You are on page 1of 1

|Vargas Case Digests|

Reyes v. national housing authority

Facts and Controversy

1977, National Housing Authority (NHA) filed separate complaints for the expropriation of sugarcane lands
(Lot No. 6450, 6448-E, 6198-A, and 6199). The stated purpose of the expropriation was the expansion of the
Dasmariñas Resettlement Project to accommodate squatters who were relocated from the Metropolitan
Manila area. Trial court ordered expropriation of lots and payment of just compensation, affirmed by the SC.

Petitioners filed a complaint for forfeiture of rights before RTC on April 28, 1992 for alleged failure of NHA to
relocate squatters to expropriated lands and payment of just compensation. NHA counterargued that it had
already paid a substantial amount and that the judgment could not be executed because of several issues
concerning capital gains tax, registration fees, and other expenses. Ocular inspections showed that the lot
was occupied (80% of Lot No. 6198-A with an area of 120, 146 square meters). Sept. 29, 1995, trial court
dismissed complaint. NHA pursued public purpose since relocation takes a long period of time, no condition
that states that properties will revert back to owners in case of abandoned expropriation purpose, payment
of just compensation based on time that property was taken. CA affirmed decision of the trial court.

ISSUE: Whether or not petitioners are able to reclaim land from the NHA.

Decision of the Supreme Court

Petition not impressed with merit.

1. Contention #1 - NHA violated stated public purpose for expansion when it failed to relocate
squatters, and its public nature is questionable in entering a contract for construction of low cost
housing units (different from stated public purpose) such that NHA forfeited its rights and interests by
virtue of the expropriation judgment. Land should be returned.

SC Ruling: Constitutional restraints – public use and just compensation. Petitioners cannot insist on the
restrictive view of eminent domain that the contract for low cost housing is a deviation from stated public
use. Settled doctrine that concept of public use is no longer limited to traditional purposes.; public use is
synonymous with public interest and etc. as in Heirs of Juancho Ardona v. Reyes ruling that whatever may be
beneficially employed for the general welfare satisfies the requirement of public use. Expropriation of private
lands for slum clearance is for a public purpose even if developed area is later sold to private homeowners
and etc. Constitution (Art. XIII Sec. 1) allows continuing program for urband land reform and housing which
makes affordable decent housing and services for homeless citizens in resettlement areas.

2. Contention #2 – Public purpose abandoned when respondent NHA failed to occupy the
expropriated lots by relocating squatters from the Metro Manila area.

SC Ruling: Fery v. Municipality of Cabanatuan still a valid doctrine. If there is a condition that allows for
reacquiring of property upon abandonment of public use, then it can be reacquired. If it is acquired for
public use in fee simple unconditionally, then the expropriated property cannot be reacquired since it is not
the absolute property of the government.

1. Contention #3 - Continued failure of respondent NHA to pay just compensation for a long period of
time justifies the forfeiture of its rights and interests over the expropriated lots. (NHA Response –
justified in delay to pay just compensation because of petitoners’ failure to pay capital gains tax
and to surrender the owners’ duplicate certificates of title).

SC Ruling: Republic of Philippines v. CA – Court ruled that non-payment of just compensation does not entitle
the private landowners to recover possession of their expropriated lots. (Valdehueza v. Republic – private
landowners remained unpaid 10 years after termination of expropriation proceedings. Landowner merely
given relief of recovering compensation for his property at computed market value at the time). HOWEVER,
refusal to pay just compensation is unfounded and unjustified. (1) expropriation judgment did not subject the
payment to any condition, (2) although right to enter upon and appropriate land to public use is completed
prior to payment, property shall only pass to expropriator upon full payment of just compensation.

With respect to amount of just compensation still due and demandable, lower courts erred in not awarding
interest from time property is actually taken to time compensation is paid. Republic v. CA – 12% interest per
annum to eliminate issue of constant fluctuation and inflation of the value of the currency over time.