DOCTRINE OF PREFFERED FREEDOM

PBM Employees Organization v. Philippine Blooming Mills (PBM) [GR L-31195, 5 June
1973] First Division, Makasiar (J): 4 concur, 1 concur in separate opinion, 1 dissents, 1
concur to dissenting opinion, 1 took no part.

Facts: On 1 March 1969, members and officers of the Philippine Blooming Mills Employees
Organization (PBMEO) decided to stage a mass demonstration at Malacañang on 4 March 1969, in
protest against alleged abuses of the Pasig police, to be participated in by the workers in the first
shift (from 6 A.M. to 2 P.M.) as well as those in the regular second and third shifts (from 7 A.M. to
4 P.M. and from 8 A.M. to 5 P.M., respectively). They informed the Company of their proposed
demonstration, and proceeded with the demonstration despite pleas from the Philippine Blooming
Mills. The Company filed on 4 March 1969 with the lower court, charging the PBMEO officers
and participating members of violation of Section 4(a) to 6 in relation to Section 13 to 14, as well
as Section 15, of Republic Act 875 and with the CBA providing for No Strike and No Lockout. The
charge was followed by the filing of a corresponding complaint on 18 April 1969. Judge Joaquin
Salvador, in an order dated 15 September 1969, found PBMEO guilty of bargaining in bad faith
and declaring the officers and members directly responsible for perpetrating the said unfair labor
practice and were considered to have lost their status as employees of the company. A motion for
reconsideration was filed 15 September 1969, which was dismissed in a resolution dated 9 October
1969. On 31 October 1969, PBMEO filed with the Court of Industria Relations (CIR) a petition for
relief from the order dated 9 October 1969, on the ground that their failure to file their motion for
reconsideration on time was due to excusable negligence and honest mistake committed by the
president of the Union and of the office clerk of their counsel. Without waiting for any resolution
on their petition for relief, PBMEO filed on 3 November 1969, with the Supreme Court, a notice of
appeal.

Issue: Whether the Company can prevent its workers from engaging in concerted activity against
alleged abuses of policemen, especially if such work stoppage would prejudice the Company’s
operation, else its profits.

Held: The demonstration, being directed against alleged abuses of policemen and not against their
employer, was purely and completely an exercise of their freedom of expression in general and of
their right of assembly and of petition for redress of grievances in particular before the appropriate
governmental agency. They exercised their civil and political rights for their mutual aid and
protection from what they believe were police excesses. It was the duty of the firm to protect the
Union and its members from the harassment of local police officers. It was to the interest of the
firm to rally to the defense of, and to take up the cudgels for, its employees, so that they can report
to work free from harassment, vexation or peril and as a consequence perform more efficiently
their respective tasks to enhance its productivity as well as profits. Although the demonstration
paralyzed to a large extent the operations of the complainant company, there is no finding
involving the loss actually sustained by the firm. On the contrary, the company saved a sizable
amount in the form of wages for its hundreds of workers, cost of fuel, water and electric
consumption that day. Such savings could have amply compensated for unrealized profits or
damages it might have sustained by reason of the absence of its workers for only one day.

Francisco Chavez v. Raul M. Gonzales and National Telecommunications Commission, G.R.

No. 168338, February 15, 2008
DECISION
(En Banc)

I. THE FACTS

As a consequence of the public release of copies of the “Hello Garci” compact disc audiotapes
involving a wiretapped mobile phone conversation between then-President Gloria Arroyo and
Comelec Commissioner Virgilio Garcillano, respondent DOJ Secretary Gonzales warned reporters
that those who had copies of the CD and those broadcasting or publishing its contents could be
held liable under the Anti-Wiretapping Act. He also stated that persons possessing or airing said
tapes were committing a continuing offense, subject to arrest by anybody. Finally, he stated that he
had ordered the National Bureau of Investigation to go after media organizations “found to have
caused the spread, the playing and the printing of the contents of a tape.”
Meanwhile, respondent NTC warned in a press release all radio stations and TV network
owners/operators that the conditions of the authorization and permits issued to them by
government like the Provisional Authority and/or Certificate of Authority explicitly provides that
they shall not use their stations for the broadcasting or telecasting of false information or willful
misrepresentation. The NTC stated that the continuous airing or broadcast of the “Hello Garci”
taped conversations by radio and TV stations is a continuing violation of the Anti-Wiretapping
Law and the conditions of the Provisional Authority and/or Certificate of Authority. It warned
that their broadcast/airing of such false information and/or willful misrepresentation shall be a just
cause for the suspension, revocation and/or cancellation of the licenses or authorizations issued to
the said media establishments.

Subsequently, a dialogue was held between the NTC and the Kapisanan ng mga Brodkaster sa
Pilipinas (KBP) which resulted in the issuance of a Joint Press Statement which stated, among
others, that the supposed wiretapped tapes should be treated with sensitivity and handled
responsibly.

Petitioner Chavez filed a petition under Rule 65 against respondents Secretary Gonzales and the
NTC directly with the Supreme Court.

II. THE ISSUES

1. Will a purported violation of law such as the Anti-Wiretapping Law justify straitjacketing
the exercise of freedom of speech and of the press?

2. Did the mere press statements of respondents DOJ Secretary and the NTC constitute a form
of content-based prior restraint that has transgressed the Constitution?

III. THE RULING

[The Court voted 10-5 (CJ Puno, joined by JJ. Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio, Austria-Martinez, Carpio Morales, Azcuna, Reyes and Tinga in the majority, as against JJ.
Corona, Chico-Nazario, Nachura, Leonardo-De Castro and Velasco in the minority) in granting
the petition insofar as respondent Secretary Gonzalez’s press statement was concerned. Likewise,
it voted 10-5 (CJ Puno, joined by JJ. Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio,
Austria-Martinez, Carpio Morales, Azcuna, Reyes and Velasco in the majority, as against JJ.
Corona, Chico-Nazario, Nachura, Leonardo-De Castro and Tinga in the minority) in granting the
same insofar as NTC’s press statement was concerned.]

1. NO, a purported violation of law such as the Anti-Wiretapping Law will NOT justify
straitjacketing the exercise of freedom of speech and of the press.

A governmental action that restricts freedom of speech or of the press based on content is given the
strictest scrutiny, with the government having the burden of overcoming the presumed
unconstitutionality by the clear and present danger rule. This rule applies equally to all kinds of
media, including broadcast media.

Respondents, who have the burden to show that these acts do not abridge freedom of speech and of
the press, failed to hurdle the clear and present danger test. [T]he great evil which government
wants to prevent is the airing of a tape recording in alleged violation of the anti-wiretapping law.
The records of the case at bar however are confused and confusing, and respondents’ evidence falls
short of satisfying the clear and present danger test. Firstly, the various statements of the Press
Secretary obfuscate the identity of the voices in the tape recording. Secondly, the integrity of the
taped conversation is also suspect. The Press Secretary showed to the public two versions, one
supposed to be a “complete” version and the other, an “altered” version. Thirdly, the evidence of
the respondents on the who’s and the how’s of the wiretapping act is ambivalent, especially
considering the tape’s different versions. The identity of the wire-tappers, the manner of its
commission and other related and relevant proofs are some of the invisibles of this case. Fourthly,
given all these unsettled facets of the tape, it is even arguable whether its airing would violate the
anti-wiretapping law.

We rule that not every violation of a law will justify straitjacketing the exercise of freedom of
speech and of the press. Our laws are of different kinds and doubtless, some of them provide norms
of conduct which[,] even if violated[,] have only an adverse effect on a person’s private comfort
but does not endanger national security. There are laws of great significance but their violation, by
itself and without more, cannot support suppression of free speech and free press. In fine, violation
of law is just a factor, a vital one to be sure, which should be weighed in adjudging whether to
restrain freedom of speech and of the press. The totality of the injurious effects of the violation to
private and public interest must be calibrated in light of the preferred status accorded by the
Constitution and by related international covenants protecting freedom of speech and of the press.
In calling for a careful and calibrated measurement of the circumference of all these factors to
determine compliance with the clear and present danger test, the Court should not be
misinterpreted as devaluing violations of law. By all means, violations of law should be
vigorously prosecuted by the State for they breed their own evil consequence. But to repeat, the
need to prevent their violation cannot per se trump the exercise of free speech and free press, a
preferred right whose breach can lead to greater evils. For this failure of the respondents alone to
offer proof to satisfy the clear and present danger test, the Court has no option but to uphold the
exercise of free speech and free press. There is no showing that the feared violation of the
anti-wiretapping law clearly endangers the national security of the State.

2. YES, the mere press statements of respondents DOJ Secretary and the NTC constituted a
form of content-based prior restraint that has transgressed the Constitution.

[I]t is not decisive that the press statements made by respondents were not reduced in or
followed up with formal orders or circulars. It is sufficient that the press statements were made by
respondents while in the exercise of their official functions. Undoubtedly, respondent Gonzales
made his statements as Secretary of Justice, while the NTC issued its statement as the regulatory
body of media. Any act done, such as a speech uttered, for and on behalf of the government in an
official capacity is covered by the rule on prior restraint. The concept of an “act” does not limit
itself to acts already converted to a formal order or official circular. Otherwise, the non
formalization of an act into an official order or circular will result in the easy circumvention of the
prohibition on prior restraint. The press statements at bar are acts that should be struck down as
they constitute impermissible forms of prior restraints on the right to free speech and press.

FUNDAMENTAL POWERS OF THE STATE

DIONISIO LOPEZ Y ABERASTURI v. PEOPLE

Freedom of expression enjoys an exalted place in the hierarchy of constitutional rights. Free
expression however, "is not absolute for it may be so regulated that [its exercise shall neither] be
injurious to the equal enjoyment of others having equal rights, nor injurious to the rights of the
community or society."[1] Libel stands as an exception to the enjoyment of that most guarded
constitutional right.

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court filed by
Dionisio Lopez (petitioner) assailing the Decision[2] dated August 31, 2005 of the Court of
Appeals (CA) in CA-G.R. CR No. 28175. The CA affirmed with modification the Decision[3]
rendered by the Regional Trial Court (RTC) of Cadiz City, Branch 60 finding petitioner guilty
beyond reasonable doubt of the crime of libel.

Procedural and Factual Antecedents

On April 3, 2003, petitioner was indicted for libel in an Information dated March 31, 2003, the
accusatory portion of which reads in full as follows:

That on or about the early part of November 2002 in the City of Cadiz, Philippines and within the
jurisdiction of this Honorable Court, the herein accused did then and there, willfully, unlawfully
and feloniously with intent to impeach the integrity, reputation and putting to public ridicule and
dishonor the offended party MAYOR SALVADOR G. ESCALANTE, JR., City Mayor of Cadiz
City and with malice and intent to injure and expose the said offended party to public hatred,
contempt and ridicule put up billboards/signboards at the fence of Cadiz Hotel, Villena Street,
Cadiz City and at Gustilo Boulevard, Cadiz City, which billboards/signboards read as follows:

"CADIZ FOREVER"
"______________ NEVER"

thereby deliberately titillating the curiosity of and drawing extraordinary attention from the
residents of Cadiz City and passers-by over what would be placed before the word "NEVER".
Later on November 15, 2002, accused affixed the nickname of the herein private complainant
"BADING" and the name of the City of "SAGAY" before the word "NEVER" thus making the
billboard appear as follows

"CADIZ FOREVER"
"BADING AND SAGAY NEVER"

For which the words in the signboards/billboards were obviously calculated to induce the
readers/passers-by to suppose and understand that something fishy was going on, therefore
maliciously impeaching the honesty, virtue and reputation of Mayor Salvador G. Escalante, Jr.,
and hence were highly libelous, offensive and defamatory to the good name, character and
reputation of the offended party and his office and that the said billboards/signboards were read by
thousands if not hundred[s] of thousands of persons, which caused damage and prejudice to the
offended party by way of moral damages in the amount [of]:

P5,000,000.00 - as moral damages.

ACT CONTRARY TO LAW.[4]

Upon arraignment on May 8, 2003, petitioner, as accused, entered a plea of "not guilty." During the
pre-trial, the parties stipulated, among others, on the identity of the accused, that the private
complainant is the incumbent City Mayor of Cadiz City and is popularly known by the nickname
"Bading" and that the petitioner calls the private complainant "Bading." Thenceforth, trial on the
merits commenced in due course.

Evidence introduced for the prosecution reveals that in the early part of November 2002, while
exercising his official duties as Mayor of Cadiz City, private respondent saw billboards with the
printed phrase "CADIZ FOREVER" with a blank space before the word "NEVER" directly under
said phrase. Those billboards were posted on the corner of Gustilo and Villena streets, in front of
Cadiz Hotel and beside the old Coca-Cola warehouse in Cadiz City. He became intrigued and
wondered on what the message conveyed since it was incomplete.

Some days later, on November 15, 2002, private respondent received a phone call relating that the
blank space preceding the word "NEVER" was filled up with the added words "BADING AND
SAGAY." The next day, he saw the billboards with the phrase "CADIZ FOREVER BADING
AND SAGAY NEVER" printed in full. Reacting and feeling that he was being maligned and
dishonored with the printed phrase and of being a "tuta" of Sagay, private respondent, after
consultation with the City Legal Officer, caused the filing of a complaint for libel against
petitioner. He claimed that the incident resulted in mental anguish and sleepless nights for him and
his family. He thus prayed for damages.

Jude Martin Jaropillo (Jude) is a licensing officer of the Permit and License Division of Cadiz City.
While on a licensing campaign, he was able to read the message on the billboards. He wondered
what fault the person alluded therein has done as the message is so negative. He felt that the
message is an insult to the mayor since it creates a negative impression, as if he was being rejected
by the people of Cadiz City. He claimed that he was giving his testimony voluntarily and he was
not being rewarded, coerced or forced by anybody.

Nenita Bermeo (Nenita), a retired government employee of Cadiz City, was at Delilah's Coffee
[Shop] in the morning of November 19, 2002 when she heard the petitioner shouting "Bading,
Bading, Never, Never." She and the tricycle drivers drinking coffee were told by petitioner "You
watch out I will add larger billboards." When she went around Cadiz City, she saw larger
billboards with the phrase "CADIZ FOREVER BADING AND SAGAY NEVER," thus
confirming what petitioner had said. With the message, she felt as if the people were trying to
disown the private respondent. According to her, petitioner has an ax to grind against the mayor.
Like Jude, she was not also forced or rewarded in giving her testimony.

Bernardita Villaceran (Bernardita) also found the message unpleasant because Mayor Escalante is
an honorable and dignified resident of Cadiz City. According to her, the message is an insult not
only to the person of the mayor but also to the people of Cadiz City.

Petitioner admitted having placed all the billboards because he is aware of all the things happening
around Cadiz City. He mentioned "BADING" because he was not in conformity with the many
things the mayor had done in Cadiz City. He insisted that he has no intention whatsoever of
referring to "Bading" as the "Tuta" of Sagay. He contended that it was private respondent who
referred to Bading as "Tuta" of Sagay. He further maintained that his personal belief and
expression was that he will never love Bading and Sagay. He concluded that the message in the
billboards is just a wake-up call for Cadiz City.

Ruling of the Regional Trial Court

On December 17, 2003, the RTC rendered judgment convicting petitioner of libel. The trial
court ruled that from the totality of the evidence presented by the prosecution vìs-a-vìs that of the
defense, all the elements of libel are present. The fallo of the Decision reads:

WHEREFORE, in view of all the foregoing, this Court finds accused DIONISIO LOPEZ y
ABERASTURI (bonded) GUILTY beyond reasonable doubt of the crime of Libel defined and
penalized under Article 353 in relation to Article 355 of the Revised Penal Code and there being no
mitigating or aggravating circumstances attendant thereto hereby sentences him to suffer an
indeterminate penalty of imprisonment of FOUR MONTHS AND TWENTY DAYS of Arresto
Mayor maximum as the minimum to TWO YEARS, ELEVEN MONTHS AND TEN DAYS of
Prision Correccional Medium as the maximum and a FINE of P5,000.00 with subsidiary
imprisonment in case of insolvency.

The accused is further ordered to pay the private complainant the sum of P5,000,000.00 by way
of moral damages.

The cash bond posted by the accused is hereby ordered cancelled and returned to the accused,
however the penalty of Fine adjudged against the accused is hereby ordered deducted from the
cash bond posted by the accused pursuant to Section 22 of Rule 114 of the Rules of Court and the
remaining balance ordered returned to the accused. The accused is hereby ordered immediately
committed to the BJMP, Cadiz City for the service of his sentence.

Cost against the accused.

SO ORDERED.[5]

Ruling of the Court of Appeals

Petitioner appealed the Decision of the RTC to the CA which, as stated earlier, rendered judgment
on August 31, 2005, affirming with modification the Decision of the RTC. Like the trial court,
the appellate court found the presence of all the elements of the crime of libel. It reduced
however, the amount of moral damages to P500,000.00. Petitioner then filed his Motion for
Reconsideration, which the appellate court denied in its Resolution[6] dated April 7, 2006.

Disgruntled, petitioner is now before us via the instant petition. Per our directive, private
respondent filed his Comment[7] on August 29, 2006 while the Office of the Solicitor General
(OSG) representing public respondent People of the Philippines, submitted a Manifestation and
Motion in Lieu of Comment[8] on even date. After the filing of petitioner's Reply to private
respondent's Comment, we further requested the parties to submit their respective memoranda.
The OSG filed a Manifestation in Lieu of Memorandum, adopting as its memorandum, the
Manifestation and Motion in Lieu of Comment it earlier filed. Petitioner and private respondent
submitted their respective memoranda as required.

Issues

Petitioner raised the following arguments in support of his petition:

I
WHETHER X X X THE COURT OF APPEALS ERRED IN HOLDING THAT THE WORDS
"CADIZ FOREVER[,] BADING AND SAGAY NEVER" CONTAINED IN THE
BILLBOARDS/SIGNBOARDS SHOW THE INJURIOUS NATURE OF THE IMPUTATIONS
MADE AGAINST THE PRIVATE RESPONDENT AND TENDS TO INDUCE SUSPICION
ON HIS CHARACTER, INTEGRITY AND REPUTATION AS MAYOR OF CADIZ CITY.

II

ASSUMING WITHOUT CONCEDING THAT THE WORDS "CADIZ FOREVER, BADING

AND SAGAY NEVER" CONTAINED IN THE BILLBOARDS ERECTED BY PETITIONER
ARE DEFAMATORY, DID THE COURT OF APPEALS ERR IN NOT HOLDING THAT
THEY COMPRISE FAIR COMMENTARY ON MATTERS OF PUBLIC INTEREST WHICH
ARE THEREFORE PRIVILEGED?

III

WHETHER X X X THE COURT OF APPEALS ERRED IN HOLDING THAT THE

PRESUMPTION OF MALICE IN THE CASE AT BAR HAS NOT BEEN OVERTHROWN.

IV

WHETHER X X X THE COURT OF APPEALS ERRED IN NOT ACQUITTING PETITIONER

OF THE CHARGE OF LIBEL AND IN HOLDING HIM LIABLE FOR MORAL DAMAGES IN
THE AMOUNT OF P500,000.[9]

Summed up, the focal issues tendered in the present petition boil down to the following: 1) whether
the printed phrase "CADIZ FOREVER, BADING AND SAGAY NEVER" is libelous; and 2)
whether the controversial words used constituted privileged communication.

Our Ruling

We ought to reverse the CA ruling.

At the outset, only questions of law may be raised in a petition for review on certiorari under Rule
45 of the Rules of Court. The factual findings of the lower courts are final and conclusive and are
not reviewable by this Court, unless the case falls under any of the following recognized
exceptions:

When the conclusion is a finding grounded entirely on speculation, surmises and conjectures;
When the inference made is manifestly mistaken, absurd or impossible;
Where there is a grave abuse of discretion;
When the judgment is based on a misapprehension of facts;
When the findings of fact are conflicting;
When the Court of Appeals, in making its findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellant and appellee;
When the findings are contrary to those of the trial court;
When the findings of fact are conclusions without citation of specific evidence on which they are
based;
When the facts set forth in the petition as well as in the petitioners' main and reply briefs are not
disputed by the respondents; and,
When the findings of fact of the Court of Appeals are premised on the supposed absence of
evidence and contradicted by the evidence on record.[10]

Indeed, the CA affirmed the factual findings of the RTC that all the elements of the crime of libel
are present in this case. Thus, following the general rule, we are precluded from making further
evaluation of the factual antecedents of the case. However, we cannot lose sight of the fact that
both lower courts have greatly misapprehended the facts in arriving at their unanimous conclusion.
Hence, we are constrained to apply one of the exceptions specifically paragraph 4 above, instead of
the general rule.

Petitioner takes exception to the CA's ruling that the controversial phrase "CADIZ FOREVER,
BADING AND SAGAY NEVER" tends to induce suspicion on private respondent's character,
integrity and reputation as mayor of Cadiz City. He avers that there is nothing in said printed
matter tending to defame and induce suspicion on the character, integrity and reputation of private
respondent.

The OSG, in its Manifestation and Motion in Lieu of Comment, asserts that "there is nothing in the
phrase "CADIZ FOREVER" and "BADING AND SAGAY NEVER" which ascribe to private
respondent any crime, vice or defect, or any act, omission, condition, status or circumstance which
will either dishonor, discredit, or put him into contempt."[11]

The prosecution maintains that the appellate court correctly sustained the trial court's finding of
guilt on petitioner. Citing well-established jurisprudence[12] holding that "[w]ords calculated to
induce suspicion are sometimes more effective

to destroy reputation than false charges directly made" and that "[i]ronical and metaphorical
language is a favored vehicle for slander," it argued that the words printed on the billboards
somehow bordered on the incomprehensible and the ludicrous yet they were so deliberately crafted
solely to induce suspicion and cast aspersion against private respondent's honor and reputation.

A libel is defined as "a public and malicious imputation of a crime or of a vice or defect, real or
imaginary or any act, omission, condition, status or circumstance tending to cause the dishonor,
discredit or contempt of a natural or juridicial person or to blacken the memory of one who is
dead."[13] "For an imputation to be libelous, the following requisites must concur: a) it must be
defamatory; b) it must be malicious; c) it must be given publicity and d) the victim must be
identifiable."[14] Absent one of these elements precludes the commission of the crime of libel.

Although all the elements must concur, the defamatory nature of the subject printed phrase must be
proved first because this is so vital in a prosecution for libel. Were the words imputed not
defamatory in character, a libel charge will not prosper. Malice is necessarily rendered immaterial.

An allegation is considered defamatory if it ascribes to a person the commission of a crime, the

possession of a vice or defect, real or imaginary or any act, omission, condition, status or
circumstance which tends to dishonor or discredit or put him in contempt or which tends to blacken
the memory of one who is dead. To determine "whether a statement is defamatory, the words
used are to be construed in their entirety and should be taken in their plain, natural and ordinary
meaning as they would naturally be understood by persons reading them, unless it appears that
they were used and understood in another sense."[15] Moreover, "[a] charge is sufficient if the
words are calculated to induce the hearers to suppose and understand that the person or persons
against whom they were uttered were guilty of certain offenses or are sufficient to impeach the
honesty, virtue or reputation or to hold the person or persons up to public ridicule."[16]

Tested under these established standards, we cannot subscribe to the appellate court's finding that
the phrase "CADIZ FOREVER, BADING AND SAGAY NEVER" tends to induce suspicion on
private respondent's character, integrity and reputation as mayor of Cadiz City. There are no
derogatory imputations of a crime, vice or defect or any act, omission, condition, status or
circumstance tending, directly or indirectly, to cause his dishonor. Neither does the phrase in its
entirety, employ any unpleasant language or somewhat harsh and uncalled for that would reflect on
private respondent's integrity. Obviously, the controversial word "NEVER" used by petitioner was
plain and simple. In its ordinary sense, the word did not cast aspersion upon private respondent's
integrity and reputation much less convey the idea that he was guilty of any offense. Simply
worded as it was with nary a notion of corruption and dishonesty in government service, it is our
considered view to appropriately consider it as mere epithet or personal reaction on private
respondent's performance of official duty and not purposely designed to malign and besmirch his
reputation and dignity more so to deprive him of public confidence.

Indeed, the prosecution witnesses were able to read the message printed in the billboards and gave
a negative impression on what it says. They imply that the message conveys something as if the
private respondent was being rejected as city mayor of Cadiz. But the trustworthiness of these
witnesses is doubtful considering the moral ascendancy exercised over them by the private
respondent such that it is quite easy for them to draw such negative impression. As observed by
the OSG, at the time the billboards were erected and during the incumbency of private respondent
as mayor of Cadiz City, these witnesses were either employed in the Cadiz City Hall or active in
the project of the city government. Bernardita was a member of the Clean and Green Program of
Cadiz City; Jude was employed as a licensing officer under the Permit and License Division of the
Cadiz City Hall and Nenita held the position of Utility Worker II of the General Services Office of
Cadiz City. These witnesses, according to the OSG, would naturally testify in his favor. They
could have verbicide the meaning of the word "NEVER." Prudently, at the least, the prosecution
could have presented witnesses within the community with more independent disposition than
these witnesses who are beholden to private respondent.

According to the private respondent, the message in the billboards would like to convey to the
people of Cadiz that he is a tuta of Sagay City.

We disagree. Strangely, the OSG adopted a position contrary to the interest of the People. In its
Manifestation and Motion in Lieu of Comment, instead of contesting the arguments of the
petitioner, the OSG surprisingly joined stance with him, vehemently praying for his acquittal. We
quote with approval the OSG's analysis of the issue which was the basis for its observation, thus:

During the proceedings in the trial court, private respondent testified that the subject billboards
maligned his character and portrayed him as a puppet of Sagay City, Thus:

Q: You do not know of course the intention of putting those billboards "BADING AND SAGAY
NEVER"?

A: Definitely, I know the intention because to answer your question, it will not only require those
"BADING AND SAGAY NEVER" billboard[s], it was after which additional billboards were put
up. That strengthen, that I am being a "Tuta of Sagay. I am being maligned because of those
billboards that states and I repeat: "Ang Tubig san Cadiz, ginkuha sang Sagay", "Welcome to
Brgy. Cadiz" and there is a small word under it, Zone 2, very small, very very small, you cannot
see it in [sic] a glance.

xxxx

A: That is the meaning of the signboard[s]. The message that the signboards would like to convey
to the people of Cadiz, that the Mayor of Cadiz City is a "Tuta" or Puppet of Sagay City.

x x x x[17]

Contrary to private respondent's assertion, there is nothing in the subject billboards which state,
either directly or indirectly, that he is, in his words, a "tuta" or "puppet" of Sagay City. Except for
private respondent, not a single prosecution witness testified that the billboards portray Mayor
Bading Escalante, Jr. as a "tuta or "puppet" of Sagay City. The billboards erected by petitioner
simply say "CADIZ FOREVER", "BADING AND SAGAY NEVER"[18]

Apparently, private respondent refers to the circumstances mentioned in another billboard that is
not the subject matter in the present charge. The aforesaid facts dismally failed to support the
allegations in the instant information. Be that as it may, private respondent nevertheless did not
specify any actionable wrong or particular act or omission on petitioner's part that could have
defamed him or caused his alleged injury. While it may be that the Court is not bound by the
analysis and observation of the OSG, still, the Court finds that it deserves meritorious
consideration. The prosecution never indulged to give any reason persuasive enough for the court
not to adopt it.

Truth be told that somehow the private respondent was not pleased with the controversial printed
matter. But that is grossly insufficient to make it actionable by itself. "[P]ersonal hurt or
embarrassment or offense, even if real, is not automatically equivalent to defamation,"[19] "words
which are merely insulting are not actionable as libel or slander per se, and mere words of general
abuse however opprobrious, ill-natured, or vexatious, whether written or spoken, do not constitute
bases for an action for defamation in the absence of an allegation for special damages. The fact that
the language is offensive to the plaintiff does not make it actionable by itself," as the Court ruled in
MVRS Publications, Inc. v. Islamic Da' Wah Council of the Phils., Inc.[20]

In arriving at an analogous finding of guilt on petitioner, both lower courts heavily relied on the
testimony of the petitioner pertaining to the reasons behind the printing of the phrase "CADIZ
FOREVER BADING AND SAGAY NEVER."[21] Our in-depth scrutiny of his testimony,
however, reveals that the reasons elicited by the prosecution mainly relate to the discharge of
private respondent's official duties as City Mayor of Cadiz City. For that matter, granting that the
controversial phrase is considered defamatory, still, no liability attaches on petitioner. Pursuant
to Article 361 of the Revised Penal Code, if the defamatory statement is made against a public
official with respect to the discharge of his official duties and functions and the truth of the
allegations is shown, the accused will be entitled to an acquittal even though he does not prove that
the imputation was published with good motives and for justifiable ends. As the Court held in
United States v. Bustos,[22] the policy of a public official may be attacked, rightly or wrongly with
every argument which ability can find or ingenuity invent. The public officer "may suffer under a
hostile and an unjust accusation; the wound can be assuaged by the balm of a clear conscience. A
public [official] must not be too thin-skinned with reference to comments upon his official acts."

"In criminal prosecutions, fundamental is the requirement that the elemental acts constituting the
offense be established with moral certainty as this is the critical and only requisite to a finding of
guilt."[23] In this case, contrary to the conclusion of the trial court as affirmed by the appellate
court, the prosecution failed to prove that the controversial phrase "CADIZ FOREVER, BADING
AND SAGAY NEVER" imputes derogatory remarks on private respondent's character, reputation
and integrity. In this light, any discussion on the issue of malice is rendered moot.

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated
August 31, 2005 in CA-G.R. CR No. 28175 is REVERSED and SET ASIDE and the petitioner is
ACQUITTED of the crime charged.

SO ORDERED

POLICE POWER

Lozano v. Martinez [GR L-63419, 18 December 1986]

En Banc, Yap (J): 9 concur

Facts: Batas Pambansa 22 (BP22; Bouncing Check Law) was approved on 3 April 1979. The
petitions arose from cases involving prosecution of offenses under BP22. (Florentina A. Lozano
vs. RTC Judge Antonio M. Martinez [Manila, Branch XX] in GR L-63419, Luzviminda F.
Lobaton vs. RTC Executive Judge Glicerio L. Cruz [Lemery Batangas, Branch V] in GR
L-66839-42, Antonio and Susan Datuin vs. RTC Judge Ernani C. Pano [Quezon City, Branch
LXXVIII] in GR 71654, Oscar Violago vs. RTC Judge Ernani C. Pano [Quezon City, Branch
LXXVIII] in GR 74524-25, Elinor Abad vs. RTC Judge Nicolad A. Gerochi Jr. [Makati, Branch
139] in GR 75122-49, Amable and Sylvia Aguiluz vs. Presiding Judge of Branch 154 of Pasig in
GR 75812- 13, Luis M. Hojas vs. RTC Judge Senen Penaranda [Cagayan de Oro, Branch XX] in
GR 72565-67, and People vs. RTC Judge David Nitafan [Manila, Branch 52] and Thelma
Sarmiento in GR 75789]. Lozano, Lobaton, Datuin, Violago, Abad, Aguiluz, Hojas and Sarmiento
moved seasonably to quash the informations on the ground that the acts charged did not constitute
an offense, the statute being unconstitutional. The motions were denied by the trial courts, except
in one case, which is the subject of GR 75789 (People vs. Nitafan), wherein the trial court declared
the law unconstitutional and dismissed the case. The parties adversely affected have come to the
Supreme Court for relief.

Issue: Whether BP 22 is a valid legislative act.

Held: Yes. It is within the authority of the legislature to enact such a law in the exercise of the
police power. It is within the prerogative of the lawmaking body to proscribe certain acts deemed
pernicious and inimical to public welfare. Acts mala in se are not the only acts which the law can
punish. An act may not be considered by society as inherently wrong, hence, not malum in se, but
because of the harm that it inflicts on the community, it can be outlawed and criminally punished
as malum prohibitum. BP 22 is aimed at putting a stop to or curbing the practice of issuing checks
that are worthless, i.e. checks that end up being rejected or dishonored for payment. The thrust of
the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting
them in circulation. The law punishes the act not as an offense against property, but an offense
against public order. It is not the non-payment of an obligation which the law punishes, nor is it
intended or designed to coerce a debtor to pay his debt. Further, a statute is presumed to be valid.
Every presumption must be indulged in favor of its constitutionality. Where it is clear that the
legislature has overstepped the limits of its authority under the constitution, the Court should not
hesitate to wield the axe and let it fall heavily on the offending statute.

Del Rosario v. Bengzon [GR 88265, 21 December 1989]

En Banc, Grino-Aquino (J): 12 concur, 2 concur in result

Facts: On 15 March 1989, the full text of Republic Act 6675 was published in two newspapers of
general circulation in the Philippines. The law took effect on 30 March 1989, 15 days after its
publication, as provided in Section 15 thereof. Section 7, Phase 3 of Administrative Order 62 was
amended by Administrative Order 76 dated 28 August 1989 by postponing to 1 January 1990 the
effectivity of the sanctions and penalties for violations of the law, provided in Sections 6 and 12 of
the Generics Act and Sections 4 and 7 of the Administrative Order. Officers of the Philippine
Medical Association, the national organization of medical doctors in the Philippines, on behalf of
their professional brethren who are of kindred persuasion, filed a class suit requesting the Court to
declare some provisions (specifically penal) of the Generics Act of 1988 and the implementing
Administrative Order 62 issued pursuant thereto as unconstitutional, hence, null and void. The
petition was captioned as an action for declaratory relief, over which the Court does not exercise
jurisdiction. Nevertheless, in view of the public interest involved, the Court decided to treat it as a
petition for prohibition instead.

Issue: Whether the prohibition against the use by doctors of "no substitution" and/or words of
similar import in their prescription in the Generics Act is a lawful regulation.

Held: Yes. There is no constitutional infirmity in the Generics Act; rather, it implements the
constitutional mandate for the State "to protect and promote the right to health of the people" and
"to make essential goods, health and other social services available to all the people at affordable
cost" (Section 15, Art. II and Section 11, Art. XIII, 1987 Constitution). The prohibition against the
use by doctors of "no substitution" and/or words of similar import in their prescription, is a valid
regulation to prevent the circumvention of the law. It secures to the patient the right to choose
between the brand name and its generic equivalent since his doctor is allowed to write both the
generic and the brand name in his prescription form. If a doctor is allowed to prescribe a
brand-name drug with "no substitution," the patient's option to buy a lower-priced, but equally
effective, generic equivalent would thereby be curtailed. The law aims to benefit the impoverished
(and often sickly) majority of the population in a still developing country like ours, not the affluent
and generally healthy minority.

Tablarin v. Gutierrez (J) [GR 78164, 31 July 1987]

En Banc, Feliciano (J): 13 concur

Facts: Teresita Tablarin, Ma. Luz Ciriaco, Ma. Nimfa B. Rovira, and Evangelina S. Labao sought
admission into colleges or schools of medicine for the school year 1987-1988. However, they
either did not take or did not successfully take the National Medical Admission Test (NMAT)
required by the Board of Medical Education and administered by the Center for Educational
Measurement (CEM). On 5 March 1987, Tablarin, et. al., in behalf of applicants for admission into
the Medical Colleges who have not taken up or successfully hurdled the NMAT, filed with the
Regional Trial Court (RTC), National Capital Judicial Region, a Petition for Declaratory Judgment
and Prohibition with a prayer for Temporary Restraining Order (TRO) and Preliminary Injunction,
to enjoin the Secretary of Education, Culture and Sports, the Board of Medical Education and the
Center for Educational Measurement from enforcing Section 5 (a) and (f) of Republic Act 2382, as
amended, and MECS Order 52 (series of 1985), dated 23 August 1985 [which established a
uniform admission test (NMAT) as an additional requirement for issuance of a certificate of
eligibility for admission into medical schools of the Philippines, beginning with the school year
1986-1987] and from requiring the taking and passing of the NMAT as a condition for securing
certificates of eligibility for admission, from proceeding with accepting applications for taking the
NMAT and from administering the NMAT as scheduled on 26 April 1987 and in the future. After
hearing on the petition for issuance of preliminary injunction, the trial court denied said petition on
20 April 1987. The NMAT was conducted and administered as previously scheduled. Tablarin, et.
al. accordingly filed a Special Civil Action for Certiorari with the Supreme Court to set aside the
Order of the RTC judge denying the petition for issuance of a writ of preliminary injunction.

Issue: Whether NMAT requirement for admission to medical colleges contravenes the
Constitutional guarantee for the accessibility of education to all, and whether such regulation is
invalid and/or unconstitutional.
Held: No. Republic Act 2382, as amended by Republic Acts 4224 and 5946, known as the
"Medical Act of 1959" defines its basic objectives to govern (a) the standardization and regulation
of medical education; (b) the examination for registration of physicians; and (c) the supervision,
control and regulation of the practice of medicine in the Philippines. The Statute created a Board of
Medical Education and prescribed certain minimum requirements for applicants to medical
schools. The State is not really enjoined to take appropriate steps to make quality education
"accessible to all who might for any number of reasons wish to enroll in a professional school but
rather merely to make such education accessible to all who qualify under "fair, reasonable and
equitable admission and academic requirements." The regulation of the practice of medicine in all
its branches has long been recognized as a reasonable method of protecting the health and safety of
the public. The power to regulate and control the practice of medicine includes the power to
regulate admission to the ranks of those authorized to practice medicine. Legislation and
administrative regulations requiring those who wish to practice medicine first to take and pass
medical board examinations have long ago been recognized as valid exercises of governmental
power. Similarly, the establishment of minimum medical educational requirements for admission
to the medical profession, has also been sustained as a legitimate exercise of the regulatory
authority of the state.

EMILIO GANCAYCO v. CITY GOVERNMENT OF QUEZON CITY, GR No. 177807,

2011-10-11

Facts:

In the early 1950s, retired Justice Emilio A. Gancayco bought a parcel of land located at

EDSA

,... Quezon City with an area of 375 square meters and covered by Transfer Certificate of Title
(TCT) No. RT114558.

On 27 March 1956, the Quezon City Council issued Ordinance No. 2904, entitled "An Ordinance
Requiring the Construction of Arcades, for Commercial Buildings to be Constructed in Zones
Designated as Business Zones in the Zoning Plan of Quezon City, and Providing Penalties in

Violation Thereof."

Ordinance No. 2904 required the relevant property owner to construct an arcade with a width of
4.50 meters and height of 5.00 meters along EDSA, from the north side of Santolan Road to one lot
after Liberty Avenue, and from one lot before Central Boulevard to the Botocan... transmission
line.

At the outset, it bears emphasis that at the time Ordinance No. 2904 was passed by the city council,
there was yet no building code passed by the national legislature.

In effect, property owners relinquish the use of the space for use as an arcade for pedestrians,
instead of using it for their own purposes.

The ordinance was amended several times. On 8 August 1960, properties located at the Quezon
City-San Juan boundary were exempted by Ordinance No. 60-4477 from the construction of
arcades. This ordinance was further amended by Ordinance No. 60-4513, extending the exemption
to... commercial buildings from Balete Street to Seattle Street. Ordinance No. 6603 dated 1 March
1966 meanwhile reduced the width of the arcades to three meters for buildings along V. Luna
Road, Central District, Quezon City.

The ordinance covered the property of Justice Gancayco.

Justice Gancayco sought the exemption of a two-storey building being constructed on his property
from the application of Ordinance No. 2904 that he be exempted from constructing an arcade on...
his property.

the City Council acted favorably on Justice Gancayco's request and issued Resolution No. 7161,
S-66, "subject to the condition that upon notice by the City Engineer, the owner shall, within
reasonable time, demolish the enclosure of said arcade at his own... expense when public interest
so demands."

Decades after,... the

MMDA... conducted operations to clear obstructions along the sidewalk of EDSA in Quezon City
pursuant to Metro Manila Council's (MMC) Resolution No. 02-28, Series of 2002.

The... resolution authorized the MMDA and local government units to "clear the sidewalks, streets,
avenues, alleys, bridges, parks and other public places in Metro Manila of all illegal structures and
obstructions."

On 28 April 2003, the MMDA sent a notice of demolition to Justice Gancayco alleging that a
portion of his building violated the

Building Code... in relation to Ordinance No. 2904.

Justice Gancayco did not comply with the notice. Soon after the lapse of the fifteen (15) days, the
MMDA proceeded to demolish the party wall, or what was referred to as the "wing walls," of the
ground floor structure.

On 29 May 2003, Justice Gancayco filed a Petition... with prayer for a temporary restraining order
and/or writ of preliminary injunction before the Regional Trial Court (RTC) of Quezon City,...
seeking to prohibit the

MMDA and the City Government of Quezon City from demolishing his property.

The City Government of Quezon City claimed that the ordinance was a valid exercise of police
power, regulating the use of property in a business zone.

Similarly, the MMDA alleged that Justice Gancayco could not seek the nullification of an
ordinance that he had already violated, and that the ordinance enjoyed the presumption of
constitutionality.

Issues:

WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM ASSAILING THE

VALIDITY OF ORDINANCE NO. 2904

Ruling:

Justice Gancayco questioned the constitutionality of the ordinance on two grounds: (1) whether the
ordinance "takes" private property without due process of law and just compensation; and (2)
whether the ordinance violates the equal protection of rights because it... allowed exemptions from
its application.

On the first ground, we find that Justice Gancayco may still question the constitutionality of the
ordinance to determine whether or not the ordinance constitutes a "taking" of private property
without due process of law and just compensation. It was only in 2003 when he was... allegedly
deprived of his property when the MMDA demolished a portion of the building. Because he was
granted an exemption in 1966, there was no "taking" yet to speak of.

in Acebedo Optical Company, Inc. v. Court of Appeals,... we held:

It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner
acquiesced in the special conditions imposed by the City Mayor in subject business permit does
not preclude it from challenging the said imposition, which is ultra... vires or beyond the ambit of
authority of respondent City Mayor. Ultra vires acts or acts which are clearly beyond the scope of
one's authority are null and void and cannot be given any effect. The doctrine of estoppel cannot
operate to give effect to an act... which is otherwise null and void or ultra vires.
Anent the second ground, we find that Justice Gancayco may not question the ordinance on the
ground of equal protection when he also benefited from the exemption. It bears emphasis that
Justice Gancayco himself requested for an exemption from the application of the ordinance in

1965 and was eventually granted one. Moreover, he was still enjoying the exemption at the time of
the demolition as there was yet no valid notice from the city engineer. Thus, while the ordinance
may be attacked with regard to its different treatment of properties that appears... to be similarly
situated, Justice Gancayco is not the proper person to do so.

Ermita Malate Hotel & Motel Operators Association v. City of Manila [GR L-24693, 31 July
1967]
En Banc, Fernando (J): 7 concur, 2 on leave

Facts: On 13 June 1963, Ordinance 4760 was issued by the municipal board of the City of Manila
and approved by Vice Mayor Herminio Astorga, who was at the time acting Mayor of the City of
Manila. The ordinance (1) imposes a P6,000.00 fee per annum for first class motels and P4,500.00
for second class motels;
(2) requires the owner, manager, keeper or duly authorized representative of a hotel, motel, or
lodging house to refrain from entertaining or accepting any guest or customer or letting any room
or other quarter to any person or persons without his filling up the prescribed form in a lobby open
to public view at all times and in his presence, wherein the surname, given name and middle name,
the date of birth, the address, the occupation, the sex, the nationality, the length of stay and the
number of companions in the room, if any, with the name, relationship, age and sex would be
specified, with data furnished as to his residence certificate as well as his passport number, if any,
coupled with a certification that a person signing such form has personally filled it up and affixed
his signature in the presence of such owner, manager, keeper or duly authorized representative,
with such registration forms and records kept and bound together; (3) provides that the premises
and facilities of such hotels, motels and lodging houses would be open for inspection either by the
City Mayor, or the Chief of Police, or their duly authorized representatives. The ordinance also
classified motels into two classes and required the maintenance of certain minimum facilities in
first class motels such as a telephone in each room, a dining room or restaurant and laundry; while
second class motels are required to have a dining room. It prohibited a person less than 18 years old
from being accepted in such hotels, motels, lodging houses, tavern or common inn unless
accompanied by parents or a lawful guardian and made it unlawful for the owner, manager, keeper
or duly authorized representative of such establishments to lease any room or portion thereof more
than twice every 24 hours. It provided a penalty of automatic cancellation of the license of the
offended party in case of conviction. On 5 July 1963, the Ermita-Malate Hotel and Motel
Operators Association (EMHMOA), its member Hotel del Mar, and a certain Go Chiu filed a
petition for prohibition against the mayor of the City of Manila in his capacity as he is charged with
the general power and duty to enforce ordinances of the City of Manila and to give the necessary
orders for the faithful execution and enforcement of such ordinances. There was a plea for the
issuance of preliminary injunction and for a final judgment declaring the above ordinance null and
void and unenforceable. The lower court on 6 July 1963 issued a writ of preliminary injunction
ordering the Mayor to refrain from enforcing said Ordinance 4760 from and after 8 July 1963.
After the submission of the memoranda, ruled that the City of Manila lack authority to regulate
motels and rendering Ordinance 4760 unconstitutional and therefore null and void. It made
permanent the preliminary injunction issued by the Mayor and his agents to restrain him from
enforcing the ordinance. The Mayor of Manila appealed to the Supreme Court.

Issue: Whether the regulations imposed on motels and hotels (increasing license fees, partially
restricting the freedom to contract, and restraining the liberty of individuals) is valid and/or
constitutional.

Held: Yes. The ordinance was enacted to minimize certain practices hurtful to public morals. It
was made as there is observed an alarming increase in the rate of prostitution, adultery and
fornication in Manila traceable in great part to the existence of motels, which provide a necessary
atmosphere for clandestine entry, presence and exit and thus become the ideal haven for prostitutes
and thrill seekers. The ordinance proposes to check the clandestine harboring of transients and
guests of these establishments by requiring these transients and guests to fill up a registration form,
prepared for the purpose, in a lobby open to public view at all times, and by introducing several
other amendatory provisions calculated to shatter the privacy that characterizes the
Constitutional Law II, 2005 ( 3 )

Narratives (Berne Guerrero)

registration of transients and guests. The increase in the license fees was intended to discourage
establishments of the kind from operating for purpose other than legal and to increase the income
of the city government. Further, the restriction on the freedom to contract, insofar as the challenged
ordinance makes it unlawful for the owner, manager, keeper or duly authorized representative of
any hotel, motel, lodging house, tavern, common inn or the like, to lease or rent any room or
portion thereof more than twice every 24 hours, with a proviso that in all cases full payment shall
be charged, cannot be viewed as a transgression against the command of due process. It is neither
unreasonable nor arbitrary. Precisely it was intended to curb the opportunity for the immoral or
illegitimate use to which such premises could be, and, are being devoted. Furthermore, the right of
the individual is necessarily subject to reasonable restraint by general law for the common good.
The liberty of the citizen may be restrained in the interest of the public health, or of the public order
and safety, or otherwise within the proper scope of the police power. State in order to promote the
general welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order
to secure the general comfort, health, and prosperity of the state.

Sangalang v. IAC [GR 71169, 25 August 1989]

En Banc, Sarmiento (J): 11 concur, 3 took no part

Facts: The Supreme Court promulgated its decision on 22 December 1988. Two (2) motions for
reconsideration were filed by Atty. Sangco (in behalf of the Sangalangs, GR71169) and Atty.
Sison (in behalf of Bel-Air Village Association [BAVA]), and a motion for
reconsideration/clarification filed by Atty. Funk (GR 74376, 76394, 78182, and 82281). The
motion for reconsideration (GR 71169), filed by the Sangalangs, was anchored on two grounds: (1)
that contrary to the SC decision, Jupiter Street is for the exclusive use of Bel-Air Village residents;
and (b) that the Ayala Corporation did contrive to acquire membership at BAVA purposely to
bargain for access to Jupiter Street by the general public. Subsequently, BAVA informed the Court
that it was adopting the Sangalangs' motion for reconsideration. The motion for reconsideration (in
GRs 74376, 76394, 78182, and 82281) raises more or less the same questions and asks furthermore
that the Supreme Court delete the award of damages granted by the Court of Appeals.

Issue: Whether the general public has right to to use Jupiter and Orbit streets in Bel-Air Village,
and whether the demolition of the gates in said streets was valid or lawful.

Held: Yes. The Deed of Donation executed by the Ayala Corporation covering Jupiter and Orbit
Streets effectively required both passageways open to the general public. The donation gave the
general public equal right to it. The opening of Jupiter Street was warranted by the demands of the
common good, in terms of traffic decongestion and public convenience. The opening of Orbit
Street is upheld for the same rationale. The demolition of the gates at Orbit and Jupiter Streets does
not amount to deprivation of property without due process of law or expropriation without just
compensation, as there is no taking of property involved in the case. The challenged act of the
Mayor is, rather, in the concept of police power. The gate, the destruction of which opened Orbit
Street, has the character of a public nuisance in the sense that it hinders and impairs the use of
property. Article 699 of the Civil Code provides that the remedies against a public nuisance are (1)
A prosecution under the Penal Code or any local ordinance; or (2) A civil action; or (3) Abatement,
without judicial proceedings. In addition, under Article 701 of the Code, summary abatement
(without judicial proceeding) may be carried out by the Mayor himself.

Villanueva v. Castaneda [GR L-61311, 21 September 1987]

First Division, Cruz (J): 3 concur, 1 on leave.

Facts: On 7 November 1961, the municipal council of San Fernando (Pampanga) adopted
Resolution 218 authorizing some 24 members of the Fernandino United Merchants and Traders
Association (FUMTA) to construct permanent stalls and sell along Mercado street, on a strip of
land measuring 12 by 77 meters (talipapa). The action was protested on 10 November 1961 by
Felicidad Villanueva, Fernando Caisip, Antonio Liang, Felina Miranda, Ricardo Puno, Florencio
Laxa, and Rene Ocampo (claiming that they were granted previous authorization by the municipal
government to conduct business therein), in Civil Case 2040, where the Court of First Instance
(CFI) Pampanga, Branch 2, issued a writ of preliminary injunction that prevented the FUMTA
members from constructing the said stalls until final resolution of the controversy. On 18 January
1964, while the case was pending, the municipal council of San Fernando adopted Resolution 29,
which declared the subject area as "the parking place and as the public plaza of the municipality,"
thereby impliedly revoking Resolution 218 (series of 1961). On 2 November 1968, Judge Andres
C. Aguilar decided the aforesaid case and held that the land occupied by Villanueva, et. al., being
public in nature, was beyond the commerce of man and therefore could not be the subject of private
occupancy. The writ of preliminary injunction was made permanent. The decision was not
enforced as the petitioners were not evicted from the place. The number of vendors in the area
(talipapa) ballooned to 200. The area deteriorated increasingly to the great prejudice of the
community in general, as the makeshift stalls render the area as virtual fire trap. The problem
festered for some more years under a presumably uneasy truce among the protagonists, none of
whom made any move, for some reason. On 12 January 1982, the Association of Concerned
Citizens and Consumers of San Fernando filed a petition for the immediate implementation of
Resolution 29, to restore the property to its original and customary use as a public plaza. Acting
thereon after an investigation conducted by the municipal attorney, OIC (Office of the Mayor)
Vicente Macalino issued on 14 June 1982 a resolution requiring the municipal treasurer and the
municipal engineer to demolish the stalls beginning 1 July 1982. The Villanueva, et. al. filed a
petition for prohibition with the CFI Pampanga (Civil Case 6470) on 26 June 1982. The judge
denied the petition on 19 July 1982, and the motion for reconsideration on 5 August 1982,
prompting Villanueva, et. al. to file a petition on certiorari with the Supreme Court. Paterno
Guevarra, who replaced Macalino as OIC of San Fernando, was impleaded.

Issue: Whether the demolition of the stalls in the place known as talipapa, pursuant to Resolution
29 of the municipal government, is valid; notwithstanding alleged contractual arrangements of
market lessees (Villanueva, et.al.) with the municipal government.

Held: Yes. Police power under the general welfare clause authorizes the municipal council to enact
such ordinances and make such regulations, not repugnant to law, as may be necessary to carry into
effect and discharge the powers and duties conferred upon it by law and such as shall seem
necessary and proper to provide for the health and safety, promote the prosperity, improve the
morals, peace, good order, comfort, and convenience of the municipality and the inhabitants
thereof, and for the protection of property therein. Police power cannot be surrendered or
bargained away through the medium of a contract. In fact, a public plaza is beyond the commerce
of man and so cannot be the subject of lease or any other contractual undertaking. The lease of a
public plaza of a municipality in favor of a private person is null and void. A plaza cannot be used
for the construction of market stalls, specially of residences, and that such structures constitute a
nuisance subject to abatement according to law. On the other hand, a portion of a public sidewalk
is likewise beyond the commerce of man. Any contract entered into in connection with the
sidewalk, is ipso facto null and ultra vires. The sidewalk was intended for and was used by the
public, in going from one place to another. The streets and public places of the city shall be kept
free and clear for the use of the public, and the sidewalks and crossings for the pedestrians, and the
same shall only be used or occupied for other purposes as provided by ordinance or regulation.
Stalls block the free passage of pedestrians resulting to clogged with vehicular traffic.

De la Cruz v. Paras [GR L-42571-72, 25 July 1983]

En Banc, Fernando (J): 9 concur, 1 reserved right to dissent, 2 on official leave, 1 on sick
leave

Facts: The municipality of Bocaue, Bulacan issued Ordinance 84 (Prohibition and Closure
Ordinance of Bocaue, Bulacan) prohibited the operation of night clubs, and such clubs employing
hostesses. On 5 November 1975, two cases for prohibition with preliminary injunction were filed
with the CFI Bulacan. The cases were assigned to Judge, now Associate Justice Paras of the
Intermediate Appellate Court (IAC), who issued a restraining order on 7 November 1975. The
answers were thereafter filed. On 15 January 1976, the lower court upheld the constitutionality and
validity of Ordinance 84 and dismissed the cases. Hence the petition for certiorari by way of
appeal.

Issue: Whether the prohibition on the operation of night clubs, to foster public morals, is
reasonable and/or valid.

Held: Reasonableness is consonant with the general powers and purposes of municipal
corporations, as well as consistency with the laws or policy of the State. Sweeping exercise of a
lawmaking power could not qualify under the term reasonable. The objective of fostering public
morals, a worthy and desirable end can be attained by a measure that does not encompass too wide
a field. On its face, the Ordinance is characterized by overbreadth. The purpose sought to be
achieved could have been attained by reasonable restrictions rather than by an absolute
prohibition. A prohibition is a clear invasion of personal or property rights, personal in the case of
those individuals desirous of patronizing those night clubs and property in terms of the investments
made and salaries to be earned by those therein employed. Republic Act 938 (An Act granting
municipal or city boards and councils the power to regulate the establishment, maintenance and
operation of certain places of amusement within their respective territorial jurisdiction) granted the
municipal or city board or council of each chartered city to have the power to regulate by ordinance
the establishment, maintenance and operation of night clubs, cabarets, dancing schools, pavilions,
cockpits, bars, saloons, bowling alleys, billiard pools, and other similar places of amusement
within its territorial jurisdiction. The power to regulate, was amended to likewise prohibit on 21
May 1954; but the title remained intact. The power granted remains that of regulation, not
prohibition. The power claimed to enact the ordinance is at the most dubious and under the present
Local Government Code non-existent. The law mandates the sangguniang bayan to "(rr) Regulate
cafes, restaurants, beer-houses, hotels, motels, inns, pension houses and lodging houses, except
travel agencies, tourist guides, tourist transports, hotels, resorts, de luxe restaurants, and tourist
inns of international standards which shall remain under the licensing and regulatory power of the
Ministry of Tourism which shall exercise such authority without infringing on the taxing or
regulatory powers of the municipality; (ss) Regulate public dancing schools, public dance halls,
and sauna baths or massage parlors; and (tt) Regulate the establishment and operation of billiard
pools, theatrical performances, circuses and other forms of entertainment. It is clear that municipal
corporations cannot prohibit the operation of night clubs. They may be regulated, but not
prevented from carrying on their business.

Velasco v. Villegas [GR L-24153, 14 February 1983]

En Banc, Fernando (J): 10 concur, 1 reserving vote, 1 took no part

Facts: Ordinance 4964 was issued by the city of Manila prohibiting any operator of any barbershop
to conduct the business of massaging customers or other persons in any adjacent room(s) of said
barber shop, or in any room(s) within the same building where the barber shop is located as long as
the operator of the barber shop and the rooms where massaging is conducted is the same person.
Tomas Velasco, Lourdes Ramirez, Sy Pin, Edmundo Unson, Apolonia Ramirez, and Lourdes
Lomibao, as component members of the Sta. Cruz Barbershop Association, filed petition for
declaratory relief with the lower court, challenging the constitutionality of the ordinance as it
allegedly amounts to a deprivation of property of their means of livelihood without due process of
law. The petition was denied by the lower court as its availability being dependent on there being
as yet no case involving such issue having been filed. Hence, the appeal.

Issue: Whether Ordinance 4964 is a valid police power measure.

Held: The objectives behind its enactment are: "(1) To be able to impose payment of the license fee
for engaging in the business of massage clinic under Ordinance 3659 as amended by Ordinance
4767, an entirely different measure than the ordinance regulating the business of barbershops and,
(2) in order to forestall possible immorality which might grow out of the construction of separate
rooms for massage of customers."

The Court has been most liberal in sustaining ordinances based on the general welfare clause. It
has made clear the significance and scope of such a clause, which delegates in statutory form the
police power to a municipality. The clause has been given wide application by municipal
authorities and has in its relation to the particular circumstances of the case been liberally
construed by the courts. Such is the progressive view of Philippine jurisprudence and it has
continued to be.

Magtajas v. Pryce Properties Corp. [GR 111097, 20 July 1994]

En Banc, Cruz (J): 12 concur

Facts: The Philippine Amusement and Gaming Corporation (PAGCOR) is a corporation created
directly by Presidential Decree 1869 to help centralize and regulate all games of chance, including
casinos on land and sea within the territorial jurisdiction of the Philippines (the constitutionality of
the decree was sustained in Basco v. Philippine Amusements and Gambling Corporation).
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for
the purposes indicated in the Local Government Code. It is expressly vested with the police power
under what is known as the General Welfare Clause embodied in Section 16. Its Sangguniang
Panglungsod derives its powers, duties and functions under Section 458 of said Code. In 1992,
following its success in several cities, PAGCOR decided to expand its operations to Cagayan de
Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation
Inc., renovated and equipped the same, and prepared to inaugurate its casino there during the
Christmas season. The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift
and hostile. On 7 December 1992, it enacted Ordinance 3353 (An Ordinance Prohibiting the
issuance of business permit and canceling existing business permit to any establishment for the
using and allowing to be used its premises or portion thereof for the operation of Casino). On 4
January 1993, it adopted a sterner Ordinance 3375-93 (An Ordinance prohibiting the operation of
Casino and providing penalty for violation therefore). Pryce assailed the ordinances before the
Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental petitioner. The
Court found the ordinances invalid and issued the writ prayed for to prohibit their enforcement.
Reconsideration of the decision was denied on 13 July 1993. Cagayan de Oro City and its mayor
filed a petition for review under Rules of Court with the Supreme Court.

Issue: Whether the Sangguniang Panlungsod of Cagayan de Oro can prohibit the establishment of
a casino, or gambling, operated by PAGCOR through an ordinance or resolution.

Held: The morality of gambling is not justiciable issue. Gambling is not illegal per se. While it is
generally considered inimical to the interests of the people, there is nothing in the Constitution
categorically proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is
left to Congress to deal with the activity as it sees fit. In the exercise of its own discretion, the
legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some
forms of gambling and allow others for whatever reasons it may consider sufficient. Further, there
are two kinds of gambling, to wit, the illegal and those authorized by law. Legalized gambling is
not a modern concept; it is probably as old as illegal gambling, if not indeed more so. The
suggestion that the Local Government Code (LGC) authorize Local Government Units (LGUs) to
prohibit all kinds of gambling would erase the distinction between these two forms of gambling
without a clear indication that this is the will of legislature. Ordinances should not contravene a
statute as municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred on them by Congress as the national
lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than
those of the latter.

Tano v. Socrates [GR 110249, 21 August 1997]

En Banc, Davide Jr. (J): 5 concur, 4 join ponencias of Davide & Mendoza, 1 on official leave.

Facts: On 15 December 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted
Ordinance 15-92 (taking effect on 1 January 1993; An ordinance banning the shipment of all live
fish and lobster outside Puerto Princesa City from 1 January 1993 to 1 January 1998, and providing
exemptions; penalties and for other purposes thereof). To implement said ordinance, Acting
Mayor Amado L. Lucero issued Office Order 23 (series of 1993) dated 22 January 1993
authorizing the inspection of cargoes shipped out from the Puerto Princesa Airport, Wharf, and any
other port within the jurisdiction of the City. On 19 February 1993, the Sangguniang Lalawigan of
Palawan enacted Resolution 33 [A resolution prohibiting the catching, gathering, possessing,
buying, selling, and shipment of live marine coral dwelling aquatic organisms, to wit: Family:
Scaridae (Mameng), Epine Phelus Fasciatus (Suno), Cromileptes Altivelis (Panther or Senorita),
Lobster below 200 grams and spawning, Tridacna Gigas (Takllobo), Pinctada Margaritefera
(Mother pearl, Oysters, Giant clams, and other species), Penaeus Monodon (Tiger Prawn, Breeder
size or mother), Epinephelus Suillus (Loba or Green grouper), and Family: Balistidae (Tropical
Aquarium Fishes) for a period of 5 years in and coming from Palawan waters]. Puerto Princesa
City and the province of Palawan implemented said ordinances. Tano, et. al., who were criminally
charged with violating Sangguniang Panlalawigan Resolution 33 and Ordinance 2 of Palawan in
Criminal Case 93-05-C of the 1st MCTC of Palawan; and Robert Lim and Virginia Lim, who were
charged with violating City Ordinance 15-92 of Puerto Princesa City and Ordinance 2 of Palawan
before the Office of the City Prosecutor of Puerto Princesa, questioned the validity of the said
ordinances before the Supreme Court.
Issue: Whether the ordinances in question, which prohibit the fishing of certain marine species in
Palawan, are constitutional and/or valid.

Held: Laws (including ordinances enacted by local government units) enjoy the presumption of
constitutionality. To overthrow this presumption, there must be a clear and unequivocal breach of
the Constitution, not merely a doubtful or argumentative contradiction. In short, the conflict with
the Constitution must be shown beyond reasonable doubt. Where doubt exists, even if
well-founded, there can be no finding of unconstitutionality. To doubt is to sustain. In light of the
principles of decentralization and devolution enshrined in the Local Government Code (LGC) and
the powers granted therein to local government units under Section 16 (the General Welfare
Clause), and under Sections 149, 447(a) (1) (vi), 458(a)(1)(vi) and 468(a)(1)(vi), which involve the
exercise of police power, the validity of the Ordinances cannot be doubted. The ordinance also find
full support under Republic Act 7611 (Strategic Environmental Plan for Palawan Act), approved
on 19 June 1992; which adopts a comprehensive framework for the sustainable development of
Palawan compatible with protecting and enhancing the natural resources and endangered
environment of the province, which serve to guide the local government of Palawan and the
government agencies concerned in the formulation and implementation of plans, programs and
projects affecting said province. The first objective (to establish a "closed season" for the species
of fish or aquatic animals covered therein for a period of five years) is well within the devolved
power to enforce fishery laws in municipal waters which allows the establishment of "closed
seasons." The second objective (to protect the coral in the marine waters of the City of Puerto
Princesa and the Province of Palawan from further destruction due to illegal fishing activities) falls
within both the general welfare clause of the LGC and the express mandate thereunder to cities and
provinces to protect the environment and impose appropriate penalties for acts which endanger the
environment.

City of Manila vs Judge Perfecto Laguio

FACTS: On 30 Mar 1993, Mayor Lim signed into law Ord 7783 entitled AN ORDINANCE
PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING
CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES
IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION
THEREOF, AND FOR OTHER PURPOSES. It basically prohibited establishments such as bars,
karaoke bars, motels and hotels from operating in the Malate District which was notoriously
viewed as a red light district harboring thrill seekers. Malate Tourist Development Corporation
avers that the ordinance is invalid as it includes hotels and motels in the enumeration of places
offering amusement or entertainment. MTDC reiterates that they do not market such nor do they
use women as tools for entertainment. MTDC also avers that under the LGC, LGUs can only
regulate motels but cannot prohibit their operation. The City reiterates that the Ordinance is a valid
exercise of Police Power as provided as well in the LGC. The City likewise emphasized that the
purpose of the law is to promote morality in the City.

ISSUE: Whether or not Ordinance 7783 is valid.

HELD: The SC ruled that the said Ordinance is null and void. The SC noted that for an ordinance
to be valid, it must not only be within the corporate powers of the local government unit to enact
and must be passed according to the procedure prescribed by law, it must also conform to the
following substantive requirements:

(1) must not contravene the Constitution or any statute;

(2) must not be unfair or oppressive;

(3) must not be partial or discriminatory;

(4) must not prohibit but may regulate trade;

(5) must be general and consistent with public policy; and

(6) must not be unreasonable.

The police power of the City Council, however broad and far-reaching, is subordinate to the
constitutional limitations thereon; and is subject to the limitation that its exercise must be
reasonable and for the public good. In the case at bar, the enactment of the Ordinance was an
invalid exercise of delegated power as it is unconstitutional and repugnant to general laws.

A. The Ordinance contravenes

the Constitution

The enactment of the Ordinance was an invalid exercise of delegated power as it is

unconstitutional and repugnant to general laws.
The police power granted to LGUs must always be exercised with utmost observance of the rights
of the people to due process and equal protection of the law. Due process requires the intrinsic
validity of the law in interfering with the rights of the person to his life, liberty and property.

Requisites for the valid exercise

of Police Power are not met

To successfully invoke the exercise of police power as the rationale for the enactment of the
Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear
that the interests of the public generally, as distinguished from those of a particular class, require
an interference with private rights, but the means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals.60 It must be evident
that no other alternative for the accomplishment of the purpose less intrusive of private rights can
work. A reasonable relation must exist between the purposes of the police measure and the means
employed for its accomplishment, for even under the guise of protecting the public interest,
personal rights and those pertaining to private property will not be permitted to be arbitrarily
invaded.

Lacking a concurrence of these two requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights a violation of the due process clause.

The object of the Ordinance was, accordingly, the promotion and protection of the social and moral
values of the community. Granting for the sake of argument that the objectives of the Ordinance
are within the scope of the City Council’s police powers, the means employed for the
accomplishment thereof were unreasonable and unduly oppressive.

The worthy aim of fostering public morals and the eradication of the community’s social ills can be
achieved through means less restrictive of private rights; it can be attained by reasonable
restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or
their conversion into businesses “allowed” under the Ordinance have no reasonable relation to the
accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated
establishments will not per se protect and promote the social and moral welfare of the community;
it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it
arrest the spread of sexual disease in Manila.

The enumerated establishments are lawful pursuits which are not per se offensive to the moral
welfare of the community. While a motel may be used as a venue for immoral sexual activity, it
cannot for that reason alone be punished. It cannot be classified as a house of ill-repute or as a
nuisance per se on a mere likelihood or a naked assumption.

If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can
instead impose reasonable regulations such as daily inspections of the establishments for any
violation of the conditions of their licenses or permits; it may exercise its authority to suspend or
revoke their licenses for these violations; and it may even impose increased license fees. In other
words, there are other means to reasonably accomplish the desired end.

It is readily apparent that the means employed by the Ordinance for the achievement of its
purposes, the governmental interference itself, infringes on the constitutional guarantees of a
person’s fundamental right to liberty and property.

Modality employed is
unlawful taking
It is an ordinance which permanently restricts the use of property that it can not be used for any
reasonable purpose goes beyond regulation and must be recognized as a taking of the property
without just compensation.78 It is intrusive and violative of the private property rights of
individuals.

There are two different types of taking that can be identified. A “possessory” taking occurs when
the government confiscates or physically occupies property. A “regulatory” taking occurs when
the government’s regulation leaves no reasonable economically viable use of the property.

What is crucial in judicial consideration of regulatory takings is that government regulation is a

taking if it leaves no reasonable economically viable use of property in a manner that interferes
with reasonable expectations for use. When the owner of real property has been called upon to
sacrifice all economically beneficial uses in the name of the common good, that is, to leave his
property economically idle, he has suffered a taking.

The Ordinance gives the owners and operators of the “prohibited” establishments three (3) months
from its approval within which to “wind up business operations or to transfer to any place outside
of the Ermita-Malate area or convert said businesses to other kinds of business allowable within
the area.” The directive to “wind up business operations” amounts to a closure of the
establishment, a permanent deprivation of property, and is practically confiscatory. Unless the
owner converts his establishment to accommodate an “allowed” business, the structure which
housed the previous business will be left empty and gathering dust. It is apparent that the
Ordinance leaves no reasonable economically viable use of property in a manner that interferes
with reasonable expectations for use.
The second and third options to transfer to any place outside of the Ermita-Malate area or to
convert into allowed businesses are confiscatory as well. The penalty of permanent closure in
cases of subsequent violations found in Section 4 of the Ordinance is also equivalent to a “taking”
of private property.

Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning
ordinance, although a valid exercise of police power, which limits a “wholesome” property to a use
which can not reasonably be made of it constitutes the taking of such property without just
compensation. Private property which is not noxious nor intended for noxious purposes may not,
by zoning, be destroyed without compensation. Such principle finds no support in the principles of
justice as we know them. The police powers of local government units which have always received
broad and liberal interpretation cannot be stretched to cover this particular taking.

Further, The Ordinance confers upon the mayor arbitrary and unrestricted power to close down
establishments. Ordinances such as this, which make possible abuses in its execution, depending
upon no conditions or qualifications whatsoever other than the unregulated arbitrary will of the
city authorities as the touchstone by which its validity is to be tested, are unreasonable and invalid.
The Ordinance should have established a rule by which its impartial enforcement could be secured.
Similarly, the Ordinance does not specify the standards to ascertain which establishments “tend to
disturb the community,” “annoy the inhabitants,” and “adversely affect the social and moral
welfare of the community.”

The cited case supports the nullification of the Ordinance for lack of comprehensible standards to
guide the law enforcers in carrying out its provisions.

Petitioners cannot therefore order the closure of the enumerated establishments without infringing
the due process clause. These lawful establishments may be regulated, but not prevented from
carrying on their business.

B. The Ordinance violates Equal

Protection Clause

In the Court’s view, there are no substantial distinctions between motels, inns, pension houses,
hotels, lodging houses or other similar establishments. By definition, all are commercial
establishments providing lodging and usually meals and other services for the public. No reason
exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other
similar establishments. The classification in the instant case is invalid as similar subjects are not
similarly treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not
rest on substantial distinctions bearing a just and fair relation to the purpose of the Ordinance.

The Court likewise cannot see the logic for prohibiting the business and operation of motels in the
Ermita-Malate area but not outside of this area. A noxious establishment does not become any less
noxious if located outside the area.

The standard “where women are used as tools for entertainment” is also discriminatory as
prostitution one of the hinted ills the Ordinance aims to banish is not a profession exclusive to
women. Both men and women have an equal propensity to engage in prostitution. Thus, the
discrimination is invalid.

C. The Ordinance is repugnant

to general laws; it is ultra vires

The Ordinance is in contravention of the Code (Sec 458) as the latter merely empowers local
government units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof.

With respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging
houses, and other similar establishments, the only power of the City Council to legislate relative
thereto is to regulate them to promote the general welfare. The Code still withholds from cities the
power to suppress and prohibit altogether the establishment, operation and maintenance of such
establishments.

It is well to point out that petitioners also cannot seek cover under the general welfare clause
authorizing the abatement of nuisances without judicial proceedings. That tenet applies to a
nuisance per se, or one which affects the immediate safety of persons and property and may be
summarily abated under the undefined law of necessity. It can not be said that motels are injurious
to the rights of property, health or comfort of the community. It is a legitimate business. If it be a
nuisance per accidens it may be so proven in a hearing conducted for that purpose. A motel is not
per se a nuisance warranting its summary abatement without judicial intervention.

Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of
P.D. 499. As correctly argued by MTDC, the statute had already converted the residential
Ermita-Malate area into a commercial area. The decree allowed the establishment and operation of
all kinds of commercial establishments except warehouse or open storage depot, dump or yard,
motor repair shop, gasoline service station, light industry with any machinery or funeral
establishment. The rule is that for an ordinance to be valid and to have force and effect, it must not
only be within the powers of the council to enact but the same must not be in conflict with or
repugnant to the general law.

Conclusion
All considered, the Ordinance invades fundamental personal and property rights and impairs
personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is
discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that
abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council under
the Code had no power to enact the Ordinance and is therefore ultra vires, null and void.

Petition Denied.

LUCENA GRAND CENTRAL TERMINAL, INC. v. JAC LINER, INC. 452 SCRA 174
(2005)

FACTS:

Two ordinances were enacted by the Sangguniang Panlungsod of Lucena with the objective of
alleviating the traffic congestion said to have been caused by the existence of various bus and
jeepney terminals within the city. City Ordinance 1631 grants franchise to the Lucena Grand
Central Terminal, Inc. to construct, finance, establish, operate and maintain common bus- jeepney
terminal facility in the City of Lucena. City Ordinance 1778, on the other hand, strips out all the
temporary terminals in the City of Lucena the right to operate which as a result favors only the
Lucena Grand Central Terminal, Inc. The Regional Trial Court of Lucena declared City Ordinance
1631 as a valid excercise of police power while declaring City Ordinance 1778 as null and void for
being invalid. Petitioner Lucena Grand Central Terminal, Inc. filed its Motion for Reconsideration
which was denied. Lucena then elevated it via petition for review under Rule 45 before the Court.
The Court referred the petition to the Court of Appeals (CA) with which it has concurrent
jurisdiction. The CA dismissed the petition and affirmed the challenged orders of the trial court. Its
motion for reconsideration having been denied by the CA, Lucena now comes to the Court via
petition for review to assail the Decision and Resolution of the CA.

ISSUE:

Whether or not the means employed by the Lucena Sannguniang Panlungsod to attain its professed
objective were reasonably necessary and not duly oppressive upon individuals.

HELD:

With the aim of localizing the source of traffic congestion in the city to a single location, the
subject ordinances prohibit the operation of all bus and jeepney terminals within Lucena, including
those already existing, and allow the operation of only one common terminal located outside the
city proper, the franchise for which was granted to Lucena. The common carriers plying routes to
and from Lucena City are thus compelled to close down their existing terminals and use the
facilities of Lucena. The true role of Constitutional Law is to effect an equilibrium between
authority and liberty so that rights are exercised within the framework of the law and the laws are
enacted with due deference to rights. A due deference to the rights of the individual thus requires a
more careful formulation of solutions to societal problems. From the memorandum filed before the
Court by Lucena, it is gathered that the Sangguniang Panlungsod had identified the cause of traffic
congestion to be the indiscriminate loading and unloading of passengers by buses on the streets of
the city proper, hence, the conclusion that the terminals contributed to the proliferation of buses
obstructing traffic on the city streets. Bus terminals per se do not, however, impede or help impede
the flow of traffic. How the outright proscription against the existence of all terminals, apart from
that franchised to Lucena, can be considered as reasonably necessary to solve the traffic problem,
the Court has not been enlightened. If terminals lack adequate space such that bus drivers are
compelled to load and unload passengers on the streets instead of inside the terminals, then
reasonable specifications for the size of terminals could be instituted, with permits to operate the
same denied those which are unable to meet the specifications. In the subject ordinances, however,
the scope of the proscription against the maintenance of terminals is so broad that even entities
which might be able to provide facilities better than the franchised terminal are barred from
operating at all. The Court is not unaware of the resolutions of various barangays in Lucena City
supporting the establishment of a common terminal, and similar expressions of support from the
private sector, copies of which were submitted to this Court by Lucena Grand Central Terminal,
Inc. The weight of popular opinion, however, must be balanced with that of an individual‘s rights.

Binay vs Domingo Case Digest

Equal Protection Clause, General Welfare Clause, Police Power, Powers of Municipal
Corporations

Facts:

Petitioner Municipality of Makati, through its Council, approved Resolution No. 60 which extends
P500 burial assistance to bereaved families whose gross family income does not exceed P2,000.00
a month. The funds are to be taken out of the unappropriated available funds in the municipal
treasury. The Metro Manila Commission approved the resolution. Thereafter, the municipal
secretary certified a disbursement of P400,000.00 for the implementation of the program.
However, the Commission on Audit disapproved said resolution and the disbursement of funds for
the implementation thereof for the following reasons: (1) the resolution has no connection to
alleged public safety, general welfare, safety, etc. of the inhabitants of Makati; (2) government
funds must be disbursed for public purposes only; and, (3) it violates the equal protection clause
since it will only benefit a few individuals.

Issues:

1. Whether Resolution No. 60 is a valid exercise of the police power under the general welfare
clause
2. Whether the questioned resolution is for a public purpose
3. Whether the resolution violates the equal protection clause

Held:

1. The police power is a governmental function, an inherent attribute of sovereignty, which was
born with civilized government. It is founded largely on the maxims, "Sic utere tuo et ahenum non
laedas and "Salus populi est suprema lex. Its fundamental purpose is securing the general welfare,
comfort and convenience of the people.

Police power is inherent in the state but not in municipal corporations. Before a municipal
corporation may exercise such power, there must be a valid delegation of such power by the
legislature which is the repository of the inherent powers of the State.

Municipal governments exercise this power under the general welfare clause. Pursuant thereto
they are clothed with authority to "enact such ordinances and issue such regulations as may be
necessary to carry out and discharge the responsibilities conferred upon it by law, and such as shall
be necessary and proper to provide for the health, safety, comfort and convenience, maintain peace
and order, improve public morals, promote the prosperity and general welfare of the municipality
and the inhabitants thereof, and insure the protection of property therein.

2. Police power is not capable of an exact definition but has been, purposely, veiled in general
terms to underscore its all comprehensiveness. Its scope, over-expanding to meet the exigencies of
the times, even to anticipate the future where it could be done, provides enough room for an
efficient and flexible response to conditions and circumstances thus assuring the greatest benefits.

The police power of a municipal corporation is broad, and has been said to be commensurate with,
but not to exceed, the duty to provide for the real needs of the people in their health, safety,
comfort, and convenience as consistently as may be with private rights. It extends to all the great
public needs, and, in a broad sense includes all legislation and almost every function of the
municipal government. It covers a wide scope of subjects, and, while it is especially occupied with
whatever affects the peace, security, health, morals, and general welfare of the community, it is not
limited thereto, but is broadened to deal with conditions which exists so as to bring out of them the
greatest welfare of the people by promoting public convenience or general prosperity, and to
everything worthwhile for the preservation of comfort of the inhabitants of the corporation. Thus,
it is deemed inadvisable to attempt to frame any definition which shall absolutely indicate the
limits of police power.

Public purpose is not unconstitutional merely because it incidentally benefits a limited number of
persons. As correctly pointed out by the Office of the Solicitor General, "the drift is towards social
welfare legislation geared towards state policies to provide adequate social services, the promotion
of the general welfare, social justice as well as human dignity and respect for human rights." The
care for the poor is generally recognized as a public duty. The support for the poor has long been an
accepted exercise of police power in the promotion of the common good.

3. There is no violation of the equal protection clause. Paupers may be reasonably classified.
Different groups may receive varying treatment. Precious to the hearts of our legislators, down to
our local councilors, is the welfare of the paupers. Thus, statutes have been passed giving rights
and benefits to the disabled, emancipating the tenant-farmer from the bondage of the soil, housing
the urban poor, etc. Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality
of Makati is a paragon of the continuing program of our government towards social justice. The
Burial Assistance Program is a relief of pauperism, though not complete. The loss of a member of
a family is a painful experience, and it is more painful for the poor to be financially burdened by
such death. Resolution No. 60 vivifies the very words of the late President Ramon Magsaysay
'those who have less in life, should have more in law." This decision, however must not be taken as
a precedent, or as an official go-signal for municipal governments to embark on a philanthropic
orgy of inordinate dole-outs for motives political or otherwise.

Bautista v. Juinio [GR L-50908, 31 January 1984]

En Banc, Fernando (J): 7 concur, 2 took no part

Facts: Letter of Instruction 869 was issued on 31 May 1979 to respond to the protracted oil crisis
dating back to 1974, banning the use of private motor vehicles with H and EH plates on weekends
and holidays from 12 am Saturday to 5:00 am Monday, or 1 am of holiday to 5:00 am of the day
after the holiday; but exempting service, truck, diplomatic, consular corps, and tourist cars.
Pursuant thereto, Alfredo L. Juinio, then Minister of Public Works, Transportation and
Communications and Romeo P. Edu, then Commissioner of Land Transportation Commission
issued on 11 June 1979, Memorandum Circular 39, which imposed "the penalties of fine,
confiscation of vehicle and cancellation of registration on owners of the above-specified vehicles"
found violating such Letter of Instruction. Memorandum Circular 39 does not impose the penalty
of confiscation but merely that of impounding, fine, and for the third offense that of cancellation of
certificate of registration and for the rest of the year or for ninety days whichever is longer. Mary
Concepcion Bautista and Enrique D. Bautista questioned the validity of LOI 869 and MC 39
through a prohibition proceeding with the Supreme Court.

Issue: Whether LOI 869 and Memorandum Circular 39, banning certain vehicles from using the
motorways in specified time, are constitutional and/or valid.

Held: A regulatory measure enjoys a presumption of constitutionality or a presumption that such

an act falls within constitutional limitations. When a questioned statute deals with a subject clearly
within the scope of the police power, and which is asked to be declare void on the ground that the
specific method of regulation prescribed is unreasonable and hence deprives the plaintiff of due
process of law, the presumption of constitutionality must prevail in the absence of some factual
foundation of record for overthrowing the statute. Herein, as to LOI 869, the determination of the
mode and manner through which the objective of minimizing the consumption of oil products and
measures conducive to energy conservation (require and establish taxi stands equipped with
efficient telephone and communication systems; strict implementation and observance of cargo
truck hours on main arteries; strict observance of traffic rules; effective solution of traffic problems
and decongestion of traffic through rerouting and quick repair of roads and efficient operation of
double decker buses; rationing of gasoline to avoid panic buying and give the private car owner the
option and responsibility of deciding on the use of his allocation; allow neon and electrically
devised advertising signs only from five o'clock p.m. to nine o'clock p.m.; prohibit immediately the
importation of heavy and luxury cars and seriously re-examine the car manufacturing program) are
left to the discretion of the political branches. The question before the Court is limited to whether
or not LOI 869 as implemented by MC 39 is violative of certain constitutional rights. On the other
hand, as to MC 39, while the imposition of a fine or the suspension of registration under the
conditions therein set forth is valid under the Land Transportation and Traffic Code, the
impounding of a vehicle finds no statutory justification. To apply that portion of MC 39 would be
ultra vires. It must likewise be made clear that a penalty even if warranted can only be imposed in
accordance with the procedure required by law.

Taxicab Operators v. The Board of Transportation [GR L-59234, 30 September 1982]

En Banc, Melencio-Herrera (p): 12 concur, 2 concur in the result

Facts: On 10 October 1977, the Board of Transportation (BT) issued Memorandum Circular 77-42
which phases out old and dilapidated taxis; refusing registration to taxi units within the National
Capitol Region having year models over 6 years old. Pursuant to the above BOT circular, the
Director of the Bureau of Land Transportation (BLT) issued Implementing Circular 52, dated 15
August 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT, all
within the National Capital Region (NCR), to implement said Circular, and formulating a schedule
of phase-out of vehicles to be allowed and accepted for registration as public conveyances. In
accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model
1972, in 1979; those of model 1973, in 1980; and those of model 1974, in 1981. On 27 January
1981, Taxicab Operators of Metro Manila, Inc. (TOMMI), including its members Ace
Transportation Corporation and Felicisimo Cabigao, filed a petition with the BT (Case 80-7553),
seeking to nullify MC 77-42 or to stop its implementation; to allow the registration and operation
in 1981 and subsequent years of taxicabs of model 1974, as well as those of earlier models which
were phased-out, provided that, at the time of registration, they are roadworthy and fit for
operation. On 16 February 1981, TOMMI, et. al. filed before the BT a "Manifestation and Urgent
Motion", praying for an early hearing of their petition. The case was heard on 20 February 1981.
On 28 November 1981, TOMMI, et. al. filed before the same Board a "Manifestation and Urgent
Motion to Resolve or Decide Main Petition" praying that the case be resolved or decided not later
than 10 December 1981 to enable them, in case of denial, to avail of whatever remedy they may
have under the law for the protection of their interests before their 1975 model cabs are phased-out
on 1 January 1982. TOMMI, et. al., through its President, allegedly made personal follow-ups of
the case, but was later informed that the records of the case could not be located. On 29 December
1981, TOMMI, et. al., instituted a petition for certiorari, prohibition and mandamus with
preliminary injunction and temporary restraining order with the Supreme Court.

Issue: Whether Memorandum Circular 77-42, phasing out 6-year old taxicabs and older, is a valid
administrative issuance.

Held: Presidential Decree 101 grants to the Board of Transportation the power to fix just and
reasonable standards, classification, regulations, practices, measurements, or service to be
furnished, imposed, observed, and followed by operators of public utility motor vehicles. The
overriding consideration in the issuance of Memorandum Circular 77-42 is the safety and comfort
of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise
of its police power, can prescribe regulations to promote the health, morals, peace, good order,
safety and general welfare of the people. It can prohibit all things hurtful to comfort, safety and
welfare of society. It may also regulate property rights. The necessities imposed by public
welfare may justify the exercise of governmental authority to regulate even if thereby certain
groups may plausibly assert that their interests are disregarded. Dispensing with a public hearing
prior to the issuance of the Circulars is not violative of procedural due process. Previous notice and
hearing is not essential to the validity of general rules or regulations promulgated to govern future
conduct of a class or persons or enterprises, unless the law provides otherwise. It is impractical to
subject every taxicab to constant and recurring evaluation to determine its road-worthiness, not to
speak of the fact that it can open the door to the adoption of multiple standards, possible collusion,
and even graft and corruption. A reasonable standard must be adopted to apply to all vehicles
affected uniformly, fairly, and justly. The span of six years supplies that reasonable standard. The
product of experience shows that by that time taxis have fully depreciated, their cost recovered,
and a fair return on investment obtained. They are also generally dilapidated and no longer fit for
safe and comfortable service to the public specially considering that they are in continuous
operation practically 24 hours everyday in three shifts of eight hours per shift. With that standard
of reasonableness and absence of arbitrariness, the requirement of due process has been met.

Anglo-Fil Trading v. Lazaro [GR L-54958, 2 September 1983]; also Philippine Integrated
Port Services v. Lazaro [GR L-54966]
En Banc, Gutierrez Jr. (p): 7 concur, 2 concur in result, 1 took no part, 1 on leave

Facts: 23 contractors, among them the Philippine Integrated Port Services, Inc. (PIPSI), Anglo-Fil
Trading Corporation, Aduana Stevedoring Corporation, Anda Stevedoring Corporation, Ben Paz
Port Service, Inc., Manila Stevedoring and Arrastre Services, Inc. (members of the Philippine
Association of Stevedoring Operators and Contractors, Inc. [PASOC]), competed at the South
Harbor for the performance of stevedoring work. The licenses of these contractors had long
expired when the Philippine Ports Authority (PPA, created by Presidential Decree 505 [11 July
1974], later superseded by Presidential Decree 857 [23 December 197]5) took over the control and
management of ports but they continued to operate afterwards on the strength of temporary permits
and hold-over authorities issued by PPA. On 4 May 1976, the Board of Directors of PPA passed
Resolution 10, approving and adopting a set of policies on Port Administration, Management and
Operation. The PPA adopted as its own the Bureau of Customs' policy of placing on only one
organization the responsibility for the operation of arrastre and stevedoring services in one port.
On 11 April 1980, President Ferdinand E. Marcos issued Letter of Instruction 1005-A which,
among other things, directed PPA to expeditiously evaluate all recognized cargo handling
contractors and port-related service operators and to determine the qualified contractor or operator
in order to ensure effective utilization of port facilities, etc. This was followed by the President's
memorandum to Col. Eustaquio S. Baclig Jr. dated 18 April 1980, directing submission of a report
on the integration of the stevedoring operations in Manila South Harbor and emphasizing the need
for such integration as well as the strengthening of the PPA in order to remedy the problems
therein. On 28 April 1980, the committee submitted its report recommending the award of an
exclusive contract for stevedoring services in the South Harbor to Ocean Terminal Services, Inc.
(OTSI) after finding it the best qualified among the existing contractors. The PPA submitted the
committee report to the President, who, on 24 May 1980, approved the recommendation to award
an exclusive management contract to OTSI. On 27 June 1980, PPA and OTSI entered into a
management contract which provided, among others, for a 5-year exclusive operation by OTSI of
stevedoring services in the South Harbor, renewable for another 5 years. The Board of Directors of
the PPA gave its approval on 27 June 1980. On 23 July 1980, PIPSI instituted an action before the
Court of First Instance (CFI) of Manila against PPA and OTSI for the nullification of the contract
between the two, the annulment of the 10% of gross stevedoring revenue being collected by PPA,
and injunction with preliminary injunction. An ex-parte restraining order was issued. On 21
August 1980. with leave of court, Anglo-Fil, et al., filed their complaint in intervention. The
motion was granted and on 22 August 1980, the CFI issued another ex-parte restraining order in
the case to include Anglo-Fil et. al., under the benefits of such order. On 30 August 1980, the PPA
filed an urgent motion to lift the restraining orders "in view of the long delay in the resolution of
the injunction incident and the countervailing public interest involved." On 1 September 1980, the
CFI dissolved, lifted and set aside the restraining orders without prejudice to the Court's resolution
on the propriety of issuing the writ of preliminary injunction prayed for. On 5 September 1980,
PPA sent a letter to the General Manager of PIPSI informing him that due to the lifting of the
temporary restraining order, it was withdrawing PIPSI's holdover authority to operate or provide
stevedoring services at South Harbor effective 7 September 1980. Anglo-Fil, et al., and PIPSI,
therefore, filed the petitions for certiorari with preliminary injunction alleging that the lifting of the
restraining orders ex-parte by the CFI was clearly effected with grave abuse of discretion
amounting to lack of jurisdiction.

Issue: Whether the issuance of a Permit to Operate (PTO) depended on the sound discretion, and
on the policies, rules and regulations implemented by the latter, or whether the non-issuance
thereof is an unlawful deprivation of property rights.

Held: From the viewpoint of procedure, there was no grave abuse of discretion or want of
jurisdiction when the CFI judge lifted ex-parte the temporary restraining order he had earlier
issued also ex-parte. Subsequent to the issuance of the questioned order, the CFI heard the parties
on the application for a writ of preliminary injunction and, after hearing the parties' evidence and
arguments, denied the application for the writ. It is also not grave abuse of discretion when a court
dissolves ex-parte abuse of discretion when a court dissolves ex- parte a restraining order also
issued ex-parte. Further, the contention that due process was violated resulting to a confiscatory
effect on private property is likewise without merit. In the first place, Anglo-Fil, et. al. were
operating merely on "hold-over" permits, which were based on PPA Memorandum Order 1 (19
January 1977). All hold-over permits were by nature temporary and subject to subsequent policy
guidelines as may be implemented by PPA. Such should have served as sufficient notice that, at
any time, PIPSI's and Anglo-Fil et.al.'s authorities may be terminated. Whether PIPSI, and
Anglo-Fil, et. al. would be issued a Permit to Operate (PTO) depended on the sound discretion of
PPA and on the policies, rules and regulations that the latter may implement in accordance with the
statutory grant of power. The latter, therefore, cannot be said to have been deprived of property
without due process because, in this respect, what was given them was not a property right but a
mere privilege and they should have taken cognizance of the fact that since they have no vested
right to operate in the South Harbor, their permits can be withdrawn anytime the public welfare
deems it best to do so. Thus, unless the case justifies it, the judiciary will not interfere in purely
administrative matters. Such discretionary power vested in the proper administrative body, in the
absence of arbitrariness and grave abuse so as to go beyond the statutory authority, is not subject to
the contrary judgment or control of others. In general, courts have no supervisory power over the
proceedings and actions of the administrative departments of the government. This is particularly
true with respect to acts involving the exercise of judgment or discretion, and to findings of fact.

PRC vs. De Guzman, G. R. No. 144681, June 21, 2004

Constitutional Law: Police Power

Facts: The respondents are all graduates of the Fatima College of Medicine, Valenzuela City,
Metro Manila. They passed the Physician Licensure Examination conducted in February 1993 by
the Board of Medicine (Board). Petitioner Professional Regulation Commission (PRC) then
released their names as successful examinees in the medical licensure examination.
Shortly thereafter, the Board observed that the grades of the seventy-nine successful examinees
from Fatima College in the two most difficult subjects in the medical licensure exam,
Biochemistry (Bio-Chem) and Obstetrics and Gynecology (OB-Gyne), were unusually and
exceptionally high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got 100% in
OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one scored 99% in OB-Gyne. The
Board also observed that many of those who passed from Fatima got marks of 95% or better in
both subjects, and no one got a mark lower than 90%. A comparison of the performances of the
candidates from other schools was made. The Board observed that strangely, the unusually high
ratings were true only for Fatima College examinees. It was a record-breaking phenomenon in the
history of the Physician Licensure Examination.
For its part, the NBI found that “the questionable passing rate of Fatima examinees in the [1993]
Physician Examination leads to the conclusion that the Fatima examinees gained early access to
the test questions.”
The Board issued Resolution No. 26, dated July 21, 1993, charging respondents with "immorality,
dishonest conduct, fraud, and deceit" in connection with the Bio-Chem and Ob-Gyne
examinations. It recommended that the test results of the Fatima examinees be nullified. Trial
court’s judgment is rendered ordering the respondents to allow the petitioners and intervenors to
take the physician’s oath and to register them as physicians without prejudice to any administrative
disciplinary action which may be taken against any of the petitioners for such causes and in the
manner provided by law and consistent with the requirements of the Constitution as any other
professionals.

Issue: Whether or not the act pursuant to R.A. 2382 (prescribes that a person who aspires to
practice medicine in the Philippines, must have “satisfactorily passed the corresponding Board
Examination) known as The Medical Act of 1959 a valid exercise of police power.

Held:
Yes. It is true that this Court has upheld the constitutional right of every citizen to select a
profession or course of study subject to a fair, reasonable, and equitable admission and academic
requirements. But like all rights and freedoms guaranteed by the Charter, their exercise may be so
regulated pursuant to the police power of the State to safeguard health, morals, peace, education,
order, safety, and general welfare of the people. Thus, persons who desire to engage in the learned
professions requiring scientific or technical knowledge may be required to take an examination as
a prerequisite to engaging in their chosen careers. This regulation takes particular pertinence in the
field of medicine, to protect the public from the potentially deadly effects of incompetence and
ignorance among those who would practice medicine.
*satisfactorily- defined as “sufficient to meet a condition or obligation” or “capable of dispelling
doubt or ignorance”
It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit
of an occupation cannot be exercised by the State or its agents in an arbitrary, despotic, or
oppressive manner. A political body that regulates the exercise of a particular privilege has the
authority to both forbid and grant such privilege in accordance with certain conditions. Such
conditions may not, however, require giving up ones constitutional rights as a condition to
acquiring the license.

EMINENT DOMAIN

City of Manila v. Chinese Community of Manila [GR14355, 31 October 1919]

First Division, Johnson (J): 4 concur

Facts: On 11 December, 1916, the city of Manila presented a petition in the Court of First Instance
(CFI) of Manila praying that certain lands (extension of Rizal Avenue within Block 3 of the district
of Binondo) be expropriated for the purpose of constructing a public improvement. The
Comunidad de Chinos de Manila [Chinese Community of Manila] alleged in its answer that it was
a corporation organized and existing under and by virtue of the laws of the Philippine Islands,
having for its purpose the benefit and general welfare of the Chinese Community of the City of
Manila; that it was the owner of parcels one and two of the land described in paragraph 2 of the
complaint; that it denied that it was either necessary or expedient that the said parcels be
expropriated for street purposes; that existing street and roads furnished ample means of
communication for the public in the district covered by such proposed expropriation; that if the
construction of the street or road should be considered a public necessity, other routes were
available, which would fully satisfy the City's purposes, at much less expense and without
disturbing the resting places of the dead; that it had a Torrens title for the lands in question; that the
lands in question had been used by the Chinese Community for cemetery purposes; that a great
number of Chinese were buried in said cemetery; that if said expropriation be carried into effect, it
would disturb the resting places of the dead, would require the expenditure of a large sum of
money in the transfer or removal of the bodies to some other place or site and in the purchase of
such new sites, would involve the destruction of existing monuments and the erection of new
monuments in their stead, and would create irreparable loss and injury to the Chinese Community
and to all those persons owning and interested in the graves and monuments which would have to
be destroyed; that the City was without right or authority to expropriate said cemetery or any part
or portion thereof for street purposes; and that the expropriation, in fact, was not necessary as a
public improvement. Ildefonso Tambunting, answering the petition, denied each and every
allegation of the complaint, and alleged that said expropriation was not a public improvement.
Feliza Concepcion de Delgado, with her husband, Jose Maria Delgado, and each of the other
defendants, answering separately, presented substantially the same defense as that presented by the
Comunidad de Chinos de Manila and Ildefonso Tambunting. Judge Simplicio del Rosario decided
that there was no necessity for the expropriation of the strip of land and absolved each and all of the
defendants (Chinese Community, Tambunting, spouses Delgado, et. al.) from all liability under the
complaint, without any finding as to costs. From the judgment, the City of Manila appealed.

Issue: Whether portions of the Chinese Cemetery, a public cemetery, may be expropriated for the
construction of a public improvement.

Held: No. Section 2429 of Act 2711 (Charter of the city of Manila) provides that the city (Manila)
may condemn private property for public use. The Charter of the city of Manila, however, contains
no procedure by which the said authority may be carried into effect. Act 190 provides for how right
of eminent domain may be exercised. Section 241 of said Act provides that the Government of the
Philippine Islands, or of any province or department thereof, or of any municipality, and any
person, or public or private corporation having, by law, the right to condemn private property for
public use, shall exercise that right in the manner prescribed by Section 242 to 246. The right of
expropriation is not an inherent power in a municipal corporation, and before it can exercise the
right some law must exist conferring the power upon it. When the courts come to determine the
question, they must not only find (a) that a law or authority exists for the exercise of the right of
eminent domain, but (b) also that the right or authority is being exercised in accordance with the
law. Herein, the cemetery in question is public (a cemetery used by the general community, or
neighborhood, or church) and seems to have been established under governmental authority, as the
Spanish Governor-General, in an order creating the same. Where a cemetery is open to the public,
it is a public use and no part of the ground can be taken for other public uses under a general
authority. To disturb the mortal remains of those endeared to us in life sometimes becomes the sad
duty of the living; but, except in cases of necessity, or for laudable purposes, the sanctity of the
grave, the last resting place of our friends, should be maintained, and the preventative aid of the
courts should be invoked for that object. While cemeteries and sepulchers and the places of the
burial of the dead are still within the memory and command of the active care of the living; while
they are still devoted to pious uses and sacred regard, it is difficult to believe that even the
legislature would adopt a law expressly providing that such places, under such circumstances,
should be violated.

Moday vs. Court of Appeals [GR 107916, 20 February 1997]

Second Division, Romero (J): 4 concur

Facts: On 23 July 1989, the Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur
passed Resolution 43-89, "Authorizing the Municipal Mayor to Initiate the Petition for
Expropriation of a 1 Hectare Portion of Lot 6138-Pls-4 Along the National Highway Owned by
Percival Moday for the Site of Bunawan Farmers Center and Other Government Sports Facilities."
In due time, the Resolution was approved by then Municipal Mayor Anuncio C. Bustillo and
transmitted to the Sangguniang Panlalawigan for its approval. On 11 September 1989, the
Sangguniang Panlalawigan disapproved said Resolution and returned it with the comment that
"expropriation is unnecessary considering that there are still available lots in Bunawan for the
establishment of the government center." The Municipality of Bunawan subsequently filed a
Petition for Eminent Domain against Percival Moday before the Regional Trial Court (RTC) at
Prosperidad, Agusan del Sur. The complaint was later amended to include the registered owners,
Percival Moday's parents, Zotico (+) and Leonora Moday, as party defendants. On 6 March 1991,
the municipality filed a Motion to Take or Enter Upon the Possession of Subject Matter of This
Case stating that it had already deposited with the municipal treasurer the necessary amount in
accordance with Section 2, Rule 67 of the Revised Rules of Court and that it would be in the
government's best interest for the municipality to be allowed to take possession of the property.
Despite Moday's opposition and after a hearing on the merits, the RTC granted the municipality's
motion to take possession of the land; holding that the Sangguniang Panlalawigan's failure to
declare the resolution invalid leaves it effective, and that the duty of the Sangguniang
Panlalawigan is merely to review the ordinances and resolutions passed by the Sangguniang Bayan
under Section 208 (1) of BP 337 (the old Local Government Code) and that the exercise of eminent
domain is not one of the two acts enumerated in Section 19 thereof requiring the approval of the
Sangguniang Panlalawigan. Moday's motion for reconsideration was denied by the trial court on
31 October 1991. Moday elevated the case before the Court of Appeals in a petition for certiorari,
which was dismissed on 15 July 1992. The appellate court also denied Moday's motion for
reconsideration on 22 October 1992. Meanwhile, the Municipality of Bunawan had erected three
buildings on the subject property: the Association of Barangay Councils (ABC) Hall, the
Municipal Motorpool, both wooden structures, and the Bunawan Municipal Gymnasium, which is
made of concrete. Moday filed on 23 November 1992 the petition for review before the Supreme
Court.

Issue: Whether a municipality may expropriate private property by virtue of a municipal resolution
which was disapproved by the Sangguniang Panlalawigan.

Held: Eminent domain, the power which the Municipality of Bunawan exercised, is a fundamental
State power that is inseparable from sovereignty. It is government's right to appropriate, in the
nature of a compulsory sale to the State, private property for public use or purpose. Inherently
possessed by the national legislature the power of eminent domain may be validly delegated to
local governments, other public entities and public utilities. For the taking of private property by
the government to be valid, the taking must be for public use and there must be just compensation.
The Municipality of Bunawan's power to exercise the right of eminent domain is not disputed as it
is expressly provided for in Batas Pambansa 337, the Local Government Code in force at the time
expropriation proceedings were initiated. The Sangguniang Panlalawigan's disapproval of
Municipal Resolution 43-89 is an infirm action which does not render said resolution null and
void. The law, as expressed in Section 153 of BP 337, grants the Sangguniang Panlalawigan the
power to declare a municipal resolution invalid on the sole ground that it is beyond the power of
the Sangguniang Bayan or the Mayor to issue. Thus, the Sangguniang Panlalawigan was without
the authority to disapprove Municipal Resolution 43-89 for the Municipality of Bunawan clearly
has the power to exercise the right of eminent domain and its Sangguniang Bayan the capacity to
promulgate said resolution, pursuant to the earlier-quoted Section 9 of BP337. Perforce; it follows
that Resolution 43-89 is valid and binding and could be used as lawful authority to petition for the
condemnation of Moday's property.

Republic vs. Philippine Long Distance Telephone Co. [GR L-18841, 27 January 1969]
En Banc, Reyes JBL [J]: 10 concur

Facts: The Republic of the Philippines, is a political entity exercising governmental powers
through its branches and instrumentalities, one of which is the Bureau of Telecommunications.
That office was created on 1 July 1947, under Executive Order 94, in addition to certain powers
and duties formerly vested in the Director of Posts. Sometime in 1933, the Philippine Long
Distance Telephone Company (PLDT), and the RCA Communications, Inc., entered into an
agreement whereby telephone messages, coming from the United States and received by RCA's
domestic station, could automatically be transferred to the lines of PLDT; and vice-versa, for calls
collected by the PLDT for transmission from the Philippines to the United States. The contracting
parties agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was
amended in 1941 to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis.
The arrangement was later extended to radio-telephone messages to and from European and
Asiatic countries. Their contract contained a stipulation that either party could terminate it on a
24-month notice to the other. On 2 February 1956, PLDT gave notice to RCA to terminate their
contract on 2 February 1956. Soon after its creation in 1947, the Bureau of Telecommunications
set up its own Government Telephone System by utilizing its own appropriation and equipment
and by renting trunk lines of the PLDT to enable government offices to call private parties. At that
time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for
telephone connection. The PLDT, on the other hand, was also maintaining 60,000 telephones and
had also 20,000 pending applications. Through the years, neither of them has been able to fill up
the demand for telephone service. The Bureau of Telecommunications had proposed to the PLDT
on 8 January 1958 that both enter into an interconnecting agreement, with the government paying
(on a call basis) for all calls passing through the interconnecting facilities from the Government
Telephone System to the PLDT. On 5 March 1958, the Republic, through the Director of
Telecommunications, entered into an agreement with RCA Communications, Inc., for a joint
overseas telephone service whereby the Bureau would convey radio-telephone overseas calls
received by RCA's station to and from local residents. They actually inaugurated this joint
operation on 2 February 1958, under a "provisional" agreement. On 7 April 1958, PLDT
complained to the Bureau of Telecommunications that said bureau was violating the conditions
under which their Private Branch Exchange (PBX) is interconnected with the PLDT's facilities,
referring to the rented trunk lines, for the Bureau had used the trunk lines not only for the use of
government offices but even to serve private persons or the general public, in competition with the
business of the PLDT; and gave notice that if said violations were not stopped by midnight of 12
April 1958, the PLDT would sever the telephone connections. When the PLDT received no reply,
it disconnected the trunk lines being rented by the Bureau at midnight on 12 April 1958. The result
was the isolation of the Philippines, on telephone services, from the rest of the world, except the
United States. On 12 April 1958, the Republic commenced suit against PLDT, in the Court of First
Instance of Manila (CFI, Civil Case 35805), praying in its complaint for judgment commanding
the PLDT to execute a contract with the Republic, through the Bureau, for the use of the facilities
of PLDT's telephone system throughout the Philippines under such terms and conditions as the
court might consider reasonable, and for a writ of preliminary injunction against PLDT to restrain
the severance of the existing telephone connections and/or restore those severed. After trial, the
lower court rendered judgment that it could not compel the PLDT to enter into an agreement with
the Bureau because the parties were not in agreement; that under Executive Order 94, establishing
the Bureau of Telecommunications, said Bureau was not limited to servicing government offices
alone, nor was there any in the contract of lease of the trunk lines, since the PLDT knew, or ought
to have known, at the time that their use by the Bureau was to be public throughout the Islands,
hence the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and, in
view of serious public prejudice that would result from the disconnection of the trunk lines,
declared the preliminary injunction permanent, although it dismissed both the complaint and the
counterclaims. Both parties appealed.

Issue: Whether interconnection between PLDT and the Government Telephone System can be an
valid object for expropriation, i.e. the exercise of eminent domain.

Held: Although parties can not be coerced to enter into a contract where no agreement is had
between them as to the principal terms and conditions of the contract -- the freedom to stipulate
such terms and conditions being of the essence of our contractual system, and by express provision
of the statute, a contract may be annulled if tainted by violence, intimidation or undue influence --
and thus the Republic may not compel the PLDT to celebrate a contract with it, the Republic may,
in the exercise of the sovereign power of eminent domain, require the telephone company to permit
interconnection of the government telephone system and that of the PLDT, as the needs of the
government service may require, subject to the payment of just compensation to be determined by
the court. Normally, of course, the power of eminent domain results in the taking or appropriation
of title to, and possession of, the expropriated property; but no cogent reason appears why the said
power may not be availed of to impose only a burden upon the owner of condemned property,
without loss of title and possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right of way. The use of the PLDT's lines and
services to allow interservice connection between both telephone systems is not much different. In
either case private property is subjected to a burden for public use and benefit. If under Section 6,
Article XIII, of the Constitution, the State may, in the interest of national welfare, transfer utilities
to public ownership upon payment of just compensation, there is no reason why the State may not
require a public utility to render services in the general interest, provided just compensation is paid
therefor. Ultimately, the beneficiary of the interconnecting service would be the users of both
telephone systems, so that the condemnation would be for public use.

Barangay San Roque v. Heirs of Pastor [GR 138896, 20 June 2000]

Third Division, Panganiban (J): 3 concur, 1 on leave on official business

Facts: Barangay San Roque in Talisay, Cebu filed before the Municipal Trial Court (MTC) of
Talisay, Cebu (Branch 1) a Complaint to expropriate a property of Heirs of Francisco Pastor
(Eugenio Sylianco, Teodoro Sylianco, Isabel Sylianco, Eugenia S. Ong, Lawrence Sylianco,
Lawson Sylianco, Lawina S. Notario, Leonardo Sylianco, Jr. and Lawford Sylianco). In an Order
dated 8 April 1997, the MTC dismissed the Complaint on the ground of lack of jurisdiction. It
reasoned that "[e]minent domain is an exercise of the power to take private property for public use
after payment of just compensation. In an action for eminent domain, therefore, the principal cause
of action is the exercise of such power or right. The fact that the action also involves real property
is merely incidental. An action for eminent domain is therefore within the exclusive original
jurisdiction of the Regional Trial Court and not with this Court." When the complaint was filed
with the Regional Trial Court (RTC), the RTC also dismissed the Complaint on 29 March 1999,
holding that an action for eminent domain affected title to real property; hence, the value of the
property to be expropriated would determine whether the case should be filed before the MTC or
the RTC; therefore concluding that the action should have been filed before the MTC since the
value of the subject property was less than P20,000. The Barangay's motion for reconsideration
was likewise denied on 14 May 1999. The Barangay filed the petition for review on certiorari with
the Supreme Court.

Issue: Whether the Regional Trial Court (RTC) or the Metropolitan Trial Court (MTC) has
jurisdiction over expropriation cases.

Held: 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 government's
exercise of eminent domain, a matter that is incapable of pecuniary estimation. True, the value of
the property to be expropriated is estimated in monetary terms, for the court is duty-bound to
determine the just compensation for it. This, however, is merely incidental to the expropriation
suit. Indeed, that amount is determined only after the court is satisfied with the propriety of the
expropriation. Verily, the Court held in Republic of the Philippines v. Zurbano that "condemnation
proceedings are within the jurisdiction of Courts of First Instance," the forerunners of the regional
trial courts (RTC). The said case was decided during the effectivity of the Judiciary Act of 1948
which, like Batas Pambansa 129 in respect to RTCs, provided that courts of first instance had
original jurisdiction over "all civil actions in which the subject of the litigation is not capable of
pecuniary estimation." The 1997 amendments to the Rules of Court were not intended to change
these jurisprudential precedents.

Republic vs. Vda. de Castellvi [GR L-20620, 15 August 1974]

En Banc, Zaldivar (J): 7 concur, 4 took no part

Facts: The Republic of the Philippines occupied the land of Carmen M. vda. de Castellvi, the
judicial administratrix of the estate of the late Alfonso de Castellvi, from 1 July 1947, by virtue of
a contract of lease, on a year to year basis (from July 1 of each year to June 30 of the succeeding
year). Before the expiration of the contract of lease on 30 June 1956, the Republic sought to renew
the same but Castellvi refused. When the AFP refused to vacate the leased premises after the
termination of the contract, Castellvi wrote to the Chief of Staff of the AFP on 11 July 1956,
informing the latter that the heirs of the property had decided not to continue leasing the property
in question because they had decided to subdivide the land for sale to the general public,
demanding that the property be vacated within 30 days from receipt of the letter, and that the
premises be returned in substantially the same condition as before occupancy. The Chief of Staff
refused, saying that it was difficult for the army to vacate the premises in view of the permanent
installations and other facilities worth almost P500,000.00 that were erected and already
established on the property, and that, there being no other recourse, the acquisition of the property
by means of expropriation proceedings would be recommended to the President. Castellvi then
brought suit in the Court of First Instance (CFI) of Pampanga (Civil Case 1458), to eject the
Philippine Air Force from the land. While this ejectment case was pending, the Republic filed on
26 June 1959 complaints for eminent domain against Castellvi, and Maria Nieves Toledo Gozun
over 3 parcels of land situated in the barrio of San Jose, Floridablanca, Pampanga. In its complaint,
the Republic alleged, among other things, that the fair market value of the above-mentioned lands,
according to the Committee on Appraisal for the Province of Pampanga, was not more than P2,000
per hectare, or a total market value of P259,669.10; and prayed, that the provisional value of the
lands be fixed at P259,669.10, that the court authorizes the Republic to take immediate possession
of the lands upon deposit of that amount with the Provincial Treasurer of Pampanga; that the court
appoints 3 commissioners to ascertain and report to the court the just compensation for the
property sought to be expropriated, and that the court issues thereafter a final order of
condemnation. The Republic was placed in possession of the lands on 10 August 1959.
Meanwhile, on 21 November 1959, the CFI of Pampanga, dismissed Civil Case 1458, upon
petition of the parties. After the parties filed their respective memoranda, the trial court, on 26 May
1961, rendered its decision, finding that the unanimous recommendation of the commissioners of
P10.00 per square meter for the 3 lots subject of the action is fair and just; and required the
Republic to pay interests. On 21 June 1961 the Republic filed a motion for a new trial and/or
reconsideration, against which motion Castellvi and Toledo- Gozun filed their respective
oppositions, and which the trial court denied on 12 July 1961. The Republic's record on appeal was
finally submitted on 6 December 1961, after filing various ex-parte motions for extension of time
within which to file its record on appeal. On 27 December 1961 the trial court dismissed both
appeals for having been filed out of time, thereby . On 11 January 1962 the Republic filed a
"motion to strike out the order of 27 December 1961 and for reconsideration", and subsequently an
amended record on appeal, against which motion Castellvi and Toledo-Gozun filed their
opposition. On 26 July 1962 the trial court issued an order, stating that "in the interest of
expediency, the questions raised may be properly and finally determined by the Supreme Court,"
and at the same time it ordered the Solicitor General to submit a record on appeal containing copies
of orders and pleadings specified therein. In an order dated 19 November 1962, the trial court
approved the Republic's record on appeal as amended. Castellvi did not insist on her appeal.
Toledo-Gozun did not appeal.

Issue: Whether the taking of Castellvi’s property occurred in 1947 or in 1959.

Held: A number of circumstances must be present in the "taking" of property for purposes of
eminent domain. First, the expropriator must enter a private property. Second, the entrance into
private property must be for more than a momentary period. Third, the entry into the property
should be under warrant or color of legal authority. Fourth, the property must be devoted to a
public use or otherwise informally appropriated or injuriously affected. Fifth, the utilization of the
property for public use must be in such a way as to oust the owner and deprive him of all beneficial
enjoyment of the property. The "taking" of Castellvi's property for purposes of eminent domain
cannot be considered to have taken place in 1947 when the Republic commenced to occupy the
property as lessee thereof. Two essential elements in the "taking" of property under the power of
eminent domain, namely: (1) that the entrance and occupation by the condemnor must be for a
permanent, or indefinite period, and (2) that in devoting the property to public use the owner was
ousted from the property and deprived of its beneficial use, were not present when the Republic
entered and occupied the Castellvi property in 1947. The "taking' of the Castellvi property should
not be reckoned as of the year 1947 when the Republic first occupied the same pursuant to the
contract of lease, and that the just compensation to be paid for the Castellvi property should not be
determined on the basis of the value of the property as of that year. Under Section 4 of Rule 67 of
the Rules of Court, the "just compensation" is to be determined as of the date of the filing of the
complaint. This Court has ruled that when the taking of the property sought to be expropriated
coincides with the commencement of the expropriation proceedings, or takes place subsequent to
the filing of the complaint for eminent domain, the just compensation should be determined as of
the date of the filing of the complaint. Herein, it is undisputed that the Republic was placed in
possession of the Castellvi property, by authority of the court, on 10 August 1959. The "taking" of
the Castellvi property for the purposes of determining the just compensation to be paid must,
therefore, be reckoned as of 26 June 1959 when the complaint for eminent domain was filed.

City Government of Quezon City vs. Ericta [GR L-34915, 24 June 1983]
First Division, Gutierrez Jr. (J): 5 concur

Facts: Section 9 of Ordinance 6118, S-64, entitled "Ordinance Regulating the Establishment,
Maintenance and Operation of Private Memorial Type Cemetery Or Burial Ground Within the
Jurisdiction of Quezon City and Providing Penalties for the Violation thereof" provides that at least
6% of the total area of the memorial park cemetery shall be set aside for charity burial of deceased
persons who are paupers and have been residents of Quezon City for at least 5 years prior to their
death, to be determined by competent City Authorities, and where the area so designated shall
immediately be developed and should be open for operation not later than 6 months from the date
of approval of the application. For several years, section 9 of the Ordinance was not enforced by
city authorities but 7 years after the enactment of the ordinance, the Quezon City Council passed a
resolution requesting the City Engineer, Quezon City, to stop any further selling and/or transaction
of memorial park lots in Quezon City where the owners thereof have failed to donate the required
6% space intended for paupers burial. Pursuant to this petition, the Quezon City Engineer notified
Himlayang Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S-64 would be enforced.
Himlayang Pilipino reacted by filing with the Court of First Instance (CFI) of Rizal (Branch XVIII
at Quezon City), a petition for declaratory relief, prohibition and mandamus with preliminary
injunction (Special Proceeding Q-16002) seeking to annul Section 9 of the Ordinance in question
for being contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and the
Revised Administrative Code. There being no issue of fact and the questions raised being purely
legal, both the City Government and Himlayang Pilipino agreed to the rendition of a judgment on
the pleadings. The CFI rendered the decision declaring Section 9 of Ordinance 6118, S-64 null and
void. A motion for reconsideration having been denied, the City Government and City Council
filed the petition or review with the Supreme Court. Issue: Whether the setting aside of 6% of the
total area of all private cemeteries for charity burial grounds of deceased paupers is tantamount to
taking of private property without just compensation.

Held: There is no reasonable relation between the setting aside of at least 6% of the total area of all
private cemeteries for charity burial grounds of deceased paupers and the promotion of health,
morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking
without compensation of a certain area from a private cemetery to benefit paupers who are charges
of the municipal corporation. Instead of building or maintaining a public cemetery for this purpose,
the city passes the burden to private cemeteries. The expropriation without compensation of a
portion of private cemeteries is not covered by Section 12(t) of Republic Act 537, the Revised
Charter of Quezon City which empowers the city council to prohibit the burial of the dead within
the center of population of the city and to provide for their burial in a proper place subject to the
provisions of general law regulating burial grounds and cemeteries. When the Local Government
Code, Batas Pambansa 337 provides in Section 177 (q) that a Sangguniang panlungsod may
"provide for the burial of the dead in such place and in such manner as prescribed by law or
ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate
private properties to construct public cemeteries. This has been the law and practice in the past and
it continues to the present. Expropriation, however, requires payment of just compensation. The
questioned ordinance is different from laws and regulations requiring owners of subdivisions to set
aside certain areas for streets, parks, playgrounds, and other public facilities from the land they sell
to buyers of subdivision lots. The necessities of public safety, health, and convenience are very
clear from said requirements which are intended to insure the development of communities with
salubrious and wholesome environments. The beneficiaries of the regulation, in turn, are made to
pay by the subdivision developer when individual lots are sold to homeowners.

People vs. Fajardo [GR L-12172, 29 August 1958]

En Banc, Reyes JBL (J): 9 concur

Facts: On 15 August 1950, during the incumbency of Juan F. Fajardo as mayor of the municipality
of Baao, Camarines Sur, the municipal council passed Ordinance 7, series of 1950, providing that
"any person or persons who will construct or repair a building should, before constructing or
repairing, obtain a written permit from the Municipal Mayor," that "a fee of not less than P2.00
should be charged for each building permit and P1.00 for each repair permit issued," and that any
violation of the provisions of the ordinance shall make the violator liable to pay a fine of not less
than P25 nor more than P50 or imprisonment of not less than 12 days nor more than 24 days or
both, at the discretion of the court; and that if said building destroys the view of the Public Plaza or
occupies any public property, it shall be removed at the expense of the owner of the building or
house. 4 years later, after the term of Fajardo as mayor had expired, he and his son-in-law, Pedro
Babilonia, filed a written request with the incumbent municipal mayor for a permit to construct a
building adjacent to their gasoline station on a parcel of land registered in Fajardo's name, located
along the national highway and separated from the public plaza by a creek. On 16 January 1954,
the request was denied, for the reason among others that the proposed building would destroy the
view or beauty of the public plaza. On 18 January 1954, Fajardo and Babilonia reiterated their
request for a building permit, but again the request was turned down by the mayor. Whereupon,
Fajardo and Babilonia proceeded with the construction of the building without a permit, because
they needed a place of residence very badly, their former house having been destroyed by a
typhoon and hitherto they had been living on leased property. On 26 February 1954, Fajardo and
Babilonia were charged before and convicted by the justice of the peace court of Baao, Camarines
Sur, for violation of Ordinance 7. Fajardo and Babilonia appealed to the Court of First Instance
(CDI), which affirmed the conviction, and sentenced both to pay a fine of P35 each and the costs,
as well as to demolish the building in question because it destroys the view of the public plaza of
Baao. From this decision, Fajardo and Babilonia appealed to the Court of Appeals, but the latter
forwarded the records to the Supreme Court because the appeal attacks the constitutionality of the
ordinance in question.

Issue: Whether the refusal of the Mayor of Baao to issue a building permit on the ground that the
proposed building would destroy the view of the public plaza is an undue deprivation of the use of
the property in question, and thus a taking without due compensation.

Held: The refusal of the Mayor of Baao to issue a building permit to Fajardo and Babilonia was
predicated on the ground that the proposed building would "destroy the view of the public plaza"
by preventing its being seen from the public highway. Even thus interpreted, the ordinance is
unreasonable and oppressive, in that it operates — to permanently deprive the latter of the right to
use their own property; hence, it oversteps the bounds of police power, and amounts to a taking of
the property without just compensation. But while property may be regulated in the interest of the
general welfare such as to regard the beautification of neighborhoods as conducive to the comfort
and happiness of residents), and in its pursuit, the State may prohibit structures offensive to the
sight, the State may not, under the guise of police power, permanently divest owners of the
beneficial use of their property and practically confiscate them solely to preserve or assure the
aesthetic appearance of the community. As the case now stands, every structure that may be
erected on Fajardo's land, regardless of its own beauty, stands condemned under the ordinance in
question, because it would interfere with the view of the public plaza from the highway. Fajardo
would, in effect, be constrained to let their land remain idle and unused for the obvious purpose for
which it is best suited, being urban in character. To legally achieve that result, the municipality
must give Fajardo just compensation and an opportunity to be heard.

National Power Corporation vs. Gutierrez [GR 60077, 18 January 1991]

Third Division, Bidin (J): 2 concur, 1 concurs with reservation

Facts: The National Power Corporation (NAPOCOR), a government owned and controlled entity,
in accordance with Commonwealth Act 120, is invested with the power of eminent domain for the
purpose of pursuing its objectives, which among others is the construction, operation, and
maintenance of electric transmission lines for distribution throughout the Philippines. For the
construction of its 230 KV Mexico- Limay transmission lines, NAPOCOR's lines have to pass the
lands belonging to Matias Cruz, Heirs of Natalia Paule and spouses Misericordia Gutierrez and
Ricardo Malit (covered by tax declarations 907, 4281 and 7582, respectively). NAPOCOR
initiated negotiations for the acquisition of right of way easements over the aforementioned lots for
the construction of its transmission lines but unsuccessful in this regard, NAPOCOR was
constrained to file eminent domain proceedings against Gutierrez, et. al. on 20 January 1965. Upon
filing of the corresponding complaint, NAPOCOR deposited the amount of P973.00 with the
Provincial Treasurer of Pampanga, tendered to cover the provisional value of the land of the Malit
and Gutierrez. And by virtue of which, NAPOCOR was placed in possession of the property of
the spouses so it could immediately proceed with the construction of its Mexico-Limay 230 KV
transmission line. In this connection, by the trial court's order of 30 September 1965, the spouses
were authorized to withdraw the fixed provisional value of their land in the sum of P973.00.
Meanwhile, for the purpose of determining the fair and just compensation due Gutierrez, et. al., the
court appointed 3 commissioners, comprised of one representative of NAPOCOR, one for the
affected families and the other from the court, who then were empowered to receive evidence,
conduct ocular inspection of the premises, and thereafter, prepare their appraisals as to the fair and
just compensation to he paid to the owners of the lots. Hearings were consequently held before said
commissioners and during their hearings, the case of the Heirs of Natalia Paule was amicably
settled by virtue of a Right of Way Grant executed by Guadalupe Sangalang for herself and in
behalf of her co-heirs in favor of NAPOCOR. The case against Matias Cruz was earlier decided by
the court, thereby leaving only the case against the spouses Malit and Gutierrez still to be resolved.
Accordingly, the commissioners submitted their individual reports. With the reports submitted, the
lower court rendered a decision, ordering NAPOCOR to pay Malit and Gutierrez the sum of P10
per square meter as the fair and reasonable compensation for the right-of-way easement of the
affected area, which is 760 squares, or a total sum of P7,600.00 and P800.00 as attorney's fees.
Dissatisfied with the decision, NAPOCOR filed a motion for reconsideration which was favorably
acted upon by the lower court, and in an order dated 10 June 1973, it amended its previous
decision, reducing the amount awarded to to P5.00 per square meter as the fair and reasonable
market value of the 760square meters belonging to the said spouses, in light of the classification of
the land to be partly commercial and partly agricultural. Still not satisfied, an appeal was filed by
the NAPOCOR with the Court of Appeals but appellate court, on 9 March 1982, sustained the trial
court. NAPOCOR filed the petition for review on certiorari before the Supreme Court.

Issue: Whether the spouses are deprive of the property’s ordinary use and thus the easement of
right of way in favor of NAPOCOR constitutes taking.

Held: The acquisition of the right-of-way easement falls within the purview of the power of
eminent domain. Such conclusion finds support in similar cases of easement of right-of-way where
the Supreme Court sustained the award of just compensation for private property condemned for
public use. Herein, the easement of right-of-way is definitely a taking under the power of eminent
domain. Considering the nature and effect of the installation of the 230 KV Mexico-Limay
transmission lines, the limitation imposed by NAPOCOR against the use of the land for an
indefinite period deprives spouses Malit and Gutierrez of its ordinary use. For these reasons, the
owner of the property expropriated is entitled to a just compensation, which should be neither more
nor less, whenever it is possible to make the assessment, than the money equivalent of said
property. Just compensation has always been understood to be the just and complete equivalent of
the loss which the owner of the thing expropriated has to suffer by reason of the expropriation. The
price or value of the land and its character at the time it was taken by the Government are the
criteria for determining just compensation. The above price refers to the market value of the land
which may be the full market value thereof. It appearing that the trial court did not act capriciously
and arbitrarily in setting the price of P5.00 per square meter of the affected property, the said award
is proper and not unreasonable.

United States vs. Causby [328 US 256, 27 May 1946]

Douglas (J)

Facts: Causby owns 2.8 acres near an airport outside of Greensboro, North Carolina. It has on it a
dwelling house, and also various outbuildings which were mainly used for raising chickens. The
end of the airport's northwest-southeast runway is 2,220 feet from Causby's barn and 2,275 feet
from their house. The path of glide to this runway passes directly over the property-which is 100
feet wide and 1,200 feet long. The 30 to 1 safe glide angle approved by the Civil Aeronautics
Authority passes over this property at 83 feet, which is 67 feet above the house, 63 feet above the
barn and 18 feet above the highest tree. The use by the United States of this airport is pursuant to a
lease executed in May 1942, for a term commencing 1 June 1942 and ending 30 June 1942, with a
provision for renewals until 30 June 1967, or 6 months after the end of the national emergency,
whichever is the earlier. Various aircraft of the United States, i.e. bombers, transports and fighters,
use this airport. Since the United States began operations in May 1942, its four-motored heavy
bombers, other planes of the heavier type, and its fighter planes have frequently passed over
Causby's land buildings in considerable numbers and rather close together. They come close
enough at times to appear barely to miss the tops of the trees and at times so close to the tops of the
trees as to blow the old leaves off. The noise is startling. And at night the glare from the planes
brightly lights up the place. As a result of the noise, the Causbys had to give up their chicken
business. As many as 6 to 10 of their chickens were killed in one day by flying into the walls from
fright. The total chickens lost in that manner was about 150. Production also fell off. The result was
the destruction of the use of the property as a commercial chicken farm. The Causbys are
frequently deprived of their sleep and the family has become nervous and frightened. Although
there have been no airplane accidents on their property, there have been several accidents near the
airport and close to their place. These are the essential facts found by the Court of Claims. On the
basis of these facts, it found that the property had depreciated in value. It held that the United States
had taken an easement over the property on June 1, 1942, and that the value of the property
destroyed and the easement taken was $2,000. The United States contends that when flights are
made within the navigable airspace (Air Commerce Act of 1926, as amended by the Civil
Aeronautics Act of 1938) without any physical invasion of the property of the landowners, there
has been no taking of property. It says that at most there was merely incidental damage occurring
as a consequence of authorized air navigation.

Issue: Whether there was taking of the Causby’s property, even in the light that the United States
allegedly has complete and exclusive national sovereignty in the air space over the country.

Held: The United States conceded that if the flights over Causby's property rendered it
uninhabitable, there would be a taking compensable under the 5th Amendment. It is the owner's
loss, not the taker's gain, which is the measure of the value of the property taken. Market value
fairly determined is the normal measure of the recovery. And that value may reflect the use to
which the land could readily be converted, as well as the existing use. If, by reason of the
frequency and altitude of the flights, Causby could not use this land for any purpose, their loss
would be complete. It would be as complete as if the United States had entered upon the surface of
the land and taken exclusive possession of it. Herein, there was a taking. Though it would be only
an easement of flight which was taken, that easement, if permanent and not merely temporary,
normally would be the equivalent of a fee interest. It would be a definite exercise of complete
dominion and control over the surface of the land. The fact that the planes never touched the
surface would be as irrelevant as the absence in this day of the feudal livery of seisin on the transfer
of real estate. The owner's right to possess and exploit the land-that is to say, his beneficial
ownership of it-would be destroyed. It would not be a case of incidental damages arising from a
legalized nuisance such as was involved in Richards v. Washington Terminal Co. (233 U.S. 546).
In that case property owners whose lands adjoined a railroad line were denied recovery for
damages resulting from the noise, vibrations, smoke and the like, incidental to the operations of the
trains. Herein, the line of flight is over the land, and the land is appropriated as directly and
completely as if it were used for the runways themselves. However, since the record in the case is
not clear whether the easement taken is a permanent or a temporary one, it would be premature for
the Court to consider whether the amount of the award made by the Court of Claims was proper,
and thus the Court remanded the cause to the Court of Claims so that it may make the necessary
findings in conformity with the Court's opinion.

Philippine Press Institute vs. Commission on Elections [GR 119694, 22 May 1995]
Resolution En Banc, Feliciano (J): 12 concur, 1 on leave

Facts: On 2 March 1995, the Commission on Elections (Comelec) promulgated Resolution 2772,
which provided that (1) the Commission shall procure free print space of not less than 1/2 page in
at least one newspaper of general circulation in every province or city for use as "Comelec Space"
from 6 March until 12 May 1995; and that in the absence of said newspaper, "Comelec Space"
shall be obtained from any magazine or periodical of said province or city; (2) that "Comelec
Space" shall be allocated by the Commission, free of charge, among all candidates within the area
in which the newspaper, magazine or periodical is circulated to enable the candidates to make
known their qualifications, their stand on public issues and their platforms and programs of
government; and that the "Comelec Space" shall also be used by the Commission for
dissemination of vital election information' among others. Apparently in implementation of the
Resolution, Comelec through Commissioner Regalado E. Maambong sent identical letters, dated
22 March 1995, to various publishers of newspapers like the Business World, the Philippine Star,
the Malaya and the Philippine Times Journal, all members of Philippine Press Institute (PPI),
advising the latter that they are directed to provide free print space of not less than 1/2 page for use
as "Comelec Space" or similar to the print support which the latter have extended during the 11
May 1992 synchronized elections which was 2 full pages for each political party fielding senatorial
candidates, from 6 March to 6 May 1995, to make known to their qualifications, their stand on
public issues and their platforms and programs of government. PPI filed a Petition for Certiorari
and Prohibition with prayer for the issuance of a Temporary restraining order before the Supreme
Court to assail the validity of Resolution 2772 and the corresponding directive dated 22 March
1995.

Issue: Whether there was necessity for the taking, i.e. compelling print media companies to donate
“Comelec space.”

Held: To compel print media companies to donate "Comelec space" of the dimensions specified in
Section 2 of Resolution 2772 (not less than 1/2 Page), amounts to "taking" of private personal
property for public use or purposes. Section 2 failed to specify the intended frequency of such
compulsory "donation." The extent of the taking or deprivation is not insubstantial; this is not a
case of a de minimis temporary limitation or restraint upon the use of private property. The
monetary value of the compulsory "donation," measured by the advertising rates ordinarily
charged by newspaper publishers whether in cities or in non-urban areas, may be very substantial
indeed. The taking of print space here sought to be effected may first be appraised under the public
of expropriation of private personal property for public use. The threshold requisites for a lawful
taking of private property for public use need to be examined here: one is the necessity for the
taking; another is the legal authority to effect the taking. The element of necessity for the taking
has not been shown by the Comelec. It has not been suggested that the members of PPI are
unwilling to sell print space at their normal rates to Comelec for election purposes. Similarly, it has
not been suggested, let alone demonstrated, that Comelec has been granted the power of imminent
domain either by the Constitution or by the legislative authority. A reasonable relationship
between that power and the enforcement and administration of election laws by Comelec must be
shown; it is not casually to be assumed. That the taking is designed to subserve "public use" is not
contested by PPI. Only that, under Section 3 of Resolution 2772, the free "Comelec space" sought
by the Comelec would be used not only for informing the public about the identities, qualifications
and programs of government of candidates for elective office but also for "dissemination of vital
election information" (including, presumably, circulars, regulations, notices, directives, etc. issued
by Comelec). It seems to the Court a matter of judicial notice that government offices and agencies
(including the Supreme Court) simply purchase print space, in the ordinary course of events, when
their rules and regulations, circulars, notices and so forth need officially to be brought to the
attention of the general public. The taking of private property for public use it, of course,
authorized by the Constitution, but not without payment of "just compensation." Thus, although
there is nothing at all to prevent newspaper and magazine publishers from voluntarily giving free
print space to Comelec for the purposes contemplated in Resolution 2772; Section 2 of resolution
2772 does not provide a constitutional basis for compelling publishers, against their will to provide
free print space for Comelec purposes. Section 2 does not constitute a valid exercise of the power
of eminent domain.

Filstream International Inc. [GR 125218 and GR 128077. 23 January 1998]

Third Division, Francisco (J): 4 concur

Facts: Filstream International, Inc., is the registered owner of the properties consisting of adjacent
parcels of land situated in Antonio Rivera Street, Tondo II, Manila, with a total area of 3,571.10
square meters (TCT 203937, 203936, 169198, 169199, 169200 and 169202 of the Register of
Deeds of Manila). On 7 January 1993, Filstream filed an ejectment suit before the Metropolitan
Trial Court (MTC) of Manila (Branch 15, Civil Case 140817-CV) against the occupants of the
parcels of land (Orlando Malit, Antonio Caguiat, Alicia Cabrera, Armando Lachica, Jacinto
Caguiat, Gloria Antonio, Elizalde Navarra, Dolores Fuentes, Susana Roy, Antonio Ibañez,
Benigno Basilio, Luceria Dematulac, Florencia Gomez, Lazaro Gomez, Jose Gomez, Venancio
Manaloto, Cristino Umali, Demetria Gatus, Priscilla Malong, Domingo Aguila, Ramon San
Agustin, Julian Ferrer, Jr., Francisco Galang, Florentino Maliwat, Severina Villar, Trinidad
Naguit, Jose Naguit, Fortunato Agustin Cabrera, Gaudencio Intal, Danilo David, Enrique David,
Vicente De Guzman, Policarpio Lumba, Belen Palma, Elen Somvillo, Leonardo Manicad, Opreng
Miclat, Benita Mata, Gregorio Lopez, Marcelina Sapno, Jesus Mercado, and Calixto Gomez) on
the grounds of termination of the lease contract and non-payment of rentals. Judgment was
rendered by the MTC on September 14, 1993 ordering private respondents to vacate the premises
and pay back rentals to Filstream. Not satisfied, malit, et. al. appealed the decision to the Regional
Trial Court (RTC) of Manila (Branch 4, Civil Case 93-68130) which in turn affirmed the decision
of the MTC. Still not content, Malit, et. al. proceeded to the Court of Appeals via a petition for
review (CA-GR SP 33714). The result however remained the same as the appellate court affirmed
the decision of the RTC in its decision dated 25 August 1994. Thereafter, no further action was
taken by Malit, et. al., as a result of which the decision in the ejectment suit became final and
executory.

However, during the pendency of the ejectment proceedings Malit, et. al. filed on 25 May 1993, a
complaint for Annulment of Deed of Exchange against Filstream before the RTC of Manila
(Branch 43, Civil Case 93-66059). It was at this stage that City of Manila came into the picture
when the city government approved Ordinance 7813 on 5 November 1993, authorizing Mayor
Alfredo S. Lim to initiate the acquisition by negotiation, expropriation, purchase, or other legal
means certain parcels of land which formed part of Filstream's properties then occupied by Malit,
et. al. Subsequently, the City of Manila approved Ordinance 7855 declaring the expropriation of
certain parcels of land situated along Antonio Rivera and Fernando Ma. Guerrero streets in Tondo,
Manila which were owned by Mr. Enrique Quijano Gutierrez, Filstream's predecessor-in-interest.
The said properties were to be sold and distributed to qualified tenants of the area pursuant to the
Land Use Development Program of the City of Manila. On 23 May 1994, the City of Manila filed
a complaint for eminent domain before the RTC of Manila (Branch 42, Civil Case 94-70560),
seeking to expropriate the parcels of land owned by Filstream which are situated at Antonio Rivera
Street, Tondo II, Manila. Pursuant to the complaint filed by the City of Manila, the trial court
issued a Writ of Possession in favor of the former which ordered the transfer of possession over the
disputed premises to the City of Manila. Filstream filed a motion to dismiss the complaint for
eminent domain as well as a motion to quash the writ of possession. On 30 September 1994, the
RTC of Manila issued an order denying Filstream's motion to dismiss and the motion to quash the
Writ of Possession. Filstream filed a motion for reconsideration as well as a supplemental motion
for reconsideration seeking the reversal of the order but the same were denied. Still, Filstream filed
a subsequent motion to be allowed to file a second motion for reconsideration but it was also
denied. Aggrieved, Filstream filed on 31 March 1996, a Petition for Certiorari with the Court of
Appeals (CA- GR SP 36904) seeking to set aside the RTC order. On 18 March 1996, the appellate
court dismissed the petition. Filsteream filed a motion for reconsideration and attached clearer
copies of the pertinent documents and papers pursuant to Section 2(a), Rule 6 of the Revised
Internal Rules of the Court of Appeals. But on 20 May 1996, the appellate court issued a resolution
denying the motion as petitioner failed to submit clearer and readable copies of the pleadings. This
prompted Filstream to proceed to the Supreme Court by filing a petition for review on certiorari.

Meanwhile, owing to the finality of the decision in the ejectment suit (Civil Case 140817-CV), the
MTC of Manila, Branch 15, upon motion of Filstream, issued a Writ of Execution as well as a
Notice to Vacate the disputed premises. Malit, et. al. filed a Motion to Recall/Quash the Writ of
Execution and Notice to Vacate alleging the existence of a supervening event in that the properties
subject of the dispute have already been ordered condemned in an expropriation proceeding in
favor of the City of Manila for the benefit of the qualified occupants thereof, thus execution shall
be stayed. For its part, the City of Manila filed on 13 March 1996, a motion for intervention with
prayer to stay/quash the writ of execution on the ground that it is the present possessor of the
property subject of execution. In its order dated 14 March 1996, the MTC of Manila denied Malit,
et. al.'s motion as it found the allegations therein bereft of merit and upheld the issuance of the Writ
of Execution and Notice to Vacate in Filstream's favor. Subsequently, the trial court also denied
the motion filed by the City of Manila. On 22 April 1996, the trial court issued an order
commanding the demolition of the structure erected on the disputed premises. To avert the
demolition, Malit, et. al. filed before the RTC of Manila, (Branch 14, Civil Case 96-78098) a
Petition for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order
and preliminary injunction . On 15 May 1996, the City of Manila filed its Petition for Certiorari
and Prohibition with prayer for the issuance of a temporary restraining order and preliminary
injunction which was raffled to Branch 23 of the RTC of Manila (Civil Case 96-78382), seeking
the reversal of the orders issued by the MTC of Manila, Branch 14. Thereafter, upon motion filed
by the City of Manila, an order was issued by the RTC of Manila, Branch 10, ordering the
consolidation of Civil Case 96-78382 with Civil Case 96-78098 pending before Branch 14 of the
RTC of Manila. Injunctions were issued. Filstream then filed a motion for reconsideration from the
order of denial but pending resolution of this motion, it filed a motion for voluntary inhibition of
the presiding judge of the RTC of Manila, Branch 14. The motion for inhibition was granted 25
and as a result, the consolidated cases (Civil Cases 96-78382 and 96-78098) were re-raffled to the
RTC of Manila, Branch 33. During the proceedings before the RTC of Manila, Branch 33,
Filstream moved for the dismissal of the consolidated cases (Civil Cases 96-78382 and 96-78098)
for violation of Supreme Court Circular 04-94 (forum shopping) because the same parties, causes
of action and subject matter involved therein have already been disposed of in the decision in the
ejectment case (Civil Case 140817) which has already become final and executory prior to the
filing of these consolidated cases. On 9 December 1996, the RTC of Manila, Branch 33 ordered the
dismissal of Civil Cases 96-78382 and 96-78098 due to forum shopping. Immediately thereafter,
Filstream filed an Ex-parte Motion for Issuance of an Alias Writ of Demolition and Ejectment and
a supplemental motion to the same dated January 10 and 13, 1997, respectively, before the MTC of
Manila, Branch 15, which promulgated the decision in the ejectment suit (Civil Case No.
140817-CV). 23 On January 1997, the court granted the motion and issued the corresponding writ
of demolition. As a consequence of the dismissal of the consolidated cases, Malit, et. al. filed a
Petition for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order
and preliminary injunction before the Court of Appeals (CA-GR SP 43101). At the conclusion of
the hearing for the issuance of a writ of preliminary injunction, the Court of Appeals, in its
resolution dated 18 February 1997, found merit in Malit, et. al.'s allegations in support of their
application of the issuance of the writ and granted the same. Filstream filed a Petition for Certiorari
under Rule 65.

Issue: Whether there is violation of due process against Filstream in the manner its properties were
expropriated and condemned in favor of the City of Manila.

Held: That only a few could actually benefit from the expropriation of the property does not
diminish its public use character. It is simply not possible to provide all at once land and shelter for
all who need them. Corollary to the expanded notion of public use, expropriation is not anymore
confined to vast tracts of land and landed estates. It is therefore of no moment that the land sought
to be expropriated in this case is less than half a hectare only. Through the years, the public use
requirement in eminent domain has evolved into a flexible concept, influenced by changing
conditions. Public use now includes the broader notion of indirect public benefit or advantage,
including in particular, urban land reform and housing. The Court takes judicial notice of the fact
that urban land reform has become a paramount task in view of the acute shortage of decent
housing in urban areas particularly in Metro Manila. Nevertheless, despite the existence of a
serious dilemma, local government units are not given an unbridled authority when exercising
their power of eminent domain in pursuit of solutions to these problems. The basic rules still have
to be followed, which are as follows: "no person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the equal protection of the laws; private
property shall not be taken for public use without just compensation". Thus, the exercise by local
government units of the power of eminent domain is not without limitations. Even Section 19 of
the 1991 Local Government Code is very explicit that it must comply with the provisions of the
Constitution and pertinent laws. Very clear from Sections 9 and 10 of Republic Act 7279 (Urban
Development and Housing Act of 1992) are the limitations with respect to the order of priority in
acquiring private lands and in resorting to expropriation proceedings as a means to acquire the
same. Private lands rank last in the order of priority for purposes of socialized housing. In the same
vein, expropriation proceedings are to be resorted to only when the other modes of acquisition
have been exhausted. Compliance with these conditions must be deemed mandatory because these
are the only safeguards in securing the right of owners of private property to due process when
their property is expropriated for public use. There is nothing in the records that would indicate
that City of Manila complied with Section 9 and Section 10 of RA 7279. Filstream's properties
were expropriated and ordered condemned in favor of the City of Manila sans any showing that
resort to the acquisition of other lands listed under Section 9 of RA 7279 have proved futile.
Evidently, there was a violation of Filstream's right to due process which must accordingly be
rectified.

City of Mandaluyong vs. Aguilar [GR 137152, 29 January 2001]

First Division, Puno (J): 4 concur

Facts: Antonio, Francisco, Thelma, Eusebio, and Rodolfo N. Aguilar, constructed residential
houses several decades ago on a portion of the 3 lots located at 9 de Febrero Street, Barangay
Mauwag, City of Mandaluyong. The Aguilars had since leased out these houses to tenants until the
present. On the vacant portion of the lots, other families constructed residential structures which
they likewise occupied. In 1983, the lots were classified by Resolution 125 of the Board of the
Housing and Urban Development Coordinating Council as an Area for Priority Development for
urban land reform under Proclamation 1967 and 2284 of then President Marcos. As a result of this
classification, the tenants and occupants of the lots offered to purchase the land from the Aguilars,
but the latter refused to sell. On 7 November 1996, the Sangguniang Panlungsod of Mandaluyong,
upon petition of the Kapitbisig, an association of tenants and occupants of the subject land,
adopted Resolution 516, Series of 1996 authorizing Mayor Benjamin Abalos of the City of
Mandaluyong to initiate action for the expropriation of the subject lots and construction of a
medium-rise condominium for qualified occupants of the land. On 10 January 1996, Mayor Abalos
allegedly sent a letter to the Aguilars offering to purchase the said property at P3,000.00 per square
meter. On 4 August 1997, the City filed with the Regional Trial Court (RTC), Branch 168, Pasig
City a complaint for expropriation, seeking to expropriate 3 adjoining parcels of land with an
aggregate area of 1,847 square meters in the names of the Aguilars, and praying that the fixing of
just compensation at the fair market value of P3,000.00 per square meter. In their answer, the
Aguilars, except Eusebio who died in 1995, denied having received a copy of Mayor Abalos' offer
to purchase their lots. They alleged that the expropriation of their land is arbitrary and capricious,
and is not for a public purpose; that the subject lots are their only real property and are too small for
expropriation, while the City has several properties inventoried for socialized housing; and that the
fair market value of P3,000.00 per square meter is arbitrary because the zonal valuation set by the
Bureau of Internal Revenue is P7,000.00 per square meter. As counterclaim, the Aguilars prayed
for damages of P21 million. On 5 November 1997, the City filed an Amended Complaint and
named as an additional defendant Virginia N. Aguilar and, at the same time, substituted Eusebio
Aguilar with his heirs. The City also excluded from expropriation TCT N59870 and thereby
reduced the area sought to be expropriated from three (3) parcels of land to two (2) parcels totalling
1,636 square meters.The Amended Complaint was admitted by the trial court on 18 December
1997. On 17 September 1998, the trial court issued an order dismissing the Amended Complaint
after declaring the Aguilars as "small property owners" whose land is exempt from expropriation
under Republic Act 7279. The court also found that the expropriation was not for a public purpose
for the City's failure to present any evidence that the intended beneficiaries of the expropriation are
landless and homeless residents of Mandaluyong. The City moved for reconsideration. On 29
December 1998, the court denied the motion. The City filed a petition for review with the Supreme
Court.

Issue: Whether the City has exhausted all means to acquire the land under the hands of private
persons, but which is within the Areas for Priority Development (APD).

Held: Presidential Decree (PD) 1517, the Urban Land Reform Act, was issued by then President
Marcos in 1978. The decree adopted as a State policy the liberation of human communities from
blight, congestion and hazard, and promotion of their development and modernization, the
optimum use of land as a national resource for public welfare. Pursuant to this law, Proclamation
1893 was issued in 1979 declaring the entire Metro Manila as Urban Land Reform Zone for
purposes of urban land reform. This was amended in 1980 by Proclamation 1967 and in 1983 by
Proclamation 2284 which identified and specified 245 sites in Metro Manila as Areas for Priority
Development and Urban Land Reform Zones. The acquisition of lands for socialized housing is
governed by several provisions in the law. Pursuant to Section 9 of RA 7279, Lands for socialized
housing are to be acquired in the following order: (1) government lands; (2) alienable lands of the
public domain; (3) unregistered or abandoned or idle lands; (4) lands within the declared Areas for
Priority Development (APD), Zonal Improvement Program (ZIP) sites, Slum Improvement and
Resettlement (SIR) sites which have not yet been acquired; (5) BLISS sites which have not yet
been acquired; and (6) privately- owned lands. Section 9, however, is not a single provision that
can be read separate from the other provisions of the law. It must be read together with Section 10
of RA 7279. Thus, lands for socialized housing under RA 7279 are to be acquired in several
modes. Among these modes are the following: (1) community mortgage;
(2) land swapping, (3) land assembly or consolidation; (4) land banking; (5) donation to the
government; (6) joint venture agreement; (7) negotiated purchase; and (8) expropriation. The
mode of expropriation is subject to two conditions: (a) it shall be resorted to only when the other
modes of acquisition have been exhausted; and (b) parcels of land owned by small property owners
are exempt from such acquisition. The acquisition of the lands in the priority list must be made
subject to the modes and conditions set forth in the next provision. In other words, land that lies
within the APD may be acquired only in the modes under, and subject to the conditions of, Section
10. Herein, the City claims that it had faithfully observed the different modes of land acquisition
for socialized housing under RA 7279 and adhered to the priorities in the acquisition for socialized
housing under said law. It, however, did not state with particularity whether it exhausted the other
modes of acquisition in Section 9 of the law before it decided to expropriate the subject lots. The
law states "expropriation shall be resorted to when other modes of acquisition have been
exhausted." The City alleged only one mode of acquisition, i.e., by negotiated purchase. The City,
through the City Mayor, tried to purchase the lots from the Aguilars but the latter refused to sell. As
to the other modes of acquisition, no mention has been made. Not even Resolution 516, Series of
1996 of the Sangguniang Panlungsod authorizing the Mayor of Mandaluyong to effect the
expropriation of the subject property states whether the city government tried to acquire the same
by community mortgage, land swapping, land assembly or consolidation, land banking, donation
to the government, or joint venture agreement under Section 9 of the law.

Lagcao vs. Labra G.R. No. 155746 October 13, 2004 Eminent Domain

FACTS:

After acquiring title, petitioners tried to take possession of the lot only to discover that it was
already occupied by squatters. Thus a demolition order was issued. However, when the demolition
order was about to be implemented, Cebu City Mayor Alvin Garcia wrote two letters] to the
MTCC, requesting the deferment of the demolition on the ground that the City was still looking for
a relocation site for the squatters. Acting on the mayors request, the MTCC issued two orders
suspending the demolition for a period of 120 days. Unfortunately for Petitioners, during the
suspension period, the Sangguniang Panlungsod (SP) of Cebu City passed a resolution which
identified Lot 1029 as a socialized housing site pursuant to RA 7279.

In this appeal, petitioners argue that Ordinance No. 1843 is unconstitutional as it sanctions the
expropriation of their property for the purpose of selling it to the squatters, an endeavor contrary to
the concept of public use contemplated in the Constitution. They allege that it will benefit only a
handful of people.

ISSUE:

What is Eminent Domain? Was this validly exercised in this case?

RULING:

It is where 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.

No, it has not been validly invoked in this case due to the fact that The foundation of the right to
exercise eminent domain should be a genuine necessity and that necessity must be of public
character. Government may not capriciously or arbitrarily choose which private property should be
expropriated. In this case, there was no showing at all why petitioners property was singled out for
expropriation by the city ordinance or what necessity impelled the particular choice or selection.
Ordinance No. 1843 stated no reason for the choice of petitioners property as the site of a
socialized housing project.

It should also be noted that, as early as 1998, petitioners had already obtained a favorable judgment
of eviction against the illegal occupants of their property but Mayor Garcia requested the trial court
to suspend the demolition on the pretext that the City was still searching for a relocation site for the
squatters. However, instead of looking for a relocation site during the suspension period, the city
council suddenly enacted Ordinance No. 1843 for the expropriation of petitioners lot. It was
trickery and bad faith, pure and simple. The unconscionable manner in which the questioned
ordinance was passed clearly indicated that respondent City transgressed the Constitution, RA
7160 and RA 7279.

JIL Christian School vs Municipality (now City) of Pasig, Metro Manila

G.R. No. 152230 / Aug 9 2005 / Callejo, Sr., J./LOCGOV-Eminent Domain/JCFMAGSINO
NATURE Petition for review on certiorari of CA decision and resolution
PETITIONERS Jesus is Lord Christian School Foundation
RESPONDENTS Municipality (now City) of Pasig, Metro Manila

FACTS.
- Municipality of Pasig decided to acquire 51 sqm out of the 1791 sqm property of Lorenzo Ching Cuanco, Victor
Ching Cuanco and Ernesto Ching Cuanco Kho (Ching Cuancos) abutting ER Santos Street
o Municipality needed an access road from E Santos St (a municipal road near the Pasig Public
Market) to Bgy. Sto Tomas (where 60 t0 70 houses, mostly made out of light materials) were
located. Road had to be at least 3m in width so that fire trucks could pass through. Also, the
residents in the area needed the road for water and electrical outlets.
- April 19 1993: Sangguniang Bayan of Pasig approve an Ordinance authorizing the municipal mayor to initiate
expropriation proceedings to acquire the said property and appropriate the fund therefor. The Ordinance
stated that the property owners were notified of the municipality’s intent to purchase the property for public
use as an access road but they rejected the offer.
- July 21 1993: Municipality filed a complaint against Ching Cuancos for expropriation of the property under RA
7160 (LGC).
o Municipality alleged that it notified the Ching Cuancos, by letter1, of its intention to construct an
access road on a portion of the property but they refused to sell the same portion. A photocopy of
the letter addressed to Lorenzo Ching Cuanco was appended to the complant.
o Municipality deposited with the RTC 15% of the market value of the property based on the latest
tax declaration covering the property.
o Upon motion, RTC issued a writ of possession over the property sought to be expropriated.
o Nov 26 1993: Municipality caused the annotation of notice of lis pendens of the TCT of the subject
lot under the name of Jesus is Lord Christian School Foundation (JILCSFI)
o Municipality thereafter constructed a cemented road (named Damayan Street) with a width of 3m.
- Ching Cuanco et al answered that they had sold the property to JILSCFI in Feb 1993. JILSCFI then moved to
become a defendant-in-intervention, which motion the RTC granted. In its answer-in-intervention, JILCSFI
averred, by way of special and affirmative defenses, that:
o The plaintiff’s exercise of eminent domain was only for a particular class and not for the benefit of
the poor and the landless.
o The property sought to be expropriated is not the best portion for the road and the least
burdensome to it.
o It also filed a crossclaim against Ching Cuancos for reimbursement in case the subject property is
expropriated. I
o In its amended answer, JILCSFI also averred that it has been denied the use and enjoyment of its
property because the road was constructed in the middle portion and that the plaintiff
(municipality) was not the real party-in-interest
- RTC: issued an Order in favor of plaintiff, holding that: (1) there was substantial compliance with the definite
and valid offer requirement of RA7160, Sec. 19; and (2) that the expropriated portion is the most convenient
access to the interior of Sto. Tomas Bukid.
 - CA affirmed2 the RTC Order. JILCSFI filed an MR3, which was denied for lack of merit4.
- In the instant petition, JILSCFI now argues that:
o the law explicitly requires that a valid and definite offer be made to the owner of the property and
that such offer was not accepted. In this case, there was no evidence to show that such offer has
been made either to the previous owner or JILSCFI, the present owner.
 the photocopy of the letter of Engr. Reyes, notifying Lorenzo Ching Cuanco of the
respondent’s intention to construct a road on its property, cannot be considered because
the trial court did not admit it in evidence.
 assuming that such letter is admissible in evidence, it would not prove that the offer has
been made to the previous owner because mere notice of intent to purchase is not
equivalent to an offer to purchase
 the offer should be made to the proper party, that is, to the owner of the property. It
noted that the records in this case show that as of February 1993, it was already the
owner of the property. Assuming, therefore, that there was an offer to purchase the
property, the same should have been addressed to the petitioner, as present owner
 the power of eminent domain must be strictly construed since its exercise is necessarily in
derogation of the right to property ownership. All the requirements of the enabling law
must therefore, be strictly complied with. Compliance with such requirements cannot be
presumed but must be proved by the local government exercising the power.
o the local government should, likewise, comply with the requirements for an easement of
right­of­way; hence, the road must be established at a point least prejudicial to the owner of the
property.
o If the property is already devoted to or intended to be devoted to another public use, its
expropriation should not be allowed
- For its part, municipality avers that:
o the CA already squarely resolved the issues raised in this petition, and the petitioner failed to show
valid and compelling reason to reverse the CA’s findings. Moreover, it is not the function of the
Supreme Court to weigh the evidence on factual issues all over again
o the Ching Cuancos were deemed to have admitted that an offer to purchase has been made and
that they refused to accept such offer considering their failure to specifically deny such allegation
in the complaint. In light of such admission, the exclusion of the photocopy of the letter of Engr.
Reyes ,therefore, is no longer significant.

ISSUES & RATIO.

1. WON Municipality complied with the requirement of a valid and definite offer to acquire the property prior to
the filing of the complaint (under Sec. 19 of the LGC)- NO

The Court first discussed the nature of eminent domain. First, it is the ultimate right of the sovereign power to
appropriate any property within its territorial sovereignty for a public purpose. Second, the authority to condemn is
to be strictly construed in favor of the owner and against the condemnor because it is a derogation of private rights.
Third, it is the condemnor who has the burden of proving all the requisites have been complied with. Citing the
Suguitan case, the court reiterated the 4 requisites. (see notes)

The letter was not a valid and definite offer because the letter was not addressed to all registered owners
and it only manifested intent, instead of a definite offer to buy, on the part of the Municipality. Notice of lis
pendens and declarations in whereas clauses of an Ordinance do not constitute substantial compliance.

The purpose of the requirement of a valid and definite offer to be first made to the owner is to encourage
settlements and voluntary acquisition of the property to avoid the expense and delay of a Ct action. The law is
designed to give the owner the opportunity to sell his land w/o the expense and inconvenience of a protracted and
expensive litigation. A reasonable offer in good faith, not merely perfunctory or pro forma offer, must be made. A
single bona fide offer will suffice. The offer must be made to the registered owners.

As applied:
a. Letter to Lorenzo— Since the pty was co-owned, the Municipality sh have made the offer to ALL the
Ching Cuancos, not merely to Lorenzo. Also, the letter contained no definite offer, it merely expressed the
Municipality’s intent to acquire the pty.
b. Notice of lis pendens— While it deemed a notice to the whole world of the pendency of an action, there is
no legal basis to claim that this constitutes substantial compliance with the requisite offer. Moreover, it
was annotated long after the complaint has been filed in the RTC.
c. Whereas clauses in the Ordinance—also not substantial compliance, there still has be competent
evidence that indeed, there was a definite an valid offer to all co-owners.
2. WON JILSCFI’s property which is already intended to be used for public purposes may still be expropriated
by the Municipality- YES

We reject the contention of the petitioner that its property can no longer be expropriated by the respondent
because it is intended for the construction of a place for religious worship and a school for its members. As aptly
explained by this Court in Manosca v. Court of Appeals, thus: It has been explained as early as Seña v. Manila Railroad
Co., that: . . . A historical research discloses the meaning of the term “public use” to be one of constant growth. As
society advances, its demands upon the individual increases and each demand is a new use to which the resources of
the individual may be devoted. . . for “whatever is
beneficially employed for the community is a public use.”

The Court likened this to the expropriation of Felix Manalo’s birthplace. The practical reality that greater benefit
may be derived by members of INC than by most others could well be true but such a peculiar advantage still
remains to be merely incidental and secondary in nature. Indeed, that only a few would actually benefit from the
expropriation of party, does not necessarily diminish the essence and character of public use.

3. WON requisites for an easement for right-of-way under Arts 649-657 of NCC may be dispensed with.

The Municipality is not mandated to comply with the essential requisites for an easement of right-of-way.

In the absence of legislative restriction, the expropriator may determine the location and route of the land to be
taken unless such determination is capricious and wantonly injurious. Expropriation is justified so long as it is for the
public good and there is genuine necessity of public character. Govt may not capriciously choose what private pty
should be taken.

As applied: The municipality has demonstrated the necessity of constructing an access road. Although there
were other ways through which one can enter the vicinity, no vehicle, however, especially fire trucks, could enter the
area except through the newly constructed Damayan St. This is more than sufficient to establish genuine necessity.

Moreover, the findings of the TC (which ruled in favor of the Municipality) based on the conduct of the ocular
inspection must be rejected because as JILCSFI pointed out, it was not notified of the ocular inspection and thus
deprived of its due process rights.

Held: RTC is ordered to dismiss the complaint w/o prejudice to the refiling thereof.

NOTES.
The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate
any property within its territorial sovereignty for a public purpose. The nature and scope of such power has been
comprehensively described as follows: . . . It is an indispensable attribute of sovereignty; a power grounded in the
primary duty of government to serve the common need and advance the general welfare. Thus, the right of
eminent domain appertains to every independent government without the necessity for constitutional
recognition. The provisions found in modern constitutions of civilized countries relating to the taking of property
for the public use do not by implication grant the power to the government, but limit the power which would,
otherwise, be without limit. Thus, our own Constitution provides that “[p]rivate property shall not be taken or
public use without just compensation.” Furthermore, the due process and equal protection clauses act as
additional safeguards against the arbitrary exercise of this governmental power.

The exercise of the right of eminent domain, whether directly by the State or by its authorized agents, is
necessarily in derogation of private rights. It is one of the harshest proceedings known to the law. Consequently,
when the sovereign delegates the power to a political unit or agency, a strict construction will be given against the
agency asserting the power. The authority to condemn is to be strictly construed in favor of the owner and
against the condemnor. When the power is granted, the extent to which it may be exercised is limited to the
expres terms or clear implication of the statute in which the grant is contained. Corollarily, the respondent, which
is the condemnor, has the burden of proving all the essentials necessary to show the right of condemnation. It has
the burden of proof to establish that it has complied with all the requirements provided by law for the valid
exercise of the power of eminent domain.

The Court declared that the following requisites for the valid exercise of the power of eminent domain by a local
government unit must be complied with:
1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the
local government unit, to exercise the power of eminent domain or pursue expropriation proceedings over a
particular private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and
the landless.
3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other
pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but
said offer was not accepted.

Heirs of Juancho Ardona vs. Reyes [GR L-60549, 60553 to 60555; 26 October 1983]
En Banc, Gutierrez Jr. (J): 7 concur, 1 concurs in result, 1 on leave
Facts: The Philippine Tourism Authority filed 4 complaints with the Court of First Instance of
Cebu City for the expropriation of some 282 hectares of rolling land situated in barangays
Malubog and Babag, Cebu City, under PTA's express authority "to acquire by purchase, by
negotiation or by condemnation proceedings any private land within and without the tourist zones"
for the purposes indicated in Section 5, paragraph B(2), of its Revised Charter (PD 564), more
specifically, for the development into integrated resort complexes of selected and well-defined
geographic areas with potential tourism value, specifically for the construction of a sports complex
(basketball courts, tennis courts, volleyball courts, track and field, baseball and softball diamonds,
and swimming pools), clubhouse, gold course, children's playground and a nature area for picnics
and horseback riding for the use of the public. The Heirs of Juancho Ardona (Represented by
Gloria Ardona)Anastacio C. Cabilao, Heirs of Cipriano Cabilao (Represented by Jose Cabilao)
Modesta Cabilao, Heirs of Roman Cabuenas (Represented by Alberto Cabuenas), Agripino
Gabisay and Prudencia Mabini, Antonio Labrador and Lucia Gabisay, Geronimo Mabini and
Marcelina Sabal, Inocencio Mabini and Arsenia Reyes, Patricio Mabini and Gregoria Borres,
Aniceto Gadapan and Maxima Gabisay, Bartolome Magno and Calineca
E. Magno, Alberto Cabuenas, Narciso Cabuenas and Victoria Cabuenas, Eutiquioseno, Heirs of
Esperidion Cabuenas (Represented by Alberto Cabuenas), Maximina Navaro, Sulpicio Navaro,
Eduardo Navaro, Martiniano Roma (In Representation of Arcadio Mabini, Deceased), Martin
Seno, Fausto Arda, Maxima Cabilao, Estrella Seno, Eduvegis S. Cabilao, Rosario Cabilao, Minors
Danilo, Socorro, Josefina and Marites, All Surnamed Cabilao, Juan Borres (Represented by
Francisca Borres), Ramon Jabadan, Jesus Alipar and Leonila Kabahar, Antonio Labrador, Heirs of
Nicasio Gabisay (Represented by Arsenio Gabisay), Pacifico Labrador, Demetrio Labrador and
Fructosa Tabura, Venancio Del Mar, Marino Del Mar, Heirs of Teodora Arcillo (Represented by
Brigida Arcillo) Dionisia Gabunada, Heirs of Buenaventura Francisco (Represented by Felicidad
Sadaya Francisco), Heirs of Victoria C. Cabuenas (Represented by Alberto Cabuenas) Heirs of
Cipriano Gabunada (Represented by Claudio Gabunada) filed their oppositions, and had a
common allegation in that the taking is allegedly not impressed with public use under the
Constitution; alleging that there is no specific constitutional provision authorizing the taking of
private property for tourism purposes; that assuming that PTA has such power, the intended use
cannot be paramount to the determination of the land as a land reform area; that limiting the
amount of compensation by legislative fiat is constitutionally repugnant; and that since the land is
under the land reform program, it is the Court of Agrarian Relations and not the Court of First
Instance (CFI), that has jurisdiction over the expropriation cases.The Philippine Tourism
Authority having deposited with the Philippine National Bank, Cebu City Branch, an amount
equivalent to 10% of the value of the properties pursuant to Presidential Decree No. 1533, the
lower court issued separate orders authorizing PTA to take immediate possession of the premises
and directing the issuance of writs of possession. The Heirs of Ardona, et. al. filed a petition for
certiorari with preliminary injunction before the Supreme Court.

Issue: Whether the expropriation of parcels of land for the purpose of constructing a sports
complex, including a golf course, by the Philippine Tourism Authority be considered taking for
“public use.”

Held: There are three provisions of the 1973 Constitution which directly provide for the exercise of
the power of eminent domain. Section 2, Article IV states that private property shall not be taken
for public use without just compensation. Section 6, Article XIV allows the State, in the interest of
national welfare or defense and upon payment of just compensation to transfer to public
ownership, utilities and other private enterprises to be operated by the government. Section 13,
Article XIV states that the Batasang Pambansa may authorize upon payment of just compensation
the expropriation of private lands to be subdivided into small lots and conveyed at cost to
deserving citizens. While not directly mentioning the expropriation of private properties upon
payment of just compensation, the provisions on social justice and agrarian reforms which allow
the exercise of police power together with the power of eminent domain in the implementation of
constitutional objectives are even more far reaching insofar as taxing of private property is
concerned. The restrictive view of public use may be appropriate for a nation which circumscribes
the scope of government activities and public concerns and which possesses big and correctly
located public lands that obviate the need to take private property for public purposes. Neither
circumstance applies to the Philippines. The Philippines has never been a laissez faire State, and
the necessities which impel the exertion of sovereign power are all too often found in areas of
scarce public land or limited government resources. There can be no doubt that expropriation for
such traditional purposes as the construction of roads, bridges, ports, waterworks, schools, electric
and telecommunications systems, hydroelectric power plants, markets and slaughterhouses, parks,
hospitals, government office buildings, and flood control or irrigation systems is valid. However,
the concept of public use is not limited to traditional purposes. Here as elsewhere the idea that
"public use" is strictly limited to clear cases of "use by the public" has been discarded. The
Philippine Tourism Authority has stressed that the development of the 808 hectares includes plans
that would give the Heirs of Ardona, et. al. and other displaced persons productive employment,
higher incomes, decent housing, water and electric facilities, andbetter living standards. The
Court’s dismissal of the petition is, in part, predicated on those assurances. The right of the PTA to
proceed with the expropriation of the 282 hectares already identified as fit for the establishment of
a resort complex to promote tourism is, therefore, sustained.

Sumulong vs. Guerrero [GR L-48685, 30 September 1987]

En Banc, Cortes (J): 12 concur

Facts: On 5 December 1977 the National Housing Authority (NHA) filed a complaint for
expropriation of parcels of land covering approximately 25 hectares, (in Antipolo Rizal) including
the lots of Lorenzo Sumulong and Emilia Vidanes-Balaoing with an area of 6,667 square meters
and 3,333 square meters respectively. The land sought to be expropriated were valued by the NHA
at P1.00 per square meter adopting the market value fixed by the provincial assessor in accordance
with presidential decrees prescribing the valuation of property in expropriation proceedings.
Together with the complaint was a motion for immediate possession of the properties. The NHA
deposited the amount of P158,980.00 with the Philippine National Bank, representing the "total
market value" of the subject 25 hectares of land, pursuant to Presidential Decree 1224 which
defines "the policy on the expropriation of private property for socialized housing upon payment of
just compensation." On 17 January 1978, Judge Buenaventura Guerrero issued the order issuing a
writ of possession in favor of NHA. Sumulong and Vidanes-Balaoing filed a motion for
reconsideration on the ground that they had been deprived of the possession of their property
without due process of law. This was, however, denied. They filed a petition for certiorari with the
Supreme Court.

Issue: Whether the taking of private property for “socialized housing,” which would benefit a few
and not all citizens, constitutes taking for “public use.”

Held: The exercise of the power of eminent domain is subject to certain limitations imposed by the
constitution (1973), i.e. that private property shall not be taken for public use without just
compensation" (Art. IV, sec. 9); and that no person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the equal protection of the laws" (Art.
IV, sec. 1). The "public use" requirement for a valid exercise of the power of eminent domain is a
flexible and evolving concept influenced by changing conditions. The term "public use" has
acquired a more comprehensive coverage. To the literal import of the term signifying strict use or
employment by the public has been added the broader notion of indirect public benefit or
advantage. Specifically, urban renewal or redevelopment and the construction of low-cost housing
is recognized as a public purpose, not only because of the expanded concept of public use but also
because of specific provisions in the Constitution. The 1973 Constitution made it incumbent upon
the State to establish, maintain and ensure adequate social services including housing [Art. II, sec.
7]. Housing is a basic human need. Shortage in housing is a matter of state concern since it directly
and significantly affects public health, safety, the environment and in sum, the general welfare.
The public character of housing measures does not change because units in housing projects
cannot be occupied by all but only by those who satisfy prescribed qualifications. A beginning has
to be made, for it is not possible to provide housing for all who need it, all at once. "Socialized
housing" falls within the confines of "public use". Provisions on economic opportunities
inextricably linked with low-cost housing, or slum clearance, relocation and resettlement, or slum
improvement emphasize the public purpose of the project. Herein, the use to which it is proposed
to put the subject parcels of land meets the requisites of "public use". The lands in question are
being expropriated by the NHA for the expansion of Bagong Nayon Housing Project to provide
housing facilities to low-salaried government employees. The Supreme Court holds that
"socialized housing" defined in Presidential Decree 1224, as amended by Presidential Decrees
1259 and 1313, constitutes "public use" for purposes of expropriation. However, as previously
held by the Supreme Court, the provisions of such decrees on just compensation are
unconstitutional. Herein, the Court finds that the Orders issued pursuant to the corollary provisions
of those decrees authorizing immediate taking without notice and hearing are violative of due
process.
Province of Camarines Sur vs. Court of Appeals [GR 103125, 17 May 1993]
First Division, Quiason (J): 3 concur

Facts: On 22 December 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur
passed Resolution 129, Series of 1988, authorizing the Provincial Governor to purchase or
expropriate property contiguous to the provincial capitol site, in order to establish a pilot farm for
non-food and non-traditional agricultural crops and a housing project for provincial government
employees. Pursuant to the Resolution, the Province of Camarines Sur, through its Governor,
Hon. Luis R. Villafuerte, filed two separate cases for expropriation against Ernesto N. San Joaquin
and Efren N. San Joaquin with the Regional Trial Court, Pili, Camarines Sur (Hon. Benjamin V.
Panga presiding; Special Civil Action Nos. P-17-89 and P-19-89). Forthwith, the Province of
Camarines Sur filed a motion for the issuance of a writ of possession. The San Joaquins failed to
appear at the hearing of the motion. The San Joaquins moved to dismiss the complaints on the
ground of inadequacy of the price offered for their property. In an order dated 6 December 1989,
the trial court denied the motion to dismiss and authorized the Province of Camarines Sur to take
possession of the property upon the deposit with the Clerk of Court of the amount of P5,714.00, the
amount provisionally fixed by the trial court to answer for damages that San Joaquin may suffer in
the event that the expropriation cases do not prosper. The trial court issued a writ of possession in
an order dated 18 January 1990. The San Joaquins filed a motion for relief from the order,
authorizing the Province of Camarines Sur to take possession of their property and a motion to
admit an amended motion to dismiss. Both motions were denied in the order dated 26 February
1990. The San Joaquins filed their petition before the Court of Appeals, praying (a) that Resolution
No. 129, Series of 1988 of the Sangguniang Panlalawigan be declared null and void; (b) that the
complaints for expropriation be dismissed; and (c) that the order dated December 6, 1989 (i)
denying the motion to dismiss and (ii) allowing the Province of Camarines Sur to take possession
of the property subject of the expropriation and the order dated February 26, 1990, denying the
motion to admit the amended motion to dismiss, be set aside. They also asked that an order be
issued to restrain the trial court from enforcing the writ of possession, and thereafter to issue a writ
of injunction. The Court of Appeals set aside the order of the trial court, and ordered the trial court
to suspend the expropriation proceedings until after the Province of Camarines Sur shall have
submitted the requisite approval of the Department of Agrarian Reform to convert the
classification of the property of the San Joaquins from agricultural to non-agricultural land. The
Province of Camarines Sur filed a petition for certiorari before the Supreme Court.

Issue: Whether the establishment of the Pilot Development Center and the housing project are
deemed for “public use.”

Held: Local government units have no inherent power of eminent domain and can exercise it only
when expressly authorized by the legislature. In delegating the power to expropriate, the
legislature may retain certain control or impose certain restraints on the exercise thereof by the
local governments. While such delegated power may be a limited authority, it is complete within
its limits. Moreover, the limitations on the exercise of the delegated power must be clearly
expressed, either in the law conferring the power or in other legislations. It is the legislative branch
of the local government unit that shall determine whether the use of the property sought to be
expropriated shall be public, the same being an expression of legislative policy. The courts defer to
such legislative determination and will intervene only when a particular undertaking has no real or
substantial relation to the public use. Statutes conferring the power of eminent domain to political
subdivisions cannot be broadened or constricted by implication. Section 9 of BP 337 does not
intimate in the least that local government units must first secure the approval of the Department of
Land Reform for the conversion of lands from agricultural to non-agricultural use, before they can
institute the necessary expropriation proceedings. Likewise, there is no provision in the
Comprehensive Agrarian Reform Law which expressly subjects the expropriation of agricultural
lands by local government units to the control of the Department of Agrarian Reform. The rules on
conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order 129-A, Series
of 1987, cannot be the source of the authority of the Department of Agrarian Reform to determine
the suitability of a parcel of agricultural land for the purpose to which it would be devoted by the
expropriating authority. While those rules vest on the Department of Agrarian Reform the
exclusive authority to approve or disapprove conversions of agricultural lands for residential,
commercial or industrial uses, such authority is limited to the applications for reclassification
submitted by the land owners or tenant beneficiaries. Further, there has been a shift from the literal
to a broader interpretation of "public purpose" or "public use" for which the power of eminent
domain may be exercised. The old concept was that the condemned property must actually be used
by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could satisfy
the constitutional requirement of "public use". Under the new concept, "public use" means public
advantage, convenience or benefit, which tends to contribute to the general welfare and the
prosperity of the whole community, like a resort complex for tourists or housing project. The
expropriation of the property authorized by Resolution 129, Series of 1988, is for a public purpose.
The establishment of a pilot development center would inure to the direct benefit and advantage of
the people of the Province of Camarines Sur. Once operational, the center would make available to
the community invaluable information and technology on agriculture, fishery and the cottage
industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be enhanced.
The housing project also satisfies the public purpose requirement of the Constitution. Housing is a
basic human need. Shortage in housing is a matter of state concern since it directly and
significantly affects public health, safety, the environment and in sum the general welfare. Thus,
the decision of the Court of Appeals is set aside insofar as it (a) nullifies the trial court's order
allowing the Province of Camarines Sur to take possession of the property of the San Joaquins; (b)
orders the trial court to suspend the expropriation proceedings; and (c) requires the Province of
Camarines Sur to obtain the approval of the Department of Agrarian Reform to convert or
reclassify the property of the San Joaquins property from agricultural to non-agricultural use.

Manosca vs. Court of Appeals [GR 106440, 29 January 1996]

First Division, Vitug (J): 4 concur

Facts: Alejandro, Asuncion and Leonica Manosca inherited a piece of land located at P. Burgos
Street, Calzada, Taguig, Metro Manila, with an area of about 492 square meters. When the parcel
was ascertained by the National Historical Institute (NHI) to have been the birthsite of Felix Y.
Manalo, the founder of Iglesia Ni Cristo, it passed Resolution 1, Series of 1986, pursuant to
Section 4 of Presidential Decree 260, declaring the land to be a national historical landmark. The
resolution was, on 6 January 1986, approved by the Minister of Education, Culture and Sports
(MECS). Later, the opinion of the Secretary of Justice was asked on the legality of the measure. In
his opinion 133, Series of 1987, the Secretary of Justice replied in the affirmative. Accordingly, on
29 May 1989, the Republic, through the office of the Solicitor-General, instituted a complaint for
expropriation before the Regional Trial Court of Pasig for and in behalf of the NHI. At the same
time, the Republic filed an urgent motion for the issuance of an order to permit it to take immediate
possession of the property. The motion was opposed by the Manoscas. After a hearing, the trial
court issued, on 3 August 1989, an order fixing the provisional market (P54,120.00) and assessed
(P16,236.00) values of the property and authorizing the Republic to take over the property once the
required sum would have been deposited with the Municipal Treasurer of Taguig, Metro Manila.
The Manoscas moved to dismiss the complaint on the main thesis that the intended expropriation
was not for a public purpose and, incidentally, that the act would constitute an application of public
funds, directly or indirectly, for the use, benefit, or support of Iglesia ni Cristo, a religious entity,
contrary to the provision of Section 29(2), Article VI, of the 1987 Constitution. The trial court
issued its denial of said motion to dismiss. The Manoscas moved for reconsideration thereafter but
were denied. The Manoscas then lodged a petition for certiorari and prohibition with the Court of
Appeals. On 15 January 1992, the appellate court dismissed the petition/A motion for the
reconsideration of the decision was denied by the appellate court on 23 July 1992. The Manoscas
filed a petition for review on certiorari with the Supreme Court.

Issue: Whether the setting up of the marker in commemoration of Felix Manalo, the founder of the
religious sect Iglesia ni Cristo, constitutes “public use.”Held: Eminent domain, also often referred
to as expropriation and, with less frequency, as condemnation, is, like police power and taxation,
an inherent power of sovereignty. It need not be clothed with any constitutional gear to exist;
instead, provisions in our Constitution on the subject are meant more to regulate, rather than to
grant, the exercise of the power. Eminent domain is generally so described as "the highest and most
exact idea of property remaining in the government" that may be acquired for some public purpose
through a method in the nature of a forced purchase by the State. It is a right to take or reassert
dominion over property within the state for public use or to meet a public exigency. It is said to be
an essential part of governance even in its most primitive form and thus inseparable from
sovereignty. The only direct constitutional qualification is that "private property shall not be taken
for public use without just compensation." This prescription is intended to provide a safeguard
against possible abuse and so to protect as well the individual against whose property the power is
sought to be enforced. The term "public use," not having been otherwise defined by the
constitution, must be considered in its general concept of meeting a public need or a public
exigency. The validity of the exercise of the power of eminent domain for traditional purposes is
beyond question; it is not at all to be said, however, that public use should thereby be restricted to
such traditional uses. The idea that "public use" is strictly limited to clear cases of "use by the
public" has long been discarded. The purpose in setting up the marker is essentially to recognize
the distinctive contribution of the late Felix Manalo to the culture of the Philippines, rather than to
commemorate his founding and leadership of the Iglesia ni Cristo. The attempt to give some
religious perspective to the case deserves little consideration, for what should be significant is the
principal objective of, not the casual consequences that might follow from, the exercise of the
power. The practical reality that greater benefit may be derived by members of the Iglesia ni Cristo
than by most others could well be true but such a peculiar advantage still remains to be merely
incidental and secondary in nature. Indeed, that only a few would actually benefit from the
expropriation of property does not necessarily diminish the essence and character of public use.

Estate of Salud Jimenez vs. Philippine Export Processing Zone [GR 137285, 16 January
2001]
Second Division, De Leon Jr. (J): 4 concur

Facts: On 15 May 1981, Philippine Export Processing Zone (PEZA), then called as the Export
Processing Zone Authority (EPZA), initiated before the Regional Trial Court of Cavite
expropriation proceedings on 3 parcels of irrigated riceland in Rosario, Cavite. One of the lots, Lot
1406 (A and B) of the San Francisco de Malabon Estate, with an approximate area of 29,008
square meters, is registered in the name of Salud Jimenez (TCT T-113498 of the Registry of Deeds
of Cavite). More than 10 years later, the said trial court in an Order dated 11 July 1991 upheld the
right of PEZA to expropriate, among others, Lot 1406 (A and B). Reconsideration of the said order
was sought by the Estate of Salud Jimenez contending that said lot would only be transferred to a
private corporation, Philippine Vinyl Corp., and hence would not be utilized for a public purpose.
In an Order dated 25 October 1991, the trial court reconsidered the Order dated 11 July 1991 and
released Lot 1406-A from expropriation while the expropriation of Lot 1406-B was maintained.
Finding the said order unacceptable, PEZA interposed an appeal to the Court of Appeals.
Meanwhile, the Estate and PEZA entered into a compromise agreement, dated 4 January 1993. The
compromise agreement provides "(1) That plaintiff agrees to withdraw its appeal from the Order of
the Honorable Court dated October 25, 1991 which released lot 1406-A from the expropriation
proceedings. On the other hand, defendant Estate of Salud Jimenez agrees to waive, quitclaim and
forfeit its claim for damages and loss of income which it sustained by reason of the possession of
said lot by plaintiff from 1981 up to the present. (2) That the parties agree that defendant Estate of
Salud Jimenez shall transfer lot 1406-B with an area of 13,118 square meters which forms part of
the lot registered under TCT No. 113498 of the Registry of Deeds of Cavite to the name of the
plaintiff and the same shall be swapped and exchanged with lot 434 with an area of 14,167 square
meters and covered by Transfer Certificate of Title No. 14772 of the Registry of Deeds of Cavite
which lot will be transferred to the name of Estate of Salud Jimenez. (3) That the swap
arrangement recognizes the fact that the lot 1406-B covered by TCT No. T-113498 of the estate of
defendant Salud Jimenez is considered expropriated in favor of the government based on Order of
the Honorable Court dated July 11, 1991. However, instead of being paid the just compensation for
said lot, the estate of said defendant shall be paid with lot 434 covered by TCT No. T-14772. (4)
That the parties agree that they will abide by the terms of the foregoing agreement in good faith and
the Decision to be rendered based on this Compromise Agreement is immediately final and
executory." The Court of Appeals remanded the case to the trial court for the approval of the said
compromise agreement entered into between the parties, consequent with the withdrawal of the
appeal with the Court of Appeals. In the Order dated 23 August 1993, the trial court approved the
compromise agreement. However, PEZA failed to transfer the title of Lot 434 to the Estate
inasmuch as it was not the registered owner of the covering TCT T-14772 but Progressive Realty
Estate, Inc. Thus, on 13 March 1997, the Estate filed a "Motion to Partially Annul the Order dated
August 23, 1993." In the Order dated 4 August 1997, the trial court annulled the said compromise
agreement entered into between the parties and directed PEZA to peacefully turn over Lot 1406- A
to the Estate. Disagreeing with the said Order of the trial court, respondent PEZA moved for its
reconsideration, which was denied in an order dated 3 November 1997. On 4 December 1997, the
trial court, at the instance of the Estate, corrected the Orders dated 4 August 1997 and 3 November
1997 by declaring that it is Lot 1406-B and not Lot 1406-A that should be surrendered and returned
to the Estate. On 27 November 1997, PEZA interposed before the Court of Appeals a petition for
certiorari and prohibition seeking to nullify the Orders dated 4 August 1997 and 3 November 1997
of the trial court. Acting on the petition, the Court of Appeals, in a Decision dated 25 March 1998,
partially granted the petition by setting aside the order of the trial court regarding "the peaceful turn
over to the Estate of Salud Jimenez of Lot 1406- B" and instead ordered the trial judge to "proceed
with the hearing of the expropriation proceedings regarding the determination of just
compensation over Lot 1406-B." The Estate sought reconsideration of the Decision dated 25
March 1998. However, the appellate court in a Resolution dated 14 January 1999 denied the
Estate's motion for reconsideration. The Estate filed a petition for review on certiorari with the
Supreme Court.

Issue: Whether the purpose of the expropriation by PEZA is of “public use.”

Held: This is an expropriation case which involves two (2) orders: an expropriation order and an
order fixing just compensation. Once the first order becomes final and no appeal thereto is taken,
the authority to expropriate and its public use cannot anymore be questioned. Contrary to the
Estate's contention, the incorporation of the expropriation order in the compromise agreement did
not subject said order to rescission but instead constituted an admission by the Estate of PEZA's
authority to expropriate the subject parcel of land and the public purpose for which it was
expropriated. This is evident from paragraph three (3) of the compromise agreement which states
that the "swap arrangement recognizes the fact that Lot 1406-B covered by TCT T-113498 of the
estate of defendant Salud Jimenez is considered expropriated in favor of the government based on
the Order of the Honorable Court dated 11 July 1991." It is crystal clear from the contents of the
agreement that the parties limited the compromise agreement to the matter of just compensation to
the Estate. Said expropriation order is not closely intertwined with the issue of payment such that
failure to pay by PEZA will also nullify the right of PEZA to expropriate. No statement to this
effect was mentioned in the agreement. The Order was mentioned in the agreement only to clarify
what was subject to payment. Since the compromise agreement was only about the mode of
payment by swapping of lots and not about the right and purpose to expropriate the subject Lot
1406-B, only the originally agreed form of compensation that is by cash payment, was rescinded.
PEZA has the legal authority to expropriate the subject Lot 1406-B and that the same was for a
valid public purpose. PEZA expropriated the subject parcel of land pursuant to Proclamation 1980
dated 30 May 1980 issued by former President Ferdinand Marcos. Meanwhile, the power of
eminent domain of respondent is contained in its original charter, Presidential Decree 66.
Accordingly, subject Lot 1406-B was expropriated "for the construction of terminal facilities,
structures and approaches thereto." The authority is broad enough to give PEZA substantial leeway
in deciding for what public use the expropriated property would be utilized. Pursuant to this broad
authority, PEZA leased a portion of the lot to commercial banks while the rest was made a
transportation terminal. Said public purposes were even reaffirmed by Republic Act 7916, a law
amending PEZA's original charter. As reiterated in various case, the "public use" requirement for a
valid exercise of the power of eminent domain is a flexible and evolving concept influenced by
changing conditions. The term "public use" has acquired a more comprehensive coverage. To the
literal import of the term signifying strict use or employment by the public has been added the
broader notion of indirect public benefit or advantage. What ultimately emerged is a concept of
public use which is just as broad as "public welfare."

ANUNCIACION VDA. DE OUANO, MARIO P. OUANO, LETICIA OUANO ARNAIZ,

and CIELO OUANO MARTINEZ,Petitioners, v. THE REPUBLIC OF THE
PHILIPPINES, THE MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY, and
THE REGISTER OF DEEDS FOR THE CITY OF CEBU, Respondents.

FACTS:

In 1949, the National Airport Corporation (NAC), MCIAA’s predecessor agency, pursued a
program to expand the Lahug Airport in Cebu City. Through its team of negotiators, NAC met and
negotiated with the owners of the properties situated around the airport.

The landowners claim the government negotiating team, as a sweetener, assured them that they
could repurchase their respective lands should the Lahug Airport expansion project do not push
through or once the Lahug Airport closes or its operations transferred to Mactan-Cebu Airport.

On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel Limbaga who
originally owned six [6] of the lots expropriated); and Aletha Suico Magat and seven others,
successors-in-interest of Santiago Suico, the original owner of two (2) of the condemned lots
(collectively, the Inocians), filed before the RTC in Cebu City a complaint for reconveyance of real
properties and damages against MCIAA. The RT rendered a decision directing MCIAA to
reconvey the lands.

Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal settlers entered
and occupied Lot No. 763-A which, before its expropriation, belonged to the Ouanos. The Ouanos
then formally asked to be allowed to exercise their right to repurchase the aforementioned lot, but
the MCIAA ignored the demand.

The RTC dismissed the Ouanos’ complaint for reconveyance. The CA denied their appeal.

ISSUE: Whether or not the testimonial evidence of the petitioners proving the promises,
assurances and representations by the airport officials and lawyers are inadmissbale under the
Statute of Frauds.

HELD:

The petition is meritorious.

CIVIL LAW: Condominium and Subdivision

Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil Code, a contract
for the sale or acquisition of real property shall be unenforceable unless the same or some note of
the contract be in writing and subscribed by the party charged. Subject to defined exceptions,
evidence of the agreement cannot be received without the writing, or secondary evidence of its
contents.

MCIAA’s invocation of the Statute of Frauds is misplaced primarily because the statute applies
only to executory and not to completed, executed, or partially consummated contracts.

Petition is GRANTED.

Municipality of Meycauayan vs. Intermediate Appellate Court [GR L-72126, 29 January

1988]
Third Division, Gutierrez Jr. (J): 4 concur

Facts: In 1975, the Philippine Pipes and Merchandising Corporation (PPMC) filed with the Office
of the Municipal Mayor of Meycauayan, Bulacan, an application for a permit to fence a parcel of
land with a width of 26.8 meters and a length of 184.37 meters covered by TCTs 215165 and
37879. The fencing of said property was allegedly to enable the storage of PMC's heavy equipment
and various finished products such as large diameter steel pipes, pontoon pipes for ports, wharves,
and harbors, bridge components, pre-stressed girders and piles, large diameter concrete pipes, and
parts for low cost housing. In the same year, the Municipal Council of Meycauayan, headed by
then Mayor Celso R. Legaspi, passed Resolution 258, Series of 1975, manifesting the intention to
expropriate the respondent's parcel of land covered by TCT 37879. An opposition to the resolution
was filed by the PPMC with the Office of the Provincial Governor, which, in turn, created a special
committee of four members to investigate the matter. On 10 March 1976, the Special Committee
recommended that the Provincial Board of Bulacan disapprove or annul the resolution in question
because there was no genuine necessity for the Municipality of Meycauayan to expropriate the
respondent's property for use as a public road. On the basis of this report, the Provincial Board of
Bulacan passed Resolution 238, Series of 1976, disapproving and annulling Resolution 258, Series
of 1975, of the Municipal Council of Meycauayan. The PPMC, then, reiterated to the Office of the
Mayor its petition for the approval of the permit to fence the aforesaid parcels of land. On 21
October 1983, however, the Municipal Council of Meycauayan, now headed by Mayor Adriano D.
Daez, passed Resolution 21, Series of 1983, for the purpose of expropriating anew PPMC's land.
The Provincial Board of Bulacan approved the aforesaid resolution on 25 January 1984.
Thereafter, the Municipality of Meycauayan, on 14 February 1984, filed with the Regional Trial
Court of Malolos, Bulacan, Branch VI, a special civil action for expropriation. Upon deposit of the
amount of P24,025.00, which is the market value of the land, with the Philippine National Bank,
the trial court on 1 March 1984 issued a writ of possession in favor of the municipality. On 27
August 1984, the trial court issued an order declaring the taking of the property as lawful and
appointing the Provincial Assessor of Bulacan as court commissioner who shall hold the hearing to
ascertain the just compensation for the property. PPMC went to the Intermediate Appellate Court
on petition for review. On 10 January 1985, the appellate court affirmed the trial court's decision.
However, upon motion for reconsideration by PPMC, the decision was re-examined and reversed.
The appellate court held that there is no genuine necessity to expropriate the land for use as a
public road as there were several other roads for the same purpose and another more appropriate lot
for the proposed public road. The court, taking into consideration the location and size of the land,
also opined that the land is more ideal for use as storage area for respondent's heavy equipment and
finished products. After its motion for reconsideration was denied, the municipality went to the
Supreme Court on petition for review on certiorari on 25 October 1985.

Issue: Whether there is genuine necessity to expropriate PPMC’s property for the purpose of a
connecting road, in light of other appropriate lots for the purpose.

Held: There is no question here as to the right of the State to take private property for public use
upon payment of just compensation. What is questioned is the existence of a genuine necessity
therefor. The foundation of the right to exercise the power of eminent domain is genuine necessity
and that necessity must be of a public character. Condemnation of private property is justified only
if it is for the public good and there is a genuine necessity of a public character. Consequently, the
courts have the power to require into the legality of the exercise of the right of eminent domain and
to determine whether there is a genuine necessity therefor. The government may not capriciously
choose what private property should be taken. With due recognition then of the power of Congress
to designate the particular property to be taken and how much thereof may be condemned in the
exercise of the power of expropriation, it is still a judicial question whether in the exercise of such
competence, the party adversely affected is the victim of partiality and prejudice. That the equal
protection clause will not allow. The Special Committee's Report, dated 10 March 1976, stated that
"there is no genuine necessity for the Municipality of Meycauayan to expropriate the aforesaid
property of the Philippine Pipes and Merchandizing Corporation for use as a public road.
Considering that in the vicinity there are other available road and vacant lot offered for sale
situated similarly as the lot in question and lying idle, unlike the lot sought to be expropriated
which was found by the Committee to be badly needed by the company as a site for its heavy
equipment after it is fenced together with the adjoining vacant lot, the justification to condemn the
same does not appear to be very imperative and necessary and would only cause unjustified
damage to the firm. The desire of the Municipality of Meycauayan to build a public road to
decongest the volume of traffic can be fully and better attained by acquiring the other available
roads in the vicinity maybe at lesser costs without causing harm to an establishment doing
legitimate business therein. Or, the municipality may seek to expropriate a portion of the vacant lot
also in the vicinity offered for sale for a wider public road to attain decongestion of traffic because
as observed by the Committee, the lot of the Corporation sought to be taken will only
accommodate a one-way traffic lane and therefore, will not suffice to improve and decongest the
flow of traffic and pedestrians in the Malhacan area." There is absolutely no showing in the
petition why the more appropriate lot for the proposed road which was offered for sale has not been
the subject of the municipalities's attempt to expropriate assuming there is a real need for another
connecting road.

De Knecht vs. Bautista [GR L-51078, 30 October 1980]

First Division, Fernandez (J): 4 concur

Facts: In 1970, the government through the Department of Public Works and Communications
(now Ministy of Public Highways [MPH]) prepared a plan to extend Epifanio de los Santos
Avenue (EDSA) to Roxas Boulevard. The proposed extension, an adjunct of another road-building
program, the Manila—Cavite Coastal Road Project, would pass through Cuneta Avenue up to
Roxas Boulevard. The route was designed to be a straight one, taking into account the direction of
EDSA. Preparatory to the implementation of the aforesaid plan, or on 13 December 1974, then
Secretary Baltazar Aquino of the Department of Public Highways directed the City Engineer of
Pasay City not to issue temporary or permanent permits for the construction and/or improvement
of buildings and other structures located within the proposed extension through Cuneta Avenue.
Shortly thereafter the Department of Public Highways decided to make the proposed extension go
through Fernando Rein and Del Pan Streets which are lined with old substantial houses. Upon
petition of the residents therein to the President of the Philippines for the implementation of the
original plan, the President referred the matter to the Human Settlements Commission. The
Commission submitted its report recommending the reversion to the original plan passing through
Cuneta Avenue. Notwithstanding said recommendation, the MPH insisted on implementing the
plan to make the extension of EDSA go through Fernando Rein and Del Pan Streets. In February
1979, the government filed in the Court of First Instance (CFI) of Rizal, Branch III, Pasay City
(Judge Pedro JL. Bautista presiding; Civil Case 7001-P), a complaint for expropriation against the
owners of the houses standing along Fernando Rein and Del Pan Streets, among them Cristina de
Knecht. De Knecht filed a motion to dismiss dated 9 March 1979. An urgent motion dated 28
March 1979 for preliminary injunction was also filed. In June 1979 the Republic of the Philippines
filed a motion for the issuance of a writ of possession of the property sought to be expropriated on
the ground that said Republic had made the required deposit with the Philippine National Bank.
Judge Bautista issued a writ of possession dated 14 June 1979 authorizing the Republic of the
Philippines to take and enter upon the possession of the properties sought so be condemned. De
Knecht filed a petition for certiorari and prohibition with the Supreme Court, praying that
judgment be rendered annulling the order for immediate possession issued by respondent court in
the expropriation proceedings and commanding the Republic to desist from further proceedings in
the expropriation action or the order for immediate possession issued in said action.

Issue: Whether the expropriation of the residential lots in Fernando Rein and Del Pan Streets is
genuinely necessary, in light of similar acceptable lots along Cuneta Avenue which were subject of
the original plan.

Held: There is no question as to the right of the Republic of the Philippines to take private property
for public use upon the payment of just compensation. Section 2, Article IV of the Constitution of
the Philippines provides that "Private property shall not be taken for public use without just
compensation." It is recognized, however, that the government may not capriciously or arbitrarily
choose what private property should be taken. A landowner is covered by the mantle of protection
due process affords. It is a mandate of reason. It frowns on arbitrariness, it is the antithesis of any
governmental act that smacks of whim or caprice. It negates state power to act in an oppressive
manner. It is, as had been stressed so often, the embodiment of the sporting idea off air play. In that
sense, it stands as a guaranty of justice. That is the standard that must be met by any governmental
agency in the exercise of whatever competence is entrusted to it. As was so emphatically stressed
by the present Chief Justice, Acts of Congress, as well as those of the Executive, can deny due
process only under pain of nullity. Herein, it is a fact that the Department of Public Highways
originally establish the extension of EDSA along Cuneta Avenue. It is to be presumed that the
Department of Public Highways made studies before deciding on Cuneta Avenue. It is indeed odd
why suddenly the proposed extension of EDSA to Roxas Boulevard was changed to go through
Fernando Rein — Del Pan Streets which the Solicitor General concedes "the Del Pan — Fernando
Rein Streets line follows northward and inward direction While admitting "that both lines, Cuneta
Avenue and Del Pan — Fernando Rein Streets lines, meet satisfactorily planning and design
criteria and therefore are both acceptable", the Solicitor General justifies the change to Del Pan —
Fernando Rein Streets on the ground that the government "wanted to minimize the social impact
factor or problem involved." It is doubtful whether the extension of EDSA along Cuneta Avenue
can be objected to on the ground of social impact. The improvements and buildings along Cuneta
Avenue to be affected by the extension are mostly motels. Even granting, arguendo, that more
people will be affected, the Human Settlements Commission has suggested coordinative efforts of
said Commission with the National Housing Authority and other government agencies in the
relocation and resettlement of those adversely affected. From the facts of record and
recommendations of the Human Settlements Commission, it is clear that the choice of Fernando
Rein — Del Pan Streets as the line through which the Epifanio de los Santos Avenue should be
extended to Roxas Boulevard is arbitrary and should not receive judicial approval.

Republic vs. de Knecht [GR 87335, 12 February 1990]

First Division, Gancayco (J): 3 concur

Facts: On 20 February 1979 the Republic of the Philippines filed in the Court of First Instance
(CFI) of Rizal in Pasay City an expropriation proceedings against the owners of the houses
standing along Fernando Rein- Del Pan streets among them Cristina De Knecht together with
Concepcion Cabarrus, and some 15 other defendants (Civil Case 7001-P). On 19 March 1979, de
Knecht filed a motion to dismiss alleging lack of jurisdiction, pendency of appeal with the
President of the Philippines, prematureness of complaint and arbitrary and erroneous valuation of
the properties. On 29 March 1979 de Knecht filed an ex parte urgent motion for the issuance by the
trial court of a restraining order to restrain the Republic from proceeding with the taking of
immediate possession and control of the property sought to be condemned. In June 1979, the
Republic filed a motion for the issuance of a writ of possession of the property to be expropriated
on the ground that it had made the required deposit with the Philippine National Bank (PNB) of
10% of the amount of compensation stated in the complaint. In an order dated 14 June 1979 the
lower court issued a writ of possession authorizing the Republic to enter into and take possession
of the properties sought to be condemned, and created a Committee of three to determine the just
compensation for the lands involved in the proceedings. On 16 July 1979, de Knecht filed with this
Court a petition for certiorari and prohibition (GR No. L-51078) and directed against the order of
the lower court dated 14 June 1979 praying that the Republic be commanded to desist from further
proceeding in the expropriation action and from implementing said order. On 30 October 1980, the
Supreme Court rendered a decision, granting the petition for certiorari and prohibition and setting
aside the 14 June 1979 order of the Judge Bautista.

On 8 August 1981, Maria Del Carmen Roxas Vda. de Elizalde, Francisco Elizalde and Antonio
Roxas moved to dismiss the expropriation action in compliance with the dispositive portion of the
aforesaid decision of the Supreme Court which had become final and in order to avoid further
damage to latter who were denied possession of their properties. The Republic filed a
manifestation on 7 September 1981 stating, among others, that it had no objection to the said
motion to dismiss as it was in accordance with the aforestated decision. However, on 2 September
1983, the Republic filed a motion to dismiss said case due to the enactment of the Batas Pambansa
340 expropriating the same properties and for the same purpose. The lower court in an order of 2
September 1983 dismissed the case by reason of the enactment of the said law. The motion for
reconsideration thereof was denied in the order of the lower court dated 18 December 1986. De
Knecht appealed from said order to the Court of Appeals wherein in due course a decision was
rendered on 28 December 1988, setting aside the order appealed from and dismissing the
expropriation proceedings. The Republic filed the petition for review with the Supreme Court.

Issue: Whether an expropriation proceeding that was determined by a final judgment of the
Supreme Court may be the subject of a subsequent legislation for expropriation.

Held: While it is true that said final judgment of the Supreme Court on the subject becomes the law
of the case between the parties, it is equally true that the right of the Republic to take private
properties for public use upon the payment of the just compensation is so provided in the
Constitution and our laws. Such expropriation proceedings may be undertaken by the Republic not
only by voluntary negotiation with the land owners but also by taking appropriate court action or
by legislation. When on 17 February 1983 the Batasang Pambansa passed BP 340 expropriating
the very properties subject of the present proceedings, and for the same purpose, it appears that it
was based on supervening events that occurred after the decision of the Supreme Court was
rendered in De Knecht in 1980 justifying the expropriation through the Fernando Rein- Del Pan
Streets. The social impact factor which persuaded the Court to consider this extension to be
arbitrary had disappeared. All residents in the area have been relocated and duly compensated.
80% of the EDSA outfall and 30% of the EDSA extension had been completed. Only De Knecht
remains as the solitary obstacle to this project that will solve not only the drainage and flood
control problem but also minimize the traffic bottleneck in the area. Moreover, the decision, is no
obstacle to the legislative arm of the Government in thereafter making its own independent
assessment of the circumstances then prevailing as to the propriety of undertaking the
expropriation of the properties in question and thereafter by enacting the corresponding legislation
as it did in this case. The Court agrees in the wisdom and necessity of enacting BP 340. Thus the
anterior decision of this Court must yield to this subsequent legislative fiat.

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC

WORKS AND HIGHWAYS (DPWH), Petitioner,
vs.
ASIA PACIFIC INTEGRATED STEEL CORPORATION, Respondent.
G.R. No. 192100 March 12, 2014

TOPIC: basis of just compensation, expropriation

FACTS:

Respondent is the registered owner of a 17,175-square meter property situated in San Simon,
Pampanga. On March 1, 2002, the Republic through the Toll Regulatory Board (TRB) instituted
expropriation proceedings against the respondent over a portion of their property to be used for the
NLEX project.

During the pre-trial conference, the parties agreed on TRB’s authority to expropriate the subject
property but disagreed as to the amount of just compensation. Petitioner offered to pay
P607,200.00 for the portion taken but respondent made a counter-offer of P1,821,600.00. The
parties eventually agreed to submit the issue of just compensation to three Commissioners
composed of the Municipal Assessor of San Simon as Chairman, and the RTC Branch Clerk of
Court and the Register of Deeds for the Province of Pampanga as Members.

In the absence of bona fide sales transaction in the area, the Assessor’s Office being aware of the
actual conditions of subject property decided to use opinion values stated by real estate brokers and
banks in the determination of the current and fair market value for the purpose of payment of just
compensation. The amount of P1,000.00 to P1,500.00 was arrived at by the commissioners due to
the conversion of the subject property from agricultural to industrial use.

Although there was no documentary evidence attached to substantiate the opinions of the banks
and the realtors indicated in the Commissioners’ Report, the Court finds the commissioners’
recommendation of the valuation of industrial lands at P1,000.00 to P1,500.00 to be fair, and the
Republic’s offer of P300 per square meter to be very low.

CA upheld RTC’s decision.

ISSUE:

Whether or not the Court judiciously determined the fair market value of the subject property.

HELD: NO

The Court held that the trial court did not judiciously determine the fair market value of the subject
property as it failed to consider other relevant factors such as the zonal valuation, tax declarations
and current selling price supported by documentary evidence.

Section 5 of R.A. 8974 enumerates the standards for assessing the value of expropriated land taken
for national government infrastructure projects, thus:

SECTION 5. Standards for the Assessment of the Value of the Land Subject of Expropriation
Proceedings or Negotiated Sale. – In order to facilitate the determination of just compensation, the
court may consider, among other well-established factors, the following relevant standards:

(a) The classification and use for which the property is suited;

(b) The developmental costs for improving the land;

(c) The value declared by the owners;

(d) The current selling price of similar lands in the vicinity;

(e) The reasonable disturbance compensation for the removal and/or demolition of certain
improvements on the land and for the value of the improvements thereon;

(f) The size, shape or location, tax declaration and zonal valuation of the land;

(g) The price of the land as manifested in the ocular findings, oral as well as documentary evidence
presented; and

(h) Such facts and events as to enable the affected property owners to have sufficient funds to
acquire similarly-situated lands of approximate areas as those required from them by the
government, and thereby rehabilitate themselves as early as possible.

In this case, the trial court considered only (a) and (d): (1) the classification of the subject property
which is located in an area with mixed land use (commercial, residential and industrial) and the
property’s conversion from agricultural to industrial land, and (2) the current selling price of
similar lands in the vicinity – the only factors which the commissioners included in their Report. It
also found the commissioners’ recommended valuation of P1,000.00 to P1,500.00 per square to be
fair and just despite the absence of documentary substantiation as said prices were based merely on
the opinions of bankers and realtors.

Nonetheless, the Court did not subscribe to petitioner’s argument that just compensation for the
subject property should not exceed the zonal valuation (P300.00 per square meter). Zonal
valuation is just one of the indices of the fair market value of real estate. By itself, this index cannot
be the sole basis of “just compensation” in expropriation cases.

Eslaban vs. Vda. de Onorio [GR 146062, 28 June 2001]

Second Division, Mendoza (J): 4 concur

Facts: Clarita Vda. de Onorio is the owner of a lot in Barangay M. Roxas, Sto. Nino, South
Cotabato with an area of 39,512 square meters (Lot 1210-A-Pad-11-000586, TCT T-22121 of the
Registry of Deeds, South Cotabato). On 6 October 1981, Santiago Eslaban, Jr., Project Manager of
the NIA, approved the construction of the main irrigation canal of the NIA on the said lot, affecting
a 24,660 square meter portion thereof. De Onorio's husband agreed to the construction of the NIA
canal provided that they be paid by the government for the area taken after the processing of
documents by the Commission on Audit. Sometime in 1983, a Right- of-Way agreement was
executed between De Onorio and the NIA. The NIA then paid De Onorio the amount of P4,180.00
as Right-of-Way damages. De Onorio subsequently executed an Affidavit of Waiver of Rights and
Fees whereby she waived any compensation for damages to crops and improvements which she
suffered as a result of the construction of a right-of-way on her property. The same year, Eslaban
offered De Onorio the sum of P35,000,00 by way of amicable settlement (financial assistance)
pursuant to Executive Order 1035, §18. De Onorio demanded payment for the taking of her
property, but Eslaban/NIA refused to pay. Accordingly, De Onorio filed on 10 December 1990 a
complaint against Eslaban before the Regional Trial Court (RTC), praying that Eslaban/NIA be
ordered to pay the sum of P111,299.55 as compensation for the portion of her property used in the
construction of the canal constructed by the NIA, litigation expenses, and the costs. Eslaban
admitted that NIA constructed an irrigation canal over the property of De Onorio and that NIA paid
a certain landowner whose property had been taken for irrigation purposes, but Eslaban interposed
the defense that: (1) the government had not consented to be sued; (2) the total area used by the
NIA for its irrigation canal was only 2.27 hectares, not 24,600 square meters; and (3) that De
Onorio was not entitled to compensation for the taking of her property considering that she secured
title over the property by virtue of a homestead patent under Commonwealth Act 141. On 18
October 1993, the trial court rendered a decision, ordering the NIA to pay to De Onorio the sum of
P107,517.60 as just compensation for the questioned area of 24,660 square meters of land owned
by De Onorio and taken by the NIA which used it for its main canal plus costs. On 15 November
1993, the NIA appealed to the Court of Appeals which, on 31 October 2000, affirmed the decision
of the Regional Trial Court. NIA filed the petition for review.

Issue: Whether the valuation of just compensation is determined at the time the property was taken
or at the time the complaint for expropriation is filed.

Held: Whenever public lands are alienated, granted or conveyed to applicants thereof, and the deed
grant or instrument of conveyance [sales patent] registered with the Register of Deeds and the
corresponding certificate and owner's duplicate of title issued, such lands are deemed registered
lands under the Torrens System and the certificate of title thus issued is as conclusive and
indefeasible as any other certificate of title issued to private lands in ordinary or cadastral
registration proceedings. The only servitude which a private property owner is required to
recognize in favor of the government is the easement of a "public highway, way, private way
established by law, or any government canal or lateral thereof where the certificate of title does not
state that the boundaries thereof have been pre-determined." This implies that the same should
have been pre-existing at the time of the registration of the land in order that the registered owner
may be compelled to respect it. Conversely, where the easement is not pre-existing and is sought to
be imposed only after the land has been registered under the Land Registration Act, proper
expropriation proceedings should be had, and just compensation paid to the registered owner
thereof. Herein, the irrigation canal constructed by the NIA on the contested property was built
only on 6 October 1981, several years after the property had been registered on 13 May 1976.
Accordingly, prior expropriation proceedings should have been filed and just compensation paid to
the owner thereof before it could be taken for public use. With respect to the compensation which
the owner of the condemned property is entitled to receive, it is likewise settled that it is the market
value which should be paid or "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." Further, just compensation means not only the correct amount to be paid to the
owner of the land but also the payment of the land within a reasonable time from its taking.
Without prompt payment, compensation cannot be considered "just" for then the property owner is
made to suffer the consequence of being immediately deprived of his land while being made to
wait for a decade or more before actually receiving the amount necessary to cope with his loss.
Nevertheless, there are instances where the expropriating agency takes over the property prior to
the expropriation suit, in which case just compensation shall be determined as of the time of taking,
not as of the time of filing of the action of eminent domain. The value of the property, thus, must be
determined either as of the date of the taking of the property or the filing of the complaint,
"whichever came first."

Republic vs. Intermediate Appellate Court [GR 71176, 21 May 1990]

Third Division, Fernan (CJ): 2 concur, 2 took no part

Facts: Avegon, Inc., offered 4 parcels of land with a total area of 9,650 square meters located at
2090 Dr. Manuel L. Carreon Street, Manila, for sale to the City School Board of Manila on 21 July
1973 at P2,300,000. The school board was willing to buy at P1,800,000 but the then Mayor of
Manila intervened and volunteered to negotiate with Avegon, Inc. for a better price. Inasmuch as
the alleged negotiation did not materialize, on 3 June 1974, Avegon, Inc. sold the property and its
improvements to Amerex Electronics, Phils. Corporation for P1,800,000. Thereafter, TCTs
115571, 115572, 115573 and 115574 were issued in favor of Amerex. On 29 August 1975, the
Solicitor General filed for the Department of Education and Culture (DEC) a complaint against
Amerex for the expropriation of said property before the Court of First Instance of Manila (Civil
Case 99190), stating therein that the property was needed by the government as a permanent site
for the Manuel de la Fuente High School (later renamed Don Mariano Marcos Memorial High
School); that the fair market value of the property had been declared by Amerex as P2,435,000,
and that the assessor had determined its market value as P2,432,042 and assessed it for taxation
purposes in the amount of P1,303,470. On 9 October 1975, the court issued an order directing the
sheriff to place the Republic in possession of the property, after informing the court that the
assessed value of the property for taxation purposes had been deposited with the Philippine
National Bank (PNB) in Escolta, Manila on 30 September 1975. The plaintiff took actual
possession thereof on 13 October 1975. Amerex filed a motion to dismiss the complaint stating
that while it was not contesting the merits of the complaint, the same failed to categorically state
the amount of just compensation for the property. It therefore prayed that in consonance with
Presidential Decree 794, the just compensation be fixed at P2,432,042, the market value of the
property determined by the assessor which was lower than Amerex's own declaration. Alleging
that its motion to dismiss merely sought a clarification on the just compensation for the property,
Amerex filed a motion to withdraw the Republic's deposit of P1,303,470 with the PNB without
prejudice to its entitlement to the amount of P1,128,572, the balance of the just compensation of
P2,432,042 insisted upon. On 3 December 1975, the lower court issued an order vesting the
Republic with the lawful right to take the property upon payment of just compensation as provided
by law. On 19 December 1975, after the parties had submitted the names of their respective
recommendees to the appraisal committee, the lower court appointed Atty. Narciso Pena, Aurelio
V. Aquino and Atty. Higinio Sunico as commissioners. On 24 January 1977, the commissioners
submitted their appraisal report finding that the fair market value of the property was P2,763,400.
Both parties objected to the report of the commissioners. On 15 March 1977, the lower court
rendered a decision, "fixing the amount of P2,258.018.57 as just compensation for the property of
the defendant and declaring the plaintiff entitled to possess and appropriate it to the public use
alleged in the complaint and to retain it upon payment of the said amount, after deducting the
amount of P1,303,470.00, with legal interest from October 13, 1975 when the plaintiff was placed
in possession of the real property, and upon payment to each of the commissioners of the sum of
P35.00 for their attendance during the hearings held on January 23, February 16, May 11, July 23,
September 17, October 12 and December 10, 1976, plus P500.00 each for the preparation of the
report, and the costs." The Republic elevated the case to the then Intermediate Appellate Court
(IAC) for review. On 29 October 1984, it affirmed the appealed decision with the modification that
the Republic of the Philippines be exempted from the payment of the commissioners' fees, the
P500.00 granted each of them for he preparation of the report and the costs. Its motion for the
reconsideration of said decision having been denied, the Republic filed the petition for review.

Issue: Whether the just compensation for the expropriated property should be the price first offered
to the Government in 1973.
Held: The determination of just compensation for a condemned property is basically a judicial
function. As the court is not bound by the commissioners' report, it may make such order or render
such judgment as shall secure to the plaintiff the property essential to the exercise of its right of
condemnation, and to the defendant just compensation for the property expropriated. For that
matter, the Supreme Court may even substitute its own estimate of the value as gathered from the
record. Hence, although the determination of just compensation appears to be a factual matter
which is ordinarily outside the ambit of its jurisdiction, the Supreme Court may disturb the lower
court's factual finding on appeal when there is clear error or grave abuse of discretion. Herein, the
just compensation prescribed by the lower court is based on the commissioners' recommendation
which in turn is founded on the "audited" statements of Amerex that the property is worth
P2,258,018.57. The Certification from the accounting firm issued to Amerex merely compared the
figures in the schedules or "audited" statements with those of the records and books of accounts of
Amerex. As no investigation was made as to the veracity of the figures in the account, there was no
audit in the real sense of the term. Thus, the accuracy of the "audited" statements is therefore
suspect. Besides the fact that the Republic was not furnished a copy of the audited statements
which were also not introduced in evidence, Enrique P. Esteban, vice-president and treasurer of
Amerex, and even a representative of the accounting firm, were likewise not presented during the
trial thereby depriving the Republic of the opportunity to cross-examine them. The Supreme Court
having declared as unconstitutional the mode of fixing just compensation under Presidential
Decree 794 in Export Processing Zone Authority vs. Dulay (GR 59603, 29 April 1987), just
compensation should be determined either at the time of the actual taking of the government or at
the time of the judgment of the court, whichever comes first. The reasonableness of the 5 June
1975 appraisal fixing at P2,400,000 the fair market value of the property, is bolstered by the fact
that on 4 June 1975, Traders Commodities Corporation offered to buy the property at P2,750,000.
It must be emphasized, however, that legal interest on the balance of the just compensation of
P2,400,000 after deducting the amount of P1,303,470 which had been delivered to Amerex, should
be paid by the Republic from the time the government actually took over the property. Much as the
Court realizes the need of the government, under these trying times, to get the best possible price
for the expropriated property considering the ceaseless and continuing necessity for schools, the
Court cannot agree with the Republic that the just compensation for the property should be the
price it commanded when it was first offered for sale to the City School Board of Manila.

Republic of the Philippines vs. Salem Investment Corporation [GR 137569, 23 June 2000]
Second Division, Mendoza (J): 4 concur

Facts: On 17 February 1983, Batas Pambansa 340 was passed authorizing the expropriation of
parcels of lands in the names of Maria del Carmen Roxas de Elizalde and Concepcion Cabarrus
Vda. de Santos, including a portion of the land, consisting of 1,380 square meters, belonging to
Milagros and Inocentes De la Rama covered by TCT 16913. On 14 December 1988, or 5 years
thereafter, Milagros and Inocentes De la Rama entered into a contract with Alfredo Guerrero
whereby the De la Ramas agreed to sell to Guerrero the entire property covered by TCT 16213,
consisting of 4,075 square meters for the amount of P11,800,000.00. The De la Ramas received the
sum of P2,200,000.00 as partial payment of the purchase price, the balance thereof to be paid upon
release of the title by the Philippine Veterans Bank. On 3 November 1989, Guerrero filed in the
Regional Trial Court in Pasay City a complaint for specific performance (Civil Case 6974-P) to
compel the De la Ramas to proceed with the sale. On 10 July 1990, while the case was pending, the
Republic of the Philippines filed the case (Civil Case 7327) for expropriation pursuant to BP 340.
Among the defendants named in the complaint were Milagros and Inocentes De la Rama as
registered owners of Lot 834, a portion of which (Lot 834-A) was part of the expropriated
property. Upon the deposit of P12,970,350.00 representing 10% of the approximate market value
of the subject lands, a writ of possession was issued on 29 August 1990 in favor of the government.
On 2 May 1991, Guerrero filed a motion for intervention alleging that the De la Ramas had agreed
to sell to him the entire Lot 834 on 14 December 1988 and that a case for specific performance had
been filed by him against the De la Ramas. On 9 September 1991, the trial court approved payment
to the De la Ramas at the rate of P23,976.00 per square meter for the taking of 920 square meters
out of the 1,380 square meters. Meanwhile, on 18 September 1991, the trial court rendered a
decision in the case for specific performance upholding the validity of the contract to sell and
ordering the De la Ramas to execute the corresponding deed of sale covering the subject property
in favor of Guerrero. The De la Ramas appealed to the Court of Appeals (CA-GR CV-35116) but
their petition was dismissed on 28 July 1992. They tried to appeal to the Supreme Court (GR
106488) but again they failed in their bid as their petition for review was denied on 7 December
1992. Meanwhile, on 2 October 1991, Guerrero filed an Omnibus Motion praying that the just
compensation for the land be deposited in court pursuant to Rule 67, §9 of the Rules of Court. As
his motion for intervention and omnibus motion had not yet been resolved, Guerrero filed with the
Court of Appeals a petition for mandamus, certiorari, and injunction with temporary restraining
order (CA-GR SP 28311) to enjoin the Republic from releasing or paying to the De la Ramas any
amount corresponding to the payment of the expropriated property and to compel the trial court to
resolve his two motions. On 12 January 1993, the Court of Appeals rendered a decision granting
the writ of mandamus. Nonetheless, the De la Ramas filed on 17 March 1993 a Motion for
Authority to Withdraw the deposit made by the Republic in 1991, which was denied on 7 May
1993. On 16 June 1993, the De la Ramas filed a Motion for Execution again praying that the court's
order dated 9 September 1991, approving the recommendation of the appraisal committee, be
enforced. On 22 June 1993, the trial court denied the motion of the De la Ramas holding that there
had been a change in the situation of the parties, therefore, making the execution of 9 September
1991 Order inequitable, impossible, or unjust. Thus, with the decision in the action for specific
performance in Civil Case 6974-P having become final, an order of execution was issued by the
Pasay City RTC, and as a result of which, a deed of absolute sale was executed by the Branch Clerk
of Court on 8 March 1994 in favor of Guerrero upon payment by him of the sum of P8,808,000.00
on 11 January 1994 and the further sum of P1,608,900.00 on 1 February 1994 as full payment for
the balance of the purchase price under the contract to sell. The entire amount was withdrawn and
duly received by the De la Ramas. Thereafter, the De la Ramas sought the nullification of the 22
June 1993 order of the trial by filing a petition for certiorari and mandamus in the Court of
Appeals. This petition was, however, dismissed in a decision dated 29 July 1994 of the appellate
court. Finally, on 5 April 1995, the Pasay City Regional Trial Court, Branch 111, declared
Guerrero the rightful owner of the 920-square meter expropriated property and ordered payment to
him of just compensation for the taking of the land. This decision was subsequently affirmed by
the Court of Appeals. The De la Ramas filed a petition for review.

Issue: Whether the legal interest should be 6% or 12%

Held: The decision dated 18 September 1991 has long become final and executory. The decision
therein ordered the De la Ramas to pay Guerrero, among others, the legal interest of the amount of
P2,200,000.00 from 2 August 1989 until the deed of absolute sale is executed in favor of Guerrero.
Specifically, the court therein rationalized that (1) the legal rate of interest for damages, and even
for loans where interest was not stipulated, is 6% per annum (Article 2209, Civil Code); that (2) the
rate of 12% per annum was established by the Monetary Board when, under the power vested in it
by PD 116 to amend Act 2655 (more commonly known as the Anti Usury Law), it amended
Section 1 by increasing the rate of legal interest for loans, renewals and forbearance thereof, as
well as for judgments, from 6% per annum to 12% per annum; and that
(3) inasmuch as the Monetary Board may not repeal or amend the Civil Code, in the face of the
apparent conflict between Article 2209 and Act 2655 as amended, the ruling of the Monetary
Board applies only to banks, financing companies, pawnshops and intermediaries performing
quasi-banking functions, all of which are under the control and supervision of the Central Bank
and of the Monetary Board. Thus, the court held therein that (1) the interest rate on the
P2,200,000.00 paid to the de la Ramas by Guerrero at the inception of the transactions should be
only 6% per annum from 2 August 1989, and as of 2 January 1994 this amounts to the sum of
P583,000.00 and P11,000.00 every month thereafter until the deed of absolute sale over the
property subject matter of this case is executed; that (2) the amounts payable by the de la Ramas to
Guerrero therefore stands at a total of P1,383,000.00. Offsetting this amount from the balance of
P8,800,000.00, Guerrero must still pay to the de la Ramas the sum of P7,417,000.00; and that (3)
since Guerrero has already deposited with the Clerk of Court of the court the sum of P5,808,100.00
as of 11 January 1994; he should add to this the sum of Pl,608,900.00. The De la Ramas can no
longer question a judgment which has already become final and executory. Hence, they are already
barred from questioning it in a proceeding before the Supreme Court.

City of Cebu vs. Dedamo [GR 142971, 7 May 2002]

Davide Jr. (CJ): 5 concur

Facts: On 17 September 1993, the City of Cebu filed in Civil Case CEB-14632 a complaint for
eminent domain against the spouses Apolonio and Blasa Dedamo, alleging that it needed the
latter's parcels of land 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 lots being the most suitable site
for the purpose. The total area sought to be expropriated is 1,624 square meters with an assessed
value of P1,786.400. The City deposited with the Philippine National Bank (PNB) the amount of
P51,156 representing 15% of the fair market value of the property to enable the City to take
immediate possession of the property pursuant to Section 19 of Republic Act (RA) 7160. The
spouses, filed a motion to dismiss the complaint because the purpose for which their property was
to be expropriated was not for a public purpose but for benefit of a single private entity, the Cebu
Holdings, Inc., besides that the price offered was very low in light of the consideration of P20,000
per square meter, more or less, which the City paid to the neighboring lots. On 23 August 1994, the
City filed a motion for the issuance of a writ of possession pursuant to Section 19 of RA7160. The
motion was granted by the trial court on 21 September 1994. On 14 December 1994, 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. Thereafter, the
commissioners submitted their report, which contained their respective assessments of and
recommendation as to the valuation of the property. On the basis of the commissioners' report and
after due deliberation thereon, the trial court rendered its decision on 7 May 1996, directing the
City to pay the spouses Dedamo the amount of P24,865.930.00 representing the compensation.
The City filed a motion for reconsideration on the ground that the commissioners' report was
inaccurate since it included an area which was not subject to expropriation (i.e. 478 of 793 square
meters only of Lot 1528). On 16 August 1996, the commissioners submitted an amended
assessment for the 478 square meters of Lot 1528 and fixed it at P12,824.10 per square meter, or in
the amount of P20,826,339.50. The assessment was approved as the just compensation thereof by
the trial court in its Order of 27 December 1996. Accordingly, the dispositive portion of the
decision was amended to reflect the new valuation. The City elevated the case to the Court of
Appeals, which affirmed in toto the decision of the trial court. The City filed with the Supreme
Court the petition for review.

Issue: Whether the valuation of the just compensation that which was recommended by the
appointed commissioners.

Held: Eminent domain is a fundamental State power that is inseparable from sovereignty. It is the
Government's right to appropriate, in the nature of a compulsory sale to the State, private property
for public use or purpose. However, the Government must pay the owner thereof just
compensation as consideration therefor. Herein, the applicable law as to the point of reckoning for
the determination of just compensation is Section 19 of Republic Act 7160, which expressly
provides that just compensation shall be determined as of the time of actual taking. Further, the
Court did not categorically rule in the case of NAPOCOR vs. Court of Appeals that just
compensation should be determined as of the filing of the complaint. What the Court explicitly
stated therein was 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." Furthermore, 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. Records show that the City consented to conform
with the valuation recommended by the commissioners. It cannot detract from its agreement now
and assail correctness of the commissioners' assessment.

Republic, as represenred by NIA vs CA and Francisco Diaz G.R. No. 147245. March 31,
2005
EMINENT DOMAIN

Facts:

Manuel Diaz owned approximately 172 hectares of property devoted to the planting of palay. The
property was located in La Fuente, Sta. Rosa, Nueva Ecija, and allegedly yielded between 132 to
200 cavans of palay per hectare every year. After Manuel Diaz’s death, his son, Franciso Diaz, was
appointed administrator of the property.

In 1972, the National Irrigation Administration bulldozed ten (10) hectares of the Property to build
two irrigation canals. Although the canals when finished occupied only a portion of the 10
hectares, the entire area became prone to flooding two months out of every year because of the
side-burrow method NIA used in the construction of the canals. NIA completed the canals without
instituting expropriation proceedings or indemnifying the property’s owners. Respondent then
sought compensation from NIA for the land affected by the canals, as well as for losses due to
unrealized profits. In 1980, NIA belatedly offered to buy the portions of the Property occupied by
the canals pursuant to NIA’s expansion program. The 1980 deeds of sale were never implemented.
Respondent did not receive any consideration pursuant to these deeds. On 20 August 1993,
respondent, as administrator of the Property, filed an action for damages and just compensation
against NIA. NIA countered that respondent’s right to bring the action had prescribed in
accordance with RA 3601, as amended by PD 552. NIA also argued that respondent’s failure to
pursue the implementation of the 1980 deeds of sale amounted to laches.

Issue:

Whether or not prescription or laches bars the respondent’s right to just compensation.

Held:

The principle of laches finds no application in the present case. There is nothing inequitable in
giving due course to respondent’s claim for compensation. Both equity and the law direct that a
property owner should be compensated if his property is taken for public use.

Eminent domain is the inherent power of a sovereign state to appropriate private property to
particular uses to promote public welfare. No one questions NIA’s authority to exercise the
delegated power of eminent domain. However, the power of eminent domain is not limitless. NIA
cannot exercise the power with wanton disregard for property rights. One basic limitation on the
State’s power of eminent domain is the constitutional directive that, “private property shall not be
taken for public use without just compensation.”

The thirteen-year interval between the execution of the 1980 deeds of sale and the 1993 filing of
the complaint does not bar the claim for compensation. This Court reiterated the long-standing rule
“that where private property is taken by the Government for public use without first acquiring title
thereto either through expropriation or negotiated sale, the owner’s action to recover the land or the
value thereof does not prescribe.”

Export Processing Zone Authority vs. Dulay [GR L-59603, 29 April 1987]
En Banc, Gutierrez Jr. (J): 10 concur, 1 concurs in result, 1 on leave

Facts: On 15 January 1979, the President of the Philippines, issued Proclamation 1811, reserving a
certain parcel of land of the public domain situated in the City of Lapu-Lapu, Island of Mactan,
Cebu and covering a total area of 1,193,669 square meters, more or less, for the establishment of an
export processing zone by petitioner Export Processing Zone Authority (EPZA). Not all the
reserved area, however, was public land. The proclamation included, among others, 4 parcels of
land with an aggregate area of 22,328 square meters owned and registered in the name of the San
Antonio Development Corporation. The EPZA, therefore, offered to purchase the parcels of land
from the corporation in accordance with the valuation set forth in Section 92, Presidential Decree
(PD) 464, as amended. The parties failed to reach an agreement regarding the sale of the property.
EPZA filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, a
complaint for expropriation with a prayer for the issuance of a writ of possession against the
corporation, to expropriate the aforesaid parcels of land pursuant to PD 66, as amended, which
empowers EPZA to acquire by condemnation proceedings any property for the establishment of
export processing zones, in relation to Proclamation 1811, for the purpose of establishing the
Mactan Export Processing Zone. On 21 October 1980, Judge Ceferino E. Dulay issued a writ of
possession authorizing EPZA to take immediate possession of the premises. At the pre-trial
conference on 13 February 1981, the judge issued an order stating that the parties have agreed that
the only issue to be resolved is the just compensation for the properties and that the pre-trial is
thereby terminated and the hearing on the merits is set on 2 April 1981. On 17 February 1981, the
judge issued the order of condemnation declaring EPZA as having the lawful right to take the
properties sought to be condemned, upon the payment of just compensation to be determined as of
the filing of the complaint. The respondent judge also issued a second order appointing certain
persons as commissioners to ascertain and report to the court the just compensation for the
properties sought to be expropriated. On 19 June 1981, the three commissioners submitted their
consolidated report recommending the amount of P15.00 per square meter as the fair and
reasonable value of just compensation for the properties. On 29 July 1981, EPZA filed a Motion
for Reconsideration of the order of 19 February 1981 and Objection to Commissioner's Report on
the grounds that PD 1533 has superseded Sections 5 to 8 of Rule 67 of the Rules of Court on the
ascertainment of just compensation through commissioners; and that the compensation must not
exceed the maximum amount set by PD 1533. On 14 November 1981, the trial court denied
EPZA's motion for reconsideration. On 9 February 1982, EPZA filed the petition for certiorari and
mandamus with preliminary restraining order, enjoining the trial court from enforcing the order
dated 17 February 1981 and from further proceeding with the hearing of the expropriation case.

Issue: Whether the exclusive and mandatory mode of determining just compensation in
Presidential Decree 1533 is valid and constitutional, and whether the lower values given by
provincial assessors be the value of just compensation.

Held: Presidential Decree 76 provides that "For purposes of just compensation in cases of private
property acquired by the government for public use, the basis shall be the current and fair market
value declared by the owner or administrator, or such market value as determined by the Assessor,
whichever is lower." Section 92 of PD 464 provides that "In determining just compensation which
private property is acquired by the government for public use, the basis shall be the market value
declared by the owner or administrator or anyone having legal interest in the property, or such
market value as determined by the assessor, whichever is lower." Section 92 of PD 794, on the
other hand, provides that "In determining just compensation when private property is acquired by
the government for public use, the same shall not exceed the market value declared by the owner or
administrator or anyone having legal interest in the property, or such market value as determined
by the assessor, whichever is lower." Lastly, Section 1 of PD 1533 provides that "In determining
just compensation for private property acquired through eminent domain proceedings, the
compensation to be paid shall not exceed the value declared by the owner or administrator or
anyone having legal interest in the property or determined by the assessor, pursuant to the Real
Property Tax Code, whichever value is lower, prior to the recommendation or decision of the
appropriate Government office to acquire the property." The provisions of the Decrees on just
compensation unconstitutional and void as the method of ascertaining just compensation under the
said decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render the
Supreme Court inutile in a matter which under the Constitution is reserved to it for final
determination. The valuation in the decree may only serve as a guiding principle or one of the
factors in determining just compensation but it may not substitute the court's own judgment as to
what amount should be awarded and how to arrive at such amount. Further, various factors can
come into play in the valuation of specific properties singled out for expropriation. The values
given by provincial assessors are usually uniform for very wide areas covering several barrios or
even an entire town with the exception of the poblacion. Individual differences are never taken into
account. The value of land is based on such generalities as its possible cultivation for rice, corn,
coconuts, or other crops. Very often land described as "cogonal" has been cultivated for
generations. Buildings are described in terms of only two or three classes of building materials and
estimates of areas are more often inaccurate than correct. Thus, tax values can serve as guides but
cannot be absolute substitutes for just compensation.

HON. VICENTE P. EUSEBIO, et al vs. JOVITO M. LUIS, et al

G.R. No. 162474 October 13, 2009

FACTS:
Respondents are owners of a parcel of land taken by the City of Pasig in 1980 which was used as a
municipal road. The Sanggunian of Pasig City passed Resolution No. 15 authorizing payments for
said parcel of land. However, the Appraisal Committee assessed the value of the land only at
P150.00 per meter2. Respondents requested the Appraisal Committee to consider P2,000.00 per
square meter as the value of their land which was rejected.
Respondents filed a Complaint for Reconveyance and/or Damages before the RTC praying that the
property be returned to them with payment of reasonable rental for 16 years of use at P500.00
meter2 with legal interest from date of filing of the complaint until full payment, or if said property
can no longer be returned, that petitioners pay just compensation of P7,930,000.00 and rental for
16 years of use at P500.00 per meter2, both with legal interest from the date of filing of the
complaint until full payment.

ISSUE:
Whether or not the respondents’ claim for just compensation has already prescribed
RULING:
Petitioners must be disabused of their belief that respondents’ action for recovery of their property,
which had been taken for public use, or to claim just compensation therefor is already barred by
prescription. In Republic v. CA, the Court emphasized "that where private property is taken by the
Government for public use without first acquiring title thereto either through expropriation or
negotiated sale, the owner’s action to recover the land or the value thereof does not prescribe."
Government agencies should not exercise the power of eminent domain with wanton disregard for
property rights as Section 9, Art III of the Constitution provides that "private property shall not be
taken for public use without just compensation."
Recovery of possession of the property by the landowner can no longer be allowed on the grounds
of estoppel and, more importantly, of public policy which imposes upon the public utility the
obligation to continue its services to the public. The non-filing of the case for expropriation will
not necessarily lead to the return of the property to the landowner. What is left to the landowner is
the right of compensation.

Ansaldo vs. Tantuico [GR 50147, 3 August 1990]

First Division, Narvasa (J): 4 concur

Facts: Two lots of private ownership were taken by the Government and used for the widening of a
road more than forty-three years ago, without benefit of an action of eminent domain or agreement
with its owners, albeit without protest by the latter. The lots belong to Jose Ma. Ansaldo and Maria
Angela Ansaldo, are covered by title in their names, and have an aggregate area of 1,041 square
meters. These lots were taken from the Ansaldos sometime in 1947 by the Department of Public
Works, Transportation and Communication and made part of what used to be Sta. Mesa Street and
is now Ramon Magsaysay Avenue at San Juan, Metro Manila. Said owners made no move
whatever until 26 years later. They wrote to ask for compensation for their land on 22 January
1973. Their claim was referred to the Secretary of Justice who rendered an opinion dated 22
February 1973, that just compensation should be paid in accordance with Presidential Decree (PD)
76, and thus advised that the corresponding expropriation suit be forthwith instituted to fix the just
compensation to be paid to the Ansaldos. Pursuant to the said opinion, the Commissioner of Public
Highways requested the Provincial Assessor of Rizal to make a redetermination of the market
value of the Ansaldos' property in accordance with PD 76. The new valuation was made, after
which the Auditor of the Bureau of Public Highways forwarded the Ansaldos' claim to the Auditor
General with the recommendation that payment be made on the basis of the "current and fair
market value and not on the fair market value at the time of taking." The Commission on Audit,
however, declined to adopt the recommendation. In a decision handed down on 26 September
1973, the Acting Chairman ruled that "the amount of compensation to be paid to the claimants is to
be determined as of the time of the taking of the subject lots," i.e. 1947. The ruling was reiterated
by the Commission on 8 September 1978, and again on 25 January 1979 when it denied the
Ansaldos' motion for reconsideration. The Ansaldos appealed to the Supreme Court.
Issue: Whether the valuation of just compensation should be determined at the time of taking in
1947, especially in light of the absence of any expropriation proceeding undertaken before the said
taking.

Held: Where the institution of an expropriation action precedes the taking of the property subject
thereof, the just compensation is fixed as of the time of the filing of the complaint. This is so
provided by the Rules of Court, the assumption of possession by the expropriator ordinarily being
conditioned on its deposits with the National or Provincial Treasurer of the value of the property as
provisionally ascertained by the court having jurisdiction of the proceedings. There are instances,
however, where the expropriating agency takes over the property prior to the expropriation suit. In
these instances, the just compensation shall be determined as of the time of taking, not as of the
time of filing of the action of eminent domain. There was undoubtedly a taking of the Ansaldos'
property when the Government obtained possession thereof and converted it into a part of a
thoroughfare for public use. It is as of the time of such a taking, to repeat, that the just
compensation for the property is to be established. The value of the Ansaldos' property must be
ascertained as of the year 1947, when it was actually taken, and not at the time of the filing of the
expropriation suit, which, by the way, still has to be done. It is as of that time that the real measure
of their loss may fairly be adjudged. The value, once fixed, shall earn interest at the legal rate until
full payment is effected, conformably with other principles laid down by case law. The Court thus
directed the Department of Public Works and Highways to institute the appropriate expropriation
action over the land in question so that the just compensation due its owners may be determined in
accordance with the Rules of Court, with interest at the legal rate of 6% per annum from the time of
taking until full payment is made.

REPUBLIC vs. LIM (GR no. 161656)

FACTS:
In 1938, the Republic instituted a special civil action for expropriation of a land in Lahug, Cebu
City for the purpose of establishing a military reservation for the Philippine Army. The said lots
were registered in the name of Gervasia and Eulalia Denzon. The Republic deposited P9,500 in the
PNB then took possession of the lots. Thereafter, on May 1940, the CFI rendered its Decision
ordering the Republic to pay the Denzons the sum of P4,062.10 as just compensation. The
Denzons appealed to the CA but it was dismissed on March 11, 1948. An entry of judgment was
made on April 5, 1948.

In 1950, one of the heirs of the Denzons, filed with the National Airports Corporation a claim for
rentals for the two lots, but it "denied knowledge of the matter." On September 6, 1961, Lt. Cabal
rejected the claim but expressed willingness to pay the appraised value of the lots within a
reasonable time.

For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons·
successors-in-interest,Valdehueza and Panerio, filed with the same CFI an action for recovery of
possession with damages against the Republic and AFP officers in possession of the property.

On November 1961, Titles of the said lots were issued in the names of Valdehueza and Panerio
with the annotation "subject to the priority of the National Airports Corporation to acquire said
parcels of land, Lots 932 and939 upon previous payment of a reasonable market value".

On July 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding that
they are the owners and have retained their right as such over lots because of the Republic·s failure
to pay the amount of P4,062.10,adjudged in the expropriation proceedings. However, in view of
the annotation on their land titles, they were ordered to execute a deed of sale in favor of the
Republic.

They appealed the CFI·s decision to the SC. The latter held that Valdehueza and Panerio are still
the registered owners of Lots 932 and 939, there having been no payment of just compensation by
the Republic. SC still ruled that they are not entitled to recover possession of the lots but may only
demand the payment of their fair market value.

Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein
respondent, as security for their loans. For their failure to pay Lim despite demand, he had the
mortgage foreclosed in 1976. The lot title was issued in his name.

On 1992, respondent Lim filed a complaint for quieting of title with the RTC against the
petitioners herein. On 2001, the RTC rendered a decision in favor of Lim, declaring that he is the
absolute and exclusive owner of the lot with all the rights of an absolute owner including the right
to possession. Petitioners elevated the case to the CA. In its Decision dated September 18, 2003, it
sustained the RTC Decision saying: ´... This is contrary to the rules of fair play because the concept
of just compensation embraces not only the correct determination of the amount to be paid to the
owners of the land,but also the payment for the land within a reasonable time from its taking.
Without prompt payment, compensation cannot be considered "just"...”

Petitioner, through the OSG, filed with the SC a petition for review alleging that they remain as the
owner of Lot 932.

ISSUE:
Whether the Republic has retained ownership of Lot 932 despite its failure to pay respondent’s
predecessors-in-interest the just compensation therefor pursuant to the judgment of the CFI
rendered as early as May 14, 1940.

HELD:
One of the basic principles enshrined in our Constitution is that no person shall be deprived of his
private property without due process of law; and in expropriation cases, an essential element of due
process is that there must be just compensation whenever private property is taken for public use.
Accordingly, Section 9, Article III, of our Constitution mandates: "Private property shall not be
taken for public use without just compensation." The Republic disregarded the foregoing provision
when it failed and refused to pay respondent’s predecessors-in-interest the just compensation for
Lots 932 and 939.

The Court of Appeals is correct in saying that Republic’s delay is contrary to the rules of fair play.
In jurisdictions similar to ours, where an entry to the expropriated property precedes the payment
of compensation, it has been held that if the compensation is not paid in a reasonable time, the
party may be treated as a trespasser ab initio.

As early as May 19, 1966, in Valdehueza, this Court mandated the Republic to pay respondent’s
predecessors-in- interest the sum of P16,248.40 as "reasonable market value of the two lots in
question." Unfortunately, it did not comply
and allowed several decades to pass without obeying this Court’s mandate. It is tantamount to
confiscation of private property. While it is true that all private properties are subject to the need of
government, and the government may take them whenever the necessity or the exigency of the
occasion demands, however from the taking of private property by the government under the
power of eminent domain, there arises an implied promise to compensate the owner for his loss.
There is a recognized rule that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. So, how could the Republic acquire
ownership over Lot 932 when it has not paid its owner the just compensation, required by law, for
more than 50 years? Clearly, without full payment of just compensation, there can be no transfer of
title from the landowner to the expropriator.

SC ruled in earlier cases that expropriation of lands consists of two stages. First is concerned with
the determination of the authority of the plaintiff to exercise the power of eminent domain and the
propriety of its exercise. The second is concerned with the determination by the court of "the just
compensation for the property sought to be taken." It is only upon the completion of these two
stages that expropriation is said to have been completed In Republic v. Salem Investment
Corporation, we ruled that, "the process is not completed until payment of just compensation."
Thus, here, the failure of the Republic to pay respondent and his predecessors-in-interest for a
period of 57 years rendered the expropriation process incomplete.

Thus, SC ruled that the special circumstances prevailing in this case entitle respondent to recover
possession of the expropriated lot from the Republic.

While the prevailing doctrine is that "the non-payment of just compensation does not entitle the
private landowner to recover possession of the expropriated lots, however, in cases where the
government failed to pay just compensation within five (5) years from the finality of the judgment
in the expropriation proceedings, the owners concerned shall have the right to recover possession
of their property. After all, it is the duty of the government, whenever it takes property from private
persons against their will, to facilitate the payment of just compensation. In Cosculluela v. Court of
Appeals, we defined just compensation as not only the correct determination of the amount to be
paid to the property owner but also the payment of the property within a reasonable time. Without
prompt payment, compensation cannot be considered "just."

Association of Small Landowners in the Philippines Inc. vs. Secretary of Agrarian Reform
[GR 78741, 14 July 1989]; Also Acuna vs. Arroyo [GR 79310], Pabico vs. Juico [GR 79744],
and Manaay vs. Juico [GR 79777]
En Banc, Cruz (J): 14 concur

Facts: On 17 July 1987, President Corazon C. Aquino issued Executive Order (EO) 228, declaring
full land ownership in favor of the beneficiaries of Presidential Decree (PD) 27 and providing for
the valuation of still unvalued lands covered by the decree as well as the manner of their payment.
This was followed on 22 July 1987 by PD 131, instituting a comprehensive agrarian reform
program (CARP), and EO 229, providing the mechanics for its implementation. Subsequently,
with its formal organization, the revived Congress of the Philippines took over legislative power
from the President and started its own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of spirited debate, was the
enactment of Republic Act (RA) 6657, otherwise known as the Comprehensive Agrarian Reform
Law of 1988, which President Aquino signed on 10 June 11988. This law, while considerably
changing RA 3844 (Agricultural Land Reform Code, 8 August 1963) and PD 27 (21 October
1972), nevertheless gives them suppletory effect insofar as they are not inconsistent with its
provisions.

[GR 79777] Nicolas Manaay and his wife owned a 9-hectare riceland worked by 4 tenants, while
Augustin Hermano Jr. owned a 5-hectare riceland worked by four tenants. The tenants therein
were declared full owners of these lands by EO 228 as qualified farmers under PD 27. Manaay and
Hermano questioned the constitutionality of PD 27, and EOs 228 and 229, before the Supreme
Court, in GR 79777, on grounds inter alia of separation of powers, due process, equal protection
and the constitutional limitation that no private property shall be taken for public use without just
compensation. In the amended petition dated 22 November 1988, it was contended that PD 27,
EOs 228 and 229 (except Sections 20 and 21) have been impliedly repealed by RA 6657, but that
the latter statute should itself also be declared unconstitutional because it suffers from substantially
the same infirmities as the earlier measures. A petition for intervention was filed with leave of
court on 1 June 1988 by Vicente Cruz, owner of a 1.83-hectare land, who complained that the
department of Agrarian Reform (DAR) was insisting on the implementation of PD 27 and EO 228
despite a compromise agreement he had reached with his tenant on the payment of rentals.

[GR 79310] Arsenio Al. Acuña, Newton Jison, Victorino Ferraris, Dennis Jereza, Herminigildo
Gustilo, and Paulino D. Tolentino are landowners and sugar planters in the Victorias Mill District,
Victorias, Negros Occidental; while the Planters' Committee, Inc. is an organization composed of
1,400 planter-members. They filed a petition (GR 79310) seeking to prohibit the implementation
of Proclamation 131 and EO 229, claiming that the power to provide for a Comprehensive
Agrarian Reform Program as decreed by the Constitution belongs to Congress and not the
President; that although they agree that the President could exercise legislative power until the
Congress was convened, she could do so only to enact emergency measures during the transition
period; and that, even assuming that the interim legislative power of the President was properly
exercised, Proclamation 131 and EO 229 would still have to be annulled for violating the
constitutional provisions on just compensation, due process, and equal protection. Furthermore,
they contend that taking must be simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no such payment is contemplated in
Section 5 of the EO 229. On the contrary, Section 6, thereof provides that the Land Bank of the
Philippines "shall compensate the landowner in an amount to be established by the government,
which shall be based on the owner's declaration of current fair market value as provided in Section
4 hereof, but subject to certain controls to be defined and promulgated by the Presidential Agrarian
Reform Council." This compensation may not be paid fully in money but in any of several modes
that may consist of part cash and part bond, with interest, maturing periodically, or direct payment
in cash or bond as may be mutually agreed upon by the beneficiary and the landowner or as may be
prescribed or approved by the PARC. A motion for intervention was filed on 27 August 1987 by
the National Federation of Sugarcane Planters (NASP) which claims a membership of at least
20,000 individual sugar planters all over the country. On 10 September 1987, another motion for
intervention was filed, this time by Manuel Barcelona, et al., representing coconut and riceland
owners. Both motions were granted by the Court. On 11 April 1988, Prudencio Serrano, a coconut
planter, filed a petition on his own behalf, assailing the constitutionality of EO 229. In addition to
the arguments already raised, Serrano contends that the measure is unconstitutional because (1)
only public lands should be included in the CARP; (2) EO 229 embraces more than one subject
which is not expressed in the title; (3) The power of the President to legislate was terminated on 2
July 1987; and (4) The appropriation of a P50 billion special fund from the National Treasury did
not originate from the House of Representatives.

[GR 79744] Inocentes Pabico in his petition (GR 79744) alleges that the then Secretary of
Department of Agrarian Reform, in violation of due process and the requirement for just
compensation, placed his landholding under the coverage of Operation Land Transfer. Certificates
of Land Transfer were subsequently issued to Salvador Talento, Jaime Abogado, Conrado
Avanceña, and Roberto Taay, who then refused payment of lease rentals to him. On 3 September
1986, Pabico protested the erroneous inclusion of his small landholding under Operation Land
Transfer and asked for the recall and cancellation of the Certificates of Land Transfer in the name
of the Talento, et. al. Pabico claims that on 24 December 1986, his petition was denied without
hearing. On 17 February 1987, he filed a motion for reconsideration, which had not been acted
upon when EO 228 and 229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to Talento, et. al. Pabico argues that (1) EOs
228 and 229 were invalidly issued by the President of the Philippines; 92) the said executive orders
are violative of the constitutional provision that no private property shall be taken without due
process or just compensation; and
(3) Pabico is denied the right of maximum retention provided for under the 1987 Constitution.

[GR 78742] The Association of Small Landowners in the Philippines, Inc., Juanito D. Gomez,
Gerardo B. Alarcio, Felife A. Guico, Jr., Bernardo M. Almonte, Canuto Ramir B. Cabrito, Isidro T.
Guico, Felisa I. Llamido, Fausto J. Salva, Reynaldo G. Estrada, Felisa C. Bautista, Esmenia J.
Cabe, Teodoro B. Madriaga, Aurea J. Prestosa, Emerenciana J. Isla, Felicisima C. Apresto,
Consuelo M. Morales, Benjamin R. Segismundo, Cirila A. Jose, and Napoleon S. Ferrer invoke in
their petition (GR 78742) the right of retention granted by PD 27 to owners of rice and corn lands
not exceeding 7 hectares as long as they are cultivating or intend to cultivate the same. Their
respective lands do not exceed the statutory limit but are occupied by tenants who are actually
cultivating such lands. They claim they cannot eject their tenants and so are unable to enjoy their
right of retention because the Department of Agrarian Reform (DAR) has so far not issued the
implementing rules required under PD 316, implementing PD 27. They therefore ask the Court for
a writ of mandamus to compel the Secretary of Agrarian Reform to issue the said rules.

Issue: Whether just compensation should exclusively be made in money and not other things of
value.

Held: This is not an ordinary expropriation where only a specific property of relatively limited area
is sought to be taken by the State from its owner for a specific and perhaps local purpose. What is
dealt with herein is a revolutionary kind of expropriation. The Court assumes that the framers of
the Constitution were aware of this difficulty when they called for agrarian reform as a top priority
project of the government. It is a part of this assumption that when they envisioned the
expropriation that would be needed, they also intended that the just compensation would have to be
paid not in the orthodox way but a less conventional if more practical method. There can be no
doubt that they were aware of the financial limitations of the government and had no illusions that
there would be enough money to pay in cash and in full for the lands they wanted to be distributed
among the farmers. The court may therefore assume that their intention was to allow such manner
of payment as is now provided for by the CARP Law, particularly the payment of the balance (if
the owner cannot be paid fully with money), or indeed of the entire amount of the just
compensation, with other things of value. The Court has not found in the records of the
Constitutional Commission any categorical agreement among the members regarding the meaning
to be given the concept of just compensation as applied to the comprehensive agrarian reform
program being contemplated. On the other hand, there is nothing in the records either that militates
against the assumptions we are making of the general sentiments and intention of the members on
the content and manner of the payment to be made to the landowner in the light of the magnitude of
the expenditure and the limitations of the expropriator. Accepting the theory that payment of the
just compensation is not always required to be made fully in money, the Court find further that the
proportion of cash payment to the other things of value constituting the total payment, as
determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the
landowner. It is noted that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big landowners, who can afford a
bigger balance in bonds and other things of value. No less importantly, the government financial
instruments making up the balance of the payment are "negotiable at any time." The other modes,
which are likewise available to the landowner at his option, are also not unreasonable because
payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other
things of value equivalent to the amount of just compensation. Admittedly, the compensation
contemplated in the law will cause the landowners, big and small, not a little inconvenience.
However, this cannot be avoided.

Department of Agrarian Reform vs. Court of Appeals [GR 118745, 6 October 1995]; also
Land Bank of the Philippines vs. Court of Appeals [GR 118712]
Second Division, Francisco (J): 3 concur, 1 on leave

Facts: On 4 September 1992, the TCTs of Pedro L. Yap were totally cancelled by the Registrar of
Deeds of Leyte and were transferred in the names of farmer beneficiaries collectively, based on the
request of the Department of Agrarian Reform (DAR) together with a certification of the
Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked for Yap for the
parcels of lands covered by TCTs 6282 and 6283 respectively, without notice to Yap and without
complying with the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash
and Landbank bonds in an accessible bank. On the other hand, in November and December 1990,
without notice to the heirs of Emiliano F. Santiago, the owners of a parcel
of land located at Laur, Nueva Ecija (18.5615 hectares, TCT NT-60359 of the registry of Deeds of
Nueva Ecija), the Landbank (or DAR, according to Landbank) required and the beneficiaries
executed Actual tillers Deed of Undertaking to pay rentals to the Landbank for the use of their
farmlots equivalent to at least 25% of the net harvest. On 24 October 1991 the DAR Regional
Director issued an order directing the Landbank to pay the heirs directly or through the
establishment of a trust fund in the amount of P135,482.12. On 24 February 1992, the Landbank
reserved in trust P135,482.12 in the name of Emiliano F. Santiago. The beneficiaries stopped
paying rentals to the heirs after they signed the Actual Tiller's Deed of Undertaking committing
themselves to pay rentals to the Landbank (The Landbank, although armed with the ATDU,
allegedly did not collect any amount as rental from the substituting beneficiaries). Lastly, the
Agricultural Management and Development Corporation (AMADCOR) owned properties in San
Francisco, Quezon (a parcel of land with an area of 209.9215 hectares, TCT 34314; another parcel
with an area of 163.6189 hectares, TCT 10832), and in Tabaco, Albay (a parcel of land with an
area of 1,629.4578 hectares, TCT T- 2466 of the Register of Deeds of Albay). Without notice to
AMADCOR, a summary administrative proceeding to determine compensation of the property
covered by TCT 34314 was conducted by the DARAB in Quezon City. A decision was rendered
on 24 November 1992 fixing compensation for the parcel of land covered by TCT 34314 with an
area of 209.9215 hectares at P2,768,326.34 and ordering the Landbank to pay or establish a trust
account for said amount in the name of AMADCOR. With respect to AMADCOR's property in
Albay, emancipation patents were issued covering an area of 701.8999 hectares which were
registered on 15 February 1988 but no action was taken thereafter by the DAR to fix the
compensation for said land. On 21 April 1993, a trust account in the name of AMADCOR was
established in the amount of P12,247,217.83, three notices of acquisition having been previously
rejected by AMADCOR. Thus, Yap, the Heirs of Santiago, AMADCOR, being landowners whose
landholdings were acquired by the DAR and subjected to transfer schemes to qualified
beneficiaries under the Comprehensive Agrarian Reform Law, and were aggrieved by the alleged
lapses of the Department of Agrarian Reform (DAR) and the Landbank with respect to the
valuation and payment of compensation for their land pursuant to the provisions of Republic Act
(RA) 6657, filed with the Supreme Court a Petition for Certiorari and Mandamus with prayer for
preliminary mandatory injunction, questioning the validity of DAR Administrative Order 6, Series
of 1992 and DAR Administrative Order 9, Series of 1990, and sought to compel the DAR to
expedite the pending summary administrative proceedings to finally determine the just
compensation of their properties, and the Landbank to deposit in cash and bonds the amounts
respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents,
and to allow them to withdraw the same. Through a Resolution of the Second Division dated 9
February 1994, the Supreme Court referred the petition to respondent Court of Appeals for proper
determination and disposition. On 20 October 1994, the Court of Appeals granted the petition,
declaring that DAR Administrative order 9, Series of 1990, null and void insofar as it provides for
the opening of trust accounts in lieu of deposits in cash or bonds; ordering Landbank to
immediately deposit
— not merely "earmark," "reserve" or "deposit in trust" — with an accessible bank designated by
DAR in the names of Yap, the Heirs of Santiago, and AMADCO the amounts of P1,455,207.31,
P135,482.12, and P15,914,127.77 respectively in cash and in government financial instruments
within the parameters of Sec. 18
(1) of RA 6657; ordering the DAR-designated bank to allow Yap, et. al. to withdraw the amounts
without prejudice to the final determination of just compensation by the proper authorities; and
ordering DAR to immediately conduct summary administrative proceedings to determine the just
compensation for the lands in question giving Yap, et. al. 15 days from notice within which to
submit evidence and to decide the cases within 30 days after they are submitted for decision. DAR
and Landbank moved for reconsideration, but were denied on 18 January 1995. DAR and
Landbank filed their respective petitions for review with the Supreme Court.

Issue: Whether the deposit may be made in other forms besides cash or LBP bonds, and whether
there should be a distinction between the deposit of compensation and the determination of just
compensation.

Held: It is very explicit in Section 16(e) of Republic Act 6657 that the deposit must be made only
in "cash" or in "LBP bonds". Nowhere does it appear nor can it be inferred that the deposit can be
made in any other form. If it were the intention to include a "trust account" among the valid modes
of deposit, that should have been made express, or at least, qualifying words ought to have
appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no
ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".
Herein, the DAR clearly overstepped the limits of its power to enact rules and regulations when it
issued Administrative Circular 9. There is no basis in allowing the opening of a trust account in
behalf of the landowner as compensation for his property because Section 16(e) of RA 6657 is very
specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, DAR
and Landbank cannot invoke LRA Circular 29, 29-A and 54 because these implementing
regulations cannot outweigh the clear provision of the law. There should be no distinction between
the deposit of compensation under Section 16(e) of RA 6657 and determination of just
compensation under Section 18. To withhold the right of the landowners to appropriate the
amounts already deposited in their behalf as compensation for their properties simply because they
rejected the DAR's valuation, and notwithstanding that they have already been deprived of the
possession and use of such properties, is an oppressive exercise of eminent domain. The irresistible
expropriation of Yap, et. al.'s properties was painful enough for them; but DAR rubbed it in all the
more by withholding that which rightfully belongs to Yap, et. al. in exchange for the taking, under
an misplaced appreciation of the Association of Small Landowners case. It must be noted that the
immediate effect in both situations, the deposit of compensation and determination of just
compensation, is the same; the landowner is deprived of the use and possession of his property for
which he should be fairly and immediately compensated. Thus, to reiterate the cardinal rule,
"within the context of the State's inherent power of eminent domain, just compensation means not
only the correct determination of the amount to be paid to the owner of the land but also the
payment of the land within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered 'just' for the property owner is made to suffer the consequence
of being immediately deprived of his land while being made to wait for a decade or more before
actually receiving the amount necessary to cope with his loss."

CITY OF ILOILO represented by HON. JERRY P. TREÑAS, City Mayor, Petitioner,

vs.
HON. LOLITA CONTRERAS-BESANA, Presiding Judge, Regional Trial Court, Branch
32, and ELPIDIO JAVELLANA, Respondents.

Facts:
On September 18, 1981, petitioner filed a Complaint for eminent domain against private Elpidio
T. Javellana and Southern Negros Development Bank. (as mortgagee). It sought to expropriate two
parcels of land registered in Javellana’s name to be used as a school site for Lapaz High School.
Petitioner alleged that the Subject Property was declared to have a value of P60.00 per square
meter, or a total value of ₱43,560.00.

*Javellana admitted ownership of the Subject Property but denied the petitioner’s public
purposebecause there was already had an existing school site for Lapaz High School. Javellana
also claimed that the true fair market value of his property was no less than P220.00 per square
meter.

*Petitioner filed a Motion for Issuance of Writ of Possession, alleging that it had deposited the
amount of P40,000.00 with the Philippine National Bank-Iloilo Branch. Petitioner claimed that it
was entitled to the immediate possession of the Subject Property, citing Section 1 of Presidential
Decree No. 1533,8 after it had deposited an amount equivalent to 10% of the amount of
compensation.

*Javellana filed an Opposition to the Motion for the Issuance of Writ of Possession citing the same
grounds he raised in his Answer – that the city already had a vast tract of land where its existing
school site was located, and the deposit of a mere 10% of the Subject Property’s tax valuation was
grossly inadequate.

*On May 17, 1983, the trial court issued an Order which granted petitioner’s Motion for Issuance
of Writ of Possession and authorized the petitioner to take immediate possession of the Subject
Property. The subject Property was used as the site for Lapaz National High school.

Sixteen years later, on April 17, 2000, Javellana filed an Ex Parte Motion/Manifestation, where he
alleged that when he finally sought to withdraw the P40,000.00 allegedly deposited by the
petitioner, he discovered that no such deposit was ever made. Private respondent thus demanded
his just compensation as well as interest.
Issue:

At what point should just compensation for the property taken be determined? Is it as of the filing
of the complaint for expropration or the time the plaintiff takes possession of the property?

Ruling:

Hust 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.

When the taking of the property sought to be expropriated coincides with the commencement of
the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent
domain, the just compensation should be determined as of the date of the filing of the complaint.

Manila Electric Company (MERALCO) vs. Pineda [GR 59791, 13 February 1992]
First Division, Medialdea (J): 3 concur

Facts: For the purpose of constructing a 230 KV Transmission line from Barrio Malaya to Tower
220 at Pililla, Rizal, the Manila Electric Company (MERALCO) needed portions of the land of
Teofilo Arayon, Sr., Gil de Guzman, Lucito Santiago and Teresa Bautista (simple fee owners),
consisting of an aggregate area of 237,321 square meters. Despite MERALCO's offers to pay
compensation and attempts to negotiate with Arayon, et. al., the parties failed to reach an
agreement. On 29 October 1974, a complaint for eminent domain was filed by MERALCO against
42 defendants (including Teofilo Arayon Sr., Gil de Guzman, Lucito Santiago, and Teresa
Bautista) with the Court of First Instance (now Regional Trial Court) of Rizal, Branch XXII, Pasig,
Metro Manila. Despite the opposition of Arayon, et. al., the court issued an Order dated 13 January
1975 authorizing MERALCO to take or enter upon the possession of the property sought to be
expropriated. On 13 July 1976, Arayon, et. al., filed a motion for withdrawal of deposit claiming
that they are entitled to be paid at P40.00 per square meter or an approximate sum of P272,000.00
and prayed that they be allowed to withdraw the sum of P71,771.50 from MERALCO's
deposit-account with the Philippine National Bank (PNB), Pasig Branch. However, Arayon, et.
al.'s motion was denied in an order dated 3 September 1976. Pursuant to a government policy,
MERALCO on 30 October 1979 sold to the National Power Corporation (NAPOCOR) the power
plants and transmission lines, including the transmission lines traversing Arayon, et. al.'s property.
On 11 February 1980, the court issued an Order appointing the members of the Board of
Commissioners to make an appraisal of the properties. On 5 June 1980, MERALCO filed a motion
to dismiss the complaint on the ground that it has lost all its interests over the transmission lines
and properties under expropriation because of their sale to the NAPOCOR. In view of this motion,
the work of the Commissioners was suspended. On 9 June 1981, Arayon, et. al. filed another
motion for payment, but despite the opposition of MERALCO, the court issued an order dated 4
December 1981 granting the motion for payment of Arayon, et. al. (P20,400 or P3.00 per square
meter without prejudice to the just compensation that may be proved in the final adjudication of the
case). On 15 December 1981, Arayon, et. al. filed an Omnibus Motion praying that they be
allowed to withdraw an additional sum of P90,125.50 from MERALCO's deposit-account with
PNB. By order dated 21 December 1981, the court granted the Omnibus Motion. Arayon, et. al.
filed another motion dated 8 January 1982 praying that MERALCO be ordered to pay the sum of
P169,200.00. On 12 January 1982, MERALCO filed a motion for reconsideration of the Orders
and to declare Arayon, et. al. in contempt of court for forging or causing to be forged the receiving
stamp of MERALCO's counsel and falsifying or causing to be falsified the signature of its
receiving clerk in their Omnibus Motion. On 9 February 1982, the court denied MERALCO's
motion for reconsideration and motion for contempt. In said order, the Court adjudged in favor of
Arayon, et. al. the fair market value of their property taken by MERALCO at P40.00 per square
meter for a total of P369.720.00; the amount to bearing legal interest from 24 February 1975 until
fully paid plus consequential damages in terms of attorney's fees in the sum of P10,000.00; all
these sums to be paid by MERALCO the former with costs of suit, minus the amount of
P102,800.00 already withdrawn by Arayon, et. al. Furthermore, the court stressed in said order that
"at this stage, the Court starts to appoint commissioners to determine just compensation or
dispenses with them and adopts the testimony of a credible real estate broker, or the Judge himself
would exercise his right to formulate an opinion of his own as to the value of the land in question.
Nevertheless, if he formulates such an opinion, he must base it upon competent evidence."
MERALCO filed a petition for review on certiorari.

Issue: Whether the court can dispense with the assistance of a Board of Commissioners in an
expropriation proceeding and determine for itself the just compensation.

Held: In an expropriation case where the principal issue is the determination of just compensation,
a trial before the Commissioners is indispensable to allow the parties to present evidence on the
issue of just compensation. The appointment of at least 3 competent persons as 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
court may substitute its own estimate of the value, the latter may only do so for valid reasons, i.e.,
where the Commissioners have applied illegal principles to the evidence submitted to them or
where they have disregarded a clear preponderance of evidence, or where the amount allowed is
either grossly inadequate or excessive (Manila Railroad Company
v. Velasquez, 32 Phil. 286) 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. Moreover, in such instances, where
the report of the commissioners may be disregarded, the trial court may make its own estimate of
value from competent evidence that may be gathered from the record. The "Joint Venture
Agreement on Subdivision and Housing Projects" executed by ABA Homes and Arayon, et. al.
relied upon by the judge, in the absence of any other proof of valuation of said properties, is
incompetent to determine just compensation. The judge's act of determining and ordering the
payment of just compensation without the assistance of a Board of Commissioners is a flagrant
violation of MERALCO's constitutional right to due process and is a gross violation of the
mandated rule established by the Revised Rules of Court.

National Power Corporation vs. Henson [GR 129998, 29 December 1998]

Third Division, Pardo (J): 3 concur

Facts: On 21 March 1990, the National Power Corporation (NAPOCOR) originally instituted with
the Regional Trial Court (RTC), Third Judicial District, Branch 46, San Fernando, Pampanga a
complaint for eminent domain, later amended on 11 October 1990, for the taking for public use of
5 parcels of land, owned or claimed by Lourdes Henson (married to Eugenio Galvez), Josefina
Henson (married to Petronio Katigbak, Jesusa Henson, Corazon Henson (married to Jose
Ricafort), Alfredo Tanchiatco, Bienvenido David, Maria Bondoc Capili (married to Romeo
Capili), and Miguel Manoloto, with a total aggregate area of 58,311 square meters, for the
expansion of the NAPOCOR Mexico Sub-Station. On 28 March 1990, NAPOCOR filed an urgent
motion to fix the provisional value of the subject parcels of land. On 20 April 1990, Henson, et. al.
filed a motion to dismiss. They did not challenge NAPOCOR's right to condemn their property, but
declared that the fair market value of their property was from P180.00 to P250.00 per square meter.
On 10 July 1990, the trial court denied Henson, et. al.'s motion to dismiss, but the court did not
declare that NAPOCOR had a lawful right to take the property sought to be expropriated.
However, the court fixed the provisional value of the land at P100.00 per square meter, for a total
area of 63,220 square meters of Henson, et. al.'s property, to be deposited with the Provisional
Treasurer of Pampanga. NAPOCOR deposited the amount on 29 August 1990. On 5 September
1990, the trial court issued a writ of possession in favor of NAPOCOR, and, on 11 September
1990, the court's deputy sheriff placed NAPOCOR in possession of the subject land. On 22
November 1990, and 20 December 1990, the trial court granted the motions of Henson, et. al. to
withdraw the deposit made by NAPOCOR of the provisional value of their property amounting to
P5,831,100.00, with a balance of P690,900.00, remaining with the Provisional Treasurer of
Pampanga. On 5 April 1991, the trial court issued an order appointing 3 commissioners to aid the
in the reception of evidence to determine just compensation for the taking of subject property.
After receiving the evidence and conducting an ocular inspection, the commissioners submitted to
the court their individual reports. However, the trial court did not conduct a hearing on any of the
reports. On 19 May 1993, the trial court rendered judgment fixing the amount of just compensation
to be paid by the NAPOCOR for the taking of the entire area of 63,220 squares meters at P400.00
per square meter, with legal interest thereon computed from 11 September 1990, when NAPOCOR
was placed in possession of the land, plus attorney's fees of P20,000.00, and costs of the
proceedings. In due time, NAPOCOR appealed to the Court of Appeals. On 23 July 1997, the
Court of Appeals rendered decision affirming that of the Regional Trial Court, except that the
award of P20,000.00 as attorney's fees was deleted. NAPOCOR filed a petition for review before
the Supreme Court.
Issue: Whether the determination of the court would be valid without hearing on the report of the
Commissioners.

Held: The trial court and the Court of Appeals fixed the value of the land at P400.00 per square
meter, which was the selling price of lots in the adjacent fully developed subdivision, the Santo
Domingo Village Subdivision. The parcels of land sought to be expropriated, however, are
undeniably idle, undeveloped, raw agricultural land, bereft of any improvement. Except for the
Henson family, all the other landowners were admittedly farmer beneficiaries under operation land
transfer of the Department of Agrarian Reform. However, the land has been reclassified as
residential. The nature and character of the land at the time of its taking is the principal criterion to
determine just compensation to the landowner. Unfortunately, the trial court, after creating a board
of commissioners to help it determine the market value of the land did not conduct a hearing on the
report of the commissioners. The trial court fixed the fair market value of subject land in an amount
equal to the value of lots in the adjacent fully developed subdivision. This finds no support in the
evidence. The valuation was even higher than the recommendation of anyone of the
commissioners (Commissioner Mariano C. Tiglao fixed the fair market value at P350.00 per
square meter, while Commissioner Arnold P. Atienza fixed it at P375.00 per square meter, and
Commissioner Victorino Oracio fixed it at P170.00 per square meter). Commissioner Atienza's
recommendation appears to be the closest valuation to the market value of lots in the adjoining
fully developed subdivision. Considering that the subject parcels of land are undeveloped raw
land, the price of P375.00 per square meter would appear to the Court as the just compensation for
the taking of such raw land.

National Power Corporation vs. Angas [GR 60225-26, 8 May 1992]

Second Division, Paras (J): 4 concur

Facts: On 13 April and 3 December 1974, the National Power Corporation (NAPOCOR), a
government- owned and controlled corporation and the agency through which the government
undertakes the on-going infrastructure and development projects throughout the country, filed two
complaints for eminent domain with the Court of First Instance (now Regional Trial Court) of
Lanao del Sur (against Lacsamana Batugan, and/or Guimba Shipping & Development
Corporation, Magancong Digayan, Moctara Lampaco, Lampaco Pasandalan, Dimaporo Subang,
Hadji Daluma Kinidar, Dimaampao Baute, Pangonotan Cosna Tagol, Salacop Dimacaling, Hadji
Sittie Sohra Linang Batara, Bertudan Pimping And/Or Cadurog Pimping, Butuan Tagol,
Disangcopan Marabong, and Hadji Salic Sawa in Civil Case 2248; and against Mangorsi Casan,
Casnangan Batugan, Pundamarug Atocal, Pasayod Pado, Dimaampao Baute, Casnangan Baute,
Dimaporo Subang, Tambilawan Ote, Manisun Atocal, and Masacal Tomiara in Civil Case 2277).
The complaint which sought to expropriate certain specified lots situated at 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 to such subsidiary works and constructions as may be necessarily
connected therewith. Both cases were jointly tried upon agreement of the parties. After a series of
hearings were held, on 15 June 1979, a consolidated decision 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 NAPOCOR, and ordering the latter to pay the
landowners 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 consolidated
decision were filed by NAPOCOR. The same were denied by the court. NAPOCOR did not appeal
on the consolidated decision, which became final and executory. Thus, on 16 May 1980, one of the
landowners (Sittie Sohra Batara) filed an ex-parte motion for the execution of the 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 15 June 1979.
NAPOCOR complied with said order and deposited the sums of money with interest computed at
6% per annum. On 10 February 1981, another landowner (Pangonatan Cosna Tagol) filed with the
trial court an ex- parte motion 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 416 of the Central Bank issued pursuant to Presidential Decree 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 11 February 1981, the
lower court granted the said motion allowing 12% interest per annum. Subsequently, the other
landowners filed motions also praying that the legal interest on the just compensation awarded to
them be computed at 12% per annum, on the basis of which the lower court issued on 10 March
1981 and 28 August 1981 orders bearing similar import. NAPOCOR moved for the
reconsideration of the lower court's last order dated 28 August 1981, which the court denied on 25
January 1982. NAPOCOR filed a petition for certiorari and mandamus with the Supreme Court.

Issue: Whether, in the computation of the legal rate of interest on just compensation for
expropriated lands, the rate applicable as legal interest is 6% (Article 2209 of the Civil Code) or
12% (Central Bank Circular 416).

Held: Article 2209 of the Civil Code, which provides that "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," and not Central Bank Circular 416,
is the law applicable. 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 not only from said circular but also from Presidential Decree 116, which amended
Act 2655, otherwise known as the Usury Law. On the other hand, Article 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. Herein, 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. Article 2209 of the Civil Code shall
apply.

Bill of Rights

LAND BANK OF THE PHILIPPINES vs. FELICIANO F. WYCOCO

G.R. No. 146733
January 13, 2004

FACTS:

This case is a consolidated petition of one seeking review of the decision of CA modifying the
decision of RTC acting as a Special Agrarian Court, and another for mandamus to compel the RTC
to issue a writ of execution and to direct Judge Caspillo to inhibit.

Feliciano F. Wycoco is the registered owner of a 94.1690 hectare land. Wycoco voluntarily offered
to sell the land to the Department of Agrarian Reform for P14.9 million. DAR offered
P2,280,159.82. The area which the DAR offered to acquire excluded idle lands, river and road
located therein. Wycoco rejected the offer, prompting 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. Thereafter, the DARAB requested LBP to
open a trust account in the name of Wycoco and deposited the compensation offered by DAR. In
the meantime, the property was distributed to farmer-beneficiaries.

On April 13, 1993, Wycoco filed the instant case for determination of just compensation with the
Regional Trial Court of Cabanatuan City against DAR and LBP.

On March 9, 1994, the DARAB dismissed the case on its hand to give way to the determination of
just compensation by the RTC.

Meanwhile, DAR and LBP filed their respective answered that the valuation of Wycoco’s 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 in as much 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 court thus took judicial notice thereof and fixed the
compensation for the entire 94.1690 hectare land at P142,500.00 per hectare or a total of
P13,428,082.00. It also awarded Wycoco actual damages for unrealized profits plus legal
interest.

The DAR and the LBP filed separate petitions before the Court of Appeals. The petition brought
by DAR on jurisdictional and procedural issues was dismissed. This prompted Wycoco to file a
petition for mandamus before this Court praying that the decision of the Regional Trial Court of
Cabanatuan City be executed, and that Judge Caspillo be compelled to inhibit himself from hearing
the case.

The petition brought by LBP on both substantive and procedural grounds was likewise dismissed
by the Court of Appeals. However, the Court of Appeals modified its decision by deducting from
the compensation due to Wycoco the amount corresponding to the 3.3672 hectare portion of the
94.1690 hectare land which was found to have been previously sold by Wycoco to the Republic.

LBP contended that the Court of Appeals erred in its ruling.

ISSUES:

1.Whether or not the RTC acquired jurisdiction over the case acting as Special Agrarian Court.

2.Assuming that it acquired jurisdiction, whether or not the compensation arrived at supported by
evidence.

3.Whether or not Wycoco can compel DAR to purchase the entire land.

4.Whether or not the awards of interest and damages for unrealized profits is valid.

HELD:

1.Yes, the RTC acting as Special Agrarian Court, acquired jurisdiction of the case. Sections 50 and
57 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988) provides:

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.

2.No, the compensation arrived is not supported by evidence. In arriving at the valuation of
Wycoco’s land, the trial court took judicial notice of the alleged prevailing market value of
agricultural lands without apprising the parties of its intention to take judicial notice thereof.
Section 3, Rule 129 of the Rules on Evidence provides:

Sec. 3. Judicial Notice. When Hearing Necessary. – During the trial, the court, on its own
initiative, or on request of a party, may announce its intention to take judicial notice of any matter
and allow the parties to be heard thereon.

After trial and before judgment or on appeal, the proper court, on its own initiative, or on request of
a party, may take judicial notice of any matter and allow the parties to be heard thereon if such
matter is decisive of a material issue in the case.

The trial court should have allowed the parties to present evidence thereon instead of practically
assuming a valuation without basis. Only the market value was taken into account in determining
the just compensation. Since other factors were not considered, the case was remanded for
determination of just compensation.

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 DAR’s 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.

4.Yes, Wycoco’s claim for payment of interest is partly meritorious. The trust account opened as
the mode of payment of just compensation should be converted to a deposit account. The
conversion should be retroactive in application in order to rectify the error committed by the DAR
in opening a trust account and to grant the landowners the benefits concomitant to payment in cash
or LBP bonds. Otherwise, petitioner’s right to payment of just and valid compensation for the
expropriation of his property would be violated. The interest earnings accruing on the deposit
account of landowners would suffice to compensate them pending payment of just compensation.

The award of actual damages for unrealized profits should be deleted because Wycoco failed to
show proof of loss.

Wycoco’s petition for mandamus in G.R. No. 146733 was dismissed. The decision of the
Regional Trial Court of Cabanatuan City, acting as Special Agrarian Court cannot be enforced
because there is a need to remand the case to the trial court for determination of just compensation.
Likewise, the prayer for the inhibition of Judge Rodrigo S. Caspillo was denied for lack of basis.
City of Manila, vs. Serrano [GR 142304, 20 June 2001]
Second Division, Mendoza (J): 4 concur

Facts: On 21 December 1993, the City Council of Manila enacted Ordinance 7833, authorizing
the expropriation of certain properties in Manila's First District in Tondo, covered by TCTs
70869, 105201, 105202, and 138273 of the Register of Deeds of Manila, which are to be sold and
distributed to qualified occupants pursuant to the Land Use DevelopIssue: Whether the legal
interest should be 6% or 12%

Held: The decision dated 18 September 1991 has long become final and executory. The
decision therein ordered the De la Ramas to pay Guerrero, among others, the legal interest of
the amount of P2,200,000.00 from 2 August 1989 until the deed of absolute sale is executed
in favor of Guerrero. Specifically, the court therein rationalized that (1) the legal rate of
interest for damages, and even for loans where interest was not stipulated, is 6% per annum
(Article 2209, Civil Code); that (2) the rate of 12% per annum was established by the
Monetary Board when, under the power vested in it by PD 116 to amend Act 2655 (more
commonly known as the Anti Usury Law), it amended Section 1 by increasing the rate of
legal interest for loans, renewals and forbearance thereof, as well as for judgments, from 6%
per annum to 12% per annum; and that
(3) inasmuch as the Monetary Board may not repeal or amend the Civil Code, in the face of
the apparent conflict between Article 2209 and Act 2655 as amended, the ruling of the
Monetary Board applies only to banks, financing companies, pawnshops and intermediaries
performing quasi-banking functions, all of which are under the control and supervision of
the Central Bank and of the Monetary Board. Thus, the court held therein that (1) the interest
rate on the P2,200,000.00 paid to the de la Ramas by Guerrero at the inception of the
transactions should be only 6% per annum from 2 August 1989, and as of 2 January 1994
this amounts to the sum of P583,000.00 and P11,000.00 every month thereafter until the
deed of absolute sale over the property subject matter of this case is executed; that (2) the
amounts payable by the de la Ramas to Guerrero therefore stands at a total of P1,383,000.00.
Offsetting this amount from the balance of P8,800,000.00, Guerrero must still pay to the de
la Ramas the sum of P7,417,000.00; and that (3) since Guerrero has already deposited with
the Clerk of Court of the court the sum of P5,808,100.00 as of 11 January 1994; he should
add to this the sum of Pl,608,900.00. The De la Ramas can no longer question a judgment
which has already become final and executory. Hence, they are already barred from
questioning it in a proceeding before the Supreme Court.
 ment Program of the City of Manila. One of the properties sought to be expropriated,
denominated as Lot 1-C, consists of 343.10 square meters, and was in the name of Feliza de
Guia. Lot 1-C was assigned to Edgardo De Guia, one of the heirs of Alberto De Guia, in turn
one of the heirs of Feliza de Guia. On 29 July 1994, the said property was transferred to Lee
Kuan Hui, in whose name TCT 217018 was issued. The property was subsequently sold on
24 January 1996 to Demetria De Guia to whom TCT 226048 was issued. On 26 September
1997, the City of Manila filed an amended complaint for expropriation (Civil Case
94-72282) with the Regional Trial Court, Branch 16, Manila, against the supposed owners
of the lots covered by TCTs 70869 (including Lot 1-C), 105201, 105202, and 138273, which
included herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida,
all surnamed Serrano. On 12 November 1997, the Serranos filed a consolidated answer,
praying the exemption of Lot 1-C from expropriation. Upon motion by the City, the trial
court issued an order, dated 9 October 1998, directing the City to deposit the amount of
P1,825,241.00 equivalent to the assessed value of the properties. After the City had made
the deposit, the trial court issued another order, dated 15 December 1998, directing the
issuance of a writ of possession in favor of the City. The Serranos filed a petition for
certiorari with the Court of Appeals. On 16 November 1999, the Court of Appeals rendered
a decision holding that although 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 RA 7279, the other modes of acquisition of lands enumerated in
§§59-10 of the law must first be tried by the city government before it can resort to
expropriation, and thus enjoined the City from expropriating Lot 1-C. In its resolution,
dated 23 February 2000, the Court of Appeals likewise

City of Manila, vs. Serrano [GR 142304, 20 June 2001]

Second Division, Mendoza (J): 4 concur

Facts: On 21 December 1993, the City Council of Manila enacted Ordinance 7833, authorizing the
expropriation of certain properties in Manila's First District in Tondo, covered by TCTs 70869,
105201, 105202, and 138273 of the Register of Deeds of Manila, which are to be sold and
distributed to qualified occupants pursuant to the Land Use DevelopIssue: Whether the legal
interest should be 6% or 12%

Held: The decision dated 18 September 1991 has long become final and executory. The decision
therein ordered the De la Ramas to pay Guerrero, among others, the legal interest of the amount of
P2,200,000.00 from 2 August 1989 until the deed of absolute sale is executed in favor of Guerrero.
Specifically, the court therein rationalized that (1) the legal rate of interest for damages, and even
for loans where interest was not stipulated, is 6% per annum (Article 2209, Civil Code); that (2) the
rate of 12% per annum was established by the Monetary Board when, under the power vested in it
by PD 116 to amend Act 2655 (more commonly known as the Anti Usury Law), it amended
Section 1 by increasing the rate of legal interest for loans, renewals and forbearance thereof, as
well as for judgments, from 6% per annum to 12% per annum; and that
(3) inasmuch as the Monetary Board may not repeal or amend the Civil Code, in the face of the
apparent conflict between Article 2209 and Act 2655 as amended, the ruling of the Monetary
Board applies only to banks, financing companies, pawnshops and intermediaries performing
quasi-banking functions, all of which are under the control and supervision of the Central Bank
and of the Monetary Board. Thus, the court held therein that (1) the interest rate on the
P2,200,000.00 paid to the de la Ramas by Guerrero at the inception of the transactions should be
only 6% per annum from 2 August 1989, and as of 2 January 1994 this amounts to the sum of
P583,000.00 and P11,000.00 every month thereafter until the deed of absolute sale over the
property subject matter of this case is executed; that (2) the amounts payable by the de la Ramas to
Guerrero therefore stands at a total of P1,383,000.00. Offsetting this amount from the balance of
P8,800,000.00, Guerrero must still pay to the de la Ramas the sum of P7,417,000.00; and that (3)
since Guerrero has already deposited with the Clerk of Court of the court the sum of P5,808,100.00
as of 11 January 1994; he should add to this the sum of Pl,608,900.00. The De la Ramas can no
longer question a judgment which has already become final and executory. Hence, they are already
barred from questioning it in a proceeding before the Supreme Court.

ment Program of the City of Manila. One of the properties sought to be expropriated, denominated
as Lot 1-C, consists of 343.10 square meters, and was in the name of Feliza de Guia. Lot 1-C was
assigned to Edgardo De Guia, one of the heirs of Alberto De Guia, in turn one of the heirs of Feliza
de Guia. On 29 July 1994, the said property was transferred to Lee Kuan Hui, in whose name TCT
217018 was issued. The property was subsequently sold on 24 January 1996 to Demetria De Guia
to whom TCT 226048 was issued. On 26 September 1997, the City of Manila filed an amended
complaint for expropriation (Civil Case 94-72282) with the Regional Trial Court, Branch 16,
Manila, against the supposed owners of the lots covered by TCTs 70869 (including Lot 1-C),
105201, 105202, and 138273, which included herein respondents Oscar, Felicitas, Jose, Benjamin,
Estelita, Leonora, Adelaida, all surnamed Serrano. On 12 November 1997, the Serranos filed a
consolidated answer, praying the exemption of Lot 1-C from expropriation. Upon motion by the
City, the trial court issued an order, dated 9 October 1998, directing the City to deposit the amount
of P1,825,241.00 equivalent to the assessed value of the properties. After the City had made the
deposit, the trial court issued another order, dated 15 December 1998, directing the issuance of a
writ of possession in favor of the City. The Serranos filed a petition for certiorari with the Court of
Appeals. On 16 November 1999, the Court of Appeals rendered a decision holding that although
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 RA 7279, the other modes of
acquisition of lands enumerated in §§59-10 of the law must first be tried by the city government
before it can resort to expropriation, and thus enjoined the City from expropriating Lot 1-C. In its
resolution, dated 23 February 2000, the Court of Appeals likewise denied two motions for
reconsideration filed by the City. The City filed a petition for review on certiorari before the
Supreme Court.

Issue: Whether it was premature to determine whether the requirements of RA 7279, §§9-10 have
been complied with.

Held: Rule 67, §2 provides that "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. If personal property is
involved, its value shall be provisionally ascertained and the amount to be deposited shall be fixed
by 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. Herein, these requirements were satisfied
and, therefore, it became the ministerial duty of the trial court to issue the writ of possession. The
distinction between the Filstream and the present case is that in the former, the judgment in that
case had already become final while herein, 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 RA 7279. Whether the City has complied with these
provisions requires the presentation of evidence, although in its amended complaint petitioner did
allege that it had complied with the requirements. The determination of this question must await
the hearing on the complaint for expropriation, particularly the hearing for the condemnation of the
properties sought to be expropriated. 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.

CAPITOL STEEL CORPORATION v. PHIVIDEC INDUSTRIAL AUTHORITY 510

SCRA 590 (2006)

Upon compliance with the requirements for a valid expropriation, it becomes the ministerial duty
of the trial court to issue a writ of possession. Capitol Steel Corporation (Capitol Steel) is a
domestic corporation which owns 65 parcels of land located at the province of Misamis Oriental.
Phividec Industrial Authority (PHIVIDEC) is a government owned and controlled corporation
which is vested the power of eminent domain for the purpose of acquiring rights of way or any
property for the establishment or expansion of the PHIVIDEC areas. PHIVIDEC filed an
expropriation case for the properties of Capitol Steel because it was identified as the most ideal site
for the project of PHIVIDEC. The trial court denied PHIVIDEC‘s issuance of a writ of possession,
noting that the amount deposited was seemingly inadequate and was simply out of PHIVIDEC‘s
interpretation of the prevailing zonal valuation and was not mutually agreed upon but it was finally
granted by the trial court. On appeal, the appellate court ruled in favor of PHIVIDEC, ordering the
RTC to issue a Writ of Possession. Hence, this present petition for review.

ISSUE:

Whether or not the appellate court erred in ordering the RTC to issue a writ of possession in favor
of PHIVIDEC

HELD:

Under R.A. 8974, the requirements for authorizing immediate entry in expropriation proceedings
involving real property are: (1) the filing of a complaint for expropriation sufficient in form and
substance; (2) due notice to the defendant; (3) payment of an amount equivalent to 100% of the
value of the property based on the current relevant zonal valuation of the BIR including payment of
the value of the improvements and/or structures if any, or if no such valuation is available and in
cases of utmost urgency, the payment of the proffered value of the property to be seized; and (4)
presentation to the court of a certificate of availability of funds from the proper officials. Upon
compliance with the requirements, a petitioner in an expropriation case, in this case PHIVIDEC, 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. No hearing is required and the court neither
exercises its discretion or judgment in determining the amount of the provisional value of the
properties to be expropriated as the legislature has fixed the amount under Section 4 of R.A. 8974.

To clarify, the payment of the provisional value as a prerequisite to the issuance of a writ of
possession differs from the payment of just compensation for the expropriated property. While the
provisional value is based on the current relevant zonal valuation, just compensation is based on
the prevailing fair market value of the property.

City of Baguio vs. National Waterworks and Sewerage Authority [GR L-12032, 31 August
1959]
En Banc, Bautista Angelo (J): 6 concur, 1 concurs in result

Facts: The City of Baguio filed on 25 April 1956, in the Court of First Instance of Baguio, a
complaint for declaratory relief against the National Waterworks and Sewerage Authority
(NAWASA), a public corporation created by Republic Act 1383, contending that said Act does not
include within its purview the Baguio Waterworks System; that assuming that it does, said Act is
unconstitutional because it has the effect of depriving the City of the ownership, control and
operation of said waterworks system without compensation and without due process of law, and
that it is oppressive, unreasonable and unjust to plaintiff and other cities, municipalities and
municipal districts similarly situated. On 22 May 1956, NAWASA filed a motion to dismiss. On
21 June 1956, the Court, acting on the motion to dismiss as well as on the answer and rejoinder
filed by both parties, denied the motion and ordered NAWASA to file its answer to the complaint.
On 6 July 1956, NAWASA filed its answer reiterating and amplifying the grounds already
advanced in its motion to dismiss. On 14 August 1956, the parties submitted a written stipulation
of facts and filed written memoranda. And after allowing the City to file a supplementary
complaint, the Court on 5 November 1956, rendered decision holding that the waterworks system
of the City of Baguio falls within the category of "private property," as contemplated by our
Constitution and may not be expropriated without just compensation. NAWASA filed a motion for
reconsideration, and upon its denial, it took the present appeal.

Issue: Whether the Baguio Waterworks partakes of the nature of public property or
private/patrimonial property of the City.

Held: The Baguio Waterworks System is not like any public road, park, street or other public
property held in trust by a municipal corporation for the benefit of the public but it is rather a
property owned by the City in its proprietary character. While the cases may differ as to the public
or private character of waterworks, the weight of authority as far as the legislature is concerned
classes them as private affairs. (sec. 239, Vol. I, Revised, McQuillin Municipal Corporations, p.
239; Shrik vs. City of Lancaster, 313 Pa. 158, 169 Atl. 557). And in this jurisdiction, this Court has
already expressed the view that a waterworks system is patrimonial property of the city that has
established it. (Mendoza vs. De Leon, 33 Phil. 509). And being owned by a municipal corporation
in a proprietary character, waterworks cannot be taken away without observing the safeguards set
by our Constitution for the protection of private property. The State may, in the interest of National
welfare, transfer to public ownership any private enterprise upon payment of just compensation. At
the same time, one has to bear in mind that no person can be deprived of his property except for
public use and upon payment of just compensation. Unless the City is given its due compensation,
the City cannot be deprived of its property even if NAWASA desires to take over its administration
in line with the spirit of the law (Republic Act 1383). The law, insofar as it expropriates the
waterworks in question without providing for an effective payment of just compensation, violates
our Constitution.

Province of Zamboanga del Norte v. City of Zamboanga [G.R. No. L-24440. March 28,
1968.]
En Banc, Bengzon (J): 8 concur, 1 on leave

Facts: Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the
provincial capital of the then Zamboanga Province. On 12 October 1936, Commonwealth Act
(CA) 39 was approved converting the Municipality of Zamboanga into Zamboanga City. Section
50 of the Act also provided that "buildings and properties which the province shall abandon upon
the transfer of the capital to another place will be acquired and paid for by the City of Zamboanga
at a price to be fixed by the Auditor General." The properties and buildings referred to consisted of
50 lots and some buildings constructed thereon, located in the City of Zamboanga and covered
individually by Torrens certificates of title in the name of Zamboanga Province. The lots are
utilized as the Capitol Site (1 lot), School site (3 lots), Hospital site (3 lots), Leprosarium (3 lots),
Curuan school (1 lot), Trade school (1 lot), Burleigh school (2 lots), burleigh (9 lots), high school
playground (2 lots), hydro-electric site (1 lot), san roque (?1 lot), and another 23 vacant lots. In
1945, the capital of Zamboanga Province was transferred to Dipolog and on 16 June 1948,
Republic Act (RA) 286 created the municipality of Molave and making it the capital of
Zamboanga Province. On 26 May 1949, the Appraisal Committee formed by the Auditor General,
pursuant to CA 39, fixed the value of the properties and buildings in question left by Zamboanga
Province in Zamboanga City at P1,294,244.00. However, on 14 July 1951, a Cabinet Resolution
was passed, conveying all the said 50 lots and buildings thereon to Zamboanga City for P1.00,
effective as of 1945, when the provincial capital of the Zamboanga Province was transferred to
Dipolog. On 6 June 1952, RA 711 was approved dividing the province of Zamboanga into
Zamboanga del Norte and Zamboanga del Sur. As to how the assets and obligations of the old
province were to be divided between the two new ones, Section 6 of the law provided that “upon
the approval of the Act, the funds, assets and other properties and the obligations of the province of
Zamboanga shall be divided equitably between the Province of Zamboanga del Norte and the
Province of Zamboanga del Sur by the President of the Philippines, upon the recommendation of
the Auditor General." On 11 January 1955, the Auditor General apportioned the assets and
obligations of the defunct Province of Zamboanga, apportioning 54.39% for Zamboanga del Norte
and 45.61% for Zamboanga del Sur. On 17 March 1959, the Executive Secretary, by order of the
President, issued a ruling holding that Zamboanga del Norte had a vested right as owner (should be
co-owner pro-indiviso) of the properties mentioned in Section 50 of CA 39, and is entitled to the
price thereof, payable by Zamboanga City. This effectively revoked the Cabinet Resolution of 14
July 1951. The Secretary of Finance then authorized the Commissioner of Internal Revenue to
deduct an amount equal to 25% of the regular internal revenue allotment for the City of
Zamboanga for the quarter ending 31 March 1960, then for the quarter ending 30 June 1960, and
again for the first quarter of the fiscal year 1960-1961. The deductions, all aggregating P57,373.46
was credited to the province of Zamboanga del Norte, in partial payment of the P704,220,05 due it.
However, on 17 June 1961, RA 3039 was approved amending Section 50 of CA 39 by providing
that "all buildings, properties and assets belonging to the former province of Zamboanga and
located within the City of Zamboanga are hereby transferred, free of charge, in favor of the said
City of Zamboanga." On 12 July 1961, the Secretary of Finance ordered the Commissioner of
Internal Revenue to stop from effecting further payments to Zamboanga del Norte and to return to
Zamboanga City the sum of P57,373.46 taken from it out of the internal revenue allotment of
Zamboanga del Norte. Zamboanga City admits that since the enactment of RA 3039, P43,030.11
of the P57,373.46 has already been returned to it. This constrained Zamboanga del Norte to file on
5 March 1962, a complaint entitled "Declaratory Relief with Preliminary Mandatory Injunction" in
the CFI Zamboanga del Norte against Zamboanga City, the Secretary of Finance and the
Commissioner of Internal Revenue. On 4 June 1962, the lower court ordered the issuance of
preliminary injunction as prayed for. After trial and on 12 August 1963, judgment was rendered
declaring RA 3039 unconstitutional as it deprives the province of its private properties, ordered the
city to pay the province the sum of P704,200.05 and in relation to this ordered the finance secretary
to direct the Commissioner of Internal revenue to deduct from its regular quarterly internal revenue
allotment equivalent to 25%, 25% from the regular quarterly internal revenue allotment for the
City and to remit the same to the province until the sum has been fully paid; ordered the province to
execute the corresponding public instrument deeding to the city the 50 parcels of land and the
improvements thereon under the certificates of title upon full payment; dismissed the counterclaim
of the city; and declared permanent the preliminary mandatory injunction issued on 8 June 1967.
The province filed a motion to reconsider praying that the City be ordered instead to pay the
P704,220.05 in lump sum with 6% interest per annum. Over the city’s opposition, the lower court
granted the province’s motion. Hence, the appeal to the Supreme Court.

Issue: Whether Zamboanga del Norte is entitled to its share of the value of the properties belonging
to the former Zamboanga province that were transferred to the City of Zamboanga.

Held: Article 423 of the Civil Code provides that “the property of provinces, cities and
municipalities, is divided into property for public use and patrimonial properly." Article 424 of the
same code provides that “property for public use, in the provinces, cities, and municipalities,
consists of the provincial roads, city streets, municipal streets, the squares, fountains, public
waters, promenades, and public works for public service paid for by said provinces, cities, or
municipalities. All other property possessed by any of them is patrimonial and shall be governed
by this Code, without prejudice to the provisions of special laws." Applying the norm in the Civil
Code, all the properties in question, except the two (2) lots used as High School playgrounds, could
be considered as patrimonial properties of the former Zamboanga province. Even the capitol site,
the hospital and leprosarium sites, and the school sites will be considered patrimonial for they are
not for public use inasmuch as they would not fall under the phrase "public works for public
service." Under the ejusdem generis rule, such public works must be for free and indiscriminate
use by anyone, just like the preceding enumerated properties in the first paragraph of Article 424.
The playgrounds, however, would fit into this category. The records do not disclose, however,
whether the buildings were constructed at the expense of the former Province of Zamboanga.
Considering however the fact that said buildings must have been erected even before 1936 when
CA 39 was enacted and the further fact that provinces then had no power to authorize construction
of buildings at their own expense, it can be assumed that said buildings were erected by the
National Government, using national funds. Hence, Congress could very well dispose of said
buildings in the same manner that it did with the lots in question. On the other hand, Republic Act
3039 cannot be applied to deprive Zamboanga del Norte of its share in the value of the rest of the
26 remaining lots which are patrimonial properties since they are not being utilized for distinctly
governmental purposes. The fact that these 26 lots are registered strengthens the proposition that
they are truly private in nature. Thus, Zamboanga del Norte is still entitled to collect from the City
of Zamboanga the former's 54.39% share in the 26 properties which are patrimonial in nature, said
share to be computed on the basis of the valuation of said 26 properties as contained in Resolution
7, dated 26 March 1949, of the Appraisal Committee formed by the Auditor General. The share,
however, cannot be paid in lump sum, except as to the P43,030.11 already returned to the City, as
the return of said amount to the city was without legal basis. RA 3039 took effect only on 17 June
1961 after a partial payment of P57,373.46 had already been made. Since the law did not provide
for retroactivity, it could not have validly affected a completed act. Hence, the amount of
P43,030.11 should be immediately returned by the City to the province. The remaining balance, if
any, in the amount of plaintiff's 54.39% share in the 26 lots should then be paid by the City in the
same manner originally adopted by the Secretary of Finance and the Commissioner of Internal
Revenue, and not in lump sum.