American Print Works v. Lawrence, 23 N.J.L.
590 On May 27, 1957 the trial court, upon application of the Government — hereinafter
Facts:
The mayor of New York was sued for damages by the owner of a building which he
had ordered blasted to stay the great fire of 1853. The plaintiff contended that the
action is one of expropriation for which he was entitled to payment of just
compensation.
Issue: WON the action of the mayor is considered as expropriation.
Held: The destruction of the property in question does not come under the right of
eminent domain, but under the right of necessity, or self-preservation. The right of
eminent domain is a public right; it arises from the laws of society and is vested in
the state or its grantee, acting under the right and power of the state, or benefit of
the state, those acting under it. The right of necessity arises under the laws of the
society or society itself. It is the right of self-defense, of self-preservation, whether
applied to persons or to property. It is a private right vested in the individual, and
with which the right of the state or state necessity has nothing to do. In the case at
bar, the petitioner cannot claim just compensation because the destruction is not a
form of taking contemplated in the exercise of power of eminent domain. However,
he can recover indemnification for damages from those who benefited.
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. LA ORDEN DE PP.
BENEDICTINOS DE FILIPINAS, defendant-appellee.
Office of the Solicitor General for plaintiff-appellant. Ledesma, Puno, Guytingco,
Antonio and Associates for defendant-appellee.
DIZON, J.:
To ease and solve the daily traffic congestion on Legarda Street, the Government
drew plans to extend Azcarraga street from its junction with Mendiola street, up to
the Sta. Mesa Rotonda, Sampaloc, Manila. To carry out this plan it offered to buy a
portion of approximately 6,000 square meters of a bigger parcel belonging to La
Orden de PP. Benedictinos de Filipinas, a domestic religious corporation that owns
the San Beda College, a private educational institution situated on Mendiola street.
Not having been able to reach an agreement on the matter with the owner, the
Government instituted the present expropriation proceedings.
referred to as appellant — issued an order fixing the provisional value of the
property in question at P270,000.00 and authorizing appellant to take immediate
possession thereof upon depositing said amount. The deposit having been made
with the City Treasurer of Manila, the trial court issued the corresponding order
directing the Sheriff of Manila to place appellant in possession of the property
aforesaid.
On June 8, 1957, as directed by the Rules of Court, the herein appellee, in lieu of an
answer, filed a motion to dismiss the complaint based on the following grounds:
I. That the property sought to be expropriated is already dedicated to public use
and therefore is not subject to expropriation.
II. That there is no necessity for the proposed expropriation.
III. That the proposed Azcarraga Extension could pass through a different site which
would entail less expense to the Government and which would not necessitate the
expropriation of a property dedicated to education.
IV. That the present action filed by the plaintiff against the defendant is
discriminatory.
V. That the herein plaintiff does not count with sufficient funds to push through its
project of constructing the proposed Azcarraga Extension and to allow the plaintiff
to expropriate defendant's property at this time would be only to needlessly
deprive the latter of the use of its property.".
The government filed a written opposition to the motion to dismiss (Record on
Appeal, pp. 30-37) while appellee filed a reply thereto (Id., pp. 38-48). On July 29,
1957, without receiving evidence upon the questions of fact arising from the
complaint, the motion to dismiss and the opposition thereto filed, the trial court
issued the appealed order dismissing the case.
The appealed order shows that the trial court limited itself to deciding the point of
whether or not the expropriation of the property in question is necessary (Rec. on
Ap., p. 50) and, having arrived at the conclusion that such expropriation was not of
extreme necessity, dismissed the proceedings.
It is to be observed that paragraph IV of the complaint expressly alleges that
appellant needs, among other properties, the portion of appellee's property in
question for the purpose of constructing the Azcarraga street extension, and that
paragraph VII of the same complaint expressly alleges that, in accordance with
claims that it is necessary that such public improvement be made in the said portion
Section 64(b) of the Revised Administrative Code, the President of the Philippines
had authorized the acquisition, thru condemnation proceedings, of the aforesaid of the private cemetery and that the said lands are within their jurisdiction.
parcel of land belonging to appellee, as evidenced by the third indorsement dated
May 15, 1957 of the Executive Secretary, Office of the President of the Philippines, a
copy of which was attached to the complaint as Annex "C" and made an integral Defendants herein answered that the said expropriation was not necessary because
part thereof. In denial of these allegations appellee's motion to dismiss alleged that
"there is no necessity for the proposed expropriation". Thus, the question of fact other routes were available. They further claimed that the expropriation of the
decisive of the whole case arose.
cemetery would create irreparable loss and injury to them and to all those persons

It is the rule in this jurisdiction that private property may be expropriated for public owing and interested in the graves and monuments that would have to be
use and upon payment of just compensation; that condemnation of private
destroyed.
property is justified only if it is for the public good and there is a genuine necessity
therefor of a public character. Consequently, the courts have the power to inquire
into the legality of the exercise of the right of eminent domain and to determine
The lower court ruled that the said public improvement was not necessary on the
whether or not there is a genuine necessity therefor (City of Manila vs. Chinese
Community, 40 Phil. 349; Manila Railroad Company vs. Hacienda Benito, Inc., 37 particular-strip of land in question. Plaintiff herein assailed that they have the right
O.G. 1957).
to exercise the power of eminent domain and that the courts have no right to
Upon the other hand, it does not need extended argument to show that whether or inquire and determine the necessity of the expropriation. Thus, the same filed an
not the proposed opening of the Azcarraga extension is a necessity in order to
relieve the daily congestion of traffic on Legarda St., is a question of fact dependent appeal.
not only upon the facts of which the trial court very liberally took judicial notice but
also up on other factors that do not appear of record and must, therefore, be
established by means of evidence. We are, therefore, of the opinion that the parties
should have been given an opportunity to present their respective evidence upon
Issue: Whether or not the courts may inquire into, and hear proof of the necessity
these factors and others that might be of direct or indirect help in determining the
vital question of fact involved, namely, the need to open the extension of Azcarraga of the expropriation.
street to ease and solve the traffic congestion on Legarda street.

WHEREFORE, the appealed order of dismissal is set aside and the present case is
remanded to the trial court for further proceedings in accordance with this
decision. Without costs Held: The courts have the power of restricting the exercise of eminent domain to
the actual reasonable necessities of the case and for the purposes designated by
CITY OF MANILA VS. CHINESE COMMUNITY [40 Phil 349; No. 14355; 31 Oct 1919]
the law. The moment the municipal corporation or entity attempts to exercise the
Saturday, January 31, 2009 Posted by Coffeeholic Writes 
Labels: Case Digests, Political Law authority conferred, it must comply with the conditions accompanying the
authority. The necessity for conferring the authority upon a municipal corporation

Facts: The City of Manila, plaintiff herein, prayed for the expropriation of a portion to exercise the right of eminent domain is admittedly within the power of the

private cemetery for the conversion into an extension of Rizal Avenue. Plaintiff legislature. But whether or not the municipal corporation or entity is exercising the

right in a particular case under the conditions imposed by the general authority, is a
question that the courts have the right to inquire to.  PLDT and RCA Communications Inc (which is not a party to this case but has
Republic vs. PLDT
(1969)
FACTS:
            Sometime in 1933, the defendant PLDT entered into an agreement with RCA
Communications Inc., an American corporation, whereby telephone messages
coming from the US and received by RCA’s domestic station, could automatically be
transferred to the lines of PLDT, and vice versa.
            The plaintiff through the Bureau of Telecommunications, after having set up
its own Government Telephone System, by utilizing its own appropriation and
equipment and by renting trunk lines of the PLDT, entered into an agreement with
RCA for a joint overseas telephone service.
            Alleging that plaintiff is in competition with them, PLDT notified the former
and receiving no reply, disconnected the trunk lines being rented by the same; thus,
prompting the plaintiff to file a case before the CFI praying for judgment
commanding PLDT to execute a contract with the Bureau for the use of the facilities
of PLDT’s telephone system, and for a writ of preliminary injunction against the
defendant to restrain the severance of the existing trunk lines and restore those
severed.
ISSUE:
            Whether or not the defendant PLDT can be compelled to enter into a
contract with the plaintiff.
HELD:
            “ x x x while the Republic may not compel the PLDT to celebrate a contract
with it, the Republic may, in the exercise of the sovereign power of eminent
domain, require the telephone company to permit interconnection of the
government telephone system and that of the PLDT, as the needs of the
government service may require, subject to the payment of just compensation to
be determined by the court.”
Republic v PLDT
Facts: 
contractual relations with e parties) entered into an agreement where telephone
messages, coming from the US and received by RCA's domestic station could
automatically be transferred to the lines of PLDT and vice versa. 
The Bureau of Telecommunications set up its own Government Telephone System
(GTS) by renting the trunk lines of PLDT to enable government offices to call private
parties. One of the many rules prohibits the use of the service for his private use. 
Republic of the Philippines entered into an agreement with RCA for a joint overseas
telephone service where the Bureau would convey radio-telephone overseas calls
received by the RCA's station to and from local residents.
PLDT complained that the Bureau was violating the conditions for using the trunk
lines not only for the use of government offices but even to serve private persons or
the general public. PLDT gave a notice that if violations were not stopped, PLDT
would sever the connections -which PLDT did.
Republic sued PLDT commanding PLDT to execute a contract, through the Bureau,
for the use of the facilities of defendant's telephone system throughout the
Philippines under such terms and conditions as the court finds it reasonable.
Issue:
Whether or not Republic can command PLDT to execute the contract.
Held: 
No. The Bureau was created in pursuance of a state policy reorganizing the
government offices to meet the exigencies attendant upon the establishment of a
free Gov't of the Phil.
When the Bureau subscribed to the trunk lines, defendant knew or should have
known that their use by the subscriber was more or less public and all embracing in
nature.
The acceptance by the defendant of the payment of rentals, despite its knowledge
that the plaintiff had extended the use of the trunk lines to commercial purposes,
implies assent by the defendant to such extended use. Since this relationship has
been maintained for a long time and the public has patronized both telephone
systems, and their interconnection is to the public convenience, it is too late for the
defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally
sever the physical connection of the trunk lines.
 RULING:
To uphold PLDT's contention is to subordinate the needs of the general public.
PLDT vs NTC
G.R. No. 88404
October 18, 1990
FACTS:
a. Petitioner assails two (2) orders of public respondent National
Telecommunications Commission granting private respondent Express
Telecommunications (ETCI) provisional authority to install, operate and
maintain a Cellular Mobile Telephone System in Metro Manila now ETCI in
accordance with specific conditions on the following grounds;
1. ETCI is not capacitated or qualified under its legislative franchise
to operate a system-wide telephone or network of telephone
service such as the one proposed in its application;
2. ETCI lacks the facilities needed and indispensable to the successful
operation of the proposed cellular mobile telephone system;
3. PLDT has its pending application with NTC Case No 86-86, to
install and operate a Cellular Mobile Telephone System for
domestic and international service not only in Manila but also in
the provinces and that under the “prior operator” or “protection
of investment” doctrine, PLDT has the priority preference in the
operation of such service; and
4. the provisional authority, if granted, will result in needless,
uneconomical, and harmful duplication, among others.
b. After evaluating the consideration sought by the PLDT, the NTC,
maintained its ruling that liberally construed, applicant’s franchise carries
with it the privilege to operate and maintain a cellular mobile telephone
service. Subsequently, PLDT alleged essentially that the interconnection
ordered was in violation of due process and that the grant of provisional
authority was jurisdictionally and procedurally infirm. However, NTC
denied the reconsideration.
ISSUES: Whether or not the contention of PLDT is tenable.
a. Petition is dismissed for lack of merit.
b. There can be no question that the NTC is the regulatory agency of the
national government with jurisdiction over all telecommunications entities.
It is legally clothed with authority and given ample discretion to grant a
provisional permit or authority. In fact, NTC may, on its own initiative,
grant such relief even in the absence of a motion from an applicant.
c. Rep. Act No. 2090 grants ETCI (formerly FACI) "the right and privilege of
constructing, installing, establishing and operating in the entire Philippines
radio stations for reception and transmission of messages on radio stations
in the foreign and domestic public fixed point-to-point and public base,
aeronautical and land mobile stations, ... with the corresponding relay
stations for the reception and transmission of wireless messages on
radiotelegraphy and/or radiotelephony
d. A franchise is a property right and cannot be revoked or forfeited without
due process of law. The determination of the right to the exercise of a
franchise, or whether the right to enjoy such privilege has been forfeited
by non-user, is more properly the subject of the prerogative writ of quo
warranto, the right to assert which, as a rule, belongs to the State "upon
complaint or otherwise" (Sections 1, 2 and 3, Rule 66, Rules of Court), 2 the
reason being that the abuse of a franchise is a public wrong and not a
private injury. A forfeiture of a franchise will have to be declared in a direct
proceeding for the purpose brought by the State because a franchise is
granted by law and its unlawful exercise is primarily a concern of
Government.
e. Transfers of shares of a public utility corporation need only NTC approval,
not Congressional authorization. What transpired in ETCI were a series of
transfers of shares starting in 1964 until 1987. The approval of the NTC
may be deemed to have been met when it authorized the issuance of the
provisional authority to ETCI.
f. PLDT cannot justifiably refuse to interconnect. Rep. Act No. 6849, or the
Municipal Telephone Act of 1989, approved on 8 February 1990, mandates
interconnection providing as it does that "all domestic telecommunications
carriers or utilities ... shall be interconnected to the public switch
telephone network." Such regulation of the use and ownership of
telecommunications systems is in the exercise of the plenary police power
of the State for the promotion of the general welfare. The 1987
Constitution recognizes the existence of that power when it provides.

Republic of the Philippines vs. Carmen M. Vda. De Castellvi, et al.
G.R. No. L-20620 August 15, 1974
Case Digest
FACTS: In 1947, the republic, through the Armed Forces of the Philippines (AFP),
entered into a lease agreement over a land in Pampanga with Castellvi on a year-to-
year basis. When Castellvi gave notice to terminate the lease in 1956, the AFP
refused because of the permanent installations and other facilities worth almost
P500,000.00 that were erected and already established on the property. She then
instituted an ejectment proceeding against the AFP. In 1959, however, the republic
commenced the expropriation proceedings for the land in question.
ISSUE: Whether or not the compensation should be determined as of 1947 or 1959.
RULING: The Supreme Court ruled that the “taking” should not be reckoned as of
1947, and that just compensation should not be determined on the basis of the
value of the property as of that year.
The requisites for taking are:
1. The expropriator must enter a private property;
2. The entry must be for more than a momentary period;
3. It must be under warrant or color of authorities;
4. The property must be devoted for public use or otherwise informally
appropriated or injuriously affected; and
5. The utilization of the property for public use must be such a way as to oust
the owner and deprive him of beneficial enjoyment of the property.
Only requisites 1, 3, and 4 were present. It is clear, therefore, that the "taking" of
Catellvi's property for purposes of eminent domain cannot be considered to have
taken place in 1947 when the Republic commenced to occupy the property as
lessee thereof.
Under Sec. 4, Rule 67 of the Rules of Court, “just compensation” is to be
determined as of the date of the filing of the complaint. The Supreme Court has
ruled that when the taking of the property sought to be expropriated coincides with
the commencement of the expropriation proceedings, or takes place subsequent to
the filing of the complaint for eminent domain, the just compensation should be
determined as of the date of the filing of the complaint.
In the instant case, it is undisputed that the Republic was placed in possession of
the Castellvi property, by authority of court, on August 10, 1959. The “taking” of the
Castellvi property for the purposes of determining the just compensation to be paid
must, therefore, be reckoned as of June 26, 1959 when the complaint for eminent
domain was filed.
United States v. Causby, 328 U.S. 256 (1946)
Facts
Causby (plaintiff) owned a dwelling and a chicken farm near a municipal
airport in Greensboro, NC. In 1942, the United States (defendant) began using this
airport for frequent and regular military flights, which passed directly over Causby’s
property at 83 feet, which was 67 feet above the house, 63 feet above the barn and
18 feet above the highest tree. They frequently came so close to respondents'
property that they barely missed the tops of trees, the noise was startling, and the
glare from their landing lights lighted the place up brightly at night. This led to the
death of 150 chickens which destroyed the use of the property as a chicken farm
and caused loss of sleep, nervousness, and fright on the part of respondents. They
sued in the Court of Claims to recover for an alleged taking of their property and for
damages to their poultry business. The court of claims held that the United States
had taken an easement over the property, and granted an award of $2,000 for the
easement and resulting property damage. However it made no finding as to the
precise nature or duration of the easement.
Issue:
 Whether or not Causby was owed compensation under the Takings Clause FACTS:
(U.S. Constitutional Amendment V)

 Ruling:
National Power Corporation (NPC) filed a case for expropriation against Petrona O.
Yes. The majority opinion cited the law (49 U.S.C. § 180) where Congress
Dilao, et al. before Regional Trial Court of Cebu, involving parcels of land located in
defined the "navigable airspace" in the public domain, as that above the "minimum
Cebu. Expropriation was instituted to implement Leyte-Cebu Interconnection
safe altitude" which varies from 500 to 1000 feet depending on time of day, aircraft,
and type of terrain. Since the aircraft passing over Causby's property were at 83 Project. 
feet, the court determined the flight path was an easement, a form of property
right. Because the government had taken the easement through private property,
Causby was owed compensation under the Takings Clause (U.S. Constitutional
Amendment V) A day after the complaint was filed, NPC filed an urgent ex parte motion for the
issuance of writ of possession of the lands. 
Amendment V:

“No person shall be held to answer for a capital, or otherwise

infamous crime, unless on a presentment or indictment of a grand The RTC issued an order granting NPC‘s motion. It appointed 3 Board of
jury, except in cases arising in the land or naval forces, or in the Commissioners to determine just compensation. The board recommended appraisal
militia, when in actual service in time of war or public danger; nor of parcel of land co-owned by Dilao, et al. at P516.66 per square meter. However,
shall any person be subject for the same offense to be twice put in NPC filed an opposition assailing the correctness of the appraisal for failing to take
jeopardy of life or limb; nor shall be compelled in any criminal case
into account Republic Act No. 6395 which provides that the just compensation for
to be a witness against himself, nor be deprived of life, liberty, or
property, without due process of law; nor shall private property be right-of-way easement shall be equivalent to ten percent (10%) of the market value
taken for public use, without just compensation.” of the property. NPC asserted that Digao, et al. could still use the traversed land for
agricultural purposes, subject only to its easement. It added that the lots were of no
Flights of aircraft over private land which are so low and frequent as to be a direct use to its operations except for its transmission lines. 
and immediate interference with the enjoyment and use of the land are as much an
appropriation of the use of the land as a more conventional entry upon it. Pp. 328
U. S. 261-262, 328 U. S. 264-267.
The RTC rendered its decision ordering NPC to pay fair market value at P516.66 per
Physical invasion of the property was not necessary where there was an intrusion
square meter. NPC appealed but the same was denied due to failure to file and
so immediate and direct as to subtract from respondents' full enjoyment and use of
the property.  perfect its appeal within the prescribed period. A motion for execution of judgment
was subsequently filed by Dilao, et al. which was granted by the lower court. On
Further, the damages were not merely consequential; they were the product of a appeal, the CA affirmed the lower court‘s decision. Hence, this petition. 
direct invasion of respondents' domain. 

The United States Supreme Court reversed and remanded the action; however,
on the basis that the record was not clear whether the easement taken was ISSUE:
temporary or permanent. The court remanded the case for a determination of the
necessary findings regarding the nature of the easement.

NPC vs Aguirre Paderanga Whether or not RTC abused its authority by misapplying the rules governing fair
valuation 

HELD:
In finding that the trial court did not abuse its authority in evaluating the evidence
and the reports placed before it nor did it misapply the rules governing fair
valuation, the Court of Appeals found the majority report‘s valuation of P500 per
square meter to be fair. Said factual finding of the Court of Appeals, absent any
showing that the valuation is exorbitant or otherwise unjustified, is binding on the
parties as well as this Court.  by competent City Authorities. QC justified the law by invoking police power.
Indeed, expropriation is not limited to the acquisition of real property with a
corresponding transfer of title or possession. The right-of-way easement resulting in
a restriction or limitation on property rights over the land traversed by transmission
lines, as in the present case, also falls within the ambit of the term ―expropriation.  to make such further ordinances and resolutions not repugnant to law as may be
From the Commissioner‘s report it cannot be gainsaid that NPC‘s complaint merely
involves a simple case of mere passage of transmission lines over Dilao et al.‘s
property. Aside from the actual damage done to the property traversed by the
transmission lines, the agricultural and economic activity normally undertaken on
the entire property is unquestionably restricted and perpetually hampered as the
environment is made dangerous to the occupant‘s life and limb. 
The determination of just compensation in expropriation proceedings being a
judicial function, the Court finds the commissioners‘ recommendation of P516.66
per square meter, which was approved by the trial court, to be just and reasonable
compensation for the expropriated property of Dilao and her siblings.  six (6) percent of the total area of all private cemeteries for charity burial grounds
 
City of Quezon v. Ericta, 122 SCRA 759
FACTS:
Quezon City enacted an ordinance  entitled “ORDINANCE REGULATING THE
ESTABLISHMENT, MAINTENANCE AND OPERATION OF PRIVATE MEMORIAL TYPE
CEMETERY OR BURIAL GROUND WITHIN THE JURISDICTION OF QUEZON CITY AND
PROVIDING PENALTIES FOR THE VIOLATION THEREOF”. The law basically provides
that at least six (6) percent of the total area of the memorial park cemetery shall be
set aside for charity burial of deceased persons who are paupers and have been
residents of Quezon City for at least 5 years prior to their death, to be determined
Petitioners argue that the taking of the respondent’s property is a valid and
reasonable exercise of police power and that the land is taken for a public use as it
is intended for the burial ground of paupers. They further argue that the Quezon
City Council is authorized under its charter, in the exercise of local police power, ”
necessary to carry into effect and discharge the powers and duties conferred by this
Act and such as it shall deem necessary and proper to provide for the health and
safety, promote the prosperity, improve the morals, peace, good order, comfort
and convenience of the city and the inhabitants thereof, and for the protection of
property therein.”
ISSUE: Whether or not the ordinance is valid.
HELD: The SC held the law as an invalid exercise of police power.It seems to the
court that Section 9 of Ordinance No. 6118, Series of 1964 of Quezon City is not a
mere police regulation but an outright confiscation. It deprives a person of his
private property without due process of law, nay, even without
compensation.There is no reasonable relation between the setting aside of at least
of deceased paupers and the promotion of health, morals, good order, safety, or
the general welfare of the people. The ordinance is actually a taking without
compensation of a certain area from a private cemetery to benefit paupers who are
charges of the municipal corporation. Instead of building or maintaining a public
cemetery for this purpose, the city passes the burden to private cemeteries.

TOPIC: Public Use
C26 – Province of Camarines Sur v. CA, 222 SCRA 173
Facts:
Sangguniang Panlalawigan (SP) of the Province of Camarines Sur passed a
Resolution No. 129 authorizing the Provincial Governor to purchase or expropriate
property in order to establish a pilot farm for non-food and non-traditional
agricultural crops and a housing project for provincial government employees. By
virtue of this resolution, the Province of Camarines Sur, through its Governor, filed
two separate cases for expropriation against private respondents (the San
Joaquins), at the Regional Trial Court, Pili, Camarines Sur.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of
the price offered for their property. In an order, the trial court denied the motion to
dismiss and authorized the Province of Camarines Sur to take possession of the
property upon the deposit with the Clerk of Court the amount provisionally fixed by
the trial court to answer for damages that private respondents may suffer in the
event that the expropriation cases do not prosper.
The San Joaquins filed a motion for relief from the order, authorizing the Province
of Camarines Sur to take possession of their property and a motion to admit an
amended motion to dismiss. Both motions were denied in the order dated February
26, 1990.
In their petition before the Court of Appeals, the San Joaquins asked: (a) that
Resolution of the Sangguniang Panlalawigan be declared null and void; (b) that the
complaints for expropriation be dismissed; and (c) that the order denying the
motion to dismiss and allowing the Province of Camarines Sur to take possession of
the property subject of the expropriation and the order dated February 26, 1990,
denying the motion to admit the amended motion to dismiss, be set aside. They
also asked that an order be issued to restrain the trial court from enforcing the writ
of possession, and thereafter to issue a writ of injunction.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor
General stated that under Section 9 of the Local Government Code (B.P. Blg. 337),
there was no need for the approval by the Office of the President of the exercise by
the Sangguniang Panlalawigan of the right of eminent domain. However, the
Solicitor General expressed the view that the Province of Camarines Sur must first
secure the approval of the Department of Agrarian Reform of the plan to
expropriate the lands of petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of
Camarines Sur to take possession of private respondents' lands and the order
denying the admission of the amended motion to dismiss. It also ordered the trial
court to suspend the expropriation proceedings until after the Province of
Camarines Sur shall have submitted the requisite approval of the Department of
Agrarian Reform to convert the classification of the property of the private
respondents from agricultural to non-agricultural land.
Issue:
1) Whether or not the resolution is null and void. Corollary to this issue is
whether or not the expropriation is for a public use.
2) Whether or not the exercise of the power of eminent domain in this case is
restricted by the Comprehensive Agrarian Reform Law (R.A. No. 6657).
3) Whether or not the complaint for expropriation may be dismissed on the
ground of inadequacy of the compensation offered.
Ruling:
1) The expropriation is for a public purpose; hence the resolution is
authorized and valid.
SC explained that there had been a shift from the old to the new concept
of “public purpose: Old concept is that the property must actually be used
by the general public. The new concept, on the other hand, means public
advantage, convenience or benefit, which tends to contribute to the
general welfare and the prosperity of the whole community.
In this case, the proposed pilot development center would inure to the
direct benefit and advantage of the people of the Province of Camarines
 Sur. Once operational, the center would make available to the community
invaluable information and technology on agriculture, fishery and the
cottage industry. Ultimately, the livelihood of the farmers, fishermen and
craftsmen would be enhanced. The housing project also satisfies the public
purpose requirement of the Constitution.
2) No, (citing Ardana vs Reyes, SC here said that the implication of the Ardana
case is that) the power of expropriation is superior to the power to
distribute lands under the land reform program.
Old Local Government Code does not intimate in the least that Local
Government Units (LGUs) must first secure approval of the Department of
Land Reform for conversion of agriculture to non-agriculture use. Likewise,
no provision in the Comprehensive Agrarian Reform (R.A. No. 6657)
subjecting expropriation by LGUs to the control of Department of Agrarian
Reform.
Moreover, Sec 65 of R.A. No. 6657 is not in point because it is applicable
only to lands previously placed under the agrarian reform program. This is
limited only to applications for reclassification submitted by land owners or
tenant beneficiaries.
Statutes conferring power of eminent domain to political subdivisions
cannot be broadened or constricted by implication.
3) Fears of private respondents that they will be paid on the basis of the
valuation declared in the tax declarations of their property, are unfounded.
It is unconstitutional to fix just compensation in expropriation cases based
on the value given either by the owners or the assessor. Rules for
determining just compensation are those laid down in Rule 67 ROC,
evidence must be submitted to justify what they consider is the just
compensation.
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of
Appeals is set aside insofar as it (a) nullifies the trial court's order allowing the
Province of Camarines Sur to take possession of private respondents' property; (b)
orders the trial court to suspend the expropriation proceedings; and (c) requires the
Province of Camarines Sur to obtain the approval of the Department of Agrarian
Reform to convert or reclassify private respondents' property from agricultural to
non-agricultural use.  
The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order
of the trial court, denying the amended motion to dismiss of the private
respondents.
ESLABAN V DE ONORIO
G.R. No. 146062
June 28, 2001
CASE DIGEST:
Facts: Clarita Vda. De Onorio is the owner of the land in Barangay M. Roxas, Sto.
Nino, South Cotabato. Such land is the subject for the construction of an irrigation
canal of the National Irrigation Administration (NIA). Mr. Santiago Eslaban Jr. is the
project manager of NIA. The parties agreed to the construction of the canal
provided that the government will pay for the area that has been taken. A right-of-
way agreement was entered into by the parties in which respondent was paid the
amount of P4, 180.00 as right of way damages. Subsequently, respondent executed
an Affidavit of Waiver of Rights and Fees which waives her rights for the damage to
the crops due to construction of the right of way. After which, respondent demands
that petitioner pay P111, 299.55 for taking her property but the petitioner refused.
Petitioner states that the government had not consented to be sued and that the
respondent is not entitled for compensation by virtue of the homestead patent
under CA no. 141. The RTC held that the NIA should pay respondent the amount of
P107, 517.60 as just compensation for the 24,660 sq meters that have been used
for the construction of the canal. The Court of Appeals also affirmed the decision of
the RTC. 
Issue: Whether or Not the CA erred in affirming the decision of the RTC. 
Held: The CA is correct in affirming the decision of the RTC but modifications shall
be made regarding the value of the just compensation. The following are the points
to be considered in arriving in this decision. 
First, Rule 7 par 5 of the Rule of Civil Procedure provides that the certification
against forum shopping should only be executed by the plaintiff or the principal.
The petition for review was filed by Mr. Eslaban jr. while the verification or
certification were signed by Mr. Cesar Gonzales, an administrator of the agency.
Neither of the two has the authority to sign such certificate for they are not the
plaintiff or principal. Such case is a sufficient ground for dismissing this petition.
Second, PD NO. 1529 provides that the owner is required to recognize in favor of
the government the easement of a “public highway, way, private way established
by law, or any government canal where the certificate of title does not state that
the boundaries thereof have been pre-determined. In the case at bar, the irrigation
canal was constructed on Oct 1981 after the property had been registered in May of
1976. In this case, prior expropriation proceedings must be filed and just
compensation shall be paid to the owner before the land could be taken for public
use.  behalf of the respondent Comelec, the Solicitor General claimed that the Resolution
Third, In this case, just compensation is defined as not only the correct amount to
be paid but the reasonable time for the Government to pay the owner. The CA
erred in this point by stating that the market value (just compensation) of the land
is determined in the filing of the complaint in 1991.The determination of such value
should be from the time of its taking by the NIA in 1981. 
Lastly, the petitioner cannot argue that the Affidavit of waiver of rights and fees
executed by the respondent pertains to the payment of the value of the land
therefore exempting NIA to pay the value of the land taken. Such waiver pertains
only to the crops and improvements that were damage due to the construction of
the right-of-way not the value of the land.  private personal property without payment of the just compensation required in
Wherefore, decision of CA affirmed with modification regarding the just
compensation in the amount of P16, 047.61 per hectare.
PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139 members, represented
by its President, Amado P. Macasaet and its Executive Director Ermin F. Garcia, Jr.,
petitioner vs. COMMISSION ON ELECTIONS, respondent G.R. No. L-119694 May 22,
1995
Facts:
Respondent Comelec promulgated Resolution No. 2772 directing newspapers to
provide free Comelec space of not less than one-half page for the common use of
political parties and candidates. The Comelec space shall be allocated by the
Commission, free of charge, among all candidates to enable them to make known
their qualifications, their stand on public Issue and their platforms of government.
The Comelec space shall also be used by the Commission for dissemination of vital
election information. Petitioner Philippine Press Institute, Inc. (PPI), a non-profit
organization of newspaper and magazine publishers, asks the Supreme Court to
declare Comelec Resolution No. 2772 unconstitutional and void on the ground that
it violates the prohibition imposed by the Constitution upon the government
against the taking of private property for public use without just compensation. On
is a permissible exercise of the power of supervision (police power) of the Comelec
over the information operations of print media enterprises during the election
period to safeguard and ensure a fair, impartial and credible election.
Issue:
Whether or not Comelec Resolution No. 2772 is unconstitutional.
Held:
The Supreme Court declared the Resolution as unconstitutional. It held that to
compel print media companies to donate “Comelec space” amounts to “taking” of
expropriation cases. Moreover, the element of necessity for the taking has not been
established by respondent Comelec, considering that the newspapers were not
unwilling to sell advertising space. The taking of private property for public use is
authorized by the constitution, but not without payment of just compensation. Also
Resolution No. 2772 does not constitute a valid exercise of the police power of the
state. In the case at bench, there is no showing of existence of a national
emergency to take private property of newspaper or magazine publishers.
EPZA VS. DULAY [148 SCRA 305; G.R. No. L-59603; 29 Apr 1987]
Facts: The four parcels of land which are the subject of this case is where the
Mactan Export Processing Zone Authority in Cebu (EPZA) is to be constructed.
Private respondent San Antonio Development Corporation (San Antonio, for
brevity), in which these lands are registered under, claimed that the lands were
expropriated to the government without them reaching the agreement as to the
compensation. Respondent Judge Dulay then issued an order for the appointment
of the commissioners to determine the just compensation. It was later found out
that the payment of the government to San Antonio would be P15 per square
meter, which was objected to by the latter contending that under PD 1533, the
basis of just compensation shall be fair and according to the fair market value
declared by the owner of the property sought to be expropriated, or by the
assessor, whichever is lower. Such objection and the subsequent Motion for
Reconsideration were denied and hearing was set for the reception of the
commissioner’s report. EPZA then filed this petition for certiorari and mandamus
enjoining the respondent from further hearing the
Issue: Whether or Not the exclusive and mandatory mode of determining just
compensation in PD 1533 is unconstitutional.
Held: The Supreme Court ruled that the mode of determination of just
compensation in PD 1533 is unconstitutional.
The method of ascertaining just compensation constitutes impermissible
encroachment to judicial prerogatives. It tends to render the courts inutile in a
matter in which under the Constitution is reserved to it for financial determination.
The valuation in the decree may only serve as 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.
The determination of just compensation is a judicial function. The executive
department or the legislature may make the initial determination but when a party
claims a violation of the guarantee in the Bill of Rights that the private party 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
justness of the decreed compensation.
NHA VS REYES
Facts: National Housing Authority filed several expropriation complaints on the
sugarland owned by the petitioners Reyes. The land is located in Dasmarinas,
Cavite. The purpose of the expropriation is for the expansion of the Dasmarinas
case.
Resettlement Project to accommodate the squatters who were relocated from
Manila. The trial court rendered judgment ordering the expropriation of these lots
with payment of just compensation. It was affirmed by the Supreme Court. 
The petitioners Reyes alleged the failure of the respondents to comply with the
Supreme Court order, so they filed a complaint for forfeiture of their rights before
the RTC of Quezon City. They also said that NHA did not relocate squatters from
Manila on the expropriated lands which violate the reason for public purpose. The
petitioners prayed that NHA be enjoined from disposing and alienating the
expropriated properties and that judgment be rendered forfeiting all its rights and real estate developer for the construction of low cost housing cannot be taken to
interests under the expropriation judgment.  mean as a deviation from the stated public purpose of their taking. 

In the answer of NHA, they already paid a substantial amount to the petitioners. Expropriation of private lands for slum clearance and urban development is for a
Thus, several issues are already raised in the expropriation court.  public purpose even if the developed area is later sold to private homeowners,
commercial firms, entertainment and service companies and other private
The trial court dismissed the case. It held that NHA did not abandon the public concerns. 
purpose because the relocation of squatters involves a long and tedious process. It
also entered into a contract with a developer for the construction of a low-cost The expropriation of private property for the purpose of socialized housing for the
housing to be sold to qualified low income beneficiaries. The payment of just marginalized sector is in furtherance of the social justice provision under Section 1,
compensation is independent of the obligation of the petitioners to pay capital Article XIII of the Constitution. 
gains tax. Lastly, the payment of just compensation is based on the value at the
time the property was taken.  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
The Court of Appeals affirmed the decision.  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
Issue: Whether or not the property expropriated is taking for public purpose.  reversion to the former owner.

Held: The decision appealed is modified. 

The 1987 Constitution explicitly provides for the exercise of the power of eminent
domain over the private properties upon payment of just compensation. Sec. 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. 

The expropriation judgment declared that NHA has a lawful right to take petitioners
properties “for the public use or purpose of expanding the Dasmarinas
Resettlement Project”. 

The “public use” is synonymous with “public interest”, “public benefit”, “public
welfare”, and “public convenience”. The act of NHA in entering a contract with a
 Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al.,
G.R. No. 171101, July 5, 2011
DECISION
VELASCO, JR., J.:
I.      THE FACTS
In 1958, the Spanish owners of Compañia General de Tabacos de Filipinas
(Tabacalera) sold Hacienda Luisita and the Central Azucarera de Tarlac, the sugar
mill of the hacienda, to the Tarlac Development Corporation (Tadeco), then owned
and controlled by the Jose Cojuangco Sr. Group. The Central Bank of the Philippines
assisted Tadeco in obtaining a dollar loan from a US bank. Also, the GSIS extended a
PhP5.911 million loan in favor of Tadeco to pay the peso price component of the
sale, with the condition that “the lots comprising the Hacienda Luisita be subdivided
by the applicant-corporation and sold at cost to the tenants, should there be any,
and whenever conditions should exist warranting such action under the provisions
of the Land Tenure Act.” Tadeco however did not comply with this condition.
On May 7, 1980, the martial law administration filed a suit before the Manila RTC
against Tadeco, et al., for them to surrender Hacienda Luisita to the then Ministry of
Agrarian Reform (MAR) so that the land can be distributed to farmers at cost.
Responding, Tadeco alleged that Hacienda Luisita does not have tenants, besides
which sugar lands – of which the hacienda consisted – are not covered by existing
agrarian reform legislations(PD 27-rice and corn). The Manila RTC rendered
judgment ordering Tadeco to surrender Hacienda Luisita to the MAR. Therefrom,
Tadeco appealed to the CA.
On March 17, 1988, during the administration of President Corazon Cojuangco
Aquino, the Office of the Solicitor General moved to withdraw the government’s
case against Tadeco, et al. The CA dismissed the case, subject to the PARC’s
approval of Tadeco’s proposed stock distribution plan (SDP) in favor of its
farmworkers. [Under EO 229 (Sec10) and later RA 6657(Sec31), Tadeco had the
option of availing stock distribution as an alternative modality to actual land
transfer to the farmworkers.] On August 23, 1988, Tadeco organized a spin-off
corporation, herein petitioner HLI, as vehicle to facilitate stock acquisition by the
farmworkers. For this purpose, Tadeco conveyed to HLI the agricultural land portion
(4,915.75 hectares) and other farm-related properties of Hacienda Luisita in
exchange for HLI shares of stock.
On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs)
complement of Hacienda Luisita signified in a referendum their acceptance of the
proposed HLI’s Stock Distribution Option Plan (SODP).  On May 11, 1989, the SDOA
was formally entered into by Tadeco, HLI, and the 5,848 qualified FWBs. This
attested to by then DAR Secretary Philip Juico. The SDOA embodied the basis and
mechanics of HLI’s SDP, which was eventually approved by the PARC after a follow-
up referendum conducted by the DAR on October 14, 1989, in which 5,117 FWBs,
out of 5,315 who participated, opted to receive shares in HLI.
As may be gleaned from the SDOA, included as part of the distribution plan are: (a)
production-sharing equivalent to three percent (3%) of gross sales from the
production of the agricultural land payable to the FWBs in cash dividends or
incentive bonus; and (b) distribution of free homelots of not more than 240 square
meters each to family-beneficiaries. The production-sharing, as the SDP indicated, is
payable "irrespective of whether [HLI] makes money or not," implying that the
benefits do not partake the nature of dividends, as the term is ordinarily
understood under corporation law. (5,117 out of 5315 = shares; 132 = land
distribution)
Prior to approval, DAR Secretary Miriam Defensor-Santiago proposed that the SDP
be revised, along the following lines:
1. That over the implementation period of the [SDP], [Tadeco]/HLI shall ensure
that there will be no dilution in the shares of stocks of individual [FWBs];
2. That a safeguard shall be provided by [Tadeco]/HLI against the dilution of the
percentage shareholdings of the [FWBs], i.e., that the 33% shareholdings of the
[FWBs] will be maintained at any given time
November 21, 1989 - the PARC, under then Sec. Defensor-Santiago, issued
Resolution No. 89-12-2, approving the SDP of Tadeco/HLI.
From 1989 to 2005, HLI claimed to have extended the following benefits to the
FWBs:
(a) 3 billion pesos (P3,000,000,000) worth of salaries, wages and fringe benefits
(b) 59 million shares of stock distributed for free to the FWBs;
(c) 150 million pesos (P150,000,000) representing 3% of the gross produce;
(d) 37.5 million pesos (P37,500,000) representing 3% from the sale of 500
hectares of converted agricultural land of Hacienda Luisita;
(e) 240-square meter homelots distributed for free;
(f) 2.4 million pesos (P2,400,000) representing 3% from the sale of 80 hectares
at 80 million pesos (P80,000,000) for the SCTEX;
(g) Social service benefits, such as but not limited to free
hospitalization/medical/maternity services, old age/death benefits and no
interest bearing salary/educational loans and rice sugar accounts.
Two separate groups subsequently contested this claim of HLI. (the
petitions/protets)
CONVERSION PROPER
On August 15, 1995, HLI applied for the conversion of 500 hectares of land of the
hacienda from agricultural to industrial use, pursuant to Sec. 65 of RA 6657. The
DAR approved the application on August 14, 1996, subject to payment of three
percent (3%) of the gross selling price to the FWBs and to HLI’s continued
compliance with its undertakings under the SDP, among other conditions.
 On December 13, 1996, HLI, in exchange for subscription of 12,000,000 shares of
stocks of Centennary Holdings, Inc. (Centennary), ceded 300 hectares of the
converted area to the latter. Subsequently, Centennary sold the entire 300 hectares
for PhP750 million to Luisita Industrial Park Corporation (LIPCO), which used it in
developing an industrial complex. From this area was carved out 2 parcels(180 has
and 4 has), for which 2 separate titles were issued in the name of LIPCO. Later,
LIPCO transferred these 2 parcels to the Rizal Commercial Banking Corporation
(RCBC) in payment of LIPCO’s PhP431,695,732.10 loan obligations to RCBC(dacion
en pago).  LIPCO’s titles were cancelled and new ones were issued to RCBC.
The other 200 has was transferred to Luisita Realty Corporation (LRC) in two
separate transactions in 1997 and 1998, both uniformly involving 100 hectares for
PhP 250 million each.
Apart from the 500 hectares, another 80.51 hectares were later detached from
Hacienda Luisita and acquired by the government as part of the Subic-Clark-Tarlac
Expressway (SCTEX) complex. Thus, 4,335.75 hectares remained of the original
4,915 hectares Tadeco ceded to HLI.
Such, was the state of things when two separate petitions reached the DAR in the
latter part of 2003. The first was filed by the Supervisory Group of HLI (Supervisory
Group), praying for a renegotiation of the SDOA, or, in the alternative, its
revocation. The second petition, praying for the revocation and nullification of the
SDOA and the distribution of the lands in the hacienda, was filed by Alyansa ng mga
Manggagawang Bukid ng Hacienda Luisita (AMBALA). The DAR then constituted a
Special Task Force (STF) to attend to issues relating to the SDP of HLI. After
investigation and evaluation, the STF found that HLI has not complied with its
obligations under RA 6657 despite the implementation of the SDP, AND
RECOMMENDED. On December 22, 2005, the PARC issued the assailed Resolution
No. 2005-32-01, recalling/revoking the SDO plan of Tadeco/HLI. It further resolved
that the subject lands be forthwith placed under the compulsory coverage or
mandated land acquisition scheme of the CARP.
From the foregoing resolution, HLI sought reconsideration. Its motion
notwithstanding, HLI also filed a petition before the Supreme Court in light of what
it considers as the DAR’s hasty placing of Hacienda Luisita under CARP even before
PARC could rule or even read the motion for reconsideration. PARC would
eventually deny HLI’s motion for reconsideration via Resolution No. 2006-34-01
dated May 3, 2006.
II.    THE ISSUES
(1)  Does the PARC possess jurisdiction to recall or revoke HLI’s SDP?
(2)  [Issue raised by intervenor FARM (group of farmworkers)] Is Sec. 31 of RA 6657,
which allows stock transfer in lieu of outright land transfer, unconstitutional?
(3)  Is the revocation of the HLI’s SDP valid? [Did PARC gravely abuse its discretion in
revoking the subject SDP and placing the hacienda under CARP’s compulsory
acquisition and distribution scheme?]
(4)  Should those portions of the converted land within Hacienda Luisita that RCBC and
LIPCO acquired by purchase be excluded from the coverage of the assailed PARC
resolution? [Did the  PARC gravely abuse its discretion when it included LIPCO’s and
RCBC’s respective properties that once formed part of Hacienda Luisita under the
CARP compulsory acquisition scheme via the assailed Notice of Coverage?]
III.   THE RULING
HLI: PARC has no authority to revoke the SDP; it has the power to disapprove, but
not to recall its previous approval of the SDP. It is the court which has jurisdiction
and authority to order the revocation or rescission of the PARC-approved SDP
        (1)  YES, the PARC has jurisdiction to revoke HLI’s SDP under the doctrine of
necessary implication.
Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the
plan for stock distribution of the corporate landowner belongs to PARC. Contrary to
petitioner HLI’s posture, PARC also has the power to revoke the SDP which it
previously approved. It may be, as urged, that RA 6657 or other executive issuances
on agrarian reform do not explicitly vest the PARC with the power to revoke/recall
an approved SDP. Such power or authority, however, is deemed possessed by PARC
under the principle of necessary implication, a basic postulate that what is implied
in a statute is as much a part of it as that which is expressed.
Following the doctrine of necessary implication, it may be stated that the
conferment of express power to approve a plan for stock distribution of the
agricultural land of corporate owners necessarily includes the power to revoke or
recall the approval of the plan. To deny PARC such revocatory power would reduce
it into a toothless agency of CARP, because the very same agency tasked to ensure
compliance by the corporate landowner with the approved SDP would be without
authority to impose sanctions for non-compliance with it. 
HLI: the parties to the SDOA should now look to the Corporation Code, instead of to
RA 6657, in determining their rights, obligations and remedies. The Code should be
the applicable law on the disposition of the agricultural land of HLI.
SC: NO! the rights, obligations and remedies of the parties to the SDOA embodying
the SDP are primarily governed by RA 6657. It should abundantly be made clear that
HLI was precisely created in order to comply with RA 6657, which the OSG aptly
described as the "mother law" of the SDOA and the SDP. It is, thus, paradoxical for
HLI to shield itself from the coverage of CARP by invoking exclusive applicability of
the Corporation Code under the guise of being a corporate entity.
              (2)  NO, Sec. 31 of RA 6657 is not unconstitutional. [The Court actually
refused to pass upon the constitutional question because it was not raised at the
earliest opportunity and because the resolution thereof is not the lis mota of the
case. Moreover, the issue has been rendered moot and academic since SDO is no
longer one of the modes of acquisition under RA 9700.]
While there is indeed an actual case or controversy, intervenor FARM, composed of
a small minority of 27 farmers, has yet to explain its failure to challenge the
constitutionality of Sec. 31 of RA 6657 as early as November 21, 1989 when PARC
approved the SDP of Hacienda Luisita or at least within a reasonable time
thereafter, and why its members received benefits from the SDP without so much
of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP
that said plan and approving resolution were sought to be revoked, but not, to
stress, by FARM or any of its members, but by petitioner AMBALA. Furthermore,
the AMBALA petition did NOT question the constitutionality of Sec. 31 of RA 6657,
but concentrated on the purported flaws and gaps in the subsequent
implementation of the SDP. Even the public respondents, as represented by the
Solicitor General, did not question the constitutionality of the provision.  On the
other hand, FARM, whose 27 members formerly belonged to AMBALA, raised the
constitutionality of Sec. 31 only on May 3, 2007 when it filed its Supplemental
Comment with the Court. Thus, it took FARM some eighteen (18) years from
November 21, 1989 before it challenged the constitutionality of Sec. 31 of RA 6657
which is quite too late in the day. The FARM members slept on their rights and even
accepted benefits from the SDP with nary a complaint on the alleged
unconstitutionality of Sec. 31 upon which the benefits were derived.  The Court
cannot now be goaded into resolving a constitutional issue that FARM failed to
assail after the lapse of a long period of time and the occurrence of numerous
events and activities which resulted from the application of an alleged
unconstitutional legal provision.
The last but the most important requisite that the constitutional issue must be the
very lis mota of the case does not likewise obtain. The lis mota aspect is not
present, the constitutional issue tendered not being critical to the resolution of the
case. If some other grounds exist by which judgment can be made without touching
the constitutionality of a law, such recourse is favored.
The lis mota in this case, proceeding from the basic positions originally taken by
AMBALA (to which the FARM members previously belonged) and the Supervisory
Group, is the alleged non-compliance by HLI with the conditions of the SDP to
support a plea for its revocation. And before the Court, the lis mota is whether or
not PARC acted in grave abuse of discretion when it ordered the recall of the SDP
for such non-compliance and the fact that the SDP, as couched and implemented,
offends certain constitutional and statutory provisions. To be sure, any of these key
issues may be resolved without plunging into the constitutionality of Sec. 31 of RA
6657. Moreover, looking deeply into the underlying petitions of AMBALA, et al., it is
not the said section per se that is invalid, but rather it is the alleged application of
the said provision in the SDP that is flawed.
It may be well to note at this juncture that Sec. 5 of RA 9700, amending Sec. 7 of  RA
6657, has all but superseded Sec. 31 of RA 6657 vis-à-vis the stock distribution
component of said Sec. 31. In its pertinent part, Sec. 5 of RA 9700 provides:  “[T]hat
after June 30, 2009, the modes of acquisition shall be limited to voluntary offer to
sell and compulsory acquisition.” Thus, for all intents and purposes, the stock
distribution scheme under Sec. 31 of RA 6657 is no longer an available option under
existing law. The question of whether or not it is unconstitutional should be a moot
issue.
(3)  YES, the revocation of the HLI’s SDP valid. [NO, the PARC did NOT gravely
abuse its discretion in revoking the subject SDP and placing the hacienda under
CARP’s compulsory acquisition and distribution scheme.]
The revocation of the approval of the SDP is valid: (1) the mechanics and timelines
of HLI’s stock distribution violate DAO 10 because the minimum individual
allocation of each original FWB of 18,804.32 shares was diluted as a result of the
use of “man days” and the hiring of additional farmworkers; (2) the 30-year
timeframe for HLI-to-FWBs stock transfer is contrary to what Sec. 11 of DAO 10
prescribes. 
In our review and analysis of par. 3 of the SDOA on the mechanics and timelines of
stock distribution, We find that it violates two (2) provisions of DAO 10. Par. 3 of
the SDOA states:
3. At the end of each fiscal year, for a period of 30 years, the SECOND PARTY
[HLI] shall arrange with the FIRST PARTY [TDC] the acquisition and distribution
to the THIRD PARTY [FWBs] on the basis of number of days worked and at no
cost to them of one-thirtieth (1/30) of 118,391,976.85 shares of the capital
stock of the SECOND PARTY that are presently owned and held by the FIRST
PARTY, until such time as the entire block of 118,391,976.85 shares shall have
been completely acquired and distributed to the THIRD PARTY.
[I]t is clear as day that the original 6,296 FWBs, who were qualified beneficiaries at
the time of the approval of the SDP, suffered from watering down of shares.  As
determined earlier, each original FWB is entitled to 18,804.32 HLI shares.   The
original FWBs got less than the guaranteed 18,804.32 HLI shares per beneficiary,
because the acquisition and distribution of the HLI shares were based on “man
days” or “number of days worked” by the FWB in a year’s time.  As explained by
HLI, a beneficiary needs to work for at least 37 days in a fiscal year before he or she
becomes entitled to HLI shares.  If it falls below 37 days, the FWB, unfortunately,
does not get any share at year end.  The number of HLI shares distributed varies
depending on the number of days the FWBs were allowed to work in one
year.  Worse, HLI hired farmworkers in addition to the original 6,296 FWBs, such
that, as indicated in the Compliance dated August 2, 2010 submitted by HLI to the
Court, the total number of farmworkers of HLI as of said date stood at 10,502.  All
these farmworkers, which include the original 6,296 FWBs, were given shares out of
the 118,931,976.85 HLI shares representing the 33.296% of the total outstanding
capital stock of HLI.  Clearly, the minimum individual allocation of each original FWB
of 18,804.32 shares was diluted as a result of the use of “man days” and the hiring
of additional farmworkers.
Going into another but related matter, par. 3 of the SDOA expressly providing for a
30-year timeframe for HLI-to-FWBs stock transfer is an arrangement contrary to
what Sec. 11 of DAO 10 prescribes.  Said Sec. 11 provides for the implementation of
the approved stock distribution plan within three (3) months from receipt by the
corporate landowner of the approval of the plan by PARC. In fact, based on the said
provision, the transfer of the shares of stock in the names of the qualified FWBs
should be recorded in the stock and transfer books and must be submitted to the
SEC within sixty (60) days from implementation.
To the Court, there is a purpose, which is at once discernible as it is practical, for the
three-month threshold. Remove this timeline and the corporate landowner can
veritably evade compliance with agrarian reform by simply deferring to absurd
limits the implementation of the stock distribution scheme. the reason
underpinning the 30-year accommodation does not apply to corporate landowners
in distributing shares of stock to the qualified beneficiaries, as the shares may be
issued in a much shorter period of time.
Taking into account the above discussion, the revocation of the SDP by PARC should
be upheld [because of violations of] DAO 10. It bears stressing that under Sec. 49 of
RA 6657, the PARC and the DAR have the power to issue rules and regulations,
substantive or procedural. Being a product of such rule-making power, DAO 10 has
the force and effect of law and must be duly complied with. The PARC is, therefore,
correct in revoking the SDP. Consequently, the PARC Resolution No. 89-12-2 dated
November 21, l989 approving the HLI’s SDP is nullified and voided.
(4)  YES, those portions of the converted land within Hacienda Luisita that RCBC
and LIPCO acquired by purchase should be excluded from the coverage of the
assailed PARC resolution.
[T]here are two (2) requirements before one may be considered a purchaser in
good faith, namely: (1) that the purchaser buys the property of another without
notice that some other person has a right to or interest in such property; and (2)
that the purchaser pays a full and fair price for the property at the time of such
purchase or before he or she has notice of the claim of another.
It can rightfully be said that both LIPCO and RCBC are purchasers in good faith for
value entitled to the benefits arising from such status.
First, at the time LIPCO purchased the entire three hundred (300) hectares of
industrial land, there was no notice of any supposed defect in the title of its
transferor, Centennary, or that any other person has a right to or interest in such
property. In fact, at the time LIPCO acquired said parcels of land, only the following
annotations appeared on the TCT in the name of Centennary: the Secretary’s
Certificate in favor of Teresita Lopa, the Secretary’s Certificate in favor of Shintaro
Murai, and the conversion of the property from agricultural to industrial and
residential use.
The same is true with respect to RCBC. At the time it acquired portions of Hacienda
Luisita, only the following general annotations appeared on the TCTs of LIPCO: the
Deed of Restrictions, limiting its use solely as an industrial estate; the Secretary’s
Certificate in favor of Koji Komai and Kyosuke Hori; and the Real Estate Mortgage in
favor of RCBC to guarantee the payment of PhP 300 million.
To be sure, intervenor RCBC and LIPCO knew that the lots they bought were
subjected to CARP coverage by means of a stock distribution plan, as the DAR
conversion order was annotated at the back of the titles of the lots they
acquired.  However, they are of the honest belief that the subject lots were validly
converted to commercial or industrial purposes and for which said lots were taken
out of the CARP coverage subject of PARC Resolution No. 89-12-2 and, hence, can
be legally and validly acquired by them.  After all, Sec. 65 of RA 6657 explicitly
allows conversion and disposition of agricultural lands previously covered by CARP
land acquisition “after the lapse of five (5) years from its award when the land
ceases to be economically feasible and sound for agricultural purposes or the
locality has become urbanized and the land will have a greater economic value for
residential, commercial or industrial purposes.”  Moreover, DAR notified all the
affected parties, more particularly the FWBs, and gave them the opportunity to
comment or oppose the proposed conversion.  DAR, after going through the
necessary processes, granted the conversion of 500 hectares of Hacienda Luisita
pursuant to its primary jurisdiction under Sec. 50 of RA 6657 to determine and
adjudicate agrarian reform matters and its original exclusive jurisdiction over all
matters involving the implementation of agrarian reform.  The DAR conversion
order became final and executory after none of the FWBs interposed an appeal to
the CA.  In this factual setting, RCBC and LIPCO purchased the lots in question on
their honest and well-founded belief that the previous registered owners could
legally sell and convey the lots though these were previously subject of CARP
coverage.  Ergo, RCBC and LIPCO acted in good faith in acquiring the subject lots.
And second, both LIPCO and RCBC purchased portions of Hacienda Luisita for value.
Undeniably, LIPCO acquired 300 hectares of land from Centennary for the amount
of PhP750 million pursuant to a Deed of Sale dated July 30, 1998. On the other
hand, in a Deed of Absolute Assignment dated November 25, 2004, LIPCO conveyed
portions of Hacienda Luisita in favor of RCBC by way of dacion en pago to pay for a
loan of PhP431,695,732.10.
In relying upon the above-mentioned approvals, proclamation and conversion
order, both RCBC and LIPCO cannot be considered at fault for believing that certain
portions of Hacienda Luisita are industrial/commercial lands and are, thus, outside
the ambit of CARP. The PARC, and consequently DAR, gravely abused its discretion
when it placed LIPCO’s and RCBC’s property which once formed part of Hacienda
Luisita under the CARP compulsory acquisition scheme via the assailed Notice of
Coverage.
[The Court went on to apply the operative fact doctrine to determine what should
be done in the aftermath of its disposition of the above-enumerated issues:
While We affirm the revocation of the SDP on Hacienda Luisita subject of PARC
Resolution Nos. 2005-32-01 and 2006-34-01, the Court cannot close its eyes to
certain “operative facts” that had occurred in the interim.   Pertinently,  the
“operative fact” doctrine realizes that, in declaring a law  or  executive action  null
and void, or, by extension, no longer without force and effect, undue harshness and
resulting unfairness must be avoided. This is as it should realistically be, since rights
might have accrued in favor of natural or juridical persons and obligations justly
incurred in the meantime. The actual existence of a statute or executive act is, prior
to such a determination, an operative fact and may have consequences which
cannot justly be ignored; the past cannot always be erased by a new judicial
declaration.
While the assailed PARC resolutions effectively nullifying the Hacienda Luisita SDP
are upheld, the revocation must, by application of the operative fact principle,
give way to the right of the original 6,296 qualified FWBs to choose whether they
want to remain as HLI stockholders or not.   The Court cannot turn a blind eye to
the fact that in 1989, 93% of the FWBs agreed to the SDOA (or the MOA), which
became the basis of the SDP approved by PARC per its Resolution No. 89-12-2 dated
November 21, 1989. From 1989 to 2005, the FWBs were said to have received from
HLI salaries and cash benefits, hospital and medical benefits, 240-square meter
homelots, 3% of the gross produce from agricultural lands, and 3% of the proceeds
of the sale of the 500-hectare converted land and the 80.51-hectare lot sold to
SCTEX. HLI shares totaling 118,391,976.85 were distributed as of April 22, 2005. On
August 6, 20l0, HLI and private respondents submitted a Compromise Agreement, in
which HLI gave the FWBs the option of acquiring a piece of agricultural land or
remain as HLI stockholders, and as a matter of fact, most FWBs indicated their
choice of remaining as stockholders. These facts and circumstances tend to indicate
that some, if not all, of the FWBs may actually desire to continue as HLI
shareholders.   A matter best left to their own discretion.]
The dissents in the July 5, 2011 decision
The dissents of the minority justices were on the other fine points of the decision.
Chief Justice Corona dissented insofar as the majority refused to declare Sec. 31 of
RA 6657 unconstitutional. The provision grants to corporate landowners the option
to give qualified FWBs the right to own capital stock of the corporation in lieu of
actual land distribution. The Chief Justice was of the view that by allowing the
distribution of capital stock, and not land, as “compliance” with agrarian reform,
Sec. 31 of RA 6657 contravenes Sec. 4, Article XIII of the Constitution, which, he
argued, requires that the law implementing the agrarian reform program should
employ [actual] land redistribution mechanism. Under Sec. 31 of RA 6657, he noted,
the corporate landowner remains to be the owner of the agricultural land. Qualified
beneficiaries are given ownership only of shares of stock, not [of] the lands they till.
He concluded that since an unconstitutional provision cannot be the basis of a
constitutional act, the SDP of petitioner HLI based on Section 31 of RA 6657 is also
unconstitutional.
Justice Mendoza fully concurred with Chief Justice Corona’s position that Sec. 31 of
RA 6657 is unconstitutional. He however agreed with the majority that the FWBs be
given the option to remain as shareholders of HLI. He also joined Justice Brion’s
proposal that that the reckoning date for purposes of just compensation should
be May 11, 1989, when the SDOA was executed by Tadeco, HLI and the FWBs.
Finally, he averred that considering that more than 10 years have elapsed from May
11, 1989, the qualified FWBs, who can validly dispose of their due shares, may do
so, in favor of LBP or other qualified beneficiaries. The 10-year period need not be
counted from the issuance of the Emancipation Title (EP) or Certificate of Land
Ownership Award CLOA) because, under the SDOA, shares, not land, were to be
awarded and distributed.
Justice Brion’s dissent centered on the consequences of the revocation of HLI’s
SDP/SDOA. He argued that that the operative fact doctrine only applies in
considering the effects of a declaration of unconstitutionality of a statute or a rule
issued by the Executive Department that is accorded the status of a statute.   The
SDOA/SDP is neither a statute nor an executive issuance but a contract between the
FWBs and the landowners; hence, the operative fact doctrine is not applicable.  A
contract stands on a different plane than a statute or an executive issuance.  When
a contract is contrary to law, it is deemed void ab initio.  It produces no legal effects
whatsoever. Thus, Justice Brion questioned the option given by the majority to the
FWBs to remain as stockholders in an almost-bankrupt corporation like HLI. He
argued that the nullity of HLI’s SDP/SDOA goes into its very existence, and the
parties to it must generally revert to their respective situations prior to its
execution. Restitution, he said, is therefore in order. With the SDP being void, the
FWBs should return everything they are proven to have received pursuant to the
terms of the SDOA/SDP. Justice Brion then proposed that all aspects of the
implementation of the mandatory CARP coverage be determined by the DAR by
starting with a clean slate from [May 11,] 1989, the point in time when the
compulsory CARP coverage should start, and proceeding to adjust the relations of
the parties with due regard to the events that intervened [thereafter]. He also held
that the time of the taking (when the computation of just compensation shall be
reckoned) shall be May 11, 1989, when the SDOA was executed by Tadeco, HLI and
the FWBs.
Justice Sereno dissented with respect to how the majority modified the questioned
PARC Resolutions (i.e., no immediate land distribution, give first the original
qualified FWBs the option to either remain as stockholders of HLI or choose actual
land distribution) and the applicability of the operative fact doctrine. She would
instead order the DAR to forthwith determine the area of Hacienda Luisita that
must be covered by the compulsory coverage and monitor the land distribution to
the qualified FWBs.
Erroneous interpretation of the Court’s decision
The High Tribunal actually voted unanimously (11-0) to DISMISS/DENY the petition
of HLI and to AFFIRM the PARC resolutions. This is contrary to media reports that
the Court “voted 6-4” to dismiss the HLI petition. The five (not four) minority
justices (Chief Justice Corona, and Justices Brion, Villarama, Mendoza, and Sereno)
only partially dissented from the decision of the majority of six (Justice Velasco Jr.,
Leonardo-De Castro, Bersamin, Del Castillo, Abad, and Perez). Justice Antonio
Carpio took no part in the deliberations and in the voting, while Justice Diosdado
Peralta was on official leave. The 14 th and 15th seats in the Court were earlier
vacated by the retirements of Justices Eduardo Antonio Nachura (June 13, 2011)
and Conchita Carpio-Morales (June 19, 2011).
Another misinterpretation came from no less than the Supreme Court administrator
and spokesperson, Atty. Midas Marquez. In a press conference called after the
promulgation of the Court’s decision, Marquez initially used the term “referendum”
in explaining the High Court’s ruling. This created confusion among the parties and
the interested public since a “referendum” implies that the FWBs will have to vote
on a common mode by which to pursue their claims over Hacienda Luisita. The
decision was thus met with cries of condemnation by the misinformed farmers and
the various people’s organizations and militant groups supportive of their cause.
Marquez would later correct himself in a subsequent press briefing. But since by
then the parties had already filed their respective motions for reconsideration, he
called upon everyone to just “wait for the final resolution of the motion[s], which is
forthcoming anyway.” The resolution of the consolidated motions for
reconsideration came relatively early on November 22, 2011, or less than five
months from the promulgation of the decision.
G.R. No. 171101               November 22, 2011
(1) Motion for Clarification and Partial Reconsideration dated July 21, 2011 filed by
petitioner Hacienda Luisita, Inc. (HLI);
- it is not proper to distribute the proceeds of the conversion sale to the FWBs
the proceeds of the sale belong to the corporation for having sold its asset,
and the distribution would be considered dissolution of HLI
- the actual taking is NOT November 21, 1989, but should be reckoned from
finality of the Decision of this Court, or at the very least, the reckoning period
may be tacked to January 2, 2006, the date when the Notice of Coverage was
issued by the DAR
(2) Motion for Partial Reconsideration dated July 20, 2011 filed by PARC and DAR
- Doctrine of Operative fact does not apply because no law was declared void.
(3) Motion for Reconsideration dated July 19, 2011 filed by AMBALA
- RA 6657 is unconstitutional
- "operative fact doctrine" does not apply. the option given to the farmers to
remain as stockholders of HLI is equivalent to an option for HLI to retain land
in direct violation of the CARL, the SDP having been revoked. It should not
apply if it would result to inequity
- CA erred in holding that improving the economic status of FWBs is not among
the legal obligations of HLI under the SDP and an imperative imposition by RA
6657 and DAO 10
- CA erred in holding that LIPCO and RCBC were purchasers for value
(4) Motion for Reconsideration dated July 21, 2011 filed by respondent-intervenor
Farmworkers Agrarian Reform Movement, Inc. (FARM);
- same with AMBALA
- issue of constitutionality is the lis mota of the case which must be decided
upon
(5) Motion for Reconsideration dated July 21, 2011 filed by private respondents
Noel Mallari, Julio Suniga, Supervisory Group of Hacienda Luisita, Inc.
(Supervisory Group) and Windsor Andaya (collectively referred to as "Mallari, et
al."); and
(6) Motion for Reconsideration dated July 22, 2011 filed by private respondents
Rene Galang and
ISSUES:
(1) applicability of the operative fact doctrine;
(2) constitutionality of Sec. 31 of RA 6657 or the Comprehensive Agrarian Reform
Law of 1988;
(3) coverage of compulsory acquisition;
(4) just compensation;
(5) sale to third parties;
(6) the violations of HLI; and
(7) control over agricultural lands (revocation of SDP)
OPERATIVE FACT DOCTRINE (not much related)
Bearing in mind that PARC Resolution No. 89-12-2 ––an executive act––was
declared invalid in the instant case, the operative fact doctrine is clearly applicable.
it should be recognized that SC, in its July 5, 2011 Decision, affirmed the revocation
of Resolution No. 89-12-2 and ruled for the compulsory coverage of the agricultural
lands of Hacienda Luisita in view of HLI’s violation of the SDP and DAO 10. By
applying the doctrine, this Court merely gave the qualified FWBs the option to
remain as stockholders of HLI and ruled that they will retain the homelots and other
benefits which they received from HLI by virtue of the SDP.
The application of the doctrine is favorable to the FWBs because not only were the
FWBs allowed to retain the benefits and homelots they received under the stock
distribution scheme, they were also given the option to choose for themselves
whether they want to remain as stockholders of HLI or not.
the decrease of the area size that may be awarded per FWB. DAR also argues that
the July 5, 2011 Decision does not give it any leeway in adjusting the area that may
be awarded per FWB in case the number of actual qualified FWBs decreases.
The argument is meritorious. In order to ensure the proper distribution of the
agricultural lands of Hacienda Luisita per qualified FWB, and considering that
matters involving strictly the administrative implementation and enforcement of
agrarian reform laws are within the jurisdiction of the DAR, it is the latter which
shall determine the area with which each qualified FWB will be awarded.
500 HECTARES
RCBC and LIPCO knew that the lots they bought were subjected to CARP coverage
by means of a stock distribution plan, as the DAR conversion order was annotated
at the back of the titles of the lots they acquired. However, they are of the honest
belief that the subject lots were validly converted to commercial or industrial
purposes and for which said lots were taken out of the CARP coverage subject of
PARC Resolution No. 89-12-2 and, hence, can be legally and validly acquired by
them.

PROCEEDS OF SALE
CONSTITUTIONALITY
Considering that the 500-hectare converted land, as well as the 80.51-hectare
(Upheld previous ruling)
SCTEX lot, should have been included in the compulsory coverage were it not for
FARM is, therefore, remiss in belatedly questioning the constitutionality of Sec. 31
their conversion and valid transfers, then it is only but proper that the price
of RA 6657. The second requirement that the constitutional question should be
received for the sale of these lots should be given to the qualified FWBs. In effect,
raised at the earliest possible opportunity is clearly wanting.
the proceeds from the sale shall take the place of the lots.
The last but the most important requisite that the constitutional issue must be the
very lis mota of the case does not likewise obtain. The lis mota aspect is not
JUST COMPENSATION - “TAKING”
present, the constitutional issue tendered not being critical to the resolution of the
In Our July 5, 2011 Decision, We stated that "HLI shall be paid just compensation for
case.
the remaining agricultural land that will be transferred to DAR for land distribution
to the FWBs." We also ruled that the date of the "taking" is November 21, 1989,
when PARC approved HLI’s SDP per PARC Resolution No. 89-12-2.
COVERAGE OF COMPULSORY ACQUISITION
Mallari, et al. argued that the valuation of the land cannot be based on November
FARM argues that this Court ignored certain material facts when it limited the
21, 1989. Instead, they aver that the date of "taking" for valuation purposes is a
maximum area to be covered to 4,915.75 hectares, whereas the area that should, at
factual issue best left to the determination of the trial courts.
the least, be covered is 6,443 hectares, which is the agricultural land allegedly
AMBALA alleged that HLI should no longer be paid just compensation for the
covered by RA 6657 and previously held by Tarlac Development Corporation
agricultural land that will be distributed to the FWBs, since the RTC already
(Tadeco).
rendered a decision ordering "the Cojuangcos to transfer the control of Hacienda
We cannot subscribe to this view. Since what is put in issue before the Court is the
Luisita to the Ministry of Agrarian Reform, which will distribute the land to small
propriety of the revocation of the SDP, which only involves 4,915.75 has. of
farmers after compensating the landowners P3.988 million." In the event, however,
agricultural land and not 6,443 has., then We are constrained to rule only as regards
that this Court will rule that HLI is indeed entitled to compensation, AMBALA
the 4,915.75 has. of agricultural land.
contended that it should be pegged at forty thousand pesos (PhP 40,000) per
DAR, however, contends that the declaration of the area to be awarded to each
hectare, since this was the same value that Tadeco declared in 1989 to make sure
FWB is too restrictive. It stresses that in agricultural landholdings like Hacienda
that the farmers will not own the majority of its stocks.
Luisita, there are roads, irrigation canals, and other portions of the land that are
considered commonly-owned by farmworkers, and this may necessarily result in
SC: the date of "taking" is November 21, 1989, the date when PARC approved HLI’s
SDP in view of the fact that this is the time that the FWBs were considered to own
and possess the agricultural lands in Hacienda Luisita. To be precise, these lands
became subject of the agrarian reform coverage through the stock distribution
scheme only upon the approval of the SDP, that is, November 21, 1989. Thus, such
approval is akin to a notice of coverage ordinarily issued under compulsory
acquisition. Further, any doubt should be resolved in favor of the FWBs.
SALE TO THIRD PARTIES
There is a view that since the agricultural lands in Hacienda Luisita were placed
under CARP coverage through the SDOA scheme on May 11, 1989, then the 10-year
period prohibition on the transfer of awarded lands under RA 6657 lapsed on May
10, 1999, and, consequently, the qualified FWBs should already be allowed to sell
these lands with respect to their land interests to third parties, including HLI,
regardless of whether they have fully paid for the lands or not.
The proposition is erroneous. If the land has not yet been fully paid by the
beneficiary, the right to the land may be transferred or conveyed, with prior
approval of the DAR, to any heir of the beneficiary or to any other beneficiary who,
as a condition for such transfer or conveyance, shall cultivate the land himself.
Failing compliance herewith, the land shall be transferred to the LBP which shall
give due notice of the availability of the land in the manner specified in the
immediately preceding paragraph.
In the event of such transfer to the LBP, the latter shall compensate the beneficiary
in one lump sum for the amounts the latter has already paid, together with the
value of improvements he has made on the land.
Without a doubt, under RA 6657 and DAO 1, the awarded lands may only be
transferred or conveyed after ten (10) years from the issuance and registration of
the emancipation patent (EP) or certificate of land ownership award (CLOA).
Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in
the instant case, the 10-year prohibitive period has not even started. Significantly,
the reckoning point is the issuance of the EP or CLOA, and not the placing of the
agricultural lands under CARP coverage.
if We maintain the position that the qualified FWBs should be immediately allowed
the option to sell or convey the agricultural lands in Hacienda Luisita, then all efforts
at agrarian reform would be rendered nugatory by this Court, since, at the end of
the day, these lands will just be transferred to persons not entitled to land
distribution under CARP.
CONTROL OVER AGRICULTURAL LANDS
SC realized that the FWBs will never have control over these agricultural lands for as
long as they remain as stockholders of HLI.
bearing in mind that with the revocation of the approval of the SDP, HLI will no
longer be operating under SDP and will only be treated as an ordinary private
corporation; the FWBs who remain as stockholders of HLI will be treated as ordinary
stockholders and will no longer be under the protective mantle of RA 6657.
In addition to the foregoing, in view of the operative fact doctrine, all the benefits
and homelots80 received by all the FWBs shall be respected with no obligation to
refund or return them, since, as We have mentioned in our July 5, 2011 Decision,
"the benefits x x x were received by the FWBs as farmhands in the agricultural
enterprise of HLI and other fringe benefits were granted to them pursuant to the
existing collective bargaining agreement with Tadeco."
One last point, the HLI land shall be distributed only to the 6,296 original FWBs. The
remaining 4,206 FWBs are not entitled to any portion of the HLI land, because the
rights to said land were vested only in the 6,296 original FWBs pursuant to Sec. 22
of RA 6657. With these, PARC/DAR’s, AMBALA’s, and FARM’s Motions – GRANTED.
The order giving option to the FWBs to choose whether or not to stay as
shareholders was thereby recalled.
G.R. No. 171101               April 24, 2012
Before the Court are the Motion to Clarify and Reconsider Resolution of November
22, 2011 dated December 16, 2011 filed by petitioner Hacienda Luisita, Inc. (HLI)
and the Motion for Reconsideration/Clarification dated December 9, 2011 filed by
private respondents Noel Mallari, Julio Suniga, Supervisory Group of Hacienda
Luisita, Inc. and Windsor Andaya (collectively referred to as "Mallari, et al.").
Basically, the issues raised by HLI and Mallari, et al. boil down to the following: (1)
determination of the date of "taking"; (2) propriety of the revocation of the option
on the part of the original FWBs to remain as stockholders of HLI; (3) propriety of
distributing to the qualified FWBs the proceeds from the sale of the converted land
and of the 80.51-hectare Subic-Clark-Tarlac Expressway (SCTEX ) land; and (4) just
compensation for the homelots given to the FWBs.
PAYMENT OF JUST COMPENSATION
HLI contends that since the SDP is a modality which the agrarian reform law gives
the landowner as alternative to compulsory coverage, then the FWBs cannot be
considered as owners and possessors of the agricultural lands of Hacienda Luisita at
the time the SDP was approved by PARC. It further claims that the approval of the
SDP is not akin to a Notice of Coverage in compulsory coverage situations because
stock distribution option and compulsory acquisition are two (2) different
modalities with independent and separate rules and mechanisms. Concomitantly,
HLI maintains that the Notice of Coverage issued on January 2, 2006 may, at the
very least, be considered as the date of "taking" as this was the only time that the
agricultural lands of Hacienda Luisita were placed under compulsory acquisition in
view of its failure to perform certain obligations under the SDP.
UPHELD PREVIOUS DECISION: taking was effected on November 21, 1989
What is notable, however, is that the divestment by Tadeco of the agricultural lands
of Hacienda Luisita and the giving of the shares of stock for free is nothing but an
enticement or incentive for the FWBs to agree with the stock distribution option
scheme and not further push for land distribution. And the stubborn fact is that the
"man days" scheme of HLI impelled the FWBs to work in the hacienda in exchange
for such shares of stock.
When the agricultural lands of Hacienda Luisita were transferred by Tadeco to HLI
in order to comply with CARP through the stock distribution option scheme, sealed
with the imprimatur of PARC under PARC Resolution No. 89-12-2 dated November
21, 1989, Tadeco was consequently dispossessed of the afore-mentioned attributes
of ownership. Notably, Tadeco and HLI are two different entities with separate and
distinct legal personalities. Ownership by one cannot be considered as ownership
by the other.
Corollarily, it is the official act by the government, that is, the PARC’s approval of
the SDP, which should be considered as the reckoning point for the "taking" of the
agricultural lands of Hacienda Luisita. Although the transfer of ownership over the
agricultural lands was made prior to the SDP’s approval, it is this Court’s consistent
view that these lands officially became subject of the agrarian reform coverage
through the stock distribution scheme only upon the approval of the SDP. And as
We have mentioned in Our November 22, 2011 Resolution, such approval is akin to
a notice of coverage ordinarily issued under compulsory acquisition.
FWBS ENTITLED TO PROCEEDS OF SALE
HLI reiterates its claim over the proceeds of the sales of the 500 hectares and 80.51
hectares of the land as corporate owner and argues that the return of said proceeds
to the FWBs is unfair and violative of the Corporation Code.
This claim is bereft of merit.
UPHELD PREVIOUS RULING - were it not for the approval of the SDP by PARC, these
large parcels of land would have been distributed and ownership transferred to the
FWBs, subject to payment of just compensation, given that, as of 1989, the subject
4,915 hectares of Hacienda Luisita were already covered by CARP.
HOMELOTS
In the present recourse, HLI also harps on the fact that since the homelots given to
the FWBs do not form part of the 4,915.75 hectares covered by the SDP, then the
value of these homelots should, with the revocation of the SDP, be paid to Tadeco
as the landowner.
We disagree. As We have explained in Our July 5, 2011 Decision, the distribution of
homelots is required under RA 6657 only for corporations or business associations
owning or operating farms which opted for land distribution. This is provided under
Sec. 30 of RA 6657.
Since none of the provisions made reference to corporations which opted for stock
distribution under Sec. 31 of RA 6657, then it is apparent that said corporations are
not obliged to provide for homelots. Nonetheless, HLI undertook to "subdivide and
allocate for free and without charge among the qualified family-beneficiaries x x x
residential or homelots of not more than 240 sq. m. each, with each family
beneficiary being assured of receiving and owning a homelot in the barrio or
barangay where it actually resides." In fact, HLI was able to distribute homelots to
some if not all of the FWBs.
Thus, in our November 22, 2011 Resolution, We declared that the homelots already
received by the FWBs shall be respected with no obligation to refund or to return
them. However, since the SDP was already revoked with finality, the Court directs
the government through the DAR to pay HLI the just compensation for said
homelots in consonance with Sec. 4, Article XIII of the 1987 Constitution that the
taking of land for use in the agrarian reform program is "subject to the payment of
just compensation."
To recapitulate, the Court voted on the following issues in this manner:
1) In determining the date of "taking," the Court voted 8-6 to maintain the ruling
fixing November 21, 1989 as the date of "taking," the value of the affected lands
to be determined by the LBP and the DAR;
2) On the propriety of the revocation of the option of the FWBs to remain as HLI
stockholders, the Court, by unanimous vote, agreed to reiterate its ruling in its
November 22, 2011 Resolution that the option granted to the FWBs stays
revoked;
3) On the propriety of returning to the FWBs the proceeds of the sale of the 500-
hectare converted land and of the 80.51-hectare SCTEX land, the Court
unanimously voted to maintain its ruling to order the payment of the proceeds
of the sale of the said land to the FWBs less the 3% share, taxes and expenses
specified in the fallo of the November 22, 2011 Resolution;
4) On the payment of just compensation for the homelots to HLI, the Court, by
unanimous vote, resolved to amend its July 5, 2011 Decision and November 22,
2011 Resolution by ordering the government, through the DAR, to pay to HLI the
just compensation for the homelots thus distributed to the FWBS.
the government, through DAR, is ordered to pay Hacienda Luisita, Inc. the just
compensation for the 240-square meter homelots distributed to the FWBs.
ASSOCIATION OF SMALL LANDOWNERS V. SECRETARY OF DAR ask the Honorable Court for a writ of mandamus to compel the respondents to
issue the said rules.

CRUZ,  J.:
ISSUE:

FACTS:
Whether or not the laws being challenged is a valid exercise of Police power or
Power of Eminent Domain.
These are consolidated cases involving common legal questions including serious
challenges to the constitutionality of R.A. No. 6657 also known as the
RULING:
"Comprehensive Agrarian Reform Law of 1988"

Police Power through the Power of Eminent Domain, though there

In G.R. No. 79777, the petitioners are questioning the P.D No. 27 and E.O Nos. 228
are traditional distinction between the police power and the power of eminent
and 229 on the grounds inter alia of separation of powers, due process, equal
domain, property condemned under police power is noxious or intended for
protection and the constitutional limitation that no private property shall be taken
noxious purpose, the compensation for the taking of such property is not subject to
for public use without just compensation.
compensation, unlike the taking of the property in Eminent Domain or the power of
expropriation which requires the payment of just compensation to the owner of the
In G.R. No. 79310, the petitioners in this case claim that the power to provide for a
property expropriated.
Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to
the Congress and not to the President, the also allege that Proclamation No. 131
and E.O No. 229 should be annulled for violation of the constitutional provisions on DALMACIO URTULA, ET AL., plaintiffs-appellants, 
vs.
just compensation, due process and equal protection. They contended that the
REPUBLIC OF THE PHILIPPINES, (represented by the Land Tenure
taking must be simultaneous with payment of just compensation which such Administration), defendant-appellant.
payment is not contemplated in Section 5 of the E.O No. 229.
Luciano M. Maggay for plaintiffs-appellants. 
Judicial Cases Division of Land Tenure Administration for defendant-appellant.
In G.R. No. 79744, the petitioner argues that E.O Nos. 228 and 229 were invalidly
issued by the President and that the said executive orders violate the constitutional REYES, J.B.L., J.:
provision that no private property shall be taken without due process or just
Direct appeals, by both the plaintiffs, Dalmacio Urtula, et al. and the defendant
compensation which was denied to the petitioners. Republic of the Philippines, represented by the Land Tenure Administration, now
Land Authority, from a judgment of the Court of First Instance of Camarines Sur, in
its Civil Case No. 5306, ordering the defendant to pay interest upon a sum
In G.R. No 78742 the petitioners claim that they cannot eject their tenants and so determined by final judgment as compensation for the property expropriated in a
are unable to enjoy their right of retention because the Department of Agrarian previous case of eminent domain between the same parties, Civil Case No. 3837 of
the same court.
Reform has so far not issued the implementing rules of the decree. They therefore
The facts, as stipulated by the parties, and as found by the court a quo are as
follows:
The Court of First Instance had rendered judgment on 16 November 1957 in its Civil
Case No. 3837, for the expropriation of the Hacienda Quitang, owned by Dalmacio
Urtula by the Republic of the Philippines, for the sum of P213,094.00, "and upon
making the payment the plaintiff shall take full possession of the land." The
Republic appealed the decision to the Court of Appeals, raising the sole issue of
whether the amount fixed by the trial court was a just compensation for the
property. While the appeal was pending before the Court of Appeals, the Republic
of the Philippines deposited on 29 July 1958, with the Philippine National Bank the
sum of P117,690.00 as provisional value of the land, in accordance with an order of
the trial court dated 3 January 1958, and this deposit was withdrawn by Dalmacio
Urtula in August of 1958.
Thereafter, on 10 September 1958, the Court of Appeals granted the Republic's
petition to be placed in possession of the property; and under a writ of possession
issued by the provincial sheriff of the province, the Land Tenure Administration took
actual physical possession of the land on 11 October 1958.
Subsequently, the Court of Appeals found that the issue between the parties was
purely one of law and thereby elevated the appeal to the Supreme Court. This Court
rendered judgment thereon on 29 November 1960 in case No. L-16028, affirming
the appealed judgment of the Court of First Instance, without modification.
The Supreme Court had affirmed, as aforesaid, the decision of the trial court fixing
the amount of just compensation for P213,094.00; thus, at the time the decision
became final, the balance still due was P95,404.00. Of this balance, the Republic
paid Dalmacio Urtula the sum of P5,404.00 on 17 April 1961; but on the same day,
Urtula deposited same amount with the Land Tenure Administration in payment of
taxes and penalties for prior years up to 1958 on the expropriated land and for the
surveyor's fee for segregating one hectare donated by condemnee Urtula for a
school site. On liquidation at a later date, an excess in the amount of P423.38 was
found, and the Republic refunded this excess to Urtula on 25 September 1961. On 3
May 1961, the Republic paid the remaining balance of P90,000.00.
The taxes due and unpaid, including penalties, on the land for the years 1959, 1960
and 70% of 1961 were computed at a total of P3,534.23 as of 28 February 1962. The
interest of 6% on P95,404.00 from 11 October 1958, the date when the condemnor
Republic took possession of the land to May 1961, when the final balance was paid
to Urtula was also computed at a total of P14,633.52.
On 26 January 1961, the plaintiff demanded payment of said interest (P14,633.52)
but the defendant Republic refused, on the ground that no payment of interest had
been ordered in the decision in Civil Case No. 3837, the expropriation proceedings,
or in the affirmatory decision of the Supreme Court in G.R. No. L-16028.
The parties further stipulated as a fact that the plaintiff had agreed to pay his
counsel 10% of the amount recoverable from the defendant, as attorney's fees.
Upon the foregoing stipulated facts, the trial court rendered judgment for plaintiff
Urtula and ordered the defendant Republic to pay P14,633.52 as interest on the
balance of P95,404.00 from 11 October 1958 to 3 May 1961 and to pay the costs,
but denied the plaintiff's claim on the land taxes 1 and attorney's fees.
Both parties were not satisfied with the decision; hence, both appealed to this
Court.1äwphï1.ñët
Against the defendant Republic's defense that the final judgment in the
expropriation case, which did not provide for interest, operates to bar the present
case, by res judicata, the theory of plaintiff Urtula is that there is no identity of
causes of action in the said cases.
Thus, Urtula relates his predicaments as follows: that while the expropriation case
was pending before the trial court, he could not claim interest because the Republic
had not as yet taken possession of the land and the rule is that interest accrues
from the time of such taking; but when the Republic took possession, the case was
already on appeal and he could not ask relief because he was not an appellant nor
could he raise the issue of interest for the first time on appeal, aside from his being
impeded by the rule that proof with respect to the taking of possession had to be
adduced before the trial court, not the appellate court.
Urtula's dilemma lies in his mistaken concept of the nature of the interest that he
failed to claim in the expropriation case and which he now claims in this separate
case. Said interest is not contractual, nor based on delict or quasi-delict, but one
that —
runs as a matter of law and follows as a matter of course from the right of
the landowner to be placed in as good a position as money can accomplish,
as of the date of the taking (30 C.J.S. 230).
Understood as such, Urtula, as defendant in the expropriation case, could have
raised the matter of interest before the trial court even if there had been no actual
taking yet by the Republic and the said court could have included the payment of
interest in its judgment but conditioned upon the actual taking, because the rate of
interest upon the amount of just compensation (6%) is a known factor, and it can
reasonably be expected that at some future time, the expropriator would take
possession of the property, though the date be not fixed. In this way, multiple suits
would be avoided. Moreover, nothing prevented appellee from calling the attention
of the appellate courts (even by motion to reconsider before judgment became
final) to the subsequent taking of possession by the condemnor, and asking for
allowance of interest on the indemnity, since that followed the taking as a matter of
course, and raised no issue requiring remand of the records to the Court of origin.
As the issue of interest could have been raised in the former case but was not
raised, res judicata blocks the recovery of interest in the present case. (Tejedor vs.
Palet, 61 Phil. 494; Phil. Engineering Corp., et al. vs. Ceniza, etc., et al., L-17834, 29
Sept. 1962). It is settled that a former judgment constitutes a bar, as between the
parties, not only as to matters expressly adjudged, but all matters that could have
been adjudged at the time (Rule 39, sec. 49; Corda vs. Maglinti, L-17476, Nov. 30,
1961; Rodriguez vs. Tan, 48 Off. Gaz. 3330). It follows that interest upon the
unrecoverable interest, which plaintiff also seeks, cannot, likewise, be granted.
It is not amiss to note that Section 3 of Rule 67 of the Revised Rules of Court (Sec. 4,
Rule 69 of the old Rules), in fact, directs the defendant in an expropriation case to
"present in a single motion to dismiss or  for other appropriate relief, all of his
objections and defenses . . ." and if not so presented "are waived." (Emphasis
Supplied.) 2 As it is, the judgment allowing the collection of interest, now under
appeal in effect amends the final judgment in the expropriation case, a procedure
abhorrent to orderly judicial proceedings.
The Republic took possession on 11 October 1958. From this date, therefore, the
owner, while retaining the naked title, was deprived of the benefits from the land
and it is just and fair that realty taxes for the years 1959 and onward should be
borne by the entity exercising the right of eminent domain. (City of Manila vs.
Roxas, 60 Phil. 215).
Costs in cases of eminent domain, except those of rival claimants litigating their
claims, are charged against the plaintiff. (Sec. 12, Rule 67, Rules of Court; Sec. 13,
Rule 67 of the old Rules.) But the present case is not one of eminent domain but an
ordinary civil action where the Republic of the Philippines is a party. Section 1 of
Rule 142 provides that no costs shall be allowed against it, unless otherwise
provided by law. No provision of law providing the contrary has been cited; hence,
costs should be charged against Urtula.
FOR THE FOREGOING REASONS, the appealed judgment is reversed and the case
dismissed, with costs against the plaintiffs Dalmacio Urtula, et al.
KNECHT VS. COURT OF APPEALS [290 SCRA 223; G.R. NO. 108015, 20 MAY 1998]
Saturday, January 31, 2009 Posted by Coffeeholic Writes 
Labels: Case Digests, Political Law
Facts: The instant case is an unending sequel to several suits commenced almost
twenty years ago involving a parcel of land located at the corner of the south end of
EDSA and F.B. Harrison in Pasay City. The land was owned by petitioners Cristina de
Knecht and her son, Rene Knecht. On the land, the Knechts constructed eight
houses, leased out the seven and occupied one of them as their residence. In 1979,
the government filed for the expropriation of Knechts’ property. The government
wanted to use the land for the completion of the Manila Flood Control and
Drainage Project and the extension of the EDSA towards Roxas Boulevard. In 1982,
the City Treasurer of Pasay discovered that the Knechts failed to pay real estate
taxes on the property from 1980 to 1982. As a consequence of this deficiency, the
City Treasurer sold the property at public auction for the same amount of their
deficiency taxes. The highest bidders were respondent Spouses Anastacio and Felisa
Babiera (the Babieras) and respondent Spouses Alejandro and Flor Sangalang (the
Sangalangs). Subsequently, Sangalang and Babiera sold the land to respondent
Salem Investment Corporation. On February 17, 1983, the Batasang Pambansa
passed B.P. Blg. 340 authorizing the national government to expropriate certain
properties in Pasay City for the EDSA Extension. The property of the Knechts was
part of those expropriated under B.P. Blg. 340. The government gave out just
compensation for the lands expropriated under B.P. Blg. 340. Salem was included
and received partial payment. Seven of the eight houses of the Knechts were
demolished and the government took possession of the portion of land on which
the houses stood. Since the Knechts refused to vacate their one remaining house,
Salem filed a case against them for unlawful detainer. As defense, the Knechts
claimed ownership of the land and building. The Municipal Trial Court however
ordered the Knechts' ejectment thus their residence was demolished.  opportunity for such trial has been given, the judgment of the court, so long as it
remains unreversed, should be conclusive upon the parties and those in privity with
The Knechts continuously claimed ownership of the property and allege that they them in law or estate. To follow a contrary doctrine would subject the public peace
must be given just compensation. and quiet to the will and neglect of individuals and prefer the gratification of the
litigious disposition of the parties to the preservation of the public tranquility. 

Issue: Whether or not Knechts are the lawful owners of the land at subject. Res judicata applies when: (1) the former judgment or order is final; (2) the
judgment or order is one on the merits; (3) it was rendered by a court having
jurisdiction over the subject matter and the parties; (4) there is between the first
Held: The Supreme Court held that the Knechts were not the owners anymore of and second actions, identity of parties, of subject matter and of cause of action. 
the said land. The Knechts' right to the land had been foreclosed after they failed to
redeem it one year after the sale at public auction. Since the petitions questioning
the order of dismissal were likewise dismissed by the Court of Appeals and this
Court, the order of dismissal became final and res judicata on the issue of
ownership of the land. Petitioners contended that they did not receive notice of
their tax delinquency. Neither did they receive notice of the auction sale. However,
this question has been previously raised in the cases which have been already set
aside. The court is not a trier of facts. Res judicata has already set it. The Knechts
therefore are not the lawful owners of the land and are not any longer accountable
for just compensation given by the government.

Note: Res judicata is a ground for dismissal of an action. It is a rule that precludes
parties from relitigating Issue actually litigated and determined by a prior and final
judgment. It pervades every well-regulated system of jurisprudence, and is based
upon two grounds embodied in various maxims of the common law — one, public
policy and necessity, that there should be a limit to litigation; and another, the
individual should not be vexed twice for the same cause. When a right of fact has
been judicially tried and determined by a court of competent jurisdiction, or an