Reconciling the Right of the Landowner to Just Compensation

and the Power of the State to Exercise Eminent Domain:

A Critical Analysis

Atty. Marlo Villarazo Destura, LLM, DCL1

ABSTRACT
The Constitution of the Philippines creates a delicate balance between
the right of the landowner to just compensation and the power of the state to
take private property for public use. This paper argues that although the
balance created by the Constitution is impressive, its application is taxing. In
practice, landowners are dispossessed of their property and even deprived of
just compensation; while the state suffers indefinite delays in the completion
of projects pump-primed towards national development due to unwarranted
claims and demands of landowners. This paper looks deeper into how right-
of-way (ROW) and land acquisition for public infrastructure can be difficult
and complex, albeit, the existence of various fields of legislations and
administrative issuance. This paper concludes that to achieve growth in
national infrastructure program, a thorough review of existing approaches and
processes, and legislation is a must to reconcile the right of the landowner
whose property is taken and the state that will ultimately bear the cost of
payment of compensation.

Introduction

The Constitution of the Philippines creates a delicate balance between the right of
landowners to just compensation and the power of the state to take private property for public
use. The state can compulsorily re-acquire, to the ownership of the Republic of the Philippines,
any private land that can be demonstrated as required for “public use” or “public benefit”,
under the precept that the sovereign ultimately holds title to all lands and may call for this title
when necessary to serve a greater purpose.

The State exercises the power of eminent domain through Congress which, in turn,
delegates this power to administrative agencies like the Department of Public Works and
Highways (DPWH) and the Department of Transportation (DOTR), to public corporations,
like the National Power Corporation (NPC) and the National Transmission Corporation
(TRANSCO), as well as to some private corporations like the National Grid Corporation of
the Philippines, all of which are engaged in public service.

1Excerpt from the Dissertation of the same title presented to the Graduate School of Law, University of Santo
Tomas in partial fulfillment of the requirements for the degree Doctor of Civil Law, on May 17, 2019.
 The exercise of this right, called Eminent Domain, is conditioned upon the genuine
necessity for the taking of private property for public use only upon the payment of just
compensation and observance of due process of law. Accordingly, this power of far-reaching
consequence is expressly limited by Section 9 of Article III of the 1987 Constitution which
guarantees that “private property shall not be taken for public use without just compensation.”

However, the way towards achieving this end has been rough. There have been several
attempts, both in legislation and judicial precedents, in ensuring that the exercise of this
power is in constant regard to the fundamental rights of every person, and vice versa. Taking
of private property requires forbearance in the disruption of the lives of many, no matter
what their economic resources or level of comfort in their current circumstances may be. In
practice, landowners are dispossessed of their properties and even deprived of just
compensation; while the state suffers indefinite delays in the completion of projects pump-
primed towards national development due to unwarranted claims and demands of
landowners.

Right-of-way (ROW) and land acquisition for public infrastructure have been difficult
and complex, albeit, the existence of various fields of legislations and administrative issuance.
The present law, Republic Act 10752, otherwise known as The Right-of-Way Act of 2016,
approved on March 7, 2016, just like its predecessor, Republic Act 8974, enacted on
November 7, 2000, and other earlier laws, tries to set a balance between the right of
landowners to just compensation and the power of the state to compulsorily take private
property for public use. It codifies the process of acquisition of real property needed as right-
of-way, infrastructure site or location for national government projects undertaken by any
department, bureau, office, commission, authority or agency of the National Government,
including any government-owned or controlled corporation or state college or university,
authorized by law or its respective charter to undertake national government projects. Its
accompanying Implementation Rules and Regulations (IRR) took effect on August 7, 2016
and provided guidance on the processes, procedures and protocols that must be observed in
the acquisition process.

As envisioned, any action undertaken to acquire land for right-of-way, whether public
land or land owned in fee simply by private entities, must be guided by the Constitution. It
must be undertaken in complete compliance with RA 10752 and its 2016 IRR. The right to
take private land and the residence or economic livelihood of citizens, is a power with very
significant impacts on the community and on individual families and businesses. It should not
be undertaken without rigorous diligence, in-depth research, and fair treatment of all entities
affected by the project.

Taking the institutional milieu, agencies must contend also with the fact that ultimately,
it is the court, that decides what constitutes genuine necessity, public use or purpose, and the
determination of just compensation, albeit, the existence of this new legislation. New
developments in jurisprudence have created the dilemma of trying to harmonize the
provisions of the Rules of Court on expropriation vis-à-vis the recent provisions of Republic
Act No. 10752, which seems to be inadequate in addressing the continuing claims
bombarding these agencies by property owners whose lands were taken prior to or without
the benefit of expropriation. At the same time, these agencies are faced with mushrooming
claims of landowners who were benefitted by recent jurisprudence requiring the full payment,
not just the payment of easement of right-of-way equivalent to 10% of the market value of
the property affected by projects of the government.

The question of whether the present law has achieved what its predecessors failed to
still lingers. Proposals for amendment and even repeal of this law are catching up in Congress.
Thus, to achieve growth in this national infrastructure program, a thorough review of existing
approaches and processes, and legislation is a must to strike a balance between the landowner
whose property is taken and the state that will ultimately bear the cost of payment of just
compensation.

Hence, the need to reconcile the right to compensation of property owners and the
power of eminent domain. To do this, following questions, among others must be addressed:

1. How can existing laws, rules and regulations addressing right-of-way and site
acquisition of national government projects be described in terms of providing
for the right to just compensation of land owners; and upholding the power of
the state to take private property for public use?
2. How does the Philippine Supreme Court interpret and construe the above laws,
rules and regulations on the valuation of just compensation; and reckoning point
in determining the value of property?
3. How can implementing government agencies be compared in terms of right-of
way and site acquisition action plan; modes of acquisition; treatment of lands
under Commonwealth Act No.141; and addressing outstanding claims for right-
of-way payments?
To address the foregoing problems, the study surveyed the State’s exercise of the power
of eminent domain through Congress, which, in turn delegates this power to local government
units, administrative agencies, public and private corporations engaged in public service. In
this study, the researcher focused on the processes employed in the acquisition of right-of-
way, and sites for national government projects by implementing agencies particularly
mentioned in Republic Act 10752, to promulgate the implementing rules and regulations of
the present law, namely; the Department of Public Works and Highways (DPWH). The
Department of Transportation (DOTR), and the Department of Energy (DOE), through the
National Transmission Corporation (TRANSCO), where most ROW-related claims and cases
are filed. The study traced and surveyed the decisions of the Supreme Court of the Philippines,
beginning 2001 to the present to determine the trend of jurisprudence affecting issues and
problems addressed in the research. It focused not only on cases involving the three agencies
concerned, but also on those that have already reached the Supreme Court, which have
relevance to the study.

Nonetheless, a survey of basic concepts and related studies is necessary to paint the
backdrop for the later findings, starting with the concept of eminent domain.

A. Concept of Eminent Domain

The power of eminent domain traces its origin from the English Common Law. It is
known as compulsory purchase, under the theory that all lands are held in allodial title by the
sovereign right thereof. Under common law, allodial title is held only by the monarch and all
the others are only tenants, who may enjoy the rights of ownership conditioned only to
governmental powers of taxation, police power and eminent domain.2

Hugo Grotius, the Dutch jurist who is credited for coining the phrase “eminent
domain,” describes this concept in a 1625 text: as the right of the state or its representative to
use and even alienate or destroy the property of the subject, not only in extreme necessity, but
also for public utility, for as long as the state likewise recompenses the subject for the loss.

Justice Isagani Cruz calls eminent domain as the power of expropriation, described as
the “highest and most exact idea of property remaining in the government that they may be
acquired for some public purpose through a method in the nature of a compulsory sale to the
State”.3

The Supreme Court, in the case of Barangay Sindalan vs. Court of Appeals, defines eminent
domain as the authority of the state to acquire private property; acknowledged as an inherent
political right founded on a common necessity and interest of appropriating the property of
individual members to the great necessities of the whole community.4

As such, the expropriating authority is vested with broad discretion to designate the
particular property to be taken and how much thereof may be expropriated. The property
owners may not interpose objections merely because in their judgment some other property
would have been more suitable, or just as suitable for the purpose. The right to the use,
enjoyment and disposal of private property is tempered by and has to yield to the demands of
the common good.5
1. Exercise of the Power

In the Philippines, the power of eminent domain is exercised by the

Legislature. However, it may be delegated by Congress to the President, administrative bodies,
local government units, and even to private enterprises performing public services. In some
jurisdictions, like in Australia, the Minister of Finance and Deregulation, is responsible to the
Parliament for administering the Land Acquisition Act represents the Commonwealth and
carries out the day-to-day administration of the law.6

Nonetheless, the foundation of the right to exercise eminent domain is a genuine

necessity. In the case Manapat & Lim’s judgement, the Supreme Court declared that if the
foundation of the right to exercise eminent domain is a genuine necessity, which must be of a
public character. It noted that, as a rule, the determination of whether there is genuine
necessity for the exercise is a justiciable question. However, when the power is exercised by

2Jessie Seginor and John F. Mcdonald, Review Articles: Eminent Domain, Academic Journal Articles,

https: docs.google.com/documents, September 20, 2017.

3 Isagani A. Cruz, citing Black’s Law Dictionary, 4th ed., Constitutional Law, Phoenix Press Inc, Quezon

City, c. 2003, p. 616

4 Barangay Sindalan vs. Court of Appeals, G.R. No. 150640.
5 Sumulong vs. Guerrero 154 SCRA 461
6 The Commonwealth and You, Compulsory Acquisition Brochure, Department of Finance and

Deregulation, Australian Government, May 2011.

the Legislature, the question of necessity is essentially a political question. Thus, in City
of Manila v. Chinese Community, the Supreme Court held, to wit:7

In providing for the exercise of the power of eminent domain, the

legislature, may directly determine the necessity for appropriating
private property for a particular improvement for public use. It may
select the exact location of the improvement. In such a case, it is
well-settled that the utility of the proposed improvement, the extent
of the public necessity for its construction, the expediency of
constructing it, the suitability of the location selected and the
consequent necessity of taking the land selected for its site, are all
questions exclusively for the legislature to determine them, and the
courts have no power to interfere, or to substitute their own views
for those of the representatives of the people.

Inversely, when the power is exercised by the delegate, the question of necessity
becomes a justiciable question. Hence, the question of necessity is an issue as its respondents
and subjects are administrative agencies endowed with delegated powers to exercise eminent
powers from the legislature.
2. Limitations of the Exercise

Among the safeguards in the exercise of the fundamental powers of the state under the
Bill of Rights are the rights, among others, to due process and equal protection. Powers and
rights countercheck but are not hostile. They have one objective: coexistence. Their goal is the
same: a well-ordered society based on the inviolability of rights, albeit regulated for the
common good.8

The 1987 Philippine Constitution provides that “private property shall not be taken for
public use without just compensation.” According to Cruz9, the exercise of the right of
eminent domain, whether directly by the State, or indirectly by its authorized agents, is
necessarily a derogation of private rights, and the rule in this case is that the authority must be
strictly construed. No species of property is held by individuals with greater tenacity, and none
is guarded by the constitution and laws more sedulously, than the right to the freehold of
inhabitants. When the legislature interferes with that right and, for greater public purposes,
appropriates the land of an individual without his/her consent, the plain meaning of the law
should not be enlarged by doubtful interpretation.

Stefan Kirchner (2012) examined in his study the right to property under European
Human Rights Law; is protected under Art. 1 of Protocol 1 to the ECHR which states that
every natural person is titled to the peaceful possession of his/her property. The first sentence
of the first paragraph in Article 1 of Protocol 1 not only protects the right to use but constitutes

7 G.R. No. L-14355 - October 31, 1919

8Ibid, p. 1
9Ibid, p. 63
a general principle. The second sentence of the same norm regulates expropriation, that is,
loss of property.10

In the case of Manapat and Lim v. Court of Appeals and The National Housing Authority11, the
Supreme Court has provided the basic elements for the valid exercise of this power:
a. the property taken must be a private one; alienated to private ownership and
possessing of a title by a private owner.
b. there must be genuine necessity to take the private property; the determination of
whether there is genuine necessity for the exercise is a justiciable question, except
when it is exercised by Congress. In this case, it becomes a political question. It is
required that the implementing agency rigorously studies the proposed project to
determine whether it is a balanced and cost-effective solution that minimizes
social and environmental impacts.
c. the taking must be for public use; or it is devoted to a public purpose. The number
of people is not determinative for as long as it redounds to the benefit of the
public and not intended for the individual only.
d. there must be payment of just compensation;
e. the taking must comply with the due process of law; the procedural elements must
comply with the rights of individuals determined under the Constitution and as
required under the Right-of-way legislation.

This will be discussed in detail in the findings of the study.

2.a. Public Use: Its meaning and expanded definition

Public use, according to Reed, is “co-terminous with the scope of a sovereign’s police
power.” On the other hand, Brett Talley (2005) believes that in the exercise thereof, public use
and payment of compensation are considered, as guards against the unwarranted exercise of
this power by the government.12

Philippine jurisprudence states that the exercise of the power of eminent domain is
constrained by two constitutional provisions, to wit: (1) private property shall not be taken for
public use without just compensation under Article III, Section 9 and (2) no person shall be
deprived of life, liberty, or property without due process of law under Art. III, Sec. 1 of the
Constitution.19 Nevertheless, the High Court said that there is no precise meaning of public
use and the term is susceptible to myriads of meanings depending on diverse situations. The
limited meaning attached to public use is used by the public or public employment, that a duty
must devolve on the person or corporation holding property appropriated by right of eminent
domain to furnish the public with the use intended, and that there must be a right on the part

10 Stefan Kirchner, et al, Compensation Under the European Convention on Human Rights for

Expropriations, Filiale Rhein Main Platz der Einheit 1, D-60327 Frankfurt am Main
11 G.R. No. 110478 and G.R. No. 116176
12 Brett Talley, Restraining Eminent Domain through Just Compensation: Kelo V. City of New London,

125 S. Ct. 2655 (2005),Harvard Journal of Law & Public Policy [Vol. 29]
of the public, or some portions of it, or some public or quasi-public agencies on behalf of the
public to use the property after it is condemned.13
Recent developments have expanded the meaning of public use to include economic
development. In the US Supreme Court case of Kelo vs. New London14, the Court held that
municipalities may use the power of eminent domain to implement an economic development
project that is fully consistent with the state statue. Whether economic development fulfills
the public use requirement or not in the Fifth Amendment, Seginor in his study finds that the
majority of the court equates public use to public purpose. This use of eminent domain power
for economic development remains controversial because of the notion that the definition of
public use has become too broad, though just compensation is provided, and public purpose
motivates the property acquisition15. This is also true in the Manapat case where “the number
of people is not determinative for as long as it redounds to the benefit of the public and not
only to the individual”.16

In the light of the expansive interpretation of the “public use” requirement, Abraham
Bell and Gideon Parchomovsky both believe that the payment of “just compensation” remains
as the only meaningful limit on the government’s eminent domain power and, consequently,
the only safeguard of private property owners’ rights against abusive takings;17 that the current
compensation regime is sub-optimal.

2.b Payment of Compensation

In defining just compensation, Reed requires that owners of property receive just
compensation, as required by the constitution. The purpose of the constitutional proscription
is “to bar Government from forcing some people alone to bear public burdens which, in all
fairness and justice, should be borne by the public as a whole.” Compensating the landowner
with an amount of money that places the owner in “as good, but not better, financial position
after the taking as much as s/he enjoyed before the taking” accomplishes this goal.18

According to Brett Talley, although the taking of property without compensation is an

old issue, the idea of affording just compensation to displaced individuals is a recent
development.19 While this could serve as warning to the government’s exercise of power, the
author also considers the application of simple mechanism to determine what compensation
should mean through the application of fair market values by asking "what a willing buyer
would pay in cash to a willing seller."20

13 Isagani A. Cruz and Carlo Cruz, Constitutional Law, (Central Book Supply, Inc., Quezon City: 2015),
p. 184
545 US 2655 (2005)
14

Jessie Seginor and John F. Mcdonald, supra

15
16 G.R. No. 110478 and G.R. No. 116176
17
Abraham Bell and Gideon Parchomovsky, Taking Compensation Private, Stanford Law Review [Vol.
59:871]
18Ibid.
19 Brett Talley, Restraining Eminent Domain through Just Compensation: Kelo V. City of New London,

125 S. Ct. 2655 (2005),Harvard Journal of Law & Public Policy [Vol. 29]
20 Brett Talley, supra
 The question of what constitutes just compensation is debatable up to now. In India,
only ‘reasonable compensation’ is given there. Under India’s Land Acquisition Act of 1894, it
is not the ‘value of the land’ or ‘just compensation’, as the process of acquisition is not based
on consultation. In Peru, Singapore and Japan, land is acquired, and compensation is
determined through discussions with stakeholders. In some other countries. Compensation
paid for land is much more than the value of land as it disturbs livelihood and raises costs. For
example, there is social subsidy in Brazil and special compensation in the United Kingdom.21

In the Philippines, just compensation is described as essentially the equivalence of the

property to restore the owner from the loss sustained in expropriation. It is not a gain of the
government but the loss of the owner. This is for the reason that compensation is also required
to be just to give its full meaning22 However, “for compensation to be just, it must be fair not
only to the owner but also to the expropriator. Payment in excess of the full and fair equivalent
of the loss sustained by the owner, being prejudicial to the public, will not satisfy the
requirement of just compensation”.

In the case of Henry Sy vs. Local Government of Quezon City, the Supreme Court
considered just compensation to be the sum equivalent of the market value of property. The
Court noted that:

“the constitutional limitation of just compensation is considered to be the

sum equivalent to the market value of the property, which is broadly
described to be the price fixed by the seller in open market in the usual
and ordinary course of legal action and competition or the fair value of
the property as between the one who receives, and one who desires to sell
it at the fixed time of the actual taking by the government. Thus, if
property is taken for public use before compensation it is deposited with
the court having jurisdiction over the case, the final compensation must
include interests on its just value to be computed from the time the
property is taken to when compensation is actually paid or deposited with
the court. In fine, between the taking of the property and the actual
payment, legal interests accrue in order to place the owner in a position as
good as (but not better than) the position he/she was in before the taking
occurred x x x”23

3. Laws and Rules on Right-of-way and Site Acquisition

Article III, Section 9 of the Constitution is the general reference for the exercise of the
right of eminent domain, which is both a recognition of the state’s inherent authority and the
limitation thereof. It states that “Private property shall not be taken for public use without just

21 Sukhpal Singh, Land Acquisition in India: An Examination of the 2013 Act and Options. Journal of
Land and Rural Studies, Centre for Rural Studies, LBSNAA, SAGE Publication, 2016.
21 Isagani A. Cruz, p. 77
22 Henry Sy vs. Local Governemnt of Quezon City, G.R. No. 202690
compensation.” With this specific declaration, this power of eminent domain is available to
the State, upon payment of just compensation and compliance of established rules. In fact,
Abraham Bell and Gideon Parchomovsky maintain in their study that while both efficiency
and fairness require paying full compensation for seizures by eminent domain, current law
limits the exercise thereof. 24

Presently, Republic Act 1075225, otherwise known as Right-of-way Act of 2016 aims to
fast track and simplify negotiated sale as preferred mode of ROW acquisitions by making the
price offer and terms negotiation more attractive and just for owners. It enables implementing
agencies to quickly adopt a market-based price without fear of audit disallowance, while
ensuring that the rights of property owners and project-affected persons (PAPs) are duly
protected. This law superseded Republic Act 8974, which was also enacted to set guidelines
for the acquisition of right-of-way, site or location for national government infrastructure
projects, to ensure that owners of real property acquired for national government
infrastructure projects are promptly paid and justly compensated. Interestingly, Section 3 of
RA 10752 defines what “national government projects” are, which –

“shall refer to all national government infrastructure projects and their

public service facilities, engineering works and service contracts, including
projects undertaken by government-owned and -controlled corporations,
all projects covered by Republic Act No. 6957, as amended by Republic
Act No. 7718, otherwise known as the “Build-Operate-and-Transfer
Law”, and other related and necessary activities, such as site acquisition,
supply or installation of equipment and materials, implementation,
construction, completion, operation, maintenance, improvement, repair
and rehabilitation, regardless of the source of funding.26”
Under this law, the entity responsible for obtaining or acquiring the property to be used
for national government infrastructure projects shall be their Implementing Agencies which
can be any department, bureau, office, commission, authority or agency of the national
government, including government-owned or controlled corporations, authorized by law or
their respective charters to contract for or undertake infrastructure or development projects.

Consistent with their legislated mandate, the Department of Transportation (DOTr) and
the Department of Public Works and Highways (DPWH) are implementing agencies that have
the right to acquire the right-of-way required for national government projects, for
transportation, and infrastructure projects, respectively. The line of authority in the use of
power to compulsorily acquire private land can be determined using the Administrative Code
of 1987 – Executive Order 292 as reference. The delegated authority of DOTr and DPWH
to exercise power of eminent domain stems from EO 125, s 1987, in relation to EO 441, series
1997.27

24 Abraham Bell, supra

25 An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government
Infrastructure Projects”, or “Right-of-Way”, was approved on )7 March 2016.
26 Section 3, RA 10752

27 Ibid
 The DOTr is the primary policy planning, programming, coordinating, implementing
and administrative entity of the executive branch of the government on the promotion,
development and regulation of a dependable and coordinated network of transportation
systems, as well as in the fast, safe, efficient and reliable transportation services. Subject to the
mandate of the Department, the DOTr Secretary has devolved Presidential authority to
assume responsibility over progress transportation projects consistent with the Department’s
mandate and supported by appropriate budgetary funding.28 Inherent in the mandate is the
right to implement national government infrastructure projects as a designated Implementing
Agency.29

On the construction of transmission lines and towers, Republic Act No. 639530 was
enacted granting the National Power Corporation (NPC) the power to acquire “property
incident to, or necessary, convenient or proper to carry out the purposes for which it was
created for the construction of the generation and transmission facilities to provide electricity
for the entire country. On September 10, 1971, the NPC’s charter was revised by Republic
Act. No.6395. In the performance of its functions, the NPC negotiated with landowners the
acquisition of right-of-way easements over their properties for the construction of
transmission lines and facilities, with a fixed formula in computing just compensation provided
in section 3-A (b) of R.A. 6395, stating that in cases of acquisition of easements of right-of-
way, compensation should not exceed ten percent of the market value as declared by the owner
or administrator or by the assessor, whichever is lower.31

At the turn of the century, Republic Act 8974 was enacted on November 7, 2000, to set
guidelines for the acquisition of right-of-way, site or location for national government
infrastructure projects, to ensure that owners of real property acquired for national
government infrastructure projects are promptly paid and justly compensated. The law
mandates the immediate payment to the owner of the property the amount equivalent to the
sum of one hundred percent (100%) of its value based on the current relevant zonal valuation
of the Bureau of Internal Revenue (BIR) and the value of the improvements and/or
structures.32

Congress also passed in 2001 Republic Act No. 9136, otherwise known as the Electric
Power Industry Reform Act (EPIRA) creating the National Transmission Corporation
(TRANSCO) that assumed the electrical transmission function of NPC, leaving the generation
function to the latter. Like its predecessor, TRANSCO has delegated sovereign power of
eminent domain to take private properties for the construction of transmission lines. It
assumed all NPC’s pending claims and cases in various courts including unpaid claims of
landowners.33 Aside from the foregoing, there were also other laws, orders, rules and

28 DOTr ROW Manual, supra

29 Ibid
30 Revising Charter of the National Power Corporation approved by Congress in 1971, for the purpose

of undertaking the development of hydroelectric power throughout the Philippines, to carry out the said purpose,
NAPOCOR is authorized to exercise the power of eminent domain.
31Ibid
32Republic Act 8974, Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National

Government Infrastructure Projects and for Other Purposes.

33 Republic Act 9136 or the Electric Power Industry Reform Act of 2001
regulations that were passed to address specific guidelines in connection with right-of-way and
site acquisitions for national government infrastructure projects.

With specific reference to just compensation, there were several decrees promulgated
by President Marcos providing that the just compensation for property under expropriation
should be either the sworn valuation made by the owner or the official assessment thereof,
whichever is lower. In National Housing Authority vs. Reyes, the Supreme Court applied this
rule on the ground. According to Chief Justice Fernando, its constitutionality should be
presumed as it had not been challenged.

In Export Processing Zone Authority vs. Dulay, these decrees were invalidated and the Reyes
case was reversed, holding that the method of ascertaining just compensation under decrees
constitutes impermissible encroachment on judicial prerogatives.34 According to him, when
the legislature interferes with the right of landowners to property and, for greater public
purposes, appropriates the land of an individual without his consent, the plain meaning of the
law should not be enlarged by doubtful interpretation.35

Nevertheless, it is an established doctrine in Expert Processing Zone Authority vs. Dulay36

that any valuation for just compensation laid down in the statutes may serve only as a guiding
principle, or one of the factors in determining just compensation. The executive department
on the legislature may make the initial determinations, “but when a party claims a violation of
the guarantee in the Bill of Rights that private property may not be taken for public use without
just compensation, no statute, decree, or executive act can mandate that its own determination
shall prevail over the court’s findings.

In the 2004 Decision of the Supreme Court, in the case titled National Power Corporation
v. Pobre, NPC moved for the dismissal of the case after it found out that it would no longer
use the property. In this case, the SC held that the case ceased to be an action for expropriation
when NPC dismissed its complaint. Since it was reduced to a simple case of recovery of
damages, in Pabre’s counter claim, the provisions of the Rules of Court on the ascertainment
of the just compensation to be paid were no longer applicable; hence, a trial before
commissioners was dispensable. The Court further held that “the usual procedure in the
determination of just compensation is waived when the government itself initially violates
procedural requirements.37

3.1. Modes of Acquisition

In the acquisition of private lands together with improvements thereon, the

Government or the Implementing agency may acquire real property required as right-of-way
or site location for any national government infrastructure project through donation,
negotiated sale and expropriation. Aside from those, RA 10752 also recognized other modes

34 Isagani A. Cruz, p. 79
35 Ibid., p. 63
36 G.R. No. 59603, April 29, 1987, 149 SCRA 305

37 G.R. No. 106804, August 12, 2004

of acquisition such as:38 acquisition of property under Commonwealth Act (CA) No. 141;
exchange or Barter; easement of ROW; acquisition of Subsurface ROW; and other modes
authorized by law.

In the case of lands granted through Commonwealth Act No. 141, as amended,
otherwise known as “The Public Land Act”, the implementing agency shall follow the:

a) other modes of acquisition enumerated in this Act, if the landowner is not the
original patent holder and any previous acquisition of said land is not through a
gratuitous title; or
b) provisions under Commonwealth Act No. 141, as amended, regarding acquisition
of right-of-way on patent lands, if the landowner is the original patent holder or
the acquisition of the land from the original patent holder is through a gratuitous
title.39

3.2. Treatment of Easement

In practice, if the portion of a lot required for a ROW is minimal, such that the expenses
for surveying or segregating that portion from the main lot would be more than the value of
the part of the lot needed, the implementing agency may, if the property owner agrees, resort
to the mode of easement of ROW provided under Civil Code of the Philippines40.

Under this mode, a ROW easement agreement shall be executed by the property owner
and the implementing agency whereby the former will grant the latter the right to use the
affected portion of the lot as ROW. Still the owner retains ownership of that portion of the
lot. The mode of ROW acquisition through easement agreement may also be used in
government agency-to-agency transactions, including those involving government – owned
and controlled corporations.

In pursuing this mandate, NPC, under Section 3A of RA 6395 provides that “in
acquiring private property or private property rights through expropriation, only a right-of-
way easement thereon shall be acquired when the principal purpose for which such land is
actually devoted will not be impaired by the project. However, with respect to the acquired
right-of-way easement over the land or portion thereof, the landowner shall not be paid more
than ten percent (10%) of the market value declared by the owner or administrator, and as
determined by the assessor, whichever is lower.

Should just compensation be a simple easement fee or the full value of the property? In
the case of NPC v. Manubay Agro-Industrial Development Corporation,41 NPC reasoned out, by
applying the aforesaid law, that it should only be a simple easement fee since there is no taking
but merely doing imposition of an encumbrance under Art. 614 of the Civil Code. The
imposition would not result to the deprivation of the beneficial enjoyment of the property. It
further stated that even if there was a taking, the same is limited only to a portion of the aerial

38 Section 4 of RA 10752 and its IRR

39 Department of Transportation ROW Manual, Volume 1, 2017.
40 Ibid
41 G.R. No. 150936, August 18, 2004
domain above the property. In answering that it is the full value of the property, the Supreme
Court held that NPC not only alleged in its complaint that it sought to acquire an easement of
a right-of-way, it also prayed for the authority to enter the property, demolish improvements
thereon to commence and undertake the construction of the power line. The acquisition of
the easement, the court concluded, falls within the purview of the power of eminent domain.

The Supreme Court awarded the full payment of the market value ,instead of only the
10% of the value thereof; although NPC merely alleged in its complaint that it sought to
acquire “an easement of right-of-way”, when its complaint shows that it would erect structures
for its transmission lines on portions of the expropriated property (NPC v. Spouses Igmedia &
Liwayway Chiong)42; when the nature and effect of the installation of the 230 KV Mexico-Limay
transmission lines, the limitation imposed by NPC against the use of the land for an indefinite
period deprive private respondents of its ordinary use (NPC v. Hon. Sylva G. Aquirre
Paderanga)43. The constant fear on the part of the landowners that the large transmission lines
looming not far above their land and the huge tower in front of their lots will affect their safety
and health; and the slim chance that no one would be interested to buy the remaining portions
on each side of the residential lot affected by the project (NPC v. Maria Mendoza San Pedro)
44
,make the instant case fall within the ambit of expropriation.

Thus, even with the clear language of the law, the Supreme Court, in the case of NPC v.
Purefoods Corporation,45 said that Section 3A of RA 6395 as amended, which provides a fixed
formula in the computation of just compensation in cases of acquisition of right-of-way, is not
binding upon the court in keeping with the established rule that the determination of “just
compensation” in eminent domain cases is a judicial function.

Hence, beginning the case of NPC v. Chiong in 2003 to the case of NPC v. vda. de
Capin in 2008, and the doctrinal case of NPC v. Manubay Agro-Industrial Development
Corporation in 2004, and the 2012 titled case NPC v. Spouses Floriman Ileto,46 that although on
easement of a right-of-way transmits no rights except the easement itself, and respondent
retains fuel ownership of the property. The acquisition of such easement is, nevertheless, not
“gratis”.47

3.3. Negotiated Sale as the Preferred Mode

Justice Cruz said that where private property is needed for conversion to some public
use, the first thing that the government should do is, obviously, to offer to buy it. If the owner
is willing to sell and the parties can agree on the price and the other conditions of the sale, a

42 G.R. No. 152436, June 20, 2003, 404 SCRA 527

43
G.R. No. 155065, July 28, 2005
44 G.R. No. 170945, September 26, 2006.
45 G.R. No. 160725, September 12, 2008
46 G.R. No. 169957, July 11, 2011.
47 Apart from interfering with the attributes of ownership, the case of NPC v. Spouses Gutierrez (1991)

articulates that these transmission lines, through them, pose a danger to the lives and limbs of those surrounding
areas, and, thus, serve to limit the activities that can be done on these loads.
voluntary transaction can then be concluded, and the transfer effected without necessity of
judicial action.48

In Australia, the Commonwealth has also recognized this mode and that private
property could be obtained for government projects by negotiated agreement. This is the safest
and fastest mode of acquisition since negotiation merely involves the landowner and the
Commonwealth agreeing to the terms thereof and the amount of compensation.49

Under RA 10752, The Implementing Agency may offer to acquire, through Negotiated
Sale, the ROW and site location property requirements for a national government
infrastructure project, under the procedures provided therein, such as the following50:

(a) The implementing agency shall offer to the property owner concerned, as
compensation price, the sum of the:
(1) current market value of the land,
(2) replacement cost of structures and improvements therein; and
(3) current market value of crops and trees therein.
(b) To determine the appropriate price offer, the implementing agency may engage
the services of a government financial institution with adequate experience in
property appraisal, or an independent property appraiser accredited by the Bangko
Sentral ng Pilipinas (BSP) or a professional association of appraisers recognized
by the BSP to be procured by the implementing agency under the provisions of
Republic Act No. 9184, otherwise known as the “Government Procurement
Reform Act” and its implementing rules and regulations pertaining to consulting
services.
(c) If the property owner does not accept the price offer, the implementing agency
shall initiate expropriation proceedings pursuant to Section 6 hereof.51

3.4. Expropriation as the least mode

Under the present law, expropriation is the least favorable mode of acquisition for public
usage of land as it is based on active compulsory dispossession of private citizens of their
significant asset. It should be the last resort.52

Under Section 6 of RA10752, and section 7 of the IRR, a case for expropriation maybe
filed in case where negotiated sale cannot be concluded because the landowner refuses to
accept the offer of the agency concerned within the 30-day time-frame allocated in the law; or
when the landowner fails to respond with a positive acceptance of the offer, or fails or refuses
to submit the appropriate documentation required for negotiated settlement; or when
negotiation is not feasible.53

48 Isagani A. Cruz, citing Black’s Law Dictionary, 4th ed., Constitutional Law, Phoenix Press Inc, Quezon
City, c. 2003, p. 616
49 The Commonwealth and You, supra
50 Section 5, RA 10752
51 Ibid
52 DOTR, ROWSA, Volume I, November 2017, p. 84
53 Ibid, p. 85
 To determine just compensation, the fair market value of the property should first be
ascertained, and the determination thereof is a judicial prerogative through a process called
expropriation, pursuant to Rule 67 of the Revised Rules of Civil Procedure in the Philippines,
to be determined as of the date of the taking, which usually coincides with the
commencement of the expropriation proceedings. Where entry precedes the filing of the
complaint, the assessment should be as of the time of entry.54

3.5. Prescription Not a Mode

Acquisitive prescription may either be ordinary in which case the possession must be in
good faith and with just title, and extraordinary. In this case, there is neither good faith nor just
title. In either case, there has to be possession which must be in the concept of an owner -
public, peaceful and uninterrupted in nature.55 As a corollary, it must not be by virtue of a
license or by mere tolerance of the owner. NPC never acquired the requisite possession. Its
use of the subject property where it erected the wooden poles and transmission line was due
merely to the to the license and tolerance of the respondents.

In cases involving prescription of claims, the case NPC v. Campos56 that was decided by
the Supreme Court in 2003 pointed out the following requisites before Section 3(1) of RA
6395 would apply:

1. The petitioner entered upon the private property in the lawful performance of
prosecution of its businesses or purposes;
2. The owner of the private property shall be paid the just compensation therefor.

Thus, the 5-year period within which all claims for compensation and/or damages may
be allowed against the petitioner should be reckoned from the time of its title acquisition to
the establishment of private property on which the right-of-way is established. Prior to that,
the claims for compensation/damages do not prescribe.

Thus, in the more recent case of NPC vs. Spouses Bernardo Saludares57 (2012) citing the
case of NPC v. Heirs of Macabangkit Sangkay (2011), the Supreme Court categorically stated that
Section 3(I) of RA 6395 was not applicable to an action to recover just compensation. That
the right to recover just compensation is enshrined in no less than our Bill of Rights, which
states in clear and categorical language that “private property shall not be taken for public use
without just compensation.” This constitutional mandate cannot be defeated by statutory
prescription.

In cases involving laws on acquisitive prescription, the case of NPC vs. Spouses Jose
Campos, Jr.58 is illustrative of the court’s position against NPC “that it had already acquired the

54 Isagani A. Cruz, supra

55 Art 1119 Civil Code, Acts of possessing character executed in virtue of license or by mere tolerance
of the owner shall not be available for the purpose of possession.”
56 G.R. No.143643, June 27, 2003.
57 G.R. No. 189127, April 25, 2012.
58 G.R. No. 143643, June 27, 2003
easement of right-of-way over the portion of the subject property by prescription”. The said
easement having been allegedly continuous and apparent for a period of about 23 years”. It
claims that Article 62059 of the Civil Code, to be applicable, requires the existence of the
following:

1. Capacity to acquire prescription;

2. A thing capable of acquisition by prescription;
3. Possession of the thing under certain conditions;
4. Lapse of time provided by law.

3.6. Requirement for Provisional Deposit

The payment of the provisional value as a prerequisite to the issuance of writ of

possession is recognized by Ra 10752. This is different from the payment of final
compensation. It refers to the preliminary or provisional determination of the value of the
property. It serves a double purpose of prepayment if the property is fully expropriated, and
of an indemnity for damages, if the proceedings are dismissed. After that, the court proceeds
with the final determination of the fair market value of the property, the “just and complete
equivalent of the loss which the owner has to suffer by reason of expropriation.

Under Section 2 Rule 67 of the 1997 Rules of Court, the same is contrary to Section 6
of RA 10752 which states that:

SECTION 6. Guidelines for Expropriation Proceedings. – Whenever it

is necessary to acquire real property for the right-of-way site or location
for any national government infrastructure through expropriation, the
appropriate implementing agency, through the Office of the Solicitor
General, the Office of the Government Corporate Counsel, or their
deputize government or private legal counsel, shall immediately initiate the
expropriation proceedings before the proper court under the following
guidelines:

Upon the filing of the complaint or at any time

thereafter, and after due notice to the defendant, the
implementing agency shall immediately deposit to the court in
favor of the owner the amount equivalent to the sum of:

One hundred percent (100%) of the value of the land

based on the current relevant zonal valuation of the Bureau of
Internal Revenue (BIR) issued not more than three (3) years
prior to the filing of the expropriation complaint subject to
subparagraph (c) of this section;

59 Art. 620 Civil Code “Continuous and apparent easements and acquired either by virtue of a title or by

prescription of ten years.”

 Upon compliance, RA 10752 requires the Court to immediately issue (ex parte) to the
implementing agency an Order to take possession of the property (Writ of Possession) and
start the implementation of the Project.

If, within seven (7) working days after the deposit to the court of the amount equivalent
to the sum under subparagraphs (a)(1) to (a)(3) of the law, the court has not yet issued to the
implementing agency a writ of possession for the affected property, the counsel of the
implementing agency shall immediately seek from the court the issuance of the writ of
possession.

Considering that RA 10752, is relatively a new law, the interpretation of what constitutes
provisional deposit is referenced to the decisions of the Supreme Court interpreting Republic
Act 897460, its predecessor law.

The case of Capitol Steel Corporation v. PHIVIDEC Industrial Corporation61, was filed just
after the effectivity of RA 8974, where the Supreme Court held that the requirements for
authorizing immediate entry in expropriation proceedings involving real property must be
complied with first, like the sufficiency in form and substance of the complaint filed, proper
notice to the landowner, and the payment of an amount equivalent to 100% of the value of
the property based on the current zonal valuation of the BIR including payment of the value
of improvement/or structures if any, and the submission to the court of a certification of
availability of funds from the proper officials of the implementing agency.

In this case, the court holds that upon compliance, the expropriator is “entitled to the
writ of possession as a matter of right. It becomes a ministerial duty of the trial court to
forthwith issue the writ of possession. No hearing is required and the court neither exercises
its discretion or judgment in determining the amount of the provisional value of the properties
as the legislature has already fixed the amount under section 4 of RA 8974. Also, the court
holds that for “purposes of a writ of possession that there is no need to take into the peculiar
and favorable features of the properties to be expropriated.” The court is statutorily bound to
rely only on the current relevant valuation of the BIR. 62 However, in the determination of just
compensation, the expropriator may present and introduce evidence hearing on the properties’
fair market value as provided in Section 5 of RA 8974.63

In the case of Republic vs. Sps. Agustin and Imelda Cancio64, the Republic argued that RA
8974 was inapplicable; hence, it averred that it should be made to pay only the price of the
land at the time of taking. According to the Supreme Court, Republic Act 8974 applies to
instances when the national government expropriates property for national government
infrastructure projects. It cites the case of Capitol Steel vs. PHILVIDEC on the payment of
provisional deposit under Section 4, and the payment of final just compensation under Section
5 of RA 8974. In this case, the Supreme Court ruled that Republic Act 8974 provides that the

60Republic Act 8974, An Act to Facilitate the Acquisition of Right-of-way Site or Location for National
Government Infrastructure Project, passed on November 07, 2000.
61 GR 169453, Dec. 6, 2006
62 Ibid
63 Ibid
64 G.R. No. 170147, January 30, 2009
court shall determine the just compensation to be paid to the owner within 60 days from the
date of filing in accordance with the guidelines laid down by law and its implementing rules.

In Republic vs. Hon. Henrich F. Guingoyon65, the Supreme Court made a doctrinal
pronouncement as to which would apply, whether Rule 67 of the Rules of Court or Republic
Act 8974, in the expropriation of the NIAA 3 facilities. The government insisted that Rule 67
of the Rules of Court governs the expropriation to the exclusion of all other laws. PIATCO
claims that it is Republic Act 8974 which applies. In deciding the case, the Supreme Court
declared that it is within the province of the legislature to fix the standard of just
compensation, although it recognizes the continued applicability of Rule 67 of the Rules of
Court on matters of procedure.

In so far as payment of provisional deposit, the Supreme Court held that it is the plain
intent of Republic Act 8974 to supersede the system of deposit under Rule 67 which provides
the scheme of “immediate payment” in cases involving national government infrastructure
projects, Section 2 of RA 8974 explains what are considered as “national government
projects”66

The deposit of the provisional value as a prerequisite to the issuance of writ of

possession serves double purpose of prepayment if the property is fully expropriated, and an
indemnity for damages if the proceedings are dismissed. It is not yet the final determination
of just compensation.67 In this case, the court holds that upon compliance, the expropriator is
“titled to the writ of possession as a matter of right and it becomes the ministerial duty of the
trial court to forthwith issue the writ of possession. No hearing is required and the court
neither exercises its discretion or judgment in determining the amount of the provisional value
of the properties as the legislature has fixed the amount under Section 4 of RA 8974” Also,
the court holds for “purposes of a writ of possession that there is no need to take into the
peculiar and favorable features of the properties to be expropriated as the court is statutorily
bound to rely only on the current relevant valuation of the BIR.

The Court is required to release the funds to the Owner upon sufficient proof of
ownership. However, pursuant to Section 6, 3(b) the implementing agency shall deposit the
amount equivalent to the sum under subparagraphs (a)(1) to (a)(3) of this section to the court.
This is for the benefit of the person to be adjudged in the same proceeding as titled thereto.68

3.7. Valuation for Final Compensation

Section 7 of RA 10752 provides for relevant standards to facilitate the determination of

the market value of the property. The following relevant standards are observed:

a. the classification and use for which the property is suited;

b. the development cost for improving the land,

65 G.R. No. 166429, December 19, 2005

66 Ibid
67
Capitol Steel Corporation v. PHIVIDEC Industrial Authority, G.R. No. 169453, 6 December 2006,
510 SCRA 590, 602.
68 Rule 67, Section 9 of the 1997 Rules of Court
 c. the value declared by the owners;
d. the current selling price of similar lands in the vicinity,
e. the reasonable disturbance compensation for the removal and demolition of
certain improvements on the land and for the value of improvements thereon;
f. the size, shape or location, tax declaration and zonal valuation of the land;
g. the price of the land as manifested in the ocular findings, oral as well as
documentary evidence presented; and
h. such facts and events as to enable the affected property owners to have sufficient
funds to acquire similarly situated lands of approximate areas as those required
from them by the government, and thereby rehabilitate themselves as early as
possible.

Philippine jurisprudence consistently holds that “in determining just compensation, the
following should be considered: the cost of the acquisition of the land, the current value of
like properties, its nature, actual use and income, the sworn valuation by the owner, the tax
declarations, the assessments made by government assessors shall be considered.” 69 The
Supreme Court of the Philippines recognizes the rule that “in expropriation proceedings, the
value of the land and the character at the time it was taken by the government are the criteria
for determining just compensation. The price of the land at the time it was taken, not its value
after the passage of time, represents the true value as just compensation.”70

The Philippine Supreme Court in 2004, in the case of BPI vs. Court of Appeals and National
Power Corporation71, accorded more weight to Resolution No. 08-95 promulgated by the
Provisional Appraisal Committee of Cavite on October 25, 1995. It said that just
compensation is determined as of the date of the taking of the property or the filing of the
complaint whichever comes first. NPC filed the complaint on April 15, 1996. A period of 6
months has elapsed from the valuation of the Provisional Assessors to the filing of the
complaint.

In the case of B.H. Berkenkotter & Co. v. Court of Appeals, it states that if the whole
property is expropriated, just compensation shall be determined by ascertaining the fair market
value of the whole property. However, if only a portion of the property is expropriated, the
just compensation is determined by adding to the fair market value of the portion of the
property, the consequential damages minus the consequential benefits.72

3.7.1. Consequential damages vs. Consequential benefits

Section 6 of Rule 67 of the Rules of Civil Procedure provides that the “commissioners
shall assess the consequential damages to the property not taken and deducted from such
damages the consequential benefits to be derived by the owner from the public use or purpose
of the property taken, the operation of its franchise by the corporation or the carrying on of
the business of the corporation or person taking the property. But in no case shall the

69 Lubrica vs. Land Bank of the Philippines, 507 SCRA 415.

70 Republic of the Philippines vs. Lensico, et. al. G.R. No. 1589919, August 9, 2005, Commissioner of
Public Highway vs. Burgos, 96 SCRA 831.
71 G.R. No. 160890, November 10, 2004
72 B.H. Berkenkotter & Co. v. Court of Appeals, GR. NO. 89980, December 14, 1992
consequential benefits should exceed the consequential damages assessed, or the owner be
deprived of the actual value of his/her property so taken.73

Consequential damages are awarded, if, as a result of the expropriation, the remaining
property of the owner suffers from an impairment or decrease in value. Thus, there is a valid
basis for the grant of consequential damages to the property- owner, and no unjust enrichment
can result therefrom. Similarly, the award of consequential damages should be deleted if the
entire property, and not merely a portion thereof is being expropriated, where it suffers an
impairment or decrease in value.74

In the Republic of the Philippines and Rosario Rodrigo Reyes vs. Court of Appeals,75 it stipulates
that an award of consequential damages for property not taken is not tantamount to unjust
enrichment of the property owner. There is unjust enrichment when a person unjustly retains
a benefit to the loss of another; or when a person retains money or property of another against
the fundamental principles of justice, equity and good conscience. Article 22 of the Civil Code
provides that every person, who, through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter without
just or legal ground, shall return the same to him/her. The principle of unjust enrichment
under Article 22 requires two conditions: (1) that a person is benefited without a valid basis or
justification, and (2) that such benefit is derived at another’s expense or damage. There is no
unjust enrichment when the person who will benefit has a valid claim to such benefit. As
stated, consequential damages are awarded, if as a result of the expropriation, the remaining
property of the owner suffers from an impairment or decrease in value.76 Thus, there is a valid
basis for the grant of consequential damages to the property owner, and no unjust enrichment
can result therefrom.

4. Special Concerns on Right-of-way and Site Acquisition

4.1. Outstanding Claims for ROW payments

In accordance with Section 5 of the RA 10752, the provisions of section 6.1 of the IRR
shall also apply to outstanding claims for ROW payments, except that the amount to be
offered shall be the price at the time of the taking of the property, including legal interest until
fully paid. This is subject to the transitory provision in Section 9 of the law – ROW payments
of ongoing transactions which, as of the effectivity of RA 10752, have already reached a written
agreement as to the price between the implementing agency and the property owner. In case
the landowner rejects the offer, the implementing agency shall initiate expropriation
proceedings pursuant to Section 6 of the law.

Reckoning Point of Valuation

To determine just compensation, the fair market value of the property should first be
ascertained, and the determination thereof is a judicial prerogative through a process called

73 Rules of Court of the Philippines

74 Department of Public Works and Highways vs. Arlene Soriano
75 GR No, 160379, August 14, 2009
76 Ibid
expropriation pursuant to Rule 67 of the Revised Rules of Civil Procedure in the Philippines.
It is determined as of the date of the taking, which usually coincides with the commencement
of the expropriation proceedings. Where entry precedes the filing of the complaint, the
assessment should be as of the time of entry.77

In the Philippines, the Office of the Solicitor General (OSG) is the statutory counsel of
the National Power Corporation (NPC) involving cases of valuation of properties, subject of
an ejectment case and or recovery of possession case. The general rule in the determination
of just compensation should be at the time of filing. However, this admits exceptions.
According to the OSG, the value of property must be determined either as of the date of the
taking of the property or the filing of the complaint whichever comes first, citing the cases of
Manansan vs. Republic, 498 SCRA 348 [2006] and Tan v. Republic, 523 SCRA 203 [2007].
Compensation for property expropriated must be determined as of the time the expropriating
authority takes possession thereof and not as of the institution of proceedings (Republic v.
Sarabia, 368 SCRA 142 [2005]). However, 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, citing the cases of Spouses
Curata v. Philippine Ports Authority, 590 SCRA 214 [2009], Eusebio vs Luis, 603 SCRA 576
[2009], as well as the case of City of Iloilo v. Besana, 612 SCRA 458 [2010]. There are, however,
exceptions to the general rule where there is (1) grave injustice to the property owner (Heirs
of Pidican vs. Air Transportation Office, 524 SCRA 579 [2007]); (2) the taking did not have
color of legal authority (National Power Corporation vs. Ibrahim, 526 SCRA 149[2007]); (3)
the taking of the property was not initially for expropriation (Tan v. Republic, 523 SCRA 203
[2007]); and (4) the owner will be given undue increment advantages because of expropriation
(Provincial Government of Rizal vs. Araullo, 58 Phil 308 [1933]).78

In 1974, the Supreme Court promulgated the landmark case of Republic of the Philippines
vs. Carmen M. Vda. De Castellvi, et al.79, where the Republic filed an eminent domain case on
June 26, 1959 against the property of the defendant, which was leased beginning July 1, 1952
to the Philippine Air Force. In deciding against the Republic, the Supreme Court underscored
the concept of taking which involves; (1) entry to private property, (2) which is not a
momentary period, and (3) under a warrant or color of authority, (4) the property to be
devoted for public purpose, and (5) the owner is ousted and deprived of all beneficial
enjoyment of the property.

Under Section 4 of Rule 67 of the Rules of Court, the “just compensation” is to be

determined as of the date of the filing of the complaint. The court 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 filing of the complaint.
In this case, the “taking” must be reckoned as of June 26, 1959 when the complaint was filed.80

77 Isagani A. Cruz, supra

78 Office of the Solicitor General, General Guidelines for Expropriation, January 9, 2012.
79 G.R. No. L-20620 August 15, 1974
80 Ibid
 In Republic v. Hon. Lucenito Tagle81, the issue is whether a judge may quash a writ of
possession on the ground that the expropriating agency is already occupying the property
sought to be expropriated. The Supreme Court answered in the negative, ratiocinating that
possession de jure and not merely physical possession is required to validly take the property.

In a 2007 Decision of the Supreme Court, on the case of National Power Corporation v.
Spouses Norberto and Josefina dela Cruz and Metrobank82, the Court ruled that just compensation
should be at the date of filing of the complaint for expropriation as of November 27, 1998
and not on March 10, 1999, when the writ of possession was issued. It is settled that just
compensation is to be maintained as of the time of the taking, which usually coincides with
the commencement of the expropriation proceedings. “Where the institution of the action
precedes entry into the property, the just compensation is to be ascertained as of the time of
the filing of the complaint.” In this case, the filing preceded the petitioner’s entry into the
property.

In a 2008 case of National Power Corporation v. Purefoods Corporation83, the Supreme Court
affirmed the decision of the Court of Appeals when it valued the just compensation at the
time of filing of the complaint since it preceded the issuance of the writ of possession.

In the case of National Power Corporation v. Maria Bagui, et al84, which was also decided in
2008, the Supreme Court remanded the case to the trial court after it found out that the
valuation was taken from the Provincial Appraisal Committee Resolution No. 03-99 issued on
March 2, 1999 – In this case, the filing of the complaint was made on March 10, 2000 and the
writ of possession was issued on December 2000; hence, the valuation used was neither the
date of filing nor the taking of the property. This case recognized the earlier case decided by
the Supreme Court in the National Power Corporation v. Omar S. Tiangco in 200785, where it also
remanded the case to the trial court after it realized that the valuations of the RTC, using the
1984 value and the Court of Appeal’s valuation using the 1993, were neither correct, since the
complaint was filed in November 1990 and the writ of possession issued in March 1991.

In 2009, the Supreme Court again remanded the determination of just compensation to
the trial court after it found out that the valuation was made at the time of the actual taking of
the property in March 25, 2002, and not the filing of the complaint, which was on June 27,
2001, an earlier date.

In another case decided by the Supreme Court in 2009 titled National Power Corporation
v. Omar G. Maruhom, et al86, it penalized NPC for the taking of property of the plaintiffs without
the benefit of expropriation. In this case, a complaint for recovery of the possession of land
and damages was filed against NPC on November 23, 1994. The Supreme Court affirmed the
decision of both the RTC and the Court of Appeals that just compensation should be made

81 G.R. No. 129079, December 2, 1998

82G.R. No. 156093 February 2, 2007
83 G.R. No. 160725, September 12, 2008
84 G.R. No. 164964, October 17, 2008
85 G.R. No. 170846, February 6, 2007
86 G.R. No. 183297
at the time of filing in 1994 and not in 1978 when NPC took possession of the subterranean
area of the land and constructed underground tunnels.

In 2010, another case decided by the Supreme Court was the case of National Power
Corporation v. Teresita Diato-Bernal.87 This time, the court agreed with NPC that the RTC
overlooked the fact that the recommended just compensation was gauged as of September 10,
1999 or more than two years after the complaint was filed on January 8, 1997. It further said
that just compensation is to be ascertained as of the time of the taking which usually coincides
with the commencement of the expropriation proceedings. Where the institution of the action
precedes entry into the property, the just compensation is to be ascertained as of the time of
the filing of the complaint.

In another case decided in 2011 by the Supreme Court titled Moises Tiñio v. National Power
Corporation88, NPC took possession of the property on February 9, 1998, but the filing of the
expropriation complaint was made only on October 13, 1999, or more than one year after
entry. Petitioner Tiñio questioned the valuation of the just compensation as of February 1998
alleging that if should be at the time of filing in 1999. However, the Supreme Court affirmed
the findings of the Court of Appeals, ratiocinating that in February 1998, NPC’s entry into the
petitioner’s land was by virtue of a “Permit to Enter” signed by them.

In a case decided by the Supreme Court also in 2011, titled National Power Corporation v.
Heirs of Macabangkit Sangkay, et al89; where the Supreme Court determined the just
compensations at the time of the filing of a complaint for recovery of damages and of the
property with alternative prayer for the payment of just compensation, filed on November 21,
1997, disregarding the claim of NPC that valuation should be at the time of the construction
of the underground tunnel in the 1970’s.

In 2012, the Supreme Court, in the case of the National Power Corporation v. Spouses
Bernardo & Mindaluz Saludares, et al90, cited the case of NPC vs. Heirs of Macabangkit Sangkay.
It found out that respondents’ spouses would be deprived of this right to just compensation
if the maker of the property is pegged back to its value in the 1970’s. The court reiterated that
NPC should have instituted eminent domain proceedings before it occupied respondent
spouses’ property. Thus, the court pegged the value of just compensation at the time of the
filing of the inverse condemnation proceedings in 2000.

In a case decided by the Supreme Court in Vicente Eusebio vs. Jovito Luis, et. Al.91, the
Court held that where property was taken without the benefit of expropriation proceedings,
and its owner files an action for recovery of possession thereof before the commencement of
expropriation proceedings, it is the value of the time of taking that is controlling,
notwithstanding whether the taking was for expropriation or not.

87 G.R. No. 180979

88 G.R. No. 160923, January 24, 2011
89 G.R. No. 165828, Aug 24, 2011
90 G.R. No. 189127, Apr 25, 2012
91 G.R. No. 162474, Oct 13, 2009
 In the case of Republic, National Irrigation Authority v. Court of Appeals, and Francisco Diaz92,
the Supreme Court ruled that just compensation shall be determined at the time of taking in
1972 and not on the commencement of the action for damages and just compensation. It
reasoned out that the Canal Site served a public purpose because it provided the much-needed
irrigation to farms in the locality. There was also no dispute that when NIA actually took over
the canal sites, the purpose was to exercise NIA’s delegated power of eminent domain.

4.2. Inverse condemnation

The study on inverse condemnation was also tackled in the OSG Guidelines, where the
NPC and the TRANSCO were directed to observe the following:93

1. If the government has already occupied the land and the landowner files
an ejectment case, file an expropriation case, obtain a writ of possession
and have the ejectment proceedings enjoined;
2. If the landowner files and action publiciana for the recovery of possession
before the RTC, has the case converted into an expropriation proceeding
and obtains a writ of possession. If the action is filed before the MTC, file
separate expropriation case with the RTC, obtain a writ of possession and
have the action “publiciana” enjoined.
An action to recover the value of the property without prior expropriation may be called
inverse condemnation. This is to highlight the fact that taking may be made without
expropriation. The phrase “inverse condemnation,” as a common understanding of that
phrase would suggest, simply describes an action that is the “inverse” or “reverse” of a
condemnation proceeding.”94

In a case decided in the Philippines titled National Power Corporation v. Heirs of Macabangit
Sangkay, the Supreme Court ruled that inverse condemnation has the objective of recovering
the value of the property taken without expropriation proceeding by the government agency95.

Finally, in National Power Corporation v. Spouses Bernardo & Mindaluz Saludares, et al96, the
Supreme Court emphasized that it is the duty of the state or its representative, and not the
landowner, to institute the expropriation proceedings.

4.3. Lands under Commonwealth Act 141

In case of lands granted through Commonwealth Act No. 141, or “The Public Land
Act”, the implementing agency has to determine whether the landowner is not the original
patent holder, or the transfer thereof is not through gratuitous title, otherwise, the provisions
under the Commonwealth Act 141 shall be followed if the original is the patent holder or the

92 G.R. No. 147245, March 31, 2005

93 OSG, General Guidelines for Expropriation, dated January 9, 2012.
94 29A Corpus Juris Secundum, Eminent Domain, 381
95 G.R. No. 165828, August 24, 2011
96 G.R. No. 189127, Apr 25, 2012
transfer or conveyance of the land from the original patent holder is through a gratuitous
title.97
In addition to donation, negotiated sale, and expropriation as discussed over and above,
other modes of acquisition, prescribed under other laws may be implemented. RA 10752
likewise provides that if the landowner is the original patent holder or the acquisition of the
land from the original patent holder is through a gratuitous title, then the implementing agency
shall follow the provisions under Commonwealth Act No 141, as amended, regarding
acquisition of right-of-way on patent lands.

Section 112 of Commonwealth Act No. 141, initially provided a twenty-meter strip of
land easement for public use with damages (compensation) limited to improvements only. In
the initial provision, there was no compensation for land easement within the prescribed
corridor width98.

The twenty-meter strip was subsequently increased to sixty (60) meters by Presidential
Decree (P.D.) No. 635, and added infrastructure projects which can benefit from the
foregoing land easements such as public highways, railroads, irrigation ditches, aqueducts,
telegraph and telephone lines, airport runways, including sites necessary for similar works that
the government or any public or quasi-public service or enterprise, may reasonably require for
carrying on their business, with payment of damages for the improvements only99.

On June 2, 1978 Section 112 was further amended by Presidential Decree 1361, which
authorizes government officials in-charge of the prosecution of projects or their representative
to take immediate possession of portion of the property, subject to the lien as soon as the
need arises and after due notice to the owners. Nonetheless, ownership over said properties
shall immediately revert to the title holders should the airport be abandoned or when the
infrastructure projects are completed and buildings used by project engineers are abandoned
or dismantled, but subject to the same lien for future improvements.

SEC. 112. Said land shall further be subject to a right-of-way not exceeding
sixty (60) meters on width for public highways, railroads, irrigation ditches,
aqueducts, telegraph and telephone lines, airport runways, including sites
necessary for terminal buildings and other government structures needed
for full operation of the airport, as well as areas and sites for government
buildings for Resident and/or Project Engineers needed in the
prosecution of government-infrastructure projects, and similar works as
the Government or any public or quasi-public service or enterprise,
including mining or forest concessionaires, may reasonably require for
carrying on their business, with damages for the improvements only.100
Government officials charged with the prosecution of these projects or their
representatives are authorized to take immediate possession of the portion of the property

97Ibid.
98 Manual on Right-of-way and Site Acquisition of the Department of Transportation, Volume 1,
November 2017.
99 Ibid
100 Ibid
subject to the lien as soon as the need arises and after due notice to the owners. It is however,
understood that ownership over said properties shall immediately revert to the title holders
should the airport be abandoned or when the infrastructure projects are completed and
buildings used by project engineers are abandoned or dismantled, but subject to the same lien
for future improvements.”101

4.3. Acquisition of Subsurface ROWSA

In the case of NPC vs. Heirs of Macabangkit Sangkay, et. al.102, where the government
corporation constructed several underground tunnels to divert the water flow from Agus River
to the hydroelectric plants, the Supreme Court held that:

Due to the need to construct the underground tunnel, NPC should have
first moved to acquire the land from the Heirs of Macabangkit either by
voluntary tender to purchase or through formal expropriation
proceedings. In either case, NPC would have been liable to pay to the
owners the fair market value of the land, for Section 3(h) of Republic Act
No. 6395 expressly requires NPC to pay the fair market value of such
property at the time of the taking x x x

There is now specific section of RA 10752, particularly Section 4 of the law that states:

When it is necessary to build, construct, or install in the sub-surface or

subterranean portion of private and government lands owned, occupied,
or leased by other persons, such as infrastructure as subways, tunnels,
underpasses, waterways, floodways, or utility facilities as part of the
government’s infrastructure and development project, the government or
any of its authorized representatives shall not be prevented from entry into
and use of the subsurface or subterranean portions of such private and
government lands by surface owners or occupants, if such entry and use
are made more than fifty (50) meters from the surface.
To implement said provision, the implementing rules of RA 10752 now states:

As provided in Section 4 of the Act, when it is necessary to build,

construct, or install on the subsurface or subterranean portion of private
and government owned lands owned, occupied or leased by other persons,
such infrastructure as subways, tunnels, underpasses, waterways, flood-
ways, or utility facilities as part of the government’s infrastructure and
development project, the government or any of its authorized
representatives shall not be prevented from entry into and use of such
private and government lands by surface owners or occupants, if such
entry and use are made more than fifty (50) meters from the surface.

101 Ibid
102 GR. No. 165828, Official Gazette, August 24, 2011
 The implementing agency shall duly consult with and notify the affected
property owners of any acquisition of subsurface right-of-way needed for
the infrastructure projects.103
If the national government project involves underground works within a depth of fifty
(50) meters from the surface, the implementing agency may undertake the mode of acquisition
in the following order:

i. Negotiate with the property owner a perpetual easement of ROW for the
subterranean portions of his property required by the project; and
ii. Offer to acquire from the property owner the affected portion of the land,
including the affected structures, improvements, crops and trees therein in
accordance with the provisions of the Act.104

To assist the implementing agency in determining (a) the appropriate price offer for the
perpetual easement of the ROW under Section11(a) of the IRR or (b) the appropriate price
offer for the entire affected land including structures, improvement, crops and trees under
Section 11(b) of the IRR, the implementing agency may engage the services of a GFI or an
IPA, in accordance with the procedure provided in section 6 of the IRR. The easement price
under section11 (a) of the IRR shall be twenty percent (20%) of the market price of the land.105

B. Methodology

This study employed both the qualitative and quantitative research designs. It also
employed the triangulation method where the researcher was able to use his personal
observation from the documents used and discussions made with key informants to come up
with findings of the study. In the analysis of the findings of this study, descriptive statistics
were used, such as frequency counts, ranking and weighted means to arrive at the
interpretation of data.

In the process, the result of the data gathered from the one hundred randomly-selected
Supreme Court decisions based on the sequence in the statement of the problem, the data
gathered from the focused group discussion with the study’s key informants and the
researcher’s observation on current issues and practices on the subject during his years of
practice involving expropriation cases, presented, analyzed and interpreted, starting with the
existing laws, rules and regulation on expropriation.

C. On Existing Laws, Rules and Regulations

Existing laws, rules and regulations were identified by the researcher for their relevance
in addressing both the right of the landowners to just compensation and the power of the
State to exercise eminent domain, particularly, those that involved national government

103Implementing Rules and Regulations (IRR) of RA 10752, 25 May 2016.

104 Manual on Right-of-way and Site Acquisition of the Department of Transportation, Volume 1,
November 2017.
105 RA 10752
infrastructure projects.106 The researcher employed the checklist method, where these laws,
rules and regulations were systematically arranged to determine whether they were being
applied and considered or not by the Supreme Court in deciding cases involving the
government agencies such as the DPWH, DOTR and NPC/TRANSCO, in providing just
compensation to the land owners and upholding the power of the state to take private
properties for public use.

Every provision of laws, rules and regulations addressing right-of-way and site
acquisition of national government projects in terms of providing for the right to just
compensation of the land owner and the power of the state to take private property for public
use were described, beginning from the fundamental law of the land.

1. The 1987 Constitution of the Philippines

The exercise of the power of eminent domain is inherent in the State that need not be
granted even by the fundamental law. It is the authority and right of the State, as sovereign, to
take private property for public use upon observance of due process of law and upon payment
of just compensation107. There is therefore no provision in the 1987 Constitution vesting this
power to the State, albeit only constitutional provisions limiting the exercise thereof.

Section 9, Article III of the 1987 Constitution, in mandating that “private property shall
not be taken for public use without just compensation”, merely imposes a limit on the
government’s exercise of this power and provides a measure of protection to the individual’s
right to property.108

Interestingly, the limit on the exercise of eminent domain is found in Art. III on the Bill
of Rights of the 1987 Constitution, or the charter of rights, where most important rights of
the citizens are provided. This is to highlight the constitutional safeguards to landowners
against abusive or arbitrary exercise of state’s awesome power of eminent domain109.

In the constitutional view point, in order to reconcile the right of landowners to just
compensation and the power of the state to exercise eminent domain, it is imperative that the
following elements are present:

(1) the property taken must be private one;

106 As used in Section 3, Republic Act 10752, the term “national government projects” shall refer to all

national government infrastructure projects and its public service facilities, engineering works and service
contracts, including projects undertaken by government-owned and -controlled corporations, all projects covered
by Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the “Build-Operate-and-
Transfer Law”, and other related and necessary activities, such as site acquisition, supply or installation of
equipment and materials, implementation, construction, completion, operation, maintenance, improvement,
repair and rehabilitation, regardless of the source of funding.

107 Republic of the Philippines vs. Court of Appeals, G.R. No. 160379, August 14, 2009.
108 Antonio E.B. Nachura, Outline Reviewer in Political Law, VJ Graphic Arts, Inc., Quezon City,
2016, page 70.
109 Republic of the Philippines, represented by the Secretary of the Department of Public Works and

Highways (DPWH) vs. Jose Gamir-Consuelo Diaz Heirs Association, Inc., G.R. No. 218732, November 12,
2018
 All private property capable of ownership maybe expropriated, except money and
choses in action. Even services maybe subject to eminent domain110. This means that every
parcel of land from which any piece of it is required for completion and commissioning of the
project must be identified to determine if it is formally owned and controlled by the Republic
of the Philippines, or if it has been alienated to private ownership and possessing a title with
a private owner. At this point, the actual owner, whether identified or obscure, is less
important than the existence of private property, an estate in fee simple alienated from the
State111.
It is important though that private property already devoted to public use cannot be
expropriated by a delegate of legislature acting under a general grant of authority.
(2) there must be genuine necessity to take the private property;

In the exercise by the State of eminent domain, it must be for genuine necessity. The
right to take private property for public purposes necessarily originates from "the necessity"
and the taking must be limited to such necessity. In the case of Masikip vs. The City of Pasig112,
the Supreme Court held:

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

necessity and that necessity must be of a public character. Moreover, the
ascertainment of the necessity must precede or accompany and not
follow, the taking of the land. In City of Manila v. Arellano Law
College113, we ruled that "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 the property owner consistent
with such benefit."

If the foundation of the right to exercise eminent domain is genuinely necessary, then
that necessity must be of a public character. As a rule, the determination of whether there is
genuine necessity for the exercise is a justiciable question114. However, when the power is
exercised by the legislature, the question of necessity is essentially a political question.115

Therefore, the landowners have the right to object to the necessity of the takeover,
and this is done in his Answer to the Complaint. The issue of necessity becomes an issue and
the proper Regional Trial Court should address this in the course of the trial.116

110 City Manila vs. Chinese Community, 40 Phil. 349

111 DOTr ROW Manual of Procedure, p. 8
112 GR. NO. 136349, January 23, 2006
113 85 Phil. 663 (1950).
114 Municipality of Meycauayan, Bulacan vs. Intermediate Appelate Court, GR. No. 72126, January 29,

1988.
115 Republic vs. La Order de PP. Benedictios, GR. No. L-12792, February 28, 1961.
116 Bardillon vs. Barangay Masili of Calamba, Laguna, G.R. No. 146886, April 30, 2003.
 (3) the taking must be for public use;

As a requirement for eminent domain, it is now a settled doctrine that the concept of
public use is no longer limited to traditional purposes. Here, as elsewhere, the idea that "public
use" is strictly limited to clear cases of "use by the public" has been abandoned. The term
"public use" has now been held to be synonymous with "public interest," "public benefit,"
"public welfare," and "public convenience."117 The rationale for this new approach is well
explained in the case of Heirs of Juancho Ardona, et al. vs. Reyes, et al.,118 to wit:

"The restrictive view of public use may be appropriate for a nation which
circumscribes the scope of government activities and public concerns
and which possesses big and correctly located public lands that obviate
the need to take private property for public purposes. Neither
circumstance applies to the Philippines. We have never been a laissez
faire State. And the necessities which impel the exertion of sovereign
power are all too often found in areas of scarce public land or limited
government resources.

xxx

The taking to be valid must be for public use. There was a time when it
was felt that a literal meaning should be attached to such a requirement.
Whatever project is undertaken must be for the public to enjoy, as in the
case of streets or parks. Otherwise, expropriation is not allowable. It is
not anymore. As long as the purpose of the taking is public, then the
power of eminent domain comes into play. As just noted, the
constitution in at least two cases, to remove any doubt, determines what
is public use. One is the expropriation of lands to be subdivided into
small lots for resale at cost to individuals. The other is in the transfer,
through the exercise of this power, of utilities and other private
enterprise to the government. It is accurate to state then that at
present whatever may be beneficially employed for the general welfare
satisfies the requirement of public use."

Therefore, the public nature of the prospective exercise of expropriation cannot

depend on the “numerical count of those to be served or the smallness or largeness of the
community to be benefited.” The number of people is not determinative by whether or not it
constitutes public use; provided the use is exercisable in common and is not limited to
particular individuals.

However, the Government may not capriciously or arbitrarily choose which private
property should be expropriated, like singling out for expropriation a particular property
without stating what necessity impelled the particular choice or selection. Condemnation of
private lands in an irrational or piecemeal fashion or the random expropriation of small lots
to accommodate no more than a few tenants or squatters is certainly not the condemnation

117 Reyes vs. National Housing Authority, Gr. No. 147511, January 20, 2003.
118 GR No. L-60549, October 26, 1983.
for public use as contemplated by the Constitution. This is depriving a citizen of his/her
property for the convenience of a few without perceptible benefit to the public119. In this case,
case, the landowners have the right to object to the necessity of the takeover for not being for
public use, and this is done in his Answer to the Complaint. The issue of public use becomes
an issue and the proper Regional Trial Court should also address this in the course of the trial.

(4) there must be payment of just compensation;

1.1. Section 9, Article III of the Constitution expressly requires the payment of just
compensation as the balancing factor to the exercise of eminent domain by the State. The
seizure of one’s property without payment, even though intended for public use, is a taking
without due process of law and a denial of the equal protection of the laws.
Jurisprudence surveyed by the researcher defines it as the “full and fair equivalent of
the property taken from its owner by the expropriator”. The measure is not the taker’s gain,
but the owner’s loss. The word "just" is used to intensify the meaning of the word
"compensation" and to convey thereby the idea that the equivalent to be rendered for the
property to be taken shall be real, substantial, full, and ample120. Just compensation means not
only the correct amount to be paid to the owner of the land but also payment within a
reasonable time from its taking121.

In Republic v. Court of Appeals,122 the Supreme Court held that -- the

constitutional limitation of "just compensation" is considered to be the sum equivalent to
the market value of the property, broadly described to be the price fixed by the seller in
open market in the usual and ordinary course of legal action and competition or the fair
value of the property as between one who receives, and one who desires to sell, it fixed at
the time of the actual taking by the government. x x x

It is settled that the nature and character of the land at the time of its taking is the
principal criterion for determining how much just compensation should be given to the
landowner. However, jurisprudence has consistently ruled that just compensation cannot be
arrived at arbitrarily; several factors must be considered such as, but not limited to, acquisition
cost, current market value of like properties, tax value of the condemned property, its size,
shape, and location. But before these factors can be considered and given weight, the same
must be supported by documentary evidence.123 The amount of just compensation could only
be attained by using reliable and actual data as bases for fixing the value of the condemned
property. A commissioners’ report of land prices which is not based on any documentary
evidence is manifestly hearsay and should be disregarded by the court124.

119 Lagcao vs. Judge Labra, GR. No. 155746, October 13, 2004.
120 Republic of the Philippines as represented by the Department of Public Works and Highways v. Asia
Pacific Integrated Steel Corporation, GR No. 192100, March 12, 2014.
121 Eslaban vs. De Onorio, GR. No. 146062, June 28, 2001.
122 G.R. No. 146587, July 2, 2002, 383 SCRA 611, 622-623.
123 National Power Corporation v. Zabala, G.R. No. 173520, January 30, 2013, 689 SCRA 554, 564
124 National Power Corporation vs. YCLA Sugar Development Corporation, GR No. 193936,

December 11, 2013.

 The aforementioned rule, however, is modified where only a part of a certain property
is expropriated. In such a case the owner is not restricted to compensation for the portion
actually taken. In addition to the market value of the portion taken, he/she is also entitled to
recover for the consequential damage, if any, to the remaining part of the property. At the
same time, from the total compensation must be deducted the value of the consequential
benefits125. No actual taking of the building is necessary to grant consequential damages.
Consequential damages are awarded if, as a result of the expropriation, the remaining property
of the owner suffers from an impairment or decrease in value.126 The rules on expropriation
clearly provide legal bases for the award of consequential damages. Section 6 of Rule 67 of the
Rules of Court provides:

x x x The commissioners shall assess the consequential damages to the

property not taken and deduct from such damages the consequential
benefits to be derived by the owner from the public use or public
purpose of the property taken, the operation of its franchise by the
corporation or the carrying on of the business of the corporation or
person taking the property. But in no case shall the consequential
benefits assessed exceed the consequential damages assessed, or the
owner be deprived of the actual value of his property so taken.

In B.H. Berkenkotter & Co. v. Court of Appeals, we held that:

To determine just compensation, the trial court should first as

certain the market value of the property, to which should be
added the consequential damages after deducting therefrom the
consequential benefits which may arise from the expropriation.
If the consequential benefits exceed the consequential damages,
these items should be disregarded altogether as the basic value
of the property and should be paid in every case.

Indeed, just compensation must not be arrived at arbitrarily, but determined after an
evaluation of different factors. If relevant factors, such as the zonal valuation, tax declarations
and current selling price supported by documentary evidence are not judiciously determined,
then the fair market value of the property is not considered. This requirement cuts both ways.
Compensation must be just not only to the property-owner but also to the public that
ultimately bears the cost of expropriation127.

(5) the taking must comply with due process of law;

In the cases surveyed by the researcher, the provision of Section 9, Article III of the
Constitution had been consistently applied to address the right of the landownership to just
compensation. This is amplified by Section 1, Article III of the Constitution which says that

125 National Power Corporation vs. Spouses Chiong, G.R. No. 152436, June 20, 2003.
126 Republic of the Philippines, as represented by the Department of Public Works and Highways vs.
bank of the Philippine Islands, GR No. 202039, September 11, 2013.
127 Secretary, Department of Public Works and Highways vs. Spouses Heracleo and Ramona Tecson,

GR No. 179334, July 1, 2013.

“no person shall be deprived of life, liberty, or property without due process of law”. Hence,
in the exercise thereof, the State must conform with both the substantive and procedural
aspects of due process. In the former, the interest of the public, in general, as distinguished
from those of a particular class, requires the intervention of the state, and the means employed
are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive
on individuals. In the latter case, procedural due process conforms to a more or less fixed
formula and has the following requisites: (1) There must be a court or tribunal with judicial
power to hear and determine the matter before it; (2) jurisdiction must be acquired over the
person of the parties to the case or over the property which is the subject matter of the
proceedings; (3) the parties must be given an opportunity to be heard; and (4) judgment must
be rendered upon lawful hearing128.

2. Republic Act 8974

Republic Act 8974 or an Act to Facilitate the Acquisition of Right-Of-Way , Site or Location for
National Government Infrastructure Projects, signed into law on November 7, 2000, authorizes an
implementing agency, “whenever it is necessary to acquire real property for the right-of-way
or location for any national government infrastructure project” to file an expropriation
complaint with the proper court.

The general rule is that upon the filing of the expropriation complaint, the plaintiff has
the right to take or enter into possession of the real property involved if he/she deposits with
the authorized government depositary an amount equivalent to the assessed value of the
property. An exception to this procedure is provided by RA 8974, with respect to national
government projects which requires the payment of 100% of the zonal value of the property
to be expropriated as the provisional value.129 It must be emphasized, however, that whether
a deposit is made under Rule 67 of the Rules of Court or the provisional value of the property
is paid pursuant to RA 8974130, the said amount serves the double-purpose of: (a) pre-payment
if the property is fully expropriated, and (b) indemnity for damages if the proceedings are
dismissed131.

Section 2, Rule 67 of the Rules of Court requires the expropriator to deposit the
amount equivalent to the assessed value of the property to be expropriated prior to entry. The
assessed value41 of a real property constitutes a mere percentage of its fair market value based
on the assessment levels fixed under the pertinent ordinance passed by the local government
where the property is located. In contrast, RA 8974 requires the payment of the amount
equivalent to 100% of the current zonal value of the property which is usually of a higher
amount.

128 Banco Espanol vs. Palanca, 37 Phil. 921

129Metropolitan Cebu Water District (MCWD) v. J. King and Sons Company, Inc., 603 Phil. 471, 483
(2009). RA 8974 has been repealed by RA 10752, which substantially maintained in Section 6 thereof the
requirement of "deposit" of 100% of the value of the land based on the current relevant BIR zonal valuation
issued not more than three (3) years prior to the filing of the expropriation complaint.
130 Section 6 of RA 10752 reverted to the term "deposit."
131Felisa Agricultural Corporation, v. National Transmission Corporation, G.R. Nos. 231655 and

231670, July 02, 2018.

 In Republic of the Philippines v. Judge Gingoyon132, the Court recognized that while
expropriation proceedings have always demanded just compensation in exchange for private
property, the deposit requirement under Rule 67 of the Rules of Court "impeded immediate
compensation to the private owner, especially in cases wherein the determination of the final
amount of compensation would prove highly disputed. "Thus, it categorically declared that "it
is the plain intent of RA 8974 to supersede the system of deposit under Rule 67 with the scheme
of 'immediate payment' in cases involving national government infrastructure projects." The
same case further ruled:

It likewise bears noting that the appropriate standard of just

compensation is a substantive matter. It is well within the province of
the legislature to fix the standard, which it did through the enactment of
RA 8974. Specifically, this prescribes the new standard in determining
the amount of just compensation in expropriation cases relating to
national government infrastructure projects, as well as the payment of
the provisional value as a prerequisite to the issuance of a writ of
possession. Of course, rules of procedure, as distinguished from
substantive matters, remain the exclusive preserve of the Supreme Court
by virtue of Section 5(5), Article VIII of the Constitution. Indeed,
Section 14 of the Implementing Rules recognizes the continued
applicability of Rule 67 on procedural aspects when it provides "all
matters regarding defenses and objections to the complaint, issues on
uncertain ownership and conflicting claims, effects of appeal on the
rights of the parties, and such other incidents affecting the complaint
shall be resolved under the provisions on expropriation of Rule 67 of
the Rules of Court."47

Indubitably, a matter is substantive when it involves the creation of rights to be

enjoyed by the owner of the property to be expropriated. The right of the owner to receive
just compensation prior to acquisition of possession by the State of the property is a
proprietary right, appropriately classified as a substantive matter and, thus, within the sole
province of the legislature to legislate on.133

Statutes are generally applied prospectively unless they expressly allow a

retroactive application. It is well known that the principle that a new law shall
not have retroactive effect only governs rights arising from acts done under
the rule of the former law. However, if a right is declared for the first time by
a subsequent law, it shall take effect from that time even though it has arisen
from acts subject to the former laws, provided that it does not prejudice
another acquired right of the same origin.

Notably, the payment of the provisional value of the subject land equivalent to 100%
of its current zonal value is declared for the first time by the said law which is evidently more
favorable to the landowner than the mere deposit of its assessed value52 as required by Rule
67. Accordingly, the application of the provisions of RA 8974 to the instant case is beyond

132 514 Phil. 657 (2005).

133 Felisa Agricultural Corporation, supra
cavil. Besides, there is no legal impediment to the issuance of a writ of possession in favor of
respondent, as successor of NPC, despite entry to the subject land long before the filing of
the inverse condemnation proceedings before the RTC because physical possession gained by
entering the property is not equivalent to expropriating it with the aim of acquiring ownership
thereon. In Republic v. Hon. Tagle134, the Supreme Court explained:

The expropriation of real property does not include mere physical entry
or occupation of land. Although eminent domain usually involves a
taking of title, there may also be compensable taking of only some, not
all, of the property interests in the bundle of rights that constitute
ownership.

x x x Mere physical entry and occupation of the property fall short of

the taking of title, which includes all the rights that may be exercised by
an owner over the subject property. Its actual occupation, which renders
academic the need for it to enter, does not by itself include its acquisition
of all the rights of ownership. x x x.

The law also provides for standards in the assessment of the value of the property
subject of expropriation or negotiated sale. In order to facilitate the determination of just
compensation, the court may consider, among other well-established factors, the following
relevant standards135:

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

(b) The developmental costs for improving the land;

(c) The value declared by the owners;

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

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

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

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

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

134 359 Phil. 892 (1998).

135 Section 5 of Republic Act 8974, November 7, 2000.
 3. Republic Act 10752

Republic Act No. 10752 or An Act Facilitating The Acquisition of Right-of-Way Site
or Location for National Government Infrastructure Projects (the Right of Way Act of 2016)
signed into law on March 7, 2016, repealed Republic Act 8974 and is aimed at fast-tracking
and simplifying negotiated sale as the preferred mode of ROW acquisition by making the price
offer and terms of negotiations more attractive and just for the owners than the old rules.

Under the law, the government may acquire real property needed as right-of-way site
or location for any national government infrastructure project through donation, negotiated
sale, expropriation, or any other mode of acquisition as provided by law.

The law ensures that the implementing agency may offer to acquire, through
negotiated sale, the right-of-way site or location for a national government infrastructure
project, the sum of the current market value of the land, the replacement cost of the structures
and improvements therein, and the current market value of crops and trees therein. It enables
implementing agencies to quickly adopt a market-based price without fear of audit
disallowance, while ensuring that the rights of property owners and project-affected persons
are duly protected. It was also enacted to ensure that owners of real property acquired for
national government infrastructure projects are promptly paid just compensation for the
expeditious acquisition of the required right-of-way for the projects. The law recognizes that
while time is of the essence in building new roads and other infrastructure projects, the
contentious issue of computing for the compensation of real estate acquired for ROW sites
had been a cause of delay.

These sites can be acquired by the government through different modes: by donation,
negotiated sale, expropriation and other modes of acquisition authorized by existing laws. In
negotiated sales, which is the most preferred mode, the Bureau of Internal Revenue zonal
value is no longer the basis for compensation, as the offered compensation price could be the
sum of the 1) current market value of the land; 2) replacement cost of structures and
improvements; and 3) current market value of crops and trees in the property.

The measure mandates the implementing agency to take into account the ecological and
environmental impact of the project it will undertake. Before any national government project
could be undertaken, the implementing agency shall consider environmental laws, land use
ordinances and all pertinent provisions of Republic Act No. 7160 or the "Local Government
Code."

New developments in right-of-way practice are introduced. Unlike Republic Act 8974,
the new law now provides for compensation under certain conditions, for landowners whose
lands are covered by a free patent, or land granted through Commonwealth Act No. 141.
Thus, in addition to the private properties that the government may acquire as right-of-way
site or location for any national government infrastructure project, through donation,
negotiated sale, expropriation, or any other mode of acquisition as provided by law, Section 4
of RA10752 now includes lands covered by free patents holder and any previous acquisition
of said land is not through a gratuitous title. The said section provides:
 In case of lands granted through Commonwealth Act No. 141, as
amended, otherwise known as “The Public Land Act”, the implementing
agency shall:

(a) follow the other modes of acquisition enumerated in this Act,

if the landowner is not the original patent holder and any
previous acquisition of said land is not through a gratuitous title;
or

(b) follow the provisions under Commonwealth Act No. 141, as

amended, regarding acquisition of right-of-way on patent lands,
if the landowner is the original patent holder or the acquisition
of the land from the original patent holder is through a
gratuitous title.136

Also, the new law now admits the existence of landowners whose land were taken
by the government for national infrastructure projects without the payment of just
compensation, by providing a provision on outstanding claims under the last paragraph
of Section 5 of the law, which says:

The provisions of subparagraph (a) herein shall also apply to outstanding

claims for right-of-way payments, except that the amount to be offered shall
be the price at the time of taking of the property, including legal interest until
fully paid.

The provisions of subparagraph (a) of Section 5 refers to the rules on negotiated sale,
where the implementing agency may offer to acquire, through negotiate sale, the right-of-way
site or location for a national government infrastructure project, under the following rules.

(a) The implementing agency shall offer to the property owner

concerned, as compensation price, the sum of:

(1) the current market value of the land,

(2) the replacement cost of structures and improvements therein;

and

(3) the current market value of crops and trees therein.137

One important change introduced to fast-track the implementation of a national

infrastructure project, and without waiting for the final determination of compensation that
usually takes years, is the new law, which now sets the parameters for the payment of
provisional deposit for the immediate issuance of writ of possession. The payment is made by
depositing with the clerk the “the current relevant zonal valuation of the BIR”, which must be
“issued not more than three (3) years prior to the filling of the expropriation complaint”,
136 Section 4 of Republic Act 10752
137 Section 5 of Republic Act 10752
hence, it is more advantageous to the landowners compared to the old law which utilizes
existing BIR zonal valuations that are not updated and are usually old. This is provided by
Section 6 of RA 10752 which states that:

Section 6. Guidelines for Expropriation Proceedings. – Whenever it is

necessary to acquire real property for the right-of-way site or location
for any national government infrastructure through expropriation, the
appropriate implementing agency, through the Office of the Solicitor
General, the Office of the Government Corporate Counsel, or their
deputized government or private legal counsel, shall immediately initiate
the expropriation proceedings before the proper court under the
following guidelines:

(a) Upon the filing of the complaint or at any time

thereafter, and after due notice to the defendant, the
implementing agency shall immediately deposit to the court in
favor of the owner the amount equivalent to the sum of:

(1) One hundred percent (100%) of the value of the land

based on the current relevant zonal valuation of the Bureau of
Internal Revenue (BIR) issued not more than three (3) years
prior to the filing of the expropriation complaint subject to
subparagraph (c) of this section;138

In cases where there is no zonal valuation in the area, or if there is, but not yet updated,
the landowner can validly refuse or object to the issuance of a writ of possession. Clearly, the
BIR zonal valuation to be considered current and relevant zonal valuation must be issued not
more than three (3) years prior to the filing of the expropriation.

Section 6 (a)(1) of the same law provides for the remedy when there is no zonal
valuation available at the time the Complaint is filed, or when the zonal valuation has been in
force for more than three (3) years, which says:

(c) In provinces, cities, municipalities, and other areas where there is no

land classification, the city or municipal assessor is hereby mandated,
within the period of sixty (60) days from the date of filing of the
expropriation case, to come up with the required land classification and
the corresponding declaration of real property and improvement for the
area. In provinces, cities, municipalities, and other areas where there is
no zonal valuation, or where the current zonal valuation has been in
force for more than three (3) years, the BIR is mandated, within the
period of sixty (60) days from the date of filing of the expropriation case,
to conduct a zonal valuation of the area, based on the land classification
done by the city or municipal assessor.139

138 Section 6 of Republic Act 10752

139 Section 6 (a)(1) of Republic Act 10752
 There is no more need for the city or municipal assessor to come up with the required
land classification and the corresponding declaration of real property and improvement for
the area pursuant to the above section when immediately after the filing of the complaint, a
new zonal valuation is issued by the BIR, usually through a Department Order by the
Department of Finance.

However, the deposit of provisional payment is without prejudice to the payment of

final compensation for the actual affected areas, including the portions of the land that were
left and rendered useless due to the construction of the national infrastructure projects. The
final compensation shall be the market value of the property which is to be determined
following the standards which must be observed under Section 7 of the law.140

Anent the replacement cost of improvements and structures, Section 6 (a)(2) of RA

10752, upon the filing of the complaint or at any time thereafter, and after due notice to the
defendant, the implementing agency shall immediately deposit to the court in favor of the
owner the amount equivalent to the sum of the replacement cost at current market value of
the improvements and structures as determined by: (i) the implementing agency; (ii) a
government financial institution with adequate experience in property appraisal; and (iii) an
independent property appraiser accredited by the BSP. 141

4. Commonwealth Act 141

Commonwealth Act No. 141, authorizes government officials in-charge of the

prosecutions of projects or their representatives to take immediate possession of portion of
the property, subject to the lien as soon as the need arises and after due notice to the owners.

By way of a background, Section 112 of Commonwealth Act No. 141, initially

provided a 20-meter strip of land easement for public use with damages limited to
improvements only. In the initial provision, there was no compensation for land easement
within the prescribed corridor width. The twenty-meter strip was subsequently increased to
sixty (60) meters by Presidential Decree (P.D.) No. 635, and added infrastructure projects
which can benefit from the foregoing land easements such as public highways, railroads,
irrigation ditches, aqueducts, telegraph and telephone lines, airport runways, including sites
necessary for similar works that the government or any public or quasi-public service or
enterprise, may reasonably require for carrying on their business, with payment of damages
for improvements only;

On June 2, 1978, Section 112 was further amended by Presidential Decree 1361, which
authorizes government officials in-charge with the prosecution of projects or their
representative to take immediate possession of portion of the property subject to the lien as
soon as the need arises, and after due notice to the owners. Nonetheless, ownership over said
property shall immediately revert to the title holders should the project be abandoned or when

140 Section 7 of Republic Act 10752

141 Section 6 (a)(2) of Republic Act 10752
the infrastructure projects are completed, and buildings used are abandoned or dismantled,
but subject to the same lien for future improvements. The applicable provision states:

Sec. 112. Said land shall further be subject to a right-of-way not

exceeding sixty (60) meters on width for public highways, railroads,
irrigation ditches, aqueducts, telegraph and telephone lines, airport
runways, including sites necessary for terminal buildings and other
government structures needed for full operation of the airport, as well
as areas and sites for government buildings for Resident and/or Project
Engineers needed in the prosecution of government-infrastructure
projects, and similar works as the Government or any public or quasi-
public service or enterprise, including mining or forest concessionaires,
may reasonably require for carrying on their business, with damages for
the improvements only.
Government officials charged with the prosecution of these projects or
their representatives are authorized to take immediate possession of the
portion of the property subject to the lien as soon as the need arises and
after due notice to the owners. It is however, understood that ownership
over said properties shall immediately revert to the title holders should
the airport be abandoned or when the infrastructure projects are
completed, and buildings used by project engineers are abandoned or
dismantled, but subject to the same lien for future improvements.142

Before the property owner will be entitled to just compensation the Supreme Court in
Bartolata v. Republic143, held:

To recapitulate, two elements must concur before the property owner

will be entitled to just compensation for the remaining property under
Sec. 112 of CA 141: (1) that the remainder is not subject to the statutory
lien of right of way; and (2) that the enforcement of the right of way
results in the practical destruction or material impairment of the value
of the remaining property, or in the property owner being dispossessed
or otherwise deprived of the normal use of the said remainder.144

However, with the enactment of Republic Act 10752, landowners whose titles are
derived from free patent are already entitled to just compensation. Inquiry should first be made
whether the landowner is the original patent title holder or whether the acquisition of the land
from the original patent holder was through gratuitous title. Paragraph (a) of Section 4 of RA
10752 states:

142 Section 112 of Commonwealth Act 141

143 GR No. 223334, June 7, 2018, cited in Republic vs. Spouses Cornelio Alforte and Susana Alforte,
August 22, 2018.
144 Bartolata v. Republic, GR No. 223334, June 7, 2018
 In case of lands granted through Commonwealth Act No. 141, as amended,
otherwise known as “The Public Land Act”, the implementing agency shall:

(a) follow the other modes of acquisition enumerated in this Act, if

the landowner is not the original patent holder and any previous
acquisition of said land is not through a gratuitous title; or

(b) follow the provisions under Commonwealth Act No. 141, as

amended, regarding acquisition of right-of-way on patent lands, if
the landowner is the original patent holder or the acquisition of the
land from the original patent holder is through a gratuitous title.145

The determination of just compensation in expropriation proceedings is essentially a

judicial prerogative.146 This determination of just compensation, which remains to be a judicial
function performed by the court, is usually aided by the appointed commissioners. In Spouses
Ortega v. City of Cebu,147 the Supreme Court held:

Likewise, in the recent cases of National Power Corporation v. dela

Cruz and Forfom Development Corporation v. Philippine National Railways, we
emphasized the primacy of judicial prerogative in the ascertainment of
just compensation as aided by the appointed commissioners, to wit:

Though the ascertainment of just compensation is a judicial prerogative,

the appointment of commissioners to ascertain just compensation for
the property sought to be taken is a mandatory requirement in
expropriation cases. While it is true that the findings of commissioners
may be disregarded and the trial court may substitute its own estimate
of the value, it may only do so for valid reasons; that is, where the
commissioners have· applied illegal principles to the evidence submitted
to them, where they have disregarded a clear preponderance of evidence,
or where the amount allowed is either grossly inadequate or excessive.
Thus, "trial with the aid of the commissioners is a substantial right that
may not be done away with capriciously or for no reason at all.148

The survey of cases also brought the researcher into the concept of inverse
condemnation, now subject OSG Guidelines, where the NPC and the TRANSCO were
directed to observe the following:149

If the government has already occupied the land and the landowner
files an ejectment case, there is a need to file an expropriation case,

145 Section 4 of RA 10752

146 National Power Corporation v. Spouses Asoque, supra note 17, citing National Power Corporation
v. Spouses Zabala, 702 Phil. 491, 499-500 (2013) and Land Bank of the Philippines v. Celada, 515 Phil. 467, 477
(2006).
147 617 Phil. 817 (2009)
148 Spouses Ortega v. City of Cebu, 617 Phil. 817 (2009)
149 OSG, General Guidelines for Expropriation, dated January 9, 2012.
 obtain a writ of possession and have the ejectment proceedings
enjoined;

If landowner files and action “publiciana” for recovery of possession

before the RTC, have the case converted into an expropriation
proceeding and obtain a writ of possession. If the action is filed before
the MTC, file separate expropriation case with the RTC, obtain a writ of
possession and have the action “publiciana” enjoined.
“Inverse condemnation is a cause of action against a governmental defendant to
recover the value of property which has been taken in fact by the governmental defendant,
even though no formal exercise of the power of eminent domain has been attempted by the
taking agency. While the typical taking occurs when the government acts to condemn property
in the exercise of its power of eminent domain, the entire doctrine of inverse condemnation
is predicated on the proposition that a taking may occur without such formal proceedings.
The phrase “inverse condemnation,” as a common understanding of that phrase would
suggest, simply describes an action that is the “inverse” or “reverse” of a condemnation
proceeding.”150

In a case decided in the Philippines, titled National Power Corporation v. Heirs of Macabangit
151
Sangkay , the Supreme Court ruled that:

the action to recover just compensation from the State or its

expropriating agency differs from the action for damages. The former,
also known as inverse condemnation, has the objective to recover the value
of property taken in fact by the governmental defendant, even though
no formal exercise of the power of eminent domain has been attempted
by the taking agency. Just compensation is the full and fair equivalent of
the property taken from its owner by the expropriator. The measure is
not the taker’s gain, but the owner’s loss. The word just is used to
intensify the meaning of the word compensation in order to convey the
idea that the equivalent to be rendered for the property to be taken shall
be real, substantial, full, and ample. On the other hand, the latter action
seeks to vindicate a legal wrong through damages, which may be actual,
moral, nominal, temperate, liquidated, or exemplary. When a right is
exercised in a manner not conformable with the norms enshrined in
Article 19 and like provisions on human relations in the Civil Code, and
the exercise results to the damage of another, a legal wrong is committed
and the wrongdoer is held responsible.

Also in the case of National Power Corporation v. Spouses Bernardo & Mindaluz Saludares,
152
et al , the Supreme Court held that:

150
29A Corpus Juris Secundum, Eminent Domain, §381
151
G.R. No. 165828, August 24, 2011
152 G.R. No. 189127, Apr 25, 2012
 to begin with, it was not the duty of respondent-spouses to demand for
just compensation. Rather, it was the duty of NAPOCOR to institute
eminent domain proceedings before occupying their property. In the
normal course of events, before the expropriating power enters a private
property, it must first file an action for eminent domain and deposit with
the authorized government depositary an amount equivalent to the
assessed value of the property. Due to its omission, however,
respondents were constrained to file inverse condemnation proceedings
to demand the payment of just compensation before the trial court. We
therefore rule that NAPOCOR cannot invoke the statutory prescriptive
period to defeat respondent- spouses’ constitutional right to just
compensation.”

D. Judicial Precedents

The researcher determined the application of the above-described laws, rules and
regulations and examined whether they were applied by the Supreme Court, either singly or
in conjunction with other laws and rules.

Through the analysis of the researcher and key informants vis-a-vis the 100 Supreme
Court Decisions which were randomly selected from 2001 until 2018, the study came up with
the following results: Out of the 100 decisions, there were 80 decided cases, or rank 1, where
the Supreme Court applied the 1987 Constitution. This is followed by the 1997 Rules of Civil
Procedure with a frequency of 38 or rank 2, Republic Act 6395 with a frequency of 24, or rank
3 and the Republic Act 8974, with a frequency of 18 as rank 4. Commonwealth Act 14 ranked
5th with a frequency of 7, and Republic act 7160 ranked 6th with a frequency of 4. There were
no cases decided by the Supreme Court applying Republic Act 10752 as one of the bases for
land acquisition.

Based on the findings mentioned above, the researcher inferred that most of the
decisions were based on the 1987 Constitution, while Republic Act 7160 was the least. The
frequency of the table exceeded the 100 Supreme Court decisions because two or more laws,
rules and regulations were applied in a single expropriation case.

In the cases where the Supreme Court invoked the 1987 Constitution, it applied Section
9 of Article III of the Constitution in mandating that “private property shall not be taken for
public use without just compensation”, as a limitation on the government’s exercise of eminent
domain.153 However, while the Supreme Court recognized eminent domain as "the power of
the nation or a sovereign state to take, or to authorize the taking of, private property for a
public use; as "an inherent political right, or since it is founded on a common necessity and
interest of appropriating the property of individual members of the community to the great
necessities of the whole community, the Supreme Court, nonetheless, stressed that the exercise
of the power of eminent domain is constrained by two constitutional provisions: (1) that
private property shall not be taken for public use without just compensation under Article III

153Antonio E.B. Nachura, Outline Reviewer in Political Law, VJ Graphic Arts, Inc., Quezon City,
2016, page 70.
(Bill of Rights), Section 9 and (2) that no person shall be deprived of his life, liberty, or property
without due process of law under Art. III, Sec. 1.

Thus, the mention of the 1987 Constitution in the decisions of the Supreme Court was
meant both to recognize the inherent right of the state to exercise eminent domain, and the
right of the landowners to just compensation and to due process of law, which is aptly
described in Sindalan vs. Court of Appeals154, to wit:

On due process, it is likewise basic under the Constitution that the

property owner must be afforded a reasonable opportunity to be heard
on the issues of public use and just compensation and to present
objections to and claims on them. It is settled that taking of property for
a private use or without just compensation is a deprivation of property
without due process of law. Moreover, it has to be emphasized that the
taking of private property without filing any complaint before a court of
law under Rule 67 of the Rules of Court or existing laws is patently
felonious, confiscatory, and unconstitutional. Judicial notice can be
taken of some instances wherein some government agencies or
corporations peremptorily took possession of private properties and
usurped the owner’s real rights for their immediate use without first
instituting the required court action. Running roughshod over the
property rights of individuals is a clear and gross breach of the
constitutional guarantee of due process, which should not be
countenanced in a society where the rule of law holds sway.

This is followed by the 1997 Rules of Civil Procedure with a frequency of 38 or rank
2. The application mostly involved in the issuance of order of condemnation, the appointment
of commissioners and in reckoning the payment for just compensation. In many of these
cases, the Supreme Court was consistent in relying with the precedent that determination of
just compensation is a judicial function. However, in so far as the payment of provisional
deposit is concerned, the Supreme Court had made a precedent, starting with the case of
Republic of the Philippines v. Gingoyon155 and recently with the case of Republic of the Philippines vs.
Hon. Jesus M. Mupas156. That in matters involving national infrastructure projects, the provision
of Section 4 of Republic Act 8974, and not Section 2 Rule 67 of the Rules of Court shall
govern.

Here, the Supreme Court reconciled the conflicting stance of the parties. The
Government argued that Rule 67 of the Rules of Court, and not RA 8974, was applicable since
the NAIA-IPT III was not a national government infrastructure project, that under Section 2,
Rule 67 of the Rules of Court, it shall have the right to a writ of possession upon deposit with
the authorized government depositary of an amount equivalent to the assessed value of the
property for purposes of taxation, which amount shall be held by the depositary subject to the

154 Brgy. Sindalan vs. Court of Appeals, G.R. No. 150640 March 22, 2007.
155 Republic of the Philippines represented by Executive Secretary Eduardo R. Ermita, the Department
of Transportation and Communications, and the Manila International Airport Authority, Plaintiffs, -versus-
Philippine Air Terminals Co., Inc., G.R. No. 209731.
156 G.R. No. 181892, September 8, 2015.
orders of the court. In contrast, the property owner invoked Section 4 of RA 8974, that as a
rule, it requires the Government to immediately pay the property owner the amount equivalent
to100% of the value of the property based on the BIR's relevant zonal valuation and the value
of the improvements/and or structures, upon the filing of the complaint and after due notice
to the defendant.

According to the Supreme Court, Republic Act 8974 is the governing law in cases
where the national government expropriates property for the purpose of commencing national
government infrastructure projects such as the construction of the NAIA-IPT III. However,
Rule 67 of the Rules of Court applies in determining the assessed value and the mode of
deposit of just compensation if the national government initiates the expropriation complaint
for purposes other than national infrastructure projects.157

Republic Act 6395 with a frequency of 24, ranked 3rd in the list of cases applied by the
Supreme Court in deciding cases. Most of these cases were initiated by the National Power
Corporation invoking Section 3 (i) of R.A. No. 6395 and 3-A (b) of R.A. 6395. Some of these
cases had already been decided by the Supreme Court when the National Transmission
Corporation already assumed the liabilities of NPC involving transmission-related cases of
NPC. In these cases, the Supreme Court was consistent in debunking the claim of
NPC/TransCo that in cases of acquisition of easements of right-of-way, compensation should
not exceed ten percent of the market value and the defense of prescription.

The Supreme Court had ruled several times that the prescriptive period under Section
3 (i) of R.A. No. 6395 does not extend to an action to recover just compensation. It sided with
the landowners in stating that it would be a confiscatory act on the part of the government to
take the property of landowners for public purpose and deprive them of their right to just
compensation, solely because they failed to institute inverse condemnation proceedings within
five years from the time the transmission lines were constructed. In so far as the
NPC/TRANSCO’s defense that it is only after a right-of-way easement, the Supreme Court
ruled that it nevertheless perpetually deprives defendants of their proprietary rights as
manifested by the imposition by the plaintiff upon defendants that below said transmission
lines no plant higher than three (3) meters is allowed.

The application of Republic Act 8974 ranked 4th, with a frequency of 18. Of the cases
decided by the Supreme Court, the provision of Section 4 on provisional deposit and Section
5 on the standards for the assessment of the value of the property subject of expropriation or
negotiated sale were the most applied ones.

As already explained, the provision of Section 4 of Republic Act 8974 became a

contentious issue between the government and the landowner because the amount of
provisional payment is higher in RA 8974. As compared to the assessed value required to be
deposited pursuant to Section 2 of Rule 67, the law requires the implementing agency to pay
the landowners, upon filing of the complaint for expropriation, the amount equivalent to
100% of the current and zonal value of the property, which is usually higher than the assessed
value. Considering the great disparity in the amount, the parties have invoked the courts to
settle the issue.

157 Republic v. Gingoyon , 514 Phil. 678 (2005)

 The Supreme Court finally reconciled the Rules of Court and Republic Act 8974 in the
most recent case of Felisa Agricultural Corporation vs. National Transmission Corporation,158 when it
resolved “that the appropriate standard of just compensation is a substantive matter. It is well
within the province of the legislature to fix the standard, which it did through the enactment
of RA 8974. Specifically, this prescribes the new standard in determining the amount of just
compensation in expropriation cases relating to national government infrastructure projects,
as well as the payment of the provisional value as a prerequisite to the issuance of a writ of
possession”.

Thus, even in the determination of the final compensation of the case, the provision of
Section 5 of the law was invoked by the Supreme Court in cases where said law was already
effective. However, since the law was passed only in 2000, there are few cases yet decided by
the Supreme Court applying the law. And although the law was repealed in 2016 by Republic
Act 10752, it is expected that the Supreme Court would still be applying this law since there
are still cases pending before it and the lower courts.

On the application of Commonwealth Act 141, which ranked 5th in the survey, the cases
decided by the Supreme Court dealt mostly on cases filed by the landowners demanding
compensation for the property taken by the government. Usually, the government would
move for the dismissal on the ground, among others, of lack of cause of action - arguing that,
since the property was originally acquired by free patent, an easement in favor of the
government of 60 meters existed without need of payment of just compensation - except if
there are improvements, pursuant to Section 112 of CA 141, as amended by Presidential
Decree (PD) No. 1361. The state would argue against the landowner stating that the state’s
lien followed the property even when they acquired the same from the original grantee of the
patent or the latter's successor- in-interest.

The dilemma faced by the Court is between the provisions of CA No. 141 imposing
encumbrance in favor of the government on the subject property up to 60-meters in width as
road right of way and the provisions of the Constitution particularly Article III, Section 9
which provides that "no one should be deprived of life, liberty and property without due
process of law, "and Section 9 which provides that "Private property shall not be taken for
public use without just compensation", which of them would prevail?

In the cases decided by the Supreme Court, the State’s allodial right to the properties
covered by CA 141 was upheld159. However, in these cases where the Court denied
compensation to patent holders, the latter’s right to compensation is recognized when (1) the
remainder of the lot is not subject to the statutory lien of right of way, and (2) that the
enforcement of the right of way results in the practical destruction or material impairment of
the value of the remaining property, or in the property owner being dispossessed or otherwise
deprived of the normal use of the said remainder.160

158 G.R. Nos. 231655 and 231670, July 02, 2018

159 National Irrigation vs. Court of Appeals, 395 Phil 48 (2000), Republic vs. Andaya, 552 Phil 48 (2007).
160 Republic vs. Regulto, 784 Phil 805 (2016), Bartolato vs. Republic, GR. No. 223334, June 7, 2017.
 Thus, there must be a thorough determination by the trial court if the utilization and
taking of the remaining portion of landowner’s land amounts to a taking of the whole
property, as it amounts to the material impairment of the value of the remaining portion, or if
the respondents are being dispossessed or otherwise deprived of the normal use thereof.161

However, with the enactment of Republic Act 10752, landowners whose titles are
derived from free patent had already been entitled to just compensation for as long as the
landowner is not the original patent title holder or whether the acquisition of the land from
the original patent holder was not through gratuitous title. Considering that the surveyed cases
were decided prior to the enactment of the law, the benefit derived from this new law was not
yet applied.

Republic Act 7160, which ranked 6th in the survey of cases is applied minimally due to
the limitation of the study as it dealt only on national government infrastructure projects,
compared to the expropriation by LGUs. The mention of the law involving cases where the
government agencies are involved, is by reference only.

Finally, not one of the Supreme Court cases included Republic Act 10752 as one basis
for land acquisition. This is understandable since the law was just passed in 2016. Usually, it
takes years before a law is tested and scrutinized by the Supreme Court. Nevertheless, the
findings of the study is very relevant in analyzing whether the new law could now strike the
balance between the rights of the state and those of the landowners.

E. Comparative Analysis

Comparison of ranks of expropriation laws, rules, and regulation applied in the 3

different government agencies involved in this study such as the DPWH, DOTR and
NPC/TRANSCO was undertakn.

The researcher employed simple statistical analysis in getting the means using the
respective ranks of the given laws, rules and regulation in getting the average rank of the laws,
rules and regulations. The result revealed that the 1987 Constitution has an average rank of
1.0, followed by the 1997 Rule of Civil Procedure with a rank of 2.0. The average rank of
Republic act 8974 was 3.3, while Republic Act 6395 had an average of 4.0. Commonwealth
Act 141 had an average of 4.5. Only in DPWH and NPC/TRANSCO cases was this law
applied by the Supreme Court, while Republic Act 7160 had an average rank of 5.6.

It indicates, that except with the application of Republic Act 6395, there was a
correlation among the different agencies in the application of the different expropriation laws,
rules and regulation. The difference in the ranking involving Republic Act 6395 is evident
being the Charter of NPC, the predecessor-in-interest of TRANSCO.

1. On the payment of provisional value of the property.

In the payment of the provisional value of the property, whether a deposit is made
under Rule 67 of the Rules of Court or is paid pursuant to RA 8974, the said amount still

161 Republic vs. Spouses Cornelio Alforte, GR No. 217051, August 22, 2018.
serves the double-purpose of: (a) pre-payment if the property is fully expropriated, and (b)
indemnity for damages if the proceedings are dismissed162.

In this section, the researcher investigated how the Supreme Court interpreted and
construe the laws, rules, and regulation in terms of payment of provisional value of the
property. The frequency distribution and rank as shown in Table 2 shows that out of the 100
cases checked by the researcher, the issue on how the provisional amount of deposit should
be valued was discussed in 53 cases, out of which, the use of the BIR zonal value had a
frequency of 31 cases applying it, and is ranked 1st. The proffered value by the implementing
agencies ranked 2nd with 14 cases, while assessed value ranked 3rd with 8 cases.

The finding confirms the governments’ use of the proffered value in the filing of
expropriation cases, which is readily available since it is the value set by the agency concerned,
and is considerably lower than its BIR Zonal counterpart for the purpose of the issuance of a
writ of possession. Conversely, the finding confirms landowners’ insistence in the use of the
BIR Zonal Value of the property pursuant to Republic Act 8974, mandating the immediate
release of the amount of provisional payment equivalent to 100% of the current and relevant
zonal valuation to the landowner from the filing of the complaint for expropriation, being
more favorable to the landowners.

The findings also imply the trend in the payment of provisional deposit brought about
by the current decisions of the Supreme Court, particularly the case of Republic vs. Gingoyon,
differentiating the procedure for prepayment under RA 8974 from Rule 67 of the Rules of
Court, and decreeing that RA 8974 shall be applicable on the substantive aspect of
expropriation. Of these cases, where the Supreme Court disapproved the use of the BIR zonal
value for the payment of provisional deposit, most of these cases happened prior to the
effectivity of RA 8974, and what was applied was either the proffered value by the
implementing agencies or assessed value as declared in the tax declaration by the owner of the
land. The decision in the Gingoyon case was adopted by succeeding Supreme Court cases, the
latest of which is the case of Republic of the Philippines vs. Hon. Jesus M. Mupas163 that in matters
involving national infrastructure projects, the provision of Section 4 of Republic Act 8974,
and not Section 2 Rule 67 of the Rules of Court shall govern. According to the Supreme Court,
Republic Act 8974 is the governing law in cases where the national government expropriates
property for the purpose of commencing national government infrastructure projects.

The Supreme Court likewise put to rest the issue of whether the landowner could also
invoke the provision of Section 4 of Republic Act 8974 if he/she initiates the complaint for
just compensation or inverse condemnation. In the aforementioned case of Felisa Agricultural
Corporation vs. TRANSCO, where the government argues that the law applies only when it
is the government that initiates an expropriation case, the Supreme Court held:

In this case, the government had long entered the subject land
and constructed the transmission towers and lines. However,

162
See Visayan Refining Co. v. Camus, 40 Phil. 550, 563 (1919). See also Capitol Steel Corp. v. PHIVIDEC
Industrial Authority, 539 Phil. 644, 660 (2006)
163 G.R. No. 181892, September 8, 2015.
 petitioner initiated inverse condemnation proceedings after the
effectivity of RA 8974 on November 26, 2000; hence,
procedurally and substantially, the said law should govern.
Notably, the payment of the provisional value of the subject land
equivalent to 100% of its current zonal value is declared for the
first time by the said law which is evidently more favorable to
the landowner than the mere deposit of its assessed value52 as
required by Rule 67. Accordingly, the application of the
provisions of RA 8974 to the instant case is beyond cavil.
Besides, there is no legal impediment to the issuance of a writ of
possession in favor of respondent, as successor of NPC, despite
entry to the subject land long before the filing of the inverse
condemnation proceedings before the RTC because physical
possession gained by entering the property is not equivalent to
expropriating it with the aim of acquiring ownership thereon.164

It is worthy to note, that Republic Act 10752, just like its predecessor-law, is silent in so
far as the right of the landowner to demand the deposit of provisional amount representing
the 100% BIR zonal value of the property when it is the landowner that files the case for just
compensation or inverse condemnation. However, with the ruling of the Supreme Court in
the Felisa case, when a landowner initiates inverse condemnation proceedings after the
effectivity of Republic Act 10752 on March 7, 2016, procedurally and substantially, the said
law should govern.

The trend towards the payment of provisional value using the current and relevant BIR
zonal valuation of the property, issued not more than three (3) years prior to the filling of the
expropriation complaint”, has also removed the wide discretion of implementing agencies in
making the offer, as well as, the court’s power in the issuance of a writ of possession. As it
now stands, once the implementing agency has deposited with the clerk the amount equivalent
to one hundred percent (100%) of the value of the land based on the current relevant zonal
valuation of the Bureau of Internal Revenue (BIR) issued not more than three (3) years prior
to the filing of the expropriation complaint165, the issuance of the writ of possession becomes
a ministerial function of the court.

In fact, even in cases where there is no zonal valuation in the area, or if there is, it is
not yet updated, the court could invoke Section 6 (a)(1) of the same law, requiring the city or
municipal assessor, within the period of sixty (60) days from the date of filing of the
expropriation case, to come up with the required land classification and the corresponding
declaration of real property and improvement of the area, and to conduct a zonal valuation of
the area, based on the land classification done by the city or municipal assessor.166

Indubitably, the expressed requirement of the law removed the possibility of corrupt
officials in the government influencing the outcome of the claim by subjecting landowners to

164 G.R. Nos. 231655 and 231670, July 02, 2018

165 Section 6 of Republic Act 10752
166 Section 6 (a)(1) of Republic Act 10752
their whims and caprices, unless the latter provides them with a share of the bacon. The new
law sets the minimum price of the property as the provisional value to immediately
recompense the landowner with the same degree of speed as the taking of the property, which
reconciles the inherent unease attending expropriation proceedings with a position of
fundamental equity.167

2. Application of the Standards in terms of payment of final amount of

compensation

In determining just compensation, the courts must consider and apply the parameters
set by the law and its implementing rules and regulations in order to ensure that they do not
arbitrarily fix an amount as just compensation that is contradictory to the objectives of the
law. Be that as it may, when acting within such parameters, courts are not strictly bound to
apply the same to its minutest detail, particularly when faced with situations that do not
warrant its strict application.168 However, it must be emphasized that laws providing for
standards do not take away from the courts the power to judicially determine the amount of
just compensation. It merely provides relevant standards in order to facilitate the
determination of just compensation169.

The researcher surveyed how the Supreme Court applied the standards fixed by existing
laws, rules and regulation in fixing the final amount of compensation. The result shows that
out of the 100 cases checked by the researcher, the standard on the “the size, shape or location,
tax declaration and zonal valuation”, ranked 1st with 24 cases observing it, and only case, not
observing it. This is followed by “classification and use for which the property is suited” with
21 cases observing, while only 1 did not, and closely following it is “the current selling price
of similar lands in the vicinity”, with 15 cases observing, and 9 cases not observing it,
respectively.

The most seldom used standard in the fixing of just compensation was “values declared
by the owner’s with 12 cases decided by the Supreme Court, followed by the “development
cost for improving the land” and the “reasonable disturbance compensation for removal and
demolition of certain improvements” with 8 cases, respectively.

These results indicate the predominant reliance by the Supreme Court of the actual and
not the potential value of the property in determining just compensation, which is determined
by the “the size, shape or location, tax declaration and zonal valuation”. It is also for this
reason why in most cases decided by the Supreme Court, it seldom used the “values declared
by the owner and “development cost for improving the land” for being self-serving and
conjectural, respectively.

The result further indicates the adoption by the legislature of the trend of jurisprudence
regarding fixing of just compensation. Both Republic Act 8974 and Republic Act 10752

167 Felisa Agricultural Corporation vs. TRANSCO, supra.

168 Felisa Agricultural Corporation, supra.
169
Metropolitan Cebu Water District (MCWD) v. J. King and Sons Company, Inc., 603 Phil. 471, 483 (2009)
provide for the standard in fixing the amount of just compensation. Specifically, the current
law now requires that the compensation must be the market value of the property.

In determining the current market value or the appropriate price of the property to be
bought by the government, the implementing agency may seek the assistance of a government
financial institution (GFI) or a qualified independent property appraiser (IPA), which shall
adopt whichever is higher of the two estimated market values – i.e. (a) the market value as
determined by GFI/IPA, and (b) the market value as reflected in the BIR Zonal Value – as
the appropriate price offer to the land owner under the mode of negotiated sale.

The trend of jurisprudence has adopted a “whichever is higher” principle whenever

the Court is faced with an amount equal to the BIR zonal valuation on one hand, or the fair
market value of the property, on the other. Since the individual stands to lose the property by
compulsion of the law, the expropriation authority should not further prejudice the owner’s
rights by delaying payment of just compensation. To obviate any possibility of delay in the
payment, the expropriator should already make available, at the time of the filing of the
expropriation complaint, the amount equal to the BIR zonal valuation or the fair market value
of the property, whichever is higher.170

3. Determination of the Reckoning Point in the of payment of compensation

for outstanding claims

As a rule, to determine just compensation, the fair market value of the property should
first be ascertained as of the date of the taking, which usually coincides with the
commencement of the expropriation proceedings. Where entry precedes the filing of the
complaint, the assessment should be as of the time of entry.171

The researcher surveyed how the Supreme Court determined the reckoning point in the
payment of compensation involving outstanding claims – when construction precedes the
filing of the complaint.

The frequency distribution shows that out of the 100 cases checked by the researcher,
there were 43 cases that discussed where construction of the national infrastructure projects
preceded the filing of cases. Of the 43 cases, 25 considered the time of the construction as the
reckoning point where just compensation was computed or determined, while 18 cases
reckoned it at the time of the filing of the complaint.

Of the 25 cases reckoned at the time of construction, 15 involved the DPWH, while
NPC/TransCo had 6, and the remaining 4 with the DOTR. Of the 18 cases reckoned at the
time of filing, 10 of them involved NPC/TransCo, while 6 were with the DPWH and the
remaining 2 with the DOTR.

These results show the disparity in the trend of decisions involving cases where the
construction of the project precedes the filing of the expropriation cases. Under Republic Act
10752, this was classified as outstanding claims. Those involving DPWH, the trend of cases

170 ROW Manual of the Department of Public Works and Highways, page __.
171 Isagani A. Cruz, supra
was reckoned with the time of taking or the time of the construction of the highways, while
in cases involving transmission lines and tunnels NPC/TransCo, the trend was still at the time
of filing.

In cases involving NPV/TRANSCO, the Supreme Court in 2009, in the case of

National Power Corporation v. Omar G. Maruhom, et al172, penalized NPC for the taking of property
of the plaintiffs without the benefit of expropriation. In this case, a complaint for recovery of
possession of land and damages was filed against NPC on November 23, 1994. The Supreme
Court affirmed the decision of both the RTC and the Court of Appeals that just compensation
should be made at the time of filing in 1994 and not in 1978 when NPC took possession of
the subterranean area of the land and constructed underground tunnels.

In a case decided by the Supreme Court in 2011, titled National Power Corporation v.
Heirs of Macabangkit Sangkay, et al173; the Supreme Court determined the just compensations at
the time of the filing of a complaint for recovery of damages and of the property, with
alternative prayer for the payment of just compensation, filed on November 21, 1997. In
disregarding the claim of NPC that valuation should be at the time of the construction of the
underground tunnel in the 1970’s, the court said:

“We rule that the reckoning value is the value at the time of the
filing of the complaint. Compensation that is reckoned on the
market value prevailing at the time either when NPC entered or
when it completed the tunnel, as NPC submits, moved as not just,
for it would compound the gross unfairness already caused to the
owners.

By NPC’s entering without the intention of formally expropriating

the land, and without the prior knowledge and consent of the Heirs
of Macabangkit. NPC’s entering denied elementary due process of
law to the owners since then until the owners commenced the
immense consideration proceedings.”174

In 2012, the Supreme Court, in the case of National Power Corporation v. Spouses Bernardo
& Mindaluz Saludares, et al175, cited the case of NPC vs. Heirs of Macabangkit Sangkay. It found
out that respondents’ spouses were deprived of this right to just compensation when the value
of the property was pegged back to its value in the 1970’s. The court reiterated that NPC
should have instituted eminent domain proceedings before it occupied respondent spouses’
property. Thus, the court pegged the value of just compensation at the time of the filing of
the inverse condemnation proceedings in 2000.

172 G.R. No. 183297,Dec 23, 2009

173G.R. No. 165828, Aug 24, 2011
174 Interestingly, the court cited an earlier case of NPC vs. Court of Appeals (1996), a case that involved

the similar construction of the underground tunnel, where the entry by NPC was made without intent to
expropriate or was not made under warrant or color legal authority.
175 G.R. No. 189127, Apr 25, 2012
 The above pronouncements of the Supreme Court is somewhat different in cases
involving the construction of roads, highways, rails and airports, or cases involving the
DPWH and DOTR.

In the 2013 case of Secretary, DPWH vs. Spouses Heracleo and Ramona Tecson 176 where the
land of Spouses Tecson was among the properties taken by the government sometime in
1940 without the their consent and without the necessary expropriation proceedings used for
the construction of the MacArthur Highway, the Supreme Court, citing the earlier case of
Republic v. Court of Appeals177, held that:

Just compensation is “the fair value of the property as between one who
receives, and one who desires to sell, fixed at the time of the actual taking
by the government. This rule holds true when the property is taken
before the filing of an expropriation suit, and even if it is the property-
owner who brings the action for compensation178.

In arguing against landowner Tecson, the Republic cited the following cases:

a. Forfom Development Corporation v. Philippine National Railways179, where

the PNR entered the property of Forfom in January 1973 for for railroad
tracks, facilities and appurtenances for use of the Carmona Commuter Service
without initiating expropriation Proceedings. In 1990, Forfom filed a
complaint for recovery of possession of real property and/or damages against
PNR.

b. Eusebio v. San Luis180, where the parcel of land of the landowner was
taken in 1980 by the City of Pasig and used as a municipal road now known as
A. Sandoval Avenue in Pasig City, without the appropriate expropriation
proceedings. In 1994, the landowner demanded payment of the value of the
property, but they could not agree on its valuation prompting respondent to
file a complaint for reconveyance and/or damages against the city government
and the mayor.

c. Manila International Airport Authority v. Rodriguez181, in the early 1970s,

MIAA implemented expansion programs for its runway necessitating the
acquisition and occupation of some of the properties surrounding its premises.
As to respondent’s property, no expropriation proceedings were initiated. In
1997, respondent demanded the payment of the value of the property, but the
demand remained unheeded prompting him to institute a case for accion
reivindicatoria with damages against petitioner.

176 G.R. No. 179334, July 01, 2013

177 G.R. No. 147245, March 31, 2005, 454 SCRA
178 ibid.
179 Forfom Development Corporation v. Philippine National Railways, G.R. No. 124795, December

10, 2008.
180 Eusebio v. Luis, G.R. No. 162474, October 13, 2009.
181 Manila International Airport Authority v. Rodriguez, 518 Phil. 750, 757 (2006).
 d. Republic v. Sarabia182, sometime in 1956, where the Air
Transportation Office (ATO) took possession and control of a portion of a
lot situated in Aklan, registered in the name of respondent, without initiating
expropriation proceedings. Several structures were erected thereon including
the control tower, the Kalibo crash fire rescue station, the Kalibo airport
terminal and the headquarters of the PNP Aviation Security Group. In 1995,
several stores and restaurants were constructed on the remaining portion of
the lot. In 1997, respondent filed a complaint for recovery of possession with
damages against the storeowners where ATO intervened claiming that the
storeowners were its lessees.

The Court in the above-mentioned cases was confronted with common factual
circumstances where the government took control and possession of the subject properties
for public use without initiating expropriation proceedings and without payment of just
compensation. The landowners also failed for a long period of time to question such
government act albeit instituted actions for recovery of possession with damages. The Court
thus determined the landowners’ right to the payment of just compensation and, more
importantly, the amount of just compensation. The Court has uniformly ruled that just
compensation is the value of the property at the time of taking that is controlling for purposes
of compensation. The reason for the rule has been clearly explained in Republic v. Lara, et
al.183, and repeatedly held by the Court in recent cases, thus:

The value of the property should be fixed as of the date when it was
taken and not the date of the filing of the proceedings.” For where
property is taken ahead of the filing of the condemnation proceedings,
the value thereof may be enhanced by the public purpose for which it is
taken; the entry by the plaintiff upon the property may have depreciated
its value thereby; or, there may have been a natural increase in the value
of the property from the time it is taken to the time the complaint is
filed, due to general economic conditions. The owner of private property
should be compensated only for what he actually loses; it is not intended
that his compensation shall extend beyond his loss or injury. And what
he loses is only the actual value of his property at the time it is taken x x
x184.
In an effort to reconcile the conflict, and for the guidance of lawyers of these
government agencies, the Office of the Solicitor General (OSG), as the statutory counsel of
the DPWH, DOTR and NPC/TRANSCO, issued a Guidelines on cases where the
government agency is subject of an ejectment and or recovery of possession case. The general
rule is determination of just compensation at the time of filing. However, this admits
exceptions. According to the OSG, the value of property must be determined either as of the
date of the taking of the property or the filing of the complaint whichever comes first.185,
Compensation for property expropriated must be determined as of the time the expropriating

182 G.R. No. 157847, August 25, 2005, 468 SCRA 142
183 96 Phil. 170 (1954)
184 Republic v. Lara, et al., supra
185 citing the cases of Manansan vs. Republic, 498 SCRA 348 [2006] and Tan v. Republic, 523 SCRA 203

[2007].
 authority takes possession thereof and not of the institution of proceedings (Republic v.
Sarabia, 368 SCRA 142 [2005]). However, when the taking of the property sought to be
expropriated coincides with the commencement of the expropriation proceedings, or takes
place subsequent of the filing of the complaint for eminent domain, the just compensation
should be determined as of the date of the filing of the complaint186. There are however
exceptions to the general rule, such as: where there is -

(1) grave injustice to the property owner (Heirs of Pidacan vs. Air
Transportation Office, 524 SCRA 579 [2007]);
(2) the taking did not have color of legal authority (National Power Corporation
vs. Ibrahim, 526 SCRA 149[2007]);
(3) the taking of the property was not initially for expropriation (Tan v.
Republic, 523 SCRA 203 [2007]); and
(4) the owner will be given undue increment advantages because of the
expropriation (Provincial Government of Rizal vs. Araullo, 58 Phil 308 [1933]).187

It is fortunate that Republic Act 10752 recognizes outstanding claims, and provides for
how the claim should be paid. In accordance with Section 5 of the Act, the law shall also apply
to outstanding claims for ROW payments, except that the amount to be offered shall be the
price at the time of taking of the property, including legal interest until fully paid, subject to
the transitory provision in Section 9 of the law, or ROW payments to ongoing transactions
which, as of the effectivity of RA 10752, have already reached a written agreement as to the
price between the implementing agency and the property owner.

In case the landowner rejects the offer, the implementing agency shall also initiate
expropriation proceedings pursuant to Section 6 of the law188.

4. Treatment of Lands Covered by Free Patent (Commonwealth Act 141)

The researcher studied the treatment of lands covered by Commonwealth Act 141, to
determine how the Supreme Court reconciled the claim of landowners for just compensation
pursuant to the Constitution and the stand of the state as sovereign owner of lands.

Of the 100 cases checked, only 7 that dealt on the application of land covered by the
Commonwealth Act No. 141 were decided by the Supreme Court. Of these 7 cases, the
Supreme Court confirmed the state’s lien over the land, regardless whether the title is OCT or
TCT. The Supreme Court consistently acknowledged the effects of Commonwealth Act No.
141 despite landowners’ invocation of the Constitution and due process. Hence, in these cases
the Supreme Court ordered the landowner’s execution of a quitclaim instead of payment of
just compensation.

186 citing the cases of Spouses Curata v. Philippine Ports Authority, 590 SCRA 214 [2009], Eusebio vs Luis,

603 SCRA 576 [2009]; and the case of City of Iloilo v. Besana, 612 SCRA 458 [2010]
187 Office of the Solicitor General, General Guidelines for Expropriation, January 9, 2012.
188 ROW Manual of DOTR
 However, the current decisions of the Supreme, recognized the right of landowners for
compensation for the remainder of the lot if rendered useless by reason of the project, or
when the 2 requisites concur:

1. The remainder is not subject to the statutory lien of right of way;

2. The enforcement results in the practical destruction or material impairment,
or normal use of the property.

Incidentally, some of the cases were decided in 2018, or after the effectivity of Republic
Act 10752, but since the cases were filed prior to the enactment of the law, the favorable
provision granted to landowners, whose property was previously covered by a free patent, was
not yet enforced.

Reconciling the right of landowners to just compensation and in upholding the interest
of the state to exercise eminent domain, Republic Act 10752 provided for a compromise,
whereby property owners whose title thereto is derived from free patent would be entitled to
just compensation, through any of the modes of acquisition under the law, i.e. sale, barter,
exchange or expropriation. Paragraph (a) of Section 4 of RA 10752 states that in case of lands
granted Free Patents, the implementing agency shall:

(a) Follow the other modes of acquisition enumerated in this Act, if the
landowner is not the original patent holder and any previous acquisition
of said land is not through a gratuitous title;

However, if the landowner is the original patent holder or the acquisition of the land
from the original patent holder is through a gratuitous title, the implementing agency and the
landowner have no other recourse but to follow the provisions under Commonwealth Act
No. 141, as amended, regarding acquisition of right-of-way on patent lands, that is the
execution of quitclaim in favor of the government and payment of improvements or the
remainder of the land that is rendered useless.

Conclusion

The study focused on how to reconcile two conflicting forces in the field of law: A Right
safeguarded by the Constitution, and a Power inherent in the State. As a starting point, laws,
rules and regulations addressing right of way and site acquisition for national government
projects were identified and described vis-à-vis their relevance and application in terms of
providing for the right of landowners to just compensation and in upholding the power of the
state to take private property for public use.

These laws, rules and regulations were analyzed as they were actually applied or not
applied by the Supreme Court in the latter’s capacity as the ultimate arbiter in the interpretation
and construction of laws. When called upon to decide cases filed by or against the government
or the landowner, it is the Supreme Court that eventually determines whether existing laws,
rules and regulations are sufficient to balance the interest of the landowners and that of the
state in taking private property for public use.
 In the process, these laws and regulations were described in terms of their application
in the determination of just compensation, particularly on the payment of provisional amount
of affected properties, the standards used in the determination of final compensation, and
their availability in upholding the state’s allodial power against unreasonable claims and
demands, as they interacted in the hundred cases surveyed by the researcher.

This study involved three government agencies, the Department of Public Works and
Highways (DPWH), the Department of Transportation (DOTR), and the National Power
Corporation (NPC) and its successor-in-interest, the National Transmission Corporation
(TRANSCO), both of which are treated as one entity for the purpose of this study. These
agencies have one thing in common: they are involved in national government infrastructure
projects defined under Republic Act 10752. The study tried to examine whether a correlation
existed between the power of the state to eminent domain and the right to just compensation
of landowner’s property, in terms of right-of-way and site acquisition action plan; treatment
of lands under Commonwealth Act 141, outstanding claims of landowners, modes of
acquisitions and compliance with the formal guidelines of Republic Act 10752.

After identifying and describing the laws, rules, and regulations, they were examined
whether they were being applied by the Supreme Court, either singly or in conjunction with
other laws and rules. The study showed that the Supreme Court applied the 1987 Constitution
most in deciding case. This is followed by the 1997 Rules of Civil Procedure, Republic Act
6395, Republic Act 8974, Commonwealth Act 141, and Republic act 7160 in that order. There
were no cases decided by the Supreme Court applying Republic Act 10752 as one basis for
land acquisition, being a new law.

The payment of the provisional value of the property, whether a deposit is made under
Rule 67 of the Rules of Court or is paid pursuant to RA 8974, serves the double-purpose of:
(a) pre-payment if the property is fully expropriated, and (b) indemnity for damages if the
proceedings are dismissed.

The researcher found out that in terms of payment of provisional value of the property,
the use of the BIR zonal value is the most applied valuation, followed by proffered value by
the implementing agencies, then the assessed value as declared in the tax declaration.

The findings confirmed the trend in the payment of provisional deposit brought about
by the current decisions of the Supreme Court, particularly the case of Republic vs. Gingoyon,
differentiating the procedure for prepayment under RA 8974 from Rule 67 of the Rules of
Court, and decreeing that RA 8974 shall be applicable on substantive aspect of expropriation.
This was reiterated in the case of Republic of the Philippines vs. Hon. Jesus M. Mupas that in matters
involving national infrastructure projects, the provision of Section 4 of Republic Act 8974,
and not Section 2 Rule 67 of the Rules of Court shall govern.

The Supreme Court likewise stressed that the landowner could invoke the provisions of
Republic Act 8974, now Republic Act 10752, if he initiates the complaint for just
compensation or inverse condemnation.
 The trend towards the payment of provisional value using the current and relevant BIR
zonal valuation of the property, issued not more than three (3) years prior to the filling of the
expropriation complaint”, has also removed the wide discretion of implementing agencies in
making the offer, as well as, the court’s power in the issuance of a writ of possession. As it
now stands, once the implementing agency has deposited with the clerk the amount equivalent
to one hundred percent (100%) of the value of the land based on the current relevant zonal
valuation of the Bureau of Internal Revenue (BIR) issued not more than three (3) years prior
to the filing of the expropriation complaint, the issuance of the writ of possession becomes a
ministerial function of the court.

Indubitably, the express requirement of the law removed the possibility of corrupt
officials in the government influencing the outcome of the claim by subjecting landowners to
their whims and caprices; unless the latter provides them with a share of the bacon. The new
law sets the minimum price of the property as the provisional value to immediately
recompense the landowner with the same degree of speed as the taking of the property, which
reconciles the inherent unease attending expropriation proceedings with a position of
fundamental equity.

It can be inferred, that in the payment of provisional amount of the value of the
property, no correlation existed between the landowner and among the different agencies
involved in the study. While the government agencies offered the proffered value of the
property, the landowners wanted the payment of BIR zonal value of the property. However,
this initial disagreement or no correlation between them was settled by the Supreme Court
when it reconciled the application of Section 2 Rule 67 and Section 4 of Republic Act 8974,
in the cases of Gingoyon and Mupas.

In determining just compensation, the courts considered and applied the parameters
set by the law and its implementing rules and regulations in order to ensure that they do not
arbitrarily fix an amount as just compensation that is contradictory to the objectives of the
law. However, it must be emphasized that laws providing for standards do not take away from
the courts the power to judicially determine the amount of just compensation. It merely
provides relevant standards in order to facilitate the determination thereof.

The standard often used by the Supreme Court to arrive at the market value of the
property is the “the size, shape or location, tax declaration and zonal valuation” of the
property. This is followed by “classification and use for which the property is suited”, and
closely following is “the current selling price of similar lands in the vicinity”.

The most seldom used standards in the fixing of just compensation are “values declared
by the owner’s, the “development cost for improving the land” and the “reasonable
disturbance compensation for removal and demolition of certain improvements”.

It can be inferred, that in the standards used in the payment of final compensation, there
is no correlation between the standards used by landowners and the government agencies
involved in the study, as the former would often invoked the “values declared by the owner’s,
the “development cost for improving the land” and the “reasonable disturbance compensation
for removal and demolition of certain improvements”, while the latter would insist on the “the
size, shape or location, tax declaration and zonal valuation” of the property.
 This disagreement was reconciled by the Supreme Court when it ruled in a catena of
cases that standards invoked by the parties must be the actual and not the potential value of
the property as the latter is more self-serving and conjectural.

The Supreme Court’s decisions vary with respect to the reckoning point in the payment
of compensation involving outstanding claims – when construction precedes the filing of the
complaint.

For those involving the DPWH and DOTR, the trend of cases was the time of taking
or the time of the construction of the highways, while in cases involving transmission lines
and tunnels NPC/TransCo, the trend is at the time of filing.

In cases involving NPC/TRANSCO, the reason for the Supreme Court’s decisions to
reckon the determination of just compensation at the time of filing was to penalize NPC for
the taking of property of the plaintiffs without the benefit of expropriation. For the Supreme
Court, compensation that is reckoned with the market value prevailing at the time of entry or
construction would compound the gross unfairness already caused to the owners and deny
elementary due process of law to the owners.

The above pronouncements of the Supreme Court is somewhat different with cases
involving the constructions of roads, highways, rails and airports, or cases involving the
DPWH and DOTR. In cases where properties of landowners are taken by the government
without their consent and without the necessary expropriation proceedings, the just
compensation is fixed at the time of the actual taking by the government. This rule holds
true when the property is taken before the filing of an expropriation suit, and even if it is the
property owner who brings the action for compensation. The Supreme Court ratiocinated
that when property is taken ahead of the filing of the condemnation proceedings, the value
thereof may be enhanced by the public on the purpose for which it is taken; the entry by the
plaintiff upon the property may have depreciated its value thereby; or, there may have been
a natural increase in the value of the property from the time it is taken to the time the
complaint is filed, due to general economic conditions. The owner of private property should
be compensated only for what he/she actually loses; it is not intended that his/her
compensation shall extend beyond his/her loss or injury.

It can be inferred, that in reckoning point for the payment of outstanding claims, there
is no correlation between the government agencies involved.
In an effort to reconcile the conflict, and for the guidance of lawyers of these
government agencies, the Office of the Solicitor General (OSG), as the statutory counsel of
the DPWH, DOTR and NPC/TRANSCO, issued Guidelines on cases where the
government agency is subject to an ejectment and or recovery of possession case. The general
rule is the determination of just compensation at the time of filing. There are however
exceptions to this, where there is:

(1) grave injustice to the property owner (Heirs of Pidacan vs. Air
Transportation Office, 524 SCRA 579 [2007]);
 (2) the taking did not have color of legal authority (National Power Corporation
vs. Ibrahim, 526 SCRA 149[2007]);
(3) the taking of the property was not initially for expropriation (Tan v.
Republic, 523 SCRA 203 [2007]); and
(4) the owner will be given undue increment advantages because of the
expropriation (Provincial Government of Rizal vs. Araullo, 58 Phil 308 [1933]).

Republic Act 10752 now recognizes outstanding claims, and provides for how the claim
should be paid. In accordance with Section 5 of the Act, the law shall also apply to outstanding
claims for ROW payments, except that the amount to be offered shall be the price at the time
of taking of the property, including legal interest until fully paid, subject to the transitory
provision in Section 9 of the law, or ROW payments to ongoing transactions which, as of the
effectivity of RA 10752, have already reached a written agreement as to the price between the
implementing agency and the property owner.

The Supreme Court is consistent in confirming the state’s lien over the land, regardless
of whether the title to the land is original or transferred. The Court consistently acknowledged
the effects of Commonwealth Act No. 141 despite landowners’ invocation of the Constitution
and due process. Hence, the Supreme Court ordered the execution of the landowner of a quit
claim instead of payment of just compensation. Hence, it can be inferred that in the treatment
of lands covered by free patent, there is no correlation between the landowner and the State.

However, the current decisions of the Supreme Court, recognized the right of
landowners for compensation for the remainder of the lot if rendered useless by reason of the
project, or when two requisites concur:
3. The remainder is not subject to the statutory lien of right of way;
4. The enforcement results in the practical destruction or material impairment,
or normal use of the property.

Reconciling the right of landowners to just compensation and upholding the interest of
the state to exercise eminent domain, Republic Act 10752 provided for a compromise,
whereby property owners whose title thereto is derived from free patent would be entitled to
just compensation, through any of the modes of acquisition under the law, i.e. sale, barter,
exchange or expropriation, if the landowner is not the original patent holder and any previous
acquisition of said land is not through a gratuitous title. However, the rule remains if the
landowner is the original patent holder or the acquisition of the land from the original patent
holder is through a gratuitous title.

On the modes involved in the acquisition of ROW sites, the process involved in the
determination of just compensation, a majority of the key informants with whom the
researcher have discussion with, considered negotiation as the most expedient way of
determining just compensation, and only when this is not possible that a case is filed in court
for the determination of just compensation by a set of commissioners appointed by the court,
through the filing of expropriation. While they recognized the benefit and expediency of
Donation or entering into Barter or Exchange, the same usually seldom happens.
 There is an increase in the denial of claims by government agencies involving lands
covered by Commonwealth Act 141, but the difficulty in enforcing the concomitant right of
the state to enforce the lien over the lands covered by free patent through the execution of
landowners quitclaim have resulted in these government agencies filing cases in court for
mandamus or specific performance.

Nevertheless, for the DOTR and DPWH group, and guided by their respective ROW
Manuals, it is only when the property owner refuses or fails to accept the price offer for
negotiated sale or fails and/or refuses to submit the documents necessary for payment, or
when negotiation is not feasible, that they would file an expropriation case, through the Office
of the Solicitor General. For these agencies, expropriation is the least favorable mode of
acquisition for public usage of land as it is based on active compulsory dispossession of private
citizens of their significant asset; hence, should be the last resort. It can be inferred, that in
modes in acquiring right-of-way and sites for the construction of national government
infrastructure projects, there is correlation among the government agencies involved in the
study; that only when negotiation fails that an expropriation case is filed in court.

Agency’s Compliance with the Formal Requirement of Republic 10752

The DPWH, DOTR and TransCo, have their respective right-of-way Manuals in
compliance with the requirement of Republic 10752. The DPWH and DOTR observed in
their manuals the mandate of the law to provide a Right of Way and Site Acquisition Action
Plan, Environmental Impact Assessment Plan, Land Acquisition Plan, Resettlement Action
Plan and Parcellary Survey Plan.
However, TransCo only observed in its Manuals, Land Acquisition Plan and Parcellary
Survey Plan but not Right of Way and Site Acquisition Action Plan, Environmental Impact
Assessment Plan, and Resettlement Action Plan.

Hence, it can be inferred that in the observance of the formal requirement of Republic
Act 10752, there is only correlation between DPWH and DOTR, but not with TRANSCO,
as the latter’s present mandate is to pay only outstanding claims since it is not anymore
undergoing the construction of transmission lines and assets. Thus, what are only involved in
this agency are the requirement for Land Acquisition and Parcellary Survey plans, as these are
necessary in the payment of outstanding claims.

Recommendations

Based on the findings, conclusions and implications of this study the following
recommendations are advanced.

1. Amendment of laws and rules of procedure to Congress and to the Supreme Court,
respectively, to reconcile the right of landowners to just compensation and the power of the
state to exercise eminent domain.

The researcher proposes the amendment of the following:

a. Sec. 4, Rule 67 of the 1997 Rules Civil Procedure

 From: Sec 4. Order of expropriation.

If the objections to and the defenses against the right of the plaintiff to
expropriate the property are overruled, or when no party appears to
defend as required by this Rule, the court may issue an order of
expropriation declaring that the plaintiff has a lawful right to take the
property sought to be expropriated, 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 taking of the property or the filing
of the complaint, whichever came first.
To: Sec 4. Order of expropriation.

If the objections to and the defenses against the right of the plaintiff to
expropriate the property are overruled, or when no party appears to
defend as required by this Rule, the court may issue an order of
expropriation declaring that the plaintiff has a lawful right to take the
property sought to be expropriated, for public use or purpose described
in the complaint, upon the payment of just compensation to be
determined as of the date the filing of the complaint.

b. Article 435 of the Civil Code

From:

Art. 435. No person shall be deprived of his property except by competent

authority and for public use and always upon payment of just compensation.

Should this requirement be not first complied with, the courts shall protect
and, in a proper case, restore the owner in his possession.

To:

Art. 435. No person shall be deprived of his property except by competent

authority and for public use and always upon payment of just compensation
to be determined at the time of the filing of the complaint.

Should this requirement be not first complied with, the courts shall protect
and, in a proper case, restore the owner in his possession.

The Rationale for the proposed amendment of the Rules of Court, and consequently,
the substantive law under the Civil Code is to settle once and for all the nagging issue of how
to reckon the payment of compensation where the construction of the projects precedes the
payment of just compensation or the filing of an expropriation case in court.
 With the amendment, the judicial determination would only be limited to the findings
of what valuation is available at the time of the filing of the complaint. This would end to the
long delays incurred in litigating expropriation cases, when the issue of reckoning alone takes
years to settle.

This would also proscribe the practice of taking the property without the benefit of
expropriation, violating the constitutional right of the landowner to be paid first of just
compensation before his property is taken for public use.

c. Section 5 of Republic Act 10752

From:

The provisions of subparagraph (a) herein shall also apply to outstanding

claims for right-of-way payments, except that the amount to be offered shall
be the price at the time of taking of the property, including legal interest until
fully paid.

To:
The provisions of subparagraph (a) herein shall also apply to outstanding
claims for right-of-way payments.

Deleting the phrase : “except that the amount to be offered shall be the price
at the time of taking of the property, including legal interest until fully paid.”

The rationale for the proposed amendment is three-fold:

Firstly, since the intention of the law is to fast-tract the implementation of national
government infrastructure projects with negotiated sale as the preferred mode, delaying
further the claim of those whose properties were taken ahead and without the benefit of
expropriation is actually adding insult to injury. The amount of just compensation, even
including legal interests, is considerably low, and in most cases, landowners would always
decline the government’s offer and opt that the government should just instead file an
expropriation case.

Secondly, the land owner would usually reject the offer of the government of the amount
fixed at the time of taking of the property, including legal interest and opt that she/he be paid
the provisional value of the property in an expropriation proceeding, which is considerably
higher than the price offered. Under Section 5 of Republic Act 10752, the government agency
is mandated to file an expropriation case within 30 days from the denial of the offer pursuant
to Section 6 of the law. Once the government initiates the filing of an expropriation case, there
is dilemma whether to deposit the amount initially offered (but rejected) or the 100% current
and relevant BIR zonal valuation. Since Section 6 is clear and unambiguous, landowners’
tendency is to just reject the offer and opt to receive the provisional amount of the value of
the property in an expropriation proceeding.
Thirdly, the accompanying delay in the processing of payment and in the institution of
cases, provide for an avenue for corruption where there will be compromising employees of
the government who would advise landowners with outstanding claims with the government
to just reject the initial offer and opt for a higher valuation in an expropriation proceedings,
for a price or percentage thereof.
d. Section 3A (b) of Republic Act No. 6395, as amended, reads:
From:

(b) With respect to the acquired right-of-way easement over the land or
portion thereof, not to exceed ten percent (10%) of the market value
declared by the owner or administrator or anyone having legal interest
in the property, or such market value as determined by the assessor
whichever is lower.

To:

(b) With respect to the acquired right-of-way easement over the land or
portion thereof, the market value declared by the owner or administrator
or anyone having legal interest in the property, or such market value as
determined by the assessor whichever is lower.

Delete the phrase: “not to exceed ten percent (10%) of”

e. Section 3 (i) of Republic Act No. 6395

From:

x x x Enter upon private property in the lawful performance or

prosecution of its business or purposes, including the construction of
the transmission lines thereon; Provided, that the owner of such private
property shall be paid the just compensation therefor in accordance with
the provisions hereinafter provided; Provided, further, that any action
by any person claiming compensation and/or damages shall be filed
within five (5) years after the right-of-way, transmission lines,
substations, plants or other facilities shall have been established;
Provided, finally, that after the said period no suit shall be brought to
question the said right-of-way, transmission lines, substations, plants or
other facilities nor the amounts of compensation and/or damages
involved.

To:
x x x Enter upon private property in the lawful performance or
prosecution of its business or purposes, including the construction of
the transmission lines thereon; Provided, that the owner of such private
property shall be paid the just compensation therefor in accordance with
the provisions hereinafter provided;

Delete the phrase: “Provided, further, that any action by any person
claiming compensation and/or damages shall be filed within five (5)
years after the right-of-way, transmission lines, substations, plants or
other facilities shall have been established; Provided, finally, that after
the said period no suit shall be brought to question the said right-of-way,
 transmission lines, substations, plants or other facilities nor the amounts
of compensation and/or damages involved.

The rationale for the amendment is to finally unclog the courts of cases where
NPC/TRANSCO keeps on citing these provisions to deny the landowners of just
compensation. A catena of cases have already debunked the reliance of NPC/TRANSCO of
these provisions, as they are against due process and the clear and categorical language that
private property shall not be taken for public use without just compensation. The
constitutional mandate, as well as the judicial prerogative to determine just compensation
cannot be defeated by statutory prescription.

2. Policy redirection in the practice of just compensation to conform to the

existing jurisprudence by government agencies. As presented in this study, the Supreme Court,
for the past two decades has been reconciling the seemingly conflicting positions of the
landowners and the government agencies. A change in the policy pursuant to the
recommendation in this study, would eventually reconcile the right of the landowners to just
compensation and the power of the state to exercise eminent domain.