1. Assn. of Small Landowners v. Sec.

of Agrarian Reform, 175 SCRA 343

Facts:

In G.R. No. 79777, the subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner
Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin
Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D. No.
27.

Petitioners are questioning constitutionality of P.D. No. 27 and E.O. Nos. 228 and 229. Moreover, the just compensation
contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other things of value.
However, in an amended petition, petitioners contended that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and
21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself also be declared
unconstitutional because it suffers from substantially the same infirmities as the earlier measures.

Section 18 of the CARP Law providing in full as follows:

SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in such amount as may be
agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and
17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the
land.

The compensation shall be paid in one of the following modes, at the option of the landowner:

(1) Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned — Twenty-five percent (25%) cash,
the balance to be paid in government financial instruments negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares — Thirty percent (30%) cash, the balance to
be paid in government financial instruments negotiable at any time.

(c) For lands twenty-four (24) hectares and below — Thirty-five percent (35%) cash, the balance to be paid in
government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other
qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds

Issue:

Whether or not Sec. 18 of RA 6657 is unconstitutional insofar as it requires the owners of the expropriated properties to
accept just compensation therefor in less than money, which is the only medium of payment allowed.

Held:

No. It cannot be denied from these case that the traditional medium for the payment of just compensation is money and
no other. And so, conformably, has just compensation been paid in the past solely in that medium. However, we do not
deal here with the traditional excercise of the power of eminent domain. This is not an ordinary expropriation where
only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and
perhaps local purpose.

What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they
are in excess of the maximum retention limits allowed their owners.

the Court hereby declares that the content and manner of the just compensation provided for in the afore- quoted
Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this Court is not a cloistered institution removed from
the realities and demands of society or oblivious to the need for its enhancement.

Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find
further that the proportion of cash payment to the other things of value constituting the total payment, as determined
on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the
smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than
the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly, the
government financial instruments making up the balance of the payment are "negotiable at any time." The other modes,
which are likewise available to the landowner at his option, are also not unreasonable because payment is made in
shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of
just compensation.

Eminent domain may be used as an implement to attain the police objective

Form of compensation. Compensation is to be paid in money and no other. But in Association of

Small Landowners v. Secretary of Agrarian Reform, supra., 175 SCRA 343, it was held that in
agrarian reform, payment is allowed to be made partly in bonds, because under the CARP, “we do
not deal with the traditional exercise of the power of eminent domain; we deal with a revolutionary
kind of expropriation”.

Police power vs. Eminent domain

Property condemned under the police power is noxious or intended for a noxious purpose, such
as a building on the verge of collapse, which should be demolished for the public safety, or obscene
materials, which should be destroyed in the interest of public morals. The confiscation
of such property is not compensable, unlike the taking of property under the power of
expropriation, which requires the payment of just compensation to the owner.
The cases before us present no knotty complication insofar as the question of compensable
taking is concerned. To the extent that the measures under challenge merely prescribe retention
limits for landowners, there is an exercise of the police power for the regulation of private
property in accordance with the Constitution. But where, to carry out such regulation, it becomes
necessary to deprive such owners of whatever lands they may own in excess of the maximum
area allowed, there is definitely a taking under the power of eminent domain for which payment
of just compensation is imperative. The taking contemplated is not a mere limitation of the use
of the land. What is required is the surrender of the title to and the physical possession of the
said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary.
This is definitely an exercise not of the police power but of the power of eminent domain.

Held: This is not an ordinary expropriation where only a specific property of relatively limited area is sought
to be taken by the State from its owner for a specific and perhaps local purpose. What is dealt with herein is a
revolutionary kind of expropriation. The Court assumes that the framers of the Constitution were aware of this
difficulty when they called for agrarian reform as a top priority project of the government. It is a part of this
assumption that when they envisioned the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less conventional if more practical
method. There can be no doubt that they were aware of the financial limitations of the government and had no
illusions that there would be enough money to pay in cash and in full for the lands they wanted to be
distributed among the farmers. The court may therefore assume that their intention was to allow such manner
of payment as is now provided for by the CARP Law, particularly the payment of the balance (if the owner
cannot be paid fully with money), or indeed of the entire amount of the just compensation, with other things
of value. The Court has not found in the records of the Constitutional Commission any categorical agreement
among the members regarding the meaning to be given the concept of just compensation as applied to the
comprehensive agrarian reform program being contemplated. On the other hand, there is nothing in the
records either that militates against the assumptions we are making of the general sentiments and intention of
the members on the content and manner of the payment to be made to the landowner in the light of the
magnitude of the expenditure and the limitations of the expropriator. Accepting the theory that payment of the
just compensation is not always required to be made fully in money, the Court find further that the proportion
of cash payment to the other things of value constituting the total payment, as determined on the basis of the
areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the
land, the bigger the payment in money, primarily because the small landowner will be needing it more than
the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly,
the government financial instruments making up the balance of the payment are "negotiable at any time." The
other modes, which are likewise available to the landowner at his option, are also not unreasonable because
payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of
value equivalent to the amount of just compensation. Admittedly, the compensation contemplated in the law
will cause the landowners, big and small, not a little inconvenience. However, this cannot be avoided.
2. Manosca v. CA, Jan. 29, 1996
SYLLABUS

1. POLITICAL LAW; INHERENT POWER OF THE STATE; EMINENT DOMAIN; CONCEPT. — Eminent
domain, also often referred to as expropriation and, with less frequency, as condemnation, is, like
police power and taxation, an inherent power of sovereignty. It need not be clothed with any
constitutional gear to exist; instead, provisions in our Constitution on the subject are meant more to
regulate, rather than to grant, the exercise of the power. Eminent domain is generally so described
as "the highest and most exact idea of property remaining in the government" that may be acquired
for some public purpose through a method in the nature of a forced purchase by the State. It is a
right to take or reassert dominion over property within the state for public use or to meet a public
exigency. It is said to be an essential part of governance even in its most primitive form and thus
inseparable from sovereignty. The only direct constitutional qualification is that "private property
shall not be taken for public use without just compensation." This proscription is intended to provide
a safeguard against possible abuse and so to protect as well the individual against whose property
the power is sought to be enforced.

2. ID.; ID.; ID.; THE GUIDELINES SET BY THE SUPREME COURT IN GUIDO VS. RURAL PROGRESS
ADMINISTRATION WHERE NOT MEANT TO BE PRECLUSIVE IN NATURE AND THE POWER OF EMINENT
DOMAIN SHOULD NOT BE UNDERSTOOD AS BEING CONFINED ONLY TO EXPROPRIATION OF VAST
TRACTS OF LAND AND LANDED ESTATES. — The court, in Guido, merely passed upon the issue of
the extent of the President’s power under Commonwealth Act No. 539 to, specifically, acquire private
lands for subdivision into smaller home lots or farms for resale to bona fide tenants or occupants. It
was in this particular context of the statute that the Court had made the pronouncement. The
guidelines in Guido were not meant to be preclusive in nature and, most certainly, the power of
eminent domain should not now be understood as being confined only to the expropriation of vast
tracts of land and landed estates.

3. ID.; ID.; ID.; TRADITIONAL CONCEPT OF "PUBLIC USE" EXPANDED. — The validity of the exercise
of the power of eminent domain for traditional purposes is beyond question; it is not at all to be said,
however, that public use should thereby be restricted to such traditional uses. The idea that "public
use" is strictly limited to clear cases of "use by the public" has long been discarded.

4. ID.; ID.; ID.; SIGNIFICANT FACTOR TO BE CONSIDERED IN EMINENT DOMAIN IS THE PRINCIPAL
OBJECTIVE OF THE EXERCISE OF THE POWER AND NOT THE CASUAL CONSEQUENCES THAT MIGHT
FOLLOW FROM SUCH EXERCISE. — The attempt to give some religious perspective to the case
deserves little consideration, for what should be significant is the principal objective of, not the casual
consequences that might follow from the exercise of the power. The purpose in setting up the marker
is essentially to recognize the distinctive contribution of the late Felix Manalo to the culture of the
Philippines, rather than to commemorate his founding and leadership of the Iglesia ni Cristo. The
practical reality that greater benefit may be derived by members of the Iglesia ni Cristo than by most
others could well be true but such a peculiar advantage still remains to be merely incidental and
secondary in nature. Indeed, that only a few would actually benefit from the expropriation of
property does not necessarily diminish the essence and character of public use.

FACTS:
Petitioners inherited a piece of land located at P. Burgos Street, Calzada, Taguig. Metro Manila, with an area of
about four hundred ninety-two (492) square meters. Manosca v. Court of Appeals
The parcel has been the birthsite of Felix Y. Manalo, the founder of the Iglesia Ni Cristo. Because of that, the
Naitional Historical Institute (NHI) passed a resolution declaring  the land to be a national historical landmark
which was then approved by the Minister of Education, Culture and Sports.
Regional Trial Court: The Republic, through the OSG instituted a complaint for expropriation alleging that the
land is a public purpose. RTC then ordered the Republic to take over the property after fixing the provisional
market and assessed value of the property. Manosca v. peals
Court of Appeals: The petition for certiorari and prohibition was dismissed.

ISSUE:
Whether or not the "public use" requirement of Eminent Domain is extant in the attempted expropriation by the
Republic of a 492-square-meter parcel of land so declared by the National Historical Institute ("NHI") as a
national historical landmark. Manosca v. Court of Appeals

HELD:

Yes. 
Eminent domain, also often referred to as expropriation and, with less frequency, as condemnation, is, like
police power and taxation, an inherent power of sovereignty. It need not be clothed with any constitutional gear
to exist; instead, provisions in our Constitution on the subject are meant more to regulate, rather than to grant,
the exercise of the power. Manosca v.rt
Eminent domain is generally so described as "the highest and the most exact idea of property remaining in the
government" that may be acquired for some public purpose through a method in the nature of a forced purchase
by the State.
It is a right to take or reassert dominion over property within the state for public use or to meet a public
exigency. It is said to be an essential part of governance even in its most primitive form and thus inseparable
from sovereignty.
The only direct constitutional qualification is that "private property shall not be taken for public use without just
compensation." This proscription is intended to provide a safeguard against possible abuse and so to protect as
well the individual against whose property the power is sought to be enforced. Manosca v. Court of Appeals
Petitioners ask:
. . . "(w)hat is the so-called unusual interest that the expropriation of (Felix Manalo's) birthplace become so vital
as to be a public use appropriate for the exercise of the power of eminent domain". . . when only members of the
Iglesia ni Cristo would benefit? 
This attempt to give some religious perspective to the case deserves little consideration, for what should be
significant is the principal objective of, not the casual consequences that might follow from, the exercise of the
power. The purpose in setting up the marker is essentially to recognize the distinctive contribution of the late
Felix Manalo to the culture of the Philippines, rather than to commemorate his founding and leadership of the
Iglesia ni Cristo. Man

Public use The practical reality that greater benefit may be derived by Iglesia ni Cristo members than most others could
well be true, but such peculiar advantage still remains merely incidental and secondary in nature. That only few would
actually benefit from the expropriation of the property does not necessarily diminish the essence and character of public
use [Manosca v. Court of Appeals, 252 SCRA 412]. 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 so any more. 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 public use is. One is the expropriation of lands
to be subdivided into small lots for resale at cost to individuals. The other is 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. Eminent domain is
generally so described as "the highest and most exact idea of property remaining in the government" that may be
acquired for some public purpose through a method in the nature of a forced purchase by the State.

Held: Eminent domain, also often referred to as expropriation and, with less frequency, as condemnation, is,
like police power and taxation, an inherent power of sovereignty. It need not be clothed with any
constitutional gear to exist; instead, provisions in our Constitution on the subject are meant more to regulate,
rather than to grant, the exercise of the power. Eminent domain is generally so described as "the highest and
most exact idea of property remaining in the government" that may be acquired for some public purpose
through a method in the nature of a forced purchase by the State. It is a right to take or reassert dominion over
property within the state for public use or to meet a public exigency. It is said to be an essential part of
governance even in its most primitive form and thus inseparable from sovereignty. The only direct
constitutional qualification is that "private property shall not be taken for public use without just
compensation." This prescription is intended to provide a safeguard against possible abuse and so to protect as
well the individual against whose property the power is sought to be enforced. The term "public use," not
having been otherwise defined by the constitution, must be considered in its general concept of meeting a
public need or a public exigency. The validity of the exercise of the power of eminent domain for traditional
purposes is beyond question; it is not at all to be said, however, that public use should thereby be restricted to
such traditional uses. The idea that "public use" is strictly limited to clear cases of "use by the public" has
long been discarded. The purpose in setting up the marker is essentially to recognize the distinctive
contribution of the late Felix Manalo to the culture of the Philippines, rather than to commemorate his
founding and leadership of the Iglesia ni Cristo. The attempt to give some religious perspective to the case
deserves little consideration, for what should be significant is the principal objective of, not the casual
consequences that might follow from, the exercise of the power. The practical reality that greater benefit may
be derived by members of the Iglesia ni Cristo than by most others could well be true but such a peculiar
advantage still remains to be merely incidental and secondary in nature. Indeed, that only a few would
actually benefit from the expropriation of property does not necessarily diminish the essence and character of
public use.
3. De Knecht vs. Bautista [GR L-51078, 30 October 1980]

Facts: In 1970, the government through the Department of Public Works and Communications (now Ministy
of Public Highways [MPH]) prepared a plan to extend Epifanio de los Santos Avenue (EDSA) to Roxas
Boulevard. The proposed extension, an adjunct of another road-building program, the Manila—Cavite Coastal
Road Project, would pass through Cuneta Avenue up to Roxas Boulevard. The route was designed to be a
straight one, taking into account the direction of EDSA. Preparatory to the implementation of the aforesaid
plan, or on 13 December 1974, then Secretary Baltazar Aquino of the Department of Public Highways
directed the City Engineer of Pasay City not to issue temporary or permanent permits for the construction
and/or improvement of buildings and other structures located within the proposed extension through Cuneta
Avenue. Shortly thereafter the Department of Public Highways decided to make the proposed extension go
through Fernando Rein and Del Pan Streets which are lined with old substantial houses. Upon petition of the
residents therein to the President of the Philippines for the implementation of the original plan, the President
referred the matter to the Human Settlements Commission. The Commission submitted its report
recommending the reversion to the original plan passing through Cuneta Avenue. Notwithstanding said
recommendation, the MPH insisted on implementing the plan to make the extension of EDSA go through
Fernando Rein and Del Pan Streets. In February 1979, the government filed in the Court of First Instance
(CFI) of Rizal, Branch III, Pasay City (Judge Pedro JL. Bautista presiding; Civil Case 7001-P), a complaint
for expropriation against the owners of the houses standing along Fernando Rein and Del Pan Streets, among
them Cristina de Knecht. De Knecht filed a motion to dismiss dated 9 March 1979. An urgent motion dated 28
March 1979 for preliminary injunction was also filed. In June 1979 the Republic of the Philippines filed a
motion for the issuance of a writ of possession of the property sought to be expropriated on the ground that
said Republic had made the required deposit with the Philippine National Bank. Judge Bautista issued a writ
of possession dated 14 June 1979 authorizing the Republic of the Philippines to take and enter upon the
possession of the properties sought so be condemned. De Knecht filed a petition for certiorari and prohibition
with the Supreme Court, praying that judgment be rendered annulling the order for immediate possession
issued by respondent court in the expropriation proceedings and commanding the Republic to desist from
further proceedings in the expropriation action or the order for immediate possession issued in said action.

Issue: Whether the expropriation of the residential lots in Fernando Rein and Del Pan Streets is genuinely necessary, in
light of similar acceptable lots along Cuneta Avenue which were subject of the original plan.
Held: There is no question as to the right of the Republic of the Philippines to take private property for public
use upon the payment of just compensation. Section 2, Article IV of the Constitution of the Philippines
provides that "Private property shall not be taken for public use without just compensation." It is recognized,
however, that the government may not capriciously or arbitrarily choose what private property should be
taken. A landowner is covered by the mantle of protection due process affords. It is a mandate of reason. It
frowns on arbitrariness, it is the antithesis of any governmental act that smacks of whim or caprice. It negates
state power to act in an oppressive manner. It is, as had been stressed so often, the embodiment of the sporting
idea off air play. In that sense, it stands as a guaranty of justice. That is the standard that must be met by any
governmental agency in the exercise of whatever competence is entrusted to it. As was so emphatically
stressed by the present Chief Justice, Acts of Congress, as well as those of the Executive, can deny due
process only under pain of nullity. Herein, it is a fact that the Department of Public Highways originally
establish the extension of EDSA along Cuneta Avenue. It is to be presumed that the Department of Public
Highways made studies before deciding on Cuneta Avenue. It is indeed odd why suddenly the proposed
extension of EDSA to Roxas Boulevard was changed to go through Fernando Rein — Del Pan Streets which
the Solicitor General concedes "the Del Pan — Fernando Rein Streets line follows northward and inward
direction While admitting "that both lines, Cuneta Avenue and Del Pan — Fernando Rein Streets lines, meet
satisfactorily planning and design criteria and therefore are both acceptable", the Solicitor General justifies
the change to Del Pan — Fernando Rein Streets on the ground that the government "wanted to minimize the
social impact factor or problem involved." It is doubtful whether the extension of EDSA along Cuneta Avenue
can be objected to on the ground of social impact. The improvements and buildings along Cuneta Avenue to
be affected by the extension are mostly motels. Even granting, arguendo, that more people will be affected,
the Human Settlements Commission has suggested coordinative efforts of said Commission with the National
Housing Authority and other government agencies in the relocation and resettlement of those adversely
affected. From the facts of record and recommendations of the Human Settlements Commission, it is clear
that the choice of Fernando Rein — Del Pan Streets as the line through which the Epifanio de los Santos
Avenue should be extended to Roxas Boulevard is arbitrary and should not receive judicial approval.

Held: No, The choice of property to be expropriated cannot be without rhyme or reason. The condemnor may not
choose any property it wants. Where the legislature has delegated a power of eminent do-main, the question of the
necessity for taking a particular fine for the intended improvement rests in the discretion of the grantee power subject
however to review by the courts in case of fraud, bad faith or gross abuse of discretion. The choice of property must be
examined for bad faith, arbitrariness or capriciousness and due process determination as to whether or not the
proposed location was proper in terms of the public interests.
Limitations of a delegated authority in exercising the power of eminent domain: Legislature’s discretion and review by
the courts The choice of property to be expropriated cannot be without rhyme or reason. The condemnor may not
choose any property it wants. Where the legislature has delegated a power of eminent do-main, the question of the
necessity for taking a particular fine for the intended improvement rests in the discretion of the grantee power subject
however to review by the courts in case of fraud, bad faith or gross abuse of discretion. The choice of property must be
examined for bad faith, arbitrariness or capriciousness and due process determination as to whether or not the
proposed location was proper in terms of the public interests. Subject to judicial review especially because there was an
alteration from the original plan. While the issue would seem to boil down to a choice between people, on one hand,
and progress and development, on the other, it is to be remembered that progress and development are carried out for
the benefit of the people.
4. Republic vs. de Knecht [GR 87335, 12 February 1990]

Facts: On 20 February 1979 the Republic of the Philippines filed in the Court of First Instance (CFI) of Rizal
in Pasay City an expropriation proceedings against the owners of the houses standing along Fernando ReinDel Pan
streets among them Cristina De Knecht together with Concepcion Cabarrus, and some 15 other
defendants (Civil Case 7001-P). On 19 March 1979, de Knecht filed a motion to dismiss alleging lack of
jurisdiction, pendency of appeal with the President of the Philippines, prematureness of complaint and
arbitrary and erroneous valuation of the properties. On 29 March 1979 de Knecht filed an ex parte urgent
motion for the issuance by the trial court of a restraining order to restrain the Republic from proceeding with
the taking of immediate possession and control of the property sought to be condemned. In June 1979, the
Republic filed a motion for the issuance of a writ of possession of the property to be expropriated on the
ground that it had made the required deposit with the Philippine National Bank (PNB) of 10% of the amount
of compensation stated in the complaint. In an order dated 14 June 1979 the lower court issued a writ of
possession authorizing the Republic to enter into and take possession of the properties sought to be
condemned, and created a Committee of three to determine the just compensation for the lands involved in the
proceedings. On 16 July 1979, de Knecht filed with this Court a petition for certiorari and prohibition (GR
No. L-51078) and directed against the order of the lower court dated 14 June 1979 praying that the Republic
be commanded to desist from further proceeding in the expropriation action and from implementing said
order. On 30 October 1980, the Supreme Court rendered a decision, granting the petition for certiorari and
prohibition and setting aside the 14 June 1979 order of the Judge Bautista. On 8 August 1981, Maria Del Carmen Roxas
Vda. de Elizalde, Francisco Elizalde and Antonio Roxas moved
to dismiss the expropriation action in compliance with the dispositive portion of the aforesaid decision of the
Supreme Court which had become final and in order to avoid further damage to latter who were denied
possession of their properties. The Republic filed a manifestation on 7 September 1981 stating, among others,
that it had no objection to the said motion to dismiss as it was in accordance with the aforestated decision.
However, on 2 September 1983, the Republic filed a motion to dismiss said case due to the enactment of the
Batas Pambansa 340 expropriating the same properties and for the same purpose. The lower court in an order
of 2 September 1983 dismissed the case by reason of the enactment of the said law. The motion for
reconsideration thereof was denied in the order of the lower court dated 18 December 1986. De Knecht
appealed from said order to the Court of Appeals wherein in due course a decision was rendered on 28
December 1988, setting aside the order appealed from and dismissing the expropriation proceedings. The
Republic filed the petition for review with the Supreme Court.

Issue: Whether an expropriation proceeding that was determined by a final judgment of the Supreme Court
may be the subject of a subsequent legislation for expropriation.

Held: While it is true that said final judgment of the Supreme Court on the subject becomes the law of the
case between the parties, it is equally true that the right of the Republic to take private properties for public
use upon the payment of the just compensation is so provided in the Constitution and our laws. Such
expropriation proceedings may be undertaken by the Republic not only by voluntary negotiation with the land
owners but also by taking appropriate court action or by legislation. When on 17 February 1983 the Batasang
Pambansa passed BP 340 expropriating the very properties subject of the present proceedings, and for the
same purpose, it appears that it was based on supervening events that occurred after the decision of the
Supreme Court was rendered in De Knecht in 1980 justifying the expropriation through the Fernando ReinDel Pan
Streets. The social impact factor which persuaded the Court to consider this extension to be arbitrary
had disappeared. All residents in the area have been relocated and duly compensated. 80% of the EDSA
outfall and 30% of the EDSA extension had been completed. Only De Knecht remains as the solitary obstacle
to this project that will solve not only the drainage and flood control problem but also minimize the traffic
bottleneck in the area. Moreover, the decision, is no obstacle to the legislative arm of the Government in
thereafter making its own independent assessment of the circumstances then prevailing as to the propriety of
undertaking the expropriation of the properties in question and thereafter by enacting the corresponding
legislation as it did in this case. The Court agrees in the wisdom and necessity of enacting BP 340. Thus the
anterior decision of this Court must yield to this subsequent legislative fiat.

SYLLABUS

1. CONSTITUTIONAL LAW; BILL OF RIGHTS; EMINENT DOMAIN; EXPROPRIATION PROCEEDINGS

MAY BE UNDERTAKEN NOT ONLY BY VOLUNTARY NEGOTIATION BUT LIKEWISE BY TAKING
APPROPRIATE COURT ACTION OR BY LEGISLATION. — There is no question that in the decision of
this Court dated October 30, 1980 in De Knecht v. Bautista, G.R. No. L-51078, this Court held that
the "choice of the Fernando Rein-Del Pan streets as the line through which the EDSA should be
extended to Roxas Boulevard is arbitrary and should not receive judicial approval." It is based on the
recommendation of the Human Settlements Commission that the choice of Cuneta street as the line
of the extension will minimize the social impact factor as the buildings and improvement therein are
mostly motels. While it is true that said final judgment of this Court on the subject becomes the law
of the case between the parties, it is equally true that the right of the petitioner to take private
properties for public use upon the payment of the just compensation is so provided in the
Constitution and our laws. Such expropriation proceedings may be undertaken by the petitioner not
only by voluntary negotiation with the land owners but also by taking appropriate court action or by
legislation.

2. ID.; ID.; ID.; ID.; SUPERVENING EVENT AFTER RENDITION OF DECISION JUSTIFIES THE
CONTINUATION OF THE EXPROPRIATION PROCEEDINGS. — When on February 17, 1983 the
Batasang Pambansa passed B.P. Blg. 340 expropriating the very properties subject of the present
proceedings, and for the same purpose, it appears that it was based on supervening events that
occurred after the decision of this Court was rendered in De Knecht in 1980 justifying the
expropriation through the Fernando Rein-Del Pan Streets. The social impact factor which persuaded
the Court to consider this extension to be arbitrary had disappeared. All residents in the area have
been relocated and duly compensated. Eighty percent of the EDSA outfall and 30% of the EDSA
extension had been completed. Only private respondent remains as the solitary obstacle to this
project that will solve not only the drainage and flood control problem but also minimize the traffic
bottleneck in the area. The Court finds justification in proceeding with the said expropriation
proceedings through the Fernando Rein-Del Pan streets from EDSA to Roxas Boulevard due to the
aforestated supervening events after the rendition of the decision of this Court in De Knecht.

3. ID.; ID.; ID.; ANTERIOR DECISION OF THE COURT MUST YIELD TO SUBSEQUENT LEGISLATIVE
FIAT. — B.P. Blg. 340 therefore effectively superseded the aforesaid final and executory decision of
this Court. And the trial court committed no grave abuse of discretion in dismissing the case pending
before it on the ground of the enactment of B.P. Blg. 340. Moreover, the said decision, is no obstacle
to the legislative arm of the Government in thereafter (over two years later in this case) making its
own independent assessment of the circumstances then prevailing as to the propriety of undertaking
the expropriation of the properties in question and thereafter by enacting the corresponding
legislation as it did in this case. The Court agrees in the wisdom and necessity of enacting B.P. Blg.
340. Thus the anterior decision of this Court must yield to this subsequent legislative fiat.

Enactment of a legislative statute supersedes the law of the case theory (Previous Jurisprudence) While it is true that
said final judgment of this Court on the subject becomes the law of the case between the parties, it is equally true that
the right of the petitioner to take private properties for public use upon the payment of the just compensation is so
provided in the Constitution and our laws. Such expropriation proceedings may be undertaken by the petitioner not only
by voluntary negotiation with the land owners but also by taking appropriate court action or by legislation. Thus the
anterior decision of this Court must yield to this subsequent legislative fiat. Fiat- Legal, authoritative decision that has
absolute sanction
5. Export Processing Zone Authority vs. Dulay [GR L-59603, 29 April 1987]

Facts: On 15 January 1979, the President of the Philippines, issued Proclamation 1811, reserving a certain
parcel of land of the public domain situated in the City of Lapu-Lapu, Island of Mactan, Cebu and covering a
total area of 1,193,669 square meters, more or less, for the establishment of an export processing zone by
petitioner Export Processing Zone Authority (EPZA). Not all the reserved area, however, was public land.
The proclamation included, among others, 4 parcels of land with an aggregate area of 22,328 square meters
owned and registered in the name of the San Antonio Development Corporation. The EPZA, therefore,
offered to purchase the parcels of land from the corporation in accordance with the valuation set forth in
Section 92, Presidential Decree (PD) 464, as amended. The parties failed to reach an agreement regarding the
sale of the property. EPZA filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, a
complaint for expropriation with a prayer for the issuance of a writ of possession against the corporation, to
expropriate the aforesaid parcels of land pursuant to PD 66, as amended, which empowers EPZA to acquire
by condemnation proceedings any property for the establishment of export processing zones, in relation to
Proclamation 1811, for the purpose of establishing the Mactan Export Processing Zone. On 21 October 1980,
Judge Ceferino E. Dulay issued a writ of possession authorizing EPZA to take immediate possession of the
premises. At the pre-trial conference on 13 February 1981, the judge issued an order stating that the parties
have agreed that the only issue to be resolved is the just compensation for the properties and that the pre-trial
is thereby terminated and the hearing on the merits is set on 2 April 1981. On 17 February 1981, the judge
issued the order of condemnation declaring EPZA as having the lawful right to take the properties sought to
be condemned, upon the payment of just compensation to be determined as of the filing of the complaint. The
respondent judge also issued a second order appointing certain persons as commissioners to ascertain and
report to the court the just compensation for the properties sought to be expropriated. On 19 June 1981, the
three commissioners submitted their consolidated report recommending the amount of P15.00 per square
meter as the fair and reasonable value of just compensation for the properties. On 29 July 1981, EPZA filed a
Motion for Reconsideration of the order of 19 February 1981 and Objection to Commissioner's Report on the
grounds that PD 1533 has superseded Sections 5 to 8 of Rule 67 of the Rules of Court on the ascertainment of
just compensation through commissioners; and that the compensation must not exceed the maximum amount
set by PD 1533. On 14 November 1981, the trial court denied EPZA's motion for reconsideration. On 9
February 1982, EPZA filed the petition for certiorari and mandamus with preliminary restraining order,
enjoining the trial court from enforcing the order dated 17 February 1981 and from further proceeding with
the hearing of the expropriation case.

Issue: Whether the exclusive and mandatory mode of determining just compensation in Presidential Decree
1533 is valid and constitutional, and whether the lower values given by provincial assessors be the value of
just compensation.

Held: Presidential Decree 76 provides that "For purposes of just compensation in cases of private property
acquired by the government for public use, the basis shall be the current and fair market value declared by the
owner or administrator, or such market value as determined by the Assessor, whichever is lower." Section 92
of PD 464 provides that "In determining just compensation which private property is acquired by the
government for public use, the basis shall be the market value declared by the owner or administrator or
anyone having legal interest in the property, or such market value as determined by the assessor, whichever is
lower." Section 92 of PD 794, on the other hand, provides that "In determining just compensation when
private property is acquired by the government for public use, the same shall not exceed the market value
declared by the owner or administrator or anyone having legal interest in the property, or such market value as
determined by the assessor, whichever is lower." Lastly, Section 1 of PD 1533 provides that "In determining
just compensation for private property acquired through eminent domain proceedings, the compensation to be
paid shall not exceed the value declared by the owner or administrator or anyone having legal interest in the
property or determined by the assessor, pursuant to the Real Property Tax Code, whichever value is lower,
prior to the recommendation or decision of the appropriate Government office to acquire the property." The
provisions of the Decrees on just compensation unconstitutional and void as the method of ascertaining just
compensation under the said decrees constitutes impermissible encroachment on judicial prerogatives. It tends
to render the Supreme Court inutile in a matter which under the Constitution is reserved to it for final
determination. The valuation in the decree may only serve as a guiding principle or one of the factors in
determining just compensation but it may not substitute the court's own judgment as to what amount should
be awarded and how to arrive at such amount. Further, various factors can come into play in the valuation of
specific properties singled out for expropriation. The values given by provincial assessors are usually uniform
for very wide areas covering several barrios or even an entire town with the exception of the poblacion.
Individual differences are never taken into account. The value of land is based on such generalities as its
possible cultivation for rice, corn, coconuts, or other crops. Very often land described as "cogonal" has been
cultivated for generations. Buildings are described in terms of only two or three classes of building materials
and estimates of areas are more often inaccurate than correct. Thus, tax values can serve as guides but cannot
be absolute substitutes for just compensation.
6. Philippine Press Institute vs. Commission on Elections [GR 119694, 22 May 1995]

Facts: On 2 March 1995, the Commission on Elections (Comelec) promulgated Resolution 2772, which
provided that (1) the Commission shall procure free print space of not less than 1/2 page in at least one
newspaper of general circulation in every province or city for use as "Comelec Space" from 6 March until 12
May 1995; and that in the absence of said newspaper, "Comelec Space" shall be obtained from any magazine
or periodical of said province or city; (2) that "Comelec Space" shall be allocated by the Commission, free of
charge, among all candidates within the area in which the newspaper, magazine or periodical is circulated to
enable the candidates to make known their qualifications, their stand on public issues and their platforms and
programs of government; and that the "Comelec Space" shall also be used by the Commission for
dissemination of vital election information' among others. Apparently in implementation of the Resolution,
Comelec through Commissioner Regalado E. Maambong sent identical letters, dated 22 March 1995, to
various publishers of newspapers like the Business World, the Philippine Star, the Malaya and the Philippine
Times Journal, all members of Philippine Press Institute (PPI), advising the latter that they are directed to
provide free print space of not less than 1/2 page for use as "Comelec Space" or similar to the print support
which the latter have extended during the 11 May 1992 synchronized elections which was 2 full pages for each political
party fielding senatorial candidates, from 6 March to 6 May 1995, to make known to their
qualifications, their stand on public issues and their platforms and programs of government. PPI filed a
Petition for Certiorari and Prohibition with prayer for the issuance of a Temporary restraining order before the
Supreme Court to assail the validity of Resolution 2772 and the corresponding directive dated 22 March
1995.

Issue: Whether there was necessity for the taking, i.e. compelling print media companies to donate “Comelec
space.”

Held: To compel print media companies to donate "Comelec space" of the dimensions specified in Section 2
of Resolution 2772 (not less than 1/2 Page), amounts to "taking" of private personal property for public use or
purposes. Section 2 failed to specify the intended frequency of such compulsory "donation." The extent of the
taking or deprivation is not insubstantial; this is not a case of a de minimis temporary limitation or restraint
upon the use of private property. The monetary value of the compulsory "donation," measured by the
advertising rates ordinarily charged by newspaper publishers whether in cities or in non-urban areas, may be
very substantial indeed. The taking of print space here sought to be effected may first be appraised under the
public of expropriation of private personal property for public use. The threshold requisites for a lawful taking
of private property for public use need to be examined here: one is the necessity for the taking; another is the
legal authority to effect the taking. The element of necessity for the taking has not been shown by the
Comelec. It has not been suggested that the members of PPI are unwilling to sell print space at their normal
rates to Comelec for election purposes. Similarly, it has not been suggested, let alone demonstrated, that
Comelec has been granted the power of imminent domain either by the Constitution or by the legislative
authority. A reasonable relationship between that power and the enforcement and administration of election
laws by Comelec must be shown; it is not casually to be assumed. That the taking is designed to subserve
"public use" is not contested by PPI. Only that, under Section 3 of Resolution 2772, the free "Comelec space"
sought by the Comelec would be used not only for informing the public about the identities, qualifications and
programs of government of candidates for elective office but also for "dissemination of vital election
information" (including, presumably, circulars, regulations, notices, directives, etc. issued by Comelec). It
seems to the Court a matter of judicial notice that government offices and agencies (including the Supreme
Court) simply purchase print space, in the ordinary course of events, when their rules and regulations,
circulars, notices and so forth need officially to be brought to the attention of the general public. The taking of
private property for public use it, of course, authorized by the Constitution, but not without payment of "just
compensation." Thus, although there is nothing at all to prevent newspaper and magazine publishers from
voluntarily giving free print space to Comelec for the purposes contemplated in Resolution 2772; Section 2 of
resolution 2772 does not provide a constitutional basis for compelling publishers, against their will to provide
free print space for Comelec purposes. Section 2 does not constitute a valid exercise of the power of eminent
domain.
7. Republic vs. Philippine Long Distance Telephone Co. [GR L-18841, 27 January 1969]

Facts: The Republic of the Philippines, is a political entity exercising governmental powers through its
branches and instrumentalities, one of which is the Bureau of Telecommunications. That office was created on
1 July 1947, under Executive Order 94, in addition to certain powers and duties formerly vested in the
Director of Posts. Sometime in 1933, the Philippine Long Distance Telephone Company (PLDT), and the
RCA Communications, Inc., entered into an agreement whereby telephone messages, coming from the United
States and received by RCA's domestic station, could automatically be transferred to the lines of PLDT; and
vice-versa, for calls collected by the PLDT for transmission from the Philippines to the United States. The
contracting parties agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was
amended in 1941 to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis. The
arrangement was later extended to radio-telephone messages to and from European and Asiatic countries.
Their contract contained a stipulation that either party could terminate it on a 24-month notice to the other. On
2 February 1956, PLDT gave notice to RCA to terminate their contract on 2 February 1956. Soon after its
creation in 1947, the Bureau of Telecommunications set up its own Government Telephone System by
utilizing its own appropriation and equipment and by renting trunk lines of the PLDT to enable government
offices to call private parties. At that time, the Bureau was maintaining 5,000 telephones and had 5,000
pending applications for telephone connection. The PLDT, on the other hand, was also maintaining 60,000
telephones and had also 20,000 pending applications. Through the years, neither of them has been able to fill
up the demand for telephone service. The Bureau of Telecommunications had proposed to the PLDT on 8
January 1958 that both enter into an interconnecting agreement, with the government paying (on a call basis)
for all calls passing through the interconnecting facilities from the Government Telephone System to the
PLDT. On 5 March 1958, the Republic, through the Director of Telecommunications, entered into an
agreement with RCA Communications, Inc., for a joint overseas telephone service whereby the Bureau would
convey radio-telephone overseas calls received by RCA's station to and from local residents. They actually
inaugurated this joint operation on 2 February 1958, under a "provisional" agreement. On 7 April 1958, PLDT
complained to the Bureau of Telecommunications that said bureau was violating the conditions under which
their Private Branch Exchange (PBX) is interconnected with the PLDT's facilities, referring to the rented
trunk lines, for the Bureau had used the trunk lines not only for the use of government offices but even to
serve private persons or the general public, in competition with the business of the PLDT; and gave notice
that if said violations were not stopped by midnight of 12 April 1958, the PLDT would sever the telephone
connections. When the PLDT received no reply, it disconnected the trunk lines being rented by the Bureau at
midnight on 12 April 1958. The result was the isolation of the Philippines, on telephone services, from the rest
of the world, except the United States. On 12 April 1958, the Republic commenced suit against PLDT, in the
Court of First Instance of Manila (CFI, Civil Case 35805), praying in its complaint for judgment commanding
the PLDT to execute a contract with the Republic, through the Bureau, for the use of the facilities of PLDT's
telephone system throughout the Philippines under such terms and conditions as the court might consider
reasonable, and for a writ of preliminary injunction against PLDT to restrain the severance of the existing
telephone connections and/or restore those severed. After trial, the lower court rendered judgment that it could
not compel the PLDT to enter into an agreement with the Bureau because the parties were not in agreement;
that under Executive Order 94, establishing the Bureau of Telecommunications, said Bureau was not limited
to servicing government offices alone, nor was there any in the contract of lease of the trunk lines, since the
PLDT knew, or ought to have known, at the time that their use by the Bureau was to be public throughout the
Islands, hence the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and, in view
of serious public prejudice that would result from the disconnection of the trunk lines, declared the
preliminary injunction permanent, although it dismissed both the complaint and the counterclaims. Both
parties appealed.

Issue: Whether interconnection between PLDT and the Government Telephone System can be an valid object
for expropriation, i.e. the exercise of eminent domain.

Held: Although parties can not be coerced to enter into a contract where no agreement is had between them as
to the principal terms and conditions of the contract -- the freedom to stipulate such terms and conditions
being of the essence of our contractual system, and by express provision of the statute, a contract may be
annulled if tainted by violence, intimidation or undue influence -- and thus the Republic may not compel the
PLDT to celebrate a contract with it, the Republic may, in the exercise of the sovereign power of eminent
domain, require the telephone company to permit interconnection of the government telephone system and
that of the PLDT, as the needs of the government service may require, subject to the payment of just
compensation to be determined by the court. Normally, of course, the power of eminent domain results in the
taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears
why the said power may not be availed of to impose only a burden upon the owner of condemned property,
without loss of title and possession. It is unquestionable that real property may, through expropriation, be
subjected to an easement of right of way. The use of the PLDT's lines and services to allow interservice
connection between both telephone systems is not much different. In either case private property is subjected
to a burden for public use and benefit. If under Section 6, Article XIII, of the Constitution, the State may, in
the interest of national welfare, transfer utilities to public ownership upon payment of just compensation,
there is no reason why the State may not require a public utility to render services in the general interest,
provided just compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would
be the users of both telephone systems, so that the condemnation would be for public use.
8. Republic vs CA G.R. No. 146587 July 2, 2002

Petitioner instituted expropriation proceedings on 19 September 1969 before the Regional Trial Court ("RTC") of
Bulacan, docketed Civil Cases No. 3839-M, No. 3840-M, No. 3841-M and No. 3842-M, covering a total of 544,980 square
meters of contiguous land situated along MacArthur Highway, Malolos, Bulacan, to be utilized for the continued
broadcast operation and use of radio transmitter facilities for the "Voice of the Philippines" project. Petitioner, through
the Philippine Information Agency ("PIA"), took over the premises after the previous lessee, the "Voice of America," had
ceased its operations thereat. Petitioner made a deposit of P517,558.80, the sum provisionally fixed as being the
reasonable value of the property. On 26 February 1979, or more than nine years after the institution of the
expropriation proceedings, the trial court issued this order -

"WHEREFORE, premises considered, judgment is hereby rendered:

"Condemning the properties of the defendants in Civil Cases Nos. 3839-M to 3842-M located at KM 43, MacArthur
Highway, Malolos, Bulacan and covered by several transfer certificates of title appearing in the Commissioners’ Appraisal
Report consisting of the total area of 544,980 square meters, as indicated in plan, Exhibit A, for plaintiff, also marked as
Exhibit I for the defendants, and as Appendix ‘A’ attached to the Commissioners’ Appraisal Report, for the purpose
stated by the plaintiff in its complaint;

"Ordering the plaintiff to pay the defendants the just compensation for said property which is the fair market value of
the land condemned, computed at the rate of six pesos (P6.00) per square meter, with legal rate of interest from
September 19, 1969, until fully paid; and

"Ordering the plaintiff to pay the costs of suit, which includes the aforesaid fees of commissioners, Atty. Victorino P.
Evangelista and Mr. Pablo Domingo."1

The bone of contention in the instant controversy is the 76,589-square meter property previously owned by Luis Santos,
predecessor-in-interest of herein respondents, which forms part of the expropriated area.

It would appear that the national government failed to pay to herein respondents the compensation pursuant to the
foregoing decision, such that a little over five years later, or on 09 May 1984, respondents filed a manifestation with a
motion seeking payment for the expropriated property. On 07 June 1984, the Bulacan RTC, after ascertaining that the
heirs remained unpaid in the sum of P1,058,655.05, issued a writ of execution served on the plaintiff, through the Office
of the Solicitor General, for the implementation thereof. When the order was not complied with, respondents again filed
a motion urging the trial court to direct the provincial treasurer of Bulacan to release to them the amount of P72,683.55,
a portion of the sum deposited by petitioner at the inception of the expropriation proceedings in 1969, corresponding to
their share of the deposit. The trial court, in its order of 10 July 1984, granted the motion.

In the meantime, President Joseph Ejercito Estrada issued Proclamation No. 22,2 transferring 20 hectares of the
expropriated property to the Bulacan State University for the expansion of its facilities and another 5 hectares to be
used exclusively for the propagation of the Philippine carabao. The remaining portion was retained by the PIA. This fact
notwithstanding, and despite the 1984 court order, the Santos heirs remained unpaid, and no action was taken on their
case until 16 September 1999 when petitioner filed its manifestation and motion to permit the deposit in court of the
amount of P4,664,000.00 by way of just compensation for the expropriated property of the late Luis Santos subject to
such final computation as might be approved by the court. This time, the Santos heirs, opposing the manifestation and
motion, submitted a counter-motion to adjust the compensation from P6.00 per square meter previously fixed in the
1979 decision to its current zonal valuation pegged at P5,000.00 per square meter or, in the alternative, to cause the
return to them of the expropriated property. On 01 March 2000, the Bulacan RTC ruled in favor of respondents and
issued the assailed order, vacating its decision of 26 February 1979 and declaring it to be unenforceable on the ground
of prescription -

"WHEREFORE, premises considered, the court hereby:

"1) declares the decision rendered by this Court on February 26, 1979 no longer enforceable, execution of the same by
either a motion or an independent action having already prescribed in accordance with Section 6, Rule 39 of both the
1964 Revised Rules of Court and the 1997 Rules of Civil Procedure;

"2) denies the plaintiff’s Manifestation and Motion to Permit Plaintiff to Deposit in Court Payment for Expropriated
Properties dated September 16, 1999 for the reason stated in the next preceding paragraph hereof; and

"3) orders the return of the expropriated property of the late defendant Luis Santos to his heirs conformably with the
ruling of the Supreme Court in Government of Sorsogon vs. Vda. De Villaroya, 153 SCRA 291, without prejudice to any
case which the parties may deem appropriate to institute in relation with the amount already paid to herein oppositors
and the purported transfer of a portion of the said realty to the Bulacan State University pursuant to Proclamation No.
22 issued by President Joseph Ejercito."3

Petitioner brought the matter up to the Court of Appeals but the petition was outrightly denied. It would appear that the
denial was based on Section 4, Rule 65, of the 1997 Rules of Civil Procedure which provided that the filing of a motion
for reconsideration in due time after filing of the judgment, order or resolution interrupted the running of the sixty-day
period within which to file a petition for certiorari; and that if a motion for reconsideration was denied, the aggrieved
party could file the petition only within the remaining period, but which should not be less than five days in any event,
reckoned from the notice of such denial. The reglementary period, however, was later modified by A.M. No. 00-2-03
S.C., now reading thusly:

"Sec. 4. When and where petition filed. --- The petition shall be filed not later than sixty (60) days from notice of the
judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is
required or not, the sixty (60) day period shall be counted from notice of the denial of said motion."

The amendatory provision, being curative in nature, should be made applicable to all cases still pending with the courts
at the time of its effectivity.

In Narzoles vs. NLRC,4 the Court has said:

"The Court has observed that Circular No. 39-98 has generated tremendous confusion resulting in the dismissal of
numerous cases for late filing. This may have been because, historically, i.e., even before the 1997 revision to the Rules
of Civil Procedure, a party had a fresh period from receipt of the order denying the motion for reconsideration to file a
petition for certiorari. Were it not for the amendments brought about by Circular No. 39-98, the cases so dismissed
would have been resolved on the merits. Hence, the Court deemed it wise to revert to the old rule allowing a party a
fresh 60-day period from notice of the denial of the motion for reconsideration to file a petition for certiorari. x x x

"The latest amendments took effect on September 1, 2000, following its publication in the Manila Bulletin on August 4,
2000 and in the Philippine Daily Inquirer on August 7, 2000, two newspapers of general circulation.

"In view of its purpose, the Resolution further amending Section 4, Rule 65, can only be described as curative in nature,
and the principles governing curative statutes are applicable.

"Curative statutes are enacted to cure defects in a prior law or to validate legal proceedings which would otherwise be
void for want of conformity with certain legal requirements. (Erectors, Inc. vs. National Labor Relations Commission, 256
SCRA 629 [1996].) They are intended to supply defects, abridge superfluities and curb certain evils. They are intended to
enable persons to carry into effect that which they have designed or intended, but has failed of expected legal
consequence by reason of some statutory disability or irregularity in their own action. They make valid that which,
before the enactment of the statute was invalid. Their purpose is to give validity to acts done that would have been
invalid under existing laws, as if existing laws have been complied with. (Batong Buhay Gold Mines, Inc. vs. Dela Serna,
312 SCRA 22 [1999].) Curative statutes, therefore, by their very essence, are retroactive. (Municipality of San Narciso,
Quezon vs. Mendez, Sr., 239 SCRA 11 [1994].)"5

At all events, petitioner has a valid point in emphasizing the "public nature" of the expropriated property. The petition
being imbued with public interest, the Court has resolved to give it due course and to decide the case on its merits.

Assailing the finding of prescription by the trial court, petitioner here posited that a motion which respondents had filed
on 17 February 1984, followed up by other motions subsequent thereto, was made within the reglementary period that
thereby interrupted the 5-year prescriptive period within which to enforce the 1979 judgment. Furthermore, petitioner
claimed, the receipt by respondents of partial compensation in the sum of P72,683.55 on 23 July 1984 constituted
partial compliance on the part of petitioners and effectively estopped respondents from invoking prescription expressed
in Section 6, Rule 39, of the Rules of Court.6

In opposing the petition, respondents advanced the view that pursuant to Section 6, Rule 39, of the Rules of Court, the
failure of petitioner to execute the judgment, dated 26 February 1979, within five years after it had become final and
executory, rendered it unenforceable by mere motion. The motion for payment, dated 09 May 1984, as well as the
subsequent disbursement to them of the sum of P72,683.55 by the provincial treasurer of Bulacan, could not be
considered as having interrupted the five-year period, since a motion, to be considered otherwise, should instead be
made by the prevailing party, in this case by petitioner. Respondents maintained that the P72,683.55 paid to them by
the provincial treasurer of Bulacan pursuant to the 1984 order of the trial court was part of the initial deposit made by
petitioner when it first entered possession of the property in 1969 and should not be so regarded as a partial payment.
Respondents further questioned the right of PIA to transfer ownership of a portion of the property to the Bulacan State
University even while the just compensation due the heirs had yet to be finally settled.
The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate any
property within its territorial sovereignty for a public purpose.7 Fundamental to the independent existence of a State, it
requires no recognition by the Constitution, whose provisions are taken as being merely confirmatory of its presence
and as being regulatory, at most, in the due exercise of the power. In the hands of the legislature, the power is inherent,
its scope matching that of taxation, even that of police power itself, in many respects. It reaches to every form of
property the State needs for public use and, as an old case so puts it, all separate interests of individuals in property are
held under a tacit agreement or implied reservation vesting upon the sovereign the right to resume the possession of
the property whenever the public interest so requires it.8

The ubiquitous character of eminent domain is manifest in the nature of the expropriation proceedings. Expropriation
proceedings are not adversarial in the conventional sense, for the condemning authority is not required to assert any
conflicting interest in the property. Thus, by filing the action, the condemnor in effect merely serves notice that it is
taking title and possession of the property, and the defendant asserts title or interest in the property, not to prove a
right to possession, but to prove a right to compensation for the taking.9

Obviously, however, the power is not without its limits: first, the taking must be for public use, and second, that just
compensation must be given to the private owner of the property.10 These twin proscriptions have their origin in the
recognition of the necessity for achieving balance between the State interests, on the one hand, and private rights, upon
the other hand, by effectively restraining the former and affording protection to the latter.11 In determining "public
use," two approaches are utilized - the first is public employment or the actual use by the public, and the second is
public advantage or benefit.12 It is also useful to view the matter as being subject to constant growth, which is to say
that as society advances, its demands upon the individual so increases, and each demand is a new use to which the
resources of the individual may be devoted.13

The expropriated property has been shown to be for the continued utilization by the PIA, a significant portion thereof
being ceded for the expansion of the facilities of the Bulacan State University and for the propagation of the Philippine
carabao, themselves in line with the requirements of public purpose. Respondents question the public nature of the
utilization by petitioner of the condemned property, pointing out that its present use differs from the purpose originally
contemplated in the 1969 expropriation proceedings. The argument is of no moment. The property has assumed a
public character upon its expropriation. Surely, petitioner, as the condemnor and as the owner of the property, is well
within its rights to alter and decide the use of that property, the only limitation being that it be for public use, which,
decidedly, it is.

In insisting on the return of the expropriated property, respondents would exhort on the pronouncement in Provincial
Government of Sorsogon vs. Vda. de Villaroya14 where the unpaid landowners were allowed the alternative remedy of
recovery of the property there in question. It might be borne in mind that the case involved the municipal government
of Sorsogon, to which the power of eminent domain is not inherent, but merely delegated and of limited application.
The grant of the power of eminent domain to local governments under Republic Act No. 716015 cannot be understood
as being the pervasive and all-encompassing power vested in the legislative branch of government. For local
governments to be able to wield the power, it must, by enabling law, be delegated to it by the national legislature, but
even then, this delegated power of eminent domain is not, strictly speaking, a power of eminent, but only of inferior,
domain or only as broad or confined as the real authority would want it to be.16

Thus, in Valdehueza vs. Republic17 where the private landowners had remained unpaid ten years after the termination
of the expropriation proceedings, this Court ruled -

"The points in dispute are whether such payment can still be made and, if so, in what amount. Said lots have been the
subject of expropriation proceedings. By final and executory judgment in said proceedings, they were condemned for
public use, as part of an airport, and ordered sold to the government. x x x It follows that both by virtue of the judgment,
long final, in the expropriation suit, as well as the annotations upon their title certificates, plaintiffs are not entitled to
recover possession of their expropriated lots - which are still devoted to the public use for which they were expropriated
- but only to demand the fair market value of the same.

"Said relief may be granted under plaintiffs' prayer for: `such other remedies, which may be deemed just and equitable
under the premises'."18

The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay City19 where the recovery of possession of
property taken for public use prayed for by the unpaid landowner was denied even while no requisite expropriation
proceedings were first instituted. The landowner was merely given the relief of recovering compensation for his
property computed at its market value at the time it was taken and appropriated by the State.

The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides not only for the payment
of just compensation to herein respondents but likewise adjudges the property condemned in favor of petitioner over
which parties, as well as their privies, are bound.20 Petitioner has occupied, utilized and, for all intents and purposes,
exercised dominion over the property pursuant to the judgment. The exercise of such rights vested to it as the
condemnee indeed has amounted to at least a partial compliance or satisfaction of the 1979 judgment, thereby
preempting any claim of bar by prescription on grounds of non-execution. In arguing for the return of their property on
the basis of non-payment, respondents ignore the fact that the right of the expropriatory authority is far from that of an
unpaid seller in ordinary sales, to which the remedy of rescission might perhaps apply. An in rem proceeding,
condemnation acts upon the property.21 After condemnation, the paramount title is in the public under a new and
independent title;22 thus, by giving notice to all claimants to a disputed title, condemnation proceedings provide a
judicial process for securing better title against all the world than may be obtained by voluntary conveyance.23

Respondents, in arguing laches against petitioner did not take into account that the same argument could likewise apply
against them. Respondents first instituted proceedings for payment against petitioner on 09 May 1984, or five years
after the 1979 judgment had become final. The unusually long delay in bringing the action to compel payment against
herein petitioner would militate against them. Consistently with the rule that one should take good care of his own
concern, respondents should have commenced the proper action upon the finality of the judgment which, indeed,
resulted in a permanent deprivation of their ownership and possession of the property.24

The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the
property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal
action and competition or the fair value of the property as between one who receives, and one who desires to sell, it
fixed at the time of the actual taking by the government.25 Thus, if property is taken for public use before compensation
is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just
value to be computed from the time the property is taken to the time when compensation is actually paid or deposited
with the court.26 In fine, between the taking of the property and the actual payment, legal interests accrue in order to
place the owner in a position as good as (but not better than) the position he was in before the taking occurred.27

The Bulacan trial court, in its 1979 decision, was correct in imposing interests on the zonal value of the property to be
computed from the time petitioner instituted condemnation proceedings and "took" the property in September 1969.
This allowance of interest on the amount found to be the value of the property as of the time of the taking computed,
being an effective forbearance, at 12% per annum28 should help eliminate the issue of the constant fluctuation and
inflation of the value of the currency over time.29 Article 1250 of the Civil Code, providing that, in case of extraordinary
inflation or deflation, the value of the currency at the time of the establishment of the obligation shall be the basis for
the payment when no agreement to the contrary is stipulated, has strict application only to contractual obligations.30 In
other words, a contractual agreement is needed for the effects of extraordinary inflation to be taken into account to
alter the value of the currency.31

All given, the trial court of Bulacan in issuing its order, dated 01 March 2000, vacating its decision of 26 February 1979
has acted beyond its lawful cognizance, the only authority left to it being to order its execution. Verily, private
respondents, although not entitled to the return of the expropriated property, deserve to be paid promptly on the yet
unpaid award of just compensation already fixed by final judgment of the Bulacan RTC on 26 February 1979 at P6.00 per
square meter, with legal interest thereon at 12% per annum computed from the date of "taking" of the property, i.e., 19
September 1969, until the due amount shall have been fully paid.

WHEREFORE, the petition is GRANTED. The resolution, dated 31 July 2000, of the Court of Appeals dismissing the
petition for certiorari, as well as its resolution of 04 January 2001 denying the motion for reconsideration, and the
decision of the Regional Trial Court of Bulacan, dated 01 March 2000, are SET ASIDE. Let the case be forthwith remanded
to the Regional Trial Court of Bulacan for the proper execution of its decision promulgated on 26 February 1979 which is
hereby REINSTATED. No costs.

SO ORDERED.
9. City Government of Quezon City vs. Ericta [GR L-34915, 24 June 1983]

Facts: Section 9 of Ordinance 6118, S-64, entitled "Ordinance Regulating the Establishment, Maintenance
and Operation of Private Memorial Type Cemetery Or Burial Ground Within the Jurisdiction of Quezon City
and Providing Penalties for the Violation thereof" provides that at least 6% of the total area of the memorial
park cemetery shall be set aside for charity burial of deceased persons who are paupers and have been
residents of Quezon City for at least 5 years prior to their death, to be determined by competent City
Authorities, and where the area so designated shall immediately be developed and should be open for
operation not later than 6 months from the date of approval of the application. For several years, section 9 of
the Ordinance was not enforced by city authorities but 7 years after the enactment of the ordinance, the
Quezon City Council passed a resolution requesting the City Engineer, Quezon City, to stop any further
selling and/or transaction of memorial park lots in Quezon City where the owners thereof have failed to
donate the required 6% space intended for paupers burial. Pursuant to this petition, the Quezon City Engineer
notified Himlayang Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S-64 would be enforced.
Himlayang Pilipino reacted by filing with the Court of First Instance (CFI) of Rizal (Branch XVIII at Quezon
City), a petition for declaratory relief, prohibition and mandamus with preliminary injunction (Special
Proceeding Q-16002) seeking to annul Section 9 of the Ordinance in question for being contrary to the
Constitution, the Quezon City Charter, the Local Autonomy Act, and the Revised Administrative Code. There
being no issue of fact and the questions raised being purely legal, both the City Government and Himlayang
Pilipino agreed to the rendition of a judgment on the pleadings. The CFI rendered the decision declaring
Section 9 of Ordinance 6118, S-64 null and void. A motion for reconsideration having been denied, the City
Government and City Council filed the petition or review with the Supreme Court.

Issue: Whether the setting aside of 6% of the total area of all private cemeteries for charity burial grounds of
deceased paupers is tantamount to taking of private property without just compensation.

Held: There is no reasonable relation between the setting aside of at least 6% of the total area of all private
cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals, good order,
safety, or the general welfare of the people. The ordinance is actually a taking without compensation of a
certain area from a private cemetery to benefit paupers who are charges of the municipal corporation. Instead
of building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries.
The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of
Republic Act 537, the Revised Charter of Quezon City which empowers the city council to prohibit the burial
of the dead within the center of population of the city and to provide for their burial in a proper place subject
to the provisions of general law regulating burial grounds and cemeteries. When the Local Government Code,
Batas Pambansa 337 provides in Section 177 (q) that a Sangguniang panlungsod may "provide for the burial
of the dead in such place and in such manner as prescribed by law or ordinance" it simply authorizes the city
to provide its own city owned land or to buy or expropriate private properties to construct public cemeteries.
This has been the law and practice in the past and it continues to the present. Expropriation, however, requires
payment of just compensation. The questioned ordinance is different from laws and regulations requiring
owners of subdivisions to set aside certain areas for streets, parks, playgrounds, and other public facilities
from the land they sell to buyers of subdivision lots. The necessities of public safety, health, and convenience
are very clear from said requirements which are intended to insure the development of communities with
salubrious and wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the
subdivision developer when individual lots are sold to homeowners.
10. City of Manila v. Chinese Community of Manila [GR14355, 31 October 1919]

Facts: On 11 December, 1916, the city of Manila presented a petition in the Court of First Instance (CFI) of
Manila praying that certain lands (extension of Rizal Avenue within Block 3 of the district of Binondo) be
expropriated for the purpose of constructing a public improvement. The Comunidad de Chinos de Manila
[Chinese Community of Manila] alleged in its answer that it was a corporation organized and existing under
and by virtue of the laws of the Philippine Islands, having for its purpose the benefit and general welfare of
the Chinese Community of the City of Manila; that it was the owner of parcels one and two of the land
described in paragraph 2 of the complaint; that it denied that it was either necessary or expedient that the said
parcels be expropriated for street purposes; that existing street and roads furnished ample means of
communication for the public in the district covered by such proposed expropriation; that if the construction
of the street or road should be considered a public necessity, other routes were available, which would fully
satisfy the City's purposes, at much less expense and without disturbing the resting places of the dead; that it
had a Torrens title for the lands in question; that the lands in question had been used by the Chinese
Community for cemetery purposes; that a great number of Chinese were buried in said cemetery; that if said
expropriation be carried into effect, it would disturb the resting places of the dead, would require the
expenditure of a large sum of money in the transfer or removal of the bodies to some other place or site and in
the purchase of such new sites, would involve the destruction of existing monuments and the erection of new
monuments in their stead, and would create irreparable loss and injury to the Chinese Community and to all
those persons owning and interested in the graves and monuments which would have to be destroyed; that the
City was without right or authority to expropriate said cemetery or any part or portion thereof for street
purposes; and that the expropriation, in fact, was not necessary as a public improvement. Ildefonso
Tambunting, answering the petition, denied each and every allegation of the complaint, and alleged that said
expropriation was not a public improvement. Feliza Concepcion de Delgado, with her husband, Jose Maria
Delgado, and each of the other defendants, answering separately, presented substantially the same defense as
that presented by the Comunidad de Chinos de Manila and Ildefonso Tambunting. Judge Simplicio del
Rosario decided that there was no necessity for the expropriation of the strip of land and absolved each and all
of the defendants (Chinese Community, Tambunting, spouses Delgado, et. al.) from all liability under the
complaint, without any finding as to costs. From the judgment, the City of Manila appealed.

Issue: Whether portions of the Chinese Cemetery, a public cemetery, may be expropriated for the construction
of a public improvement.

Held: No. Section 2429 of Act 2711 (Charter of the city of Manila) provides that the city (Manila) may
condemn private property for public use. The Charter of the city of Manila, however, contains no procedure
by which the said authority may be carried into effect. Act 190 provides for how right of eminent domain may
be exercised. Section 241 of said Act provides that the Government of the Philippine Islands, or of any
province or department thereof, or of any municipality, and any person, or public or private corporation
having, by law, the right to condemn private property for public use, shall exercise that right in the manner
prescribed by Section 242 to 246. The right of expropriation is not an inherent power in a municipal
corporation, and before it can exercise the right some law must exist conferring the power upon it. When the
courts come to determine the question, they must not only find (a) that a law or authority exists for the
exercise of the right of eminent domain, but (b) also that the right or authority is being exercised in
accordance with the law. Herein, the cemetery in question is public (a cemetery used by the general
community, or neighborhood, or church) and seems to have been established under governmental authority, as
the Spanish Governor-General, in an order creating the same. Where a cemetery is open to the public, it is a
public use and no part of the ground can be taken for other public uses under a general authority. To disturb
the mortal remains of those endeared to us in life sometimes becomes the sad duty of the living; but, except in
cases of necessity, or for laudable purposes, the sanctity of the grave, the last resting place of our friends,
should be maintained, and the preventative aid of the courts should be invoked for that object. While cemeteries and
sepulchers and the places of the burial of the dead are still within the memory and command
of the active care of the living; while they are still devoted to pious uses and sacred regard, it is difficult to
believe that even the legislature would adopt a law expressly providing that such places, under such
circumstances, should be violated.
11. Heirs of Juancho Ardona vs. Reyes [GR L-60549, 60553 to 60555; 26 October 1983]

Facts: The Philippine Tourism Authority filed 4 complaints with the Court of First Instance of Cebu City for
the expropriation of some 282 hectares of rolling land situated in barangays Malubog and Babag, Cebu City,
under PTA's express authority "to acquire by purchase, by negotiation or by condemnation proceedings any
private land within and without the tourist zones" for the purposes indicated in Section 5, paragraph B(2), of
its Revised Charter (PD 564), more specifically, for the development into integrated resort complexes of
selected and well-defined geographic areas with potential tourism value, specifically for the construction of a
sports complex (basketball courts, tennis courts, volleyball courts, track and field, baseball and softball
diamonds, and swimming pools), clubhouse, gold course, children's playground and a nature area for picnics
and horseback riding for the use of the public. The Heirs of Juancho Ardona (Represented by Gloria Ardona) Anastacio C.
Cabilao, Heirs of Cipriano Cabilao (Represented by Jose Cabilao) Modesta Cabilao, Heirs of
Roman Cabuenas (Represented by Alberto Cabuenas), Agripino Gabisay and Prudencia Mabini, Antonio
Labrador and Lucia Gabisay, Geronimo Mabini and Marcelina Sabal, Inocencio Mabini and Arsenia Reyes,
Patricio Mabini and Gregoria Borres, Aniceto Gadapan and Maxima Gabisay, Bartolome Magno and Calineca
E. Magno, Alberto Cabuenas, Narciso Cabuenas and Victoria Cabuenas, Eutiquioseno, Heirs of Esperidion
Cabuenas (Represented by Alberto Cabuenas), Maximina Navaro, Sulpicio Navaro, Eduardo Navaro,
Martiniano Roma (In Representation of Arcadio Mabini, Deceased), Martin Seno, Fausto Arda, Maxima
Cabilao, Estrella Seno, Eduvegis S. Cabilao, Rosario Cabilao, Minors Danilo, Socorro, Josefina and Marites,
All Surnamed Cabilao, Juan Borres (Represented by Francisca Borres), Ramon Jabadan, Jesus Alipar and
Leonila Kabahar, Antonio Labrador, Heirs of Nicasio Gabisay (Represented by Arsenio Gabisay), Pacifico
Labrador, Demetrio Labrador and Fructosa Tabura, Venancio Del Mar, Marino Del Mar, Heirs of Teodora
Arcillo (Represented by Brigida Arcillo) Dionisia Gabunada, Heirs of Buenaventura Francisco (Represented
by Felicidad Sadaya Francisco), Heirs of Victoria C. Cabuenas (Represented by Alberto Cabuenas) Heirs of
Cipriano Gabunada (Represented by Claudio Gabunada) filed their oppositions, and had a common allegation
in that the taking is allegedly not impressed with public use under the Constitution; alleging that there is no
specific constitutional provision authorizing the taking of private property for tourism purposes; that
assuming that PTA has such power, the intended use cannot be paramount to the determination of the land as a
land reform area; that limiting the amount of compensation by legislative fiat is constitutionally repugnant;
and that since the land is under the land reform program, it is the Court of Agrarian Relations and not the
Court of First Instance (CFI), that has jurisdiction over the expropriation cases.The Philippine Tourism
Authority having deposited with the Philippine National Bank, Cebu City Branch, an amount equivalent to
10% of the value of the properties pursuant to Presidential Decree No. 1533, the lower court issued separate
orders authorizing PTA to take immediate possession of the premises and directing the issuance of writs of
possession. The Heirs of Ardona, et. al. filed a petition for certiorari with preliminary injunction before the
Supreme Court.
Issue: Whether the expropriation of parcels of land for the purpose of constructing a sports complex,
including a golf course, by the Philippine Tourism Authority be considered taking for “public use.”
Held: There are three provisions of the 1973 Constitution which directly provide for the exercise of the power
of eminent domain. Section 2, Article IV states that private property shall not be taken for public use without
just compensation. Section 6, Article XIV allows the State, in the interest of national welfare or defense and
upon payment of just compensation to transfer to public ownership, utilities and other private enterprises to be
operated by the government. Section 13, Article XIV states that the Batasang Pambansa may authorize upon
payment of just compensation the expropriation of private lands to be subdivided into small lots and conveyed
at cost to deserving citizens. While not directly mentioning the expropriation of private properties upon
payment of just compensation, the provisions on social justice and agrarian reforms which allow the exercise
of police power together with the power of eminent domain in the implementation of constitutional objectives
are even more far reaching insofar as taxing of private property is concerned. 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. The Philippines has 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. There can be no doubt that expropriation for such
traditional purposes as the construction of roads, bridges, ports, waterworks, schools, electric and
telecommunications systems, hydroelectric power plants, markets and slaughterhouses, parks, hospitals,
government office buildings, and flood control or irrigation systems is valid. However, the concept of public
use is not 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 discarded. The Philippine Tourism Authority has stressed that the
development of the 808 hectares includes plans that would give the Heirs of Ardona, et. al. and other
displaced persons productive employment, higher incomes, decent housing, water and electric facilities, and better
living standards. The Court’s dismissal of the petition is, in part, predicated on those assurances. The
right of the PTA to proceed with the expropriation of the 282 hectares already identified as fit for the
establishment of a resort complex to promote tourism is, therefore, sustained.
12. LAND BANK OF THE PHILIPPINES vs CA

Consequent to the denial of their petitions for review on certiorari by this Court on October 6, 19951, petitioners
Department of Agrarian Reform (DAR) and Land Bank of the Philippines (LBP), filed their respective motions for
reconsideration contending mainly that, contrary to the Court's conclusion, the opening of trust accounts in favor of the
rejecting landowners is sufficient compliance with the mandate of Republic Act 6657. Moreover, it is argued that there is
no legal basis for allowing the withdrawal of the money deposited in trust for the rejecting landowners pending the
determination of the final valuation of their properties.

Petitioner DAR maintains that "the deposit contemplated by Section 16(e) of Republic Act 6657, absent any specific
indication, may either be general or special, regular or irregular, voluntary or involuntary (necessary) or other forms
known in law, and any thereof should be, as it is the general rule, deemed complying."2

We reject this contention. Section 16(e) of Republic Act 6657 was very specific in limiting the type of deposit to be made
as compensation for the rejecting landowners, that is in "cash" or in "LBP bonds", to wit:

Sec. 16. Procedure for Acquisition of Private Lands —

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper
Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. . . . .
(Emphasis supplied)

The provision is very clear and unambiguous, foreclosing any doubt as to allow an expanded construction that would
include the opening of "trust accounts" within the coverage of the term "deposit". Accordingly, we must adhere to the
well-settled rule that when the law speaks in clear and categorical language, there is no reason for interpretation or
construction, but only for application.3 Thus, recourse to any rule which allows the opening of trust accounts as a mode
of deposit under Section 16(e) of RA 6657 goes beyond the scope of the said provision and is therefore impermissible. As
we have previously declared, the rule-making power must be confined to details for regulating the mode or proceedings
to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the statutory
requirements or to embrace matters not covered by the statute.4 Administrative regulations must always be in harmony
with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the
basic law.5

The validity of constituting trust accounts for the benefit of the rejecting landowners and withholding immediate
payment to them is further premised on the latter's refusal to accept the offered compensation thereby making it
necessary that the amount remains in the custody of the LBP for safekeeping and in trust for eventual payment to the
landowners.6 Additionally, it is argued that the release of the amount deposited in trust prior to the final determination
of the just compensation would be premature and expose the government to unnecessary risks and disadvantages,
citing the possibility that the government may subsequently decide to abandon or withdraw from the coverage of the
CARP certain portions of the properties that it has already acquired, through supervening administrative determination
that the subject land falls under the exempt category, or by subsequent legislation allowing additional exemptions from
the coverage, or even the total scrapping of the program itself. Force majeure is also contemplated in view of the
devastation suffered by Central Luzon due to lahar. Petitioner DAR maintains that under these conditions, the
government will be forced to institute numerous actions for the recovery of the amounts that it has already paid in
advance to the rejecting landowners.7

We are not persuaded. As an exercise of police power, the expropriation of private property under the CARP puts the
landowner, and not the government, in a situation where the odds are already stacked against his favor. He has no
recourse but to allow it. His only consolation is that he can negotiate for the amount of compensation to be paid for the
expropriated property. As expected, the landowner will exercise this right to the hilt, but subject however to the
limitation that he can only be entitled to a "just compensation." Clearly therefore, by rejecting and disputing the
valuation of the DAR, the landowner is merely exercising his right to seek just compensation. If we are to affirm the
withholding of the release of the offered compensation despite depriving the landowner of the possession and use of his
property, we are in effect penalizing the latter for simply exercising a right afforded to him by law.

Obviously, this would render the right to seek a fair and just compensation illusory as it would discourage owners of
private lands from contesting the offered valuation of the DAR even if they find it unacceptable, for fear of the hardships
that could result from long delays in the resolution of their cases. This is contrary to the rules of fair play because the
concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of
the land, but also the payment of the land within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered "just" for the property owner is made to suffer the consequence of being
immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount
necessary to cope with his loss.8
It is significant to note that despite petitioners' objection to the immediate release of the rejected compensation,
petitioner LBP, taking into account the plight of the rejecting landowners, has nevertheless allowed partial withdrawal
through LBP Executive Order No. 003,9 limited to fifty (50) per cent of the net cash proceeds. This is a clear confirmation
that petitioners themselves realize the overriding need of the landowners' immediate access to the offered
compensation despite rejecting its valuation. But the effort, through laudable, still falls short because the release of the
amount was unexplainably limited to only fifty per cent instead of the total amount of the rejected offer,
notwithstanding that the rejecting landowner's property is taken in its entirety. The apprehension against the total
release of the rejected compensation is discounted since the government's interest is amply protected under the
aforementioned payment scheme because among the conditions already imposed is that the landowner must execute a
Deed of Conditional Transfer for the subject property.10

Anent the aforecited risks and disadvantages to which the government allegedly will be unnecessarily exposed if
immediate withdrawal of the rejected compensation is allowed, suffice it to say that in the absence of any substantial
evidence to support the same, the contemplated scenarios are at the moment nothing but speculations. To allow the
taking of the landowners' properties, and in the meantime leave them empty handed by withholding payment of
compensation while the government speculates on whether or not it will pursue expropriation, or worse for government
to subsequently decide to abandon the property and return it to the landowner when it has already been rendered
useless by force majeure, is undoubtedly an oppressive exercise of eminent domain that must never be sanctioned.
Legislations in pursuit of the agrarian reform program are not mere overnight creations but were the result of long
exhaustive studies and even heated debates. In implementation of the program, much is therefore expected from the
government. Unduly burdening the property owners from the resulting flaws in the implementation of the CARP which
was supposed to have been a carefully crafted legislation is plainly unfair and unacceptable.

WHEREFORE, in view of the foregoing, petitioners' motions for reconsideration are hereby DENIED for lack of merit.
13. National Power Corporation vs. Angas [GR 60225-26, 8 May 1992]

Facts: On 13 April and 3 December 1974, the National Power Corporation (NAPOCOR), a governmentowned and
controlled corporation and the agency through which the government undertakes the on-going
infrastructure and development projects throughout the country, filed two complaints for eminent domain with
the Court of First Instance (now Regional Trial Court) of Lanao del Sur (against Lacsamana Batugan, and/or
Guimba Shipping & Development Corporation, Magancong Digayan, Moctara Lampaco, Lampaco
Pasandalan, Dimaporo Subang, Hadji Daluma Kinidar, Dimaampao Baute, Pangonotan Cosna Tagol, Salacop
Dimacaling, Hadji Sittie Sohra Linang Batara, Bertudan Pimping And/Or Cadurog Pimping, Butuan Tagol, Disangcopan
Marabong, and Hadji Salic Sawa in Civil Case 2248; and against Mangorsi Casan, Casnangan
Batugan, Pundamarug Atocal, Pasayod Pado, Dimaampao Baute, Casnangan Baute, Dimaporo Subang,
Tambilawan Ote, Manisun Atocal, and Masacal Tomiara in Civil Case 2277). The complaint which sought to
expropriate certain specified lots situated at Limogao, Saguiaran, Lanao del Sur was for the purpose of the
development of hydro-electric power and production of electricity as well as the erection to such subsidiary
works and constructions as may be necessarily connected therewith. Both cases were jointly tried upon
agreement of the parties. After a series of hearings were held, on 15 June 1979, a consolidated decision was
rendered by the lower court, declaring and confirming that the lots mentioned and described in the complaints
have entirely been lawfully condemned and expropriated by NAPOCOR, and ordering the latter to pay the
landowners certain sums of money as just compensation for their lands expropriated "with legal interest
thereon until fully paid. Two consecutive motions for reconsideration of the consolidated decision were filed
by NAPOCOR. The same were denied by the court. NAPOCOR did not appeal on the consolidated decision,
which became final and executory. Thus, on 16 May 1980, one of the landowners (Sittie Sohra Batara) filed
an ex-parte motion for the execution of the decision, praying that petitioner be directed to pay her the unpaid
balance of P14,300.00 for the lands expropriated from her, including legal interest which she computed at 6%
per annum. The said motion was granted by the lower court. Thereafter, the lower court directed the petitioner
to deposit with its Clerk of Court the sums of money as adjudged in the joint decision dated 15 June 1979.
NAPOCOR complied with said order and deposited the sums of money with interest computed at 6% per
annum. On 10 February 1981, another landowner (Pangonatan Cosna Tagol) filed with the trial court an exparte motion
praying, for the first time, that the legal interest on the just compensation awarded to her by the
court be computed at 12% per annum as allegedly "authorized under and by virtue of Circular 416 of the
Central Bank issued pursuant to Presidential Decree 116 and in a decision of the Supreme Court that legal
interest allowed in the judgment of the courts, in the absence of express contract, shall be computed at 12%
per annum." On 11 February 1981, the lower court granted the said motion allowing 12% interest per annum.
Subsequently, the other landowners filed motions also praying that the legal interest on the just compensation
awarded to them be computed at 12% per annum, on the basis of which the lower court issued on 10 March
1981 and 28 August 1981 orders bearing similar import. NAPOCOR moved for the reconsideration of the
lower court's last order dated 28 August 1981, which the court denied on 25 January 1982. NAPOCOR filed a
petition for certiorari and mandamus with the Supreme Court.

Issue: Whether, in the computation of the legal rate of interest on just compensation for expropriated lands,
the rate applicable as legal interest is 6% (Article 2209 of the Civil Code) or 12% (Central Bank Circular
416).

Held: Article 2209 of the Civil Code, which provides that "If the obligation consists in the payment of a sum
of money, and the debtor incurs a delay, the indemnity for damages, there being no stipulation to the contrary,
shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is
six percent per annum," and not Central Bank Circular 416, is the law applicable. The Central Bank circular
applies only to loan or forbearance of money, goods or credits and to judgments involving such loan or
forbearance of money, goods or credits. This is evident not only from said circular but also from Presidential
Decree 116, which amended Act 2655, otherwise known as the Usury Law. On the other hand, Article 2209 of
the Civil Code applies to transactions requiring the payment of indemnities as damages, in connection with
any delay in the performance of the obligation arising therefrom other than those covering loan or forbearance
of money, goods or credits. Herein, the transaction involved is clearly not a loan or forbearance of money,
goods or credits but expropriation of certain parcels of land for a public purpose, the payment of which is
without stipulation regarding interest, and the interest adjudged by the trial court is in the nature of indemnity
for damages. The legal interest required to be paid on the amount of just compensation for the properties
expropriated is manifestly in the form of indemnity for damages for the delay in the payment thereof.
Therefore, since the kind of interest involved in the joint judgment of the lower court sought to be enforced in
this case is interest by way of damages, and not by way of earnings from loans, etc. Article 2209 of the Civil
Code shall apply.
14. National Power Corporation vs. Gutierrez [GR 60077, 18 January 1991]

Facts: The National Power Corporation (NAPOCOR), a government owned and controlled entity, in
accordance with Commonwealth Act 120, is invested with the power of eminent domain for the purpose of
pursuing its objectives, which among others is the construction, operation, and maintenance of electric
transmission lines for distribution throughout the Philippines. For the construction of its 230 KV MexicoLimay
transmission lines, NAPOCOR's lines have to pass the lands belonging to Matias Cruz, Heirs of
Natalia Paule and spouses Misericordia Gutierrez and Ricardo Malit (covered by tax declarations 907, 4281
and 7582, respectively). NAPOCOR initiated negotiations for the acquisition of right of way easements over
the aforementioned lots for the construction of its transmission lines but unsuccessful in this regard,
NAPOCOR was constrained to file eminent domain proceedings against Gutierrez, et. al. on 20 January 1965.
Upon filing of the corresponding complaint, NAPOCOR deposited the amount of P973.00 with the Provincial
Treasurer of Pampanga, tendered to cover the provisional value of the land of the Malit and Gutierrez. And
by virtue of which, NAPOCOR was placed in possession of the property of the spouses so it could
immediately proceed with the construction of its Mexico-Limay 230 KV transmission line. In this connection,
by the trial court's order of 30 September 1965, the spouses were authorized to withdraw the fixed provisional
value of their land in the sum of P973.00. Meanwhile, for the purpose of determining the fair and just
compensation due Gutierrez, et. al., the court appointed 3 commissioners, comprised of one representative of
NAPOCOR, one for the affected families and the other from the court, who then were empowered to receive
evidence, conduct ocular inspection of the premises, and thereafter, prepare their appraisals as to the fair and
just compensation to he paid to the owners of the lots. Hearings were consequently held before said
commissioners and during their hearings, the case of the Heirs of Natalia Paule was amicably settled by virtue
of a Right of Way Grant executed by Guadalupe Sangalang for herself and in behalf of her co-heirs in favor of
NAPOCOR. The case against Matias Cruz was earlier decided by the court, thereby leaving only the case
against the spouses Malit and Gutierrez still to be resolved. Accordingly, the commissioners submitted their
individual reports. With the reports submitted, the lower court rendered a decision, ordering NAPOCOR to
pay Malit and Gutierrez the sum of P10 per square meter as the fair and reasonable compensation for the
right-of-way easement of the affected area, which is 760 squares, or a total sum of P7,600.00 and P800.00 as
attorney's fees. Dissatisfied with the decision, NAPOCOR filed a motion for reconsideration which was
favorably acted upon by the lower court, and in an order dated 10 June 1973, it amended its previous decision,
reducing the amount awarded to to P5.00 per square meter as the fair and reasonable market value of the 760 square
meters belonging to the said spouses, in light of the classification of the land to be partly commercial
and partly agricultural. Still not satisfied, an appeal was filed by the NAPOCOR with the Court of Appeals
but appellate court, on 9 March 1982, sustained the trial court. NAPOCOR filed the petition for review on
certiorari before the Supreme Court.

Issue: Whether the spouses are deprive of the property’s ordinary use and thus the easement of right of way in
favor of NAPOCOR constitutes taking.

Held: The acquisition of the right-of-way easement falls within the purview of the power of eminent domain.
Such conclusion finds support in similar cases of easement of right-of-way where the Supreme Court
sustained the award of just compensation for private property condemned for public use. Herein, the easement
of right-of-way is definitely a taking under the power of eminent domain. Considering the nature and effect of
the installation of the 230 KV Mexico-Limay transmission lines, the limitation imposed by NAPOCOR
against the use of the land for an indefinite period deprives spouses Malit and Gutierrez of its ordinary use.
For these reasons, the owner of the property expropriated is entitled to a just compensation, which should be
neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said
property. Just compensation has always been understood to be the just and complete equivalent of the loss
which the owner of the thing expropriated has to suffer by reason of the expropriation. The price or value of
the land and its character at the time it was taken by the Government are the criteria for determining just
compensation. The above price refers to the market value of the land which may be the full market value
thereof. It appearing that the trial court did not act capriciously and arbitrarily in setting the price of P5.00 per
square meter of the affected property, the said award is proper and not unreasonable.
15. TELEBAP v. Comelec, April 21, 1998

FACTS: Section 92 of Batas Pambansa (BP) Blg. 881, as amended, reads as follows:

Sec. 92. Comelec time. — The commission shall procure radio and television time to be known as “Comelec Time” which
shall be allocated equally and impartially among the candidates within the area of coverage of all radio and television
stations. For this purpose, the franchise of all radio broadcasting and television stations are hereby amended so as to
provide radio or television time, free of charge, during the period of the campaign.

Petitioners contend that §92 of BP Blg. 881 violates the due process clause and the eminent domain provision of the
Constitution by taking airtime from radio and television broadcasting stations without payment of just compensation.
Petitioners claim that the primary source of revenue of the radio and television stations is the sale of airtime to
advertisers and that to require these stations to provide free airtime is to authorize a taking which is not “a de minimis
temporary limitation or restraint upon the use of private property.” According to petitioners, in 1992, the GMA Network,
Inc. lost P22,498,560.00 in providing free airtime of one (1) hour every morning from Mondays to Fridays and one (1)
hour on Tuesdays and Thursdays from 7:00 to 8:00 p.m. (prime time) and, in this year’s elections, it stands to lose
P58,980,850.00 in view of COMELEC’s requirement that radio and television stations provide at least 30 minutes of
prime time daily for the COMELEC Time.

Held: No. The petition is dismissed.

With the prohibition on media advertising by candidates themselves, the COMELEC Time and COMELEC Space are about
the only means through which candidates can advertise their qualifications and programs of government. More than
merely depriving candidates of time for their ads, the failure of broadcast stations to provide air time unless paid by the
government would clearly deprive the people of their right to know. Art. III, §7 of the Constitution provides that “the
right of the people to information on matters of public concern shall be recognized,” while Art. XII, §6 states that “the
use of property bears a social function [and] the right to own, establish, and operate economic enterprises [is] subject to
the duty of the State to promote distributive justice and to intervene when the common good so demands.”

To affirm the validity of §92 of B.P. Blg. 881 is to hold public broadcasters to their obligation to see to it that the variety
and vigor of public debate on issues in an election is maintained. For while broadcast media are not mere common
carriers but entities with free speech rights, they are also public trustees charged with the duty of ensuring that the
people have access to the diversity of views on political issues. This right of the people is paramount to the autonomy of
broadcast media. To affirm the validity of §92, therefore, is likewise to uphold the people’s right to information on
matters of public concern. The use of property bears a social function and is subject to the state’s duty to intervene for
the common good. Broadcast media can find their just and highest reward in the fact that whatever altruistic service
they may render in connection with the holding of elections is for that common good.

All broadcasting stations is licensed by the government. This is, therefore, a franchise, which is a privilege
subject to amendment by Congress in accordance with the constitutional provision that a franchise shall be
subject to amendment by the Congress when the common good requires. These radio and television broadcasting
companies do not own the airwaves and frequencies through which they transmit broadcast signals and images.
Through franchises, they are merely given the temporary privilege of using them. They are, therefore, burdened with the
performance by the grantee of some form of public service.

Article 12 Section 11
No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines, at least sixty per centum of
whose capital is owned by such citizens; nor shall such franchise, certificate, or
authorization be exclusive in character or for a longer period than fifty years. Neither shall
any such franchise or right be granted except under the condition that it shall be subject to
amendment, alteration, or repeal by the Congress when the common good so requires.
The State shall encourage equity participation in public utilities by the general public. The
participation of foreign investors in the governing body of any public utility enterprise shall
be limited to their proportionate share in its capital, and all the executive and managing
officers of such corporation or association must be citizens of the Philippines.

- Article XII, Section 11 of the 1987 Constitution o This provision authorizes the amendment of franchises for the
common good. In this case, the common good involved is for the voters who have the right to be fully informed
of the issues in an election
- Article XII, Section 6 o The use of property bears a social function which shall be for the common good.
Individuals shall have the right to own, establish, and operate economic enterprises, subject to the duty of the
State to promote distributive justice and to intervene when
the common good demands.
The state spends considerable public funds in licensing and supervising such stations, it would be strange if it
cannot even require the licensees to render public service

Free and without just compensation

Petitioner’s argument is without merit. All broadcasting, whether radio or by television stations, is
licensed by the government. Airwave frequencies have to be allocated as there are more individuals
who want to broadcast that there are frequencies to assign. Radio and television broadcasting
companies, which are given franchises, do not own the airwaves and frequencies through which
they transmit broadcast signals and images. They are merely given the temporary privilege to use
them. Thus, such exercise of the privilege may reasonably be burdened with the performance by
the grantee of some form of public service. In granting the privilege to operate broadcast stations
and supervising radio and television stations, the state spends considerable public funds in
licensing and supervising them.
The argument that the subject law singles out radio and television stations to provide free air time
as against newspapers and magazines which require payment of just compensation for the print
space they may provide is likewise without merit. Regulation of the broadcast industry requires
spending of public funds which it does not do in the case of print media. To require the broadcast
industry to provide free air time for COMELEC is a fair exchange for what the industry gets.
16. Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978)

Syllabus

Under New York City's Landmarks Preservation Law (Landmarks Law), which was enacted to protect historic landmarks
and neighborhoods from precipitate decisions to destroy or fundamentally alter their character, the Landmarks
Preservation Commission (Commission) may designate a building to be a "landmark" on a particular "landmark site" or
may designate an area to be a "historic district." The Board of Estimate may thereafter modify or disapprove the
designation, and the owner may seek judicial review of the final designation decision. The owner of the designated
landmark must keep the building's exterior "in good repair," and, before exterior alterations are made, must secure
Commission approval. Under two ordinances, owners of landmark sites may transfer development rights from a
landmark parcel to proximate lots. Under the Landmarks Law, the Grand Central Terminal (Terminal), which is owned by
the Penn Central Transportation Co. and its affiliates (Penn Central) was designated a "landmark" and the block it
occupies a "landmark site." Appellant Penn Central, though opposing the designation before the Commission, did not
seek judicial review of the final designation decision. Thereafter appellant Penn Central entered into a lease with
appellant UGP Properties, whereby UGP was to construct a multistory office building over the Terminal. After the
Commission had rejected appellants' plans for the building as destructive of the Terminal's historic and aesthetic
features, with no judicial review thereafter being sought, appellants brought suit in state court claiming that the
application of the Landmarks Law had "taken" their property without just compensation in violation of the Fifth and
Fourteenth Amendments, and arbitrarily deprived them of their property without due process of law in violation of the
Fourteenth Amendment. The trial court's grant of relief was reversed on appeal, the New York Court of Appeals
ultimately concluding that there was no "taking," since the Landmarks Law had not transferred control of the property
to the city, but only restricted appellants' exploitation of it; and that there was no denial of due process because (1) the
same use of the Terminal was permitted as before; (2) the appellants had not shown that they could not earn a
reasonable return on their investment

Page 438 U. S. 105

in the Terminal itself; (3) even if the Terminal proper could never operate at a reasonable profit, some of the income
from Penn Central's extensive real estate holdings in the area must realistically be imputed to the Terminal; and (4) the
development rights above the Terminal, which were made transferable to numerous sites in the vicinity, provided
significant compensation for loss of rights above the Terminal itself.

Held: The application of the Landmarks Law to the Terminal property does not constitute a "taking" of appellants'
property within the meaning of the Fifth Amendment as made applicable to the States by the Fourteenth Amendment.
Pp. 438 U. S. 123-138.

(a) In a wide variety of contexts, the government may execute laws or programs that adversely affect recognized
economic values without its action constituting a "taking," and, in instances such as zoning laws where a state tribunal
has reasonably concluded that "the health, safety, morals, or general welfare" would be promoted by prohibiting
particular contemplated uses of land, this Court has upheld land use regulations that destroyed or adversely affected
real property interests. In many instances use restrictions that served a substantial public purpose have been upheld
against "taking" challenges, e.g., Goldblatt v. Hempstead, 369 U. S. 590; Hadacheck v. Sebastian, 239 U. S. 394, though a
state statute that substantially furthers important public policies may so frustrate distinct investment-backed
expectations as to constitute a "taking," e.g., Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, and government
acquisitions of resources to permit uniquely public functions constitute "takings," e.g., United States v. Causby, 328 U. S.
256. Pp. 438 U. S. 123-128.

(b) In deciding whether particular governmental action has effected a "taking," the character of the action and nature
and extent of the interference with property rights (here the city tax block designated as the "landmark site") are
focused upon, rather than discrete segments thereof. Consequently, appellants cannot establish a "taking" simply by
showing that they have been denied the ability to exploit the superjacent airspace, irrespective of the remainder of
appellants' parcel. Pp. 438 U. S. 130-131.

(c) Though diminution in property value alone, as may result from a zoning law, cannot establish a "taking," as
appellants concede, they urge that the regulation of individual landmarks is different, because it applies only to selected
properties. But it does not follow that landmark laws, which embody a comprehensive plan to preserve structures of
historic or aesthetic interest, are discriminatory, like "reverse spot" zoning. Nor can it be successfully contended that
designation of a landmark involves only a matter of taste, and therefore will inevitably

Page 438 U. S. 106

lead to arbitrary results, for judicial review is available, and there is no reason to believe it will be less effective than
would be so in the case of zoning or any other context. Pp. 438 U. S. 131-133.
(d) That the Landmarks Law affects some landowners more severely than others does not, itself, result in "taking," for
that is often the case with general welfare and zoning legislation. Nor, contrary to appellants' contention, ar they solely
burdened and unbenefited by the Landmarks Law, which has been extensively applied and was enacted on the basis of
the legislative judgment that the preservation of landmarks benefits the citizenry both economically and by improving
the overall quality of city life. Pp. 438 U. S. 133-135.

(e) The Landmarks Law no more effects an appropriation of the airspace above the Terminal for governmental uses than
would a zoning law appropriate property; it simply prohibits appellants or others from occupying certain features of that
space while allowing appellants gainfully to use the remainder of the parcel. United States v. Causby, supra,
distinguished. P. 438 U. S. 135.

(f) The Landmarks Law, which does not interfere with the Terminal's present uses or prevent Penn Central from realizing
a "reasonable return" on its investment, does not impose the drastic limitation on appellants' ability to use the air rights
above the Terminal that appellants claim, for, on this record, there is no showing that a smaller, harmonizing structure
would not be authorized. Moreover, the preexisting air rights are made transferable to other parcels in the vicinity of
the Terminal, thus mitigating whatever financial burdens appellants have incurred. Pp. 438 U. S. 135-137.

42 N.Y.2d 324, 366 N.E.2d 1271, affirmed.

BRENNAN, J., delivered the opinion of the Court, in which STEWART, WHITE, MARSHALL, BLACKMUN, and POWELL, JJ.,
joined. REHNQUIST, J, filed a dissenting opinion, in which BURGER, C.J., and STEVENS, J., joined, post, p. 438 U. S. 138.

Page 438 U. S. 107

MR. JUSTICE BRENNAN delivered the opinion of the Court.

The question presented is whether a city may, as part of a comprehensive program to preserve historic landmarks and
historic districts, place restrictions on the development of individual historic landmarks -- in addition to those imposed
by applicable zoning ordinances -- without effecting a "taking" requiring the payment of "just compensation."
Specifically, we must decide whether the application of New York City's Landmarks Preservation Law to the parcel of
land occupied by Grand Central Terminal has "taken" its owners' property in violation of the Fifth and Fourteenth
Amendments.

Over the past 50 years, all 50 States and over 500 municipalities have enacted laws to encourage or require the
preservation of buildings and areas with historic or aesthetic importance. [Footnote 1] These nationwide legislative
efforts have been

Page 438 U. S. 108

precipitated by two concerns. The first is recognition that, in recent years, large numbers of historic structures,
landmarks, and areas have been destroyed [Footnote 2] without adequate consideration of either the values
represented therein or the possibility of preserving the destroyed properties for use in economically productive ways.
[Footnote 3] The second is a widely shared belief that structures with special historic, cultural, or architectural
significance enhance the quality of life for all. Not only do these buildings and their workmanship represent the lessons
of the past and embody precious features of our heritage, they serve as examples of quality for today.

"[H]istoric conservation is but one aspect of the much larger problem, basically an environmental one, of enhancing -- or
perhaps developing for the first time -- the quality of life for people. [Footnote 4]"

New York City, responding to similar concerns and acting

Page 438 U. S. 109

pursuant to a New York State enabling Act, [Footnote 5] adopted its Landmarks Preservation Law in 1965. See
N.Y.C.Admin.Code, ch. 8-A, § 201.0et seq. (1976). The city acted from the conviction that "the standing of [New York
City] as a world-wide tourist center and world capital of business, culture and government" would be threatened if
legislation were not enacted to protect historic landmarks and neighborhoods from precipitate decisions to destroy or
fundamentally alter their character. § 201.0(a). The city believed that comprehensive measures to safeguard desirable
features of the existing urban fabric would benefit its citizens in a variety of ways: e.g., fostering "civic pride in the
beauty and noble accomplishments of the past"; protecting and enhancing "the city's attractions to tourists and
visitors"; "support[ing] and stimul[ating] business and industry"; "strengthen[ing] the economy of the city"; and
promoting "the use of historic districts, landmarks, interior landmarks and scenic landmarks for the education, pleasure
and welfare of the people of the city." § 201.0(b).

The New York City law is typical of many urban landmark laws in that its primary method of achieving its goals is not by
acquisitions of historic properties, [Footnote 6] but rather by involving public entities in land use decisions affecting
these properties

Page 438 U. S. 110

and providing services, standards, controls, and incentives that will encourage preservation by private owners and users.
[Footnote 7] While the law does place special restrictions on landmark properties as a necessary feature to the
attainment of its larger objectives, the major theme of the law is to ensure the owners of any such properties both a
"reasonable return" on their investments and maximum latitude to use their parcels for purposes not inconsistent with
the preservation goals.

The operation of the law can be briefly summarized. The primary responsibility for administering the law is vested in the
Landmarks Preservation Commission (Commission), a broad-based 11-member agency [Footnote 8] assisted by a
technical staff. The Commission first performs the function, critical to any landmark preservation effort, of identifying
properties and areas that have

"a special character or special historical or aesthetic interest or value as part of the development, heritage or cultural
characteristics of the city, state or nation."

§ 2071.0(n); see § 207-1.0(h). If the Commission determines, after giving all interested parties an opportunity to be
heard, that a building or area satisfies the ordinance's criteria, it will designate a building to be a "landmark," § 207-
1.0(n), [Footnote 9] situated

Page 438 U. S. 111

on a particular "landmark site," § 207-1.0(o), [Footnote 10] or will designate an area to be a "historic district," § 207-
1.0(h). [Footnote 11] After the Commission makes a designation, New York City's Board of Estimate, after considering
the relationship of the designated property "to the master plan, the zoning resolution, projected public improvements
and any plans for the renewal of the area involved," § 207-2.0(g)(1), may modify or disapprove the designation, and the
owner may seek judicial review of the final designation decision. Thus far, 31 historic districts and over 400 individual
landmarks have been finally designated, [Footnote 12] and the process is a continuing one.

Final designation as a landmark results in restrictions upon the property owner's options concerning use of the landmark
site. First, the law imposes a duty upon the owner to keep the exterior features of the building "in good repair" to assure
that the law's objectives not be defeated by the landmark's

Page 438 U. S. 112

falling into a state of irremediable disrepair. See § 20710.0(a). Second, the Commission must approve in advance any
proposal to alter the exterior architectural features of the landmark or to construct any exterior improvement on the
landmark site, thus ensuring that decisions concerning construction on the landmark site are made with due
consideration of both the public interest in the maintenance of the structure and the landowner's interest in use of the
property. See §§ 207.0 to 207-9.0.

In the event an owner wishes to alter a landmark site, three separate procedures are available through which
administrative approval may be obtained. First, the owner may apply to the Commission for a "certificate of no effect on
protected architectural features": that is, for an order approving the improvement or alteration on the ground that it will
not change or affect any architectural feature of the landmark and will be in harmony therewith. See § 207-5.0. Denial of
the certificate is subject to judicial review.

Second, the owner may apply to the Commission for a certificate of "appropriateness." See § 207-6.0. Such certificates
will be granted if the Commission concludes -- focusing upon aesthetic, historical, and architectural values -- that the
proposed construction on the landmark site would not unduly hinder the protection, enhancement, perpetuation, and
use of the landmark. Again, denial of the certificate is subject to judicial review. Moreover, the owner who is denied
either a certificate of no exterior effect or a certificate of appropriateness may submit an alternative or modified plan for
approval. The final procedure -- seeking a certificate of appropriateness on the ground of "insufficient return," see §
207.0 -- provides special mechanisms, which vary depending on whether or not the landmark enjoys a tax exemption,
[Footnote 13] to ensure that designation does not cause economic hardship.
Page 438 U. S. 113

Although the designation of a landmark and landmark site restricts the owner's control over the parcel, designation also
enhances the economic position of the landmark owner in one significant respect. Under New York City's zoning laws,
owners of real property who have not developed their property

Page 438 U. S. 114

to the full extent permitted by the applicable zoning laws are allowed to transfer development rights to contiguous
parcels on the same city block. See New York City, Zoning Resolution Art. I, ch. 2, § 12-10(1978) (definition of "zoning
lot"). A 1968 ordinance gave the owners of landmark sites additional opportunities to transfer development rights to
other parcels. Subject to a restriction that the floor area of the transferee lot may not be increased by more than 20%
above its authorized level, the ordinance permitted transfers from a landmark parcel to property across the street or
across a street intersection. In 1969, the law governing the conditions under which transfers from landmark parcels
could occur was liberalized, see New York City Zoning Resolutions 74-79 to 74-793, apparently to ensure that the
Landmarks Law would not unduly restrict the development options of the owners of Grand Central Terminal. See
Marcus, Air Rights Transfers in New York City, 36 Law & Contemp.Prob. 372, 375 (1971). The class of recipient lots was
expanded to include lots

"across a street and opposite to another lot or lots which except for the intervention of streets or street intersections
f[or]m a series extending to the lot occupied by the landmark building[, provided that] all lots [are] in the same
ownership."

New York City Zoning Resolution 779 (emphasis deleted). [Footnote 14] In addition, the 1969 amendment permits, in
highly commercialized

Page 438 U. S. 115

areas like midtown Manhattan, the transfer of all unused development rights to a single parcel. Ibid.

This case involves the application of New York City's Landmarks Preservation Law to Grand Central Terminal (Terminal).
The Terminal, which is owned by the Penn Central Transportation Co. and its affiliates (Penn Central), is one of New York
City's most famous buildings. Opened in 1913, it is regarded not only as providing an ingenious engineering solution to
the problems presented by urban railroad stations, but also as a magnificent example of the French beaux-arts style.

The Terminal is located in midtown Manhattan. Its south facade faces 42d Street and that street's intersection with Park
Avenue. At street level, the Terminal is bounded on the west by Vanderbilt Avenue, on the east by the Commodore
Hotel, and on the north by the Pan-American Building. Although a 20-story office tower, to have been located above the
Terminal, was part of the original design, the planned tower was never constructed. [Footnote 15] The Terminal itself is
an eight-story structure which Penn Central uses as a railroad station and in which it rents space not needed for railroad
purposes to a variety of commercial interests. The Terminal is one of a number of properties owned by appellant Penn
Central in this area of midtown Manhattan. The others include the Barclay, Biltmore, Commodore, Roosevelt, and
Waldorf-Astoria Hotels, the Pan-American Building and other office buildings along Park Avenue, and the Yale Club. At
least eight of these are eligible to be recipients of development rights afforded the Terminal by virtue of landmark
designation.

On August 2, 1967, following a public hearing, the Commission designated the Terminal a "landmark" and designated
the

Page 438 U. S. 116

"city tax block" it occupies a "landmark site." [Footnote 16] The Board of Estimate confirmed this action on September
21, 1967. Although appellant Penn Central had opposed the designation before the Commission, it did not seek judicial
review of the final designation decision.

On January 22, 1968, appellant Penn Central, to increase its income, entered into a renewable 50-year lease and
sublease agreement with appellant UGP Properties, Inc. (UGP), a wholly owned subsidiary of Union General Properties,
Ltd., a United Kingdom corporation. Under the terms of the agreement, UGP was to construct a multistory office
building above the Terminal. UGP promised to pay Penn Central $1 million annually during construction and at least $3
million annually thereafter. The rentals would be offset in part by a loss of some $700,000 to $1 million in net rentals
presently received from concessionaires displaced by the new building.
Appellants UGP and Penn Central then applied to the Commission for permission to construct an office building atop the
Terminal. Two separate plans, both designed by architect Marcel Breuer and both apparently satisfying the terms of the
applicable zoning ordinance, were submitted to the Commission for approval. The first, Breuer I, provided for the
construction of a 55-story office building, to be cantilevered above the existing facade and to rest on the roof of the
Terminal. The second, Breuer II Revised, [Footnote 17] called for tearing

Page 438 U. S. 117

down a portion of the Terminal that included the 42d Street facade, stripping off some of the remaining features of the
Terminal's facade, and constructing a 53-story office building. The Commission denied a certificate of no exterior effect
on September 20, 1968. Appellants then applied for a certificate of "appropriateness" as to both proposals. After four
days of hearings at which over 80 witnesses testified, the Commission denied this application as to both proposals.

The Commission's reasons for rejecting certificates respecting Breuer II Revised are summarized in the following
statement: "To protect a Landmark, one does not tear it down. To perpetuate its architectural features, one does not
strip them off." Record 2255. Breuer I, which would have preserved the existing vertical facades of the present structure,
received more sympathetic consideration. The Commission first focused on the effect that the proposed tower would
have on one desirable feature created by the present structure and its surroundings: the dramatic view of the Terminal
from Park Avenue South. Although appellants had contended that the Pan-American Building had already destroyed the
silhouette of the south facade, and that one additional tower could do no further damage, and might even provide a
better background for the facade, the Commission disagreed, stating that it found the majestic approach from the south
to be still unique in the city, and that a 55-story tower atop the Terminal would be far more detrimental to its south
facade than the Pan-American Building 375 feet away. Moreover, the Commission found that, from closer vantage
points, the Pan-American Building and the other towers were largely cut off from view, which would not be the case of
the mass on top of the Terminal planned under Breuer I. In conclusion, the Commission stated:

"[We have] no fixed rule against making additions to designated buildings -- it all depends on how they are done. . . . But
to balance a 55-story office tower above

Page 438 U. S. 118

a flamboyant Beaux-Arts facade seems nothing more than an aesthetic joke. Quite simply, the tower would overwhelm
the Terminal by its sheer mass. The 'addition' would be four times as high as the existing structure, and would reduce
the Landmark itself to the status of a curiosity."

"Landmarks cannot be divorced from their settings -- particularly when the setting is a dramatic and integral part of the
original concept. The Terminal, in its setting, is a great example of urban design. Such examples are not so plentiful in
New York City that we can afford to lose any of the few we have. And we must preserve them in a meaningful way --
with alterations and additions of such character, scale, materials and mass as will protect, enhance and perpetuate the
original design, rather than overwhelm it."

Id. at 2251. [Footnote 18]

Appellants did not seek judicial review of the denial of either certificate. Because the Terminal site enjoyed a tax
exemption, [Footnote 19] remained suitable for its present and future uses, and was not the subject of a contract of
sale, there were no further administrative remedies available to appellants as to the Breuer I and Breuer II Revised
plans. See n 13, supra. Further, appellants did not avail themselves of the opportunity to develop

Page 438 U. S. 119

and submit other plans for the Commission's consideration and approval. Instead, appellants filed suit in New York
Supreme Court, Trial Term, claiming, inter alia, that the application of the Landmarks Preservation Law had "taken" their
property without just compensation in violation of the Fifth and Fourteenth Amendments and arbitrarily deprived them
of their property without due process of law in violation of the Fourteenth Amendment. Appellants sought a declaratory
judgment, injunctive relief barring the city from using the Landmarks Law to impede the construction of any structure
that might otherwise lawfully be constructed on the Terminal site, and damages for the "temporary taking" that
occurred between August 2, 1967, the designation date, and the date when the restrictions arising from the Landmarks
Law would be lifted. The trial court granted the injunctive and declaratory relief, but severed the question of damages
for a "temporary taking." [Footnote 20]

Appellees appealed, and the New York Supreme Court, Appellate Division, reversed. 50 App.Div.2d 265, 377 N.Y.S.2d
20(1975). The Appellate Division held that the restrictions on the development of the Terminal site were necessary to
promote the legitimate public purpose of protecting landmarks, and therefore that appellants could sustain their
constitutional claims only by proof that the regulation deprived them of all reasonable beneficial use of the property.
The Appellate Division held that the evidence appellants

Page 438 U. S. 120

introduced at trial -- "Statements of Revenues and Costs," purporting to show a net operating loss for the years 1969
and 1971, which were prepared for the instant litigation -- had not satisfied their burden. [Footnote 21] First, the court
rejected the claim that these statements showed that the Terminal was operating at a loss, for, in the court's view,
appellants had improperly attributed some railroad operating expenses and taxes to their real estate operations, and
compounded that error by failing to impute any rental value to the vast space in the Terminal devoted to railroad
purposes. Further, the Appellate Division concluded that appellants had failed to establish either that they were unable
to increase the Terminal's commercial income by transforming vacant or underutilized space to revenue-producing use
or that the unused development rights over the Terminal could not have been profitably transferred to one or more
nearby sites. [Footnote 22] The Appellate Division concluded that all appellants had succeeded in showing was that they
had been deprived of the property's most profitable use, and that this showing did not establish that appellants had
been unconstitutionally deprived of their property.

The New York Court of Appeals affirmed. 42 N.Y.2d 324, 366 N.E.2d 1271 (1977). That court summarily rejected any
claim that the Landmarks Law had "taken"

Page 438 U. S. 121

property without "just compensation," id. at 329, 366 N.E.2d at 1274, indicating that there could be no "taking," since
the law had not transferred control of the property to the city, but only restricted appellants' exploitation of it. In that
circumstance, the Court of Appeals held that appellants' attack on the law could prevail only if the law deprived
appellants of their property in violation of the Due Process Clause of the Fourteenth Amendment. Whether or not there
was a denial of substantive due process turned on whether the restrictions deprived Penn Central of a "reasonable
return" on the "privately created and privately managed ingredient" of the Terminal. Id. at 328, 366 N.E.2d at 1273.
[Footnote 23] The Court of Appeals concluded that the Landmarks Law had not effected a denial of due process
because: (1) the landmark regulation permitted the same use as had been made of the Terminal for more than half a
century; (2) the appellants had failed to show that they could not earn a reasonable return on their investment in the
Terminal itself; (3) even if the Terminal proper could never operate at a reasonable profit, some of the income from
Penn Central's extensive real estate holdings in the area, which include hotels and office buildings, must realistically be
imputed to the Terminal; and

Page 438 U. S. 122

(4) the development rights above the Terminal, which had been made transferable to numerous sites in the vicinity of
the Terminal, one or two of which were suitable for the construction of office buildings, were valuable to appellants and
provided "significant, perhaps fair,' compensation for the loss of rights above the terminal itself." Id. at 333-336, 366
N.E.2d at 1276-1278.

Observing that its affirmance was "[o]n the preset record," and that its analysis had not been fully developed by counsel
at any level of the New York judicial system, the Court of Appeals directed that counsel

"should be entitled to present . . . any additional submissions which, in the light of [the court's] opinion, may usefully
develop further the factors discussed."

Id. at 337, 366 N.E.2d at 1279. Appellants chose not to avail themselves of this opportunity, and filed a notice of appeal
in this Court. We noted probable jurisdiction. 434 U.S. 983 (1977). We affirm.

II

The issues presented by appellants are (1) whether the restrictions imposed by New York City's law upon appellants'
exploitation of the Terminal site effect a "taking" of appellants' property for a public use within the meaning of the Fifth
Amendment, which, of course, is made applicable to the States through the Fourteenth Amendment, see Chicago, B. &
Q. R. Co. v. Chicago, 166 U. S. 226, 166 U. S. 239 (1807), and, (2), if so, whether the transferable development rights
afforded appellants constitute "just compensation" within the meaning of the Fifth Amendment. [Footnote 24] We need
only address the question whether a "taking" has occurred. [Footnote 25]

Page 438 U. S. 123

A
Before considering appellants' specific contentions, it will be useful to review the factors that have shaped the
jurisprudence of the Fifth Amendment injunction "nor shall private property be taken for public use, without just
compensation." The question of what constitutes a "taking" for purposes of the Fifth Amendment has proved to be a
problem of considerable difficulty. While this Court has recognized that the

"Fifth Amendment's guarantee . . . [is] designed 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,"

Armstrong v. United States, 364 U.S.

Page 438 U. S. 124

40, 364 U. S. 49 (1960), this Court, quite simply, has been unable to develop any "set formula" for determining when
"justice and fairness" require that economic injuries caused by public action be compensated by the government, rather
than remain disproportionately concentrated on a few persons. See Goldblatt v. Hempstead, 369 U. S. 590, 369 U. S. 594
(1962). Indeed, we have frequently observed that whether a particular restriction will be rendered invalid by the
government's failure to pay for any losses proximately caused by it depends largely "upon the particular circumstances
[in that] case." United States v. Central Eureka Mining Co., 357 U. S. 155, 357 U. S. 168 (1958); see United States v.
Caltex, Inc., 344 U. S. 149, 344 U. S. 156 (1952).

In engaging in these essentially ad hoc, factual inquiries, the Court's decisions have identified several factors that have
particular significance. The economic impact of the regulation on the claimant and, particularly, the extent to which the
regulation has interfered with distinct investment-backed expectations are, of course, relevant considerations. See
Goldblatt v. Hempstead, supra at 369 U. S. 594. So, too, is the character of the governmental action. A "taking" may
more readily be found when the interference with property can be characterized as a physical invasion by government,
see, e.g., United States v. Causby, 328 U. S. 256 (1946), than when interference arises from some public program
adjusting the benefits and burdens of economic life to promote the common good.

"Government hardly could go on if, to some extent, values incident to property could not be diminished without paying
for every such change in the general law,"

Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 260 U. S. 413 (1922), and this Court has accordingly recognized, in a wide
variety of contexts, that government may execute laws or programs that adversely affect recognized economic values.
Exercises of the taxing power are one obvious example. A second are the decisions in which this Court has dismissed
"taking" challenges on the ground that, while the challenged government action caused

Page 438 U. S. 125

economic harm, it did not interfere with interests that were sufficiently bound up with the reasonable expectations of
the claimant to constitute "property" for Fifth Amendment purposes. See, e.g., United States v. Willow River Power Co.,
324 U. S. 499 (1945) (interest in high-water level of river for runoff for tailwaters to maintain power head is not
property); United States v. Chandler-Dunbar Water Power Co., 229 U. S. 53 (1913) (no property interest can exist in
navigable waters); see also Demorest v. City Bank Co., 321 U. S. 36 (1944); Muhlker v. Harlem R. Co., 197 U. S. 544
(1905); Sax, Takings and the Police Power, 74 Yale L.J. 36, 62 (1964).

More importantly for the present case, in instances in which a state tribunal reasonably concluded that "the health,
safety, morals, or general welfare" would be promoted by prohibiting particular contemplated uses of land, this Court
has upheld land use regulations that destroyed or adversely affected recognized real property interests. See Nectow v.
Cambridge, 277 U. S. 183, 277 U. S. 188 (1928). Zoning laws are, of course, the classic example, see Euclid v. Ambler
Realty Co., 272 U. S. 365 (1026) (prohibition of industrial use); Gorieb v. Fox, 274 U. S. 603, 274 U. S. 608 (1927)
(requirement that portions of parcels be left unbuilt); Welch v. Swasey, 214 U. S. 91 (1909) (height restriction), which
have been viewed as permissible governmental action even when prohibiting the most beneficial use of the property.
See Goldblatt v. Hempstead, supra at 369 U. S. 592-593, and cases cited; see also Eastlake v. Forest City Enterprises, Inc.,
426 U. S. 668, 426 U. S. 674 n. 8 (1976).

Zoning laws generally do not affect existing uses of real property, but "taking" challenges have also been held to be
without merit in a wide variety of situations when the challenged governmental actions prohibited a beneficial use to
which individual parcels had previously been devoted, and thus caused substantial individualized harm. Miller v.
Schoene, 276 U. S. 272 (1928), is illustrative. In that case, a state entomologist, acting pursuant to a state statute,
ordered

Page 438 U. S. 126

the claimants to cut down a large number of ornamental red cedar trees because they produced cedar rust fatal to apple
trees cultivated nearby. Although the statute provided for recovery of any expense incurred in removing the cedars, and
permitted claimants to use the felled trees, it did not provide compensation for the value of the standing trees or for the
resulting decrease in market value of the properties as a whole. A unanimous Court held that this latter omission did not
render the statute invalid. The Court held that the State might properly make "a choice between the preservation of one
class of property and that of the other," and, since the apple industry was important in the State involved, concluded
that the State had not exceeded

"its constitutional powers by deciding upon the destruction of one class of property [without compensation] in order to
save another which, in the judgment of the legislature, is of greater value to the public."

Id. at 276 U. S. 279.

Again, Hadacheck v. Sebastian, 239 U. S. 394 (1915), upheld a law prohibiting the claimant from continuing his otherwise
lawful business of operating a brickyard in a particular physical community on the ground that the legislature had
reasonably concluded that the presence of the brickyard was inconsistent with neighboring uses. See also United States
v. Central Eureka Mining Co., supra, (Government order closing gold mines so that skilled miners would be available for
other mining work held not a taking); Atchison, T. & S. F. R. Co. v. Public Utilities Comm'n, 346 U. S. 346 (1953) (railroad
may be required to share cost of constructing railroad grade improvement); Walls v. Midland Carbon Co., 254 U. S. 300
(1920) (law prohibiting manufacture of carbon black upheld); Reinman v. Little Rock, 237 U. S. 171 (1915) (law
prohibiting livery stable upheld); Mugler v. Kansas, 123 U. S. 623 (1887) (law prohibiting liquor business upheld).

Goldblatt v. Hempstead, supra, is a recent example. There, a 1958 city safety ordinance banned any excavations below

Page 438 U. S. 127

the water table and effectively prohibited the claimant from continuing a sand and gravel mining business that had been
operated on the particular parcel since 1927. The Court upheld the ordinance against a "taking" challenge, although the
ordinance prohibited the present and presumably most beneficial use of the property, and had, like the regulations in
Miller and Hadacheck, severely affected a particular owner. The Court assumed that the ordinance did not prevent the
owner's reasonable use of the property, since the owner made no showing of an adverse effect on the value of the land.
Because the restriction served a substantial public purpose, the Court thus held no taking had occurred. It is, of course,
implicit in Goldblatt that a use restriction on real property may constitute a "taking" if not reasonably necessary to the
effectuation of a substantial public purpose, see Nectow v. Cambridge, supra; cf. Moore v. East Cleveland, 431 U. S. 494,
431 U. S. 513-514 (1977) (STEVENS, J., concurring), or perhaps if it has an unduly harsh impact upon the owner's use of
the property.

Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 (1922), is the leading case for the proposition that a state statute that
substantially furthers important public policies may so frustrate distinct investment-backed expectations as to amount
to a "taking." There the claimant had sold the surface rights to particular parcels of property, but expressly reserved the
right to remove the coal thereunder. A Pennsylvania statute, enacted after the transactions, forbade any mining of coal
that caused the subsidence of any house, unless the house was the property of the owner of the underlying coal and
was more than 150 feet from the improved property of another. Because the statute made it commercially
impracticable to mine the coal, id. at 260 U. S. 414, and thus had nearly the same effect as the complete destruction of
rights claimant had reserved from the owners of the surface land, see id. at 260 U. S. 414-415, the Court held that the
statute was invalid as effecting a "taking"

Page 438 U. S. 128

without just compensation. See also Armstrong v. United States, 364 U. S. 40 (1960) (Government's complete
destruction of a materialman's lien in certain property held a "taking"); Hudson Water Co. v. McCarter, 209 U. S. 349,
209 U. S. 355 (1908) (if height restriction makes property wholly useless "the rights of property . . . prevail over the other
public interest" and compensation is required). See generally Michelman, Property, Utility, and Fairness: Comments on
the Ethical Foundations of "Just Compensation" Law, 80 Harv.L.Rev. 1165, 1229-1234 (1967).

Finally, government actions that may be characterized as acquisitions of resources to permit or facilitate uniquely public
functions have often been held to constitute "takings." United States v. Causby, 328 U. S. 256 (1946), is illustrative. In
holding that direct overflights above the claimant's land, that destroyed the present use of the land as a chicken farm,
constituted a "taking," Causby emphasized that Government had not "merely destroyed property [but was] using a part
of it for the flight of its planes." Id. at 328 U. S. 262-263, n. 7. See also Griggs v. Allegheny County, 369 U. S. 84 (1962)
(overflights held a taking); Portsmouth Co. v. United States, 260 U. S. 327 (1922) (United States military installations'
repeated firing of guns over claimant's land is a taking); United States v. Cress, 243 U. S. 316 (1917) (repeated floodings
of land caused by water project is a taking); but see YMCA v. United States, 395 U. S. 85 (1969) (damage caused to
building when federal officers who were seeking to protect building were attacked by rioters held not a taking). See
generally Michelman, supra at 1226-1229; Sax, Takings and the Police Power, 74 Yale L.J. 36 (1964).

In contending that the New York City law has "taken" their property in violation of the Fifth and Fourteenth
Amendments, appellants make a series of arguments, which, while tailored to the facts of this case, essentially urge that

Page 438 U. S. 129

any substantial restriction imposed pursuant to a landmark law must be accompanied by just compensation if it is to be
constitutional. Before considering these, we emphasize what is not in dispute. Because this Court has recognized, in a
number of settings, that States and cities may enact land use restrictions or controls to enhance the quality of life by
preserving the character and desirable aesthetic features of a city, see New Orleans v. Dukes, 427 U. S. 297 (1976);
Young v. American Mini Theatres, Inc., 427 U. S. 50 (1976); Village of Belle Terre v. Boraas, 416 U. S. 1, 416 U. S. 9-10
(1974); Berman v. Parker, 348 U. S. 26, 348 U. S. 33 (1954); Welch v. Swasey, 214 U.S. at 214 U. S. 108, appellants do not
contest that New York City's objective of preserving structures and areas with special historic, architectural, or cultural
significance is an entirely permissible governmental goal. They also do not dispute that the restrictions imposed on its
parcel are appropriate means of securing the purposes of the New York City law. Finally, appellants do not challenge any
of the specific factual premises of the decision below. They accept for present purposes both that the parcel of land
occupied by Grand Central Terminal must, in its present state, be regarded as capable of earning a reasonable return
[Footnote 26] and that the transferable development rights afforded appellants by virtue of the Terminal's designation
as a landmark are valuable, even if not as valuable as the rights to construct above the Terminal. In appellants' view,
none of these factors derogate from their claim that New York City's law has effected a "taking."

Page 438 U. S. 130

They first observe that the airspace above the Terminal is a valuable property interest, citing United States v. Causby,
supra. They urge that the Landmarks Law has deprived them of any gainful use of their "air rights" above the Terminal
and that, irrespective of the value of the remainder of their parcel, the city has "taken" their right to this superjacent
airspace, thus entitling them to "just compensation" measured by the fair market value of these air rights.

Apart from our own disagreement with appellants' characterization of the effect of the New York City law, see infra at
438 U. S. 134-135, the submission that appellants may establish a "taking" simply by showing that they have been
denied the ability to exploit a property interest that they heretofore had believed was available for development is quite
simply untenable. Were this the rule, this Court would have erred not only in upholding laws restricting the
development of air rights, see Welch v. Swasey, supra, but also in approving those prohibiting both the subjacent, see
Goldblatt v. Hempstead, 369 U. S. 590 (1962), and the lateral, see Gorieb v. Fox, 274 U. S. 603 (1927), development of
particular parcels. [Footnote 27] "Taking" jurisprudence does not divide a single parcel into discrete segments and
attempt to determine whether rights in a particular segment have been entirely abrogated. In deciding whether a
particular governmental action ha effected a taking, this Court focuses rather both on the character of the action and on
the nature and extent of the interference with rights in the

Page 438 U. S. 131

parcel as a whole -- here, the city tax block designated as the "landmark site."

Secondly, appellants, focusing on the character and impact of the New York City law, argue that it effects a "taking"
because its operation has significantly diminished the value of the Terminal site. Appellants concede that the decisions
sustaining other land use regulations, which, like the New York City law, are reasonably related to the promotion of the
general welfare, uniformly reject the proposition that diminution in property value, standing alone, can establish a
"taking," see Euclid v. Ambler Realty Co., 272 U. S. 365 (1926) (75% diminution in value caused by zoning law);
Hadacheck v. Sebastian, 239 U. S. 394 (1915) (87 1/2% diminution in value); cf. Eastlake v. Forest City Enterprises, Inc.,
426 U.S. at 426 U. S. 674 n. 8, and that the "taking" issue in these contexts is resolved by focusing on the uses the
regulations permit. See also Goldblatt v. Hempstead, supra. Appellants, moreover, also do not dispute that a showing of
diminution in property value would not establish a "taking" if the restriction had been imposed as a result of historic
district legislation, see generally Maher v. New Orleans, 516 F.2d 1051 (CA5 1975), but appellants argue that New York
City's regulation of individual landmarks is fundamentally different from zoning or from historic district legislation
because the controls imposed by New York City's law apply only to individuals who own selected properties.

Stated baldly, appellants' position appears to be that the only means of ensuring that selected owners are not singled
out to endure financial hardship for no reason is to hold that any restriction imposed on individual landmarks pursuant
to the New York City scheme is a "taking" requiring the payment of "just compensation." Agreement with this argument
would, of course, invalidate not just New York City's law, but all comparable landmark legislation in the Nation. We find
no merit in it.

Page 438 U. S. 132

It is true as appellants emphasize, that both historic district legislation and zoning laws regulate all properties within
given physical communities whereas landmark laws apply only to selected parcels. But, contrary to appellants'
suggestions, landmark laws are not like discriminatory, or "reverse spot," zoning: that is, a land use decision which
arbitrarily singles out a particular parcel for different, less favorable treatment than the neighboring ones. See 2 A.
Rathkopf, The Law of Zoning and Planning 26-4, and n. 6 (4th ed.1978). In contrast to discriminatory zoning, which is the
antithesis of land use control as part of some comprehensive plan, the New York City law embodies a comprehensive
plan to preserve structures of historic or aesthetic interest wherever they might be found in the city, [Footnote 28] and,
as noted, over 400 landmarks and 31 historic districts have been designated pursuant to this plan.

Equally without merit is the related argument that the decision to designate a structure as a landmark "is inevitably
arbitrary, or at least subjective, because it is basically a matter of taste," Reply Brief for Appellants 22, thus unavoidably
singling out individual landowners for disparate and unfair treatment. The argument has a particularly hollow ring in this
case. For appellants not only did not seek judicial review of either the designation or of the denials of the certificates of
appropriateness and of no exterior effect, but do not even now suggest that the Commission's decisions concerning the
Terminal were in any sense arbitrary or unprincipled. But, in

Page 438 U. S. 133

any event, a landmark owner has a right to judicial review of any Commission decision, and, quite simply, there is no
basis whatsoever for a conclusion that courts will have any greater difficulty identifying arbitrary or discriminatory action
in the context of landmark regulation than in the context of classic zoning or indeed in any other context. [Footnote 29]

Next, appellants observe that New York City's law differs from zoning laws and historic district ordinances in that the
Landmarks Law does not impose identical or similar restrictions on all structures located in particular physical
communities. It follows, they argue, that New York City's law is inherently incapable of producing the fair and equitable
distribution of benefits and burdens of governmental action which is characteristic of zoning laws and historic district
legislation and which, they maintain, is a constitutional requirement if "just compensation" is not to be afforded. It is, of
course, true that the Landmarks Law has a more severe impact on some landowners than on others, but that, in itself,
does not mean that the law effects a "taking." Legislation designed to promote the general welfare commonly burdens
some more than others. The owners of the brickyard in Hadacheck, of the cedar trees in Miller v. Schoene, and of the
gravel and sand mine in Goldblatt v. Hempstead, were uniquely burdened by the legislation sustained in those cases.
[Footnote 30] Similarly, zoning

Page 438 U. S. 134

laws often affect some property owners more severely than others, but have not been held to be invalid on that
account. For example, the property owner in Euclid who wished to use its property for industrial purposes was affected
far more severely by the ordinance than its neighbors who wished to use their land for residences.

In any event, appellants' repeated suggestions that they are solely burdened and unbenefited is factually inaccurate.
This contention overlooks the fact that the New York City law applies to vast numbers of structures in the city in addition
to the Terminal -- all the structures contained in the 31 historic districts and over 400 individual landmarks, many of
which are close to the Terminal. [Footnote 31] Unless we are to reject the judgment of the New York City Council that
the preservation of landmarks benefits all New York citizens and all structures, both economically and by improving the
quality of life in the city as a whole -- which we are unwilling to do -- we cannot

Page 438 U. S. 135

conclude that the owners of the Terminal have in no sense been benefited by the Landmarks Law. Doubtless appellants
believe they are more burdened than benefited by the law, but that must have been true, too, of the property owners in
Miller, Hadacheck, Euclid, and Goldblatt. [Footnote 32]

Appellants' final broad-based attack would have us treat the law as an instance, like that in United States v. Causby, in
which government, acting in an enterprise capacity, has appropriated part of their property for some strictly
governmental purpose. Apart from the fact that Causby was a case of invasion of airspace that destroyed the use of the
farm beneath, and this New York City law has in nowise impaired the present use of the Terminal, the Landmarks Law
neither exploits appellants' parcel for city purposes nor facilitates nor arises from any entrepreneurial operations of the
city. The situation is not remotely like that in Causby, where the airspace above the property was in the flight pattern for
military aircraft. The Landmarks Law's effect is simply to prohibit appellants or anyone else from occupying portions of
the airspace above the Terminal, while permitting appellants to use the remainder of the parcel in a gainful fashion. This
is no more an appropriation of property by government for its own uses than is a zoning law prohibiting, for "aesthetic"
reasons, two or more adult theaters within a specified area, see Young v. American Mini Theatres, Inc., 427 U. S. 50
(1976), or a safety regulation prohibiting excavations below a certain level. See Goldblatt v. Hempstead.

Rejection of appellants' broad arguments is not, however, the end of our inquiry, for all we thus far have established is

Page 438 U. S. 136

that the New York City law is not rendered invalid by its failure to provide "just compensation" whenever a landmark
owner is restricted in the exploitation of property interests, such as air rights, to a greater extent than provided for
under applicable zoning laws. We now must consider whether the interference with appellant' property is of such a
magnitude that "there must be an exercise of eminent domain and compensation to sustain [it]." Pennsylvania Coal Co.
v. Mahon, 260 U.S. at 260 U. S. 413. That inquiry may be narrowed to the question of the severity of the impact of the
law on appellants' parcel, and its resolution, in turn, requires a careful assessment of the impact of the regulation on the
Terminal site.

Unlike the governmental acts in Goldblatt, Miller, Causby, Griggs, and Hadacheck, the New York City law does not
interfere in any way with the present uses of the Terminal. Its designation as a landmark not only permits, but
contemplates, that appellants may continue to use the property precisely as it has been used for the past 65 years: as a
railroad terminal containing office space and concessions. So the law does not interfere with what must be regarded as
Penn Central's primary expectation concerning the use of the parcel. More importantly, on this record, we must regard
the New York City law as permitting Penn Central not only to profit from the Terminal but also to obtain a "reasonable
return" on its investment.

Appellants, moreover, exaggerate the effect of the law on their ability to make use of the air rights above the Terminal in
two respects. [Footnote 33] First, it simply cannot be maintained, on this record, that appellants have been prohibited
from occupying any portion of the airspace above the Terminal. While the Commission's actions in denying applications
to construct an

Page 438 U. S. 137

office building in excess of 50 stories above the Terminal may indicate that it will refuse to issue a certificate of
appropriateness for any comparably sized structure, nothing the Commission has said or done suggests an intention to
prohibit ay construction above the Terminal. The Commission's report emphasized that whether any construction would
be allowed depended upon whether the proposed addition "would harmonize in scale, material, and character with [the
Terminal]." Record 2251. Since appellants have not sought approval for the construction of a smaller structure, we do
not know that appellants will be denied any use of any portion of the airspace above the Terminal. [Footnote 34]

Second, to the extent appellants have been denied the right to build above the Terminal, it is not literally accurate to say
that they have been denied all use of even those preexisting air rights. Their ability to use these rights has not been
abrogated; they are made transferable to at least eight parcels in the vicinity of the Terminal, one or two of which have
been found suitable for the construction of new office buildings. Although appellants and others have argued that New
York City's transferable development rights program is far from ideal, [Footnote 35] the New York courts here
supportably found that, at least in the case of the Terminal, the rights afforded are valuable. While these rights may well
not have constituted "just compensation" if a "taking" had occurred, the rights nevertheless undoubtedly mitigate
whatever financial burdens the law has imposed on appellants and, for that reason, are to be taken into account in
considering the impact of regulation. Cf. Goldblatt v. Hempstead, 369 U.S. at 369 U. S. 594 n. 3.

Page 438 U. S. 138

On this record, we conclude that the application of New York City's Landmarks Law has not effected a "taking" of
appellants' property. The restrictions imposed are substantially related to the promotion of the general welfare, and not
only permit reasonable beneficial use of the landmark site, but also afford appellants opportunities further to enhance
not only the Terminal site proper but also other properties. [Footnote 36]

Affirmed.
17. NATIONAL POWER CORPORATION, Petitioner, v. TERESITA DIATO-BERNAL, Respondent.

At bar is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the reversal of the September
28, 2007 Decision1 and the December 17, 2007 Resolution2 of the Court of Appeals (CA).

The assailed issuances affirmed the January 14, 2000 Order3 of the Regional Trial Court (RTC), Branch 20, Imus, Cavite,
which fixed the just compensation at ₱10,000.00 per square meter (sq m), in relation to the expropriation suit, entitled
"National Power Corporation v. Teresita Diato-Bernal."

The factual antecedents are undisputed.

Petitioner National Power Corporation (NAPOCOR) is a government owned and controlled corporation created by
Republic Act No. 6395,4 as amended, 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.5

Respondent Teresita Diato-Bernal (respondent) is the registered owner of a 946 sq m parcel of land situated along
General Aguinaldo Highway, Imus, Cavite, covered by Transfer Certificate of Title No. T-384494.6

In order to complete the construction of structures and steel posts for NAPOCOR’s "Dasmariñas-Zapote 230 KV
Transmission Line Project," it had to acquire an easement of right of way over respondent’s property.7

Thus, on January 8, 1997, NAPOCOR filed an expropriation suit against respondent, alleging, inter alia, that: the project is
for public purpose; NAPOCOR negotiated with respondent for the price of the property, as prescribed by law, but the
parties failed to reach an agreement; and NAPOCOR is willing to deposit the amount of Eight Hundred Fifty- Three Pesos
and 72/100 (₱853.72), representing the assessed value of the property for taxation purposes.8

Respondent moved for the action’s dismissal, arguing the impropriety of the intended expropriation, and claiming that
the value of her property is Twenty Thousand Pesos (₱20,000.00) per sq m for the front portion, and Eighteen Thousand
Pesos (₱18,000.00) per sq m for the rear portion, and that she will lose One Hundred Fifty Thousand Pesos
(₱150,000.00) per month by way of expected income if the property is expropriated.9

On September 25, 1998, the parties filed with the RTC a partial compromise agreement,10 which reads:

1. That the parties, after earnest and diligent efforts, have reached an amicable settlement regarding the location and
size of Pole Site No. DZ-70 to be constructed on the property of (respondent);

2. That the parties have agreed that the said Pole Site No. DZ-70 shall be constructed or located on (respondent’s) Lot
No. 6075-B covered by Transfer Certificate of Title No. T-384494 of the Registry of Deeds for Cavite, covering a total
affected area of 29.25 square meters more or less as indicated in the Sketch hereto attached as Annex "A";

3. That the case shall[,] however, proceed to trial on its merits only with respect to the question of just compensation.

The agreement was approved by the RTC in its Order dated September 25, 1998.11

With the first phase of the expropriation proceedings having been laid to rest by the partial compromise agreement, the
RTC proceeded to determine the amount of just compensation. To assist in the evaluation of the fair market value of the
subject property, the RTC appointed three (3) commissioners, viz.: (1) the Provincial Assessor of Cavite; (2) the Municipal
Assessor of Imus, Cavite, upon recommendation of NAPOCOR; and (3) Soledad Zamora, respondent’s representative.12
The commissioners submitted their report to the RTC on September 14, 1999. In the main, they recommended that the
just compensation due from NAPOCOR be pegged at ₱10,000.00 per sq m, based on the property’s fair market value.13

NAPOCOR filed an Opposition14 to the Commissioner’s Valuation Report, asserting that it was not substantiated by any
official documents or registered deeds of sale of the subject property’s neighboring lots. NAPOCOR invoked our ruling in
Rep. of the Phil. v. Santos,15 wherein we held that a commissioner’s report that is not based on any documentary
evidence is hearsay and should be disregarded by the court. Lastly, NAPOCOR claimed that the just compensation for
the expropriated property should be ₱3,500.00 per sq m, based on Resolution No. 08-95 dated October 23, 1995,
enacted by the Provincial Appraisal Committee of Cavite (PAC-Cavite).

On January 14, 2000, the RTC issued an Order adopting the recommendation of the commissioners, viz.:

To the mind of the Court, the appraisal made by the Commissioners is just and reasonable. It is of judicial notice that
land values in Cavite ha[ve] considerably increased. Such being the case, the just compensation is fixed at ₱10,000.00
per sq. meter.16
Dissatisfied, NAPOCOR sought recourse with the CA, reiterating the arguments raised in its Opposition.

On September 28, 2007, the CA rendered its Decision affirming the RTC’s judgment.17 Its motion for reconsideration18
having been denied,19 NAPOCOR interposed the present petition.

NAPOCOR, through the Office of the Solicitor General, repleads its contentions before the courts a quo and adds that the
CA failed to explain why the value of the subject property went up by almost 200% in a span of two (2) years - ₱3,500.00
per sq m in 1995 to ₱10,000.00 per sq m at the time of the filing of the expropriation complaint in 1997.

For her part, respondent prays for the dismissal of the petition on the ground that it raises purely factual questions
which are beyond the province of a Petition for Review on Certiorari under Rule 45 of the Rules of Court.

The petition is meritorious.

We shall first address the procedural infirmity raised by respondent.

In Santos v. Committee on Claims Settlement,20 the Court had occasion to delineate the distinction between a question
of law and a question of fact, thus: A question of law exists when there is doubt or controversy on what the law is on a
certain state of facts. There is a question of fact when the doubt or difference arises from the truth or the falsity of the
allegations of facts.

The Court elucidated as follows:

A question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence to a
certain set of facts; or when the issue does not call for an examination of the probative value of the evidence presented,
the truth or falsehood of facts being admitted. A question of fact exists when the doubt or difference arises as to the
truth or falsehood of facts or when the query invites calibration of the whole evidence considering mainly the credibility
of the witnesses, the existence and relevancy of specific surrounding circumstances as well as their relation to each
other and to the whole, and the probability of the situation.21

In this case, it is clear that NAPOCOR raises a question of law, that is, whether or not the resolution of the PAC-Cavite
should prevail over the valuation report of the court-appointed commissioners. The issue does not call for a recalibration
or reevaluation of the evidence submitted by the parties, but rather the determination of whether the pertinent
jurisprudence and laws cited by NAPOCOR in support of its argument are applicable to the instant case.

On the substantive issue, the Court finds that the CA and the RTC erred in relying on the unsubstantiated and insufficient
findings contained in the commissioners’ report.

In arriving at the ₱10,000.00 per sq m market value of the expropriated property, the commissioners utilized the
following factors:

I. PROPERTY LOCATION

The property subject of the appraisal is situated along Gen. Aguinaldo Highway, Brgy. Anabu, Municipality of Imus,
Province of Cavite, consisting of 946 sq. m. more or less, identified as Lot 6075-B with Flat Terrain approximately 5 kms.
Distance Southwest of Imus Town proper, about 500 to 600 m. from the entrance gate of Orchard Club and San Miguel
Yamamura Corp. from Southeast around 1 km. [t]o 1.5 kms. From EMI (Yasaki), Makro, and Robinsons Department
Store.

II. NEGHBORHOOD DESCRIPTION

The neighborhood particularly in the immediate vicinity, is within a mixed residential and commercial area situated in
the Southern Section of the Municipality of Imus which is transversed by Gen. Emilio Aguinaldo Highway w[h]ere several
residential subdivisions and commercial establishments are located.

Residential houses in the area are one to two storey in height constructed of concrete and wood materials belonging to
families in the middle income bracket, while commercial buildings mostly located along Gen. Emilio Aguinaldo Highway.

Some of the important landmarks and commercial establishments in the immediate vicinity are:

Newly constructed Robinsons Department Store

Makro
Caltex Gasoline station and Shell Gasoline station
Goldbomb Const. Corp.
EMI (Yasaki)
Pallas Athena Subd.
and various Commercial and Savings Banks

Community [c]enters such as school, churches, public markets, shopping malls, banks and gasoline stations are easily
accessible from the subject property.

Convenience facility such as electricity, telephone service as well as pipe potable water supply system are all available
along Gen. Aguinaldo Highway

IV. VALUATION OF LAND MARKET DATA

This method of valuation involves the research and investigation of market and sales data of the properties comparable
with the property under appraisal.

These other properties are compare[d] with the subject property as to location and physical characteristics. Adjustment
of their selling prices [is] then made with respect to the said comparative elements as well as time compensate for the
increase or decrease in value.

Based on our investigations and verifications of market sales data and price listings of the neighborhood where the
property under appraisal is located indicates land value within the range of ₱10,000.00 to ₱15,000.00 per square meter
for residential lots while commercial lots along Gen. E. Aguinaldo Highway are range[d] from ₱10,000.00 to ₱20,000.00
per square meters (sic).

With this data and making the proper adjustment with respect to the location, area, shape, accessibility, and the highest
and best use of the subject property, we estimate the market value of the subject land at ₱10,000.00 per square meter,
as of this date September 10, 1999.22

It is evident that the above conclusions are highly speculative and devoid of any actual and reliable basis. First, the
market values of the subject property’s neighboring lots were mere estimates and unsupported by any corroborative
documents, such as sworn declarations of realtors in the area concerned, tax declarations or zonal valuation from the
Bureau of Internal Revenue for the contiguous residential dwellings and commercial establishments. The report also
failed to elaborate on how and by how much the community centers and convenience facilities enhanced the value of
respondent’s property.23 Finally, the market sales data and price listings alluded to in the report were not even
appended thereto.1avvphi1

As correctly invoked by NAPOCOR, a commissioners’ report of land prices which is not based on any documentary
evidence is manifestly hearsay and should be disregarded by the court.24

The trial court adopted the flawed findings of the commissioners hook, line, and sinker. It did not even bother to require
the submission of the alleged "market sales data" and "price listings." Further, 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 is settled 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.25 Clearly, the recommended just compensation in the commissioners’ report is unacceptable.

Just compensation is defined 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 ample.26 Indeed, the "just"-ness of the compensation can only be attained by using reliable
and actual data as bases in fixing the value of the condemned property.

The trial court should have been more circumspect in its evaluation of just compensation due the property owner,
considering that eminent domain cases involve the expenditure of public funds.

As to the resolution of the PAC-Cavite advanced by NAPOCOR, which pegged the fair market value of the property at
₱3,500.00 per sq m, it can only serve as one of the factors in the judicial evaluation of just compensation, along with
several other considerations.27 NAPOCOR cannot demand that the PAC-Cavite resolution be substituted for the report
of court-appointed commissioners in consonance with the firm doctrine that the determination of just compensation is a
judicial function.28
Hence, the legal basis for the determination of just compensation being insufficient, the ruling of the RTC and the
affirming Decision and Resolution of the CA ought to be set aside.

WHEREFORE, the petition is GRANTED. The January 14, 2000 Order of the Regional Trial Court, Branch 120, Imus, Cavite,
and the September 28, 2007 Decision and the December 17, 2007 Resolution of the Court of Appeals are hereby Set
ASIDE. This case is remanded to the trial court for the proper determination of just compensation, in conformity with
this Resolution. No costs.
18. Land Bank v. Palmares (G.R. No. 192890; June 17, 2013)

FACTS: Respondents inherited a 19.98 hectare agricultural land located in Iloilo. In 1995, they voluntarily offered the
land for sale to the government pursuant to the Comprehensive Agrarian Law of 1988. DAR acquired 19.107 hectares of
the entire are which was valued by LBP at P440,355.92. Respondents rejected said amount. DARAB resolved to adopt
LBPs valuation. Hence, the same amount was deposited to respondents credit as provisional compensation.

The RTC of Iloilo ordered LBP to recomputed hence the land increased from 440,355.92 to 503,148.97. Respondents still
rejected the offer.

RTC rendered a decision fixing the just compensation to 669,962.53. The trial court arrived at its own computation by
getting an average of the price per hectare as computed by LBP in accordance with DAR guidelines and the market value
of the land per hectare as shown in the tax declaration.

LBP appealed to the CA arguing that the computation made by the RTC failed to consider the factors in determining just
compensation an enumerated under section 17 of RA 6657.

The appellate court affirmed RTC ruling as having been arrived at in consonance with Section 17 of RA 6657. It
emphasized that the determination of just compensation in eminent domain proceedings is essentially a judicial function
and, in the exercise thereof, courts should be given ample discretion and should not be delimited by mathematical
formulas.

ISSUE: Is the CA's ruling correct?

HELD: The principal basis of the computation for just compensation is Section 17 of RA 6657,which enumerates the
following factors to guide the special agrarian courts in the determination thereof :

[1] Acquisition cost of the land

[2] Current value of the properties
[3] Its nature, actual use, and income
[4] The sworn valuation by the owner
[5] The tax declaration
[6] The assessment made by government assessors
[7]The social and economic benefits contributed by the farmers and the farmworkers, and by the government to the
property
[8] The non payment of taxes or loans secured from any government financing institution of the said land, if any

In the instant case, the trial court found to be unrealistically low the total valuation by LBP and the DAR in the amount of
P440,355.92, which was computed on the basis of DAR AO No. 6 series of 1992 as amended by DAR AO No. 11 Series of
1994. It then merely proceeded to add said valuation to the market value of the subject land as appearing in the 1997
tax declaration, and used the average of such values to fix the just compensation.

While the determination of just compensation is essentially a judicial function vestd in the RTC acting as a special
agrarian court, the judge cannot abuse his discretion by not taking into full consideration the factors specifically
identified by law and implementing rules.

We agree with the LBP that the double take up of the market value per tax declaration as a valuation factor completely
destroys the rationale of the formula laid down by the DAR. GRANTED.

The Court's Ruling

There is merit in the instant petition.

The principal basis of the computation for just compensation is Section 17 of RA 6657,20 which enumerates the
following factors to guide the special agrarian courts in the determination thereof: (1) the acquisition cost of the land;
(2) the current value of the properties; (3) its nature, actual use, and income; (4) the sworn valuation by the owner; (5)
the tax declarations; (6) the assessment made by government assessors; (7) the social and economic benefits
contributed by the farmers and the farmworkers, and by the government to the property; and (8) the non-payment of
taxes or loans secured from any government financing institution on the said land, if any.21 Pursuant to its rule-making
power under Section 4922 of the same law, the DAR translated these factors into a basic formula.23
In the instant case, the trial court found to be "unrealistically low" the total valuation by LBP and the DAR in the amount
of P440,355.92, which was computed on the basis of DAR AO No. 6, Series of 1992, as amended by DAR AO No. 11,
Series of 1994. It then merely proceeded to add said valuation to the market value of the subject land as appearing in
the 1997 Tax Declaration, and used the average of such values to fix the just compensation at P669,962.53.

In Land Bank of the Philippines v. Barrido,24 where the RTC adopted a different formula, as in this case, by considering
the average between the findings of the DAR using the formula laid down in Executive Order No. 22825 and the market
value of the property as stated in the tax declaration, we declared it to be an obvious departure from the mandate of
the law and the DAR administrative order. We emphasized therein that, while the determination of just compensation is
essentially a judicial function vested in the RTC acting as a special agrarian court, the judge cannot abuse his discretion
by not taking into full consideration the factors specifically identified by law and implementing rules.

We agree with LBP in the instant case that the "double take up" of the market value per tax declaration as a valuation
factor completely destroys the rationale of the formula laid down by the DAR. Thus, argues LBP:cralavvonlinelawlibrary

x x x Market value accounts for only 10% under the basic formula of LV = (CNI x 0.60) + (CS x .30) + (MV x .10). The 10%
remains constant even under the variation formulae of LV = (CNI x .90) + (MV x .10) and LV = (CS x .90) + (MV x .10). It is
only when the data constituting CS (Comparable sales) and CNI (capitalized net income) are absent that MV is given
greater weight in determining just compensation. This is not obtaining in this case.

x x x Greater weight is accorded CNI, 60% in the basic formula and 90% in the other variation thereof, and this is not
without a valid reason. The valuation formula is heavily production based (net income) because that is the true value of
what landowners lose when their lands are expropriated and what the farmers-beneficiaries gain when the lands are
distributed to them. A more fundamental reason for the valuation formula of DAR is the fidelity to the principle of
affordability, i.e. what the farmers-beneficiaries can reasonably afford to pay based on what the land can produce. It
must be emphasized that agricultural lands are not residential lands, and farmers-beneficiaries are not given those lands
so they can live there but so that they can till them. And since they generally live on hand to mouth existence, their
source of repaying the just compensation is sourced from their income derived from the cultivation of the land. Thus,
the double take up of market value as a valuation factor goes against the grain of affordability as the basic principle in
the government-supervised valuation formula for agrarian reform.26

Considering, therefore, that the RTC based its valuation on a different formula and without taking into full consideration
the factors set forth in Section 17 of RA 6657, we order the consolidation of the instant case (CA-G.R. CEB SP No. 01846)
with CA-G.R. CEB SP No. 01845, where the appeal of the DAR from the March 27, 2006 Decision of the RTC was granted
and said case was remanded to the trial court for determination of just compensation with the assistance of
commissioners. We have held that consolidation of cases is proper when there is a real need to forestall, as in this case,
the possibility of conflicting decisions being rendered in the cases.27

WHEREFORE, the petition is GRANTED. The August 28, 2007 Decision and June 29, 2010 Resolution of the Court of
Appeals in CA-G.R. SP No. 01846 are hereby REVERSED and SET ASIDE. The case is CONSOLIDATED with CA-G.R. CEB SP
No. 01845 and REMANDED to the Regional Trial Court of Iloilo City, Branch 34, which is directed to determine with
dispatch, and with the assistance of at least three (3) commissioners, the just compensation due the respondents in
accordance with Section 17 of Republic Act No. 6657 and the applicable DAR Administrative Orders.
19. REPUBLIC OF THE PHILIPPINES v. HEIRS OF SPOUSES PEDRO BAUTISTA and VALENTINA MALABANAN

FACTS: Spouses Bautista are the registered owners of a 1,893-square meter parcel of land located in Brgy. Bulacnin
North, Lipa City. Respondents are their children. Herein petitioner Republic of the Philippines (Republic), through the
Department of Public Works and Highways (DPWH), acquired a 36-square meter portion of the lot for use in the STAR
(Southern Tagalog Arterial Road) Tollway project. Later on, DPWH offered to purchase an additional 1,155 square meters
of the lot at P100.00 per square meter to be used for the Balete-Lipa City Interchange Ramp B, but the spouses Bautista
refused to sell. Republic filed a Complaint with the RTC of Lipa City for the expropriation of the said 1,155-square meter
portion (the subject portion).

In an Order of Expropriation, the trial court condemned the subject portion for expropriation and constituted a panel of
commissioners, consisting of the Lipa City Assessor and the Registrar of Deeds of Lipa City, for the purpose of
ascertaining just compensation. On Republics Opposition, the trial court appointed a third commissioner in the person of
Nimfa Martinez-Mecate (Mecate), who is the DPWH special agent for Road Right-of-Way for Region IV-A.

The Lipa City Assessor and the Registrar of Deeds thus concluded that the just compensation should be within the range
of P1,960.00 and P2,500.00 per square meter.

On the other hand, Mecates Commissioners Report recommended that the reasonable value for agricultural, orchard,
and sugar land is P400.00 per square meter, and P600.00 per square meter for residential and commercial land.

The trial court rendered its Decision, fixing just compensation for the subject portion, including all its improvements, at
P1,960.00 per square meter. Petitioner interposed an appeal with the CA. The CA affirmed the appealed decision.

The Republic argued that the CAs reliance on the Joint Commissioners Report is erroneous because the said report failed
to consider all factors prescribed by law specifically Republic Act No. 8974 in determining just compensation.

ISSUE: Did the RTC err in fixing the amount of P1,960.00 per square meter as just compensation for the subject
property?

HELD: What escapes petitioner, is that the courts are not bound to consider these standards; the exact wording of the
said provision is that in order to facilitate the determination of just compensation, the courts may consider them. The
use of the word may in the provision is construed as permissive and operating to confer discretion. In the absence of a
finding of abuse, the exercise of such discretion may not be interfered with. For this case, the Court finds no such abuse
of discretion.
Mecates Commissioners Report evidently failed to consider factors other than the value of the subject portion as
reflected in the tax declarations, the BIR zonal valuation, and its classification as an agricultural land. To make matters
worse, Mecate based her Report on the 1998 Appraisal Committee Report of the Lipa City Appraisal Committee, which is
clearly obsolete and does not reflect 2004 property values. The Complaint for expropriation was filed in 2004; thus, just
compensation should be based on 2004 valuations. 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. DENIED.

Our Ruling

The Petition must be denied.

This Court is not a trier of facts. Questions of fact may not be raised in a petition brought under Rule 45, as such petition
may only raise questions of law.

This rule applies in expropriation cases.50 Moreover, factual findings of the trial court, when affirmed by the CA, are
generally binding on this Court. An evaluation of the case and the issues presented leads the Court to the conclusion
that it is unnecessary to deviate from the findings of fact of the trial and appellate courts.

Under Section 851 of Rule 67 of the Rules of Court, the trial court sitting as an expropriation court may, after hearing,
accept the commissioners’ report and render judgment in accordance therewith. This is what the trial court did in this
case. The CA affirmed the trial court’s pronouncement in toto. Given these facts, the trial court and the CA’s identical
findings of fact concerning the issue of just compensation should be accorded the greatest respect, and are binding on
the Court absent proof that they committed error in establishing the facts and in drawing conclusions from them. There
being no showing that the trial court and the CA committed any error, we thus accord due respect to their findings.

The only legal question raised by the petitioner relates to the commissioners’ and the trial court’s alleged failure to take
into consideration, in arriving at the amount of just compensation, Section 5 of RA 8974 enumerating the standards for
assessing the value of expropriated land taken for national government infrastructure projects. What escapes petitioner,
however, is that the courts are not bound to consider these standards; the exact wording of the said provision is that "in
order to facilitate the determination of just compensation, the courts may consider" them. The use of the word "may" in
the provision is construed as permissive and operating to confer discretion.52 In the absence of a finding of abuse, the
exercise of such discretion may not be interfered with. For this case, the Court finds no such abuse of discretion.

Besides, a cursory review of the May 3, 2005 Joint Commissioners’ Report leads one to the conclusion, without need of
further elaboration, that the commissioners and the trial court did not ignore absolutely the standards enumerated in
Section 5. Quite the contrary, they took into consideration several of these standards in arriving at the amount of just
compensation, specifically:

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

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

(c) The size, shape or location, and tax declaration of the land; and

(d) The price of the land as manifested in the ocular findings, oral as well as documentary evidence presented.

In fact, the May 3, 2005 Joint Commissioners’ Report took into consideration four out of the eight standards
enumerated in Section 5. This can hardly be termed a total disregard of Section 5.

On the other hand, Mecate’s April 25, 2005 Commissioner’s Report evidently failed to consider factors other than the
value of the subject portion as reflected in the tax declarations, the BIR zonal valuation, and its classification as an
agricultural land. Although Mecate professes to base her Report on the fair market value of the property, current values
of like properties, the property’s actual or potential uses, and location, still in reality these factors were not taken into
account in arriving at the conclusions contained in her Report. To make matters worse, Mecate based her Report on the
1998 Appraisal Committee Report of the Lipa City Appraisal Committee, which is clearly obsolete and does not reflect
2004 property values. The Complaint for expropriation was filed in 2004; thus, just compensation should be based on
2004 valuations. "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." 53

It is quite evident that petitioner is a desperate buyer of the subject portion.1âwphi1 It needs the property for the
Balete-Lipa City Interchange Ramp B, and no property other than the subject portion could answer this need. Having
purchased a portion of respondents’ property in 2000 at ₱1,300.00 per square meter – by negotiated sale at that – there
appears to be no reason why it should not be made to pay just compensation at a premium four years later. It is
evidently unfair and absurd that, after negotiating a sale at a higher price of ₱1,300.00, petitioner should later insist on a
lower ₱600.00, ₱400.00, or even ₱100.00 valuation for the same land four years after such negotiated sale. It should be
bound by the higher ₱1,300.00 valuation, at the very least. Given the increase in population and rate of growth and
progress in the country, it is highly unlikely if not impossible that property values would take a downward trend. This
applies to Lipa City

especially; the Joint Commissioners' Report indicates how the city has rapidly progressed through the years -- where
once there was grass, concrete structures now stand.

Moreover, of note are petitioner's several purchases of land within the vicinity, ranging from ₱500.00 up to ₱3,000.00
per square meter, from 1997 up to 2003. The average price of all these purchases within the vicinity amounts to P 1 ,
960.00 per square meter. Although it may be said that from the facts this amount is low, the respondents have
nonetheless given their assent to this valuation in their June 23, 2005 Comment54 as well as in their July 25, 2008
Comment55 filed before this Court. Thus, as to them, the market value of the subject portion is ₱1,960.00 per square
meter. As for the petitioner- a desperate buyer of the subject portion which is absolutely necessary to link the existing
highway to the city- this is what it should be made to pay for the subject portion. It must be remembered that "the
market value of the property is the price that may be agreed upon by parties willing but not compelled to enter into a
sale. Not unlikely, a buyer desperate to acquire it would agree to pay more, and a seller in urgent need of funds would
agree to accept less, than what it is actually worth."56

WHEREFORE, the Petition is DENIED. The assailed October 31, 2007 Decision and January 11, 2008 Resolution of the
Court of Appeals in CA-G.R. CV No. 85751 are AFFIRMED.

SO ORDERED.