Case No.

54

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
HON. MAMINDIARA P. MANGOTARA, in his capacity as Presiding Judge of the
Regional Trial Court, Branch 1, Iligan City, Lanao del Norte, and MARIA
CRISTINA FERTILIZER CORPORATION, and the PHILIPPINE NATIONAL
BANK, Respondents,

G.R. No. 170375, July 7, 2010

TOPIC: Defendants in Expropriation Proceedings

Defendants in an expropriation case are not limited to the owners of the property to be
expropriated, and just compensation is not due to the property owner alone.

FACTS:

 The Complaint for Expropriation was originally filed by the Iron and Steel
Authority (ISA), now the NSC, against Maria Cristina Fertilizer Corporation
(MCFC), and the latter’s mortgagee, the Philippine National Bank (PNB).
 President Ferdinand E. Marcos issued Presidential Proclamation No.
2239, reserving in favor of ISA a parcel of land in Iligan City, of which MCFC
occupied certain portions of said land. When negotiations with MCFC failed, ISA
was compelled to file a Complaint for Expropriation.
 When the statutory existence of ISA expired during the pendency of the case, the
Supreme Court allowed the Republic to substitute ISA as plaintiff in the Civil Case
No. 106. The RTC-Branch 1 then ordered the substitution.
 The Republic then filed a Motion for Leave to File Supplemental Complaint and to
Admit the Attached Supplemental Complaint seeking to implead Teofilo Cacho
and Demetria Vidal and their respective successors-in-interest, LANDTRADE
and AZIMUTH, in the case, alleging that Lots 1 and 2 involved in the 1997 Cacho
case encroached and overlapped the parcel of land subject of Civil Case No. 106.
 The Motion was denied since the Republic did not file any motion for execution of
the judgment of this Court in the ISA case, and that the substitution of the
Republic for ISA was an honest mistake.
 MCFC then filed a Motion to Dismiss Civil Case No. 106 for: (1) failure of the
Republic to implead indispensable parties because MCFC insisted it was not the
owner of the parcels of land sought to be expropriated; and (2) forum shopping,
considering the institution by the Republic of an action for the reversion of the
same parcels subject of the instant case for expropriation.
 Judge Mangotara denied the Motion for Reconsideration for lack of merit and
granted the Motion to Dismiss Civil Case No. 106 filed by MCFC. Judge
Mangotara dismissed the case for question of ownership of the subject parcels of
land has long attained finality and is conclusive. Since MCFC, the only defendant
left in this case, is not a proper party defendant in this complaint for expropriation,
the present case should be dismissed.

ISSUE:
 Case No. 54

Whether Judge Mangotara gravely erred in ordering the dismissal of the expropriation
complaint on the ground that MCFC is not a proper party defendant.

RULING:

Yes, Judge Mangotara gravely erred in the dismissal of the case on the ground that MCFC is
not a proper party defendant.

Rule 67, Section 1 of the then Rules of Court provides that “The right of eminent
domain shall be exercised by the filing of a complaint which shall state with certainty
the right and purpose of condemnation, describe the real or personal property sought
to be condemned, and join as defendants all persons owning or claiming to own, or
occupying, any part thereof or interest therein, showing, so far as practicable, the
interest of each defendant separately. If the title to any property sought to be
condemned appears to be in the Republic of the Philippines, although occupied by
private individuals, or if the title is otherwise obscure or doubtful so that the plaintiff
cannot with accuracy or certainty specify who are the real owners, averment to that
effect may be made in the complaint. (Emphases supplied.)

The defendants in an expropriation case are not limited to the owners of the property
condemned. They include all other persons owning, occupying or claiming to own the
property. When [property] is taken by eminent domain, the owner x x x is not
necessarily the only person who is entitled to compensation. In the American
jurisdiction, the term ‘owner’ when employed in statutes relating to eminent domain to
designate the persons who are to be made parties to the proceeding, refer, as is the
rule in respect of those entitled to compensation, to all those who have lawful interest
in the property to be condemned, including a mortgagee, a lessee and a vendee in
possession under an executory contract. Every person having an estate or interest at
law or in equity in the land taken is entitled to share in the award. If a person claiming
an interest in the land sought to be condemned is not made a party, he is given the
right to intervene and lay claim to the compensation. (Emphasis supplied.)

Thus, being the occupant of the parcel of land sought to be expropriated, MCFC could
very well be named a defendant in Civil Case No. 106 and that the owner of the
property is not an indispensable party in the original Complaint for Expropriation.