SPECPRO – RULE 67
Barangay Masili to reach an agreement with herein petitioner on the
G.R. No. 146886             April 30, 2003
DEVORAH E. BARDILLON, petitioner,
vs.
BARANGAY MASILI OF CALAMBA, LAGUNA, respondent.
PANGANIBAN, J.:
An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls
within the jurisdiction of regional trial courts, regardless of the value of the
subject property.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court,
seeking to set aside the January 10, 2001 Decision and the February 5, 2001
Resolution of the Court of Appeals 2 (CA) in CA-GR SP No. 61088. The
dispositive part of the Decision reads:
"WHEREFORE, premises considered, the present [P]etition for [C]ertiorari is
hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of
merit."3
The assailed Resolution4 denied petitioner's Motion for Reconsideration.
The Facts
The factual antecedents are summarized by the CA as follows:
"At the root of this present [P]etition is the controversy surrounding the two
(2) [C]omplaints for eminent domain which were filed by herein respondent
for the purpose of expropriating a ONE HUNDRED FORTY FOUR (144)
square meter-parcel of land, otherwise known as Lot 4381-D situated in
Barangay Masili, Calamba, Laguna and owned by herein petitioner under
Transfer Certificate of Title No. 383605 of the Registry of Deeds of
Calamba, Laguna. Petitioner acquired from Makiling Consolidated Credit
Corporation the said lot pursuant to a Deed of Absolute Sale which was
executed by and between the former and the latter on October 7, 1996.
"The first [C]omplaint for eminent domain, docketed as Civil Case No. 3648
and entitled 'Brgy. Masili, Calamba, Laguna v. Emelita A. Reblara, Eugenia
Almazan & Devorah E. Bardillon,' was filed before the Municipal Trial Court
of Calamba, Laguna ('MTC') on February 23, 1998, following the failure of
purchase offer of TWO HUNDRED THOUSAND PESOS (P200,000.00).
The expropriation of Lot 4381-D was being pursued in view of providing
Barangay Masili a multi-purpose hall for the use and benefit of its
constituents.
"On March 5, 1999, the MTC issued an order dismissing Civil Case No.
3648 'for lack of interest' for failure of the [respondent] and its counsel to
appear at the pre-trial. The MTC, in its Order dated May 3, 1999, denied
[respondent's] [M]otion for [R]econsideration thereof.
"The second [C]omplaint for eminent domain, docketed as Civil Case No.
2845-99-C and entitled 'Brgy. Masili, Calamba, Laguna v. Devorah E.
Bardillon' was filed before Branch 37 of the Regional Trial Court of
Calamba, Laguna ('RTC') on October 18, 1999. This [C]omplaint also
sought the expropriation of the said Lot 4381-D for the erection of a multi-
purpose hall of Barangay Masili, but petitioner, by way of a Motion to
Dismiss, opposed this [C]omplaint by alleging in the main that it violated
Section 19(f) of Rule 16 in that [respondent's] cause of action is barred by
prior judgment, pursuant to the doctrine of res judicata.
"On January 21, 2000, [the] Judge issued an order denying petitioner's
Motion to Dismiss, holding that the MTC which ordered the dismissal of Civil
Case No. 3648 has no jurisdiction over the said expropriation proceeding.
"With the subsequent approval of Municipal Ordinance No. 2000-261 on
July 10, 2000, and the submission thereof in compliance with [the] Judge's
Order dated June 9, 2000 requiring herein respondent to produce the
authority for the expropriation through the Municipal Council of Calamba,
Laguna, the assailed Order dated August 4, 2000 was issued in favor of
Barangay Masili x x x and, on August 16, 2000, the corresponding order for
the issuance of the [W]rit of [P]ossession over Lot 4381-D."5
Ruling of the Court of Appeals
In dismissing the Petition, the CA held that the Regional Trial Court (RTC) of
Calamba, Laguna (Branch 37)6 did not commit grave abuse of discretion in
issuing the assailed Orders. It ruled that the second Complaint for eminent
domain (Civil Case No. 2845-99-C) was not barred by res judicata. The
reason is that the Municipal Trial Court (MTC), which dismissed the first
Complaint for eminent domain (Civil Case No. 3648), had no jurisdiction over
the action.
Hence, this Petition.7
 The Issues
In her Memorandum, petitioner raises the following issues for our
consideration:
"A. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion amounting to lack of jurisdiction when it denied and
dismissed petitioner's appeal;
"B. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion when it did not pass upon and consider the pending
Motion for Reconsideration which was not resolved by the Regional Trial
Court before issuing the questioned Orders of 4 and 16 August 2000;
"C. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in taking the total amount of the assessed value of the
land and building to confer jurisdiction to the court a quo;
"D. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in ignoring the fact that there is an existing multi-purpose
hall erected in the land owned by Eugenia Almazan which should be subject
of expropriation; and
"E. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in failing to consider the issue of forum shopping
committed by Respondent Masili."8
Simply put, the issues are as follows: (1) whether the MTC had jurisdiction
over the expropriation case; (2) whether the dismissal of that case before the
MTC constituted res judicata; (3) whether the CA erred when it ignored the
issue of entry upon the premises; and (4) whether respondent is guilty of
forum shopping.
The Court's Ruling
The Petition has no merit.
First Issue:
Jurisdiction Over Expropriation
Petitioner claims that, since the value of the land is only P11,448, the MTC
had jurisdiction over the case.9
On the other hand, the appellate court held that the assessed value of the
property was P28,960.10 Thus, the MTC did not have jurisdiction over the
expropriation proceedings, because the amount involved was beyond the
P20,000 jurisdictional amount cognizable by MTCs.
An expropriation suit does not involve the recovery of a sum of money.
Rather, it deals with the exercise by the government of its authority and right
to take property for public use.11 As such, it is incapable of pecuniary
estimation and should be filed with the regional trial courts. 12
This was explained by the Court in Barangay San Roque v. Heirs of Francisco
Pastor:13
"It should be stressed that the primary consideration in an expropriation suit
is whether the government or any of its instrumentalities has complied with
the requisites for the taking of private property. Hence, the courts determine
the authority of the government entity, the necessity of the expropriation,
and the observance of due process. In the main, the subject of an
expropriation suit is the 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. The said case was
decided during the effectivity of the Judiciary Act of 1948 which, like BP 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. 14
To reiterate, an expropriation suit is within the jurisdiction of the RTC
regardless of the value of the land, because the subject of the action is the
government's exercise of eminent domain — a matter that is incapable of
pecuniary estimation.
Second Issue:
Res Judicata
Petitioner claims that the MTC's dismissal of the first Complaint for eminent
domain was with prejudice, since there was no indication to the contrary in the
Order of dismissal. She contends that the filing of the second Complaint
before the RTC should therefore be dismissed on account of res judicata.
Res judicata literally means a matter adjudged, judicially acted upon or
decided, or settled by judgment. 15 It provides that a final judgment on the
merits rendered by a court of competent jurisdiction is conclusive as to the
rights of the parties and their privies; and constitutes an absolute bar to
subsequent actions involving the same claim, demand or cause of action. 16
The following are the requisites of res judicata: (1) the former judgment must
be final; (2) the court that rendered it had jurisdiction over the subject matter
and the parties; (3) it is a judgment on the merits; and (4) there is — between
the first and the second actions — an identity of parties, subject matter and
cause of action.17
Since the MTC had no jurisdiction over expropriation proceedings, the
doctrine of res judicata finds no application even if the Order of dismissal may
have been an adjudication on the merits.
Third Issue:
Legality of Entry Into Premises
The issue of the necessity of the expropriation is a matter properly addressed
to the RTC in the course of the expropriation proceedings. If petitioner objects
to the necessity of the takeover of her property, she should say so in her
Answer to the Complaint.21 The RTC has the power to inquire into the legality
of the exercise of the right of eminent domain and to determine whether there
is a genuine necessity for it.22
Fourth Issue:
Forum Shopping
Petitioner claims that respondent is guilty of forum shopping, because it
scouted for another forum after obtaining an unfavorable Decision from the
MTC.
The test for determining the presence of forum shopping is whether the
elements of litis pendentia are present in two or more pending cases, such
that a final judgment in one case will amount to res judicata in another.23
Be it noted that the earlier case lodged with the MTC had already been
dismissed when the Complaint was filed before the RTC. Even granting
arguendo that both cases were still pending, a final judgment in the MTC case
will not constitute res judicata in the RTC, since the former had no jurisdiction
over the expropriation case.

Petitioner argues that the CA erred when it ignored the RTC's Writ of WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED.
Possession over her property, issued despite the pending Motion for Costs against petitioner.
Reconsideration of the ruling dismissing the Complaint. We are not
persuaded. SO ORDERED.

The requirements for the issuance of a writ of possession in an expropriation

case are expressly and specifically governed by Section 2 of Rule 67 of the
1997 Rules of Civil Procedure.18 On the part of local government units,
expropriation is also governed by Section 19 of the Local Government Code. 19
Accordingly, in expropriation proceedings, the requisites for authorizing
immediate entry are as follows: (1) the filing of a complaint for expropriation
sufficient in form and substance; and (2) the deposit of the amount equivalent
to 15 percent of the fair market value of the property to be expropriated based
on its current tax declaration.20

In the instant case, the issuance of the Writ of Possession in favor of

respondent after it had filed the Complaint for expropriation and deposited the
amount required was proper, because it had complied with the foregoing
requisites.
SPECPRO – RULE 67
G.R. No. 147511            January 20, 2003
MARINA Z. REYES; ALFREDO A. FRANCISCO; ANGELITA Z. GARCIA;
ALFREDO Z. FRANCISCO, JR; ARMANDO Z. FRANCISCO; ALMA C.
FRANCISCO; EUGENIA Z. LUNA; CLARITA Z. ZABALLERO, LEONARDO
Z. ZABALLERO, JR, and TEODORO Z. ZABALLERO, in substitution of
LEONARDO M. ZABALLERO; AUGUSTO M. ZABALLERO; FRINE A.
ZABALLERO; ELENA FRONDA ZABALLERO; VICTOR GREGORIO F.
ZABALLERO; MARIA ELENA F. ZABALLERO; LOURDES ZABALLERO-
LAVA; SOCORRO EMILIA ZABALLERO-YAP; and TERESITA F.
ZABALLERO, petitioners,
vs.
NATIONAL HOUSING AUTHORITY, respondent.
PUNO, J.:
This is an appeal by certiorari from the decision of the Court of Appeals in CA-
GR CV No. 51641 dated September 29, 2000 1 affirming the judgment of the
Regional Trial Court of Quezon City, Branch 79 which dismissed the
complaint for forfeiture of rights filed by herein petitioners, as well as the
Resolution dated March 13, 2001 denying petitioners' motion for
reconsideration.
Records show that in 1977, respondent National Housing Authority (NHA)
filed separate complaints for the expropriation of sugarcane lands, particularly
Lot Nos. 6450, 6448-E, 6198-A and 6199 of the cadastral survey of
Dasmariñas, Cavite belonging to the petitioners, before the then Court of First
Instance of Cavite, and docketed as Civil Case Nos. T.G.-392, T.G.-396 and
T.G.-417. The stated public purpose of the expropriation was the expansion of
the Dasmariñas Resettlement Project to accommodate the squatters who
were relocated from the Metropolitan Manila area. The trial court rendered
judgment ordering the expropriation of these lots and the payment of just
compensation. This was affirmed by the Supreme Court in a decision
rendered on October 29, 1987 in the case of NHA vs. Zaballero 2 and which
became final on November 26, 1987.3
On February 24, 1989, the expropriation court (now Branch 18, Regional Trial
Court of Tagaytay City) issued an Order4 the dispositive portion of which
reads:
"WHEREFORE, and resolving thus, let an Alias Writ of Execution be
immediately issued and that:
(1) The Register of Deeds of the Province of Cavite is hereby ordered to
transfer, in the name of the plaintiff National Housing Authority, the
following:
(a) Transfer Certificate No. RT-638 containing an area of 79,167 square
meters situated in Barrio Bangkal, Dasmariñas, Cavite;
(b) Transfer Certificate of Title No. T-55702 containing an area of 20,872
square meters situated in Barrio Bangkal, Dasmariñas, Cavite;
(c) Transfer Certificate of Title No. RT-639 and RT-4641 covering Lot Nos.
6198-A and 6199 with an aggregate area of 159,985 square meters also
situated in Barrio Bangkal, Dasmariñas, Cavite.
(2) Plaintiff National Housing Authority is likewise hereby ordered, under
pain of contempt, to immediately pay the defendants, the amounts stated in
the Writ of Execution as the adjudicated compensation of their expropriated
properties, which process was received by it according to the records, on
September 26, 1988, segregating therefrom, and in separate check, the
lawyer's fees in favor of Atty. Bobby P. Yuseco, in the amount of
P322,123.05, as sustained by their contract as gleaned from the records,
with no other deduction, paying on its own (NHA) account, the necessary
legal expenses incident to the registration or issuance of new certificates of
title, pursuant to the provisions of the Property Registration Law (PD 1529);
(3) Defendants, however, are directed to pay the corresponding capital
gains tax on the subject properties, directing them additionally, to coordinate
with the plaintiff NHA in this regard, in order to facilitate the termination of
this case, put an end to this controversy and consign the same to its final
rest."
For the alleged failure of respondent NHA to comply with the above order,
petitioners filed on April 28, 1992 a complaint 5 for forfeiture of rights before the
Regional Trial Court of Quezon City, Branch 79, in Civil Case No. Q-92-
12093. They alleged that respondent NHA had not relocated squatters from
the Metropolitan Manila area on the expropriated lands in violation of the
stated public purpose for expropriation and had not paid the just
compensation fixed by the court. They prayed that respondent NHA be
enjoined from disposing and alienating the expropriated properties and that
judgment be rendered forfeiting all its rights and interests under the
expropriation judgment. In its Answer,6 respondent NHA averred that it had
already paid a substantial amount to herein petitioners and that the
expropriation judgment could not be executed in view of several issues raised
by respondent NHA before the expropriation court (now Branch 18, RTC,
Tagaytay City) concerning capital gains tax, registration fees and other
expenses for the transfer of title to respondent NHA, as well as the claims for
attorney's fees of Atty. Joaquin Yuseco, Jr., collaborating counsel for
petitioners.
Ocular inspections7 conducted by the trial court on the subject properties
show that:
"1. 80% of Lot No. 6198-A with an area of 120,146 square meters is already
occupied by relocatees whose houses are made of light materials with very
few houses partly made of hollow blocks. The relocatees were relocated
only on (sic) March of 1994;
2. Most of the area covered by Lot No. 2075 is almost occupied by houses
and structures, most of which are made of concrete materials. These
houses are not being occupied by squatters relocated to the said lot by the
defendant NHA;
3. Lot No. 6199 is also occupied by concrete houses and structures but
likewise there are no relocatees in said lot. A large area of the same is still
unoccupied."
On September 29, 1995, the trial court rendered judgment dismissing the
complaint. Finding that the failure of respondent NHA to pay just
compensation and of petitioners to pay capital gains tax are both unjustified
and unreasonable, the trial court held that: (1) respondent NHA is not deemed
to have abandoned the public purpose for which the subject properties were
expropriated because the relocation of squatters involves a long and tedious
process. It ruled that respondent NHA actually pursued the public purpose of
the expropriation when it entered into a contract with Arceo C. Cruz involving
the construction of low cost housing on the expropriated lots to be sold to
qualified low income beneficiaries; (2) there is no condition imposed in the
expropriation judgment that the subject properties shall revert back to its
original owners in case the purpose of expropriation is terminated or
abandoned; (3) the payment of just compensation is independent of the
obligation of herein petitioners to pay capital gains tax; and (4) in the payment
of just compensation, the basis should be the value at the time the property
was taken. On appeal, the Court of Appeals affirmed the decision of the trial
court.
Petitioners are now before us raising the following assignment of errors:
"1. The Honorable Court of Appeals had decided a question of substance
not in accord with justice and equity when it ruled that, as the judgment of
the expropriation court did not contain a condition that should the
expropriated property be not used for the intended purpose it would revert to
the condemnee, the action to declare the forfeiture of rights under the
expropriation judgment can not prosper;
2. The Honorable Court of Appeals decided a question of substance not in
accord with jurisprudence, justice and equity when it ruled that the non-
payment is not a ground for forfeiture;
3. The Honorable Court of Appeals erred in not declaring the judgment of
expropriation forfeited in light of the failure of respondent to use the
expropriated property for the intended purpose but for a totally different
purpose."
The petition is not impressed with merit.
Petitioners contend that respondent NHA violated the stated public purpose
for the expansion of the Dasmariñas Resettlement Project when it failed to
relocate the squatters from the Metro Manila area, as borne out by the ocular
inspection conducted by the trial court which showed that most of the
expropriated properties remain unoccupied. Petitioners likewise question the
public nature of the use by respondent NHA when it entered into a contract for
the construction of low cost housing units, which is allegedly different from the
stated public purpose in the expropriation proceedings. Hence, it is claimed
that respondent NHA has forfeited its rights and interests by virtue of the
expropriation judgment and the expropriated properties should now be
returned to herein petitioners. We are not persuaded.
The 1987 Constitution explicitly provides for the exercise of the power of
eminent domain over private properties upon payment of just compensation.
More specifically, section 9, Article III states that private property shall not be
taken for public use without just compensation. The constitutional restraints
are public use and just compensation.
Petitioners cannot insist on a restrictive view of the eminent domain provision
of the Constitution by contending that the contract for low cost housing is a
deviation from the stated public use. It is now settled doctrine that the concept
of public use is no longer 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 abandoned. The term "public use" has now been held to be
synonymous with "public interest," "public benefit," "public welfare," and
"public convenience."8 The rationale for this new approach is well explained in
the case of Heirs of Juancho Ardona, et al. vs. Reyes, et al.,9 to wit:
"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. We have 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.
x x x           x x x           x x x
The taking to be valid must be for public use. There was a time when it was
felt that a literal meaning should be attached to such a requirement.
Whatever project is undertaken must be for the public to enjoy, as in the
case of streets or parks. Otherwise, expropriation is not allowable. It is not
anymore. As long as the purpose of the taking is public, then the power of
eminent domain comes into play. As just noted, the constitution in at least
two cases, to remove any doubt, determines what is public use. One is the
expropriation of lands to be subdivided into small lots for resale at cost to
individuals. The other is in the transfer, through the exercise of this power,
of utilities and other private enterprise to the government. It is accurate to
state then that at present whatever may be beneficially employed for the
general welfare satisfies the requirement of public use." (emphasis
supplied)
The act of respondent NHA in entering into a contract with a real estate
developer for the construction of low cost housing on the expropriated lots to
be sold to qualified low income beneficiaries cannot be taken to mean as a
deviation from the stated public purpose of their taking. Jurisprudence has it
that the expropriation of private land for slum clearance and urban
development is for a public purpose even if the developed area is later sold to
private homeowners, commercials firms, entertainment and service
companies, and other private concerns.10
Moreover, the Constitution itself allows the State to undertake, for the
common good and in cooperation with the private sector, a continuing
program of urban land reform and housing which will make at affordable
cost decent housing and basic services to underprivileged and homeless
citizens in urban centers and resettlement areas.11 The expropriation of
private property for the purpose of socialized housing for the marginalized
sector is in furtherance of the social justice provision under Section 1, Article
XIII of the Constitution which provides that:
"SECTION 1. The Congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to human
dignity, reduce social, economic, and political inequalities, and remove
cultural inequities by equitably diffusing wealth and political power for the
common good.
To this end, the State shall require the acquisition, ownership, use and
disposition of property and its increments."
It follows that the low cost housing project of respondent NHA on the
expropriated lots is compliant with the "public use" requirement.
We likewise do not subscribe to petitioners' contention that the stated public
purpose was abandoned when respondent NHA failed to occupy the
expropriated lots by relocating squatters from the Metro Manila area. The
expropriation judgment declared that respondent NHA has a lawful right to
take petitioners properties "for the public use or purpose of expanding the
Dasmariñas Resettlement Project." The taking here is absolute, without any
condition, restriction or qualification. Contrary to petitioners' submission, the
ruling enunciated in the early case of Fery vs. Municipality of Cabanatuan,12 is
still good and sound doctrine, viz.:
"x x x If, for example, land is expropriated for a particular purpose, with the
condition that when that purpose is ended or abandoned the property shall
return to its former owner, then, of course, when the purpose is terminated
or abandoned the former owner reacquires the property so expropriated. x x
x If, upon the contrary, however, the decree of expropriation gives to the
entity a fee simple title, then, of course, the land becomes the absolute
property of the expropriator x x x.
When land has been acquired for public use in fee simple
unconditionally, either by the exercise of eminent domain or by
purchase, the former owner retains no rights in the land, and the
public use may be abandoned, or the land may be devoted to a
different use, without any impairment of the estate or title acquired, or
any reversion to the former owner."
Petitioners further aver that the continued failure of respondent NHA to pay
just compensation for a long period of time justifies the forfeiture of its rights
and interests over the expropriated lots. They demand the return of the
expropriated lots. Respondent NHA justifies the delay to pay just
compensation by reason of the failure of petitioners to pay the capital gains
tax and to surrender the owners' duplicate certificates of title.
In the recent case of Republic of the Philippines vs. Court of Appeals, et al.,13
the Court ruled that non-payment of just compensation does not entitle the
private landowners to recover possession of their expropriated lots. Thus:
"Thus, in Valdehueza vs. Republic where the private landowners had
remained unpaid ten years after the termination of the expropriation
proceedings, this Court ruled –
 'The points in dispute are whether such payment can still be made and, if
so, in what amount. Said lots have been the subject of expropriation
proceedings. By final and executory judgment in said proceedings, they
were condemned for public use, as part of an airport, and ordered sold to
the government. x x x. It follows that both by virtue of the judgment, long
final, in the expropriation suit, as well as the annotations upon their title
certificates, plaintiffs are not entitled to recover possession of their
expropriated lots – which are still devoted to the public use for which they
were expropriated – but only to demand the market value of the same.
Said relief may be granted under plaintiffs' prayer for such other remedies,
which may be deemed just and equitable under the premises.'
The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay
City where the recovery of possession of property taken for public use
prayed for by the unpaid landowner was denied even while no requisite
expropriation proceedings were first instituted. The landowner was merely
given the relief of recovering compensation for his property computed at its
market value at the time it was taken and appropriated by the State.
The judgment rendered by the Bulacan RTC in 1979 on the expropriation
proceedings provides not only for the payment of just compensation to
herein respondents but likewise adjudges the property condemned in
favor of petitioner over which parties, as well as their privies, are
bound. Petitioner has occupied, utilized and, for all intents and
purposes, exercised dominion over the property pursuant to the
judgment. The exercise of such rights vested to it as the condemnee
indeed has amounted to at least a partial compliance or satisfaction of
the 1979 judgment, thereby preempting any claim of bar by prescription on
grounds of non-execution. In arguing for the return of their property on
the basis of non-payment, respondents ignore the fact that the right of
the expropriating authority is far from that of an unpaid seller in
ordinary sales, to which the remedy of rescission might perhaps
apply. An in rem proceeding, condemnation acts upon the property.
After condemnation, the paramount title is in the public under a new and
independent title; thus, by giving notice to all claimants to a disputed title,
condemnation proceedings provide a judicial process for securing better title
against all the world than may be obtained by voluntary conveyance."
(emphasis supplied)
We, however, likewise find the refusal of respondent NHA to pay just
compensation, allegedly for failure of petitioners to pay capital gains tax and
surrender the owners' duplicate certificates of title, to be unfounded and
unjustified.
First, under the expropriation judgment the payment of just compensation is
not subject to any condition. Second, it is a recognized rule that although the
right to enter upon and appropriate the land to public use is completed prior to
payment, title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. In the case of
Association of Small Landowners in the Phils., Inc., et al. vs. Secretary of
Agrarian Reform,14 it was held that:
"Title to property which is the subject of condemnation proceedings does not
vest the condemnor until the judgment fixing just compensation is entered
and paid, but the condemnor's title relates back to the date on which the
petition under the Eminent Domain Act, or the commissioner's report under
the Local Improvement Act, is filed.
x x x Although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the
owner until payment is actually made.
In Kennedy v. Indianapolis, the US Supreme Court cited several cases
holding that title to property does not pass to the condemnor until just
compensation had actually been made. In fact, the decisions appear to be
uniformly to this effect. As early as 1838, in Rubottom v. McLure, it was held
that 'actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the State'
albeit 'not to the appropriation of it to public use.' In Rexford v. Knight, the
Court of Appeals of New York said that the construction upon the statutes
was that the fee did not vest in the State until the payment of the
compensation although the authority to enter upon and appropriate the land
was complete prior to the payment. Kennedy further said that 'both on
principle and authority the rule is x x x that the right to enter on and use
the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but that the
title does not pass from the owner without his consent, until just
compensation has been made to him.'"
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that no
piece of land can be finally and irrevocably taken from an unwilling owner
until compensation is paid. x x x." (emphasis supplied)
With respect to the amount of the just compensation still due and demandable 1. Ordering respondent National Housing Authority to pay petitioners the
from respondent NHA, the lower courts erred in not awarding interest amount of P1,218,574.35 with legal interest thereon at 12% per annum
computed from the time the property is actually taken to the time when computed from the taking of the expropriated properties in 1997 until the
compensation is actually paid or deposited in court. In Republic, et al. vs. amount due shall have been fully paid;
Court of Appeals, et al.,15 the Court imposed interest at 12% per annum in
order to help eliminate the issue of the constant fluctuation and inflation of the 2. Ordering petitioners to pay the capital gains tax; and
value of the currency over time, thus:
3. Ordering petitioners to surrender to respondent National Housing
"The constitutional limitation of 'just compensation' is considered to be the Authority the owners' duplicate certificates of title of the expropriated
sum equivalent to the market value of the property, broadly described to be properties upon full payment of just compensation.
the price fixed by the seller in open market in the usual and ordinary course
of legal action and competition or the fair value of the property as between SO ORDERED.
one who receives, and one who desires to sell, it being fixed at the time of
the actual taking by the government. Thus, if property is taken for public use
before compensation is deposited with the court having jurisdiction over the
case, the final compensation must include interests on its just value to be
computed from the time the property is taken to the time when
compensation is actually paid or deposited with the court. In fine, between
the taking of the property and the actual payment, legal interests accrue in
order to place the owner in a position as good as (but not better than) the
position he was in before the taking occurred.

x x x This allowance of interest on the amount found to be the value of the

property as of the time of the taking computed, being an effective
forbearance, at 12% per annum should help eliminate the issue of the
constant fluctuation and inflation of the value of the currency over time.
Article 1250 of the Civil Code, providing that, in case of extraordinary
inflation or deflation, the value of the currency at the time of the
establishment of the obligation shall be the basis for the payment when no
agreement to the contrary is stipulated, has strict application only to
contractual obligations. In other words, a contractual agreement is needed
for the effects of extraordinary inflation to be taken into account to alter the
value of the currency."

Records show that there is an outstanding balance of P1,218,574.35 that

ought to be paid to petitioners. 16 It is not disputed that respondent NHA took
actual possession of the expropriated properties in 1977. 17 Perforce, while
petitioners are not entitled to the return of the expropriated property, they are
entitled to be paid the balance of P1,218,574.35 with legal interest thereon at
12% per annum computed from the taking of the property in 1977 until the due
amount shall have been fully paid.

WHEREFORE, the appealed judgment is modified as follows:

SPECPRO – RULE 67
G.R. No. L-59791 February 13, 1992
MANILA ELECTRIC COMPANY, petitioner,
vs.
THE HONORABLE GREGORIO G. PINEDA, Presiding Judge, Court of
First Instance of Rizal, Branch XXI, Pasig, Metro Manila, TEOFILO
ARAYON, SR., GIL DE GUZMAN, LUCITO SANTIAGO and TERESA
BAUTISTA, respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari on pure question of law seeking the
nullification of the orders issued by the respondent Judge Gregorio G. Pineda,
in his capacity as the presiding Judge of the Court of First Instance (now
Regional Trial Court) of Rizal, Branch 21, Pasig, Metro Manila in Civil Case
No. 20269, entitled "Manila Electric Company v. Teofilo Arayon, et al." The
aforesaid orders are as follows: (1) the order dated December 4, 1981
granting the motion for payment of private respondents; (2) the order dated
December 21, 1981 granting the private respondents' omnibus motion; and (3)
the order dated February 9, 1982 adjudging in favor of private respondents
the fair market value of their property at forty pesos (P40.00) per square meter
for a total of P369,720.00 and denying the motions for contempt for being
moot and academic and the motion for reconsideration of the orders dated
December 4, 1981 and December 21, 1981 for lack of merit.
The antecedent facts giving rise to the controversy at bar are as follows:
Petitioner Manila Electric Company (MERALCO) is a domestic corporation
duly organized and existing under the laws of Philippines. Respondent
Honorable Judge Gregorio G. Pineda is impleaded in his official capacity as
the presiding judge of the Court of First Instance (now Regional Trial Court) of
Rizal, Branch XXI, Pasig, Metro Manila. While private respondents Teofilo
Arayon, Sr., Gil de Guzman, Lucito Santiago and Teresa Bautista are owners
in fee simple of the expropriated property situated at Malaya, Pililla, Rizal.
On October 29, 1974, a complaint for eminent domain was filed by petitioner
MERALCO against forty-two (42) defendants with the Court of First Instance
(now Regional Trial Court) of Rizal, Branch XXII, Pasig, Metro Manila.
The complaint alleges that for the purpose of constructing a 230 KV
Transmission line from Barrio Malaya to Tower No. 220 at Pililla, Rizal,
petitioner needs portions of the land of the private respondents consisting of
an aggregate area of 237,321 square meters. Despite petitioner's offers to pay
compensation and attempts to negotiate with the respondents', the parties
failed to reach an agreement.
Private respondents question in their motion to dismiss dated December 27,
1974 the petitioner's legal existence and the area sought to be expropriated
as too excessive.
On January 7, 1975, respondents Gil de Guzman and Teresa Bautista filed a
motion for contempt of court alleging, among other things that petitioner's
corporate existence had expired in 1969 and therefore it no longer exists
under Philippine Laws.
But despite the opposition of the private respondents, the court issued an
Order dated January 13, 1975 authorizing the petitioner to take or enter upon
the possession of the property sought to be expropriated.
On July 13, 1976, private respondents filed a motion for withdrawal of deposit
claiming that they are entitled to be paid at forty pesos (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 petitioner's deposit-account with the
Philippine National Bank, Pasig Branch. However, respondents motion was
denied in an order dated September 3, 1976.
In the intervening period, Branch XXII became vacant when the presiding
Judge Nelly Valdellon-Solis retired, so respondent Judge Pineda acted on the
motions filed with Branch XXII.
Pursuant to a government policy, the petitioners on October 30, 1979 sold to
the National Power Corporation (Napocor) the power plants and transmission
lines, including the transmission lines traversing private respondents' property.
On February 11, 1980, respondent court issued an Order appointing the
members of the Board of Commissioners to make an appraisal of the
properties.
On June 5, 1980, petitioner 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 June 9, 1981, private respondents filed another motion for payment. But
despite the opposition of the petitioner, the respondent court issued the first of
the questioned Orders dated December 4, 1981 granting the motion for
payment of private respondents, to wit:
As prayed for by defendants Teofilo Arayon, Lucito Santiago, Teresa
Bautista and Gil de Guzman, thru counsel Gil de Guzman, in their Motion for
Payment, for reasons therein stated, this Court hereby orders the plaintiff to
pay the movants the amount of P20,400.00 for the expropriated area of
6,800 square meters, at P3.00 per square meter without prejudice to the just
compensation that may be proved in the final adjudication of this case.
The aforesaid sum of P20,400.00 having been deposited by plaintiff in the
Philippine National Bank (Pasig Branch) under Savings Account No. 9204,
let the Deputy Sheriff of this Branch Mr. Sofronio Villarin withdraw said
amount in the names of Teofilo Arayon, Lucito Santiago, Teresa Bautista
and Gil de Guzman, the said amount to be delivered to the defendant's
counsel Atty. Gil de Guzman who shall sign for the receipt thereof.
SO ORDERED. (Rollo, p. 108)
On December 15, 1981, private respondents filed an Omnibus Motion praying
that they be allowed to withdraw an additional sum of P90,125.50 from
petitioner's deposit-account with the Philippine National Bank.
By order dated December 21, 1981, the respondent court granted the
Omnibus Motion hereunder quoted as follows:
Acting on the Omnibus Motion dated December 15, 1981 filed by Atty. Gil
de Guzman, counsel for Teofilo Arayon, Sr., Lucito Santiago, Teresita
Bautista and for himself, and it appearing that there is deposited in the bank
in trust for them the amount of P90,125.50 to guarantee just compensation
of P272,000.00, thereby leaving a balance of P161,475.00 still payable to
them, the same is hereby GRANTED.
Mr. Nazario Nuevo and Marianita Burog, respectively the Manager and
Cashier, Philippine National Bank, Pasig Branch, Pasig, Metro Manila are
hereby ordered to allow Sheriff Sofronio Villarin to withdraw and collect from
the bank the amount of P90,125.50 under Savings Account No. 9204 and to
deliver the same to Atty. Gil de Guzman upon proper receipt, pending final
determination of just compensation.
SO ORDERED. (Rollo, p. 120)
Private respondents filed another motion dated January 8, 1982 praying that
petitioner be ordered to pay the sum of P169, 200.00.
On January 12, 1982 petitioner filed a motion for reconsideration of the Orders
dated December 4, 1981 and December 21, 1981 and to declare private
respondents in contempt of court for forging or causing to be forged the
receiving stamp of petitioner's counsel and falsifying or causing to be falsified
the signature of its receiving clerk in their Omnibus Motion.
In response to private respondents' motion for payment dated January 8,
1982, petitioner filed an opposition alleging that private respondents are not
entitled to payment of just compensation at this stage of the proceeding
because there is still no appraisal and valuation of the property.
On February 9, 1982 the respondent court denied the petitioner's motion for
reconsideration and motion for contempt, the dispositive portion of which is
hereunder quoted as follows:
Viewed in the light of the foregoing, this Court hereby adjudges in favor of
defendants Teofilo Arayon, Sr., Lucito Santiago, Teresita Bautista and Atty.
Gil de Guzman the fair market value of their property taken by MERALCO at
P40.00 per square meter for a total of P369,720.00, this amount to bear
legal interest from February 24, 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 to said defendants with costs of suit, minus
the amount of P102,800.00 already withdrawn by defendants.
For being moot and academic, the motions for contempt are DENIED; for
lack of merit, the motion for reconsideration of the orders of December 4,
1981 and December 21, 1981 is also DENIED.
SO ORDERED. (Rollo, p. 211-212)
Furthermore, the respondent 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." (Rollo, p. 211)
Hence, this petition.
Subsequently, the respondent court issued an Order dated March 22, 1982
granting the private respondents' motion for execution pending appeal, thus
requiring petitioner to deposit P52,600.00 representing the consideration paid
by Napocor for the property it bought from petitioner which includes the
subject matter of this case, computed at P200.55 per square meter and to
render an accounting.
On March 26, 1982, petitioner filed a petition for preliminary injunction with
this Court seeking to enjoin respondent judge and all persons acting under
him from enforcing the Order dated March 22, 1982.
This Court issued a temporary restraining order addressed to respondent
judge. A motion to lift the restraining order was filed by the respondents.
Despite a series of oppositions and motions to lift the said order, this Court
reiterated its stand and noted that the restraining order is still effective.
The petitioner strongly maintains that the respondent court's act of
determining and ordering the payment of just compensation to private
respondents without formal presentation of evidence by the parties on the
reasonable value of the property constitutes a flagrant violation of petitioner's
constitutional right to due process. It stressed that respondent court ignored
the procedure laid down by the law in determining just compensation because
it formulated an opinion of its own as to the value of the land in question
without allowing the Board of Commissioners to hold hearings for the
reception of evidence.
On the other hand, private respondents controvert the position of the
petitioner and contend that the petitioner was not deprived of due process.
They agreed with respondent court's ruling dispensing the need for the
appointment of a Board of Commissioners to determine just compensation,
thus concluding that the respondent court did not err in determining just
compensation.
Furthermore, petitioner argues that the respondent judge gravely abused his
discretion in granting the motion for execution pending appeal and
consequently denying the petitioner's motion to dismiss. Respondent judge
should have ordered that Napocor be impleaded in substitution of petitioner or
could have at least impleaded both the Napocor and the petitioner as party
plaintiffs.
The controversy boils down to the main issue of whether or not the
respondent court can dispense with the assistance of a Board of
Commissioners in an expropriation proceeding and determine for itself the just
compensation.
The applicable laws in the case at bar are Sections 5 and 8 of Rule 67 of the
Revised Rules of Court. The said sections particularly deal with the
ascertainment of compensation and the court's action upon commissioners'
report, to wit:
Sec. 5. Upon the entry of the order of condemnation, the court shall appoint
not more than three (3) competent and disinterested persons as
commissioners to ascertain and report to the court the just compensation for
the property sought to be taken. The order of appointment shall designate
the time and place of the first session of the hearing to be held by the
commissioners and specify the time within which their report is to be filed
with the court.
x x x           x x x          x x x
Sec. 8. Upon the expiration of the period of ten (10) days referred to in the
preceding section, or even before the expiration of such period but after all
the interested parties have filed their objections to the report or their
statement of agreement therewith, the court may, after hearing, accept the
report and render judgment in accordance therewith; or, for cause shown, it
may recommit the same to the commissioners for further report of facts; or it
may set aside the report and appoint new commissioners, or it may accept
the report in part and reject it in part; and it may make such order or render
such judgment as shall secure to the plaintiff the property essential to the
exercise of his right of condemnation, and to the defendant just
compensation for the property so taken.
We already emphasized in the case of Municipality of Biñan v. Hon. Jose Mar
Garcia (G.R. No. 69260, December 22, 1989, 180 SCRA 576, 583-584) the
procedure for eminent domain, to wit:
There are two (2) stages in every action of expropriation. The 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 in the context
of the facts involved in the suit. It ends with an order, if not of dismissal of
the action, "of condemnation declaring that the plaintiff has a lawful right to
take the property sought to be condemned, for the public use or purpose
described in the complaint, upon the payment of just compensation to be
determined as of the date of the filing of the complaint". An order of
dismissal, if this be ordained, would be a final one, of course, since it finally
disposes of the action and leaves nothing more to be done by the Court on
the merits. So, too, would an order of condemnation be a final one, for
thereafter, as the Rules expressly state, in the proceedings before the Trial
Court, "no objection to the exercise of the right of condemnation (or the
propriety thereof) shall be filed or heard."
The second phase of the eminent domain action is concerned with the
determination by the Court of "the just compensation for the property sought
to be taken." This is done by the Court with the assistance of not more than
three (3) commissioners. The order fixing the just compensation on the
basis of the evidence before, and findings of, the commissioners would be
final, too. It would finally dispose of the second stage of the suit, and leave
 nothing more to be done by the Court regarding the issue. Obviously, one or
another of the parties may believe the order to be erroneous in its
appreciation of the evidence or findings of fact or otherwise. Obviously, too,
such a dissatisfied party may seek reversal of the order by taking an appeal
therefrom.
Respondent judge, in the case at bar, arrived at the valuation of P40.00 per
square meter on a property declared for real estate tax purposes at P2.50 per
hectare on the basis of a "Joint Venture Agreement on Subdivision and
Housing Projects" executed by A.B.A Homes and private respondents on
June 1, 1972. This agreement was merely attached to the motion to withdraw
from petitioner's deposit. Respondent judge arrived at the amount of just
compensation on its own, without the proper reception of evidence before the
Board of Commissioners. Private respondents as landowners have not proved
by competent evidence the value of their respective properties at a proper
hearing. Likewise, petitioner has not been given the opportunity to rebut any
evidence that would have been presented by private respondents. In an
expropriation case such as this one 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. Contrary to the submission of private respondents, the
appointment of at least three (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 aforesaid joint venture agreement relied upon by the
respondent judge, in the absence of any other proof of valuation of said
properties, is incompetent to determine just compensation.
Prior to the determination of just compensation, the property owners may
rightfully demand to withdraw from the deposit made by the condemnor in
eminent domain proceedings. Upon an award of a smaller amount by the
court, the property owners are subject to a judgment for the excess or upon
the award of a larger sum, they are entitled to a judgment for the amount
awarded by the court. Thus, when the respondent court granted in the Orders
dated December 4, 1981 and December 21, 1981 the motions of private
respondents for withdrawal of certain sums from the deposit of petitioner,
without prejudice to the just compensation that may be proved in the final
adjudication of the case, it committed no error.
Records, specifically Meralco's deed of sale dated October 30, 1979, in favor
of Napocor show that the latter agreed to purchase the parcels of land already
acquired by Meralco, the rights, interests and easements over those parcels
of land which are the subject of the expropriation proceedings under Civil
Case No. 20269, (Court of First Instance of Rizal, Branch XXII), as well as
those parcels of land occupied by Meralco by virtue of grant of easements of
right-of-way (see Rollo, pp. 341-342). Thus, Meralco had already ceded and in
fact lost all its rights and interests over the aforesaid parcels of land in favor of
Napocor. In addition, the same contract reveals that the Napocor was
previously advised and actually has knowledge of the pending litigation and
proceedings against Meralco (see Rollo, pp. 342-343). Hence, We find the
contention of the petitioner tenable. It is therefore proper for the lower court to
either implead the Napocor in substitution of the petitioner or at the very least
implead the former as party plaintiff.
All premises considered, this Court is convinced that the respondent 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 petitioner's
constitutional right to due process and is a gross violation of the mandated
rule established by the Revised Rules of Court.
ACCORDINGLY, the petition is GRANTED and the order dated February 9,
1982 issued by the respondent judge insofar as it finally determined the
amount of just compensation is nullified. This case is hereby ordered
remanded to the lower court for trial with the assistance of a Board of
Commissioners. Further, the National Power Corporation is impleaded as
party plaintiff therein.
SO ORDERED.
SPECPRO – RULE 67
G.R. No. L-59603               April 29, 1987
EXPORT PROCESSING ZONE AUTHORITY, petitioner,
vs.
HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge,
Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, and SAN
ANTONIO DEVELOPMENT CORPORATION, respondents.
Elena M. Cuevas for respondents.
GUTIERREZ, JR., J.:
The question raised in this petition is whether or not Presidential Decrees
Numbered 76, 464, 794 and 1533 have repealed and superseded Sections 5
to 8 of Rule 67 of the Revised Rules of Court, such that in determining the just
compensation of property in an expropriation case, the only basis should be
its market value as declared by the owner or as determined by the assessor,
whichever is lower.
On January 15, 1979, the President of the Philippines, issued Proclamation
No. 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, four (4) parcels of land with an aggregate area of
22,328 square meters owned and registered in the name of the private
respondent. The petitioner, therefore, offered to purchase the parcels of land
from the respondent in acccordance with the valuation set forth in Section 92,
Presidential Decree (P.D.) No. 464, as amended. The parties failed to reach
an agreement regarding the sale of the property.
The petitioner 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 private respondent, to expropriate the
aforesaid parcels of land pursuant to P.D. No. 66, as amended, which
empowers the petitioner to acquire by condemnation proceedings any
property for the establishment of export processing zones, in relation to
Proclamation No. 1811, for the purpose of establishing the Mactan Export
Processing Zone.
On October 21, 1980, the respondent judge issued a writ of possession
authorizing the petitioner to take immediate possession of the premises. On
December 23, 1980, the private respondent flied its answer.
At the pre-trial conference on February 13, 1981, the respondent 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 April 2, 1981.
On February 17, 1981, the respondent judge issued the order of
condemnation declaring the petitioner 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, subject of this petition, appointing certain persons as
commissioners to ascertain and report to the court the just compensation for
the properties sought to be expropriated.
On June 19, 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 July 29, 1981, the petitioner Med a Motion for Reconsideration of the order
of February 19, 1981 and Objection to Commissioner's Report on the grounds
that P.D. No. 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 P.D. No.
1533.
On November 14, 1981, the trial court denied the petitioner's motion for
reconsideration and gave the latter ten (10) days within which to file its
objection to the Commissioner's Report.
On February 9, 1982, the petitioner flied this present petition for certiorari and
mandamus with preliminary restraining order, enjoining the trial court from
enforcing the order dated February 17, 1981 and from further proceeding with
the hearing of the expropriation case.
The only issue raised in this petition is whether or not Sections 5 to 8, Rule 67
of the Revised Rules of Court had been repealed or deemed amended by
P.D. No. 1533 insofar as the appointment of commissioners to determine the
just compensation is concerned. Stated in another way, is the exclusive and
mandatory mode of determining just compensation in P.D. No. 1533 valid and
constitutional?
The petitioner maintains that the respondent judge acted in excess of his
jurisdiction and with grave abuse of discretion in denying the petitioner's
motion for reconsideration and in setting the commissioner's report for hearing
because under P.D. No. 1533, which is the applicable law herein, the basis of
just compensation shall be the fair and current market value declared by the
owner of the property sought to be expropriated or such market value as
determined by the assessor, whichever is lower. Therefore, there is no more
need to appoint commissioners as prescribed by Rule 67 of the Revised
Rules of Court and for said commissioners to consider other highly variable
factors in order to determine just compensation. The petitioner further
maintains that P.D. No. 1533 has vested on the assessors and the property
owners themselves the power or duty to fix the market value of the properties
and that said property owners are given the full opportunity to be heard before
the Local Board of Assessment Appeals and the Central Board of Assessment
Appeals. Thus, the vesting on the assessor or the property owner of the right
to determine the just compensation in expropriation proceedings, with
appropriate procedure for appeal to higher administrative boards, is valid and
constitutional.
Prior to the promulgation of P.D. Nos. 76, 464, 794 and 1533, this Court has
interpreted the eminent domain provisions of the Constitution and established
the meaning, under the fundametal law, of just compensation and who has the
power to determine it. Thus, in the following cases, wherein the filing of the
expropriation proceedings were all commenced prior to the promulgation of
the aforementioned decrees, we laid down the doctrine onjust compensation:
Municipality of Daet v. Court of Appeals (93 SCRA 503, 516),
x x x           x x x          x x x
"And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31
SCRA 413, the Court, speaking thru now Chief Justice Fernando, reiterated
the 'well-settled (rule) that just compensation means the equivalent for the
value of the property at the time of its taking. Anything beyond that is more
and anything short of that is less, than just compensation. It means a fair and
full equivalent for the loss sustained, which is the measure of the indemnity,
not whatever gain would accrue to the expropriating entity."
Garcia v. Court ofappeals (102 SCRA 597, 608),
x x x           x x x          x x x
"Hence, in estimating the market value, all the capabilities of the property
and all the uses to which it may be applied or for which it is adapted are to
be considered and not merely the condition it is in the time and the use to
which it is then applied by the owner. All the facts as to the condition of the
property and its surroundings, its improvements and capabilities may be
shown and considered in estimating its value."
Republic v. Santos (141 SCRA 30, 35-36),
"According to section 8 of Rule 67, 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 his right
of condemnation, and to the defendant just compensation for the property
expropriated. This Court may substitute its own estimate of the value as
gathered from the record (Manila Railroad Company v. Velasquez, 32 Phil.
286)."
However, the promulgation of the aforementioned decrees practically set
aside the above and many other precedents hammered out in the course of
evidence-laden, well argued, fully heard, studiously deliberated, and
judiciously considered court proceedings. The decrees categorically and
peremptorily limited the definition of just compensation thus:
P.D. No. 76:
x x x           x x x          x x x
"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."
P.D. No. 464:
"Section 92. Basis for payment of just compensation in expropriation
proceedings. — 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."
P.D. No. 794:
"Section 92. Basis for payment of just compensation in expropriation
proceedings. — 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."
P.D. No. 1533:
"Section 1. 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."
We are constrained to declare the provisions of the Decrees on just
compensation unconstitutional and void and accordingly dismiss the instant
petition for lack of merit.
The method of ascertaining just compensation under the aforecited decrees
constitutes impermissible encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter which under the Constitution is reserved to
it for final determination.
Thus, although in an expropriation proceeding the court technically would still
have the power to determine the just compensation for the property, following
the applicable decrees, its task would be relegated to simply stating the lower
value of the property as declared either by the owner or the assessor. As a
necessary consequence, it would be useless for the court to appoint
commissioners under Rule 67 of the Rules of Court. Moreover, the need to
satisfy the due process clause in the taking of private property is seemingly
fulfilled since it cannot be said that a judicial proceeding was not had before
the actual taking. However, the strict application of the decrees during the
proceedings would be nothing short of a mere formality or charade as the
court has only to choose between the valuation of the owner and that of the
assessor, and its choice is always limited to the lower of the two. The court
cannot exercise its discretion or independence in determining what is just or
fair. Even a grade school pupil could substitute for the judge insofar as the
determination of constitutional just compensation is concerned.
In the case of National Housing Authority v. Reyes (123 SCRA 245), this
Court upheld P.D. No. 464, as further amended by P.D. Nos. 794, 1224 and
1259. In this case, the petitioner National Housing Authority contended that
the owner's declaration at P1,400.00 which happened to be lower than the
assessor's assessment, is the just compensation for the respondent's property
under section 92 of P.D. No. 464. On the other hand, the private respondent
stressed that while there may be basis for the allegation that the respondent
judge did not follow the decree, the matter is still subject to his final
disposition, he having been vested with the original and competent authority
to exercise his judicial discretion in the light of the constitutional clauses on
due process and equal protection.
To these opposing arguments, this Court ruled ihat under the conceded facts,
there should be a recognition that the law as it stands must be applied; that
the decree having spoken so clearly and unequivocably calls for obedience;
and that on a matter where the applicable law speaks in no uncertain
language, the Court has no choice except to yield to its command. We further
stated that "the courts should recognize that the rule introduced by P.D. No.
76 and reiterated in subsequent decrees does not upset the established
concepts of justice or the constitutional provision on just compensation for,
precisely, the owner is allowed to make his own valuation of his property."
While the Court yielded to executive prerogative exercised in the form of
absolute law-making power, its members, nonetheless, remained
uncomfortable with the implications of the decision and the abuse and
unfairness which might follow in its wake. For one thing, the President himself
did not seem assured or confident with his own enactment. It was not enough
to lay down the law on determination of just compensation in P.D. 76. It had to
be repeated and reiterated in P.D. 464, P.D. 794, and P.D. 1533. The
provision is also found in P.D. 1224, P.D. 1259 and P.D. 1313. Inspite of its
effectivity as general law and the wide publicity given to it, the questioned
provision or an even stricter version had to be embodied in cases of specific
expropriations by decree as in P.D. 1669 expropriating the Tambunting Estate
and P.D. 1670 expropriating the Sunog Apog area in Tondo, Manila.
In the present petition, we are once again confronted with the same question
of whether the courts under P.D. 1533, which contains the same provision on
just compensation as its predecessor decrees, still have the power and
authority to determine just compensation, independent of what is stated by the
decree and to this effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
In overruling the petitioner's motion for reconsideration and objection to the
commissioner's report, the trial court said:
"Another consideration why the Court is empowered to appoint
commissioners to assess the just compensation of these properties under
eminent domain proceedings, is the well-entrenched ruling that 'the owner
of property expropriated is entitled to recover from expropriating authority
the fair and full value of the lot, as of the time when possession thereof was
actually taken by the province, plus consequential damages — including
 attorney's fees — from which the consequential benefits, if any should be
deducted, with interest at the legal rate, on the aggregate sum due to the
owner from and after the date of actual taking.' (Capitol Subdivision, Inc. v.
Province of Negros Occidental, 7 SCRA 60). In fine, the decree only
establishes a uniform basis for determining just compensation which the
Court may consider as one of the factors in arriving at 'just compensation,'
as envisage in the Constitution. In the words of Justice Barredo,
"Respondent court's invocation of General Order No. 3 of September 21,
1972 is nothing short of an unwarranted abdication of judicial authority,
which no judge duly imbued with the implications of the paramount principle
of independence of the judiciary should ever think of doing." (Lina v.
Purisima, 82 SCRA 344, 351; Cf. Prov. of Pangasinan v. CFI Judge of
Pangasinan, Br. VIII, 80 SCRA 117) Indeed, where this Court simply follows
PD 1533, thereby limiting the determination of just compensation on the
value declared by the owner or administrator or as determined by the
Assessor, whichever is lower, it may result in the deprivation of the
landowner's right of due process to enable it to prove its claim to just
compensation, as mandated by the Constitution. (Uy v. Genato, 57 SCRA
123). The tax declaration under the Real Property Tax Code is,
undoubtedly, for purposes of taxation."
We are convinced and so rule that the trial court correctly stated that 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. A return to the earlier well-established doctrine, to our mind, is
more in keeping with the principle that the judiciary should live up to its
mission "by vitalizing and not denigrating constitutional rights." (See Salonga
v. Cruz Paño, 134 SCRA 438, 462; citing Mercado v. Court of First Instance of
Rizal, 116 SCRA 93.) The doctrine we enunciated in National Housing
Authority v. Reyes, supra, therefore, must necessarily be abandoned if we are
to uphold this Court's role as the guardian of the fundamental rights
guaranteed by the due process and equal protection clauses and as the final
arbiter over transgressions committed against constitutional rights.
The basic unfairness of the decrees is readily apparent.
Just compensation means the value of the property at the time of the taking. It
means a fair and full equivalent for the loss sustained. All the facts as to the
condition of the property and its surroundings, its improvements and
capabilities, should be considered.
In this particular case, the tax declarations presented by the petitioner as
basis for just compensation were made by the Lapu-Lapu municipal, later city
assessor long before martial law, when land was not only much cheaper but
when assessed values of properties were stated in figures constituting only a
fraction of their true market value. The private respondent was not even the
owner of the properties at the time. It purchased the lots for development
purposes. To peg the value of the lots on the basis of documents which are
out of date and at prices below the acquisition cost of present owners would
be arbitrary and confiscatory.
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. Tax values can
serve as guides but cannot be absolute substitutes for just compensation.
To say that the owners are estopped to question the valuations made by
assessors since they had the opportunity to protest is illusory. The
overwhelming mass of land owners accept unquestioningly what is found in
the tax declarations prepared by local assessors or municipal clerks for them.
They do not even look at, much less analyze, the statements. The Idea of
expropriation simply never occurs until a demand is made or a case filed by
an agency authorized to do so.
It is violative of due process to deny to the owner the opportunity to prove that
the valuation in the tax documents is unfair or wrong. And it is repulsive to
basic concepts of justice and fairness to allow the haphazard work of a minor
bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the
property, after evidence and arguments pro and con have been presented,
and after all factors and considerations essential to a fair and just
determination have been judiciously evaluated.
As was held in the case of Gideon v. Wainwright (93 ALR 2d,733,742):
"In the light of these and many other prior decisions of this Court, it is not
surprising that the Betts Court, when faced with the contention that 'one
charged with crime, who is unable to obtain counsel must be furnished
counsel by the State,' conceded that '[E]xpressions in the opinions of this
court lend color to the argument. . .' 316 U.S., at 462, 463, 86 L ed. 1602, 62
S Ct. 1252. The fact is that in deciding as it did-that "appointment of counsel is
not a fundamental right, essential to a fair trial" — the Court in Betts v. Brady
made an ubrupt brake with its own well-considered precedents. In returning to
these old precedents, sounder we believe than the new, we but restore
constitutional principles established to achieve a fair system of justice. . ."

We return to older and more sound precedents. This Court has the duty to
formulate guiding and controlling constitutional principles, precepts, doctrines,
or rules. (See Salonga v. Cruz Pano, supra).

The determination of "just compensation" in eminent domain cases is a

judicial function. The executive department or the legislature may make the
initial determinations but when a party claims a violation of the guarantee in
the Bill of Rights that private property may not be taken for public use without
just compensation, no statute, decree, or executive order can mandate that its
own determination shall prevail over the court's findings. Much less can the
courts be precluded from looking into the "just-ness" of the decreed
compensation.

We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion
to appoint commissioners pursuant to Rule 67 of the Rules of Court, is
unconstitutional and void. To hold otherwise would be to undermine the very
purpose why this Court exists in the first place.

WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby

DISMISSED. The temporary restraining order issued on February 16, 1982 is
LIFTED and SET ASIDE.

SO ORDERED.
SPECPRO – RULE 67
G.R. No. 146587               July 2, 2002
REPUBLIC OF THE PHILIPPINES, represented by the General Manager
of the PHILIPPINE INFORMATION AGENCY (PIA), petitioner,
vs.
THE HONORABLE COURT OF APPEALS and the HEIRS OF LUIS
SANTOS as herein represented by DR. SABINO SANTOS and
PURIFICACION SANTOS IMPERIAL, respondents.
DECISION
VITUG, J.:
Petitioner instituted expropriation proceedings on 19 September 1969 before
the Regional Trial Court ("RTC") of Bulacan, docketed Civil Cases No. 3839-
M, No. 3840-M, No. 3841-M and No. 3842-M, covering a total of 544,980
square meters of contiguous land situated along MacArthur Highway, Malolos,
Bulacan, to be utilized for the continued broadcast operation and use of radio
transmitter facilities for the "Voice of the Philippines" project. Petitioner,
through the Philippine Information Agency ("PIA"), took over the premises
after the previous lessee, the "Voice of America," had ceased its operations
thereat. Petitioner made a deposit of P517,558.80, the sum provisionally fixed
as being the reasonable value of the property. On 26 February 1979, or more
than nine years after the institution of the expropriation proceedings, the trial
court issued this order -
"WHEREFORE, premises considered, judgment is hereby rendered:
"Condemning the properties of the defendants in Civil Cases Nos. 3839-M to
3842-M located at KM 43, MacArthur Highway, Malolos, Bulacan and covered
by several transfer certificates of title appearing in the Commissioners’
Appraisal Report consisting of the total area of 544,980 square meters, as
indicated in plan, Exhibit A, for plaintiff, also marked as Exhibit I for the
defendants, and as Appendix ‘A’ attached to the Commissioners’ Appraisal
Report, for the purpose stated by the plaintiff in its complaint;
"Ordering the plaintiff to pay the defendants the just compensation for said
property which is the fair market value of the land condemned, computed at
the rate of six pesos (P6.00) per square meter, with legal rate of interest from
September 19, 1969, until fully paid; and
"Ordering the plaintiff to pay the costs of suit, which includes the aforesaid
fees of commissioners, Atty. Victorino P. Evangelista and Mr. Pablo
Domingo."1
The bone of contention in the instant controversy is the 76,589-square meter
property previously owned by Luis Santos, predecessor-in-interest of herein
respondents, which forms part of the expropriated area.
It would appear that the national government failed to pay to herein
respondents the compensation pursuant to the foregoing decision, such that a
little over five years later, or on 09 May 1984, respondents filed a
manifestation with a motion seeking payment for the expropriated property.
On 07 June 1984, the Bulacan RTC, after ascertaining that the heirs remained
unpaid in the sum of P1,058,655.05, issued a writ of execution served on the
plaintiff, through the Office of the Solicitor General, for the implementation
thereof. When the order was not complied with, respondents again filed a
motion urging the trial court to direct the provincial treasurer of Bulacan to
release to them the amount of P72,683.55, a portion of the sum deposited by
petitioner at the inception of the expropriation proceedings in 1969,
corresponding to their share of the deposit. The trial court, in its order of 10
July 1984, granted the motion.
In the meantime, President Joseph Ejercito Estrada issued Proclamation No.
22,2 transferring 20 hectares of the expropriated property to the Bulacan State
University for the expansion of its facilities and another 5 hectares to be used
exclusively for the propagation of the Philippine carabao. The remaining
portion was retained by the PIA. This fact notwithstanding, and despite the
1984 court order, the Santos heirs remained unpaid, and no action was taken
on their case until 16 September 1999 when petitioner filed its manifestation
and motion to permit the deposit in court of the amount of P4,664,000.00 by
way of just compensation for the expropriated property of the late Luis Santos
subject to such final computation as might be approved by the court. This
time, the Santos heirs, opposing the manifestation and motion, submitted a
counter-motion to adjust the compensation from P6.00 per square meter
previously fixed in the 1979 decision to its current zonal valuation pegged at
P5,000.00 per square meter or, in the alternative, to cause the return to them
of the expropriated property. On 01 March 2000, the Bulacan RTC ruled in
favor of respondents and issued the assailed order, vacating its decision of 26
February 1979 and declaring it to be unenforceable on the ground of
prescription -
"WHEREFORE, premises considered, the court hereby:
 "1) declares the decision rendered by this Court on February 26, 1979 no
longer enforceable, execution of the same by either a motion or an
independent action having already prescribed in accordance with Section 6,
Rule 39 of both the 1964 Revised Rules of Court and the 1997 Rules of Civil
Procedure;
"2) denies the plaintiff’s Manifestation and Motion to Permit Plaintiff to
Deposit in Court Payment for Expropriated Properties dated September 16,
1999 for the reason stated in the next preceding paragraph hereof; and
"3) orders the return of the expropriated property of the late defendant Luis
Santos to his heirs conformably with the ruling of the Supreme Court in
Government of Sorsogon vs. Vda. De Villaroya, 153 SCRA 291, without
prejudice to any case which the parties may deem appropriate to institute in
relation with the amount already paid to herein oppositors and the purported
transfer of a portion of the said realty to the Bulacan State University
pursuant to Proclamation No. 22 issued by President Joseph Ejercito." 3
Petitioner brought the matter up to the Court of Appeals but the petition was
outrightly denied. It would appear that the denial was based on Section 4,
Rule 65, of the 1997 Rules of Civil Procedure which provided that the filing of
a motion for reconsideration in due time after filing of the judgment, order or
resolution interrupted the running of the sixty-day period within which to file a
petition for certiorari; and that if a motion for reconsideration was denied, the
aggrieved party could file the petition only within the remaining period, but
which should not be less than five days in any event, reckoned from the notice
of such denial. The reglementary period, however, was later modified by A.M.
No. 00-2-03 S.C., now reading thusly:
"Sec. 4. When and where petition filed. --- The petition shall be filed not later
than sixty (60) days from notice of the judgment, order or resolution. In case a
motion for reconsideration or new trial is timely filed, whether such motion is
required or not, the sixty (60) day period shall be counted from notice of the
denial of said motion."
The amendatory provision, being curative in nature, should be made
applicable to all cases still pending with the courts at the time of its effectivity.
In Narzoles vs. NLRC,4 the Court has said:
"The Court has observed that Circular No. 39-98 has generated tremendous
confusion resulting in the dismissal of numerous cases for late filing. This may
have been because, historically, i.e., even before the 1997 revision to the
Rules of Civil Procedure, a party had a fresh period from receipt of the order
denying the motion for reconsideration to file a petition for certiorari. Were it
not for the amendments brought about by Circular No. 39-98, the cases so
dismissed would have been resolved on the merits. Hence, the Court deemed
it wise to revert to the old rule allowing a party a fresh 60-day period from
notice of the denial of the motion for reconsideration to file a petition for
certiorari. x x x
"The latest amendments took effect on September 1, 2000, following its
publication in the Manila Bulletin on August 4, 2000 and in the Philippine Daily
Inquirer on August 7, 2000, two newspapers of general circulation.
"In view of its purpose, the Resolution further amending Section 4, Rule 65,
can only be described as curative in nature, and the principles governing
curative statutes are applicable.
"Curative statutes are enacted to cure defects in a prior law or to validate legal
proceedings which would otherwise be void for want of conformity with certain
legal requirements. (Erectors, Inc. vs. National Labor Relations Commission,
256 SCRA 629 [1996].) They are intended to supply defects, abridge
superfluities and curb certain evils. They are intended to enable persons to
carry into effect that which they have designed or intended, but has failed of
expected legal consequence by reason of some statutory disability or
irregularity in their own action. They make valid that which, before the
enactment of the statute was invalid. Their purpose is to give validity to acts
done that would have been invalid under existing laws, as if existing laws
have been complied with. (Batong Buhay Gold Mines, Inc. vs. Dela Serna,
312 SCRA 22 [1999].) Curative statutes, therefore, by their very essence, are
retroactive. (Municipality of San Narciso, Quezon vs. Mendez, Sr., 239 SCRA
11 [1994].)"5
At all events, petitioner has a valid point in emphasizing the "public nature" of
the expropriated property. The petition being imbued with public interest, the
Court has resolved to give it due course and to decide the case on its merits.
Assailing the finding of prescription by the trial court, petitioner here posited
that a motion which respondents had filed on 17 February 1984, followed up
by other motions subsequent thereto, was made within the reglementary
period that thereby interrupted the 5-year prescriptive period within which to
enforce the 1979 judgment. Furthermore, petitioner claimed, the receipt by
respondents of partial compensation in the sum of P72,683.55 on 23 July
1984 constituted partial compliance on the part of petitioners and effectively
estopped respondents from invoking prescription expressed in Section 6, Rule
39, of the Rules of Court.6
In opposing the petition, respondents advanced the view that pursuant to
Section 6, Rule 39, of the Rules of Court, the failure of petitioner to execute
the judgment, dated 26 February 1979, within five years after it had become
final and executory, rendered it unenforceable by mere motion. The motion for
payment, dated 09 May 1984, as well as the subsequent disbursement to
them of the sum of P72,683.55 by the provincial treasurer of Bulacan, could
not be considered as having interrupted the five-year period, since a motion,
to be considered otherwise, should instead be made by the prevailing party, in
this case by petitioner. Respondents maintained that the P72,683.55 paid to
them by the provincial treasurer of Bulacan pursuant to the 1984 order of the
trial court was part of the initial deposit made by petitioner when it first entered
possession of the property in 1969 and should not be so regarded as a partial
payment. Respondents further questioned the right of PIA to transfer
ownership of a portion of the property to the Bulacan State University even
while the just compensation due the heirs had yet to be finally settled.
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. 7 Fundamental to the independent existence
of a State, it requires no recognition by the Constitution, whose provisions are
taken as being merely confirmatory of its presence and as being regulatory, at
most, in the due exercise of the power. In the hands of the legislature, the
power is inherent, its scope matching that of taxation, even that of police
power itself, in many respects. It reaches to every form of property the State
needs for public use and, as an old case so puts it, all separate interests of
individuals in property are held under a tacit agreement or implied reservation
vesting upon the sovereign the right to resume the possession of the property
whenever the public interest so requires it.8
The ubiquitous character of eminent domain is manifest in the nature of the
expropriation proceedings. Expropriation proceedings are not adversarial in
the conventional sense, for the condemning authority is not required to assert
any conflicting interest in the property. Thus, by filing the action, the
condemnor in effect merely serves notice that it is taking title and possession
of the property, and the defendant asserts title or interest in the property, not
to prove a right to possession, but to prove a right to compensation for the
taking.9
Obviously, however, the power is not without its limits: first, the taking must be
for public use, and second, that just compensation must be given to the
private owner of the property. 10 These twin proscriptions have their origin in
the recognition of the necessity for achieving balance between the State
interests, on the one hand, and private rights, upon the other hand, by
effectively restraining the former and affording protection to the latter. 11 In
determining "public use," two approaches are utilized - the first is public
employment or the actual use by the public, and the second is public
advantage or benefit.12 It is also useful to view the matter as being subject to
constant growth, which is to say that as society advances, its demands upon
the individual so increases, and each demand is a new use to which the
resources of the individual may be devoted.13
The expropriated property has been shown to be for the continued utilization
by the PIA, a significant portion thereof being ceded for the expansion of the
facilities of the Bulacan State University and for the propagation of the
Philippine carabao, themselves in line with the requirements of public
purpose. Respondents question the public nature of the utilization by
petitioner of the condemned property, pointing out that its present use differs
from the purpose originally contemplated in the 1969 expropriation
proceedings. The argument is of no moment. The property has assumed a
public character upon its expropriation. Surely, petitioner, as the condemnor
and as the owner of the property, is well within its rights to alter and decide
the use of that property, the only limitation being that it be for public use,
which, decidedly, it is.
In insisting on the return of the expropriated property, respondents would
exhort on the pronouncement in Provincial Government of Sorsogon vs. Vda.
de Villaroya14 where the unpaid landowners were allowed the alternative
remedy of recovery of the property there in question. It might be borne in mind
that the case involved the municipal government of Sorsogon, to which the
power of eminent domain is not inherent, but merely delegated and of limited
application. The grant of the power of eminent domain to local governments
under Republic Act No. 716015 cannot be understood as being the pervasive
and all-encompassing power vested in the legislative branch of government.
For local governments to be able to wield the power, it must, by enabling law,
be delegated to it by the national legislature, but even then, this delegated
power of eminent domain is not, strictly speaking, a power of eminent, but
only of inferior, domain or only as broad or confined as the real authority
would want it to be.16
Thus, in Valdehueza vs. Republic17 where the private landowners had
remained unpaid ten years after the termination of the expropriation
proceedings, this Court ruled -
"The points in dispute are whether such payment can still be made and, if so,
in what amount. Said lots have been the subject of expropriation proceedings.
By final and executory judgment in said proceedings, they were condemned
for public use, as part of an airport, and ordered sold to the government. x x x
It follows that both by virtue of the judgment, long final, in the expropriation
suit, as well as the annotations upon their title certificates, plaintiffs are not
entitled to recover possession of their expropriated lots - which are still
devoted to the public use for which they were expropriated - but only to
demand the fair market value of the same.
"Said relief may be granted under plaintiffs' prayer for: `such other remedies,
which may be deemed just and equitable under the premises'." 18
The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay
City19 where the recovery of possession of property taken for public use
prayed for by the unpaid landowner was denied even while no requisite
expropriation proceedings were first instituted. The landowner was merely
given the relief of recovering compensation for his property computed at its
market value at the time it was taken and appropriated by the State.
The judgment rendered by the Bulacan RTC in 1979 on the expropriation
proceedings provides not only for the payment of just compensation to herein
respondents but likewise adjudges the property condemned in favor of
petitioner over which parties, as well as their privies, are bound. 20 Petitioner
has occupied, utilized and, for all intents and purposes, exercised dominion
over the property pursuant to the judgment. The exercise of such rights vested
to it as the condemnee indeed has amounted to at least a partial compliance
or satisfaction of the 1979 judgment, thereby preempting any claim of bar by
prescription on grounds of non-execution. In arguing for the return of their
property on the basis of non-payment, respondents ignore the fact that the
right of the expropriatory authority is far from that of an unpaid seller in
ordinary sales, to which the remedy of rescission might perhaps apply. An in
rem proceeding, condemnation acts upon the property. 21 After condemnation,
the paramount title is in the public under a new and independent title; 22 thus,
by giving notice to all claimants to a disputed title, condemnation proceedings
provide a judicial process for securing better title against all the world than
may be obtained by voluntary conveyance.23
Respondents, in arguing laches against petitioner did not take into account
that the same argument could likewise apply against them. Respondents first
instituted proceedings for payment against petitioner on 09 May 1984, or five
years after the 1979 judgment had become final. The unusually long delay in
bringing the action to compel payment against herein petitioner would militate
against them. Consistently with the rule that one should take good care of his
own concern, respondents should have commenced the proper action upon
the finality of the judgment which, indeed, resulted in a permanent deprivation
of their ownership and possession of the property.24
The constitutional limitation of "just compensation" is considered to be the
sum equivalent to the market value of the property, broadly described to be
the price fixed by the seller in open market in the usual and ordinary course of
legal action and competition or the fair value of the property as between one
who receives, and one who desires to sell, it fixed at the time of the actual
taking by the government.25 Thus, if property is taken for public use before
compensation is deposited with the court having jurisdiction over the case, the
final compensation must include interests on its just value to be computed
from the time the property is taken to the time when compensation is actually
paid or deposited with the court. 26 In fine, between the taking of the property
and the actual payment, legal interests accrue in order to place the owner in a
position as good as (but not better than) the position he was in before the
taking occurred.27
The Bulacan trial court, in its 1979 decision, was correct in imposing interests
on the zonal value of the property to be computed from the time petitioner
instituted condemnation proceedings and "took" the property in September
1969. This allowance of interest on the amount found to be the value of the
property as of the time of the taking computed, being an effective forbearance,
at 12% per annum28 should help eliminate the issue of the constant fluctuation
and inflation of the value of the currency over time. 29 Article 1250 of the Civil
Code, providing that, in case of extraordinary inflation or deflation, the value of
the currency at the time of the establishment of the obligation shall be the
basis for the payment when no agreement to the contrary is stipulated, has
strict application only to contractual obligations. 30 In other words, a contractual
agreement is needed for the effects of extraordinary inflation to be taken into
account to alter the value of the currency.31
All given, the trial court of Bulacan in issuing its order, dated 01 March 2000,
vacating its decision of 26 February 1979 has acted beyond its lawful
cognizance, the only authority left to it being to order its execution. Verily,
private respondents, although not entitled to the return of the expropriated
property, deserve to be paid promptly on the yet unpaid award of just
compensation already fixed by final judgment of the Bulacan RTC on 26
February 1979 at P6.00 per square meter, with legal interest thereon at 12%
per annum computed from the date of "taking" of the property, i.e., 19
September 1969, until the due amount shall have been fully paid.
WHEREFORE, the petition is GRANTED. The resolution, dated 31 July 2000,
of the Court of Appeals dismissing the petition for certiorari, as well as its
resolution of 04 January 2001 denying the motion for reconsideration, and the
decision of the Regional Trial Court of Bulacan, dated 01 March 2000, are
SET ASIDE. Let the case be forthwith remanded to the Regional Trial Court of
Bulacan for the proper execution of its decision promulgated on 26 February
1979 which is hereby REINSTATED. No costs.
SO ORDERED.
SPECPRO – RULE 67
G.R. No. L-2929             February 28, 1950
THE CITY OF MANILA, plaintiff-appellant,
vs.
THE ARRELANO LAW COLLEGES, INC., defendant-appellee.
TUASON, J.:
Section 1 of Republic Act No. 267 provides:
Cities and municipalities are authorized to contract loans from the
Reconstruction Finance Corporation, the Philippine National Bank, and/or
other entity or person at the rate of interest not exceeding eight per cent
annum for the purpose of purchasing or expropriating homesites within their
respective territorial jurisdiction and reselling them at cost to residents of the
said cities and municipalities.
The court below ruled that this provision empowers cities to purchase but not
to expropriate lands for the purpose of subdivision and resale, and so
dismissed the present action, which seeks to condemn, for the purpose just
stated, several parcels of land having a combined area of 7,270 square
meters and situated on Legarda Street, City of Manila.
In the cases of Guido vs. Rural Progress Administration (G. R. No. L-2089)
and Commonwealth of the Philippines vs. De Borja (G. R. No. L-1496),2 we
discussed at great length the extent of the Philippine Government's power to
condemn private property for resale. Among other things, we said:
It has been truly said that the assertion of the right on the part of the
legislature to take the property of one citizen and transfer it to another, even
for a full compensation, when the public interest is not promoted thereby, is
claiming a despotic power, and one inconsistent with every just principle
and fundamental maxim of a free government. (29 C. J. S., 820.)
In a broad sense, expropriation of large estates, trusts in perpetuity, and
land that embraces a whole town, or large section of a town or city, bears
direct relation to the public welfare. The size of the land expropriated, the
large number of people benefited, and the extent of social and economic
reform secured by the condemnation, clothes the expropriation with public
interest and public use. The expropriation in such cases tends to abolish
economic slavery, feudalistic practices, endless conflicts between landlords
and tenants, and other evils inimical to community prosperity and
contentment and public peace and order. Although courts are not in
agreement as to the tests to applied in determining whether the use is public
or not, some go so far in the direction of a liberal construction as to hold that
public use is synonymous with public benefit, public utility, or public
advantage, and to authorize the exercise of the power of eminent domain to
promote such public benefit, etc., especially where the interest involved are
of considerable magnitude. (29 C. J. S.; 823, 824; see also People of Puerto
Rico vs. Eastern Sugar Associate et al., 156 Fed. [2d], 316.) In some
instances, slumsites have been acquired by condemnation. The highest
court of New York State has ruled that slum clearance and erection of
houses for low-income families were public purpose for which New York
City Housing authorities could exercise the power of condemnation. and this
decision was followed by similar ones in other states. The underlying
reasons for these decisions are that the destruction of congested areas and
unsanitary dwellings diminished the potentialities of epidemics, crime and
waste, prevents the spread of crime and diseases to unaffected areas,
enhances the physical and moral value of the surrounding communities, and
promote the safety and welfare of the public in general. (Murray et al. vs. La
Guardia, 52 N. e. [2d], 884; General Development Coop. vs. City of Detroit,
33 N. W. [2d], 919; Weizner vs. Stichman, 64 N. Y. S. [2d], 50.) But it will be
noted that in all these cases and of similar nature extensive areas were
involved and numerous people and the general public benefited by the
action taken.
The condemnation of a small property in behalf of 10, 20 or 50 persons and
1 their families does not insure to the benefit of the public to a degree
sufficient to give the use public character. The expropriation proceedings at
bar have been instituted for the economic relief of a few families devoid of
any consideration of public peace and order, or other public advantage.
What is proposed to be done is to take plaintiff's property, which for all we
know she acquired by sweat and sacrifices for her and her family's security,
and sell it at cost to a few lessees who refuse to pay the stipulated rent or
leave the premises.
No fixed line of demarcation between what taking is for public use and what
is not can made; each case has to be judged according to its peculiar
circumstances. It suffices to say for the purpose of this decision that the
case under consideration is far wanting in those elements which make for
public convenience or public use. It is patterned upon an ideology far
removed from the majority of the citizens of this country. If upheld, this case
would open the gates to more oppressive expropriations. If this
expropriation be constitutional, we see no reason why a 10-, 15-, or 25-
hectare farm land might not be expropriated and subdivided, and sold to
those who want to own a portion of it. to make the analogy closer, we find
 no reason why the Rural Progress Administration could not take by
condemnation an urban lot containing and area of 1,000 or 2,000 square
meters for subdivision into tiny lots for resale to its occupations or those who
want to build thereon.
We are inclined to believe that Act No. 267 empowers cities to expropriate as
well as to purchase lands for homesites. The word "expropriating," taken
singly or with the text, is susceptible of only meaning. But this power to
expropriate is necessarily subject to the limitations and conditions noted in the
decisions above cited. The National Government may not confer its
instrumentalities authority which itself may not exercise. A stream can not run
higher than its source.
Viewed from another angle, the case at bar is weaker for the condemnor. In
the first place, the land that is the subject of the present expropriation is only
one-third of the land sought to be taken in the Guido case, and about two-
thirds of that involved in the Borja condemnation proceeding. In the second
place, the Arellano Colleges' land is situated in a highly commercial section of
the city and is occupied by persons who are not bona fide tenants. Lastly, this
land was brought by the defendant for a university site to take the place of
rented buildings that are unsuitable for schools of higher learning.
To authorize the condemnation of any particular land by a grantee of the
power of eminent domain, a necessity must exist for the taking thereof for the
proposed uses and purposes. (29 C. J. S., 884-885.) In City of Manila vs.
Manila Chinese Community (40 Phil., 349), this Court, citing American
decision, laid done this rule:
The very foundation of the right to exercise eminent domain is a genuine
necessity, and that necessity must be of a public character. The
ascertainment of the necessity must precede or accompany, and not follow,
the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind., 511;
Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc.
Co., 72 Ohio St., 368.)
benefits. (29 C. J. S., 386.) But measured even by this standard, and
forgetting for a moment the private character of the intended use, necessity
for the condemnation has not been shown. The land in question has cost the
owner P140,000. The people for whose benefit the condemnation is being
undertaken are so poor they could ill afford to meet this high price, unless they
intend to borrow the money with a view to disposing of the property later for a
profits. Cheaper lands not dedicated to a purpose so worthy as a school and
more suited to the occupants' needs and means, if really they only want to
own their own homes, are plenty elsewhere. On the other hand, the defendant
not only has invested a considerable amount for its property but had the plans
for construction ready and would have completed the project a long time ago
had it not been stopped by the city authorities. And again, while a handful of
people stand to profits by the expropriation, the development of a university
that has a present enrollment of 9,000 students would be sacrificed. Any good
that would accrue to the public from providing homes to a few families fades
into insignificance in comparison with the preparation of a young men and
young women for useful citizenship and for service to the government and the
community, a task which the government alone is not in a position to
undertake. As the Rural Progress Administration, the national agency lands
for resale as homesites and to which the petition to purchase the land in
question on behalf of the occupants was referred by the President, turning
down the occupants request after proper investigation, commented that "the
necessity of the Arellano Law College to acquire a permanent site of its own is
imperative not only because denial of the same would hamper the objectives
of that educational institution, but it would likewise be taking a property
intended already for public benefit." The Mayor of the City of Manila himself
confessed that he believes the plaintiff is entitled to keep this land.
The order of the Court of First Instance of Manila is affirmed without costs.

And this passage in Blackstone's Commentaries on the English Law is cited in

that decision: "So great is the regard of the law for private property that it will
not authorize the least violation of it, even for the public good, unless there
exist a very great necessity thereof."

Perhaps modern decisions are not so exigent. Necessity within the rule that
the particular property to be expropriated must be necessary. does not mean
an absolute but only a reasonable or practical necessity, such as would
combine the greatest benefit to the public with the least inconvenience and
expense to the condemning party and property owner consistent with such
SPECPRO – RULE 67
G.R. No. L-106528 December 21, 1993
PHILIPPINE COLUMBIAN ASSOCIATION, petitioner,
vs.
THE HONORABLE DOMINGO D. PANIS as Judge, Regional Trial Court of
Manila, Branch 41, THE HONORABLE RICARDO DIAZ, as Judge,
Regional Trial Court of Manila, Branch 27, the CITY OF MANILA,
ANTONIO GONZALES, JR., KARLO BUTIONG, LEONARDO AQUINO,
EDILBERTO LOPEZ, ANTILANO FERRER, LEONCIA DAVILLO JAMERO,
LUIS FERNANDEZ, PATRICIO DE GUZMAN, RICARDO DE LEON,
VIRGILIO TORNERO, FAUSTO FERNANDEZ, DOMINGO MEREN,
EDUARDA JACINTO, MAGDALENA VELEZ, LUSITO ALMADRONES,
MYRNA BARREDO EBREO, FULGENCIO CORSINO, PEDRO
VELASQUEZ, JUAN INOBAYA, NENITA ARCE, MAGNO ORTINEZ,
ARMANDO PARAGAS, HIPOLITO ESTABILLO, FELICIANO FAUSTINO,
VIRGILIO EDIC, JOSE TINGZON, JOSUE MARIANO, MARIA YERO, MA.
DOLORES QUIZON, ISIDERO TAGUILIG, CIRIACO MENDOZA, JUAN
ROMERO, JOSE LAGATA, FRUCTUSO PUSING, TEOFILO TERSOL,
ANTONIO LACHICA, PIO RAJALES, REGINA VIERNES, JUAN ROMERO,
DOMINGO EDIC, EDUARDA GONZALES, PABLO QUIRANTE, LEONORA
SANTIA, MARIA RIVERA, ELENA ARCE, LAZARO GOMEZ, PEDRO
MENDOZA, DOMINADOR ADAO, JUAN PANTERA, FRISCA MANDOT,
SOCORRO SANTOS AND GLORIA JEBUNAN, respondents.
QUIASON, J.:
This is an appeal by certiorari to review: (1) the decision of the Court of
Appeals in CA-G.R. SP No. 23338, which dismissed the petition for certiorari
filed by herein petitioner, assailing the orders of (a) respondent Judge
Domingo D. Panis of the Regional Trial Court, Branch 41, Manila, in Civil
Case No. 90-53531, and (b) respondent Judge Ricardo D. Diaz, of the
Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346; and (2)
its Resolution dated July 30, 1992, which denied the motion for
reconsideration of the decision.
Philippine Columbian Association, petitioner herein, is a non-stock, non-profit
domestic corporation and is engaged in the business of providing sports and
recreational facilities for its members. Petitioner's office and facilities are
located in the District of Paco, Manila, and adjacent thereto, is a parcel of land
consisting of 4,842.90 square meters owned by petitioner.
Private respondents are the actual occupants of the said parcel of land, while
respondents Antonio Gonzales, Jr. and Karlo Butiong were duly-elected
councilors of the City of Manila.
In 1982, petitioner instituted ejectment proceedings against herein private
respondents before the metropolitan Trial Court of Manila. Judgment was
rendered against the said occupants, ordering them to vacate the lot and pay
reasonable compensation therefor. This judgment was affirmed by the
Regional Trial Court, the Court of Appeals and subsequently by the Supreme
Court in G.R. No. 85262.
As a result of the favorable decision, petitioner filed before the Metropolitan
Trial Court of Manila, a motion for execution of judgment, which was granted
on April 9, 1990. A writ of demolition was later prayed and likewise issued by
the same court on May 30, 1990.
On June 8, 1990, private respondents filed with the Regional Trial Court,
Branch 27, Manila, a petition for injunction and prohibition with preliminary
injunction and restraining order against the Metropolitan Trial Court of Manila
and petitioner herein (Civil Case No. 90-53346) to enjoin their ejectment from
and the demolition of their houses on the premises in question.
On June 28, 1990, the City of Manila filed a complaint docketed as Civil Case
No. 90-53531 against petitioner before the Regional Trial Court, Branch 41,
Manila, for the expropriation of the 4,842.90 square meter lot subject of the
ejectment proceedings in Civil Case No. 90-53346. Petitioner, in turn, filed a
motion to dismiss the complaint, alleging, inter alia, that the City of Manila had
no power to expropriate private land; that the expropriation is not for public
use and welfare; that the expropriation is politically motivated; and, that the
deposit of P2 million in the City of Manila representing the provisional value of
the land, was insufficient and was made under P.D. 1533, a law declared
unconstitutional by the Supreme Court.
On September 14, 1990, the Regional Trial Court, Branch 41, Manila, denied
petitioner's motion to dismiss and entered an order of condemnation declaring
that the expropriation proceeding was properly instituted in accordance with
law. The Court also ordered the parties to submit, within five days, the names
of their respective nominees as commissioners to ascertain just compensation
for the land in question.
Petitioner filed a motion for reconsideration of the order denying its motion to
dismiss, and later a motion to defer compliance with the order directing the
submission of the names of nominees to be appointed commissioners. The
City of Manila, however, filed an ex-parte motion for the issuance of a writ of
possession over the subject lot, mentioning the P2 million deposit with the
Philippine National Bank, representing the provisional value of the land.
In separate orders dated October 5 and 8, 1990, the court issued the writ of
possession, and at the same time, denied petitioner's motion to defer
compliance and motion for reconsideration.
On September 21, 1990, as a result of the expropriation proceedings, the
Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346 issued an
order, granting the writ of preliminary injunction prayed for by the private
respondents. A motion for reconsideration filed by petitioner was denied.
Petitioner filed before the Court of Appeals a petition before the Court of
Appeals a petition assailing the orders dated September 14, 1990, and
October 5 and 8, 1990 of Branch 41 of the Regional Trial Court, and the Order
dated September 21, 1990 of Branch 27 of the same court (CA-G.R. SP No.
23338). The Court of Appeals rendered a Decision on November 31, 1992,
denying the petition, and a Resolution on July 30, 1992, denying consideration
thereof.
Hence, this petition.
The land subject of this case is the 4,842.90 square meter lot, which was
formerly a part of the Fabie Estate. As early as November 11, 1966, the
Municipal Board of the City of Manila passed Ordinance No. 5971, seeking to
expropriate the Fabie Estate. Through negotiated sales, the City of Manila
acquired a total of 18,017.10 square meters of the estate, and thereafter
subdivided the land into home lots and distributed the portions to the actual
occupants thereof.
The remaining area of 4,842.90 square meters, more or less, was sold in
1977 by its owner, Dolores Fabie-Posadas, to petitioner. Since the time of the
sale, the lot has been occupied by private respondents. On 23, 1989, the City
Council of Manila, with the approval of the Mayor, passed Ordinance No. 7704
for the expropriation of the 4,842.90 square meter lot.
Petitioner claims that expropriation of the lot cannot prosper because:
(1) the City of Manila has no specific power to expropriate private property
under the 1987 Constitution; and (2) assuming that it has such power, this
was exercised improperly and illegally in violation of the Public use
requirement and petitioner's right to due process.
Petitioner argues that under the 1987 Constitution, there must be a law
expressly authorizing local governments to undertake urban land reform (Art.
XIII, Sec. 9).
Petitioner forgot that the Revised Charter of the City of Manila, R.A. No. 409,
expressly authorizes the City of Manila to "condemn private property for public
use" (Sec. 3) and "to acquire private land . . . and subdivide the same into
home lots for sale on easy terms to city residents" (Sec. 100).
The Revised Charter of the City of Manila expressly grants the City of Manila
general powers over its territorial jurisdiction, including the power of eminent
domain, thus:
General powers. — The city may have a common seal and alter the same at
pleasure, and may take, purchase, receive, hold, lease, convey, and
dispose of real and personal property for the general interest of the city,
condemn private property for public use, contract and be contracted with,
sue and be sued, and prosecute and defend to final judgment and
execution, and exercise all the powers hereinafter conferred (R.A. 409, Sec.
3; Emphasis supplied).
Section 100 of said Revised Charter authorizes the City of Manila to
undertake urban land reform, thus:
Sec. 100. The City of Manila is authorized to acquire private lands in the city
and to subdivide the same into home lots for sale on easy terms for city
residents, giving first priority to the bona fide tenants or occupants of said
lands, and second priority to laborers and low-salaried employees. For the
purpose of this section, the city may raise the necessary funds by
appropriations of general funds, by securing loans or by issuing bonds, and,
if necessary, may acquire the lands through expropriation proceedings in
accordance with law, with the approval of the President . . . (Emphasis
supplied).
The City of Manila, acting through its legislative branch, has the express
power to acquire private lands in the city and subdivide these lands into home
lots for sale to bona fide tenants or occupants thereof, and to laborers and
low-salaried employees of the city. 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 (Sumulong v. Guerrero, 154 SCRA 461 [1987] ).
Corollary to the expanded notion of public use, expropriation is not anymore
confined to vast tracts of land and landed estates (Province of Camarines Sur
v. Court of Appeals, G.R. No. 103125, May 17, 1993; J.M. Tuason and Co.,
Inc. v. Land Tenure Administration, 31 SCRA 413 [1970] ). It is therefore of no
moment that the land sought to be expropriated in this case is less than half a
hectare only (Pulido v. Court of Appeals, 122 SCRA 63 [1983]).
Through the years, the public use requirement in eminent domain has evolved
into a flexible concept, influenced by changing conditions (Sumulong v.
Guerrero, supra; Manotok v. National Housing Authority, 150 SCRA 89 [1987];
Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]). Public use now
includes the broader notion of indirect public benefit or advantage, including in
particular, urban land reform and housing.
just compensation to be paid the landowner (Revised Rules of Court, Rule 67,
Sec. 5; National Power Corporation v. Jocson, 206 SCRA 520 [1992] ).
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

This concept is specifically recognized in the 1987 Constitution which provides

that:

xxx xxx xxx

The state shall, by law, and for the common good, undertake, in
cooperation with the private sector, a continuing program of urban land
reform and housing which will make available at affordable cost decent
housing and basic services to underprivileged and homeless citizens in
urban centers and resettlement areas. It shall also promote adequate
employment opportunities to such citizens. In the implementation of such
program the State shall respect the rights of small property owners (Art. XIII,
Sec. 9; Emphasis supplied).

x x x           x x x          x x x

The due process requirement in the expropriation of subject lot has likewise
been complied with. Although the motion to dismiss filed by petitioner was not
set for hearing as the court is required to do (National Housing Authority v.
Valenzuela, 159 SCRA 396 [1988]), it never questioned the lack of hearing
before the trial and appellate courts. It is only now before us that petitioner
raises the issue of due process.

Indeed, due process was afforded petitioner when it filed its motion for
reconsideration of the trial court's order, denying its motion to dismiss.

The Court of Appeals, in determining whether grave abuse of discretion was

committed by respondent courts, passed upon the very same issues raised by
petitioner in its motion to dismiss, which findings we uphold. Petitioner
therefore cannot argue that it was denied its day in court.

The amount of P2 million representing the provisional value of the land is an

amount not only fixed by the court, but accepted by both parties. The fact
remains that petitioner, albeit reluctantly, agreed to said valuation and is
therefore estopped from assailing the same. It must be remembered that the
valuation is merely provisional. The parties still have the second stage in the
proceedings in the proper court below to determine specifically the amount of
SPECPRO – RULE 67
G.R. No. 100626 November 29, 1991
CITY OF MANILA, represented by Mayor Gemiliano C. Lopez, Jr.,
petitioner,
vs.
HON. COURT OF APPEALS and THE ARMY & NAVY CLUB, INC.,
respondents.
CRUZ, J.:
Respondent Court of Appeals is faulted in this action for certiorari for having
set aside the order of execution dated June 10, 1991, and the writ of
execution issued by Judge Wilfredo Reyes of the Regional Trial Court of
Manila in Civil Case No. 9156335.
This was a complaint for unlawful detainer filed by the City of Manila against
private respondent Army and Navy Club for violation of the lease agreement
between them over a parcel of land on Roxas Boulevard in the said city. A
summary judgment in favor of the petitioner was rendered by the Metropolitan
Trial Court of Manila 1 and seasonably elevated to the Regional Trial Court. To
stay its execution, ANC filed a supersedes bond in the amount of
P2,700,000.00, which was approved by Judge Reyes. 2 He subsequently
affirmed the appealed judgment on June 7, 1991. 3
On June 10, 1991, the petitioner filed an ex parte motion for execution on the
ground that the judgment had already become final and executory under RA
6031. Judge Reyes granted the motion the same day 4 and at 4:00 o'clock
that afternoon the writ of execution was served on ANC.
ANC moved to quash the writ on June 11, 1991, but hours later, sensing that
the motion could not be acted upon, filed a petition for certiorari and
prohibition with the Court of Appeals.
5
On July 3, 1991, that court issued the questioned decision, prompting the
filing of the present petition for certiorari.
The petitioner assails the action of the respondent court and contends that
decisions of the regional trial court in cases exclusively cognizable by inferior
courts and are final and executory under RA 6031. Thus:
Sec. 1. . . .
In cases falling under the exclusive original jurisdiction of municipal and city
courts which are appealed to the courts of first instance, the decision of the
latter shall be final: Provided, That the findings of facts contained in said
decision are supported by substantial evidence as basis thereof, and the
conclusions are not clearly against the law and jurisprudence; in cases
falling under the concurrent jurisdictions of the municipal and city courts with
the courts of first instance, the appeal shall be made directly to the Court of
Appeals whose decision shall be final: Provided, however, that the Supreme
Court in its direction may, in any case involving a question of law, upon
petition of the party aggrieved by the decision and under rules and
conditions that it may prescribe, require by certiorari that the case be
certified to it for review and determination, as if the case had been brought
before it on appeal. (Emphasis supplied.)
The respondents argue on the other hand that under BP 129, decisions of the
regional trial court in cases originating from and within the exclusive
jurisdiction of the metropolitan or municipal trial courts are not final but subject
to appeal in a petition for review to the Court of Appeals. Such decisions
cannot be executed where the period of time for the defendant to perfect his
appeal has not yet expired. Thus:
Sec. 22. (BP 129) — Appellate jurisdiction. — Regional Trial Courts shall
exercise appellate jurisdiction over all cases decided by Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their
respective territorial jurisdiction. Such cases shall be decided on the basis of
the entire record of the proceedings had in the court of origin and such
memoranda and/or briefs as may be submitted by the parties or required by
the Regional Trial Courts. The decision of the RTC in such cases shall be
appealable by petition for review to the Intermediate Appellate Court which
may give it due course only when the petition shows prima facie that the
lower court has committed an error of fact or law that will warrant a reversal
or modifications of the decision or judgment sought to be reviewed.
(Emphasis supplied.)
It is useful at this point to review the distinction between a "final" judgment and
one which has become "final and executory."
In PLDT Employees Union v. PLDT Free Telephone Workers Union, 6
the
Court observed:
 . . . (A)n order or judgment is deemed final when it finally disposes of the
pending action so that nothing more can be done with it in the trial court. In
other words, a final order is that which gives an end to the litigation . . .
when the order or judgment does not dispose of the case completely but
leaves something to be done upon the merits, it is merely interlocutory.
The case of Antonio v. Samonte 7 elaborated on this matter thus:
A final order of judgment finally disposes of, adjudicates, or determines the
rights, or some right or rights of the parties, either on the entire controversy
or on some definite and separate branch thereof, and concludes them until it
is reversed or set aside . . .Where no issue is left for future consideration,
except the fact of compliance or non-compliance with the terms of the
judgment or order, such judgment or order is final and appealable.
By contrast, in Investments, Inc. v. Court of Appeals, 8 we declared:
Now, a "final judgment" in the sense just described becomes final "upon
expiration of the period to appeal therefrom if no appeal has been duly
perfected" or, an appeal therefrom having been taken, the judgment of the
appellate tribunal in turn becomes final and the records of the case are
returned to the Court of origin. The "final" judgment is then correctly
categorized as a "final and executory judgment" in respect to which, as the
law explicitly provides, "execution shall issue as a matter of right." It bears
stressing that only a final judgment or order, i.e., "a judgment or order that
finally dispose of the action of proceeding" can become final and executory.
A judgment becomes "final and executory" by operation of law. Finality of
judgment becomes a fact upon the lapse of the reglementary period to appeal
if no appeal is perfected. In such a situation, the prevailing party is entitled to
a writ of execution, and issuance thereof is a ministerial duty of the court.
Both RA 6031 and BP 129 provide that decisions of the regional trial court in
its appellate capacity may be elevated to the Court of Appeals in a petition for
review. In effect, both laws recognize that such judgments are "final" in the
sense that they finally dispose of, adjudicate, or determine the rights of the
parties in the case. But such judgments are not yet "final and executory"
pending the expiration of the reglementary period for appeal. During that
period, execution of the judgment cannot yet be demanded by the winning
party as a matter of right.
In the present case, the private respondent had up to June 25, 1991, to
appeal the decision of the regional trial court. The motion for execution was
filed by the petitioner on June 10, 1991, before the expiration of the said
reglementary period. As the decision had not yet become final and executory
on that date, the motion was premature and should therefore not have been
granted. Contrary to the petitioner's contention, what the trial court authorized
was an execution pending appeal.
While it is true that execution pending appeal is allowed under Rule 39, Sec.
2, of the Rules of Court, this provision must be strictly construed, being an
exception to the general rule. The reason allowing this kind of execution must
be of such urgency as to outweigh the injury or damage of the losing party
should it secure a reversal of the judgment on appeal. Absent any such
justification, the order of execution must be struck down as flawed with grave
abuse of discretion. 9
We see no such justification in the case before us.
It is worth remarking that as the case was not tried under the Rule on
Summary procedure, the writ of execution did not even fall under the following
Section 18 thereof :
d) Sec. 18. Appeal. — The judgment or final order, including that rendered
under Section 5 hereof, shall be appealable to the appropriate regional trial
court which shall decide the same on the basis of the records, in
accordance with Section 22 of Batas Pambansa Blg. 129. The decision of
the regional trial court in such civil cases shall be immediately executory.
To stay the execution, a supersedes bond is necessary except where one has
already been filed in the lower court. This bond continues to be effective if the
judgment of the regional trial court is appealed. But during the pendency of
the appeal, the defendant-appellant must continue to depositing with the
appellate court the payments required in the appealed judgment. The rentals
accruing during the pendency of the appeal must be deposited on or before
the date stipulated, if there is one, and in the absence thereof, on or before
the dates provided for in Sec. 8 of Rule 70. Failure to make such deposits or
payments is ground for execution of the judgment. 10
Since the private respondent in the case at bar has filed a supersedeas bond
and the stipulated rental is yearly, 11 execution may issue only when it fails to
make the yearly deposit of the rental, and after notice and hearing. Such
default has not yet been established.
The Court notes with disapproval the arbitrary manner in which Sheriff
Dominador Cacpal and Deputy Sheriff Reynaldo Cordero acted in delivering
possession of the leased premises to the petitioner. The evidence shows that
they enforced the writ of execution on the same date they received it, forcibly
taking out movables from the said premises, including chandeliers, furniture
and furnishings, music organs, stereo components, lighting fixtures and
computers. They turned off the water, cut off the electricity and disconnected execution. 14 The only exception is the execution pending appeal, which can
the telephones. They also unreasonably prevented ANC members from be issued by the regional trial court under Sec. 8 of Rule 70 or the Court of
entering the premises to get their personal belongings. Appeals or the Supreme Court under Sec. 10 of the same Rule.

Cacpal and Cordero are hereby sternly reprimanded and warned that a
repetition of similar arbitrariness will be dealt with more severely. Their
conduct was a clear violation of the requirement that:
Under the Rules of Court the immediate enforcement of a writ of ejectment
execution is carried out by giving the defendant notice of such writ, and
making a demand that defendants comply therewith within a reasonable
period, normally from three (3) to five (5) days, and it is only after such
period that the sheriff enforces the writ by the bodily removal of the
defendant and his personal belonging. 12
As previously observed, the petitioner has shown no weighty justification for
the application of the exception. Hence, the respondent court committed no
error in reversing the Regional Trial Court of Manila and annulling the writ of
execution issued by it on June 10, 1991, pending appeal of its decision.
ACCORDINGLY, the petition is DISMISSED, and the challenged decision of
the Court of Appeals is AFFIRMED in toto. No costs.
SO ORDERED.

On the issue of the propriety of a special civil action for certiorari to assail an
order of execution pending appeal, this Court has held that —

. . . Although Sec. 1, Rule 66 of the Rules of Court provides that the special
civil action of certiorari may only be invoked when "there is no appeal, nor
any plain, speedy and adequate remedy in the (ordinary) course of law" this
rule is not without exception. The availability of the ordinary course of
appeal does not constitute sufficient ground to prevent a party from making
use of the extraordinary remedy of certiorari where the appeal is not an
adequate remedy or equally beneficial, speedy and sufficient. It is the
inadequacy — not the mere absence of all other legal remedies and the
danger of failure of justice without merit that usually determines the
propriety of certiorari. 13

While appeal is normally employed to question an order or writ which varies

the terms of the decision being executed, it is nevertheless not the sole and
exclusive remedy. The special civil action of certiorari and prohibition under
Rule 65 was available to the private respondent on the allegation that the
regional trial court, in issuing the writ of execution, committed grave abuse of
discretion and acted beyond its jurisdiction and that the ordinary remedy of
appeal was inadequate.

The last question to be resolved is, assuming that the decision of the regional
trial court had already become "final and executory," could the said court
order its execution?

The rule is that if the judgment of the metropolitan trial court is appealed to the
regional trial court and the decision of the latter is itself elevated to the Court
of Appeals, whose decision thereafter became final, the case should be
remanded through the regional trial court to the metropolitan trial court for