EXPROPRIATION ONWARDS

LAST CASE ASSIGNMENTS IN PROV REM
XIII
• NPC V. CO, G.R. NO. 166973, FEBRUARY 10, 2009- TORREJOS
Principle :
Substantive matters of expropriation proceedings involving national
project is governed by RA 8974 to the exclusion of Rule 67. It is the
plain intent of Rep. Act No. 8974 to supersede the system of deposit
under Rule 67 with the scheme of immediate payment in cases
involving national government infrastructure projects.
payment. Not satisfied, petitioner filed an appeal with the Court of
Appeals. On 20 October 2004, the Court of Appeals rendered its
Decision holding petitioner liable to pay the full fair market value at
the time of actual taking, with interest at 6% per annum from 15
April 2002. To determine the actual valuation of the property, the
Court of Appeals ordered the RTC to appoint a new set of
disinterested commissioners.
Petitioner filed a motion for partial reconsideration, questioning the
order to pay the full fair market value computed as of the date of its
actual possession of the property. The Court of Appeals denied the
motion for partial reconsideration; hence, the present petition.

Just compensation is to be ascertained as of the time of the taking,

ISSUE: Whether petitioner (NPC) should pay the property in its full
which usually coincides with the commencement of the market value instead of the easement fee.
expropriation proceedings. Where the institution of the action
precedes entry into the property, the just compensation is to be When is the reckoning date for the determination of just
compensation?
ascertained as of the time of the filing of the complaint
HELD:
FACTS:
1.) YES.

NPC, (petitioner) is a government corp. created under R.A. No. 6395

Petitioner reliance on Sec. 3A1[18] of R.A. No. 6395, as
to undertake the development of hydroelectric generation of power
amended, which provides that only an easement fee equivalent to
and the production of electricity from nuclear, geothermal and
10% of the market value shall be paid to affected property owners
other sources, as well as the transmission of electric power on a
is misplaced. Petitioner expropriated respondents property for its
nationwide basis. Its charter grants, among others, the power to
Lahar Project, a project for public use. In Republic v. Gingoyon
exercise the right to eminent domain.
(Gingoyon), we observed that R.A. No. 8974 covers expropriation
proceedings intended for national government infrastructure
On 27 June 2001, petitioner filed a complaint with the RTC of San
projects. The Implementing
Fernando, Pampanga, for the acquisition of an easement of right-of-
way over three (3) lots at Barangay Cabalantian, Bacolor, Pampanga
Rules and Regulations of R.A. No. 8974 explicitly include power
with a total area of 575 square meters belonging to respondent, in
generation, transmission and distribution projects among the
connection with the construction of its transmission lines for its
national government projects covered by the law. There is no doubt
Lahar Affected Transmission Line Project (Lahar Project). It
that the installation of transmission lines is important to the
obtained a writ of possession of March 25,2002 and took
continued growth of the country. Electricity moves our economy, it
possession of the property on April 2002.
is a national concern. R.A. No. 8974 should govern the
expropriation of respondent's property since the Lahar Project is a
RTC appointed three (3) commissioners to determine the fair
national government project.
market value of the property as of 15 April 2002. Commissioners
Dayrit and Garcia submitted their joint report and appraised the
Significantly, Gingoyon is explicit authority that R.A. No.
value of the property at P1,900.00 per square meter or a total of
8974 applies with respect to substantive matters covered by it to
P1,179,000.00, while Commissioner Abcejo valued it at P875.00 per
the exclusion of Rule 67 in cases when expropriation is availed of
square meter. The RTC rendered its Partial Decision, wherein it
for a national government project. We noted in Gingoyon:
declared the validity of the expropriation and ordered petitioner to
pay the sum of P1,179,000.00, with interest at 6% per annum
beginning 15 April 2002, the date of actual taking, until full
1
It ’s not a PROVREM 2015  1

It is the plain intent of Rep. Act No.
8974 to supersede the system of deposit under
Rule 67 with the scheme of immediate payment
in cases involving national government
infrastructure projects.
2. The determination of just compensation should reckoned from
the date of filing.
It is settled that just compensation is
to be ascertained as of the time of the taking,
which usually coincides with the
commencement of the expropriation
proceedings. Where the institution of the
action precedes entry into the property, the
just compensation is to be ascertained as of
the time of the filing of the complaint.
(emphasis supplied)
Typically, the time of taking is contemporaneous with the
time the petition is filed. The general rule is what is
provided for by Rule 67, exceptions are grave injustice to
the property owner, the taking did not have color of legal
authority, the taking of the property was not initially for
expropriation and the owner will be given undue
increment advantages because of the expropriation.
QUICK DIGEST:
NPC, a gov’t corporation which is granted in its charter the power
to exercise the right of eminent domain instituted expropriation
proceedings on a lot Mr. Co. for the construction of transmission
lines in the Lahar Affected Area. The Commissioners appointed by
RTC appraised its value at 1,179,000.00. RTC declared the validity of
the expropriation and ordered petitioner to pay the sum with 6%
int. per annum reckoned from the time of the taking. NPC appealed
the findings of RTC, CA affirmed the decision of RTC ordering NPC
to pay the full value of the property, aggrieved of the decision of the
CA, petitioner filed a petition for review on certiorari.
• PHILIPPINE VETERANS BANK V. BASES CONVERSION, G.R. NO.
173085, JANUARY 19, 2011- FERNANDEZ
BACKGROUND:
This case is about the authority of the court in an expropriation case
to adjudicate questions of ownership of the subject properties
where such questions involve the determination of the validity of
the issuance to the defendants of Certificates of Land Ownership
Awards (CLOAs) and Emancipation Patents (EPs), questions that fall
within the jurisdiction of the Department of Agrarian Reform
Adjudication Board (DARAB).
FACTS:
EXPROPRIATION ONWARDS
In 2003 respondent Bases Conversion Development Authority
(BCDA), a government corporation, filed several expropriation
actions before the various branches of the RTC of Angeles City, for
acquisition of lands needed for the construction of the Subic-Clark-
Tarlac Expressway Project. Ten of these cases were raffled to Branch
58 of the court.
The defendants in Branch 58 cases were respondents Simbillo,
Marcelo, David, Bucud, Santos, Enriquez, Espeleta, Castro, Mercado,
and Suarez. They were the registered owners of the expropriated
lands that they acquired as beneficiaries of the comprehensive
agrarian reform program. Another defendant was Land Bank of the
Philippines, the mortgagee of the lands by virtue of the loans it
extended for their acquisition. The lands in these cases were located
in Pampanga.
On learning of the expropriation cases before Branch 58, petitioner
Philippine Veterans Bank (PVB) filed motions to intervene in all the
cases with attached complaints-in-intervention, a remedy that it
adopted in similar cases with the other branches. PVB alleged that
the covered properties actually belonged to Belmonte Agro-
Industrial Development Corp. which mortgaged the lands to PVB in
1976. PVB had since foreclosed on the mortgages and bought the
same at public auction in 1982. Unfortunately, the bank had been
unable to consolidate ownership in its name.
The court’s order of August 18, 2004, Branch 58 denied PVB’s
motion for intervention on the ground that the intervention
amounts to a third-party complaint that is not allowed in
expropriation cases and that the intervention would delay the
proceedings in the cases before it. Besides, said Branch 58, PVB had
a pending action for annulment of the titles issued to the individual
defendants and this was pending before Branch 62 of the court.
PVB filed its motion for reconsideration but Branch 58 denied the
same, prompting the bank to file a petition for certiorari with the
CA. CA rendered a decision, dismissing the petition for lack of
merit. It also denied in a resolution PVB’s MR.
On April 2006 Branch 58 issued separate decisions in all 10 cases
before it, granting the expropriation of the subject properties. The
court noted the uncertainty as to the ownership of such properties
but took no action to grant BCDA’s prayer in its complaint that it
determine the question of ownership of the same pursuant to
Section 9, Rule 67 of the Revised Rules of Civil Procedure.
ISSUE:
Whether or not PVB is entitled to intervene in the expropriation
cases before Branch 58.
SC RULING:
No. PVB is not entitled to intervene.
PVB maintains that in deciding the case, the RTC and the CA ignored
Section 9, Rule 67 of the 1997 Rules of Civil Procedure, which
authorizes the court adjudicating the expropriation case to hear and
decide conflicting claims regarding the ownership of the properties
It ’s not a PROVREM 2015  2

involved while the compensation for the expropriated property is in
the meantime deposited with the court. Section 9 provides:
Sec. 9. Uncertain ownership; conflicting claims. – If the ownership of
the property taken is uncertain, or there are conflicting claims to
any part thereof, the court may order any sum or sums awarded as
compensation for the property to be paid to the court for the benefit
of the person adjudged in the same proceeding to be entitled
thereto. But the judgment shall require the payment of the sum or
sums awarded to either the defendant or the court before the
plaintiff can enter upon the property, or retain it for the public use
or purpose if entry has already been made.
PVB’s point regarding the authority of the court in expropriation
cases to hear and adjudicate conflicting claims over the ownership
of the lands involved in such cases is valid. But such rule obviously
cannot apply to PVB for the following reasons:
1. At the time PVB tried to intervene in the expropriation cases, its
conflict with the farmer beneficiaries who held CLOAs, EPs, or TCTs
emanating from such titles were already pending before Angeles
City RTC Branch 62, a co-equal branch of the same court. Branch 58
had no authority to pre-empt Branch 62 of its power to hear and
adjudicate claims that were already pending before it.
2. After the CA dismissed PVB’s petition on January 2006, the latter
filed a motion for reconsideration, pointing out that it had in the
meantime already withdrawn the actions it filed with Branch 62
after learning from the decision of the Supreme Court in
Department of Agrarian Reform v. Cuenca, that jurisdiction over
cases involving the annulment of CLOAs and EPs were vested by
Republic Act 6657 in the DARAB.
PVB now points out that, since there was no longer any impediment
in RTC Branch 58 taking cognizance of its motion for intervention
and adjudicating the parties’ conflicting claims over the
expropriated properties, the CA was in error in not reconsidering its
decision.
But PVB’s withdrawal of its actions from Branch 62 cannot give
Branch 58 comfort. As PVB itself insists, jurisdiction over the
annulment of the individual defendants’ CLOAs and EPs (which
titles if annulled would leave PVB’s titles to the lands unchallenged)
lies with the DARAB. Branch 58 would still have no power to
adjudicate the issues of ownership presented by the PVB’s
intervention.
Actually, PVB’s remedy was to secure an order from Branch 58 to
have the proceeds of the expropriation deposited with that branch
in the meantime, pending adjudication of the issues of ownership of
the expropriated lands by the DARAB. Section 9 empowers the court
to order payment to itself of the proceeds of the expropriation
whenever questions of ownership are yet to be settled. There is no
reason why this rule should not be applied even where the
settlement of such questions is to be made by another tribunal.
AFFIRMED the decision of the Court of Appeals.
QUICK DIGEST:
EXPROPRIATION ONWARDS
FACTS:
BCDA filed several expropriation actions before the various
branches of the RTC of Angeles City, for acquisition of lands needed
for the construction of the Subic-Clark-Tarlac Expressway Project.
Ten of these cases were raffled to Branch 58 of the court. Another
defendant was LBP, the mortgagee of the lands by virtue of the loans
it extended for their acquisition. The lands in these cases were
located in Pampanga.
PVB filed motions to intervene in all the cases but it was denied.
Their motions were denied in all other proceedings/courts.
Branch 58 issued separate decisions in all 10 cases before it,
granting the expropriation. The court noted the uncertainty as to
the ownership of such properties but took no action to grant BCDA’s
prayer in its complaint that it determine the question of ownership.
ISSUE:
Whether or not the court can decide questions of ownership in
expropriation cases.
SC RULING:
Yes.
As a rule, the court in expropriation cases can hear and adjudicate
conflicting claims over the ownership of the lands involved in the
cases (See Sec. 9 Rule 67). But such rule obviously cannot apply
to PVB for the following reasons:
1. At the time PVB tried to intervene in the expropriation cases, its
conflict with the farmer beneficiaries who held CLOAs, EPs, or TCTs
emanating from such titles were already pending before Branch 62,
a co-equal branch of the same court.
2. PVB’s withdrawal of its actions from Branch 62 cannot give
Branch 58 comfort. The jurisdiction over the annulment of the
individual defendants’ CLOAs and EPs with the DARAB. Branch 58
would still have no power to adjudicate the issues of ownership
presented by the PVB’s intervention.
• REPUBLIC V. GINGOYON, G.R. NO. 166429, 19 DECEMBER
2005- VALDEZ
LONGDIGEST
FACTS:
The case concerns the construction of the NAIA Terminal 3. The first
case that has reached the Supreme Court is Agan v. PIATCO wherein
the contracts which the Government had with the contractor were
voided for being contrary to law and public policy. The second case
now before the Court involves the matter of just compensation due
the contractor for the terminal complex it built. The case was
decided on the basis of fairness, the same norm that pervades both
the Court’s 2004 Resolution in the first case and the latest
expropriation law.
The present controversy has its roots with the promulgation of the
Court’s decision in Agan v. PIATCO (2003 Decision). This decision
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nullified the "Concession Agreement for the Build-Operate-and-
Transfer Arrangement of the Ninoy Aquino International Airport
Passenger Terminal III" entered into between the Philippine
Government and the Philippine International Air Terminals Co., Inc.
(PIATCO), as well as the amendments and supplements thereto. The
agreement had authorized PIATCO to build a new international
airport terminal (NAIA 3), as well as a franchise to operate and
maintain the said terminal during the concession period of 25 years.
The contracts were nullified, among others, that Paircargo
Consortium, predecessor of PIATCO, did not possess the requisite
financial capacity when it was awarded the NAIA 3 contract and that
the agreement was contrary to public policy.
After the promulgation of the rulings in Agan, the NAIA 3 facilities
have remained in the possession of PIATCO, despite the avowed
intent of the Government to put the airport terminal into immediate
operation.
Then, on 21 December 2004, the Government filed a Complaint for
expropriation with the Pasay City Regional Trial Court (RTC),
together with an Application for Special Raffle seeking the
immediate holding of a special raffle. The Government sought upon
the filing of the complaint the issuance of a writ of possession
authorizing it to take immediate possession and control over the
NAIA 3 facilities.
The Government also declared that it had deposited the amount of
P3,002,125,000.00 (3 Billion) in Cash with the Land Bank of the
Philippines, representing the NAIA 3 terminal’s assessed value for
taxation purposes.
The case was raffled to Branch 117 of the Pasay City RTC, presided
by respondent judge Hon. Henrick F. Gingoyon. On the same day
that the Complaint was filed, the RTC issued an Order directing the
issuance of a writ of possession to the Government, authorizing it to
"take or enter upon the possession" of the NAIA 3 facilities.
However, on 4 January 2005, the RTC issued another Order
designed to supplement its 21 December 2004 Order and the Writ
of Possession. In the 4 January 2005 Order, now assailed in the
present petition, the RTC noted that its earlier issuance of its writ of
possession was pursuant to Section 2, Rule 67 of the 1997 Rules of
Civil Procedure. However, it was observed that Republic Act No.
8974 otherwise known as "An Act to Facilitate the Acquisition of
Right-of-Way, Site or Location for National Government
Infrastructure Projects and For Other Purposes" and its
Implementing Rules and Regulations had amended Rule 67 in many
respects.
There are at least two crucial differences between the respective
procedures under Rep. Act No. 8974 and Rule 67. Under the statute,
the Government is required to make immediate payment to the
property owner upon the filing of the complaint to be entitled to a
writ of possession, whereas in Rule 67, the Government is required
only to make an initial deposit with an authorized government
depositary. Moreover, Rule 67 prescribes that the initial deposit be
equivalent to the assessed value of the property for purposes of
taxation, unlike Rep. Act No. 8974 which provides, as the relevant
standard for initial compensation, the market value of the property
as stated in the tax declaration or the current relevant zonal
EXPROPRIATION ONWARDS
valuation of the Bureau of Internal Revenue (BIR), whichever is
higher, and the value of the improvements and/or structures using
the replacement cost method.
Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974
and Section 10 of the Implementing Rules, the RTC made key
qualifications to its earlier issuances. First, it directed the Land
Bank of the Philippines, Baclaran Branch (LBP-Baclaran), to
immediately release the amount of US$62,343,175.77 to PIATCO, an
amount which the RTC characterized as that which the Government
"specifically made available for the purpose of this expropriation;"
and such amount to be deducted from the amount of just
compensation due PIATCO as eventually determined by the RTC.
Second, the Government was directed to submit to the RTC a
Certificate of Availability of Funds signed by authorized officials to
cover the payment of just compensation. Third, the Government
was directed "to maintain, preserve and safeguard" the NAIA 3
facilities or "perform such as acts or activities in preparation for
their direct operation" of the airport terminal, pending
expropriation proceedings and full payment of just compensation.
However, the Government was prohibited "from performing acts of
ownership like awarding concessions or leasing any part of [NAIA
3] to other parties."
The very next day after the issuance of the assailed 4 January 2005
Order, the Government filed an Urgent Motion for Reconsideration,
which was set for hearing on 10 January 2005. On 7 January 2005,
the RTC issued another Order, the second now assailed before this
Court, which appointed three (3) Commissioners to ascertain the
amount of just compensation for the NAIA 3 Complex. That same
day, the Government filed a Motion for Inhibitionof Hon. Gingoyon.
The RTC heard the Urgent Motion for Reconsideration and Motion
for Inhibition on 10 January 2005. On the same day, it denied these
motions in an Omnibus Order dated 10 January 2005. This is the
third Order now assailed before this Court. Nonetheless, while the
Omnibus Order affirmed the earlier dispositions in the 4 January
2005Order, it excepted from affirmance "the superfluous part of the
Order prohibiting the plaintiffs from awarding concessions or
leasing any part of [NAIA 3] to other parties."
Thus, the present Petition for Certiorari and Prohibition under Rule
65 was filed on 13 January 2005. The petition prayed for the
nullification of the RTC orders dated 4 January 2005, 7 January
2005, and 10 January 2005, and for the inhibition of Hon. Gingoyon
from taking further action on the expropriation case. A concurrent
prayer for the issuance of a temporary restraining order and
preliminary injunction was granted by this Court in a Resolution
dated 14 January 2005.
ISSUE:
Whether or not Rule 67 prevails over R.A. 8974 in the expropriation
proceedings.
RULING:
NO. Rule 67 outlines the procedure under which eminent domain
may be exercised by the Government. Yet by no means does it serve
at present as the solitary guideline through which the State may
expropriate private property. For example, Section 19 of the Local
It ’s not a PROVREM 2015  4

Government Code governs as to the exercise by local government
units of the power of eminent domain through an enabling
ordinance. And then there is Rep. Act No. 8974, which covers
expropriation proceedings intended for national government
infrastructure projects.
Rep. Act No. 8974, which provides for a procedure eminently more
favorable to the property owner than Rule 67, inescapably applies
in instances when the national government expropriates property
"for national government infrastructure projects."Thus, if
expropriation is engaged in by the national government for
purposes other than national infrastructure projects, the assessed
value standard and the deposit mode prescribed in Rule 67
continues to apply.
Under both Rule 67 and Rep. Act No. 8974, the Government
commences expropriation proceedings through the filing of a
complaint. Unlike in the case of local governments which
necessitate an authorizing ordinance before expropriation may be
accomplished, there is no need under Rule 67 or Rep. Act No. 8974
for legislative authorization before the Government may proceed
with a particular exercise of eminent domain. The most crucial
difference between Rule 67 and Rep. Act No. 8974 concerns the
particular essential step the Government has to undertake to be
entitled to a writ of possession.
The first paragraph of Section 2 of Rule 67 provides:
SEC. 2. Entry of plaintiff upon depositing value with authorized
government depository. — Upon the filing of the complaint or at any
time thereafter and after due notice to the defendant, the plaintiff
shall have the right to take or enter upon the possession of the real
property involved if he deposits with the authorized government
depositary an amount equivalent to the assessed value of the
property for purposes of taxation to be held by such bank subject to
the orders of the court. Such deposit shall be in money, unless in
lieu thereof the court authorizes the deposit of a certificate of
deposit of a government bank of the Republic of the Philippines
payable on demand to the authorized government depositary.
In contrast, Section 4 of Rep. Act No. 8974 relevantly states:
SEC. 4. Guidelines for Expropriation Proceedings.— Whenever it is
necessary to acquire real property for the right-of-way, site or
location for any national government infrastructure project through
expropriation, the appropriate proceedings before the proper court
under the following guidelines:
a) Upon the filing of the complaint, and after due notice to the
defendant, the implementing agency shall immediately pay the
owner of the property the amount equivalent to the sum of (1) one
hundred percent (100%) of the value of the property based on the
current relevant zonal valuation of the Bureau of Internal Revenue
(BIR); and (2) the value of the improvements and/or structures as
determined under Section 7 hereof;
...
c) In case the completion of a government infrastructure project is
of utmost urgency and importance, and there is no existing
valuation of the area concerned, the implementing agency shall
EXPROPRIATION ONWARDS
immediately pay the owner of the property its proffered value
taking into consideration the standards prescribed in Section 5
hereof.
Upon completion with the guidelines abovementioned, the court
shall immediately issue to the implementing agency an order to
take possession of the property and start the implementation of the
project.
Before the court can issue a Writ of Possession, the implementing
agency shall present to the court a certificate of availability of funds
from the proper official concerned.
...
As can be gleaned from the above-quoted texts, Rule 67 merely
requires the Government to deposit with an authorized government
depositary the assessed value of the property for expropriation for
it to be entitled to a writ of possession. On the other hand, Rep. Act
No. 8974 requires that the Government make a direct payment to
the property owner before the writ may issue. Moreover, such
payment is based on the zonal valuation of the BIR in the case of
land, the value of the improvements or structures under the
replacement cost method, or if no such valuation is available and in
cases of utmost urgency, the proffered value of the property to be
seized.
It is quite apparent why the Government would prefer to apply Rule
67 in lieu of Rep. Act No. 8974. Under Rule 67, it would not be
obliged to immediately pay any amount to PIATCO before it can
obtain the writ of possession since all it need do is deposit the
amount equivalent to the assessed value with an authorized
government depositary. Hence, it devotes considerable effort to
point out that Rep. Act No. 8974 does not apply in this case,
notwithstanding the undeniable reality that NAIA 3 is a national
government project. Yet, these efforts fail, especially considering the
controlling effect of the 2004 Resolution in Agan on the
adjudication of this case.
It is the finding of this Court that the staging of expropriation
proceedings in this case with the exclusive use of Rule 67 would
allow for the Government to take over the NAIA 3 facilities in a
fashion that directly rebukes our 2004 Resolution in Agan. This
Court cannot sanction deviation from its own final and executory
orders.
Section 2 of Rule 67 provides that the State "shall have the right to
take or enter upon the possession of the real property involved if
[the plaintiff] deposits with the authorized government depositary
an amount equivalent to the assessed value of the property for
purposes of taxation to be held by such bank subject to the orders of
the court." It is thus apparent that under the provision, all the
Government need do to obtain a writ of possession is to deposit the
amount equivalent to the assessed value with an authorized
government depositary.
Would the deposit under Section 2 of Rule 67 satisfy the
requirement laid down in the 2004 Resolution that "[f]or the
government to take over the said facility, it has to compensate
respondent PIATCO as builder of the said structures"? Evidently not.
It ’s not a PROVREM 2015  5

If Section 2 of Rule 67 were to apply, PIATCO would be enjoined
from receiving a single centavo as just compensation before the
Government takes over the NAIA 3 facility by virtue of a writ of
possession. Such an injunction squarely contradicts the letter and
intent of the 2004 Resolution. Hence, the position of the
Government sanctions its own disregard or violation the
prescription laid down by this Court that there must first be just
compensation paid to PIATCO before the Government may take over
the NAIA 3 facilities.
Thus, at the very least, Rule 67 cannot apply in this case without
violating the 2004 Resolution. Even assuming that Rep. Act No.
8974 does not govern in this case, it does not necessarily follow that
Rule 67 should then apply. After all, adherence to the letter of
Section 2, Rule 67 would in turn violate the Court’s requirement in
the 2004 Resolution that there must first be payment of just
compensation to PIATCO before the Government may take over the
property.
It is the plain intent of Rep. Act No. 8974 to supersede the system of
deposit under Rule 67 with the scheme of "immediate payment" in
cases involving national government infrastructure projects.
It likewise bears noting that the appropriate standard of just
compensation is a substantive matter. It is well within the province
of the legislature to fix the standard, which it did through the
enactment of Rep. Act No. 8974. Specifically, this prescribes the new
standards in determining the amount of just compensation in
expropriation cases relating to national government infrastructure
projects, as well as the manner of payment thereof. At the same
time, Section 14 of the Implementing Rules recognizes the
continued applicability of Rule 67 on procedural aspects when it
provides "all matters regarding defenses and objections to the
complaint, issues on uncertain ownership and conflicting claims,
effects of appeal on the rights of the parties, and such other
incidents affecting the complaint shall be resolved under the
provisions on expropriation of Rule 67 of the Rules of Court."
Given that the 2004 Resolution militates against the continued use
of the norm under Section 2, Rule 67, is it then possible to apply
Rep. Act No. 8974? We find that it is, and moreover, its application in
this case complements rather than contravenes the prescriptions
laid down in the 2004 Resolution.
SUMMARY OF THE COURT'S RULING:
(1) The 2004 Resolution in Agan sets the base requirement that has
to be observed before the Government may take over the NAIA 3,
that there must be payment to PIATCO of just compensation in
accordance with law and equity. Any ruling in the present
expropriation case must be conformable to the dictates of the Court
as pronounced in the Agan cases.
(2) Rep. Act No. 8974 applies in this case, particularly insofar as it
requires the immediate payment by the Government of at least the
proffered value of the NAIA 3 facilities to PIATCO and provides
certain valuation standards or methods for the determination of
just compensation.
EXPROPRIATION ONWARDS
(3) Applying Rep. Act No. 8974, the implementation of Writ of
Possession in favor of the Government over NAIA 3 is held in
abeyance until PIATCO is directly paid the amount of P3 Billion,
representing the proffered value of NAIA 3 under Section 4(c) of the
law.
(4) Applying Rep. Act No. 8974, the Government is authorized to
start the implementation of the NAIA 3 Airport terminal project by
performing the acts that are essential to the operation of the NAIA 3
as an international airport terminal upon the effectivity of the Writ
of Possession, subject to the conditions above-stated. As prescribed
by the Court, such authority encompasses "the repair,
reconditioning and improvement of the complex, maintenance of
the existing facilities and equipment, installation of new facilities
and equipment, provision of services and facilities pertaining to the
facilitation of air traffic and transport, and other services that are
integral to a modern-day international airport."
(5) The RTC is mandated to complete its determination of the just
compensation within sixty (60) days from finality of this Decision.
In doing so, the RTC is obliged to comply with "law and equity" as
ordained in Again and the standard set under Implementing Rules
of Rep. Act No. 8974 which is the "replacement cost method" as the
standard of valuation of structures and improvements.
(6) There was no grave abuse of discretion attending the RTC Order
appointing the commissioners for the purpose of determining just
compensation. The provisions on commissioners under Rule 67
shall apply insofar as they are not inconsistent with Rep. Act No.
8974, its Implementing Rules, or the rulings of the Court in Agan.
(7) The Government shall pay the just compensation fixed in the
decision of the trial court to PIATCO immediately upon the finality
of the said decision.
(8) There is no basis for the Court to direct the inhibition of Hon.
Gingoyon.
SHORTDIGEST
FACTS:
The present controversy has its roots with the promulgation of the
Court’s decision in Agan v. PIATCO, promulgated in 2003 (2003
Decision). This decision nullified the “Concession Agreement for the
Build-Operate-and-Transfer Arrangement of the Ninoy Aquino
International Airport Passenger Terminal III” entered into between
the Philippine Government (Government) and the Philippine
International Air Terminals Co., Inc. (PIATCO), as well as the
amendments and supplements thereto.
After the promulgation of the rulings in Agan, the NAIA 3 facilities
have remained in the possession of PIATCO, despite the avowed
intent of the Government to put the airport terminal into immediate
operation. The Government and PIATCO conducted several rounds
of negotiation regarding the NAIA 3 facilities.
Planning to put NAIA 3 facilities into immediate operation, the
Government, through expropriation filed a petition to be entitled of
a writ of possession contending that a mere deposit of the assessed
value of the property with an authorized government depository is
It ’s not a PROVREM 2015  6

enough for the entitlement to said writ (Rule 67 of the Rules of
Court).
However, respondent avers that before an entitlement of the writ of
possession is issued, direct payment of just compensation must be
made, citing RA No. 8974.
ISSUE:
Whether or not Rule 67 prevails over R.A. 8974 in the expropriation
proceedings.
RULING:
No. The 2004 Resolution in Agan sets the base requirement that has
to be observed before the Government may take over the NAIA 3,
that there must be payment to PIATCO of just compensation in
accordance with law and equity. Any ruling in the present
expropriation case must be conformable to the dictates of the Court
as pronounced in the Agan case.
Rule 67 outlines the procedure under which eminent domain may
be exercised by the Government. Yet by no means does it serve at
present as the solitary guideline through which the State may
expropriate private property.
And then there is Rep. Act No. 8974, which covers expropriation
proceedings intended for national government infrastructure
projects. Rep. Act No. 8974, which provides for a procedure
eminently more favorable to the property owner than Rule 67,
inescapably applies in instances when the national government
expropriates property “for national government infrastructure
projects.” Thus, if expropriation is engaged in by the national
government for purposes other than national infrastructure
projects, the assessed value standard and the deposit mode
prescribed in Rule 67 continues to apply.
Thus, at the very least, Rule 67 cannot apply in this case without
violating the 2004 Resolution. Even assuming that Rep. Act No.
8974 does not govern in this case, it does not necessarily follow that
Rule 67 should then apply. After all, adherence to the letter of
Section 2, Rule 67 would in turn violate the Court’s requirement in
the 2004 Resolution that there must first be payment of just
compensation to PIATCO before the Government may take over the
property.
Rep. Act No. 8974 applies in this case, particularly insofar as it
requires the immediate payment by the Government of at least the
proffered value of the NAIA 3 facilities to PIATCO and provides
certain valuation standards or methods for the determination of
just compensation.
Applying Rep. Act No. 8974, the implementation of Writ of
Possession in favor of the Government over NAIA 3 is held in
abeyance until PIATCO is directly paid the amount of P3 Billion,
representing the proffered value of NAIA 3 under Section 4(c) of the
law.
• REPUBLIC V. GINGOYON, G.R. NO. 166429, FEBRUARY 1, 2006-
CHUA
EXPROPRIATION ONWARDS
PRINCIPLE: while Section 4, Rule 67 of the Rules of Court provides
that just compensation shall be determined at the time of the filing
of the complaint for expropriation, such law cannot prevail over R.A.
7160, which is a substantive law.
Facts:
On 17 September 1993, petitioner City of Cebu filed in Civil Case No.
CEB-14632 a complaint for eminent domain against respondents
spouses Apolonio and Blasa Dedamo. The petitioner alleged therein
that it needed the following parcels of land of respondents (Lot No.
1527 and Lot No. 1528) for a public purpose, i.e., for the
construction of a public road which shall serve as an access/relief
road of Gorordo Avenue to extend to the General Maxilum Avenue
and the back of Magellan International Hotel Roads in Cebu City.
The total area sought to be expropriated is 1,624 square meters
with an assessed value of P1,786,400. Petitioner deposited with the
Philippine National Bank the amount of P51,156 representing 15%
of the fair market value of the property to enable the petitioner to
take immediate possession of the property pursuant to Section 19
of R.A. No. 7160.
The parties executed and submitted to the trial court an Agreement
wherein they declared that they have partially settled the case.
Pursuant to said agreement, the trial court appointed three
commissioners to determine the just compensation of the lots
sought to be expropriated
On the basis of the commissioners report and after due deliberation
thereon, the trial court rendered its decision where the Plaintiff is
directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the
sum of pesos: (P24,865.930.00) representing the compensation
mentioned in the Complaint.
Petitioner elevated the case to the Court of Appeals, which docketed
the case. Petitioner alleged that the lower court erred in fixing the
amount of just compensation. Contending that just compensation
should be based on the prevailing market price of the property at
the commencement of the expropriation proceedings.
ISSUE: whether just compensation should be determined as of the
date of the filing of the complaint?
RULING:
In the case at bar, the applicable law as to the point of reckoning for
the determination of just compensation is Section 19 of R.A. No.
7160, which expressly provides that just compensation shall be
determined as of the time of actual taking. The Section reads as
follows:
SECTION 19. Eminent Domain. -- A local government unit may,
through its chief executive and acting 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 landless, upon payment
of just compensation, pursuant to the provisions of the Constitution
and pertinent laws: Provided, however, That the power of eminent
domain may not be exercised unless a valid and definite offer has
been previously made to the owner, and such offer was not
It ’s not a PROVREM 2015  7

accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the
expropriation proceedings and upon making a deposit with the
proper court of at least fifteen percent (15%) of the fair market
value of the property based on the current tax declaration of the
property to be expropriated: Provided finally, That, the amount to be
paid for the expropriated property shall be determined by the
proper court, based on the fair market value at the time of the
taking of the property.
The petitioner has misread our ruling in The National Power Corp.
vs. Court of Appeals. We did not categorically rule in that case that
just compensation should be determined as of the filing of the
complaint. We explicitly stated therein that although the general
rule in determining just compensation in eminent domain is the
value of the property as of the date of the filing of the complaint, the
rule admits of an exception: where this Court fixed the value of the
property as of the date it was taken and not at the date of the
commencement of the expropriation proceedings.
Also, the trial court followed the then governing procedural law on
the matter, which was Section 5 of Rule 67 of the Rules of Court,
which provided as follows:
SEC. 5. Ascertainment of compensation. -- Upon the entry of the
order of condemnation, the court shall appoint not more than three
(3) competent and disinterested persons as commissioners to
ascertain and report to the court the just compensation for the
property sought to be taken. The order of appointment shall
designate the time and place of the first session of the hearing to be
held by the commissioners and specify the time within which their
report is to be filed with the court.
More than anything else, the parties, by a solemn document freely
and voluntarily agreed upon by them, agreed to be bound by the
report of the commission and approved by the trial court. The
agreement is a contract between the parties.
Furthermore, during the hearing on 22 November 1996, petitioner
did not interpose a serious objection. It is therefore too late for
petitioner to question the valuation now without violating the
principle of equitable estoppel.
Finally, while Section 4, Rule 67 of the Rules of Court provides that
just compensation shall be determined at the time of the filing of
the complaint for expropriation, such law cannot prevail over R.A.
7160, which is a substantive law.
WHEREFORE, finding no reversible error in the assailed judgment
of the Court of Appeals in CA-G.R. CV No. 59204, the petition in this
case is hereby DENIED.
• ASIA’S EMERGING DRAGON CORPORATION V. DOTC, G.R. NO.
169914, APRIL 18, 2008 SURRALTA
Note: This case is a petition for Prohibition and Mandamus filed by
Asia's Emergring Dragon Corporation (the original proponent of the
"Unsolicited Proposal for the construction and operation of NAIA 3
Project " as discussed in the case of Agan, Jr. vs. PIATCO as was also
reiterated in the subsequent case of Republic vs Gingoyon). Guys,
EXPROPRIATION ONWARDS
this case, including the two previous cases of Agan and Gingoyon,
relates to the NAIA 3 project. However, the facts in Agan, Jr. case as
well as that of Gingoyon case were presented herein as reference for
the court's resolution of the prohibition and mandamus petitions
filed by Asia's Emerging Dragon. Of these 3 cases, it is only
"Republic vs Gingoyon case" that fits the topic - Expropriation. But
after reading the entire 43-page decision, the last few pages of this
decision show little relevance, to wit:
FACTS:
Congresman Baterina intervened in this case, he was opposing the
expropriation proceedings, as discussed in Republic vs Gingoyon, on
the ground that NAIA IPT III is already public property. Hence,
according to him, PIATCO is not entitled to just compensation for
NAIA IPT III. He is asking the Court to make a definitive ruling on
this matter considering that it was not settled in either Agan or
Gingoyon cases.
HELD:
The Court ruled: We disagree. Contrary to Baterina's stance,
PIATCO's entitlement to just and equitable consideration for its
construction of NAIA IPT III and the propriety of the Republic's
resort to expropriation proceedings were already recognized and
upheld by this Court in Agan and Gingoyon.
The Court's Decisions in both Agan and Gingoyon had attained
finality. This Court already made an unequivocal pronouncement in
its Resolution in Agan that for the Government of the Republic to
take over the NAIA IPT III facility, it has to compensate PIATCO as a
builder of the structures; and that the compensation must be just
and in accordance with law and equity for the government cannot
unjustly enrich itself at the expense of PIATCO and its investors. As
between the Republic and PIATCO, the judgment on the need to
compensate PIATCO before the Government may take over NAIA
IPT III is already conclusive and beyond question.
Hence, the Petition is DISMISSED for being moot and academic.
LANDBANK V. WYCOCO, G.R. NO. 140160, 13 JANUARY 2004,
419 SCRA 67, 80- LAMBAN
PRINCIPLE:
JURISDICTION OF SPECIAL AGRARIAN COURTS : Special Agrarian
Courts are given original and exclusive jurisdiction over two
categories of cases, to wit: (1) all petitions for the determination of
just compensation; and (2) the prosecution of all criminal offenses
under R.A. No. 6657. Section 50 must be construed in harmony with
Section 57 by considering cases involving the determination of just
compensation and criminal cases for violations of R.A. No. 6657 as
excepted from the plenitude of power conferred to the DAR. Indeed,
there is a reason for this distinction. The DAR, as an administrative
agency, cannot be granted jurisdiction over cases of eminent
domain and over criminal cases. The valuation of property in
eminent domain is essentially a judicial function which is vested
with the Special Agrarian Courts and cannot be lodged with
administrative agencies.
It ’s not a PROVREM 2015  8

VALUATION: While market value may be one of the bases of
determining just compensation, the same cannot be arbitrarily
arrived at without considering the factors to be appreciated in
arriving at the fair market value of the property e.g., the cost of
acquisition, the current value of like properties, its size, shape,
location, as well as the tax declarations thereon.
DETERMINATION OF LAND COVERAGE: The power to determine
whether a parcel of land may come within the coverage of the
Comprehensive Agrarian Reform Program is essentially lodged with
the DAR.
FACTS:
Feliciano F. Wycoco is the registered owner of a 94.1690 hectare
unirrigated and untenanted rice land situated in the Nueva Ecija. In
line with the Comprehensive Agrarian Reform Program (CARP) of
the government, Wycoco voluntarily offered to sell the land to the
Department of Agrarian Reform (DAR) for P14.9 million. However,
after the DAR’s evaluation of the application and the determination
of the just compensation by the Land Bank of the Philippines (LBP),
a notice of intention to acquire 84.5690 hectares of the property
excluding idle lands, river and road located therein for P1,342,667.4
but later on raised to P2,594,045.39 and, upon review, was modified
to P2,280,159.82 to which Wycoco refused to prompting the the
DAR to indorse the case to the Department of Agrarian Reform
Adjudication Board (DARAB) for the purpose of fixing the just
compensation in a summary administrative proceeding.
DARAB required the parties to submit their respective memoranda
or position papers in support of their claim. Wycoco, however,
decided to forego with the filing of the required pleadings, and
instead filed on April 13, 1993, the instant case for determination of
just compensation with the Regional Trial Court of Cabanatuan City,
Branch 23 impleading as party defendants the DAR and LBP.
DARAB issued an order dismissing the case to give way to the
determination of just compensation by the Cabanatuan court. DAR
and LBP filed their respective answers before the special agrarian
court contending that the valuation of Wycocos property was in
accordance with law and that the latter failed to exhaust
administrative remedies by not participating in the summary
administrative proceedings before the DARAB which has primary
jurisdiction over determination of land valuation.
On November 14, 1995, the trial court rendered a decision in favor
of Wycoco. It ruled that there is no need to present evidence in
support of the land valuation inasmuch as it is of public knowledge
that the prevailing market value of agricultural lands sold in Licab,
Nueva Ecija is from P135,000.00 to 150,000.00 per hectare. The
DAR and the LBP filed separate petitions before the Court of
Appeals but was both dismissed.
The decision became final and executory prompting Wycoco to file a
petition for mandamus before this Court, docketed as G.R. No.
146733, praying that the decision of the Regional Trial Court of
Cabanatuan City, Branch 23, in Agrarian Case No. 91 (AF) be
executed, and that Judge Rodrigo S. Caspillo, the now presiding
Judge of said court, be compelled to inhibit himself from hearing the
case.
EXPROPRIATION ONWARDS
ISSUE:
(1) Whether or not the RTC acting as a Special Agrarian Court
taking into cognizance the case of land valuation covered by CARP
was proper.
(2) Whether or not RTC acting as a Special Agrarian Court’s
assumption of value of the property was proper.
(3) Whether or not Wycoco can compel the DAR to purchase the
entire property.
HELD:
1. Yes.
Anent the issue of jurisdiction, the laws in point are Sections 50 and
57 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law
of 1988) which, in pertinent part, provide:
Section 50. Quasi-judicial Powers of the DAR. The DAR is hereby
vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive original
jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive jurisdiction
of the Department of Agriculture (DA) and the Department of
Environment and Natural Resources (DENR).
Section 57. Special Jurisdiction. The Special Agrarian Court shall
have original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners, and the
prosecution of all criminal offenses under this Act.
In Republic v. Court of Appeals, it was held that Special Agrarian
Courts are given original and exclusive jurisdiction over two
categories of cases, to wit: (1) all petitions for the determination of
just compensation; and (2) the prosecution of all criminal offenses
under R.A. No. 6657. Section 50 must be construed in harmony with
Section 57 by considering cases involving the determination of just
compensation and criminal cases for violations of R.A. No. 6657 as
excepted from the plenitude of power conferred to the DAR. Indeed,
there is a reason for this distinction. The DAR, as an administrative
agency, cannot be granted jurisdiction over cases of eminent
domain and over criminal cases. The valuation of property in
eminent domain is essentially a judicial function which is vested
with the Special Agrarian Courts and cannot be lodged with
administrative agencies.
The trial court properly acquired jurisdiction over Wycocos
complaint for determination of just compensation. It must be
stressed that although no summary administrative proceeding was
held before the DARAB, LBP was able to perform its legal mandate
of initially determining the value of Wycocos land pursuant to
Executive Order No. 405, Series of 1990. What is more, DAR and
LBPs conformity to the pre-trial order which limited the issue only
to the determination of just compensation estopped them from
questioning the jurisdiction of the special agrarian court. The pre-
trial order limited the issues to those not disposed of by admission
or agreements; and the entry thereof controlled the subsequent
course of action.
It ’s not a PROVREM 2015  9

Besides, the issue of whether Wycoco violated the rule on
exhaustion of administrative remedies was rendered moot and
academic in view of the DARABs dismissal of the administrative
case to give way to and in recognition of the courts power to
determine just compensation.
2. No.
The valuation of the property of Wycoco is the very issue in the case
at bar, the trial court should have allowed the parties to present
evidence thereon instead of practically assuming a valuation
without basis. While market value may be one of the bases of
determining just compensation, the same cannot be arbitrarily
arrived at without considering the factors to be appreciated in
arriving at the fair market value of the property e.g., the cost of
acquisition, the current value of like properties, its size, shape,
location, as well as the tax declarations thereon. Since these factors
were not considered, a remand of the case for determination of just
compensation is necessary.
3. No.
The DAR cannot be compelled to purchase the entire property
voluntarily offered by Wycoco. The power to determine whether a
parcel of land may come within the coverage of the Comprehensive
Agrarian Reform Program is essentially lodged with the DAR. That
Wycoco will suffer damages by the DARs non-acquisition of the
approximately 10 hectare portion of the entire land which was
found to be not suitable for agriculture is no justification to compel
DAR to acquire the whole area.
Quick Digest:
Feliciano F. Wycoco is the registered owner of a 94.1690 hectare
unirrigated and untenanted rice land situated in the Nueva Ecija. In
line with the Comprehensive Agrarian Reform Program (CARP) of
the government, Wycoco voluntarily offered to sell the land to the
Department of Agrarian Reform (DAR) for P14.9 million however, a
different valuation was offered by DAR to which he refused to
prompting the the DAR to indorse the case to the Department of
Agrarian Reform Adjudication Board (DARAB) for the purpose of
fixing the just compensation in a summary administrative
proceeding.
Wycoco, however, decided to forego with the filing of the required
pleadings, and instead filed on April 13, 1993, the instant case for
determination of just compensation with the Regional Trial Court of
Cabanatuan City, Branch 23 impleading as party defendants the
DAR and LBP. To this, DARAB issued an order dismissing the case to
give way to the determination of just compensation by the
Cabanatuan court. DAR and LBP filed their respective answers
contending that the valuation of Wycocos property was in
accordance with law and that the latter failed to exhaust
administrative remedies by not participating in the summary
administrative proceedings before the DARAB which has primary
jurisdiction over determination of land valuation.
On November 14, 1995, the trial court rendered a decision in favor
of Wycoco. It ruled that there is no need to present evidence in
support of the land valuation inasmuch as it is of public knowledge
EXPROPRIATION ONWARDS
that the prevailing market value of agricultural lands sold in Licab,
Nueva Ecija is from P135,000.00 to 150,000.00 per hectare. The
DAR and the LBP filed separate petitions before the Court of
Appeals but was both dismissed.
• NPC V. ANGAS, G.R. NOS. 60225-26, 8 MAY 1992, 208 SCRA
542- DACUA
FACTS:
NPC filed complaints for eminent domain against respondents with
CFI no RTC of Lanao del Sur. The complaint which sought to
expropriate certain lots in Limogao, Saguiaran, Lanao del Sur was
for the purpose of the development of hydro-electric power and
production of electricity as well as the erection of such subsidiary
works and constructions as may be necessarily connected
therewith.
On June 15, 1979, a consolidated decision in Civil Cases Nos. 2248
and 2277 was rendered by the lower court, declaring and
confirming that the lots mentioned and described in the complaints
have entirely been lawfully condemned and expropriated by the
petitioner, and ordering the latter to pay the private respondents
certain sums of money as just compensation for their lands
expropriated "with legal interest thereon . . . until fully paid."
Two consecutive motions for reconsideration of the said
consolidated decision were filed by the petitioner. The same were
denied by the respondent court. Petitioner did not appeal the
aforesaid consolidated decision, which became final and executory.
Thus, on May 16, 1980, one of the private respondents (Sittie Sohra
Batara) filed an ex-parte motion for the execution of the June 15,
1979 decision, praying that petitioner be directed to pay her the
unpaid balance of P14,300.00 for the lands expropriated from her,
including legal interest which she computed at 6% per annum. The
said motion was granted by the lower court. Thereafter, the lower
court directed the petitioner to deposit with its Clerk of Court the
sums of money as adjudged in the joint decision dated June 15,
1979. Petitioner complied with said order and deposited the sums
of money with interest computed at 6% per annum.
On February 10, 1981, one of the private respondents (Pangonatan
Cosna Tagol), through counsel, filed with the trial court an ex-
parte motion in Civil Case No. 2248 praying, for the first time, that
the legal interest on the just compensation awarded to her by the
court be computed at 12% per annum as allegedly "authorized
under and by virtue of Circular No. 416 of the Central Bank issued
pursuant to Presidential Decree No. 116 and in a decision of the
Supreme Court that legal interest allowed in the judgment of the
courts, in the absence of express contract, shall be computed at
12% per annum."
On February 11, 1981, the lower court granted the said motion
allowing 12% interest per annum.
Petitioner moved for a reconsideration of the lower court's last
order dated August 28, 1981, alleging that the main decision had
already become final and executory with its compliance of
depositing the sums of money as just compensation for the lands
It ’s not a PROVREM 2015  10

condemned, with legal interest at 6% per annum; that the said main
decision can no longer be modified or changed by the lower court;
and that Presidential Decree No. 116 is not applicable to this case
because it is Art. 2209 of the Civil Code which applies.
ISSUE: Whether or not in the computation of the legal rate of
interest on just compensation for expropriated lands, the law
applicable is Article 2209 of the Civil Code which prescribes a 6%
legal interest rate or Central Bank Circular No. 416 which fixed the
legal interest rate at 12% per annum.
RULING:
The legal rate should be 6% per annum.
By virtue of the authority granted to it under Section 1 of Act No.
2655, as amended, otherwise known as the "Usury Law," the
Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has
prescribed that the rate of interest for the loan or forbearance of
any money, goods or credits and the rate allowed in judgments,
in the absence of express contract as to such rate of interest,
shall be twelve per cent (12%)per annum.
It is clear from the foregoing provision that the Central Bank
circular applies only to loan or forbearance of money, goods or
credits. This has already been settled in several cases decided by
this Court. Private respondents, however, take exception to the
inclusion of the term "judgments" in the said circular, claiming that
such term refers to any judgment directing the payment of legal
interest, which term includes the questioned judgment of the lower
court in the case at bar.
Private respondents' contention is bereft of merit. The term
"judgments" as used in Section 1 of the Usury Law, as well as in
Central Bank Circular No. 416, should be interpreted to mean only
judgments involving loan or forbearance of money, goods or credits,
following the principle of ejusdem generis. Under this doctrine,
where general terms follow the designation of particular things or
classes of persons or subjects, the general term will be construed to
comprehend those things or persons of the same class or of the
same nature as those specifically enumerated.
Applying the said rule on statutory construction to Central Bank
Circular No. 416, the general term "judgments" can refer only to
judgments in cases involving loans or forbearance of any money,
goods or credits.
Obviously, therefore, Art. 2209 of the Civil Code, and not
Central Bank Circular No. 416, is the law applicable to the case
at bar. Said law reads:
Art. 2209. If the obligation consists in the payment of a sum of
money, and the debtor incurs a delay, the indemnity for damages,
there being no stipulation to the contrary, shall be the payment of
the interest agreed upon, and in the absence of stipulation, the legal
interest, which is six percent per annum.
The Central Bank circular applies only to loan or forbearance
of money, goods or credits and to judgments involving such
loan or forbearance of money, goods or credits. This is evident
EXPROPRIATION ONWARDS
not only from said circular but also from Presidential Decree
No. 116, which amended Act No. 2655, otherwise known as the
Usury Law. On the other hand, Art. 2209 of the Civil Code
applies to transactions requiring the payment of indemnities
as damages, in connection with any delay in the performance of
the obligation arising therefrom other than those covering loan
or forbearance of money, goods or credits.
In the case at bar, the transaction involved is clearly not a loan or
forbearance of money, goods or credits but expropriation of certain
parcels of land for a public purpose, the payment of which is
without stipulation regarding interest, and the interest adjudged by
the trial court is in the nature of indemnity for damages. The legal
interest required to be paid on the amount of just compensation for
the properties expropriated is manifestly in the form of indemnity
for damages for the delay in the payment thereof. Therefore, since
the kind of interest involved in the joint judgment of the lower court
sought to be enforced in this case is interest by way of damages, and
not by way of earnings from loans, etc. Art. 2209 of the Civil Code
shall apply.
SHORT DIGEST:
NPC filed a complaint for eminent domain against respondent
which sought to expropriate certain lands in Lanao del Sur for
certain public purpose.
The lower court directed the expropriation and required the
petitioner to pay just compensation with legal interest thereon.
One of the private respondents moved for execution of judgment
praying for petitioner to pay the just compensation and the legal
interest of 6% per annum pursuant to Art. 2209 of the Civil Code.
Thereafter, the lower court directed petitioner to deposit the
payment with the interest of 6% per annum.
Another one of the private respondents filed ex parte motion stating
that the legal interest should be 12% per annum and not the 6% per
annum pursuant to Circular No. 416 of the Central Bank issued
pursuant to PD 116.
What is the legal rate of interest on just compensation for
expropriated lands?
• CITY OF MANILA V. SERRANO, G.R. NO. 142304, JUNE 20, 2001
REALINO
FACTS:
The City Council of Manila enacted Ordinance No. 7833 authorizing
the expropriation of certain properties in Manila’s First District in
Tondo. One of the properties sought to be expropriated was that
supposedly owned by respondents.
Petitioner City of Manila filed an amended complaint for
expropriation, docketed as Civil Case No. 94-72282, with the RTC of
Manila, against the supposed owners of the lots, which included
herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita,
Leonora, Adelaida, all surnamed Serrano.
It ’s not a PROVREM 2015  11

Respondents filed a consolidated answer, in which they alleged that
their mother, the late Demetria De Guia, had acquired Lot 1-C from
Lee Kian Hui; that they had been the bona fide occupants of the said
parcel of land for more than 40 years; that the expropriation of Lot
1-C would result in their dislocation, it being the only residential
land left to them by their deceased mother; and that the said lot was
exempt from expropriation because dividing the said parcel of land
among them would entitle each of them to only about 50 square
meters of land. Respondents, therefore, prayed that judgment be
rendered declaring Lot 1-C exempt from expropriation and ordering
the cancellation of the notice annotated on the back of TCT No.
226048, regarding the pendency of Civil Case No. 94-72282 for
eminent domain filed by petitioner.
Upon motion by petitioner, the trial court issued an order, dated
October 9, 1998, directing petitioner to deposit the amount of
P1,825,241.00 equivalent to the assessed value of the properties.
After petitioner had made the deposit, the trial court issued another
order, dated December 15, 1998, directing the issuance of a writ of
possession in favor of petitioner.
Respondents filed a petition for certiorari with the Court of Appeals,
alleging that the expropriation of Lot 1-C would render
respondents, who are actual occupants thereof, landless; that Lot 1-
C is exempt from expropriation because R.A. No. 7279 provides that
properties consisting of residential lands not exceeding 300 square
meters in highly urbanized cities are exempt from expropriation;
that respondents would only receive around 49 square meters each
after the partition of Lot 1-C which consists of only 343.10 square
meters; and that R.A. No. 7279 was not meant to deprive an owner
of the entire residential land but only that in excess of 300 square
meters.
On November 16, 1999, the Court of Appeals rendered a decision
holding that Lot 1-C is not exempt from expropriation because it
undeniably exceeds 300 square meters which is no longer
considered a small property within the framework of R.A. No. 7279.
However, it held that in accordance with the ruling in Filstream
International Inc. v. Court of Appeals, the other modes of acquisition
of lands enumerated in §§9-10 of the law must first be tried by the
city government before it can resort to expropriation. As petitioner
failed to show that it had done so, the Court of Appeals gave
judgment for respondents and enjoined petitioner from
expropriating Lot 1-C.
ISSUE:
WON the CA erred in concluding that the Order of the RTC which
authorizes the immediate entry of the City as the expropriating
agency into the property sought to be expropriated upon the
deposit thereof as tantamount to condemnation of the property.
RULING:
YES. Rule 67, §2 provides: Upon the filing of the complaint or at any
time thereafter and after due notice to the defendant, the plaintiff
shall have the right to take or enter upon the possession of the real
property involved if he deposits with the authorized government
depositary an amount equivalent to the assessed value of the
property for purposes of taxation to be held by such bank subject to
EXPROPRIATION ONWARDS
the orders of the court. After such deposit is made the court shall
order the sheriff or other proper officer to forthwith place the
plaintiff in possession of the property involved and promptly
submit a report thereof to the court with service of copies to the
parties. Thus, a writ of execution may be issued by a court upon the
filing by the government of a complaint for expropriation sufficient
in form and substance and upon deposit made by the government of
the amount equivalent to the assessed value of the property subject
to expropriation. Upon compliance with these requirements, the
issuance of the writ of possession becomes ministerial. In this case,
these requirements were satisfied and, therefore, it became the
ministerial duty of the trial court to issue the writ of possession.
The Court of Appeals, however, ruled that petitioner failed to
comply with the requirements laid down in §§9-10 of R.A. No. 7279
and reiterated in the Filstream ruling. This is error. The ruling in
Filstream was necessitated because an order of condemnation had
already been issued by the trial court in that case. Thus, the
judgment in that case had already become final. In this case, the
trial court has not gone beyond the issuance of a writ of possession.
Hearing is still to be held to determine whether or not petitioner
indeed complied with the requirements provided in R.A. No. 7279.
It is, therefore, premature at this stage of the proceedings to find
that petitioner resorted to expropriation without first trying the
other modes of acquisition enumerated in §10 of the law.
Expropriation proceedings consists of two stages: first,
condemnation of the property after it is determined that its
acquisition will be for a public purpose or public use and, second,
the determination of just compensation to be paid for the taking of
private property to be made by the court with the assistance of not
more than three commissioners.
• MCWD V. J. KING AND SONS, G.R. NO. 175983, APRIL 16, 2009
MATA
Principle:
In expropriation proceeding, there are two stages, first, is the
determination of the validity of the expropriation, and second is the
determination of just compensation.
The general rule is that upon filing of the expropriation complaint,
the plaintiff has the right to take or enter into possession of the real
property involved if he deposits with the authorized government
depositary an amount equivalent to the assessed value of the
property for purposes of taxation. An exception to this procedure is
provided by R.A. No. 8974. It requires the payment of one hundred
percent (100%) of the zonal value of the property to be
expropriated to entitle the plaintiff to a writ of possession.
Facts:
Petitioner Metropolitan Cebu Water District is a government-owned
and controlled corporation created pursuant to Presidential Decree
No. 198, as amended. Among its purposes are to acquire, install,
improve, maintain and operate water supply and distribution
systems within the boundaries of the District.
Petitioner, wanted to acquire a five (5)-square meter lot occupied by
its production well. The lot is part of respondent’s property covered
It ’s not a PROVREM 2015  12

by TCT No. 168605 and located in Banilad, Cebu City. Petitioner
initiated negotiations with respondent for the voluntary sale of the
latter’s property. Respondent did not acquiesce to petitioner’s
proposal. After the negotiations had failed, petitioner pursuant to
its charter initiatedexpropriation proceedings through Board
Resolution No. 015-2004 which was duly approved by the Local
Water Utilities Administration (LWUA). On 10 November 2004,
petitioner filed a complaint to expropriate the five (5)-square meter
portion of respondent’s property.
On 7 February 2005, petitioner filed a motion for the issuance of a
writ of possession. Petitioner wanted to tender the amount to
respondent during a rescheduled hearing which petitioner’s
counsel had failed to attend. Petitioner then deposited with the
Clerk of Court the amount of P17,500.00 equivalent to one hundred
percent (100%) of the current zonal value of the property which the
Bureau of Internal Revenue had pegged at P3,500.00 per square
meter. Subsequently, the trial court granted the motion and issued
the writ of possession. Respondent moved for reconsideration but
the motion was denied.
Respondent filed a petition for certiorari under Rule 65 with the
Court of Appeals. It sought the issuance of a temporary restraining
order (TRO) which the Court of Appeals granted. Thus, petitioner
was not able to gain entry to the lot.
On 26 July 2006, the Court of Appeals rendered the assailed
decision granting respondent’s petition. It ruled that the board
resolution which authorized the filing of the expropriation
complaint lacked exactitude and particularity which made it invalid;
that there was no genuine necessity for the expropriation of the five
(5)-square meter lot and; that the reliance on Republic Act (R.A.)
No. 8974 in fixing the value of the property contravenes the judicial
determination of just compensation. Petitioner moved for
reconsideration but the motion was rejected
Hence, this petition.
Issues:
1. Whether there was sufficient authority from the petitioner’s
board of directors to institute the expropriation complaint; and
2. Whether the procedure in obtaining a writ of possession was
properly observed.
Ruling:
Yes, the petitioner’s board of directors has sufficient authority to
institute the expropriation complaint. Moreover, the procedure in
obtaining a writ of possession was properly observed.
Eminent domain is the right of the state to acquire private property
for public use upon payment of just compensation. The power of
eminent domain is inseparable in sovereignty being essential to the
existence of the State and inherent in government. Its exercise is
proscribed by only two Constitutional requirements: first, that there
must be just compensation, and second, that no person shall be
deprived of life, liberty or property without due process of law.In an
expropriation proceeding there are two stages, first, is the
EXPROPRIATION ONWARDS
determination of the validity of the expropriation, and second is the
determination of just compensation.
As an inherent sovereign prerogative, the power to expropriate
pertains to the legislature. However, Congress may, as in fact it often
does, delegate the exercise of the power to government agencies,
public officials and quasi-public entities. Petitioner is empowered
under its charter, to explicitly exercise the power of eminent
domain.
R.A. No. 8974, otherwise known as "An Act To Facilitate The
Acquisition Of Right-Of-Way, Site Or Location For National
Government Infrastructure Projects And For Other Purposes" ,
includes projects undertaken by government owned and controlled
corporations. Moreover, the Implementing Rules and Regulations of
R.A. No. 8974 explicitly includes water supply, sewerage, and waste
management facilities among the national government projects
covered by the law.
A corporation does not have powers beyond those expressly
conferred upon it by its enabling law. All the powers, privileges, and
duties of the district shall be exercised and performed by and
through the board and that any executive, administrative or
ministerial power may be delegated and re-delegated by the board
to any of its officers or agents for suchpurpose.
In this case, petitioner being a corporation it can exercise its powers
only through its board of directors. For petitioner to exercise its
power of eminent domain, two requirements should be met,
namely: first, its board of directors passed a resolution authorizing
the expropriation, and; second, the exercise of the power of eminent
domain was subjected to review by the LWUA. These requirements
were properly observed by the petitioner. Therefore, there was
sufficient authority from the petitioner’s board of directors to
institute the expropriation complaint.
As to the propriety of the issuance of a writ of possession, a
discussion on the various stages in an expropriation proceeding is
necessary.
The general rule is that upon filing of the expropriation complaint,
the plaintiff has the right to take or enter into possession of the real
property involved if he deposits with the authorized government
depositary an amount equivalent to the assessed value of the
property for purposes of taxation. An exception to this procedure is
provided by R.A. No. 8974. It requires the payment of one hundred
percent (100%) of the zonal value of the property to be
expropriated to entitle the plaintiff to a writ of possession, as
discussed inTan v. Republic G.R. No. 170740, 25 May 2007,523 SCRA
203. R.A. No. 8974 also provides a different scheme for the
obtention of a writ of possession. The law does not require a
deposit with a government bank; instead it requires the
government to immediately pay the property owner.Under this
statutory provision, when the government, its agencies or
government-owned and controlled corporations, make the required
provisional payment, the trial court has a ministerial duty to issue a
writ of possession.
In this case, petitioner was supposed to tender the provisional
payment directly to respondent during a hearing which it had failed
It ’s not a PROVREM 2015  13

to attend. Petitioner, then, deposited the provisional payment with
the court. The trial court did not commit an error in accepting the
deposit and in issuing the writ of possession. The deposit of the
provisional amount with the court is equivalent to payment. Upon
compliance with the requirements, a petitioner in an expropriation
case is entitled to a writ of possession as a matter of right and it
becomes the ministerial duty of the trial court to forthwith issue the
writ of possession. Therefore, the proper procedure was observed
in this case.
Quick digest:
NDXE, a GOCC, with authority to expropriate private property under
its charter, sought to expropriate portion of K. Queen and Daughters
Company’s property, for its deep well project. The Board of
Directors of NDXE authorized its expropriation and was reviewed
by Local Water Utilities Administration. NXDE then deposited with
the Clerk of Court the amount of P17,500.00 equivalent to one
hundred percent (100%) of the current zonal value of the property
which the Bureau of Internal Revenue had pegged at P3,500.00 per
square meter.The trial court issued writ of possession to NXDE over
the property. However, the Court of Appeals(CA) issued a TRO
because there was no sufficient authority to expropriate said
property. Is the CA correct?
No.
In an expropriation proceeding there are two stages, first, is the
determination of the validity of the expropriation, and second is the
determination of just compensation.
A corporation does not have powers beyond those expressly
conferred upon it by its enabling law. All the powers, privileges, and
duties of the district shall be exercised and performed by and
through the board and that any executive, administrative or
ministerial power may be delegated and re-delegated by the board
to any of its officers or agents for such purpose.
The general rule is that upon filing of the expropriation complaint,
the plaintiff has the right to take or enter into possession of the real
property involved if he deposits with the authorized government
depositary an amount equivalent to the assessed value of the
property for purposes of taxation. An exception to this procedure is
provided by R.A. No. 8974. It requires the payment of one hundred
percent (100%) of the zonal value of the property to be
expropriated to entitle the plaintiff to a writ of possession
In this case, petitioner being a corporation it can exercise its powers
only through its board of directors. NXDE was authorized by its
Board, and was reviewed by Local Water Utilities Administration.
Further, NXDE then properlydeposited with the Clerk of Court the
amount of P17,500.00 equivalent to one hundred percent (100%) of
the current zonal value of the property which the Bureau of Internal
Revenue had pegged at P3,500.00 per square meter.
Therefore, NXDE has sufficient authority to expropriate the
property of K. Queen and Daughters Company. The CA’s order was
incorrect.
EXPROPRIATION ONWARDS
Side Notes: Full discussion of the stages of expropriation
proceeding.
(1) Determination of the authority of the plaintiff to exercise the
power of eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an order, if not
of dismissal of the action, with condemnation declaring that the
plaintiff has a lawful right to take the property sought to be
condemned for the public use or purpose described in the
complaint, upon payment of just compensation. An order of
expropriation is final. An order of dismissal, if this be ordained,
would be a final one, as it finally disposes of the action and leaves
nothing more to be done by the courts on the merits. The order of
expropriation would also be a final one for after its issuance, no
objection to the right of condemnation shall be heard. The order of
expropriation may be appealed by any party aggrieved thereby by
filing a record on appeal.
(2) Determination by the court of the just compensation for the
property sought to be taken with the assistance of not more than
three (3) commissioners. The order fixing the just compensation on
the basis of the evidence before the court and findings of the
commissioners would likewise be a final one, as it would leave
nothing more to be done by the court regarding the issue. A second
and separate appeal may be taken from this order fixing the just
compensation.37
• Republic v. Tagle, G.R. No. 129079, December 2, 1998 PAGAPONG
Re: Executive Order No. 1035[1] (EO 1035) was enacted to facilitate
government acquisition of private property to be used for
infrastructure or other development projects. Under Section 7
thereof, it is the ministerial duty of courts to issue a writ of
possession within five days from the time the government deposits
10 percent of the just compensation payable. Moreover, such writ
cannot be nullified by an adverse decision in an ejectment
proceeding involving the same property and the same parties.
Facts:
• 2 parcels of land were owned by Helena Benetiz.
• The Philippine Government, through the Philippine Human
Resources Development Center (PHRDC) in coordination with the
Japanese International Cooperation Agency (JICA) plan for the
establishment of ASEAN Human Resources Development Project in
the Philippines.
• Among the 5 main programs of the proposed project was the
Construction Manpower Development Center (CMDC) in the land
owned by Helena.
• Several transaction and agreements were entered into between
Benitez and the PHRDC with regards to the lease and consequently,
the possible sale of the land which did not push through because of
Benitez’s desistance.
• Thus subsequently, the state through DTI instituted a complaint
for Eminent Domain, pursuant to EO 1935. In compliance with
Section 2, Rule 67 of the Rules of Court, as amended by Presidential
It ’s not a PROVREM 2015  14

Decree No. 42, DTI deposited with PNB in favor of Benitez P708,490
an amount equivalent to the provisional value of the land sought to
be expropriated.
• Subsequently, DTI filed a Motion for Issuance of Writ of Possession
which had been granted but;
• Subsequently the writ was quashed by MTC Judge Tagle on the
ground that the applicants were already in possession of the lot.
• (note: that Benitez in turn, also instituted a case of ejectment
against PHRDC)
Issue:
Whether Judge Tagle may quash a writ of possession on the ground
that the expropriating government agency is already occupying the
property sought to be expropriated.
Ruling:
No. Judge Tagle is required to issue a writ of possession pursuant to
Sec. 7 of EO 1035:
“SEC 7. Expropriation. If the parties fail to agree in negotiation of
the sale of the land as provided in the preceding section, the
government implementing agency/instrumentality concerned shall
have authority to immediately institute expropriation proceedings
through the Office of the Solicitor General, as the case may be. The
just compensation to be paid for the property acquired through
expropriation shall be in accordance with the provisions of P.D. No.
1533. Courts shall give priority to the adjudication of cases on
expropriation and shall immediately issue the necessary writ of
possession upon deposit by the government implementing
agency/instrumentality concerned of an amount equivalent to ten
per cent (10%) of the amount of just compensation provided under
P.D. No. 1533; Provided, That the period within which said writ of
possession shall be issued shall in no case extend beyond five (5)
days from the date such deposit was made.”
Under this statutory provision, when the government or its
authorized agent makes the required deposit, the trial court has a
ministerial duty to issue a writ of possession.
What will happen if the required writ of possession is not issued?
• This question becomes very important because the Municipal
Trial Court (MTC), where private respondent (Benetiz) sued
petitioner for unlawful detainer, has rendered a decision ordering
petitioner to vacate the property.[16] It would be circuitous, if not
legally absurd, for this Court to require petitioner to first vacate the
property in view of the adverse judgment in the unlawful detainer
case, and soon afterwards, order the trial court to issue in
petitioners favor a writ of possession pursuant to the expropriation
proceedings. Such a scenario is a bureaucratic waste of precious
time and resources. This precisely is the sort of pernicious and
unreasonable delay of government infrastructure or development
projects, which EO 1035 intended to address by requiring the
immediate issuance of a writ of possession.
EXPROPRIATION ONWARDS
• Ineludibly, said writ is both necessary and practical, because mere
physical possession that is gained by entering the property is not
equivalent to expropriating it with the aim of acquiring ownership
over, or even the right to possess, the expropriated property.
Short case:
The government through its Human Development Agency (HDA)
leased the private land of Benetiz for its infrastructure. Latter
however, HDA offer to buy the land to which Benetiz decline. This
prompted HDA to file for an expropriation proceeding. In turn,
Benetiz also filed a case for ejectment against HDA.
After HDA paid the provisional value of the land pursuant to EO
1935, it prayed the court to issue a writ of possession to which the
court granted, but latter quashed. The court argued that the writ is
no longer necessary in view of the fact that HDA has the land in
possession.
Is the contention of the court correct? Reason out.
• CITY OF CEBU V. SPOUSES DEDAMO, G.R. NO. 142971, MAY 7,
2002 DUYONGCO
PRINCIPLE: while Section 4, Rule 67 of the Rules of Court provides
that just compensation shall be determined at the time of the filing
of the complaint for expropriation, such law cannot prevail over R.A.
7160, which is a substantive law.
Facts:
On 17 September 1993, petitioner City of Cebu filed in Civil Case No.
CEB-14632 a complaint for eminent domain against respondents
spouses Apolonio and Blasa Dedamo. The petitioner alleged therein
that it needed the following parcels of land of respondents (Lot No.
1527 and Lot No. 1528) for a public purpose, i.e., for the
construction of a public road which shall serve as an access/relief
road of Gorordo Avenue to extend to the General Maxilum Avenue
and the back of Magellan International Hotel Roads in Cebu City.
The total area sought to be expropriated is 1,624 square meters
with an assessed value of P1,786,400. Petitioner deposited with the
Philippine National Bank the amount of P51,156 representing 15%
of the fair market value of the property to enable the petitioner to
take immediate possession of the property pursuant to Section 19
of R.A. No. 7160.
The parties executed and submitted to the trial court an Agreement
wherein they declared that they have partially settled the case.
Pursuant to said agreement, the trial court appointed three
commissioners to determine the just compensation of the lots
sought to be expropriated
On the basis of the commissioners report and after due deliberation
thereon, the trial court rendered its decision where the Plaintiff is
directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the
sum of pesos: (P24,865.930.00) representing the compensation
mentioned in the Complaint.
It ’s not a PROVREM 2015  15

Petitioner elevated the case to the Court of Appeals, which docketed
the case. Petitioner alleged that the lower court erred in fixing the
amount of just compensation. Contending that just compensation
should be based on the prevailing market price of the property at
the commencement of the expropriation proceedings.
ISSUE: whether just compensation should be determined as of the
date of the filing of the complaint?
RULING:
In the case at bar, the applicable law as to the point of reckoning for
the determination of just compensation is Section 19 of R.A. No.
7160, which expressly provides that just compensation shall be
determined as of the time of actual taking. The Section reads as
follows:
SECTION 19. Eminent Domain. -- A local government unit may,
through its chief executive and acting 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 landless, upon payment
of just compensation, pursuant to the provisions of the Constitution
and pertinent laws: Provided, however, That the power of eminent
domain may not be exercised unless a valid and definite offer has
been previously made to the owner, and such offer was not
accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the
expropriation proceedings and upon making a deposit with the
proper court of at least fifteen percent (15%) of the fair market
value of the property based on the current tax declaration of the
property to be expropriated: Provided finally, That, the amount to be
paid for the expropriated property shall be determined by the
proper court, based on the fair market value at the time of the
taking of the property.
The petitioner has misread our ruling in The National Power Corp.
vs. Court of Appeals. We did not categorically rule in that case that
just compensation should be determined as of the filing of the
complaint. We explicitly stated therein that although the general
rule in determining just compensation in eminent domain is the
value of the property as of the date of the filing of the complaint, the
rule admits of an exception: where this Court fixed the value of the
property as of the date it was taken and not at the date of the
commencement of the expropriation proceedings.
Also, the trial court followed the then governing procedural law on
the matter, which was Section 5 of Rule 67 of the Rules of Court,
which provided as follows:
SEC. 5. Ascertainment of compensation. -- Upon the entry of the
order of condemnation, the court shall appoint not more than three
(3) competent and disinterested persons as commissioners to
ascertain and report to the court the just compensation for the
property sought to be taken. The order of appointment shall
designate the time and place of the first session of the hearing to be
held by the commissioners and specify the time within which their
report is to be filed with the court.
More than anything else, the parties, by a solemn document freely
and voluntarily agreed upon by them, agreed to be bound by the
EXPROPRIATION ONWARDS
report of the commission and approved by the trial court. The
agreement is a contract between the parties.
Furthermore, during the hearing on 22 November 1996, petitioner
did not interpose a serious objection. It is therefore too late for
petitioner to question the valuation now without violating the
principle of equitable estoppel.
Finally, while Section 4, Rule 67 of the Rules of Court provides that
just compensation shall be determined at the time of the filing of
the complaint for expropriation, such law cannot prevail over R.A.
7160, which is a substantive law.
WHEREFORE, finding no reversible error in the assailed judgment
of the Court of Appeals in CA-G.R. CV No. 59204, the petition in this
case is hereby DENIED.
• SPOUSES ORTEGA V. CITY OF CEBU, G.R. NO. 181562-63,
OCTOBER 2, 2009 BELLEZA
FACTS:
Spouses Ortega are the registered owners of a parcel of land known
as Lot No. 310-B, situated in Hipodromo, Cebu City, with an area of
5,712 square meters and covered by Transfer Certificate of Title No.
113311, issued by the Register of Deeds of the City of Cebu.
On May 23, 1994, the Sangguniang Panglungsod of [Cebu City]
enacted City Ordinance No. 1519, giving authority to the City Mayor
to expropriate one-half (1/2) portion (2,856 square meters) of [the
spouses Ortegas] land (which is occupied by the squatters), and
appropriating for that purpose the amount of P3,284,400.00 or at
the price of ONE THOUSAND ONE HUNDRED FIFTY PESOS
(P1,150.00) per square meter.
Pursuant to said ordinance, [Cebu City] filed a Complaint for
Eminent Domain [before the Regional Trial Court (RTC), Branch 23,
Cebu City] against [the spouses Ortega], docketed as Civil Case No.
CEB-16577.
On March 13, 1998, the [RTC] issued an order declaring that
[Cebu City] has the lawful right to take the property subject of the
instant case, for public use or purpose described in the complaint
upon payment of just compensation.
Based on the recommendation of the appointed
Commissioners (one of whom was the City Assessor of [Cebu City],
the [RTC] issued another Order dated May 21, 1999, fixing the value
of the land subject to expropriation at ELEVEN THOUSAND PESOS
(P11,000.00) per square meter and ordering [Cebu City] to pay
[Spouses Ortega] the sum of THIRTY ONE MILLION AND FOUR
HUNDRED SIXTEEN THOUSAND PESOS (P31,416,000.00) as just
compensation for the expropriated portion of Lot No. 310-B.
The Decision of the [RTC] became final and executory because of
[Cebu Citys] failure to perfect an appeal on time, and a Writ of
Execution was issued on September 17, 1999 to enforce the courts
judgment.
It ’s not a PROVREM 2015  16

In view thereof, the above-mentioned sum is now subject for
execution or garnishment for the same is no longer exempt from
execution.
[Cebu City] filed an Omnibus Motion to Stay Execution, Modification
of Judgment and Withdrawal of the Case, contending that the price
set by the [RTC] as just compensation to be paid to [the Spouses
Ortega] is way beyond the reach of its intended beneficiaries for its
socialized housing program. The motion was denied by the [RTC].
[Cebu City’s] Motion for Reconsideration was likewise denied. Then
it appealed to CA and CA affirmed RTC’s decision.
Issue:
1. Whether or not the CA erred in affirming the RTCs denial
of Cebu Citys Omnibus Motion to Modify Judgment and to
be Allowed to Withdraw from the Expropriation
Proceedings.
2. Whether or not just compensation is dependent on
whether State/City [Cebu City] would have sufficient
funds to pay for the same.
Ruling:
1. No. Both the Order of expropriation and the Order fixing
just compensation by the RTC can no longer be modified.
In short, Cebu City cannot withdraw from the
expropriation proceedings.
Section 4, Rule 67 of the Rules of Court on Expropriation provides:
SEC. 4. Order of expropriation. If the objections to and the defenses
against the right of the plaintiff to expropriate the property are
overruled, or when no party appears to defend as required by this
Rule, the court may issue an order of expropriation declaring that
the plaintiff has a lawful right to take the property sought to be
expropriated, for the public use or purpose described in the
complaint, upon the payment of just compensation to be
determined as of the date of the taking of the property or the filing
of the complaint, whichever came first.
A final order sustaining the right to expropriate the property may
be appealed by any party aggrieved thereby. Such appeal, however,
shall not prevent the court from determining the just compensation
to be paid.
After the rendition of such an order, the plaintiff shall not be
permitted to dismiss or discontinue the proceeding except on such
terms as the court deems just and equitable.
Plainly, from the aforequoted provision, expropriation proceedings
speak of two (2) stages, i.e.:
1. Determination of the authority of the plaintiff to exercise the
power of eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. This ends with an order, if
not of dismissal of the action, of condemnation [or order of
expropriation] declaring that the plaintiff has the lawful right to
take the property sought to be condemned, for the public use or
EXPROPRIATION ONWARDS
purpose described in the complaint, upon the payment of just
compensation to be determined as of the date of the filing of the
complaint; and
2. Determination by the court of the just compensation for
the property sought to be taken.
2. It is well-settled in jurisprudence that the determination of
just compensation is a judicial prerogative.
In Export Processing Zone Authority v. Dulay, we declared:
The determination of just compensation in eminent domain cases
is a judicial function. The executive department or the legislature
may make the initial determinations but when a party claims a
violation of the guarantee in the Bill of Rights that private property
may not be taken for public use without just compensation, no
statute, decree, or executive order can mandate that its own
determination shall prevail over the courts findings. Much less can
the courts be precluded from looking into the just-ness of the
decreed compensation.
We, therefore, hold that P.D. No. 1533, which eliminates the courts
discretion to appoint commissioners pursuant to Rule 67 of the
Rules of Court, is unconstitutional and void. To hold otherwise
would be to undermine the very purpose why this Court exists in
the first place.
Likewise, in the recent cases of National Power Corporation v. dela
Cruz and Forfom Development Corporation v. Philippine National
Railways, we emphasized the primacy of judicial prerogative in the
ascertainment of just compensation as aided by the appointed
commissioners, to wit:
Though the ascertainment of just compensation is a judicial
prerogative, the appointment of commissioners to ascertain just
compensation for the property sought to be taken is a mandatory
requirement in expropriation cases. While it is true that the findings
of commissioners may be disregarded and the trial court may
substitute its own estimate of the value, it may only do so for valid
reasons; that is, where the commissioners have applied illegal
principles to the evidence submitted to them, where they have
disregarded a clear preponderance of evidence, or where the
amount allowed is either grossly inadequate or excessive. Thus, trial
with the aid of the commissioners is a substantial right that may not
be done away with capriciously or for no reason at all.
• BPI V. COURT OF APPEALS, G.R. NO. 160890, NOVEMBER 10,
2004 LIM
Principle:
The just compensation is determined as of the date of the taking of
the property or the filing of the complaint whichever came first.
Facts:
This is a petition for review under Rule 45 of the Rules of Court,
assailing the Decision of the Court of Appeals which reversed the
Decision of the Regional Trial Court reducing from P10,000.00 to
It ’s not a PROVREM 2015  17

P3,000.00 the amount of just compensation for the expropriated
land of petitioner; and decreasing from P10,000.00 to P3,000.00 the
commissioners fee for each of the three commissioners.
On April 15, 1996, private respondent National Power Corporation
(NAPOCOR) filed a Complaint for Eminent Domain, seeking to
expropriate a portion of petitioner Bank of the Philippine Islands
(BPI) property located Cavite, for the purpose of constructing and
maintaining its DasmariasZapote 230 KV Transmission Line Project.
Consequently, BPI moved for the dismissal of the case and the same
was granted without prejudice to its reinstatement.Private
respondent NAPOCOR filed a motion for reconsideration. The trial
court granted the motion and reinstated the case.
In its Order dated November 28, 1997, the trial court designated
three commissioners to determine the just value of the property
subject of the expropriation. Accordingly, on February 26, 1999, the
Commissioners submitted its Report which assessed the sum of the
area of the property taken and the estimated value of just
compensation at 75.34 square meters x P10,000.00 = P753,400.00,
and recommended an additional payment of P524,660.00 as
severance damage, or a total of P1,278,060.00. Likewise, they
submitted an undated Commissioners Valuation Report citing the
Market Data Approach as the method used in arriving at the amount
of P10,000.00 per square meter as just compensation, whereby the
value of the land is based on sales and listing of comparable
property registered within the immediate vicinity.
The trial court rendered judgment in favor of BPI and ordered the
NAPOCOR to pay the latter the fair market value of the property at
10,000 per square meter. The CA reversed the trial court decision
and ordered the NAPOCOR to pay BPI the amount of 3,000 per
square meter.
Issue:
Whether the Court of Appeals gravely abused its discretion and
seriously erred in fixing the just compensation for the subject
property at P3,000.00 per square meter.
Ruling:
No. Just compensation is defined as the full and fair equivalent of
the property taken from its owner by the expropriator. The measure
is not the takers gain, but the owners loss.To compensate is to
render something which is equal in value to that taken or received.
The word just is used to intensify the meaning of the word
compensation; to convey the idea that the equivalent to be rendered
for the property taken shall be real, substantial, full, ample.
In eminent domain or expropriation proceedings, the general rule is
that the just compensation which the owner of condemned
property is entitled to is the market value. Market value is that sum
of money which a person desirous but not compelled to buy, and an
owner willing but not compelled to sell, would agree on as a price to
be given and received therefor.
EXPROPRIATION ONWARDS
After a careful perusal of the records, we find no reason to disturb
this finding of fact by the Court of Appeals, sufficiently supported as
it is, by the evidence on record.
We find that the rate imposed by the Commissioners is
unsubstantiated. No official documents were presented to reflect
the true market value of the subject lots in the surrounding area.
The Commissioners Report merely states that the value of the land
is based on sales and listings of comparable property registered
within the immediate vicinity without any evidence to support the
market data provided.
In this instance, we accord more weight to Resolution No. 0895
promulgated by the Provincial Appraisal Committee of Cavite held
at the Office of the Provincial Assessor.Said Resolution pegs as fair
and reasonable the value of P3,000.00 per square meter of all the
lots in the Municipality of Dasmarias, specifically along General
Aguinaldo Highway.
The just compensation is determined as of the date of the taking of
the property or the filing of the complaint whichever came
first.NAPOCOR filed the complaint on April 15, 1996. A period of 6
months has elapsed from the valuation of the Provincial Assessors
and the filing of the complaint. We note the considerable
discrepancy between the valuation of the former and that of the
Commissioners. Indeed, the appellate court computed the increase
of the valuation to be 233%.
The Court of Appeals pointed out that more than 70% of the 200 lot
owners have entered into compromise agreements and accepted
the price set by the Provincial Appraisal Committee of Cavite. It is
also worthy to note that one of the Commissioners in this case, Mr.
Lamberto C. Parra, was the Chairman Provincial Assessor and
signatory of the same Resolution
Short Digest:
Facts:
NAPOCOR filed a complaint for Eminent Domain seeking to
expropriate a portion of BPI’s property in Cavite. The trial court
designated three commissioners to determine the value of just
compensation. On February 26, 1999, the Commissioners submitted
its Report which assessed the sum of the area of the property taken
and the estimated value of just compensation at 75.34 square
meters x P10,000.00. Likewise, they submitted an undated
Commissioners Valuation Report citing the Market Data Approach
as the method used in arriving at the amount of P10,000.00 per
square meter as just compensation. On the other hand, the
Provincial Appraisal Committee of Cavite promulgated a resolution.
Said resolution pegs as fair and reasonable the value of P3,000.00
per square meter of all the lots in the Municipality of Dasmarias.
The CA affirmed the 3,000 per square meter just compensation.
Issue:
Whether or not the CA is correct in fixing the just compensation at
3,000 per square meter.
It ’s not a PROVREM 2015  18

Ruling:
Yes. The find that the rate imposed by the Commissioners is
unsubstantiated. No official documents were presented to reflect
the true market value of the subject lots in the surrounding area.
The Commissioners Report merely states that the value of the land
is based on sales and listings of comparable property registered
within the immediate vicinity without any evidence to support the
market data provided.
In this instance, the court accord more weight to Resolution No. 08-
95 promulgated by the Provincial Appraisal Committee of Cavite
held at the Office of the Provincial Assessor. Said Resolution pegs as
fair and reasonable the value of P3,000.00 per square meter of all
the lots in the Municipality of Dasmarias, specifically along General
Aguinaldo Highway.
The just compensation is determined as of the date of the taking of
the property or the filing of the complaint whichever came
first.NAPOCOR filed the complaint on April 15, 1996. A period of 6
months has elapsed from the valuation of the Provincial Assessors
and the filing of the complaint.We note the considerable
discrepancy between the valuation of the former and that of the
Commissioners. Indeed, the appellate court computed the increase
of the valuation to be 233%.
The Court of Appeals pointed out that more than 70% of the 200 lot
owners have entered into compromise agreements and accepted
the price set by the Provincial Appraisal Committee of Cavite.
• BARDILLON V. BARANGAY MASILI, G.R. NO. 146886, APRIL 30,
2003 GARBANZOS
PRINCIPLE:
An expropriation suit does not involve the recovery of a sum of
money. Rather, it deals with the exercise by the government of its
authority and right to take property for public use. [11] As such, it is
incapable of pecuniary estimation and should be filed with the
regional trial courts.[12]
FACTS:
- Two (2) [C]omplaints for eminent domain which were
filed by herein respondent for the purpose of
expropriating a ONE HUNDRED FORTY FOUR (144)
square meter-parcel of land, otherwise known as Lot
4381-D situated in Barangay Masili, Calamba, Laguna and
owned by herein petitioner under Transfer Certificate of
Title No. 383605 which petitioner acquired from Makiling
Consolidated Credit Corporation the said lot pursuant to
a Deed of Absolute Sale.
- The first [C]omplaint for eminent domain, docketed as
Civil Case No. 3648 and entitled Brgy. Masili, Calamba,
Laguna v. Emelita A. Reblara, Eugenia
Almazan&Devorah E. Bardillon, was filed before the
Municipal Trial Court of Calamba, Laguna (MTC)
on February 23, 1998, following the failure of Barangay
Masili to reach an agreement with herein petitioner on the
EXPROPRIATION ONWARDS
purchase offer of TWO HUNDRED THOUSAND PESOS
(P200,000.00). The expropriation of Lot 4381-D was being
pursued in view of providing Barangay Masili a multi-
purpose hall for the use and benefit of its constituents.
- On March 5, 1999, the MTC dismissed Civil Case No. 3648
for lack of interest for failure of the [respondent] and its
counsel to appear at the pre-trial.
- The second [C]omplaint for eminent domain, docketed as
Civil Case No. 2845-99-C and entitled Brgy. Masili,
Calamba, Laguna v. Devorah E. Bardillon, was filed
before Branch 37 of the Regional Trial Court of Calamba,
Laguna (RTC) on October 18, 1999. This [C]omplaint also
sought the expropriation of the said Lot 4381-D for the
erection of a multi-purpose hall of Barangay Masili, but
petitioner, by way of a Motion to Dismiss, opposed this
[C]omplaint by alleging in the main that it violated Section
19(f) of Rule 16 in that [respondents] cause of action is
barred by prior judgment, pursuant to the doctrine of res
judicata.
- With the subsequent approval of Municipal Ordinance No.
2000-261 on July 10, 2000, and the submission thereof in
compliance with [the] Judges Order dated June 9, 2000
requiring herein respondent to produce the authority for
the expropriation through the Municipal Council of
Calamba, Laguna, the assailed Order dated August 4, 2000
was issued in favor of Barangay Masili x xx and, on August
16, 2000, the corresponding order for the issuance of
the [W]rit of [P]ossession over Lot 4381-D.[5] Hence, this
petition.
ISSUE:
1. Whether the MTC had jurisdiction over the expropriation
case.
RULING:
1. NO
An expropriation suit does not involve the recovery of a sum of
money. Rather, it deals with the exercise by the government of its
authority and right to take property for public use. [11] As such, it is
incapable of pecuniary estimation and should be filed with the
regional trial courts.[12]
This was explained by the Court in Barangay San Roque v. Heirs of
Francisco Pastor:[13]
It should be stressed that the primary consideration in an
expropriation suit is whether the government or any of its
instrumentalities has complied with the requisites for the taking of
private property. Hence, the courts determine the authority of the
government entity, the necessity of the expropriation, and the
observance of due process. In the main, the subject of an
expropriation suit is the governments exercise of eminent domain, a
matter that is incapable of pecuniary estimation.
It ’s not a PROVREM 2015  19

QUICK DIGEST:
FACTS:
- Two (2) complaints for eminent domain were filed by
herein respondent for the purpose of expropriating a
parcel of land, otherwise known as Lot 4381-D situated in
Barangay Masili, Calamba, Laguna and owned by herein
petitioner. The first case filed in the MTC was dismissed by
the court for lack of interest for failure of the [respondent]
and its counsel to appear at the pre-trial. The second
complaint was filed in the RTC. Respondents moved to
dismiss but was denied. With the subsequent approval of
Municipal Ordinance No. 2000-261 on July 10, 2000, and
the submission thereof in compliance with [the] Judges
Order dated June 9, 2000 requiring herein respondent to
produce the authority for the expropriation through the
Municipal Council of Calamba, Laguna, the assailed Order
dated August 4, 2000 was issued in favor of Barangay
Masili x xx and, on August 16, 2000, the corresponding
order for the issuance of the [W]rit of [P]ossession over Lot
4381-D. Hence, this petition.
• REPUBLIC V. COURT OF APPEALS, G.R. NO. 160379, AUGUST
14, 2009 DESCALLAR
Facts:
Private respondent Rosario Rodriguez Reyes is the absolute owner
of a parcel of land identified as Lot 849-B covered by TCT No. T-
7194. The 1,043-square meter lot is situated on Claro M. Recto and
Osmenñ a Streets, Cagayan de Oro City.
On 6 November 1990, private respondent received a letter from
petitioner Republic of the Philippines, through the DPWH,
requesting permission to enter into a portion of private
respondent’s lot consisting of 663 square meters, and to begin
construction of the Osmenñ a Street extension road. Petitioner took
possession of private respondent’s property without initiating
expropriation proceedings. Consequently, on 4 and 7 January
1991, private respondent sent letters to the DPWH stating her
objection to the taking of her property. On 16 May 1991, private
respondent sent a letter to the City Appraisal Committee (CAC)
rejecting the latter’s appraisal of the subject property and requested
the City Assessor for a reappraisal of her property, but said request
was denied.4
On 17 March 1992 , private respondent filed with the Regional Trial
Court (RTC) of Cagayan de Oro City a complaint claiming just
compensation and damages against petitioner.
On 30 June 1993, the RTC appointed three commissioners 5 to
determine the subject property’s fair market value, as well as the
consequential benefits and damages of its expropriation. On 15
September 1993, one of the three commissioners submitted to the
RTC a separate report stating that the just, fair and reasonable
market value of P4,000 per square meter as the highest price
obtaining and prevailing in 1990.
EXPROPRIATION ONWARDS
The hearing was set on 19 May 1994, to give private respondent
(plaintiff) time to consider the offer of petitioner (defendant) to
amicably settle the case.
On 16 May 1994, private respondent filed with the RTC an "Urgent
Motion to Deposit The Amount of P2,121,600 in Court," alleging that
petitioner’s counsel previously manifested in open court that the
amount was ready for release should the amount be acceptable to
private respondent, and praying that said amount ofP2,121,600 be
deposited by petitioner with the trial court. 8 The RTC granted the
motion but it was only on 21 October 1994 that petitioner
deposited with the RTC Clerk of Court a Landbank check amounting
to P2,121,600 as just compensation.10
On 16 June 1994, the RTC ordered the commissioners to submit
their report as soon as possible, but until the scheduled hearing on
15 July 1994, the commissioners still failed to submit their report.
Upon motion of private respondent, the RTC issued an order
appointing a new set of commissioners.11
On 11 October 1994, the new commissioners submitted their report
stating the valuation of the property involved. They informed the
trial court that what has been taken over and used by the defendant
is not only 663 square meters but 746 square meters, more or less,
which includes Lot No. 849-B-1.
On appeal by petitioner, the Court of Appeals rendered
judgment,15 affirming with modifications the decision of the RTC.
The Court of Appeals found that the commissioners’
recommendations on just compensation were not supported by
valid documents
Petitioner filed a Motion for Reconsideration, but this was denied by
the Court of Appeals in its Resolution of 17 September 2003.
Issue:
Whether the Court of Appeals erred in ordering the remand of the
case to the trial court, to order the reconvening of the
commissioners or appointment of new commissioners to determine
the consequential damages for the remaining 297- square meter lot.
Ruling:
The appeal is unmeritorious.
Eminent domain is the authority and right of the State, as sovereign,
to take private property for public use upon observance of due
process of law and payment ofjust compensation. 20 The Constitution
provides that, "[p]rivate property shall not be taken for public use
without just compensation."21
Just compensation is the full and fair equivalent of the property
sought to be expropriated.22 Among the factors to be considered in
arriving at the fair market value of the property are the cost of
acquisition, the current value of like properties, its actual or
potential uses, and in the particular case of lands, their size, shape,
location, and the tax declarations thereon. 23 The measure is not the
taker’s gain but the owner’s loss. 24 To be just, the compensation
must be fair not only to the owner but also to the taker. 25
It ’s not a PROVREM 2015  20

Just compensation is based on the price or value of the property at
the time it was taken from the owner and appropriated by the
government.26 However, if the government takes possession before
the institution of expropriation proceedings, the value should be
fixed as of the time of the taking of said possession, not of the filing
of the complaint. The value at the time of the filing of the complaint
should be the basis for the determination of the value when the
taking of the property involved coincides with or is subsequent to
the commencement of the proceedings. 27
The procedure for determining just compensation is set forth in
Rule 67 of the 1997 Rules of Civil Procedure. Section 5 of Rule 67
partly states that "[u]pon the rendition of the order of
expropriation, the court shall appoint not more than three (3)
competent and disinterested persons as commissioners to ascertain
and report to the court the just compensation for the property
sought to be taken." However, we held in Republic v. Court of
Appeals28 that Rule 67 presupposes a prior filing of complaint for
eminent domain with the appropriate court by the expropriator. If
no such complaint is filed, the expropriator is considered to have
violated procedural requirements, and hence, waived the usual
procedure prescribed in Rule 67, including the appointment of
commissioners to ascertain just compensation.
In this case, petitioner took possession of the subject property
without initiating expropriation proceedings. Consequently, private
respondent filed the instant case for just compensation and
damages. To determine just compensation, the trial court appointed
three commissioners pursuant to Section 5 of Rule 67 of the 1997
Rules of Civil Procedure. None of the parties objected to such
appointment.
The trial court’s appointment of commissioners in this particular
case is not improper. The appointment was done mainly to aid the
trial court in determining just compensation, and it was not
opposed by the parties. Besides, the trial court is not bound by the
commissioners’ recommended valuation of the subject property.
The court has the discretion on whether to adopt the
commissioners’ valuation or to substitute its own estimate of the
value as gathered from the records.32
The Supreme Court agreed with the appellate court that the trial
court’s decision is not clear as to its basis for ascertaining just
compensation. The trial court mentioned in its decision the
valuations in the reports of the City Appraisal Committee and of the
commissioners appointed pursuant to Rule 67. The trial court
simply gave the total amount of just compensation due to the
property owner without laying down its basis. Thus, there is no way
to determine whether the adjudged just compensation is based on
competent evidence. For this reason alone, a remand of the case to
the trial court for proper determination of just compensation is in
order. The court is proscribed from basing its judgment on
speculations and surmises.35
No actual taking of the remaining portion of the real property is
necessary to grant consequential damages. If as a result of the
expropriation made by petitioner, the remaining lot) of private
respondent suffers from an impairment or decrease in value,
consequential damages may be awarded to private respondent. On
EXPROPRIATION ONWARDS
the other hand, if the expropriation results to benefits to the
remaining lot of private respondent, these consequential
benefits36 may be deducted from the awarded consequential
damages, if any, or from the market value of the expropriated
property. In B.H. Berkenkotter & Co. v. Court of Appeals 37 that:
To determine just compensation, the trial court should first
ascertain the market value of the property, to which should be
added the consequential damages after deducting therefrom the
consequential benefits which may arise from the expropriation. If
the consequential benefits exceed the consequential damages, these
items should be disregarded altogether as the basic value of the
property should be paid in every case.
Section 6 of Rule 67 of the Rules of Civil Procedure provides:
x x x The commissioners shall assess the consequential damages to the
property not taken and deduct from such consequential damages the
consequential benefits to be derived by the owner from the public use
or purpose of the property taken, the operation of its franchise by the
corporation or the carrying on of the business of the corporation or
person taking the property. But in no case shall the consequential
benefits assessed exceed the consequential damages assessed, or the
owner be deprived of the actual value of his property so taken.
An award of consequential damages for property not taken is not
tantamount to unjust enrichment of the property owner. There is
unjust enrichment "when a person unjustly retains a benefit to the
loss of another, or when a person retains money or property of
another against the fundamental principles of justice, equity and
good conscience."
As stated, consequential damages are awarded if as a result of the
expropriation, the remaining property of the owner suffers from an
impairment or decrease in value. Thus, there is a valid basis for the
grant of consequential damages to the property owner, and no
unjust enrichment can result therefrom.
• Eusebio v. Luis, G.R. No. 162474, October 13, 2009 TURA
• LANDBANK V. SANTIAGO, G.R. NO. 182209, 3 OCTOBER 2012
ALTERADO
When the agrarian reform process is still incomplete as the just
compensation due the landowner has yet to be settled, such just
compensation should be determined and the process concluded
under Republic Act No. 6657:
Section 17 of Republic Ac t No. 6657 or the Comprehensive Agrarian
Reform Law of 1988 provides:
SEC. 17. Determination of Just compensation. - In determining just
compensation, the cost of acquisition of the land, the current value
of like properties, its nature, actual use and income, the sworn
valuation by the owner, the tax declarations, and the assessment
made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farm workers
and by the Government to the property as well as the non-payment
of taxes or loans secured from any government financing institution
It ’s not a PROVREM 2015  21

on the said land shall be considered as additional factors to
determine its valuation.
FACTS:
Land Bank of the Philippines (LBP) is a government financial
institution designated under Section 64 of Republic Act No. 6657 as
the financial intermediary of the agrarian reform program of the
government.
Emiliano R. Santiago, Jr. (respondent) is one of the heirs of Emiliano
F. Santiago (Santiago), the registered owner of an 18.5615-hectare
parcel of land (subject property) in Laur, Nueva Ecija.
Pursuant to the government’s Operation Land Transfer (OLT)
Program under Presidential Decree No. 27, the Department of
Agrarian Reform (DAR) acquired 17.4613 hectares of the subject
property.
In determining the just compensation payable to Santiago, the LBP
and the DAR used the following formula under Presidential Decree
No. 27, which states: the value of the land shall be equivalent to two
and one-half (2-1/2) times the average harvest of three normal crop
years immediately preceding the promulgation of this Decree and
Executive Order No. 228.
The above formula in equation form is:
(Average Gross Production [AGP] x 2.5
Land Value
Hectares x Government Support Price
(LV) =
[GSP])
Using the foregoing formula, the land value of the subject property
was pegged at 3,915 cavans of palay.
As Santiago had died earlier on November 1, 1987, the LBP, in 1992,
reserved in trust for his heirs the amount of One Hundred Thirty-
Five Thousand Four Hundred Eighty-Two Pesos and 12/100
(P 135,482.12), as just compensation computed by LBP and DAR
using the above formula with P 35.00 as the GSP per cavan of palay
for the year 1972 under Executive Order No. 228.
This amount was released to Santiago’s heirs on April 28, 1998. On
May 21, 1998 and June 1, 1998, the LBP, also paid the heirs the sum
of P353, 122.62, representing the incremental interest of 6% on the
preliminary compensation pursuant to Provincial Agrarian Reform
Council (PARC) Resolution and DAR Administrative Order (AO) No.
13.
However, on November 20, 1998, respondent, as a co-owner and
administrator of the subject property, filed a petition before the RTC
of Cabanatuan City, Branch 23, acting as a Special Agrarian Court
(SAC Branch 23), for the "approval and appraisal of just
compensation" due on the subject property.
While respondent was in total agreement with the land valuation of
the subject property at 3,915 cavans of palay, he contended that the
1998 GSP per cavan, which was P 400.00, should be used in the
EXPROPRIATION ONWARDS
computation of the just compensation for the subject property.
Moreover, the incremental interest of 6% compounded annually, as
per PARC Resolution No. 94-24-1, should be imposed on the
principal amount from 1972 to 1998 or for 26 years.
On January 21, 2000, the Special Agrarian Court (SAC) Branch 23
rendered its Decision, ordering LBP to pay the Santiagos the sum
of P 1,039,017.88 representing the balance of the land valuation of
the plaintiff with legal interest at 12 % from the year 1998 until the
same is fully paid subject to the modes of compensation under R.A.
No. 6657.
Discontented with the ruling, respondent filed a Motion for
Reconsideration of the SAC’s decision on February 16, 2000,
arguing that the GSP per cavan of palay should be computed
at P 400.00 instead of P 300.00 because payment of the preliminary
compensation was made by LBP in 1998 and not in 1992.
Respondent likewise insisted that in addition to the 12% legal
interest ordered by the SAC, a compounded annual interest of 6% of
the principal amount should be awarded to them pursuant to the
PARC Resolution and DAR AO No. 13. Furthermore, respondent
asked that the DAR be ordered to return to him the unacquired
portion of the subject property.
On February 10, 2000, the presiding judge of SAC Branch 23,
inhibited himself from resolving the motion for
reconsideration,29 thus, the case was re-raffled to the RTC of
Cabanatuan City, Branch 29, acting as Special Agrarian Court (SAC
Branch 29).
On January 28, 2004, the SAC Branch 29 issued a Resolution,
ordering LBP to pay the petitioner the sum of P1,039,017.88
representing the land valuation of the petitioner with legal interest
of six percent (6%) per annum beginning year 1998 until the same
is fully paid subject to the modes of compensation under Republic
Act No. 6657 and to return to the petitioner the unacquired portion
of the subject property after segregating the area taken by the DAR.
In denying respondent’s claim over the 6% compounded annual
interest, the SAC Branch 29 explained that the purpose of the
compounded interest was to compensate the landowners for
unearned interest, as their money would have earned if they had
been paid in 1972, when the GSP for a cavan of palay was still
at P 35.00. The SAC Branch 29 said that since a higher GSP was
already used in the computation of the subject property’s land
value, there was no more justification in adding any compounded
interest to the principal amount. Furthermore, since the
government only acquired 17.4 hectares of the subject property, it
ordered LBP to return the unacquired portion to respondent.
LBP filed a Petition for Review before the Court of Appeals,
questioning the just compensation fixed and the legal interest
granted by the SAC Branch 23 and by the SAC Branch 29. The Court
of Appeals, affirmed the SAC Branch 23’s Decision as modified by
the SAC Branch 29’s Resolution.
The Court of Appeals held that the formula in DAR AO No. 13 could
no longer be applied since the Provincial Agrarian Reform Ad
judicator (PARAD) had already been using a higher GSP. Hence, the
It ’s not a PROVREM 2015  22

Court of Appeals ruled that he was no longer entitled to the
incremental interest of 6%.
The LBP moved to reconsider the foregoing decision. However, the
Court of Appeals. Hence this case.
ISSUE:
What law or formula should govern the computation of just
compensation for the subject property? Under PD 27 and EO 228 or
RA 6657?
RULING:
LBP has been consistent in its position that the formula prescribed
in Presidential Decree No. 27 and Executive Order No. 228 is the
only formula that should be applied in the computation of the
valuation of lands acquired under Presidential Decree No. 27.
This Court notes that even before respondent filed a petition for the
judicial determination of the just compensation due him for the
subject property before the SAC Branch 23 on November 20, 1998,
Republic Act No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, already took effect on June 15, 1988.
The determination of the just compensation therefore in this case
depends on the valuation formula to be applied.
In the case of Land Bank of the Philippines vs. Natividad, the Court
categorically ruled: "the seizure of the landholding did not take
place on the date of effectivity of P.D. No. 27 but would take effect on
the payment of just compensation." Under Section 17 of R.A. No.
6657, the following factors are considered in determining just
compensation, to wit:
Sec. 17. Determination of Just Compensation. - In determining just
compensation, the cost of acquisition of the land, the current value
of like properties, its nature, actual use and income, the sworn
valuation by the owner, the tax declarations, and the assessment
made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farm-workers
and by the Government to the property as well as the non-payment
of taxes or loans secured from any government financing institution
on the said land shall be considered as additional factors to
determine its valuation.
Under the circumstances of this case, the Court deems it more
equitable to apply the ruling in the Natividad case. In said case, the
Court applied the provisions of R.A. No. 6657 in computing just
compensation for property expropriated under P.D. No. 27: Land
Bank's contention that the property was acquired for purposes of
agrarian reform on October 21, 1972, the time of the effectivity of
PD 27, ergo just compensation should be based on the value of the
property as of that time and not at the time of possession in 1993, is
likewise erroneous.
Under the factual circumstances of this case, the agrarian reform
process is still incomplete as the just compensation to be paid
private respondents has yet to be settled. Considering the passage
of Republic Act No. 6657 (RA 6657) before the completion of this
EXPROPRIATION ONWARDS
process, the just compensation should be determined and the
process concluded under the said law. Indeed, RA 6657 is the
applicable law, with PD 27 and EO 228 having only suppletory
effect.
It would certainly be inequitable to determine just compensation
based on the guideline provided by PD 27 and EO 228 considering
the DAR's failure to determine the just compensation for a
considerable length of time. That just compensation should be
determined in accordance with RA 6657, and not PD 27 or EO 228,
is especially imperative considering that just compensation should
be the full and fair equivalent of the property taken from its owner
by the expropriator, the equivalent being real, substantial, full and
ample.
In the case before us, the emancipation patents were issued to the
farmer-beneficiaries from 1992 to 1994. While the preliminary
compensation of P 135,482.12 was reserved in trust at LBP for the
heirs of Santiago in 1992, this amount was not received by the heirs
until 1998, as its release, pending the final determination of the
land valuation, became the subject of a petition in this Court in Land
Bank of the Philippines v. Court of Appeals. Like in the case cited
above, both the taking and the valuation of the subject property
occurred after Republic Act No. 6657 had already become effective.
Until now, the issue of just compensation for the subject property
has not been settled and the process has yet to be completed; thus,
the provisions of Republic Act No. 6657 shall apply.
• LANDBANK V. ARANETA, G.R. NO. 161796, 8 FEBRUARY 2012
DAPANAS
Principle:
1. Vested Private Rights  The Farmer-Beneficiaries who
were given Certificate of Land Transfers (CLTs) PRIOR TO THE
ISSUANCE OF PD # 1283, as amended by PD # 1637: Water
Conservation Act of Antipolo, are deemed full owners of the lots
covered by CLTs vis-a-vis the real registered owner. The farmer-
beneficiaries have private rights over said lots as they were deemed
owners prior to the establishment of the subsequent issuance PD #
1283 as amended or at least are subrogated to the rights of the
registered lot owner.
But, for those farmer-beneficiaries who were issued CLTs
or EPs after June 21, 1974 when PD # 1283, as amended, became
effective do not acquire rights over the lots they were claiming
under PD 27 or RA 6657, because the lots have already been
reclassified as residential and are beyond the compulsory coverage
for agrarian reform under RA 6657.
2. The Office of Solicitor General (OSG) withdrawal of
the expropriation suit did not automatically restore the
property to its original classification nor did it grant DAR or
DARAB the power or jurisdiction to order the compulsory
acquisition of the property and to place it under CARP. Pursuant
to DAR AO #3: Emancipation Patents (EPs) or Certificate of Land
Ownership Awards (CLOAs) already generated for landholdings to be
reconveyed shall have to be cancelled first pursuant to Administrative
Order No. 02, Series of 1994 prior to the actual reconveyance. The
cancellation shall either be through administrative proceedings
in cases where the EP/CLOA has not yet been registered with the
ROD or through quasi-judicial proceedings in cases where the
said EP/CLOA has already been registered.
It ’s not a PROVREM 2015  23

LONG CASE DIGEST:
At the heart of the controversy is a large tract of land,
denominated as Lot # 23, located in Brgy. Mascap, Montalban, Rizal
with an area of 1,645 hectares, more or less. Lot 23 was originally
registered in the name of Alfonso Doronilla under Original
Certificate of Title (OCT) No. 7924 of the Rizal Registry.
The petitioners who were compose of:
 Land Bank of the Phils.;
 Department of Agrarian Reform (DAR);
 the 79-TENANT FARMERS who were issued with
Certificate of Land Transfers (CLT) base on PD #
27 Tenant Emancipation Decree of October 21,
1972; and
 the recent 912-FARMER BENEFICIARIES issued
with Emancipation Patents on September 25,
1990under RA # 6657 – CARP Law of 1988.
However, the implementation of PD # 27 Tenant
Emancipation DecreeWERE STOPPED due to the issuances of PD
1283 as amended by 1637 – Watershed Conservation
Act/LungsodSilangan Town Site SUBJECT TO PRIVATE RIGHTS,
IF ANY THERE BEissued on June 21, 1974 & April 18,
1977respectively and the RA # 6657: CARP LAW OF1988.
On November 9, 1977, Letter of Instructions No. (LOI) 625
addressed to several agencies. The OSG, in particular, was directed
to initiate condemnation proceedings for the acquisition of
private lands within the new townsite, among which was Lot 23
(the Doronilla property). In 1978, the OSG, conformably with the
directive embodied in LOI 625, filed with the then CFI -Rizal an
expropriation complaint against the Doronilla
property. Meanwhile, on June 6, 1979, Doronilla issued a
Certification, copy furnished the Agrarian Reform Office, among
other agencies, listing seventy-nine (79) bona fide planters he
allegedly permitted to occupy a portion of his land. On
September 9, 1987 or nine (9) years after it commenced
expropriation proceedings, the OSG moved for and secured, per
the Rizal CFI Order dated September 18, 1987, the DISMISSAL
OF THE EXPROPRIATION CASE.
Defendant Araneta, sometime in April 1992, filed with the
DARAB an “ACTION AGAINST THE DAR AND LAND BANK
FOR CANCELLATION OF COMPULSORY COVERAGE UNDER PD 27
AND EXEMPTION FROM CARL COVERAGE OF THE ERSTWHILE
DORONILLA PROPERTY.”
RULING OF THE REGIONAL ADJUDICATOR --
Unfavorable to Araneta:By Decision of the Regional Agrarian
Reform Adjudicator (RARAD)-Manalang ruled against Araneta,
denying its bid to have its property excluded from OLT coverage
and/or the compulsory scheme under CARL. Therefrom, Araneta
appealed to the DARAB proper. The appeal was docketed as DARAB
Case No. 4176 which following the RARADs line that the intervenor-
appellees were deemed owners of the land they tilled as of October
21, 1972, rendered a Decision affirming in toto that of the RARADs.
RULING OF THE CA: By Decision of the CA, SET ASIDE the
Decision of the DARAB, in effect nullifying all the individual farm
lots awards thus made by the DARAB ostensibly in favor of the
named intervenor-appellees and necessarily all other unnamed
awardees. In the main, the CA predicated its reversal action on the
interplay of the ensuing premises, juxtaposed with the pertinent
pronouncements in the cited cases of NATALIA REALTY, INC.
EXPROPRIATION ONWARDS
Petitioners assailed the CA decision reversing the DARAB
decision upholding the agrarian reform coverage of 1,266 hectares
of respondent estates 1,644.55-hectare property and its award to
over a thousand farmer-beneficiaries. According to the CA, the
property in question, having meanwhile ceased to be agricultural, is
not amenable to land reform coverage and, hence, falls outside of
DARs jurisdiction to implement agrarian enactments.
In particular, petitioners assailed the rulings of CA giving
“retroactive exclusionary” application of PD 1283 as amended
by 1637 – Watershed Conservation Act/LungsodSilangan Town
Site issued on June 21, 1974 & April 18, 1977 respectively and
the RA # 6657: CARP Law in 1988 AFTER the 1972 issuance of
PD # 27: Tenant Emancipation Decree. In so doing, they
claims, the CA effectively but illegally extended exempt-
coverage status to the subject land and in the process
negated the purpose behind Presidential Decree No. (PD) 27:
to emancipate rice/corn land tenant-farmers from the bondage
of the soil under their tillage.
Issue:
Whether or not the Doronilla, now the Araneta, property,
in light of the issuance of the land reclassifying Proclamation 1283,
as amended, is, as held by the CA, entirely outside the ambit of PD
27 and RA 6657, and, thus, excluded from compulsory agrarian
reform coverage, unfettered by the private claim of the farmer-
beneficiaries.
If so, in the negative, what would be the effect of the OSG’s
withdrawal of EXPROPRIATION proceedings to the property?
Held:
SC held that the petition is partly meritorious, that is:
1ST ISSUE: NO, as to the vested PRIVATE RIGHTS of the
75-TENANT FARMERS who were issued with Certificate of Land
Transfers (CLT) base on PD # 27 Tenant Emancipation Decree
of October 21, 1972;
Under the principle of Natalia Realty Inc. Casethey would
be exempt from land reform and, by necessarily corollary, beyond
DARs or DARABs jurisdictional reach. Excerpts from Natalia Realty,
Inc.:
We now determine whether such lands are
covered by the CARL. Section 4 of R.A. 6657
provides that the CARL shall cover, regardless of
tenurial arrangement and commodity produced,
all public and private agricultural lands. As to
what constitutes AGRICULTURAL LAND, IT IS
REFERRED TO AS LAND DEVOTED TO
AGRICULTURAL ACTIVITY AS DEFINED IN THIS
ACT AND NOT CLASSIFIED AS MINERAL, FOREST,
RESIDENTIAL, COMMERCIAL OR INDUSTRIAL
LAND. The deliberations of the Constitutional
Commission confirm this limitation. Agricultural
lands are only those lands which are arable and
suitable agricultural lands and do not include
commercial, industrial and residential lands.
Guided by the foregoing doctrinal pronouncement, the key
date to reckon, as a preliminary matter, is the precise time when
Doronillas Lot 23, now Aranetas property, ceased to be agricultural.
This is the same crucial cut-off date for considering the existence of
private rights of farmers, if any, to the property in question. This, in
It ’s not a PROVREM 2015  24

turn, means the date when Proclamation 1637 establishing LS
Townsite was issued: April 18, 1977. xxx apply mutatis mutandis to
the instant case.
HOWEVER: Unlike in Natalia Realty, Inc., however, where
pre-existing tenancy arrangement over the Natalia land, among
other crucial considerations, was not part of the equation, THIS
CASE INVOLVES FARMERS CLAIMING BEFORE APRIL 18, 1979 TO
BE ACTUAL TENANTS OF THE RICE AND/OR CORN PORTION OF
THE DORONILLA PROPERTY. The Court has, to be sure, taken stock
of the fact that PD 27 ordains the emancipation of tenants and
deems them owners of the rice and corn lands they till as of October
21, 1972. The following provisions of the decree have concretized
this emancipation and ownership policy:
Therefore: Summarizing, the FARMER-BENEFICIARIES
WHO WERE GIVEN THE 75 CLTS PRIOR TO THE ISSUANCE OF
PROCLAMATION 1283, as amended by Proclamation 1637, are
DEEMED FULL OWNERS OF THE LOTS COVERED BY 75 CLTS
VIS--VIS THE REAL REGISTERED OWNER. The farmer-
beneficiaries have private rights over said lots as they were
deemed owners prior to the establishment of the LS Townsite
reservation or at least are subrogated to the rights of the
registered lot owner.
Thus,
YES, as to the recent 912-FARMER BENEFICIARIES
issued with Emancipation Patents under RA # 6657 – CARP Law
on September 25, 1990.
Those farmer-beneficiaries who were issued CLTs or
EPs after June 21, 1974 when Proclamation 1283, as amended,
became effective do not acquire rights over the lots they were
claiming under PD 27 or RA 6657, because the lots have
already been reclassified as residential and are beyond the
compulsory coverage for agrarian reform under RA
6657. Perforce, the said CLTs or EPs issued after June 21, 1974 have
to be annulled and invalidated for want of legal basis, since the lots
in question are no longer subject to agrarian reform due to the
reclassification of the erstwhile Doronilla estate to non-agricultural
purposes.
(MY COMPARATIVE LEGAL OPINION: Therefore, this case
Land Bank vs. Araneta is an exception to the application of Natalia
Realty Inc. principle, wherein there is already a vested private rights
existingthus, it is still within the ambit of PD 27 or RA6657 and
subject for issuances of CLT’s and /or EP’s).
2ND ISSUE:
THE OSGS WITHDRAWAL OF THE EXPROPRIATION
SUIT on September 9, 1987 DID NOT, as Land Bank posits,
automatically restore the Doronilla property to its original
classification nor did it grant DAR or DARAB the power or
jurisdiction to order the compulsory acquisition of the property
and to place it under CARP. And, as the CA aptly noted, the DOJ
Secretary, through Opinion No. 181, even advised the DAR Secretary
that lands covered by Proclamation 1637, having been reserved for
townsite purposes, are not deemedagricultural lands within the
meaning and intent of Sec. 3(c) of RA 6657 and, hence, outside the
coverage of CARL. The Secretary of Justice further stated that RA
6657 did not supersede or repeal Proclamations 1283 and 1637
and they remain operative until now; their being townsite
reservations still remain valid and subsisting. To clarify, a DOJ
opinion carries only a persuasive weight upon the courts. However
EXPROPRIATION ONWARDS
since this Court, in Natalia Realty, Inc., cited with approval DOJ
Opinion No. 181, such citation carries weight and importance as
jurisprudence. Be that as it may, We recognize and apply the
principles found in Natalia Realty, Inc. regarding the character of the
Doronilla property being converted to a townsite and, thus, non-
agricultural in character.
The DARAB has been created and designed to exercise the
DARs adjudicating functions. And just like any quasi-judicial
body, DARAB derives its jurisdiction from law, specifically RA
6657,which invested it with adjudicatory powers over agrarian
reform disputes, and matters related to the implementation of
CARL. As earlier discussed, the process of land reform covering
the 1,266 hectares of the Araneta estate was not completed
prior to the issuance of Proclamation 1637. So the intervenors,
with the exception of the 79 tenant-beneficiaries who were
granted CLTs, failed to acquire private rights of ownership
under PD 27 before the effective conversion of the Doronilla
property to non-agricultural uses. Hence, the DORONILLA
PROPERTY, BEING OUTSIDE OF CARP COVERAGE, IS ALSO
BEYOND DARABS JURISDICTION.
REMEDY OF REACQUIRING OWNERSHIP FOR
ERRONEOUS CARP COVERAGE:
DAR itself issued administrative circulars governing lands
exempted from CARP. For instance, Administrative No. (AO) 3,
Series of 1996, declares in its policy statement what categories
of lands are outside CARP coverage and unequivocally states
that properties not covered by CARP shall be reconveyed to the
original transferors or owners. Significantly, AO 3 defines lands
not so covered as property determined to be exempted from CARP
coverage pursuant to [DOJ] Opinion Nos. 44 and 181 and where
Presidential Proclamation has been issued declaring the subject
property for certain uses other than agricultural. Said policy of the
DAR, as explained in the CA Decision, should be applied and upheld
in cases where the DAR had erroneously ordered the compulsory
acquisition of the lands found outside CARP coverage. This is true
with the case at bar due to the fact that Proclamation 1283, as
amended by Proclamation 1637, had effectively reclassified
respondents land as residential.
HOW? To address erroneous compulsory coverage or
acquisition of non-agricultural lands or agricultural lands subject of
retention, especially where Certificates of Land Ownership Award
(CLOAs) or EPs have been generated, AO # 3 itself provides the
mechanism/remedy for the reconveyance of lots thus covered
or acquired, viz:
The Emancipation Patents (EPs) or Certificate
of Land Ownership Awards (CLOAs) already generated
for landholdings to be reconveyed shall have to be
cancelled first pursuant to Administrative Order No.
02, Series of 1994 prior to the actual reconveyance.
The cancellation shall either be through
administrative proceedings in cases where the
EP/CLOA has not yet been registered with the ROD or
through quasi-judicial proceedings in cases where the
said EP/CLOA has already been registered.
Given the foregoing perspective, private petitioners lament
about the injustice done to them due to the cancellation of their EPs
or CLOAs, as the case may be, is specious at best, for those EPs or
CLOAs were generated or granted based on the invalid order by
DAR for the inclusion of the bulk of the Doronilla property under PD
27 and CARP.
It ’s not a PROVREM 2015  25

Fallo: WHEREFORE, the petitions are hereby
partly DENIED. The CA Decision dated September 19, 2003, as
effectively reiterated in its Resolution of January 22, 2004 and April 2,
2004, is AFFIRMED with the modification that the 75 CLTs issued
prior to the effectivity of Presidential Proclamation No. 1283 on June
21, 1974 are declared legal and valid.The other CLTs, EPs, CLOAs
issued by DAR involving the subject property are
hereby CANCELED and NULLIFIED.
The Land Bank and DAR are hereby ordered
to COMPUTE the just compensation of the land subject of the 75 CLTs
and PAY the just compensation to the Estate of J. Amado Araneta. No
pronouncement as to cost.
SHORT CASE DIGEST:
Petitioners “79-Tenant Farmers” was issued a Certificate
of Land Transfers (CLTs) over Lot # 23 registered under name of
“D” (Doronilla) under PD # 27: Tenant Emancipation Decree on
October 21, 1974. However, the implementation thereof were
stopped due to the subsequent issuances of PD 1283 as amended by
1637 – Watershed Conservation Act/LungsodSilangan Town Site
SUBJECT TO PRIVATE RIGHTS, IF ANY THERE BE which was
issued on June 21, 1974 & April 18, 1977 respectively.
While the other Petitioners composing of “912 Tenant
Beneficiaries” were issued Emancipation Patents (EPs) under the
RA # 6557 otherwise known as the CARP Law of 1988 on
September 20, 1990.
Meanwhile, in 1979, “D” issued a Certification, copy
furnished the Agrarian Reform Office, among other agencies, listing
seventy-nine (79) bona fide planters he allegedly permitted to
occupy a portion of his land. On 1987 or nine (9) years after it
commenced expropriation proceedings, the OSG moved for and
secured, per the Rizal CFI Order dated September 18, 1987, the
dismissal of the expropriation case.
Defendant “A” (Araneta), in April 1992, filed with the
DARAB an “Action Against The DARand Land Bank For Cancellation
Of Compulsory Coverage Under PD 27 And Exemption From Carl
Coverage Of The Erstwhile Doronilla Property.” Which ruled
unfavorably against A, but said rulings was reversed by the CA.
Petitioners were joined by the Land Bank of the
Philippines and the DARAB in assailing the reversed rulings of CA
giving “retroactive exclusionary” application of PD 1283 as
amended by 1637 – Watershed Conservation Act/LungsodSilangan
Town Site issued on June 21, 1974 & April 18, 1977 respectively and
the RA # 6657: CARP Law in 1988 AFTER the 1972 issuance of PD
# 27: Tenant Emancipation Decree. In so doing, they claims, the CA
effectively but illegally extended exempt-coverage status to the
subject land and in the process negated the purpose behind
Presidential Decree No. (PD) 27: to emancipate rice/corn land
tenant-farmers from the bondage of the soil under their tillage.
According to the CA, the property in question, having
meanwhile ceased to be agricultural, is not amenable to land reform
coverage and, hence, falls outside of DARs jurisdiction to implement
agrarian enactments.
Rule, whether or not the Doronilla, now the Araneta,
property, in light of the issuance of the land reclassifying
Proclamation 1283, as amended, is, as held by the CA, entirely
outside the ambit of PD 27 and RA 6657, and, thus, excluded from
EXPROPRIATION ONWARDS
compulsory agrarian reform coverage, unfettered by the private
claim of the farmer-beneficiaries.
If so, in the negative, what would be the effect of the OSG’s
withdrawal of EXPROPRIATION proceedings to the property?
HELD:
SC held that the petition is partly meritorious, that is:
1ST ISSUE: NO, as to the vested PRIVATE RIGHTS of the
75-TENANT FARMERS who were issued with Certificate of Land
Transfers (CLT) base on PD # 27 Tenant Emancipation Decree
of October 21, 1972;
Under the principle of Natalia Realty Inc. Case they would
be exempt from land reform and, by necessarily corollary, beyond
DARs or DARABs jurisdictional reach. Excerpts from Natalia Realty,
Inc.:
xxxlands are covered by the CARL. Section 4 of R.A.
6657 provides that the CARL shall cover,
regardless of tenurial arrangement and
commodity produced, all public and private
agricultural lands. As to what constitutes
AGRICULTURAL LAND, IT IS REFERRED TO AS
LAND DEVOTED TO AGRICULTURAL ACTIVITY
AS DEFINED IN THIS ACT AND NOT CLASSIFIED
AS MINERAL, FOREST, RESIDENTIAL,
COMMERCIAL OR INDUSTRIAL LAND. The
deliberations of the Constitutional Commission
confirm this limitation. Agricultural lands are only
those lands which are arable and suitable
agricultural lands and do not include
commercial, industrial and residential lands.
Guided by the foregoing doctrinal pronouncement, the key
date to reckon, as a preliminary matter, is the precise time when
Doronillas Lot 23, now Aranetas property, ceased to be
agricultural. This is the same crucial cut-off date for considering
the existence of private rights of farmers, if any, to the property in
question. This, in turn, means the date when Proclamation 1637
establishing LS Townsite was issued: April 18, 1977. xxx
apply mutatis mutandis to the instant case.
HOWEVER: Unlike in Natalia Realty, Inc., where pre-
existing tenancy arrangement over the Natalia land, among
other crucial considerations, was not part of the equation, THIS
CASE INVOLVES FARMERS CLAIMING BEFORE APRIL 18, 1979 TO
BE ACTUAL TENANTS OF THE RICE AND/OR CORN PORTION OF
THE DORONILLA PROPERTY. The Court has, to be sure, taken stock
of the fact that PD 27 ordains the emancipation of tenants and
deems them owners of the rice and corn lands they till as of October
21, 1972. The following provisions of the decree have concretized
this emancipation and ownership policy:
Therefore: Summarizing, the FARMER-BENEFICIARIES
WHO WERE GIVEN THE 75 CLTS PRIOR TO THE ISSUANCE OF
PROCLAMATION 1283, as amended by Proclamation 1637, are
DEEMED FULL OWNERS OF THE LOTS COVERED BY 75 CLTS
VIS--VIS THE REAL REGISTERED OWNER. The farmer-
beneficiaries have private rights over said lots as they were
deemed owners prior to the establishment of the LS Townsite
reservation or at least are subrogated to the rights of the
registered lot owner.
BUT,
It ’s not a PROVREM 2015  26

YES, as to the recent 912-FARMER BENEFICIARIES
issued with Emancipation Patents under RA # 6657 – CARP Law
on September 25, 1990.
But, those farmer-beneficiaries who were issued CLTs
or EPs after June 21, 1974 when Proclamation 1283, as
amended, became effective do not acquire rights over the lots
they were claiming under PD 27 or RA 6657, because the lots
have already been reclassified as residential and are beyond
the compulsory coverage for agrarian reform under RA
6657. Perforce, the said CLTs or EPs issued after June 21, 1974 have
to be annulled and invalidated for want of legal basis, since the lots
in question are no longer subject to agrarian reform due to the
reclassification of the erstwhile Doronilla estate to non-agricultural
purposes.
(MY COMPARATIVE LEGAL OPINION: Therefore, this case
Land Bank vs. Araneta is an exception to the application of Natalia
Realty Inc. principle, wherein there is already a vested private rights
existing thus, it is still within the ambit of PD 27 or RA6657 and
subject for issuances of CLT’s and /or EP’s).
2ND ISSUE:
THE OSGS WITHDRAWAL OF THE EXPROPRIATION
SUIT on September 9, 1987 DID NOT, as Land Bank posits,
automatically restore the Doronilla property to its original
classification nor did it grant DAR or DARAB the power or
jurisdiction to order the compulsory acquisition of the property
and to place it under CARP. And, as the CA aptly noted, the DOJ
Secretary, through Opinion No. 181, even advised the DAR Secretary
that lands covered by Proclamation 1637, having been reserved for
townsite purposes, are not deemedagricultural lands within the
meaning and intent of Sec. 3(c) of RA 6657 and, hence, outside the
coverage of CARL. The Secretary of Justice further stated that RA
6657 did not supersede or repeal Proclamations 1283 and 1637
and they remain operative until now; their being townsite
reservations still remain valid and subsisting. To clarify, a DOJ
opinion carries only a persuasive weight upon the courts. However
since this Court, in Natalia Realty, Inc., cited with approval DOJ
Opinion No. 181, such citation carries weight and importance as
jurisprudence. Be that as it may, We recognize and apply the
principles found in Natalia Realty, Inc. regarding the character of the
Doronilla property being converted to a townsite and, thus, non-
agricultural in character.
The DARAB has been created and designed to exercise the
DARs adjudicating functions. And just like any quasi-judicial
body, DARAB derives its jurisdiction from law, specifically RA
6657,which invested it with adjudicatory powers over agrarian
reform disputes, and matters related to the implementation of
CARL. Hence, the DORONILLA PROPERTY, BEING OUTSIDE OF
CARP COVERAGE, IS ALSO BEYOND DARABS JURISDICTION.
REMEDY OF REACQUIRING OWNERSHIP FOR
ERRONEOUS CARP COVERAGE: DAR itself issued administrative
circulars governing lands exempted from CARP. For instance,
Administrative No. (AO) 3, Series of 1996, declares in its policy
statement what categories of lands are outside CARP coverage
and unequivocally states that properties not covered by CARP
shall be reconveyed to the original transferors or owners. Said
policy of the DAR, as explained in the CA Decision, should be applied
and upheld in cases where the DAR had erroneously ordered the
compulsory acquisition of the lands found outside CARP
coverage. This is true with the case at bar due to the fact that
EXPROPRIATION ONWARDS
Proclamation 1283, as amended by Proclamation 1637, had
effectively reclassified respondents land as residential.
HOW?DAR AO # 3 itself provides the
mechanism/remedy for the reconveyance of lots thus covered
or acquired, viz:
The Emancipation Patents (EPs) or Certificate of Land
Ownership Awards (CLOAs) already generated for landholdings to
be reconveyed shall have to be cancelled first pursuant to
Administrative Order No. 02, Series of 1994 prior to the actual
reconveyance. The cancellation shall either be through
administrative proceedings in cases where the EP/CLOA has not
yet been registered with the ROD or through quasi-judicial
proceedings in cases where the said EP/CLOA has already been
registered.
• LANDBANK V. PERALTA, G.R. NO. 182704, 23 APRIL 2014
BITANGJOL
Principle:
That just compensation should be determined in
accordance with RA 6657, and not PD 27 or EO 228, is especially
imperative considering that just compensation should be the full
and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.
Facts:
Victorino T. Peralta (respondent) is the registered owner
of two parcels of agricultural land. On October 17, 2000, he filed
with the RTC, acting as Special Agrarian Court (SAC), a petition for
judicial determination of just compensation for his landholding
which he claimed was valued by the Department of Agrarian Reform
Adjudication Board (DARAB) at the price of only P17,240.00.
Respondent alleged that based on his own investigation, the true
valuation of lands sold within the vicinity is P200,000/ha. while the
valuation made by petitioner as affirmed by the DARAB was fixed at
only P6,315.02/ha., or 63 centavos per square meter which is highly
unconscionable.
Petitioner filed its Answer stating that the subject land
was valued way back in 1981 as evidenced by the Landowner-
Tenant Production Agreement (LTPA). It maintained that having
agreed to the stipulated price in the LTPA, respondent had waived
his claim for a higher compensation. Also, petitioner claimed that
respondent’s cause of action has already prescribed under Article
1144 of the Civil Code.
On December 14, 2004, the SAC rendered its decision:
WHEREFORE, judgment is rendered in favor of the plaintiff,
declaring the amount of FOUR HUNDRED NINE THOUSAND FIVE
HUNDRED (P409,500.00) PESOS as just compensation for the
property of the plaintiff.
Petitioner appealed to the CA arguing that respondent’s act of filing
a petition for judicial determination of just compensation with the
SAC was in repudiation of the LTPA executed more than 19 years
ago. Not only did respondent fail to indicate in his complaint before
It ’s not a PROVREM 2015  27

the RTC his date of receipt of the DARAB decision, more than 30
days had already lapsed before he brought the action in court.
The CA ruled that while it is true that petitioner had made a
valuation of the property as stated in the LTPA, using the formula
provided under P.D. No. 27, the CA stressed that the effort has not
gone beyond that point as no just compensation, as thus evaluated,
had ever been made to the respondent prompting the latter to file,
sometime in 2000, a summary administrative proceeding before the
DARAB, and eventually a petition with the SAC praying for the fixing
of just compensation pursuant to Republic Act No. 6657. The CA
thus ruled that since the application of the process of agrarian
reform to the subject land has remained incomplete as of the advent
of R.A. No. 6657, actual title remains with respondent and the
completion of the agrarian reform process should now be
undertaken under R.A. No. 6657.
Issue:
WHETHER OR NOT THE CARP LAW (R.A. 6657) HAS RENDERED
INOPERATIVE THE VALUATION FORMULA AND FACTORS
PRESCRIBED IN PRESIDENTIAL DECREE NO. 27, EXECUTIVE
ORDER NO. 228.
Ruling:
The Court has, in several cases, for reason of equity,
applied R.A. No. 6657 in determining just compensation for lands
acquired under P.D. No. 27 and before the effectivity of R.A. No.
6657.
In Land Bank of the Philippines v. Natividad, 24 we ruled that where
the agrarian reform process is still incomplete at the time of
effectivity of R.A. 6657, the just compensation should be
determined and the process concluded under the latter law.
Under the factual circumstances of this case, the agrarian reform
process is still incomplete as the just compensation to be paid
private respondents has yet to be settled. Considering the passage
of Republic Act No. 6657 (RA 6657) before the completion of this
process, the just compensation should be determined and the
process concluded under the said law. Indeed, RA 6657 is the
applicable law, with PD 27 and EO 228 having only suppletory
effect, conformably with our ruling in Paris v. Alfeche.
x xxx
It would certainly be inequitable to determine just compensation
based on the guideline provided by PD 27 and EO 228 considering
the DAR’s failure to determine the just compensation for a
considerable length of time. That just compensation should be
determined in accordance with RA 6657, and not PD 27 or EO 228,
is especially imperative considering that just compensation should
be the full and fair equivalent of the property taken from its owner
by the expropriator, the equivalent being real, substantial, full and
ample.25 (Emphasis supplied; citations omitted.)
In sum, if the issue of just compensation is not settled prior to the
passage of R.A. No. 6657, it should be computed in accordance with
the said law, although the property was acquired under P.D. No. 27.
EXPROPRIATION ONWARDS
XIV.A Monzon v. Relova, G.R. No. 171827, 12 September 2008 GIME
MONZON VS RELOVA
Principle: Types of sales, namely: an ordinary execution sale, a
judicial foreclosure sale, and an extrajudicial foreclosure sale. An
ordinary execution sale is governed by the pertinent provisions of
Rule 39 of the Rules of Court on Execution, Satisfaction and Effect of
Judgments. Rule 68 of the Rules, captioned Foreclosure of Mortgage,
governs judicial foreclosure sales. On the other hand, Act No. 3135,
as amended by Act No. 4118, otherwise known as "An Act to
Regulate the Sale of Property under Special Powers Inserted in or
Annexed to Real Estate Mortgages," applies in cases of extrajudicial
foreclosure sales of real estate mortgages.
FACTS:
Monzon executed a promissory note in favor of the spouses Perez
for the amount of P600,000.00, with interest of five percent per
month, payable on or before 28 December 1999. This was secured
by a 300-square meter lot in Barangay Kaybagal, Tagaytay City.
Denominated as Lot No. 2A, this lot is a portion of Psu-232001,
covered by Tax Declaration No. 98-008-1793. On 31 December
1998, Monzon executed a Deed of Absolute Sale over the said parcel
of land in favor of the spouses Perez.
Respondents also claim in their Petition for Injunction that on 29
March 1999, Monzon executed another promissory note, this time
in favor of the spouses Relova for the amount of P200,000.00 with
interest of five percent per month payable on or before 31
December 1999. This loan was secured by a 200 square meter lot,
denominated as Lot No. 2B, another portion of the aforementioned
Psu-232001 covered by Tax Declaration No. 98-008-1793. On 27
December 1999, Monzon executed a Deed of Conditional Sale over
said parcel of land in favor of the spouses Relova.
On 23 October 1999, Coastal Lending Corporation extrajudicially
foreclosed the entire 9,967-square meter propertythe covered by
Psu-232001, including the portions mortgaged and subsequently
sold to respondents. According to the Petition for Injunction,
Monzon was indebted to the Coastal Lending Corporation in the
total amount of P3,398,832.35. The winning bidder in the
extrajudicial foreclosure, Addio Properties Inc., paid the amount of
P5,001,127.00, thus leaving a P1,602,393.65 residue. According to
respondents, this residue amount, which is in the custody of Atty.
Luna as Branch Clerk of Court, should be turned over to them
pursuant to Section 4, Rule 68 of the Revised Rules of Civil
Procedure. Thus, respondents pray in their Petition for Injunction
for a judgment (1) finding Monzon liable to the spouses Perez in the
amount of P1,215,000.00 and to the spouses Relova in the amount
of P385,000.00.
ISSUE:
Whether or not the rule 68 is applicables?
RULING:
No.le 68 governs the judicial foreclosure of mortgages. Extra-
judicial foreclosure of mortgages, which was what transpired in the
It ’s not a PROVREM 2015  28

case at bar, is governed by Act No. 3135,[11] as amended by Act No.
4118,[12] Section 6 of Republic Act No. 7353, Section 18 of Republic
Act No. 7906, and Section 47 of Republic Act No. 8791. A.M. No. 99-
10-05-0, issued on 14 December 1999, provides for the procedure
to be observed in the conduct of an extrajudicial foreclosure sale.
Thus, we clarified the different types of sales in Supena v. Dela Rosa,
[13] to wit:
Any judge, worthy of the robe he dons, or any lawyer, for that
matter, worth his salt, ought to know that different laws apply to
different kinds of sales under our jurisdiction. We have three
different types of sales, namely: an ordinary execution sale, a
judicial foreclosure sale, and an extrajudicial foreclosure sale. An
ordinary execution sale is governed by the pertinent provisions of
Rule 39 of the Rules of Court on Execution, Satisfaction and Effect of
Judgments. Rule 68 of the Rules, captioned Foreclosure of Mortgage,
governs judicial foreclosure sales. On the other hand, Act No. 3135,
as amended by Act No. 4118, otherwise known as "An Act to
Regulate the Sale of Property under Special Powers Inserted in or
Annexed to Real Estate Mortgages," applies in cases of extrajudicial
foreclosure sales of real estate mortgages.
Unlike Rule 68, which governs judicial foreclosure sales, neither Act
No. 3135 as amended, nor A.M. No. 99-10-05-0 grants to junior
encumbrancers the right to receive the balance of the purchase
price. The only right given to second mortgagees in said issuances is
the right to redeem the foreclosed property pursuant to Section 6 of
Act No. 3135, as amended by Act No. 4118, which provides:
Sec. 6. Redemption. In all cases in which an extrajudicial sale is
made under the special power hereinbefore referred to, the debtor,
his successors in interest or any judicial creditor or judgment
creditor of said debtor, or any person having a lien on the property
subsequent to the mortgage or deed of trust under which the
property is sold, may redeem the same at any time within the term
of one year from and after the date of the sale; and such redemption
shall be governed by the provisions of sections four hundred and
sixty-four to four hundred and sixty- six,[14] inclusive, of the Code
of Civil Procedure, in so far as these are not inconsistent with this
Act.
Even if, for the sake of argument, Rule 68 is to be applied to
extrajudicial foreclosure of mortgages, such right can only be given
to second mortgagees who are made parties to the (judicial)
foreclosure. While a second mortgagee is a proper and in a sense
even a necessary party to a proceeding to foreclose a first mortgage
on real property, he is not an indispensable party, because a valid
decree may be made, as between the mortgagor and the first
mortgagee, without regard to the second mortgage; but the
consequence of a failure to make the second mortgagee a party to
the proceeding is that the lien of the second mortgagee on the
equity of redemption is not affected by the decree of foreclosure.
[15]
BAR Question:
Monzon executed 2 two promissory notes to spouses pereaz and
spouses relova which was mortgages by land. It turns out that
Coastal Lending Corporation was also a creditor of monzon and it
EXPROPRIATION ONWARDS
manage to extrajudicially foreclosed the property and sells it to
Adio Property Inc., for P5,001,127.00, the debt was only for
P3,398,832.35 thus leaving a P1,602,393.65 residue. According to
respondents, this residue amount, which is in the custody of Atty.
Luna as Branch Clerk of Court, should be turned over to them
pursuant to Section 4, Rule 68 of the Revised Rules of Civil
Procedure. Thus, respondents pray in their Petition for Injunction
for a judgment (1) finding Monzon liable to the spouses Perez in the
amount of P1,215,000.00 and to the spouses Relova in the amount
of P385,000.00.
XIV.B LOOYUKO V. CA, G.R. NO. 102696, 12 JULY 2001
CABUENAS CLEA
PRINCIPLE:
Section 1, Rule 68 of the Rules of Court requires all persons having
or claiming an interest in the premises subordinate in right to that
of the holder of the mortgage be made defendants in the action for
foreclosure. The requirement for joinder of the person claiming an
interest subordinate to the mortgage sought to be foreclosed,
however, is not mandatory in character but merely directory, in the
sense that failure to comply therewith will not invalidate the
foreclosure proceedings.
FACTS:
 Disputed in these consolidated cases is a house and lot
located in Mandaluyong City. Previously owned by the
Spouses Mendoza. The property is contested by the
spouses’ various creditors as well as the creditors’ of
alleged assignee.
 One set of creditors includes Looyuko and Uy. Their
lawyer, Atty. Victoria Cuyos, has also annotated her
attorney’s lien over the property. Gutang and her children
David and Elizabeth, who have substituted their father,
comprise another set. Both sets of creditors rest their
claim upon separate levies on execution and their
supposed purchase of the property at public auction.
 Looyuko and Uy, through Atty. Cuyos, filed a complaint
against the Spouses Mendoza before the RTC of Manila.
The Manila RTC issued a writ of preliminary attachment
over the property and a notice of levy on attachment
bearing the date April 22, 1977 was annotated at the back
of the TCT No. 1702.
The Manila RTC issued a writ of execution and the
property was sold at public auction with Looyuko and Uy
as the highest bidders.
The Register of Deeds of Mandaluyong issued a new TCT
over the property in the name of Looyuko and Uy.
 In another case filed in the RTC of Iloilo, Gutang filed a
complaint for a sum of money with damages against
Mendoza. Judgment was rendered in favor of Gutang and
the decision later became final and executor. A notice of
levy on execution was annotated on the same TCT No.
1702.
Gutang, by virtue of the certificate of sale, filed a petition
for the cancellation of TCT No. 1702 and the issuance of a
It ’s not a PROVREM 2015  29

new title in her name. This was granted by the RTC of
Rizal.
TCT No. 1702 was cancelled and a new TCT was issued on
December 23, 1987.
 On December 2, 1976, Sps. Mendoza executed a mortgage
over the subject property in favor of FGU Insurance
Corporation. The spouses failed to satisfy the obligation
secured by the mortgage. FGU filed an action with the RTC
of Manila against the spouses.
Judgment was rendered in favor of FGU and the spouses
were ordered to pay FGU sum of money.
FGU filed a motion for partial reconsideration, pointing
out that the action was not for a sum of money but for
foreclosure of mortgage. It prayed that in accordance with
Section 2, Rule 68 of the Rules of Court, "the decision be
amended by ordering the sale of the property mortgaged
in case defendant should not satisfy the judgment in favor
of plaintiff within ninety (90) days from notice of
decision."
The RTC granted the motion. No appeal was taken and the
Order subsequently became final and executory.
In a public bidding, FGU was declared the highest bidder
and the issuance of new TCT was issued in the name of
FGU.
Before the new TCT was issued, the Spouses Gutang filed
a motion for intervention and to set aside the judgment of
the RTC, alleging that they are the new registered owners
of the property.
The RTC allowed the motion for intervention, holding that
the failure of the FGU to implead the Spouses in the action
for foreclosure deprived the latter of due process.
 Looyuko et al. filed a motion for intervention which the
RTC granted in its Order.
 FGU filed a petition for certiorari, prohibition and
mandamus in the Court of Appeals, arguing that the trial
court committed grave abuse of discretion in granting the
Spouses Gutang’s motion for intervention since the RTC
decision was already final and executory.
 The CA ruled that the action before the RTC was not
actually an action for foreclosure but one for collection of a
sum of money. The court affirmed the order of the RTC
allowing intervention.
 FGU filed a petition for review on certiorari with the SC.
FGU contents that the CA erred in characterizing the case
as an action for a sum of money and not one for the
foreclosure of mortgage and in allowing the intervention
of the Sps. Gutang and Looyuko et al in the proceedings
before the trial court.
EXPROPRIATION ONWARDS
ISSUES: Was the motion for intervention filed by the Spouses
Gutang and Looyuko et. al proper considering that the case already
final and executory?
HELD:
NO. We do not deem it necessary to address the issue of whether
the complaint filed by FGU against the Spouses Mendoza was an
action for foreclosure of mortgage or one for a sum of money.
Clearly, if it were the latter, the Gutangs and Looyuko et al. would
have no right to intervene therein since the action for sum of money,
i.e., damages, would have arisen from the contract secured by
mortgage, to which they are not parties. Then Section 2, Rule 12 of
the Rules of Court, the law prevailing at the time, read as follows:
Intervention. – A person may, before or during a trial be
permitted by the court, in its discretion, to intervene in an
action, if he has legal interest in the matter in litigation, or
in the success of either of the parties, or an interest against
both, or when he is so situated as to be adversely affected by
a distribution or other disposition of property in the custody
of the court or of an officer thereof. [Italics supplied.]
None of the grounds underscored above are present to warrant
their intervention. Accordingly, we assume for purposes of
discussion that the action was indeed for the foreclosure of the
mortgage over the subject property.
The rule stated above also requires that a motion for intervention
should be made "before or during a trial." Because of varying
interpretations of the phrase, the present Rules have clarified that
the motion should be filed "any time before rendition of judgment."
In the present case, the motions for intervention were filed after
judgment had already been rendered, indeed when the case was
already final and executory. Certainly, intervention can no longer be
allowed in a case already terminated by final judgment.
Intervention is merely collateral or accessory or ancillary to the
principal action, and not an independent proceeding; it is an
interlocutory proceeding dependent on or subsidiary to the case
between the original parties. Where the main action ceases to exist,
there is no pending proceeding wherein the intervention may be
based. Here, there is no more pending principal action wherein the
Spouses Gutang and Looyuko et al. may intervene.
A decision was already rendered therein and no appeal
having been taken therefrom, the judgment in that main
case is now final and executory. Intervention is legally
possible only "before or during a trial," hence a motion for
intervention filed after trial—and, a fortiori, when the case
has already been submitted, when judgment has been
rendered, or worse, when judgment is already final and
executory—should be denied.
Section 1, Rule 68 of the Rules of Court requires all persons having
or claiming an interest in the premises subordinate in right to that
of the holder of the mortgage be made defendants in the action for
foreclosure. The requirement for joinder of the person claiming an
interest subordinate to the mortgage sought to be foreclosed,
however, is not mandatory in character but merely directory, in the
sense that failure to comply therewith will not invalidate the
foreclosure proceedings.
It ’s not a PROVREM 2015  30

A subordinate lien holder is a proper, even a necessary, but not an
indispensable, party to a foreclosure proceeding. Appropriate relief
could be granted by the court to the mortgagee in the foreclosure
proceeding, without affecting the rights of the subordinate lien
holders. The effect of the failure on the part of the mortgagee to
make the subordinate lien holder a defendant is that the decree
entered in the foreclosure proceeding would not deprive the
subordinate lien holder of his right of redemption. A decree of
foreclosure in a suit to which the holders of a second lien are not
parties leaves the equity of redemption in favor of such lien holders
unforeclosed and unaffected.
The Spouses Gutang make a lot of needless hair-splitting by arguing
that cases applying the above principles are not on all fours with the
one at bar. They persistently cling to the notion that as purchasers
in the execution sale, they stepped into the shoes of the Spouses
Gutang and have become, in legal contemplation, the mortgagors of
the property. Consequently, their intervention should be allowed.
This contention is utterly devoid of merit. Subordinate lien holders
like the Spouses Gutang and Looyuko et al. acquire only a lien upon
the equity of redemption vested in the mortgagor, and their rights
are strictly subordinate to the superior lien of the mortgagee.
An execution creditor who levies his execution upon property that
the judgment debtor has mortgaged to another can sell at most only
the equity of redemption belonging to the mortgagor. As it is the
equity of redemption that the subordinate lien holders had acquired
by the levy on execution and that was sold in the public auction, this
equity, not the property itself, was what the purchasers, who
incidentally are the subordinate lien holders themselves, bought at
the execution sale.
The failure of the mortgagee to join the subordinate lien holders as
defendants in the foreclosure suit, therefore, did not have the effect
of nullifying the foreclosure proceeding, but kept alive the equity of
redemption acquired by the purchasers in their respective
execution sales.
SHORT DIGEST
X filed a complaint of against Spouses Y before the RTC of Manila.
The RTC granted the petition and issued a writ a preliminary
attachment over the subject property. The property was later on
transferred in the name of X. In another case filed in the RTC of
Iloilo, Z, by virtue of certificate of sale, filed a petition for
cancellation of TCT. 1702 and the issuance of a new title in Z’s
name. The Trial Court granted the petition.
Spouses Y executed a mortgage over the subject property in favor
of FGU. Sps. Y failed to settle their obligation. FGU filed an action
with the RTC of manila against Spouses Y. The RTC rendered an
order in favor of FGU and ordered the spouses to pay the plaintiff
a sum of money. In a later order, the RTC pointed out that the
action was not for a sum of money but for foreclosure of
mortgage.
Before the new TCT was issued, X and Z filed a motion for
intervention and prayed to set aside the judgment of the RTC
alleging that they are the new registered owners of the property.
EXPROPRIATION ONWARDS
ISSUE: Was the motion for intervention filed by the Spouses X and
Y proper considering that the case already final and executory?
HELD: NO.
We do not deem it necessary to address the issue of whether the
complaint filed by FGU against the Spouses Y was an action for
foreclosure of mortgage or one for a sum of money. Clearly, if it
were the latter, the X and Z would have no right to intervene
therein since the action for sum of money, i.e., damages, would
have arisen from the contract secured by mortgage, to which they
are not parties.
The rule requires that a motion for intervention should be made
"before or during a trial." Because of varying interpretations of
the phrase, the present Rules have clarified that the motion
should be filed "any time before rendition of judgment."
Intervention is merely collateral or accessory or ancillary to the
principal action, and not an independent proceeding; it is an
interlocutory proceeding dependent on or subsidiary to the case
between the original parties. Where the main action ceases to
exist, there is no pending proceeding wherein the intervention
may be based. Here, there is no more pending principal action
wherein the Spouses Gutang and Looyuko et al. may intervene
Section 1, Rule 68 of the Rules of Court requires all persons
having or claiming an interest in the premises subordinate in
right to that of the holder of the mortgage be made defendants in
the action for foreclosure. The requirement for joinder of the
person claiming an interest subordinate to the mortgage sought
to be foreclosed, however, is not mandatory in character but
merely directory, in the sense that failure to comply therewith
will not invalidate the foreclosure proceedings.
XIV.C • LOOYOKO, ID. VILLAMANTE
Basic Principle:
This is the mortgagor’s equity (not right) of redemption which, as
above stated, may be exercised by him even beyond the 90-day
period "from the date of service of the order," and even after the
foreclosure sale itself, provided it be before the order of
confirmation of the sale. After such order of confirmation, no
redemption can be effected any longer.
Facts:
Disputed in these consolidated cases is a house and lot located in
Mandaluyong, Rizal (now Mandaluyong City), formerly covered by
Transfer Certificate of Title (TCT) No. 1702, and previously owned
by the Spouses Tomas and Linda Mendoza. Bitterly contesting the
property are the spouses’ various creditors as well as the creditors’
alleged assignee.
One set of creditors includes Albert Looyuko and Jose Uy. Their
lawyer, Atty. Victoria Cuyos, has also annotated her attorney’s lien
over the property. Antonia Gutang and her children David and
Elizabeth, who have substituted their father,[1] comprise another
set. Both sets of creditors rest their claim upon separate levies on
execution and their supposed purchase of the property at public
auction, including the claims of another creditor, FGU Insurance
Corporation, as well as Schubert Tanuliong, who purports to be
It ’s not a PROVREM 2015  31

Looyuko et al.’s and the Gutangs’ assignee.FGU filed a motion for
partial reconsideration, pointing out that the action was not for a
sum of money but for foreclosure of mortgage which was granted by
the RTC.
However, before the issuance of TCT for FGU insurance, Sps. Gutang
filed a motion for intervention alleging that they are the newly
registered owner of the property which was granted by the RTC.
FGU moved to reconsider the RTC’s decision over the granting of
intervention.
Schubert Tanunliong claims that on December 19, 1985, the
Spouses Mendoza sold the subject house and lot to him.
The Court of Appeals ruled that the action before the RTC was not
actually an action for foreclosure but one for collection of a sum of
money.
Issue/s:
Whether or not an execution creditor who levies his execution upon
property that the judgment debtor has mortgaged to another can
sell at most only the equity of redemption belonging to the
mortgagor.
Held:
Yes.
As it is the equity of redemption that the subordinate lien holders
had acquired by the levy on execution and that was sold in the
public auction, this equity, not the property itself, was what the
purchasers, who incidentally are the subordinate lien holders
themselves, bought at the execution sale.
The failure of the mortgagee to join the subordinate lien holders as
defendants in the foreclosure suit, therefore, did not have the effect
of nullifying the foreclosure proceeding, but kept alive the equity of
redemption acquired by the purchasers in their respective
execution sales.
This is the mortgagor’s equity (not right) of redemption which, as
above stated, may be exercised by him even beyond the 90-day
period "from the date of service of the order," and even after the
foreclosure sale itself, provided it be before the order of
confirmation of the sale. After such order of confirmation, no
redemption can be effected any longer.
Such equity of redemption does not constitute a bar to the
registration of the property in the name of the mortgagee.
• HUERTA ALBA . V. COURT OF APPEALS, G.R. NO. 128567, 1
SEPTEMBER 2000- VILLAGANAS
FACTS:
Herein private respondent sought the foreclosure of 4 parcels of
land mortgaged by petitioner to Intercon.
Private respondent instituted judicial foreclosure of mortgage as
mortgagee-assignee.
EXPROPRIATION ONWARDS
The scheduled auction sale of subject pieces of properties
proceeded and the private respondent was declared the highest
bidder. The covering Certificate of Sale issued in its favor was
registered.
Petitioner contended that the Intercom, predecessor in interest of
the private respondent, is a credit institution, such that Section 78
of Republic Act No. 337 should apply in this case. Stated differently,
it is the submission of petitioner that it should be allowed to
redeem subject properties within one year from the date of sale as a
result of the foreclosure of the mortgage constituted thereon.
ISSUE:
Whether or not the petitioner has the one-year right of redemption
of subject properties under Section 78 of Republic Act No. 337
otherwise known as the General Banking Act.
RULING:
NO.
The one-year right of redemption under Section 78 of Republic
Act No. 337 is applicable if the mortgagee is a bank or credit
institution.
In this case, for several crucial stages of the proceedings petitioner
failed to allege and prove that private respondent's predecessor in
interest was a credit institution and therefore, Section 78 of R.A. No.
337 was applicable.
If petitioner were really acting in good faith, it would have
ventilated before the Court of Appeals its alleged right under
Section 78 of R.A. No. 337; but petitioner never did do so.
Indeed, at the earliest opportunity, when it submitted its answer to
the complaint for judicial foreclosure, petitioner should have
alleged that it was entitled to the beneficial provisions of Section 78
of R.A. No. 337 but again, it did not make any allegation in its
answer regarding any right thereunder.
The failure of petitioner to seasonably assert its alleged right under
Section 78 of R.A. No. 337 precludes it from so doing at this late
stage case. Estoppel may be successfully invoked if the party fails to
raise the question in the early stages of the proceedings.
XIV.D
SPOUSES SUICO V. PHILIPPINE NATIONAL BANK, G.R. NO.
170215, 28 AUGUST 2007- CANETE FRANCIS
Principle:The disposition of the proceeds of the sale in foreclosure
shall be as follows: TICA
(a) first, pay the costs
(b) secondly, pay off the mortgage debt
It ’s not a PROVREM 2015  32

(c) thirdly, pay the junior encumbrancers, if any in the order of
priority
(d) fourthly, give the balance to the mortgagor, his agent or the
person entitled to it.
Thus it has been held that if the mortgagee is retaining more of the
proceeds of the sale than he is entitled to, this fact alone will not
affect the validity of the sale but simply give the mortgagor a cause
of action to recover such surplus.
FACTS:
Petitioners Spouses Esmeraldo and Elizabeth Suico,
obtained a loan from the Philippine National Bank (PNB) secured by
a real estate mortgage on real properties. The petitioners were
unable to pay their obligation prompting the PNB to extrajudicially
foreclose the mortgage over the subject properties before the City
Sheriff of Mandaue City. The petitioners thereafter filed a Complaint
against the PNB before the Regional Trial Court (RTC) of Mandaue
City, Branch 55,for Declaration of Nullity of Extrajudicial
Foreclosure of Mortgage.
Petitioners claimed that during the foreclosure sale of the
subject properties held on 30 October 1992, PNB, as the lone bidder,
offered a bid in the amount of P8,511,000.00. By virtue of the said
bid, a Certificate of Sale of the subject properties was issued by the
Mandaue City Sheriff in favor of PNB. PNB did not pay to the Sheriff
who conducted the auction sale the amount of its bid which was
P8,511,000.00 or give an accounting of how said amount was
applied against petitioners' outstanding loan, which, as of 10 March
1992, amounted only to P1,991,770.38. Since the amount of the bid
grossly exceeded the amount of petitioners' outstanding obligation
as stated in the extrajudicial foreclosure of mortgage, it was the
legal duty of the winningbidder, PNB, to deliver to the Mandaue City
Sheriff the bid price or what was left thereof after deducting the
amount of petitioners' outstanding obligation. PNB failed to deliver
the amount of their bid to the Mandaue City Sheriff or, at the very
least, the amount of such bid in excess of petitioners' outstanding
obligation.
Owing to the failure of PNB as the winning bidder to
deliver to the petitioners the amount of its bid or even just the
amount in excess of petitioners' obligation, the latter averred that
the extrajudicial foreclosure conducted over the subject properties
by the Mandaue City Sheriff, as well as the Certificate of Sale and the
Certificate of Finality of Sale of the subject properties issued by the
Mandaue City Sheriff, in favor of PNB, were all null and void.
PNB filed a Motion to Dismiss, however, the Motion to
Dismisswas denied in the Order of the RTC. RTC rendered its
Decision for the declaration of nullity of the extrajudicial
foreclosure of mortgage. PNB appealed its case to the Court of
Appeals, and the appellate court granted the appeal.
ISSUE: WON the foreclosure proceeding is null and void for failure
of the mortgagee to pay and tender the price of its bid or the
surplus thereof to the sheriff.
HELD:NO.
EXPROPRIATION ONWARDS
Rule 68, Section 4 of the Rules of Court provides:
SEC. 4. Disposition of proceeds of sale. — The amount
realized from the foreclosure sale of the mortgaged property shall,
after deducting the costs of the sale, be paid to the person
foreclosing the mortgage, and when there shall be any balance or
residue, after paying off the mortgage debt due, the same shall be
paid to junior encumbrancers in the order of their priority, to be
ascertained by the court, or if there be no such encumbrancers or
there be a balance or residue after payment to them, then to the
mortgagor or his duly authorized agent, or to the person entitled to
it.
Under the above rule, the disposition of the proceeds of the sale in
foreclosure shall be as follows: TICA
(a) First, pay the costs
(b) Secondly, pay off the mortgage debt
(c) Thirdly, pay the junior encumbrancers, if any in the order of
priority
(d) Fourthly, give the balance to the mortgagor, his agent or the
person entitled to it.
It is the mortgagee's duty to return any surplus in the
selling price to the mortgagor. A mortgagee who exercises the
power of sale contained in a mortgage is considered a custodian of
the fund and, being bound to apply it properly, is liable to the
persons entitled thereto if he fails to do so. And even though the
mortgagee is not strictly considered a trustee in a purely equitable
sense, but as far as concerns the unconsumed balance, the
mortgagee is deemed a trustee for the mortgagor or owner of the
equity of redemption.
Thus it has been held that if the mortgagee is retaining
more of the proceeds of the sale than he is entitled to, this fact
alone will not affect the validity of the sale but simply give the
mortgagor a cause of action to recover such surplus.
Being the only existing documentary evidence to support its claim,
shows that petitioners' loan obligations to PNB as of 30 October
1992 amounted to P6,409,814.92, and considering that the amount
of PNB's bid is P8,511,000.00, there is clearly an excess in the bid
price which PNB must return, together with the interest computed
in accordance with the guidelines laid down by the court in Eastern
Shipping Lines v. Court of Appeals.
SHORT DIGEST:
FACTS:
Petitioners Spouses Suico, obtained a loan from the
Philippine National Bank (PNB) secured by a real estate
mortgage on real properties. PNB extrajudicially foreclose the
mortgage over the subject properties before the City Sheriff of
Mandaue City as Sps. Suico is unable to pay their
obligation.Petitioners thereafter filed a Complaint against the PNB
It ’s not a PROVREM 2015  33

before the RTC of Mandaue City, for Declaration of Nullity of
Extrajudicial Foreclosure of Mortgage.
During the foreclosure salePNB, as the lone bidder, offered
a bid in the amount of P8,511,000.00. However, PNB did not pay to
the Sheriff who conducted the auction sale the amount of its bid or
give an accounting of how said amount was applied against
petitioners' outstanding loan, which, as of 10 March 1992,
amounted only to P1,991,770.38.
Owing to the failure of PNB as the winning bidder to
deliver to the petitioners the amount of its bid or even just the
amount in excess of petitioners' obligation, the latter averred that
the extrajudicial foreclosure be declared null and void.
RTC rendered its Decision for the declaration of nullity of
the extrajudicial foreclosure of mortgage. PNB appealed its case to
the Court of Appeals, and the appellate court granted the appeal.
ISSUE: WON the foreclosure proceeding is null and void for failure
of the mortgagee to pay and tender the price of its bid or the
surplus thereof to the sheriff.
HELD: NO.
Rule 68, Section 4 of the Rules of Court provides:
SEC. 4. Disposition of proceeds of sale. — The amount
realized from the foreclosure sale of the mortgaged property shall,
after deducting the costs of the sale, be paid to the person
foreclosing the mortgage, and when there shall be any balance or
residue, after paying off the mortgage debt due, the same shall be
paid to junior encumbrancers in the order of their priority, to be
ascertained by the court, or if there be no such encumbrancers or
there be a balance or residue after payment to them, then to the
mortgagor or his duly authorized agent, or to the person entitled to
it.
Under the above rule, the disposition of the proceeds of the sale in
foreclosure shall be as follows: TICA
(a) first, pay the costs
(b) secondly, pay off the mortgage debt
(c) thirdly, pay the junior encumbrancers, if any in the order of
priority
(d) fourthly, give the balance to the mortgagor, his agent or the
person entitled to it.
Thus it has been held that if the mortgagee is retaining more of the
proceeds of the sale than he is entitled to, this fact alone will not
affect the validity of the sale but simply give the mortgagor a cause
of action to recover such surplus.
XIV.E SPOUSES ROSALES V. SPOUSES SUBA, G.R. NO. 137792, 12
AUGUST 2003- CORTES
Principle:
EXPROPRIATION ONWARDS
As a general rule, there is no right of redemption in a judicial
foreclosure of mortgage. The only exemption is when the mortgagee
is the Philippine National Bank or a bank or a banking institution.
The mortgagors only have equity (not right) of redemption which
may be exercised by him even beyond the 90-day period from the
date of service of the order, and even after the foreclosure sale itself,
provided it be before the order of confirmation of the sale. After
such order of confirmation, no redemption can be effected any
longer.
Quick digest:
Facts:
The RTC of Manila rendered judgment in 2 civil cases that the Deed
of Sale affecting the property in question as an equitable mortgage;
declared spouses Rosales to deposit to the Cleark the sum of
P65,000 for payment to Macaspac with 9%interest/annum plus
P219.76 for real estate tax reimbursement; while Macapac to
execute a deed of reconveyance to Spouses Rosales upon deposit,
however in case of non-payment, the property shall be sold in
accordance with the rules of court.
The decision became final and executory. Spouses Ricardo and
Erlinda Rosales failed to comply.An auction sale of the property was
held and the property was sold forP285,000.00 to spouses Alfonso
and Lourdes Suba, herein respondents, being the highest
bidders. On July 15, 1998, the trial court issued an order confirming
the sale of the property and directing the sheriff to issue a final deed
of sale in their favor.
The Register of Deeds of Manila issued a new TCT over the subject
property in the Spouses Suba.
Spouses Suba filed with the trial court a motion for a writ of
possession. The trial court ruled that petitioners have no right to
redeem the property since the case is for judicial foreclosure of
mortgage under Rule 68 of the 1997 Rules of Civil Procedure, as
amended. Hence, respondents, as purchasers of the property, are
entitled to its possession as a matter of right.
Petitioners filed with the Court of Appeals a petition for certiorari
however, Court of Appeals dismissed the petition, holding that there
is no right of redemption in case of judicial foreclosure of mortgage.
Issue: WON Petitioner has the right of redemption?
Ruling: No. There is no right of redemption in a judicial foreclosure
of mortgage.
The law declares that a judicial foreclosure sale, when confirmed by
an order of the court, x x x shall operate to divest the rights of all the
parties to the action and to vest their rights in the purchaser, subject
to such rights of redemption as may be allowed by law. The
mortgagors equity (not right) of redemption which may be
exercised by him even beyond the 90-day period from the date of
It ’s not a PROVREM 2015  34

service of the order, and even after the foreclosure sale itself,
provided it be before the order of confirmation of the sale. After
such order of confirmation, no redemption can be effected any
longer.
The Petitioners merely have an equity of redemption, which, to
reiterate, is simply their right, as mortgagor, to extinguish the
mortgage and retain ownership of the property by paying the
secured debt prior to the confirmation of the foreclosure
sale. However, instead of exercising this equity of redemption,
petitioners chose to delay the proceedings by filing several
manifestations with the trial court. Thus, they only have themselves
to blame for the consequent loss of their property.
Long Digest
Facts:
On June 13, 1997, the Regional Trial Court, Branch 13, Manila
rendered a Decision] in 2 Civil cases, where the dispositive portion
reads:
(1) Declaring the Deed of Sale affecting the property in question, as
an equitable mortgage;
(2) Declaring the parties Erlinda Sibug and Ricardo Rosales, within
90 days from finality of this Decision, to deposit with the Clerk of
Court, for payment to the parties Felicisimo Macaspac and Elena
Jiao, the sum of P65,000.00, with interest at nine (9) percent per
annum from September 30, 1982 until payment is made, plus the
sum of P219.76 as reimbursement for real estate taxes;
(3) Directing the parties Felicisimo Macaspac and Elena Jiao, upon
the deposit on their behalf of the amounts specified in the foregoing
paragraph, to execute a deed of reconveyance of the property in
question to Erlinda Sibug, married to Ricardo Rosales, and the
Register of Deeds of Manila shall cancel Transfer Certificate of Title
No. 150540 in the name of the Macaspacs and issue new title in the
name of Sibug;
(4) For non-compliance by Sibug and Rosales of the directive in
paragraph (2) of this dispositive portion, let the property be sold in
accordance with the Rules of Court for the release of the mortgage
debt and the issuance of title to the purchaser.
The decision became final and executory. Spouses Ricardo and
Erlinda Rosales, judgment debtors and herein petitioners, failed to
comply with paragraph 2 quoted above.
This prompted Macaspac, as judgment creditor, to file with the trial
court a motion for execution.
An auction sale of the property was held wherein petitioners
participated. However, the property was sold forP285,000.00 to
spouses Alfonso and Lourdes Suba, herein respondents, being the
highest bidders. On July 15, 1998, the trial court issued an order
confirming the sale of the property and directing the sheriff to issue
a final deed of sale in their favor.
EXPROPRIATION ONWARDS
On July 28, 1998, Macaspac filed a motion praying for the release to
him of the amount of P176,176.06 from the proceeds of the auction
sale, prompting petitioners to file a motion praying that an
independent certified public accountant be appointed to settle the
exact amount due to movant Macaspac.
Meanwhile, the Register of Deeds of Manila issued a new Transfer
Certificate of Title over the subject property in the names of
respondents.
On August 18, 1998, respondents filed with the trial court a motion
for a writ of possession, contending that the confirmation of the sale
effectively cut off petitioners equity of redemption which the trial
court granted. The trial court ruled that petitioners have no right to
redeem the property since the case is for judicial foreclosure of
mortgage under Rule 68 of the 1997 Rules of Civil Procedure, as
amended. Hence, respondents, as purchasers of the property, are
entitled to its possession as a matter of right.
Petitioners filed with the Court of Appeals a petition for certiorari,
alleging that the trial court committed grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing a writ of
possession for confirming the sale of the property.
However, Court of Appeals dismissed the petition, holding
that there is no right of redemption in case of judicial foreclosure of
mortgage.
Arguments:
Petitioners= they faulted the Appellate Court in applying the rules
on judicial foreclosure of mortgage. They contend that their loan
with Macaspac is unsecured, hence, its payment entails an execution
of judgment for money under Section 9 in relation to Section 25,
Rule 39 of the 1997 Rules of Civil Procedure, as amended, allowing
the judgment debtor one (1) year from the date of registration of
the certificate of sale within which to redeem the foreclosed
property.
Respondents= they insist that petitioners are actually questioning
the decision of the trial court dated June 13, 1997 which has long
become final and executory; and that the latter have no right to
redeem a mortgaged property which has been judicially foreclosed.
Issue:
1. WON the transaction between petitioner and Macaspac is
an equitable mortgage?
2. WON Petitioner has the right of redemption?
Ruling:
1. YES.
The decision of the trial court, which is final and executory, declared
the transaction between petitioners and Macaspac an equitable
mortgage.
In Matanguihan vs. Court of Appeals, this Court defined an equitable
mortgage as one which although lacking in some formality, or form
It ’s not a PROVREM 2015  35

or words, or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property as
security for a debt, and contains nothing impossible or contrary to
law. An equitable mortgage is not different from a real estate
mortgage, and the lien created thereby ought not to be defeated by
requiring compliance with the formalities necessary to the validity
of a voluntary real estate mortgage. Since the parties transaction is
an equitable mortgage and that the trial court ordered its
foreclosure, execution of judgment is governed by Sections 2 and 3,
Rule 68 of the 1997 Rules of Civil Procedure, as amended, quoted as
follows:
SEC. 2. Judgment on foreclosure for payment or sale. If upon the
trial in such action the court shall find the facts set forth in the
complaint to be true, it shall ascertain the amount due to the
plaintiff upon the mortgage debt or obligation, including interest
and other charges as approved by the court, and costs, andshall
render judgment for the sum so found due and order that the
same be paid to the court or to the judgment obligee within a
period of not less that ninety (90) days nor more than one
hundred twenty (120) days from the entry of judgment, and
that in default of such payment the property shall be sold at
public auction to satisfy the judgment.
SEC. 3. Sale of mortgaged property, effect. When the defendant,
after being directed to do so as provided in the next preceding
section, fails to pay the amount of the judgment within the
period specified therein, the court, upon motion, shall order
the property to be sold in the manner and under the provisions of
Rule 39 and other regulations governing sales of real estate under
execution. Such sale shall not effect the rights of persons holding
prior encumbrances upon the property or a part thereof, and when
confirmed by an order of the court, also upon motion, it shall
operate to divest the rights in the property of all the parties to
the action and to vest their rights in the purchaser, subject to
such rights of redemption as may be allowed by law.
2. NO. The right of redemption is not recognized in a judicial
foreclosure.
The right of redemption in relation to a mortgage understood
in the sense of a prerogative to re-acquire mortgaged property
after registration of the foreclosure saleexists only in the case
of the extrajudicial foreclosure of the mortgage. No such right
is recognized in a judicial foreclosure except only where the
mortgagee is the Philippine National bank or a bank or a
banking institution.
Where a mortgage is foreclosed extrajudicially, Act 3135 grants to
the mortgagor the right of redemption within one (1) year from the
registration of the sheriffs certificate of foreclosure sale.
Where the foreclosure is judicially effected, however, no
equivalent right of redemption exists. The law declares that
a judicial foreclosure sale, when confirmed by an order of the
court, x x x shall operate to divest the rights of all the parties to
the action and to vest their rights in the purchaser, subject to
such rights of redemption as may be allowed by law. Such rights
EXPROPRIATION ONWARDS
exceptionally allowed by law (i.e., even after the confirmation by an
order of the court) are those granted by the charter of the
Philippine National Bank (Act Nos. 2747 and 2938), and the General
Banking Act (R.A.337). These laws confer on the mortgagor, his
successors in interest or any judgment creditor of the mortgagor,
the right to redeem the property sold on foreclosure after
confirmation by the court of the foreclosure sale which right may be
exercised within a period of one (1) year, counted from the date of
registration of the certificate of sale in the Registry of Property.
XXX This is the mortgagors equity (not right) of
redemption which, as above stated, may be exercised by him
even beyond the 90-day period from the date of service of the
order, and even after the foreclosure sale itself, provided it be
before the order of confirmation of the sale. After such order of
confirmation, no redemption can be effected any longer.
XIV.F SUICO RATTAN V. COURT OF APPEALS, G.R. NO. 138145,
15 JUNE 2006- SAURA
Principle:
Given the fact that the proceeds of the auction sale were not sufficient
to answer the entire obligation of petitioners to respondent bank, the
latter has the right to recover the balance due it after applying the
proceeds of the sale. We agree with the CA that where the mortgage
creditor chooses the remedy of foreclosure and the foreclosure sale
are insufficient to cover the debt, the mortgagee is entitled to claim
the deficiency from the debtor.
FACTS:
Suico Rattan &Buri Interiors, Inc. (SRBII) is a domestic corporation
engaged in the business of export of rattan and buri products.
Spouses Esmeraldo and Elizabeth Suico (Suico spouses) are officers
of SRBII. On the other hand, Metropolitan Bank and Trust Co., Inc.
(Metrobank) is a commercial banking corporation duly organized
and existing under the laws of the Philippines.
In the course of its business, SRBII applied for a credit line with
Metrobank. On September 5, 1991, SRBII and Metrobank, Mandaue
branch, entered into a Credit Line Agreement (Agreement) wherein
the latter granted the former a discounting line amounting to
P7,000,000.00 and an export bills purchase or draft against
payment line (EBP/DP line) P10,000,000.00 for a maximum
aggregate principal amount of P17,000,000.00.4 As provided for
under the Agreement, drawings on the credit line are secured by a
Continuing Surety Agreement for the sum of P17,500,000.00
executed by the Suico spouses,5 a Real Estate Mortgage executed on
September 5, 1991 by SRBII and the Suico spouses over properties
located at Brgy. Tabok, Mandaue City, Cebu and covered by Transfer
Certificate of Title (TCT) Nos. 21663 and 21665, and Fire Insurance
policies over the properties duly endorsed in favor of Metrobank.
The Agreement expressly provides that the EBP/DP line is "clean". 6
Previous to the execution of the Agreement, the Suico spouses had
already incurred loan obligations from Metrobank which are
secured by separate Real Estate Mortgages executed on May 8,
1986,7 March 23, 19878 and August 24, 19879 over the same
properties which are the subject of the Real Estate Mortgage
It ’s not a PROVREM 2015  36

executed on September 5, 1991. Between June 13, 1991 and July 11,
1991, SRBII also incurred obligations with Metrobank by entering
into twelve negotiations for the purchase of export bills by the
former from the latter. These obligations are evidenced by drafts
drawn by SRBII in favor of Metrobank for a sum amounting to
US$441,279.25 which has a peso equivalent of P12,218,866.23. 10 As
a consequence of these negotiations, Metrobank issued various
checks in favor of petitioners totaling P12,194,443.23, 11 the last one
of which was dated July 24, 1991.12
Subsequently, SRBII and the Suico spouses were unable to pay their
obligations prompting Metrobank to extra-judicially foreclose the
four mortgages constituted over the subject properties. Metrobank,
being the lone and highest bidder, acquired the said properties
during the auction sale. A Certificate of Sale dated November 18,
1992 was then issued in its favor. 13
On November 5, 1992, Metrobank filed an action for the recovery of
a sum of money arising from the obligations of SRBII and the Suico
spouses on their export bills purchases incurred between June and
July, 1991.14 SRBII and the Suico spouses filed their Answer
contending that their indebtedness are secured by a real estate
mortgage and that the value of the mortgaged properties is more
than enough to answer for all their obligations to Metrobank.
While the CA affirmed the trial court’s ruling that under the
provisions of the real estate mortgage contracts executed by herein
petitioners, the clear intent of the contracting parties is that the
mortgages shall not be limited to the amount secured under the
said contracts but shall extend to other obligations that they may
obtain from Metrobank, including renewals or extensions thereof,
the CA ruled that since the proceeds from the foreclosure sale of the
mortgaged properties amounted only to P10,383,141.63, the same
is not sufficient to answer for the entire obligation of petitioners to
Metrobank and that the latter may still recover the deficiency of
P16,585,286.27 representing the value of the export bills purchased
by herein petitioners.
ISSUE:
Whether or not the mortgage creditor is entitled to claim the
deficiency from the debtor if the former chooses the remedy of
foreclosure and the sale are insufficient to cover the debt.
RULING:
YES.
The creditor is not barred from recovering the deficiency even if it
bought the mortgaged property at the extrajudicial foreclosure sale
at a lower price than its market value notwithstanding the fact that
said value is more than or equal to the total amount of the debtor’s
obligation.
Hence, it is wrong for petitioners to conclude that when
respondent bank supposedly bought the foreclosed properties
at a very low price, the latter effectively prevented the former
from satisfying their whole obligation. Petitioners still had the
option of either redeeming the properties and, thereafter, selling the
same for a price which corresponds to what they claim as the
EXPROPRIATION ONWARDS
properties’ actual market value or by simply selling their right to
redeem for a price which is equivalent to the difference between the
supposed market value of the said properties and the price
obtained during the foreclosure sale. In either case, petitioners will
be able to recoup the loss they claim to have suffered by reason of
the inadequate price obtained at the auction sale and, thus, enable
them to settle their obligation with respondent bank. Moreover,
petitioners are not justified in concluding that they should be
considered as having paid their obligations in full since respondent
bank was the one who acquired the mortgaged properties and that
the price it paid was very inadequate. The fact that it is respondent
bank, as the mortgagee, which eventually acquired the mortgaged
properties and that the bid price was low is not a valid reason for
petitioners to refuse to pay the remaining balance of their
obligation. Settled is the rule that a mortgage is simply a
security and not a satisfaction of indebtedness.
Given the fact that the proceeds of the auction sale were not
sufficient to answer the entire obligation of petitioners to
respondent bank, the latter has the right to recover the balance due
it after applying the proceeds of the sale. We agree with the CA that
where the mortgage creditor chooses the remedy of
foreclosure and the foreclosure sale are insufficient to cover
the debt, the mortgagee is entitled to claim the deficiency from
the debtor.
Short Digest
FACTS: SRBII applied for a credit line with Metrobank.
Subsequently, SRBII and the Suico spouses were unable to pay their
obligations prompting Metrobank to extra-judicially foreclose the
four mortgages constituted over the subject properties. Metrobank,
being the lone and highest bidder, acquired the said properties
during the auction sale.The proceeds from the foreclosure sale of
the mortgaged properties amounted only to P10,383,141.63, the
same is not sufficient to answer for the entire obligation of
petitioners to Metrobanksince there is a deficiency of
P16,585,286.27 representing the value of the export bills purchased
by herein petitioners.
ISSUE: Whether or not the mortgage creditor is entitled to claim the
deficiency from the debtor if the former chooses the remedy of
foreclosure and the sale are insufficient to cover the debt.
RULING: YES.Given the fact that the proceeds of the auction sale
were not sufficient to answer the entire obligation of petitioners to
respondent bank, the latter has the right to recover the balance due
it after applying the proceeds of the sale. We agree with the CA that
where the mortgage creditor chooses the remedy of foreclosure and
the foreclosure sale are insufficient to cover the debt, the mortgagee
is entitled to claim the deficiency from the debtor.
XVI.A • ARAMBULO V. GUNGAB, G.R. NO. 156581, 30
SEPTEMBER 2005- SILVA
Principe: pls refer to the table under “Short Digest”
Long Digest:
Facts:
It ’s not a PROVREM 2015  37

Respondent Emerenciana R. Gungab is the registered owner
of the contested parcel of land with improvements located in Quezon
City. Petitioners are her sister Victoria R. Arambulo and nephew Miguel
R. Arambulo III. In separate letters, respondents’ counsel made a
formal demand to petitioners to vacate the subject property.
Petitioners refused. Respondent sought the assistance of the barangay
authorities. However, no amicable settlement was reached.
Later, respondent filed separate ejectment complaints
against the petitioners before the MeTC alleging: (1) that she owns the
subject property; (2) that she tolerated petitioner’s occupancy of
certain portions of the subject property without rent; and (3) that
despite her demands, they refused to vacate the subject
property.Petitioners denied respondents claim of sole ownership of the
subject property, asserting that petitioner Victoria Arambulo is a co-
owner, that Victoria continuously used and occupied this portion for
the last 20 yearsand that their use and possession of these portions of
the subject property had been with the knowledge, consent and
tolerance of all the other co-owners.
MeTC dismissed the ejectment cases for lack of cause of
action, that summary procedure was not the proper procedure to
resolve the cases.
RTC upheld the MeTCs judgment.
Court of Appealsreversed RTC’s decision and orderedthe
petitioners to vacate the portion of the subject property under their
occupancy or possession, and to surrender the same to the
respondent. It held that respondent had a preferred right to possess
the property because she had a genuine TCT. It rejected for being
unsubstantiated, petitioners claim that Victoria was a co-owner of the
subject property.
Issue: WON respondents can eject the petitioners
Ruling:
YES.
In forcible entry, one is deprived of physical possession of
land or building by means of force, intimidation, threat, strategy, or
stealth. In unlawful detainer, one unlawfully withholds possession
thereof after the expiration or termination of his right to hold
possession under any contract, express or implied. In forcible entry, the
possession is illegal from the beginning and the basic inquiry centers on
who has the prior possession de facto. In unlawful detainer, the
possession was originally lawful but became unlawful by the expiration
or termination of the right to possess, hence the issue of rightful
possession is decisive for, in such action, the defendant is in actual
possession and the plaintiffs cause of action is the termination of the
defendants right to continue in possession. What determines the cause
of action is the nature of defendants entry into the land. If the entry is
illegal, then the action which may be filed against the intruder within
one year therefrom is forcible entry. If, on the other hand, the entry is
legal but the possession thereafter became illegal, the case is one of
unlawful detainer which must be filed within one year from the date of
the last demand.
Here, respondents’ cause of action was not deprivation of
possession of the subject property by force, intimidation, threat,
strategy or stealth. Rather, these were for unlawful detainer since
respondent alleged that (1) she owns the subject property; (2) she
allowed petitioners to occupy it by tolerance; (3) she withdrew her
consent and demanded that petitioners vacate it, but they refused. Her
complaints were also filed within one year from the date of her last
demand.
EXPROPRIATION ONWARDS
Persons who occupy the land of another at the latter’s
tolerance or permission, without any contract between them is bound
by an implied promise that they will vacate the same upon demand,
failing which a summary action for ejectment is the proper remedy
against them. Notably, respondent only allowed petitioners to use and
occupy certain portions of the subject property. They admitted their
use and possession of these portions of the subject property had been
with the knowledge, consent and tolerance of all the other co-owners.
Consequently, after respondent obtained title to the subject property
and withdrew her tolerance later on, petitioners refusal to vacate it
rendered their possession thereof unlawful.
The court did not sustain petitioners contention that since
they had possession of the subject property, they are entitled to
remain there. Again, they confuse unlawful detainer with forcible entry.
Prior physical possession by the plaintiff is not necessary in an unlawful
detainer case. It is enough that she has a better right of possession.
Prior physical possession of a property by a party is
indispensable only in forcible entry cases. In unlawful detainer cases,
the defendant is necessarily in prior lawful possession of the property,
but his possession eventually becomes unlawful upon termination or
expiration of his right to possess. Thus, petitioners prior physical
possession of the property does not automatically entitle them to
continue in said possession and does not give them a better right to the
property.
Short Digest:
Facts:
Herein Respondent filed separate ejectment complaints
against the petitioners (respondent’s sister and nephew) before the
MeTC allegingthat she owns said property, tolerated petitioners’
occupancy of certain portions of the subject property without rent; and
that despite her demands, they refused to vacate the subject property.
Petitioners denied respondents claim of sole ownership of the subject
property, asserting that petitioner is a co-owner, and has continuously
used and occupied this portion for the last 20 years and that their use
and possession of these portions of the subject property had been with
the knowledge, consent and tolerance of all the other co-owners.
MeTC dismissed the ejectment cases for lack of cause of
action, that summary procedure was not the proper procedure to
resolve the cases.
RTC upheld the MeTCs judgment.
Court of Appeals reversed RTC’s decision and ordered the
petitioners to vacate the portion of the subject property under their
occupancy or possession, and to surrender the same to the
respondent. It held that respondent had a preferred right to possess
the property because she had a genuine TCT. It rejected for being
unsubstantiated, petitioners claim that Victoria was a co-owner of the
subject property.
Issue: WON respondents can eject the petitioners
Ruling:
Yes.Pertinent to the instant case are the summary remedies of forcible
entry and unlawful detainer under Section 1, Rule 70 of the Rules of
Court. The 2 are differentiated as follows:
FORCIBLE ENTRY UNLAWFUL DETAINER
-one is deprived of physical -One unlawfully withholds
It ’s not a PROVREM 2015  38

possession of land or building by possession thereof after the
means of force, intimidation, expiration or termination of his
threat, strategy, or stealth right to hold possession under
any contract, express or implied
-the possession is illegal from the -the possession was originally
beginning and the basic inquiry lawful but became unlawful by
centers on who has the prior the expiration or termination of
possession de facto the right to possess, hence the
issue of rightful possession is
decisive for, in such action, the
defendant is in actual possession
and the plaintiffs cause of action
is the termination of the
defendants right to continue in
possession.
-filed within 1 yr from illegal entry -filed within 1 yr from the last
demand to vacate
UNLAWFUL DETAINER is applicable here.
In the case, respondents’ cause of action was not deprivation
of possession of the subject property by force, intimidation, threat,
strategy or stealth. Rather, these were for unlawful detainer since
respondent alleged that (1) she owns the subject property; (2) she
allowed petitioners to occupy it by tolerance; (3) she withdrew her
consent and demanded that petitioners vacate it, but they refused. Her
complaints were also filed within one year from the date of her last
demand.
Persons who occupy the land of another at the latter’s
tolerance or permission, without any contract between them is bound
by an implied promise that they will vacate the same upon demand,
failing which a summary action for ejectment is the proper remedy
against them. Notably, respondent only allowed petitioners to use and
occupy certain portions of the subject property. They admitted their
use and possession of these portions of the subject property had been
with the knowledge, consent and tolerance of all the other co-owners.
Consequently, after respondent obtained title to the subject property
and withdrew her tolerance later on, petitioners refusal to vacate it
rendered their possession thereof unlawful.
• Spouses Barnachea v. Court of Appeals, G.R. No. 150025, 23 July
2008- EDOMBINGO
“A pending civil action involving ownership of the same property
does not justify the suspension of the ejectment proceedings.”
Facts:
A complaint for ejectment was filed by the respondents
against petitioner before the MTC on October 20, 1998 over a parcel
of land titled in respondent’s name Avelino Ignacio which lots are
adjacent to the property that the petitioners own and occupy, which
were originally part of a piece of land owned by a certain Luis
Santos and subsequently inherited by his daughter Purificacion
Santos Imperial. The land was subdivided and transferred to tenant-
farmers Santiago Isidro and Procopio de Guzman. The property that
the petitioners own and occupy was derived from the land
transferred to Santiago Isidro. Respondent Ignacios properties were
EXPROPRIATION ONWARDS
derived, on the other hand, from the land originally transferred to
Procopio de Guzman.
The complaint was dismissed but was revived. Petitioners
received summons and, instead of filing a new Answer, file a Motion
for Extension of Time to File Answer which the MTC denied. The
petitioners filed a motion for reconsideration. Respondents filed a
Motion for the Issuance of a Writ of Execution.
To stop the implementation of the writ of execution, the
petitioners filed a Notice of Appeal while respondents filed a
Manifestation and Motion praying that the petitioners Motion for
Reconsideration be denied for being moot and academic.
MTC issued an order declaring the petitioners Motion for
Reconsideration abandoned because of the Notice of Appeal they
previously filed. Thereafter, the MTC forwarded the entire record of
Civil Case to the Regional Trial Court, Branch 20 Malolos, Bulacan.
Petitioners submitted their Appeal Memorandum to the RTC Branch
20 which affirmed the MTC decision.
On October 5, 2000, the petitioner Julita's sister, Leticia,
representing herself to be the sole owner of EP No. A-050545 (TCT
No. T-188-EP), filed a Petition for Quieting of Title with the Regional
Trial Court, Branch 19 (RTC Branch 19), Malolos, Bulacan. On
October 9, 2000, prior to their receipt of the RTC Branch 20s
September 20, 2000 decision, the petitioners filed an Urgent Motion
for the Suspension of Proceedings which was denied by the court.
The petitioners brought the denials to the CA via a petition
for certiorari under Rule 65 of the Rules of Court on the issue of
whether the pendency of an action involving the issue of ownership
is sufficient basis for the suspension of an ejectment proceeding
between the same parties and relating to the same subject matter.
CA denied the petition.
Issue:
Whether or not the ejectment case filed by the
respondents against petitioners with the MTC of Pulilan is for
unlawful detainer or for forcible entry;
Held:
Petition was dismissed.
It ’s not a PROVREM 2015  39

The actions for forcible entry and unlawful detainer are
similar because they are both summary actions where the issue is
purely physical possession. Dissimilarities are clear, distinct, and
well established in law.
In forcible entry, (1) the plaintiff must prove that he was in
prior physical possession of the property until he was deprived of
possession by the defendant; (2) the defendant secures possession
of the disputed property from the plaintiff by means of force,
intimidation, threat, strategy or stealth; hence, his possession is
unlawful from the beginning; (3) the law does not require a
previous demand by the plaintiff for the defendant to vacate the
premises; and (4) the action can be brought only within one-year
from the date the defendant actually and illegally entered the
property.
Unlawful detainer is attended by the following features:
(1) prior possession of the property by the plaintiff is not
necessary; (2) possession of the property by the defendant at the
start is legal but the possession becomes illegal by reason of the
termination of his right to possession based on his or her contract
or other arrangement with the plaintiff; (3) the plaintiff is required
by law to make a demand as a jurisdictional requirement; and (4)
the one-year period to bring the complaint is counted from the date
of the plaintiffs last demand on the defendant.
The case involves forcible entry rather than unlawful
detainer. There is a showing that the respondents allowed them to
occupy the disputed property by tolerance; that the respondents
eventually made a demand that the petitioners vacate the; and that
the petitioners refused to vacate the property in light of the
defenses they presented.
There is complete absence of any allegation of force, intimidation,
strategy or stealth in the complaint with respect to the petitioner’s
possession of the respondent’s property. While admittedly no
express contract existed between the parties regarding the
petitioner’s possession, the absence does not signify an illegality in
the entry nor an entry by force, intimidation, strategy or stealth that
would characterize the entry as forcible.
SHORT DIGEST:
Facts:
A complaint for ejectment was filed by the respondents
against petitioner. The complaint was dismissed but was revived.
MTC forwarded the entire record of Civil Case to the Regional Trial
Court, which affirmed the MTC decision. Petitioners brought the
denials to the CA via a petition for certiorari under Rule 65 of the
Rules of Court on the issue of whether the pendency of an action
involving the issue of ownership is sufficient basis for the
suspension of an ejectment proceeding between the same parties
and relating to the same subject matter. CA denied the petition.
EXPROPRIATION ONWARDS
Issue:
Whether or not the ejectment case filed by the
respondents against petitioners with the MTC of Pulilan is for
unlawful detainer or for forcible entry;
Held:
Petition was dismissed.
The actions for forcible entry and unlawful detainer are
similar because they are both summary actions where the issue is
purely physical possession. Dissimilarities are clear, distinct, and
well established in law.
In forcible entry, (1) the plaintiff must prove that he was in
prior physical possession of the property until he was deprived of
possession by the defendant; (2) the defendant secures possession
of the disputed property from the plaintiff by means of force,
intimidation, threat, strategy or stealth; hence, his possession is
unlawful from the beginning; (3) the law does not require a
previous demand by the plaintiff for the defendant to vacate the
premises; and (4) the action can be brought only within one-year
from the date the defendant actually and illegally entered the
property.
Unlawful detainer is attended by the following features:
(1) prior possession of the property by the plaintiff is not
necessary; (2) possession of the property by the defendant at the
start is legal but the possession becomes illegal by reason of the
termination of his right to possession based on his or her contract
or other arrangement with the plaintiff; (3) the plaintiff is required
by law to make a demand as a jurisdictional requirement; and (4)
the one-year period to bring the complaint is counted from the date
of the plaintiffs last demand on the defendant.
The case involves forcible entry rather than unlawful
detainer. There is a showing that the respondents allowed them to
occupy the disputed property by tolerance; that the respondents
eventually made a demand that the petitioners vacate the; and that
the petitioners refused to vacate the property in light of the
defenses they presented.
There is complete absence of any allegation of force, intimidation,
strategy or stealth in the complaint with respect to the petitioner’s
possession of the respondent’s property. While admittedly no
express contract existed between the parties regarding the
petitioner’s possession, the absence does not signify an illegality in
the entry nor an entry by force, intimidation, strategy or stealth that
would characterize the entry as forcible.
• FERNANDO V. SPOUSES LIM, G.R. NO. 176282, 22 AUGUST
2008- CLAROS
FACTS:
X Inc [Lim Kieh Tong and Sons, Inc. (LKTSI)]owns property leased
by Y [Victoria Fernando]. Y is leasing the property on a month-to-
month basis. X Inc executed a deed of assignment over the property
to Spouses Z (Spouses Lim).
It ’s not a PROVREM 2015  40

Y sought to annul the deed of assignment to Z in a complaint filed
before the RTC. X Inc then filed an ejectment suit against Y in the
MeTC.
Y invokes PD 1517 which provides that legitimate tenants in Urban
Land Reform Areas who have resided on the land for ten years or
more who have built their homes on the land and residents who
have legally occupied the lands by contract, continuously for the last
ten years shall not be dispossessed of the land and shall be allowed
the right of first refusal to purchase. Y claims that Spouses Z did not
acquire title to the property because PD 1517 prohibited
dispossession of tenants or the transfer of property without first
offering it for sale to tenants like her. Y argued before the MeTC that
the court had no jurisdiction over the ejectment suit because the
issues of possession and title could not be adjudicated separately
and an accion reivindicatoria should have been brought before the
RTC, not the MeTC.
The lower courts, MeTC, RTC, and CA ruled against petitioner
ISSUE: WON the MeTC had jurisdiction over the ejectment suit
Petitioner, however, has raised an issue of title, to question the
jurisdiction of the MeTC. She claims that respondents have no right
to institute the action for unlawful detainer because they did not
validly acquire the property in view of the prohibition under P.D.
No. 1517 against her dispossession or the transfer of the property
without first offering it for sale to her. She insists that such issue of
title prevents the MeTC from acquiring jurisdiction over the case; it
should have deferred to the jurisdiction of the RTC where there is a
pending case for annulment of the title of respondents.
ISSUE: Whether the trial court a quo has jurisdiction over the
complaint when the defendant raises a defense in her answer that
the issue of possession cannot be resolved without resolving the
issue of title.
HELD: YES
The allegations in a complaint[50] and the character of the relief
sought[51] determine the nature of the action and the court with
jurisdiction over it. The defenses set up in an answer are not
determinative
A complaint sufficiently alleges a cause of action for unlawful
detainer if it recites that: a) initially, possession of the property by
the defendant was by contract with or by tolerance of the plaintiff;
b) eventually, such possession became illegal upon notice by
plaintiff to defendant of the termination of the latter's right of
possession; c) thereafter, defendant remained in possession of the
property and deprived plaintiff of the enjoyment thereof; and d)
within one year from the last demand on defendant to vacate the
property, plaintiff instituted the complaint for ejectment.
As a rule, the nature of a complaint for unlawful detainer
and the jurisdiction of a court over it are not altered by the mere
claim of the defendant of title to the property subject matter of the
ejectment case.[56] Even a pending action involving title to the
property which the defendant may have instituted in another court
will not abate or suspend the summary proceedings for unlawful
EXPROPRIATION ONWARDS
detainer.[57] The underlying reason for this rule is to prevent the
defendant from trifling with the summary nature of the case by the
simple expedient of asserting ownership over the disputed
property.
The consistent case law is that ejectment suits deal only with the
issue of physical possession. The pendency of an action for the
annulment of the sale and the reconveyance of the disputed
property may not be successfully pleaded in abatement of an action
for ejectment.
XVI.B
• SPOUSES SAMONTE V. CENTURY SAVINGS BANK, G.R. NO.
176413, NOVEMBER 25, 2009 –CULTURA
LONG DIGEST
PRINCIPLE:
As a general rule, an ejectment suit cannot be abated or suspended
by the mere filing of another action raising ownership of the
property as an issue.
FACTS:
Petitioners Danilo T. Samonte and Rosalinda N. Samonte obtained a
loan amounting to P1,500,000.00 from respondent Century Savings
Bank secured by a Real Estate Mortgage over a property located at
7142 M. Ocampo Street, Pio del Pilar, Makati City. For petitioners
failure to pay the obligation, the mortgage was extrajudicially
foreclosed on December 9, 1999 and the property was sold at public
auction and was eventually awarded to respondent as the highest
bidder.
Having failed to redeem the property, petitioners entered into a
Contract of Lease with respondent, wherein the former agreed to
pay the latter a monthly rental of P10,000.00 for and in
consideration of their continuing occupation of the subject property
from January 16, 2001-January 16, 2002. Petitioners further
acknowledged respondents valid and legal title to enter into the
contract as absolute owner of the property in question.
On March 28, 2001, respondent consolidated its ownership over the
property, which led to the cancellation of petitioners title and the
issuance of a new one in respondents name.
Of the agreed monthly rentals, petitioners only paid a total amount
of P40,000.00. On April 4, 2002, respondent sent a letter to
petitioners demanding that the latter pay their unpaid rentals and
vacate the leased premises. Petitioners, however, refused to heed
the demand. Hence, the complaint for ejectment docketed as Civil
Case No. 79002.
In their Answer, petitioners admitted having entered into the
contract of lease but claimed that it was void, since their consent
was vitiated by mistake and they were made to believe that it was a
requirement for the loan-restructuring agreement with the bank. To
justify their failure to pay the rents and to vacate the premises,
petitioners insisted on the nullity of the foreclosure proceedings.
It ’s not a PROVREM 2015  41

Petitioners had, in fact, commenced an action for the nullification of
the foreclosure proceedings docketed as Civil Case No. 01-1564.
MeTC rendered a decision in favor of respondent.
RTC affirmed the MeTC decision.
CA rendered the assailed decision affirming the RTC decision.
ISSUE:
Whether or not the instant ejectment case should be suspended
pending the resolution of the action for nullity of foreclosure.
RULING: NO
As a general rule, an ejectment suit cannot be abated or suspended
by the mere filing of another action raising ownership of the
property as an issue.
Only in rare instances is suspension allowed to await the outcome of
a pending civil action. In Vda. de Legaspi v. Avendao, and Amagan v.
Marayag, we ordered the suspension of the ejectment proceedings
on considerations of equity. We explained that the ejectment of
petitioners therein would mean a demolition of their house and
would create confusion, disturbance, inconvenience, and expense.
Needlessly, the court would be wasting much time and effort by
proceeding to a stage wherein the outcome would at best be
temporary but the result of enforcement would be permanent,
unjust and probably irreparable.
The instant case hardly falls within the exception cited in Vda. de
Legaspi and Amagan as the resolution of the ejectment suit will not
result in the demolition of the leased premises. Verily, petitioners
failed to show strong reasons of equity to sustain the suspension or
dismissal of the ejectment case. Faced with the same scenario on
which the general rule is founded, and finding no reason to deviate
therefrom, the Court adheres to settled jurisprudence that suits
involving ownership may not be successfully pleaded in abatement
of an action for ejectment. This rule is not without good reason. If
the rule were otherwise, ejectment cases could easily be frustrated
through the simple expedient of filing an action contesting the
ownership over the property subject of the controversy. This would
render nugatory the underlying philosophy of the summary remedy
of ejectment which is to prevent criminal disorder and breaches of
the peace and to discourage those who, believing themselves
entitled to the possession of the property, resort to force rather than
to some appropriate action in court to assert their claims.
We would like to stress that unlawful detainer and forcible entry
suits under Rule 70 of the Rules of Court are designed to summarily
restore physical possession of a piece of land or building to one who
has been illegally or forcibly deprived thereof, without prejudice to
the settlement of the parties opposing claims of juridical possession
in appropriate proceedings. These actions are intended to avoid
disruption of public order by those who would take the law in their
hands purportedly to enforce their claimed right of possession. In
these cases, the issue is pure physical or de facto possession, and
pronouncements made on questions of ownership are provisional
EXPROPRIATION ONWARDS
in nature. The provisional determination of ownership in the
ejectment case cannot be clothed with finality.
SHORT DIGEST
PRINCIPLE:
As a general rule, an ejectment suit cannot be abated or suspended
by the mere filing of another action raising ownership of the
property as an issue.
FACTS:
Petitioners Danilo T. Samonte and Rosalinda N. Samonte obtained a
loan amounting to P1,500,000.00 from respondent Century Savings
Bank secured by a Real Estate Mortgage over a property located at
7142 M. Ocampo Street, Pio del Pilar, Makati City. For petitioners
failure to pay the obligation, the mortgage was extrajudicially
foreclosed on December 9, 1999 and the property was sold at public
auction and was eventually awarded to respondent as the highest
bidder.
Having failed to redeem the property, petitioners entered into a
Contract of Lease with respondent, wherein the former agreed to
pay the latter a monthly rental of P10,000.00 for and in
consideration of their continuing occupation of the subject property
from January 16, 2001-January 16, 2002. Petitioners further
acknowledged respondents valid and legal title to enter into the
contract as absolute owner of the property in question.
Of the agreed monthly rentals, petitioners only paid a total amount
of P40,000.00.
To justify their failure to pay the rents and to vacate the premises,
petitioners insisted on the nullity of the foreclosure proceedings.
Petitioners had, in fact, commenced an action for the nullification of
the foreclosure proceedings docketed as Civil Case No. 01-1564.
MeTC rendered a decision in favor of respondent.
RTC affirmed the MeTC decision.
CA rendered the assailed decision affirming the RTC decision.
ISSUE:
Whether or not the instant ejectment case should be suspended
pending the resolution of the action for nullity of foreclosure.
RULING: NO
As a general rule, an ejectment suit cannot be abated or suspended
by the mere filing of another action raising ownership of the
property as an issue.
Only in rare instances is suspension allowed to await the outcome of
a pending civil action.
It ’s not a PROVREM 2015  42

The instant case hardly falls within the exception as the resolution
of the ejectment suit will not result in the demolition of the leased
premises. Verily, petitioners failed to show strong reasons of equity
to sustain the suspension or dismissal of the ejectment case. The
Court adheres to settled jurisprudence that suits involving
ownership may not be successfully pleaded in abatement of an
action for ejectment.
We would like to stress that unlawful detainer and forcible entry
suits under Rule 70 of the Rules of Court are designed to summarily
restore physical possession of a piece of land or building to one who
has been illegally or forcibly deprived thereof, without prejudice to
the settlement of the parties opposing claims of juridical possession
in appropriate proceedings. These actions are intended to avoid
disruption of public order by those who would take the law in their
hands purportedly to enforce their claimed right of possession. In
these cases, the issue is pure physical or de facto possession, and
pronouncements made on questions of ownership are provisional
in nature. The provisional determination of ownership in the
ejectment case cannot be clothed with finality.
• SPOUSES REFUGIA V. COURT OF APPEALS, G.R. NO. 118284, 5
JULY 1996 AMORES
PRINCIPLE:
The judgment rendered in an action for forcible entry or unlawful
detainer shall be effective with respect to the possession only and in
no wise bind the title or affect the ownership of the land or building.
Long digest
FACTS:
The records en bloc of the aforesaid cases show that private
respondent-spouses Arturo Refugia and Aurora Timbang-Refugia
are the registered owners of a parcel of land and a duplex
apartment building located at No. 16 Meriales Street, Marulas,
Valenzuela, as evidenced by TCT No. 218979.The title was issued
pursuant to a Deed of Absolute Sale executed on September 11,
1975 in favor of respondent Arturo Refugia, but the purchase price
of P20,000.00 was reportedly advanced by his father, herein
petitioner MamertoRefugia. Thereafter, respondent Arturo Refugia
obtained a housing loan from the SSS, using the land as collateral to
secure payment thereof. In 1976, after the construction of the
duplex apartment building, herein petitioners immediately began to
occupy one door while respondents stayed in the other unit.
However, things did not turn out well between between petitioner
FelizaRefugia and her daughter-in-law, Aurora, such that in
February of 1993, petitioners were told by private respondents to
vacate the unit that they were occupying because, according to
private respondents, the family of one of their children who is
married needed a place of their own. Petitioners refused to leave,
claiming that they own the unit they are occupying by reason of the
fact that it was actually MamertoRefugia who bought the lot on
which the duplex apartment stood. Because of this, the matter was
brought before the barangay court of conciliation. No amicable
settlement having been reached and so private respondents
EXPROPRIATION ONWARDS
instituted an action for ejectment on October 20, 1993 in the
Metropolitan Trial Court of Valenzuela, Branch 81.
MTC decision (3/4/1994) dismissed the complaint for
ejectmentbased on its finding that herein petitioners are the lawful
occupants of the premises.
RTC decisionaffirmed with modification the judgment of the lower
court by declaring herein petitioners and private respondents co-
owners of the lot and the two-door apartment.
Petition for review on CA(12/9/1994) reversed and set aside the
decisions of the Metropolitan Trial Court and the Regional Trial
Court, and thereafter ordered petitioners and their privies to vacate
the subject premises and to surrender possession thereof to private
respondents.In so ruling, respondent court declared that the
Regional Trial Court, in the exercise of its appellate jurisdiction
over an ejectment case, had no authority to resolve the issue of
ownership and to declare herein petitioners as co-owners
because its power is limited only to a determination of the
issue of possession; that petitioners bare allegation of ownership
cannot prevail over the transfer certificate of title and deed of sale
in favor of private respondents; and that petitioners have been
occupying the subject premises by mere tolerance.
ISSUE:
WONthe Metropolitan Trial Court, as well as the Regional Trial
Court in the exercise of its appellate jurisdiction, have jurisdiction to
resolve the issue of ownership in an action for unlawful detainer
where the issue of possession cannot be resolved without deciding
the question of ownership.
HELD:
No.
The Regional Trial Court overstepped its bounds in ruling that
petitioners and private respondents are co-owners of the property.
Where the question of who has prior possession hinges on the
question of who the real owner of the disputed portion is, the
inferior court may resolve the issue of ownership and make a
declaration as to who among the contending parties is the real
owner. In the same vein, where the resolution of the issue of
possession hinges on a determination of the validity and
interpretation of the document of title or any other contract on
which the claim of possession is premised, the inferior court may
likewise pass upon these issues. This is because, and it must be so
understood, that any such pronouncement made affecting
ownership of the disputed portion is to be regarded merely
as provisional, hence, does not bar nor prejudice an action between
the same parties involving title to the land. Moreover, Section 7,
Rule 70 of the Rules of Court expressly provides that the judgment
rendered in an action for forcible entry or unlawful detainer shall
be effective with respect to the possession only and in no wise bind
the title or affect the ownership of the land or building.
While it may be argued that petitioners were able to prove prior
possession, such, however, is not the issue involved in this action for
It ’s not a PROVREM 2015  43

unlawful detainer. An action for unlawful detainer is different from
a forcible entry case in that the former involves an act of
unlawfully withholding the possession of the land or building
against or from a landlord, vendor or vendee or other person
after the expiration or termination of the detainers right to
hold possession by virtue of a contract, express or implied, and
neither is prior physical possession of the property by the
plaintiff necessary; whereas in the latter, the main issue is one of
priority of possession.
In the case at bar, petitioners failed to show that they were legally
entitled to continue occupying the unit in question. We agree with
the position of respondent Court of Appeals that petitioners would
in effect be occupying the premises by mere tolerance. A person
who occupies the land of another at the latters tolerance or
permission, without any contract between them, is necessarily
bound by an implied promise that he will vacate the same upon
demand, failing which a summary action for ejectment is the proper
remedy against him. The status of petitioners is analogous to that of
a lessee or tenant whose term of lease has expired but whose
occupancy continued by tolerance of the owner.
It has further been held that such tolerance must be present right
from the start of possession sought to be recovered, to categorize a
cause of action as one of unlawful detainer. Here, it cannot be
gainsaid that petitioners possession was by mere tolerance of
private respondents from the very beginning.
Original Rules on forcible entry and unlawful detainer and the
Amended rules
Under Republic Act No. 296, or the Judiciary Act of 1948as
amended, the jurisdiction of the then municipal and city courts over
actions for forcible entry and unlawful detainer was defined as
follows:
Sec. 88. Original jurisdiction in civil cases. x xx In forcible entry and
detainer proceedings, the municipal judge or judge of the city court
shall have original jurisdiction, but the said municipal judge or city
judge may receive evidence upon the question of title therein,
whatever may be the value of the property, solely for the purpose of
determining the character and extent of possession and damages for
detention. In forcible entry proceedings, he may grant preliminary
injunctions, in accordance with the provisions of the Rules of Court, to
prevent the defendant from committing further acts of dispossession
against the plaintiff. (As amended by Republic Acts Nos. 2613 and
3828).
The law was subsequently amended by Republic Act No.
5967 which vested in the city courts special jurisdiction to resolve
the issue of ownership in conjunction with the issue of possession
whenever the question of ownership is brought in issue by the
pleadings, thus:
Sec. 3. Besides the civil cases over which the City Courts have
jurisdiction under Section eighty-eight of Republic Act Numbered
Two hundred ninety-six, as amended, it shall likewise have concurrent
jurisdiction with the Court of First Instance over the following:
EXPROPRIATION ONWARDS
(c) In ejection cases where the question of ownership is brought in
issue in the pleadings. The issue of ownership shall therein be resolved
in conjunction with the issue of possession.
August 14, 1981, Batas PambansaBlg. 129, or the Judiciary
Reorganization Act of 1980, was approved and it redefined the
jurisdiction of the Court of Appeals, the Regional Trial Courts and
the inferior courts. Specifically, the new law modified the power of
inferior courts to resolve the issue of ownership in forcible entry
and unlawful detainer cases, subject, however, to the qualification
that a resolution thereof shall only be for the purpose of
determining the issue of possession:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts in Civil Cases.Metropolitan
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise:
xxx xxx xxx
(2) Exclusive original jurisdiction over cases of forcible entry and
unlawful detainer: Provided, That when in such cases, the defendant
raises the question of ownership in his pleadings and the question of
possession cannot be resolved without deciding the issue of
ownership, the issue of ownership shall be resolved only to determine
the issue of possession.
Subsequently, this Court promulgated its Interim Rules and
Guidelines in the implementation of Batas PambansaBlg. 129,
Section 10 of which provides:
10. Jurisdiction in ejectment cases. Metropolitan trial courts,
municipal trial courts, and municipal circuit trial courts, without
distinction, may try cases of forcible entry and detainer even if the
question of ownership is raised in the pleadings and the question of
possession could not be resolved without deciding the issue of
ownership, but the question of ownership shall be resolved only to
determine the issue of possession.
Section 33(2) of Batas PambansaBlg. 129, inferior courts have
jurisdiction to resolve the question of ownership raised as an
incident in an ejectment case where a determination thereof is
necessary for a proper and complete adjudication of the issue of
possession. Certain guidelines, however, must be observed in the
implementation of this legislative prescription, viz.:
1. The primal rule is that the principal issue must be that of
possession, and that ownership is merely ancillary thereto, in
which case the issue of ownership may be resolved but only for the
purpose of determining the issue of possession. Thus, as earlier
stated, the legal provision under consideration applies only where
the inferior court believes and the preponderance of evidence
shows that a resolution of the issue of possession is dependent
upon the resolution of the question of ownership.
2. It must sufficiently appear from the allegations in the complaint
that what the plaintiff really and primarily seeks is the restoration
of possession.Consequently, where the allegations of the complaint
as well as the reliefs prayed for clearly establish a case for the
recovery of ownership, and not merely one for the recovery of
It ’s not a PROVREM 2015  44

possession de facto, or where the averments plead the claim of
material possession as a mere elemental attribute of such claim for
ownership, or where the issue of ownership is the principal
question to be resolved, the action is not one for forcible entry but
one for title to real property.
3. The inferior court cannot adjudicate on the nature of ownership
where the relationship of lessor and lessee has been sufficiently
established in the ejectment case, unless it is sufficiently established
that there has been a subsequent change in or termination of that
relationship between the parties. This is because under Section
2(b), Rule 131 of the Rules of Court, the tenant is not permitted to
deny the title of his landlord at the time of the commencement of
the relation of landlord and tenant between them.
4. The rule in forcible entry cases, but not in those for unlawful
detainer, is that a party who can prove prior possession can recover
such possession even against the owner himself. Regardless of the
actual condition of the title to the property and whatever may be
the character of his prior possession, if he has in his favor priority in
time, he has the security that entitles him to remain on the property
until he is lawfully ejected by a person having a better right through
an accionpubliciana oraccionreivindicatoria. Corollarily, if prior
possession may be ascertained in some other way, then the inferior
court cannot dwell upon or intrude into the issue of ownership.
5. Where the question of who has prior possession hinges on the
question of who the real owner of the disputed portion is, the
inferior court may resolve the issue of ownership and make a
declaration as to who among the contending parties is the real
owner. In the same vein, where the resolution of the issue of
possession hinges on a determination of the validity and
interpretation of the document of title or any other contract on
which the claim of possession is premised, the inferior court may
likewise pass upon these issues. This is because, and it must be so
understood, that any such pronouncement made affecting
ownership of the disputed portion is to be regarded merely
as provisional, hence, does not bar nor prejudice an action between
the same parties involving title to the land. Moreover, Section 7,
Rule 70 of the Rules of Court expressly provides that the judgment
rendered in an action for forcible entry or unlawful detainer shall
be effective with respect to the possession only and in no wise bind
the title or affect the ownership of the land or building.
SHORT DIGEST
FACTS:
Petitioners claim to be co-owners of the subject premises on the
basis of an alleged verbal agreement between the parties to
subdivide the property, as well as the payment made by petitioner
MamertoRefugia for the purchase of the lot in the amount of
P20,000.00. On the other hand, private respondents property rights
are supported by sufficient documents and muniments of
ownership, namely, the deed of absolute sale, transfer certificate of
title (acquired by Arturo from Mamerto), and building permit in
their names, the regularity in the issuance of which was never
controverted nor put in issue by petitioners.Respondent filed an
EXPROPRIATION ONWARDS
ejectment case to the petitioners. RTC ruled that petitioners and
respondents are co-owners.
ISSUE:
WON the Metropolitan Trial Court, as well as the Regional Trial
Court in the exercise of its appellate jurisdiction, have jurisdiction to
resolve the issue of ownership in an action for unlawful detainer
where the issue of possession cannot be resolved without deciding
the question of ownership.
HELD:
No.
The Regional Trial Court overstepped its bounds in ruling that
petitioners and private respondents are co-owners of the property,
which issue should be finally determined in the separate action for
specific performance reportedly pending between the parties. The
evidence conduces to a finding that private respondents are in
possession of the premises in the concept of and consequent to
their being owners thereof.Even on such prima facie showing,
therefore, private respondents can maintain the ejectment case
involved.
While it may be argued that petitioners were able to prove prior
possession, such, however, is not the issue involved in this action for
unlawful detainer. An action for unlawful detainer is different from
a forcible entry case in that the former involves an act of
unlawfully withholding the possession of the land or building
against or from a landlord, vendor or vendee or other person
after the expiration or termination of the detainers right to
hold possession by virtue of a contract, express or implied, and
neither is prior physical possession of the property by the
plaintiff necessary; whereas in the latter, the main issue is one of
priority of possession.
XVI.C ENCARNACION V. AMIGO, G.R. NO. 169793, 15
SEPTEMBER 2006 CABUENAS CLARISSE
PRINCIPLES:
A. The three kinds of actions for the recovery of possession of real
property are:
1. Accioninterdictal, or an ejectment proceeding which may be
either that for forcible entry (detentacion) or unlawful detainer
(desahucio), which is a summary action for recovery of physical
possession where the dispossession has not lasted for more than
one year, and should be brought in the proper inferior court;
2. Accionpubliciana or the plenary action for the recovery of the real
right of possession, which should be brought in the proper Regional
Trial Court when the dispossession has lasted for more than one
year; and
3. Accionreinvindicatoria or accion de reivindicacion, which is an
action for the recovery of ownership which must be brought in the
proper Regional Trial Court.
It ’s not a PROVREM 2015  45

B. If the case is tried on the merits by the Municipal Court without
jurisdiction over the subject matter, the RTC on appeal may no
longer dismiss the case if it has original jurisdiction thereof.
Moreover, the RTC shall no longer try the case on the merits, but
shall decide the case on the basis of the evidence presented in the
lower court, without prejudice to the admission of the amended
pleadings and additional evidence in the interest of justice.
LONG DIGEST
FACTS:
Petitioner Victoriano M. Encarnacion is the registered owner of Lot
No. 2121-B-1 and Lot No. 2121-B-2. Said two lots originally form
part of Lot No. 2121 owned by Rogelio Valiente who sold the same
to NicasioMallapitan on 1982. On 1985, Mallapitan sold the land to
VictorianoMagpantay. After the death of the latter in 1992, his
widow, Anita N. Magpantay executed an Affidavit of Waiver on 1995
waving her right over the property in favor of her son-in-law, herein
petitioner, VictorianoEncarnacion. Thereafter, the latter caused the
subdivision of the land into two lots and the issuance of titles in his
name.
Respondent Nieves Amigo allegedly entered the premises and took
possession of a portion of the property sometime in 1985 without
the permission of the then owner, VictorianoMagpantay.
Petitioner, demanded from respondent to vacate the subject
property. The demand letter was delivered by registered mail to the
respondent on February 12, 2001. Notwithstanding receipt of the
demand letter, respondent still refused to vacate the subject
property. Thereafter, on March 2, 2001, petitioner filed a
complaint for ejectment, damages with injunction and prayer for
restraining order with the Municipal Trial Court in Cities of Isabela.
Respondent alleged that he has been in actual possession and
occupation of a portion of the subject land since 1968 and that the
issuance of Free Patent and titles in the name of petitioner was
tainted with irregularities.
The Municipal Trial Court in Cities rendered judgment against
herein respondent ordering him to vacate the portion of the parcels
of land he is now occupying and surrender it to Encarnacion. On
appeal, the Regional Trial Courtdismissed the case on the ground
that the Municipal Court had no jurisdiction over the case, thusthe
Regional Trial Court acquired no appellate jurisdiction thereof.
Aggrieved, petitioner filed a petition for review under Rule 42 of the
Rules of Court before the Court of Appeals which promulgated the
assailed Decision remanding the case to the Regional Trial Court for
further proceedings. Hence, this petition.
ISSUE:
Whether or not the proper action in this case is accionpubliciana
and not unlawful detainer as determined by the allegations in the
complaint filed by petitioner.
HELD:
EXPROPRIATION ONWARDS
The Court of Appeals committed no reversible error in holding that
the proper action in this case is accionpubliciana; and in ordering
the remand of the case to the Regional Trial Court.
The three kinds of actions for the recovery of possession of real
property are:
1. Accioninterdictal, or an ejectment proceeding which may be
either that for forcible entry (detentacion) or unlawful detainer
(desahucio), which is a summary action for recovery of physical
possession where the dispossession has not lasted for more than
one year, and should be brought in the proper inferior court;
2. Accionpubliciana or the plenary action for the recovery of the real
right of possession, which should be brought in the proper Regional
Trial Court when the dispossession has lasted for more than one
year; and
3. Accionreinvindicatoria or accion de reivindicacion, which is an
action for the recovery of ownership which must be brought in the
proper Regional Trial Court.
The material element that determines the proper action to be filed
for the recovery of the possession of the property in this case is the
length of time of dispossession.
It appears that the petitioner became the owner of the property on
1995 by virtue of the waiver of rights executed by his mother-in-
law. He filed the complaint for ejectment 2001 making the filing of
the complaint for ejectment fall within the requisite one year from
last demand for complaints for unlawful detainer. It is also equally
true that petitioner became the owner of the subject lot in 1995 and
has been since that time deprived possession of a portion thereof.
From the date of the petitioner's dispossession in 1995 up to his
filing of his complaint for ejectment in 2001, almost 6 years have
elapsed. The length of time that the petitioner was dispossessed of
his property made his cause of action beyond the ambit of an
accioninterdictal and effectively made it one for accionpubliciana.
The respondent's actual entry on the land of the petitioner was in
1985 but it was only on March 2, 2001 or sixteen years after, when
petitioner filed his ejectment case. The respondent should have filed
an accionpubliciana case which is under the jurisdiction of the RTC.
However, the RTC should have not dismissed the case. Section 8,
Rule 40 of the Rules of Court provides:
Section 8.
xxx xx
If the case was tried on the merits by the lower court without
jurisdiction over the subject matter, the Regional Trial Court on
appeal shall not dismiss the case if it has original jurisdiction
thereof, but shall decide the case in accordance with the preceding
section, without prejudice to the admission of amended pleadings
and additional evidence in the interest of justice.
It ’s not a PROVREM 2015  46

Hence, Court of Appeals is correct in ordering the remand of the
case to the Regional Trial Court for further proceedings.
SHORT DIGEST
FACTS:
Petitioner VictorianoEncarnacion is the registered owner of Lot No.
2121-B-1 and Lot No. 2121-B-2. Said two lots originally form part of
Lot No. 2121 owned by Rogelio Valiente who sold the same to
Nicasio, who also sold to VictorianoMagpantay. The latter’s widow,
Anita N. Magpantay executed an Affidavit of Waiver on 1995 waving
her right over the property in favor of her son-in-law, herein
petitioner, VictorianoEncarnacion.
Respondent Nieves Amigo allegedly entered the premises and took
possession of a portion of the property sometime in 1985 without
the permission of the then owner, VictorianoMagpantay.
Petitioner, demanded from respondent to vacate the subject
property. Respondent alleged that he has been in actual possession
and occupation of a portion of the subject land since 1968 and that
the issuance of Free Patent and titles in the name of petitioner was
tainted with irregularities.
The Municipal Trial Court in Cities rendered judgment against
herein respondent ordering him to vacate the subject land. On
appeal, the Regional Trial Courtdismissed the case on the ground
that the Municipal Court had no jurisdiction over the case, thusthe
Regional Trial Court acquired no appellate jurisdiction thereof.
Aggrieved, petitioner filed a petition for review under Rule 42 of the
Rules of Court before the Court of Appeals which remand the case to
the Regional Trial Court for further proceedings. Hence, this
petition.
ISSUE:
Whether or not the proper action in this case is accionpubliciana
and not unlawful detainer as determined by the allegations in the
complaint filed by petitioner.
HELD:
The material element that determines the proper action to be filed
for the recovery of the possession of the property in this case is the
length of time of dispossession.
The respondent's actual entry on the land of the petitioner was in
1985 but it was only on March 2, 2001 or sixteen years after, when
petitioner filed his ejectment case. The respondent should have filed
an accionpubliciana case which is under the jurisdiction of the RTC.
However, the RTC should have not dismissed the case. The Rules of
Court provides that if the case was tried on the merits by the lower
court without jurisdiction over the subject matter, the Regional Trial
Court on appeal shall not dismiss the case if it has original
jurisdiction thereof, but shall decide the case in accordance with the
preceding section, without prejudice to the admission of amended
pleadings and additional evidence in the interest of justice.
EXPROPRIATION ONWARDS
Hence, Court of Appeals is correct in ordering the remand of the
case to the Regional Trial Court for further proceedings.
XVI.D SPOUSES MENDOZA V. CORONEL, G.R. NO. 156402, 13
FEBRUARY 2006 ROLLAN
Principles:
Facts: Respodent Maria Coronel is one of the co-owners of Lots 1
and 2. Petitioners, spouses Mendoza, occupied said lots upon
tolerance of respondent and her co-owners without paying any
rent. When respondent demanded that petitioners vacate the
premises, the latter refused. Thus, respondent filed a case before
the MTC for unlawful detainer against petitioners. The MTC ordered
petitioner to vacate. RTC ruled in favor of the petitioners. It held
that the co-owners of the subject lot should have been impleaded as
indispensable parties. The CA reversed the decision of the RTC.
Issue: Whether or not any co-owners may bring an action in
ejectment.
Ruling: Yes.
Article 487 of the Civil Code provides any one of the co-owners may
bring an action in ejectment.
As explained by Tolentino, a co-owner to bring an action for
ejectment, which covers all kinds of actions for the recovery of
possession, including forcible entry and unlawful detainer, without
the necessity of joining all the other co-owners as co-plaintiffs,
because the suit is deemed to be instituted for the benefit of all.
In this case, as co-owner respondent Coronel can validly bring an
action for ejectment without impleading the other co-owners.
Other principle:
Petitioners claim that Juanito Coronel, attorney-in-fact of Maria
Coronel, one of the co-owners of the lots in dispute is not
authorized to file the ejectment suit. They insist that he should have
obtained the authority and consent of all the co-owners. But since
Article 487 of the Civil Code authorizes any one of the co-owners to
bring an action for ejectment and the suit is deemed to be instituted
for the benefit of all, without the other co-owners actually giving
consent to the suit, it follows that an attorney-in-fact of the plaintiff
co-owner does not need authority from all the co-owners. He needs
authority only from the co-owner instituting the ejectment suit.
XVI.E PAJUYO V. COURT OF APPEALS, G.R. NO. 146364, 3 JUNE
2004 CANETE LUVERNIE
Principle:
In no way should our ruling in this case be interpreted to condone
squatting. The ruling on the issue of physical possession does not
affect title to the property nor constitute a binding and conclusive
adjudication on the merits on the issue of ownership. The owner
can still go to court to recover lawfully the property from the person
who holds the property without legal title. Our ruling here does not
diminish the power of government agencies, including local
governments, to condemn, abate, remove or demolish illegal or
It ’s not a PROVREM 2015  47

unauthorized structures in accordance with existing laws.
FACTS:
June 1979, petitioner Colito T. Pajuyo ("Pajuyo") paid P400 to a
certain Pedro Perez for the rights over a 250-square meter lot in
Barrio Payatas, Quezon City. Pajuyo then constructed a house made
of light materials on the lot. Pajuyo and his family lived in the house
from 1979 to 7 December 1985.
On 8 December 1985, Pajuyo and private respondent Eddie
Guevarra ("Guevarra") executed a Kasunduan or agreement. Pajuyo,
as owner of the house, allowed Guevarra to live in the house for free
provided Guevarra would maintain the cleanliness and orderliness
of the house. Guevarra promised that he would voluntarily vacate
the premises on Pajuyo’s demand.
In September 1994, Pajuyo informed Guevarra of his need of the
house and demanded that Guevarra vacate the house. Guevarra
refused.
Pajuyo filed an ejectment case against Guevarra with the MTC of
Quezon City.
In his Answer, Guevarra claimed that Pajuyo had no valid title or
right of possession over the lot where the house stands because the
lot is within the 150 hectares set aside by Proclamation No. 137 for
socialized housing. Guevarra pointed out that from December 1985
to September 1994, Pajuyo did not show up or communicate with
him. Guevarra insisted that neither he nor Pajuyo has valid title to
the lot.
The MTC ordered its decision in favor or Pajuyo ordering Guevarra
to vacate the property.
Guevarra appealed to the RTC of Quezon City but the RTC affirmed
MTC’s decision.
Guevarra received the RTC decision on 29 November 1996.
Guevarra had only until 14 December 1996 to file his appeal with
the Court of Appeals. Instead of filing his appeal with the Court of
Appeals, Guevarra filed with the Supreme Court a "Motion for
Extension of Time to File Appeal by Certiorari Based on Rule 42"
("motion for extension"). Guevarra theorized that his appeal raised
pure questions of law. The Receiving Clerk of the Supreme Court
received the motion for extension on 13 December 1996 or one day
before the right to appeal expired.
On 3 January 1997, Guevarra filed his petition for review with the
Supreme Court.
On 8 January 1997, the First Division of the Supreme Court issued a
Resolution referring the motion for extension to the Court of
Appeals which has concurrent jurisdiction over the case. The case
presented no special and important matter for the Supreme Court
to take cognizance of at the first instance.
On 28 January 1997, the Thirteenth Division of the Court of Appeals
issued a Resolution granting the motion for extension conditioned
on the timeliness of the filing of the motion.
EXPROPRIATION ONWARDS
On 21 June 2000, the Court of Appeals issued its decision reversing
the RTC decision. The dispositive portion of the decision reads:
WHEREFORE, premises considered, the assailed Decision of the
court is REVERSED and SET ASIDE; and it is hereby declared that
the ejectment case filed against defendant-appellant is without
factual and legal basis.
Pajuyo filed a motion for reconsideration of the decision. Pajuyo
pointed out that the Court of Appeals should have dismissed
outright Guevarra’s petition for review because it was filed out of
time. Moreover, it was Guevarra’s counsel and not Guevarra who
signed the certification against forum-shopping.
The CA found that Pajuyo and Guevarra are squatters. Pajuyo and
Guevarra illegally occupied the contested lot which the government
owned.
Perez, the person from whom Pajuyo acquired his rights, was also a
squatter. Perez had no right or title over the lot because it is public
land. The assignment of rights between Perez and Pajuyo, and the
Kasunduan between Pajuyo and Guevarra, did not have any legal
effect. Pajuyo and Guevarra are in pari delicto or in equal fault. The
court will leave them where they are.
ISSUE:
1. WON the CA erred when it renounced its jurisdiction in an action
for ejectment case upon finding that Pajuyo and Guevarra are
squatters
2. Who is entitled to the possession of the premises?
HELD:
1. YES
Settled is the rule that the defendant’s claim of ownership of the
disputed property will not divest the inferior court of its
jurisdiction over the ejectment case. Even if the pleadings raise the
issue of ownership, the court may pass on such issue to determine
only the question of possession, especially if the ownership is
inseparably linked with the possession. The adjudication on the
issue of ownership is only provisional and will not bar an action
between the same parties involving title to the land. This doctrine is
a necessary consequence of the nature of the two summary actions
of ejectment, forcible entry and unlawful detainer, where the only
issue for adjudication is the physical or material possession over the
real property.
Ownership or the right to possess arising from ownership is not at
issue in an action for recovery of possession. The parties cannot
present evidence to prove ownership or right to legal possession
except to prove the nature of the possession when necessary to
resolve the issue of physical possession. The same is true when the
defendant asserts the absence of title over the property. The
absence of title over the contested lot is not a ground for the courts
to withhold relief from the parties in an ejectment case.
2. Pajuyo is Entitled to Physical Possession of the Disputed Property
It ’s not a PROVREM 2015  48

The only question that the courts must resolve in ejectment
proceedings is - who is entitled to the physical possession of the
premises, that is, to the possession de facto and not to the
possession de jure. It does not even matter if a party’s title to the
property is questionable, or when both parties intruded into public
land and their applications to own the land have yet to be approved
by the proper government agency. Regardless of the actual
condition of the title to the property, the party in peaceable quiet
possession shall not be thrown out by a strong hand, violence or
terror. Neither is the unlawful withholding of property allowed.
Courts will always uphold respect for prior possession.
Thus, a party who can prove prior possession can recover such
possession even against the owner himself. Whatever may be the
character of his possession, if he has in his favor prior possession in
time, he has the security that entitles him to remain on the property
until a person with a better right lawfully ejects him. To repeat, the
only issue that the court has to settle in an ejectment suit is the
right to physical possession.
Their entry into the disputed land was illegal. Both the plaintiff and
defendant entered the public land without the owner’s permission.
Title to the land remained with the government because it had not
awarded to anyone ownership of the contested public land. Both the
plaintiff and the defendant were in effect squatting on government
property. Yet, we upheld the courts’ jurisdiction to resolve the issue
of possession even if the plaintiff and the defendant in the
ejectment case did not have any title over the contested land.
Courts must not abdicate their jurisdiction to resolve the issue of
physical possession because of the public need to preserve the basic
policy behind the summary actions of forcible entry and unlawful
detainer. The underlying philosophy behind ejectment suits is to
prevent breach of the peace and criminal disorder and to compel
the party out of possession to respect and resort to the law alone to
obtain what he claims is his. The party deprived of possession must
not take the law into his own hands. Ejectment proceedings are
summary in nature so the authorities can settle speedily actions to
recover possession because of the overriding need to quell social
disturbances.
The Principle of Pari Delicto is not Applicable to Ejectment Cases.
Clearly, the application of the principle of pari delicto to a case of
ejectment between squatters is fraught with danger. To shut out
relief to squatters on the ground of pari delicto would openly invite
mayhem and lawlessness. A squatter would oust another squatter
from possession of the lot that the latter had illegally occupied,
emboldened by the knowledge that the courts would leave them
where they are. Nothing would then stand in the way of the ousted
squatter from re-claiming his prior possession at all cost.
Possession is the only Issue for Resolution in an Ejectment Case
The Court of Appeals’ determination of Pajuyo and Guevarra’s rights
under Proclamation No. 137 was premature. Pajuyo and Guevarra
were at most merely potential beneficiaries of the law. Courts
should not preempt the decision of the administrative agency
mandated by law to determine the qualifications of applicants for
the acquisition of public lands. Instead, courts should expeditiously
resolve the issue of physical possession in ejectment cases to
prevent disorder and breaches of peace.
EXPROPRIATION ONWARDS
Guevarra does not dispute Pajuyo’s prior possession of the lot and
ownership of the house built on it. Guevarra expressly admitted the
existence and due execution of the Kasunduan.
Based on the Kasunduan, Pajuyo permitted Guevarra to reside in the
house and lot free of rent, but Guevarra was under obligation to
maintain the premises in good condition. Guevarra promised to
vacate the premises on Pajuyo’s demand but Guevarra broke his
promise and refused to heed Pajuyo’s demand to vacate.
These facts make out a case for unlawful detainer. Unlawful detainer
involves the withholding by a person from another of the
possession of real property to which the latter is entitled after the
expiration or termination of the former’s right to hold possession
under a contract, express or implied.
Where the plaintiff allows the defendant to use his property by
tolerance without any contract, the defendant is necessarily bound
by an implied promise that he will vacate on demand, failing which,
an action for unlawful detainer will lie.60 The defendant’s refusal to
comply with the demand makes his continued possession of the
property unlawful.61 The status of the defendant in such a case is
similar to that of a lessee or tenant whose term of lease has expired
but whose occupancy continues by tolerance of the owner.
This principle should apply with greater force in cases where a
contract embodies the permission or tolerance to use the property.
The Kasunduan expressly articulated Pajuyo’s forbearance. Pajuyo
did not require Guevarra to pay any rent but only to maintain the
house and lot in good condition. Guevarra expressly vowed in the
Kasunduan that he would vacate the property on demand.
Guevarra’s refusal to comply with Pajuyo’s demand to vacate made
Guevarra’s continued possession of the property unlawful.
Ruling on Possession Does not Bind Title to the Land in Dispute
We are aware of our pronouncement in cases where we declared
that "squatters and intruders who clandestinely enter into titled
government property cannot, by such act, acquire any legal right to
said property."80 We made this declaration because the person who
had title or who had the right to legal possession over the disputed
property was a party in the ejectment suit and that party instituted
the case against squatters or usurpers.
In this case, the owner of the land, which is the government, is not a
party to the ejectment case. This case is between squatters. Had the
government participated in this case, the courts could have evicted
the contending squatters, Pajuyo and Guevarra.
Since the party that has title or a better right over the property is
not impleaded in this case, we cannot evict on our own the parties.
Such a ruling would discourage squatters from seeking the aid of
the courts in settling the issue of physical possession. Stripping both
the plaintiff and the defendant of possession just because they are
squatters would have the same dangerous implications as the
application of the principle of pari delicto. Squatters would then
rather settle the issue of physical possession among themselves
than seek relief from the courts if the plaintiff and defendant in the
ejectment case would both stand to lose possession of the disputed
It ’s not a PROVREM 2015  49

property. This would subvert the policy underlying actions for
recovery of possession.
Since Pajuyo has in his favor priority in time in holding the property,
he is entitled to remain on the property until a person who has title
or a better right lawfully ejects him. Guevarra is certainly not that
person. The ruling in this case, however, does not preclude Pajuyo
and Guevarra from introducing evidence and presenting arguments
before the proper administrative agency to establish any right to
which they may be entitled under the law.81
In no way should our ruling in this case be interpreted to condone
squatting. The ruling on the issue of physical possession does not
affect title to the property nor constitute a binding and conclusive
adjudication on the merits on the issue of ownership. The owner
can still go to court to recover lawfully the property from the person
who holds the property without legal title. Our ruling here does not
diminish the power of government agencies, including local
governments, to condemn, abate, remove or demolish illegal or
unauthorized structures in accordance with existing laws.
Petition is granted.
SHORT DIGEST:
FACTS:
June 1979, petitioner Colito T. Pajuyo ("Pajuyo") paid P400 to a
certain Pedro Perez for the rights a lot in Barrio Payatas, Quezon
City. Pajuyo constructed a house made of light materials on the lot.
Pajuyo and his family lived in the house from 1979 to 7 December
1985.
Decembe 8, 1985, Pajuyo and private respondent Eddie Guevarra
("Guevarra") executed a Kasunduan or agreement. Pajuyo, as owner
of the house, allowed Guevarra to live in the house for free provided
Guevarra would maintain the cleanliness and orderliness of the
house. Guevarra promised that he would voluntarily vacate the
premises on Pajuyo’s demand.
In September 1994, Pajuyo informed Guevarra of his need of the
house and demanded that Guevarra vacate the house. Guevarra
refused.
Pajuyo filed an ejectment case against Guevarra in the MTC.
Guevarra claimed that Pajuyo had no valid title or right of
possession over the lot where the house stands because the lot is
within the 150 hectares set aside by Proclamation No. 137 for
socialized housing.
MTC decided in favor of Pajuyo. On appeal, RTC affirmed MTC’s
decision.
On Appeal with CA, the CA reversed MTC’s decision. The CA found
that Pajuyo and Guevarra are squatters. Pajuyo and Guevarra
EXPROPRIATION ONWARDS
illegally occupied the contested lot which the government owned.
ISSUE:
Who is entitled to the possession of the premises?
HELD:
Unlawful detainer involves the withholding by a person from
another of the possession of real property to which the latter is
entitled after the expiration or termination of the former’s right to
hold possession under a contract, express or implied.
Where the plaintiff allows the defendant to use his property by
tolerance without any contract, the defendant is necessarily bound
by an implied promise that he will vacate on demand, failing which,
an action for unlawful detainer will lie.60 The defendant’s refusal to
comply with the demand makes his continued possession of the
property unlawful.61 The status of the defendant in such a case is
similar to that of a lessee or tenant whose term of lease has expired
but whose occupancy continues by tolerance of the owner.
This principle should apply with greater force in cases where a
contract embodies the permission or tolerance to use the property.
The Kasunduan expressly articulated Pajuyo’s forbearance. Pajuyo
did not require Guevarra to pay any rent but only to maintain the
house and lot in good condition. Guevarra expressly vowed in the
Kasunduan that he would vacate the property on demand.
Guevarra’s refusal to comply with Pajuyo’s demand to vacate made
Guevarra’s continued possession of the property unlawful.
In this case, the owner of the land, which is the government, is not a
party to the ejectment case. This case is between squatters. Had the
government participated in this case, the courts could have evicted
the contending squatters, Pajuyo and Guevarra.
Since the party that has title or a better right over the property is
not impleaded in this case, we cannot evict on our own the parties.
Such a ruling would discourage squatters from seeking the aid of
the courts in settling the issue of physical possession. Stripping both
the plaintiff and the defendant of possession just because they are
squatters would have the same dangerous implications as the
application of the principle of pari delicto. Squatters would then
rather settle the issue of physical possession among themselves
than seek relief from the courts if the plaintiff and defendant in the
ejectment case would both stand to lose possession of the disputed
property. This would subvert the policy underlying actions for
recovery of possession.
XVI.F Spouses Benitez v. Court of Appeals, G.R. No. 104828, 16
January 1997 DY
Principle:
REMEDIAL LAW; SPECIAL CIVIL ACTIONS; UNLAWFUL DETAINER;
PRIOR PHYSICAL POSSESSION IS NOT REQUIRED. — Prior
possession is not always a condition sine qua non in ejectment. This
is one of the distinctions between forcible entry and unlawful
detainer. In forcible entry, the plaintiff is deprived of physical
possession of his land or building by means of force, intimidation,
It ’s not a PROVREM 2015  50

threat, strategy or stealth; thus, he must allege and prove prior
possession. But in unlawful detainer, the defendant unlawfully
withholds possession after the expiration or termination of his right
thereto under any contract, express or implied. In such a case, prior
physical possession is not required. Possession can also be
acquired, not only by material occupation, but also by the fact that a
thing is subject to the action of one's will or by the proper acts and
legal formalities established for acquiring such right. Possession of
land can be acquired upon the execution of the deed of sale thereof
by its vendor. Actual or physical occupation is not always necessary.
Bar Question:
May possession of a lot encroached upon by a part of another's
house be recovered in an action for ejectment?
Facts:
In 1986, petitioners Rafael and Avelina Benitez purchased
a 303- square-meter parcel of land with improvement from the
Cavite Development Bank. Subsequently, private respondents
Renato and Elizabeth Macapagal bought a 361- square-meter lot
covered by TCT No. 40155. On September 18, 1986, they filed a civil
case with the RTC of Pasig against petitioners for the recovery of
possession of an encroached portion of the lot they purchased. The
parties were able to reach a compromise in which private
respondents sold the encroached portion to petitioners at
P1,000.00/square meter.
On July 17, 1989, private respondents purchased still another
property, a 285.70 square-meter-lot adjacent to that of petitioners.
After a relocation survey was conducted, private respondents
discovered that some 46.50 square meters of their property was
occupied by petitioners' house. Despite verbal and written
demands, petitioners refused to vacate. A last notice to vacate was
sent to petitioners on October 26, 1989.
In 1990, private respondents filed with the MeTC of San Juan a civil
case for ejectment against petitioners. The MeTC of San Juan
decided in favor of the former. The RTC affirmed the decision of the
lower court on appeal. Upon further appeal, the public respondent
found no merit in petitioners' plea and ruled the petition to be a
mere rehash of the issues and arguments presented before the
lower courts.
In a nutshell, petitioners insist that the MeTC had no jurisdiction
over the case at bar because its real nature isaccion publiciana or
recovery of possession, not unlawful detainer. It is not forcible entry
because private respondents did not have prior possession of the
contested property as petitioners possessed it ahead of private
EXPROPRIATION ONWARDS
respondents. It is not unlawful detainer because petitioners were
not the private respondents’ tenants or vendee unlawfully
withholding possession thereof.
Issue:
Whether or not the possession of the portion of the
private respondents' land encroached by petitioners' house can be
recovered through an action of ejectment, not accion publiciana?
Ruling: YES
• The jurisdictional requirements for ejectment, as borne
out by the facts, are: after conducting a relocation survey, private
respondents discovered that a portion of their land was encroached
by petitioners' house; notices to vacate were sent to petitioners, the
last one being dated October 26, 1989; and private respondents
filed the ejectment suit against petitioners on January 18, 1990 or
within one (1) year from the last demand.
• Private respondents' cause of action springs from Sec. 1,
Rule 70 of the Revised Rules of Court.
• That petitioners occupied the land prior to private
respondents' purchase thereof does not negate the latter's case for
ejectment.
• Prior possession is not always a condition sine qua non in
ejectment.
o This is one of the distinctions between forcible entry and
unlawful detainer. In forcible entry, the plaintiff is deprived of
physical possession of his land or building by means of force,
intimidation, threat, strategy or stealth; thus, he must allege and
prove prior possession. But in unlawful detainer, the defendant
unlawfully withholds possession after the expiration or termination
of his right thereto under any contract, express or implied. In such a
case, prior physical possession is not required.
• Possession can also be acquired, not only by material
occupation, but also by the fact that a thing is subject to the action
of one's will or by the proper acts and legal formalities established
for acquiring such right. Possession of land can be acquired upon
the execution of the deed of sale thereof by its vendor. Actual or
physical occupation is not always necessary.
• In the case before us, considering that private respondents
are unlawfully deprived of possession of the encroached land and
that the action for the recovery of possession thereof was made
within the one- year reglementary period, ejectment is the proper
remedy. The MeTC of San Juan had jurisdiction. In addition, after
voluntarily submitting themselves to its proceedings, petitioners
are estopped from assailing the jurisdiction of the MeTC. 13 This
Court will not allow petitioners to attack the jurisdiction of the trial
court after receiving a decision adverse to their position.
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XVI.G MALABANAN V. RURAL BANK OF CABUYAO, G.R. NO.
163495, 8 MAY 2009 CUEVAS
Principle:
1. A judgment rendered in an ejectment case shall not bar an
action between the same parties respecting title to the
land or building nor shall it be conclusive as to the facts
therein found in a case between the same parties upon a
different cause of action involving possession.
2. If possession is by tolerance as has been alleged in the
complaint such possession becomes illegal upon demand
to vacate, with the possessor refusing to comply with such
demand.
FACTS:
Samuel Malabanan (petitioner) was indebted to the Rural Bank of
Cabuyao (Respondent) in the amount of P5M which was secured by
a Real Estate Mortgage (REM) over a parcel of land in Calamba,
Laguna, with an area of 1,021 square meters, covered by Transfer
Certificate of Title (TCT) No. 255916. However, when petitioner
failed to settle the loan, he executed a dacion en pago in favor of
respondent. The transfer of the registration of property was
effected and issued to respondents. Unfortunately, petitioner
refused to surrender possession thereof which prompted
respondent to file a complaint for unlawful detainer before the
MTCC praying for the award of reasonable rental amounting to
P100,000.00; another P100,000.00 as exemplary damages, and
P300,000.00 as attorneys fees.
Petitioner, in his answer, denied having executed a dacion en pago,
and stated that he never appeared before the Notary Public, and
that its Executive Vice-President/General Manager, Renato Delfino,
who purportedly represented respondent, was no longer officially
connected with the latter since 1999. He also made a counterclaim
for damages. Prior to the filing of the ejectment case, however,
petitioner had already filed an action for an Annulment of the
dacion en pago and reconveyance before Branch 35, RTC-Calamba.
MTCC dismissed the complaint. The lower court noted that
respondent was not able to prove that petitioners continued
occupancy of the subject premises was by mere tolerance in order
to sustain a cause of action for unlawful detainer. On appeal, the
RTC reversed the MTCC decision and ordered petitioner to vacate
the subject property and to pay respondent P100,000.00 for rentals
and P20,000.00 as attorneys fees.
Petitioner elevated the case to the Court of Appeals by way of
Petition for Review with Urgent Prayer for Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction. Petitioner
imputed error on the part of the trial court in not dismissing the
complaint for unlawful detainer on the ground of litispendencia. He
also faulted the RTC for not simultaneously resolving the ejectment
case and the annulment of dacion en pago. CA affirmed in toto the
decision of the RTC.
ISSUE:
EXPROPRIATION ONWARDS
Whether or not a judgment rendered in an ejectment case will bar
an action between the same parties respecting title to the land or
building? WON it will be conclusive as to the facts therein found in a
case between the same parties upon a different cause of action
involving possession?
HELD:
NO.
It has been laid to rest by heaps of cases iterating the principle that
a judgment rendered in an ejectment case shall not bar an action
between the same parties respecting title to the land or building nor
shall it be conclusive as to the facts therein found in a case between
the same parties upon a different cause of action involving
possession.
It bears emphasizing that in ejectment suits, the only issue for
resolution is the physical or material possession of the property
involved, independent of any claim of ownership by any of the party
litigants. However, the issue of ownership may be provisionally
ruled upon for the sole purpose of determining who is entitled to
possession de facto. Therefore, the provisional determination of
ownership in the ejectment case cannot be clothed with finality.
Corollary, the incidental issue of whether a pending action for
annulment would abate an ejectment suit must be resolved in the
negative.
A pending action involving ownership of the same property does
not bar the filing or consideration of an ejectment suit, nor suspend
the proceedings. This is so because an ejectment case is simply
designed to summarily restore physical possession of a piece of land
or building to one who has been illegally or forcibly deprived
thereof, without prejudice to the settlement of the parties' opposing
claims of juridical possession in appropriate proceedings.
The crux of the controversy centers on the propriety of the unlawful
detainer suit. In unlawful detainer, one unlawfully withholds
possession thereof after the expiration or termination of his right to
hold possession under any contract, express or implied. In such
case, the possession was originally lawful but became unlawful by
the expiration or termination of the right to possess; hence, the
issue of rightful possession is decisive for, in such action, the
defendant is in actual possession and the plaintiffs cause of action is
the termination of the defendants right to continue in possession.
In the case at bar, both the trial court and the appellate court lent
more credence to the validity of the dacion en pago and
respondents title. This determination, however, is regarded merely
as provisional. It is a settled doctrine that courts in ejectment cases
may determine questions of ownership whenever necessary to
decide the question of possession. In any case, we sustain the
finding that the respondents have the better right to possess the
subject property.
Well-established is the rule that if possession is by tolerance as has
been alleged in the complaint such possession becomes illegal upon
demand to vacate, with the possessor refusing to comply with such
demand.
It ’s not a PROVREM 2015  52

Going over the allegations in the complaint, it is clear that
respondent’s action for unlawful detainer is based on petitioner’s
possession by mere tolerance. From the time the title to the
property was transferred in the name of respondent, petitioners
possession was converted into one by mere tolerance of the owner.
The forbearance ceased when respondent made a demand on
petitioner to vacate the lot. Thenceforth, petitioner’s occupancy had
become unlawful.
A person who occupies the land of another with the latter’s
tolerance or permission, without any contract between them, is
necessarily bound by an implied promise that he will vacate upon
demand, failing which a summary action for ejectment is the proper
remedy against him.
WHEREFORE, premises considered, the Petition is GRANTED IN
PART. The Decision dated 7 May 2004 of the Court of Appeals is
AFFIRMED WITH MODIFICATION in that its affirmation of the
Regional Trial Courts award of reasonable rentals in favor of
respondent is DELETED and SET ASIDE.
Quick Digest:
Petitioner X was indebted to Respondent bank Y in the amount of
P5M which was secured by a Real Estate Mortgage (REM) over a
parcel of land. However, when X failed to settle the loan, he executed
a dacion en pago in favor of Y. The transfer of the registration of
property was effected and issued to X. Unfortunately, X refused to
surrender possession thereof which prompted respondent to file a
complaint for unlawful detainer before the MTCC . MTCC dismissed
the complaint.MTCC dismissed the complaint. The lower court
noted that X was not able to prove that petitioners continued
occupancy of the subject premises was by mere tolerance in order
to sustain a cause of action for unlawful detainer. On appeal, the
RTC reversed the MTCC decision and ordered X to vacate the subject
property and to pay Yrental and attorneys fees. CA affirmed the
decision of the RTC.
Question.
Whether or not a judgment rendered in an ejectment case will bar
an action between the same parties respecting title to the land or
building? WON it will be conclusive as to the facts therein found in a
case between the same parties upon a different cause of action
involving possession?
Answer:
NO.
A judgment rendered in an ejectment case shall not bar an action
between the same parties respecting title to the land or building nor
shall it be conclusive as to the facts therein found in a case between
the same parties upon a different cause of action involving
possession.
It bears emphasizing that in ejectment suits, the only issue for
resolution is the physical or material possession of the property
involved, independent of any claim of ownership by any of the party
litigants. However, the issue of ownership may be provisionally
EXPROPRIATION ONWARDS
ruled upon for the sole purpose of determining who is entitled to
possession de facto. Therefore, the provisional determination of
ownership in the ejectment case cannot be clothed with finality.
Corollary, the incidental issue of whether a pending action for
annulment would abate an ejectment suit must be resolved in the
negative.
A pending action involving ownership of the same property does
not bar the filing or consideration of an ejectment suit, nor suspend
the proceedings. This is so because an ejectment case is simply
designed to summarily restore physical possession of a piece of land
or building to one who has been illegally or forcibly deprived
thereof, without prejudice to the settlement of the parties' opposing
claims of juridical possession in appropriate proceedings.
The crux of the controversy centers on the propriety of the unlawful
detainer suit. In unlawful detainer, one unlawfully withholds
possession thereof after the expiration or termination of his right to
hold possession under any contract, express or implied. In such
case, the possession was originally lawful but became unlawful by
the expiration or termination of the right to possess; hence, the
issue of rightful possession is decisive for, in such action, the
defendant is in actual possession and the plaintiffs cause of action is
the termination of the defendants right to continue in possession.
Well-established is the rule that if possession is by tolerance as has
been alleged in the complaint such possession becomes illegal upon
demand to vacate, with the possessor refusing to comply with such
demand.
Going over the allegations in the complaint, it is clear that
respondent’s action for unlawful detainer is based on petitioner’s
possession by mere tolerance. From the time the title to the
property was transferred in the name of respondent, petitioners
possession was converted into one by mere tolerance of the owner.
The forbearance ceased when respondent made a demand on
petitioner to vacate the lot. Thenceforth, petitioner’s occupancy had
become unlawful.
A person who occupies the land of another with the latter’s
tolerance or permission, without any contract between them, is
necessarily bound by an implied promise that he will vacate upon
demand, failing which a summary action for ejectment is the proper
remedy against him.
It ’s not a PROVREM 2015  53