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G.R. No.

127820 July 20, 1998 WHEREFORE, defendant's motion for
reconsideration is hereby granted. The order
MUNICIPALITY OF PARAÑAQUE, petitioner, dated February 4, 1994 is vacated and set aside.

vs. This case is hereby dismissed. No pronouncement
as to costs.
V.M. REALTY CORPORATION, respondent.
SO ORDERED. 5
PANGANIBAN, J.:
Factual Antecedents
A local government unit (LGU), like the Municipality of Parañaque,
cannot authorize an expropriation of private property through a Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of
mere resolution of its lawmaking body. The Local Government Code 1993, 6 the Municipality of Parañaque filed on September 20, 1993, a
expressly and clearly requires an ordinance or a local law for the Complaint for expropriation 7 against Private Respondent V.M. Realty
purpose. A resolution that merely expresses the sentiment or opinion Corporation over two parcels of land (Lots 2-A-2 and 2-B-1 of
of the Municipal Council will not suffice. On the other hand, the Subdivision Plan Psd-17917), with a combined area of about 10,000
principle of res judicata does not bar subsequent proceedings for the square meters, located at Wakas, San Dionisio, Parañaque, Metro
expropriation of the same property when all the legal requirements Manila, and covered by Torrens Certificate of Title No. 48700.
for its valid exercise are complied with. Allegedly, the complaint was filed "for the purpose of alleviating the
living conditions of the underprivileged by providing homes for the
homeless through a socialized housing project." 8 Parenthetically, it
Statement of the Case
was also for this stated purpose that petitioner, pursuant to
its Sangguniang Bayan Resolution No. 577, Series of
These principles are applied by this Court in resolving this petition for 1991, 9 previously made an offer to enter into a negotiated sale of
review on certiorari of the July 22, 1996 Decision 1 of the Court of the property with private respondent, which the latter did not
Appeals 2 in CA GR CV No. 48048, which affirmed in toto 3 the accept. 10
Regional Trial Court's August 9, 1994 Resolution. 4 The trial court
dismissed the expropriation suit as follows:
Finding the Complaint sufficient in form and substance, the Regional
Trial Court of Makati, Branch 134, issued an Order dated January 10,
The right of the plaintiff to exercise the power of 1994, 11 giving it due course. Acting on petitioner's motion, said court
eminent domain is not disputed. However, such issued an Order dated February 4, 1994, 12 authorizing petitioner to
right may be exercised only pursuant to an take possession of the subject property upon deposit with its clerk of
Ordinance (Sec. 19, R.A No. 7160). In the instant court of an amount equivalent to 15 percent of its fair market value
case, there is no such ordinance passed by the based on its current tax declaration.
Municipal Council of Parañaque enabling the
Municipality, thru its Chief Executive, to exercise
On February 21, 1994, private respondent filed its Answer containing
the power of eminent domain. The complaint,
affirmative defenses and a counterclaim, 13 alleging in the main that
therefore, states no cause of action.
(a) the complaint failed to state a cause of action because it was filed
pursuant to a resolution and not to an ordinance as required by RA
Assuming that plaintiff has a cause of action, the 7160 (the Local Government Code); and (b) the cause of action, if
same is barred by a prior judgment. On any, was barred by a prior judgment or res judicata. On private
September 29, 1987, the plaintiff filed a respondent's motion, its Answer was treated as a motion to
complaint for expropriation involving the same dismiss. 14 On March 24, 1991, 15 petitioner filed its opposition,
parcels of land which was docketed as Civil Case stressing that the trial court's Order dated February 4, 1994 was in
No. 17939 of this Court (page 26, record). Said accord with Section 19 of RA 7160, and that the principle of res
case was dismissed with prejudice on May 18, judicata was not applicable.
1988 (page 39, record). The order of dismissal
was not appealed, hence, the same became final.
Thereafter, the trial court issued its August 9, 1994
The plaintiff can not be allowed to pursue the
Resolution 16 nullifying its February 4, 1994 Order and dismissing the
present action without violating the principle
case. Petitioner's motions for reconsideration and transfer of venue
of [r]es [j]udicata. While defendant in Civil Case
were denied by the trial court in a Resolution dated December 2,
No. 17939 was Limpan Investment Corporation,
1994. 17 Petitioner then appealed to Respondent Court, raising the
the doctrine of res judicata still applies because
following issues:
the judgment in said case (C.C. No. 17939) is
conclusive between the parties and their
successors-in-interest (Vda. de Buncio vs. Estate 1. Whether or not the
of the late Anita de Leon). The herein defendant Resolution of the Parañaque
is the successor-in-interest of Limpan Investment Municipal Council No. 93-95,
Corporation as shown by the "Deed of Series of 1993 is a substantial
Assignment Exchange" executed on June 13, compliance of the statutory
1990. requirement of Section 19,
R.A. 7180 [sic] in the exercise
of the power of eminent

domain by the plaintiff- The Court disagrees. The power of eminent domain is lodged in the
appellant. legislative branch of government, which may delegate the exercise
thereof to LGUs, other public entities and public utilities. 25 An LGU
2. Whether or not the may therefore exercise the power to expropriate private property
complaint in this case states only when authorized by Congress and subject to the latter's control
no cause of action. and restraints, imposed "through the law conferring the power or in
other legislations." 26 In this case, Section 19 of RA 7160, which
delegates to LGUs the power of eminent domain, also lays down the
3. Whether or not the strict
parameters for its exercise. It provides as follows:
adherence to the literal
observance to the rule of
procedure resulted in Sec. 19. Eminent Domain. A local government
technicality standing in the unit may, through its chief executive and acting
way of substantial justice. pursuant to an ordinance, exercise the power of
eminent domain for public use, or purpose, or
welfare for the benefit of the poor and the
4. Whether or not the
landless, upon payment of just compensation,
principle of res judicata is
pursuant to the provisions of the Constitution
applicable to the present
and pertinent laws: Provided, however, That the
case. 18
power of eminent domain may not be exercised
unless a valid and definite offer has been
As previously mentioned, the Court of Appeals affirmed in toto the previously made to the owner, and such offer
trial court's Decision. Respondent Court, in its assailed Resolution was not accepted: Provided, further, That the
promulgated on January 8, 1997, 19 denied petitioner's Motion for local government unit may immediately take
Reconsideration for lack of merit. possession of the property upon the filing of the
expropriation proceedings and upon making a
Hence, this appeal. 20 deposit with the proper court of at least fifteen
percent (15%) of the fair market value of the
The Issues property based on the current tax declaration of
the property to be expropriated: Provided, finally,
That, the amount to be paid for the expropriated
Before this Court, petitioner posits two issues, viz.: property shall be determined by the proper
court, based on the fair market value at the time
1. A resolution duly approved by the municipal of the taking of the property. (Emphasis supplied)
council has the same force and effect of an
ordinance and will not deprive an expropriation Thus, the following essential requisites must concur before an LGU
case of a valid cause of action. can exercise the power of eminent domain:

2. The principle of res judicata as a ground for 1. An ordinance is enacted by the local legislative
dismissal of case is not applicable when public council authorizing the local chief executive, in
interest is primarily involved. 21 behalf of the LGU, to exercise the power of
eminent domain or pursue expropriation
The Court's Ruling proceedings over a particular private property.

The petition is not meritorious. 2. The power of eminent domain is exercised for
public use, purpose or welfare, or for the benefit
First Issue: of the poor and the landless.

Resolution Different from an Ordinance 3. There is payment of just compensation, as
required under Section 9, Article III of the
Constitution, and other pertinent laws.
Petitioner contends that a resolution approved by the municipal
council for the purpose of initiating an expropriation case
"substantially complies with the requirements of the law" 22 because 4. A valid and definite offer has been previously
the terms "ordinance" and "resolution" are synonymous for "the made to the owner of the property sought to be
purpose of bestowing authority [on] the local government unit expropriated, but said offer was not accepted. 27
through its chief executive to initiate the expropriation proceedings
in court in the exercise of the power of eminent In the case at bar, the local chief executive sought to exercise the
domain." 23 Petitioner seeks to bolster this contention power of eminent domain pursuant to a resolution of the municipal
by citing Article 36, Rule VI of the Rules and Regulations council. Thus, there was no compliance with the first requisite that
Implementing the Local Government Code, which provides. "If the the mayor be authorized through an ordinance. Petitioner
LGU fails to acquire a private property for public use, purpose, or cites Camarines Sur vs. Court of Appeals 28 to show that a resolution
welfare through purchase, the LGU may expropriate said property may suffice to support the exercise of eminent domain by an
through a resolution of the Sanggunian authorizing its chief executive LGU. 29 This case, however, is not in point because the applicable law
to initiate expropriation proceedings." 24 (Emphasis supplied.) at that time was BP 337, 30 the previous Local Government Code,

which had provided that a mere resolution would enable an LGU to imposed by the delegation, and thus partakes only of a share in
exercise eminent domain. In contrast, RA 7160, 31 the present Local eminent domain. 38 Indeed, "the national legislature is still the
Government Code which was already in force when the Complaint for principal of the local government units, which cannot defy its will or
expropriation was filed, explicitly required an ordinance for this modify or violate it." 39
purpose.
Complaint Does Not
We are not convinced by petitioner's insistence that the terms
"resolution" and "ordinance" are synonymous. A municipal ordinance State a Cause of Action
is different from a resolution. An ordinance is a law, but a resolution
is merely a declaration of the sentiment or opinion of a lawmaking
In its Brief filed before Respondent Court, petitioner argues that
body on a specific matter. 32 An ordinance possesses a general and
its Sangguniang Bayan passed an ordinance on October 11, 1994
permanent character, but a resolution is temporary in nature.
which reiterated its Resolution No. 93-35, Series of 1993, and ratified
Additionally, the two are enacted differently — a third reading is
all the acts of its mayor regarding the subject expropriation. 40
necessary for an ordinance, but not for a resolution, unless decided
otherwise by a majority of all the Sanggunian members. 33
This argument is bereft of merit. In the first place, petitioner merely
alleged the existence of such an ordinance, but it did not present any
If Congress intended to allow LGUs to exercise eminent domain
certified true copy thereof. In the second place, petitioner did not
through a mere resolution, it would have simply adopted the
raise this point before this Court. In fact, it was mentioned by private
language of the previous Local Government Code. But Congress did
respondent, and only in passing. 41 In any event, this allegation does
not. In a clear divergence from the previous Local Government Code,
not cure the inherent defect of petitioner's Complaint for
Section 19 of RA 7160 categorically requires that the local chief
expropriation filed on September 23, 1993. It is hornbook doctrine
executive act pursuant to an ordinance. Indeed, "[l]egislative intent is
that
determined principally from the language of a statute. Where the
language of a statute is clear and unambiguous, the law is applied
according to its express terms, and interpretation would be resorted . . . in a motion to dismiss based on the ground
to only where a literal interpretation would be resorted to only that the complaint fails to state a cause of action,
where a literal interpretation would be either impossible or absurd or the question submitted before the court for
would lead to an injustice." 34 In the instant case, there is no reason determination is the sufficiency of the allegations
to depart from this rule, since the law requiring an ordinance is not at in the complaint itself. Whether those allegations
all impossible, absurd, or unjust. are true or not is beside the point, for their truth
is hypothetically admitted by the motion. The
issue rather is: admitting them to be true, may
Moreover, the power of eminent domain necessarily involves a
the court render a valid judgment in accordance
derogation of a fundamental or private right of the
with the prayer of the complaint? 42
people. 35 Accordingly, the manifest change in the legislative
language — from "resolution" under BP 337 to "ordinance" under RA
7160 — demands a strict construction. "No species of property is The fact that there is no cause of action is evident from the face of
held by individuals with greater tenacity, and is guarded by the the Complaint for expropriation which was based on a mere
Constitution and laws more sedulously, than the right to the freehold resolution. The absence of an ordinance authorizing the same is
of inhabitants. When the legislature interferes with that right and, for equivalent to lack of cause of action. Consequently, the Court of
greater public purposes, appropriates the land of an individual Appeals committed no reversible error in affirming the trial court's
without his consent, the plain meaning of the law should not be Decision which dismissed the expropriation suit.
enlarged by doubtful interpretation." 36
Second Issue:
Petitioner relies on Article 36, Rule VI of the Implementing Rules,
which requires only a resolution to authorize an LGU to exercise Eminent Domain Not Barred by Res Judicata
eminent domain. This is clearly misplaced, because Section 19 of RA
7160, the law itself, surely prevails over said rule which merely seeks As correctly found by the Court of Appeals 43 and the trial court, 44 all
to implement it. 37 It is axiomatic that the clear letter of the law is the requisites for the application of res judicata are present in this
controlling and cannot be amended by a mere administrative rule case. There is a previous final judgment on the merits in a prior
issued for its implementation. Besides, what the discrepancy seems expropriation case involving identical interests, subject matter and
to indicate is a mere oversight in the wording of the implementing cause of action, which has been rendered by a court having
rules, since Article 32, Rule VI thereof, also requires that, in exercising jurisdiction over it.
the power of eminent domain, the chief executive of the LGU act
pursuant to an ordinance.
Be that as it may, the Court holds that the principle of res judicata,
which finds application in generally all cases and
In this ruling, the Court does not diminish the policy embodied in proceedings, 45 cannot bar the right of the State or its agent to
Section 2, Article X of the Constitution, which provides that expropriate private property. The very nature of eminent domain, as
"territorial and political subdivisions shall enjoy local autonomy." It an inherent power of the State, dictates that the right to exercise the
merely upholds the law as worded in RA 7160. We stress that an LGU power be absolute and unfettered even by a prior judgment or res
is created by law and all its powers and rights are sourced therefrom. judicata. The scope of eminent domain is plenary and, like police
It has therefore no power to amend or act beyond the authority power, can "reach every form of property which the State might need
given and the limitations imposed on it by law. Strictly speaking, the for public use." 46 "All separate interests of individuals in property are
power of eminent domain delegated to an LGU is in reality not held of the government under this tacit agreement or implied
eminent but "inferior" domain, since it must conform to the limits

if any. . once the said legal requirement municipal council for the purpose of initiating an expropriation case and. July 20. 2. and subsequently exercising its Held: No to 1st Issue. 1. According to the respondent. the complaint failed to state a cause of action because it was filed pursuant to a resolution and not to an 3. pursuant to the Under a city council resolution. authorizing of eminent domain or pursue expropriation proceedings over a petitioner to take possession of the subject property upon deposit particular private property. or purpose. and they have the right to resume the possession of the property whenever the public interest requires it. An LGU may therefore exercise the power to expropriate private property only when authorized by Congress and subject to the latter’s control and restraints. Sec 19. The power of eminent domain is lodged in the legislative branch of government. a Complaint for expropriation against Private Thus. an expropriation suit on the ground that there was no prior offer precludes another suit raising the same issue. 127820. The petitioner’s MFR was denied. or for the benefit of the poor and the landless. through its chief executive and acting pursuant to an ordinance. For example. with its clerk of court of an amount equivalent to 15 percent of its fair market value based on its current tax declaration.reservation. WON the principle of res judicata as a ground for dismissal of case decided in a previous case. Court-No.” petitioner's proper exercise of its power of eminent domain over subject property. a final judgment dismissing is not applicable when public interest is primarily involved. While the principle of res judicata does not denigrate the right of the State to exercise eminent domain. the petitioner cited Article 36. Petition dismissed. same force and effect of an ordinance and will not deprive an expropriation case of a valid cause of action. public use. upon payment of just compensation. The power of eminent domain is exercised for public use.M. Costs against petitioner. 49 the the terms “ordinance” and “resolution” are synonymous for “the Court ruled that the power of the State or its agent to exercise purpose of bestowing authority [on] the local government unit eminent domain is not diminished by the mere fact that a prior final through its chief executive to initiate the expropriation proceedings judgment over the property to be expropriated has become the law in court in the exercise of the power of eminent domain. all others are properly complied with. De Knecht. LGUs. No. or welfare for the benefit of the poor and the Facts: landless. WON a resolution duly approved by the municipal council has the any legal requirement. which may delegate the exercise thereof to SO ORDERED. imposed “through the law conferring the power or in Municipality of Paranaque v VM other legislations. Article III of the Constitution. To rule otherwise will Rules and Regulations Implementing the Local Government Code. RA 7160 1998 A local government unit may. or welfare through purchase. Petitioner contends that a resolution approved by the reinstituting similar proceedings. Parenthetically and by parity of reasoning. Realty G. the petition is hereby DENIED without prejudice to authorizing its chief executive to initiate expropriation proceedings." In Republic vs. 1994. our ruling that petitioner cannot exercise its delegated power Ratio: of eminent domain through a mere resolution will not bar it from 1. The city previously negotiated for the sale of the property but VM didn’t accept. bar the State or its agent from thereafter complying with this requirement. the following essential requisites must concur before an LGU Respondent V. the eminent The trial court dismissed the case. for that matter. To strengthen this point. domain.000 square meters. the LGU may expropriate said property through a resolution of the Sanggunian WHEREFORE. Rule VI of the once all legal requirements are complied with. purpose or welfare. the same is also true of “substantially complies with the requirements of the law” because the principle of "law of the case. exercise the power of eminent domain for public use. but also which provides: “If the LGU fails to acquire a private property for clearly defeat social justice." 47 Thus. An ordinance is enacted by the local legislative council authorizing the local chief executive. as required under Section ordinance as required by RA 7160 (the Local Government Code). purpose. the Municipality of Parañaque filed provisions of the Constitution and pertinent laws. other public entities and public utilities. The State or its authorized agent may still subsequently exercise its right to expropriate the same property. NO. on September 20. power of eminent domain over the same property. in behalf of the LGU. to exercise the power The trial court issued an Order dated February 4. There is payment of just compensation.R. not only improperly diminish the power of eminent domain. Notwithstanding the grant to individuals. Yes to 2nd. the State or its authorized agent cannot be forever barred from Issues: exercising said right by reason alone of previous non-compliance with 1. it does apply to specific issues 2. it cannot. the highest and most exact idea of property. 1993. government. Petitioner claimed that res judicata was not applicable. (b) the cause of action. however. or in the aggregate body of the people in their sovereign capacity. of the case as to the parties. as prescribed by law. remains in the The CA affirmed. was barred by a prior judgment or res judicata. Realty Corporation over two parcels of land of can exercise the power of eminent domain: 10. and other pertinent laws. and 9. 48 By the same token.

An ordinance is a law. which finds application in generally all cases and proceedings. An ordinance possesses a general and permanent character. which requires only a resolution to authorize an LGU to exercise eminent domain. appropriates the land of an individual without his consent. Petitioner relies on Article 36. Be that as it may. But Congress did not. which has been rendered by a court having jurisdiction over it. . In a clear divergence from the previous Local Government Code.[35] Accordingly. Section 19 of RA 7160 categorically requires that the local chief executive act pursuant to an ordinance.4. but said offer was not or its agent to exercise eminent domain is not diminished by the accepted. the power of eminent domain delegated to an LGU is in reality not eminent but “inferior” domain. 2. A municipal ordinance is different from a resolution. The In the case at bar. If Congress intended to allow LGUs to exercise eminent domain through a mere resolution. the local chief executive sought to exercise the State or its authorized agent may still subsequently exercise its right power of eminent domain pursuant to a resolution of the municipal to expropriate the same property. Rule VI of the Implementing Rules. but a resolution is temporary in nature. Eminent Domain can reach every form of property which the State might need for public use whenever they need it. the manifest change in the legislative language -.demands a strict construction.from “resolution” under BP 337 to “ordinance” under RA 7160 -. for greater public purposes. it would have simply adopted the language of the previous Local Government Code. A valid and definite offer has been previously made to the owner In Republic vs De Knecht. It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its implementation. it does apply to specific issues decided in a previous case. subject matter and cause of action. mere fact that a prior final judgment over the property to be expropriated has become the law of the case as to the parties. While the principle of res judicata does not denigrate the right of the State to exercise eminent domain. There is a previous final judgment on the merits in a prior expropriation case involving identical interests. the mayor be authorized through an ordinance. but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. As correctly found by the Court of Appeals and the trial court. Strictly speaking. there was no compliance with the first requisite that complied with. all the requisites for the application of res judicata are present in this case. We are not convinced by petitioner’s insistence that the terms “resolution” and “ordinance” are synonymous. and thus partakes only of a share in eminent domain. cannot bar the right of the State or its agent to expropriate private property. the power of eminent domain necessarily involves a derogation of a fundamental or private right of the people. the Court ruled that the power of the State of the property sought to be expropriated. When the legislature interferes with that right and. Thus. the plain meaning of the law should not be enlarged by doubtful interpretation. Moreover. since it must conform to the limits imposed by the delegation. the Court holds that the principle of res judicata. once all legal requirements are council.

an expropriation proceeding. the trial court ordered that and against defendant-appellee Maria Nieves Toledo Gozun the Republic be placed in possession of the lands. Joaquin V.. defendants-appellees. 1623.. Bounded on the NE by Lot No. Paloma Castellvi. Luis Castellvi. that the On November 4. Lands Plan Psd 26254. according to the Treasurer of Pampanga to pay defendant Toledo-Gozun the sum of Committee on Appraisal for the Province of Pampanga. possession of the lands upon deposit of that amount with the CARMEN M.000.675. Carmen M. .00 as provisional value of her lands.00 per square Register of Deeds of Pampanga. among other things. and that Office of the Solicitor General for plaintiff-appellant. dated October 22.00. or that the Republic be ordered to pay her P15. fair market value of said lands was P15. a complaint for unrealized profits. that the land under her administration. plus interest thereon at Castellvi (hereinafter referred to as Castellvi).2 On May 16. Bounded on the NE by Lot alleged. plaintiff-appellant. A parcel of land. 1960. (hereinafter from using and disposing of it. Appeal from the decision of the Court of First Instance of Pampanga through the Armed Forces of the Philippines. more or less and for expansion sites of the already completed subdivisions.A. Natividad Castellvi de Raquiza.. Blk-1. value of the lands at P259. thus causing her damages by way of referred to as the Republic) filed. among other things.00.00 per Castellvi.. in fact a portion with an area of 343. Jose Castellvi Nieves Toledo-Gozun. de dismissed.00. that the court appoints three commissioners to ascertain and report to the court the just compensation for the property sought to be expropriated.. the Republic alleged. on the NW meters had already been subdivided into different lots for sale to the by AFP military reservation. Pampanga. 1959.485.:p residential land. that the registered in the name of Maria Nieves Toledo. Castellvi alleged. In its complaint. DE CASTELLVI.000. Raquiza and Alberto Cacnio & Associates for On June 29. and attorney's fees in the amount of A parcel of land (Portion of lot 3. being a ZALDIVAR. 1959.00. Diaz. and complaint be dismissed.10. ET AL. 13631 of the Register of Pampanga .10. on June 26... or that she be paid the amount of P8. described as follows: By order of the trial court. Philippine Air Force. judicial administratrix of the estate of the late Alfonso de square meter. meter. Amparo C.00.. on February 11. the name of Alfonso Castellvi under TCT No.669. Floridablanca. illegally occupying her property since July 1. particularly the in its Civil Case No. Blk. 3. Bureau of P50.085.. 199-B Bureau of Lands Dolores G. This defendant prayed that the complaint be eminent domain against defendant-appellee. Bureau of In her "motion to dismiss". on the SW by Lot 1-B Blk 2 (equivalent to Lot 199.485. Blk-1. 8708 of the Register of had a total market value of P8. Lot No. 8708 of the sought to be expropriated was at the rate of P15. 26254. more or less. that the court authorizes plaintiff to take immediate vs. that the provisional value of the lands be fixed at REPUBLIC OF THE PHILIPPINES.609. Provincial Treasurer of Pampanga. 1956. on the NW by Lot 1-B. thereby preventing her Plaintiff-appellant. and on the NW by defendants. 1959. that the Republic. 1960 the . described as follows: 1959.389. all alleged that the value of the lands Nieves Toledo Gozun under TCT No.000.669. had a fair market value of P15. on the SE by Lot 3. Containing an area of 759. was not more P107. among other things.000 per hectare. Jr. Mendoza & A. In her "motion to dismiss" filed on July 14. 2 residential lands. her P5.669. No. the court issues thereafter a final order of condemnation. 1959 the trial court issued an order fixing the provisional defendant-appellees. VDA. on the SE by school lot and national road. L-20620 August 15. 1960. Vda. the trial court authorized the Provincial fair market value of the above-mentioned lands. was also allowed by the court to square meters. in his motion to more or less.. P259. Containing an area of general public. so they Gozun under TCT No. husband of AFP reservation. Subsequently. and the remaining portion had already been set aside 450.389.273 square meters. and she prayed that the Deeds of Pampanga.00 per square meter.303 square (equivalent to Lot 199-B Swo 23666. dated August. and prayed. Containing an area of 88.1 A parcel of land (Portion Lot Blk-1.675. Toledo-Gozun Lands Plan Psd.10..772 square meters.669. Jr. husband of defendant Maria Nieves Toledo-Gozun. Intervenors Jose Castellvi and Consuelo Castellvi in their answer. and Consuelo Castellvi were allowed to intervene as parties on the SW by AFP reservation. 1959. or a total market value of P259. viuda de Gil. dated May 27. on the SW by Lot 1-B. .299 defendant Nieves Toledo Gozun. Bounded on the NE by Maria Castellvi. Gozun. so it had a total market value of P11. C. filed B Swo 23666). 1959.00 as unrealized profits. 1956. and also intervenor Joaquin Gozun. had been.10. and registered in the name of Maria dismiss.00 per square meter. The Republic was (hereinafter referred to as Toledo-Gozun over two parcels of land actually placed in possession of the lands on August 10. Carmen Castellvi. or a total of P11. After the Republic had deposited with the Provincial Treasurer of Pampanga the amount of P259. despite repeated demands. V. the Republic of the Philippines.G. plus interest thereon at the rate of 6% per annum from October 13. on the SE by national road. that her two parcels of land were 3. that the Republic be ordered to pay situated in the barrio of San Jose. J. over a parcel of land 6% per annum from July 1. 1974 than P2.. and the costs of the suit.085. Rafael Plan Swo 23666. 1959.R. and registered in intervene as a party defendant.

as commissioner for the court. computed from August 10. upon the grounds of newly-discovered evidence. after several extensions of appeal was finally submitted on December 6. 1961 the Republic gave notice of its intention to appeal and Toledo-Gozun. The Republic's record on respective memoranda. the rising trend of land values . 8. 1959 when the provisional value thereof was actually deposited . had adopted as its memorandum its objections to the report of the Commissioners. and that the sought to be expropriated were residential lands. 1961 the trial court issued an titled. Felicisimo G. Lansangan. but this Court Castellvi land when the instant action had not yet denied the motion. 1956 when The motion to dismiss the Republic's appeal was reiterated by plaintiff commenced its illegal possession of the appellees Castellvi and Toledo-Gozun before this Court.. and the Republic. Filipino legal counsel at Clark Air Base. 1961 when the motion of the Republic for new trial and/or that an additional P5. On July per square meter. rendered its Defendants Castellvi and Toledo-Gozun filed not only a joint decision6 the dispositive portion of which reads as follows: opposition to the approval of the Republic's record on appeal. on July 17. 1959. Leonardo F. and ordered said defendant to interest shall be paid from July 11.00 per square meter. thereby dismissing both appeals. and that the lands are its record on appeal. All the intervenors Clerk of Court. for the plaintiff. counsel of the Philippine National Bank Branch at their respective interventions. and by the Defendant Castellvi also filed. This motion for new trial and/or deducting the amounts already paid to the owners. The Republic WHEREFORE. In an order dated provisional value from August 10.trial Court authorized the Provincial Treasurer of Pampanga to pay in court. 1961. on May 26. consequential damages be awarded. and lowered purchasing power of the Philippine peso. who insisted that the fair market value of their from the decision of May 26. recommendation of the commissioners of ten (P10. against which motion the defendants Castellvi and Toledo-Gozun filed their opposition. or 1960 the trial Court entered an order of condemnation.00 be paid to Toledo-Gozun for reconsideration was called for hearing.. recommendation. On December 27.859.4 The Commissioners' report was objected to by all the parties in the case — by defendants Castellvi On July 17. ordered the Solicitor General to submit a record on appeal containing Gozun since (sic) the amount deposited as copies of orders and pleadings specified therein. and Atty. In another order of May 16. 1962 the Republic filed a "motion to strike out the lots of the defendants subject of this action is fair order of December 27. which insisted that the price to be paid for the lands should from the decision of the trial court. proceeded to the The costs shall be charged to the plaintiff. subsequently an amended record on appeal. 1961 the Republic filed a motion for a new trial and/or On March 15.. be fixed at P0.000. On xxx xxx xxx July 26. they recommended decision was against the law.3 P151. after having qualified themselves.1961 the Commissioners submitted their report and reconsideration.80 as provisional value land as herein adjudged. and that no reconsideration was denied by the court on July 12. that legal interest on the supplemental motion for new trial upon the ground of additional compensation. Defendant Toledo- In respect to the defendant Castellvi. the record on appeal filed by defendant Castellvi as having been filed the court finds that the unanimous out of time. The same rate of of the land under her administration. on the total value of the said (Castellvi) defendant Castellvi the amount of P151. lands should be fixed at P15.5 The Republic filed various ex-parte motions for extension of time After the parties-defendants and intervenors had filed their within which to file its record on appeal. but also a joint memorandum in support of their opposition. said interventions Floridablanca. after having determined that the lands that the decision was not supported by the evidence. time. for both the lands of Castellvi and Toledo-Gozun. Defendant Castellvi did not insist on her appeal. therefor is made in court. and and just. . such interest to run until full payment is made to said defendant or deposit The trial Court appointed three commissioners: Atty. 1962 the trial court issued an order..859. taking into account all the also filed a memorandum in support of its prayer for the approval of foregoing circumstances. stating that "in the interest of expediency. 6% per annum will also be paid by the plaintiff to defendant Castellvi from July 1. amount deposited as provisional value. performance of their duties. Amadeo Yuzon. 1962.80. 1959 on the deposit the amount with the Philippine National Bank under the total value of the land herein adjudged minus the supervision of the Deputy Clerk of Court. her notice of appeal Republic. 1961 and the order of July 12." and at the same time it the total value of the lands of defendant Toledo.. interest at Gozun did not appeal. Atty. 1961. wherein. The Commissioners. be paid after newly-discovered evidence. On June 21. therefor is made in court. the trial court. having failed to produce evidence in support of Pamandanan. been commenced to July 10. against which motion defendants unanimously that the lowest price that should be paid was P10. 1961. the trial court approved the Republic's record on payment is made to said defendant or deposit appeal as amended. 1961. and the order declaring both the record on appeal filed by the Republic. the questions raised may be properly and The plaintiff will pay 6% interest per annum on finally determined by the Supreme Court. 1961 and for reconsideration".00) pesos per square meter for the three On January 11. the Republic filed a improvements found on her land. for the defendants.20 per square meter. are ordered dismissed.00 Castellvi and Toledo-Gozun filed their respective oppositions. 1959 until full November 19. 1961.

because the Republic was paying the lessor Castellvi a monthly rental of P445.435) [sic] and appellee Castellvi. In holding that the "taking" of the properties CALIXTO DUQUE. Appellee Toledo-Gozun did not comment on the Republic's argument On February 14. lease and let unto the LESSEE the following described In its brief. The Republic. Judicial Administratrix .In her motion of August 11. privilege" to buy the property should the lessor wish to terminate the lease. and that the hectares thereof are actually occupied and permanent improvements amounting to more that half a million covered by this contract. subject of expropriation.7 No. to wit: (1) entrance and occupation by condemn or upon registered owner(s) and with full authority to execute a contract of the private property for more than a momentary or limited period. maintains that the "taking" of property under the power of eminent domain requires two essential of which premises. was denied by this Court or October 14. in its appellee argues that in the instant case the first element is wanting. in so equivalent to ten per centum of whatever the court may finally far as the Castellvi property is concerned. Municipio de commenced with the filing of the complaint in this case. pesos constructed during a period of twelve years on the land. the Republic Floridablanca Pampanga. and by these presents does. 27 del Plano de subdivision 1.. praying that they be authorized to mortgage the lands privilege" to buy the premises "at the value at the time of subject of expropriation. M. For and in consideration of the rentals hereinafter reserved and the mutual terms. 3. Chief of Staff of the ARMED under expropriation commenced with the filing FORCES OF THE PHILIPPINES. . comment on Castellvi's motion. the Republic contends that the lower court erred: This AGREEMENT OF LEASE MADE AND ENTERED 1. viz: Republic's discussion. 1964. 1016.. year. 1959. it should be noted that the decide as the expropriated price of the property subject matter of Castellvi property had been occupied by the Philippine Air Force since the case. that the second element is also wanting. and Associates. 75. province of Pampanga . 1972. Lote No. In denying plaintiff-appellant's motion for new covenants and conditions of the parties. . this nature. holding that the "taking" of the properties under expropriation situado en el Barrio de San Jose. the Republic discusses the second error assigned as the land together with the improvements thereon first issue to be considered. the trial based on newly discovered evidence. were indicative of an agreed pattern of permanency and stability of occupancy by the Philippine Air Force in Above lot is more particularly described in TCT the interest of national Security. 4. counsel in support of the second error assigned. the LESSEE. hereinafter called the LESSOR and THE REPUBLIC OF THE PHILIPPINES represented by MAJ. the former was granted the "right and metros cuadrados. This Court denied for the contract of lease relied upon provides for a lease from year to Castellvi's motion in a resolution dated October 2. because as far as she was for the estate of the late Don Alfonso de Castellvi in the expropriation concerned the Republic had not taken possession of her lands prior proceedings. midiendo una argues that the "taking" should be reckoned from the year 1947 extension superficial de cuatro milliones once mil when by virtue of a special lease agreement between the Republic cuatro cientos trienta y cinco (4. the pertinent portions of which read: --------- CONTRACT OF LEASE Before this Court. parte de la hacienda de Campauit. Alberto Cacnio... 4-Castellvi. appellee Castellvi sought to and deprive him of all beneficial enjoyment of the property. dated October the contract of lease does not grant the Republic the "right and 6. and (2) devoting it to a public use in such a way as to oust the owner . stating that as per to August 10. In ordering plaintiff-appellant to pay 6% WITNESSETH: interest on the adjudged value of the Castellvi property to start from July of 1956. Un Terreno. opposed the same. We shall follow the sequence of the and appurtenances thereof..001. and that in the event of such sale. Attys. Castellvi and Toledo-Gozun. "the sum In order to better comprehend the issues raised in the appeal. In support of the assigned error that the lower court erred in Psu 34752. GEN. DE CASTELLVI. In finding the price of P10 per square meter of into by and between INTESTATE ESTATE OF the lands subject of the instant proceedings as ALFONSO DE CASTELLVI. represented by CARMEN just compensation.1964. LESSOR has.9 agreement with the administrator of the estate of Don Alfonso de Castellvi they shall receive by way of attorney's fees. 2. it was stipulated that the fair Out of the above described property." 1947 under a contract of lease. typified by the contract marked Exh. on the other hand. hereinafter called of this action. mas o menos. the LESSOR warrants that he/she/they/is/are the elements."8 1969. 1969. Appellee Castellvi. 1.58.. occupancy. and that The motion of appellees. This increase the provisional value of her land.93 market value should be as of the time of occupancy. filed a notice of attorney's lien.

58) . 10 do so. as a matter of fact has of occupancy less fair wear and tear and already signed an agreement with defendants. shall Chief of Staff. the elements or other acts and deeds not another year at the option of the LESSEE or due to the negligence on the part of the LESSEE. reasonable and erected and already established on the property. install facilities and not to continue leasing the property in question because they had fixtures and errect additions . Fair value is to be determined as the value at the time 1. 1458. demanding the delivery and LESSEE shall surrender possession of the return of the property within one month from said date (Exh. While this ejectment case was pending. subject matter of the instant case from 6. therefore. On November 21.. as stated earlier in LESSOR give notice within the time specified this opinion.2. 1966 up to 1959 when the Philippine Air time during the term hereof by giving written Force was placed in possession by virtue of an notice to the LESSOR at least thirty (30) days in order of the Court upon depositing the advance . Plaintiff has agreed. saying that it was return the premises in substantially the same difficult for the army to vacate the premises in view of the permanent condition as that existing at the time same were installations and other facilities worth almost P500. provisional amount as fixed by the Provincial .n.. answered the letter of Castellvi. dismissed Civil Case No.000. The LESSEE shall pay to the LESSOR as monthly to June 30 of the succeeding year) under the terms and conditions rentals under this lease the sum of FOUR therein stated. When the 5. in Civil Case No. the LESSEE at its option may proceed to do so at the expense of the LESSOR. that should the instituted these expropriation proceedings. 1952 the date the premises under special legislation for any damages to the were occupied by the PHILIPPINE AIR FORCE. this lease and if so required by the LESSOR. The LESSOR hereby warrants that the LESSEE written. the Court of First Instance privilege to compensate the LESSOR at the fair of Pampanga. peaceful and undisturbed parties covering the property herein leased. on a year to year basis (from July 1 of each year 4. the LESSOR shall give Defendant Castellvi then brought suit in the Court of First Instance of written notice thereof to the LESSEE at least Pampanga. any between defendant Castellvi and the Republic of the Philippines (p.. The LESSEE should not be responsible. t. to eject the Philippine Air Force twenty (20) days before the termination of the from the land. the Republic was placed in possession of the lands on above. so placed in.. which facilities or decided to subdivide the land for sale to the general public. The letter was sent on January 12. 1953... The LESSEE may terminate this lease at any June 30. if any. subject to renewal for GOD. 8. reads as follows: its obligation. the LESSEE shall have the right and August 10. The LESSOR It was stipulated by the parties. and. 1956. in part. This LEASE AGREEMENT supersedes and voids any and all agreements and undertakings. fixtures . On January 30. AFP premises by reason of combat operations. if the LESSOR so requires the return of the premises in such condition. at any time prior to the AFP refused to vacate the leased premises after the termination of termination of this lease. A follow-up LESSEE prior to the termination of this lease. and that the premises be returned in substantially the LESSEE and may be removed therefrom by the same condition as before occupancy (Exh. on July 11. conveyance will be conditioned on the right of 17. the acquisition of the property by means of elements or by circumstances over which the expropriation proceedings would be recommended to the President LESSEE has no control excepted: PROVIDED. 1458. 1957. whereby she has agreed to receive the rent of the lands.. Castellvi wrote to the Chief of Staff. except beginning July 1. 11 It is undisputed. The term of this lease shall be for the period 7. The LESSEE may. to restore the premises. 1956 the Republic sought to renew the same but Castellvi refused. previously entered into between the shall have quiet. HUNDRED FIFTY-FIVE PESOS & 58/100 (P455. use the property for any the contract. in an order which.. This the full term or period of this lease and the AGREEMENT may not be modified or altered LESSOR undertakes without cost to the LESSEE to except by instrument in writing only duly signed eject all trespassers. purpose or purposes and. that "the foregoing contract of lease further agrees that should he/she/they sell or (Exh. there ordinary wear and tear and damages by the being no other recourse. in lieu of performance of parties. Castellvi) is 'similar in terms and conditions. that the Republic the LESSEE hereunder. by virtue of the above- mentioned contract. III)". further.. depreciation during the period of this lease. with the annual contracts entered into from year to year premises during the period of this lease. including the encumber all or any part of the herein described date'. that (Exhibit "7" — Castellvi). 1947. acts of until June 30. and that. 4. at its own costs and AFP. Before the expiration of the contract of lease on June 30. Vol. the Republic lease and provided. informing the latter that the heirs of the property had decided expense make alteration. unless sooner terminated by the LESSEE as hereinafter provided. 1959. occupied Castellvi's land from July 1.s. Lieutenant General Alfonso Arellano. but should the LESSOR fail to by the parties. upon petition of the value or the equivalent. 6 premises upon the expiration or termination of Castellvi).00 that were first occupied by the AFP. upon or attached to the demanding that the property be vacated within 30 days from receipt said premises shall be and remain property of the of the letter. oral or 3. 1959. the possession of the demised premises throughout same having been merged herein. 5 — Castellvi). 1957.

"lasting but a moment. when by virtue of the Castellvi remained as owner. two essential elements in the "taking" of property under the power through the AFP. 1371. intention was. operative or recurring at every moment" (Webster's Third on June 26. and was continuously recognized as lease agreement the Republic. as shown by the renewal of the lease contract the property of Castellvi. 26. Castellvi the agreed monthly page 596). Vol. took possession of owner by the Republic. "lasting a very short time. but certainly mere notice . This Castellvi and deprive her of all beneficial enjoyment of the property. purposes of eminent domain cannot be considered to have taken The aforecited lease contract was for a period of one year. is as lessee thereof. through the AFP. 348). as present in the instant case. That because of the above-cited agreement Inc. the property must be devoted to a public use or otherwise and deprive him of all beneficial enjoyment informally appropriated or injuriously affected. devoting it to a public use. or indefinite period. lease entered into on year to year basis? Why was the lease the instant case now has become moot and agreement renewed from year to year? Why did not the Republic academic and/or by virtue of the agreement expropriate this land of Castellvi in 1949 when. their contemporaneous and rent corresponding to the rent from 1956 up to subsequent acts shall be principally considered (Art. Intent is to be deduced from the language employed it was "in reality a more or less permanent right to occupy the by the parties. The fact that the Republic. because the Republic was but a moment's duration" (The Oxford English Dictionary.." and "the right to buy the property is merged as an integral part of the lease . lease contract. as lessee. In American Jurisprudence. namely: (1) that the entrance and occupation by nature does not alter the fact that the entry into the land was the condemnor must be for a permanent. renewable place in 1947 when the Republic commenced to occupy the property from year to year. constructed some installations of a permanent of eminent domain. having a very brief rentals until the time when it filed the complaint for eminent domain life. 53 Phil. In the instant case. 1959. the entry into the property should be under warrant or color of be defined generally as entering upon private legal authority. according to the signed by plaintiff. 2nd edition. 461. Myrick. Baylosis. 515. under the lease. and by the provision in the lease contract whereby the Republic undertook to return the property to Castellvi when the Second. for the purpose of converting them into a jet air base? 14 It might really have been the intention of the Republic to expropriate the lands in question at some The Republic urges that the "taking " of Castellvi's property should be future time. 71 Phil. of beneficial enjoyment of the property. it expropriated the other parcels of land that it action in the above-entitled case. 525). in order to judge the wherein the administratrix decided to get the intention of the contracting parties. were not the lease agreement the Republic. Inc. The expropriation must be actually commenced "taking" (in eminent domain) as follows: in court (Republic vs. It is claimed that the intention of the lessee was to occupy the land permanently. transitory. 484). Civil 1959 and considering that this action is one of Code). bind the landowner. 2. the expropriator must enter a private property. Pursuant to the aforecited authority. nor 157. she has waived her cause of Republic itself. why was the contract of of said land by virtue of non-payment of rents.. v. "Momentary" means. Castellvi property as lessee.. bound to pay. This circumstance in the "taking" may be considered property for more than a momentary period. 12 occupied at the same time as the Castellvi land. Moreover. therefore. Neither was Castellvi deprived of all the momentary period. the utilization of the property for public use must be in such a domain. and could not. and considered transitory. and had been paying. But Untenable also is the Republic's contention that although the this "intention" cannot prevail over the clear and express terms of the contract between the parties was one of lease on a year to year basis. under the warrant or color of legal authority. (City of Manila v. We find merit in the contention of Castellvi that temporary. circumstance is present in the instant case. If the intention of the lessee (Republic) in 1947 was really to illegal detainer and/or to recover the possession occupy permanently Castellvi's property. that the "taking" of Catellvi's property for construed to mean "a limited period" — not indefinite or permanent. or intended to last a year. By express provision of from the property and deprived of its beneficial use. property was first occupied by the AFP. Appraisal Committee with the Provincial proof of mistake or fraud — the question being not what the Treasurer of Pampanga. but what is expressed in the language used. Rizal Park Co. Taking' under the power of eminent domain may Third. we read the definition of bind the land itself. 96 Phil. way as to oust the owner and deprive him of all beneficial enjoyment of the property. from year to year. Magdalena Estate. although renewable from year (2) that in devoting the property to public use the owner was ousted to year by consent of 'The owner of the land. 13 that the circumstance of the property being devoted to public use is present because the property was used by the air force of the AFP. as premises under the guise of lease with the 'right and privilege' to buy in the instant case. Volume VI. It may be conceded thereof. and transitory. et al. as may be inferred from the construction of permanent improvements. and the terms 'of the contract. 344. when unambiguous. Section lands in the future did not. a number of circumstances must be present in the "taking" of property for purposes of eminent Fifth. because the Republic entered the and.much less an implied notice deemed as of the year 1947 by virtue of afore-quoted lease — of such intention on the part of the Republic to expropriate the agreement. undertook to return the present when the Republic entered and occupied the Castellvi premises in substantially the same condition as at the time the property in 1947. The entry on the property. or otherwise informally appropriating or injuriously affecting it in such a way as substantially to oust the owner Fourth.) The word "momentary" when applied to possession or occupancy of (real) property should be It is clear. the entry of the Republic into the property and its utilization of the same for public use did not oust First. 1963 edition. the entrance into private property must be for more than a lease was terminated. International Dictionary. are conclusive in the absence of averment and the property should the lessor wish to terminate the lease. on the subject of "Eminent Domain.

The inquiry. The Republic's claim that it had the "right Toledo-Gozun are residential lands. The "fair value" at to be awarded on the basis of the plans would be speculative. It is a rule in the interpretation of Republic filed the complaint for eminent domain. or takes place subsequent to the filing of determinate time. for purchase was never intended to convert their lands into residential subdivisions even before the by the parties to the lease contract. on accepted that the Republic would enter into a contract of lease August 10. Such fair value residential purposes. What was agreed expressly in paragraph No. that the "taking" of the Castellvi property should public purposes. This Court said: to agree" (Art. that is to say. the lessee would have the "right and contending that the plans of the appellees to convert the lands into privilege" (or option) of paying the lessor what it would fairly cost to subdivision for residential purposes were only on paper. it would first negotiate with the owner of the land to lease the land (for say ten or twenty years) then expropriate the same when the 2. or why the Republic should enter purposes of determining the just compensation to be paid must. then claim that the "taking" of the — the Republic maintains that. be reckoned as of June 26. had the right of eminent domain. 16 the "just upon. also sought to be Neither can we see how a right to buy could be merged in a contract expropriated. that they had become adaptable for time when the lessee took possession of the property. Section 1. The finding of the lower court is and privilege" to buy the property at the value that it had at the time in consonance with the unanimous opinion of the three when it first occupied the property as lessee nowhere appears in the commissioners who. On the expropriated be reckoned as of the start of the lease. Regarding the two parcels of land of Toledo-Gozun. both Castellvi and Toledo-Gozun maintain that their fact that the value of the property. on August 10. that the lands of Castellvi and actually instituted in court. the just compensation should be case. which had never been under lease to the Republic. in such cases. as was the lease of Castellvi's land in the instant the complaint for eminent domain. 5 of the lands are residential lands. but refers that the lands in question had ceased to be devoted to the to the cost of restoring the property in the same condition as of the production of agricultural crops. so that any compensation the undertaking to put the land in said condition. 1959. practice whereby in order to secure a low price for a land which the must also be reckoned as of June 26. 1959. The the time of occupancy.00 per square meter. We find evidence showing refer to the value of the property if bought by the lessee. 1959. 961- domain may be exercised by simply leasing the premises to be 962). as therefore. therefore. To sustain the contention of the Republic is to sanction a the court. for many good reasons. had in the lands are residential lands with a fair market value of not less than meantime increased during the period of the lease. and that the appellees had actually taken steps cannot refer to the purchase price. and then assert that the value of the property being exhorbitant but also unconscionable. 1372. therefore. in spite of the other hand. so much so that the fair market value has been agreed Under Section 4 of Rule 67 of the Rules of Court. What filing of the complaint in this case. mentioned in the lease agreement. The "taking" of the Castellvi property for the where its real intention was to buy. but as of the time of compensation" is to be determined as of the date of the filing of the occupancy" 15 We cannot accept the Republic's contention that a complaint. Civil Code). 1 SCRA 957. even assuming that the value of the property for the purposes of the expropriation be reckoned as of the expropriated lands is to be determined as of June 26. it is undisputed that the Republic was placed expropriated (Rule 67. sanctioning what obviously is a deceptive scheme. is it worth from its availability for valuable uses? . not. but with reference to the uses "taking" of the property under expropriation commenced with the to which it is plainly adapted. This would be P15. 1959 when the complaint for expressed by counsel for the Republic) when all the time the Republic eminent domain was filed. The taking of those lands. in lieu of the lessee's performance of subdivision project had been commenced. In the case of City contracts that "However general the terms of a contract may be. Rules of Court). must be what compensation to be paid for the Castellvi property should not be is the property worth in the market.. the price date when the Government started to occupy the property under the of P10. 1669. 82. was first occupied by the AFP. and could expropriate Castellvi's land if it wanted to without resorting to any guise whatsoever. 98) this Court laid down basic shall not be understood to comprehend things that are distinct and guidelines in determining the value of the property expropriated for cases that are different from those upon which the parties intended public purposes. April 12. the date of the filing of government intends to expropriate (or would eventually expropriate) the complaint for eminent domain. does not Republic's contention is not well taken. Corrales (32 Phil. 1961. the same consideration are to be not be reckoned as of the year 1947 when the Republic first occupied regarded as in a sale of property between private the same pursuant to the contract of lease..relationship . 1959. This Court has ruled that when the taking of the property lease on a year to year basis can give rise to a permanent right to sought to be expropriated coincides with the commencement of the occupy. declared that the lease contract. they of Manila vs. Civil Code). merely with reference to the uses to which it is at The lower court did not commit an error when it held that the the time applied. Regarding the first assigned error — discussed as the second issue lease is about to terminate. should the lessor require the lessee to return the premises in the same condition as at the time the same The Republic assails the finding that the lands are residential. without need of a demand (Article determined as of the date of the filing of the complaint. In determining the value of land appropriated for We hold. and almost fantastic". ceases upon the day fixed. in their report to the court. In the instant case. into a simulated contract of lease ("under the guise of lease". (Republic vs. by authority of the court. the of lease in the absence of any agreement between the parties to that Republic was placed in possession of said lands. and that the just parties. since by express legal provision a lease made for a expropriation proceedings. Nor can it be in possession of the Castellvi property. and declared. as of the time of purchase. L-14158. lease agreement was that. which would have the effect of depriving the owner of the property of its true and fair market value at the time when the expropriation proceedings were The lower court found.00 per square meter fixed by the lower court "is not only lease. there being put the premises in the same condition as it was at the no overt acts on the part of the appellees which indicated that the commencement of the lease. also by authority of effect. Neither can it be said that the right of eminent Philippine National Bank. viewed not determined on the basis of the value of the property as of that year.

This Court said.20 per square meter as the fair valuation Base. the Pampanga Sugar Mills. We find that this resolution was made by schoolhouse. and assessed for taxation been devoted to agriculture since 1947 when it was leased to the purposes at around P400.000. and due to the fact that it was not being devoted was based on the allegation of the defendants (owners) in their to agriculture.S. 1956.20 per square meter. of the lower court may be reasonably expected in the immediate that the lands that are the subject of expropriation in the present future. were residential lands and were adaptable for use as residential subdivisions. 1958.00 per hectare. The most the market. which this Court decided on circumstances. regarding lot 1-B it had already been surveyed and property condemned for public purposes. when the present proceedings were instituted.20 per square meter. 13-Castellvi). 12. adjoin the land of Castellvi. as fixed by this Court in the Narciso case. et al. the proposed subdivision plans of the lands sought to May 18. Exh. among other of Republic vs. The lands of Toledo-Gozun of Pampanga. These lands are near the barrio of the Castellvi property. They are also contiguous to the Basa Air recommended the sum of P. 17 The owner may thus show every advantage that his important issue to be resolved in the present case relates to the property possesses. The evidence shows that on two sides by roads (Exh. Indeed. In the minutes of the meeting of the Provincial involved in the Narciso case. and Castellvi). as residential lands. The land of Castellvi had not the lands were classified as sugar lands. 68). Gozun to open a subdivision estimated by reference to the use for which the on their lands in question (Exhs. The lands that are sought to composed of the Provincial Treasurer. 98 U. 10 the following: be at P. Narciso. also find that the price of P. 21 property is suitable. paragraphs 1 and 2. Since 1957 the land has been classified as We can not sustain the stand of the Republic. (Exh. held on May 14. and the conclusions. and Rum River Boom Co.000. 1959 (Exh. The Republic cites the case The trial court. The price of their lands was P2. the layout of the subdivision plan was was considered the fair market value of the lands as of the year 1949 tentatively approved by the National Planning Commission on when the expropriation proceedings were instituted. Philippine Army. but.20 per square meter. since 1949 those lands were no longer cultivated as sugar lands. correctly considered.20 per square meter. as a general thing. in 1959 those lands were already classified. the poblacion. but also site of the Basa Air Base. and are along the road. vs. In the Narciso case this Court fixed the fair by the Provincial Appraisal Committee of the province of Pampanga market value at P. 1959 when the same were taken possession of Patterson. as embodied in their report. the value of is at the left side of the entrance of the Basa Air Base and bounded those lands had increased considerably. The location of the Castellvi land justifies its per square meter in 1949.S. L-6594. and Mrs. or P. having regard to the existing business or wants of the community.20 per square meter in the Narciso case Castellvi) As a matter of fact. Exceptional 1959 (Exhs. might have a fair market value of P. we should commissioned officers. and its conversion into a residential subdivision was is practically impossible to formulate a rule to tentatively approved by the National Planning Commission on July 8.1960. therefore. it is the stand of the Republic that the Appraisal Committee. govern its appraisement in all cases. We the Chief of Staff of the Armed Forces of the Philippines. in suitability for a residential subdivision. Joaquin D.20 then (Exh. 18 The owner may also show that the property is suitable for division into village or town lots. (Miss. owners of the land could not be given more than what they had asked. 1957 (Exhibit D). This Castellvi and Toledo-Gozun. 403)." 20 assessed at P1. notwithstanding the recommendation of the majority of the The evidence shows that Castellvi broached the idea of subdividing Commission on Appraisal — which was adopted by the trial court — her land into residential lots as early as July 11.00 per hectare. In 1957 said land was classified as residential. and the the Republic the basis in asking the court to fix the provisional value . 8. and 22 While the lands involved in the present case. (Exh. there is a plan to convert it answer to the complaint for eminent domain in that case that the into a subdivision for residential purposes.04 per square meter. in order that the price it question of what is the just compensation that should be paid to the could be sold for in the market may be satisfactorily appellees. then. 3 and 4-Toledo-Gozun). (of Floridablanca) the municipal building. no less circumstances will modify the most carefully than 32 man connected with the Philippine Air Force among them guarded rule. it can not be denied that ten years later. by the Republic. In fact. the owners of these lands have the In expropriation proceedings. As found by the trial court. 1956. 8-Castellvi). 5. and assessed for taxation and the Pampanga Sugar Mills are closed by.00 per square meter. that the on its classification as residential land.. in its resolution No. and enlisted men say that the compensation of the owner is to be had requested Mr. case. 8-A to 8-ZZ-Toledo-Gozun). non-commission officers.00 per hectare and that was the price taxes due on the property have been paid based that they asked the court to pay them. November 23. therefore. the owner of the land has right to their value for the use for which they would bring the most in the right to its value for the use for which it would bring the most in the market at the time the same were taken from them. which finding of the lower court is supported not only by the unanimous were expropriated by the Republic in 1949 and which are now the opinion of the commissioners. the barrio chapel. or such as We agree with the findings. and to one Donata Montemayor. 5 of February 15. So many and varied are the circumstances to be poblacion of Floridablanca (Exhs. As early as June. 13-Castellvi). In 1959 the land of Castellvi was and chapel are also near (T. like the lands taxes based on its classification as residential had been paid since involved in the Narciso case.N. as of August 10. and at that time September 7. "It 1959. The Narciso case involved lands that belonged to be expropriated in finding that those lands are residential lots. 1956 in her letter to that the fair market value of the lands was P3. 5 and 6 Toledo-Gozun). 19 The Republic asserts that the fair market value of the lands of the appellees is P. that it subdivided. present and prospective. We find that the price residential in view of its proximity to the air base of P.. determined. As a taken into account in determining the value of matter of fact. 13-Castellvi) We price that should be fixed for the lands now in question should also read in its Resolution No. 23 The lands of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the The Republic also points out that the Provincial Appraisal Committee same condition as the land of Castellvi. The barrio schoolhouse purposes. 1. the Provincial Auditor and the be expropriated in the present case being contiguous to the lands District Engineer. 3. p.

1623) are both near amount fixed as the provisional value of the lands that are being the air bases. this Court has held that the valuation fixed for the purposes of the assessment of the land for taxation purposes can From the above and considering further that the not bind the landowner where the latter did not intervene in fixing lowest as well as the highest price per square it.00) pesos per square meter for the three lots of the defendants by the commissioners consisted of deeds of sale of residential lands subject of this action is fair and just". 17. involving a parcel of land adjacent to the Clark Air Base in Angeles City. in 1957. that the present case (Civil Case No.. which was Case No. Also just Castellvi). as well as the land in was assessed at P. of the testimonies of the Commissioners based on the documentary evidence. Provincial Assessor of Pampanga. 1959. 18. The value is only "provisional" or "tentative". this Court said: 1959. 26 recommendation on the basis of their observation after several ocular inspections of the lands. recommended to Commissioners. to the effect that in 1950 the lands of Toledo-Gozun were classified The deeds of absolute sale. As added advantage it may be said expropriated by the condemnor. as the evidence shows. among other circumstances. Sabina Tablante. 326.40 per square meter and part at P. The land in Civil the property as gathered from the record in . and was assessed at P450. 1959 and the taking of the lands in question.00 per hectare. was assessed at P. so justify. 19. yet a court may therein are similar in many respects to the substitute therefor its estimate of the value of defendants' lands in this case.". the among other things. but it owners of the land. Both Castellvi and Toledo. More specifically so the land at Clark Air Base We can not also consider this certification of the Acting Assistant which coincidentally is the subject matter in the Provincial Assessor as a basis for fixing the fair market value of the complaint in said Civil Case No. several months before the lands in this are concerned. been filed on January 13. There is a national road value of the land. concerned. The certification of the Court of First Instance of Pampanga on January assessor refers to the year 1950 as far as the lands of Toledo-Gozun 15. which counts with a P1. Pampanga. are nearer to the poblacion of Floridablanca then Clark Air Base is nearer (sic) to the poblacion of The Republic further relied on the certification of the Acting Assistant Angeles. 10 of May 14. Pampanga. The commissioners made their question is P10. 1531 of this Court and the lands in the approved by the court.669. that. the Commission finds that the the court that the price of P10. A court of first instance or. according to the partly as sugar land and partly as urban land.. It follows. In their report.. said: Supreme Court. 1531. The lower court arrived at the conclusion Gozun testified that the fair market value of their respective land was that "the unanimous recommendation of the commissioners of ten at P15. 1531 are competent evidence. the commissioners. Pampanga. 1961 (Exhibit K).00 per square meter. The defendants' lands of the lands of Castellvi and Toledo-Gozun. This expropriation case is specially pointed out. and the lowered purchasing power of the Philippine peso. 16.00 per square meter.00 to P20.. determining land values.40 per square meter. Caligsihan. appointed by the court to the year 1959 is very well known by the appraise the lands that were being expropriated. of their own personal knowledge of The lower court did not altogether accept the findings of the land values in the province of Pampanga. vs. 23-Castellvi).. 10. were already classified and assessed the land involved therein was ordered by the for taxation purposes as residential lands. therefore. 21.045 per square meter. it having lands of Castellvi and Toledo-Gozun because. and other witnesses.10.20 per square because they were executed during the year meter.00 that the lands are titled. 5 of the Provincial Appraisal weekends. entitled Republic vs. and that the sugar land undersigned commissioners. 20. and that in 1956 the Castellvi land was classified as sugar land 1959 and before August 10 of the same year. and to the year 1956 as far as the land of Castellvi is case were taken by the plaintiffs . 25 meter obtainable in the market of Pampanga relative to subdivision lots within its jurisdiction in On the other hand. 5 was repealed by the same Provincial Committee on mill at Del Carmen. In the case of Manila Railroad Co. and recommended the price of town of Floridablanca. The documentary evidence considered (P10. which were sold at prices ranging from P8. 22. the Clark Air Base and the Basa Air expropriated does not necessarily represent the true and correct Base respectively. Floridablanca. in the province of the lower court took into consideration. In that resolution No. a sitio of the locality has increased since 1957 . The records show that this that the Basa Air Base land is very near the sugar resolution No. the appraisal committee stated stone's throw away from the same lands is a that "The Committee has observed that the value of the land in this beautiful vacation spot at Palacol. 1531 of the Court of First Instance of Pampanga.. These advantages are not found in the Committee can not be made the basis for fixing the fair market value case of the Clark Air Base. that there is a rising trend of land values. that resolution No. 328. on appeal. 27 In arriving at its conclusion.00 per square meter would be the fair lowest price that can be awarded to the lands in market value of the lands. which was expropriation case filed on January 13. contrary to the natural swimming pool for vacationists on stand of the Republic. to fronting them and are situated in a first-class serve as the basis for the immediate occupancy of the property being municipality. 40 Phil. the Commissioners. The commissioners also considered the decision in Civil Case No. While great weight is attached to the because the circumstances and factors involved report of the commissioners. where the court fixed the price at P18. may change or modify the report of the commissioners by increasing or reducing the amount of the award if the facts of the case . per square meter (Exhibits 15.of the lands sought to be expropriated at P259. Appraisal in its resolution No. or P. 24 It must be considered. in the town of San Fernando and in Angeles City.. Moreover. and of documentary considered the documentary evidence as basis for comparison in evidence presented by the appellees.50 per square meter.00 per square meter (Exhibit 14-Castellvi). dated February 8. owned by the Pampanga Sugar Mills. while part of the urban land Civil Case No. however. 1959 (Exhibit 13.

Laird and per annum on the total amount adjudged as the Cornelio G. as recommended by the commissioners and adopted by the compensation of her land. and the facilities that obtain because of their nearness Plaintiff has agreed. for P14. No. 1959 when the Republic was placed in proceedings are not binding. 31 However. by the spouses Evelyn D. in this case. The important factor in expropriation proceeding is that the owner is If Castellvi had agreed to receive the rentals from June 30. is quite high. sold for from P2. The report of the commissioners of appraisal in condemnation 1956. In the order dismissing the ejectment case. Floridablanca. In ordering the Republic to pay 6% interest on the total value of the or where the amount allowed is either palpably land of Castellvi from July 1. Aguas.00 per square meter. Pampanga. Fortuna.00 per square meter.. 1956 to July 10. the Republic filed the considered the nature and similarities of said lands in relation to the complaint for eminent domain in the present case and was placed in lands in other places in the province of Pampanga. motion. so much so that Castellvi filed an ejectment case against Castellvi and Toledo-Gozun for their lands. after its lease of the land had expired on June 30. 28 held that the Republic had illegally possessed the land of Castellvi from July 1.000 square meters with a of the same nature. and she could considering the circumstances attending the lands in question We not at the same time be entitled to the payment of interest during have arrived at the conclusion that the price of P10.000 square meters of land that the lower court erred when it ordered the situated at Floridablanca for P7.00 per square meter would be a fair valuation of the lands in land. 1956 to Q.A. the Court question suited for residential purposes — their location near the of First Instance of Pampanga said: Basa Air Base. and because of the and Angeles City. situated in Barrio price for all these lands. the Court has deemed it proper to fix the same sugar quota of 100 piculs. 1959. and are parcel of sugar land having an area of 100. to order of the Court upon depositing the compare the land values in Floridablanca to the land values in San provisional amount as fixed by the Provincial Fernando and Angeles City. 1959. 1961. thereof. just like the lands in Angeles City that are near the Clark Air Base. or P. 1961. but merely advisory in character. 1959. and in fixing the price of the lands that are being After the lower court had decided this case on May 26. and form an idea of the value of the lands Appraisal Committee with the Provincial in Floridablanca with reference to the land values in those two other Treasurer of communities. and to the already signed an agreement with defendants. The Republic maintains were: (1) a deed of sale of some 35. 1956. It is not out of place.00 (or about P. flourishing first class town of Floridablanca. 1956. 29 In our analysis of the report of the the court. therefore. It is Our considered view that the price of Castellvi interest at the rate of 6% per annum on the value of her P5. 1956 up to 1959 when the Philippine Air of Floridablanca may be considered practically adjacent to San Force was placed in possession by virtue of an Fernando and Angeles City. among others. In arriving at this conclusion We have particularly taken into consideration the resolution of the Provincial Committee on 4. This Court has also taken The alleged newly discovered evidence in the motion filed on June judicial notice of the fact that the value of the Philippine peso has 21. The Court has weighed all the circumstances relating to this expropriations proceedings. the lower court inadequate or excessive. Aguas and Josefina value of the land of Castellvi. she should be considered as having allowed her studied the record. It should be noted that the Republic in the Court of First Instance of Pampanga. only from July question and would constitute a just compensation to the owners 10. 1701. The third issue raised by the Republic relates to In the supplemental motion. and the price advocated by the Republic.. .000. supplemented by another as recommended by the commissioners and approved by the court. covered by P.00 to discovered evidence. We find merit in this assignment of applied illegal principles to the evidence error. 3. The fourth error assigned by the Republic relates to the denial by Appraisal of the province of Pampanga informing. while the land of Toledo-Gozun could be error. the commissioners had made ocular inspections of the lands and had while that ejectment case was pending. certain cases. the expropriated the Court arrived at a happy medium between the price Republic filed a motion for a new trial.50 to P3. as. 1956 to awarded the just compensation for his property. like San Fernando possession of the land on August 10. where the commissioners have July 10. and (2) a deed of absolute sale of a parcel of land having an . the town June 30.500. We have carefully August 10. What really happened was that the Republic continued to commissioners. the lands. 30 Considering that the showing that a certain Serafin Francisco had sold to Pablo L. submitted to them. or where they have disregarded a clear preponderance of evidence. 1961 was a deed of absolute sale-executed on January 25. The Republic. minus the provisional value that was deposited. from July 1. Laird in favor of spouses Bienvenido S. both based upon the ground of newly discovered evidence. therefore. should pay lower court.00 per square the same period on the amount awarded her as the just meter. as a matter of fact has to the big sugar central of the Pampanga Sugar mills. and after land to be leased to the Republic until August 10. We cannot disregard the observations of the institution of the expropriation proceedings the ejectment case was commissioners regarding the circumstances that make the lands in later dismissed.21 per square Republic to pay Castellvi interest at the rate of 6% meter) executed in July. Narciso a lands of Castellvi and Toledo-Gozun are adjoining each other. 1959. that the lower court of its motion for a new trial based on nearly in the year 1959 the land of Castellvi could be sold for from P3. We do not find merit in this assignment of P4. 1959. 1959 when it deposited in court the provisional value of the land. It is true that the lands in whereby she had agreed to receive the rent of question are not in the territory of San Fernando and Angeles City.14 per square meter. until August 10. as far possession of the land pursuant to the writ of possession issued by as the court is concerned. We find points that merit serious consideration in the occupy the land of Castellvi after the expiration of its lease on June determination of the just compensation that should be paid to 30. subject matter of the instant case from but. and the evidence. the alleged newly discovered evidence the payment of interest. considerably gone down since the year 1959. considering the facilities of modern communications. 1959.

for said evidence could have been lands near or around the parcels of land sought discovered and produced at the trial. the evidence in this case as it is now sought to be done by virtue of the motions at bar. or in We agree with the trial court. the court but this document passed through the Solicitor Padua made the observation: Office of the Register of Deeds for the purpose of transferring the title or annotating the sale on the I understand. in the archives of the National Library. The assertion that he only went to the later promulgated on May 26. the evidence could not have been discovered and The same can be said of the deeds of sale produced at the trial. is covered by a Certificate of It is also recalled that during the hearing before Title issued by the Office of the Register of Deeds the Court of the Report and Recommendation of of Pampanga. among other things. in the Office of the Register of lands sought to be expropriated in the instant case are residential Deeds of Pampanga. It is true that Fiscal Lagman that took place in this place of land recently went to the Office of the Register of Deeds to where the land was sold for P0. that there was a sale certificate of title. checked half-hazard [sic] manner by which the plaintiff up the alleged sale and moved for a reopening to looked for evidence to be presented during the adduce further evidence. For the same reason they could have been easily discovered if reasonable diligence has been The lower court. 1957 by Jesus Toledo y Mendoza in tecum directing the Register of Deeds of favor of the Land Tenure Administration. including the sugar quota covered to have done according to Solicitor Padua. discovered evidence. the evidence would still not documents diligently showing conveyances of warrant the grant of a new trial. He did not do so. that the lands mentioned in have right away though [sic] of digging up those deeds of sale were residential. if it is at all forgot to present the evidence at a more true that Fiscal Lagman did what he is supposed propitious time.area of 4. It by Plantation Audit No. situated at Floridablanca. Your Honor. the lands must. the Office of the Provincial lands. and that the evidence is of such a nature as to attached to the supplementary motion. the Office of the Clerk of spouses Laird to the spouses Aguas was a sugar land. by the Register of Deeds of Pampanga. There is no question in the mind of the Commissioners and objection thereto. be the Land Tenure Administration. government entity. and the rules. The land described in the deed of sale executed by Serafin Francisco. while the offices. Regarding this point. He could have. . in a well-reasoned order. not exercise reasonable diligence as required by This was before the decision was rendered. They alter the result of the case if admitted. would have been the easiest matter for plaintiff Pampanga. . it must appear that the evidence was discovered after the trial. Now. Any lawyer with a modicum of ability handling this expropriation case would But even assuming. one of the lawyers of the plaintiff.101 square meters.09 per square to move for the issuance of a subpoena duces meter) executed on October 22. gratia argumenti. 32 The lower court correctly refer to lands covered by certificate of title issued ruled that these requisites were not complied with. namely. would have been able to find these documents and/or caused the issuance of subpoena duces tecum. copy of which is attached to the original motion. therefore... and they cannot be considered to be expropriated in this case in the offices that newly discovered evidence as contemplated in Section 1(b) of Rule 37 would have naturally come to his mind such as of the Rules of Court. he seeks to introduce said . Even this elementary precaution was not done by plaintiff's numerous To warrant the granting of a new trial based on the ground of newly attorneys. 161 1345. In respect to order that evidence as to the sale price of other lands may be Annex 'B' of the supplementary motion copy of admitted in evidence to prove the fair market value of the land the document could also be found in the Office of sought to be expropriated.00 per hectare (a little less than P. of sale could be found in several government because those sales covered sugarlands with sugar quotas. and had counsel for the movant really exercised the reasonable The Court will now show that there was no diligence required by the Rule' undoubtedly they reasonable diligence employed. 1961 or more than office of the Register of Deeds 'now and then' to one month after Solicitor Padua made the above check the records in that office only shows the observation. did document subject to the approval of the Court. another shown to be similar. It is noteworthy that all these deeds to the Land Tenure Administration were immaterial and irrelevant. that even with the exercise of due diligence. In eminent domain proceedings. He hearing before the Commissioners. Pampanga to come to testify and to bring with him all documents found in his office pertaining We find that the lower court acted correctly when it denied the to sales of land in Floridablanca adjacent to or motions for a new trial. found that the sales made exerted by the numerous lawyers of the plaintiff by Serafin Francisco to Pablo Narciso and that made by Jesus Toledo in this case. for P860.. Court as a part of notarial reports of notaries public that acknowledged these documents. The lower court also concluded that the land sold by the Assessor of Pampanga. near the lands in question executed or recorded from 1958 to the present.120.. Fiscal The Court gave him permission to submit said Lagman.20 which is check conveyances which may be presented in contiguous to this land. the trial court said: the offices mentioned above.

The property must be devoted for public use or otherwise her one parcel of land that has an area of informally appropriated or injuriously affected. In 1959. the republic. 2. the republic commenced the expropriation The granting or denial of a motion for new trial is. Alberto The fact that the Republic. minus the sum of P151. therefore. Rule 141. with interest at indefinite or permanent. through the Armed Forces of the Philippines evidence. as described in the complaint.not the provisional value of her lands. as a general rule.859. 3 and 4 are present. Forgotten permanent installations and other facilities worth almost however. or intended to last a year. But this “intention” cannot prevail over the clear and express terms of the lease contract. under the lease. (e) the attorney's lien of Atty. and 759. discretionary with the trial court. court. is temporary.000.00 that were erected and already established on the evidence.00 as the just commenced to occupy the property as lessee thereof. The entry on the until the day full payment is made or deposited in property. It is claimed that the intention of the lessee was to occupy the land IT IS SO ORDERED. although (f) the costs should be paid by appellant Republic renewable from year to year by consent of the owner of the land. are declared The requisites for taking are: expropriated for public use. It must be under warrant or color of authorities. (b) the fair market value of the lands of the appellees is fixed at P5.299 square meters. Castellvi and Maria Nieves Toledo-Gozun. When Castellvi gave notice to the circumstances. because tinder Castellvi on a year-to-year basis. 33 property.809. L-20620) the Republic into the property and its utilization of the same for public use did not oust Castellvi and deprive her of all beneficial enjoyment of the property. have a total area of 539. and was Facts: continuously recognized as owner by the Republic. and that just compensation should not be determined on (a) the lands of appellees Carmen Vda. Cstellvi remained as owner. and by the provision in the lease contract whereby the Republic undertook to return the . Only requisites 1.80 that she withdrew out of the 5.00 as just compensation for 4. The 5th requirement is also lacking. and installations of a permanent nature does not alter the fact that the entry into the lant was transitory. proceedings for the land in question. No. 3. It is clear.695. The aforecited lease contract was for a the rate of 6%. compensation for her two parcels of land that Requisite number 2 is not present according to the Supreme Court. as at the time the property was first occupied by the AFP. entered into a lease agreement over a land in Pampanga with it as newly-discovered evidence. when it denied the motions for a new trial. and in Section 13. the decision appealed from is modified. as provided in Section 12. of the Rules of undertook to return the premises in substantially the same condition Court. rate of 6% per annum from July 10. as may be inferred from the construction of permanent improvements. as shown by the renewal of the lease contract from year to year. The expropriator must enter a private property. The utilization of the property for public use must be such a way as amount that was deposited in court as the to oust the owner and deprive him of beneficial enjoyment of the provisional value of the land. is not newly-discovered P500.796.225. renewable from year to year. Vda. 34 We Issue: Whether or not the compensation should be determined as of do not see any abuse of discretion on the part of the lower court 1947 or 1959. whose judgment should not be disturbed unless there is a clear showing of abuse of discretion.045 square meters. however. 1959 until the day full payment is made or deposited in court. evidence under the guise of newly-discovered In 1947. through AFP.495. with interest at the property. 1959 period of one year. (c) the Republic must pay appellee Castellvi the sum of P3. as follows: The Supreme Court ruled that the taking should not be reckoned as of 1947. permanently. minus the sum of P107. 67.00 that she withdrew “momentary” when applied to possession or occupancy of real out of the amount that was deposited in court as property should be construed to mean “a limited period” -. de the basis of the value of the property that year . Rule express provision of the lease agreement the republic. Republic of the Philippines vs. In the instant case the entry of De Castellvi (G. the correct qualification that terminate the lease in 1956. By of the Philippines. constructed some Cacnio is enforced. as lessee.00 per square meter. Ruling: WHEREFORE. per annum from July 10. Unfortunately the Court cannot classify (AFP). and considered transitory. 1.R. She then instituted an ejectment proceeding against the AFP. The entry must be for more than a momentary period. the AFP refused because of the can be given is 'forgotten evidence'. that the “taking” of Castellvi’s property for purposes of eminent domain (d) the Republic must pay appellee Toledo-Gozun cannot be considered to have taken place in 1947 when the republic the sum of P2.

because the Republic was bound to pay. The lower court did not commit an error when it held that the “taking” of the property under expropriation commenced with the filing of the complaint in this case. “just compensation” is to be determined as of the date of the filing of the complaint. therefore. Neither was Castellvi deprived of all the beneficial enjoyment of the property. Rule 67 of the Rules of Court. and that the just compensation to be paid for the Castellvi’s property should not be determined on the basis of the value of the property as of that year. Castellvi the agreed monthly rentals until the time when it filed the complaint for eminent domain on June 26. It is clear. 1959. and had been paing. 4. The Supreme Court has ruled that when the taking of the property sought to be expropriated coincides with the commencement of the expropriation proceedings. or takes place subsequent to the filing of the complaint for eminent domain. that the “taking” of Castellvi’s property for purposes of eminent domain cannot be considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee thereof. Under Sec. .property to Castellvi when the lease was terminated. the just compensation should be determined as of the date of the filing of the complaint.

and those to to the other. 35805. by assignment..B. Inc. and the PLDT which are on file with the Public Service Commission. after hearing. containing a statement. appropriation and equipment and by renting trunk lines of the PLDT to enable government offices to call private parties. The sharing was amended in 1941 to 30% for PLDT SEC. they agreement with other countries desiring to establish such inaugurated this joint operation on 2 February 1958. Sometime in 1933. 1 Office of the Solicitor General Arturo A. L-18841 January 27. PLDT. Siguion Reyna. entered into an agreement with RCA (d) To establish and maintain coastal stations to serve ships Communications. as follows: 25% to PLDT and 75% to RCA.. plaintiff-appellant. the Bureau of Telecommunications established to provide telecommunication service in places set up its own Government Telephone System by utilizing its own requiring such service.: telephone systems of other countries. operate and for the use of these trunk lines was in the usual form of applications maintain wire-telephone or radio telephone for telephone service. the plaintiff. adhered to by the Government of the Republic of the Philippines. one of which is the Bureau of Telecommunications. J. to appellant. 2 The RCA Communications. 7 One provinces as may be found feasible and under such terms of the many rules prohibits the public use of the service furnished the and conditions or arrangements with the present owners or telephone subscriber for his private use. in addition to certain powers transmission from the Philippines to the United States. the PLDT.R. a Government Telephone System (GTS) subscriber could make a call to (c) To prescribe. and the RCA The plaintiff. RCA's domestic station. First Instance of Manila. above the signature of communication service throughout the Philippines by the applicant. as well as such additional offices or stations as may hereafter be Soon after its creation in 1947. 10 Through these trunk lines. Republic of the Philippines. that the latter will abide by the rules and regulations of utilizing such existing facilities in cities. defendant. 5 service under the Bureau of Posts. The following powers and duties: arrangement was later extended to radio-telephone messages to and from European and Asiatic countries. by the Court of transact business in the Philippines and is the grantee. J. under Executive Order No. 3 said parties. 1969 (e) To abide by all existing rules and regulations prescribed by the International Telecommunication Convention REPUBLIC OF THE PHILIPPINES. and "provisional" agreement. in its Civil Case No. could automatically be transferred to the That office was created on 1 July 1947.. Assistant Solicitor General Antonio A. relative to the accounting. the defendant. and rented from. messages handled in the international service. No. upon a joint record on appeal.4 On 2 February 1956. by both the plaintiff relations with the parties) is an American corporation authorized to and the defendant from the dismissal. 9 using the same trunk satisfaction of all concerned. for a joint overseas telephone service whereby at sea or aircrafts and. Inc. for short). when public interest so requires. subject to approval by the Department a PLDT subscriber in the same way that the latter could make a call to Head. install. stations. that may hereafter be promulgated by said convention and appellant. equitable rates of charges for messages handled by the former. disposition and exchange of vs. 12 . and facilities. PLDT gave notice to RCA to be established to restore the pre-war telecommunication terminate their contract on 2 February 1958. On 5 March 1958. The and duties formerly vested in the Director of Posts: 1awphil. entered into an agreement whereby exercising governmental powers through its branches and telephone messages. (which is not a party to the present case but has contractual Direct appeals. Alafriz. to the Bureau would convey radio-telephone overseas calls received by engage in the international telecommunication service in RCA's station to and from local residents. lines owned by. under a service with the Republic of the Philippines. Act 3426. through the Director of Telecommunications.G. coming from the United States and received by instrumentalities. negotiate for. and those PHILIPPINE LONG DISTANCE TELEPHONE COMPANY. the system and/or for time calls and other services that may be rendered by said system. 79.. as amended by Commonwealth Act 407. of their respective of a legislative franchise to operate a domestic station for the complaint and counterclaims. and prescribing its (the Bureau's) own schedule of rates. towns. lines of PLDT. franchise.ñêt contracting parties agreed to divide the tolls. Montecillo and Belo for defendant. Philippine Long Distance Telephone Company (PLDT plaintiff-appellant. is a public service corporation holding a legislative Ponce Enrile. and vice-versa. consolidate. and again amended in 1947 to a 50-50 basis. Torres and Solicitor Camilo D. Quiason for The defendant. operate and maintain a telephone system throughout the Philippines and to carry on the business of electrical transmission of messages within the Philippines and between the Philippines and the REYES. Inc. The Bureau of Telecommunications shall exercise the and 70% for RCA. 6 Its application (b) To investigate. but making permanent a preliminary reception and transmission of long distance wireless messages (Act mandatory injunction theretofore issued against the defendant on 2178) and to operate broadcasting and radio-telephone and radio- the interconnection of telephone facilities owned and operated by telegraphic communications services (Act 3180). for calls collected by the PLDT for with the following powers and duties. 94.L. Their contract contained a (a) To operate and maintain existing wire-telegraph and stipulation that either party could terminate it on a 24-month notice radio-telegraph offices. is a political entity Communications. 11 Actually. 8 The Bureau has extended operators thereof as may be agreed upon to the its services to the general public since 1948.

without loss of title and possession. Philippine Long Distance Telephone Company. a contract may be annulled if tainted by violence. with referring to the rented trunk lines. in view of serious public prejudice that would result from the and Asian countries provided that the Bureau would submit to the disconnection of the trunk lines. through the Bureau. praying in its and conditions of the interconnection. plaintiff Republic commenced suit against the seeking to compel the defendant to enter into an interconnecting defendant. 19 In its counterclaims. (2) to refrain from carrying into effect its threat taking or appropriation of title to. the lower court rendered judgment that it could not applications. abuse. including the payment of just compensation to be determined by the court. from the rest of the world. intimidation. that under Executive Order 94. Inc. neither of them has been able to compel the PLDT to enter into an agreement with the Bureau fill up the demand for telephone service. the defendant company filed its answer. 17Through the years. 35805). 15 commercial telephone operations in excess of authority. except the United of its rights. and (3) to accept and services to allow inter-service connection between both and connect through its telephone system all such telephone systems is not much different.000 telephones and had also 20. In either case private . on page 8. for the use of the facilities of defendant's telephone system throughout the Philippines under such terms and conditions as the court might consider reasonable. in the exercise of the sovereign power of eminent domain. the to sever the existing telephone communication between expropriated property. with plaintiff. 16 The PLDT was also maintaining 60. and of its refusal to fix the complaint for judgment commanding the PLDT to execute a contract terms and conditions therefor. memorandum in lieu of oral argument in this Court dated 9 February 1964. the defendant Philippine Long Distance Telephone telephone calls coming to the Philippines from foreign Company. stipulate such terms and conditions is of the essence of our contractual system. the defendant reduced its offer to 33 1/3 % (1/3) as Both parties appealed. 13 When the PLDT received no reply. Freedom to restore those severed.000 pending applications for telephone connection. to enter into an agreement on overseas telephone service to Europe and. be through the said Bureau's telephone facilities and the radio subjected to an easement of right of way. although it dismissed both the complaint and the consideration of 37 1/2% of the gross revenues. and not power may not be availed of to impose only a burden upon the to make connection over its telephone system of telephone owner of condemned property. while the Republic may not compel the PLDT to celebrate a contract on 14 April 1958. said The Bureau of Telecommunications had proposed to the PLDT on 8 Bureau was not limited to servicing government offices alone. and gave notice that if said violations were not with the Bureau of Telecommunications. the court a quo. it agreements. but no cogent reason appears why the said the Bureau of Telecommunications and defendant. 1337. and to the prejudice of. the latter complains of the action of the trial court in dismissing the part of its complaint On 12 April 1958. the PLDT. the PLDT would sever the the Court of First Instance to compel it to enter into interconnecting telephone connections. or Acting on the application of the plaintiff. establishing the Bureau of Telecommunications. Taking up first the appeal of the Republic. complained to the Bureau of Telecommunications that countries — until further order of this Court. because the parties were not in agreement.000 pending After trial. since the with the government paying (on a call basis) for all calls passing PLDT knew. and averred that it was justified to disconnect the trunk disconnected the trunk lines being rented by the Bureau at midnight lines heretofore leased to the Bureau of Telecommunications under on 12 April 1958. on the existing agreement because its facilities were being used in fraud telephone services. the Bureau was maintaining 5. hence the Bureau Telephone System to the PLDT. because the parties could not agree on the terms Court of First Instance of Manila (Civil Case No. declared the preliminary injunction jurisdiction and regulations of the Public Service Commission and in permanent.000 telephones and had own telephone poles. or misuse of the poles of the PLDT. in competition with the It denied any obligation on its part to execute a contrary of services business of the PLDT. subject to facilities of the Government Telephone System. the Republic may. or ought to have known. 5. Civil Code of the severance of telephone connections by the defendant company Philippines). 18 The PLDT replied that it was willing was neither guilty of fraud. require the telephone company to permit (1) to forthwith reconnect and restore the seventy-eight interconnection of the government telephone system and that of the (78) trunk lines that it has disconnected between the PLDT. and the facilities of Nominally. nor January 1958 that both enter into an interconnecting agreement. The use of the PLDT's lines facilities of RCA Communications. at the time that their use by the through the interconnecting facilities from the Government Bureau was to be public throughout the Islands. The proposals were not accepted by either party. and on the ground that the undue influence (Articles 1306. the power of eminent domain results in the defendant. its share in the overseas telephone service. PLDT further claimed that the Bureau was engaging in States. for the Bureau had used the trunk counterclaims. its overseas telephone services. contested the jurisdiction of stopped by midnight of 12 April 1958. On 28 April 1958. of course. through expropriation. was there any in the contract of lease of the trunk lines.. On 7 April 1958. and possession of. 1336. using defendants At that time. It calls coming to the Philippines from foreign countries is unquestionable that real property may. and by express provision of the statute. in the contract with it. But the court a quo has apparently overlooked that would isolate the Philippines from other countries. 14 The result was the isolation of the Philippines. without proper accounting of revenues. in competition with. lines not only for the use of government offices but even to serve private persons or the general public. as the needs of the government service may require. said bureau was violating the conditions under which their Private Branch Exchange (PBX) is inter-connected with the PLDT's facilities. and for We agree with the court below that parties can not be coerced to a writ of preliminary injunction against the defendant company to enter into a contract where no agreement is had between them as to restrain the severance of the existing telephone connections and/or the principal terms and conditions of the contract. issued an order for the defendant: with it.

Record on Appeal. are. the demand for the same. while the and the rights and power to grant to any corporation. likewise. in subsection (c). 14. defendant telephone company is a public utility corporation whose association or person other than the grantee franchise for franchise. untenable. condemnation of such services independently of contract and proceeded to determine the just and reasonable compensation for First. vs. under the law. 803. "to prescribe. If. Court of First Instance of Tayabas. Second. under Section 14 of the Public Service Act. expressly empowered the latter in its Section utilizing existing facilities in cities. equitable rates of charges for messages condemnation proceedings where unreasonable or unjust terms and handled by the system and/or for time calls and other services that conditions are exacted. And since the lower court found that both parties "are 807. and for the purpose of promoting its knowledge that the plaintiff had extended the use of the trunk simplicity. under and the determination of state policy is not vested in the section 6. that is. thereby preventing the Bureau of Order. The Bureau of Telecommunications. Republic Act No. Collector of Internal Revenue. Series of 1947. provided just compensation is paid therefor. page 216). We find that the court a quo ruled correctly in rejecting both assertions. the charter of the defendant petition and that the proper forum for the action was the Public expressly provides: Service Commission. instead of dismissing the petition.000 This view we have taken of the true nature of the Republic's petition pending applications at the time. the PLDT had 20. 574. 711. practically at one that defendant (PLDT) is entitled to reasonable compensation from plaintiff for the reasonable use of the former's The theses that the Bureau's commercial services constituted unfair telephone facilities" (Decision. 724). 124 interest of national welfare. As previously noted. The Bureau of Telecommunications was Telecommunications subscribed to the trunk lines. hence exempt. the State may. despite the Philippines. the error in not holding that the Bureau of Telecommunications was not beneficiary of the interconnecting service would be the users of both empowered to engage in commercial telephone business. 373). Benguet Consolidated Mining Co. as authorized by the terms of the Executive were to be carried out by the PLDT. Furthermore. the competition. the competition is merely hypothetical. subject to approval but there is nothing in this section that would exclude resort to by the Department Head. and. the averments make out a case for compulsory (PLDT vs. throughout the Philippines. continuously since 1948. reorganizing the Bureau of radio telephone communications throughout the Philippines by Telecommunications. if not abroad" (Decision. the Bureau to non-commercial activities or prevents it from serving the general public. from such jurisdiction. has no authority to pass upon actions for the taking of private property under the SEC. It is a well-known prejudice of the general public. to the extent of crippling or seriously may be rendered by the system". 90 Phil. Ultimately. implies 1. upon payment of just compensation. equipment and other properties are under the jurisdiction. defendant knew created in pursuance of a state policy reorganizing the government or should have known that their use by the subscriber was more or offices — less public and all embracing in nature. "when the Bureau of supervision and control. The rights herein granted shall not be exclusive. yet the plaintiff's telecommunications network is this franchise: — (Act 3436) a public service owned by the Republic and operated by an instrumentality of the National Government. and in telephone systems. 13. page 224). economy and efficiency in its operation (Section lines to commercial purposes.000. vs. Nothing in these provisions limits hampering the operations of said Bureau. 52 Phil. 676). signals shall not be impaired or affected by the granting of Public Service Act). That body. telephone service being very much more than the supposed competitors can supply. there is no reason why the State may not require a public utility to render services in the general Defendant PLDT. as appellant. nor could the officials of the Bureau bind the Government not Telecommunications from properly discharging its functions.E. Philippines". Since this relationship has been maintained for a long time and the public has patronized . 51) — assent by the defendant to such extended use. necessarily results in overruling the plea of defendant-appellant PLDT The telephone company's inability to meet the demands for service that the court of first instance had no jurisdiction to entertain the are notorious even now. and that the Bureau was guilty of fraud and abuse under lower court should have proceeded to treat the case as one of its contract. It may be that in its original prospectuses the A perusal of the complaint shows that the Republic's cause of action Bureau officials had stated that the service would be limited to is predicated upon the radio telephonic isolation of the Bureau's government offices: but such limitations could not block future facilities from the outside world if the severance of interconnection expansion of the system. of the Constitution. to the to engage in services that are authorized by law. Bartonville Bus Line. and that the rendering of inter-connecting services by the telephone company Government is never estopped by mistake or error on the part of its upon such terms and conditions as the court may determine to be agents (Pineda vs. And third. the telephone or electrical transmission of message or supervision and control of the Public Service Commission (Sec. and the Bureau had another 5. towns. 290 Ill. in the Commission (Utilities Com. may operate and maintain wire telephone or Executive Order No. transfer utilities to public ownership N. Record on Appeal. just. as the trial court correctly stated. 94. subsection (b). to meet the exigencies attendant upon the establishment of the free and independent Government of the Republic of The acceptance by the defendant of the payment of rentals. contends that the court below was in interest. sovereign right of eminent domain. telephone trunk lines it had previously leased to the Bureau. 94. to "negotiate for. Article XIII. operate and maintain wire terms and conditions or arrangement with present owners or telephone or radio telephone communication service throughout the operators as may be agreed upon to the satisfaction of all concerned. and provinces under such 79. under section 78 (b) of Executive Order No. so that the condemnation would be for public ruling that said defendant was not justified in disconnecting the use. Pineda. 98 Phil. Save for the prayer to compel the rule that erroneous application and enforcement of the law by public PLDT to enter into a contract (and the prayer is no essential part of officers do not block subsequent correct application of the statute the pleading).property is subjected to a burden for public use and benefit.

from the filing of the original complaint or petition. so that Considering. and the objections of defendant-appellant are without merit. including the period elapsed 636. or that the a fair and workable arrangement and guaranteed by Government has attached to the poles more than one ten-pin cross- contract and the continuous line has come to be patronized arm as permitted by the PLDT charter. Mich. was one ten-pin cross-arm attachment and only for plaintiff's telegraph system. connection of the trunk lines. 650. but this expansion is no ground for the discontinuance of the service agreed upon. telephone system would expand with such rapidity as it has done. an American corporation. any time that the government decided to engage receive due consideration. the owner can no longer deal with it as private property only. 527. and for a compensation. agreement with RCA Communications Inc. entered into an agreement with RCA for a joint overseas by the plaintiff. As there is no proof that the telephone wires strain the poles of the . The last issue urged by the PLDT as appellant is its right to PLDT compensation for the use of its poles for bearing telephone wires of the Bureau of Telecommunications. telephone system upon such terms. Cadwaller. and that the PLDT's right to just independence. the act of is well-known that defendant PLDT is unable to adequately cope with the parties in making such connection is equivalent to a the current demands for telephone service. public interest or privilege for the benefit of the public. the public is held to have of the telegraph wires of the government should not be extended to such an interest in the arrangement that its rights must its telephone lines. The implication of the argument is that . WHEREFORE. as is here alleged to be the case. we see no point in this and established as a great public convenience. the aforequoted provision. the true objection of the PLDT to continue Justice Myers as follows: "Such physical connection cannot the link between its network and that of the Government is that the be required as of right. the lines of PLDT.. disconnected the trunk because it did not have such telephone system when defendant lines being rented by the same. That the Bureau of Posts shall have the right to place additional cross-arms and wires on RCA’s domestic station. 638). v. such assignment of error. is affirmed. and vice versa.772. that it the public acquires an interest in its continuance. This position finds approval in also in this kind of communication. and it imposes upon the property such a compensation for the services rendered to the Government public status that it may not be disregarded" — citing telephone system and its users is herein recognized and preserved. made by contract." Allnut v.. could automatically be transferred to the the poles of the grantee by paying a compensation. 93 N. that the (Clinton-Dunn Tel.W. REPUBLIC OF THE PHILIPPINES VS. 87 N. however. prompting the plaintiff to file a acquired its franchise. but if such connection is voluntarily latter competes "parasitically" (sic) with its own telephone services. 74 S. So long as the burden to be borne by the PLDT connection shall not in breach of the agreement be severed poles is not increased. as follows: "Where private public to the right of the PLDT to derive profit from the future property is by the consent of the owner invested with a expansion of its services under its non-exclusive franchise. and their interconnection is to the public plaintiff has to pay for the use of defendant's poles if such use is for convenience. Mahan v. Carolina Tel. Co. after and the grantee. now under but must hold it subject to the right of the public in the appeal.E. — having set up its own Government Telephone System. and to install. Provided. by utilizing its own appropriation and equipment and by renting trunk lines of the the defendant counterclaimed for P8. and it is not now at liberty to unilaterally sever the physical than one (1) ten-pin cross-arm for telegraphic purposes. Inglis (1810) 12 East. & Tel.both telephone systems. trial court may determine to be just. as shown by the number declaration of a purpose to waive the primary right of of pending applications therefor. In that case. To uphold the reasons upon which it is in part made to rest are the PLDT's contention is to subordinate the needs of the general referred to in the same opinion. vs. Tel. contending that what was allowed free use. however.00 for the use of its poles PLDT. 242. 132 Mich. the decision of the Court of First Instance. 629. under telephone service. Alleging that plaintiff is in competition with them. The Telephone Company to continue servicing the Government doctrine of this early case is the acknowledged law. and is stated in the elaborate and learned opinion of Chief In the ultimate analysis. 619.E. State ex rel. we see no reason why the reservation in favor by one of the parties. except in so far as it dismisses the petition of the exercise of that public interest or privilege conferred for Republic of the Philippines to compel the Philippine Long Distance their benefit... rate of which is to be agreed upon by the Director of Posts The plaintiff through the Bureau of Telecommunications. maintain and operate wires of its telegraph system whereby telephone messages coming from the US and received by thereon.. 172 Ind. notified the former and receiving no reply. it is too late for the defendant to claim misuse of its plaintiff's telephone system and has to pay also if it attaches more facilities. Admitting that section 19 of the PLDT charter reserves to the Government — FACTS: the privilege without compensation of using the poles of Sometime in 1933. No costs. Co. the defendant PLDT entered into an the grantee to attach one ten-pin cross-arm. And for this purpose. nor that they cause more such physical connection has been voluntarily made. thus. the records are ordered returned to the court of origin for It is clear that the main reason for the objection of the PLDT lies in further hearings and other proceedings not inconsistent with this the fact that said appellant did not expect that the Bureau's opinion. when PLDT more than the telegraph wires.. PLDT that said section could not refer to the plaintiff's telephone system. that the PLDT franchise is non-exclusive. 636. Co. not for its telephone system. under damage than the wires of the telegraph system. but there is high authority for the position that.

.case before the CFI praying for judgment commanding PLDT to execute a contract with the Bureau for the use of the facilities of PLDT’s telephone system. without loss of title and possession. ISSUE: Whether or not interconnection between PLDT and the Government Telephone System can be a valid object for expropriation.The CFI rendered judgment stating that it could not compel PLDT to enter into such agreement. in the interest of national welfare. and possession of. Hence this petition. through expropriation can be a subject to an easement of right of way. The use of lines and services to allow inter-service connection between the both telephone systems. the power of eminent domain results in taking or appropriation of title to. there is no reason why a state may not require a public utility to render services in the general interest. and for a writ of preliminary injunction against the defendant to restrain the severance of the existing trunk lines and restore those severed. HELD: Yes. Normally. transfer utilities to public ownership upon payment of just compensation. CFI: For PLDT . but no cogent reason appears why said power may not be availed of to impose only a burden upon the owner of the condemned property. the Republic may require the telephone company to permit interconnection as the needs of the government service may require. Public petitioner commenced a suit against private respondent praying for the right of the Bureau of Telecommunications to demand interconnection between the Government Telephone System and that of PLDT. in the exercise of the sovereign power of eminent domain. so that the Government Telephone System could make use of the lines and facilities of the PLDT. provided just compensation is paid therefor. Private respondent contends that it cannot be compelled to enter into a contract where no agreement is had between them. subject to the payment of just compensation. the expropriated party. x x x the state may.

00 from 1978 up to July 1992 with P150 Residential Lot P100 12% interest per annum from which sum the amount of P250 Commercial Lot P180 P2.280. and the property is condemned P300 Industrial Lot P200 in favor of Napocor effective July 1992 upon payment of the fair market value of the property at One Thousand (P1. 1354 of the President of the Philippines dated December 3. 1990 board meeting. The City Appraisal Committee in its Minutes filing of the complaint for eminent domain? This is the main question dated March 8. 58). Five Thousand (P21.00 per square meter. respondents. However. (Records.00 per square meter for only a 12. Mangondato. when NAPOCOR started building its Agus I HE (Hydroelectric to pay not less than P300. and covered by Transfer Certificate of Title No. Costs against NAPOCOR. and that he is not privy to any agreement between annum (id. NAPOCORs board passed Resolution No. NAPOCORs board on May 17. M Price per Sq. fixed the fair market value as follows:[7] posed by the parties in this petition for review on certiorari assailing the Decision[1] of the Court of Appeals[2] which affirmed in toto the Land Fair Market Value Per Sq..995. 1991. p.199. NAPOCOR and Marawi City and that any payment made to said city cannot be considered as payment to him.00 for those along the city a financial assistance of P40. decision of the Regional Trial Court ofMarawi City.00 per square meter. Mangondato disagreed with the NAPOCOR boards Resolution No. 90-225 resolving to pay Mangondato P100. NAPOCORs general Plant) Project. 1990. took possession of 12% interest per annum from 1978 (P698. 610-92. owned by value of the property (id. 1990. vs. M. DECISION At the outset.00) pending the a 21. In a letter dated December 17. 605-92. 90-316 Court.[5] and are quoted from the Decision of the respondent On August 14.00 private property covered by Transfer Certificate of Title No. 1974. but property. On July 13. J. 329 dated July 11.[3] The dispositive portion of the decision of the trial court reads:[4] Price Per Sq. 91-247 resolving to pay Mangondato P100. Civil Case No. 20). 1991 Mangondato claimed that the subject land is his duly registered passed Resolution No. 1991 NAPOCOR alleged that the subject land was until then possessed and and February 19.000.000.995 square meter land which is a portion of Lot 1 of the determination whether P100.00 (Id. 1990. 45).000.132 square meter portion of the subject property plus 12% interest per annum from 1978. Marawi City affected by At what point in time should the value of the land subject of the infrastructure projects of NAPOCOR without specifying any expropriation be computed: at the date of the taking or the date of the particular land-owner. The Facts confirmation of said resolution was deferred to allow NAPOCORs regional legal counsel to determine whether P100. NAPOCORs regional legal counsels findings embodied in 2 memoranda to NAPOCORs general counsel (dated January 29. NAPOCORs National Power Board (hereafter SO ORDERED.: 1988 requested Marawi Citys City Appraisal Committee to appraise the market value of the property in Saduc. is 12%. p.NATIONAL POWER CORPORATION. under Proclamation No.00 should be deducted. NAPOCOR refused to compensate insisting that the plus the data that the area possessed by NAPOCOR is 21. (Records. pp.808. NAPOCORs regional legal counsel. property belongs to Mangondato. 1991) state that Mangondatos property is classified administered by Marawi City so that in exchange for the citys waiver as industrial. T-378- A. in March.[6] as follows: resolving that Mangondato be paid the base price of P40.995 square property is public land and that it had already paid financial meters.00 per square meter is the fair market subdivision plan (LRC) Psd-116159 situated in Marawi City. Civil Case No.00 for those not along the highway and that on the basis of recent Supreme Court decisions. NAPOCOR has In 1979.00) Pesos.00 per square meter is the fair market value. The facts are undisputed by both the petitioner and the private respondent. T-378-A per square meter for the property excluding 12% interest per in his name. under the mistaken belief that it forms part of the public land Pursuant to the aforementioned resolution Mangondato was paid reserved for use by NAPOCOR for hydroelectric power purposes P1. and that the legal rate of interest per annum from the time assistance to Marawi City in exchange for the rights over the of the taking of the property alleged to be in 1978. National Power Corporation (NAPOCOR).184. 1990. 91-247 pegging the compensation . petitioner. M. COURT OF APPEALS More than a decade later NAPOCOR acceded to the fact that the and MACAPANTON MANGONDATO. in the August 7.00 per square meter for the 12.00 per square meter. 50-52).).00) plus In 1978.. recommended to the board that the fair market value of the property is P 100. NAPOCORs board) passed Resolution No. national highway and P200. PANGANIBAN. Mangondato demanded compensation from counsel incorporated the foregoing findings in his report to the board NAPOCOR.500. that the market value of industrial lots in Marawi City and quitclaim of any right over the property. the prayer in the recovery case for Napocors surrender National Highway National Highway of the property is denied but Napocor is ordered to pay monthly rentals in the amount of P15. pursuant to Executive Order No.088. NAPOCOR had paid the when NAPOCOR took possession is P300.00) Pesos per square meter or a total of Twenty-One Million Nine Hundred Ninety. p.132 square meter portion (P485. Along the City Not in the City WHEREFORE.

that the restraining order issued in the recovery Property where NAPOCOR acceded to Mangondatos request of of possession case be maintained and a writ of preliminary injunction provisional payment of P100. restrain NAPOCOR from proceeding with any construction and/or Mangondato submitted that the fair market value of his land is even improvements on Mangondatos land or from committing any act of more than the P300. he is willing to settle for P300. 1992 (Id. pp 60-62) the land be reckoned from the time of the filing of the expropriation case. 6-7). Mangondato reiterated his 20).500. 92-121 the assessed value of the land appearing in Tax Declaration No. the general counsel submitted that since the possession of his land from 1978 until the filing of the Complaiant board has already set the purchase price at P100. Mangondato was paid P1. court. 605-92 against NAPOCOR seeking to recover the possession of Deposit (id.00. that he treats the highway and P200.00 per square meter P100. P 100. NAPOCOR. 610-92. 1992 recommended the approval of Mangondatos request (Records. 1992..000. Ali. NAPOCORs general counsel filed a No. and that NAPOCOR be ordered and without prejudice to Mangondatos pursuance of claims for just to deposit the value of the land as provisionally determined by the compensation and interest. 17- In another letter dated February 4. Atty.199.00 for the 12. 8). 0873 granting its president the authority to negotiate for the payment of for 1992 which was used as basis by the lower court (id.412.995 square meter land Upon agreement of the parties. 1992. 60).00 per square meter On the same date Mangondato filed his Manifestation in Lieu of without prejudice to the final determination of the proper and just Answer contending that the negotiations for payment made by compensation by the board inasmuch as the regional counsel NAPOCOR were virtual dictations on a take it or leave it basis. 70-71). 1992. Saipal Alawi.00 per square meter without of preliminary mandatory injunction. 1992. Civil Case No. so that there appraisal of industrial lots in Marawi City when NAPOCOR took was no agreement reached as to payment because of NAPOCORs possession is P300. 91-247). under Tax Declaration No. addition to the P1. the parties executed a Deed of Sale Of A Registered of possession case. Mangondato filed before the lower court Civil Case Motion For Reconsideration Of the Order For Provisional No. Appraisal Report but that for expediency. Civil Case No..00 per square meter for those not along the P2. 1992. disagreement to the P100. memorandum for its president finding no legal impediment if they. pp. on July 27. attorneys fees and costs. and instead of filing a motion to prejudice to pursuing his claim for the proper and just compensation dismiss. Anent 1978 (id.184. However. the lower court did not rule on the the property described in the complaint as Lots 1 and 3 of the provisional value to be deposited and chose to go right into the subdivision plan (LRC) Psd-116159 against NAPOCOR. NAPOCORs president.. the prayer for the writ of preliminary mandatory injunction. 85-87).00 per square meter without interest from 1978. In reply. 1-8). the 2 cases were ordered (Records. Mangondato prayed that he be square meter plus 12% interest on the basis of recent Supreme Court compensated in damages for the unauthorized taking and continued decisions. 7394 was P100. pp.00 per square meter (id. pp.] NAPOCOR opposed the provisional value quoted by the authorized payment shall be effected only after Agus I HE Project has lower court saying that the basis of the provisional value of the land been placed in operation and that said payment shall be covered by a should be the assessed value of the property as of the time of the deed of absolute sale with a quitclaim executed by taking which in this case is 1978 when the assessed value of the land Mangondato (Id. and the issuance of a temporary second phase of expropriation cases which is the determination by restraining order and a writ of preliminary mandatory injunction to ..00 so far received by him as partial payment for the rent highway. that he submitted to him (general counsel) 2 memoranda stating that the was given the run-around by NAPOCOR for 15 years. 28-32).. In his letter to NAPOCORs president dated April 20. the payment of determination of just compensation on the ground that the a monthly rent of P15. 1992.. 610-92.00 per square (sic) in the expropriation case. pp.. NAPOCOR filed its Opposition thereto on July 23. in his the just compensation (id.00 (per) square meter stated in the City dispossession (id. National Bank the amount of P10.. 4-5).015.. pp. Mangondato filed his Opposition To On July 7.00 per square meter from the City Assessors Office to ascertain and report to the court plus 12% interest per annum from 1978. 1992.00 per square meter plus 12% interest per annum from The temporary restraining order was issued by the lower court. filed also before the lower plus interest thereon (id.00 per for the use of his property. The lower court ordered NAPOCOR to deposit with the Philippine pp. that the just compensation for thereby (id. that the expropriation case be consolidated with the recovery In March. to get partial payment. P100.00 per square meter compensation without interest. pp.for his land at P 100. 63-69). Connie Doromal. NAPOCORs board passed Resolution No. memorandum to the board dated April 24.00 per square meter for the land plus 12% interest per annum from 1978 less the payments already made to Mangondato and to In its Motion for Reconsideration of the Order For Provisional Marawi City on the portion of his land and with the provisos that said Deposit[.. he asked Before the lower court could resolve the pending incident on the writ that he be paid in the meantime. representing NAPOCOR. 1-3).997.00 lower than On May 25. Civil Case On February 12. representing the lower court.199. that should the lower court order the meter (Resolution No. 53-59). and that NAPOCOR has to pay not less than P300.500. Civil Case No.00 in lower court (id.00 from 1978 until the surrender of the provisional valuation could not be decided without going into the property.500. NAPOCOR would not be prejudiced expropriation of the subject property. pp. p. in the meantime were to pay Mangondato P100.00 per square meter excluding interest be at once issued against NAPOCOR. Further.. 610-92 which is a Complaint for eminent domain against Mangondato over the subject property (Records.00 earlier paid to him by NAPOCOR which payments total P2. 44-46). pp. pp. consolidated and the lower court appointed the following commissioners: Atty. p. At the same time. and Mr. Alimbsar A. 605-92.00 per square meter for those along the national insistence of its own determination of the price.088. pp. provisionally fixing the value of the land at P500. Mangondato asked for the payment of P300.

23- 34). pp. On July 28. pp. WHEN rendered its decision denying Mangondato recovery of possession of THE PROPERTY WAS TAKEN BY PETITIONER. 1992.00 per square meter as of 1992 (id.00 per square meter. Order of Condemnation. the lower court THE COMPLAINT WAS FILED.R. 162-184). pp. Civil Case No. Said motion was however. 1992. as P40. 1992 the lower court granted enter an order of condemnation declaring that the plaintiff has a intervenors Motion For Intervention (id. later withdrawn by Mangondato (id. pp. on the basis of the value of the property as of 1978. private respondent worded the issues as 28971 to this Court. P 1. Commissioner Doromal filed his report recommending a fair market value of P300. said Order was annulled and set aside (Rollo. P2 1.00 PER SQUARE 1992 upon the payment of P1. pp. 1992 (id. on August 7. upon the payment . On August 12. 145-149). 82). 1978. After Mangondato filed as of the year 1992 when NAPOCOR filed its Complaint for eminent his Opposition To Motion For Reconsideration the lower court denied domain but as of the year 1978 when it took possession of the NAPOCORs motion for reconsideration in an Order dated September property.995.00 per square meter or a total of METER. portion in the Complaint describing Lot 3 and declared that intervenors Motion For Intervention has become moot (id. the commissioners filed their respective reports. as follows:[12] expropriate the entire area described in the Complaint (id. The petitioner summarized the two issues it raised by asking Mangondato filed a Motion For Partial Execution Pending Appeal whether or not the respondent court was justified in deviating from which was granted by the lower court in an Order the well-settled doctrine that just compensation is the equivalent of dated September 15. 15. The general rule in determining just compensation in eminent interest and that they are entitled to just compensation from domain is the value of the property as of the date of the filing of the NAPOCOR should the lower court decide that NAPOCOR is entitled to complaint. However.the court of the just compensation for the property soguht (sic) to be On August 25. thus:[8] Commissioners Alawi and Ali filed their joint report recommending a fair market value of P1.[9] In his Comment. 11-27). Property submitting that Lot 3 which does not form part of the reiterated before us its proposition (with cited cases) that when the subject property was included in the Complaint because of a clerical taking of property precedes the filing of the judicial proceeding.. for the public use or purpose described in the complaint. 1992. p. 1992. the property but ordering NAPOCOR to pay a monthly rent of P15. p. Civil Case No. pp.000. and that the just compensation. supra) (Decision.00 per square meter. property. of November 23. follows:[10] 30-37). in its appeal NAPOCOR filed a Motion For Reconsideration of the decision alleging that the fair market value of the property at the time it was taken x x x avers that the taking of the proerty (sic) should not be reckoned allegedly in 1978 is P40. 1992 (id. Napocor. (Id. 151-152 and 157-160).00 as just compensation.. The Issues In the meanwhile. On August 5. the lower court ordered the deletion of the taken (NPC vs. WHEN commissioners reports. lawful right to take the property sought to be condemned. On August 6. 1992 (Records.000. ASSIGNMENT OF ERRORS 40-42).00 per square meter as Two errors were raised before this Court by the petitioner... 1992 and The Decision business and purpose but to legitimize a patently illegal possession Dated August 21. T-378-A. 72). p. 22). Jocson.000. the error inadvertently committed by the typist who continuously copied value of the property at the time it was taken shall be the basis for the the description of the property covered by Transfer Certificate of payment of just compensation. 1992 which was however denied by the lower court and at the same time continue dictating its own valuation of the in an Order dated November 26. the court may In an Order dated August 19. 1992 the intervenors filed their Motion To eminent domain not for the legitimate aim of pursuing NAPOCORs Reconsider The Order Of August 25. AND NOT ITS VALUE IN 1978.00 from 1978 up to July 1992 with 12% interest per annum THE COURT ERRED IN FIXING THE VALUE OF JUST COMPENSATION AT and condemning the property in favor of NAPOCOR effective July.[11] Title No. the intervenors filed their Motion For The First Issue: Date of Taking or Date of Suit? Intervention and Intervention claiming interest against each of the parties on the ground that Lot 3 which is included in the Complaint has since been conveyed by Mangondato to their predecessors-in. 1992. of taking.000. 605-92. When such a motion is overruled or when any party fails to defend as required by this rule. on August 21.00 PER SQUARE METER INSTEAD OF P40. 1992. and thus praying that the portion of the Complaint describing Lot 3 be deleted (Records. In the meanwhile...000. pp. 37-39 and 47). p. pp.. THE RESPONDENT COURT ERRED IN AFFIRMING THAT THE JUST After the parties filed their respective comments to the COMPENSATION FOR THE PROPERTY IS ITS VALUE IN 1992. Mangondato filed a Motion To Dismiss in the expropriation case alleging that NAPOCOR filed its Complaint for On October 13. Mangondato filed an Ex- Parte Manifestation To Correct Clerical Error of Description of The petitioner. after failing to persuade both lower courts. 5). SP No. x x x As stated by the respondent court. determined as it should be. 1992. 610-92. Sec. 4.. the value of the property taken for public use reckoned from the time on appeal by NAPOCOR via a Petition For Certiorari in CA-G.

the City direct cause of the increase in valuation from 1978 to 1992. An city being bound to buy the building at an agreed price. the extension of a main thoroughfare as was the case in Caro should be reckoned as of the date when it started to occupy the de Araullo. the just compensation is to be ascertained as of the be under warrant or color of legal authority. In the instant case. under a valid examination of the undisputed factual environment would show that and subsisting contract. as sought by the defendant.[15] the Court. 1354. however. Justifying this stance. beneficial use. the time of the taking coincides with the filing of the complaint for expropriation.00 reached in 1992 was due to increments directly caused by petitioners use of the In Noble vs. is in force. x x x the owner as is the constitutional intent. Justice (later Chief Justice) Enrique Fernando. the be denied and why the respondent Court should be sustained. after the private respondent sued to recover however. devoted to public use as of the date of the taking. The doctrine to which this Court has been of 1978. the taking was not really made in 1978. then We would be sanctioning a deceptive scheme whereby committed is intended precisely to avoid either contingency fraught NAPOCOR. Said the Court: Side Issue: When is There Taking of Property? The contract. he had been deprived thereof. speaking for the Court Clearly. for it believed the property was public land covered by right to recover damages for this unearned increment resulting from Proclamation No. In this case. Only in 1990.not ordinary inflation and increase in land values . however. could not expropriate the building. the petitioner neglected and/or refused to exercise the paid what he is entitled to according to the value of the property so power of eminent domain. (4) the property must be time of the filing of the complaint. City of Manila. and (5) the utilization of the property for public The general rule. The Spouses Felicidad Baltazar and law. as indeed the records value of the property.[20] the City entered into a lease- land. In subsequently cases. Since the petitioner is claiming an exception to Rule 67.000. many rulings of this Court have A number of circumstances must be present in the taking of property equated just compensation with the value of the property as of the for purposes of eminent domain: (1) the expropriator must enter a time of filing of the complaint consistent with the above provision of private property.[13] devoted to a public use or otherwise informally appropriated or injuriously affected. did law guarantees just compensation. Mr. is . ingredient in the exercise of power of eminent domain. Expropriation could be resorted to only when it is made necessary by the opposition of the owner to the sale or by the lack of any agreement as to the price. therefore. first Simply stated.[14] the Court ruled that x x x the owners of the land have no authority. the expropriation thereof. Caro de expropriate or was not made under warrant or color of legal Araullo. admits of an exception: where this use must be in such a way to oust the owner and deprive him of all Court fixed the value of the property as of the date it was taken and beneficial enjoyment of the property. (Italics supplied) not at the date of the commencement of the expropriation proceedings. did the petitioner recognize private respondents ownership and negotiate for the voluntary purchase of the property. in so far as it refers to the purchase of the building. There could be on the other hand. the respondent Court correctly held:[19] was lost. not having been But there is yet another cogent reason why this petition should revoked by the parties or by judicial decision. nakedly insisted that the property was public them to do so would be to allow them to recover more than the value land and wrongly justified its possession by alleging it had already of the land at the time when it was taken. He had no choice but to submit. this is not the intent nor the expropriation contemplated by in Municipality of La Carlota vs. From that time. (3) the entry into the property should into the property. he could not recover the value of what domain. as we have interpreted it. To permit claim for compensation. is Obviously. This being the case. When the private respondent raised his claim the construction of the public improvement (lengthening of Taft of ownership sometime in 1979. the petitioner flatly refused the Avenue from Manila to Pasay) for which the land was taken.[18] in the following words: Normally. Vicente Gan. following the above A Deed of Sale with provisional payment and subject to negotiations doctrine. the petitioners entrance in 1978 was without intent to In the old case of Provincial Government of Rizal vs. So too. where the institution of the action precedes entry more than a momentary period.[17] it has the burden of proving its claim that its occupancy predecessor-in-interest in accordance with the specifications of the and use . He is not. (2) the entrance into private property must be for the Rules. determining lawful or just compensation. injustice to the expropriator if by a delay in the collection. It would be an injustice to him petitioner manifest its intention to exercise the power of eminent certainly if from such a period. and would discourage the over the property. and the plaintiff being agreeable to its sale. after more than a decade of construction of important public improvements. invariably held that the time of taking is the critical date in for the correct price was then executed. it is difficult to conceive of property and that the value of the property should be computed as how there could have been an extra-ordinary increase in the value of of the date of the taking despite the increase in the meantime in the the owners land arising from the expropriation.[16] said. the exception finds application where the owner negotiate for a low price and then conveniently expropriate the would be given undue incremental advantages arising from the use to property when the land owner refuses to accept its offer claiming which the government devotes the property expropriated -as for that the taking of the property for the purpose of eminent domain instance. Hence. occupy anothers property and when later pressed for payment. purchase agreement of a building constructed by the petitioners Section 4. or just compensation. to be despoiled of such a right. Thus. which is the true measure paid financial assistance to Marawi City in exchange for the rights of the damages. Only in 1992. No less than the fundamental possession and petitioner filed its Complaint to expropriate.was the former. the increment in price If We decree that the fair market value of the land be determined as would accrue to the owner. The Court held that being bound by the said contract. This is a simple attempt at a voluntary purchase and sale.of just compensation to be determined as of the date of the filing of This Court has defined the elements of taking as the main the complaint x x x (Italics supplied). do not show any evidence that the valuation of P1. for any reason other than for eminent domain would with unfairness.

00 per sq. 1990. for the to the legal rate of six percent (6%) per annum. recommending P300. between the owner of the building and the city. 92-121 on May 25. the respondent appellate Court is not grossly exorbitant. petitioner effectively repudiated the deed of sale it entered into with the private respondent when it passed Resolution No.00 for those along the national highway and on the basis of Commissioner Doromals report. for the proper and just compensation plus interest thereon. Facts: The Second Issue: Valuation In 1978. NAPOCOR‘s board passed Resolution No. differs from the 2 commissioners only because his report was P300. he asked that he be paid in the rule in determining just compensation provided under Section 4 of meantime. a trial before Commissioners is indispensable to allow the parties to present evidence on the issue of just NAPOCOR alleged that the subject land was until then possessed and compensation. There being in the present case a valid and subsisting monthly rentals. owned by Mangondato. NAPOCOR‘s regional legal counsel‘s findings state that Mandondato‘s xxx xxx xxx property is classified as industrial which has a fair market value of P300.[21] Inasmuch as the determination of just administered by Marawi City so that in exchange for the city‘s waiver compensation in eminent domain cases is a judicial function[22] and and quitclaim of any right over the property. 1992 authorizing its president to negotiate. . filed suit.m for the property excluding 12% interest per annum. as payment to him. On the contrary.baseless. the petition is hereby DISMISSED and the opposition of the owner to the sale or by the lack of any agreement as judgment appealed from AFFIRMED. In an expropriation case where for hydroelectric power purposes under Proclamation No. with a general knowledge of the 12% interest per annum from 1978. NAPOCOR had paid the factual findings of the Court of Appeals are conclusive on the parties city a ―financial assistance‖ of P40. NAPOCOR‘s board on May 17. property cannot be lightly brushed aside. which is hereby reduced from twelve percent (12%) contract.m is the fair market value.m without prejudice to pursuing his claim Rule 67.m is the fair market value. 128-129).m for only a 12. a portion of Lot 1 of the subdivision plan situated We now come to the issue of valuation. Costs against the purchase thereof at an agreed price. counsels query (id. case here. 132 sq. expropriation. 995 sq. except as to the interest on the to the price.00 per square meter. 1974.[24] To quote:[25] On July 13. CA and MANGONDATO respondent disagreed and. In a letter dated December 17. (Italics supplied) SO ORDERED. In sum.00 per sq. took possession of a 21. 1354 of the principal issue is the determination of just compensation.00 per sq. the court-and. 91-247 resolving to pay Mangondato P100. 1990.m portion of the property plus may well be considered an expert. 1991 passed based on the valuation as of 1978 by the City Appraisal Committee as Resolution No. P100.00 per sq. under the mistaken belief The fair market value as held by the respondent Court. It was only then that NATIONAL POWER CORPORATION petitioners intent to expropriate became manifest as private vs. as is the the President of the Philippines dated Dec.00 per sq. As can be gleaned from the records. 1992. that payment shall be effected only after Agus I HE project has been placed in operation. private respondent has convinced us that. On August 14. in Marawi City. barely a month after. 90-225 resolving to pay Mangondato Commissioner Ali comes from the Office of the Register of Deeds who P100. In the instant case.m determinants used by the commissioners report the others being as plus 12% from 1978 pending the determination whether P100.[23] which is not the situation obtaining in this petition.m. is the that it forms part of the public land reserved for use of the NAPOCOR amount of P1. inter alia. The amount fixed and agreed to by to Mangondato. 3. Expropriation lies only when it is made necessary by the WHEREFORE. At the same failed to show why it should be granted an exemption from the general time.m land. National Power Corporation (NAPOCOR).00 per square recent Supreme Court decisions. 1991 and February 4. However. such general rule should in fact be observed in this case.00 per sq.. 90-316 The prevailing market value of the land is only one of the resolving that Mangondato be paid the base price of P40. pp. NAPOCOR has to pay not less than meter. there is no reason for the petitioner.000.m. the-parties-appointed commissioners did not abuse their authority in evaluating the evidence submitted to them nor misappreciate the Later NAPOCOR acceded to the fact that the subject property belongs clear preponderance of evidence.00 per clarified by the latters chairman in response to NAPOCORs general sq. NAPOCOR‘s National Power Board (NAPOCOR‘s board) passed Resolution No. we and that he is not privy to any agreement between NAPOCOR and see no reason to disturb the factual findings as to valuation of the Marawi City and that any payment to the city cannot be considered subject property. Mangondato and reviewable only when the case falls within the recognized claimed that the subject land is his duly registered private property exceptions. indeed. to get partial payment. said resolution was appraisal of real estate and the prevailing prices of land in the vicinity deferred to allow the NAPOCOR‘s regional legal counsel to determine of the land in question so that his opinion on the valuation of the whether P100. we agree with the Court of Appeals that petitioner has Mandondato disagreed with Resolution No. 91-247.00 per herein shown: sq.

1978. NAPOCOR‘s board passed Resolution No. 1992. 1991. the Court ruled In a letter dated April 20. Mangondato asked for the payment that ". which is a Complaint for eminent domain against Mangondato over He had no choice but to submit. compensation and interest. Commissioners Alawi and Ali should be under warrant or color of legal authority. and would discourage the construction of important On July 7. (3) the entry into the property November 23. is paid what he is entitled to according to the value of the property so devoted to public use as of On the other hand. On March. upon the payment prejudice to the final determination of the proper and just of just compensation to. (4) the property filed their joint report recommending a fair market value of P1000.000.00 In this case. the owners of the land have no right to recover damages for of P300. 1992 authority. 1354. Inasmuch as Side issue: When is there ―Taking of Property? determination of just compensation in eminent domain cases is a judicial function and factual findings of the Court of Appeals are 2) What is the fair market value of the property? conclusive on the parties and reviewable only when the case falls Rulings: within the recognized exceptions. . NAPOCOR‘s general counsel filed a enter an order of condemnation declaring that the plaintiff has a memorandum for its president finding no legal impediment if they. On August 6. Proclamation No. In Provincial Government of Rizal vs. in the case of Municipality of La Carlota payment of a monthly rent of P15.On February 12. to be despoiled the subject property.00 from 1978 until the vs.m as of 1992.00 per sq. 1992." against NAPOCOR seeking to recover the possession of the property described in the complaint as Lots 1 and 3 of the subdivision plan. 1992. we see no reason to disturb the factual findings as to 1) The general rule in determining "just compensation" in eminent valuation of the subject property. the court may .m for the land plus 12% interest per annum from 1978 less them to recover more than the value of the land at the time when it payments already made.00 per sq. Mangondato filed before the lower court Civil case public improvements. To permit them to do so would be to allow per sq. the Following the above doctrine. Caro de Araullo. domain is the value of the property as of the date of the filing of complaint. he had been deprived thereof. this unearned increment resulting from the construction of the public However. the two cases were ordered Side issue: This Court has defined the elements of ―taking‖ as the consolidated and appointed Atty.m without public use or purpose described in the complaint. Issues: 2) The fair market value as held by the respondent court is the 1) At what point in time should the value of the land subject of amount of P1000. of such a right. the parties executed a Deed of Sale where The general rule however. From that time. Alimbsar Ali from following words: City Assessor‘s Office to ascertain and report to the court the just compensation. 1992. owner as is the constitutional intent. however. Commissioner Doromal filed his report enter a private property. The Spouses Felicidad Baltazar and Vicente Gan. Atty. .00 which the land was taken. and other related costs. NAPOCOR filed before the lower court a Civil Case the date of the taking. 1992. in lawful right to take the property sought to be condemned.m as a just compensation. which is the true measure of the damages. the petitioner‘s entrance in 1978 was without intent to from 1978 up to July 1992 with 12% interest per annum and expropriate or was not made under warrant or color of legal condemning the property in favor of NAPOCOR effective July.00 per sq. Order of Condemnation. property but ordering NAPOCOR to pay monthly rent of P15. was taken. (2) the entrance into private property must recommending a fair market value of P300. A number of circumstances must be present in the "taking" of property for purposes of eminent domain: (1) the expropriator must On July 28. which is not the situation in this petition. He is not.m plus 12% interest per annum from 1978. In an expropriation case where the expropriation be computed: at the date of ―taking or the date of principal issue is the determination of just compensation. Upon agreement of the parties.m. in the court.00 must be devoted to a public use or otherwise informally appropriated per sq. 4. 92-121 granting improvement (lengthening of Taft Avenue from Manila to Pasay) for its president the authority to negotiate for the payment of P100.00 per sq.00 per sq. said. for the the meantime were to pay Mangondato P100. the complaint. . admits of an exception where this Court NAPOCOR paid Mangondato P100. Saipal Alawi representing the lower main ingredient in the exercise of power of eminent domain. and (5) the utilization of the property for After receiving the reports and comments from the parties.m excluding interest and fixed the value of the property as of the date it was taken and not at without prejudice to Mandondato‘s pursuance of claims for just the date of the commencement of the expropriation proceedings. Connie Doromal for NAPOCOR and Atty. or injuriously affected. When such a motion is overruled or when any party fails to defend as required by this rule. ". for it believed the property was public land covered by upon payment of P1000.00 per sq. the court public use must be in such a way to oust the owner and deprive him denied Mangondato‘s request for recovery of possession of the of all beneficial enjoyment of the property. as follows: Sec.000. be determined as of the date of the filing of compensation. or just compensation.m as of be for more than a momentary period. a trial filing of the complaint for eminent domain? before the Commissioners is indispensable to allow the parties to present the evidence on the issue of just compensation. the surrender of the property.

J.915.68 per 5) 2278 consisting of 70. namely that (1) there is a MARUHOM. AZCUNA. 168732 much less pay damages. these illegally constructed tunnels caused -versus. GARCIA. Chairperson. failure to state a cause of action since respondents seek possession of MARUHOM.191 meters effective from its occupancy of the square meters each respectively. NAPOCOR filed an answer with MARUHOM. reconsideration of the Decision which it had received on August 9. the sub-terrain portion when they were never in possession of the MARUHOM.R. divided into three (3) square meter of the total area of 48. Bucay G.005 square lots. of this case until paid. CV No.J. 1996. Maruhom. ROCANIA G. IBRAHIM. and CAIRONESA M. Maruhom. On the other hand. IV. instituted an action against petitioner National remaining unpaid portion of 48. lands are subject to such easement as may be necessary for the MARUHOM. respondent Lucman G. 1996. Solayman G. filed an Urgent On September 19. No.000. requested the Marawi City Water District for a permit to construct NAPOCOR filed a Notice of Appeal by registered mail on August 19.050. 1994. Ibrahim. On August 15. Ibrahim and square meter or a total of P48.00 as moral tunnels was only discovered sometime in July 1992 by respondents damages. them sleepless nights. G. JJ. area of 21. Lots 1. Maruhom. the decretal portion IBRAHIM. Maruhom. and 3 consisting of 31.00 for the Caironesa M. Nangca and Balo-i in Lanao del Norte.: 1. 2. 57792.00 per Maruhom. ELIAS G. plaintiffs a reasonable monthly rental of P0. 2. IBRAHIM. to plaintiffs the fair market value of said 70. Farouk square meters of land covering Lots 1. respondents demanded that NAPOCOR pay damages and vacate 1996. Maruhom. 1992. with 6% interest per annum from the filing damages before the Regional Trial Court (RTC) of Lanao del Sur. 2. Thereafter. took possession of the sub-terrain area of their lands and 4. III. through alleged stealth and without respondents knowledge and prior consent.000. tunnels are a government project for the benefit of all and all private MARUHOM. underground tunnels constructed between the 2005 rendered by the Court of Appeals (CA) in C. counterclaim denying the material allegations of the complaint and MARUHOM. i. and (3) the MARUHOM. and 23. the sub-terrain portion of their lands but the latter refused to vacate . Acmad G. BUCAY G. of which reads as follows: Respondents. MARUHOM. C. Ordering defendant to pay his personal capacity and in behalf of his co-heirs Omar G.000. Sometime in 1978. June 29. VII projects located in Saguiran.[2] MARUHOM. FAROUK G. Ordering defendant to pay Manager. same. foregoing area in 1978 or a total of P7. and and then later confirmed on November 13. Ordering defendant to pay were owners of several parcels of land described in Survey Plan FP (VII. Mamod G.005 square Power Corporation (NAPOCOR) for recovery of possession of land and meters. respondent Omar G. On November 23. Mohamad M. 14. X----------------------------------------------------------------------------------------X WHEREFORE. (2) respondents have no cause of action because they failed to MARUHOM. NAPOCOR. Lumba G.005. Promulgated: show proof that they were the owners of the property. Ibrahim. NAPOCOR must be held liable for exemplary damages. 1992. Maruhom. and properties as Marawi City lies in an area of local volcanic and Present: tectonic activity. Lanao del Sur.000. and 3 of Survey Plan The facts are as follows: FP (VII-5) 2278. Maruhom. NAPOCOR filed a vigorous opposition to the motion City but his request was turned down because the construction of the for execution of judgment pending appeal with a motion for deep well would cause danger to lives and property.. POTRISAM G.000 square meters. SOLAYMAN G. MOHAMAD M. 1992 by NAPOCOR itself through a memorandum issued by the latters Acting Assistant Project 5. Respondents further averred that the CORPORATION.-G. Denying plaintiffs [private respondents] prayer for defendant [petitioner] This is a petition for review on certiorari under Rule 45 of the National Power Corporation to dismantle the Rules of Court seeking to annul the Decision[1] dated June 8. Hidjara G.995 square meters at P1. V. On August 7. and 3 as G. construction of the underground tunnels has endangered their lives Petitioner. ACMAD G. Maruhom. joined by his co-heirs. judgment is hereby DECISION rendered: AZCUNA. Potrisam G. On October 7. and interposing affirmative and special defenses. Agus II. Maruhom. In their complaint. 2007 same.894. VI. lands of plaintiffs in Lots 1. serious anxiety and shock thereby entitling them to recover moral damages and that by way of example for the LUCMAN G. Ibrahim and his co-heirs claimed that they 3. in 2.* Disputing respondents claim.000 Elias G. Further. Ordering defendant to pay constructed therein underground tunnels. SANDOVAL-GUTIERREZ. CORONA. Rocania G.NATIONAL POWER G. and Ditucalan and Fuentes SO ORDERED. OMAR PUNO. HIDJARA G. SINAB G. The tunnels were apparently being used by NAPOCOR in the further sum of P200. Sinab G. The existence of the plaintiffs the sum of P200.974. Ibrahim. public good.00 as attorneys fees siphoning the water of Lake Lanao and in the operation of NAPOCORs and the costs. described in Survey Plan FP (VII-5) 2278 less the Maruhom.[3] in Iligan City. Maruhom Motion for Execution of Judgment Pending Appeal. Maruhom. and/or install a motorized deep well in Lot 3 located in Saduc. Marawi 1996. the RTC rendered a Decision.40.e. LUMBA G.R.A.

1996.603.974. to the plaintiffs represented not only Maruhom. a modified judgment is hereby On August 28.000. Maruhom.00 by executed pending appeal and funds of NAPOCOR were garnished by 9. 1996. 2005.40 pertaining involved in the case. Maruhom.050.911.005. difference by P38. damages and attorneys fees but Maruhom and Lumba G. Maruhom.[5] of the decision decreeing just compensation for petitioners properties. Meanwhile. 5) they would never have agreed to the alienation of their property in favor of In the Decision dated June 8.00 to herein and attorneys fees only as prayed for in petitioners Omar G.000. they learned that the amounts awarded Maruhom.00 subject of filed by respondents Omar G. rentals. to plaintiffs. the period of appeal has embodied in the August 7. Elias G.00 and by the further sum On October 4. already expired.00 as 4) they were prevented by fraud. the RTC issued an Order granting rendered: execution pending appeal and denying NAPOCORs motion for reconsideration. Maruhom. the anybody. Maruhom. 1996.00 or for a respondents Ibrahim and his co-heirs. Farouk G. which Order was received by NAPOCOR on September 6. and further mistake. Maruhom and Lumba G. 3) when they learned of the nature of 3) Ordering defendant the judgment.000. NAPOCOR filed a Manifestation and The RTC granted the petition and rendered a modified Motion withdrawing its Notice of Appeal purposely to give way to the judgment dated September 8.500. the execution pending appeal Maruhom. moral damages.00 which may be follows: the subject of execution upon the finality of this modified 1) they did not file a motion to judgment with 6% interest per reconsider or appeal the decision within annum from the filing of the the reglementary period of fifteen (15) case until paid. Subsequently. 1996 decision to pay plaintiffs the sum of P200. Mamod G. Mahmod 2) it was only on August 26. a Petition for Relief from Judgment was of P33. the Decision of the RTC was of P48. WHEREFORE. 1996.500.00 as negligence from taking legal steps to attorneys fees and costs. accident. amending it further by deleting the award of moral damages among the valuable properties they and reducing the amount of rentals and attorneys fees.526. thus: inherited from their dear father and they would rather see their land WHEREFORE. 1996 that G. NAPOCOR filed its Notice of Appeal award of plaintiffs for the fair by registered mail which was denied by the RTC on the ground of market value having been filed out of time.878. Maruhom asserting as 4. the CA set aside the anybody. both respondent Ibrahim and NAPOCOR appealed to the CA. Bucay G.000. 1996. Hidjara G. Farouk G. considering the fact that the modified judgment and reinstated the original Decision dated August parcels of land involved in this case were 7. 1) Reducing the judgment On September 9. or excusable sum of P200. On August 26.479. thus: hearing of its motion for reconsideration.000. Hidjara G. Elias G. Maruhom.476. Bucay G. Portrisam G. leaving a difference of Maruhom. 1997. the complaint: Maruhom. Maruhom. the greatest portion of which was Maruhom as reasonable payment of just compensation which in rental deductible from the effect would make the defendant NPC awarded sum the owner of the parcels of land of P7. protect and preserve their rights over their parcels of land in so far as the part SO ORDERED. 1996. herein crumble to dust than sell it to Appeals are hereby partially GRANTED.[4] Modified Judgment is ordered SET ASIDE and rendered of no force and effect and the original Decision of the court a quo dated 7 August 1996 is hereby RESTORED with the MODIFICATION that . premises considered. days from receipt of judgment because they believed in good faith that the 2) Awarding the sum decision was for damages and rentals of P1. Potrisam G.

[6] ART.00/SQ. therefore. Petitioner maintains that the sub-terrain portion where the underground tunnels were constructed does not belong to Under the theory of the respondent respondents because. of damages awarded by this Court. the Court does not pass upon questions of fact. WAY OF DAMAGES. and. This is by petitioner. COMPENSATION BY WAY OF DAMAGES. In Republic of the Philippines v. Court of Appeals. and how high can the established his residence on a part of the property. require a definitive and categorical classification. by extension. 437. the basis for computing the same. its findings of fact being as a rule conclusive and binding are REDUCED to P6. portion of the property similarly belongs to respondents. In any well because he may interfere with the mining case. owner of a piece of land has rights not only to its surface but also to everything underneath and This case revolves around the propriety of paying just compensation the airspace above it up to a reasonable height. NO EVIDENCE WAS consequently. their right to the subsoil of the same does not land while the mining locator will be boring extend beyond what is necessary to enable them to obtain all the tunnels underneath. the ownership of land extends to the surface as well as to the (b) ASSUMING THAT RESPONDENTS ARE subsoil under it. also difficult to understand.40 and P50.00. cannot be disturbed. the land must Generally. The farmer cannot dig a utility and convenience that such property can normally give.[8] The jurisdiction of the Court in cases brought and possession of their properties in the event the latter are . without detriment to (a) RESPONDENTS WERE NOT DENIED servitudes and subject to special laws and THE BENEFICIAL USE OF THEIR SUBJECT ordinances.[7] The Court feels that the rights over the land are indivisible and that the land itself cannot The contention lacks merit. thus: PRESENTED ANENT THE VALUATION OF RESPONDENTS PROPERTY AT THE TIME The Court of Appeals justified this by saying OF ITS TAKING IN THE YEAR 1978 TO there is no conflict of interest between the JUSTIFY THE AWARD OF ONE owners of the surface rights and the owners of THOUSAND SQUARE METERS the sub-surface rights. the Clerk of Court of RTC Lanao demonstrating grave abuse of discretion on the part of the CA or to del Sur is hereby directed to reassess and any other circumstances which would call for the application of the determine the additional filing fee that should be exceptions to the above rule.[9] this ENTITLED TO JUST COMPENSATION BY principle was applied to show that rights over lands are indivisible and. Absent any agricultural. The classification must be categorical. petitioner failed to point to any evidence In this connection. even conceding the fact that respondents court. the award of moral damages is DELETED and the to it from the CA is limited to reviewing and revising the errors of law amounts of rentals and attorneys fees imputed to it. How example the fact that one of the respondents. petitioner asserts that respondents were still able to use the operations below and the miner cannot blast a subject property even with the existence of the tunnels. He cannot complain of the reasonable PROPERTIES TO ENTITLE THEM TO JUST requirements of aerial navigation. Petitioner miner go without encroaching on each others concludes that the underground tunnels 115 meters below rights? Where is the dividing line between the respondents property could not have caused damage or prejudice to surface and the sub-surface rights? respondents and their claim to this effect was. M. This is rather strange (P1000.757.888. Consequently. Such additional the Court sustains the finding of the lower courts that the sub-terrain filing fee shall constitute a lien on the judgment. on the Court. the CAs findings which paid by Plaintiff-Appellant IBRAHIM taking into upheld those of the trial court that respondents owned and possessed consideration the total amount of damages the property and that its substrata was possessed by petitioner since sought in the complaint vis--vis the actual amount 1978 for the underground tunnels. citing as an tunnel lest he destroy the crops above. purely conjectural and speculative. and he can construct thereon any works or make any plantations and excavations which he may deem proper. to respondents. Omar G. This conclusion is drawn from Article 437 of the Civil Code which provides: SO ORDERED. Maruhom. be half agricultural and half mineral.000. In the present case. Moreover. the land is classified The threshold issue of whether respondents are entitled to just as mineral underneath and agricultural on the compensation hinges upon who owns the sub-terrain area occupied surface. the Court will not examine the evidence introduced by the parties below to determine if they correctly assessed and evaluated Registered landowners may even be ousted of ownership the evidence on record. for it is a well-known principle that the OF BACK RENTALS IS ITSELF IMPROPER. Under the aforesaid ruling. the surface owner will be planting on the owned the property. in an appeal by certiorari under Rule 45 of the Rules of be either completely mineral or completely Court. subject to separate claims of title. respectively.) EVEN AS PAYMENT doctrine. had deep can the farmer. The owner of a parcel of land is the owner of its surface and of everything under Hence. this petition ascribing the following errors to the CA: it. especially in its practical application. showing that the trial and appellate courts gravely abused their discretion. Thus.

Respondents. that there is payment of just the land and considerably reduced its value. an affirmative answer seems to be in have established the condemnation of their land order. an encumbrance. The manner in which that Marawi City lies in an area of local volcanic the easement was created by petitioner. but the application Moreover. we regret to surface owners. therefore. Architects and Economists. million peso loan with the Amanah Islamic Bank they are entitled to just compensation under the Mining Laws or in for the expansion of the operation of the Ameer appropriate expropriation proceedings. Omar rental since 1978. authority and for public use and always upon payment of just 2). the property owner may demand payment of just of land will cause danger to lives and property. Consulting Engineers. Atty. In the past. He compensation in the event restoration of possession is neither was informed that beneath your lands are convenient nor feasible. tunnels and it was not shown that the tunnels either destroyed said houses or disturb[ed] the All the foregoing evidence and findings possession thereof by plaintiffs? From the convince this Court that preponderantly plaintiffs evidence. R). after construction of the deep well as (sic) the parcels many years. it landowners cannot be deprived of their right over their land until has been shown that the underground tunnels expropriation proceedings are instituted in court.[14] construction of the tunnel without the prior consent of plaintiffs beneath the latters property Petitioner contends that the underground tunnels in this endangered the lives and properties of said case constitute an easement upon the property of respondents which plaintiffs. On September 16. The theory would limit the right to the sub-soil upon the economic utility which such area offers to the Apropos to this. however. property with an existing Has it deprived the plaintiffs of the use encumbrance cannot be of their lands when from the evidence they have considered neither accepted already existing residential houses over said as collateral for a loan. no more interest protected by law. though. Petitioner could have.005 sq. meters located at discovered [these] big underground tunnels in Saduc.[11] to wit: In this regard. For the loss sustained by such owners. still had a legal interest in the underground tunnel by the sub-terrain portion insofar as they could have excavated the same for NPC for the Agus I Project. Agus 1 Hydro Electric Project just compensation and/or reasonable monthly (Exh. violates the due and tectonic activity. there are a number of power of eminent domain to acquire the easement over respondents former volcanoes and an extensive amount of property as this power encompasses not only the taking or faulting. plaintiffs applied for a two- characteristically indivisible. The fact that they could not was which tunnel is traversing appreciated by the RTC as proof that the tunnels interfered with underneath your property. This was confirmed by the defendant Power Corporation without even the benefit of on November 13. O) stating that: serves only to further weaken its case. It has been proved indubitably does not involve any loss of title or possession. respondents enjoyment of their property and deprived them of its full hence. and it is extinguished beyond such limit as there would be due to the following reasons. In Marawi City. appropriation of title to and possession of the expropriated property (Feasibility Report on Marawi City Water District but likewise covers even the imposition of a mere burden upon the by Kampsa-Kruger.[16] . K). Q. the Court has held that if the government takes property Q). Some of these faults are still moving. Presumably. The court must then [have] deprived the plaintiffs of the lawful use of see to it that the taking is for public use. the trial court found that respondents could That per my actual ocular have dug upon their property motorized deep wells but were inspection and verification. prevented from doing so by the authorities precisely because of the subject property offered as construction and existence of the tunnels underneath the surface of collateral has an existing their property.[15] Significantly. Exh. He was refused the permit because the without expropriation and devotes the property to public use. As a use and enjoyment.[13] This is in accordance with the principle that constructed the Napocor underground tunnel in persons shall not be deprived of their property except by competent connection with Agua Hydroelectric plant (Exh. owner of the condemned property. 1992. petitioners argument that the landowners right was disapproved by the bank in its letter of April extends to the sub-soil insofar as necessary for their practical interests 25. at any time. the landowners right extends to such inform you that we cannot height or depth where it is possible for them to obtain some benefit or consider your loan application enjoyment.[10] Construction and Integrated Services to be secured by said land (Exh. There in fact exists ample evidence that this compensation. The plaintiffs and [their] co-heirs covering an area of 48. Lake Lanao has been formed process rights of respondents as it was without notice and indemnity by extensive earth movements and is considered to them and did not go through proper expropriation to be a drowned basin of volcano/tectonic proceedings. N). 1995. the construction of the deep well. Marawi City by the defendant National 1992.reclassified as mineral lands because real properties are On March 6. compensation and that there is due process of law. validly exercised the origin. Moreover. thus: matter of bank policy. 1995 (Exh.[12] Maruhom (co-heir) requested the Marawi City Water District for permit to construct a motorized deep well over Lot 3 for his residential house (Exh. 1992 by the Acting Assistant expropriation proceedings or the payment of any Project Manager.

taking of construction of important public improvements. this Court held: could not recover the value of what was lost. There is a taking in this context when the do so would be to allow them to recover more expropriator enters private property not only for a momentary period than the value of the land at the time it was taken. the assessment. injustice to The First Issue: Date of Taking or Date of Suit? the expropriator if by a delay in the collection. The Spouses Felicidad Baltazar and Vicente Gan. however. following the above Under the factual backdrop of this case. for the Court in Municipality of La Carlota vs. the time of the taking coincides with the The entitlement of respondents to just compensation having filing of the complaint for expropriation. the Court ruled that x x x the referring to the value of the land and its character at the time it was owners of the land have no right to recover taken by the expropriating authority. x x x which should be neither more nor less. the . or just property to a public use in such a manner as to oust the owner and compensation. or when they are deprived from which the land was taken. Based upon the foregoing. Mr. When such a them of its ordinary use.[18] Normally. the property for purposes of eminent domain entails that the entry into the property must be under warrant or color of legal authority. From that time.e. He is not. It was only in 1990. Justice justified its nonpayment of the indemnity due respondents upon its (later Chief Justice) Enrique Fernando. but for more permanent duration. are entitled to a just compensation as of the date of the filing of the complaint. admits of an exception: [petitioner] of portion of Lot 1 of the subdivision plan (LRC) PSD where this Court fixed the value of the property as 116159 which is adjacent to Lots 2 and 3 of the same subdivision plan of the date it was taken and not the date of the which is the subject of the instant controversy. Respondents. There could be on the other hand. He had no choice but to than a decade of beneficial use. for the purpose of devoting the which is the true measure of the damages. It would be injustice to him certainly if from such a period. petitioner claims that the basis for the computation of compensation with the value of the property as of the just compensation should be the value of the property at the time the time of filing of the complaint consistent with it was taken in 1978. No less than the fundamental law the property. This is so sought to be condemned. using it to build its Aqua I Hydroelectric of the property so devoted to public use as of the Plant Project. the issue now is on the manner of computing the same. upon the the owners of its normal beneficial use. to be despoiled of respondents ownership and negotiated for the voluntary purchase of such a right.[17] Notwithstanding the fact that petitioner only enter an order of condemnation declaring that the occupies the sub-terrain portion. however. where there is a practical destruction or a material (lengthening of Taft Avenue from Manila to Pasay) impairment of the value of their property. This situation is on all fours with that in x x x the owner as is the constitutional intent. he had been mistaken belief that it was public land. Court of Appeals and the institution of the action precedes entry to the Macapanton Mangondato[19] as the basis for computing the amount property. i.[20] commencement of the expropriation proceedings. as follows: without expense. In disregarding this procedure and failing to recognize The general rule in determining just respondents ownership of the sub-terrain portion. petitioner took a compensation in eminent domain is the value of risk and exposed itself to greater liability with the passage of time. respondents are motion is overruled or when any party fails to clearly entitled to the payment of just defend as required by this rule. Petitioner compensation. It the property as of the date of the filing of the must be emphasized that the acquisition of the easement is not complaint. Caro de Araullo. for the public use or because in this case. been settled. speaking mistaken belief that the property formed part of the public dominion. the nature of the easement practically deprives purpose described in the complaint. whenever it is possible to make (Italics supplied). 4. the court may compensation.[24] In subsequent cases. fair market value was sustained in a case involving a lot adjoining the property in question which case involved an expropriation by The general rule. he In Mangondato. that NAPOCOR recognized therein submit. Petitioner also impugns the reliance made by the the above provision of the Rules. To permit them to of the ordinary use thereof. the just compensation is to be of just compensation in this action.. and would discourage the deprive him of all beneficial enjoyment thereof. Order of Condemnation. where CA upon National Power Corporation v. that the entry into the property is under the critical date in determining lawful or just warrant or color of legal authority. many ruling of this Court have equated just In this regard. The CA found that the award of ascertained as of the time of filing of the damages is not excessive because the P1000 per square meter as the complaint. after more deprived thereof.[23] Moreover. The underground tunnels impose limitations on respondents use of the property for an indefinite period and deprive Sec. Just compensation has been understood to be the just and In the old case of Provincial Government of Rizal complete equivalent of the loss[21] and is ordinarily determined by vs. said. Justifying this stance. NAPOCOR in that case took the property of paid what he is entitled to according to the value therein respondents in 1979. without paying any compensation. allegedly under the date of taking. than the money equivalent of said property. the last element of doctrine. is the Mangondato case. is patently lacking. invariably held that the time of taking is taking mentioned. guarantees just compensation. Hence. it is liable to pay not merely an plaintiff has a lawful right to take the property easement fee but rather the full compensation for land.[22] There is a taking in this sense damages for this unearned increment resulting when the owners are actually deprived or dispossessed of their from the construction of the public improvement property. as the owners of payment of just compensation to be determined the property thus expropriated. the Court. So too.

therefore. as sought by the In this case. the City could not expropriate taking of property for purposes of eminent the building. NAPOCOR. under a valid and subsisting property. first negotiate for a low from 1978 to 1992.increment in price would accrue to the owner. however. 1354. In the instant case. in the following words: interest in accordance with the specifications of the former. for the purchase sometime in 1979. it has the burden sanctioning a deceptive scheme whereby in proving its claim that its occupancy and use -. between the owner respondent raised his claim of ownership of the building and the city. after the private respondent sued to Araullo. (2) the entrance into private property of the owner to the sale or by the lack of any must be for more than a momentary period. did petitioner manifest ordinary increase in the value of the owners land its intention to exercise the power of eminent arising from the expropriation. and subject to negotiations for the correct price was then executed. then We would be exception to Rule 67. The Court held that being bound by A number of circumstances must be present in the said contract. the petitioners entrance in 1978 defendant. this is not the intent Simply stated. after more the private respondent when it passed Resolution than a decade of beneficial use. The recognize private respondents ownership and doctrine to which this Court has been committed negotiate for the voluntary purchase of the is intended precisely to avoid either contingency property. for it owner to the sale or by the lack of any agreement believed the property was public land covered by as to the price. Complaint to expropriate. There being in the present case a Proclamation No. Thus the respondent Court correctly records do not show any evidence that the held: valuation of P1.as for instance. as we have interpreted otherwise informally appropriated or injuriously it. the petitioner neglected and/or which the government devotes the property refused to exercise the power of eminent domain.was the direct cause of the increase in valuation later pressed for payment. Clearly. When the private valid and subsisting contract. Section 4. In Noble vs. price and then conveniently expropriate the property when the land owner refuses to accept its offer claiming that the taking of the property for Side Issue: When is there Taking of Property? the purpose of the eminent domain should be reckoned as of the date when it started to occupy But there is yet another cogent reason why this the property and that the value of the property petition should be denied and why the respondent should be computed as of the date of the taking Court should be sustained. (4) the The contract. nakedly insisted that the the expropriation. Expropriation could be resorted to domain: (1) the expropriator must enter a private only when it is made necessary by the opposition property. (Italics supplied) property was public land and wrongly justified its possession by alleging it had already paid financial In the instant case. the taking was not really made in 1978. incremental advantages arising from the use to Obviously. and the plaintiff being agreeable to its sale. petitioner effectively assistance to Marawi City in exchange for the repudiated the deed of sale it entered into with rights over the property. as indeed the domain. A Deed of Sale with provisional payment fraught with unfairness. agreement as to the price. in so far as it refers to the property must be devoted to a public use or purchase of the building. not having been revoked by the affected. An examination of the despite the increase in the meantime in the value undisputed factual environment would show that of the property. This being the case. the City entered into a This Court has defined the elements of taking as lease-purchase agreement of a building the main ingredient in the exercise of power of constructed by the petitioners predecessor-in- eminent domain. Expropriation lies only was without intent to expropriate or was not made when it is made necessary by the opposition of the under warrant or color of legal authority. public use must be in such a way to oust the owner the city being bound to buy the building at an and deprive him of all beneficial enjoyment of the agreed price. for any reason other than for eminent not ordinary inflation and increase in land values .(Italics supplied) contract. This is where the owner would be given undue a simple attempt at a voluntary purchase and sale. and (5) the utilization of the property for parties or by judicial decision. expropriated -. Since the petitioner is claiming an be determined as of 1978. City of Manila.000. Only in 1990. 92-121 on May 25. domain would occupy anothers property and when . the exception finds the application nor the expropriation contemplated by law. the expropriation thereof. 1992 authorizing its . there is no reason for claim for compensation.00 reached in 1992 was due to increments directly caused by petitioners use of If We decree that the fair market value of the land the land. Said the Court: (3) the entry into the property should be under warrant or color of legal authority. did the petitioner No. is baseless. it is difficult recover possession and petitioner filed its to conceive of how there could have been an extra. the extension of a main thoroughfare as was in the case in Caro de Only in 1992. is in force. the petitioner flatly refused the thereof at an agreed price.

opinion on the valuation of the property cannot be lightly brushed aside. it did not enter the land under warrant or color of legal Committee as clarified by the latters chairman in authority or with intent to expropriate the same. obtaining in this petition. as is the case here. is the amount of P1.00 per square meter. First. Lot 1 (the property reaching such a valuation.[26] case. CV No. president to negotiate. the court-and-the-parties-appointed siphoning the water of Lake Lanao and in the operation of NAPOCOR’s commissioners did not abuse their authority in Agus projects. was valued at P1. inter alia. when respondents discovered the construction of the huge Section 4 of Rule 67. subject property. thus: Court of Appeals in C. we see no reason to In 1978.000. NAPOCOR took possession of the sub-terrain area disturb the factual findings as to valuation of the of the land and constructed underground tunnels on the said property. It was only then that petitioners intent to expropriate became manifest xxx as private respondent disagreed and. As can be gleaned from the The tunnels were apparently being used by NAPOCOR in records.00 per square meter. the RTC and the CA both Petitioner has not shown any error on the part of the CA in used as basis the value of the adjacent property. differs from the 2 In the present case. namely. In an expropriation case where the principal issue is the determination of just compensation. To quote: property by reason of the presence of the underground tunnels. The fair market value as held by the respondent SO ORDERED. Inasmuch as the determination of just compensation in eminent domain cases is a judicial function and factual findings of the Court of Appeals are conclusive on the parties and Facts: reviewable only when the case falls within the recognized exceptions. the tunnels. Court. as granted an exemption from the general rule in affirmed by the CA. with a general knowledge of the appraisal Issue: WON Ibrahim is the rightful owner of the sub-terrain of real estate and the prevailing prices of land in area of the land. 2005 The Second Issue: Valuation is AFFIRMED. recommending P300.000 per sq. in no way contributed petitioner has failed to show why it should be to an increase in the value of the land. we agree with the Court of Appeals that introduced by petitioner. filed suit. meter as of 1990. a trial before Commissioners is indispensable to allow the parties to present evidence on the issue of just NPC Vs.[25] Commissioner Doromals report. In fact.[27] As to the amount of the valuation. Maruhom (one of the co-heirs of Ibrahim) misappreciate the clear preponderance of requested Marawi City Water District for a permit to construct or evidence. therefore. We now come to the issue of valuation. The amount fixed and agreed to by the install a motorized deep well on the parcel of land but it was rejected respondent appellate Court is not grossly on the grounds that the construction would cause danger to lives and exorbitant. are they entitled to the payment of just compensation. Secondly. it did not response to NAPOCORs general counsels query. The trial court. as sustained by this WHEREFORE. Ibrahim compensation. which is not the situation Ibrahim owns a parcel of land located in Lanao del Norte. bother to notify the owners and wrongly assumed it had the right to dig those tunnels under their property. the petition is DENIED and the Decision of the Court in Mangondato. such same and started negotiations for their purchase but no agreement general rule should in fact be observed in this could be reached. evaluating the evidence submitted to them nor In 1991. Maruhom demanded NAPOCOR to pay damages and to Commissioner Ali comes from the Office of the vacate the sub-terrain portion of the land. The sub-terrain portion of the property belongs to Ibrahim. which are not within the ambit of the present review. to allow petitioner to use the date it commissioners only because his report was based constructed the tunnels as the date of valuation would be grossly on the valuation as of 1978 by the City Appraisal unfair. No costs. that payment shall be effective only after Agus I HE project has xxx been placed in operation.A.-G. On the contrary. these are factual matters that involved herein being Lots 2 and 3 of the same subdivision plan). 57792 dated June 8. The prevailing market value of the land is only one of the determinants used by the commissioners The Supreme Court cited Article 437 of the Civil Code which report the other being as herein shown: provides that: The owner of a parcel of land is the owner of its surface . Register of Deeds who may well be considered an expert. the vicinity of the land in question so that his If yes. the improvements In sum. barely a month. rightly computed the valuation of the property as determining just compensation provided under of 1992.R. private underground tunnels beneath their lands and petitioner confirmed the respondent has convinced us that. Held: YES. indeed. Furthermore.

On the issue of just compensation. Ibrahim could have dug upon their property and built motorized deep wells but was prevented from doing so by the authorities because of the construction of the tunnels underneath the surface of the land. It was held that: If the government takes property without expropriation and devotes the property to public use. the Supreme Court also said that Ibrahim should be paid a just compensation.and of everything under it. without detriment to servitudes and subject to special laws and ordinances. 2007] . NO. the ownership of land extends to the surface as well as to the subsoil under it. after many years. Ibrahim still had a legal interest in the sub-terrain portion insofar as they could have excavated the same for the construction of the deep wells.R. Therefore. Ibrahim owns the property as well as the sub-terrain area of the land where the underground tunnels were constructed. the property owner may demand payment of just compensation in the event restoration of possession is neither convenient nor feasible. This is in accordance with the principle that persons shall not be deprived of their property except by competent authority and for public use and always upon payment of just compensation. It has been shown that the underground tunnels have deprived the plaintiffs of the lawful use of the land and considerably reduced its value. [G. and he can construct thereon any works or make any plantations and excavations which he may deem proper. 160656 : June 15. xxx Hence.

or an equivalent of 701 square basin for the floodwaters coming from the Agusan River. The parties.443 square meters.: Registry of Deeds.R. REPUBLIC OF THE PHILIPPINES (Department of Public Works and a) That the plaintiff is legally entitled to its inherent right of Highways). viz... The the issuance of Transfer Certificate of Titles for the aforementioned easement was for concrete levees and floodwalls for Phase 1. DECISION with an area of 288 sq. irrigation ditches. b) That however.free of charge by reason of the statutory lien of easement of This is a Petition for Review of the Decision1 dated October 30. of the Republic.000. as Attorney's fees. and other follows: similar works of the government or any public enterprise. 65066 affirming with modification the Decision2 of the Regional Trial Court of Butuan City. Commissioner's Report.00) PESOS as fair and reasonable severance damages.820. as follows: Act. however. The Republic court issued an Order of Expropriation upon payment of just contested the awards of severance damages and attorney's fees compensation. RT-10646.. 1995. the just compensation should be P11. the trial court decreed on April provisions of the Land Registration Act8 and the Public Land 29. and 8 of the failed to reach an agreement. HUNDRED THIRTY (P2. aqueducts. and other similar works of the government or public enterprise. It is undisputed that there is a legal easement of right-of-way in favor nor objection. highways.820.00) PESOS each. v. it being shown that it is for public use and purpose . portion of lot 3293-F-5-B (LRC) Psd-230236.373. at no cost to the government.679 square meters. the sole issue for resolution Andaya objected to the report because although the Republic may be stated thus: Is the Republic liable for just compensation if in reduced the easement to 10 meters or an equivalent of 701 square enforcing the legal easement of right-of-way on a property. On December 13. 1996. the Court decides as in width for public highways. with an area of 413 sq. (LRC) Psd-255693. in the light of the foregoing. m. RT-10225.9 Section 11210 of the Public Land Act provides that lands granted by patent shall be subject to a right-of-way not exceeding 60 meters WHEREFORE. aqueducts. 1999. the Board reported that there was a while Andaya demanded just compensation for his entire property discrepancy in the description of the property sought to be minus the easement. the meters. the plaintiff is obligated to pay defendant the sum Branch 33 in Civil Case No. the Board reported that the project would total compensable area of 9. both of the Butuan City QUISUMBING. his entire property would be rendered unusable and uninhabitable. meters. CV No. thus: for the Certificates of Title Nos. m.430.5 Hence.937 square meters. 4. Stage 1 two (2) lots in the name of the Republic of the Philippines. Thus. Andaya alleged that the easement would expropriated.405. the Republic instituted an action before the NO COSTS. free of charge.. for enforcement of easement of of TWO MILLION EIGHT HUNDRED TWENTY THOUSAND FOUR right-of-way (or eminent domain). The Republic thus amended its complaint.4 Later.373. except only for the value of the improvements existing . 7.443 square meters of which will be for the 60-meter easement. irrigation ditches. portion of lot 3291-B-1. the trial Both parties appealed to the Court of Appeals. except only the value of the improvements existing thereon that may d) To pay defendant's counsel FIFTY THOUSAND (P50. covered by TCT No.000. J. and 2) the lot now known as lot 3293-F-5- B-1. He thus demanded P11. and finally. The Board The Court of Appeals modified the trial court's decision by imposing a also reported that the easement would diminish the value of the 6% interest on the consequential damages from the date of the writ remaining 5. Regional Trial Court of Butuan City to enforce the easement of right- of-way or eminent domain. opposition.430 for the fees. the instant petition.. As a result. His ownership is evidenced by Transfer c) To pay members of the Board of Commissioners. The Republic did not file any comment. of the Court of Appeals in CA-G. RT-10225 and RT-10646. Eventually. The trial court issued a writ of possession IT IS SO ORDERED..00) PESOS and the two are subject to a 60-meter wide perpetual easement for public (2) members at FIFTEEN THOUSAND (P15. reducing the prevent ingress and egress to his property and turn it into a catch 60-meter easement to 10 meters. affect a total of 10.ISMAEL ANDAYA. Petitioner Republic of the Philippines (Republic) negotiated with e) That the Registry of Deeds of Butuan City is also directed to effect Andaya to enforce the 60-meter easement of right-of-way. 4378. and by deleting the attorney's payment of consequential damages amounting to P2.: 1) the lot now known as lot 3291-B-1-A.TWENTY THOUSAND (P20. He contended remaining area would be rendered unusable and that the consequential damages should be based on the remaining uninhabitable?cralaw library area of 9. it recommended the of possession or the actual taking. covered by TCT No. Andaya's transfer certificates of title7 contained the reservation that the lands covered thereby are subject to the After considering the Board's report. following of the Lower Agusan Development Project. 1998.679 square meters. These properties chairman . Butuan City. Petitioner.380 square meters of Andaya's properties.6 on April 26. the technical description as appearing in pages 6. As a result. Respondent. 2003 right-of-way imposed on defendant's titles. Simply put. remaining area.405 as just compensation based on the On December 10.3 It also constituted a Board of Commissioners (Board) to determine the just compensation.000. Respondent Ismael Andaya is the registered owner of two parcels of land in Bading.00) PESOS be affected. the Board still granted it 4. expropriation to.

there was undoubtedly a taking of the remaining area of GR 160656.937 square meters of the total area of 10. his remaining property having been altered his private property without due process of law. WHEREFORE. respondent objected to it claiming that he suffered enshrined in our Constitution is that no person shall be deprived of consequential damages. Branch 33 for the determination of the final just compensation without having to initiate expropriation proceedings and without of the compensable area consisting of 5. 2007 Andaya's property.R.937 square meters. the floodwalls without paying for it. there should not be liable for the 3.13 One of the basic principles report. but also when there is a practical destruction or material Clearly.11 Hence. 1995.14 would be rendered unusable and uninhabitable? Finally. Noteworthy. But. Section 9. without such damages alleged and proved. But. no burden was imposed thereon and Andaya still retained title square meters to which it is fully entitled to use as easement. the nature and the effect of under Section 112 of the Public Land Act." in the exercise of the power of eminent domain. modifying the Decision of the Regional Trial Court of Butuan City. the Republic may interest thereon at the legal rate of 6% per annum from the date of appropriate the 701 square meters necessary for the construction of the writ of possession or actual taking until fully paid. however. It would prevent ingress and Facts: On December 13. Yet. the Court of Appeals The case is hereby REMANDED to the Regional Trial Court of Butuan declared that all the Republic needs to do is to enforce such right City. use. For the purpose of determining the final just compensation. no burden was imposed thereon and Andaya still retained title and possession of the property. Andaya is entitled to payment of just compensation. is AFFIRMED with MODIFICATION as herein set forth. becoming a catch basin of the Agusan River. We are. the difference between this area of 701 square meters and the 4. True.380 square meters. In view of this. but also when there is a practical destruction or material impairment of the value of his property. annum from the date of the writ of possession or the actual taking until full payment is made. then the value of the whole to respondent Andaya with deliberate dispatch. Eventually. 2003 in CA-G. the Held: "Taking.443 True. the trial court issued an Order of Expropriation upon payment of just For this reason. which constitute was undoubtedly a taking of the remaining area of Andaya's property. Using this standard.12 Using this standard. as correctly observed by the charge except for damages to affected existing improvements. free of and possession of the property. June 15. property should be the basis of just compensation. CV No. occurs not only when the government actually deprives or dispossesses the property owner of his property Republic vs Andaya. Board and affirmed by the courts a quo. before the Regional Trial Court of Butuan City to enforce the easement of right-of-way or eminent domain. the remaining area would be rendered unusable and uninhabitable.742 square meters. the Republic is and turn it into a catch basin for the floodwaters coming from the liable for just compensation of only the remaining areas consisting of 5. the floodwalls would deprive Andaya of the normal use of the remaining areas. Said court CASE DOCTRINE: If the remaining property be rendered useless or its is ordered to make the determination of just compensation payable usefulness substantially impaired. as correctly observed by the Board and affirmed by the courts a quo. which must be neither more nor less than the monetary equivalent of the land. 65066. dispossesses the property owner of his property or of its ordinary meter wide easement or an equivalent of 4. It would prevent ingress and egress to the property In effect. the Republic instituted an action egress to the property and turn it into a catch basin for the floodwaters coming from the Agusan River. unable to sustain the Republic's argument that it is not liable to pay consequential damages if in enforcing the legal SO ORDERED. 4378. if any. When the Board (Commissioners) submitted their compensation. Article III of our Constitution mandates that Issue: Is the Republic liable for just compensation if in enforcing private property shall not be taken for public use without just the legal easement of right-of-way on a property. . we affirm the findings of the Court of Appeals and the trial court that just compensation should be paid only for 5. the nature and the effect of the floodwalls would deprive Andaya of the normal use of the remaining areas.thereon that may be affected. the case is remanded to the trial court. it impairment of the value of his property. Republic needs only a 10-meter easement or an equivalent of 701 occurs not only when the government actually deprives or square meters. with interest thereon at the legal rate of 6% per Agusan River. the Decision of the Court of Appeals dated October 30.937 square meters. an essential element of due process is that there must be just compensation whenever private property is taken for public use." in the exercise of the power of eminent domain. Branch 33 in Civil Case No. Admittedly. No pronouncement as to costs. although the Republic will use only 701 square meters. the remaining area compensation. it is also settled that it is legally entitled to a 60. easement on Andaya's property. "Taking.443 square meters. with having to pay any just compensation. cases. or of its ordinary use. and in expropriation by the easement. in our view.

restaurants and recreation centers. R. further. on the other hand. the Department of Finance (DOF). – The senior citizens shall be establishment has granted to a senior citizen. signed into law by President Gloria Macapagal-Arroyo and it became effective on March 21. 2004. – The establishment may "Leyte Serv-Well Drugstore. inapplicable since no tax payments have previously occurred.. The tax credit scheme for the death of senior citizens. Provided. That the total amount Under this scheme. YAP. Provided. (g) that the establishment concerned may claim the discounts under and (h) as tax deduction based on the net cost of the goods sold or Section 4(a). on the other hand. Lourdes B. Rule VI. amending R. Provided. however. SIMPLICIO L. Section 4(a) of the Act states: Effectively. promulgate the implementing rules and regulations for the effective implementation of the law. Medical and Dental Services in Private DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT (DSWD). Section 4 – Discounts for vs. No. and the Department of Interior and Local Government (DILG) Act). Article under the name and style "City Pharmacy. 2004. restaurants and recreation The antecedents are as follows: centers and purchase of medicines anywhere in the country. allowed as deduction from gross income for the same taxable year that the discount is granted. a tax credit scheme similar lodging establishments. clarified as follows: Public respondents.A. doing business Implementing Rules and Regulations of R. Tax Deduction of Establishments. and DEPARTMENT OF INTERIOR and sold or services rendered.A. doing business under the name and style Article 8.. 4. That the cost of the discount LOCAL GOVERNMENT (DILG). The provision under R. No." and LEYTE SERV-WELL CORP." Dr. 9257.1. JR. in computing for its tax liability." MELVIN S. through Director IV Ma. 9257. the establishment concerned is allowed to of the claimed tax deduction net of value added tax if applicable. as amended. the DSWD approved and adopted the and style "Advance Drug. 9257. 1. 2007 subject to proper documentation and to the provisions of the National Internal Revenue Code. shall be allowed as deduction from gross income for the same taxable year that the discount is granted. provides The establishment may claim the discounts granted under (a). doing business under the name and style "Carlos Superdrug. necessitates that prior payments of and purchase of medicines in all establishments for the exclusive use taxes have been made and the taxpayer is attempting to recover this or enjoyment of senior citizens. doing business under the name On May 28. (g) and (h) as tax deduction from gross income. shall be included in their gross sales receipts for tax AZCUNA. Privileges for the Senior Citizens.]6 and Sections 107 and 118 – Air. (f). further. (a) the grant of twenty percent (20%) discount from all establishments relative to the utilization of services in hotels and It must be noted. Citizens Act) grants twenty percent (20%) discount from all establishments relative to the utilization of transportation services. DEPARTMENT OF FINANCE (DOF). The provision of Section 4 of R.9 Citizens Act of 2003. Establishments. the costs of which may be claimed by the private establishments On February 26. Transportation as tax deduction based on the net cost of the goods DEPARTMENT OF JUSTICE (DOJ). in reference to the query of the Drug Stores Petitioners are domestic corporations and proprietors operating Association of the Philippines (DSAP) concerning the meaning of a tax drugstores in the Philippines. No. No. that conceptually. 7432 is.: purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code. Facilities[. Recente. respondents." petitioners. CANO. including funeral and burial services tax payment from his/her income tax due. and 1. the Department of Health 1) The difference between the Tax Credit (under the Old Senior (DOH). as amended. hotels and similar lodging establishment. Provided." On July 10. the Department of Justice Citizens Act) and Tax Deduction (under the Expanded Senior Citizens (DOJ).5 Section 9. 7432.) No. deduction under the Expanded Senior Citizens Act. 2004.A. Effectively. That the total DECISION amount of the claimed tax deduction net of value added tax if applicable. include the Department of Social Welfare and Development (DSWD). 166494 June 29. under the Philippine tax system. No. the government loses in terms of foregone revenues an amount .3 was concerned as tax credit.A.G. that the implementation of the tax deduction shall This is a petition1 for Prohibition with Prayer for Preliminary be subject to the Revenue Regulations to be issued by the Bureau of Injunction assailing the constitutionality of Section 4(a) of Republic Internal Revenue (BIR) and approved by the Department of Finance Act (R.A. The establishment entitled to the following: recovers the full amount of discount given to a senior citizen and hence. 7432 (the old Senior prosecute and revoke the licenses of erring drugstore establishments. shall deduct from gross income. No. 8 of which states: doing business under the name and style "Botica dela Serna. ... the DOF.2 otherwise known as the "Expanded Senior (DOF). the government shoulders 100% of the discounts granted.. services rendered: Provided." ELSIE M. finally. a tax credit is a peso-for-peso deduction from a taxpayer’s tax liability due to the government of the amount of discounts such SEC. claim the discounts granted under Rule V. which have been specifically tasked to monitor the drugstores’ compliance with the law. Sea and Land DEPARTMENT OF HEALTH (DOH).A.2. DELA SERNA. (f). therefore. the be included in their gross sales receipts for tax purposes and shall be amount of discounts granted to senior citizens.4 CARLOS SUPERDRUG CORP. J.A. under R.R. 2004. That the cost of the discount shall be based on the net cost of goods sold or services rendered. 9257. No.

Tax Due was computed based on the Net Taxable Income.) No. was deducted directly from the tax due Theoretically. The word just is used to .A. otherwise known as the "Expanded Senior Citizens Act of 2003"11was issued by the DOH. 2004. Compelling drugstore owners and establishments to grant the discount will result Net Sales x x x x x x x x x x x x in a loss of profit Less: Operating Expenses: and capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines. On the other hand. Meanwhile.x x gross income and results in a lower taxable income. provided in the purchase of medicines from all establishments dispensing medicines for the exclusive use of the senior citizens. Thus. III. were it not for R. The establishment stated that "[t]he grant of twenty percent (20%) discount shall be shoulders the remaining portion of the granted discounts. Sec. Aside from the establishments that may claim tax credits 1) The law is confiscatory because it infringes Art. Under A. 2) It violates the equal protection clause (Art. Tax Due x x x x x x Based on the afore-stated DOF Opinion. it twenty percent (20%) discounts so granted. would ordinarily become entitled to a just compensation. This is because the discount is treated as a deduction. including professional fees of attending doctors in all private hospitals and medical facilities. or the Policies and Guidelines to Implement the Relevant Provisions of Republic Act 9257. the amount of discounts which is the tax credit item. 9 of the under the old law. under a tax deduction scheme. the DOH issued Administrative Order No Just compensation is defined as the full and fair equivalent of the 17712 amending A.10 the net income of the private establishments concerned. the number of potential Senior Citizens Act based on the following grounds:13 establishments that may claim tax deductions. 171. under a tax credit scheme. a tax-deductible expense that is subtracted from the Net Tax Due -. 171 9257. the tax deduction on due. but shall extend to both prescription and pay the government. 177. diagnostic and laboratory services. No. as follows: 3) The 20% discount on medicines violates the constitutional guarantee in Article XIII. No. Tax Deduction Tax Credit health and other social services available to all people at affordable cost. life. Administrative Order (A.O.______x x accorded to senior citizens. the treatment of the discount as a deduction reduces amount. it is apparent that what petitioners Other deductions: x x x x x x x x are ultimately questioning is the validity of the tax deduction scheme as a reimbursement mechanism for the twenty percent (20%) Net Taxable Income x x x x x x x x x x discount that they extend to senior citizens. The measure is percent discount shall not be limited to the purchase of unbranded not the taker’s gain but the owner’s loss." It may be necessary to note that while the burden on [the] government is slightly diminished in terms of its percentage share on Petitioners assail the constitutionality of Section 4(a) of the Expanded the discounts granted to senior citizens. have however. The discounts given would have entered the coffers and formed part of the gross sales of the private establishments. been broadened. it is an amount that is allowed by law15 to reduce the income prior to the application of the tax rate to compute the amount of tax which is As shown above. Tax Deduction on Discounts x x x x -- Examining petitioners’ arguments. providing the grant of twenty The permanent reduction in their total revenues is a forced subsidy percent (20%) discount in the purchase of unbranded generic corresponding to the taking of private property for public use or medicines from all establishments dispensing medicines for the benefit. 2004.O. 1) enshrined in operators of domestic air and sea transport services."14 Gross Sales x x x x x x x x x x x x Petitioners assert that Section 4(a) of the law is unconstitutional Less : Cost of goods sold x x x x x x x x x x because it constitutes deprivation of private property. This will be an amount equivalent to 32% of the non-prescription medicines whether branded or generic. On November 12." and A simple illustration might help amplify the points discussed above. Stated otherwise. nor shall any person be denied of the equal protection of the laws. III. liberty or property without due process of law. public railways our Constitution which states that "no person shall be deprived of and skyways and bus transport services.equivalent to the marginal tax rate the said establishment is liable to generic medicines only. more establishments were added under the new Constitution which provides that private property shall not be taken law such as: establishments providing medical and dental services. No.16 Being a tax deduction. Section 11 that makes "essential goods. for public use without just compensation. on October 1. and 2) the law failed to provide a scheme whereby drugstores will be justly compensated for the discount. the twenty property taken from its owner by the expropriator. Sec.O.17 This constitutes compensable taking for which petitioners exclusive use of the senior citizens. the tax deduction scheme does not fully reimburse petitioners for the discount privilege Less: Tax Credit -. the discount does not reduce taxes discounts was subtracted from Net Sales together with other owed on a peso for peso basis but merely offers a fractional deductions which are considered as operating expenses before the reduction in taxes owed.

available to all the people at affordable cost. the legislature. provides: "The State shall adopt an integrated ₱1..89 per tablet. petitioners insist that they provide social justice in all phases of national development. it acquires Norvasc from the distributors at ₱37. as they shall judge to be for the good and welfare of the commonwealth. property rights must bow to the primacy of police power because property rights."23 It is "[t]he power vested in the legislature A tax deduction does not offer full reimbursement of the senior by the constitution to make. For purposes of reimbursement. and ordinances. so that they have not been able to Article XV. cannot substantiate their claim that they will be operating at a loss should they give the discount. statutes.53 per tablet will be refunded and not the full partnership. health and other social services government by way of a tax deduction. before deducting allowable expenses. there is no basis for its nullification in view of the presumption of validity which The priority given to senior citizens finds its basis in the Constitution every law has in its favor. If it grants a 20% . not repugnant to the constitution. similar to the erroneously based on the assumption that their customers consisted power of eminent domain. discount to senior citizens or an amount equivalent to ₱7.29 the amount of income derived from all sources leisure and amusement.92. diagnostic and laboratory fees. the questioned provision is benefits and privileges to them for their improvement and well-being invalidated. In short. and establish all manner of citizen discount. in promoting the health and welfare of a special group of citizens.19 with penalties or without. air and sea travel.26 as set forth in the law itself. women To illustrate this point.60 (or at a margin of 5%). the law grants a twenty percent discount to senior citizens for medical and dental services. it is incorrect for petitioners to insist that the grant of SEC. utilization of services in hotels and similar lodging establishments." Consonant with these constitutional principles the hypertensive maintenance drug Norvasc as an example." Further. An income statement.32 will be refunded by the endeavor to make essential goods. referring to the DOF Opinion.25 The Court believes so. the Act provides: Given these. Police wholly of senior citizens. only 32% of the 20% discount will be reimbursed to the drugstores.28 To implement the above policy.18 insistent and the least limitable of powers. and net profit (or loss) for reimbursement. gross income. In addition to this.27 of social security for them. the law provides that business establishments a given period could have accurately reflected the effect of the extending the twenty percent discount to senior citizens may claim discount on their income. substantial. restaurants and recreation centers. veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible . only ₱2.68 will and comprehensive approach to health development which shall be shouldered by them as only ₱0. in the absence of evidence demonstrating the as the State considers them an integral part of our society. it would not meet the definition of just wholesome and reasonable laws. Republic Act No.00 senior citizen discount that petitioners would give.68 which translates to a loss from (f) To recognize the important role of the private sector in the capital of ₱5. Section 11. petitioners the discount as a tax deduction. According to following are the declared policies of this Act: the latter. thus assuring the greatest idea that the equivalent to be rendered for the property to be taken benefits. either compensation. Moreover. Section 4 of the Constitution. – Pursuant to come up with a financial report. As a form of accounting of petitioners’ sales.20 alleged confiscatory effect of the provision in question. ₱0. it is the duty of the family to show properly whether or not the tax deduction scheme really works take care of its elderly members while the State may design programs greatly to their disadvantage. and Petitioners’ computation is flawed. not on the amount of the discount. the computation was The law is a legitimate exercise of police power which. Even if the government will allow a tax improvement of the welfare of senior citizens and to actively seek their deduction. but has been purposely income. has general welfare for its object. petitioners tried to show a loss on a per transaction basis. can impose upon private establishments the burden of partly subsidizing For this reason. 7432 is hereby amended to read as follows: the senior citizen discount is unduly oppressive to their business. and to grant suffer loss of earnings and capital.92. and of the subjects of the same. 22 Accordingly. and retails it at ₱39. shall be real. showing an the exclusive use or enjoyment of senior citizens.57 per tablet. disabled. and other similar places of culture. 2. Here. In addition. and purchases of medicines for which should not be the case. Section 10 in the Declaration of Principles and State Policies provides: "The State shall In treating the discount as a tax deduction. then it would have to sell Norvasc at ₱31. ordain. because petitioners have not taken time to calculate correctly and SECTION 1. must yield to general welfare. this raises the question of whether the State. extending as it does to all the great public needs.21 amount of the discount which is ₱7. elderly. the law states that the cost of the discount shall be deducted from concert halls. There shall be priority for the needs of the underprivileged sick.. fares for domestic land. admission fees charged by theaters. Absent any financial statement. carnivals. circuses. though sheltered by due process. As such. it has been described as "the most essential. full and ample. which will result in net income. when the conditions so demand as determined by a government program. Lastly. Declaration of Policies and Objectives. petitioner Carlos Super Drug cited the anti- and children. Police power as an attribute to promote the common good would be The Senior Citizens Act was enacted primarily to maximize the diluted considerably if on the mere plea of petitioners that they will contribution of senior citizens to nation-building."24 Having said that. expenses. for every Article XIII. will incur losses because. Thus. and to convey the response to conditions and circumstances. the 32% tax rate is to be imposed on power is not capable of an exact definition.intensify the meaning of the word compensation.

Furthermore. public needs. the means employed in invoking the active participation of the private sector. While Article power because property rights. ordain.” It is the power vested in the legislature by the constitution to make. part of petitioners to peg the mark-up at 5%.31 WHEREFORE. For this reason. insistent cannot afford to raise their prices for fear of losing their customers to and the least limitable of powers. either with penalties industry and the competitive pricing component of the business. Petitioners assail the constitutionality of Section 4(a) of RA 9257. or without. though sheltered by due process.30 Undeniably. Inasmuch as pricing is a property right. the right to property has a social dimension. This being the case. petitioners cannot reproach the law for being oppressive.A. It is a business decision on the welfare for its object. DSWD Facts: Petitioners are domestic corporations and proprietors operating drugstores in the Philippines. has general nature of the players in the industry. SO ORDERED. as they shall judge to While the Constitution protects property rights. it is unfair for petitioners to criticize the law because Held: Petition is dismissed. Without sufficient proof that Section 4(a) of R. continuously serve as a reminder that the right to property can be relinquished upon the command of the State for the promotion of public good. it has been described as “the most essential. No costs. AZCUNA Associate Justice CARLOS SUPERDRUG VS. similar to the power of eminent domain. Selling the medicines below acquisition cost. and ordinances. particularly on agrarian reform and the regulation of contracts and public utilities. simply because they Accordingly. ADOLFO S. petitioners must be for the good and welfare of the commonwealth. in the exercise of police subjects of the same. Issue: Whether or not RA 9257 is unconstitutional . extending as it does to all the great competition. is merely a result of this decision. in order to achieve the purpose or objective of the law. and establish all manner of wholesome The Court is not oblivious of the retail side of the pharmaceutical and reasonable laws. statutes. and that the continued implementation of the same would be unconscionably detrimental to petitioners. when the conditions so demand as determined by the legislature. No. not repugnant to the constitution. Petitioner contends that said law is unconstitutional because it constitutes deprivation of private property. as alleged by petitioners. The law is a legitimate exercise of police they cannot raise the prices of their medicines given the cutthroat power which. XIII of the Constitution provides the precept for the protection of must yield to general welfare. the success of the senior citizens program rests largely on the support imparted by petitioners and the other private establishments concerned. the petition is DISMISSED for lack of merit. otherwise known as the “Expanded Senior Citizens Act of 2003. can intervene in the operations of a business which may result in an impairment of property rights in the process. and of the accept the realities of business and the State. various laws and jurisprudence. the Court will refrain from quashing a legislative act. is reasonably and directly related. 9257 is arbitrary. property rights must bow to the primacy of police Moreover.” Section 4(a) of RA 9257 grants twenty percent (20%) discount as privileges for the Senior Citizens. property.” power.

J. 1. the amount of P158. No. pursuant to fixed by government Presidential Decree No. bereft of public character. Petitioners argue that: Petitioners' objections to the taking of their property subsumed 1) Respondent Judge acted without or in excess under the headings of public use. liberty. Private property shall not be taken for public use SO ORDERED. is unconstitutional for being violative of the due a) Socialized Housing process clause. issuing the Order dated June 28.00 upon payment of unjust and with the Philippine National Bank. Quezon City. IV. 9)." . Pasig. sec. Heart Center Extension Office. and due of his jurisdiction or with grave abuse of process have to be balanced against competing interests of the public discretion by issuing the Order of January 17. a) The Decree would allow Decree No. Decree l224. 1224 which defines "the policy on the assessors.R.: Decree. 1977 the National Housing Authority (NIIA) filed a complaint for expropriation of parcels of land covering approximately c) The Decree violates twenty five (25) hectares." e) The Decree would deprive the courts of their judicial On January 17. 1978. 1987 regardless of size and no matter how small the area to LORENZO SUMULONG and EMILIA VIDANES-BALAOING. vs.G. respondent Judge issued the following Order: discretion to determine what would be the "just compensation" in each and Plaintiff having deposited with the Philippine every raise of expropriation. to wit: possession be issued. (in Antipolo. possession. Rizal) including the lots of procedural due process as it petitioners Lorenzo Sumulong and Emilia Vidanes-Balaoing with an allows immediate taking of area of 6. National Bank. promoting the general welfare. 1978. IV.333 square meters respectively. respondents. specifically: Petitioners contend that "socialized housing" as defined in Pres. denied. recognized and sought to be served under declared policies of the 1978 without notice and without hearing and in constitution as implemented by legislation. the exercise of the power of eminent domain is subject to value of the subject parcels of land. 1).00) per square meter adopting the market value fixed by the without giving the owner his provincial assessor in accordance with presidential decrees day in court. without just compensation (Art. Decree No. L-48685 September 30. as defined in said CORTES.980. representing the "total market unfair valuations arbitrarily value" of the subject twenty five hectares of land. for the purpose of condemnation the taking of property proceedings is not "public use" since it will benefit only "a handful of people. the purpose of condemnation proceeding. a clear case of constitutional infirmity has to be established for this Court to nullify legislative or executive measures Hence. This was however. January 17. just compensation. BUENAVENTURA GUERRERO and NATIONAL HOUSING b) "Socialized housing" for AUTHORITY. Public use 2) Pres. control and The land sought to be expropriated were valued by the NHA at one disposition of property peso (P1. Metro Manila. HON. petitioners. this petition challenging the orders of respondent Judge and adopted to implement specific constitutional provisions aimed at assailing the constitutionality of Pres. 1978 denying the motion for reconsideration. had been deprived of the possession of their property without due process of law. Metro Manila. prescribing the valuation of property in expropriation proceedings. let a writ of certain limitations imposed by the constitution. as amended. The NHA deposited the amount of P158. as amended. No person shall be deprived of life. 1224. as amended. is not really for a public purpose.00 representing the total market Indeed. nor shall any person be denied the equal protection of the Petitioners filed a motion for reconsideration on the ground that they laws (Art.980. Diliman. or property without due process of law.667 square meters and 3. On December 5. d) The Decree would allow Together with the complaint was a motion for immediate possession the taking of private property of the properties. 1224. be expropriated. expropriation of private property for socialized housing upon payment of just compensation. Nevertheless. Sec.

from poverty through policies that provide 1259. Otherwise. G. In the implementation of such streets or parks. As discussed in the above cited case of Heirs of facilities. beneficially employed for the general welfare satisfies the requirement of public use [Heirs of . The 1987 enhance the total community growth. FERNANDO. of utilities and other private housing projects cannot be occupied by all but only by those who enterprise to the government. promote full employment. Neither property involved. community centers. a rising standard of living and an improved quality of life for all. Juancho Ardona: b) Slum clearance. maintain and ensure industrial estates and such other facilities to adequate social services including housing [Art. a) The construction and/or improvement of The term "public use" has acquired a more comprehensive coverage. It is not anymore. "the construction of dwelling units Juancho Ardona v. As long as the property owners. including the construction by the public has been added the broader notion of indirect public of the supporting infrastructure and other benefit or advantage. then the power of supplied) eminent domain comes into play. sec. including the 60553-60555 October 26. clinics. The 1973 Constitution made it including the development of commercial and incumbent upon the State to establish. [Art. 1) adequate social services. and for the common good. Nos. It shall also requirement. for it is state then that at present whatever may be not possible to provide housing for are who need it. (2nd include among others: ed. sec. A beginning has to be made. (Art. the general welfare. 9. parks. 1977) Emphasis supplied]. 125 SCRA 220 construction of the supporting infrastructure and other facilities" (1983) at 234-5 quoting E. determines what is public use. public land or limited government resources. 1983. to remove any doubt. the statutory and judicial The state shall by law. The safety. II. provisions in the Constitution. and Constitution goes even further by providing that: e) Such other activities undertaken in pursuance The State shall promote a just and dynamic social of the objective to provide and maintain housing order that will ensure the prosperity and for the greatest number of people under independence of the nation and free the people Presidential Decree No. trend has been summarized as follows: undertake. low-cost housing is recognized as a public purpose. relocation and resettlement of The restrictive view of public use may be squatters and slum dwellers as well as the appropriate for a nation which circumscribes the provision of related facilities and services. drainage. Emphaisis purpose of the taking is public. We have alignment of existing houses and other dwelling never been a laissez faire State. scope of government activities and public concerns and which possesses big and correctly c) Slum improvement which consists basically of located public lands that obviate the need to take allocating homelots to the dwellers in the area or private property for public purposes. where power are all too often found in areas of scarce there are none. small lots for resale at cost to individuals. Decree No. sec. for the middle and lower class members of our society. THE (Pres. 7]. in cooperation with the private sector. Decree No. the environment and in sum. water and power system 231) schools. The public other is in the transfer. cost decent housing and basic services to There was a time when it was felt that a literal underprivileged and homeless citizens in urban meaning should be attached to such a centers and resettlement areas.R. such as roads. barangay centers. XIII. sec. 757. playgrounds and Specifically. rearrangemeant and re. all at once. dwelling units for the middle and lower income To the literal import of the term signifying strict use or employment groups of the society."Socialized housing" is defined as. As just noted. open spaces. Whatever project is undertaken promote adequate employment opportunities to must be for the public to enjoy. urban renewal or redevelopment and the construction of other recreational facilities. expropriation is not program the State shall respect the rights of small allowable. sewerage. through the exercise of character of housing measures does not change because units in this power. 60549. 9] The "public use" requirement for a and exercise of the power of eminent domain is a flexible and evolving concept influenced by changing conditions. footpaths. a continuing program of urban land reform and housing which will make available at affordable The taking to be valid must be for public use. This definition was later expanded to CONSTITUTION OF THE PHILIPPINES 523-4. par. as in the case of such citizens. It is accurate to satisfy prescribed qualifications. (p. In this jurisdiction. And the structures and the construction and provision of necessities which impel the exertion of sovereign basic community facilities and services. not only because of the expanded concept of public use but also because of specific d) The provision of economic opportunities. (Pres. One is Housing is a basic human need. 11. 1).. 1224. Reyes. the constitution in at least two cases. Shortage in housing is a matter of the expropriation of lands to be subdivided into state concern since it directly and significantly affects public health. circumstance applies to the Philippines.

. b) Size of Property In the case at bar. pp. section 4 of our Constitution cannot be determined on a purely It is situated on rugged terrain 7. Not only does the Marikina Town proper. 266-7) The said case of J.. No. It is surprising [therefore] why community development undertaking of the respondent National Housing Authority [would] include [their] two National Housing Authority. The lands in Petitioners further contend that Pres. MEDIUM TERM PHILIPPINE DEVELOPMENT PLAN slum clearance.5 kms.M. No. 1043-4] the country. Official data indicate that more than one third of the lands was the area of the land and not the number of people who households nationwide do not own their dwelling places. A significant stood to be benefited. those problems".B. Tuason Co. So basic and urgent urban families. the driving conditions of the PLAN 1987-1992. Rizal hundred of hectares of which 1. 1637 on April 18. or agricultural purposes. involving a The lands involved in the present petitions are considerable number of individuals.000 families in The propriety of exercising the power of eminent Phase I and about 4. and San Isidro. Vol. Rural Progress Administration [84 Phil. salaried government employees.. which opportunities inextricably linked with low-cost housing. east of Manila. Inc. more 32049. 240]. Decree 1224.R. p. rolling hills. FOUR YEAR Homeless" "to focus the attention of the international community on DEVELOPMENT PLAN For 1974-1977. earlier ruled that expropriation is not confined to landed estates. [Mataas na Lupa Tenants Association. 57625. (Rollo. but his interest and that of his National Census and Statistics Office. 1983.. Res. 215-228 important to draw attention to paragraph (d) of Pres. the efforts of the government to initiate housing and other projects are matters of public knowledge [See NEDA. p. Inc. Up to the present. 122 SCRA 63 (1983) alone which lies proximate to and is expected to be the most at 73]. the migration to urban areas and the According to the National Economic and Development Authority at mushrooming of crowded makeshift dwellings is a worldwide the time of the expropriation in question. Land Tenure Administration [G. relocation and resettlement. in its quest for social justice and Proclamation No. particularly YEAR PHILIPPINE DEVELOPMENT PLAN 1978-1982. 847 (1949)] which The acute shortage of housing units in the country is of public held that the test to be applied for a valid expropriation of private knowledge. greater may only of the inhabitants of the country. NEDA.000 families in Phase II. Inc. or slum improvement 1987-1992. Quoting respondents: Petitioners claim that "there are vast areas of lands in Mayamot. majority of the people in slums and squatter areas and rural settlements. Phase II includes about 30 hectares for industrial In J.9725 hectares. and structures intended for commercial. as amended. Phase I covers about man lots . NEDA. Of these unacceptable dwelling units. 1977)." . Since then "there has evolved a clear pattern number live in dwellings of unacceptable standards. a major problem before taking remedial action. domain under Article XIII.L. vs. no matter how small the area of the land to be expropriated. 1980 Census of Population and family should not stand in the way of progress and the benefit of the Housing]. constitutional provision speak of lands instead of and is within the Lungs Silangan Townsite landed estates. 36. February 18. No. "[i]t is unfortunate that the petitioner benefited by the housing project involved in the case at bar [See. 37/221. June 25. Cupang. should exclusively devote attention to conflicts of large proportions. about "50 per cent of development particularly in developing countries. pp. Rizal. question are being expropriated by the NHA for the expansion of would allow the taking of "any private land" regardless of the size and Bagong Nayon Housing Project to provide housing facilities to low. They likewise include raw. housing some remains to be out of the reach of a sizable proportion despite the efforts of Governments at the national and local levels of the population" [NEDA. 1224 NEDA. May 3. 461 (1955)]. this Court is satisfied that "socialized YEAR DEVELOPMENT PLAN For 1974-1977. G. 357-361. Antipolo. than one third is located within the National Capital Region (NCR) Court of Appeals [G. v. departed from the ruling in Guido vs. This Court. 130 SCRA 30 (1984) at 39]. Dimayuga.1984. The General Assembly is Seriously concerned that. pp. L- development and the rest are for residential 21064. The Bagong Nayong Project is a housing and are owned by a few landowners only. from quantitative or area basis. continue to The mushrooming of squatter colonies in the Metropolitan Manila deteriorate in both relative and absolute terms. or 109-117. subsidized either partially or totally" [NEDA. MEDIUM-TERM PHILIPPINE DEVELOPMENT and of international organizations. especially in developing countries. Dec. 1970. 22 Kms. It is. cannot afford adequate shelter even at reduced rates are housing problems that the United Nations General Assembly and will need government support to provide them with social proclaimed 1987 as the "International Year of Shelter for the housing. FOUR In the light of the foregoing. peace. this Court stated that. pp. Reyes It is intended for low-salaried government in Republic vs. FIVE- housing" fans within the confines of "public use". Tuason Co. 31 SCRA 413 (1970) at 428] this Court housing development. 240-254]. Baylosis.R. FIVE YEAR PHILIPPINE DEVELOPMENT PLAN 1983-1987. R. pp. held that: employees and aims to provide housing and community services for about 2. quoting the dissenting opinion of Justice J. 357]. in Pulido vs. No. emphasize the public purpose of the project. area as well as in other cities and centers of population throughout Yearbook of the United Nations 1982. Thus. the use to which it is proposed to put the subject parcels of land meets the requisites of "public use"." 60 hectares of GSIS property in Antipolo.A. p." [G. such as shanties. industrial. and eschew parts of the expanded/additional areas for the small controversies and wait until they grow into Bagong Nayon Project totalling 25. and. but I see no cogent reason why Reservation (created by Presidential the government.M. of adherence to the "number of people to be benefited test" " natural shelters.Population growth. [96 Phil. would be deprived of his landholdings.

supra at 42-3 citing I. The property owner The basic unfairness of the decrees is readily may not interpose objections merely because in their judgment some apparent. Very often land described as provisions in the 1935 and 1973 Constitutions. bad faith. tax documents is unfair or wrong. this Court pointed abuse of discretion. Decree No. of national development. which are restatements of the other crops. As a mere steward. other property would have been more suitable. and remove cultural inequities by valuation of specific properties singled out for equitably diffusing wealth and political power for expropriation. Due Process compensation". L-49088. 49439. its improvements and capabilities.. Just Compensation municipal clerks for them. 123 SCRA 245 (1983)] which repulsive to basic concepts of justice and fairness . Buildings are described in terms of only two or .R. No. the opportunity to protest is illusory.1983. The Inc. arose from the same expropriation in court. 1224 and 1259. May 29. Dulay (G.Presidential Decree designate the particular property/properties to be taken for Nos.R. It means a fair and full equivalent for the loss sustained. (pp. as amended by . much less analyze. 1) differences are never taken into account. No. And it is Reyes [G. The value of land is based on such generalities as its possible cultivation for rice. It is violative of due process to deny to the owner the opportunity to prove that the valuation in the This Court abandoned the ruling in National Housing Authority vs. reduce social. Respondent Judge ordered the issuance of a writ of complaint that led to this instant petition. control and disposition of property without giving the owner his day 1987) which. Decree No. and political Various factors can come into play in the inequalities. economic. (Art. they assert that the Decree would deprive the courts of their judicial discretion to determine what would be "just 3. under which private three classes of building materials and estimates property is supposed to be held by the individual of areas are more often inaccurate than correct. only as a trustee for the people in general.. 1224. The provisions on just possession without notice and without hearing. coconuts. or gross In said case of Export Processing Zone Authority. Guerrero (G. the State shall assessors are usually uniform for very wide areas regulate the acquisition. 76. or just as suitable.R. Absent a clear showing of fraud. would expropriation simply never occurs until a demand allow the taking of private property upon payment of unjust and is made or a case filed by an agency authorized to unfair valuations arbitrarily fixed by government assessors. 464.)]. The values given by provincial the common good.the stewardship concept. 794 and 1533 which were declared unconstitutional in Export the Export Processing Zone Authority case. sec. emphasize: directional has been cultivated for generations. viz: Processing Zone All thirty vs. who Tax values can serve as guides but cannot be are its real owners. ownership. The right to the use. the foregoing provisions. 70 (1983 ed. 12-3) addition. (Art. which petitioners herein failed to demonstrate. CRUZ.The State acting through the NHA is vested with broad discretion to upheld Pres. compensation found in Presidential Decree Nos. 1259 and 1313 are the same provisions found in Presidential Decree Nos. enjoyment and disposal of private property is tempered by and has to yield to the demands of the Just compensation means the value of the common good. 1987) for being encroachments on prerogatives. 1224. PHILIPPINE overwhelming mass of landowners accept POLITICAL LAW. ALL the facts as to the condition of the property and its The State shall promote social justice in all phases surroundings. as amended. or Indeed. sec. To this end. The Idea of Petitioners maintain that Pres. In do so. use and covering several barrios or even an entire total disposition of property and its increments. Petitioners assert that Pres. 794. for the purpose. the absolute substitutes for just compensation. the statements. Court in the case of Ignacio vs. The Congress shall give highest priority to the xxx xxx xxx enactment of measures that protect and enhance the right of all the people to human dignity. socialized housing purposes and how much thereof may be expropriated. with the exception of the poblacion. out that: the Court will give due weight to and leave undisturbed the NHA's choice and the size of the site for the project. unquestioningly what is found in the tax declarations prepared by local assessors or 2. June 29. individual must exercise his rights to the property not for his own exclusive and selfish benefit but To say that the owners are estopped to question for the good of the entire community or nation the valuations made by assessors since they had [Mataas na Lupa Tenants Association. The Constitutional provisions on the subject are clear: property at the time of the taking. corn. violates The foregoing contentions have already been ruled upon by this procedural due process as it allows immediate taking of possession. They do not even look at. The constitutionality of this procedure has also been ruled upon in 464. 10) should be considered. II. 5960 April 29. Individual XIII. No. as amended. Decree 1224. incidentally.

expropriation of private lands was the area of the land and not the number of people who stood to be benefitted. No costs. determination have been judiciously evaluated. and (3) The deposit requirement advantage. 1978 welfare. but his interest and FACTS: On December 5. Rule 67 must be complied with. as amended. After denial of petitioners. GUERRERO because in their judgment some other property would have been more suitable. Decree No.333 square meters respectively. the following requisites must be met: (1) There must be a Complaint for infrastructure and other facilities" (Pres." "Socialized housing" is defined [I]t is imperative that before a writ of possession as. recognized as a public purpose. thus they of a court promulgated only after expert challenged the constitutionality of Pres. thus: proceedings is not of "public use" since it will benefit only "a handful of people." approximately twenty five (25) hectares.980. safety. the Orders of the lower court dated January 17. The property owner may not interpose objections merely SUMULONG VS. motion for . The NHA deposited the amount of P158. as previously Constitution. Decree No. 7]. However. pursuant to Presidential Decree No. Reyes. The test to be applied for a valid SO ORDERED. 1224. origin for further proceedings to determine the compensation the petitioners are entitled to be paid. to allow the haphazard work of minor bureaucrat reconsideration on the ground that they had been deprived of the or clerk to absolutely prevail over the judgment possession of their property without due process of law. housing is a matter of state concern since it directly and significantly affects public health. urban renewal or redevelopment and the construction of low-cost housing is This Court holds that "socialized housing" defined in Pres. On the matter of the issuance of a writ of possession. held by this Court. (p. is for a public and considerations essential to a fair and just purpose. 14) requirement of public use. To the literal compensation for the properties sought to be expropriated must be made by the trial court on import of the term signifying strict use or employment by the public the basis of judicial (not legislative or executive) has been added the broader notion of indirect public benefit or discretion.667 square meters and 3. (in Antipolo. the provisions of such decrees on just compensation are unconstitutional. Housing is a basic human need. the environment and in sum. the term "public (2) A provisional determination of just use" has acquired a more comprehensive coverage. 1) expropriation sufficient in form and in substance. The Court stated that. 1224. Decree No.00 with the Philippine National Bank. commissioners have actually viewed the property. 1978 issuing the writ of possession on the basis of the "socialized housing" fans within the confines of "public use". Together with the complaint was a motion for immediate possession of the properties. as amended by Pres. In the light of the foregoing. and after all factors condemnation proceeding. It is accurate to state then that at present whatever may under Section 2. 11. constitutes concept of public use but also because of specific provisions in the "public use" for purposes of expropriation. the ruling in Decree No. sec. this Court is satisfied that and June 28. for the purpose of condemnation the Ignacio case is reiterated. be beneficially employed for the general welfare satisfies the (p. 1259 and 1313. "the construction of dwelling units for the middle and lower class is issued by the Court in expropriation members of our society. 1977 the National Housing Authority (NIIA) that of his family should not stand in the way of progress and the filed a complaint for expropriation of parcels of land covering benefit of the greater may only of the inhabitants of the country. Specifically." This was granted by the court. the general WHEREFORE. "[i]t is unfortunate that the petitioner would be deprived of his landholdings. Why should the NHA pick their small lots? Expropriation is not confined to landed estates. after evidence and arguments pro and Issue: WON the "Socialized housing" for the purpose of con have been presented. market value appearing therein are annulled for having been issued Petitioners claim that there are vast areas of lands in Rizal hundreds in excess of jurisdiction. Shortage in hearing are violative of due process. representing the "total market value" of the subject twenty five hectares of land. The State acting through the NHA is vested with broad discretion to designate the property. 1224 which defines "the policy on the expropriation of private property for socialized housing upon payment of just compensation. par. Decree Nos. Citing the case of Heirs of Juancho Ardona v. Let this case be remanded to the court of of hectares of which are owned by a few landowners only. and in the instant case the Court The 1973 Constitution made it incumbent upon the State to finds that the Orders issued pursuant to the corollary provisions of establish. 13) HOLDING: Yes. as defined in said Decree. bereft of public character. Petitioners contend that "socialized housing" as defined in Pres. 1224. maintain and ensure adequate social services including those decrees authorizing immediate taking without notice and housing [Art. including the construction of the supporting proceedings. Rizal) including the lots of petitioners Lorenzo Sumulong and Emilia Vidanes-Balaoing with an area of 6. not only because of the expanded 1224.

6199 is also occupied by concrete houses and structures but likewise there are no relocatees in said lot. the trial court rendered judgment dismissing the complaint.985 square meters for which the subject properties were expropriated because the also situated in Barrio Bangkal.-417.G. The relocatees were relocated only on (sic) March of 1994. relocation of squatters involves a long and tedious process. ZABALLERO. Finding that the failure of respondent NHA to pay just compensation and of petitioners to pay capital gains tax are (c) Transfer Certificate of Title No. (a) Transfer Certificate No. ZABALLERO. Joaquin Yuseco. Cruz (2) Plaintiff National Housing Authority is likewise hereby ordered. ELENA FRONDA other deduction. RTC. the expropriation court (now Branch 18. let an Alias Writ of Execution be already occupied by relocatees whose houses are made of light immediately issued and that: materials with very few houses partly made of hollow blocks.: order to facilitate the termination of this case.146 square meters is WHEREFORE. (2) there is no amounts stated in the Writ of Execution as the adjudicated condition imposed in the expropriation judgment that the subject . 2000[1] affirming For the alleged failure of respondent NHA to comply with the the judgment of the Regional Trial Court of Quezon City. 6450. and TEODORO Z. the lawyers fees in LEONARDO Z. in Civil Case No. directing them additionally. They alleged that respondent petitioners motion for reconsideration. This is an appeal by certiorari from the decision of the Court of Appeals in CA-GR CV No. as in substitution of LEONARDO M. and rendered forfeiting all its rights and interests under the expropriation docketed as Civil Case Nos. most of which are made of concrete materials. Cavite.MARINA Z. GARCIA. which process was ALFREDO Z. The trial court raised by respondent NHA before the expropriation court (now Branch rendered judgment ordering the expropriation of these lots and the 18. ZABALLERO. 2. On February 24.123. Lot No. FRANCISCO. ANGELITA Z. T. Jr. 1987 in the case of NHA as the claims for attorneys fees of Atty. Ocular inspections[7] conducted by the trial court on the subject Regional Trial Court of Tagaytay City) issued an Order[4] the dispositive properties show that: portion of which reads: 1. and resolving thus. A large area of the same is still unoccupied. CLARITA Z. LOURDES ZABALLERO-LAVA. 1988. and TERESITA F. 6198-A with an area of 120. both unjustified and unreasonable. These houses are not being occupied by squatters relocated to the said lot by the defendant NHA. (1) The Register of Deeds of the Province of Cavite is hereby ordered to transfer. to immediately pay the defendants. however. ARMANDO Z. FRANCISCO. ZABALLERO. in the name of the plaintiff National Housing Authority. On September 29. FRANCISCO. put an end to this controversy and consign the same to its final rest. Q-92-12093. C. 6198-A and 6199 court.G. T-55702 containing an area of 20. ALFREDO A. registration fees payment of just compensation. the trial court held that: (1) 4641 covering Lot Nos. in PUNO.[6] respondent NHA averred that it had already public purpose of the expropriation was the expansion of the paid a substantial amount to herein petitioners and that the Dasmarias Resettlement Project to accommodate the squatters who expropriation judgment could not be executed in view of several issues were relocated from the Metropolitan Manila area. respondent. 1995. 1992 a complaint[5] for which dismissed the complaint for forfeiture of rights filed by herein forfeiture of rights before the Regional Trial Court of Quezon City. 2001 denying Branch 79. FRINE A. respondent National Housing on the expropriated lands in violation of the stated public purpose for Authority (NHA) filed separate complaints for the expropriation of expropriation and had not paid the just compensation fixed by the sugarcane lands.[3] collaborating counsel for petitioners. 80% of Lot No. Registration Law (PD 1529). This was affirmed by the Supreme and other expenses for the transfer of title to respondent NHA. RT-638 containing an area of 79. NHA had not relocated squatters from the Metropolitan Manila area Records show that in 1977. AUGUSTO M. petitioners filed on April 28. NATIONAL HOUSING AUTHORITY. as well Court in a decision rendered on October 29. FRANCISCO. J. are directed to pay the corresponding DECISION capital gains tax on the subject properties. JR.872 square meters situated in Barrio Bangkal. 51641 dated September 29. In its Answer.. Most of the area covered by Lot No. They prayed that respondent NHA be enjoined from disposing of the cadastral survey of Dasmarias. the to be sold to qualified low income beneficiaries. on September 26. that respondent NHA actually pursued the public purpose of the expropriation when it entered into a contract with Arceo C. paying on its own (NHA) account. RT-639 and RT.G. Dasmarias. ZABALLERO. JR. It ruled Cavite.167 square meters situated in Barrio Bangkal. and in separate check. 1989. LUNA. 3. 6448-E. particularly Lot Nos. The stated judgment. petitioners. 2075 is almost occupied by the following: houses and structures. as well as the Resolution dated March 13. REYES. favor of Atty. VICTOR GREGORIO F. 6198-A and 6199 with respondent NHA is not deemed to have abandoned the public purpose an aggregate area of 159. SOCORRO EMILIA certificates of title.-396 and T. Zaballero[2] and which became final on November 26. compensation of their expropriated properties. ZABALLERO. involving the construction of low cost housing on the expropriated lots under pain of contempt. vs. in the amount of P322. EUGENIA Z. Tagaytay City) concerning capital gains tax. Branch 79 above order. vs. Yuseco. sustained by their contract as gleaned from the records.-392. ALMA received by it according to the records.05. segregating therefrom. pursuant to the provisions of the Property ZABALLERO-YAP. MARIA ELENA legal expenses incident to the registration or issuance of new F. (b) Transfer Certificate of Title No. Bobby P. Dasmarias. T. (3) Defendants. Cavite. ZABALLERO. Cavite belonging to the and alienating the expropriated properties and that judgment be petitioners. before the then Court of First Instance of Cavite. Dasmarias. to coordinate with the plaintiff NHA in this regard. petitioners. ZABALLERO. 1987. the necessary ZABALLERO. with no ZABALLERO.

The . public welfare. of utilities and substance not in accord with jurisprudence. the that obviate the need to take private property for public basis should be the value at the time the property was taken. To this end. The constitutional restraints are public use and just political power for the common good. general welfare satisfies the requirement of public use. compensation. The 1987 Constitution explicitly provides for the exercise of the SECTION 1. use Petitioners cannot insist on a restrictive view of the eminent and disposition of property and its increments. the idea that public use is strictly limited to clear cases of use by the public has been We likewise do not subscribe to petitioners contention that the abandoned. a unoccupied. of errors: xxxxxxxxx 1. We have appeal. The other is 2. It is now It follows that the low cost housing project of respondent NHA settled doctrine that the concept of public use is no longer limited to on the expropriated lots is compliant with the public use requirement. Whatever project is undertaken must be for the public for the intended purpose it would revert to the to enjoy. et al. We are not persuaded. (3) the payment of just which circumscribes the scope of government activities and public compensation is independent of the obligation of herein petitioners to concerns and which possesses big and correctly located public lands pay capital gains tax. Petitioners contend that respondent NHA violated the stated commercials firms. Neither circumstance applies to the Philippines. determines what is public use. Here.properties shall revert back to its original owners in case the purpose The restrictive view of public use may be appropriate for a nation of expropriation is terminated or abandoned. cannot be taken to mean as a deviation from the stated public purpose of their taking. economic. ownership.. Article XIII of the Constitution which expropriated properties should now be returned to herein provides that: petitioners. Reyes. the constitution in at least two cases. The Honorable Court of Appeals had decided a question of substance not in accord with justice and equity when it ruled that. The expropriation judgment declared that respondent in the case of Heirs of Juancho Ardona. and public occupy the expropriated lots by relocating squatters from the Metro convenience.[10] Project when it failed to relocate the squatters from the Metro Manila area. It is not anymore. And the necessities which impel the exertion of sovereign power are all too often found in areas of scarce Petitioners are now before us raising the following assignment public land or limited government resources. The Honorable Court of Appeals erred in not declaring the judgment of expropriation forfeited in light of The act of respondent NHA in entering into a contract with a real the failure of respondent to use the expropriated estate developer for the construction of low cost housing on the property for the intended purpose but for a totally expropriated lots to be sold to qualified low income beneficiaries different purpose. the Court of Appeals affirmed the decision of the trial court. More specifically. reduce social. Petitioners likewise question the public nature of the use continuing program of urban land reform and housing which will make by respondent NHA when it entered into a contract for the at affordable cost decent housing and basic services to underprivileged construction of low cost housing units. entertainment and service companies. justice other private enterprise to the government. the Constitution itself allows the State to undertake. public benefit. which showed that most of the expropriated properties remain for the common good and in cooperation with the private sector. it is claimed that respondent NHA has forfeited for the marginalized sector is in furtherance of the social justice its rights and interests by virtue of the expropriation judgment and the provision under Section 1. Jurisprudence has it that the expropriation of private The petition is not impressed with merit. expropriation is condemnee. and (4) in the payment of just compensation. land for slum clearance and urban development is for a public purpose even if the developed area is later sold to private homeowners. One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The Congress shall give highest priority to the enactment power of eminent domain over private properties upon payment of of measures that protect and enhance the right of all the people to just compensation. et al. to remove any doubt. Otherwise. The term public use has now been held to be synonymous stated public purpose was abandoned when respondent NHA failed to with public interest. The Honorable Court of Appeals decided a question of in the transfer. and other public purpose for the expansion of the Dasmarias Resettlement private concerns. the State shall require the acquisition. the action to declare the forfeiture of not allowable. as borne out by the ocular inspection conducted by the trial court Moreover.[11] The from the stated public purpose in the expropriation expropriation of private property for the purpose of socialized housing proceedings.[9] to wit: NHA has a lawful right to take petitioners properties for the public use or purpose of expanding the Dasmarias Resettlement Project. private property shall not be taken for public use without just and remove cultural inequities by equitably diffusing wealth and compensation. never been a laissez faire State. through the exercise of this power. vs. noted. traditional purposes. As long as the purpose of the taking rights under the expropriation judgment can not is public. Hence. and political inequalities. There was a time when the expropriation court did not contain a condition it was felt that a literal meaning should be attached to such a that should the expropriated property be not used requirement. As just prosper. domain provision of the Constitution by contending that the contract for low cost housing is a deviation from the stated public use. (emphasis supplied) 3. which is allegedly different and homeless citizens in urban centers and resettlement areas. Article III states that human dignity. as elsewhere. then the power of eminent domain comes into play. as the judgment of The taking to be valid must be for public use.[8] The rationale for this new approach is well explained Manila area. section 9. It is accurate to state and equity when it ruled that the non-payment is then that at present whatever may be beneficially employed for the not a ground for forfeiture. as in the case of streets or parks. On purposes.

After condemnation. Knight. They compensation is not subject to any condition. In fact. The exercise of such rights vested to it as the x x x If. restriction or compensation to herein respondents but likewise adjudges the qualification. only upon full payment of the just compensation. under the expropriation judgment the payment of just forfeiture of its rights and interests over the expropriated lots. The landowner was merely given the relief of recovering pass from the owner without his consent. time it was taken and appropriated by the State. v. plaintiffs are not holding that title to property does not pass to the condemnor until entitled to recover possession of their expropriated lots which are just compensation had actually been made. only to demand the market value of the same. then.. are bound. it is a demand the return of the expropriated lots.. as soon as the property is actually appropriated while no requisite expropriation proceedings were first under the authority of law for a public use. Republic where the private landowners had back to the date on which the petition under the Eminent Domain remained unpaid ten years after the termination of the expropriation Act. in Rubottom v. respondents reacquires the property so expropriated. which may be deemed just and equitable under the said that the construction upon the statutes was that the fee did not premises. In arguing for the the purpose is terminated or abandoned the former owner return of their property on the basis of non-payment.. We. as In Kennedy v. Said lots have been the subject of complete at the time of entry. acts upon the property. vs. either by the exercise of eminent domain or by than may be obtained by voluntary conveyance.[14] it was held that: Appeals. of course. likewise find the refusal of respondent NHA to pay or any reversion to the former owner. title to the property taken remains in expropriation proceedings. and ordered sold to the government. Indianapolis. condemnation proceedings When land has been acquired for public use in fee simple provide a judicial process for securing better title against all the world unconditionally. An in rem proceeding. The points in dispute are whether such payment can still be made x x x Although the right to appropriate and use land taken for a canal is and. it was held that actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State albeit not to the appropriation of Said relief may be granted under plaintiffs prayer for such other it to public use. in what amount. et al. Second. upon the contrary. Petitioner has occupied. the former owner retains no rights in the land. of course. Kennedy further said that both on principle and Pasay City where the recovery of possession of property taken for authority the rule is x x x that the right to enter on and use the public use prayed for by the unpaid landowner was denied even property is complete. however. this Court ruled is filed. for example. ignore the fact that the right of the expropriating authority is far from however. (emphasis supplied) purchase. but that the title does not instituted.[12] is still good and sound doctrine. exercised dominion over the property pursuant to the judgment. the land becomes the absolute property of the rescission might perhaps apply. long final.: intents and purposes. if so. Municipality of as their privies. Thus: Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation is entered and paid. In Rexford v. the decisions still devoted to the public use for which they were expropriated but appear to be uniformly to this effect. and the public use may be abandoned. the US Supreme Court cited several cases well as the annotations upon their title certificates. to be unfounded and unjustified. or the land may be devoted to a different use. but the condemnors title relates Thus. condemnee indeed has amounted to at least a partial compliance or with the condition that when that purpose is ended or abandoned satisfaction of the 1979 judgment. until just compensation has compensation for his property computed at its market value at the been made to him. McLure. in the expropriation suit. for all Cabanatuan. x x x If. to which the remedy of title. the Court of Appeals of New York remedies. condemnation expropriator x x x. the paramount title is in the public under a new and independent title. or the commissioners report under the Local Improvement Act. without any condition. Our own Supreme Court has held in Visayan Refining Co. Secretary In the recent case of Republic of the Philippines vs. title to the petitioners to pay the capital gains tax and to surrender the owners property expropriated shall pass from the owner to the expropriator duplicate certificates of title. It follows that both by virtue of the judgment. in Valdehueza vs. Camus and The judgment rendered by the Bulacan RTC in 1979 on the Paredes. vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land was complete prior The Court proceeded to reiterate its pronouncement in Alfonso vs. as well enunciated in the early case of Fery vs. by giving notice to all claimants to a disputed title. proceedings. then. x x x. et al. allegedly for failure of petitioners to pay capital gains tax and surrender the owners duplicate certificates of title. that: expropriation proceedings provides not only for the payment of just . when bar by prescription on grounds of non-execution. just compensation. Court of of Agrarian Reform. proceedings. viz. thereby preempting any claim of the property shall return to its former owner. As early as 1838. Inc. Petitioners further aver that the continued failure of respondent NHA to pay just compensation for a long period of time justifies the First. In the case of Association of Small Landowners in the Phils. thus. land is expropriated for a particular purpose. utilized and. to the payment. the decree of expropriation gives to the entity a fee simple that of an unpaid seller in ordinary sales. Respondent NHA justifies recognized rule that although the right to enter upon and appropriate the delay to pay just compensation by reason of the failure of the land to public use is completed prior to payment.[13] the Court ruled that non-payment of just compensation does not entitle the private landowners to recover possession of their expropriated lots. they were condemned for public use. Contrary to petitioners submission. the ruling property condemned in favor of petitioner over which parties. By final and executory judgment in said the owner until payment is actually made. without any impairment of the estate or title acquired.taking here is absolute. as part of an airport.

NHA and demandable from respondent NHA. broadly judgment of the lower court. x x x. In Republic. if property is taken for public use before Dasmariñas Resettlement Project when it failed to relocate the compensation is deposited with the court having jurisdiction over the squatters from the Metro Manila area. which is allegedly different from the stated public (but not better than) the position he was in before the taking purpose in the expropriation proceedings." disputed that respondent NHA took actual possession of the "public welfare. Court of Appeals. petitioners contended that respondent NHA desires to sell. described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives. It is now settleddoctrine that the concept of public use is no Records show that there is an outstanding balance longer limited to traditional purposes. irrevocably taken from an unwilling owner until compensation is paid.[15] the Court for the expropriation of sugarcane lands belonging to the petitioners. Thus.[17] Perforce. the final compensation must include interests on its just value ocular inspection conducted by the trial court which showed that to be computed from the time the property is taken to the time when most of the expropriated properties remain unoccupied. the appealed judgment is modified as follows: is later sold to private homeowners. The expropriation of private property for the 2.218. it is claimed that occurred. and one who A few years later.218. respondent NHA has forfeited its rights and interests by virtue of the expropriation judgment and the expropriated properties should now x x x This allowance of interest on the amount found to be the value be returned to herein petitioners." Thus. 1. Ordering petitioners to pay the capital gains tax. Ordering petitioners to surrender to respondent discussion are attentively examined it will be apparent that the National Housing Authority the owners duplicate method of expropriation adopted in this jurisdiction is such as to certificates of title of the expropriated properties afford absolute reassurance that no piece of land can be finally and upon full payment of just compensation. The trial court rendered judgment ordering the expropriation of these lots and The constitutional limitation of just compensation is considered to be the payment of just compensation. at the time of the establishment of the obligation shall be the basis for the payment when no agreement to the contrary is stipulated. The term "public use" has now of P1.If the laws which we have exhibited or cited in the preceding 3. urban development is for a public purpose even if the developed area WHEREFORE. vs. likewise question the public nature of the use by respondent NHA between the taking of the property and the actual payment. Ordering respondent National Housing Authority to Moreover. underprivileged and homeless citizens in urban centers and resettlement areas. Hence. (emphasis supplied) With respect to the amount of the just compensation still due REYES VS.35 that ought to be paid to petitioners." "public benefit.35 with legal interest thereon at 12% per annum computed from the taking of the property in 1977 In addition. the Constitution itself allows the State to undertake. the contract for low cost housing is a deviation from the stated public use.35 with the common good and in cooperation with the private sector.574. providing that. of the property as of the time of the taking computed. being an effective forbearance. The Supreme Court affirmed the the sum equivalent to the market value of the property.218. et al. Held: The Supreme Court held in favor of the respondent NHA. it being fixed at the time of the actual taking by the violated the stated public purpose for the expansion of the government.. the lower courts erred in not awarding interest computed from the time the property is actually taken to the time when compensation is actually paid or deposited in Facts: Respondent National Housing Authority (NHA) filed complaints court. commercials firms. at 12% per annum should help eliminate the Issue: Whether or not the judgment of expropriation was forfeited in issue of the constant fluctuation and inflation of the value of the the light of the failure of respondent NHA to use the expropriated currency over time. Accordingly." to be paid the balance of P1. a legal interest thereon at 12% per annum computed continuing program of urban land reform andhousing which will from the taking of the expropriated properties in make at affordable cost decent housing and basic services to 1997 until the amount due shall have been fully paid. whatever may be expropriated properties in 1977. and other private concerns. the expropriation of private land for slum clearance and until the due amount shall have been fully paid. while petitioners are not beneficially employed for the general welfare satisfies the entitled to the return of the expropriated property. entertainment and service companies.574. Petitioners compensation is actually paid or deposited with the court. . imposed interest at 12% per annum in order to help eliminate the issue The stated public purpose of the expropriation was the expansion of of the constant fluctuation and inflation of the value of the currency the Dasmariñas Resettlement Project to accommodate the squatters over time. for pay petitioners the amount of P1. thus: who were relocated from the Metropolitan Manila area. the value of the currency property for the intended purpose but for a totally different purpose. in case of extraordinary inflation or deflation. legal when it entered into a contract for the construction of low interests accrue in order to place the owner in a position as good as costhousing units. as borne out by the case. In fine. Article 1250 of the Civil Code.[16] It is not been held to be synonymous with "public interest.574. petitioners cannot insist on a restrictive view of a contractual agreement is needed for the effects of extraordinary the eminent domain provision of the Constitution by contending that inflation to be taken into account to alter the value of the currency. has strict application only to contractual obligations. they are entitled requirement of public use." and "public convenience. In other words. et al. and purpose of socialized housing for the marginalized sector is in furtherance of social justice.

vs.[4] an order fixing the VITUG. Eminent domain is generally so described as the Office of the Solicitor General in behalf of the Republic. characteristic. declaring the later. as condemnation. is. v. The motion was opposed by petitioners. approved by the Minister of Education. admittedly. dated 15 January 1992. When the parcel was ascertained by On 15 February 1990. provisions in our Constitution on question in accordance with the procedure provided for in Rule 67 of the subject are meant more to regulate. petitioners. the birthsite of the founder of the Iglesia ni remedy of appeal in the ordinary course of law was an adequate Cristo. RTC-Pasig.[8] According to your guidelines. COURT OF APPEALS. with an area of about four hundred ninety-two (492) square meters. 1. in CA-G. with development of historical sites that may be declared as national less frequency.00) and assessed (P16.00) values of In this appeal. In his Opinion No. Series of 1986. Taguig. Municipal Treasurer of Taguig. a religious entity. or support of Iglesia historical landmark. ASUNCION MANOSCA and LEONICA which is the birthsite of Felix Y.). instead. Presiding Judge. which was private property shall not be taken for public use without just approved on January.236. The facts of the case are not in dispute. In view thereof. a suspension in the implementation of the 03rd August Petitioners inherited a piece of land located at P. achievement. Branch 71. benefit. the late Felix Y. At the same time. who. it is believed that the National Historical Institute as We begin. the land as such national historical landmark which is a public HON. on 29 May 1989. 24969 (entitled Alejandro Manosca. It is said to be an essential part of governance even in its most primitive form and thus inseparable from Pursuant to Section 4 of Presidential Decree No. Presiding Judge. in any case. 260. that the act would constitute an application of public declared by the National Historical Institute (NHI) as a national funds. Metro Manila. Petitioners motion for the legality of the measure. like police power and taxation. monuments and landmarks and the Eminent domain. Calzada. may initiate the institution of an inherent power of sovereignty. expropriation by the Republic of a 492-square-meter parcel of land so incidentally. the trial court issued.: provisional market (P54. 1986 by the then Minister of Education. of the 1987 Constitution. or modification that makes a turning point or stage in the appellate court dismissed the petition on the ground that the Philippine history.[7] another order was issued by the trial land to be a national historical landmark. Metro Manila. the the Revised Rules of Court. The proceedings should be instituted by exercise of the power. The resolution was. or on 20 February 1990. RTC-Pasig. the Republic. Manalo.[6] Five (5) days pursuant to Section 4[2] of Presidential Decree No. Series of 1986. J. through the Office of the government that may be acquired for some public purpose through a Solicitor-General. Metro Manila. ni Cristo. once the required sum would have been deposited with the SP No.[10] The only direct constitutional qualification is that Historical Institute issued Resolution No. from the the property and authorizing the Republic to take over the property decision[1] of the Court of Appeals. with a few known an agency of the Government charged with the maintenance and postulates. monuments and/or landmarks. the opinion of the Secretary of Justice was asked on the of petitioners motion to dismiss.[9] It is a right the Regional Trial Court of Pasig for and in behalf of the NHI to take or reassert dominion over property within the state for public alleging. respondent Republic filed an urgent motion for the issuance of an order to permit it to take immediate possession of the DECISION property. on 03 August 1989.[11] This proscription is intended to provide a safeguard Culture and Sports. Metro Manila. Manalo. Branch 168. the highest and most exact idea of property remaining in the Accordingly. as a National Historical Landmark. REYES CLARAVAL. 1989 order of the trial court. et al. Later. PELAYO. also often referred to as expropriation and. the of Iglesia Ni Cristo. It need not be clothed with any condemnation proceedings for the purpose of acquiring the lot in constitutional gear to exist. in this present recourse of petitioners. BENJAMIN Cristo. inter alia. trial court issued its denial of said motion to dismiss.ALEJANDRO MANOSCA. Series of 1987. Burgos Street. had failed to show contributions to Philippine history and culture has been declared as a any grave abuse of discretion or lack of jurisdictional competence on national landmark. contrary to the provision of Section 29(2). it passed Resolution No. care of national shrines. et al. had made remedy and that the petition itself. founder of the Iglesia ni MANOSCA. Culture and and/or suspension of the order of 03 August 1989 with the rejection Sports. HON. that: use or to meet a public exigency.Thus. the reconsideration of the 20th February 1990 order was likewise denied Secretary of Justice replied in the affirmative. the Court of Appeals. 1. following the filing by respondent Republic of the NHI to have been the birthsite of Felix Y. on 06 court. for the use. GRADUACION A. declaring moot and academic the motion for reconsideration January 1986. Pelayo. Hon. Benjamin V. court. and REPUBLIC OF THE PHILIPPINES. directly or indirectly. the National sovereignty.120. 133. shrines. this Court is asked to resolve whether or not the public Petitioners moved to dismiss the complaint on the main thesis that use requirement of Eminent Domain is extant in the attempted the intended expropriation was not for a public purpose and. national landmarks are places or Petitioners then lodged a petition for certiorari and prohibition with objects that are associated with an event. respondents.[5]Petitioners sought. the founder its reply to petitioners motion seeking the dismissal of the case. declaring the above described parcel of land . purpose. After a hearing. in the meanwhile. 260. rather than to grant.R. compensation. Article VI. Manalo. via a petition for review on certiorari. he explained: by the trial court in its 16th April 1991 order. HON. A motion for the reconsideration of the historical interest is a public use for which the power of eminent decision was denied in the 23rd July 1992 resolution of the appellate domain may be authorized x x x. instituted a complaint for expropriation[3] before method in the nature of a forced purchase by the State. The plaintiff perforce needs V. It has been held that places invested with unusual the part of the trial court. In its now disputed 15th January 1992 decision.

679.. 99 L. or be personally and directly affected lands to be subdivided into small lots for resale at cost to individuals. The term may be said to mean public to state then that at present whatever may be beneficially employed usefulness. 773. It is not so any more. 156 Conn. The concept of the public welfare is broad and x x x taking of property for military posts.[21] has viewed the Constitution a surrendered without obvious general loss and inconvenience. Reyes. that is The other is the transfer. Katz v. piers. means a taking is public. 25. those who govern the District of Columbia decide that the Nations specifically. 43 S. 424. thus: x x x A historical research discloses the meaning of the term public Public Use. 580. Missouri. cemeteries. the right to preclusive in nature and. It is accurate 689. the constitution in at least two cases. well-balanced This view of petitioners is much too limitative and restrictive. sidewalks. inclusive. ferries. Rural Progress cases of use by the public has long been discarded. v. In the present case.M. There was a time when advantage or public benefit accrues sufficient to constitute a public it was felt that a literal meaning should be attached to such a use. ed. As long as the purpose of the right to take private property in virtue of eminent domain. 96 bridges. in Guido. 14 S Ct 891. has aptly observed that what. as in the case of streets or parks. United States v. and. as long as public has right of use. 521. ed. vs. its demands for taking property by eminent domain. 38 L. to remove any individuals.[15] Luxton v. It is within the power wells. It is not for us to reappraise them. Rindge Co. 700.[12] to wit: (a) the size of the land expropriated. it is not confined to actual use by public. determines what is public use. 469. parks. crematories. this particular context of the statute that the Court had made the pronouncement. has ultimately emerged government.[22] increase in population and new modes of communication and transportation. Ed. Otherwise.2d 579. 160 US The term public use. 692. held: economic reform.. beautiful as well as healthy. See expropriation of vast tracts of land and landed estates. 153 US 525. As society advances. of the legislature to determine that the community should be and railroads. 16 S Ct 427. that public use should thereby be restricted to such Petitioners assert that the expropriation has failed to meet the traditional uses. writing the ponencia in J. 72 S Ct 405. See DayBrite Lighting. water supply and sewerage systems. Brandon. market places. Parker large number of people benefited. 2d 769. Los Angeles County. For condemnation purposes. vs. One is the expropriation of equally interested in such use. The values it represents are spiritual as schoolhouses. public buildings including L. plazas.[18] quoting from Berman v. whether exercised by one or many members of public. and other differing circumstances brought about by an is a concept of public use which is just as broad as public welfare. however.e. A dynamic instrument and one that is not to be construed narrowly or public use for which land may be taken defies absolute definition for pedantically so as to enable it to meet adequately whatever problems it changes with varying conditions of society. Chief Justice Fernando. if the object is to satisfy a great public want or exigency. Fernando states: condemnation is sought and. It was in Fifth Amendment that stands in the way. or what is productive of general for the general welfare satisfies the requirement of public use. 27). Inc.Ct. If the Presidents power under Commonwealth Act No. the . utilities and other private enterprise to the government. Gettysburg Electric R.against possible abuse and so to protect as well the individual against The validity of the exercise of the power of eminent domain for whose property the power is sought to be enforced. The guidelines in Guido were not meant to be Once the object is within the authority of Congress. it is not at all to be said. 1186. 342 US 421. It is measured in beneficially employed for the community is a public use. spacious as well as clean. 808. streets. Montana Power Co.Ed. upon the individual increase and each demand is a new use to which public use is one which confers same benefit or advantage to the the resources of the individual may be devoted. terms of right of public to use proposed facilities for which Chief Justice Enrique M. But each and every member of society need not be doubt. must be considered in its general concept of meeting a public need or a public exigency. We do not sit to determine whether a particular housing project is or is not desirable. aesthetic as well as monetary. playgrounds. acquire private lands for subdivision into smaller home Capital should be beautiful as well as sanitary.S. Fr.[14] i. requirement. This Court in Heirs Administration. 472. (c) the extent of social and (348 U. (b) the of Juancho Ardona v. or advantage. expropriation is Public use. 457 P. 772.. 262 U. Eminent domain. merely passed upon the issue of the extent of account a wide variety of values. in constitutional provisions restricting the exercise of the not allowable. x x x for whatever is public.[16] Black summarizes the It has been explained as early as Sea v. a public The taking to be valid must be for public use. Whatever project is undertaken must be for the public to enjoy. through the exercise of this power. most certainly. Tuason & The use must be a needful one for the public. changing conceptions of scope and functions of himself. artesian well as physical. use concerning the whole community as distinguished from particular As just noted. new appliances in the the future has in store. of sufficient. Land Tenure Administration.[19] that: characterization given by various courts to the term. The constitutional and statutory basis use to be one of constant growth. a noted constitutionalist sciences. utility. 529. traditional purposes is beyond question. in fact. ed. roads. there is nothing in the lots or farms for resale to bona fide tenants or occupants. For the domain should not now be understood as being confined only to the power of eminent domain is merely the means to the end. 539 to. vs. constitution. 530. Manila Railroad Co. Mont. North River Bridge Co. 245 A. The idea that public use is strictly limited to clear guidelines set by this Court in the case of Guido v. 576. and not for a particular individual. It may be limited to the inhabitants of a small or restricted locality.586.[20] benefit. the Congress and its authorized agencies have made determinations that take into The court. Co. then the power of eminent domain comes into play.[13] Petitioners suggest that we confine the concept of expropriation only to the following public uses. 40 L. 810. by it. 67 L. wharves. Joaquin Bernas. not having been otherwise defined by the 668. but must be in common. Bokma.S. levees.[17] Petitioners ask: But (w)hat is the so-called unusual interest that the expropriation of (Felix Manalos) birthplace become so vital as to be a . as well as carefully patrolled. which cannot be Co. the power of eminent realize it through the exercise of eminent domain is clear.

public use appropriate for the exercise of the power of eminent Issue: Whether or not the expropriation of the land whereat Manalo
domain when only members of the Iglesia ni Cristo would was born is valid and constitutional.
benefit? This attempt to give some religious perspective to the case
deserves little consideration, for what should be significant is the Held: Yes. The taking to be valid must be for public use. There was a
principal objective of, not the casual consequences that might follow time when it was felt that a literal meaning should be attached to
from, the exercise of the power. The purpose in setting up the such a requirement. Whatever project is undertaken must be for the
marker is essentially to recognize the distinctive contribution of the public to enjoy, as in the case of streets or parks. Otherwise,
late Felix Manalo to the culture of the Philippines, rather than to expropriation is not allowable. It is not so any more. As long as the
commemorate his founding and leadership of the Iglesia ni purpose of the taking is public, then the power of eminent domain
Cristo. The practical reality that greater benefit may be derived by comes into play. As just noted, the constitution in at least two cases,
members of the Iglesia ni Cristo than by most others could well be to remove any doubt, determines what public use is. One is the
true but such a peculiar advantage still remains to be merely expropriation of lands to be subdivided into small lots for resale at
incidental and secondary in nature. Indeed, that only a few would cost to individuals. The other is the transfer, through the exercise of
actually benefit from the expropriation of property does not this power, of utilities and other private enterprise to the
necessarily diminish the essence and character of public use.[23] government. It is accurate to state then that at present whatever
may be beneficially employed for the general welfare satisfies the
Petitioners contend that they have been denied due process in the requirement of public use.
fixing of the provisional value of their property. Petitioners need
merely to be reminded that what the law prohibits is the lack of
opportunity to be heard;[24] contrary to petitioners argument,
the records of this case are replete with pleadings[25] that could have
dealt, directly or indirectly, with the provisional value of the property.

Petitioners, finally, would fault respondent appellate court in
sustaining the trial courts order which considered inapplicable the
case of Noble v. City of Manila.[26] Both courts held correctly.The
Republic was not a party to the alleged contract of exchange
between the Iglesia ni Cristo and petitioners which (the contracting
parties) alone, not the Republic, could properly be bound.

All considered, the Court finds the assailed decision to be in accord
with law and jurisprudence.

WHEREFORE, the petition is DENIED. No costs.

SO ORDERED.

Manosca vs. CA

G.R. NO. 106440, January 29, 1996

Facts: Petitioners inherited a piece of land when the parcel was
ascertained by the NHI to have been the birth site of Felix Y. Manalo,
the founder of Iglesia Ni Cristo, it passed Resolution No. 1, declaring
the land to be a national historical landmark. Petitioners moved to
dismiss the complaint on the main thesis that the intended
expropriation was not for a public purpose and, incidentally, that the
act would constitute an application of public funds, directly or
indirectly, for the use, benefit, or support of Iglesia ni Cristo, a
religious entity, contrary to the provision of Section 29(2), Article VI,
of the 1987 Constitution.

HEIRS OF TIMOTEO MORENO and MARIA ROTEA, namely: ESPERANZA and the airport manager begging them for the exercise of their
R. EDJEC, BERNARDA R. SUELA, RUBY C. ROTEA, BERNARDA R. ROTEA, alleged right to repurchase Lots Nos. 916 and 920.[11] Their pleas
ELIA R. VDA. DE LIMBAGA, VIRGINIA R. ARBON, ROSALINDA R. were not heeded.[12]
ARQUISOLA, CORAZON ROTEA, FE R. EBORA, CARIDAD ROTEA,
ANGELES VDA. DE RENACIA, JORGE ROTEA, MARIA LUISA ROTEA- On 11 March 1997 petitioners filed a complaint for reconveyance and
VILLEGAS, ALFREDO R. ROTEA, represented by his heirs LIZBETH ROTEA damages with RTC of Cebu City against respondent MCIAA to compel
and ELEPETH ROTEA; LUIS ROTEA, represented by his heir JENNIFER the repurchase of Lots Nos. 916 and 920, docketed as Civil Case No.
ROTEA; and ROLANDO R. ROTEA, represented by his heir ROLANDO R. CEB-20015. In the main, petitioners averred that they had been
ROTEA JR., petitioners, vs. MACTAN - CEBU INTERNATIONAL AIRPORT convinced by the officers of the predecessor agency of respondent
AUTHORITY, respondent. MCIAA not to oppose the expropriation proceedings since in the
future they could repurchase the properties if the airport expansion
DECISION would not push through. MCIAA did not object to petitioners
evidence establishing these allegations.
BELLOSILLO, J.:
When the civil case was pending, one Richard E. Enchuan filed
THE HEIRS OF TIMOTEO MORENO AND MARIA ROTEA, petitioners a Motion for Transfer of Interest alleging that he acquired through
herein, are the successors-in-interest of the former registered deeds of assignment the rights of some of herein petitioners over
owners of two (2) parcels of land situated in Lahug, Cebu City, Lots Nos. 916 and 920.[13] The Department of Public Works and
designated as Lot No. 916 with an area of 2,355 square meters under Highways (DPWH) also sought to intervene in the civil case claiming
TCT No. RT-7543 (106) T-13694, and Lot No. 920 consisting of 3,097 that it leased in good faith Lot No. 920 from the predecessor agencies
square meters under TCT No. RT-7544 (107) T-13695.[1] of respondent MCIAA and that it built thereon its Regional Equipment
In 1949 the National Airport Corporation as the predecessor agency Services and its Region 7 Office.[14]
of respondent Mactan-Cebu International Airport Authority (MCIAA) On 12 April 1999 the trial court found merit in the claims of
wanted to acquire Lots Nos. 916 and 920 above described among petitioners and granted them the right to repurchase the properties
other parcels of land for the proposed expansion at the amount pegged as just compensation in Civil Case No. R-1881
of Lahug Airport.[2] To entice the landowners to cede their properties, but subject to the alleged property rights of Richard E. Enchuan and
the government assured them that they could repurchase their lands the leasehold of DPWH.[15] The trial court opined that the
once Lahug Airport was closed or its operations transferred expropriation became illegal or functus officio when the purpose for
to Mactan Airport.[3] Some of the landowners executed deeds of sale which it was intended was no longer there.[16]
with right of repurchase in favor of the government but many others,
including the owners of Lots Nos. 916 and 920 herein mentioned, Respondent MCIAA appealed the Decision of the trial court to the
refused the offer because the payment was perceived to be way Court of Appeals, docketed as CA-G.R. CV No. 64456.
below the market price.[4]
On 20 December 2001 the Court of Appeals reversed the
On 16 April 1952, as the negotiations for the purchase of the lots assailed Decision on the ground that the judgment of condemnation
necessary for the expansion and improvement of Lahug Airport in Civil Case No. R-1881 was unconditional so that the rights
irredeemably broke down, the Civil Aeronautics Administration as the gained therefrom by respondent MCIAA were indicative of ownership
successor agency of the National Airport Corporation filed a in fee simple.[17] The appellate court
complaint with the Court of First Instance of Cebu, for the cited Fery v. Municpality of Cabanatuan[18] which held that mere
expropriation of Lots Nos. 916 and 920 and other subject realties, deviation from the public purpose for which the power of eminent
docketed as Civil Case No. R-1881. domain was exercised does not justify the reversion of the property
to its former owners, and Mactan-Cebu International Airport
On 29 December 1961 the trial court promulgated its Decision in Civil Authority v. Court of Appeals[19] which is allegedly stare decisis to the
Case No. R-1881 condemning Lots Nos. 916 and 920 and other lots instant case to prevent the exercise of the right of repurchase as the
for public use upon payment of just compensation.[5] Petitioners former dealt with a parcel of land similarly expropriated under Civil
predecessors were paid P7,065.00 for Lot No. 916 and P9,291.00 for Case No. R-1881.[20]
Lot No. 920 with consequential damages by way of legal interest
from 16 November 1947.No appeal was taken from the Decision on On 28 November 2002 reconsideration of the Decision was
Lots Nos. 916 and 920, and the judgment of condemnation became denied. [21] Hence, this petition for review.
final and executory.[6] Thereafter, the certificates of title for these
parcels of land were issued in the name of the Republic of the Petitioners argue that Fery v. Municpality of Cabanatuan does not
Philippines under TCT No. 58691 for Lot No. 916 and TCT No. 58692 apply to the case at bar since what was involved therein was the right
for Lot No. 920, which under RA 6958 (1990) were subsequently of reversion and not the right of repurchase which they are
transferred in favor of respondent MCIAA.[7] invoking. They also differentiate Mactan-Cebu International Airport
Authority v. Court of Appeals[22] from the instant case in that the
At the end of 1991, or soon after the transfer of Lots Nos. 916 and landowners in the MCIAA case offered inadmissible evidence to show
920 to MCIAA, Lahug Airport ceased operations as their entitlement to a right of repurchase, while petitioners herein
the Mactan Airport was opened for incoming and outgoing offered evidence based on personal knowledge for which reason
flights.[8]Lots Nos. 916 and 920 which had been expropriated for the MCIAA did not object and thus waived whatever objection it might
extension of Lahug Airport were not utilized.[9] In fact, no expansion have had to the admissibility thereof. Finally, petitioners allege that
of Lahug Airport was undertaken by MCIAA and its predecessors-in- their right to equal protection of the laws would be infringed if some
interest.[10] Hence, petitioners wrote then President Fidel V. Ramos

landowners are given the right to repurchase their former properties her claim, for to do so would unsettle as to her properties the
even as they are denied the exercise of such prerogative. judgment of condemnation in the eminent domain proceedings. We
also held therein that Chiongbians evidence was both inadmissible
On the other hand, respondent MCIAA clings to our decisions and lacking in probative value -
in Fery v. Municpality of Cabanatuan and Mactan-Cebu International
Airport Authority v. Court of Appeals. According to respondent MCIAA The terms of the judgment are clear and unequivocal and grant title
there is only one instance when expropriated land may be to Lot No. 941 in fee simple to the Republic of the Philippines. There
repurchased by its previous owners, and that is, if the decision of was no condition imposed to the effect that the lot would return to
expropriation itself provides [the] condition for such repurchase. CHIONGBIAN or that CHIONGBIAN had a right to repurchase the
Respondent asserts that the Decision in Civil Case No. R-1881 is same if the purpose for which it was expropriated is ended or
absolute and without conditions, thus, no repurchase could be validly abandoned or if the property was to be used other than as
exercised. the Lahug Airport.CHIONGBIAN cannot rely on the ruling in Mactan-
Cebu International Airport vs. Court of Appeals wherein the
This is a difficult case calling for a difficult but just solution. To begin presentation of parol evidence was allowed to prove the existence of
with, there exists an undeniable historical narrative that the a written agreement containing the right to repurchase. Said case did
predecessors of respondent MCIAA had suggested to the landowners not involve expropriation proceedings but a contract of sale x x x x To
of the properties covered by the Lahug Airport expansion scheme permit CHIONGBIAN to prove the existence of a compromise
that they could repurchase their properties at the termination of the settlement which she claims to have entered into with the Republic
airports venture.[23] Some acted on this assurance and sold their of the Philippines prior to the rendition of judgment in the
properties;[24] other landowners held out and waited for the exercise expropriation case would result in a modification of the judgment of
of eminent domain to take its course until finally coming to terms a court which has long become final and executory x x x x And even
with respondents predecessors that they would not appeal nor block assuming for the sake of argument that CHIONGBIAN could prove the
further the judgment of condemnation if the same right of existence of the alleged written agreement acknowledging her right
repurchase was extended to them.[25] A handful failed to prove that to repurchase Lot No. 941 through parol evidence, the Court of
they acted on such assurance when they parted with the ownership Appeals erred in holding that the evidence presented by
of their lands.[26] CHIONGBIAN was admissible x x x x Aside from being inadmissible
In resolving this dispute, we must reckon with the rulings of this under the provisions of the Statute of Frauds, [the] testimonies are
Court in Fery v. Municpality of Cabanatuan and Mactan- also inadmissible for being hearsay in nature x x x x[29]
Cebu International Airport Authority v. Court of Appeals, which define We adhere to the principles enunciated in Fery and in Mactan-
the rights and obligations of landowners whose properties were Cebu International Airport Authority, and do not overrule
expropriated when the public purpose for which eminent domain them. Nonetheless the weight of their import, particularly our ruling
was exercised no longer subsists. In Fery, which was cited in the as regards the properties of respondent Chiongbian in Mactan-
recent case of Reyes v. Court of Appeals,[27] we declared that the Cebu International Airport Authority, must be commensurate to the
government acquires only such rights in expropriated parcels of land facts that were established therein as distinguished from those
as may be allowed by the character of its title over the properties - extant in the case at bar. Chiongbian put forth inadmissible and
If x x x land is expropriated for a particular purpose, with the inconclusive evidence, while in the instant case we have
condition that when that purpose is ended or abandoned the preponderant proof as found by the trial court of the existence of the
property shall return to its former owner, then, of course, when the right of repurchase in favor of petitioners.
purpose is terminated or abandoned the former owner reacquires Moreover, respondent MCIAA has brought to our attention a
the property so expropriated. If x x x land is expropriated for a public significant and telling portion in the Decision in Civil Case No. R-1881
street and the expropriation is granted upon condition that the city validating our discernment that the expropriation by the
can only use it for a public street, then, of course, when the city predecessors of respondent was ordered under the running
abandons its use as a public street, it returns to the former owner, impression that Lahug Airport would continue in operation -
unless there is some statutory provision to the contrary x x x x If,
upon the contrary, however, the decree of expropriation gives to the As for the public purpose of the expropriation proceeding, it cannot
entity a fee simple title, then, of course, the land becomes the now be doubted. Although Mactan Airport is being constructed, it
absolute property of the expropriator, whether it be the State, a does not take away the actual usefulness and importance of
province, or municipality, and in that case the non-user does not the LahugAirport: it is handling the air traffic both civilian and
have the effect of defeating the title acquired by the expropriation military. From it aircrafts fly to Mindanao and Visayas and pass thru it
proceedings x x x x When land has been acquired for public use in fee on their flights to the North and Manila. Then, no evidence was
simple, unconditionally, either by the exercise of eminent domain or adduced to show how soon is the Mactan Airport to be placed in
by purchase, the former owner retains no rights in the land, and the operation and whether the Lahug Airport will be closed immediately
public use may be abandoned, or the land may be devoted to a thereafter. It is up to the other departments of the Government to
different use, without any impairment of the estate or title acquired, determine said matters. The Court cannot substitute its judgment for
or any reversion to the former owner x x x x[28] those of the said departments or agencies. In the absence of such
showing, the Court will presume that the Lahug Airport will continue to
In Mactan-Cebu International Airport Authority, be in operation (emphasis supplied).[30]
respondent Chiongbian sought to enforce an alleged right of
repurchase over her properties that had been expropriated in Civil While the trial court in Civil Case No. R-1881 could have simply
Case No. R-1881. This Court did not allow her to adduce evidence of acknowledged the presence of public purpose for the exercise of

916 and 920. To sum up what we have said so far. failing to keep its bargain. 87. petitioners herein. the court inadvertently omitted and which. Case No.eminent domain regardless of the survival of LahugAirport. and while the for reconveyance and damages that respondent MCIAA was the inclusion of this pronouncement in the judgment of condemnation absolute owner of Lots Nos. the return or admission concerns a legal conclusion fiercely debated by the repurchase of the condemned properties of petitioners could be parties[32] but more so since respondent was truly the absolute owner readily justified as the manifest legal effect or consequence of the of the realties until it was apparent that Lahug Airport had stopped trial courts underlying presumption that Lahug Airport will continue doing business. if an already final judgment can still be amended to court in its Decision chose not to do so but instead prefixed its finding supply an omission committed through oversight. continue to be in operation. et al. petitioners to the expropriated Lots Nos. Hence. CEB-20015 the Lahug Airport. wherein this Court allowed a judgment that had become final the wronged party seeking the aid of a court of equity in establishing and executory to be clarified by supplying a word which had been a constructive trust must himself do equity. and.. This is as it should be not only because the is it fatal to the cause of petitioners herein. In Republic v. he may no doubt that our present reading of the fallo of the Decision in Civil demand the reconveyance of the property to him. Court of Appeals[33] but within the principles grantee. must be equitably adjusted. Verily. De Los Angeles[34] we ruled . If an absolute conveyance of property is made in order to takes this case away from the ambit of Mactan-Cebu International secure the performance of an obligation of the grantor toward the Airport Authority v. the trial in the first place. when supplied. R-1881 so as to include the statements in the body thereof petitioners conveyed Lots Nos. 91-92. Paredes. such precision is not absolutely necessary nor petitioners interests. No doubt. Code. one that as well as the portions above-quoted of the Decision in the is akin[37] to the implied trust referred to in Art. Hence Although the symmetry between the instant case and the situation x x x the decision of the court below should be taken as a whole and contemplated by Art. to get the true intent and meaning of a decision. in effect changed will exercise its discretion in deciding what acts are required of the the literal import of the original phraseology x x x x This is so because. 916 and 920 to the government with afore-quoted is sanctioned by the rule that a final the latter obliging itself to use the realties for the expansion and executory judgment may nonetheless be clarified by reference to of Lahug Airport. In the case at bar. there should be obligation is offered by the grantor when it becomes due.[31] the same if the purpose for which it was expropriated is ended or Significantly.. the admission of abandoned or if the property was to be used other than as petitioners during the pre-trial of Civil Case No. 1454 is not perfect. a judgment must not be read separately but in connection with the other portions of the decision of which it forms a part. R-1881 to the effect that the [condemned] lot would return the premises is clearly inadequate since the dispositiveportion is not to [the landowner] or that [the landowner] had a right to repurchase in accord with the findings as contained in the body thereof. the arrangement is temporary and passive in the fallo thereof x x x x The foregoing pronouncements find support which the trustees sole duty is to transfer the title and possession in the case of Locsin. otherwise. On the contrary. over the property to the plaintiff-beneficiary.[38] Constructive trusts are fictions of equity which are al. these meaningful statements in the fallo or dispositive portion thereof must be correlated with the the body of the Decision warrant the conclusion that the body of such final decision x x x x [I]f an amendment may be allowed expropriated properties would remain to be so until it was confirmed after a decision has already become final x x x such amendment may that Lahug Airport was no longer in operation. the provision is considered in its entirety to get the true meaning and intent of any undoubtedly applicable. vs. constructive trusts is to decide whether in the numerous and varying the judgment portion of a decision should be interpreted and fact situations presented to the courts there is a wrongful holding of construed in harmony with the ratio decidendi thereof x x x x As property and hence a threatened unjust enrichment of the stated in the case of Policarpiovs. 63 Phil. (b) the foregoing Mactan-Cebu International Airport Authority[36] is correct in stating unmistakable declarations in the body of the Decision should merge that one would not find an express statement in the Decision in Civil with and become an intrinsic part of the fallo thereof which under Case No. to be in operation when it granted the complaint for eminent domain and the airport discontinued its activities.[41] Accordingly. the attendance in the case at bar of standing admissible evidence validating the claim of petitioners The predicament of petitioners involves a constructive trust. as explained by an expert on the law of particular portion thereof x x x x Neither is this Court inclined to trusts: The only problem of great importance in the field of confine itself to a reading of the said fallo literally. 916 and 920 as between the State and their former owners.[35] undertaking as such and the expropriated lots were not being used for any airport expansion project. the rights vis--vis the expropriated We now resolve to harmonize the respective rights of the State and Lots Nos. If the fulfillment of the enunciated in Fery as mentioned earlier. supra. 916 and 920 does not prejudice would have been ideal. et al. this simply means of public purpose upon its understanding that Lahug Airport will that in the construction or interpretation of an already final decision. the government can be other portions of the decision of which it forms a part. plaintiff-beneficiary as conditions precedent to obtaining such decree . This omission notwithstanding. compelled by petitioners to reconvey the parcels of land to them. no bound by no unyielding formula when they are used by courts as specific portion thereof should be resorted to but the same must be devices to remedy any situation in which the holder of the legal title considered in its entirety. in light of the discussion above. et defendant.. 1454 of the Civil expropriation case volunteered no less than by respondent itself. petitioners would be denied the use of their properties upon a state of affairs that was not conceived nor contemplated This Court has promulgated many cases x x x wherein it was held that when the expropriation was authorized.[40] Of course. For. a resolution or ruling may and does may not in good conscience retain the beneficial interest. In addition. This inference further consist x x x either in the x x x interpretation of an ambiguous phrase implies two (2) things: (a) after the Lahug Airport ceased its therein in relation to the body of the decision which gives it life. Philippine Veterans Board.[39] appear in other parts of the decision and not merely in In constructive trusts. a trust by virtue of law is established.

the trial court cannot base its The medium of compensation for the restitution shall be ready award on any of the exceptions enumerated in Art.00 for Lot No. Petitioners need not also pay for improvements introduced by third parties. 1190 of the Civil Code. cannot be recovered.00 for litigation expenses in favor of petitioners as conditions have for their purpose the extinguishment of an obligation decreed in the assailed Decision of 12 April 1999 of the trial court. the trustee may also be paid the necessary expenses he the lapse of the compromise scheme or schedule of payment such may have incurred in sustaining the property. leasehold right of litigation. or by time.. 916 and 920 which is crime.00 for Lot No.The records money or cash payable within a period of three hundred sixty five of the instant case do not disclose any proof presented by petitioners (365) days from the date that the amount to be returned by to substantiate that the actuations of respondent MCIAA were clearly . the provisions which.. thereby.[43] deemed forfeited and the ownership of those parcels of land shall vest absolutely upon respondent MCIAA. petitioners must pay respondent their prevailing reasonable. deterioration or improvement of the thing. the right of repurchase of petitioners improvements thereon. as the disposition of these properties is governed (11) In any other case where the court deems it just and equitable by existing contracts and relevant provisions of law. the creditor being the person who stands to receive employer's liability laws. upon the fulfillment of said conditions. DPWH. free market price in case petitioners opt to buy them and respondent decides to sell. if any. where such right is exercised in good faith. his fixed costs for amount owed is not settled. R-1881. the improvements would have to be removed without any rule remains that attorneys fees are not recoverable in the absence obligation on the part of petitioners to pay any compensation to of a stipulation thereto. attorney's fees and expenses of same subject to existing liens thereon.291. De la Cruz. with albeit the decision to resist the claim is erroneous.[46] respect to the debtor. respondent MCIAA for whatever it may have tangibly introduced therein. are laid down in the preceding article shall be applied to the party who is bound to return x x x x The rule on awards of attorneys fees and litigation expenses is found in Art. The rights and obligations between the constructive trustee and the beneficiary. the improvement shall inure to the benefit of the (8) In actions for indemnity under workmen's compensation and creditor x x x. When the and P15. if petitioners do not want to As noted in Mirasol v.000.065. In return. petitioners as if they were plaintiff-beneficiaries of (1) When exemplary damages are awarded. 916 managing the property to the extent that plaintiff-beneficiary will and 920 and/or the latters improvements as set forth herein shall be secure a benefit from his acts. Consequently. petitioners as creditors do not have to settle as part of the process of (9) In a separate civil action to recover civil liability arising from a restitution the appreciation in value of Lots Nos. 916 (2) When the defendant's act or omission has compelled the plaintiff and 920 in Civil Case No. the law considers (6) In actions for legal support. as in the present case. the parties. If after the period of three hundred sixty five (365) days or the court.00 for attorneys fees Nos. 2208. It to give.e. the fruits and interests as the equivalent of each other. the attorney's fees and expenses of litigation must be 916 and 920.[45] In the case at bar. 916 and 920 to petitioners who shall hold the In the absence of stipulation. As for the that attorney's fees and expenses of litigation should be recovered. 1189 of the Civil Code. respondent MCIAA and petitioners over Lots Finally.[44] (7) In actions for the recovery of wages of household helpers.. except: DPWH. 2208 intends to retain the appropriate such improvements or respondent does not choose to award of attorneys fees as the exception in our law and the general sell them. 920 with consequential damages by way of interests. 916 to litigate with third persons or to incur expenses to protect his and P9. legal interest from 16 November 1947. 2208 of the Civil Code - Hence. in the same way (5) Where the defendant acted in gross and evident bad faith in that petitioners need not account for the interests that the amounts refusing to satisfy the plaintiff's valid and demandable claim.e. they received as just compensation may have earned in the meantime. Petitioners must likewise pay respondent MCIAA the necessary expenses it may have incurred in (3) In criminal cases of malicious prosecution against the plaintiff. are echoed in Art. i. a constructive trust must restore to respondent MCIAA what they received as just compensation for the expropriation of Lots Nos. The government however may keep whatever income or fruits it may have obtained from the parcels of land.e. If the thing is improved by its laborers and skilled workers. (10) When at least double judicial costs are awarded. we delete the award of P60. the natural consequence of nature and time.and has the obligation to reimburse the trustee the consideration petitioners is determined with finality. P7. improvements that respondent MCIAA may have made on Lots Nos. considering the established absence of any stipulation regarding attorneys fees. unless the parties herein received from the latter just as the plaintiff-beneficiary would if he stipulate and agree upon a different scheme. in this case. respondent MCIAA as representative of the State is obliged to reconvey Lots Nos. other than judicial costs. As a matter of justice and convenience. i.000. sustaining the properties and the monetary value of its services in (4) In case of a clearly unfounded civil action or proceeding against managing them to the extent that petitioners will be benefited the plaintiff. nature. shall return is not sound public policy to set a premium upon the right to litigate to each other what they have received x x x x In case of the loss. In all cases. 916 and 920.[42] In the good judgment of payment. and the monetary value of his services in and the obligation of respondent MCIAA to reconvey Lots Nos. medium or schedule of proceeded on the theory of rescission. In other words.[47] Art. something as a result of the process of restitution. i. Under Art.

in otherwise. Rotea. namely: Lizbeth Rotea and Elepeth Rotea. par. securing the R. While Art. neither does the improvements WITHOUT ANY OBLIGATION on the part of petitioners trial court make any finding to that effect in its appealed Decision. 916 and 920. Case No. 916 and 920.00 for Lot No.00 for attorneys fees his heir Jennifer Rotea. different scheme or schedule of payment. De Renacia. 64456 dated 20 December 2001 and its Resolution of 28 those parcels of land shall VEST ABSOLUTELY upon respondent November 2002 denying reconsideration of MCIAA. Cebu City (c) ORDERING respondent MCIAA TO CONVEY to petitioners the for the proposed expansion of Lahug Airport. contracts and relevant provisions of law. Rosalinda R. Lot No.e. P7... (b) ORDERING petitioner Heirs of Timoteo Moreno and No costs. 920 with consequential damages by way of legal interest from 16 November 1947.065. and the value of the prevailing free market price of the Authority (MCIAA) TO RECONVEY to petitioner Heirs improvements built thereon by respondent MCIAA. Arbon. allows attorneys fees in cases of clearly (d) ORDERING petitioners TO PAY the amount so determined under unfounded civil actions. Jorge Rotea. the government which case petitioners SHALL PAY for these improvements at the assured them that they could repurchase their lands once Lahug prevailing free market price. and Lot No. the Decision are REVERSED and SET ASIDE. Rotea Jr.. Ebora. Respondent MCIAA however may keep Facts: whatever income or fruits it may have obtained from the parcels of land. i. after the period demands a factual. represented by his heir and P15. the instant Petition for respondent MCIAA to so reconvey Lots Nos. represented by (g) DELETING the award of P60. 2208.000.355 square meters and in favor of petitioners. 916 and 920 in Civil Case No. unless the parties herein stipulate a discretion in the award of attorneys fees under Art. Edjec. with all the improvements thereon evolving This Decision is without prejudice to the claim of intervenor one through nature or time. if any and desired to be bought and sold by the parties. Rotea. 920 consisting of 3. Rotea. Virginia (f) ORDERING petitioners to respect the right of the Department of R. in the same way that petitioners need not account for the  National Airport Corporation as the predecessor agency of interests that the amounts they received as just compensation may respondent Mactan-Cebu International Airport Authority (MCIAA) have earned in the meantime. C. and in general. namely: Esperanza to be bought and sold by the parties. appropriate such improvements. if petitioners do not want to Airport was closed or its operations transferred to Mactan Airport. Fe Public Works and Highways to its lease contract until the expiration R. The exercise of judicial is determined with finality.097 square meters in Lahug. wanted to acquire Lots Nos. 916 with an area of 2. 916 and 920 to be paid by petitioners as mandated in letter (b) (a) ORDERING respondent Mactan-Cebu International Airport hereof. 916 and 920 situated in Lahug.e.unfounded or purely for the purpose of harassment. represented by his heirs.00 for Lot No. Bernarda R. 19 of Cebu City dated 12 April 1999 in Civil purposes of determining the amount of compensation for Lots Nos. in  To entice the landowners to cede their properties. 916 and 920 and/or the Review is GRANTED. and Luisa Rotea-Villegas.R. Angeles Vda. The Decision of the Court of Appeals in CA-G. if any and desired of Timoteo Moreno and Maria Rotea. Luis Rotea. Corazon Rotea. (11). Bernarda R. Cebu City. which shall be governed by existing of assignment the rights of some of herein petitioners over Lots Nos. i. Ruby immediate execution of this Decision under the premises. Caridad Rotea. legal or equitable justification that would bring of three hundred sixty five (365) days or the lapse of the compromise the case within the exception and justify the grant of such award. as well as the prevailing and evident bad faith. 916 and P9. this exception must be understood to mean letter (b) of this dispositive portion as consideration for those where the defenses are so untenable as to amount to gross the reconveyance of Lots Nos. 19 of Cebu City for The Decision of RTC-Br. just compensation for the expropriation of Lots Nos. Suela. Vda De Limbaga. Evidence must be presented to the court as to free market price of the improvements built thereon by respondent the facts and circumstances constituting the alleged bad faith. Arquisola. (e) REMANDING the instant case to RTC-Br. but excluding those that were introduced by Richard E. if any.00 for litigation expenses against respondent MCIAA Rolando R. Mactan Cebu MCIAA the necessary expenses that the latter may have incurred in 413 SCRA 502 (2003) sustaining the properties and the monetary value of its services in managing the properties to the extent that petitioners will secure a benefit from such acts. Enchuan on his allegation that he acquired through deeds third parties. to pay any compensation to respondent MCIAA for them. the award of attorneys fees is not justified where there is ready money or cash PAYABLE within a period of three hundred sixty no proof other than the bare statement of harassment that a party to five (365) days from the date that the amount under letter (b) above be so adjudged had acted in bad faith. (4). respondent MCIAA SHALL REMOVE these . par. Maria of the lease period.000. improvements shall be DEEMED FORFEITED and the ownership of CV No. CEB-20015 is MODIFIED IN PART by . and Rolando R. DPWH. Alfredo R. otherwise. Rotea. or if respondent does not choose to sell them. Maria Rotea TO PAY respondent MCIAA what the former received as SO ORDERED. Petitioners must likewise PAY respondent Heirs of Moreno vs. Elia R. 916 and 920. otherwise.291. R-1881. MCIAA. the right of repurchase of petitioners and the obligation of WHEREFORE. scheme or schedule of payment and the amount so payable is not settled. 2208. improvements it may have built on Lots Nos.

the former owner retains no rights in the land. Ramos and the airport manager their properties upon a state of affairs that was not conceived nor begging them for the exercise of their alleged right to repurchase contemplated when the expropriation was authorized Lots Nos. "If an absolute conveyance of property is made in order to secure the performance of an obligation of the grantor toward the grantee. 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. unconditionally. this petition for review. when the purpose is terminated or abandoned the former owner reacquires the property so expropriated. petitioners conveyed Lots Nos. 916 and 920. Murag mao ni ang point sa PUBLIC USE nga topic)  Mactan-Cebu International Airport Authority36 is correct in stating that one would not find an express statement in the Decision in Civil Case No. When land has been acquired for public use in fee simple. Supreme Court ruled that if the land is expropriated for a particular purpose. it returns to the former owner. If the fulfillment of the obligation is offered by the grantor when it becomes due. Held: Of course!  In the case of Reyes vs. then. of course. either by the exercise of eminent domain or by purchase. without any impairment of the estate or title acquired. Issue: W/N petitioners can exercise the right of repurchase over the said land.  The predicament of petitioners involves a constructive trust. the land becomes the absolute property of the expropriator. If. whether it be the State. No doubt. or any reversion to the former owner (The above stated are principles." This omission notwithstanding. petitioners of land to them. a province. If it is expropriated for a public street and the expropriation is granted upon condition that the city can only use it for a public street. and the public use may be abandoned. 916 and 920 to the government with the latter obliging itself to use the realties for the expansion of Lahug Airport. a trust by virtue of law is established. then. he may demand the reconveyance of the property to him. with the condition that when that purpose is ended or abandoned the property shall return to its former owner. however. unless there is some statutory provision to the contrary. In 1991. 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. the decree of expropriation gives to the entity a fee simple title. one that is akin37 to the implied trust referred to in Art. of course. Hence. but they were not heeded. upon the contrary. failing to keep its bargain. 1454 of the Civil Code. or the land may be devoted to a different use. petitioners would be denied the use of wrote then President Fidel V. Lahug Airport ceased operations as the Mactan Airport government can be compelled by petitioners to reconvey the parcels was opened for incoming and outgoing flights. and while the inclusion of this pronouncement in the judgment of condemnation would have been ideal. and in that case the non-user does not have the effect of defeating the title acquired by the expropriation proceedings. then. the . Hence. when the city abandons its use as a public street. otherwise."  In the case at bar. or municipality. of course. CA.

2 the dispositive portion of settled. Rotea. SUELA. R-1881. 19 of Cebu City for purposes of determining the amount of compensation for Lot Nos. (b) ORDERING petitioner Heirs of Timoteo Moreno and Maria No costs. VDA. i. Jr. As an incentive for the other owners to cede their lots adjoining the then existing Lahug . and the value of the prevailing free market price of the (a) ORDERING respondent Mactan-Cebu International Airport improvements built thereon by respondent MCIAA. namely: Lizbeth Rotea and Elepeth Rotea. Arquisola. otherwise. August 9. sought to acquire Lot No. appropriate such improvements. Fe R. 19 of Cebu City dated 12 April 1999 in Civil 916 and 920 to be paid by petitioners as mandated in letter (b) Case No.3 compensation for the expropriation of Lot Nos. (e) REMANDING the instant case to RTC-Br. 920 with consequential damages by way of legal interest from National Airport Corporation (NAC). 2003. Corazon Rotea. Rosalinda R. RT-7544 (107) T-13695 for the benefit from such acts.4 The spouses refused to sell their interests that the amounts they received as just compensation may properties because the proposed price was unacceptably way below have earned in the meantime.355 square meters under Transfer Certificate of Title (TCT) No. namely. Suela. in the same way that petitioners need not account for the Moreno and Maria Rotea. DE RENACIA. LUIS ROTEA. Elia R. namely. ROTEA. immediate execution of this Decision under the premises. Lot No. sustaining the properties and the monetary value of its services in RT-7543 (106) T-13694. de Limbaga. ROTEA. (f) ORDERING petitioners to respect the right of the Department of Virginia R. ROTEA.R. represented by his heir (g) DELETING the award of ₱60. 916 with an area of 2.. securing the Moreno and Maria Rotea. Enchuan on his allegation that he acquired through deeds parties. 2005 (c) ORDERING respondent MCIAA TO CONVEY to petitioners the improvements it may have built on Lot Nos. 920 containing an area of 3. to pay any compensation to respondent MCIAA from them.. Vda. Respondent. and in general. Angeles Vda. DPWH.097 managing the properties to the extent that petitioners will secure a square meters covered by TCT No. represented by his heirs. Rotea. Arbon.00 for litigation expenses against respondent MCIAA and in Rolando R. represented by his heir (d) ORDERING petitioners TO PAY the amount so determined under ROLANDO R. ROSALINDA R. those parcels of land shall VEST ABSOLUTELY upon the respondent The Decision of the Court of Appeals in CA-G. Public Works and Highways to its lease contract until the expiration Caridad Rotea. the market value of the lands at that time.e. but excluding those that were introduced by third Richard E. 64456 dated MCIAA. 156273. Cebu City were owned by the spouses Timoteo land. Rotea TO PAY respondent MCIAA what the former received as just SO ORDERED. The two parcels of land whatever income or fruits it may have obtained from the parcels of located in Lahug. DE LIMBAGA.: five (365) days from the date that the amount under letter (b) above is determined with finality. having a total area the necessary expenses that the latter may have incurred in of 2. 2003 filed different scheme or schedule of payment. prevailing free market price.. market price of the improvements built thereon by respondent MCIAA. CARIDAD ROTEA. JR. if any and desired to be bought and sold by the parties. represented by his heir ₱15. Rotea. CORAZON ROTEA. namely: Esperanza R. 916 and 920 in Civil Case No. BERNARDA R.000. Maria Luisa of the lease period. Petitioners. Bernarda R. with all the improvements thereon evolving through This Decision is without prejudice to the claim of intervenor one nature or time. ROTEA. and Lot No. JORGE ROTEA. J. Respondent MCIAA however may keep proposed expansion of the Lahug Airport. sell them. SR. and ROLANDO R. if any. as the predecessor of herein 16 November 1947. 916 and ₱9. in RESOLUTION ready money or cash PAYABLE within a period of three hundred sixty- CALLEJO. 916 and 920. FE R. EBORA. i. CV No. and Rotea-Villegas. 916.00 for A review of the factual milieu of the case reveals that in 1949. after the period by respondent Mactan-Cebu International Airport Authority (MCIAA). unless the parties herein stipulate a This is a Motion for Reconsideration dated November 10. LIZBETH ROTEA and ELEPETH ROTEA. Petitioners must likewise PAY respondent MCIAA respondent MCIAA.G.00 for Lot No. 916 and 920 and/or the improvements shall be DEEMED FORFEITED and the ownership of WHEREFORE.291. ALFREDO R. Luis Rotea. meters and Lot No. de Renacia.065. if petitioners do not want to ELIA R. otherwise. EDJEC. or if respondent does not choose to ARQUISOLA. Rotea. ARBON. reconveyance of Lot Nos. improvements WITHOUT ANY OBLIGATION on the part of petitioners VILLEGAS. MARIA LUISA ROTEA. Alfredo R. the Lot No. represented by his heir JENNIFER ROTEA. No.097 square meters in Lahug. CEB 20015 is MODIFIED IN PARTby – hereof. 20 December 2001 and its Resolution of 28 November 2002. ROTEA. Rotea. The Decision of RTC-Br. Cebu City. 916 and 920. Edjec. 916 and 920. VIRGINIA R. ESPERANZA which case petitioners SHALL PAY for these improvements at the R. seeking the reversal scheme or schedule of payment and the amount so payable is not of the Decision1dated October 15.. Jorge Rotea. ₱7. and Rolando R. the instant Petition for Review is GRANTED.00 for attorney’s fees and Jennifer Rotea. which shall be governed by existing contracts and of assignment the rights of some of herein petitioners over Lot Nos. as well as the prevailing free MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY. 920 consisting of 3.. relevant provisions of law. respondent MCIAA SHALL REMOVE these ANGELES VDA. BERNARDA R.e. Ebora.R.000. letter (b) of this dispositive portion as consideration for the vs. represented by his heirs. RUBY C. the right of repurchase of petitioners and the obligation of which reads: respondent MCIAA to so reconvey Lot Nos. denying reconsideration of the Decision are REVERSED and SET ASIDE. Bernarda R.355 square favor of petitioners. in HEIRS OF TIMOTEO MORENO and MARIA ROTEA. if any and desired Authority (MCIAA) TO RECONVEY to petitioner Heirs of Timoteo to be bought and sold by the parties. Ruby C. of three hundred sixty-five (365) days or the lapse of the compromise through the Office of the Solicitor General (OSG).

Airport. 920 and Court of Appeals24 which is allegedly stare decisis to the case to would be adversely affected by the outcome of the litigation. government in the event that these properties were no longer used he was sent as part of the legal team to Mactan.00 for Lot No. the and ordered the payment thereof to the owners in the sum of TCTs of Lot Nos. 916 and 920. the petitioners filed a motion for the landowners affected by the expropriation. On cross-examination. against the respondent asserting their right to 1881. one Richard E. 920. with ones were issued in the name of the Republic of the Philippines in payment of consequential damages by way of legal interest from 1962. Atty. the petitioners presented two witnesses to with a parcel of land similarly expropriated under Civil Case No. and Maria Rotea. Unchuan filed a Municipality of Cabanatuan. granting them the right to repurchase the properties at damages with the Regional Trial Court of Cebu City docketed as Civil the amount originally paid by the respondent in Civil Case No. the head of the legal Cebu.00 per square meter for the two lots testified that as a consequence of the expropriation proceedings. the trial court rendered judgment22 in favor of the Consequently. Thereafter. 916 and ₱9. the assurance to the landowners that if the airport is transferred to Mactan. and that out of the 19 lots. the petitioners filed a complaint for reconveyance and petitioners. During the pendency of the case. He added conveyance while others who refused to cede their properties that when the negotiations broke down. the legal contingent became defendants in an action for expropriation filed by the resorted to expropriation proceedings. R-1881 did November 16.20 In a Decision7 rendered by the trial court on December 29. the same questions relating to the same event have Esperanza Rotea Edjec.065. wrote then President Fidel Bacarisas alleged that some of the expropriated lots were recovered V.12 airport officials and the previous registered owners of the disputed properties. be impaired.14 requesting for the by their previous landowners because they were acquired through exercise of their supposed right to repurchase Lot Nos. used for airport purposes.23 which held that when a land has been Motion for Transfer of Interest. a legal assistant of the MCIAA. The witness trial court fixed the price at ₱3. Lot Nos. 2001. appellate court was Mactan-Cebu International Airport Authority v. He pronounced that the decision in Civil Case No.19 . the witness admitted subsequently turned over to MCIAA under Republic Act (Rep. and ownership over the subject properties. the CA cited Fery v. the subject lands were transferred not expressly impart that the landowners were guaranteed the in the name of the Republic of the Philippines under TCT No. interests. a retired government employee of right to repurchase their properties for the same price paid by the the Civil Aeronautics Administration (CAA).9 Thereafter. which was denied in a Resolution present during the gathering and attested that the registered owners dated November 28.17 alleging that some of the petitioners acquired for public use unconditionally and in fee simple. of the lots were assured of the return of the expropriated lands should the same be no longer utilized as an airport. R- support their allegations in the complaint. Cebu City. hence. 916 and 920 were cancelled and in lieu thereof. on the other hand. Act) No. the had already assigned to him their respective rights. the lots will be returned to their previous owners.21 ignored by the respondent. the heirs of Timoteo Moreno 15 lots were already returned to their former owners. The trial court ruled that the reacquire the subject properties. 19 lots were the subject of court and operations were transferred to the Mactan Airport. In maintaining a contrary view. Bacarisas. 916 and 920 negotiated sale wherein the standard contract had an express considering that the said lots intended for the expansion of the Lahug provision that should the proposed expansion of the Lahug Airport Airport were not utilized.6 Lot Nos. 2002. reconveyance of the lots to them if the lands expropriated would not 5869110 for Lot No. The same reason was given by the petitioners for not court’s decision on the premise that the judgment affirming the opposing and appealing the case later on. the respondent appealed the decision to the Court of persuaded the registered owners to continue with the expropriation Appeals (CA). therefore. Ramos13 and the MCIAA General Manager.8 The Michael M. The first witness was 1881. Upon instructions from the Republic of the Philippines before the Court of First Instance (CFI) of central office of CAA in Manila. Their written and verbal demands were not materialize. 1961. likewise. were The respondent. presented on the witness stand condemned for public use after payment of just compensation. 5869211 for Lot No. 1947. tasked to for purposes of the airport. In two litigations concerning their reconveyance. His research likewise revealed that a total of 65 lots were Subsequently. On April 12. In the complaint. the Lahug Airport was abandoned and all its functions expropriated by the government. various letters sent on different dates. the landowners may recover their properties. along with the other adjoining lands. 2002. gave among those included in the expropriation case. old.00 for Lot No. Moreover. including consequential damages. the airport authority representatives called for a meeting with On February 11. that he had no personal knowledge of any agreement between the 6958 in 1990. not. who testified that when she was just 22 years already been previously litigated and decided by a competent court. the petitioners public purpose for which the lands were expropriated had ceased to claimed that assurances were given by the NAC officials regarding the exist. Ocampo. the CA reversed the trial proceedings. sought to intervene alleging that it is the lessee of Lot No. Another case relied upon by the the Department of Public Works and Highways (DPWH).18 prevent the exercise of the right of repurchase as the former dealt At the start of the trial. 916 and 920 were corps which undertook the procurement of the subject lands.16 state’s right to exercise its power of eminent domain was unconditional.15 The petitioners further added that the guaranty of right to repurchase was the propelling factor that Aggrieved. NAC guaranteed them or their successors-in-interest the The next witness was Asterio Uy. in any way. previous owner retains no right in the land and the title obtained will participation.5Some landowners executed deeds of acquire certain lots for the extension of the Lahug Airport.291. R- Case No. The witness was reconsideration before the CA. new ₱7. who attested that in 1957. 920 and be used for the purpose. 916 and TCT No. it is but logical and in the higher interest of entitlement of the landowners to repurchase their properties for the substantial justice to give back the right of ownership of the subject same price paid by NAC in the event that the lots were no longer lots to the former owners. CEB-20015. the petitioners herein. 1999. docketed as Civil Case No. R-1881. On December 20.

The of the condemned properties of petitioners could be readily justified respondent is mistaken. the judgment must clearly spell out said condition. we declared that the government acquires only the airport discontinued its activities. Mactan-Cebu International Airport Authority is correct in stating that Suffice it to say that the Court considered the rulings in Fery v. (b) this Court’s October or any reversion to the former owner x x x x32 15. when the grantee. and in that case the non-user does not expropriation was authorized. This belated news further bolsters ." This omission notwithstanding. such rights in expropriated parcels of land as may be allowed by the The predicament of petitioners involves a constructive trust. 916 and 920. R-1881 to the effect that "the [condemned] lot would return to Authority v. the decree of expropriation gives to the by petitioners to reconvey the parcels of land to them. 2003. Municipality of there should foremost be an express condition in the dispositive Cabanatuan. (d) Lot Nos. In fact. the Court ratiocinated that the On November 20. 916 and 920 in fee different use. 2003. which were that there was a prior promise by the predecessor of the respondent expropriated in Civil Case No.25 This Court moreover added: of the case have already been discussed at length in the challenged decision and to linger further on them herein would be inordinate. alleging that the present case involves novel questions of review of the decision of the CA. has long become final and executory. National operation" when it granted the complaint for eminent domain and Housing Authority. but still within the principles enunciated in We remain unpersuaded by the respondent’s assertions. "when same if the purpose for which it was expropriated is ended or the public purpose for which the eminent domain was exercised no abandoned or if the property was to be used other than as the Lahug longer subsists. MCIAA filed a Motion to Resolve the Motion for agreement33 with the respondent’s predecessor-in-interest wherein Reconsideration by the Honorable Court En Banc dated November the property was leased to DPWH. and while the inclusion of this pronouncement in the judgment of condemnation would have The respondent insists that the decision effectively overturned the been ideal. then. public use may be abandoned. the reconveyance or repurchase. which was cited in the recent case of Reyes v. however. the respondent reiterated its earlier by purchase. whether it be the State. Court of Appeals which defined the rights and obligations [the landowner] or that [the landowner] had a right to repurchase the of landowners. If x x x land is expropriated for a public demand the reconveyance of the property to him. It must be pointed out that nothing in the Fery case bespeaks that effectively overturns the rulings in Fery v.26 have the effect of defeating the title acquired by the expropriation Respondent MCIAA filed a Motion for Reconsideration27 dated proceedings x x x x When land has been acquired for public use in fee November 10. then." In the case at bar. and (e) granting arguendo that witness for the respondent testified that 15 lots were already petitioners have a right to repurchase Lot Nos. or the land may be devoted to a which granted to MCIAA the titles to Lot Nos. it returns to the former owner. The indisputable certainty in the present case is of the Lahug Airport. the return or repurchase conditional. entity a fee simple title. one would not find an express statement in the Decision in Civil Case Municipality of Cabanatuan and Mactan-Cebu International Airport No."31 Airport. to wit: underlying presumption that "Lahug Airport will continue to be in … In Fery.Expectedly. the government can be compelled upon the contrary. he may the property so expropriated. 1454 of the Civil If x x x land is expropriated for a particular purpose. of course. No doubt. should not be treated like that the expropriated properties may be recovered by the former those lots sold through negotiated sale with a stipulation for owners once the airport is transferred to Mactan. 920 is the subject of a memorandum of Additionally. In reversing the decision of the CA. We reiterate what we stated in our as the manifest legal effect or consequence of the trial court’s decision. a of affairs that was not conceived nor contemplated when the province. manifested that Lot No. the latter obliging itself to use the realties for the expansion of Lahug unless there is some statutory provision to the contrary x x x x If. unconditionally. or municipality. street and the expropriation is granted upon condition that the city petitioners conveyed Lot Nos.29and Reyes v. likewise. otherwise. R-1881. one that character of its title over the properties – is akin to the implied trust referred to in Art. failing to keep its bargain. the petitioners filed an Opposition to the attendance in the case at bar of standing admissible evidence respondent’s Motion for Reconsideration stating that no new validating the claim of the petitioners’ right to repurchase the arguments have been proffered by the respondent to warrant the expropriated properties took away the instant case from the ambit reversal of the Court’s decision. the reconveyed to their previous owners. Airport. Intervenor DPWH. repurchase price should be the fair market value of the lands. National portion of the decision before the condemned property can be Housing Authority.28 MCIAA v. Court of Appeals. and the claim that: (a) the decision of the trial court in Civil Case No.30 (c) the petitioners are not entitled to returned to its former owner after the purpose for its taking has been reconveyance or repurchase of the questioned lots after the closure abandoned or ended. either by the exercise of eminent domain or and set aside. such precision is not absolutely necessary nor is it fatal to ruling in the Fery case which requires that for an expropriation to be the cause of petitioners herein. 916 and 920. simple. If the fulfillment of the purpose is terminated or abandoned the former owner reacquires obligation is offered by the grantor when it becomes due. the petitioners filed before this Court a petition for 11. law. without any impairment of the estate or title acquired. with the Code. Court of Appeals. R-1881. whose properties were expropriated. In the said motion. 2003 praying that the Court’s decision be reconsidered simple. the former owner retains no rights in the land. 2003 Decision. granting the petitioners’ right of repurchase. The merits the Fery case. 916 and 920 to the government with can only use it for a public street. the land becomes the petitioners would be denied the use of their properties upon a state absolute property of the expropriator. of Mactan-Cebu International Airport Authority v. "If an absolute conveyance of property is made in order to condition that when that purpose is ended or abandoned the secure the performance of an obligation of the grantor toward the property shall return to its former owner. Cebu. of course. a trust by virtue of law is established.

sir. the respondent’s Q: Now. who will use it predominantly for his Since Lahug airport was already in existence. Legal Team to negotiate with the landowners for the acquisition of Section 11 of the same Rule likewise states that "[m]aterial averment lots for purposes. the lot owners would be able to reacquire their properties. how did you to the landowners to the effect that as soon as the Lahug Airport is come to know about this? abandoned or transferred to Mactan. you are referring of course to in the complaint. the direct and unconstitutional state’s power to Q: When you say affected. while in the present case we expropriation. in its answer. A: The assurance was from the Chief of the team. the respondent asseverates that the Court departed from the A: For the Lahug airport expansion. Ocampo. if the condemning authority ceases to use the property for Q: Now what was the purpose of your negotiations also in Lahug. Atty. negotiations. fact the truth of which he does not admit and. Court of Appeals. for airport purposes." The predominant precept is that upon abandonment of real A: Yes. there is another right of eminent rulings that in MCIAA v. Unlike in the case of MCIAA v. I am have preponderant proof as found by the trial court of the existence referring to the properties in Lahug. Inc. one of the members of the CAA Mactan Legal Team. Jacinto portion of the subject properties had been purchased by the Cebu Property Ventures. because I was made as the spokesman considering that I am a returned to the original owners once the Lahug Airport is transferred Boholano who knows the dialect. where respondent Chiongbian offered inadmissible evidence for through him and accordingly per instruction from the Central Office in being hearsay in nature. ruling enunciated in Mactan-Cebu International Airport Authority v. Part of Uy’s testimony is as follows: A more pressing discovery unearthed by this Court is that a significant Atty. the party who originally condemned the property recovers control of the land if the … condemning party continues to use the property for public purpose. We are not convinced. Atty. Where a defendant is without A: I will mention Atty. you were the one who conducted the negotiations? . and my companions were to Mactan. and then transferring it to A: The purpose there was to purchase or buy the property affected private persons under the guise of public use or purpose is the by the Lahug extension. – A defendant must specify each material allegation of A: I was a member of the CAA Legal Team. In what capacity or what position were you holding complex. they don’t know Cebuano so I participated in the he was a former employee of the respondent’s predecessor-in. interest and was merely recalling and informing the court of the Q: In short. of that team? an averment. Uy is a credible witness inasmuch as he was even tasked by the landowners or was it Atty. witness whose testimony was based on his own personal knowledge. property reverts to the owner in fee simple.35 The what was the purpose of those negotiations? government’s taking of private property. property condemned for public purpose. Ocampo.37 negotiate with the adjacent landowners? Next. for the development of a commercial Q: Lahug Airport. the petitioners in this case presented a Manila. Rule 8 of the Revised Rules conducting negotiations with the landowners? of Court provides: Witness Specific denial. which interceded for the acquisition of the lots for the Lahug Airport’s expansion. whenever practicable. Can you tell the court who were the support his denial. of the lots. he shall specify so much of it as is true and material and shall deny only the remainder. why did you still have to own private gain. Atty. possession to another citizen.the fact that the purpose for which the properties were condemned events that transpired during the negotiations for the expropriations has been abandoned. Sarigumba and knowledge or information sufficient to form a belief as to the truth of myself. CA. Likewise. CA." No less than transferred to Mactan. And with the assurance that these properties. Q: As a member of the legal team. is offensive to our laws. a public purpose. a material averment made in the complaint. did not deny this allegation at the time when you were assigned to Cebu for the purpose of in the petitioners’ complaint. Where a defendant desires to deny only a part of members. in what manner? contention can prevail only if the facts of the present case are A: We convinced the landowners affected by the expansion to sell accurately in point with those in the other case. Ocampo? the negotiating panel to directly communicate to the landowners the instructions from the CAA main office that the properties will be A: We. however. Cebuano. Clearly. respondent Virginia Chiongbian proffered domain of the government to acquire the properties through "inadmissible and inconclusive evidence. if you still remember. CAA Legal Team. that will be the time that these properties will Asterio Uy. be returned to the landowners at the same price.36 Moreover. he cannot be considered as a biased witness as Tagalogs. he shall so state. We recapitulate our their properties and if they refuse. … shall be deemed admitted when not specifically the acquisition of lot in Mactan? denied.34 The respondent. affirmed that persistent assurances were given Q: Why do you say that there was an assurance given. did you have any specific instructions as to oblige a landowner to renounce his productive and invaluable what Lahug airport would be devoted to? I will reform Your Honor. shall set forth the substance of the matters upon which he relies to Q: I see. how did you conduct the negotiations. Section 10. Lansang. despotism found in the immense power of eminent domain. and this Q: You stated that you were sent to Cebu as a member of the CAA shall have the effect of a denial. as soon as Lahug airport will be of the right of repurchase in favor of the petitioners. did you gave [sic] the assurance to Surely.

. Inevitably. indeed. Our stand on the amount of repurchase price remains unperturbed.38 Moreover. I was there assisting. this Court’s ruling that the fallo of the decision in Civil Case No. Thus. Any increase or decrease in market value due to the proposed improvement may not be considered in determining the market value. We find it proper to cite. who. 916 and 920 should be their prevailing market price. whether or not the consideration was based on the land’s highest and best use when the sale to the State occurred. A reading of the Court’s judgment must not be confined to the dispositive portion alone. it should be meaningfully construed in unanimity with the ratio decidendi thereof to grasp the true intent and meaning of a decision. R-1881.39 On the other hand. the motion for reconsideration is DENIED. plus legal interest. Be that as it may. rather. there was one. reconveyance to the original owner shall be for whatever amount he was paid by the government. if. we do not subscribe to the respondent’s contention that since the possibility of the Lahug Airport’s closure was actually considered by the trial court. once more.A: Together with the members of the team. SO ORDERED. The respondent maintains that the sum to be paid by the petitioners for Lot Nos. R-1881 must be read in reference to the other portions of the decision in which it forms a part. we however find that there is historic as well as rational bases for affording the petitioners the right of repurchase. One must never fail to overlook the reality that the power to condemn property is an awesome power of the State40 and that to compel a citizen to forcibly surrender his precious property to the enormous governmental power is too much a sacrifice which deserves more consideration than those landowners. justice and equity dictates the reconveyance of the expropriated lots to their previous owners. from the very beginning voluntarily relinquished their ownership. and not the expropriation price which would be grossly unfair considering that the petitioners were paid just compensation and the lots are now millions of pesos in value. Meanwhile. the landowners who found it burdensomely difficult to part with their cherished lands underwent the costly expropriation proceedings which lasted for a number of years. these landowners who chose to cede their properties were fortunate to have a stipulation in their contract of sale vouching for their right of repurchase. it should not profit from sudden appreciations in land values. And. a stipulation on reversion or repurchase was so material that it should not have been discounted by the court a quo in its decision in Civil Case No. We are cognizant of the incontestable fact that some landowners immediately sold their properties upon the assurance that they could repurchase them at the cessation of the Lahug Airport’s operations. in fact. When the State reconveys land. We now come to the discussion of the amount of repurchase price.41 WHEREFORE. 916 and 920 should not be treated like those lands acquired through negotiated sale with a proviso in their contracts for reconveyance or repurchase. we agree with the respondent in asserting that Lot Nos.

in the exercise of the respondent City of Mandaluyong's power of Certificate Of Title No. 1995. the court granted the assailed order of expropriation. title to the from notice hereof. in order to ascertain the just compensation. 135087. 56264 of the Registry of Deeds of ordinance for the exercise of the power of eminent domain under Metro Manila District II. the right of eminent Suguitan filed a motion to dismiss[6] the complaint based on the domain appertains to every independent government without the following grounds -(1) the power of eminent domain is not being necessity for constitutional recognition. 1994. only upon full payment of the just compensation. a constitutionally-protected On November 14.: Petitioner assert that the city of Mandaluyong may only exercise its In this petition for review on certiorari under Rule 45. 1995. Rule 67. The intended purpose of the expropriation section 19 of the Code. the payment of just compensation. novero need and advance the general welfare. Rules of Court. S-1994[3] authorizing then Mayor Benjamin S. On arbitrary exercise of this governmental power. thus:[11] right to take the subject parcel of land together with existing improvements thereon more specifically covered by Transfer . The case was docketed as SCA No."[18] Furthermore. 2000] upon the deposit of P621. Suguitan. 1998 required by section 19 of Republic Act (RA) No. Respondent filed its comment and opposition to the motion. City of Mandaluyong.[20] the need for its circumspect operation cannot be .[2]ella necessary upon the initiation of expropriation proceedings and that It is undisputed by the parties that on October 13. the trial court issued an order allowing the City of dignity and intimately connected with the rights to life and Mandaluyong to take immediate possession of Suguitan's property liberty.R.[4] Consequently. March 14. a list of independent appraisers from which the property expropriated shall pass from the owner to the expropriator Court t will select three (3) to be appointed as Commissioners. the due process and equal ploy of Mayor Benjamin Abalos to acquire the same for his personal protection clauses[19] act as additional safeguards against the use. (3) the City of property for the public use do not by implication grant the power to Mandaluyong seeks to expropriate the said property without the government. (4) the City of Mandaluyong has no limit. our own Constitution provides that "[p]rivate property budget and appropriation for the payment of the property being shall not be taken for public use without just expropriated. that dispositive portion of which reads as follows: pursuant to article 36. a "resolution" empowering the City Mayor to Manila District II for the public use or purpose as stated in the initiate such expropriation proceedings and thereafter when the Complaint. 7160. 1995 offering to buy his property.. 56264 of the Registry of Deeds for Metro eminent domain. October 24. Rosario streets in Mandaluyong City with an expropriation case in court and to represent the local government area of 414 square meters and more particularly described under unit in such case. respondent. however. a resolution is a sufficient antecedent WHEREFORE. in view of the foregoing. Alberto S.[15] Thus. means of a mere resolution. 1995. Rule VI of the Implementing Rules and Regulations (IRR) of RA 7160. The petition is imbued with merit.000 representing 15% of the fair market value of the subject property based upon the current tax declaration HEIRS OF ALBERTO SUGUITAN.[13] was the expansion of the Mandaluyong Medical Center. Petitioners refute respondent's contention that only a resolution is SO ORDERED. the parties an Ordinance of the Sanggunian Panlungosd appropriating funds for are hereby directed to submit to the Court within fifteen (15) days the payment of the expropriated property.. the trial court denied Suguitan's motion to Since the exercise of the power of eminent domain affects an dismiss. GONZAGA_REYES. court has already determine[d] with certainty the amount of just compensation to be paid for the property expropriated. the city of Mandaluyong welfare.[12] novero pursuant to Section 5. but Suguitan refused to appropriate private property to particular uses to promote public sell.[G. then follows Accordingly. but limit a power which would otherwise be without payment of just compensation. (2) there is no public necessity to modern constitutions of civilized countries relating to the taking of warrant expropriation of subject property. which was upheld by the trial court. has a lawful was explained. Admittedly. assumed possession of the subject property by virtue of a writ of DECISION possession issued by the trial court on December 14. CITY OF of such property. on March 13. No. that 875 entitled "City of Mandaluyong v. issued declaring that the plaintiff.[17] Thus. explaining that the resolution 396. 1995. the it validly and legally exercised its power of eminent domain. Mayor Benjamin Abalos wrote Alberto Suguitan a letter dated Eminent domain is the right or power of a sovereign state to January 20. petitioner. 1995. 1998.[8] On July 28.[16] The provisions found in exercised in accordance with law.[14] It is an indispensable attribute of sovereignty. a power filed a complaint[5] for expropriation with the Regional Trial Court of grounded in the primary duty of government to serve the common Pasig. acting upon a motion filed by the right necessary for the preservation and enhancement of personal respondent. the instant Motion to Dismiss for the filing of expropriation proceedings with the Regional Trial is hereby DENIED and an ORDER OF CONDEMNATION is hereby Court.[9]and not by issued by Branch 155 of the Regional Trial Court of Pasig in SCA No. the City of Mandaluyong MANDALUYONG. On December 15.[10] Respondent contends. 875.[7] individual's right to private property. Respondent's position. Abalos to institute mentioned in article 36 of the IRR is for purposes of granting expropriation proceedings over the property of Alberto Sugui located administrative authority to the local chief executive to file the at Boni Avenue and Sto. delegated power of eminent domain by means of an ordinance as petitioners[1] pray for the reversal of the Order dated July 28. upon payment of just compensation. but does not dispense with the necessity of an Transfer Certificate of Title No. vs. the an ordinance is required only in order to appropriate the funds for Sangguniang Panlungsod of Mandaluyong City issued Resolution No. and (5) expropriation of Suguitan' s property is but a compensation. J.

the property sought to be condemned.. further. That the power of eminent domain may not be exercised power of eminent domain is already being exercised. or by its authorized agents. An ordinance possesses a general and law. and the rule in that case is that the authority must be the local chief executive. and none is guarded by the constitution and the proceedings over a particular private property . 411. unless a valid and definite offer has been previously made to the owner. V. exercise the power of eminent domain for needed only to appropriate funds after the court has determined the public use. not a resolution. complaint with the proper court since. censorious attitude in resolving questions involving the proper this is done by the court with the assistance of not more than three exercise of this delegated power by local bodies. it ends with an order. beginning at this point. upon payment of just compensation. A municipal ordinance although the scope of this delegated legislative power is necessarily is different from a resolution. Additionally. or for the benefit of the poor and the landless. When the legislature interferes with that right. and cases cited. in contravention of the first requisite. 306 and 9. for the public use or purpose described in the complaint. but said offer was not consent is one of the most delicate exercise of governmental accepted. pursuant to the will show that an ordinance is necessary to authorize the filing of a provisions of the Constitution and pertinent laws.calr laws more sedulously. We reiterate our ruling in Municipality of Paraaque v. upon the payment of just compensation Despite the existence of this legislative grant in favor of local to be determined as of the date of the filing of the complaint. as required under Section interpretation.) Realty Corporation[26] regarding the distinction between an ordinance and a resolution. for greater public 2. the two are enacted differently -a third reading is The basis for the exercise of the power of eminent domain by local necessary for an ordinance. although the determination and award of just compensation to the defendant is indispensable to the transfer of ownership in . but a resolution narrower than that of the delegating authority and may only be is merely a declaration of the sentiment or opinion of a lawmaking exercised in strict compliance with the terms of the delegating body on a specific matter. and. unless decided government units is section 19 of RA 7160 which provides that: otherwise by a majority of all the Sanggunian members.[23] In fact. An examination of the applicable law landless. It is firmly settled..[22] micks permanent character.[24] Clearly. the courts have adopted a more court of the just compensation for the property sought to be taken. "resolution" and "ordinance" are synonymous. There is payment of just compensation. based on the fair market condemnation declaring that the plaintiff has a lawful right to take value at the time of the taking of the property. (Bensley vs. as compared to (3) commissioners. the City of Mandaluyong seeks to exercise the free constitutions attach to the right of property of the citizens. the however. or welfare for the benefits of the poor and the amount of just compensation. or welfare. 576]. Dec. The power of eminent domain is exercised for public use. An ordinance is a law. Manila Railroad Co. to strictly construed. in behalf of the local government unit. The law in this case law which are prescribed as modes of the exercise of the power. cases cited [73 Am. That the Rule 67 of the 1997 Revised Rules of Court reveals that expropriation local government unit may immediately take possession of the proceedings are comprised of two stages: property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (1) the first is concerned with the determination of the authority of (15%) of the fair market value of the property based on the current the plaintiff to exercise the power of eminent domain and the tax declaration of the property to be expropriated. and such offer was not accepted. whether directly by the State. propriety of its exercise in the context of the facts involved in the finally. governments. Important as the power may be to the government.. the plain meaning of the law should not be enlarged by doubt[ful] 3. purpose purposes. . other public entities and public utilities. Section 19 of the Code requires an to protect it from abuse. Article III of the Constitution. Provided. Mountainlake Water Co. appropriates the land of an individual without his consent. 13 Cal. of shall be determined by the proper court.. purpose. An ordinance is enacted by the local legislative council authorizing private rights. it is still the duty of the courts to determine whether the power of eminent domain is being exercised in accordance with (2) the second phase is concerned with the determination by the the delegating law. Provided. 22 domain. Tenorio vs. In City of Manila vs. and is clear and free from ambiguity.overemphasized. In that 1998 case we held that:miso The power of eminent domain is essentially legislative in nature. power of eminent domain over petitioners' property by means of a constrains the strict observance of the substantial provisions of the resolution.) 4.[25] authority. 1040.. for the exercise of the power of eminent Ed. if not in a dismissal of the action.].M.. however. A valid and definite offer has been previously made to the owner The statutory power of taking property from the owner without his of the property sought to be expropriated. sec. that such power may be validly delegated to We are not convinced by petitioner's insistence that the terms local government units. Provided. A local government unit may. and other pertinent laws.[27] instances when it is directly exercised by the national legislature. than the right to the freehold of inhabitants. through its chief executive and acting We cannot uphold respondent's contention that an ordinance is pursuant to an ordinance. Phil. Chinese Community of The courts have the obligation to determine whether the following Manila we said:[21] requisites have been complied with by the local government unit concerned: The exercise of the right of eminent domain. the inviolable sanctity which all In the present case. That the amount to be paid for the expropriated property suit. is necessarily in derogation of 1.(Dillon on Municipal Corporations [5th ordinance. but not for a resolution. No species of property is held by individuals with exercise the power of eminent domain or pursue expropriation greater tenacity. but a resolution is temporary in nature. It is to be watched with jealous scrutiny.

while we remain conscious of the constitutional policy of promoting local autonomy. Besides. because Section 19 of RA 7160. power of eminent domain is necessary prior to the filing by the latter of the complaint with the proper court. for so long as it has complied with all other legal requirements.akin SO ORDERED. requiring the issuance of a resolution. for the public use or purpose described in the complaint.[29] which we quote hereunder: Petitioner relies on Article 36. Neither is respondent's position improved by its reliance upon Article HELD: YES.favor of the plaintiff.[28] Therefore. LGU may expropriate said property through a resolution. Rule VI of the IRR which provides that: local government units that shall exercise the same through an ordinance. it is but the last stage of the expropriation proceedings. The Local Government Code’s requirement of through a resolution of the sanggunian authorizing its chief executive an ordinance prevails over the Implementing Rules and Regulations to initiate expropriation proceedings. and not by means of a mere RESOLUTION. also requires that. an ordinance promulgated by the local delegated power of eminent domain must be exercised through the legislative body authorizing its local chief executive to exercise the issuance of an ordinance. The court later issued an order of current tax declaration of the property to be expropriation. what the discrepancy seems to indicate is a mere oversight in the wording of the implementing rules. in exercising the power of eminent domain. which requires only a resolution to authorize an LGU to exercise eminent domain. CITY OF MANDALUYONG sought to be expropriated. Petitioners argue that the local government unit’s expropriated. The city property involved upon depositing with the court at least fifteen later assumed possession of the property by virtue of a writ of percent (15%) of the fair market value of the property based on the possession issued by the trial court.M. which cannot be arrived at without an initial finding by HEIRS OF ALBERTO SUGUITAN the court that the plaintiff has a lawful right to take the property vs. purpose. resolving the question of whether or not the plaintiff has properly and legally exercised its power of eminent domain. An order of condemnation or dismissal at this stage would be final. which is more apparent than real. Rule VI of the Implementing Rules. The city filed a complaint already have the right to enter upon the possession of the real for expropriation when Suguitan refused to sell the property. surely prevails over said rule which merely seeks to implement it. The local government unit failed to comply with this If the LGU fails to acquire a private property for public use. requirement when they exercised their power of eminent domain or welfare through purchase. the petition is hereby GRANTED. The Court has already discussed this inconsistency between the Code and the IRR. The law may delegate the power of eminent domain to 36 (a). FACTS: The Sangguniang Panglungsod of Mandaluyong City issued a resolution authorizing Mayor Abalos to institute expropriation Also. not by mere resolution. This is clearly misplaced. it is noted that as soon as the complaint is filed the plaintiff shall proceedings over the property of Suguitan. 1998 decision of Branch 155 of the Regional Trial Court of Pasig in SCA No. . and not only after the court ISSUE: Whether or not the City of Mandaluyong must exercise its has determined the amount of just compensation to which the delegated power of eminent domain by means of an ORDINANCE as defendant is entitled.[30] WHEREFORE. however. in Municipality of Paraaque vs. V. Realty Corporation. Therefore. that our ruling in this case will not preclude the City of Mandaluyong from enacting the necessary ordinance and thereafter reinstituting expropriation proceedings. we cannot grant judicial sanction to a local government unit's exercise of its delegated power of eminent domain in contravention of the very law giving it such power. Rule VI thereof. It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its implementation. the law itself. It should be noted. the chief executive of the LGU must act pursuant to an ordinance. The July 28.basra required by §19 RA 7160. 875 is hereby REVERSED and SET ASIDE. since Article 32.