Republic vs Lim

G.R. No. 161656

June 29, 2005

Facts:

Fifty-seven (57) years have lapsed from the time the Decision in the subject
expropriation proceedings became final, but still the Republic of the Philippines,
has not compensated the owner of the property.
On September 5, 1938, the Republic of the Philippines instituted a special
civil action for expropriation with the Court of First Instance of Cebu, involving
Lots 932 registered in the name of Gervasia Denzon and 939 in the name of Eulalia
Denzon of the Banilad Friar Land Estate, Lahug, Cebu City, for the purpose of
establishing a military reservation for the Philippine Army.
The Republic took possession of the lots after depositing P9,500.00 with the
Philippine National Bank. On May 14, 1940, the CFI rendered its Decision
ordering the Republic to pay the Denzons the sum of P4,062.10 as just
compensation.
In 1950, Jose Galeos, one of the heirs of the Denzons, filed with the National
Airports Corporation a claim for rentals for the two lots, but it denied knowledge
of the matter. Another heir, Nestor Belocura, brought the claim to the Office of
then President Carlos Garcia who wrote the Civil Aeronautics Administration and
the Secretary of National Defense to expedite action on said claim. On September
6, 1961, Lt. Manuel Cabal rejected the claim but expressed willingness to pay the
appraised value of the lots within a reasonable time.
For failure of the Republic to pay for the lots, on September 20, 1961, the
Denzons successors-in-interest, Francisca Galeos-Valdehueza and Josefina
Galeos-Panerio, filed with the same CFI an action for recovery of possession with
damages against the Republic and officers of the Armed Forces of the Philippines
in possession of the property.
On July 31, 1962, the CFI promulgated its Decision in favor of Valdehueza
and Panerio, holding that they are the owners and have retained their right as such
over Lots 932 and 939 because of the Republic’s failure to pay the amount
of P4,062.10, adjudged in the expropriation proceedings. However, in view of the
annotation on their land titles, they were ordered to execute a deed of sale in favor
of the Republic. In view of the differences in money value from 1940 up to the
present, the court adjusted the market value at P16,248.40, to be paid with 6%
interest per annum from April 5, 1948, date of entry in the expropriation
proceedings, until full payment.
After their motion for reconsideration was denied, Valdehueza and Panerio
appealed from the CFI Decision, in view of the amount in controversy, directly to
this Court. On May 19, 1966, this Court rendered its Decision affirming the CFI
Decision. It held that Valdehueza and Panerio are still the registered owners of
Lots 932 and 939, there having been no payment of just compensation by the
Republic. Apparently, this Court found nothing in the records to show that the
Republic paid the owners or their successors-in-interest according to the CFI
decision. While it deposited the amount of P9,500,00, and said deposit was
allegedly disbursed, however, the payees could not be ascertained.
Notwithstanding the above finding, this Court still ruled that Valdehueza
and Panerio are not entitled to recover possession of the lots but may only demand
the payment of their fair market value. The reasons withheld:
(1) possession of Lots 932 and 939 should be restored to them as owners of
the same; (2) the Republic should be ordered to pay rentals for the use of said lots,
plus attorneys fees; and (3) the court a quo in the present suit had no power to fix
the value of the lots and order the execution of the deed of sale after payment.
(Note: It is further certified that the corresponding Vouchers and pertinent
Journal and Cash Book were destroyed during the last World War, and therefore
the names of the payees concerned cannot be ascertained.). The Government now
admits that there is no available record showing that payment for the value of the
lots in question has been made.
(Note: The title certificates mentioned secured by plaintiffs over said lots
contained annotations of the right of the National Airports Corporation (now CAA)
to pay for and acquire them. It follows that both by virtue of the judgment, long
final, in the expropriation suit, as well as the annotations upon their title
certificates, plaintiffs are not entitled to recover possession of their expropriated
lots which are still devoted to the public use for which they were expropriated but
only to demand the fair market value of the same. )
In 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, as
security for their loans. For their failure to pay Lim despite demand, he had the
mortgage foreclosed in 1976. Thus, TCT No. 23934 was cancelled, and in lieu
thereof, TCT No. 63894 was issued in his name.
In 1992, respondent Lim filed a complaint for quieting of title with the
Regional Trial Court (RTC), Branch 10, Cebu City, against General Romeo
Zulueta, as Commander of the Armed Forces of the Philippines, Commodore
Edgardo Galeos, as Commander of Naval District V of the Philippine Navy,
Antonio Cabaluna, Doroteo Mantos and Florencio Belotindos. Subsequently, he
amended the complaint to implead (sue) the Republic. The RTC rendered a
decision in favor of respondent (Lim). Vicente Lim the absolute and exclusive
owner of Lot No. 932. Petitioners elevated the case to the Court of Appeals but the
Appellate Court sustained the RTC Decision.
The Court said “Obviously, defendant-appellant Republic evaded its duty of
paying what was due to the landowners. The expropriation proceedings had
already become final in the late 1940s and yet, up to now, or more than fifty (50)
years after, the Republic had not yet paid the compensation fixed by the court
while continuously reaping benefits from the expropriated property to the prejudice
of the landowner.”
Petitioners, through the Office of the Solicitor General, filed with this Court a
petition for review on certiorari alleging that the Republic has remained the owner
of Lot 932 but denied the petition outright on the ground that the Court of Appeals
did not commit a reversible error.
The Republic’s urgent motion for clarification is actually a second motion for
reconsideration. This motion is prohibited under Section 2, Rule 52, of the 1997
Rules of Civil Procedure.

Sec. 2. Second motion for reconsideration. No second motion for reconsideration

of a judgment or final resolution by the same party shall be entertained.

One of the basic principles enshrined in our Constitution is that no person shall
be deprived of his private property without due process of law; and in
expropriation cases, an essential element of due process is that there must be just
compensation whenever private property is taken for public use.  Accordingly,
Section 9, Article III, of our Constitution mandates: Private property shall not be
taken for public use without just compensation.
“As just compensation embraces not only the correct determination of the
amount to be paid to the owners of the land, but also the payment for the land
within a reasonable time from its taking.” It has been held that if the compensation
is not paid in a reasonable time, the party may be treated as a trespasser ab initio.
The Court mandated the Republic to pay respondents predecessors-in-interest
the sum of P16,248.40 as reasonable market value of the two lots in question.
 From the taking of private property by the government under the power of
eminent domain, there arises an implied promise to compensate the owner for his
loss.
The provision of Section 9, Article III of the Constitution is not a grant but
a limitation of power. This limiting function is in keeping with the philosophy of
the Bill of Rights against the arbitrary exercise of governmental powers to the
detriment of the individual’s rights. Given this function, the provision should
therefore be strictly interpreted against the expropriator, the government,
and liberally in favor of the property owner.
The recognized rule is that title to the property expropriated shall pass from the
owner to the expropriator only upon full payment of the just compensation.
Expropriation of lands consists of two stages:

The first is concerned with the determination of the authority of the plaintiff to

exercise the power of eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an order, if not of dismissal of
the action, of condemnation declaring that the plaintiff has a lawful right to take
the property sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be determined as of the date
of the filing of the complaint x x x.

The second phase of the eminent domain action is concerned with the

determination by the court of the just compensation for the property sought to be
taken. This is done by the court with the assistance of not more than three (3)
commissioners.
Reasons for valid Reversion of Lot 932:
1. Lot 932 had ceased to operate as an airport.
2. The reversion of Lot 932 to respondent will only affect a handful of military
personnel.
It may be argued that respondent Vicente Lim acted in bad faith in entering
into a contract of mortgage with Valdehueza and Panerio despite the clear
annotation in TCT No. 23934 that Lot 932 is subject to the priority of the
National Airports Corporation [to acquire said parcels of land] x x x upon
previous payment of a reasonable market value.
 The Republic failed to perfect its title over Lot 932 by its failure to pay just
compensation. The issue of bad faith would have assumed relevance if the
Republic actually acquired title over Lot 932.
In cases where the government failed to pay just compensation within five (5)
years from the finality of the judgment in the expropriation proceedings,
the owners concerned shall have the right to recover possession of their
property.
Without prompt payment, compensation cannot be considered just.
Just compensation is described as a full and fair equivalent of the property
taken from the private owner by the expropriator. This is intended to indemnify
the owner fully for the loss he has sustained as a result of the expropriation.
The measure of this compensation is not the takers gain but the owner’s loss.
The word just is used to intensify the meaning of the word compensation, to
convey the idea that the equivalent to be rendered for the property taken shall
be real, substantial, full, and ample.
Section 6, Rule 39 provides that: A final and executory judgment or order may
be executed on motion within five (5) years from the date of its entry. After
the lapse of such time, and before it is barred by the statute of limitations, a
judgment may be enforced by action. The revived judgment may also be
enforced by motion within (5) years from the date of its entry and thereafter
by action before it is barred by the statute of limitations.

Issue: The basic issue for our resolution is whether the Republic has retained
ownership of Lot 932 despite its failure to pay respondents predecessors-in-interest
the just compensation.
The City Of Manila vs. The Arellano Law Colleges, Inc.
G.R. No. L-2929            
February 28, 1950

Facts:

Section 1 of Republic Act No. 267 provides:

Cities and municipalities are authorized to contract loans from the

Reconstruction Finance Corporation, the Philippine National Bank, and/or
other entity or person at the rate of interest not exceeding eight per cent
annum for the purpose of purchasing or expropriating homesites within their
respective territorial jurisdiction and reselling them at cost to residents of the
said cities and municipalities.

The court below ruled that this provision empowers cities to purchase but not to
expropriate lands for the purpose of subdivision and resale, and so dismissed the
present action, which seeks to condemn, for the purpose just stated, several parcels
of land having a combined area of 7,270 square meters and situated on Legarda
Street, City of Manila.

In the cases of Guido vs. Rural Progress Administration (G. R. No. L-2089)

and Commonwealth of the Philippines vs. De Borja (G. R. No. L-1496), we
discussed at great length the extent of the Philippine Government's power to
condemn private property for resale. Among other things, we said:

It has been truly said that the assertion of the right on the part of the
legislature to take the property of one citizen and transfer it to another, even
for a full compensation, when the public interest is not promoted thereby, is
claiming a despotic power, and one inconsistent with every just principle
and fundamental maxim of a free government. (29 C. J. S., 820.)

In a broad sense, expropriation of large estates, trusts in perpetuity, and land

that embraces a whole town, or large section of a town or city, bears direct
relation to the public welfare. The size of the land expropriated, the large
number of people benefited, and the extent of social and economic reform
secured by the condemnation, clothes the expropriation with public interest
and public use. The expropriation in such cases tends to abolish economic
slavery, feudalistic practices, endless conflicts between landlords and
tenants, and other evils inimical to community prosperity and contentment
and public peace and order. Although courts are not in agreement as to the
tests to be applied in determining whether the use is public or not, some go
so far in the direction of a liberal construction as to hold that public use is
synonymous with public benefit, public utility, or public advantage, and to
authorize the exercise of the power of eminent domain to promote such
public benefit, etc., especially where the interest involved are of
considerable magnitude. (29 C. J. S.; 823, 824; see also People of Puerto
Rico vs. Eastern Sugar Associate et al., 156 Fed. [2d], 316.) In some
instances, slumsites have been acquired by condemnation. The highest court
of New York State has ruled that slum clearance and erection of houses for
low-income families were public purpose for which New York City Housing
authorities could exercise the power of condemnation and this decision was
followed by similar ones in other states. The underlying reasons for these
decisions are that the destruction of congested areas and unsanitary
dwellings diminished the potentialities of epidemics, crime and waste,
prevents the spread of crime and diseases to unaffected areas, enhances the
physical and moral value of the surrounding communities, and promote the
safety and welfare of the public in general. (Murray et al. vs. La Guardia, 52
N. e. [2d], 884; General Development Coop. vs. City of Detroit, 33 N. W.
[2d], 919; Weizner vs. Stichman, 64 N. Y. S. [2d], 50.) But it will be noted
that in all these cases and of similar nature extensive areas were involved
and numerous people and the general public benefited by the action taken.

The condemnation of a small property in behalf of 10, 20 or 50 persons and

their families does not insure to the benefit of the public to a degree
sufficient to give the use public character. The expropriation proceedings at
bar have been instituted for the economic relief of a few families devoid of
any consideration of public peace and order, or other public advantage. What
is proposed to be done is to take plaintiff's property, which for all we know
she acquired by sweat and sacrifices for her and her family's security, and
sell it at cost to a few lessees who refuse to pay the stipulated rent or leave
the premises.

No fixed line of demarcation between what taking is for public use and what
is not can made; each case has to be judged according to its peculiar
circumstances. It suffices to say for the purpose of this decision that the case
 under consideration is far wanting in those elements which make for public
convenience or public use. It is patterned upon an ideology far removed
from the majority of the citizens of this country. If upheld, this case would
open the gates to more oppressive expropriations. If this expropriation be
constitutional, we see no reason why a 10-, 15-, or 25-hectare farm land
might not be expropriated and subdivided, and sold to those who want to
own a portion of it. to make the analogy closer, we find no reason why the
Rural Progress Administration could not take by condemnation an urban lot
containing an area of 1,000 or 2,000 square meters for subdivision into tiny
lots for resale to its occupations or those who want to build thereon.

We are inclined to believe that Act No. 267 empowers cities to expropriate as well
as to purchase lands for homesites. The word "expropriating," taken singly or with
the text, is susceptible of only meaning. But this power to expropriate is
necessarily subject to the limitations and conditions noted in the decisions above
cited. The National Government may not confer its instrumentalities authority
which itself may not exercise. A stream cannot run higher than its source.

Viewed from another angle, the case at bar is weaker for the condemner. In the
first place, the land that is the subject of the present expropriation is only one-third
of the land sought to be taken in the Guido case, and about two-thirds of that
involved in the Borja condemnation proceeding. In the second place, the Arellano
Colleges' land is situated in a highly commercial section of the city and is occupied
by persons who are not bona fide tenants. Lastly, this land was brought by the
defendant for a university site to take the place of rented buildings that are
unsuitable for schools of higher learning.

To authorize the condemnation of any particular land by a grantee of the power of

eminent domain, a necessity must exist for the taking thereof for the proposed uses
and purposes. (29 C. J. S., 884-885.) In City of Manila vs. Manila Chinese
Community (40 Phil., 349), this Court, citing American decision, laid done this
rule:

The very foundation of the right to exercise eminent domain is a genuine

necessity, and that necessity must be of a public character. The
ascertainment of the necessity must precede or accompany, and not follow,
the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind.,
511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry.
etc. Co., 72 Ohio St., 368.)
And this passage in Blackstone's Commentaries on the English Law is cited in that
decision: "So great is the regard of the law for private property that it will not
authorize the least violation of it, even for the public good, unless there exist a very
great necessity thereof."

Perhaps modern decisions are not so exigent. Necessity within the rule that the
particular property to be expropriated must be necessary. does not mean an
absolute but only a reasonable or practical necessity, such as would combine the
greatest benefit to the public with the least inconvenience and expense to the
condemning party and property owner consistent with such benefits. (29 C. J. S.,
386.) But measured even by this standard, and forgetting for a moment the private
character of the intended use, necessity for the condemnation has not been shown.
The land in question has cost the owner P140,000. The people for whose benefit
the condemnation is being undertaken are so poor they could ill afford to meet this
high price, unless they intend to borrow the money with a view to disposing of the
property later for a profit. Cheaper lands not dedicated to a purpose so worthy as a
school and more suited to the occupants' needs and means, if really they only want
to own their own homes, are plenty elsewhere. On the other hand, the defendant
not only has invested a considerable amount for its property but had the plans for
construction ready and would have completed the project a long time ago had it not
been stopped by the city authorities. And again, while a handful of people stand to
profits by the expropriation, the development of a university that has a present
enrollment of 9,000 students would be sacrificed. Any good that would accrue to
the public from providing homes to a few families fades into insignificance in
comparison with the preparation of a young men and young women for useful
citizenship and for service to the government and the community, a task which the
government alone is not in a position to undertake. As the Rural Progress
Administration, the national agency lands for resale as homesites and to which the
petition to purchase the land in question on behalf of the occupants was referred by
the President, turning down the occupants request after proper investigation,
commented that "the necessity of the Arellano Law College to acquire a permanent
site of its own is imperative not only because denial of the same would hamper the
objectives of that educational institution, but it would likewise be taking a property
intended already for public benefit." The Mayor of the City of Manila himself
confessed that he believes the plaintiff is entitled to keep this land.

The order of the Court of First Instance of Manila is affirmed without costs.

Moran, C.J., Ozaeta, Pablo, Padilla, Montemayor, Reyes and Torres, JJ., concur.
City of Manila vs Chinese Community of Manila
G.R. No. L-14355            
October 31, 1919

Facts:

On the 11th day of December, 1916, the city of Manila presented a petition in the
Court of First Instance of said city, praying that certain lands, therein particularly
described, be expropriated for the purpose of constructing a public improvement.

The purpose of constructing a public improvement (street purposes), namely, the

extension of Rizal Avenue, Manila, it is necessary for the plaintiff to acquire
ownership in fee simple of certain parcels of land situated in the district of Binondo
of said city within Block 83 of said district, and within the jurisdiction of this
court.

The defendant, the Comunidad de Chinos de Manila was the owner of parcels one

and two of the land described in paragraph 2 of the complaint. It denied that it
was either necessary or expedient that the said parcels be expropriated for street
purposes. Its contention is that if the construction of the street or road should be
considered a public necessity, other routes were available, which would fully
satisfy the plaintiff's purposes, at much less expense and without disturbing the
resting places of the dead.

Ildefonso Tambunting and others, answering the petition, presented a substantial

defense. They said that a portion of the lands in question was used as a cemetery in
which were the graves of his ancestors; that the land had become quasi-public
property of a benevolent association, dedicated and used for the burial of the dead
and that many dead were buried there; that if the plaintiff deemed it necessary to
extend Rizal Avenue, he had offered and still offers to grant a right of way for the
said extension over other land, without cost to the plaintiff, in order that the
sepulchers, chapels and graves of his ancestors may not be disturbed; that the land
so offered, free of charge, would answer every public necessity on the part of the
plaintiff.
The petition was decided in favor of the defendants. There was an appeal.

In the present case there are two conditions imposed upon the authority conceded
to the City of Manila: First, the land must be private; and, second, the purpose
must be public. If the court, upon trial, finds that neither of these conditions exists
or that either one of them fails, certainly it cannot be contended that the right is
being exercised in accordance with law.