RULING: NO.
The action for eminent domain is within
Rule 67 –
EXPROPRIATION
Barangay San Roque v. Heirs of Pastor,
G.R. No. 138896, 20 June 2000  right to take private property for public use. The subject
SUMMARY: Brgy. San Roque of Talisay, Cebu filed a
complaint to expropriate the property of Pator with
MTC. The MTC dismissed the Complaint on the ground
of lack of jurisdiction. It reasoned that “The principal
cause of action is the exercise of the power of eminent
domain. The fact that the action also involves real
property is merely incidental. An action for eminent
domain is therefore within the exclusive original
jurisdiction of the RTC.” This was then filed to RTC but
was dismissed, holding that an action for eminent
domain affected title to real property; hence, the value
of the property to be expropriated would determine
whether the case should be filed before the MTC or the
RTC. The property value was less than 20k and should
be filed with MTC.
FACTS: Petitioner filed before the MTC of Talisay,
Cebu a Complaint to expropriate a property of the
respondents. In an Order dated April 8, 1997, the MTC
dismissed the Complaint on the ground of lack of
jurisdiction. It reasoned that an action for eminent
domain is within the exclusive original jurisdiction of the
RTC and not with MTC.
The RTC also dismissed the Complaint when filed
before it, holding that an action for eminent domain
affected title to real property; hence, the value of the
property to be expropriated would determine whether
the case should be filed before the MTC or the RTC.  It
appears from the current Tax Declaration of the land
involved that its assessed value is only P1,740.00.
Pursuant to Section 3, paragraph (3), of Republic Act
No. 7691, all civil actions involving title to, or
possession of, real property with an assessed value of
less than P20,000.00 are within the exclusive original
jurisdiction of the MTCs. In the case at bar, it is within
the exclusive original jurisdiction of the MTC of Talisay,
Cebu, where the property involved is located.
Petitioner appealed directly to this Court, raising a pure
question of law. 
ISSUE: WON the action for eminent domain is within
the jurisdiction of the MTC where the assessed value of
the subject property is below P20,000
the jurisdiction of the RTC.  
In the present case, an expropriation suit DOES NOT
INVOLVE the recovery of a sum of money but it deals
with the exercise by the government of its authority and
of an expropriation suit is the government’s exercise of
eminent domain, a matter that is incapable of pecuniary
estimation.  The value of the property to be
expropriated is estimated in monetary terms, for the
court is duty-bound to determine the just compensation
for it.  However, this is merely incidental to the
expropriation suit.  The amount is determined only after
the court is satisfied with the propriety of the
expropriation.
In Republic of the Philippines v. Zurbano, the Court
held that "condemnation proceedings are within the
jurisdiction of Courts of First Instance," the forerunners
of the RTCs. The said case was decided during the
effectivity of the Judiciary Act of 1948 which, like BP
129 in respect to RTCs, provided that courts of first
instance had original jurisdiction over "all civil actions in
which the subject of the litigation is not capable of
pecuniary estimation."  The 1997 amendments to the
Rules of Court were not intended to change these
jurisprudential precedents.
Also, the Court is not persuaded by respondents’
argument that the present action involves the title to or
possession of a parcel of land. They cite the
observation of retired Justice Jose Y. Feria, an eminent
authority in remedial law, that condemnation or
expropriation proceedings are examples of real actions
that affect the title to or possession of a parcel of land. 
Their reliance is misplaced.  Justice Feria sought
merely to distinguish between real and personal
actions. His discussion on this point pertained to the
nature of actions, not to the jurisdiction of courts. In
fact, in his pre-bar lectures, he emphasizes that
jurisdiction over eminent domain cases is still within the
RTCs under the 1997 Rules.
WHEREFORE, the Petition is hereby GRANTED and
the assailed Orders SET ASIDE. The Regional Trial
Court is directed to HEAR the case. No costs.
SYLLABUS
Actions; Eminent Domain; Expropriation; Jurisdiction;
Courts; An expropriation suit is incapable of pecuniary
estimation, and falls within the jurisdiction of the
Regional Trial Courts.—We agree with the petitioner
JDSPECA | Cases | Rule 67 | 1
that an expropriation suit is incapable of pecuniary
estimation. The test to determine whether it is so was
laid down by the Court in this wise: “A review of the
jurisprudence of this Court indicates that in determining
whether an action is one the subject matter of which is
not capable of pecuniary estimation, this Court has
adopted the criterion of first ascertaining the nature of
the principal action or remedy sought. If it is primarily
for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and
whether jurisdiction is in the municipal courts or in the
courts of first instance would depend on the amount of
the claim. However, where the basic issue is something
other than the right to recover a sum of money, or
where the money claim is purely incidental to, or a
consequence of, the principal relief sought, like in suits
to have the defendant perform his part of the contract
(specific performance) and in actions for support, or for
annulment of a judgment or to foreclose a mortgage,
this Court has considered such actions as cases where
the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by
courts of first instance. The rationale of the rule is
plainly that the second class cases, besides the
determination of damages, demand an inquiry into
other factors which the law has deemed to be more
within the competence of courts of first instance, which
were the lowest courts of record at the time that the first
organic laws of the Judiciary were enacted allocating
jurisdiction (Act 136 of the Philippine Commission of
June 11, 1901).”
Same; Same; Same; Two Phases of Expropriation
Proceedings.—In the present case, an expropriation
suit does not involve the recovery of a sum of money.
Rather, it deals with the exercise by the government of
its authority and right to take private property for public
use. In National Power Corporation v. Jocson, the Court
ruled that expropriation proceedings have two phases: “
‘The first is concerned with the determination of the
authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, ‘of condemnation
declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment
of just compensation to be determined as of the date of
the filing of the complaint.’ An order of dismissal, if this
be ordained, would be a final one, of course, since it
finally disposes of the action and leaves nothing more
to be done by the Court on the merits. So, too, would
an order of condemnation be a final one, for thereafter
as the Rules expressly state, in the proceedings before
the Trial Court, ‘no objection to the exercise of the right
of condemnation (or the propriety thereof) shall be filed
or heard.’ “The second phase of the eminent domain
action is concerned with the determination by the court
of ‘the just compensation for the property sought to be
taken.’ This is done by the Court with the assistance of
not more than three (3) commissioners. The order fixing
the just compensation on the basis of the evidence
before, and findings of, the commissioners would be
final, too. It would finally dispose of the second stage of
the suit, and leave nothing more to be done by the
Court regarding the issue, x x x’ ”
Same; Same; Same; It should be stressed that the
primary consideration in an expropriation suit is whether
the government or any of its instrumentalities has
complied with the requisites for the taking of private
property.—It should be stressed that the primary
consideration in an expropriation suit is whether the
government or any of its instrumentalities has complied
with the requisites for the taking of private property.
Hence, the courts determine the authority of the
government entity, the necessity of the expropriation,
and the observance of due process. In the main, the
subject of an expropriation suit is the government’s
exercise of eminent domain, a matter that is incapable
of pecuniary estimation.
G.R. No. 138896               June 20, 2000
BARANGAY SAN ROQUE, TALISAY,
CEBU, petitioner,
vs.
Heirs of FRANCISCO PASTOR namely: EUGENIO
SYLIANCO, TEODORO SYLIANCO, TEODORO
SYLIANCO, ISABEL SYLIANCO, EUGENIA S. ONG,
LAWRENCE SYLIANCO, LAWSON SYLIANCO,
LAWINA S. NOTARIO, LEONARDO SYLIANCO JR.
and LAWFORD SYLIANCO, respondents.
PANGANIBAN, J.:
An expropriation suit is incapable of pecuniary
estimation. Accordingly, it falls within the jurisdiction of
the regional trial courts, regardless of the value of the
subject property.
The Case
Before us is a Petition for Review on Certiorari  assailing
the March 29, 1999 Order 1 of the Regional Trial Court
(RTC) of Cebu City (Branch 58) in Civil Case No. CEB-
21978, in which it dismissed a Complaint for eminent
domain. It ruled as follows:
Premises considered, the motion to dismiss is hereby
granted on the ground that this Court has no jurisdiction
over the case. Accordingly, the Orders dated February
JDSPECA | Cases | Rule 67 | 2
19, 1999 and February 26, 1999, as well as the Writ of
Possession issued by virtue of the latter Order are
hereby recalled for being without force and effect.2
Petitioner also challenges the May 14, 1999 Order of
the RTC denying reconsideration.
The Facts
Petitioner filed before the Municipal Trial Court (MTC)
of Talisay, Cebu (Branch 1)3 a Complaint to expropriate
a property of the respondents. In an Order dated April
8, 1997, the MTC dismissed the Complaint on the
ground of lack of jurisdiction. It reasoned that "[e]minent
domain is an exercise of the power to take private
property for public use after payment of just
compensation. In an action for eminent domain,
therefore, the principal cause of action is the exercise of
such power or right. The fact that the action also
involves real property is merely incidental. An action for
eminent domain is therefore within the exclusive
original jurisdiction of the Regional Trial Court and not
with this Court."4
Assailed RTC Ruling
The RTC also dismissed the Complaint when filed
before it, holding that an action for eminent domain
affected title to real property; hence, the value of the
property to be expropriated would determine whether
the case should be filed before the MTC or the RTC.
Concluding that the action should have been filed
before the MTC since the value of the subject property
was less than P20,000, the RTC ratiocinated in this
wise:
The instant action is for eminent domain. It appears
from the current Tax Declaration of the land involved
that its assessed value is only One Thousand Seven
Hundred Forty Pesos (P1,740.00). Pursuant to Section
3, paragraph (3), of Republic Act No. 7691, all civil
actions involving title to, or possession of, real property
with an assessed value of less than P20,000.00 are
within the exclusive original jurisdiction of the Municipal
Trial Courts. In the case at bar, it is within the exclusive
original jurisdiction of the Municipal Trial Court of
Talisay, Cebu, where the property involved is located.
The instant action for eminent domain or condemnation
of real property is a real action affecting title to or
possession of real property, hence, it is the assessed
value of the property involved which determines the
jurisdiction of the court. That the right of eminent
domain or condemnation of real, property is included in
a real action affecting title to or possession of real
property, is pronounced by retired Justice Jose Y.
Feria, thus, "Real actions are those affecting title to or
possession of real property. These include partition or
condemnation of, or foreclosures of mortgage on, real
property. . . ."5
Aggrieved, petitioner appealed directly to this Court,
raising a pure question of law. 6 In a Resolution dated
July 28, 1999, the Court denied the Petition for Review
"for being posted out of time on July 2, 1999, the due
date being June 2, 1999, as the motion for extension of
time to file petition was denied in the resolution of July
14, 1999."7 In a subsequent Resolution dated October
6, 1999, the Court reinstated the Petition.8
Issue
In its Memorandum, petitioner submits this sole issue
for the consideration of this Court:
Which court, MTC or RTC, has jurisdiction over cases
for eminent domain or expropriation where the
assessed value of the subject property is below Twenty
Thousand (P20,000.00) Pesos?9
This Court's Ruling
The Petition is meritorious.
Main Issue:
Jurisdiction over an Expropriation Suit
In support of its appeal, petitioner cites Section 19 (1) of
BP 129, which provides that RTCs shall exercise
exclusive original jurisdiction over "all civil actions in
which the subject of the litigation is incapable of
pecuniary estimation; . . . . ." It argues that the present
action involves the exercise of the right to eminent
domain, and that such right is incapable of pecuniary
estimation.
Respondents, on the other hand, contend that the
Complaint for Eminent Domain affects the title to or
possession of real property. Thus, they argue that the
case should have been brought before the MTC,
pursuant to BP 129 as amended by Section 3 (3) of RA
7691. This law provides that MTCs shall have exclusive
original jurisdiction over all civil actions that involve title
to or possession of real property, the assessed value of
which does not exceed twenty thousand pesos or, in
civil actions in Metro Manila, fifty thousand pesos
exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses and costs.
We agree with the petitioner that an expropriation suit is
incapable of pecuniary estimation. The test to
JDSPECA | Cases | Rule 67 | 3
determine whether it is so was laid down by the Court in
this wise:
A review of the jurisprudence of this Court indicates that
in determining whether an action is one the subject
matter of which is not capable of pecuniary estimation,
this Court has adopted the criterion of first ascertaining
the nature of the principal action or remedy sought. If it
is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation,
and whether jurisdiction is in the municipal courts or in
the courts of first instance would depend on the amount
of the claim. However, where the basic issue is
something other than the right to recover a sum of
money, or where the money claim is purely incidental
to, or a consequence of, the principal relief sought, like
in suits to have the defendant perform his part of the
contract (specific performance) and in actions for
support, or for annulment of a judgment or to foreclose
a mortgage, this Court has considered such actions as
cases where the subject of the litigation may not be
estimated in terms of money, and are cognizable
exclusively by courts of first instance. The rationale of
the rule is plainly that the second class cases, besides
the determination of damages, demand an inquiry into
other factors which the law has deemed to be more
within the competence of courts of first instance, which
were the lowest courts of record at the time that the first
organic laws of the Judiciary were enacted allocating
jurisdiction (Act 136 of the Philippine Commission of
June 11, 1901). 10
In the present case, an expropriation suit does not
involve the recovery of a sum of money. Rather, it deals
with the exercise by the government of its authority and
right to take private property for public
use. 11 In National Power Corporation v. Jocson, 12 the
Court ruled that expropriation proceedings have two
phases:
The first is concerned with the determination of the
authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, "of condemnation
declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment
of just compensation to be determined as of the date of
the filing of the complaint." An order of dismissal, if this
be ordained, would be a final one, of course, since it
finally disposes of the action and leaves nothing more
to be done by the Court on the merits. So, too, would
an order of condemnation be a final one, for thereafter
as the Rules expressly state, in the proceedings before
the Trial Court, "no objection to the exercise of the right
of condemnation (or the propriety thereof) shall be filed
or heard."
The second phase of the eminent domain action is
concerned with the determination by the court of "the
just compensation for the property sought to be taken."
This is done by the Court with the assistance of not
more than three (3) commissioners. The order fixing the
just compensation on the basis of the evidence before,
and findings of, the commissioners would be final, too.
It would finally dispose of the second stage of the suit,
and leave nothing more to be done by the Court
regarding the issue. . . .
It should be stressed that the primary consideration in
an expropriation suit is whether the government or any
of its instrumentalities has complied with the requisites
for the taking of private property. Hence, the courts
determine the authority of the government entity, the
necessity of the expropriation, and the observance of
due process. 1 In the main, the subject of an
expropriation suit is the government's exercise of
eminent domain, a matter that is incapable of pecuniary
estimation.
True, the value of the property to be expropriated is
estimated in monetary terms, for the court is duty-
bound to determine the just compensation for
it.1avvphi1 This, however, is merely incidental to the
expropriation suit. Indeed, that amount is determined
only after the court is satisfied with the propriety of the
expropriation.
Verily, the Court held in Republic of the Philippines
v. Zurbano that "condemnation proceedings are within
the jurisdiction of Courts of First Instance," 14 the
forerunners of the regional trial courts. The said case
was decided during the effectivity of the Judiciary Act of
1948 which, like BP 129 in respect to RTCs, provided
that courts of first instance had original jurisdiction over
"all civil actions in which the subject of the litigation is
not capable of pecuniary estimation." 15 The 1997
amendments to the Rules of Court were not intended to
change these jurisprudential precedents.
We are not persuaded by respondents' argument that
the present action involves the title to or possession of
a parcel of land. They cite the observation of retired
Justice Jose Y. Feria, an eminent authority in remedial
law, that condemnation or expropriation proceedings
are examples of real actions that affect the title to or
possession of a parcel of land. 16
Their reliance is misplaced. Justice Feria sought merely
to distinguish between real and personal actions. His
discussion on this point pertained to the nature of
JDSPECA | Cases | Rule 67 | 4
actions, not to the jurisdiction of courts. In fact, in his
pre-bar lectures, he emphasizes that jurisdiction over
eminent domain cases is still within the RTCs under the
1997 Rules.
To emphasize, the question in the present suit is
whether the government may expropriate private
property under the given set of circumstances. The
government does not dispute respondents' title to or
possession of the same. Indeed, it is not a question of
who has a better title or right, for the government does
not even claim that it has a title to the property. It
merely asserts its inherent sovereign power to
"appropriate and control individual property for the
public benefit, as the public necessity, convenience or
welfare may demand." 17
WHEREFORE, the Petition is hereby GRANTED and
the assailed Orders SET ASIDE. The Regional Trial
Court is directed to HEAR the case. No costs.
SO ORDERED.
National Power Corporation v. Jocson,
206 SCRA 520 (1992)  land. The respondent judge failed to observe this
G.R. Nos. 94193-99 February 25, 1992
NATIONAL POWER CORPORATION, petitioner,
vs. HON. ENRIQUE T. JOCSON, in his capacity as
Presiding Judge, RTC, 6th Judicial Region, Branch 47,
Bacolod City; JESUS, FERNANDO, MARIA CRISTINA
and MICHAEL, all surnamed GONZAGA; LUIS,
DIONISIO, ROBERTO, GABRIEL, BENJAMIN, ANA,
ALEXANDER, CARLA, SOFIA and DANIEL, all
surnamed GONZAGA; ROSARIO P. MENDOZA;
CELSOY AGRO-IND. CORP.; EMMANUEL, LYDIA,
HARRY, NOLI, CLIFFORD and CHRISTIAN DALE, all
surnamed AÑO; MAYO L. LACSON; and LUCIA
GOSIENFIAO, respondents.
FACTS: The petitioner filed 7 eminent domain cases in
the acquisition of right of way/easement over 7 parcels
of land in relation to the necessity of building towers
and transmission line for the common good. Initially,
the values of lands concerned were based on tax
declarations which the petitioner paid. Land owners
concerned asserted that the amounts were low and that
their lands value is more than what is being offered.
The following day respondent Judge Jocson increased
provisional values of sugar land without hearing and
directed petitioner to deposit the differential amounts to
which the petitioner also complied with. Jocson then
ordered NPC to pay in full the amounts to the
landowners 5 days after the 2nd order was complied
with. He also refused to issue a writ of possession until
full payment. Petitioners allege that respondent Judge
acted in excess of jurisdiction, in violation of laws and
indereliction of the duty to afford respondents
due process when he issued said orders.
They assert that orders were not valid and the payment
required for the lands specified therein were excessive
and unconscionable amounts. Additionally they state
that his refusal to issue a writ of possession until
full payment, even when they had already deposited the
provisional values, was a violation of the Rules of Court
and of PD 42.
ISSUE: Whether respondent judge Jocson committed
grave abuse of discretion amounting to lack
of jurisdiction when he issued the said orders.
HELD:
The court ruled that PD No. 42 provides that upon filing
in court complaints on eminent domain proceeding and
after due notice to the defendants, plaintiff will have the
right to take possession of the real property upon
deposit of the amount of the assessed value of the
procedure by his failure to issue the writ of possession
to the petitioner. Furthermore, the respondent judge
erred in increasing the provisional value of properties
without holding any hearing for both parties. The instant
petition was granted by the court setting aside the
temporary restraining order and directing respondent
judge to cease and desist from enforcing his orders.
There are 2 stages in the action of expropriation:
1. Determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety
of its exercise in the context of the facts involved in the
suit; and
2. Eminent domain action is concerned with the
determination by the Court of the "just compensation for
the property sought to be taken." This is done by the
Court with the assistance of not more than three (3)
commissioners whose findings are deemed to be final.
SYLLABUS
Constitutional Law; Expropriation; There are two (2)
stages in every action of expropriation.—In Municipality
of Biñan vs. Hon. Jose Mar Garcia, et al., this Court
ruled that there are two (2) stages in every action of
expropriation: “The first is concerned with the
JDSPECA | Cases | Rule 67 | 5
determination of the authority of the plaintiff to exercise
the power of eminent domain and the propriety of its
exercise in the context of the facts involved in the suit. It
ends with an order, if not of dismissal of the action, ‘of
condemnation declaring that the plaintiff has a lawful
right to take the property sought to be condemned, for
the public use or purpose described in the complaint,
upon the payment of just compensation to be
determined as of the date of the filing of the complaint.’
An order of dismissal, if this be ordained, would be a
final one, of course, since it finally disposes of the
action and leaves nothing more to be done by the Court
on the merits. So, too, would an order of condemnation
be a final one, for thereafter as the Rules expressly
state, in the proceedings before the Trial Court, ‘no
objection to the exercise of the right of condemnation
(or the propriety thereof) shall be filed or heard.’ The
second phase of the eminent domain action is
concerned with the determination by the Court of ‘the
just compensation for the property sought to be taken.’
This is done by the Court with the assistance of not
more than three (3) commissioners. The order fixing the
just compensation on the basis of the evidence before,
and findings of, the commissioners would be final, too.
It would finally dispose of the second stage of the suit,
and leave nothing more to be done by the Court
regarding the issue. x x x.”
Same; Same; Upon the filing of the complaint or at any
time thereafter, the petitioner has the right to take or
enter upon the possession of the property involved
upon compliance with P.D. No. 42.—However, upon the
filing of the complaint or at any time thereafter, the
petitioner has the right to take or enter upon the
possession of the property involved upon compliance
with P.D. No. 42 which requires the petitioner, after due
notice to the defendant, to deposit with the Philippine
National Bank in its main office or any of its branches or
agencies, “an amount equivalent to the assessed value
of the property for purposes of taxation.” This assessed
value is that indicated in the tax declaration.
Same; Same; PD No. 42 repealed the provisions of
Rule 67 of the Rules of Court and of any other existing
law contrary to or inconsistent with it.—P.D. No. 42
repealed the “provisions of Rule 67 of the Rules of
Court and of any other existing law contrary to or
inconsistent” with it. Accordingly, it repealed Section 2
of Rule 67 insofar as the determination of the
provisional value, the form of payment and the agency
with which the deposit shall be made, are concerned.
Same; Same; PD No. 42 effectively removes the
discretion of the court in determining the provisional
value.—PD No. 42, however effectively removes the
discretion of the court in determining the provisional
value. What is to be deposited is an amount equivalent
to the assessed value for taxation purposes. No hearing
is required for that purpose. All that is needed is notice
to the owner of the property sought to be condemned.
Same; Same; Just Compensation; The determination of
just compensation in eminent domain cases is a judicial
function.—This Court ruled in Export Processing Zone
Authority vs. Dulay, et al. that the determination of just
compensation in eminent domain cases is a judicial
function; accordingly, We declared as unconstitutional
and void, for being, inter alia, impermissible
encroachment on judicial prerogatives which tends to
render the Court inutile in a matter which, under the
Constitution, is reserved to it for final determination, the
method of ascertaining just compensation prescribed in
P.D. Nos. 76, 464, 794 and 1533, to wit: the market
value as declared by the owner or administrator or such
market value as determined by the assessor, whichever
is lower in the first three (3) decrees, and the value
declared by the owner or administrator or anyone
having legal interest in the property or the value as
determined by the assessor, pursuant to the Real
Property Tax Code, whichever is lower, prior to the
recommendation or decision of the appropriate
Government office to acquire the property, in the last
mentioned decree.
DAVIDE, JR., J.:
This is a special civil action for certiorari to annul, for
having been issued without or in excess of jurisdiction,
in violation of law and in deprivation of petitioner's right
to due process, four (4) orders successively issued by
the respondent Judge in seven (7) eminent domain
cases (1) fixing the provisional values of the parcels of
land sought to be expropriated by the petitioner,
National Power Corporation (NAPOCOR), in amounts
far exceeding their market values, (2) increasing the
provisional values of the parcels of land involved in two
(2) of such cases without hearing and holding in
abeyance the issuance of the writ of possession in
favor of petitioner until deposit of the additional amount,
(3) requiring the private respondents, as defendants in
said cases, to state in writing within twenty-four (24)
hours whether or not they are amenable to accepting
and withdrawing the amount deposited by petitioner as
provisional values in full and final satisfaction of their
respective properties, and directing that the writ of
possession be issued only until after the defendants
shall have so manifested in writing their acceptance
and receipt of said amounts, and (4) directing petitioner
to release and pay within twenty-four (24) hours,
JDSPECA | Cases | Rule 67 | 6
through the Court and in favor of the defendants, the
amount of P43,016,960.00.
The antecedents of this case are not controverted.
Petitioner is a government-owned and controlled
corporation created and existing by virtue of Republic
Act No. 6395, as amended, for the purpose of
undertaking the development of hydraulic power, the
production of power from any source, particularly by
constructing, operating and maintaining power plants,
auxiliary plants, dams, reservoirs, pipes, mains,
transmission lines, power stations and other works for
the purpose of developing hydraulic power from any
river, creek, lake, spring and waterfall in the Philippines
and supplying such power to the inhabitants thereof. In
order to carry out these purposes, it is authorized to
exercise the power of eminent domain.
On 30 March 1990, petitioner filed seven (7) eminent
domain cases before the Regional Trial Court of the
Sixth Judicial Region in Bacolod City, to wit:
(1) Civil Case No. 5938 against Jesus, Fernando, Ma.
Cristina and Michael, all surnamed GONZAGA; 1
(2) Civil Case No. 5939 against Louis, Dionisio,
Roberto, Gabriel, Benjamin, Ana, Alexander, Carla,
Sofia, Daniel, all surnamed GONZAGA; 2
(3) Civil Case No. 5940 against Rosario P. Mendoza; 3
(4) Civil Case No. 5941 against Celsoy Agro-Ind.
Corporation; 4
(5) Civil Case No. 5942 against Emmanuel, Lydia,
Harry, Noli, Clifford and Christian, Dale, all surnamed
AÑO; 5
(6) Civil Case No. 5943 against Mayo L. Lacson; 6
(7) Civil Case No. 5944 against Lucia Gosiengfiao 7
for the acquisition of a right-of-way easement over
portions of the parcels of land described in the
complaints for its Negros-Panay Interconnection
Project, particularly the Bacolod-Tomonton
Transmission Line.
The complaints uniformly (a) allege that petitioner
urgently needs portions of the affected land to enable it
to construct its tower and transmission line in a manner
that is compatible with the greatest good while at the
same time causing the least private injury; the purpose
for which the lands are principally devoted will not be
impaired by the transmission lines as it will only acquire
a right-of-way-easement thereon; and it had negotiated
with and offered to pay defendants for the portions
affected by the Bacolod-Tomonton Transmission Line,
but the parties failed to reach an agreement despite
long and repeated negotiations, and (b) pray that:
1. This Honorable Court fix the provisional value of the
portions of the parcel of land herein sought to be
expropriated pursuant to Section 2, Rule 67 of the
Rules of Court;
2. This Honorable Court, by proper order and writ,
authorize the plaintiff to enter or take possession of the
premises described in paragraph 3 hereof, and to
commence and undertake the construction of the
Bacolod-Tomonton T/L after depositing with the
Provincial Treasurer of Negros Occidental the
provisional value fixed by this Honorable Court, which
amount shall be held by said official subject to the order
and final disposition of the Court;
3. This Honorable Court appoint three (3)
Commissioners to hear the parties, view the premises,
assess the damages to be paid for the condemnation,
and to report in full their proceedings to the Court;
4. The plaintiff be declared to have the lawful right to
acquire portions of the properties of the defendants
affected by the condemnation;
5. After the determination of the amount of indemnity,
the Court authorize the payment by the plaintiff to the
defendants; and
6. Judgment be rendered against the defendants,
condemning the portion of the parcels of land referred
to in paragraphs 3 and 4 hereof, including the
improvements thereof, if any, for public use and for the
purpose hereinabove set forth, free from all other liens
and encumbrances whatsoever; and thereafter, upon
plaintiff's compliance with the requirements of said
judgment, a final order of condemnation be issued and
entered in favor of the plaintiff.
Plaintiff further prays for such other reliefs as may be
deemed just and equitable in the premises.
The cases were raffled to different branches of the trial
court as follows: Civil Cases Nos. 5938, 5943 and 5944
to Branch 43; Civil Case No. 5939 to Branch 54; Civil
Case No. 5940 to Branch 45; Civil Case No. 5941 to
Branch 50; and Civil Case No. 5942 to Branch 46.
Only the defendants in Civil Cases Nos. 5938, 5939,
and 5942 filed Motions to Dismiss. 8
JDSPECA | Cases | Rule 67 | 7
On 4 April 1990, petitioner filed a Motion to consolidate
these cases for joint trial 9 and an Urgent Motion To Fix
Provisional Value.10
On 10 April 1990, Executive Judge Jesus V. Ramos
issued an Order granting the motion for consolidation
and ordering the consolidation of all the cases in
Branch 43 of the court, then presided over by Judge
Romeo Habaradas.11
Considering that Judge Habaradas was on sick leave,
petitioner filed on 8 May 1990 an Urgent Motion to
Reraffle due to the urgent necessity for the hearing of
the cases and the Urgent Motion to Fix Provisional
Value. 12 Acting on said motion, Vice Executive Judge
Bethel K. Moscardon issued on 9 May 1990 an Order
granting the motion and directing the re-raffle of the
cases. 13
Upon re-raffle, the cases were assigned to Branch 47,
presided over by respondent Judge. Since the latter
went on sick leave effective 16 May 1990, petitioner
filed on said date an Urgent Motion for Special Re-raffle
and for Immediate Fixing of Provisional Value. 14 As a
consequence thereof, the cases were re-raffled to
Branch 48 of the court.
On 17 May 1990, Judge Romeo Hibionada of Branch
48 issued an Order directing the defendants to appear
before the court on 21 May 1990 at 8:30 A.M. to
register their comments or objections to the fixing of the
provisional values of the parcels of land subject of
expropriation. 15
On 21 May 1990, the petitioner and the defendants,
through their respective lawyers, appeared and orally
argued their respective positions on the Motion to Fix
Provisional Value. 16
Instead of ruling on the issues raised therein, Judge
Hibionada, citing Circular No. 7 of this Court dated 23
September 1974 which establishes a pairing
system,17 promulgated an Order directing the return of
the seven (7) cases to Branch 47 for further disposition.
On 5 June 1990, Branch 47, through respondent Judge,
issued an Order directing the petitioner:
. . . to show by documents and otherwise within five (5)
days from receipt hereof the following:
1. That it has earlier negotiated repeatedly with
defendants but failed to reach agreement;
2. That expropriation of heavily populated subdivision
areas in order to install primary electric transmission
lines would not endanger lives and property in the area;
3. That such installation is of paramount public interest
and there is no other demonstrable alternative.
and warning that "no provisional order for tentative cost
payment of the land affected would be issued" pending
compliance by petitioner with the
foregoing. 18
On 25 June 1990, respondent Judge, finding the
existence of paramount public interest which. may be
served by the expropriation, the long range benefit of
the project involved, substantial compliance with the
rules concerning efforts for negotiation and, taking into
consideration the market value of the subject areas and
the daily opportunity profit that the petitioner allegedly
admitted in open court, issued an Order fixing the
provisional values of the subject areas, to wit:
CIVIL CASE AFFECTED MARKET PROVISIONAL
NO. AREA(SQ. M.) VALUE
1. 5938 7,050 P 45,000.00 P 180,000.00
3,000 668,700.00 2,674,800.00
6,600 219,830.00 879,320.00
2. 5939 23,400 757,437.00 3,029,748.00
3. 5940 9,030 2,870.00 11,480.00
4. 5941 17,430 433,130.00 1,732,520.00
5. 5942 2,700 342,900.00 1,371,600.00
6. 5943 15,900 2,125,340.00 8,501,360.00
7. 5944 21,000 1,200,000.00 1,800,000.00
and directing the petitioner:
. . . to deposit the amount with the Philippine National
Bank in escrow for the benefit of the defendants
pending decision on the merits. 19
The market values mentioned in the Order are the
same values appearing in the tax declarations of the
properties and the notices of assessment issued by the
Assessor.
In compliance with the said Order, petitioner deposited
the total sum of P23,180,828.00 with the Philippine
National Bank, NAPOCOR Branch, Quezon City, under
Savings Account 249-505865-7 and manifested on 3
July 1990 with the court below that it did so. 20
On 11 July 1990, the defendants in Civil Case No. 5938
filed a motion for the reconsideration of the 25 June
1990 Order alleging that the provisional value of the
property involved therein "had been set much too low"
considering the allegations therein adduced, stating that
the real compensation that should accrue to them is
estimated at P29,970,000.00 and praying that the
questioned Order be reconsidered so as to reflect "the
true amount covering the properties subject to ( sic)
Eminent Domain estimated at TWENTY NINE MILLION
NINE HUNDRED SEVENTY THOUSAND
(P29,970,000.00)." 21
JDSPECA | Cases | Rule 67 | 8
It likewise appears that the defendants in "Civil Case
No. 5939 filed a motion for reconsideration asking for a
re-evaluation of the provisional value of the subject
property. 22
On 12 July 1990, respondent Judge issued an
Order 23 increasing the provisional values of the
properties enumerated in the motions for
reconsideration, directing the petitioner to deposit
"whatever differential between the amounts above fixed
and those already deposited within twenty four (24)
hours from receipt of the Order" and holding in
abeyance the issuance of the writ of possession
pending compliance therewith. The Order reads in full
as follows:
ORDER
I P12,600,000.00.
Before this Court are two (2) Motions for
Reconsideration of the Order dated June 25, 1990
fixing provisional values of the lands sought to be
expropriated belonging to the defendants in these
cases. The first motion was filed by the Torres Valencia
Ciocon Dabao Valencia & De La Paz Law Offices for
the defendants Jesus, Fernando, Ma. Cristina and
Michel (sic), all surnamed Gonzaga, seeking a
reconsideration of the values set by this Court earlier at
P3,734,120.00 for the areas affected consisting of the
following:
7,050 square meters;
6,600 square meters; and
3,000 square meters
belonging to the aforesaid persons. The Court is aware
that the Order of July 25, 1990 was not based on
ultimate factual conditions of the property of the
movants. At that time, the Court is (sic) unaware that
the expropriation of these areas would render the
remaining portion practically a total loss considering
that it is in a subdivision and not agricultural and that
the fetching price (sic) now in the immediate vicinity is
between P1,500.00 and P2,000.00 per square meter.
Considering that the presence of the primary
transmission lines of the property and the earlier
intrusion of the Central Negros Cooperative at the side
of the areas affected for free ( sic) during the Martial
Law Regime, and considering further the proximity of
the Rolling Hills Memorial Park, the San Miguel
Corporation manufacturing complex, Jesusa Heights,
Green Hills Memorial Park and other posh subdivisions,
as well as a golf course, the Court is convinced that that
(sic), defendants Jesusa Gonzaga, Fernando Gonzaga,
Ma. Cristina and Michel (sic) Gonzaga are entitled to a
higher valuation for the property, not only because of
the above-stated facts but because of the clear danger
to the inhabitants in the area and the destruction of the
marketability of the remaining portion after
expropriation.
II
In respect to the plea of defendants Louis Gonzaga, et
al. for re-evaluation of the areas owned by them, the
Court feels that adjustment should also be made
considering that it is contiguous to the areas belonging
to Jesus Gonzaga, et al. above-stated and it is also
affected by the same conditions. Considering that the
area affected is 23,000 square meters and the fetching
price (sic) in the vicinity is between P1,500.00 and
P2,000.00 per square meter, the Court feels that the
provisional value of the property should be
As to the rest of the defendants, there being no extra-
ordinary or peculiar conditions which may warrant re-
evaluation the amounts fixed earlier by this Court shall
stand.
WHEREFORE, (a) the Court rules that the provisional
value of 7,050 square meters aforestated should be
P6,000,000.00; the provisional value of 6,600 square
meters aforestated should be P5,000,000.00; and the
provisional value of 3,000 square meters aforestated
should be P3,000,000.00 instead of those in the June
25, 1990 Order of this Court for these properties. (b)
The provisional value of 23,000 square meters
belonging to Louis Gonzaga, et al. should be rightfully
valued at P12,600,000.00.
The plaintiff is directed to deposit whatever differential
between the amounts above fixed and those already
deposited in PNB Savings Account No. 249-5-5865-7
within 48 hours from receipt of this Order. Pending such
compliance hereof, action on the Motion for Issuance of
Writ of Possession will be held in abeyance. The
representative of the plaintiff may get from the Branch
Clerk of Court the corresponding bank book earlier
attached to the expediente for the purpose of complying
with this Order.
SO ORDERED.
In compliance with the said Order, petitioner
immediately deposited the additional sum of
P22,866,860.00 with the Philippine National Bank under
Savings Account No. 249-505865-7 as evidenced by
the Bank's certification dated 13 July 1990. 24
JDSPECA | Cases | Rule 67 | 9
On 16 July 1990, respondent Judge issued an several lots to be expropriated are sugarlands with the
Order 25 mandatorily requiring the defendants: following assessed values:

. . . to state in writing within twenty-four (24) hours OWNER TAX DEC. NO. ASSESSED
whether or not they are amenable to accept and VALUE
withdraw (sic) the amounts already deposited by the
1. JESUS L. GONZAGA 007-000621 P18,000.00
plaintiff for each of them at final and full satisfaction of 2. Estate of SOPHIA
the value of their respective property (sic) affected by Vda. de GONZAGA 007-000495 267,480.00
expropriation, and this is mandatory. 3. JESUS GONZAGA 005-000007 87,930.00
4. LOUIS, DIONISIO
ROBERTO, GABRIEL
[t]he Writ of Possession sought for by the plaintiff will be BENJAMIN, ANA
issued immediately after manifestation of acceptance ALEXANDER, CARLO
SOPHIA, DANIEL
and receipt of said amounts.
also named
GONZAGA 007-5224 398,260.00
On 18 July 1990, respondent Judge, claiming to act on 5. ROSARIO MENDOZA Notice of Assessment
the of Real Property dated
March 23, 1990,
Manifestation — filed in compliance with the Order of Lot No. 1278-B-1 860.00
16 July 1990 — of defendants Jesus Gonzaga, et al. in 6. ROSARIO MENDOZA Notice of Assessment
of Real Property dated
Civil Case No. 5938, Luis Gonzaga, et al. in Civil Case
March 23, 1990, 861,380.00
No. 5939, Rosario Mendoza in Civil Case No. 5940, Lot No. 1278-C-1 429,080.00
Emmanuel Año, et al. in Civil Case No. 5942 and Mayo 7. CEL-SOY-AGRO-
IND. CORPORATION 2284 179,650.00
Lacson in Civil Case No. 5943, issued an 8. LYDIA S. ANO
Order 26 directing the petitioner to pay the defendants married to
within twenty-four (24) hours, through the court and EMMANUEL ANO 4047 (0854-05) 137,160.00
9. PACITA LACSON
from petitioner's Philippine National Bank Savings (MAYO L. LACSON) Notice of Assessment
Account No. 249-505865-7 or from any other fund; of Real Property dated
whichever may be most expeditious, the following March 21, 1990
Lot No. 7-G 861,380.00
amounts by way of full payment for their expropriated 10. DOLORES D.
property: COSCOLLUELA 020-00017 487,730.00
(LUCIA GOSIENFIAO)
CIVIL CASE NO. AFFECTED AREA VALUE
(SQ. M.) Yet, petitioner submits that in a clear display of abuse
of discretion, respondent Judge fixed, in the Order of 25
1. 5938 7,050 P 6,000,000.00 June 1990, the provisional valued as follows:
3,000 3,000,000.00
6,600 5,000,000.00
2. 5939 23,000 12,600,000.00
CIVIL CASE AFFECTED AREA MARKET
3. 5940 9,030 11,480.00 PROVISIONAL
4. 5941 17,430 1,732,520.00 VALUE (SQ. M.) VALUE
5. 5942 2,700 1,371,600.00
6. 5943 15,900 8,501,360.00 NO.
7. 5944 21,000 4,800,000.00
1. 5938 7,050 P 45,000.00 P 180,000.00
3,000 668,700.00 2,674,800.00
and ordering that the writ of possession be issued in 6,600 219,830.00 879,320.00
these cases after the defendants "have duly received 2. 5939 23,400 757,437.00 3,029,748.00
the amounts." 3 5940 9,030 2,870.00 11,480.00
4. 5941 17,430 433,130.00 1,732,520.00
5. 5942 2,700 342,900.00 1,371,600.00
Unable to accept the above Orders of 25 June, 12 July, 6. 5943 15,900 2,125,340.00 8,501,360.00
16 July and 18 July 1990, petitioner filed this petition on 7. 5944 21,000 1,200,000.00 4,800,000.00
24 July 1990 alleging therein, as grounds for its
allowance, that respondent Judge acted in excess of and that:
jurisdiction, in violation of laws and in dereliction of the
. . . in another clear abuse (sic) of discretion, herein
duty to afford respondents due process when he issued
respondent Judge, on the basis of the respective
said Orders. In support thereof petitioner asserts that
Motion (sic) for Reconsideration of defendants in Civil
the Orders of 25 June and 12 July 1990 fixing the
Cases Nos. 5938 and 5939, without affording the herein
provisional values at excessive and unconscionable
petitioner an opportunity to be heard, and with evident
amounts, are utterly scandalous and unreasonable. As
and manifest partiality to therein defendants increased
classified under their respective tax declarations, the

JDSPECA | Cases | Rule 67 | 10

the previously fixed provisional value of their respective
lands, as follows:
a. Civil Case No. 5938:
1. 7,050 sq. m. — From P180,000.00 to P6,000,000.00
2. 3,000 sq. m. — From P2,674,800.00 to P3,000,000.00
3. 6,600 sq. m. — From P879,320.00 to P5,000,000.00
b. Civil Case No. 5939
1. 23,400 sq. m. — From P3,029,748.00 to P12,600,000.00
Nevertheless, due to its urgent need for the areas to be
able to complete the interconnection project as soon as
possible, petitioner deposited the amounts representing
the provisional values fixed by the respondent Judge.
Still, petitioner laments, the latter persisted in his
stubbornness by not issuing a writ of possession, in
violation of Section 2, Rule 67 of the Rules of Court
which provides that upon the filing of the complaint or at
any time thereafter, the plaintiff shall have the right to
take or enter upon the possession of the real or
personal property involved if he deposits with the
National or Provincial Treasurer its value, as
provisionally and promptly ascertained and fixed by the
court having jurisdiction of the proceedings, to be held
by such treasurer subject to the orders and final
disposition of the court; and that after such deposit to
made, the court shall order the sheriff or other proper
officer to forthwith place the plaintiff in possession of
the property involved P.D. No. 42, which provides that:
. . . upon filing in the proper court of the complaint in
eminent domain proceedings or at anytime thereafter,
and after due notice to the defendant, plaintiff shall
have the right to take or enter upon the possession of
the real property involved if he deposits with the
Philippine National Bank, in its main office or any of its
branches or agencies, an amount equivalent to the
assessed value of the property for purposes of taxation,
to be held by said bank subject to the orders and final
disposition of the court.
is also alleged to have been violated by respondent
Judge.
The issuance then of the writ of possession was an
unqualified ministerial duty which respondent Judge
failed to perform.
Moreover, the Order of 16 July 1990 surrenders the
judicial prerogative to fix the provisional value in favor
of the defendants considering that respondent Judge's
valuation may still be overruled by the latter since they
were given twenty-four (24) hours to state in writing
whether or not they are accepting and withdrawing the
amount already deposited by petitioner.
Finally, petitioner contends that the Order of 16 July
1990 partakes of the nature of a final disposition of the
case should the defendants accept the provisional
value as "final and full satisfaction of the value of their
respective property (sic)affected by expropriation,"
thereby preempting and depriving the former of the right
to dispute and contest the value of the property.
Clearly, respondent Judge took a short-cut, violating in
the process the procedure laid down in Sections 3 to 8,
inclusive, of Rule 67 of the Rules of Court.
In the Resolution of 31 July 1990, this court required
the respondents to comment on the petition and
resolved to issue a temporary restraining order,
effective immediately and to continue until further
orders from the Court, compelling the respondent
Judge to cease and desist from enforcing and/or
executing his questioned Orders and directing him,
pending determination of this case, to place petitioner in
possession of the properties subject of this petition. 27
The following respondents filed, through their counsels,
their Answers on various dates, as follows:
Mayo Lacson — 14 September 199028
Rosario P. Mendoza — 18 September 199029
Jesus Gonzaga, et al.;
Emmanuel Año, et al. — 27 September 199030
Luis Gonzaga, et al. — 20 September 199031
All of them, except for Rosario P. Mendoza who
informed the Court that she filed a motion to reconsider
the 18 July 1990 Order of respondent Judge and who
agrees with petitioner that commissioners should be
appointed to determine the just
compensation, 32 support and sustain the actions of
respondent Judge and pray for the dismissal of the
petition.
Mayo Lacson, in submitting that the procedure
prescribed in Rule 67 may be abbreviated provided that
the rights of the parties are duly protected, cites the
case of City Government of Toledo vs. Fernandos, et
al. 33 wherein this Court sustained the judgment of the
trial court on the basis of what transpired in the pre-trial
conference.
Complying with the Resolution of the 25 September
1990, petitioner filed on 6 November 1990 a Reply to
the Comment of respondent Mayo Lacson, 34 stressing
therein that the case of City Government of Toledo City
vs. Fernandos, et al. 35 does not apply to the present
case because a pre-trial was conducted in the former
JDSPECA | Cases | Rule 67 | 11
during which the parties were able to present their
respective positions on just compensation.
On 22 January 1991, this Court resolved to consider
the respondents' Comments as Answers to the petition,
give due course to the petition and require the parties to
file simultaneously their respective Memoranda within
twenty (20) days from notice, which petitioner complied
with on 11 March
1991; 36 respondent Mendoza on 4 March
1991; 37 respondents Jesus Gonzaga, et al. and
Emmanuel Año, et al. on 19 March 1991; 38 and Mayo
Lacson on 5 April 1991. 39
We find merit in the petition.
Respondent Judge committed grave abuse of discretion
amounting to lack of jurisdiction, and is otherwise either
unmindful or ignorant of the law: when he fixed the
provisional values of the properties for the purpose of
issuing a writ of possession on the basis of the market
value and the daily opportunity profit petitioner may
derive in violation or in disregard of P.D. No. 42; in
amending such determination in Civil Cases Nos. 5938
and 5939 by increasing the same without hearing; in
directing the defendants to manifest within twenty-four
(24) hours whether or not they are accepting and
withdrawing the amounts, representing the provisional
values, deposited by the plaintiff for each of them as
"final and full satisfaction of the value of their respective
property (sic); " in declaring the provisional values as
the final values and directing the release of the
amounts deposited, in full satisfaction thereof, to the
defendants even if not all of them made the
manifestation; and in suspending the issuance of the
writ of possession until after the suspending the
amounts shall have been released to and received by
defendants.
In Municipality of Biñan vs. Hon. Jose Mar Garcia, et
al., 40 this Court ruled that there are two (2) stages in
every action of expropriation:
The first is concerned with the determination of the
authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. 41 It ends with
an order, if not of dismissal of the action, "of
condemnation declaring that the plaintiff has a lawful
right to take the property sought to be condemned, for
the public use or purpose described in the complaint,
upon the payment of just compensation to be
determined as of the date of the filing of the
complaint." 42 An order of dismissal, if this be ordained,
would be a final one, of course, since it finally disposes
of the action and leaves nothing more to be done by the
Court on the merits. 43 So, too, would an order of
condemnation be a final one, for thereafter as the Rules
expressly state, in the proceedings before the Trial
Court, "no objection to the exercise of the right of
condemnation (or the propriety thereof) shall be filed or
heard."
The second phase of the eminent domain action is
concerned with the determination by the Court of the
"just compensation for the property sought to be taken."
This is done by the Court with the assistance of not
more than three (3) commissioners. 44 The order fixing
the just compensation on the basis of the evidence
before, and findings of, the commissioners would be
final, too. It would finally dispose of the second stage of
the suit, and leave nothing more to be done by the
Court regarding the issue. . . .
However, upon the filing of the complaint or at any time
thereafter, the petitioner has the right to take or enter
upon the possession of the property involved upon
compliance with P.D. No. 42 which requires the
petitioner, after due notice to the defendant, to deposit
with the Philippine National Bank in its main office or
any of its branches or agencies, "an amount equivalent
to the assessed value of the property for purposes of
taxation." This assessed value is that indicated in the
tax declaration.
P.D. No. 42 repealed the "provisions of Rule 67 of the
Rules of Court and of any other existing law contrary to
or inconsistent" with it. Accordingly, it repealed Section
2 of Rule 67 insofar as the determination of the
provisional value, the form of payment and the agency
with which the deposit shall be made, are concerned.
Said section reads in full as follows:
Sec. 2. Entry of plaintiff upon depositing value with
National or Provisional Treasurer . — Upon the filing of
the complaint or at any time thereafter the plaintiff shall
have the right to take or enter upon the possession of
the real or personal property involved if he deposits with
the National or Provincial Treasurer its value, as
provisionally and promptly ascertained and fixed by the
court having jurisdiction of the proceedings, to be held
by such treasurer subject to the orders and final
disposition of the court. Such deposit shall be in money,
unless in lieu thereof the court authorizes the deposit of
a certificate of deposit of a depository of the Republic of
the Philippines payable on demand to the National or
Provincial Treasurer, as the case may be, in the
amount directed by the court to be deposited. After
such deposit is made the court shall order the sheriff or
other proper officer to forthwith place the plaintiff in
possession of the property involved.
JDSPECA | Cases | Rule 67 | 12
It will be noted that under the aforequoted section, the
court has the discretion to determine the provisional
value which must be deposited by the plaintiff to enable
it "to take or enter upon the possession of the property."
Notice to the parties is not indispensable. In interpreting
a similar provision of Act No. 1592, this Court, in the
1915 case of Manila Railroad Company, et
al. vs. Paredes, et al., 45 held:
. . . The statute directs that, at the very outset, "when
condemnation proceedings are brought by any railway
corporation" the amount of the deposit is to be
"provisionally and promptly ascertained and fixed by the
court." It is very clear that it was not the intention of the
legislator that before the order fixing the amount of the
deposit could lawfully be entered the court should finally
and definitely determine who are the true owners of the
land; and after doing so, give them a hearing as to its
value, and assess the true value of the land
accordingly. In effect, that would amount to a denial of
the right of possession of the lands involved until the
conclusion of the proceedings, when there would no
need for the filing of the deposit. Of course, there is
nothing in the statute which denies the right of the judge
to hear all persons claiming an interest in the land, and
courts should ordinarily give all such persons an
opportunity to be heard if that be practicable, and will
cause no delay in the prompt and provisional
ascertainment of the value of the land. But the scope
and extent of the inquiry is left wholly in the discretion of
the court, and a failure to hear the owners and
claimants of the land, who may or may not be known at
the time of the entry of the order, in no wise effects the
validity of the order. . . .
P.D. No. 42, however, effectively removes the
discretion of the court in determining the provisional
value. What is to be deposited is an amount equivalent
to the assessed value for taxation purpose . 46 No
hearing is required for that purpose. All that is needed
is notice to the owner of the property sought to be
condemned. 47
Clearly, therefore, respondent Judge either deliberately
disregarded P.D. No. 42 or was totally unaware of its
existence and the cases applying the same.
In any event, petitioner deposited the provisional value
fixed by the court. As a matter of right, it was entitled to
be placed in possession of the property involved in the
complaints at once, pursuant to both Section 2 of Rule
67 and P.D. No. 42. Respondent Court had the
corresponding duty to order the sheriff or any other
proper officer to forthwith place the petitioner in such
possession. Instead of complying with the clear
mandate of the law, respondent Judge chose to ignore
and overlook it. Moreover, upon separate motions for
reconsideration filed by the defendants in Civil Cases
Nos. 5938 and 5939, he issued a new Order increasing
the provisional values of the properties involved therein.
No hearing was held on the motions. As a matter of
fact, as the records show, the motion for
reconsideration filed by defendants Jesus Gonzaga, et
al. in Civil Case No. 5938 is dated 11 July 1990 48 while
the Order granting both motions was issued the next
day, 12 July 1990. 49 The motion for reconsideration in
Civil Case No. 5938 does not even contain a notice of
hearing. It is then a mere scrap of paper; it presents no
question which merits the attention and consideration of
the court. It is not even a mere motion for it does not
comply with the rules, more particularly Sections 4 and
5, Rule 15 of the Rules of Court; the Clerk of Court then
had no right to receive it. 50
There was, moreover, a much stronger reason why the
respondent Court should not have issued the 12 July
1990 Order increasing the provisional values of the
Gonzaga lots in Civil Cases Nos. 5938 and 5939. After
having fixed these provisional values, albeit
erroneously, and upon deposit by petitioner of the said
amounts, respondent Judge lost, as was held in Manila
Railroad Company vs. Paredes, 51 "plenary control over
the order fixing the amount of the deposit, and has no
power to annul, amend or modify it in matters of
substance pending the course of the condemnation
proceedings." The reason for this is that a contrary
ruling would defeat the very purpose of the law which is
to provide a speedy and summary procedure whereby
the peaceable possession of the property subject of the
expropriation proceedings "may be secured without the
delays incident to prolonged and vexatious litigation
touching the ownership and value of such lands, which
should not be permitted to delay the progress of the
work."
Compounding the above error and the capriciousness
with which it was committed is respondent Judge's
refusal to place the petitioner in possession of the
property or issue the writ of possession despite the fact
that the latter had likewise deposited the additional
amount called for by the 12 July 1990 Order. Instead,
respondent Judge issued the 16 July 1990 Order
directing the defendants to state in writing within
twenty-four (24) hours whether or not they would accept
and withdraw the amounts deposited by the petitioner
for each of them " as final and full satisfaction of the
value of their respective property (sic) affected by the
expropriation" and stating at the same time that the writ
will be issued after such manifestation and acceptance
and receipt of the amounts.
JDSPECA | Cases | Rule 67 | 13
The above Order has absolutely no legal basis even as
it also unjustly, oppressively and capriciously compels
the petitioner to accept the respondent Judge's
determination of the provisional value as the just
compensation after the defendants shall have
manifested their conformity thereto. He thus
subordinated his own judgment to that of the
defendants' because he made the latter the final
authority to determine such just compensation. This
Court ruled in Export Processing Zone Authority
vs. Dulay, et al. 52 that the determination of just
compensation in eminent domain cases is a judicial
function; accordingly, We declared as unconstitutional
and void, for being, inter alia, impermissible
encroachment on judicial prerogatives which tends to
render the Court inutile in a matter which, under the
Constitution, is reserved to it for final determination, the
method of ascertaining just compensation prescribed in
P.D. Nos. 76 464, 794 and 1533, to wit: the market
value as declared by the owner or administrator or such
market value as determined by the assessor, whichever
is lower in the first three (3) decrees, and the value
declared by the owner or administrator or anyone
having legal interest in the property or the value as
determined by the assessor, pursuant to the Real
Property Tax Code, whichever is lower, prior to the
recommendation or decision of the appropriate
Government office to acquire the property, in the last
mentioned decree. If the legislature or the executive
department cannot even impose upon the court how
just compensation should be determined, it would be far
more objectionable and impermissible for respondent
Judge to grant the defendants in an eminent domain
case such power and authority.
Without perhaps intending it to be so, there is not only a
clear case of abdication of judicial prerogative, but also
a complete disregard by respondent Judge of the
provisions of Rule 67 as to the procedure to be followed
after the petitioner has deposited the provisional value
of the property. It must be recalled that three (3) sets of
defendants filed motions to dismiss 53 pursuant to
Section 3, Rule 67 of the Rules of Court; Section 4 of
the same rule provides that the court must rule on them
and in the event that it overrules the motions or, when
any party fails to present a defense as required in
Section 3, it should enter an order of condemnation
declaring that the petitioner has a lawful right to take
the property sought to be condemned.
As may be gleaned from the 25 June 1990 Order, the
respondent Judge found that the petitioner has that
right and that "there will be a ( sic) paramount public
interest to be served by the expropriation of the
defendants' properties." Accordingly, considering that
the parties submitted neither a compromise agreement
as to the just compensation nor a stipulation to
dispense with the appointment of commissioners and to
leave the determination of just compensation to the
court on the basis of certain criteria, respondent Judge
was duty bound to set in motion Section 5 of Rule 67;
said section directs the court to appoint not more than
three (3) competent and disinterested persons as
commissioners to ascertain and report to it regarding
the just compensation for the property sought to be
taken. Such commissioners shall perform their duties in
the manner provided for in Section 6; upon the filing of
their report, the court may, after a period of ten (10)
days which it must grant to the parties in order that the
latter may file their objections to such report, and after
hearing pursuant to Section 8, accept and render
judgment in accordance therewith or, for cause shown,
recommit the same to the commissioners for further
report of facts. The court may also set aside the report
and appoint new commissioners, or it may accept the
report in part and reject it in part; and it may make such
order or render such judgment as shall secure to the
petitioner the property essential to the exercise of its
right of condemnation, and to the defendant just
compensation for the property so taken.
Not satisfied with the foregoing violations of law and
insisting upon his own procedure, respondent Judge
declared in his Order of 18 July 1990 that the
provisional amounts he fixed, later increased with
respect to the properties of the Gonzagas, shall be
considered as the full payment of the value of the
properties after the defendants in Civil Cases Nos.
5938, 5939, 5940, 5942 and 5943 shall have filed their
manifestations; he also ruled that the writ of possession
will be issued only after the latter shall have received
the said amounts. This Order and the records before
this Court do not disclose that the defendants in Civil
Cases Nos. 5941 and 5944 filed any manifestation; yet,
in the Order, respondent Judge whimsically and
arbitrarily considered the so-called provisional values
fixed therein as the final values. By such Order, the
case was in fact terminated and the writ of execution
then became a mere incident of an execution of a
judgment. The right of the petitioner to take or enter into
possession of the property upon the filing of the
complaint granted by Section 2 of Rule 67 and P.D. No.
42 was totally negated despite compliance with the
deposit requirement under the latter law.
Nothing can justify the acts of respondent Judge. Either
by design or sheer ignorance, he made a mockery of
the procedural law on eminent domain by concocting a
procedure which he believes to be correct. Judges must
apply the law; they are not at liberty to legislate. As
Canon 18 of the Canon of Judicial Ethics provides:
JDSPECA | Cases | Rule 67 | 14
A judge should be mindful that his duty his the
application of general law to particular instances, that
ours is a government of law and not of men, and that he
violates his duty as a minister of justice under such a
system if he seeks to do what he may personally
consider substantial justice in a particular case and
disregards the general law as he knows it to be binding
on him. Such action may become a precedent
unsettling accepted principles and may have
detrimental consequences beyond the immediate
controversy. He should administer his office with a due
regard to the integrity of the system of the law itself,
remembering that he is not a depositary of arbitrary
power, but a judge under the sanction of law.
They must be reminded once more that "the demands
of fair, impartial, and wise administration of justice call
for a faithful adherence to legal precepts on procedure
which ensure to litigants the opportunity to present their
evidence and secure a ruling on all the issues
presented in their respective pleadings. "Short-cuts" in
judicial processes are to be avoided where they impede
rather than promote a judicious disposition of justice." 54
We agree with the petitioner that the ruling in the case
of City Government of Toledo City vs. Fernandos, et
al., 55 does not apply to the instant petition because at
the pre-trial conference held therein, the petitioner
submitted to the discretion of the court as to the correct
valuation, private respondents stated that they have no
objections and are in conformity with the price of
P30.00 per square meter as reasonable compensation
for their land and the City Assessor informed the court
of the current market and appraisal values of the
properties in the area and the factors to be considered
in the determination of such. The parties presented
their documentary exhibits. In effect, therefore, the
parties themselves agreed to submit to a judicial
determination on the matter of just compensation and
that judgment be rendered based thereon. In the instant
case, no pre-trial was conducted; the proceedings were
still at that state where the provisional value was yet to
be determined; and the parties made no agreement on
just compensation.
WHEREFORE, the instant petition is GRANTED and
the Orders of respondent Judge of 25 June 1990, 12
July 1990, 16 July 1990 and 18 July 1990 are hereby
SET ASIDE and the temporary restraining order issued
by this Court on 31 July 1990 directing respondent
Judge to cease and desist from enforcing the
questioned Orders is hereby made permanent.
The respondent Judge is hereby directed to fix the
provisional values of the parcels of land in Civil Cases
Nos. 5938, 5939, 5940, 5941, 5942, 5943, and 5944 in
accordance with P.D. No. 42; thereafter, the petitioner
may retain in Savings Account No. 249-505865-7 with
the Philippine National Bank, NAPOCOR Branch,
Diliman, Quezon City, a sum equivalent to the
provisional value as thus fixed, which the Bank shall
hold subject to the orders and final disposition of the
court a quo, and withdraw the balance.
The respondent Judge is further directed to proceed
with the above eminent domain cases without
unnecessary delay pursuant to the procedure laid down
in Rule 67 of the Rules of Court.
Finally, respondent Judge is reminded to comply
faithfully with the procedure provided for in the Rules of
Court. Let a copy of this Decision be appended to his
record.
Costs against private respondents.
IT IS SO ORDERED.
Visayan Refining Co. v. Camus, 40 Phil. 550 (1919) 
G.R. No. L-15870 December 3, 1919
VISAYAN REFINING COMPANY, DEAN C.
WORCESTER, and FRED A. LEAS, petitioners,
vs.
HON. MANUEL CAMUS, Judge of the Court of First
Instance of the Province of Rizal and HON. QUINTIN
PAREDES, Attorney-General of the Philippine
Islands, respondents.
FACTS: Upon the direction of the Governor-General,
the Attorney-General filed a complaint with the CFI
(Rizal) in the name of the Government of the
Philippines for the condemnation of a certain tract of
land in Paranaque for military and aviation purposes.
The petitioners herein are among the defendants
named. Likewise, it was prayed that the court will give
the Government the possession of the land to be
expropriated after the necessary deposit (provisional) of
P600, 000.00 as the total value of the property.
Through the order of the public respondent, Judge
Camus, the prayer was granted.
JDSPECA | Cases | Rule 67 | 15
During the pendency of the proceedings, the petitioners
raised a demurrer questioning the validity of the
proceedings on the ground that there is no law
authorizing the exercise of the power of eminent
domain. Likewise, they moved for the revocation of the
order on the same ground stated and with additional
allegation that the deposit had been made without
authority of law since the money was taken from the
unexpended balance of the funds appropriated by
previous statutes for the use of the Militia Commission
and the authority for the exercise of the power of
eminent domain could not be found in those statutes.
The demurrer and motion were overruled and denied
respectively by Camus. This prompted the petitioners to
file this instant petition to stop the proceedings in the
CFI.
ISSUE: Can the Philippine Government initiate
expropriation proceedings in the absence of a statute
authorizing the exercise of the power of eminent
domain?
 HELD: YES, it can. The Philippine Government has the
general authority to exercise the power of eminent
domain as expressly conferred by Section 63 of the
Philippine Bill (Act of Congress of July 1, 1902). It says
that the Philippine Government is authorized to acquire,
receive, hold, maintain, and convey title to real and
personal property, and may acquire real estate for
public uses by the exercise of the right to eminent
domain. The same is subject to the limitation of due
process of law. In consonance with this, Section 64 of
the Administrative Code of the Philippine Islands (Act
No. 2711) expressly confers on the Government
General the power to determine when it is necessary or
advantageous to exercise the right of eminent domain
in behalf of the Government of the Philippine Island;
and to direct the Attorney-General, where such at is
deemed advisable, to cause the condemnation
proceedings to be begun in the court having proper
jurisdiction. There is no question as to the Governor
General’s authority to exercise this power.
However, this authority is not absolute. It is subject to
two limitations, namely, that the taking shall be for
public purpose and there must be just compensation.
Apparently, the reason behind the taking of the subject
land was for military and aviation purposes. This
considered a public purpose given the importance of
the military and aviation in the operation of the State.
As to the second requirement, it must be remembered
that at that time there was no law requiring that
compensation shall actually be paid prior to the
judgment of condemnation. The deposit was made,
despite the absence of said law, to afford absolute
assurance that no piece of land can be finally and
irrevocably taken from an unwilling owner until
compensation is paid. This is in conformity with the just
compensation requirement.
Given these reasons, the proceedings were made in
accordance with law.
Petition is denied. Proceedings of the lower court were
in all respects regular and within the jurisdiction of the
court.
SYLLABUS
1.EMINENT DOMAIN; PUBLIC USE; MILITARY AND
AVIATION PURPOSES.—The use of land by the
Government for military and aviation purposes is a
public use within the meaning of the provisions of law
authorizing the Government of the Philippine Islands to
acquire real estate for public uses by the exercise of the
right of eminent domain.
2.JUDICIAL PROCEEDINGS; AUTHORITY OF
GOVERNOR-GENERAL TO DIRECT INSTITUTION
OF PROCEEDINGS.—Judicial proceedings for the
condemnation of land for public use can be maintained
in the name of the Government of the Philippine Islands
pursuant to the directions of the Governor-General,
without any other special legislative authority than that
expressed in subsection (h) of section 64 of the
Administrative Code, in relation with section 3 of the
Jones Act.
3. LEGISLATIVE APPROPRIATION.—The existence of
a legislative appropriation especially destined to pay for
land to be acquired by the Government through the
exercise of the power of eminent domain is not an
essential prerequisite to the institution and maintenance
of judicial proceedings for the expropriation of such
land. All that can be required of the Government is that
it should comply with the conditions laid down by law as
and when those conditions arise.
4. RIGHT TO EXERCISE POWER; INHERENT IN
SOVEREIGNTY.—The power of eminent domain is
inseparable from sovereignty, being essential to the
existence of the State and inherent in government even
in its most primitive forms. No law, therefore, is ever
necessary to confer this right upon sovereignty or upon
any Government exercising sovereign or quasi-
sovereign powers.
5. DUE PROCESS OF LAW; JUST COMPENSATION.
—The power of eminent domain, with respect to the
JDSPECA | Cases | Rule 67 | 16
conditions under which the property is taken, must be
exercised in subjection to the restraints imposed by
constitutional or organic law, and in these Islands
especially with reference to section 3 of the Jones Act
which declares that no law shall be enacted which shall
deprive any person of property without due process of
law and that private property shall not be taken for
public use without just compensation.
6. METHOD OF EXPROPRIATION.—If the Legislature
prescribes a method of expropriation which provides for
the payment of just compensation and such method is
so conceived and adapted as to fulfill the constitutional
requisite of due process of law, any expropriation
accomplished in conformity with that method is valid.
7. PAYMENT OF COMPENSATION.—There is no
organic or constitutional provision in force in these
Islands requiring that compensation shall actually be
paid prior to the judgment of condemnation.
8. PAYMENT OF COMPENSATION AS
PREREQUISITE TO ACQUISITION OF PROPERTY.—
The system of expropriation prescribed by laws in force
in these Islands affords absolute assurance that no
piece of land can be finally and irrevocably taken from
an unwilling owner until compensation is paid. In this
connection our courts are directed to make such final
order and judgment as shall secure just compensation
for the land taken, and the right of the expropriator is
finally made absolutely dependent upon the payment of
compensation by him.
9. GIVING OF PROVISIONAL POSSESSION TO
GOVERNMENT ; OFFICE OF PRELIMINARY
DEPOSIT.—Where provisional possession is given to
the Government in an expropriation proceeding, upon
the making of the deposit required by Act No. 2826 of
the Philippine Legislature, the owner of the land is fully
protected from any loss that might result from the
temporary occupation of the land by the Government in
the event that the Legislature should finally f ail to
appropriate any additional amount necessary to satisfy
the award of the court; for such preliminary deposit
serves the double purpose of prepayment upon the
value of the property, if finally expropriated, and as an
indemnity against damage in the eventuality that the
proceeding should fail of consummation.
STREET, J.:
This is an original petition, directed to the Supreme
Court, containing an alternative prayer for a writ
of certiorari or prohibition, as the facts may warrant, to
stop certain condemnation proceedings instituted by the
Government of the Philippine Islands, and now pending
in the Court of First Instance of the Province of Rizal.
The respondents have interposed what is called an
answer, but which is in legal effect merely a demurrer,
challenging the sufficiency of the allegations of the
petition. The matter having been submitted upon oral
argument, the cause is now before us for the decision
of the question thus presented.
It appears that upon September 13, 1919, the
Governor-General directed the Attorney-General to
cause condemnation proceedings to be begun for the
purpose of expropriating a tract of land of an area of
about 1,100,463 square meters, commonly known as
the site of Camp Tomas Claudio. Said land is located in
the municipality of Parañaque, Province of Rizal, and
lies along the water front of Manila Bay, a few miles
south of the city of Manila. It is stated in communication
of the Governor-General that the property in question is
desired by the Government of the Philippine Islands for
military and aviation purposes.
In conformity with the instructions of the Governor-
General, condemnation proceedings were begun by the
Attorney-General on September 15, 1919, by filing a
complaint in the name of the Government of the
Philippine Islands in the Court of First Instance of the
Province of Rizal. Numerous persons are named in the
complaint as defendants because of their supposed
ownership of portions of the property intended to be
expropriated. In the list of persons thus impleaded
appear the names of the three petitioners herein,
namely, the Visayan Refining Co., Dean C. Worcester,
and Fred A. Leas, who are severally owners of different
portions of the property in question.
In the communication of the Governor-General, the
Attorney-General was directed immediately upon filing
the complaint to ask the court to give the Government
the possession of the land to be expropriated, after the
necessary deposit should be made as provided by law.
Accordingly in the complaint itself the Attorney-General
prayed the court promptly and provisionally to fix the
sum of P600,000 as the total value of the property and
to put the Government in immediate possession when
said sum should be placed at the disposition of the
court. An order was accordingly made on September
15, 1919, by the Honorable Judge Manuel Camus, of
the Court of First Instance of the Province of Rizal,
fixing the value of the property provisionally at the
amount stated and ordering that the plaintiff be placed
in possession, it being made to appear that a certificate
of deposit for the amount stated had been delivered to
the provincial treasurer.
JDSPECA | Cases | Rule 67 | 17
At this stage of the proceedings in the Court of First
Instance the three respondents already mentioned, to
wit, the Visayan Refining Co., Dean C. Worcester, and
Fred A. Leas, interposed a demurrer, questioning the
validity of the proceedings on the ground that there is
no Act of the Philippine Legislature authorizing the
exercise of the power of eminent domain to acquire
land for military or aviation purposes.
Contemporaneously with the filing of their demurrer, the
same parties moved the Court of First Instance to
revoke its order of September 15, giving the plaintiff
provisional possession. This motion is based
substantially on the same ground as the demurrer, that
is, the lack of legislative authority for the proposed
expropriation, but it contains one additional allegation to
the effect that the deposit in court of the sum of
P600,000, had been made without authority of law. In
support of this contention it was shown, by means of an
informal communication from the Insular Auditor, that
the money in question had been taken from the
unexpended balance of the funds appropriated by Acts
Nos. 2748 and 2785 of the Philippine Legislature for the
use of the Militia Commission. This appropriation
showed, upon the date said deposit of P600,000 was
made, an unexpended balance of P1,144,672.83.
On October 3, 1919, the Judge of the Court of First
Instance overruled the demurrer interposed by the three
parties mentioned and denied their motion to vacate the
order granting possession to the Government. The
present proceeding was thereupon instituted in this
Court in the manner and for the purpose already stated.
General authority to exercise the power of eminent
domain is expressly conferred on the Government of
the Philippine Islands, as now constituted by section 63
of the Philippine Bill, which reads as follows:
That the Government of the Philippine Islands is hereby
authorized, subject to the limitation and conditions
prescribed in this Act to acquire, receive, hold,
maintain, and convey title to real and personal property,
and may acquire real estate for public uses by the
exercise of the right of eminent domain. (Act of
Congress of July 1, 1902.)
Section 3 of the Jones Act contains the further provision
that "private property shall not be taken for public use
without just compensation." In addition to this there is
found in the same section the familiar provision, already
expressed in section 5 of the Philippine Bill, that no law
shall be enacted which shall deprive any person of
property without due process of law, or deny any
person the equal protection of the laws. (Acts of
Congress of August 29, 1916, sec. 3.)
Section 64 of the Administrative Code of the Philippine
Islands (Act No. 2711) expressly confers on the
Government General the power, among others:
To determine when it is necessary or advantageous to
exercise the right of eminent domain in behalf of the
Government of the Philippine Islands; and to direct the
Attorney-General, where such at is deemed advisable,
to cause the condemnation proceedings to be begun in
the court having proper jurisdiction.
The procedural provisions relative to the conduct of
expropriation proceedings are contained in section 241
to 253, inclusive, of the Code of Civil Procedure,
supplemented as they are by various later Acts of the
Legislature. Among the salient features of the scheme
of expropriation thus created are these: (1) If the court
is of the opinion that the right of expropriation exists,
three commissioners are appointed to hear the parties,
view the premises, and assess the damages to be paid
for the condemnation (sec. 243 Code Civ. Proc.); (2)
after hearing the evidence submitted by the parties and
assessing the damages in the manner prescribed by
law (sec. 244), the commissioners make their report to
the court, setting forth all their proceedings; and it is
expressly declared that "none of their proceedings shall
be effectual to bind the property or the parties until the
court shall have accepted their report and rendered
judgment in accordance with its recommendations"
(sec. 245); (3) the court then acts upon the report,
accepting the same in whole or in part, or rejecting,
recommitting, or setting aside the same, as it sees fit
(sec. 246).
It is further declared in section 246 that —
The court . . . may make such final order and judgment
as shall secure to the plaintiff the property essential to
the exercise of his rights under the law, and to the
defendant just compensation for the land so taken; and
the judgment shall require payment of the sum awarded
as provided in the next section (i.e., sec. 247) before
the plaintiff can enter upon the ground and appropriate
it to the public use.
Sections 247 and 251 of the same Code are of
sufficient importance in this connection to warrant
quotation in their entirety. They are as follows:
SEC. 247. Rights of Plaintiff After the Judgment . —
Upon payment by the plaintiff to the defendant of
compensation as fixed by the judgment, or after tender
to him of the amount so fixed and payment of the costs,
the plaintiffs shall have the right to enter in and upon
the land so condemned, to appropriate the same to the
public use defined in the judgment. In case the
JDSPECA | Cases | Rule 67 | 18
defendant and his attorney absent themselves from the
court or decline to receive the same, payment may be
made to the clerk of the court for him, and such officer
shall be responsible on his bond therefor and shall be
compelled to receive it."
SEC. 251. Final Judgment, Its Record and Effect . —
The record of the final judgment in such action shall
state definitely, by meters and bounds and adequate
description, the particular land or interest in land
condemned to the public use, and the nature of the
public use. A certified copy of the record of the
judgment shall be recorded in the office of the registrar
of deeds for the province in which the estate is situated,
and its effect shall be to vest in the plaintiff for the
public use stated the land and estate so described.
The provisions which deal with the giving of immediate
possession when the Government of the Philippine
Islands is the plaintiff are found in Act No. 2826, which
is in part as follows:
SEC. 2. When condemnation proceedings are instituted
by or in favor of the Insular Government . . . in any
competent court of the Philippines, the plaintiff shall be
entitled to enter immediately upon the land covered by
such proceedings, after depositing with the provincial
treasurer the value of said land in cash, as previously
and promptly determined and fixed by the competent
court, which money the provincial treasurer shall retain
subject to the order and final decision of the
court: Provided, however, That the court may permit
that in lieu of cash, there may be deposited with the
provincial treasurer a certificate of deposit of any
depository of the Government of the Philippine Islands,
payable to the provincial treasurer on sight, for the sum
ordered deposited by the court. The certificate and the
sums represented by it shall be subject to the order and
final decision of the court, and the court shall have
authority to place said plaintiff in possession of the land,
upon such deposit being made, by the proper orders
and a mandate, if necessary.
SEC. 3. . . . Upon the payment by the plaintiff to the
defendants of the compensation awarded by the
sentence, or after the tender of said sum to the
defendants, and the payment of the costs, or in case
the court orders the price to be paid into court, the
plaintiff shall be entitled to appropriate the land so
condemned to the public use specified in the sentence.
In case payment is made to the court, the clerk of the
same shall be liable on his bond for the sum so paid
and shall be obliged to receive the same.
In connection with the foregoing provisions found in
laws enact under the American regime is to be
considered the following provision of the Civil Code:
ART. 349. No one may be deprived of his property
unless it be by competent authority for some purpose of
proven public utility and after payment of the proper
compensation.
Unless this requisite has been complied with, it shall be
the duty of the court to protect the owner of such
property in its possession or to restore its possession to
him, as the case may be.
Taken together the laws mentioned supply a very
complete scheme of judicial expropriation, deducing the
authority from its ultimate source in sovereignty,
providing in detail for the manner of its exercise, and
making the right of the expropriator finally dependent
upon payment of the amount awarded by the court.
As has already been indicated the petition before us
proceeds on the idea that the expropriation proceedings
in question cannot be maintained by the Philippine
Government in the absence of a statute authorizing the
exercise of the power of eminent domain for military
and aviation purposes; and while it is not urged that a
special legislative Act must be passed every time any
particular parcel of property is to be expropriated, it is
claimed — and this really amounts to the same thing —
that the Government cannot institute and prosecute
expropriation proceedings unless there is already in
existence a legislative appropriation especially destined
to pay for the land to be taken.
We are of the opinion that the contentions of the
petitioners, in whatever way they may be understood or
expressed, are not well founded. There is one point at
least on which all must agree, namely, that if land can
be taken by the Government for a public use at all, the
use intended to be made of the land now in question,
that is, for military and aviation purposes, is a public
use. It is undeniable that a military establishment is
essential to the maintenance of organized society, and
the courts will take judicial notice of the recent progress
of the military and naval arts resulting from the
development of aeronautics.
The question as to the abstract authority of the
Government to maintain expropriation proceedings
upon the initiative of the Governor-General should not
be confused with that which has reference to the
necessity for a legislative appropriation. They really
involve different problems and will be separately
considered.
JDSPECA | Cases | Rule 67 | 19
Upon the first, we are of the opinion that in this
jurisdiction at least expropriation proceedings may be
maintained upon the exclusive initiative of the
Governor-General, without the aid of any special
legislative authority other than that already on the
statute books. Furthermore, if the Government complies
with the requirements of law relative to the making of a
deposit in court, provisional possession of the property
may be at once given to it, just as is permitted in the
case of any other person or entity authorized by law to
exercise the power eminent domain. Special legislative
authority for the buying of a piece of land by the
Government is no more necessary than for buying a
paper of pain; and in the case of a forced taking of
property against the will of the owner, all that can be
required of the government is that should be able to
comply with the conditions laid down by law as and
when those conditions arise.
The contention that the authority to maintain such a
proceeding cannot be delegated by the Legislature to
the Chief Executive, is in our opinion wholly erroneous
and apparently has its basis in a misconception of
fundamentals. It is recognized by all writers that the
power of eminent domain is inseparable from
sovereignty being essential to the existence of the State
and inherent in government even in its most primitive
forms. Philosophers and legists may differ as to the
grounds upon which the exercise of this high power is
to be justified, but no one can question its existence. No
law, therefore, is ever necessary to confer this right
upon sovereignty or upon any government exercising
sovereign or quasi-sovereign powers.
As is well said by the author of the article on Eminent
Domain in the encyclopædic treaties Ruling Case Law.
The power of eminent domain does not depend for its
existence on a specific grant in the constitution. It is
inherent in sovereignty and exists in a sovereign state
without any recognition of it in the constitution. The
provisions found in most of the state constitutions
relating to the taking of property for the public use do
not by implication grant the power to the government of
the state, but limit a power which would otherwise be
without limit. (10, R. C. L., pp. 11, 12.)
In other words, the provisions now generally found in
the modern laws of constitutions of civilized countries to
the effect that private property shall not be taken for
public use without compensation have their origin in the
recognition of a necessity for restraining the sovereign
and protecting the individual. Moreover, as will be at
once apparent, the performance of the administrative
acts necessary to the exercise of the power of eminent
domain in behalf of the state is lodged by tradition in the
Sovereign or other Chief Executive. Therefore, when
the Philippine Legislature declared in section 64 of the
Administrative Code, that the Governor-General, who
exercises supreme executive power in these Islands
(sec. 21, Jones Act), should be the person to direct the
initiation of expropriation proceedings, it placed the
authority exactly where one would expect to find it, and
we can conceive of no ground upon which the efficacy
of the statute can reasonably be questioned.
We would not of course pretend that, under our modern
system of Government, in which the Legislature plays
so important a role, the executive department could,
without the authority of some statute, proceed to
condemn property for its own uses; because the
traditional prerogatives of the sovereign are not often
recognized nowadays as a valid source of power, at
least in countries organized under republican forms of
government. Nevertheless it may be observed that the
real check which the modern Legislature exerts over
the Executive Department, in such a matter as this, lies
not so much in the extinction of the prerogative as in
the fact the hands of the Executive can always be
paralyzed by lack of money — something which is
ordinarily supplied only by the Legislature.
At any rate the conclusion is irresistible that where the
Legislature has expressly conferred the authority to
maintain expropriation proceedings upon the Chief
Executive, the right of the latter to proceed therein is
clear. As is said by the author of the article from which
we have already quoted, "Once authority is given to
exercise the power of eminent domain, the matter
ceases to be wholly legislative. The executive
authorities may then decide whether the power will be
invoked and to what extent." (10 R. C. L., p. 14.)
The power of eminent domain, with respect to the
conditions under which the property is taken, must of
course be exercised in subjection to all the restraints
imposed by constitutional or organic law. The two
provisions by which the exercise of this power is chiefly
limited in this jurisdiction are found in the third section
of the Jones Act, already mentioned, which among
other things declares (1) that no law shall be enacted
which shall deprive any person of property without due
process of law and (2) that private property shall not be
taken for public use without just compensation. The
latter of these provisions is directly aimed at the taking
of property under the exercise of the power of eminent
domain; and as this requirement, in connection with the
statutes enacted to make sure the payment of
compensation, usually affords all the protection that the
owner of property can claim, it results that the due
process clause is rarely invoked by the owner in
expropriation proceedings.
JDSPECA | Cases | Rule 67 | 20
Nevertheless it should be noted that the whole problem
of expropriation is resolvable in its ultimate analysis into
a constitutional question of due process of law. The
specific provisions that just compensation shall be
made is merely in the nature of a superadded
requirement to be taken into account by the Legislature
in prescribing the method of expropriation. Even were
there no organic or constitutional provision in force
requiring compensation to be paid, the seizure of one's
property without payment, even though intended for a
public use, would undoubtedly be held to be a taking
without due process of law and a denial of the equal
protection of the laws.
This point is not merely an academic one, as might
superficially seem. On the contrary it has a practical
bearing on the problem before us, which may be
expressed by saying that, if the Legislature has
prescribed a method of expropriation which provides for
the payment of just compensation and such method is
so conceived and adapted as to fulfill the constitutional
requisite of due process of law, any proceeding
conducted in conformity with that method must be
valid.lawphi1.net
These considerations are especially important to be
borne in mind in connection with the second contention
made by counsel for the petitioners, namely, that land
cannot be expropriated by the Government in the
absence of a legislative appropriation especially
destined to pay for the land to be taken. To this
question we now address ourselves; and while we bear
in mind the cardinal fact that just compensation must be
made, the further fact must not be overlooked that there
is no organic or constitutional provision in force in these
lands Islands requiring that compensation shall actually
be paid prior to the judgment of condemnation.
If the laws which we have exhibited or cited in the
preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in
this jurisdiction is such as to afford absolute assurance
that no piece of land can be finally and irrevocably
taken from an unwilling owner until compensation is
paid. It is true that in rare instances the proceedings
may be voluntarily abandoned before the expropriation
is complete or the proceedings may fail because the
expropriator becomes insolvent, in either of which
cases the owner retains the property; and if possession
has been prematurely obtained by the plaintiff in the
proceedings, it must be restored. It will be noted that
the title does not actually pass to the expropriator until a
certified copy of the record of the judgment is recorded
in the office of the register of deeds (sec. 251, Code
Civ. Proc.). Before this stage of the proceedings is
reached the compensation is supposed to have been
paid; and the court is plainly directed to make such final
order and judgment as shall secure to the defendant
just compensation for the land taken. (Sec. 246, Code
Civ. Proc.). Furthermore, the right of the expropriator is
finally made dependent absolutely upon the payment of
compensation by him. (Sec. 3, Act No. 2826; sec. 247,
Code Civ. Proc.).
It will be observed that the scheme of expropriation
exemplified in our statutes does not primarily
contemplate the giving of a personal judgment for the
amount of the award against the expropriator; the idea
is rather to protect the owner by requiring payment as a
condition precedent to the acquisition of the property by
the other party. The power of the court to enter a
judgment for the money and to issue execution thereon
against the plaintiff is, however, unquestioned; and the
court can without doubt proceed in either way. But
whatever course be pursued the owner is completely
protected from the possibility of losing his property
without compensation.
When the Government is plaintiff the judgment will
naturally take the form of an order merely requiring the
payment of the award as a condition precedent to the
transfer of the title, as a personal judgment against the
Government could not be realized upon execution. It is
presumed that by appearing as plaintiff in
condemnation proceedings, the Government submits
itself to the jurisdiction of the court and
thereby waives its immunity from suit. As a
consequence it would be theoretically subject to the
same liability as any other expropriator. Nevertheless,
the entering of a personal judgment against it would be
an unnecessary, as well as profitless formality.
In the face of the elaborate safeguards provided in our
procedure, it is frivolous to speculate upon the
possibility that the Legislature may finally refuse to
appropriate any additional amount, over and above the
provisional deposit, that may be necessary to pay the
award. That it may do. But the Government can not
keep the land and dishonor the judgment. Moreover, in
the eventuality that the expropriation shall not be
consummated, the owners will be protected by the
deposit from any danger of loss resulting from the
temporary occupation of the land by the Government;
for it is obvious that this preliminary deposit serves the
double purpose of a prepayment upon the value of the
property, if finally expropriated and as an indemnity
against damage in the eventuality that the proceedings
should fail of consummation.
It appears that the money represented by the certificate
of deposit which was placed at the disposal of the lower
court, pursuant to the requirements of section 2 of Act
JDSPECA | Cases | Rule 67 | 21
No. 2826, was taken from certain appropriations under
the control of the Militia Commission, a body created by
section 29 of Act No. 2715, for the purpose, among
others, of advising the Governor-General upon
measures relative to the organization equipment, and
government of the National Guard and reserve militia.
Counsel for the petitioners say that money appropriated
for the purpose of the Militia Commission cannot be
lawfully used to acquire the land which is now the
subject of expropriation, because no authority for the
exercise of the power of eminent domain is to be found
in any of the Acts appropriating money for said
Commission; from whence it is argued that the
certificate of deposit affords no protection to the owners
of property.
The point appears to be one of little general
importance, and we will not multiply words over it.
Suffice it to say that in our opinion the Insular Auditor
was acting within his authority when he let this money
out of the Insular Treasury; and being now within the
control of the lower court, it will doubtless in due time
be applied to the purpose for which the deposit was
made.
From the foregoing discussion it is apparent that the
action taken by the lower court in the condemnation
proceedings aforesaid was in all respects regular and
within the jurisdiction of the court. The writ prayed for in
the petition before us, therefore, can not be issued. The
application is accordingly denied, with costs against the
petitioners.
Separate Opinions
MALCOLM, J.,  concurring:
I agree with the conclusion arrived at in the majority decision. I
am clearly of the opinion that the alternative application for a writ
of certiorari  or prohibition should not be granted. An analysis
into their simplest elements of the various questions presented
may easily be made as follows: 1. The power of the Philippine
Government in eminent domain; (2) The constitutional
prohibition that (A) private property ( B) shall not be taken for
public use (C) without just compensation; and 3. The
constitutional prohibition that no money shall be paid out of the
treasury except in pursuance of an appropriation by law.
1. The power of eminent domain is expressly vested in the
Government of the Philippine Islands be section 63 of the Act of
Congress of July 1, 1902, commonly known as the Philippine
Bill. The Philippine Legislature has, in turn by section 64 (h) of
the Administrative Code of 1917, expressly delegated to the
Governor-General the specific power and duty to determine
when it is necessary or advantageous to exercise the right of
eminent domain in behalf of the Government of the Philippine
Islands. This delegation of legislative power to the Governor-
General was authorized in view of the nature of eminent
domain, which necessitates administrative agents for its
execution, in view of the previous attitude assumed by the
Judiciary with relation to similar delegations of power, and in
view of the undeniable fact that the Governor-General is a part
of the same Government of the Philippine Islands to which was
transferred the right of eminent domain by the Congress of the
United States. (See Government of the Philippine
Islands vs. Municipality of Binangonan [1916], 34 Phil. 518.)
When, therefore, the Governor-General directed the Attorney-
General to cause condemnation proceedings to be begun in the
Court of First Instance of Rizal with the object of having the
Government obtain title to the site commonly known as "Camp
Tomas Claudio," the Governor-General was merely acting as a
mouthpiece of American sovereignty, pursuant to a delegated
power transmitted by the Congress of the United States to the
Government of the Philippine Islands and lodged by this latter
Government in the Chief Executive. Any other holding would
mean that section 64 (h) of the Administrative Code is invalid, a
result to be avoided.lawphi1.net
2. In the existing Philippine Bill of Rights (last sentence,
paragraph 1, section 3, Act of Congress of August 29, 1916) is a
provision that "private property shall not be taken for public use
without just compensation." It seems undeniable ( A) that Camp
Claudio was "private property," and ( B) that it was being "taken
for public use," namely, for military and aviation purposes. The
only remaining point concerns "just compensation," which can
better be discussed under our division 3.
3. Another provision of the Philippine Bill of Rights (paragraph
15, section 3, Act of Congress of August 29, 1916) is, "that no
money shall be paid out of the treasury except in pursuance of
an appropriation by law." The same Auditor who shall "audit, in
accordance with law and administrative regulations, all
expenditure of funds or property pertaining to, or held in trust, by
the Government." His administrative jurisdiction is made
"exclusive." The Philippine Legislature could, of course, have
specifically appropriated an amount for the purchase of the
Camp Claudio site just as it could have specifically enacted a
law for the condemnation of such site, but instead it preferred to
include in the general Appropriation Acts, under the heads of
The Philippine National Guard or Philippine Militia, a large
amount to be expended in the discretion of the Militia
Commission, which may "use the funds appropriated for other
purposes, as the efficiency of the service may require." This
transfer of power of the Militia Commission, like the delegation
of some of the general legislative power to the Governor-
General, raises no constitutional bar. The Insular Auditor has
stated that there is in the treasury over a million pesos available
for the condemnation of Camp Claudio, and this decision for
present purposes must be taken as final and conclusive. The six
hundred thousand pesos deposit is merely the provisional
determination of the value of the land by the competent court,
and in no way jeopardizes the financial interests of the owners
of the property. No additional security is required since the
sovereign power has waived its right to be sued, has pledged
the public faith, and cannot obtain title until the owners receive
just compensation for their property. (See Sweet vs. Rechel
[1895], 159 U. S., 380.)
In resume, therefore, the Governor-General of the Philippine
Islands had the right to authorize the condemnation of this land
for military and aviation purposes, and no constitutional
provision has been violated. The Court of First Instance of Rizal
JDSPECA | Cases | Rule 67 | 22
has merely acted in strict accord with law, and its action should,
consequently, be sustained.
Municipality of Binan v. Garcia, 180 SCRA 576 (1989)  • The first is concerned with the determination of the
Municipality of Biñan vs. Garcia, 180 SCRA 576, G.R.
No. 69260 December 22, 1989
G.R. No. 69260 December 22, 1989
MUNICIPALITY OF BIÑAN, petitioner,
vs. HON. JOSE MAR GARCIA, Judge of the Regional
Trial Court at Biñan, Laguna (BRANCH XXXIV, Region
IV), and ERLINDA FRANCISCO, respondents
FACTS:
• Municipality of Binan filed an expropriation suit in the
RTC Laguna which impleaded defendant Erlinda
Francisco and other defendants who owned the land in
question and the case was presided over by
Respondent Judge Garcia.
• Petitioner sought the expropriation of 11 adjacent
parcels of lands in Binan with an aggregate area of 11
and 1/2 hectares. Lot was to be used for the new site of
a modern public market. Acquisition was authorized by
a resolution of the Sangguniang Bayan of Binan
• Erlinda filed for a “Motion to Dismiss” on the grounds
that the complaint filed by Petitioner (1) was vague and
conjectural, (2) violates the constitutional limitations of
law and jurisprudence in eminent domain, (3) it was
oppressive, (4) barred by prior decision and disposition
on the subject matter, (5) it states no cause of action
. • The motion to dismiss was actually a pleading that
substituted an answer in an ordinary civil action thus it
was not governed by the Rules of Court
. • Respondent Judge issued a writ of possession in
favor of the Municipality
• Erlinda filed a “Motion for Separate Trial” stating that
she had another defense as opposed to the common
defenses of the other defendants. Erlinda had a
constitutional defense provided by an apporved
Locational Clearance from H.S.R.C. She alleged that
until her clearance was revoked, the Municipality should
not file the expropriation case for it would be premature.
• At the separate trial, the Respondent Judge decided
in favor of Erlinda dismissing the complaint naming her
as defendant and amending the Writ of Possession
granted by the court to the Municipality to remove the
properties of Erlinda Francisco.
2 phases/stages in every action for expropriation:
authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, "of condemnation
declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment
of just compensation to be determined as of the date of
the filing of the complaint.”
• The second phase of the eminent domain action is
concerned with the determination by the Court of "the
just compensation for the property sought to be taken."
This is done by the Court with the assistance of not
more than three (3) commissioners. The order fixing the
just compensation on the basis of the evidence before,
and findings of, the commissioners would be final, too.
It would finally dispose of the second stage of the suit,
and leave nothing more to be done by the Court
regarding the issue. Obviously, one or another of the
parties may believe the order to be erroneous in its
appreciation of the evidence or findings of fact or
otherwise. Obviously, too, such a dissatisfied party may
seek reversal of the order by taking an appeal
therefrom.
• In actions of eminent domain, as in actions for
partition, since no less than two (2) appeals are allowed
by law, the period for appeal from an order of
condemnation is thirty (30) days counted from notice of
order and not the ordinary period of fifteen (15) days
prescribed for actions in general, conformably with the
provision of Section 39 of BP129 to the effect that in
"appeals in special proceedings in accordance with
Rule 109 of the Rules of Court and other cases wherein
multiple appeals are allowed, the period of appeal shall
be thirty (30) days, a record of appeal being required.
SYLLABUS
Eminent Domain; Two stages of; Procedure of.—1.
There are two (2) stages in every action of
expropriation. The first is concerned with a
determination of the authority of the plaintiff to exercise
the power of eminent domain and the propriety of its
exercise in the context of the facts involved in the suit. It
ends with an order, if not of dismissal of the action, “of
condemnation declaring that the plaintiff has lawful right
to take the property sought to be condemned, for the
public use or purpose described in the complaint, upon
JDSPECA | Cases | Rule 67 | 23
the payment of just compensation to be determined as
of the date of the filing of the complaint.” An order of
dismissal, if this be ordained, would be a final one, of
course, since it finally disposes of the action and leaves
nothing more to be done by the Court on the merits. So,
too, would an order of condemnation be a final one, for
thereafter, as the Rules expressly state, in the
proceedings before the Trial Court, “no objection to the
exercise of the right of condemnation (or the propriety
thereof) shall be filed or heard.” The second phase of
the eminent domain action is concerned with the
determination by the Court of “the just compensation for
the property sought to be taken.” This is done by the
Court with the assistance of not more than three (3)
commissioners. The order fixing the just compensation
on the basis of the evidence before, and finding of, the
commissioners would be final, too. It would finally
dispose of the second stage of the suit, and leave
nothing more to be done by the Court regarding the
issue. Obviously, one or another of the parties may
believe the order to be erroneous in its appreciation of
the evidence or findings of fact or otherwise. Obviously,
too, such a dissatisfied party may seek reversal of the
order by taking an appeal therefrom.
Same; Same; Same; Co-ownership; First phase of
partition and / or accounting suit—The first phase of a
partition and/or accounting suit is taken up with the
determination of whether or not a co-ownership in fact
exists, and a partition is proper (i.e., not otherwise
legally proscribed) and may be made by voluntary
agreement of all the parties interested in the property.
This phase may end with a declaration that plaintiff is
not entitled to have a partition either because a co-
ownership does not exist, or partition is legally
prohibited. It may end, on the other hand, with an
adjudgment that a co-ownership does in truth exist,
partition is proper in the premises and an accounting of
rents and profits received by the defendant from the
real estate in question is in order. In the latter case, “the
parties may, if they are able to agree, make partition
among themselves by proper instruments of
conveyance, and the court shall confirm the partition so
agreed upon. In either case—i.e., either the action is
dismissed or partition and/or accounting is decreed—
the order is a final one, and may be appealed by any
party aggrieved thereby.
Same; Same; Same; Second phase commences when
it appears that the parties are unable to agree upon the
partition directed by the court.—The second phase
commences when it appears that “the parties are
unable to agree upon the partition” directed by the
court. In that event partition shall be done for the parties
by the Court with the assistance of not more than three
(3) commissioners. This second stage may well also
deal with the rendition of the accounting itself and its
approval by the Court after the parties have been
accorded opportunity to be heard thereon, and an
award for the recovery by the party or parties thereto
entitled of their just share in the rents and profits of the
real estate in question.” Such an order is, to be sure,
final and appealable.
Same; Same; Same; Appeals; Reglementary period of
30 days to appeal in expropriation proceedings;
Reason; Case at bar.—The Court therefore holds that
in actions of eminent domain, as in actions for partition,
since no less than two (2) appeals are allowed by law,
the period for appeal from an order of condemnation is
thirty (30) days counted from notice of said order and
not the ordinary period of fiteen (15) days prescribed for
actions in general, conformably with the provision of
Section 39 of Batas Pambansa Bilang 129, in relation to
paragraph 19 (b) of the Implementing Rules to the
effect that in “appeals in special proceedings in
accordance with Rule 109 of the Rules of Court and
other cases wherein multiple appeals are allowed, the
period of appeal shall be thirty (30) days, a record of
appeal being required. In the case at bar, where a
single complaint was filed against several defendants
having individual, separate interest, and a separate trial
was held relative to one of said defendants after which
a final order or judgment was rendered on the merits of
the plaintiffs claim against that particular defendant, it is
obvious that in the event of an appeal from that
separate judgment, the original record cannot and
should not be sent up to the appellate tribunal. The
record will have to stay with the trial court because it
will still try the case as regards the other defendants. As
the rule above quoted states, “In an action against
several defendants, the court may, when a several
judgment is proper, render judgment against one or
more of them, leaving the action to proceed against the
others.w In lieu of the original record, a record on
appeal will perforce have to be prepared and
transmitted to the appellate court. More than one
appeal being permitted in this case, therefore, “the
period of appeal shall be thirty (30) days, a record of
appeal being required,” as provided by the
Implementing Rules in relation to Section 39 of B.P.
Blg. 129, supra.
.
NARVASA, J.:
Three (3) questions are resolved in the action
of certiorari at bar. The first is whether the special civil
action of eminent domain under Rule 67 of the Rules of
Court is a case "wherein multiple appeals are
allowed, 1 as regards which 'the period of appeal shall
JDSPECA | Cases | Rule 67 | 24
be thirty [30] days,2 instead of fifteen (15) days. 3 The
second is whether or not the Trial Court may treat the
motion to dismiss" filed by one of the defendants in the
action of eminent domain as a "motion to dismiss"
under Rule 16 of the Rules of Court, reverse the
sequence of trial in order and hear and determine said
motion to dismiss, and thereafter dismiss the
expropriation suit as against the movant. And the third
is whether or not a "locational clearance issued by the
Human Settlements Regulatory Commission relative to
use of land is a bar to an expropriation suit involving
that land.
The expropriation suit involved in
this certiorari proceeding was commenced by complaint
of the Municipality of Biñan, Laguna 4 filed in the
Regional Trial Court of Laguna and City of San Pablo,
presided over by respondent Judge Jose Mar Garcia.
The complaint named as defendants the owners of
eleven (11) adjacent parcels of land in Biñan with an
aggregate area of about eleven and a half (11-1/2)
hectares. The land sought to be expropriated was
intended for use as the new site of a modern public
market and the acquisition was authorized by a
resolution of the Sangguniang Bayan of Biñan
approved on April 11, 1983.
One of the defendants was Erlinda Francisco. She filed
a "Motion to Dismiss" dated August 26, 1983, on the
following grounds; (a) the allegations of the complaint
are vague and conjectural; (b) the complaint violates
the constitutional limitations of law and jurisprudence on
eminent domain; (c) it is oppressive; (d) it is barred by
prior decision and disposition on the subject matter; and
(e) it states no cause of action. 5 Now, her motion to
dismiss" was filed pursuant to Section 3, Rule 67 of the
Rules of Court:
Sec. 3. Defenses and objections within the time
specified in the summons, each defendant, in lieu of an
answer, shall present in a single motion to dismiss or
for other apppropriate relief, all of his objections and
defenses to the right of the plaintiff to take his property
for the use or purpose specified in the complaint. All
such objections and defenses not so presented are
waived. A copy of the motion shall be served on the
plaintiffs attorney of record and filed with the court with
the proof of service.
Her "motion to dismiss" was thus actually a pleading,
taking the place of an answer in an ordinary civil
action; 6 it was not an ordinary motion governed by Rule
15, or a "motion to dismiss" within the contemplation of
Rule 16 of the Rules of Court.
On October 23, 1983, respondent Judge issued a writ
of possession in favor of the plaintiff Municipality.
On February 3, 1984, Erlinda Francisco filed a "Motion
for Separate Trial," invoking Section 2, Rule 31. 7 She
alleged that there had already been no little delay in
bringing all the defendants within the court's jurisdiction,
and some of the defendants seemed "nonchalant or
without special interest in the case" if not mere "free
riders;" and "while the cause of action and defenses are
basically the same;" she had, among other defenses, "a
constitutional defense of vested right via a pre-existing
approved Locational Clearance from the
H.S.R.C." 8 Until this clearance was revoked, Francisco
contended, or the Municipality had submitted and
obtained approval of a "rezoning of the lots in question,"
it was premature for it to "file a case for
expropriation. 9 The Court granted the motion. By Order
dated March 2, 1984, it directed that a separate trial be
held for defendant Erlinda Francisco regarding her
special defenses mentioned in her .. Motion for
Separate Trial and in her Motion to Dismiss, distinct
from and separate from the defenses commonly raised
by all the defendants in their respective motions to
dismiss."
At the separate trial, the Fiscal, in representation of the
Municipality called the Trial Court's attention to the
irregularity of allowing Francisco to present her
evidence ahead of the plaintiff, "putting the cart before
the horse, as it were." He argued that the motion to
dismiss was in truth an answer, citing Rural Progress
Administration v. Judge de Guzman, and its filing did
"not mean that the order of presentation of evidence will
be reversed," but the usual procedure should be
followed; and the evidence adduced should be deemed
"evidence only for the motion for reconsideration of the
writ of possession." 10
Nevertheless, at the hearing of March 5, and March 26,
1984, the Court directed Francisco to commence the
presentation of evidence. Francisco presented the
testimony of Atty. Josue L. Jorvina, Jr. and certain
exhibits the Land Use Map of the Municipality of Biñan,
the Locational Clearance and Development Permit
issued by the H.S.R.C. in favor of "Erlinda Francisco c/o
Ferlins Realty & Development Corporation, and
Executive Order No. 648 and Letter of Instruction No.
729, etc. Thereafter, the respondent Judge issued an
Order dated July 24, 1984 dismissing the complaint "as
against defendant ERLINDA FRANCISCO," and
amending the Writ of Possession dated October 18,
1983 so as to "exclude therefrom and from its force and
effects said defendant .. and her property ..." His Honor
found that-
JDSPECA | Cases | Rule 67 | 25
1) a Locational Clearance had been issued on May
4,1983 by the Human Settlements Regulatory
Commission to the "Ferlin's Realty .. owned by
defendant Erlinda Francisco to convert .. (her) lot to a
commercial complex;"
2) according to the testimony of Atty. Jorvina of the
H.S.R.C., a grantee of a locational clearance acquires a
vested right over the subject property in the sense
that .. said property may not be subject of an
application for locational clearance by another applicant
while said locational clearance is subsisting;"
3) such a clearance should be "considered as a
decision and disposition of private property co-equal
with or in parity with a disposition of private property
through eminent domain;
4) the clearance was therefore "a legal bar against the
right of plaintiff Municipality .. to expropriate the said
property."
The Municipality filed on August 17, 1984 a Motion for
Reconsideration. Therein it (a) reiterated its contention
respecting the irregularity of the reversal of the order of
trial, supra. 11 (b) decried the act of the Court in
considering the case submitted for decision after the
presentation of evidence by Francisco without setting
the case for further hearing for the reception of the
plaintiffs own proofs, (c) pointed out that as admitted by
Atty. Jorvina, the locational clearance did not "mean
that other persons are already prevented from filing
locational clearance for the same project, and so could
not be considered a bar to expropriation, (d) argued
that the locational clearance issued on May 4, 1983,
became a "worthless sheet of paper" one year later, on
May 4, 1984 in accordance with the explicit condition in
the clearance that it "shall be considered automatically
revoked if not used within a period of one (1) year from
date of issue," the required municipal permits to put up
the commercial complex never having been obtained by
Francisco; and (e) alleged that all legal requirements for
the expropriation of the property had been duly
complied with by the Municipality. 12
The Municipality set its motion for reconsideration for
hearing on August 28, 1984 after furnishing Francisco's
counsel with copy thereof The Court however re-
scheduled the hearing more than two (2) months later,
on November 20, 1984. 13 Why the hearing was reset to
such a remote date is not explained.
On September 13, 1984, Francisco filed an "Ex-Parte
Motion for Execution and/or Finality of Order,"
contending that the Order of July 27, 1984 had become
"final and executory on August 12, 1984" for failure of
the Municipality to file a motion for reconsideration
and/or appeal within the reglementary period," 14 i.e
"fifteen (15) days counted from the notice of the final
order .. appealed from. 15
On October 10, 1984, the Court issued an Order
declaring the Municipality's motion for reconsideration
dated August 15, 1984 to have been "filed out of time,"
on account of which the Court 49 could not give due
course to and/or act x x (thereon) except to dismiss (as
it did thereby dismiss) the same." 16 It drew attention to
the fact that notice of its Order of July 24, 1984
(dismissing the complaint as against Francisco) was
served on plaintiff Municipality on July 27, 1984, but its
motion for reconsideration was not presented until
August 17, 1984, beyond the fifteen-day period for
appeal prescribed by law. And on October 15, 1985,
His Honor promulgated another Order directing the
issuance of (1) a writ of execution of the Order of July
24, 1984, and (2) a "certificate of finality" of said
order. 17
The Municipality attempted to have the respondent
Court reconsider both and Orders of October 10, and
October 15, 1984. To this end it submitted a motion
contending that: 18
1) "multiple appeals are allowed by law" in actions of
eminent domain, and hence the period of appeal is
thirty (30), not fifteen (15) days;
2) moreover, the grant of a separate trial at Francisco's
instance had given rise "ipso facto to a situation where
multiple appeals became available (Sections 4 and 5,
Rule 36, .. Santos v. Pecson, 79 Phil. 261);"
3) it was wrong for the Trial Court to have acted exparte
on the motion for execution, the motion being "litigable
in character;" and
4) it (the Municipality) was denied due process when
the Court, after receiving Francisco's evidence and
admitting her exhibits, immediately resolved the case
on the merits as regards Francisco, without setting the
case "for further hearing for reception of evidence for
the plaintiff."
The motion was denied, by Order dated October 18,
1984; hence, the special civil action of certiorari at bar.
1. There are two (2) stages in every action of
expropriation. The first is concerned with the
determination of the authority of the plaintiff to exercise
the power of eminent domain and the propriety of its
exercise in the context of the facts involved in the
suit. 19 It ends with an order, if not of dismissal of the
JDSPECA | Cases | Rule 67 | 26
action, "of condemnation declaring that the plaintiff has
a lawful right to take the property sought to be
condemned, for the public use or purpose described in
the complaint, upon the payment of just compensation
to be determined as of the date of the filing of the
complaint." 20 An order of dismissal, if this be ordained,
would be a final one, of course, since it finally disposes
of the action and leaves nothing more to be done by the
Court on the Merits. 21 So, too, would an order of
condemnation be a final one, for thereafter, as the
Rules expressly state, in the proceedings before the
Trial Court, "no objection to the exercise of the right of
condemnation (or the propriety thereof) shall be flied or
heard. 22
The second phase of the eminent domain action is
concerned with the determination by the Court of "the
just compensation for the property sought to be taken."
This is done by the Court with the assistance of not
more than three (3) commissioners. 23 The order fixing
the just compensation on the basis of the evidence
before, and findings of, the commissioners would be
final, too. It would finally dispose of the second stage of
the suit, and leave nothing more to be done by the
Court regarding the issue. Obviously, one or another of
the parties may believe the order to be erroneous in its
appreciation of the evidence or findings of fact or
otherwise. Obviously, too, such a dissatisfied party may
seek reversal of the order by taking an appeal
therefrom.
A similar two-phase feature is found in the special civil
action of partition and accounting under Rule 69 of the
Rules of Court. 24
The first phase of a partition and/or accounting suit is
taken up with the determination of whether or not a co-
ownership in fact exists, and a partition is proper (i.e.,
not otherwise legally prescribed) and may be made by
voluntary agreement of all the parties interested in the
property. 25 This phase may end with a declaration that
plaintiff is not entitled to have a partition either because
a co-ownership does not exist, or partition is legally
prohibited.26 It may end, on the other hand, with an
adjudgment that a co-ownership does in truth exist,
partition is proper in the premises and an accounting of
rents and profits received by the defendant from the
real estate in question is in order. 27 In the latter case,
"the parties may, ff they are able to agree, make
partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition so
agreed upon. 28, In either case i.e. either the action is
dismissed or partition and/or accounting is decreed the
order is a final one, and may be appealed by any party
aggrieved thereby. 29
The second phase commences when it appears that
"the parties are unable to agree upon the partition"
directed by the court. In that event partition shall be
done for the parties by the Court with the assistance of
not more than three (3) commissioners. 30 This second
stage may well also deal with the rendition of the
accounting itself and its approval by the Court after the
parties have been accorded opportunity to be heard
thereon, and an award for the recovery by the party or
parties thereto entitled of their just share in the rents
and profits of the real estate in question." 31 Such an
order is, to be sure, final and appealable.
Now, this Court has settled the question of the finality
and appealability of a decision or order decreeing
partition or recovery of property and/or accounting. In
Miranda v. Court of Appeals, decided on June 18,
1986,32 the Court resolved the question affirmatively,
and expressly revoked the ruling in Zaldarriaga v.
Enriquez 33 -that a decision or order of partition is not
final because it leaves something more to be done in
the trial court for the complete disposition of the case,
i.e, the appointment of commissioners, the proceedings
for the determination by said commissioners of just
compensation, the submission of their reports, and
hearing thereon, and the approval of the partition-and in
Fuentebella vs. Carrascoso 34 -that a judgement for
recovery of property with account is not final, but merely
interlocutory and hence not appealable until the
accounting is made and passed upon. As pointed out in
Miranda, imperative considerations of public policy, of
sound practice and adherence to the constitutional
mandate of simplified, just, speedy and inexpensive
determination of every action require that judgments for
recovery (or partition) of property with accounting be
considered as final judgments, duly appealable. This,
notwithstanding that further proceedings will still have to
be rendered by the party required to do so, it will be
ventilated and discussed by the parties, and will
eventually be passed upon by the Court. It is of course
entirely possible that the Court disposition may not sit
well with either the party in whose favor the accounting
is made, or the party rendering it. In either case, the
Court's adjudication on the accounting is without doubt
a final one, for it would finally terminate the proceedings
thereon and leave nothing more to be done by the
Court on the merits of the issue. And it goes without
saying that any party feeling aggrieved by that ultimate
action of the Court on the accounting may seek reversal
or modification thereof by the Court of Appeals or the
Supreme Court. 35
The Miranda doctrine was reiterated in de Guzman v.
C.A.- 36 Valdez v. Bagaso; 37 Lagunzad v.
Gonzales; 38 Cease v. C.A., 39 Macadangdang v.
JDSPECA | Cases | Rule 67 | 27
C.A. 40 and Hernandez v. C.A., 41 Gabor v.
C.A. 42 Fabrica v. C.A  . 43
No reason presents itself for different disposition as
regards cases of eminent domain. On the contrary, the
close analogy between the special actions of eminent
domain and partition already pointed out, argues for the
application of the same rule to both proceedings.
The Court therefore holds that in actions of eminent
domain, as in actions for partition, since no less than
two (2) appeals are allowed by law, the period for
appeal from an order of condemnation 44 is thirty (30)
days counted from notice of order and not the ordinary
period of fifteen (15) days prescribed for actions in
general, conformably with the provision of Section 39 of
Batas Pambansa Bilang 129, in relation to paragraph
19 (b) of the Implementing Rules to the effect that in
"appeals in special proceedings in accordance with
Rule 109 of the Rules of Court and other cases wherein
multiple appeals are allowed, the period of appeal shall
be thirty (30) days, a record of appeal being required. 45
The municipality's motion for reconsideration filed on
August 17, 1984 was therefore timely presented, well
within the thirty-day period laid down by law therefor;
and it was error for the Trial Court to have ruled
otherwise and to have declared that the order sought to
be considered had become final and executory.
2. As already observed, the Municipality's complaint for
expropriation impleaded eleven (11) defendants. A
separate trial was held on motion of one of them,
Erlinda Francisco, 46 it appearing that she had asserted
a defense personal and peculiar to her, and
inapplicable to the other defendants, supra.
Subsequently, and on the basis of the evidence
presented by her, the Trial Court promulgated a
separate Order dismissing the action as to her, in
accordance with Section 4, Rule 36 of the Rules of
Court reading as follows:
Sec. 4. Several judgments in an action against several
defendants, the court may, when a several judgment is
proper, render judgment against one or more of them,
leaving the action to proceed against the others.
It is now claimed by the Municipality that the issuance
of such a separate, final order or judgment had given
rise "ipso facto to a situation where multiple appeals
became available." The Municipality is right.
In the case at bar, where a single complaint was filed
against several defendants having individual, separate
interests, and a separate trial was held relative to one
of said defendants after which a final order or judgment
was rendered on the merits of the plaintiff s claim
against that particular defendant, it is obvious that in the
event of an appeal from that separate judgment, the
original record cannot and should not be sent up to the
appellate tribunal. The record will have to stay with the
trial court because it will still try the case as regards the
other defendants. As the rule above quoted settles, "In
an action against several defendants, the court may,
when a several judgment is proper, render judgment
against one or more of them, leaving the action to
proceed against the others. " 47 In lieu of the original
record, a record on appeal will perforce have to be
prepared and transmitted to the appellate court. More
than one appeal being permitted in this case, therefore,
"the period of appeal shall be thirty (30) days, a record
of appeal being required as provided by the
Implementing Rules in relation to Section 39 of B.P.
Blg. 129, supra. 48
3. Erlinda Francisco filed a "motion to dismiss"
intraverse of the averments of the Municipality's
complaint for expropriation. That "motion to dismiss"
was in fact the indicated responsive pleading to the
complaint, "in lieu of an answer." 49
Now, the Trial Court conducted a separate trial to
determine whether or not, as alleged by Francisco in
her "motion to dismiss," she had a "vested right via a
pre-existing approved Locational Clearance from the
HRSC.," making the expropriation suit
premature. 50 While such a separate trial was not
improper in the premises, 51 and was not put at issue by
the Municipality, the latter did protest against the Trial
Court's (a) reversing the order of trial and receiving first,
the evidence of defendant Francisco, and (b)
subsequently rendering its order sustaining Francisco's
defense and dismissing the action as to her, solely on
the basis of said Francisco's evidence and without
giving the plaintiff an opportunity to present its own
evidence on the issue. The Trial Court was clearly
wrong on both counts. The Court will have to sustain
the Municipality on these points.
Nothing in the record reveals any valid cause to reverse
the order of trial. What the Trial Court might have had in
mind was the provision of Section 5, Rule 16 of the
Rules of Court allowing "any of the grounds for
dismissal" in Rule 16 to "be pleaded as an affirmative
defense and authorizing the holding of a "preliminary
hearing .. thereon as if a motion to dismiss had been
filed." Assuming this to be the fact, the reception of
Francisco's evidence first was wrong, because
obviously, her asserted objection or defense that the
locational clearance issued in her favor by the HSRC
was a legal bar to the expropriation suit was not a
ground for dismissal under Rule 16. She evidently
JDSPECA | Cases | Rule 67 | 28
meant to prove the Municipality's lack of cause of
action; but lack of cause of action is not a ground for
dismissal of an action under Rule 16; the ground is the
failure of the complaint to state a cause of action, which
is obviously not the same as plaintiff's not having a
cause of action.
Provincial Government of Rizal v. Caro de Araullo, 58
Nothing in the record, moreover, discloses any Phil. 308 (1933) 
circumstances from which a waiver by the Municipality
of the right to present contrary proofs may be inferred. SYLLABUS
So, in deciding the issue without according the
1.EMINENT DOMAIN; VALUE OF PROPERTY
Municipality that right to present contrary evidence, the
EXPROPRIATED; MEASURE OF DAMAGES.—The
Trial Court had effectively denied the Municipality due
value of the property expropriated was greatly
process and thus incurred in another reversible error.
enhanced between the time when the extension of Taft
Avenue was laid out and the date when the
4. Turning now to the locational clearance issued by the
HSRC in Francisco's favor on May 4, 1983, it seems condemnation proceedings were filed. Its value had
further increased when the commissioners held
evident that said clearance did become a "worthless
sheet of paper," as averred by the Municipality, upon hearings a year and a half after these proceedings were
filed. The value of the property was enhanced by the
the lapse of one (1) year from said date in light of the
explicit condition in the clearance that it 44 shall be purpose for which it was taken. The owners of the land
have no right to recover damages for this unearned
considered automatically revoked if not used within a
period of one (1) year from date of issue," and the increment resulting from the construction of the public
improvement for which the land was taken. To permit
unrebutted fact that Francisco had not really made use
of it within that period. The failure of the Court to them to do so would be to allow them to recover more
than the value of the land at the time when it' was
consider these facts, despite its attention having been
drawn to them, is yet another error which must be taken, which is the true measure of the damages, or
just compensation, and would discourage. the
corrected.
construction of important public improvements.
WHEREFORE, the challenged Order issued by His
2. As the Supreme Court of the United States said in its
Honor on July 24,1984 in Civil Case No. 8-1960 is
ANNULLED AND SET ASIDE, and the case is decision of the case of United States vs. Chandler-
Dunbar Water Power Company (229 U. S., 53), which
remanded to the Trial Court for the reception of the
evidence of the plaintiff Municipality of Biñan as against decision was followed by this court in the case of the
Manila Railroad Co. vs. Caligsihan (40 Phil., 326), the
defendant Erlinda Francisco, and for subsequent
proceedings and judgment in accordance with the property is to be considered in its condition and
situation at the time it is taken, and not as enhanced by
Rules of Court and the law. Costs against private
respondent. the purpose for which it is taken.

3. MARKET VALUE OF LAND.—"The fundamental

SO ORDERED.
doctrine that private property cannot be taken for public
use without just compensation requires that the owner
shall receive the market value of his property at the
time of the taking, unaffected by any subsequent
change in the condition of the property." (20 C. J., 826,
828.)

4. CONDITION OF PROPERTY WHEN TAKEN.

—"There is some diversity of opinion as to what
constitutes a taking where the right of way is acquired
by proceedings in advance of actual occupancy; but
where, as in this case, the possession is taken by
consent of the owner, followed by the location and
construction of the road, the time of going into such
actual possession is clearly the time of taking, rather
than the period of condemnation proceedings, which,

JDSPECA | Cases | Rule 67 | 29

for some reason, may have been postponed." (Wier vs.
St. Louis, Ft. S. & W. R. Co., 40 Kan., 130; 19 Pac.
Rep., 316, 322.)
5. INCREASE AND DECREASE OF VALUE OF LAND.
—The conclusion of the trial court to the effect that
there is a steady increase in the value of land is not well
founded. Land, like other property, increases or
decreases in value according to the general economic
conditions prevailing, and for special reasons, but that
is a matter of proof.
6. VALUATION OF THE COMMISSIONERS NOT
SUSTAINED BY THE EVIDENCE.—The valuation of
the commission, which was accepted by the trial court,
is not sustained by the evidence, and reports not based
on the evidence should not be accepted. The
commissioners disregarded the evidence and
substituted their opinion as to the value of the property,
based on the inspection made by them. This they were
not authorized to do. (Manila Railroad Co. vs. Aguilar,
35 Phil., 118.)
G.R. No. L-36096             August 16, 1933
THE PROVINCIAL GOVERNMENT OF RIZAL,
PHILIPPINE ISLANDS, plaintiff-appellant,
vs. FILOMENA CARO DE ARAULLO, ET
AL., defendants-appellees.
AMALIA ARCEGA DE BASA and RAMON
AGTARAP, defendants-appellants.
In the old case of Provincial Government of Rizal v.
Caro de Araullo, it was ruled that “x x x the owners of
the land have no right to recover damages for this
unearned increment resulting from the construction of
the public improvement (lengthening of Taft Avenue
from Manila to Pasay) from which the land was taken.
To permit them to do so would be to them to recover
more than the value of the land at the time it was taken,
which is the true measure of the damages, or just
compensation, and would discourage the construction
of important public improvements.”
    In subsequent cases, the Court, following the above
doctrine, invariably held that the time of taking is the
critical date in determining lawful or just compensation.
In Municipality of La Carlota v. The Spouses Felicidad
Baltazar and Vicente Gan, it was ruled that the owner,
as is the constitutional intent, is paid what he is entitled
to according to the value of the property so devoted to
public use as of the date of taking. From that time, he
had been deprived thereof. He had no choice but to
submit. He is not, however, to be despoiled of such a
right. No less than the fundamental law guarantees just
compensation. It would be injustice to him certainly if
from such a period, he could not recover the value of
what was lost. There could be on the other hand,
injustice to the expropriator if by a delay in the
collection, the increment in price would accrue to the
owner. The doctrine to which the Court has been
committed is intended precisely to avoid either
contingency fraught with unfairness. (NPC v. Ibrahim,
et al., G.R. No. 168732, June 29, 2007).
    Simply stated, the exception finds the application
where the owner would be given undue increment
advantages arising from the use to which the
government devotes the property expropriated – as for
instance, the extension of a main thoroughfare as was
in the case in Caro de Araullo. In the instant case,
however, it is difficult to conceive of how there could
have been an extra-ordinary increase in the value of the
owner’s land arising from the expropriation, as indeed
the records do not show any evidence that the valuation
of P1,000.00 reached in 1992 was due to increments
directly caused by petitioner’s use of the land. Since the
petitioner is claiming an exception to Rule 67, Section
4, it has the burden in proving its claim that its
occupancy and use – not ordinary inflation and increase
in land values – was the direct cause of the increase in
valuation from 1978 to 1992. (NPC v. Ibrahim, et al.,
G.R. No. 168732, June 29, 2007).
VICKERS, J.:
This is an appeal by the provincial government of Rizal
from the decision of the Court of First Instance of that
province dated March 21, 1931, and the additional
decision of March 23, 1931, and the order or decision of
April 17, 1931, fixing the damages to be paid by the
plaintiff for the property expropriated for the extension
of Taft Avenue from the limits of the City of Manila,
through the municipality of Pasay, to its intersection
with the Manila South Road. Fifty-two lots and the
improvements on ten lots are involved in the appeal, as
follows:
Lot No. 1 and improvements of Filomena C. de Araullo,
Lot No. 3 and improvements of J.M. McIntyre,
Lot No. 7 and improvements of Luisa Atanacio,
Lot No. 8 of Luisa Atanacio,
Lot No. 11 of Adolfo Otto Scheerer,
Lot No. 13 and improvements of Donato Espinosa,
Lot No. 26 and improvements of B.M. Lauritzen,
Lot No. 30 and improvements of Jose Rueda Arias,
Lot No. 31 of Joaquin Lim Ang,
Lot No. 33 of Gonzalo Go Kiolay,
Lot No. 34 of Roy S. Springer,
Lot No. 35 of Roy s. Springer,
Lot No. 37 of Emiliana Cordova,
Lot No. 39 of Agapito Sanchez,
Lot No. 41 and improvements of J.J. Dunbar,
Lot No. 42 of Aurelia Arcega de Basa,
Lot No. 45 of Aurelia Arcega de Basa,
Lot No. 49 of Andres and Alfredo Wieneke,
Lot No. 52 of Aquilina San Miguel,
JDSPECA | Cases | Rule 67 | 30
Lot No. 53 of Jose Villanueva,
Lot No. 54 of Proceso Orca,
Lot No. 54-A of Ambrosio Hernandez,
Lot No. 55 of Pascual Villanueva,
Lot No. 56 of Flaviano de la Cruz,
Lot No. 57 of Pascual Villanueva,
Lot No. 58 of Flaviano de los Santos,
Lot No. 60 of Ines Vda. de Taylo,
Lot No. 61 of Ines Vda. de Taylo,
Lot No. 61-A of Josefa de los Santos,
Lot No. 61-B of Canuto Cuneta,
Lot No. 62 of Esteban Marcelino,
Lot No. 63 of Esteban Marcelino,
Lot No. 64 of Damaso Ignacio,
Lot No. 64-A of Alfredo Roench,
Lot No. 65 of Alfredo Roench,
Lot No. 66 and improvements of Aquilina de la Cruz,
Lot No. 67 of Enrique Vito Cruz,
Lot No. 69 of Carlos Cruz,
Lot No. 72 of Flaviano de los Santos,
Lot No. 73 — Improvements only — of (a) Q.S. Lockart and (b) L.H.
Golucke,
Lot No. 76 of Angela Cordero,
Lot No. 77 of Ramon Agtarap,
Lot No. 78 of Ramon Agtarap,
Lot No. 86 of Jacinta Z. de Cailles,
Lot No. 87 of Simeon Taylo,
Lot No. 88 of Flaviano de los Santos,
Lot No. 92 of Guillermo Musñgi,
Lot No. 94 of Proceso Orca,
Lot No. 96 and improvements of Felisa Cruz,
Lot No. 98 of Flaviano de los Santos,
Lot No. 100 of Vicente Reyes del Rosario,
Lot No. 101 of Anastacio Dizon,
Lot No. 102 of Alejandro Anareta.
The defendant Amalia Arcega de Basa also appealed
from the decision of March 21, 1931 with respect to lots
42 and 45, and the defendant Ramon Agtarap as to lots
77 and 78.
The complaint was filed on May 31, 1928. Defendants
appeared and admitted plaintiff's right to expropriate the
property in question, and the court appointed for
commissions composed of —
(a) Pedro Magsalin, Tomas Arguelles, and Salvador
Barrios;
(b) Mariano Melendres, Tomas Arguelles, and Ramon
Borromeo;
(c) Tomas Arguelles, Tomas de Guzman, and Celestino
P. Raos; and
(d) Jose P. Pigao, Tomas Arguelles, and Manuel V.
Dadivas, respectively, to hear the parties and view the
premises, and assess the damages to be paid for the
condemnation, and to report their proceedings to the
court. The only question involved in the case was the
determination of the damages to which the defendants
were entitled.
In the case of most of the lots the evidence consists of
the owner's estimate of the value of his land at the time
of the hearing in 1929 or 1930, and for the plaintiff the
testimony of Colin M. Hoskins. Hoskins is a real estate
broker and appraiser of real property, and at the time of
the hearing had been engaged in that business for
seven years, and had participated in real estate
transactions in the municipality of Pasay and in the land
taken for the extension of Taft Avenue. He had
examined the property to be condemned, and was in a
position to express a reliable opinion as to its market
value. We have not overlooked the fact that he was
being paid for his services by the plaintiff. He testified
as to the value of the property in question in 1927
before the extension of Taft Avenue was laid out, and
as to its increase value at the time of the hearing.
ERROR NO. I
The lower court erred in declaring that the properties
expropriated should be appraised according to their
value on June 1, 1928, and not that in 1927.
The fiscal's first assignment of error raises one of the
principal questions to be decided. Are the damages to
be based upon the value of the property when the
district engineer of Rizal Province entered upon the
land and laid out the extension of Taft Avenue in 1927,
or the value on May 31, 1928 when the condemnation
proceedings were filed, or on the value of the property
at the time of the hearings before the commissioners in
1929 and 1930?
In their report of October 25, 1930 (p. 142, bill of
exceptions), commissioners Magsalin, Arguelles, and
Barrios state that in appraising the land expropriated
they gave great weight to Hoskin's valuation of the land
for 1927, which they increased slightly (A la verdad, los
comisionados al fijar los precios de los terrenos, han
tenido mucho en cuenta los valores fijados por el
experto del Gobierno, Mr. Hoskins, para los lotes de los
demandados desde el año 1927 con un ligero
aumento). An examination of the record as to the
individual lots shows, however, that in most cases the
commissioners disregarded the evidence and
substituted their opinion as to the value of the property,
based on the inspection made by them. This they were
not authorized to do (Manila Railroad Co. vs. Aguilar,
35 Phil., 118).
After referring to the case of the Manila Railroad Co.
vs. Caligsihan  (40 Phil., 326), the trial judge said that
the present expropriation was begun June 1, 1928 (esta
expropiacion ha comenzado el 1.º de junio de 1928). It
may be inferred from this statement that he was under
the erroneous impression that the province did not lay
out the street or take possession of the property before
the filing of these proceedings (p. 179, bill of
exceptions).
JDSPECA | Cases | Rule 67 | 31
The trial judge also held that there was a natural
increase in the value of the property from 1927 to 1928
(Es de estimar que de 1927 a 1928 ha transcurrido
bastante tiempo, durante el cual, como caso normal y
de ordinario curso, las propiedades tomen incremento
en su valor; p. 179, bill of exceptions); that in the
ordinary course of events land increases in value from
time to time, and the appraisal in this case is based
almost entirely on the prices fixed by Hoskins for the
year 1927, plus an extra prince in accordance with the
petition of counsel for some of the defendants, this
extra price appearing to be the natural increase in value
of the properties in question from 1927 to the date of
the expropriation (p. 239, bill of exceptions).
The record does not sustain these findings of the trial
court.
In the case of the Manila Railroad Company vs.
Caligsihan (40 Phil., 326, 329), cited by the trial judge,
this court said:
It is a rule of general application that the value of the
property taken by eminent domain should be fixed as of
the date of the proceedings, and with reference to the
loss the owner sustains, considering the property in its
condition and situation at the time it is taken, and not es
enhanced by the purpose for which it is taken. Our law
says that the compensation shall be "just" and, "to be
exactly just, the compensation should be estimated as
of the time of the taking."
The rule just quoted contemplates a case where the
taking of the property by eminent domain coincides with
the filing of the proceedings, but in the case at bar the
plaintiff through its agents entered upon the property,
with the consent of the owners, and laid out the street in
1927, and entrusted to the Director of Public Works and
other officials the negotiations as to the price to be paid
therefor. A few public spirited citizens offered to donate
their land; others agreed to accept what the authorities
deemed a reasonable price, but in most cases no
amicable agreement could be reached as to the value
of the property taken, and in order to settle the matter
plaintiff filed these condemnation proceedings on May
31, 1928. The improvements existing on the land when
it was taken had been removed or destroyed in most
cases before the filing of these proceedings ("No ha
encontrado las mejoras reclamadas porque segun se
ha probado ya habian sido destruidas antes aun de
incoarse este expediente; pero ha encontrado otras de
igual naturaleza y condicion en los alrededores;" "En
algunos casos la Comision no ha encontrado las
mejoras reclamadas porque segun pruebas ya habian
sido destruidas mucho antes de incoar este expediente,
pero en otros casos la Comision ha encontrado en
dichos terrenos ciertas mejoras reclamadas y otras
alrededor de los mismos". Reports of the commissions,
pp. 67 and 125, bill of exceptions).
The question at issue is stated by Gutierrez Repide &
Monzon, attorneys for the appellee Luisa Atanacio, as
follows: "The Provincial Government of Rizal, which
hereafter will be designated as appellant acting thru its
District Engineer, prepared the location plan and
commenced the opening of the Taft Avenue Extension
in Pasay about the year 1927. Among the properties
thus taken possession of by the appellant was a portion
of the lot of the herein appellee Luisa Atanacio.
Although the appellant actually took material
possession of all the properties necessary for the
opening and extension of the Taft Avenue Extension in
the year 1927, the expropriation proceedings were
actually begun by the filing of the complaint on June 1,
1928. The only question before this court for decision is
what is the just and reasonable compensation to which
the appellee is entitled for lots 7 and 8 taken by the
appellant through the exercise of the right of eminent
domain. It is contended for the appellant that the value
of the said two lots ought to be P3.50 per square meter
which was the price in 1927 and not P5 per square
meter which was the value fixed by the commissioners
and approved by the trial judge corresponding to the
year 1928 when the expropriation proceedings were
actually commenced in the Court of First Instance of
Rizal."
As clearly appears from the evidence of record, the
value of the property in question was greatly enhanced
between the time when the extension of the street was
laid out and the date when the condemnation
proceedings were filed, because of the fact that one of
the widest and most important streets in the City of
Manila was to be extended through the municipality of
Pasay, thereby making the land affected practically a
part of the City of Manila and giving it a frontage on one
of the city's principal boulevards. The property had
further increased in value when the commissioners held
hearings a year and a half after these proceedings were
filed. In other words, the value of the property was
enhanced by the purpose for which it was taken. In our
opinion the owners of the land have no right to recover
damages for this unearned increment resulting from the
construction of the public improvement for which the
land was taken. To permit them to do so would be to
allow them to recover more than the value of the land at
the time when it was taken, which is the true measure
of the damages, or just compensation, and would
discourage the construction of important public
improvements.
JDSPECA | Cases | Rule 67 | 32
As the Supreme Court of the Unites States said in its
decision of the case of the United States vs. Chandler-
Dunbar Water Power Company (229 U.S., 53), which
decision was followed by this court in the case of
the Manila Railroad Co. vs. Caligsihan, the property is
to be considered in its condition and situation at the
time it is taken, and not as enhanced by the purpose for
which it is taken.
The fundamental doctrine that private property cannot
be taken for public use without just compensation
requires that the owner shall receive the market value
of his property at the time of the taking, unaffected by
any subsequent change in the condition of the property.
(20 C.J., 826, 828.)
The principle of these decision, which requires
compensation for property taken for public use to be
estimated with special reference to its value at the time
of the appropriation or taking, is manifestly just to all
concerned. By no other rule, in cases of condemnations
for uses of great public interest and local benefit, could
the valuation of property in the assessment of damages
be so successfully guarded against the influence of
enhanced values resulting specially from the enterprise
(Missouri Pac. Ry. Co. vs. Hays, 15 Neb., 224, 231; 18
N.W., 51.)
It is generally held, as it was in the Nebraska case just
cited, that the valuation of the property taken should be
made as of the time of the filing of the condemnation
proceedings. That is a fixed and convenient date, and it
usually precedes or coincides with the taking of the
property; but in the case at bar the plaintiff appropriated
the property with the consent of the landowners, and
without the filing of any expropriation proceedings, in
the expectation that the parties would be able to reach
an agreement out of court as to the value of the
property taken, and the condemnation proceedings
were not filed until it was found much later than no such
agreement could be reached as to part of the property.
Under those circumstances the value of the property
should be fixed as of the date when it was taken and
not the date of the filing of the proceedings.
In the case of Wier vs. St. Louis, Ft. S. & W.R. Co. (40
Kan., 130; 19 Pac. Rep., 316, 322), the Supreme Court
of Kansas said: "The general current of authorities is
that in all such cases compensation should be
ascertained and assessed as of the time when the
property was taken. There is some diversity of opinion
as to what constitutes a taking where the right of way is
acquired by proceedings in advance of actual
occupancy; but where, as in this case, the possession
is taken by consent of the owner, followed by the
location and construction of the road, the time of going
into such actual possession is clearly the time of taking,
rather than the period of condemnation proceedings,
which, for some reason, may have been postponed.
This subject has already been fully considered by this
court in two cases, where it is decided that, under
circumstances such as are presented here, the
damages will be measured as of the time when the
company first takes possession of the land, and
occupies it as a right of way. (Railway Co. vs. Andrews,
26 Kan., 702; Cohen vs. Railroad Co., 34 Kan., 158; 8
Pac. Rep., 138; see also, the numerous cases there
cited.)"
The conclusion of the trial court to the effect that there
is a steady increase in the value of land is not well
founded. Land like other property increases or
decreases in value according to the general economic
conditions prevailing, and for special reasons, but that
is a matter of proof.
ERROR NO. II
The lower court erred in appraising lot No. 69 of the
defendant Carlos Cruz at P7 a square meter.
This lot was originally appraised by the commission at
P7 a square meter, but it subsequently increased the
valuation to P7.50, because only a small portion of the
lot was left. The defendant claimed that his land was
worth P20 a square meter. It was assessed for taxation
at P1 a square meter, and according to Hoskins was
worth P3 in 1927, and the triangular portion remaining,
which is suitable for a gasoline station, is worth P7 a
square meter.
Mariano Molo testified as to the sale of a parcel of land
on February 14, 1927 at P& a square meter (Exhibit A-
3), but the land to which he referred is situated on F.B.
Harrison Street or the Manila South Road, the principal
commercial street of Pasay, and 400 meters from the
land in question. Defendant's Exhibit A-2 evidences the
sale of lot No. 8 of the subdivision plan No. 8138 on
August 15, 1927 for P6 a square meter, but it appears
that the area of the portion sold was only 165 square
meters, and apparently this lot is just beyond the limits
of the City of Manila and far from the lot now in
question.
On the ground that the original appraisal of the
commission was sustained by a preponderance of the
evidence, the trial judge fixed the value of this lot at P7
a square meter. We see no reason for rejecting
Hoskins' valuation of this land, taking into consideration
the fact it was far from the City of Manila and not
situated on an important street. The decision of the
JDSPECA | Cases | Rule 67 | 33
lower court is therefore modified, and the value of Lot
No. 69 is fixed at P3 a square meter.
ERROR NO. III
The lower court erred in appraising lots Nos. 1 and 72
at P6.50 a square meter.
Lot No. 1 of Filomena Caro de Araullo
The commission appraised this lot at P6.50 per square
meter, because it is high land and adjoins the City of
Manila, with an outlet to Calle Sandejas. Hoskins
testified that the value of this land in 1927 was P5 per
square meter; that he intervened in the purchase of it
by the defendant, who paid P5 per square meter
therefor. The trial judge accepted the valuation of the
commission on the ground that the value of the land
had increased from 1927 to 1928. He said:
"Es de estimar que de 1927 a 1928 ha transcurrido
bastante tiempo, durante el cual, como caso normal y
de ordinario curso, las propiedades tomen incremento
en su valor." For the reasons which we have stated, the
defendant is entitled to recover the value of her land
when it was taken in 1927. The decision of the lower
court is therefore modified, and the value of this lot is
fixed at P5 a square meter.
Lot No. 72 of Flaviano de los Santos
This lot was first appraised by the commission at P6 a
square meter. The appraisal was subsequently
increased to P6.50 a square meter. Hoskins testified
that this land was worth P3 a square meter. It appears
that lot No. 71, which was similarly situated as lot No.
72, was purchased by the plaintiff for P4.50 a square
meter in accordance with the order of the court of
February 3, 1931. The valuation of lot No. 72 is
accordingly reduced to P4.50 a square meter.
ERROR NO. IV
The lower court erred in appraising lots Nos. 3, 34, 35,
61-A, 61-B, 62, 64-A, 65, and 77 at P6 a square meter.
Lot No. 3 of J.M. McIntyre
This was an interior lot, assessed for taxation at P0.80
a square meter. Hoskins appraised it at P5 a square
meter, but the commission increased the appraisal to
P6 a square meter in order to indemnify the owner for
the expense of moving his house, and the trial judge
approved the action of the commission. The cost of the
removal of defendant's house was not proved, nor was
it proved that the defendant had a house on the land
appropriated by the plaintiff. The only evidence
presented by the defendant was an affidavit as to an
offer he had received for his land. This affidavit was
clearly inadmissible. The valuation of this lot is
therefore fixed at P5 a square meter.
Lot No. 34 of Roy S. Springer
The commissioners appraised this lot at P5 a square
meter, that being in their opinion the value of adjoining
lots in the same condition. The trial judge increased the
valuation to P6 a square meter. Hoskins testified that
this lot was worth P4.50 a square meter in 1927 and P8
a square meter in 1929. Jose Araneta, a real estate
broker, testified that this lot was purchased by the
defendant in October or November, 1928 for P6.75 a
square meter, but he admitted that some years prior
thereto the land was worth P3 or P4 a square meter.
Defendant's attorneys maintain that the land should be
appraised according to its value in June, 1928, but we
have already rejected that contention. We see no
reason for not accepting the testimony of Hoskins, and
the value of this lot is accordingly fixed at P4.50 a
square meter.
Lot No. 35 of Roy S. Springer
This was an interior lot, which was appraised by
Hoskins and the commission at P4 a square meter, but
this valuation as raised by the trial judge to P6 a square
meter. Jose Araneta testified that this lot was
purchased by the defendant in October or November,
1928 for P6.50 a square meter and that that was its
value at the time of the hearing in 1930. Neither the
price paid by the defendant nor the value of the land in
1930 is controlling, but the market value of the land
when plaintiff took possession of it. The action of the
trial judge in increasing the valuation of this lot from P4
to P6 a square meter is not justified by the evidence,
and the value of said land is fixed at P4 a square meter.
Lot No. 61-A of Josefa de los Santos
The owner claimed 15 a square meter for this lot,
because it was small and it would be difficult to find
another similar lot in the same place. Hoskins testified
that this lot was worth P5 a square meter in 1927. The
commission appraised it at P6 a square meter, and this
appraisal was approved by the trial judge on the ground
that practically the whole lot had been expropriated,
and that the damages caused thereby should be
proportionately compensated. We find no evidence in
the record to justify the appraisal of this lot at P6 a
square meter, because the evidence neither shows the
area of the remaining portion, which is described as
insignificant, nor the amount of the damages. The value
of this lot is fixed at P5 a square meter.
JDSPECA | Cases | Rule 67 | 34
Lot No. 61-B of Canuto Cuneta
What we have say with respect to lot 61-A applies to
this lot, and its value is accordingly fixed at P5 a square
meter.
Lot No. 62 of Esteban Marcelino
This lot was appraised by the commission at P6 a
square meter, and this valuation was approved by the
trial judge. The owner claimed P15 a square meter,
because he had filled the lot, but he could not state how
much he had spent for filing it. This lot is assessed for
taxation at P0.50 a square meter. Hoskins testified that
it was worth P4 a square meter in 1927 and P7 in 1929.
It appears that only a small portion of the lot is not
included in the expropriation, but the evidence does not
show the area of this remaining portion or the amount
of the damages. The appraisal of the commissioners
which was approved by the trial court is not sustained
by the evidence, and the value of this lot is fixed at P4 a
square meter.
Lots Nos. 64-A and 65 of Alfredo Roench
The commission valued these lots at P6 a square
meter, because the land was high and the remaining
portions irregular in shape and not suitable for building
site, and this appraisal was approved by the trial judge.
It appears that these two lots were purchased by the
defendant on February 27, 1928 for P1 a square meter.
Hoskins declared that the value of this land in 1927 was
P1.20 a square meter and P4.50 at the time of the
hearing. It appears that prior to the construction of the
Taft Avenue extension these lots had no outlet to any
public street except through a narrow road. The
valuation of the commission, which was accepted by
the trial judge, is not sustained by the evidence, and
reports not based on the evidence should be
disregarded.
The appellee contends that he was able to buy this land
for a peso a square meter, because the owner was
forced to sell it; but it will be observed that when
Roench bought this land in February, 1928 the
extension of Taft Avenue was already laid out. The
value of these two lots is fixed at P1.20 a square meter.
Lot No. 77 of Ramon Agtarap
This lot, which is assessed for taxation at P0.50 a
square meter, was appraised by the commission at P6
a square meter, and this valuation was accepted by the
lower court. Hoskins testified that this lot, like lot No. 76,
was worth P4 a square meter in 1927, and that an
additional sum of P1 a square meter would be sufficient
to indemnify the owner for the damages sustained by
reason of the fact that the remaining portion of this land
is practically unserviceable.
The defendant Ramon Agtarap also appealed from the
decision of the court as to this lot. He claimed at the
trial that his property was worth P15 a square meter,
because in 1926 and 1927 he wished to buy the
adjoining property for P8 a square meter, but the price
demanded was P12. Such evidence, if admissible, is of
no consequence in determining the market value of the
land in question. Defendant's attorneys contend that the
price fixed for this lot should be at least P7 a square
meter, because Hoskins testified that at the time of
hearing on December 27, 1929 it was worth P7 a
square meter. For the reasons which we have already
set forth, the defendant is entitled to recover the market
value of his property when it was taken in 1927, and not
its value at the time of the hearing. The value of this lot
is therefore fixed at P5 a square meter.
ERROR NO. V
The lower court erred in appraising lots Nos. 11, 13, 31,
60, 61, and 64 at P5.50 a square meter.
Lot No. 11 of Adolfo Otto Scheerer
The commission appraised this lot at P5.50 a square
meter, because it was high land and the remaining
portion was disfigured by the expropriation. Hoskins
testified that this land was worth P5 a square meter in
1927. The trial court approved the valuation of the
commission. The contention of the appellant as to this
lot is not sustained by the record. It appears that the
difference in question of P0.50 a square meter was
awarded to the defendant as consequential damages.
The decision of the trial court as to this lot is affirmed.
Lot No. 13 of Donato Espinosa
This lot was appraised by the commission at P5.50 a
square meter on the ground that it was in the same
condition as lot No. 12, which was appraised by the
commission at that price. Hoskins testified that lot No.
12 was worth P4.50 a square meter in 1927. It does not
appear that the defendant presented any evidence as
to the value of this lot. Ildefonso Hernandez was called
as a witness, but he did not testify as to the value of the
land. Ciriaco Gaspar, the owner of lot No. 12, accepted
the appraisal of P4.50 a square meter. The value of Lot
No. 13 is fixed at P4.50 a square meter.
Lot No. 31 of Joaquin Lim Ang
This lot was originally appraised by the commission at
P5 a square meter, but this appraisal was subsequently
JDSPECA | Cases | Rule 67 | 35
increased to P5.50 a square meter because of
defendant's claim for 1,000 loads of dirt removed by the
plaintiff from this lot. It appears from the evidence that
prior to the opening of the Taft Avenue extension the lot
in question was an interior lot and its only outlet was an
alley leading to Calle Buendia. Hoskins testified that the
value of this lot in 1927 was P4 a square meter and at
the present time from P9 to P10. Taking into
consideration defendant's claim for damages, which
was allowed by the commission and the trial judge, we
fix the value of this lot at P4.50 a square meter.
Lots Nos. 60 and 61 of Ines Vda. de Taylo
The defendant claimed that these two lots were worth
P15 a square meter. Hoskins testified that the value of
the land in question in 1927 was P5 a square meter.
The commission appraised the land at P5.50 a square
meter, and this appraisal was approved by the court.
Although the reason of the commission for fixing the
value of this lot at P5.50 does not clearly appear,
nevertheless it may be inferred from what is said in the
report that this valuation was based upon the testimony
of Hoskins to the effect that this land was worth P5 a
square meter in 1927. The value of the land in 1927
must govern, and the valuation of these two lots in fixed
at P5 a square meter.
Lot No. 64 of Damasa Ignacio
Alejandro Pascual, son-in-law of Damasa Ignacio,
testified that this land was worth P15 a square meter at
the time of the expropriation.
Hoskins testified that this land was worth P4 a square
meter in 1927, and P7 at the time of the hearing, taking
into consideration the fact that it was 30 centimeters
below the level of Pilapil Street. The commission,
without giving any reason thereof, declared this land to
be worth P5.50 a square meter, and this appraisal was
approved by the trial judge. The evidence does not
sustain this appraisal, and the value of this lot is fixed at
P4 a square meter.
ERROR NO. VI
The lower court erred in appraising lots Nos. 7, 8, 33,
37, 39, 41, 76, 78, 96, and 98 at P5 a square meter.
Lots Nos. 7 and 8 of Luisa Atanacio
These lots were situated very near the limits of the City
of Manila, and were found by the commission to be in
the same condition as lot No. 3 belonging to J.M.
McIntyre and were assessed at P6 a square meter.
Hoskins testified that these lots were worth P3.50 a
square meter in 1927, but as we have already seen he
found lot No. 3 to be worth P5 a square meter in 1927.
He did not give any reason for the difference in price.
The defendant admits that the plaintiff took possession
of the property in question in 1927. It appears that the
defendant in a letter dated January 22, 1931 expressed
her willingness to accept P5 a square meter, and the
trial judge fixed the value of these lots at that price. We
see no reason for making any distinction between the
value of these two lots and lot No. 3. The decision of
the lower court as to these two lots is therefore
affirmed.
Lot No. 33 of Gonzalo C. Go Quiolay
Hoskins testified that the value of this lot in 1927 was
P3.50 a square meter. The defendant asked the absurd
price of P20 a square meter. The commission
appraised it at P5 a square meter on the ground that it
was in the same condition as lots Nos. 29 and 31, and
the appraisal of the commission was approved by the
lower court. The appellant maintains that according to
the testimony of Hoskins this lot is inferior to lots 29 and
31, but apparently this contention is not sustained by
the record. The value of this lot is fixed at P4 a square
meter.
Lot No. 37 of Emiliana Cordova
Hoskins testified that the value of this lot in 1927 was
P4 a square meter, and not P4.50 a square meter, as
stated in appellant's brief. The commission appraised
this lot at P5 a square meter for the reason that it was
in the same conditions as "the preceding lots", and the
appraisal of the commission was approved by the trial
judge. The finding of the commission is to vague to
sustain the judgment, and the value of this lot is fixed at
P4 a square meter.
Lot No. 39 of Agapito Sanchez
Hoskins testified that this lot was worth P4 a square
meter in 1927. The defendant presented no competent
evidence as to the value of the land. The commission
appraised this lot at P5 a square meter "por las mismas
razones que alega en cuanto a los lotes anteriores",
and the trial judge approved the appraisal of the
commission. The evidence does not sustain the finding
of the lower court, and the value of this lot is fixed at P4
a square meter.
Lot No. 41 of J.J. Dunbar
Hoskins testified that this lot was worth P4 a square
meter in 1927. The defendant presented an affidavit in
which he claimed P8 a square meter, but subsequently
offered to accept the commission's appraisal of P5 a
JDSPECA | Cases | Rule 67 | 36
square meter. There is no competent evidence to
sustain the valuation of the commission, which was
approved by the trial judge, and the value of this lot is
fixed at P4 a square meter.
Lot No. 76 of Angela Cordero.
Hoskins testified that this lot was worth P4 a square
meter in 1927. No competent evidence was presented
by the defendant. The commission allowed the
defendant P5 a square meter, which was approved by
the court, partly for the reason that the defendant had
been slightly damages because of the conformation of
the land not expropriated. The record does not justify
this finding of the commission as to consequential
damages, especially in view of the fact that Hoskins
testified that the remaining portion of defendant's land
is now worth P7 a square meter. The value of this lot is
therefore fixed at P4 a square meter.
Lot No. 78 of Ramon Agtarap
Hoskins testified that this lot was worth P4 a square
meter in 1927. The defendant claimed the
unreasonable price of P15 a square meter, and was
permitted to testify that in 1926 or 1927 he offered
Angela Cordero, the owner of adjoining lot No. 76, P8 a
square meter. The commission appraised this lot at P5
a square meter on the ground that it was in the same
condition as lot No. 76, which was appraised at P5 a
square meter. It appears, however, that in fixing the
value of lot No. 76 at P5 a square meter the
commission took into consideration certain
consequential damages, but that reason does not apply
in the case of lot No. 78. The trial court approved the
appraisal of the commission, and both parties have
appealed. The finding of the lower court is not
sustained by the record. There is no competent
evidence to offset the testimony of Hoskins, and the
value of this lot is fixed at P4 a square meter.
Defendant's attorneys on page 5 of their brief say: "As
to lot No. 78, the plaintiff-appellant claims that the
defendant Ramon Agtarap has not presented any
evidence at all (p. 21). This is a deliberate falsehood,
because, as has been stated, Mr. Agtarap himself this
testified as to the value (I, t. s. n. pp. 55-59, G.R.
35565)." Although the statement made in the fiscal's
brief is not strictly accurate, because Agtarap was
presented as a witness, there is not the slightest
justification for characterizing the fiscal's statement as a
deliberate falsehood, and he strongly disapprove of the
use of such language.
Lot No. 96 of Felisa Cruz
According to the evidence this lot belongs to Felisa
Cruz and her sister, Dolores Cruz. Hoskins testified that
part of this lot is low and part high land, and that in
1927 it was worth P1.50 and P3 a square meter,
respectively. Melecio Sabino claimed P17 a square
meter, because he had filled the land, and that the lot
was in the same condition as that of Carlos Cruz. The
commission appraised the lot in question at P5 a
square meter, and the trial judge accepted this
appraisal. The trial judge found that the pretensions of
the defendant were not sustained by the evidence. In
out opinion the evidence did not justify the lower court
in fixing the value of this lot at P5 instead of P3 a
square meter, in view of the testimony of Hoskins.
Plaintiff has expressed its willingness to pay P3 a
square meter for the whole portion that was
expropriated. The value of this lot is fixed at P3 a
square meter.
Lot No. 98 of Flaviano de los Santos
Hoskins testified that this lot was worth P4 a square
meter in 1927. It appears from the testimony of Meliton
de los Santos that this land had an area of 730 square
meters, and that all of it was expropriated except 30
square meters. This small remaining portion is probably
unserviceable. The defendant presented no evidence
as to the market value of his land further than to show
that it was in the same condition as lot No. 72. The
value of this last mentioned lot has been fixed by us at
P4.50 a square meter, and taking into consideration
defendants' consequential damages, we fix the value of
lot No. 98 at P4.70 a square meter.
ERROR NO. VII
The lower court erred in appraising lots Nos. 26, 42, 58,
87, and 92 at P4.50 a square meter.
Lot No. 26 of Belle M. Lauritzen
As to this lot the commission said:
El lote 26 de la expropriada Mrs. B.M. Lauritzen, cuyo
resto ha sido grandemente beneficiado por la extension
de la Avenida Taft, amillarado en P1 m. c. y tasado por
Hoskins en P4.25 m. c., estara bien compensado con
Cuatro pesos con cincuenta centavos solamente.
Hoskins testified that this lot was worth P4.25 a square
meter in 1927 and P9 a square meter at the time of the
hearing. Defendant claimed P12 a square meter, and
was permitted to testify to having refused an offer of
that price. This land was assessed for taxation at the
rate of P1 a square meter. No competent evidence was
JDSPECA | Cases | Rule 67 | 37
offered to offset the testimony of Hoskins, and the value
of this lot is fixed at P4.25 a square meter.
Lot No. 42 of Amalia Arcega de Basa
The commission appraised this lot at P4.50 a square
meter, stating that the land was high in some parts and
that the expropriation had left a portion which was
almost unserviceable. The court approved the appraisal
of the commission. Both parties have appealed.
Hoskins testified that part of this lot was low and that
the market value of the lot in 1927 was P2.75 a square
meter, not P2.25 as stated in the decision and in
plaintiff's brief. The defendant claims P5 a square
meter. The only witness for the defendant was her
attorney. According to the contention of the defendant
the are of the lot in question is 2,341 square meters and
the remaining portion not expropriated contains 440
square meters. We are of the opinion that by adding to
the market value of the land in 1927, 25 centavos a
square meter, the defendant will be compensated for
any consequential damages which she may have
suffered. The value of lot No. 42 is therefore fixed at P3
a square meter.
Lot No. 58 of Flaviano de los Santos
The commission appraised this lot at P4 a square
meter, but increased its appraisal to P4.50 a square
meter, because the expropriation had left a strip of land
on either side of the street that was unserviceable. The
revised appraisal of the commission was approved by
the trial court. Hoskins testified that the land in question
was worth P2.50 a square meter in 1927. It appears
that the area of the land expropriated is 2,564 square
meters and that the remaining portion is very small. The
exact area of it is not given. Ten centavos a square
meter on the portion condemned will probably be amply
sufficient to compensate the defendant for any
consequential damages. The value of Lot No. 58 is
therefore fixed at P2.60 a square meter.
Lot No. 87 of the heirs of Simeon Taylo
The commission originally appraised this lot at P4 a
square meter, but subsequently increased the valuation
to P4.50, without giving any reason therefor. Ines
Claudio, administratrix of the estate of the deceased
Simeon Taylo, claimed P15 a square meter, stating that
the lot in question was in the same condition as lots
Nos. 60 and 61, which were appraised by Hoskins at
P5 a square meter. It appears that the portion
expropriated was very small, and that the remainder of
defendant's land was greatly increased in value.
Hoskins testified that the market value of this land in
1927 was P3.50 a square meter. The record shows that
lots 60 and 61 had been filled to the street level, and
that the valuation of P5 a square meter includes certain
consequential damages. The value of the lot in question
is fixed at P3.50 a square meter.
Lot No. 92 of Guillermo Musñgi
The commission appraised this lot at P4.50 a square
meter, because it was high land and because Hoskins
testified that it was worth P4 a square meter in 1927.
The trial judge approved the appraisal of the
commission. As we already explained, the defendant is
entitled to recover the market value of his land in 1927.
The value of the lot in question is therefore fixed at P4 a
square meter.
ERROR NO. VIII
The lower court erred in appraising lots Nos. 52, 53, 54,
54-A, 55, 56, 57, 63, 67, 86, 88, and 94 at P4 a square
meter.
Lot No. 52 of Aquilina San Miguel, lot No. 53 of Jose
Villanueva, lot No. 54 of Proceso Orca, lot No. 54-A of
Ambrosio Hernandez and Pascual Villanueva, lot No.
55 of Pascual Villanueva, lot No. 56 of the heirs of
Flaviano de la Cruz, and lot No. 57 of Pascual
Villanueva.
Hoskins appraised lot No. 52 at P1.50 a square meter
in 1927 and P2 a square meter in 1929; lots Nos. 53
and 54 at P2.50 a square meter in 1927; lots Nos. 54-A,
55, and 56 at P2 a square meter in 1927, and lot No. 57
at P2.50 a square meter in 1927. The defendants
claimed P15, P12, P18, P15, P6, including the
improvements, P6, including the improvements, and P6
a square meter, including the improvements,
respectively.
The commission appraised all these lots at P4 a square
meter, taking into consideration the different facts as to
the several lots, and this appraisal was approved by the
trial court. Contrary to the contention of the fiscal, these
lots all appear to have fronted on Pilapil Street, and the
commission found these lots to be in the same
condition as lot No. 51. The attorney for the defendants
maintains that the plaintiff accepted the appraisal of lot
No. 51 of P4 a square meter and paid the owner of it at
that rate, but the decision of the trial judge as to lot No.
51 does not appear in the record that has been
elevated to this court. There is a sharp conflict in the
evidence as to the character of some of the lots in
question. While Hoskins testified that they were low
lands and were used as zacate fields, the defendants
maintain that they had been filed and were used for
building sites and gardens. The truth probably is that
JDSPECA | Cases | Rule 67 | 38
small portions of the land had been filled. Taking into
consideration all the facts in the case and that the
commission as a rule valued the land expropriated
according to what they deemed to be its value in 1928
or 1929 instead of its market value in 1927, we fix the
value of the foregoing lots at P3 a square meter.
Lot No. 63 of Esteban Marcelino
The commission appraised this lot at P5 a square
meter, because it was high land and the part not
expropriated was disfigured. This appraisal was
reduced by the lower court to P4 a square meter.
Hoskins testified that this land was 20 centimeters
below the street level, and that its market value in 1927
was P1.20 a square meter. It appears from the
evidence that this lot was assessed at 20 centavos a
square meter; that it was an interior lot, and that the
remaining portion, which was slightly disfigured, was
greatly benefited by the extension of Taft Avenue.
Neither the valuation of the commission nor that of the
trial judge is sustained by the evidence. The value of
this lot is fixed at P1.20 a square meter.
Lot No. 67 of Enrique Vito Cruz
The commission appraised this lot at P4.50 a square
meter, because it was high land. The trial judge
reduced the valuation to P4 a square meter.
The defendant claimed P2 a square meter. He testified
that he purchase it in 1921 at 32 centavos a square
meter, and admitted that the remainder of the property
would be benefited by the expropriation. He was
permitted to testify to having received an offer of P3 a
square meter in 1927.
It appears that this lot was assessed for taxation at 20
centavos a square meter. Hoskins testified that it was
marshy land and lower than Pilapil Street, on which it
fronted; that its market value in 1927 was P1.50 a
square meter, but that at the time of the hearing it might
be worth P4 a square meter. The evidence of record
does not sustain the finding of the commission or that of
the trial judge. The area expropriated was insignificant,
being only 36 square meters. We fix the value of this lot
at P1.50 a square meter.
Lot No. 86 of Jacinta Z. de Cailles, lot No. 88 of
Flaviano de los Santos, and Lot No. 94 of Proceso
Orca
These lots were all appraised by the commission at P4
a square meter, and this appraisal was approved by the
trial court.
Hoskins testified that the market value of lot No. 86 of
Jacinta Z. de Cailles was P3.50 in 1927. The defendant
did not present any evidence as to the value of the
land, but the trial judge states in his decision that
Hoskins in testifying as to lot No. 86 stated that it was
worth P3.50 a square meter in 1927 and P7.50 a
square meter in 1929. The court then found that the
increase in price of 50 centavos a square meter allowed
by the commission was within the natural increase of
the value of the land included in the expropriation
proceedings. This conclusion of the trial judge is clearly
erroneous, and the value of the lot in question is fixed
at P3.50 a square meter.
The commission appraised lot No. 88 at P4 a square
meter for the same reasons that it appraised lot No. 87
at that price. Hoskins testified that lot No. 88 was worth
P3.50 a square meter in 1927 and P7.50 a square
meter in 1929. The defendant did not present any direct
evidence as to the value of the lot in question. His only
witness, his son, Meliton de los Santos, admitted that
the land of his father was benefited by the opening of
the street, and requested that he be allowed
compensation at the same rate given to adjoining
owners. We have already fixed the value of lot No. 87
at P3.50 a square meter, and in accordance with the
evidence, we fix the value of lot No. 88 at the same
price.
The portion of lot No. 94 of Proceso Orca that was
expropriated was so small as to be almost negligible.
No evidence was presented by the plaintiff or the
defendant as to the value of this lot. It appears from an
examination of the plan that it was situated on the
opposite side of Calle Pilapil from lots Nos. 54 and 54-
A, which we have valued at P3 a square meter. The
value of lot No. 94 is accordingly fixed at P3 a square
meter.
ERROR NO. IX
The lower court erred in appraising lot No. 30 at P3.20
a square meter.
Lot No. 30 of Jose Rueda Arias
The commission first appraised this lot at P3 a square
meter, taking into consideration the fact that the portion
not included in the expropriation was unserviceable. In
an additional report the commission increased the
valuation of the land expropriated to P3.20 a square
meter, and allowed the defendant P235 as damages for
the destruction of the wall on two sides of the lot.
Hoskins testified that the remaining portion was of no
value, and that if the part expropriated was high land it
was worth P4 a square meter in 1927, and if low land,
JDSPECA | Cases | Rule 67 | 39
P1 a square meter. The fiscal maintains that the
commission was not authorized to change its valuation
of the land and to file an amended report without
permission from the court, and that the original
valuation of P3 a square meter should be maintained.
The trial judge states in his decision that the
commission was authorized to present an additional
report regarding the lot in question. After examining the
record, we find no sufficient reason for sustaining the
contention of appellant, and the decision of the lower
court fixing the value of the land expropriated at P3.20
a square meter is affirmed.
ERROR NO. X
The lower court erred in appraising lots Nos. 45 and 49
at P3 a square meter.
Lot No. 45 of Amalia Arcega de Basa
This lot was appraised by the commission at P3 a
square meter, and that appraisal was approved by the
trial judge. Both parties appealed. Plaintiff contends that
the valuation should be reduced to P1 a square meter
in accordance with the testimony of Hoskins, while the
defendant claims P5 a square meter. Hoskins testified
that this lot is low and swampy, and that its market
value in 1927 was P1 a square meter. It appears that
the lot in question has an area of 6,820 square meters,
and that the portion expropriated contains 2,500 square
meters; that a portion of the remaining land containing
1,361 square meters was disfigured, and 680 square
meters of it rendered unserviceable. The rest of
defendant's land was benefited by the expropriation.
Defendant waived her claim for damages for the
destruction of certain fruit trees, but the value of these
trees was not determined. There is no evidence in the
record to support defendant's claim. Taking into
consideration all the facts in the case, we fix the value
of the portion expropriated at P2 a square meter.
Lot No. 49 of Andres and Alfredo Wieneke
This lot was appraised by the commission at P2 a
square meter, but the trial judge increased the appraisal
to P3 a square meter. Hoskins testified that the market
value of this lot in 1927 was P2 a square meter. The
only witness for the defendants was Andres Wieneke,
who testified that the market value of the lot in question
was from P3 to P6 a square meter, but that the
defendants were willing to accept P3 a square meter.
The trial judge took into consideration the fact that
Hoskins appraised lot No. 48 at P3 a square meter, but
it was not proved that lots Nos. 48 and 49 were in the
same condition, and the trial judge erred in assuming
this to be true. The value of this lot is fixed at P2 a
square meter.
ERROR NO. XI
The lower court erred in appraising lots Nos. 66, 100,
101, and 102 at P2 a square meter.
Lot No. 66 of Aquilina de la Cruz
This lot was appraised by the commission at P2 a
square meter, taking into consideration the
consequential damages and benefits of the
expropriation. The trial judge fixed the value of the land
expropriated at P2 a square meter, but allowed the
defendant a further sum of P300 as damages for the
destruction of the defendant's fish-pond and fruit trees.
Hoskins testified that the lot in question was low and
muddy, and that its market value in 1927 was P1.75 a
square meter. The defendant claimed P4 a square
meter, and presented various documents evidencing
sales of land in that vicinity during the years 1927 and
1928 for prices varying from P3.47 to P5 a square
meter, but it was not proved that the lot in question was
of the same character as the parcels of land described
in the deeds. The very fact that the lot in question was
used for a fish pond and zacate field shows that it was
low land. It clearly appears that the commission in
appraising the portion of land expropriated took into
consideration the damages to defendant's fish pond
and fruit trees, and we see no reason to disturb the
finding of the commission. The value of defendant's lot
is therefore fixed at P2 a square meter, and she is not
entitled to recover in addition thereto anything for
damages to her fish pond or fruit trees.
Lot No. 100 of Vicente Reyes del Rosario and lot No.
101 of Anastacio Dizon
These two lots were appraised by the commission at P2
a square meter, and this appraisal was approved by the
trial judge. Hoskins testified that these two lots were low
and that their value in 1927 was P1.50 a square meter.
The defendants did not present any evidence as to the
value of these lots. The commission states in its report
that lot No. 100 was assessed for taxation at the rate of
P2 a square meter; that it is comparatively low for the
most part, and that P2 a square meter would be just
compensation. As to lot No. 101 it is stated in the report
of the commission that this lot was assessed for
taxation at the rate of 80 centavos per square meter,
and was in the same condition as lot No. 100. The trial
judge based his approval of the appraisal of the
commission on the fact that the commissioners had an
opportunity to view the lots in question, whereas
JDSPECA | Cases | Rule 67 | 40
Hoskins had not had an opportunity to do so. This
conclusion of the trial judge is not sustained by the
evidence, and it does not appear that the commission
was justified in substituting its own opinion as to the
value of the land for that of Hoskins. The value of these
lots is fixed at P1.50 a square meter.
Lot No. 102 of Alejandro Anareta
This lot was appraised by the commission at P4 a
square meter, but this valuation was reduced by the
trial judge to P2 a square meter. Hoskins testified that
the market value of this lot in 1927 was P1.50 a square
meter. The defendant claimed P4 a square meter, and
still claims that price, although he did not appeal from
the decision of the trial court. Defendant offered
evidence as to sales of property in the vicinity where
the lot in question is located, but did not prove that
those lots were of the same character as the lot in
question. The portion of defendant's land that was
expropriated contained only 75 square meters. The
commission in appraising this lot took into consideration
the fact that it was assessed for taxation at P2 a square
meter in 1929, and it appears that before the
expropriation it was assessed at only 80 centavos a
square meter. Defendant's land was not damaged by
the expropriation of the small piece of land in question,
on the contrary his land was enhanced in value. The
value of the land in question is fixed at P1.50 a square
meter.
was the expert testimony of Juan Bunuan, an employee
of the Bureau of Plant Industry, who has specialized in
the study of plants in the Philippine Islands and is in
charge of the office in that bureau for the sale of seeds
and young trees. He submitted a table by which he
attempted to show the value of different kinds of tress
according to their sized and age. It does not appear that
he had examined the fruit trees in question, and we are
of the opinion that the commission did not err in
refusing to be controlled by his table in fixing the
valuation of the tress in question. The value of a fruit
tree cannot be determined from its size and age alone.
It depends chiefly on what it bears.
Jose Rueda Arias was allowed P235 for the damages
to a wall on two sides of lot No. 30, and Felisa Cruz
P300 for a house of mixed materials. No reason is
adduced by the fiscal in his brief for modifying the
decision of the lower court as to these damages.
The decision of the trial judge as to the value of the
improvements on the lots mentioned in the twelfth
assignment of error is affirmed.
With respect to the improvements on lot No. 66 of
Aquilina de la Cruz, we have already held that the value
of said improvements was taken into consideration in
fixing the value of her land that was expropriated, and
that she is not entitled to recover any additional sum for
improvements.

ERROR NO. XII ERROR NO. XIII

The lower court erred in approving the commissioners' The lower court erred in sentencing the plaintiff to
report as to the value of the improvements on lots Nos. defray the costs of preparing a sketch to show the area
1, 3, 7, 13, 26, 30, 41, 66, 73, and 96. expropriated, and to pay the necessary amount for the
resulting subdivision and issuance of new certificates of
Under this assignment of error the fiscal maintains that title to the defendants, covering the portions of land not
the appraisal of the improvements should be reduced expropriated.
as follows:
If the land expropriated was already registered under
Lot No. Court Appellant Act No. 496, the owner is entitled to recover in addition
1 appraised at P53.00 should be reduced to P40.00 to the value of the land taken his expenses for the
subdivision and the issuance of a new certificate of title;
3 appraised at 51.50 should be reduced to 28.50
if the land was not registered, the owner is entitled to
7 appraised at 105.50 should be reduced to 81.50 recover his costs in obtaining a plan showing the area
13 appraised at 151.00 should be reduced to 100.00 expropriated; and if the land was not already registered
26 appraised at 230.00 should be reduced to 130.00 and was brought under the operation of the Cadastral
30 appraised at 235.00 should be reduced to 200.00
Act, each party should pay his proportionate part of the
expenses according to the area expropriated and the
41 appraised at 200.00 should be reduced to 100.00
portion remaining.
73 appraised at (a) 450.00 should be reduced to 400.00

(b) 608.00 should be reduced to 500.00 The defendants are entitled to recover legal interest on
the value of their property from the time when it was
96 appraised at 300.00 should be reduced to 240.00
taken by the plaintiff.
It appears that the only evidence presented by the
plaintiff as to the value of the improvements in question

JDSPECA | Cases | Rule 67 | 41

Any question as to the cost of subdivision plans or
registration or as to the specific date when the land of
any given defendant was taken by the plaintiff will be
determined by the lower court, as there is no evidence
before us that would enable us to do so.
The decision appealed from is modified as hereinabove
stated; in all other respects it is affirmed. The plaintiff
will pay the costs of the proceedings in the trial court.
No costs will be allowed in this court.
Malcolm, Villa-Real, Hull, and Imperial, JJ., concur.
Republic v. Vda de Castellvi, 58 SCRA 336 (1974) 
G.R. No. L-20620 August 15, 1974
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs. CARMEN M. VDA. DE CASTELLVI, ET
AL., defendants-appellees.
FACTS:  After the owner of a parcel of land that has
been rented and occupied by the government in 1947
refused to extend the lease, the latter commenced
expropriation proceedings in 1959. During the
assessment of just compensation, the government
argued that it had taken the property when the contract
of lease commenced and not when the proceedings
begun. The owner maintains that the disputed land was
not taken when the government commenced to occupy
the said land as lessee because the essential elements
of the “taking” of property under the power of eminent
domain, namely (1) entrance and occupation by
condemnor upon the private property for more than a
momentary period, and (2) devoting it to a public use in
such a way as to oust the owner and deprive him of all
beneficial enjoyment of the property, are not present.
ISSUE: Whether or not the taking of property has taken
place when the condemnor has entered and occupied
the property as lesse.
HELD: No, the property was deemed taken only when
the expropriation proceedings commenced in 1959.
The essential elements of the taking are: (1)
Expropriator must enter a private property, (2) for more
than a momentary period, (3) and under warrant of
legal authority, (4) devoting it to public use, or otherwise
informally appropriating or injuriously affecting it in such
a way as (5) substantially to oust the owner and deprive
him of all beneficial enjoyment thereof.
In the case at bar, these elements were not present
when the government entered and occupied the
property under a contract of lease.
FACTS: This case involves two cases of a complaint for
eminent domain – one against Carmen Vda. de
Castellvi, as the administratix of the estate of the late
Alfonso de Castellvi, and the other is against Maria
Nieves Toledo-Gozun.
Republic: the fair market value of the subject properties,
according to the Committee on Appraisal for the
Province of Pampanga, was not more than P 2,000 per
hectare, or a total market value of P 259,669.10.
Castellvi: the subject land, being a residential land, had
a fair market value of P15.00 per square meter, so it
had a total market value of P 11,389,485.
: The Republic, through the Philippine Air Force (PAF),
had been, despite repeated demands, illegally
occupying her property since July 1, 1956, thereby
preventing her from using and disposing of it, thus
causing her damages by way of unrealized profit.
: This stemmed from the fact that there was a lease
agreement between Castellvi and the PAF on a yearly
JDSPECA | Cases | Rule 67 | 42
basis, which started on July 1, 1947. When the contract
expires, Castellvi did not renew the same because they
want to sell the leased property.
Toledo-Gozun: the parcels of land owned by her were
residential lands and the fair market value of said lands
was P 15.00 per square meter, so they had a total
market value of P 8,085,675
: the complaint be dismissed, or that she be paid the
amount of P 8,085,675, plus interest thereon at the rate
of 6% per annum from October 13, 1959, and attorney’s
fess in the amount of P 50,000.
RTC: ordered that the Republic be placed in
possession of the lands after it had deposited with the
Provincial Treasurer of Pampanga the amount of P
259,669.10.
               : authorized the Provincial Treasurer of
Pampanga to pay Toledo-Gozun the sum of P 107,609
as provisional value of her lands
               : authorized the Provincial Treasurer of
Pampanga to pay Castellvi the amount of P 151,859.80
as provisional value of the land
               : appointed three commissioners to determine
the value of the subject properties
Commissioners: Atty. Amadeo Yuzon, as commissioner
for the court; Atty. Felicisimo Pamandanan for the
plaintiff; and Atty. Leonardo Lansangan for the
defendants
: after having determined that the lands sought to be
expropriated were residential lands, they recommended
unanimously that the lowest price that should be paid
was P 10.00 per square meter, for both lands of
Castellvi and Toledo-Gozun. An additional P 5,000 be
paid to Toledo-Gozun for improvements found on her
land. Legal interest on the compensation, computed
from August 10, 1959, be paid after deducting the
amounts already paid to the owners, and that no
consequential damages be awarded
RTC: the court finds that the unanimous
recommendation of the commissioners of ten pesos
(P10.00) per square meter for the lots of Castellvi and
Toledo-Gozun is fair and just
: the Republic will pay 6% interest per annum on the
total value of the lands to Toledo-Gozun from the time
that the provisional value has been deposited (August
10, 1959) until full payment
: Republic will pay 6% interest per annum from July 1,
1956 when Republic commenced its illegal possession
of the Castellvi land until July 10, 1959 when the
provisional value thereof was actually deposited in court
ISSUE: (As alleged by the Republic)  Whether or not the
“taking” of the properties under expropriation
commenced with the filing of the action.
Republic: the “taking” should be reckoned from the year
1947 when by virtue of a special lease agreement
between the Republic and Castellvi, the former was
granted the “right and privilege” to buy the property
should the lessor wish to terminate the lease and that in
the event of such sale, it was stipulated that the fair
market value should be as of the time of occupancy;
and that the permanent improvements amounting to
more than half a million pesos constructed during a
period of twelve years on the land, subject of
expropriation, were indicative of an agreed pattern of
permanency and stability of occupancy by the
Philippine Air Force in the interest of national security.
Castellvi: the “taking” of property under the power
eminent domain requires two essential elements, to wit:
(1) entrance and occupation by condemnor upon the
private property for more than a momentary or limited
period, and (2) devoting it to a public use in such a way
as to oust the owner and deprive him of all beneficial
enjoyment of the property.
               : the two elements are lacking
RULING: YES. A number of circumstances must be
present in the “taking” of property for purposes of
eminent domain.
1)     The expropriator must enter a private property  –
this circumstance is present in the instant case, when
by virtue of a lease agreement the Republic, through
PAF, took possession of the property of Castellvi
2)     The entrance into private property must be for
more than a momentary period  – the word “momentary”
when applied to possession or occupancy of property
should be construed to mean “a limited period” – not
indefinite or permanent. The entry on the property,
under the lease, is temporary and considered transitory
considering that the said contract is renewable from
year to year. The fact that the Republic constructed
some installation of a permanent nature does not alter
the fact that the entry into the land was transitory or
intended to last a year.
3)     The entry into the property should be under
warrant or color of legal authority –  this circumstance is
JDSPECA | Cases | Rule 67 | 43
present in the instant case because Republic entered
the Castellvi property as lessee
4)     The property must be devoted to a public use or
otherwise informally appropriated or injuriously affected
– this is likewise present in this case because the
property was used by the air force of the AFP
5)     The utilization of the property for public use must
be in such a way as to oust the owner and deprive him
of all beneficial enjoyment of the property – this is
wanting in this case as Castellvi remained as owner
and she was receiving the monthly rentals of the
property; hence, she was not deprived of the beneficial
enjoyment of the property.
We hold, therefore, that the “taking’ of the Castellvi
property should not be reckoned as of the year 1947
when the Republic first occupied the same pursuant to
the contract of lease, and that the just compensation to
be paid for the Castellvi property should not be
determined on the basis of the value of the property as
of that year. The lower court did not commit an error
when it held that the “taking” of the property under
expropriation commenced with the filing of the
complaint in this case.
Under Section 4 of Rule 67 of the Rules of Court, the
“just compensation” is to be determined as of the date
of the filing of the complaint. This Court has ruled that
when the taking of the property sought to be
expropriated coincides with the commencement of the
expropriation proceedings, or takes place subsequent
to the filing of the complaint for eminent domain, the
just compensation should be determined as of the date
of the filing of the complaint. In the instant case, it is
undisputed that the Republic was placed in possession
of the Castellvi property, by authority of the court, on
August 10, 1959. The “taking” of the Castellvi property
for the purposes of determining the just compensation
to be paid must, therefore, be reckoned as of June 26,
1959 when the complaint for eminent domain was filed.
SYLLABUS
Eminent domain; “Taking” of property; Elements of.—A
number of circumstances must be present in the
“taking” of property for purposes of eminent domain: (1)
the expropriator must enter a private property; (2) the
entrance into private property must be for more than a
momentary period; (3) the entry into the property should
be under warrant or color of legal authority; (4) the
property must be devoted to a public use or otherwise
informally appropriated or injuriously affected; and (5)
the utilization of the property for public use must be in
such a way as to oust the owner and deprive him of all
beneficial enjoyment of the property.
Entrance into private property must be for more than a
momentary period; Momentary defined.—"Momentary”
means “lasting but a moment; of but a moment’s
duration (The Oxford English Dictionary, Volume VI,
page 596); “lasting a very short time; transitory; having
a very brief life; operative or recurring at every moment”
(Webster’s Third International Dictionary, 1963 edition).
The word “momentary” when applied to possession or
occupancy of (real) property should be construed to
-mean “a limited period”—not indefinite or permanent.
Mere notice of intention to expropriate cannot bind
landowner; Expropriate must be commenced in court.—
It might really have been the intention of the Republic to
expropriate the lands at some future time, but certainly
mere notice—much less an implied notice—of such
intention on the part of the Republic to expropriate the
lands in the future did not, and could not, bind the
landowner, nor bind the land itself. The expropriation
must be actually commenced in court.
Just compensation; Value of property expropriated
determined as of the date of the filing of the complaint.
—Under section 4 of Rule 67 of the Rules of Court, the
“just compensation” is to be determined as of the date
of the filing of the complaint. When the taking of the
property sought to be expropriated coincides with the
commencement of the expropriation proceedings, or
takes place subsequent to the filing of the complaint for
eminent domain, the just compensation should be
determined as of the date of the filing of the complaint.
Circumstances considered in determining the value of
the property expropriated.—In expropriation
proceedings, the owner of the land has the right to its
value for the use for which it would bring the most in the
market. The owner may thus show every advantage
that his property possesses, present and prospective, in
order that the price it could be sold for in the market
may be satisfactorily determined. The owner may also
show that the property is suitable for division into village
or town lots.
Provisional value cannot be made the basis for fixing
the fair market value of the property expropriated;
Reason.—The amount fixed as the provisional value of
the lands that are being expropriated does not
necessarily represent the true and correct value of the
land. The value is only “provisional” or “tentative”, to
serve as the basis for the immediate occupancy of the
property being expropriated by the condemnor.
JDSPECA | Cases | Rule 67 | 44
Valuation fixed for assessment purposes cannot be
made the basis for fixing the fair market value of the
property expropriated where the landowner did not
intervene in fixing it.—The valuation fixed for the
purposes of the assessment of the land for taxation
purposes cannot bind the landowner where the latter
did not intervene in f ixing it.
Report of the commissioners; Nature of.—The report of
the commissioners of appraisal in comdemnation
proceedings are not binding, but merely advisory in
character, as far as the court is concerned.
Right of court to change.—A court of first instance or,
on appeal, the Supreme Court, may change or modify
the report of the commissioners by increasing or
reducing the amount of the award if the facts of the
case so justify. While great weight is attached to the
report of the commissioners, yet a court may substitute
therefor its estimate of the value of the property as
gathered from the record in certain cases, as, where
the commissioners have applied illegal principles to the
evidence submitted to them, or where they have
disregarded a clear preponderance of evidence, or
where the amount allowed is either palpably inadequate
or excessive.
Contracts; Construction of; Intention cannot prevail over
the clear and express terms of the contract.—Intention
cannot prevail over the clear and express terms of the
lease contract. Intent is to be deduced from the
language employed by the parties, and the terms of the
contract, when unambiguous, are conclusive in the
absence of averment and proof of mistake or fraud—
the question being not what the intention was, but what
is expressed in the language used. Moreover, in order
to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be
principally considered.
Same; Same; General terms of contract cannot include
things different from those intended by the parties.—
However general the terms of a contract may be, they
shall not be understood to comprehend things that are
distinct and cases that are different from those upon
which the parties intended to agree.
Interests; Payment of interest on amount adjudged as
the value of the property expropriated not allowed for
the period during which the owner of the property
received rentals from the condemnor; Case at bar.—If
Castellvi had agreed to receive the rentals from June
30, 1956 to August 10, 1959, she should be considered
as having allowed her land to be leased to the Republic
until August 10, 1959, and she could not at the same
time be entitled to the payment of interest during the
same period on the amount awarded her as the just
compensation of her land. The Republic should pay
Castellvi interest at the rate of 6% per annum on the
value of her land, minus the provisional value that was
deposited, only from July 10, 1959 when it deposited in
court the provisional value of the land.
New trial; Grant of new trial discretionary with the court.
—The granting or denial of a motion for new trial is, as
a general rule, discretionary with the trial court, whose
judgment should not be disturbed unless there is a
clear showing of abuse of discretion.
Same; Grant of new trial based on newly discovered
evidence; Requisites.—To warrant the granting of a
new trial based on the ground of newly discovered
evidence, it must appear that the evidence was
discovered after the trial; that even with the exercise of
due diligence, the evidence could not have been
discovered and produced at the trial; and that the
evidence is of such a nature as to alter the result of the
case if admitted.
ZALDIVAR, J.:p
Appeal from the decision of the Court of First Instance
of Pampanga in its Civil Case No. 1623, an
expropriation proceeding.
Plaintiff-appellant, the Republic of the Philippines,
(hereinafter referred to as the Republic) filed, on June
26, 1959, a complaint for eminent domain against
defendant-appellee, Carmen M. Vda. de Castellvi,
judicial administratrix of the estate of the late Alfonso de
Castellvi (hereinafter referred to as Castellvi), over a
parcel of land situated in the barrio of San Jose,
Floridablanca, Pampanga, described as follows:
A parcel of land, Lot No. 199-B Bureau of Lands Plan
Swo 23666. Bounded on the NE by Maria Nieves
Toledo-Gozun; on the SE by national road; on the SW
by AFP reservation, and on the NW by AFP
reservation. Containing an area of 759,299 square
meters, more or less, and registered in the name of
JDSPECA | Cases | Rule 67 | 45
Alfonso Castellvi under TCT No. 13631 of the Register
of Pampanga ...;
and against defendant-appellee Maria Nieves Toledo
Gozun (hereinafter referred to as Toledo-Gozun over
two parcels of land described as follows:
A parcel of land (Portion Lot Blk-1, Bureau of Lands
Plan Psd, 26254. Bounded on the NE by Lot 3, on the
SE by Lot 3; on the SW by Lot 1-B, Blk. 2 (equivalent to
Lot 199-B Swo 23666; on the NW by AFP military
reservation. Containing an area of 450,273 square
meters, more or less and registered in the name of
Maria Nieves Toledo-Gozun under TCT No. 8708 of the
Register of Deeds of Pampanga. ..., and
A parcel of land (Portion of lot 3, Blk-1, Bureau of Lands
Plan Psd 26254. Bounded on the NE by Lot No. 3, on
the SE by school lot and national road, on the SW by
Lot 1-B Blk 2 (equivalent to Lot 199-B Swo 23666), on
the NW by Lot 1-B, Blk-1. Containing an area of 88,772
square meters, more or less, and registered in the
name of Maria Nieves Toledo Gozun under TCT No.
8708 of the Register of Deeds of Pampanga, ....
In its complaint, the Republic alleged, among other
things, that the fair market value of the above-
mentioned lands, according to the Committee on
Appraisal for the Province of Pampanga, was not more
than P2,000 per hectare, or a total market value of
P259,669.10; and prayed, that the provisional value of
the lands be fixed at P259.669.10, that the court
authorizes plaintiff to take immediate possession of the
lands upon deposit of that amount with the Provincial
Treasurer of Pampanga; that the court appoints three
commissioners to ascertain and report to the court the
just compensation for the property sought to be
expropriated, and that the court issues thereafter a final
order of condemnation.
On June 29, 1959 the trial court issued an order fixing
the provisional value of the lands at P259,669.10.
In her "motion to dismiss" filed on July 14, 1959,
Castellvi alleged, among other things, that the land
under her administration, being a residential land, had a
fair market value of P15.00 per square meter, so it had
a total market value of P11,389,485.00; that the
Republic, through the Armed Forces of the Philippines,
particularly the Philippine Air Force, had been, despite
repeated demands, illegally occupying her property
since July 1, 1956, thereby preventing her from using
and disposing of it, thus causing her damages by way
of unrealized profits. This defendant prayed that the
complaint be dismissed, or that the Republic be ordered
to pay her P15.00 per square meter, or a total of
P11,389,485.00, plus interest thereon at 6% per annum
from July 1, 1956; that the Republic be ordered to pay
her P5,000,000.00 as unrealized profits, and the costs
of the suit.
By order of the trial court, dated August, 1959, Amparo
C. Diaz, Dolores G. viuda de Gil, Paloma Castellvi,
Carmen Castellvi, Rafael Castellvi, Luis Castellvi,
Natividad Castellvi de Raquiza, Jose Castellvi and
Consuelo Castellvi were allowed to intervene as parties
defendants. Subsequently, Joaquin V. Gozun, Jr.,
husband of defendant Nieves Toledo Gozun, was also
allowed by the court to intervene as a party defendant.
After the Republic had deposited with the Provincial
Treasurer of Pampanga the amount of P259,669.10,
the trial court ordered that the Republic be placed in
possession of the lands. The Republic was actually
placed in possession of the lands on August 10,
1959.1
In her "motion to dismiss", dated October 22, 1959,
Toledo-Gozun alleged, among other things, that her two
parcels of land were residential lands, in fact a portion
with an area of 343,303 square meters had already
been subdivided into different lots for sale to the
general public, and the remaining portion had already
been set aside for expansion sites of the already
completed subdivisions; that the fair market value of
said lands was P15.00 per square meter, so they had a
total market value of P8,085,675.00; and she prayed
that the complaint be dismissed, or that she be paid the
amount of P8,085,675.00, plus interest thereon at the
rate of 6% per annum from October 13, 1959, and
attorney's fees in the amount of P50,000.00.
Intervenors Jose Castellvi and Consuelo Castellvi in
their answer, filed on February 11, 1960, and also
intervenor Joaquin Gozun, Jr., husband of defendant
Maria Nieves Toledo-Gozun, in his motion to dismiss,
dated May 27, 1960, all alleged that the value of the
lands sought to be expropriated was at the rate of
P15.00 per square meter.
On November 4, 1959, the trial court authorized the
Provincial Treasurer of Pampanga to pay defendant
Toledo-Gozun the sum of P107,609.00 as provisional
value of her lands. 2 On May 16, 1960 the trial Court
authorized the Provincial Treasurer of Pampanga to
pay defendant Castellvi the amount of P151,859.80 as
provisional value of the land under her administration,
and ordered said defendant to deposit the amount with
the Philippine National Bank under the supervision of
the Deputy Clerk of Court. In another order of May 16,
1960 the trial Court entered an order of condemnation. 3
JDSPECA | Cases | Rule 67 | 46
The trial Court appointed three commissioners: Atty.
Amadeo Yuzon, Clerk of Court, as commissioner for the
court; Atty. Felicisimo G. Pamandanan, counsel of the
Philippine National Bank Branch at Floridablanca, for
the plaintiff; and Atty. Leonardo F. Lansangan, Filipino
legal counsel at Clark Air Base, for the defendants. The
Commissioners, after having qualified themselves,
proceeded to the performance of their duties.
On March 15,1961 the Commissioners submitted their
report and recommendation, wherein, after having
determined that the lands sought to be expropriated
were residential lands, they recommended unanimously
that the lowest price that should be paid was P10.00
per square meter, for both the lands of Castellvi and
Toledo-Gozun; that an additional P5,000.00 be paid to
Toledo-Gozun for improvements found on her land; that
legal interest on the compensation, computed from
August 10, 1959, be paid after deducting the amounts
already paid to the owners, and that no consequential
damages be awarded. 4 The Commissioners' report was
objected to by all the parties in the case — by
defendants Castellvi and Toledo-Gozun, who insisted
that the fair market value of their lands should be fixed
at P15.00 per square meter; and by the Republic, which
insisted that the price to be paid for the lands should be
fixed at P0.20 per square meter.5
After the parties-defendants and intervenors had filed
their respective memoranda, and the Republic, after
several extensions of time, had adopted as its
memorandum its objections to the report of the
Commissioners, the trial court, on May 26, 1961,
rendered its decision6 the dispositive portion of which
reads as follows:
WHEREFORE, taking into account all the foregoing
circumstances, and that the lands are titled, ... the rising
trend of land values ..., and the lowered purchasing
power of the Philippine peso, the court finds that the
unanimous recommendation of the commissioners of
ten (P10.00) pesos per square meter for the three lots
of the defendants subject of this action is fair and just.
xxx xxx xxx
The plaintiff will pay 6% interest per annum on the total
value of the lands of defendant Toledo-Gozun since
(sic) the amount deposited as provisional value from
August 10, 1959 until full payment is made to said
defendant or deposit therefor is made in court.
In respect to the defendant Castellvi, interest at 6% per
annum will also be paid by the plaintiff to defendant
Castellvi from July 1, 1956 when plaintiff commenced
its illegal possession of the Castellvi land when the
instant action had not yet been commenced to July 10,
1959 when the provisional value thereof was actually
deposited in court, on the total value of the said
(Castellvi) land as herein adjudged. The same rate of
interest shall be paid from July 11, 1959 on the total
value of the land herein adjudged minus the amount
deposited as provisional value, or P151,859.80, such
interest to run until full payment is made to said
defendant or deposit therefor is made in court. All the
intervenors having failed to produce evidence in
support of their respective interventions, said
interventions are ordered dismissed.
The costs shall be charged to the plaintiff.
On June 21, 1961 the Republic filed a motion for a new
trial and/or reconsideration, upon the grounds of newly-
discovered evidence, that the decision was not
supported by the evidence, and that the decision was
against the law, against which motion defendants
Castellvi and Toledo-Gozun filed their respective
oppositions. On July 8, 1961 when the motion of the
Republic for new trial and/or reconsideration was called
for hearing, the Republic filed a supplemental motion
for new trial upon the ground of additional newly-
discovered evidence. This motion for new trial and/or
reconsideration was denied by the court on July 12,
1961.
On July 17, 1961 the Republic gave notice of its
intention to appeal from the decision of May 26, 1961
and the order of July 12, 1961. Defendant Castellvi also
filed, on July 17, 1961, her notice of appeal from the
decision of the trial court.
The Republic filed various ex-parte motions for
extension of time within which to file its record on
appeal. The Republic's record on appeal was finally
submitted on December 6, 1961.
Defendants Castellvi and Toledo-Gozun filed not only a
joint opposition to the approval of the Republic's record
on appeal, but also a joint memorandum in support of
their opposition. The Republic also filed a memorandum
in support of its prayer for the approval of its record on
appeal. On December 27, 1961 the trial court issued an
order declaring both the record on appeal filed by the
Republic, and the record on appeal filed by defendant
Castellvi as having been filed out of time, thereby
dismissing both appeals.
On January 11, 1962 the Republic filed a "motion to
strike out the order of December 27, 1961 and for
reconsideration", and subsequently an amended record
on appeal, against which motion the defendants
Castellvi and Toledo-Gozun filed their opposition. On
JDSPECA | Cases | Rule 67 | 47
July 26, 1962 the trial court issued an order, stating that
"in the interest of expediency, the questions raised may
be properly and finally determined by the Supreme
Court," and at the same time it ordered the Solicitor
General to submit a record on appeal containing copies
of orders and pleadings specified therein. In an order
dated November 19, 1962, the trial court approved the
Republic's record on appeal as amended.
Defendant Castellvi did not insist on her appeal.
Defendant Toledo-Gozun did not appeal.
The motion to dismiss the Republic's appeal was
reiterated by appellees Castellvi and Toledo-Gozun
before this Court, but this Court denied the motion.
In her motion of August 11, 1964, appellee Castellvi
sought to increase the provisional value of her land.
The Republic, in its comment on Castellvi's motion,
opposed the same. This Court denied Castellvi's motion
in a resolution dated October 2,1964.
The motion of appellees, Castellvi and Toledo-Gozun,
dated October 6, 1969, praying that they be authorized
to mortgage the lands subject of expropriation, was
denied by this Court or October 14, 1969.
On February 14, 1972, Attys. Alberto Cacnio, and
Associates, counsel for the estate of the late Don
Alfonso de Castellvi in the expropriation proceedings,
filed a notice of attorney's lien, stating that as per
agreement with the administrator of the estate of Don
Alfonso de Castellvi they shall receive by way of
attorney's fees, "the sum equivalent to ten per centum
of whatever the court may finally decide as the
expropriated price of the property subject matter of the
case."
---------
Before this Court, the Republic contends that the lower
court erred:
1. In finding the price of P10 per square meter of the
lands subject of the instant proceedings as just
compensation;
2. In holding that the "taking" of the properties under
expropriation commenced with the filing of this action;
3. In ordering plaintiff-appellant to pay 6% interest on
the adjudged value of the Castellvi property to start
from July of 1956;
4. In denying plaintiff-appellant's motion for new trial
based on newly discovered evidence.
In its brief, the Republic discusses the second error
assigned as the first issue to be considered. We shall
follow the sequence of the Republic's discussion.
1. In support of the assigned error that the lower court
erred in holding that the "taking" of the properties under
expropriation commenced with the filing of the
complaint in this case, the Republic argues that the
"taking" should be reckoned from the year 1947 when
by virtue of a special lease agreement between the
Republic and appellee Castellvi, the former was
granted the "right and privilege" to buy the property
should the lessor wish to terminate the lease, and that
in the event of such sale, it was stipulated that the fair
market value should be as of the time of occupancy;
and that the permanent improvements amounting to
more that half a million pesos constructed during a
period of twelve years on the land, subject of
expropriation, were indicative of an agreed pattern of
permanency and stability of occupancy by the
Philippine Air Force in the interest of national Security.7
Appellee Castellvi, on the other hand, maintains that
the "taking" of property under the power of eminent
domain requires two essential elements, to wit: (1)
entrance and occupation by condemn or upon the
private property for more than a momentary or limited
period, and (2) devoting it to a public use in such a way
as to oust the owner and deprive him of all beneficial
enjoyment of the property. This appellee argues that in
the instant case the first element is wanting, for the
contract of lease relied upon provides for a lease from
year to year; that the second element is also wanting,
because the Republic was paying the lessor Castellvi a
monthly rental of P445.58; and that the contract of
lease does not grant the Republic the "right and
privilege" to buy the premises "at the value at the time
of occupancy."8
Appellee Toledo-Gozun did not comment on the
Republic's argument in support of the second error
assigned, because as far as she was concerned the
Republic had not taken possession of her lands prior to
August 10, 1959.9
In order to better comprehend the issues raised in the
appeal, in so far as the Castellvi property is concerned,
it should be noted that the Castellvi property had been
occupied by the Philippine Air Force since 1947 under a
contract of lease, typified by the contract marked Exh.
4-Castellvi, the pertinent portions of which read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND ENTERED
into by and between INTESTATE ESTATE OF
JDSPECA | Cases | Rule 67 | 48
ALFONSO DE CASTELLVI, represented by CARMEN
M. DE CASTELLVI, Judicial Administratrix ...
hereinafter called the LESSOR and THE REPUBLIC
OF THE PHILIPPINES represented by MAJ. GEN.
CALIXTO DUQUE, Chief of Staff of the ARMED
FORCES OF THE PHILIPPINES, hereinafter called the
LESSEE,
WITNESSETH:
1. For and in consideration of the rentals hereinafter
reserved and the mutual terms, covenants and
conditions of the parties, the LESSOR has, and by
these presents does, lease and let unto the LESSEE
the following described land together with the
improvements thereon and appurtenances thereof, viz:
Un Terreno, Lote No. 27 del Plano de subdivision Psu
34752, parte de la hacienda de Campauit, situado en el
Barrio de San Jose, Municipio de Floridablanca
Pampanga. ... midiendo una extension superficial de
cuatro milliones once mil cuatro cientos trienta y cinco
(4,001,435) [sic] metros cuadrados, mas o menos.
Out of the above described property, 75.93 hectares
thereof are actually occupied and covered by this
contract. .
Above lot is more particularly described in TCT No.
1016, province of
Pampanga ...
of which premises, the LESSOR warrants that
he/she/they/is/are the registered owner(s) and with full
authority to execute a contract of this nature.
2. The term of this lease shall be for the period
beginning July 1, 1952 the date the premises were
occupied by the PHILIPPINE AIR FORCE, AFP until
June 30, 1953, subject to renewal for another year at
the option of the LESSEE or unless sooner terminated
by the LESSEE as hereinafter provided.
3. The LESSOR hereby warrants that the LESSEE shall
have quiet, peaceful and undisturbed possession of the
demised premises throughout the full term or period of
this lease and the LESSOR undertakes without cost to
the LESSEE to eject all trespassers, but should the
LESSOR fail to do so, the LESSEE at its option may
proceed to do so at the expense of the LESSOR. The
LESSOR further agrees that should he/she/they sell or
encumber all or any part of the herein described
premises during the period of this lease, any
conveyance will be conditioned on the right of the
LESSEE hereunder.
4. The LESSEE shall pay to the LESSOR as monthly
rentals under this lease the sum of FOUR HUNDRED
FIFTY-FIVE PESOS & 58/100 (P455.58) ...
5. The LESSEE may, at any time prior to the
termination of this lease, use the property for any
purpose or purposes and, at its own costs and expense
make alteration, install facilities and fixtures and errect
additions ... which facilities or fixtures ... so placed in,
upon or attached to the said premises shall be and
remain property of the LESSEE and may be removed
therefrom by the LESSEE prior to the termination of this
lease. The LESSEE shall surrender possession of the
premises upon the expiration or termination of this
lease and if so required by the LESSOR, shall return
the premises in substantially the same condition as that
existing at the time same were first occupied by the
AFP, reasonable and ordinary wear and tear and
damages by the elements or by circumstances over
which the LESSEE has no control excepted:
PROVIDED, that if the LESSOR so requires the return
of the premises in such condition, the LESSOR shall
give written notice thereof to the LESSEE at least
twenty (20) days before the termination of the lease and
provided, further, that should the LESSOR give notice
within the time specified above, the LESSEE shall have
the right and privilege to compensate the LESSOR at
the fair value or the equivalent, in lieu of performance of
its obligation, if any, to restore the premises. Fair value
is to be determined as the value at the time of
occupancy less fair wear and tear and depreciation
during the period of this lease.
6. The LESSEE may terminate this lease at any time
during the term hereof by giving written notice to the
LESSOR at least thirty (30) days in advance ...
7. The LESSEE should not be responsible, except
under special legislation for any damages to the
premises by reason of combat operations, acts of GOD,
the elements or other acts and deeds not due to the
negligence on the part of the LESSEE.
8. This LEASE AGREEMENT supersedes and voids
any and all agreements and undertakings, oral or
written, previously entered into between the parties
covering the property herein leased, the same having
been merged herein. This AGREEMENT may not be
modified or altered except by instrument in writing only
duly signed by the parties. 10
It was stipulated by the parties, that "the foregoing
contract of lease (Exh. 4, Castellvi) is 'similar in terms
and conditions, including the date', with the annual
contracts entered into from year to year between
defendant Castellvi and the Republic of the Philippines
JDSPECA | Cases | Rule 67 | 49
(p. 17, t.s.n., Vol. III)". 11 It is undisputed, therefore, that
the Republic occupied Castellvi's land from July 1,
1947, by virtue of the above-mentioned contract, on a
year to year basis (from July 1 of each year to June 30
of the succeeding year) under the terms and conditions
therein stated.
Before the expiration of the contract of lease on June
30, 1956 the Republic sought to renew the same but
Castellvi refused. When the AFP refused to vacate the
leased premises after the termination of the contract, on
July 11, 1956, Castellvi wrote to the Chief of Staff, AFP,
informing the latter that the heirs of the property had
decided not to continue leasing the property in question
because they had decided to subdivide the land for sale
to the general public, demanding that the property be
vacated within 30 days from receipt of the letter, and
that the premises be returned in substantially the same
condition as before occupancy (Exh. 5 — Castellvi). A
follow-up letter was sent on January 12, 1957,
demanding the delivery and return of the property within
one month from said date (Exh. 6 Castellvi). On
January 30, 1957, Lieutenant General Alfonso Arellano,
Chief of Staff, answered the letter of Castellvi, saying
that it was difficult for the army to vacate the premises
in view of the permanent installations and other facilities
worth almost P500,000.00 that were erected and
already established on the property, and that, there
being no other recourse, the acquisition of the property
by means of expropriation proceedings would be
recommended to the President (Exhibit "7" —
Castellvi).
Defendant Castellvi then brought suit in the Court of
First Instance of Pampanga, in Civil Case No. 1458, to
eject the Philippine Air Force from the land. While this
ejectment case was pending, the Republic instituted
these expropriation proceedings, and, as stated earlier
in this opinion, the Republic was placed in possession
of the lands on August 10, 1959, On November 21,
1959, the Court of First Instance of Pampanga,
dismissed Civil Case No. 1458, upon petition of the
parties, in an order which, in part, reads as follows:
1. Plaintiff has agreed, as a matter of fact has already
signed an agreement with defendants, whereby she
has agreed to receive the rent of the lands, subject
matter of the instant case from June 30, 1966 up to
1959 when the Philippine Air Force was placed in
possession by virtue of an order of the Court upon
depositing the provisional amount as fixed by the
Provincial Appraisal Committee with the Provincial
Treasurer of Pampanga;
2. That because of the above-cited agreement wherein
the administratrix decided to get the rent corresponding
to the rent from 1956 up to 1959 and considering that
this action is one of illegal detainer and/or to recover
the possession of said land by virtue of non-payment of
rents, the instant case now has become moot and
academic and/or by virtue of the agreement signed by
plaintiff, she has waived her cause of action in the
above-entitled case. 12
The Republic urges that the "taking " of Castellvi's
property should be deemed as of the year 1947 by
virtue of afore-quoted lease agreement. In American
Jurisprudence, Vol. 26, 2nd edition, Section 157, on the
subject of "Eminent Domain, we read the definition of
"taking" (in eminent domain) as follows:
Taking' under the power of eminent domain may be
defined generally as entering upon private property for
more than a momentary period, and, under the warrant
or color of legal authority, devoting it to a public use, or
otherwise informally appropriating or injuriously
affecting it in such a way as substantially to oust the
owner and deprive him of all beneficial enjoyment
thereof. 13
Pursuant to the aforecited authority, a number of
circumstances must be present in the "taking" of
property for purposes of eminent domain.
First, the expropriator must enter a private property.
This circumstance is present in the instant case, when
by virtue of the lease agreement the Republic, through
the AFP, took possession of the property of Castellvi.
Second, the entrance into private property must be for
more than a momentary period. "Momentary" means,
"lasting but a moment; of but a moment's duration" (The
Oxford English Dictionary, Volume VI, page 596);
"lasting a very short time; transitory; having a very brief
life; operative or recurring at every moment" (Webster's
Third International Dictionary, 1963 edition.) The word
"momentary" when applied to possession or occupancy
of (real) property should be construed to mean "a
limited period" — not indefinite or permanent. The
aforecited lease contract was for a period of one year,
renewable from year to year. The entry on the property,
under the lease, is temporary, and considered
transitory. The fact that the Republic, through the AFP,
constructed some installations of a permanent nature
does not alter the fact that the entry into the land was
transitory, or intended to last a year, although
renewable from year to year by consent of 'The owner
of the land. By express provision of the lease
agreement the Republic, as lessee, undertook to return
the premises  in substantially the same condition as at
the time the property was first occupied by the AFP. It is
claimed that the intention of the lessee was to occupy
JDSPECA | Cases | Rule 67 | 50
the land permanently, as may be inferred from the
construction of permanent improvements. But this
"intention" cannot prevail over the clear and express
terms of the lease contract. Intent is to be deduced from
the language employed by the parties, and the terms 'of
the contract, when unambiguous, as in the instant case,
are conclusive in the absence of averment and proof of
mistake or fraud — the question being not what the
intention was, but what is expressed in the language
used. (City of Manila v. Rizal Park Co., Inc., 53 Phil.
515, 525); Magdalena Estate, Inc. v. Myrick, 71 Phil.
344, 348). Moreover, in order to judge the intention of
the contracting parties, their contemporaneous and
subsequent acts shall be principally considered (Art.
1371, Civil Code). If the intention of the lessee
(Republic) in 1947 was really to occupy permanently
Castellvi's property, why was the contract of lease
entered into on year to year basis? Why was the lease
agreement renewed from year to year? Why did not the
Republic expropriate this land of Castellvi in 1949
when, according to the Republic itself, it expropriated
the other parcels of land that it occupied at the same
time as the Castellvi land, for the purpose of converting
them into a jet air base? 14 It might really have been the
intention of the Republic to expropriate the lands in
question at some future time, but certainly mere notice -
much less an implied notice — of such intention on the
part of the Republic to expropriate the lands in the
future did not, and could not, bind the landowner, nor
bind the land itself. The expropriation must be actually
commenced in court (Republic vs. Baylosis, et al., 96
Phil. 461, 484).
Third, the entry into the property should be under
warrant or color of legal authority. This circumstance in
the "taking" may be considered as present in the instant
case, because the Republic entered the Castellvi
property as lessee.
Fourth, the property must be devoted to a public use or
otherwise informally appropriated or injuriously affected.
It may be conceded that the circumstance of the
property being devoted to public use is present
because the property was used by the air force of the
AFP.
Fifth, the utilization of the property for public use must
be in such a way as to oust the owner and deprive him
of all beneficial enjoyment of the property. In the instant
case, the entry of the Republic into the property and its
utilization of the same for public use did not oust
Castellvi and deprive her of all beneficial enjoyment of
the property. Castellvi remained as owner, and was
continuously recognized as owner by the Republic, as
shown by the renewal of the lease contract from year to
year, and by the provision in the lease contract whereby
the Republic undertook to return the property to
Castellvi when the lease was terminated. Neither was
Castellvi deprived of all the beneficial enjoyment of the
property, because the Republic was bound to pay, and
had been paying, Castellvi the agreed monthly rentals
until the time when it filed the complaint for eminent
domain on June 26, 1959.
It is clear, therefore, that the "taking" of Catellvi's
property for purposes of eminent domain cannot be
considered to have taken place in 1947 when the
Republic commenced to occupy the property as lessee
thereof. We find merit in the contention of Castellvi that
two essential elements in the "taking" of property under
the power of eminent domain, namely: (1) that the
entrance and occupation by the condemnor must be for
a permanent, or indefinite period, and (2) that in
devoting the property to public use the owner was
ousted from the property and deprived of its beneficial
use, were not present when the Republic entered and
occupied the Castellvi property in 1947.
Untenable also is the Republic's contention that
although the contract between the parties was one of
lease on a year to year basis, it was "in reality a more
or less permanent right to occupy the premises under
the guise of lease with the 'right and privilege' to buy
the property should the lessor wish to terminate the
lease," and "the right to buy the property is merged as
an integral part of the lease relationship ... so much so
that the fair market value has been agreed upon, not,
as of the time of purchase, but as of the time of
occupancy" 15 We cannot accept the Republic's
contention that a lease on a year to year basis can give
rise to a permanent right to occupy, since by express
legal provision a lease made for a determinate time, as
was the lease of Castellvi's land in the instant case,
ceases upon the day fixed, without need of a demand
(Article 1669, Civil Code). Neither can it be said that the
right of eminent domain may be exercised by simply
leasing the premises to be expropriated (Rule 67,
Section 1, Rules of Court). Nor can it be accepted that
the Republic would enter into a contract of lease where
its real intention was to buy, or why the Republic should
enter into a simulated contract of lease ("under the
guise of lease", as expressed by counsel for the
Republic) when all the time the Republic had the right
of eminent domain, and could expropriate Castellvi's
land if it wanted to without resorting to any guise
whatsoever. Neither can we see how a right to buy
could be merged in a contract of lease in the absence
of any agreement between the parties to that effect. To
sustain the contention of the Republic is to sanction a
practice whereby in order to secure a low price for a
land which the government intends to expropriate (or
would eventually expropriate) it would first negotiate
JDSPECA | Cases | Rule 67 | 51
with the owner of the land to lease the land (for say ten
or twenty years) then expropriate the same when the
lease is about to terminate, then claim that the "taking"
of the property for the purposes of the expropriation be
reckoned as of the date when the Government started
to occupy the property under the lease, and then assert
that the value of the property being expropriated be
reckoned as of the start of the lease, in spite of the fact
that the value of the property, for many good reasons,
had in the meantime increased during the period of the
lease. This would be sanctioning what obviously is a
deceptive scheme, which would have the effect of
depriving the owner of the property of its true and fair
market value at the time when the expropriation
proceedings were actually instituted in court. The
Republic's claim that it had the "right and privilege" to
buy the property at the value that it had at the time
when it first occupied the property as lessee nowhere
appears in the lease contract . What was agreed
expressly in paragraph No. 5 of the lease agreement
was that, should the lessor require the lessee to return
the premises in the same condition as at the time the
same was first occupied by the AFP, the lessee would
have the "right and privilege" (or option) of paying the
lessor what it would fairly cost to put the premises in the
same condition as it was at the commencement of the
lease, in lieu of the lessee's performance of the
undertaking to put the land in said condition. The "fair
value" at the time of occupancy, mentioned in the lease
agreement, does not refer to the value of the property if
bought by the lessee, but refers to the cost of restoring
the property in the same condition as of the time when
the lessee took possession of the property. Such fair
value cannot refer to the purchase price, for purchase
was never intended by the parties to the lease contract.
It is a rule in the interpretation of contracts that
"However general the terms of a contract may be, they
shall not be understood to comprehend things that are
distinct and cases that are different from those upon
which the parties intended to agree" (Art. 1372, Civil
Code).
We hold, therefore, that the "taking" of the Castellvi
property should not be reckoned as of the year 1947
when the Republic first occupied the same pursuant to
the contract of lease, and that the just compensation to
be paid for the Castellvi property should not be
determined on the basis of the value of the property as
of that year. The lower court did not commit an error
when it held that the "taking" of the property under
expropriation commenced with the filing of the
complaint in this case.
Under Section 4 of Rule 67 of the Rules of Court, 16 the
"just compensation" is to be determined as of the date
of the filing of the complaint. This Court has ruled that
when the taking of the property sought to be
expropriated coincides with the commencement of the
expropriation proceedings, or takes place subsequent
to the filing of the complaint for eminent domain, the
just compensation should be determined as of the date
of the filing of the complaint. (Republic vs. Philippine
National Bank, L-14158, April 12, 1961, 1 SCRA 957,
961-962). In the instant case, it is undisputed that the
Republic was placed in possession of the Castellvi
property, by authority of the court, on August 10, 1959.
The "taking" of the Castellvi property for the purposes
of determining the just compensation to be paid must,
therefore, be reckoned as of June 26, 1959 when the
complaint for eminent domain was filed.
Regarding the two parcels of land of Toledo-Gozun,
also sought to be expropriated, which had never been
under lease to the Republic, the Republic was placed in
possession of said lands, also by authority of the court,
on August 10, 1959, The taking of those lands,
therefore, must also be reckoned as of June 26, 1959,
the date of the filing of the complaint for eminent
domain.
2. Regarding the first assigned error — discussed as
the second issue — the Republic maintains that, even
assuming that the value of the expropriated lands is to
be determined as of June 26, 1959, the price of P10.00
per square meter fixed by the lower court "is not only
exhorbitant but also unconscionable, and almost
fantastic". On the other hand, both Castellvi and
Toledo-Gozun maintain that their lands are residential
lands with a fair market value of not less than P15.00
per square meter.
The lower court found, and declared, that the lands of
Castellvi and Toledo-Gozun are residential lands. The
finding of the lower court is in consonance with the
unanimous opinion of the three commissioners who, in
their report to the court, declared that the lands are
residential lands.
The Republic assails the finding that the lands are
residential, contending that the plans of the appellees to
convert the lands into subdivision for residential
purposes were only on paper, there being no overt acts
on the part of the appellees which indicated that the
subdivision project had been commenced, so that any
compensation to be awarded on the basis of the plans
would be speculative. The Republic's contention is not
well taken. We find evidence showing that the lands in
question had ceased to be devoted to the production of
agricultural crops, that they had become adaptable for
residential purposes, and that the appellees had
actually taken steps to convert their lands into
residential subdivisions even before the Republic filed
JDSPECA | Cases | Rule 67 | 52
the complaint for eminent domain. In the case of City
of Manila vs. Corrales  (32 Phil. 82, 98) this Court laid
down basic guidelines in determining the value of the
property expropriated for public purposes. This Court
said:
In determining the value of land appropriated for public
purposes, the same consideration are to be regarded
as in a sale of property between private parties. The
inquiry, in such cases, must be what is the property
worth in the market, viewed not merely with reference
to the uses to which it is at the time applied, but with
reference to the uses to which it is plainly adapted, that
is to say, What is it worth from its availability for
valuable uses?
So many and varied are the circumstances to be taken
into account in determining the value of property
condemned for public purposes, that it is practically
impossible to formulate a rule to govern its
appraisement in all cases. Exceptional circumstances
will modify the most carefully guarded rule, but, as a
general thing, we should say that the compensation of
the owner is to be estimated by reference to the use for
which the property is suitable, having regard to the
existing business or wants of the community, or such as
may be reasonably expected in the immediate future.
(Miss. and Rum River Boom Co. vs. Patterson, 98 U.S.,
403).
In expropriation proceedings, therefore, the owner of
the land has the right to its value for the use for which it
would bring the most in the market. 17 The owner may
thus show every advantage that his property
possesses, present and prospective, in order that the
price it could be sold for in the market may be
satisfactorily determined. 18 The owner may also show
that the property is suitable for division into village or
town lots. 19
The trial court, therefore, correctly considered, among
other circumstances, the proposed subdivision plans of
the lands sought to be expropriated in finding that those
lands are residential lots. This finding of the lower court
is supported not only by the unanimous opinion of the
commissioners, as embodied in their report, but also by
the Provincial Appraisal Committee of the province of
Pampanga composed of the Provincial Treasurer, the
Provincial Auditor and the District Engineer. In the
minutes of the meeting of the Provincial Appraisal
Committee, held on May 14, 1959 (Exh. 13-Castellvi)
We read in its Resolution No. 10 the following:
3. Since 1957 the land has been classified as
residential in view of its proximity to the air base and
due to the fact that it was not being devoted to
agriculture. In fact, there is a plan to convert it into a
subdivision for residential purposes. The taxes due on
the property have been paid based on its classification
as residential land;
The evidence shows that Castellvi broached the idea of
subdividing her land into residential lots as early as July
11, 1956 in her letter to the Chief of Staff of the Armed
Forces of the Philippines. (Exh. 5-Castellvi) As a matter
of fact, the layout of the subdivision plan was tentatively
approved by the National Planning Commission on
September 7, 1956. (Exh. 8-Castellvi). The land of
Castellvi had not been devoted to agriculture since
1947 when it was leased to the Philippine Army. In
1957 said land was classified as residential, and taxes
based on its classification as residential had been paid
since then (Exh. 13-Castellvi). The location of the
Castellvi land justifies its suitability for a residential
subdivision. As found by the trial court, "It is at the left
side of the entrance of the Basa Air Base and bounded
on two sides by roads (Exh. 13-Castellvi), paragraphs 1
and 2, Exh. 12-Castellvi), the poblacion, (of
Floridablanca) the municipal building, and the
Pampanga Sugar Mills are closed by. The barrio
schoolhouse and chapel are also near (T.S.N.
November 23,1960, p. 68)." 20
The lands of Toledo-Gozun (Lot 1-B and Lot 3) are
practically of the same condition as the land of
Castellvi. The lands of Toledo-Gozun adjoin the land of
Castellvi. They are also contiguous to the Basa Air
Base, and are along the road. These lands are near the
barrio schoolhouse, the barrio chapel, the Pampanga
Sugar Mills, and the poblacion of Floridablanca (Exhs.
1, 3 and 4-Toledo-Gozun). As a matter of fact,
regarding lot 1-B it had already been surveyed and
subdivided, and its conversion into a residential
subdivision was tentatively approved by the National
Planning Commission on July 8, 1959 (Exhs. 5 and 6
Toledo-Gozun). As early as June, 1958, no less than 32
man connected with the Philippine Air Force among
them commissioned officers, non-commission officers,
and enlisted men had requested Mr. and Mrs. Joaquin
D. Gozun to open a subdivision on their lands in
question (Exhs. 8, 8-A to 8-ZZ-Toledo-Gozun). 21
We agree with the findings, and the conclusions, of the
lower court that the lands that are the subject of
expropriation in the present case, as of August 10,
1959 when the same were taken possession of by the
Republic, were residential lands and were adaptable for
use as residential subdivisions. Indeed, the owners of
these lands have the right to their value for the use for
which they would bring the most in the market at the
time the same were taken from them. The most
important issue to be resolved in the present case
JDSPECA | Cases | Rule 67 | 53
relates to the question of what is the just compensation
that should be paid to the appellees.
The Republic asserts that the fair market value of the
lands of the appellees is P.20 per square meter. The
Republic cites the case of Republic vs. Narciso, et al.,
L-6594, which this Court decided on May 18, 1956. The
Narciso case involved lands that belonged to Castellvi
and Toledo-Gozun, and to one Donata Montemayor,
which were expropriated by the Republic in 1949 and
which are now the site of the Basa Air Base. In the
Narciso case this Court fixed the fair market value at
P.20 per square meter. The lands that are sought to be
expropriated in the present case being contiguous to
the lands involved in the Narciso case, it is the stand of
the Republic that the price that should be fixed for the
lands now in question should also be at P.20 per
square meter.
We can not sustain the stand of the Republic. We find
that the price of P.20 per square meter, as fixed by this
Court in the Narciso case, was based on the allegation
of the defendants (owners) in their answer to the
complaint for eminent domain in that case that the price
of their lands was P2,000.00 per hectare and that was
the price that they asked the court to pay them. This
Court said, then, that the owners of the land could not
be given more than what they had asked,
notwithstanding the recommendation of the majority of
the Commission on Appraisal — which was adopted by
the trial court — that the fair market value of the lands
was P3,000.00 per hectare. We also find that the price
of P.20 per square meter in the Narciso case was
considered the fair market value of the lands as of the
year 1949 when the expropriation proceedings were
instituted, and at that time the lands were classified as
sugar lands, and assessed for taxation purposes at
around P400.00 per hectare, or P.04 per square meter.
22 While the lands involved in the present case, like the
lands involved in the Narciso case, might have a fair
market value of P.20 per square meter in 1949, it can
not be denied that ten years later, in 1959, when the
present proceedings were instituted, the value of those
lands had increased considerably. The evidence shows
that since 1949 those lands were no longer cultivated
as sugar lands, and in 1959 those lands were already
classified, and assessed for taxation purposes, as
residential lands. In 1959 the land of Castellvi was
assessed at P1.00 per square meter. 23
The Republic also points out that the Provincial
Appraisal Committee of Pampanga, in its resolution No.
5 of February 15, 1957 (Exhibit D), recommended the
sum of P.20 per square meter as the fair valuation of
the Castellvi property. We find that this resolution was
made by the Republic the basis in asking the court to fix
the provisional value of the lands sought to be
expropriated at P259,669.10, which was approved by
the court. 24 It must be considered, however, that the
amount fixed as the provisional value of the lands that
are being expropriated does not necessarily represent
the true and correct value of the land. The value is only
"provisional" or "tentative", to serve as the basis for the
immediate occupancy of the property being
expropriated by the condemnor. The records show that
this resolution No. 5 was repealed by the same
Provincial Committee on Appraisal in its resolution No.
10 of May 14, 1959 (Exhibit 13-Castellvi). In that
resolution No. 10, the appraisal committee stated that
"The Committee has observed that the value of the land
in this locality has increased since 1957 ...", and
recommended the price of P1.50 per square meter. It
follows, therefore, that, contrary to the stand of the
Republic, that resolution No. 5 of the Provincial
Appraisal Committee can not be made the basis for
fixing the fair market value of the lands of Castellvi and
Toledo-Gozun.
The Republic further relied on the certification of the
Acting Assistant Provincial Assessor of Pampanga,
dated February 8, 1961 (Exhibit K), to the effect that in
1950 the lands of Toledo-Gozun were classified partly
as sugar land and partly as urban land, and that the
sugar land was assessed at P.40 per square meter,
while part of the urban land was assessed at P.40 per
square meter and part at P.20 per square meter; and
that in 1956 the Castellvi land was classified as sugar
land and was assessed at P450.00 per hectare, or
P.045 per square meter. We can not also consider this
certification of the Acting Assistant Provincial Assessor
as a basis for fixing the fair market value of the lands of
Castellvi and Toledo-Gozun because, as the evidence
shows, the lands in question, in 1957, were already
classified and assessed for taxation purposes as
residential lands. The certification of the assessor refers
to the year 1950 as far as the lands of Toledo-Gozun
are concerned, and to the year 1956 as far as the land
of Castellvi is concerned. Moreover, this Court has held
that the valuation fixed for the purposes of the
assessment of the land for taxation purposes can not
bind the landowner where the latter did not intervene in
fixing it. 25
On the other hand, the Commissioners, appointed by
the court to appraise the lands that were being
expropriated, recommended to the court that the price
of P10.00 per square meter would be the fair market
value of the lands. The commissioners made their
recommendation on the basis of their observation after
several ocular inspections of the lands, of their own
personal knowledge of land values in the province of
Pampanga, of the testimonies of the owners of the land,
JDSPECA | Cases | Rule 67 | 54
and other witnesses, and of documentary evidence
presented by the appellees. Both Castellvi and Toledo-
Gozun testified that the fair market value of their
respective land was at P15.00 per square meter. The
documentary evidence considered by the
commissioners consisted of deeds of sale of residential
lands in the town of San Fernando and in Angeles City,
in the province of Pampanga, which were sold at prices
ranging from P8.00 to P20.00 per square meter
(Exhibits 15, 16, 17, 18, 19, 20, 21, 22, 23-Castellvi).
The commissioners also considered the decision in
Civil Case No. 1531 of the Court of First Instance of
Pampanga, entitled Republic vs. Sabina Tablante,
which was expropriation case filed on January 13,
1959, involving a parcel of land adjacent to the Clark Air
Base in Angeles City, where the court fixed the price at
P18.00 per square meter (Exhibit 14-Castellvi). In their
report, the commissioners, among other things, said:
... This expropriation case is specially pointed out,
because the circumstances and factors involved therein
are similar in many respects to the defendants' lands in
this case. The land in Civil Case No. 1531 of this Court
and the lands in the present case (Civil Case No. 1623)
are both near the air bases, the Clark Air Base and the
Basa Air Base respectively. There is a national road
fronting them and are situated in a first-class
municipality. As added advantage it may be said that
the Basa Air Base land is very near the sugar mill at Del
Carmen, Floridablanca, Pampanga, owned by the
Pampanga Sugar Mills. Also just stone's throw away
from the same lands is a beautiful vacation spot at
Palacol, a sitio of the town of Floridablanca, which
counts with a natural swimming pool for vacationists on
weekends. These advantages are not found in the case
of the Clark Air Base. The defendants' lands are nearer
to the poblacion of Floridablanca then Clark Air Base is
nearer (sic) to the poblacion of Angeles, Pampanga.
The deeds of absolute sale, according to the
undersigned commissioners, as well as the land in Civil
Case No. 1531 are competent evidence, because they
were executed during the year 1959 and before August
10 of the same year. More specifically so the land at
Clark Air Base which coincidentally is the subject matter
in the complaint in said Civil Case No. 1531, it having
been filed on January 13, 1959 and the taking of the
land involved therein was ordered by the Court of First
Instance of Pampanga on January 15, 1959, several
months before the lands in this case were taken by the
plaintiffs ....
From the above and considering further that the lowest
as well as the highest price per square meter
obtainable in the market of Pampanga relative to
subdivision lots within its jurisdiction in the year 1959 is
very well known by the Commissioners, the
Commission finds that the lowest price that can be
awarded to the lands in question is P10.00 per square
meter. 26
The lower court did not altogether accept the findings of
the Commissioners based on the documentary
evidence, but it considered the documentary evidence
as basis for comparison in determining land values. The
lower court arrived at the conclusion that "the
unanimous recommendation of the commissioners of
ten (P10.00) pesos per square meter for the three lots
of the defendants subject of this action is fair and
just". 27 In arriving at its conclusion, the lower court took
into consideration, among other circumstances, that the
lands are titled, that there is a rising trend of land
values, and the lowered purchasing power of the
Philippine peso.
In the case of Manila Railroad Co. vs. Caligsihan, 40
Phil. 326, 328, this Court said:
A court of first instance or, on appeal, the Supreme
Court, may change or modify the report of the
commissioners by increasing or reducing the amount of
the award if the facts of the case so justify. While great
weight is attached to the report of the commissioners,
yet a court may substitute therefor its estimate of the
value of the property as gathered from the record in
certain cases, as, where the commissioners have
applied illegal principles to the evidence submitted to
them, or where they have disregarded a clear
preponderance of evidence, or where the amount
allowed is either palpably inadequate or excessive. 28
The report of the commissioners of appraisal in
condemnation proceedings are not binding, but merely
advisory in character, as far as the court is
concerned. 29 In our analysis of the report of the
commissioners, We find points that merit serious
consideration in the determination of the just
compensation that should be paid to Castellvi and
Toledo-Gozun for their lands. It should be noted that
the commissioners had made ocular inspections of the
lands and had considered the nature and similarities of
said lands in relation to the lands in other places in the
province of Pampanga, like San Fernando and Angeles
City. We cannot disregard the observations of the
commissioners regarding the circumstances that make
the lands in question suited for residential purposes —
their location near the Basa Air Base, just like the lands
in Angeles City that are near the Clark Air Base, and
the facilities that obtain because of their nearness to the
big sugar central of the Pampanga Sugar mills, and to
the flourishing first class town of Floridablanca. It is true
that the lands in question are not in the territory of San
JDSPECA | Cases | Rule 67 | 55
Fernando and Angeles City, but, considering the
facilities of modern communications, the town of
Floridablanca may be considered practically adjacent to
San Fernando and Angeles City. It is not out of place,
therefore, to compare the land values in Floridablanca
to the land values in San Fernando and Angeles City,
and form an idea of the value of the lands in
Floridablanca with reference to the land values in those
two other communities.
The important factor in expropriation proceeding is that
the owner is awarded the just compensation for his
property. We have carefully studied the record, and the
evidence, in this case, and after considering the
circumstances attending the lands in question We have
arrived at the conclusion that the price of P10.00 per
square meter, as recommended by the commissioners
and adopted by the lower court, is quite high. It is Our
considered view that the price of P5.00 per square
meter would be a fair valuation of the lands in question
and would constitute a just compensation to the owners
thereof. In arriving at this conclusion We have
particularly taken into consideration the resolution of the
Provincial Committee on Appraisal of the province of
Pampanga informing, among others, that in the year
1959 the land of Castellvi could be sold for from P3.00
to P4.00 per square meter, while the land of Toledo-
Gozun could be sold for from P2.50 to P3.00 per
square meter. The Court has weighed all the
circumstances relating to this expropriations
proceedings, and in fixing the price of the lands that are
being expropriated the Court arrived at a happy
medium between the price as recommended by the
commissioners and approved by the court, and the
price advocated by the Republic. This Court has also
taken judicial notice of the fact that the value of the
Philippine peso has considerably gone down since the
year 1959. 30 Considering that the lands of Castellvi and
Toledo-Gozun are adjoining each other, and are of the
same nature, the Court has deemed it proper to fix the
same price for all these lands.
3. The third issue raised by the Republic relates to the
payment of interest. The Republic maintains that the
lower court erred when it ordered the Republic to pay
Castellvi interest at the rate of 6% per annum on the
total amount adjudged as the value of the land of
Castellvi, from July 1, 1956 to July 10, 1959. We find
merit in this assignment of error.
In ordering the Republic to pay 6% interest on the total
value of the land of Castellvi from July 1, 1956 to July
10, 1959, the lower court held that the Republic had
illegally possessed the land of Castellvi from July 1,
1956, after its lease of the land had expired on June 30,
1956, until August 10, 1959 when the Republic was
placed in possession of the land pursuant to the writ of
possession issued by the court. What really happened
was that the Republic continued to occupy the land of
Castellvi after the expiration of its lease on June 30,
1956, so much so that Castellvi filed an ejectment case
against the Republic in the Court of First Instance of
Pampanga. 31 However, while that ejectment case was
pending, the Republic filed the complaint for eminent
domain in the present case and was placed in
possession of the land on August 10, 1959, and
because of the institution of the expropriation
proceedings the ejectment case was later dismissed. In
the order dismissing the ejectment case, the Court of
First Instance of Pampanga said:
Plaintiff has agreed, as a matter of fact has already
signed an agreement with defendants, whereby she
had agreed to receive the rent of the lands, subject
matter of the instant case from June 30, 1956 up to
1959 when the Philippine Air Force was placed in
possession by virtue of an order of the Court upon
depositing the provisional amount as fixed by the
Provincial Appraisal Committee with the Provincial
Treasurer of
Pampanga; ...
If Castellvi had agreed to receive the rentals from June
30, 1956 to August 10, 1959, she should be considered
as having allowed her land to be leased to the Republic
until August 10, 1959, and she could not at the same
time be entitled to the payment of interest during the
same period on the amount awarded her as the just
compensation of her land. The Republic, therefore,
should pay Castellvi interest at the rate of 6% per
annum on the value of her land, minus the provisional
value that was deposited, only from July 10, 1959 when
it deposited in court the provisional value of the land.
4. The fourth error assigned by the Republic relates to
the denial by the lower court of its motion for a new trial
based on nearly discovered evidence. We do not find
merit in this assignment of error.
After the lower court had decided this case on May 26,
1961, the Republic filed a motion for a new trial,
supplemented by another motion, both based upon the
ground of newly discovered evidence. The alleged
newly discovered evidence in the motion filed on June
21, 1961 was a deed of absolute sale-executed on
January 25, 1961, showing that a certain Serafin
Francisco had sold to Pablo L. Narciso a parcel of
sugar land having an area of 100,000 square meters
with a sugar quota of 100 piculs, covered by P.A. No.
1701, situated in Barrio Fortuna, Floridablanca, for
P14,000, or P.14 per square meter.
JDSPECA | Cases | Rule 67 | 56
In the supplemental motion, the alleged newly
discovered evidence were: (1) a deed of sale of some
35,000 square meters of land situated at Floridablanca
for P7,500.00 (or about P.21 per square meter)
executed in July, 1959, by the spouses Evelyn D. Laird
and Cornelio G. Laird in favor of spouses Bienvenido S.
Aguas and Josefina Q. Aguas; and (2) a deed of
absolute sale of a parcel of land having an area of
4,120,101 square meters, including the sugar quota
covered by Plantation Audit No. 161 1345, situated at
Floridablanca, Pampanga, for P860.00 per hectare (a
little less than P.09 per square meter) executed on
October 22, 1957 by Jesus Toledo y Mendoza in favor
of the Land Tenure Administration.
We find that the lower court acted correctly when it
denied the motions for a new trial.
To warrant the granting of a new trial based on the
ground of newly discovered evidence, it must appear
that the evidence was discovered after the trial; that
even with the exercise of due diligence, the evidence
could not have been discovered and produced at the
trial; and that the evidence is of such a nature as to
alter the result of the case if admitted. 32 The lower
court correctly ruled that these requisites were not
complied with.
The lower court, in a well-reasoned order, found that
the sales made by Serafin Francisco to Pablo Narciso
and that made by Jesus Toledo to the Land Tenure
Administration were immaterial and irrelevant, because
those sales covered sugarlands with sugar quotas,
while the lands sought to be expropriated in the instant
case are residential lands. The lower court also
concluded that the land sold by the spouses Laird to the
spouses Aguas was a sugar land.
We agree with the trial court. In eminent domain
proceedings, in order that evidence as to the sale price
of other lands may be admitted in evidence to prove the
fair market value of the land sought to be expropriated,
the lands must, among other things, be shown to be
similar.
But even assuming, gratia argumenti, that the lands
mentioned in those deeds of sale were residential, the
evidence would still not warrant the grant of a new trial,
for said evidence could have been discovered and
produced at the trial, and they cannot be considered
newly discovered evidence as contemplated in Section
1(b) of Rule 37 of the Rules of Court. Regarding this
point, the trial court said:
The Court will now show that there was no reasonable
diligence employed.
The land described in the deed of sale executed by
Serafin Francisco, copy of which is attached to the
original motion, is covered by a Certificate of Title
issued by the Office of the Register of Deeds of
Pampanga. There is no question in the mind of the
court but this document passed through the Office of
the Register of Deeds for the purpose of transferring
the title or annotating the sale on the certificate of title.
It is true that Fiscal Lagman went to the Office of the
Register of Deeds to check conveyances which may be
presented in the evidence in this case as it is now
sought to be done by virtue of the motions at bar, Fiscal
Lagman, one of the lawyers of the plaintiff, did not
exercise reasonable diligence as required by the rules.
The assertion that he only went to the office of the
Register of Deeds 'now and then' to check the records
in that office only shows the half-hazard [sic] manner by
which the plaintiff looked for evidence to be presented
during the hearing before the Commissioners, if it is at
all true that Fiscal Lagman did what he is supposed to
have done according to Solicitor Padua. It would have
been the easiest matter for plaintiff to move for the
issuance of a subpoena duces tecum  directing the
Register of Deeds of Pampanga to come to testify and
to bring with him all documents found in his office
pertaining to sales of land in Floridablanca adjacent to
or near the lands in question executed or recorded from
1958 to the present. Even this elementary precaution
was not done by plaintiff's numerous attorneys.
The same can be said of the deeds of sale attached to
the supplementary motion. They refer to lands covered
by certificate of title issued by the Register of Deeds of
Pampanga. For the same reason they could have been
easily discovered if reasonable diligence has been
exerted by the numerous lawyers of the plaintiff in this
case. It is noteworthy that all these deeds of sale could
be found in several government offices, namely, in the
Office of the Register of Deeds of Pampanga, the Office
of the Provincial Assessor of Pampanga, the Office of
the Clerk of Court as a part of notarial reports of
notaries public that acknowledged these documents, or
in the archives of the National Library. In respect to
Annex 'B' of the supplementary motion copy of the
document could also be found in the Office of the Land
Tenure Administration, another government entity. Any
lawyer with a modicum of ability handling this
expropriation case would have right away though [sic]
of digging up documents diligently showing
conveyances of lands near or around the parcels of
land sought to be expropriated in this case in the offices
that would have naturally come to his mind such as the
offices mentioned above, and had counsel for the
movant really exercised the reasonable diligence
required by the Rule' undoubtedly they would have
JDSPECA | Cases | Rule 67 | 57
been able to find these documents and/or caused the
issuance of subpoena duces tecum. ...
It is also recalled that during the hearing before the
Court of the Report and Recommendation of the
Commissioners and objection thereto, Solicitor Padua
made the observation:
two parcels of land that have a total area of 539,045
square meters, minus the sum of P107,809.00 that she
withdrew out of the amount that was deposited in court
as the provisional value of her lands, with interest at the
rate of 6%, per annum from July 10, 1959 until the day
full payment is made or deposited in court; (e) the
attorney's lien of Atty. Alberto Cacnio is enforced; and

I understand, Your Honor, that there was a sale that (f) the costs should be paid by appellant Republic of the
took place in this place of land recently where the land Philippines, as provided in Section 12, Rule 67, and in
was sold for P0.20 which is contiguous to this land. Section 13, Rule 141, of the Rules of Court.

The Court gave him permission to submit said IT IS SO ORDERED.

document subject to the approval of the Court. ... This
was before the decision was rendered, and later
promulgated on May 26, 1961 or more than one
month  after Solicitor Padua made the above
observation. He could have, therefore, checked up the
alleged sale and moved for a reopening to adduce
further evidence. He did not do so. He forgot to present
the evidence at a more propitious time. Now, he seeks
to introduce said evidence under the guise of newly-
discovered evidence. Unfortunately the Court cannot
classify it as newly-discovered evidence, because
tinder the circumstances, the correct qualification that
can be given is 'forgotten evidence'. Forgotten however,
is not newly-discovered
evidence. 33

The granting or denial of a motion for new trial is, as a

general rule, discretionary with the trial court, whose
judgment should not be disturbed unless there is a
clear showing of abuse of discretion. 34 We do not see
any abuse of discretion on the part of the lower court
when it denied the motions for a new trial.

WHEREFORE, the decision appealed from is modified,

as follows:

(a) the lands of appellees Carmen Vda. de Castellvi

and Maria Nieves Toledo-Gozun, as described in the
complaint, are declared expropriated for public use;

(b) the fair market value of the lands of the appellees is

fixed at P5.00 per square meter;

(c) the Republic must pay appellee Castellvi the sum of

P3,796,495.00 as just compensation for her one parcel
of land that has an area of 759,299 square meters,
minus the sum of P151,859.80 that she withdrew out of
the amount that was deposited in court as the
provisional value of the land, with interest at the rate of
6% per annum from July 10, 1959 until the day full
payment is made or deposited in court;

(d) the Republic must pay appellee Toledo-Gozun the

sum of P2,695,225.00 as the just compensation for her

JDSPECA | Cases | Rule 67 | 58

Export Processing Zone Authority v. Dulay, 149 SCRA
305 (1987) 
G.R. No. L-59603               April 29, 1987
EXPORT PROCESSING ZONE
AUTHORITY, petitioner,
vs.
HON. CEFERINO E. DULAY, in his capacity as the
Presiding Judge, Court of First Instance of Cebu,
Branch XVI, Lapu-Lapu City, and SAN ANTONIO
DEVELOPMENT CORPORATION, respondents.
Elena M. Cuevas for respondents.
FACTS: The four parcels of land which are the subject
of this case is where the Mactan Export Processing
Zone Authority in Cebu (EPZA) is to be constructed.
Private respondent San Antonio Development
Corporation (San Antonio, for brevity), in which these
lands are registered under, claimed that the lands were
expropriated to the government without them reaching
the agreement as to the compensation. Respondent
Judge Dulay then issued an order for the appointment
of the commissioners to determine the just
compensation. It was later found out that the payment
of the government to San Antonio would be P15 per
square meter, which was objected to by the latter
contending that under PD 1533, the basis of just
compensation shall be fair and according to the fair
market value declared by the owner of the property
sought to be expropriated, or by the assessor,
whichever is lower. Such objection and the subsequent
Motion for Reconsideration were denied and hearing
was set for the reception of the commissioner’s report.
EPZA then filed this petition for certiorari and
mandamus enjoining the respondent from further
hearing the case.
ISSUE: WON the exclusive and mandatory mode of
determining just compensation in PD 1533 is
unconstitutional. – YES
Whether the exclusive and mandatory mode of
determining just compensation in P.D. No. 1533 which
states “Section 1. In determining just compensation for
private property acquired through eminent domain
proceedings, the compensation to be paid shall not
exceed the value declared by the owner or
administrator or anyone having legal interest in the
property or determined by the assessor, pursuant to the
Real Property Tax Code, whichever value is lower, prior
to the recommendation or decision of the appropriate
Government office to acquire the property.” valid and
constitutional? - NO
HELD: The Supreme Court ruled that the mode of
determination of just compensation in PD 1533 is
unconstitutional.
The method of ascertaining just compensation
constitutes impermissible encroachment
to judicial prerogatives. It tends to render the courts
inutile in a matter in which under the Constitution is
reserved to it for financial determination. The valuation
in the decree may only serve as guiding principle or one
of the factors in determining just compensation, but it
may not substitute the court’s own judgment as to what
amount should be awarded and how to arrive at such
amount. The determination of just compensation is
a judicial function. The executive department or the
legislature may make the initial determination but when
a party claims a violation of the guarantee in the Bill of
Rights that the private party may not be taken for public
use without just compensation, no statute, decree,
or executive order can mandate that its own
determination shall prevail over the court’s findings.
Much less can the courts be precluded from looking into
the justness of the decreed compensation.
SYLLABUS
Constitutional Law; Just Compensation; Meaning of just
compensation.—Just Compensation means the
equivalent for the value of the property at the time of its
taking. Anything beyond that is more and anything short
of that is less, than just compensation. It means a fair
and full equivalent for the loss sustained, which is the
measure of the indemnity, not whatever gain would
accrue to the expropriating entity.
Same; Same; Same; Provisions of PD Nos. 76, 464,
794 and 1533 on just compensation unconstitutional
and void; Court has the power to determine just
compensation and to appoint commissioners for the
purpose.—The method of ascertaining just
compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It
tends to render this Court inutile in a matter which
under the Constitution is reserved to it for final
determination. Thus, although in an expropriation
proceeding the court technically would still have the
power to determine the just compensation for the
property, following the applicable decrees, its task
would be relegated to simply stating the lower value of
the property as declared either by the owner or the
assessor. As a necessary consequence, it would be
useless for the court to appoint commissioners under
JDSPECA | Cases | Rule 67 | 59
Rule 67 of the Rules of Court. Moreover, the need to
satisfy the due process clause in the taking of private
property is seemingly fulfilled since it cannot be said
that a judicial proceeding was not had before the actual
taking. However, the strict application of the decrees
during the proceedings would be nothing short of a
mere formality or charade as the court has only to
choose between the valuation of the owner and that of
the assessor, and its choice is always limited to the
lower of the two. The court cannot exercise its
discretion or independence in determining what is just
or fair. Even a grade school pupil could substitute for
the judge insofar as the determination of constitutional
just compensation is concerned. "Another consideration
why the Court is empowered to appoint commissioners
to assess the just compensation of these properties
under eminent domain proceedings, is the well-
entrenched ruling that 'the owner of property
expropriated is entitled to recover from expropriating
authority the fair and full value of the lot, as of the time
when possession thereof was actually taken by the
province, plus consequential damages—including
attorney's fees—from which the consequential benefits,
if any should be deducted, with interest at the legal rate,
on the aggregate sum due to the owner from and after
the date of actual taking.' (Capitol Subdivision, Inc. v.
Province of Negros Occidental, 7 SCRA 60). In fine, the
decree only establishes a uniform basis for determining
just compensation which the Court may consider as
one of the factors in arriving at 'just compensation/ as
envisage in the Constitution. In the words of Justice
Barredo, 'Respondent court's invocation of General
Order No. 3 of September 21, 1972 is nothing short of
an unwarranted abdication of judicial authority, which
no judge duly imbued with the implications of the
paramount principle of independence of the judiciary
should ever think of doing.' (Lina v. Purisima, 82 SCRA
344, 351; Cf. Prov. of Pangasinan v. CFI Judge of
Pangasinan, Br. VIII, 80 SCRA 117) Indeed, where this
Court simply follows PD 1533, thereby limiting the
determination of just compensation on the value
declared by the owner or administrator or as
determined by the Assessor, whichever is lower, it may
result in the deprivation of the landowner's right of due
process to enable it to prove its claim to just
compensation, as mandated by the Constitution. (Uy v.
Genato, 57 SCRA 123). The tax declaration under the
Real Property Tax Code is, undoubtedly, for purposes
of taxation." The determination of "just compensation"
in eminent domain cases is a judicial function. The
executive department or the legislature may make the
initial determinations but when a party claims a violation
of the guarantee in the Bill of Rights that private
property may not be taken for public use without just
compensation, no statute, decree, or executive order
can mandate that its own determination shall prevail
over the court's findings. Much less can the courts be
precluded from looking into the "just-ness" of the
decreed compensation.
GUTIERREZ, JR., J.:
The question raised in this petition is whether or not
Presidential Decrees Numbered 76, 464, 794 and 1533
have repealed and superseded Sections 5 to 8 of Rule
67 of the Revised Rules of Court, such that in
determining the just compensation of property in an
expropriation case, the only basis should be its market
value as declared by the owner or as determined by the
assessor, whichever is lower.
On January 15, 1979, the President of the Philippines,
issued Proclamation No. 1811, reserving a certain
parcel of land of the public domain situated in the City
of Lapu-Lapu, Island of Mactan, Cebu and covering a
total area of 1,193,669 square meters, more or less, for
the establishment of an export processing zone by
petitioner Export Processing Zone Authority (EPZA).
Not all the reserved area, however, was public land.
The proclamation included, among others, four (4)
parcels of land with an aggregate area of 22,328
square meters owned and registered in the name of the
private respondent. The petitioner, therefore, offered to
purchase the parcels of land from the respondent in
acccordance with the valuation set forth in Section 92,
Presidential Decree (P.D.) No. 464, as amended. The
parties failed to reach an agreement regarding the sale
of the property.
The petitioner filed with the then Court of First Instance
of Cebu, Branch XVI, Lapu-Lapu City, a complaint for
expropriation with a prayer for the issuance of a writ of
possession against the private respondent, to
expropriate the aforesaid parcels of land pursuant to
P.D. No. 66, as amended, which empowers the
petitioner to acquire by condemnation proceedings any
property for the establishment of export processing
zones, in relation to Proclamation No. 1811, for the
purpose of establishing the Mactan Export Processing
Zone.
On October 21, 1980, the respondent judge issued a
writ of possession authorizing the petitioner to take
immediate possession of the premises. On December
23, 1980, the private respondent flied its answer.
At the pre-trial conference on February 13, 1981, the
respondent judge issued an order stating that the
parties have agreed that the only issue to be resolved is
the just compensation for the properties and that the
JDSPECA | Cases | Rule 67 | 60
pre-trial is thereby terminated and the hearing on the
merits is set on April 2, 1981.
On February 17, 1981, the respondent judge issued the
order of condemnation declaring the petitioner as
having the lawful right to take the properties sought to
be condemned, upon the payment of just compensation
to be determined as of the filing of the complaint. The
respondent judge also issued a second order, subject
of this petition, appointing certain persons as
commissioners to ascertain and report to the court the
just compensation for the properties sought to be
expropriated.
On June 19, 1981, the three commissioners submitted
their consolidated report recommending the amount of
P15.00 per square meter as the fair and reasonable
value of just compensation for the properties.
On July 29, 1981, the petitioner Med a Motion for
Reconsideration of the order of February 19, 1981 and
Objection to Commissioner's Report on the grounds
that P.D. No. 1533 has superseded Sections 5 to 8 of
Rule 67 of the Rules of Court on the ascertainment of
just compensation through commissioners; and that the
compensation must not exceed the maximum amount
set by P.D. No. 1533.
On November 14, 1981, the trial court denied the
petitioner's motion for reconsideration and gave the
latter ten (10) days within which to file its objection to
the Commissioner's Report.
On February 9, 1982, the petitioner flied this present
petition for certiorari and mandamus with preliminary
restraining order, enjoining the trial court from enforcing
the order dated February 17, 1981 and from further
proceeding with the hearing of the expropriation case.
The only issue raised in this petition is whether or not
Sections 5 to 8, Rule 67 of the Revised Rules of Court
had been repealed or deemed amended by P.D. No.
1533 insofar as the appointment of commissioners to
determine the just compensation is concerned. Stated
in another way, is the exclusive and mandatory mode of
determining just compensation in P.D. No. 1533 valid
and constitutional?
The petitioner maintains that the respondent judge
acted in excess of his jurisdiction and with grave abuse
of discretion in denying the petitioner's motion for
reconsideration and in setting the commissioner's
report for hearing because under P.D. No. 1533, which
is the applicable law herein, the basis of just
compensation shall be the fair and current market value
declared by the owner of the property sought to be
expropriated or such market value as determined by the
assessor, whichever is lower. Therefore, there is no
more need to appoint commissioners as prescribed by
Rule 67 of the Revised Rules of Court and for said
commissioners to consider other highly variable factors
in order to determine just compensation. The petitioner
further maintains that P.D. No. 1533 has vested on the
assessors and the property owners themselves the
power or duty to fix the market value of the properties
and that said property owners are given the full
opportunity to be heard before the Local Board of
Assessment Appeals and the Central Board of
Assessment Appeals. Thus, the vesting on the
assessor or the property owner of the right to determine
the just compensation in expropriation proceedings,
with appropriate procedure for appeal to higher
administrative boards, is valid and constitutional.
Prior to the promulgation of P.D. Nos. 76, 464, 794 and
1533, this Court has interpreted the eminent domain
provisions of the Constitution and established the
meaning, under the fundametal law, of just
compensation and who has the power to determine it.
Thus, in the following cases, wherein the filing of the
expropriation proceedings were all commenced prior to
the promulgation of the aforementioned decrees, we
laid down the doctrine onjust compensation:
Municipality of Daet v. Court of Appeals  (93 SCRA 503,
516),
x x x           x x x          x x x
"And in the case of J.M. Tuason & Co., Inc. v. Land
Tenure Administration, 31 SCRA 413, the Court,
speaking thru now Chief Justice Fernando, reiterated
the 'well-settled (rule) that just compensation means the
equivalent for the value of the property at the time of its
taking. Anything beyond that is more and anything short
of that is less, than just compensation. It means a fair
and full equivalent for the loss sustained, which is the
measure of the indemnity, not whatever gain would
accrue to the expropriating entity."
Garcia v. Court ofappeals (102 SCRA 597, 608),
x x x           x x x          x x x
"Hence, in estimating the market value, all the
capabilities of the property and all the uses to which it
may be applied or for which it is adapted are to be
considered and not merely the condition it is in the time
and the use to which it is then applied by the owner. All
the facts as to the condition of the property and its
surroundings, its improvements and capabilities may be
shown and considered in estimating its value."
JDSPECA | Cases | Rule 67 | 61
Republic v. Santos (141 SCRA 30, 35-36),
"According to section 8 of Rule 67, the court is not
bound by the commissioners' report. It may make such
order or render such judgment as shall secure to the
plaintiff the property essential to the exercise of his right
of condemnation, and to the defendant just
compensation for the property expropriated. This Court
may substitute its own estimate of the value as
gathered from the record (Manila Railroad Company v.
Velasquez, 32 Phil. 286)."
However, the promulgation of the aforementioned
decrees practically set aside the above and many other
precedents hammered out in the course of evidence-
laden, well argued, fully heard, studiously deliberated,
and judiciously considered court proceedings. The
decrees categorically and peremptorily limited the
definition of just compensation thus:
P.D. No. 76:
x x x           x x x          x x x
"For purposes of just compensation in cases of private
property acquired by the government for public use, the
basis shall be the current and fair market value
declared by the owner or administrator, or such market
value as determined by the Assessor, whichever is
lower."
P.D. No. 464:
"Section 92. Basis for payment of just compensation in
expropriation proceedings. — In determining just
compensation which private property is acquired by the
government for public use, the basis shall be the
market value declared by the owner or administrator or
anyone having legal interest in the property, or such
market value as determined by the assessor, whichever
is lower."
P.D. No. 794:
"Section 92. Basis for payment of just compensation in
expropriation proceedings. — In determining just
compensation when private property is acquired by the
government for public use, the same shall not exceed
the market value declared by the owner or administrator
or anyone having legal interest in the property, or such
market value as determined by the assessor, whichever
is lower."
P.D. No. 1533:
"Section 1. In determining just compensation for private
property acquired through eminent domain
proceedings, the compensation to be paid shall not
exceed the value declared by the owner or
administrator or anyone having legal interest in the
property or determined by the assessor, pursuant to the
Real Property Tax Code, whichever value is lower, prior
to the recommendation or decision of the appropriate
Government office to acquire the property."
We are constrained to declare the provisions of the
Decrees on just compensation unconstitutional and void
and accordingly dismiss the instant petition for lack of
merit.
The method of ascertaining just compensation under
the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter which under the
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court
technically would still have the power to determine the
just compensation for the property, following the
applicable decrees, its task would be relegated to
simply stating the lower value of the property as
declared either by the owner or the assessor. As a
necessary consequence, it would be useless for the
court to appoint commissioners under Rule 67 of the
Rules of Court. Moreover, the need to satisfy the due
process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking.
However, the strict application of the decrees during the
proceedings would be nothing short of a mere formality
or charade as the court has only to choose between the
valuation of the owner and that of the assessor, and its
choice is always limited to the lower of the two. The
court cannot exercise its discretion or independence in
determining what is just or fair. Even a grade school
pupil could substitute for the judge insofar as the
determination of constitutional just compensation is
concerned.
In the case of National Housing Authority v. Reyes  (123
SCRA 245), this Court upheld P.D. No. 464, as further
amended by P.D. Nos. 794, 1224 and 1259. In this
case, the petitioner National Housing Authority
contended that the owner's declaration at P1,400.00
which happened to be lower than the assessor's
assessment, is the just compensation for the
respondent's property under section 92 of P.D. No. 464.
On the other hand, the private respondent stressed that
while there may be basis for the allegation that the
respondent judge did not follow the decree, the matter
is still subject to his final disposition, he having been
vested with the original and competent authority to
exercise his judicial discretion in the light of the
JDSPECA | Cases | Rule 67 | 62
constitutional clauses on due process and equal
protection.
To these opposing arguments, this Court ruled ihat
under the conceded facts, there should be a recognition
that the law as it stands must be applied; that the
decree having spoken so clearly and unequivocably
calls for obedience; and that on a matter where the
applicable law speaks in no uncertain language, the
Court has no choice except to yield to its command. We
further stated that "the courts should recognize that the
rule introduced by P.D. No. 76 and reiterated in
subsequent decrees does not upset the established
concepts of justice or the constitutional provision on just
compensation for, precisely, the owner is allowed to
make his own valuation of his property."
While the Court yielded to executive prerogative
exercised in the form of absolute law-making power, its
members, nonetheless, remained uncomfortable with
the implications of the decision and the abuse and
unfairness which might follow in its wake. For one thing,
the President himself did not seem assured or confident
with his own enactment. It was not enough to lay down
the law on determination of just compensation in P.D.
76. It had to be repeated and reiterated in P.D. 464,
P.D. 794, and P.D. 1533. The provision is also found in
P.D. 1224, P.D. 1259 and P.D. 1313. Inspite of its
effectivity as general law and the wide publicity given to
it, the questioned provision or an even stricter version
had to be embodied in cases of specific expropriations
by decree as in P.D. 1669 expropriating the
Tambunting Estate and P.D. 1670 expropriating the
Sunog Apog area in Tondo, Manila.
In the present petition, we are once again confronted
with the same question of whether the courts under
P.D. 1533, which contains the same provision on just
compensation as its predecessor decrees, still have the
power and authority to determine just compensation,
independent of what is stated by the decree and to this
effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
In overruling the petitioner's motion for reconsideration
and objection to the commissioner's report, the trial
court said:
"Another consideration why the Court is empowered to
appoint commissioners to assess the just compensation
of these properties under eminent domain proceedings,
is the well-entrenched ruling that 'the owner of property
expropriated is entitled to recover from expropriating
authority the fair and full value of the lot, as of the time
when possession thereof was actually taken by the
province, plus consequential damages — including
attorney's fees — from which the consequential
benefits, if any should be deducted, with interest at the
legal rate, on the aggregate sum due to the owner from
and after the date of actual taking.' (Capitol Subdivision,
Inc. v. Province of Negros Occidental, 7 SCRA 60). In
fine, the decree only establishes a uniform basis for
determining just compensation which the Court may
consider as one of the factors in arriving at 'just
compensation,' as envisage in the Constitution. In the
words of Justice Barredo, "Respondent court's
invocation of General Order No. 3 of September 21,
1972 is nothing short of an unwarranted abdication of
judicial authority, which no judge duly imbued with the
implications of the paramount principle of independence
of the judiciary should ever think of doing." (Lina v.
Purisima, 82 SCRA 344, 351; Cf. Prov. of Pangasinan
v. CFI Judge of Pangasinan, Br. VIII, 80 SCRA 117)
Indeed, where this Court simply follows PD 1533,
thereby limiting the determination of just compensation
on the value declared by the owner or administrator or
as determined by the Assessor, whichever is lower, it
may result in the deprivation of the landowner's right of
due process to enable it to prove its claim to just
compensation, as mandated by the Constitution. (Uy v.
Genato, 57 SCRA 123). The tax declaration under the
Real Property Tax Code is, undoubtedly, for purposes
of taxation."
We are convinced and so rule that the trial court
correctly stated that the valuation in the decree may
only serve as a guiding principle or one of the factors in
determining just compensation but it may not substitute
the court's own judgment as to what amount should be
awarded and how to arrive at such amount. A return to
the earlier well-established doctrine, to our mind, is
more in keeping with the principle that the judiciary
should live up to its mission "by vitalizing and not
denigrating constitutional rights." (See Salonga v. Cruz
Paño, 134 SCRA 438, 462; citing Mercado v. Court of
First Instance of Rizal, 116 SCRA 93.) The doctrine we
enunciated in National Housing Authority v. Reyes,
supra,  therefore, must necessarily be abandoned if we
are to uphold this Court's role as the guardian of the
fundamental rights guaranteed by the due process and
equal protection clauses and as the final arbiter over
transgressions committed against constitutional rights.
The basic unfairness of the decrees is readily apparent.
Just compensation means the value of the property at
the time of the taking. It means a fair and full
equivalent  for the loss sustained. All the facts as to the
condition of the property and its surroundings, its
improvements and capabilities, should be considered.
JDSPECA | Cases | Rule 67 | 63
In this particular case, the tax declarations presented by
the petitioner as basis for just compensation were made
by the Lapu-Lapu municipal, later city assessor long
before martial law, when land was not only much
cheaper but when assessed values of properties were
stated in figures constituting only a fraction of their true
market value. The private respondent was not even the
owner of the properties at the time. It purchased the lots
for development purposes. To peg the value of the lots
on the basis of documents which are out of date and at
prices below the acquisition cost of present owners
would be arbitrary and confiscatory.
Various factors can come into play in the valuation of
specific properties singled out for expropriation. The
values given by provincial assessors are usually
uniform for very wide areas covering several barrios or
even an entire town with the exception of the poblacion.
Individual differences are never taken into account. The
value of land is based on such generalities as its
possible cultivation for rice, corn, coconuts, or other
crops. Very often land described as "cogonal" has been
cultivated for generations. Buildings are described in
terms of only two or three classes of building materials
and estimates of areas are more often inaccurate than
correct. Tax values can serve as guides but cannot be
absolute substitutes for just compensation.
To say that the owners are estopped to question the
valuations made by assessors since they had the
opportunity to protest is illusory. The overwhelming
mass of land owners accept unquestioningly what is
found in the tax declarations prepared by local
assessors or municipal clerks for them. They do not
even look at, much less analyze, the statements. The
Idea of expropriation simply never occurs until a
demand is made or a case filed by an agency
authorized to do so.
It is violative of due process to deny to the owner the
opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to
basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to
absolutely prevail over the judgment of a court
promulgated only after expert commissioners have
actually viewed the property, after evidence and
arguments pro and con have been presented, and after
all factors and considerations essential to a fair and just
determination have been judiciously evaluated.
As was held in the case of Gideon v. Wainwright  (93
ALR 2d,733,742):
"In the light of these and many other prior decisions of
this Court, it is not surprising that the Betts Court, when
faced with the contention that 'one charged with crime,
who is unable to obtain counsel must be furnished
counsel by the State,' conceded that '[E]xpressions in
the opinions of this court lend color to the argument. . .'
316 U.S., at 462, 463, 86 L ed. 1602, 62 S Ct. 1252.
The fact is that in deciding as it did-that "appointment of
counsel is not a fundamental right, essential to a fair
trial" — the Court in Betts v. Brady made an ubrupt
brake with its own well-considered precedents. In
returning to these old precedents, sounder we believe
than the new, we but restore constitutional principles
established to achieve a fair system of justice. . ."
We return to older and more sound precedents. This
Court has the duty to formulate guiding and controlling
constitutional principles, precepts, doctrines, or rules.
(See Salonga v. Cruz Pano, supra).
The determination of "just compensation" in eminent
domain cases is a judicial function. The executive
department or the legislature may make the initial
determinations but when a party claims a violation of
the guarantee in the Bill of Rights that private property
may not be taken for public use without just
compensation, no statute, decree, or executive order
can mandate that its own determination shall prevail
over the court's findings. Much less can the courts be
precluded from looking into the "just-ness" of the
decreed compensation.
We, therefore, hold that P.D. No. 1533, which
eliminates the court's discretion to appoint
commissioners pursuant to Rule 67 of the Rules of
Court, is unconstitutional and void. To hold otherwise
would be to undermine the very purpose why this Court
exists in the first place.
WHEREFORE, IN VIEW OF THE FOREGOING, the
petition is hereby DISMISSED. The temporary
restraining order issued on February 16, 1982 is
LIFTED and SET ASIDE.
SO ORDERED.
JDSPECA | Cases | Rule 67 | 64

Benguet Consolidated, Inc. V. Republic, 143 SCRA 466
(1986)   Subsequently, a Board of Commissioners to assess
G.R. No. 71412 August 15, 1986
BENGUET CONSOLIDATED, INC., (now Benguet
Corporation), petitioners,
vs. REPUBLIC OF THE PHILIPPINES, respondent.
FACTS: On June 18, 1958, the Republic filed with the
then CFI of Benguet and Baguio a complaint for
expropriation against ten defendants, among them
Benguet Consolidated, Inc stating that it needed the
property for the purpose of establishing and maintaining
a permanent site for the Philippine Military Academy.
The petitioner filed a motion to dismiss on the ground
that the Republic did not need and has not occupied the
areas covered by its mining claims and neither have
improvements been made. It was also alleged that the
authority given by the President of the Philippines for
the expropriation proceedings refers to privately owned
mineral lands, mining interests, and other private
interests of private individuals and entities of private
individuals and that the expropriation of Benguet
Consolidated, Inc.'s mineral claims is in violation of law.
The trial court heard Benguet Consolidated Inc.'s
motion to dismiss. Since the possibility of an amicable
settlement was raised, the representatives of both
parties agreed that pending any definite settlement, the
hearing of the motion to dismiss would be held in
abeyance. On this same day, the trial court issued an
order, the dispositive portion of which reads:
In view of the fact that the defendants are no longer
challenging plaintiff's right to condemn the property,
subject of the instant case, the plaintiff Republic of the
Philippines is hereby declared to have lawful right to
take the property sought to be condemned, for the
public use described in the complaint, upon payment of
just compensation to be determined as of the date of
the filing of the complaint.
Benguet Consolidated, Inc. took exception to the order
of condemnation by filing a motion stating that at no
time, had it manifested, either expressly or impliedly,
that it was no longer challenging. Acting on this motion,
the trial court in its Order stated that " ... to satisfy
Benguet Consolidated, Inc., this Court makes it of
record that, pending negotiations between the
Government and Benguet Consolidated, Inc. said
corporation has not waived its right to challenge
plaintiff's right to condemn the mineral claims in
question."
and establish the reasonable amount of compensation
was formed. They submitted their report recommending
the payment of P43,703.37 to the ten 10 defendants as
just compensation for their expropriated properties. The
parties filed their objections to the Commissioners'
report.
The trial court rejected the Commissioners' Report and
made its own findings and conclusions issuing an order
fixing the "just compensation of the surface area of the
four (4) claims of Benguet Consolidated, Inc. in the
amount of P128,051.82 with interest at 6% per annum
from May 6, 1950 until fully paid, plus attorney's fees in
an amount equal to 5 % of the sum fixed by this Court."
On appeal, IAC promulgated a decision setting aside
the trial court's decision. The dispositive portion of the
decision reads:
WHEREFORE, the appealed judgment is hereby
reversed and set aside, and another one is rendered (1)
condemning the mineral claims described in the
complaint belonging to the defendants for the public
use therein stated; and (2) ordering the plaintiff to pay
the defendants as follows:
Benguet Consolidated Mining Co. 25.1082 Has. x
P300.00 7,532.46
ISSUES:
1. whether the perfection of a mining claim grants
exclusive possession even against the government
2. WON in expropriation proceedings an order of
condemnation may be entered by the court before a
motion to dismiss is denied.
3. WON the amount for just compensation is proper
HELD:
1. No. The filing of expropriation proceedings
recognizes the fact that the petitioner's property is no
JDSPECA | Cases | Rule 67 | 65
longer part of the public domain. The power of eminent
domain refers to the power of government to
take private property for public use. If the mineral
claims are public, there would be no need to
expropriate them. The fact that the location of a mining
claim has been perfected does not bar the
Government's exercise of its power of eminent domain.
The right of eminent domain covers all forms of private
property, tangible or intangible, and includes rights
which are attached to land.
2. The ruling on the motion to dismiss was deferred by
the trial court in view of a possible amicable settlement.
The lower court denied the motion to re-open the case
by stating in its Order:
When this Court issued the order declaring that plaintiff
has a lawful right to take the property sought to be
condemned,it impliedly overruled defendant's Motion to
dismiss which in expropriation cases takes the place of
an answer (Sec. 3, Rule 67, Rules of Court), and what
defendant could have done at the time would have
been to present evidence on the fair market value of its
properties. Having slept on its rights, Benguet
Consolidated, Inc. can no longer have this case
reopened for the presentation of its evidence.
This order was not challenged by the petitioner.
Instead, it filed its above-mentioned second motion for
clarification. It is to be noted that in its motion for new
trial and/or reconsideration, the petitioner stated:
Defendant Benguet Consolidated, Inc., does not
dispute the right of the government to exercise the
power of eminent domain with respect to its property.
However, in so doing this court failed to comply with the
basic constitutional provision that said power can only
be exercised upon payment of just compensation ...
Under these circumstances, the petitioner is estopped
from questioning the proceedings of condemnation
followed by the court. We cannot condone the
inconsistent positions of the petitioner. It is very clear
from the statements of the petitioner that it had already
abandoned its earlier stand on the propriety of
expropriation and that its intent shifted to the just
compensation to be paid by the plaintiff for its
condemned properties.
3. The petitioner assails the appellate court's approval
of the Commissioners' Report which fixed the amount
of P7,532.46 as just compensation for the mineral
claims. The petitioner contends that this amount is by
any standard ridiculously low and cannot be considered
just and that in fact the commissioners' report was
rejected by the trial court.
The petitioner's mining claims were classified as non-
producing unpatented claims. It was established that
the area of the mineral claims was 25.1082 hectares.
Hence, the commissioners arrived at the total amount
of P7,532.46 (25.1082 x P300.00) as just compensation
to be paid to the petitioner for its mining claims. These
findings negate the trial court's observation that the
commissioners only took into consideration the surface
value of the mineral claims. In fact, the lower court
affirmed the commissioners' report to the effect that the
petitioner herein is only entitled to the surface value of
the mineral claims when it said:
The Court regrets that it has no basis on which to
evaluate the value of the other claims the mineral
reserves of which were not included or taken into
consideration in the above- mentioned evaluations. The
Court, however, realizes that these mineral claims have
values. In the absence of any evidence as to their
positive, possible and probable ore contents, said
claims shall be evaluated only on the basis of their
surface areas.
Thus, the trial court computed the amount to be paid to
the petitioner as just compensation on the basis of the
surface value of its mining claims. While it is true that a
court may reject a Commissioners' Report on the
ground that the amount allowed is palpably inadequate
it is to be noted that the petitioner herein has not
supported its stand that the P7,532.46 just
compensation for its mining claims is by any standard
ridiculously low and cannot be considered just.
SYLLABUS
Constitutional Law; Mining; Eminent Domain; A land
where location of mineral claim has been perfected may
be the subject of expropriation.—The petitioner’s
arguments have no merit. The filing of expropriation
proceedings recognizes the fact that the petitioner’s
property is no longer part of the public domain. The
power of eminent domain refers to the power of
government to take private property for public use. If
the mineral claims are public, there would be no need
to expropriate them. The mineral claims of the petitioner
are not being transferred to another mining company or
to a public entity interested in the claims as such. The
land where the mineral claims were located is needed
for the Philippine Military Academy, a public use
completely unrelated to mining. The fact that the
location of a mining claim has been perfected does not
bar the Government’s exercise of its power of eminent
domain. The right of eminent domain covers all forms of
JDSPECA | Cases | Rule 67 | 66
private property, tangible or intangible, and includes
rights which are attached to land.
Estoppel; After party whose mineral land is being
expropriated has shifted its position to the issue only of
just compensation, it cannot later claim that its motion
to dismiss (which operates as an answer in
expropriation cases) should have been resolved first
before entry of condemnation order.—Under these
circumstances, the petitioner is estopped from
questioning the proceedings of condemnation followed
by the court. We cannot condone the inconsistent
positions of the petitioner. (See Republic v. Court of
Appeals, 133 SCRA 505). It is very clear from the
statements of the petitioner that it had already
abandoned its earlier stand on the propriety of
expropriation and that its intent shifted to the just
compensation to be paid by the plaintiff for its
condemned properties.
Same; Same; Same; Findings below on the “just
compensation” to be awarded has not been shown to
be ridiculously low and hence will not be disturbed.—As
stated earlier, the appellate court based its findings on
the Commissioners’ Report. The petitioner now assails
the approval of the commissioners’ report regarding the
P7,532.46 just compensation to be paid by the
government for its four (4) mining claims. While it is true
that a court may reject a Commissioners’ Report on the
ground that the amount allowed is palpably inadequate
(Republic v. Vda. de Castellvi, 58 SCRA 336, citing
Manila Railroad Co. v. Caligsihan, 40 Phil 326) it is to
be noted that the petitioner herein has not supported its
stand that the P7,532.48 just compensation for its
mining claims is by any standard ridiculously low and
cannot be considered just.
Petitioner did not file any objection to the
Commissioners’ appraisal of its property.—We are not
inclined to reject these findings of facts of the appellate
court in the absence of any contrary evidence pointed
to by the petitioner. Moreover, it is to be noted that
unlike the plaintiff and other defendants, the petitioner
did not file any opposition to the Commissioners’ Report
in the lower court.
Interest; Interest is due upon takeover of expropriated
land by the Government.—The appellate court,
however, should have provided for the payment of legal
interest from the time the government took over the
petitioner’s mining claims until payment is made by the
government. (See National Power Corporation v. Court
of Appeals, 129 SCRA 665).
GUTIERREZ, JR., J.:
This is a petition to review the decision of the
Intermediate Appellate Court in an expropriation case,
insofar as the decision affects the petitioner.
On June 18, 1958, the Republic of the Philippines filed
with the then Court of First Instance of Benguet and
Baguio a complaint for expropriation against ten (10)
defendants, among them Benguet Consolidated, Inc.
The Republic stated that it needed the property for the
purpose of establishing and maintaining a permanent
site for the Philippine Military Academy, a training
institution for officers in the Armed Forces of the
Philippines, under the direct authority and supervision
of the Department of National Defense. It also averred
that it had occupied since May 6, 1950, the area
covered by the mining claims of the defendants and
had already installed therein permanent buildings and
other valuable improvements with no less than
P3,000,000.00 in the belief that the area was
unoccupied portions of the public domain, and that
according to the Appraisal Committee constituted under
Administrative Order No. 144, dated October 10, 1955,
by the President of the Philippines, the reasonable and
fair market value of the rights and interests of all the
defendants which win be affected by these eminent
domain proceedings cannot exceed the total sum of
P532,371.40.
The locations of the petitioner's four mining claims with
a total area of 25.1082 hectares were made on the
following dates:
JEAN May 18, 1933 DOLORES FR May 15, 1933
NUGGET FR August 24, 1930 SMOKE May 11 & 12,
1933
The petitioner filed a motion to dismiss on the ground
that, insofar as it is concerned, the Republic did not
need and has not occupied the areas covered by the
above-mentioned mining claims and neither have
improvements been made on the said areas and that
the area covers ground which is rugged in terrain for
which the Philippine Military Academy could have no
use. By way of separate and special grounds for
dismissal, Benguet Consolidated, Inc. alleged that the
authority given by the President of the Philippines for
the expropriation proceedings refers to privately owned
mineral lands, mining interests, and other private
interests of private individuals and entities of private
individuals in certain portions of the site surveyed for
and presently occupied by the Philippine Military
Academy at Loakan, Baguio and that the expropriation
of Benguet Consolidated, Inc.'s mineral claims is in
violation of law.
JDSPECA | Cases | Rule 67 | 67
On December 28, 1955, the trial court heard Benguet
Consolidated Inc.'s motion to dismiss. Valentin Camado
was presented as witness and he testified that he
performed the annual assessment work for movant's
mineral claims. Since the possibility of an amicable
settlement was raised, the representatives of both
parties agreed that pending any definite settlement, the
hearing of the motion to dismiss would be held in
abeyance. On this same day, the trial court issued an
order, the dispositive portion of which reads:
In view of the fact that the defendants are no longer
challenging plaintiff's right to condemn the property,
subject of the instant case, the plaintiff Republic of the
Philippines is hereby declared to have lawful right to
take the property sought to be condemned, for the
public use described in the complaint, upon payment of
just compensation to be determined as of the date of
the filing of the complaint.
Benguet Consolidated, Inc. took exception to the order
of condemnation by filing a motion stating that at no
time, had it manifested, either expressly or impliedly,
that it was no longer challenging the plaintiff's right to
expropriate its former mineral claims. In the same
motion, Benguet Consolidated, Inc. moved for the
setting of a date for the continuation of the hearing of its
motion to dismiss.
Acting on this motion, the trial court in its Order dated
February 23, 1960, stated that " ... to satisfy Benguet
Consolidated, Inc., this Court makes it of record that,
pending negotiations between the Government and
Benguet Consolidated, Inc. said corporation has not
waived its right to challenge plaintiff's right to condemn
the mineral claims in question."
In the course of the proceedings, a Board of
Commissioners to assess and establish the reasonable
amount of compensation was formed. Appointed by the
court as members of the board of Commissioners were
Engineer Ernesto C. Bengson and Attorney-Engineer
Rolando J. Gamboa representing the court and the
army respectively and Mining Engineer Francisco G.
Joaquin, nominated by the defendants to represent all
of them.
Commissioner Joaquin resigned after attending eight
(8) hearings leaving the two other commissioners to
conduct 56 more hearings.
On February 28, 1963, the Board of Commissioners
submitted their report recommending the payment of
P43,703.37 to the ten (10) defendants as just
compensation for their expropriated properties.
The parties filed their objections to the Commissioners'
report.
The trial court rejected the Commissioners' Report and
made its own findings and conclusions. On July 5,
1973, the trial court promulgated a decision awarding
various sums to the defendants.
Benguet Consolidated filed a motion to clarify the
decision since the dispositive portion of the decision
computed the respective amounts to be paid by the
Republic to the defendants without, however, including
the amount to be paid to Benguet Consolidated for the
expropriation of its four (4) mining claims. In other
words, the petitioner was excluded from the awards
made by the trial court.
After Benguet Consolidated filed two other motions
(motion for new trial and/or reconsideration; second
motion for clarification) reiterating its objection to the
decision in not providing for just compensation for their
expropriated properties, the trial court issued an order
fixing the "just compensation of the surface area of the
four (4) claims of Benguet Consolidated, Inc. in the
amount of P128,051.82 with interest at 6% per annum
from May 6, 1950 until fully paid, plus attorney's fees in
an amount equal to 5 % of the sum fixed by this Court."
A motion to reopen the case praying for a new trial to
allow it to present evidence as to the value of the
properties filed by Benguet Consolidated was denied by
the trial court.
Among all parties, only the plaintiff and defendant
Benguet Consolidated, Inc. pursued their appeal before
the then Court of Appeals.
On June 28, 1985, the Intermediate Appellate Courts
promulgated a decision setting aside the trial court's
decision. The dispositive portion of the decision reads:
WHEREFORE, the appealed judgment is hereby
reversed and set aside, and another one is rendered (1)
condemning the mineral claims described in the
complaint belonging to the defendants for the public
use therein stated; and (2) ordering the plaintiff to pay
the defendants as follows:
Demonstration Gold Mines, Ltd. 22.0037 Has. x
P600.00 P13,202.22
Benguet Goldfields Mining Co. 50.6633 Has. x P300.00
15,198.99
Crown Mines, Inc. none Benguet Consolidated Mining
Co. 25.1082 Has. x P300.00 7,532.46
JDSPECA | Cases | Rule 67 | 68
Josephine McKenzie none Josephine Murphy 5.8432
Has. x P300.00 1,752.96
J.E.H. Stevenot 1.1151 Has. 334.53 x P300.00
Andres Trepp none Gregoria Beley 18.9407 Has. x
P300.00 5,682.21
No costs.
The petitioner asserts that there is a need to review and
reverse the appellate court's decision because of the
following reasons:
A. THE CONDEMNATION OF PETITIONER'S
MINERAL CLAIM IS CONTRARY TO LAW AND
APPLICABLE JURISPRUDENCE.
B. THE APPROVAL OF THE COMMISSIONER'S
REPORT IS CONTRARY TO LAW AND APPLICABLE
JURISPRUDENCE.
The petitioner states that its mineral claims were
located since 1933 at the latest. It argues that by such
location and perfection, the land is segregated from the
public domain even as against the government.
Citing Gold Greek Mining Corporation v. Rodriguez, et
al  (66 Phil. 259), it states that when the location of a
mining claim is perfected, this has the effect of a grant
of exclusive possession with right to the enjoyment of
the surface ground as well as of all the minerals within
the lines of the claim and that this right may not be
infringed.
The petitioner's arguments have no merit. The filing of
expropriation proceedings recognizes the fact that the
petitioner's property is no longer part of the public
domain. The power of eminent domain refers to the
power of government to take private property for public
use. If the mineral claims are public, there would be no
need to expropriate them. The mineral claims of the
petitioner are not being transferred to another mining
company or to a public entity interested in the claims as
such. The land where the mineral claims were located
is needed for the Philippine Military Academy, a public
use completely unrelated to mining. The fact that the
location of a mining claim has been perfected does not
bar the Government's exercise of its power of eminent
domain. The right of eminent domain covers all forms of
private property, tangible or intangible, and includes
rights which are attached to land.
The petitioner next raises a procedural point-whether or
not in expropriation proceedings an order of
condemnation may be entered by the court before a
motion to dismiss is denied.
Citing the case of Nieto v. Ysip, etc., et al  (97 Phil. 31),
the petitioner claims that this cannot be done.
We ruled in the Nieto case that:
A cursory reading of Sections 4, 5 and 6 of Rules 69 of
the Rules of Court discloses the steps to be followed,
one after another, in condemnation proceedings from
the institution thereof. Thep is the presentation by
defendants of their objections and defenses to the right
of plaintiff to take the property for the use specified,
which objections and defenses shall be set forth in a
single motion to dismiss (Section 4). The second is the
hearing on the motion and the unfavorable resolution
thereon by the court. That an adverse resolution on the
motion to dismiss, if objections and defenses are
presented, is required because the rule (Sec. 5)
authorizes the court to enter an order of condemnation
only if the motion to dismiss is overruled, or if no motion
to dismiss had been presented. The second step
includes the order of condemnation, which may be
embodied in the resolution overruling the motion to
dismiss. The third is the appointment of commissioners
to assess the just compensation for the property (Sec.
6). That the above steps must follow one another is
evident from the provisions of the rules as well as from
the inter-relation between the steps and the
dependence of one upon the previous step. Thus no
order of condemnation may be entered if the motion to
dismiss has not been passed upon and overruled, and
no assessment should be undertaken unless and until
an order of condemnation has already been entered.
In the instant case the ruling on the motion to dismiss
was deferred by the trial court in view of a possible
amicable settlement. Moreover, after the trial court
entered an order of condemnation over the objection of
the petitioner, the court issued an order to the effect
that the trial court"... makes it of record that, pending
negotiations between the Government and Benguet
Consolidated, Inc. said corporation has not waived its
right to challenge plaintiff's right to condemn the mineral
claims in question."
At the hearing conducted by the Board of
Commissioners, the counsel for the petitioner
manifested that its motion to dismiss was still pending
in court, and requested that the hearing for the
presentation of evidence for the petitioner be cancelled.
At this point, negotiations between the government and
the petitioner were still going on.
In its original decision, the lower court overlooked an
award of just compensation for the petitioner. This
triggered off the filing of the following motions by the
petitioner: (1) motion for clarification praying that an
JDSPECA | Cases | Rule 67 | 69
order be issued clarifying the decision insofar as the
compensation to be paid to the petitioner is concerned;
(2) motion for new trial and/or reconsideration on the
ground that the court did not award just compensation
for the properties of the petitioner; (3) motion to re-open
case on the ground that the issues insofar as the
petitioner is concerned have not been joined since its
motion to dismiss has not been resolved; and (4) a
second motion for clarification praying therein:
WHEREFORE, it is respectfully prayed that a
clarification of the decision rendered on July 9th 1973
be made particularly with respect to defendant Benguet
Consolidated, Inc., so as to make a specific award, as
in the case of all the other defendants, for the just and
fair market value of the surface rights to its four
condemned mineral claims at the very least on the
basis of the same rate of P0.51 per square meter, or for
the total amount of P128,051.82; with interest thereon
at 6% per annum from May 6, 1950 until fully paid; plus
attorney's fees in an amount equal to 5% of the sum
fixed to be just and fair market value of the mineral
claims.
The lower court denied the motion to re-open the case
by stating in its Order:
xxx xxx xxx
When this Court issued the order declaring that plaintiff
has a lawful right to take the property sought to be
condemned,it impliedly overruled defendant's Motion to
dismiss which in expropriation cases takes the place of
an answer (Sec. 3, Rule 67, Rules of Court), and what
defendant could have done at the time would have
been to present evidence on the fair market value of its
properties. Having slept on its rights, Benguet
Consolidated, Inc. can no longer have this case
reopened for the presentation of its evidence.
This order was not challenged by the petitioner.
Instead, it filed its above-mentioned second motion for
clarification. It is to be noted that in its motion for new
trial and/or reconsideration, the petitioner stated:
Defendant Benguet Consolidated, Inc., does not
dispute the right of the government to exercise the
power of eminent domain with respect to its property.
However, in so doing this court failed to comply with the
basic constitutional provision that said power can only
be exercised upon payment of just compensation ...
Under these circumstances, the petitioner is estopped
from questioning the proceedings of condemnation
followed by the court. We cannot condone the
inconsistent positions of the petitioner. (See Republic v.
Court of Appeals, 133 SCRA 505). it is very clear from
the statements of the petitioner that it had already
abandoned its earlier stand on the propriety of
expropriation and that its intent shifted to the just
compensation to be paid by the plaintiff for its
condemned properties.
The second issue centers on the amount of just
compensation which should be paid by the respondent
to the petitioner for the condemned properties.
The petitioner assails the appellate court's approval of
the Commissioners' Report which fixed the amount of
P7,532.46 as just compensation for the mineral claims.
The petitioner contends that this amount is by any
standard ridiculously low and cannot be considered just
and that in fact the commissioners' report was rejected
by the trial court.
The Commissioners' Report was submitted by Ernesto
C. Bengson, chairman of the board and Rolando J.
Gamboa, Francisco Joaquin, representing the
defendants resigned after attending eight (8) hearings
due to ill health. The defendants did not ask for a
replacement.
The conclusion of the Commissioners are the result of
documentary evidence presented by the parties,
testimonies of several mining experts and executives of
mining companies including Mr. Ralph W. Crosby, the
then vice-president of the petitioner, and ocular
inspections of the mining claims involved in this case.
Among those present during the ocular inspection were
Mr. Joventino S. Perfecto and Mr. Kevin A. Callow, the
Chief Engineer of the Acupan Mines and the
Exploration Geologist of the Benguet Consolidated,
Inc., respectively. Among those considered by the
commissioners in order to determine the just
compensation to be paid to the defendants were the ore
reserves, base metal concentrates, and gypsums
deposits of the mining claims.
The P7,532.46 just compensation for the petitioner was
based on the following findings of the Board of
Commissioners:
The Commissioners conducted an ocular inspection of
the mining claims involved in this case, on October 14,
1961, with prior notice to all the parties. At this ocular
inspection, Mr. Joventino S. Perfecto and Mr. Kevin A.
Callow, Chief Engineer of the Acupan Mines and
Exploration Geologist, respectively, of the Benguet
Consolidated, Inc., also took part. In the mining claims
of Benguet Consolidated, Inc., involved in this case,
namely, Dolores, Nugget, Jean and Smoke mining
claims, there are some exploration tunnels and
JDSPECA | Cases | Rule 67 | 70
trenches to explore the mineral character of these
claims. However, the exploration and/or development
work on these claims is not sufficient for making any
estimate of the value of these claims for mining
purposes. The property has possibilities; but, with the
limited work done on these claims, no ore body has as
yet been found. Consequently, the value of these
claims cannot be determined at the present time.
xxx xxx xxx
With respect to the mining claims of Benguet
Consolidated, Inc., which are considered apart from the
other mining claims involved in this case, the mineral
value of these claims cannot possibly be determined for
the present, as these claims are not yet sufficiently
developed.
Upon the foregoing considerations, it would appear that
authorities that the defendants would be entitled to
would be the value of the surface rights of their mining
claims.
xxx xxx xxx
According to the 'Schedule of Assessed Value of
Mineral Lands (Exhs. B and B-1), the assessed value of
a patented lode claim (producing or non-producing) or a
non-patented producing claim is P600.00 per hectare,
and for a non- producing unpatented claim, it is
P300.00 per hectare.
The petitioner's mining claims were classified as non-
producing unpatented claims. It was established that
the area of the mineral claims belonging to the
petitioner and included in the Philippine Military
Reservation was 25.1082 hectares. Hence, the
commissioners arrived at the total amount of P7,532.46
(25.1082 x P300.00) as just compensation to be paid to
the petitioner for its mining claims.
The Schedule of Assessment Value of Mineral Lands
(Exhibits B, B-1) presented by the government, is a
"SCHEDULE of Assessed Values of mineral lands,
furnished by the Provincial Assessor of Mountain
Province on June 30, 1955" issued by Onofre D.
Alabanza, ex-oficio Mining Recorder of the Office of the
Mining Recorder, City of Baguio, Bureau of Mines,
Department of Agriculture and Natural Resources.
These findings negate the trial court's observation that
the commissioners only took into consideration the
surface value of the mineral claims. In fact, the lower
court affirmed the commissioners' report to the effect
that the petitioner herein is only entitled to the surface
value of the mineral claims when it said:
The Court regrets that it has no basis on which to
evaluate the value of the other claims the mineral
reserves of which were not included or taken into
consideration in the above- mentioned evaluations. The
Court, however, realizes that these mineral claims have
values. In the absence of any evidence as to their
positive, possible and probable ore contents, said
claims shall be evaluated only on the basis of their
surface areas.
"Other claims" include the petitioner's mining claims.
Thus, the trial court computed the amount to be paid to
the petitioner as just compensation on the basis of the
surface value of its mining claims.
We find no reason to disturb the lower court's findings
on this matter. The petitioner has not advanced any
reason for us to reject such findings.
As stated earlier, the appellate court based its findings
on the Commissioners' Report. The petitioner now
assails the approval of the commissioners' report
regarding the P7,532.46 just compensation to be paid
by the government for its four (4) mining claims.
While it is true that a court may reject a Commissioners'
Report on the ground that the amount allowed is
palpably inadequate (Republic v. Vda. de Castellvi, 58
SCRA 336, citing Manila Railroad Co. v. Caligsihan, 40
Phil. 326) it is to be noted that the petitioner herein has
not supported its stand that the P7,532.46 just
compensation for its mining claims is by any standard
ridiculously low and cannot be considered just.
On the other hand, the appellate court said:
The integrity and impartiality of the remaining
Commissioners, Engrs. Bengson and Gamboa, were
not questioned by the defendants. They are
experienced mining engineers and members of the bar.
And the Commissioners did give value to the mineral
contents of the claims. Pages 168 to 206 of the Report
will show that the Board considered the ore reserves
and the base metal concentrates and gypsum deposits.
The Board concluded that it was not profitable to
operate the claims, taking into account the cost of
production, rehabilitation and depletion, depreciation
and smelting and marketing expenses. Although
Engineer Joaquin resigned after eight hearings of the
Board, the defendants did not ask for a replacement.
Anyway, the Court was ably represented by Engineer
Bengson. The Board held a total of 64 hearings.
Besides documentary evidence, and an ocular
inspection of the mining claims involved made with prior
notice, twelve witnesses were presented by the parties.
JDSPECA | Cases | Rule 67 | 71
We are not inclined to reject these findings of facts of
the appellate court in the absence of any contrary
evidence pointed to by the petitioner.
Moreover, it is to be noted that unlike the plaintiff and
other defendants, the petitioner did not file any
opposition to the Commissioners' Report in the lower
court.
The appellate court, however, should have provided for
the payment of legal interest from the time the
government took over the petitioner's mining claims
until payment is made by the government. (See
National Power Corporation v. Court of Appeals, 129
SCRA 665).
We ruled in Republic v. Juan (92 SCRA 26):
xxx xxx xxx
...[S]aid interest ... 'runs as a matter of law and follows
as a matter of course from the right of the landowner to
be placed in as good a position as money can
accomplish, as of the date of the taking' (30 CJS 230).
Stated otherwise: 'Where the payment of compensation
does not accompany the taking of property for public
use but is postponed to a later date, the owner of the
property is ordinarily entitled to the award of an
additional sum which will compensate for delay (cases
cited) or which was in other words, produce the full
equivalent of the value of the property paid
contemporaneously with the taking' (29-A CJS 762).
Under this view, the interest awarded is deemed part of
the just compensation required to be paid to the owner
(27 Am. Jur. 112). ...
The appellate court's decision is, therefore, modified in
this respect.
WHEREFORE, the decision of the Intermediate
Appellate Court is MODIFIED in that the government is
directed to pay the petitioner the amount of SEVEN
THOUSAND FIVE HUNDRED THIRTY-TWO PESOS)
and 46/100 (P7,532.46) plus 6% interest from May 6,
1950 to July 29, 1974 and 12% thereafter until fully
paid, and AFFIRMED in all other respects. SO
ORDERED.
Cosculluela v. Court of Appeals, G.R. No. 77765, 15
August 1988
G.R. No. 77765 August 15, 1988
SEBASTIAN COSCULLUELA, petitioner,
vs. THE HONORABLE COURT OF APPEALS and the
REPUBLIC OF THE PHILIPPINES, represented by
NATIONAL IRRIGATION
ADMINISTRATION, respondents.
FACTS:
BACKGROUND/FIRST STAGE. On March 8, 1976 the
Republic filed a complaint with the Court of First
Instance in Iloilo to expropriate two parcels of land
owned by petitioner Sebastian Cosculluela and one
Mita Lumampao, for the construction of the canal
network of the Barotac Irrigation Project.
SECOND STAGE. On September 21, 1985 the court of
appeals’ decision became final and executory, ordering
the, Republic, to pay a sum of P200,000 to the
petitioner, for it is the reasonable amount of his
property, plus attorney’s fees of P5, 000 and P2,500 for
litigation expenses, modifying the trial court’s decision.
[THIRD STAGE?] On May 7, 1986, on motion of the
petitioner, Cusculluela, the trial court ordered the
issuance of a writ of execution to implement the
judgment of the appellate court.
[FOURTH STAGE?] But on August 11, 1986, the
respondent Republic filed a motion to set aside the
order of May 7, 1986 as well as the writ of execution
issued pursuant thereto, contending that the funds of
the National Irrigation Authority (NIA) are government
funds and therefore, cannot be disbursed without a
government appropriation.
On October 6, 1986, the lower court issued an order
modifying its order of May 7, 1986, directing instead
that the respondent Republic deposit with the Philippine
National Bank (PNB) in the name of the petitioner, the
amount adjudged in favor of the latter.
[FIFTH STAGE?] The respondent filed a petition with
the Court of Appeals to annul the orders of May 7 and
October 6, 1986. And on November 25, 1986, the
appellate court rendered the questioned decision
setting aside the aforementioned orders of the trial
court on the ground that public or government funds are
not subject to levy and execution.
FINAL STAGE. The petitioner assails the decision of
the appellate court as being violative of his right to just
compensation and due process of law. He maintains
that these constitutional guarantees transcend all
administrative and procedural laws and jurisprudence
for as between these said laws and the constitutional
rights of private citizens, the latter must prevail.
The respondent Republic argues that it has no intention
of keeping the land and dishonoring the judgment, but
JDSPECA | Cases | Rule 67 | 72
public funds such as those of the respondent National
Irrigation Authority (NIA) cannot be disbursed without
the proper appropriation.
ISSUE
1. WON the petitioner’s right to just compensation and
due process of law are violated
2. WON that there is a need for the Congress to locate
funds before disbursement.
RULING
The court ruled in favor of the petitioner.
1. One of the basic principles enshrined in our
Constitution is that no person shall be deprived of his
private property without due process of law; and in
expropriation cases, an essential element of due
process is that there must be just compensation
whenever private property is taken for public use and
as in the case Commissioner  of Public Highways  case,
the Court stressed that it is incumbent upon the
legislature to appropriate the necessary amount
because it cannot keep the land and dishonor the
judgment.
Needless to state, no government instrumentality,
agency, or subdivision has any business initiating
expropriation proceedings unless it has adequate
funds, supported by proper appropriation acts, to pay
for the property to be seized from the owner.
When the National Housing Authority expropriates raw
land to convert into housing projects for rent or sale to
private persons or the NIA expropriates land to
construct irrigation systems and sells  water rights to
farmers, it would be the height of abuse and ignominy
for the agencies to start earning from those properties
while ignoring final judgments ordering the payment of
just compensation to the former owners.
2. With the second issue, the case must be
distinguished from earlier cases where payment for
property expropriated by the National Government may
not be realized upon execution. As a rule, the
legislature must first appropriate the additional amount
to pay the award. It is a fact that the NIA collects fees
for the use of the irrigation system constructed on the
petitioner's land. It means that, does not have to await
an express act of Congress to locate funds for this
specific purpose. The rule in earlier precedents that the
functions and public services rendered by the state
cannot be allowed to be paralyzed or disrupted by the
diversion of public funds from their legitimate and
specific objects (Commissioner of Public Highways v.
San Diego, supra, at p. 625) is not applicable here.
There is no showing of any public service to be
disrupted if the fees collected from the farmers of Iloilo
for the use of irrigation water from the disrupted
property were utilized to pay for that property. The
petitioner's land was not taken for the construction of a
road, bridge, school, public buildings, or other
traditional objects of expropriation.
SYLLABUS
Eminent Domain; Due Process; Just Compensation; In
expropriation cases, an essential element of due
process is that there must be compensation whenever
private property is taken for public use.—One of the
basic principles enshrined in our Constitution is that no
person shall be deprived of his private property without
due process of law; and in expropriation cases, an
essential element of due process is that there must be
just compensation whenever private property is taken
for public use. Thus, in the case of Province of
Pangasinan v. CFI Judge of Pangasinan, Branch VIII
(80 SCRA 117, 120-121), this Court speaking through
then Chief Justice Fernando ruled: “There is full and
ample recognition of the power of eminent domain by
Justice Street in a leading case of Visayan Refining Co.
v. Camus (40 Phil. 550 [1919]) decided prior to the
Commonwealth, the matter being governed by the
Philippine Autonomy Act of 1916, otherwise known as
the Jones Law. It was characterized as ‘inseparable
from sovereignty being essential to the existence of the
State and inherent in government even in its most
primitive forms.’ (Ibid, 558) Nonetheless, he was careful
to point out: ‘In other words, the provisions now
generally found in the modern laws of constitutions of
civilized countries to the effect that private property
shall not be taken for public use without just
compensation have their origin in the recognition of a
necessity for restraining the sovereign and protecting
the individual.’ (Ibid, 559) Moreover, he did emphasize:
“Nevertheless it should be noted that the whole problem
of expropriation is resolvable in its ultimate analysis into
a constitutional question of due process of law. x x x
Even were there no organic or constitutional provision
in force requiring compensation to be paid, the seizure
of one’s property without payment, even though
intended for a public use, would undoubtedly be held to
be a taking without due process of law and a denial of
the equal protection of the laws.’ That aspect of the
matter was stressed in the recent case of J. M. Tuason
and Co., Inc. v. Land Tenure Administration. (31 SCRA
413) Conformably to such a fundamental principle then,
JDSPECA | Cases | Rule 67 | 73
in accordance with a constitutional mandate, this Court
has never hesitated to assure that there be just
compensation. If it were otherwise, the element of
arbitrariness certainly would enter. It is bad enough that
an owner of a property, in the event of the exercise of
this sovereign prerogative, has no choice but to yield to
such a taking. It is infinitely worse if thereafter, he is
denied all these years the payment to which he is
entitled. This is one of the instances where law and
morals speak to the same effect.” (Cf. Province of
Tayabas v. Perez, 66 Phil. 467 [1938] and other related
cases).
Compensation cannot be “just” without prompt
payment.—Just compensation means not only the
correct determination of the amount to be paid to the
owner 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.
It is arbitrary for a government agency to expropriate
property, then refuse to pay the owner thereof on
ground that there are no appropriations, despite final
judgment of the court.—In the present case, the
irrigation project was completed and has been in
operation since 1976. The project is benefiting the
farmers specifically and the community in general.
Obviously, the petitioner’s land cannot be returned to
him. However, it is high time that the petitioner be paid
what was due him eleven years ago. It is arbitrary and
capricious for a govt agency to initiate expropriation
proceedings, seize a person’s property, allow the
judgment of the court to become final and executory
and then refuse to pay on the ground that there are no
appropriations for the property earlier taken and
profitably used. We condemn in the strongest possible
terms the cavalier attitude of government officials who
adopt such a despotic and irresponsible stance.
Public Funds; The rule in earlier precedents that the
functions and public services rendered by the state
cannot be allowed to be paralyzed by the diversion of
public funds their legitimate and specific objects, does
not apply in the present case.—Another distinction lies
in the fact that the NIA collects fees for the use of the
irrigation system constructed on the petitioner’s land. It
does not have to await an express act of Congress to
locate funds for this specific purpose. The rule in earlier
precedents that the functions and public services
rendered by the state cannot be allowed to be
paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects
(Commissioner of Public Highways v. San Diego,
supra, at p. 625) is not applicable here. There is no
showing of any public service to be disrupted if the fees
collected from the farmers of Iloilo for the use of
irrigation water from the disrupted property were utilized
to pay for that property.
Statutes; “Public Use;” It is within the expanded
meaning of “public use” under the eminent domain
clause, when the NIA expropriates private lands to
construct irrigation systems, then sells water rights to
farmers.—This case illustrates the expanded meaning
of “public use” in the eminent domain clause.
(Constitution, Art. III, Section 9.) The petitioner’s land
was not taken for the construction of a road, bridge,
school, public buildings, or other traditional objects of
expropriation. When the National Housing Authority
expropriates raw land to convert into housing projects
for rent or sale to private persons or the NIA
expropriates land to construct irrigation systems and
sells water rights to farmers, it would be the height of
abuse and ignominy for the agencies to start earning
from those properties while ignoring final judgments
ordering the payment of just compensation to the
former owners.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari which seeks to
set aside the decision of the Court of Appeals nullifying
the orders of the trial court on the ground that said
orders in effect, sought the enforcement of a writ of
execution against government funds. The petitioner
contends that to set aside the writ of execution would
be an abridgment of his right to just compensation and
due process of law. The public respondents on the
other hand, state that government funds cannot be
disbursed without proper appropriation and that a writ of
execution cannot legally issue against the State.
On March 8, 1976, the Republic of the Philippines filed
a complaint with the Court of First Instance of Iloilo to
expropriate two parcels of land in the municipality of
Barotac, Iloilo owned by petitioner Sebastian
Cosculluela and one Mita Lumampao, for the
construction of the canal network of the Barotac
Irrigation Project.
On April 4, 1976, the trial court rendered a decision
granting the expropriation and ordered the public
respondent to pay the following amounts:
1. To Mita Lumampao, the sum of P20,000 minus
P4,001.82 which she had already withdrawn plus
P3,000 attorney's fees; and
JDSPECA | Cases | Rule 67 | 74
2. Sebastian Cosculluela, the sum of P200,000.00
which is the reasonable estimate of his actual and
consequential loss by reason of the taking of his 3
hectares of land, destruction of the sugarcane therein
and the reduce in the yield of his sugarcane farm due to
water lagging and seepage; plus attorney's fees of
P10,000 and litigation expenses of P5,000.00. (p. 36,
Rollo)
On appeal, the Court of Appeals modified the trial
court's decision in that the attorney's fees and litigation
expenses were reduced from P10,000.00 and
P5,000.00 to P5,000.00 and P2,500.00 respectively.
The decision became final and executory on September
21, 1985.
On May 7, 1986, on motion of the petitioner, the trial
court ordered the issuance of a writ of execution to
implement the judgment of the appellate court.
On August 11, 1986, the respondent Republic filed a
motion to set aside the order of May 7, 1986 as well as
the writ of execution issued pursuant thereto,
contending that the funds of the National Irrigation
Authority (NIA) are government funds and therefore,
cannot be disbursed without a government
appropriation.
On October 6, 1986, the lower court issued an order
modifying its order of May 7, 1986, directing instead
that the respondenit Republic deposit with the
Philippine National Bank (PNB) in the name of the
petitioner, the amount adjudged in favor of the latter.
The respondent filed a petition with the Court of
Appeals to annul the orders of May 7 and October 6,
1986.
On November 25, 1986, the appellate court rendered
the questioned decision setting aside the
aforementioned orders of the trial court on the ground
that public or government funds are not subject to levy
and execution.
In this instant petition, the petitioner assails the decision
of the appellate court as being violative of his right to
just compensation and due process of law. He
maintains that these constitutional guarantees
transcend all administrative and procedural laws and
jurisprudence for as between these said laws and the
constitutional rights of private citizens, the latter must
prevail.
As admitted by the respondent Republic, the NIA took
possession of the expropriated property in 1975 and for
around ten (10) years already, it has been servicing the
farmers on both sides of the Barotac Viejo Irrigation
Project in Iloilo Province and has been collecting fees
therefor by way of taxes at the expense of the
petitioner. On the other hand, the petitioner, who is
already more than eighty (80) years old and sickly, is
undergoing frequent hospitalization, and is made to
suffer further by the unconscionable delay in the
payment of just compensation based on a final and
executory judgment.
The respondent Republic, on the other hand, argues
that while it has no intention of keeping the land and
dishonoring the judgment, the manner by which the
same will have to be satisfied must not be inconsistent
with prevailing jurisprudence, and that is, that public
funds such as those of the respondent NIA cannot be
disbursed without the proper appropriation.
We rule for the petitioner.
One of the basic principles enshrined in our
Constitution is that no person shall be deprived of his
private property without due process of law; and in
expropriation cases, an essential element of due
process is that there must be just compensation
whenever private property is taken for public use. Thus,
in the case of Province of Pangasinan v. CFI Judge of
Pangasinan, Branch VIII  (80 SCRA 117, 120-121), this
Court speaking through then Chief Justice Fernando
ruled:
There is full and ample recognition of the power of
eminent domain by Justice Street in a leading case of
Visayan Refining Co. v. Camus (4C) Phil. 550 [1919])
decided prior to the Commonwealth, the matter being
governed by the Philippine Autonomy Act of 1916,
otherwise known as the Jones Law. It was
characterized as "inseparable from sovereignty being
essential to the existence of the State and inherent in
government even in its most primitive forms." (Ibid, 558)
Nonetheless, he was careful to point out: "In other
words, the provisions now generally found in the
modern laws of constitutions of civilized countries to the
effect that private property shall not be taken for public
use without just compensation have their origin in the
recognition of a necessity for restraining the sovereign
and protecting the individual. (Ibid, 559) Moreover, he
did emphasize: "Nevertheless it should be noted that
the whole problem of expropriation is resolvable in its
ultimate analysis into a constitutional question of due
process of law. ... Even were there no organic or
constitutional provision in force requiring compensation
to be paid, the seizure of one's property without
payment, even though intended for a public use, would
undoubtedly be held to be a taking without due process
of law and a denial of the equal protection of the laws.
JDSPECA | Cases | Rule 67 | 75
That aspect of the matter was stressed in the recent
case of J. M. Tuason and Co., Inc. v. Land Tenure
Administration. (31 SCRA 413) Conformably to such a
fundamental principle then, in accordance with a
constitutional mandate, this Court has never hesitated
to assure that there be just compensation. If it were
otherwise, the element of arbitrariness certainly would
enter. It is bad enough that an owner of a property, in
the event of the exercise of this sovereign prerogative,
has no choice but to yield to such a taking. It is infinitely
worse if thereafter, he is denied all these years the
payment to which he is entitled. This is one of the
instances where law and morals speak to the same
effect. (Cf. Province of Tayabas v. Perez, 66 Phil. 467
[1938] and other related cases).
The property of the petitioner was taken by the
government in 1975. The following year, respondent
NIA made the required deposit of P2,097.30 with the
Philippine National Bank and within the same year, the
Barotac Viejo Irrigation Project was finished. Since
then, for more than a period of ten (10) years, the
project has been of service to the farmers nearby in the
province of Iloilo. It is, thus, inconceivable how this
project could have been started without the necessary
appropriation for just compensation. Needless to state,
no government instrumentality, agency, or subdivision
has any business initiating expropriation proceedings
unless it has adequate funds, supported by proper
appropriation acts, to pay for the property to be seized
from the owner. Not only was the government able to
make an initial deposit of P2,097.30 but the project was
finished in only a year's time. We agree with the
petitioner that before the respondent NIA undertook the
construction of the Barotac Viejo Irrigation Project, the
same was duly authorized, with the corresponding
funds appropriated for the payment of expropriated land
and to pay for equipment, salaries of personnel, and
other expenses incidental to the project. The NIA
officials responsible for the project have to do plenty of
explaining as to where they misdirected the funds
intended for the expropriated property.
The present case must be distinguished from earlier
cases where payment for property expropriated by the
National Government may not be realized upon
execution. As a rule, the legislature must first
appropriate the additional amount to pay the award.
(See Commissioner of Public Highways v. San Diego,
31 SCRA 616 and Visayan Refining Co. v. Camus &
Paredes, 40 Phil. 550).
In the present case, the Barotac Viejo Project was a
package project of government. Money was allocated
for an entire project. Before bulldozers and ditch
diggers tore up the place and before millions of pesos
were put into the development of the project, the basic
responsibility of paying the owners for property seized
from them should have been met.
Another distinction lies in the fact that the NIA collects
fees for the use of the irrigation system constructed on
the petitioner's land. It does not have to await an
express act of Congress to locate funds for this specific
purpose. The rule in earlier precedents that the
functions and public services rendered by the state
cannot be allowed to be paralyzed or disrupted by the
diversion of public funds from their legitimate and
specific objects (Commissioner of Public Highways v.
San Diego, supra, at p. 625) is not applicable here.
There is no showing of any public service to be
disrupted if the fees collected from the farmers of Iloilo
for the use of irrigation water from the disrupted
property were utilized to pay for that property.
We must emphasize that nowhere in any expropriation
case has there been a deviation from the rule that the
Government must pay for expropriated property. In
the Commissioner  of Public Highways  case, the Court
stressed that it is incumbent upon the legislature to
appropriate the necessary amount because it cannot
keep the land and dishonor the judgment.
This case illustrates the expanded meaning of "public
use" in the eminent domain clause. (Constitution, Article
III, Section 9.) The petitioner's land was not taken for
the construction of a road, bridge, school, public
buildings, or other traditional objects of expropriation.
When the National Housing Authority expropriates raw
land to convert into housing projects for rent or sale to
private persons or the NIA expropriates land to
construct irrigation systems and sells  water rights to
farmers, it would be the height of abuse and ignominy
for the agencies to start earning from those properties
while ignoring final judgments ordering the payment of
just compensation to the former owners.
Just compensation means not only the correct
determination of the amount to be paid to the owner 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.
Thus, in the case of Provincial Government of
Sorsogon v. Rosa E. Vda. de Villaroyo  (153 SCRA
291), we ruled:
The petitioners have been waiting for more than thirty
years to be paid for their land which was taken for use
JDSPECA | Cases | Rule 67 | 76
as a public high school. As a matter of fair procedure, it
is the duty of the Government whenever it takes
property from private persons against their will to
supply all required documentation and facilitate
payment of just compensation. The imposition of
unreasonable requirements and vexatious delays
before effecting payment is not only galling and
arbitrary but a rich source of discontent with
government. There should be some kind of swift and
effective recourse against unfeeling and uncaring acts
of middle or lower level bureaucrats.
Under ordinary circumstances, immediate return to the
owners of the unpaid property is the obvious remedy. ln
cases where land is taken for public use, public interest,
however, must, be considered. The children of Gubat,
Sorsogon have been using the disputed land as their
high school athletic grounds for thirty years. (Emphasis
supplied)
In the present case, the irrigation project was
completed and has been in operation since 1976. The
project is benefitting the farmers specifically and the
community in general. Obviously, the petitioner's land
cannot be returned to him. However, it is high time that
the petitioner be paid what was due him eleven years
ago. It is arbitrary and capricious for a government
agency to initiate expropriation proceedings, seize a
person's property, allow the judgment of the court to
become final and executory and then refuse to pay on
the ground that there are no appropriations for the
property earlier taken and profitably used. We condemn
in the strongest possible terms the cavalier attitude of
government officials who adopt such a despotic and
irresponsible stance.
WHEREFORE, the petition is hereby GRANTED. The
decision and order of the respondent appellate court
dated November 25, 1987 and February 16, 1987
respectively are ANNULLED and SET ASIDE. The
Regional Trial Court of Iloilo City is ordered to
immediately execute the final judgment in Civil Case
No. 10530 and effect payment of P200,000.00 as just
compensation deducting therefrom the partial payment
already deposited by the respondent at the institution of
the action below with legal interest from September 21,
1985, plus P5,000.00 attorney's fees and P2,500.00
litigation expenses. SO ORDERED.
Republic v. Lim, G.R. No. 161656, 29 June 2005  non-payment of just compensation does not entitle the
G.R. No. 161656               June 29, 2005
REPUBLIC OF THE PHILIPPINES, GENERAL
ROMEO ZULUETA, COMMODORE EDGARDO
GALEOS, ANTONIO CABALUNA, DOROTEO
MANTOS & FLORENCIO BELOTINDOS, petitioners,
vs.
VICENTE G. LIM, respondent.
FACT: On September 5, 1938, the Republic of the
Philippines (Republic) instituted a special civil action for
expropriation with the Court of First Instance (CFI) of
Cebu, involving Lots of the Banilad Friar Land Estate,
Lahug, Cebu City, for the purpose of establishing a
military reservation for the Philippine Army. After
depositing ₱9,500.00 with the Philippine National Bank,
the Republic took possession of the lots. Thereafter, the
CFI rendered its Decision ordering the Republic to pay
the Denzons the sum of ₱4,062.10 as just
compensation. In 1950, Jose Galeos, one of the heirs
of the Denzons, filed with the National Airports
Corporation a claim for rentals for the two lots, but it
“denied knowledge of the matter.” Another heir, Nestor
Belocura, brought the claim to the Office of then
President Carlos Garcia who wrote the Civil
Aeronautics Administration and the Secretary of
National Defense to expedite action on said claim. in
1962, the CFI promulgated its Decision in favor of
Valdehueza and Panerio, holding that they are the
owners and have retained their right as such over Lots
932 and 939 because of the Republic’s failure to pay
the amount of ₱4,062.10, adjudged in the expropriation
proceedings. In view of “the differences in money value
from 1940 up to the present,” the court adjusted the
market value at ₱16,248.40, to be paid with 6% interest
per annum from April 5, 1948, date of entry in the
expropriation proceedings, until full payment.
Meanwhile, in 1964, Valdehueza and Panerio
mortgaged and foreclosed Lot 932 to Vicente Lim for
failure to pay. in 1992, respondent filed a complaint for
quieting of title with the (RTC) seeking an absolute and
exclusive possession of the property. in 2001, the RTC
rendered a decision in favor of respondent. Petitioners
elevated the case to the CA but the Ruling of the RTC
was upheld and affirmed.
ISSUE: Whether the owner of the expropriated land is
entitled for the repossession of his property when party
condemning refuses to pay the compensation which
has been assessed or agreed upon?
HELD: YES, while the prevailing doctrine is that “the
private landowner to recover possession of the
expropriated lots,26 however, in cases where the
government failed to pay just compensation within five
(5) years from the finality of the judgment in the
JDSPECA | Cases | Rule 67 | 77
expropriation proceedings, the owners concerned shall
have the right to recover possession of their property.
This is in consonance with the principle that “the
government cannot keep the property and dishonor the
judgment.” To be sure, the five-year period limitation
will encourage the government to pay just
compensation punctually. This is in keeping with justice
and equity. After all, it is the duty of the government,
whenever it takes property from private persons against
their will, to facilitate the payment of just compensation
which the court defined as not only the correct
determination of the amount to be paid to the property
owner but also the payment of the property within a
reasonable time. Without prompt payment,
compensation cannot be considered “just.”
REPUBLIC vs. LIM
Gist: 57 years have lapsed from the time the decision in
the subject expropriation proceedings became final, but
still the Republic has not compensated the owner of the
property. Just compensation is not only the correct
determination of the amount to be paid to the property
owner but also the payment of the property within
a reasonable time. Without prompt payment,
compensation cannot be considered just.
FACTS: In 1938, the Republic instituted a special civil
action for expropriation of Lots 932 and 939 for the
purpose of establishing a military reservation for the
Philippine Army. Lots were registered in the names of
Gervasia and Eulalia Denzon. CFI ordered the Republic
to pay the Denzons the sum of P4,062.10 as just
compensation. The Denzons appealed to the CA but it
was dismissed.
In 1950, one of the heirs of the Denzons, filed with the
National Airports Corporation a claim for rentals for the
two lots, but it "denied knowledge of the matter." In
1961, Lt. Cabal rejected the claim but expressed
willingness to pay the appraised value of the lots within
a reasonable time. For failure of the Republic to pay for
the lots, the Denzons’ successors-in-interest (Francisca
Galeos-Valdehueza and Josefina Galeos-Panerio) filed
with the same CFI an action for recovery of possession
with damages against the Republic and AFP officers in
possession of the property.
CFI ruled in favor of Valdehueza and Panerio but titles
of the said lots came with the annotation "subject to the
priority of the National Airports Corporation to acquire
said parcels of land… ". Valdehueza and Panerio were
ordered to execute a deed of sale in favor of the
Republic.
On appeal, SC held that Valdehueza and Panerio are
still the registered owners of Lots 932 and 939, there
having been no payment of just compensation by the
Republic, but they are not entitled to recover
possession of the lots but may only demand the
payment of their fair market value.
In 1964, Valdehueza and Panerio mortgaged Lot 932 to
respondent Lim as security for their loans. For their
failure to pay Lim despite demand, the latter had the
mortgage foreclosed and the lot was issued in his
name. On 1992, Lim filed a complaint for quieting of title
with the RTC against Republic. RTC rendered a
decision in favor of Lim, declaring that Lim is the
absolute and exclusive owner of the lot with all the
rights of an absolute owner. CA affirmed. OSG then
filed petition for review with the Court.
ISSUE: Whether the Republic has retained ownership
of Lot 932 despite its failure to pay respondent’s
predecessors-in-interest the just compensation
pursuant to the judgment of the CFI rendered as early
as May 14, 1940.
HELD: NO. Under Section 9, Article III of the
Constitution: “Private property shall not be taken for
public use without just compensation.” The Republic
disregarded the foregoing provision when it failed and
refused to pay respondents predecessors-in-interest
the just compensation for Lots 932 and 939. Obviously,
defendant-appellant Republic evaded its duty of paying
what was due to the landowners. The expropriation
proceedings had already become final in the late 1940s
and yet, up to now, or more than 50 years after, the
Republic had not yet paid the compensation fixed by
the court while continuously reaping benefits from the
expropriated property to the prejudice of the landowner.
The recognized rule is that title to the property
expropriated shall pass from the owner to the
expropriator only upon full payment of the just
compensation. Clearly, without full payment of just
compensation, there can be no transfer of title from the
landowner to the expropriator. Otherwise stated, the
Republic’s acquisition of ownership is conditioned upon
the full payment of just compensation within a
reasonable time.
The expropriation of lands consists of two stages, to
wit:
The first is concerned with the determination of the
authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, of condemnation
JDSPECA | Cases | Rule 67 | 78
declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment
of just compensation to be determined as of the date of
the filing of the complaint.
The second phase of the eminent domain action is
concerned with the determination by the court of the
just compensation for the property sought to be taken.
This is done by the court with the assistance of not
more than three commissioners.
When Valdehueza and Panerio mortgaged Lot 932 to
respondent in 1964, they were still the owners and their
title had not yet passed to the petitioner Republic. In
fact, it never did.
SYLLABUS
Actions; Pleadings and Practice; A second MR is
prohibited.—While we commend the Republic for the
zeal with which it pursues the present case, we
reiterate that its urgent motion for clarification filed on
July 7, 2004 is actually a second motion for
reconsideration. This motion is prohibited under Section
2, Rule 52, of the 1997 Rules of Civil Procedure, as
amended, which provides: “Sec. 2. Second motion for
reconsideration.—No second motion for reconsideration
of a judgment or final resolution by the same party shall
be entertained.” Consequently, as mentioned earlier,
we simply noted without action the motion since
petitioners’ petition was already denied with finality.
Eminent Domain; Due Process; One of the basic
principles in our Constitution is that no person shall be
deprived of his private property without due process of
law, and in expropriation cases, an essential element of
due process is that there must be just compensation
whenever private property is taken for public use;
Undoubtedly, over 50 years of delayed payment
cannot, in any way, be viewed as fair.—One of the
basic principles enshrined in our Constitution is that no
person shall be deprived of his private property without
due process of law; and in expropriation cases, an
essential element of due process is that there must be
just compensation whenever private property is taken
for public use. Accordingly, Section 9, Article III, of our
Constitution mandates: “Private property shall not be
taken for public use without just compensation.” The
Republic disregarded the foregoing provision when it
failed and refused to pay respondent’s predecessors-in-
interest the just compensation for Lots 932 and 939.
The length of time and the manner with which it evaded
payment demonstrate its arbitrary high-handedness
and confiscatory attitude. The final judgment in the
expropriation proceedings (Civil Case No. 781) was
entered on April 5, 1948. More than half of a century
has passed, yet, to this day, the landowner, now
respondent, has remained empty-handed. Undoubtedly,
over 50 years of delayed payment cannot, in any way,
be viewed as fair. This is more so when such delay is
accompanied by bureaucratic hassles. Apparent from
Valdehueza is the fact that respondent’s predecessors-
in-interest were given a “run around” by the Republic’s
officials and agents. In 1950, despite the benefits it
derived from the use of the two lots, the National
Airports Corporation denied knowledge of the claim of
respondent’s predecessors-in-interest. Even President
Garcia, who sent a letter to the Civil Aeronautics
Administration and the Secretary of National Defense to
expedite the payment, failed in granting relief to them.
And, on September 6, 1961, while the Chief of Staff of
the Armed Forces expressed willingness to pay the
appraised value of the lots, nothing happened.
Just compensation embraces not only the correct
determination of the amount to be paid to the owners of
the land but also the payment for the land within a
reasonable time from its taking.—The Court of Appeals
is correct in saying that Republic’s delay is contrary to
the rules of fair play, as “just compensation embraces
not only the correct determination of the amount to be
paid to the owners of the land, but also the payment for
the land within a reasonable time from its taking.
Without prompt payment, compensation cannot be
considered ‘just.’ ” In jurisdictions similar to ours, where
an entry to the expropriated property precedes the
payment of compensation, it has been held that if the
compensation is not paid in a reasonable time, the
party may be treated as a trespasser ab initio.
Section 9, Article III of the Constitution is not a grant but
a limitation of power and should therefore be strictly
interpreted against the expropriator, the government,
and liberally in favor of the property owner.—
Significantly, the above-mentioned provision of Section
9, Article III of the Constitution is not a grant but a
limitation of power. This limiting function is in keeping
with the philosophy of the Bill of Rights against the
arbitrary exercise of governmental powers to the
detriment of the individual’s rights. Given this function,
the provision should therefore be strictly interpreted
against the expropriator, the government, and liberally
in favor of the property owner.
JDSPECA | Cases | Rule 67 | 79
Failure of the Republic to pay the landowner and his
predecessors-in-interest for a period of 57 years
rendered the expropriation process incomplete.—In
Municipality of Biñan v. Garcia this Court ruled that the
expropriation of lands consists of two stages, to wit: “x x
x The first is concerned with the determination of the
authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, “of condemnation
declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment
of just compensation to be determined as of the date of
the filing of the complaint” x x x. The second phase of
the eminent domain action is concerned with the
determination by the court of “the just compensation for
the property sought to be taken.” This is done by the
court with the assistance of not more than three (3)
commissioners. x x x. It is only upon the completion of
these two stages that expropriation is said to have been
completed. In Republic v. Salem Investment
Corporation, we ruled that, “the process is not
completed until payment of just compensation.” Thus,
here, the failure of the Republic to pay respondent and
his predecessors-in-interest for a period of 57 years
rendered the expropriation process incomplete.
The Republic’s failure to pay just compensation for 57
years cannot but be construed as a deliberate refusal to
pay which makes the recovery of possession in order.
—The Republic now argues that under Valdehueza,
respondent is not entitled to recover possession of Lot
932 but only to demand payment of its fair market
value. Of course, we are aware of the doctrine that
“non-payment of just compensation (in an expropriation
proceedings) does not entitle the private landowners to
recover possession of the expropriated lots.” This is our
ruling in the recent cases of Republic of the Philippines
vs. Court of Appeals, et al., and Reyes vs. National
Housing Authority. However, the facts of the present
case do not justify its application. It bears stressing that
the Republic was ordered to pay just compensation
twice,the first was in the expropriation proceedings and
the second, in Valdehueza. Fifty-seven (57) years have
passed since then. We cannot but construe the
Republic’s failure to pay just compensation as a
deliberate refusal on its part. Under such circumstance,
recovery of possession is in order. In several
jurisdictions, the courts held that recovery of
possession may be had when property has been
wrongfully taken or is wrongfully retained by one
claiming to act under the power of eminent domain or
where a rightful entry is made and the party
condemning refuses to pay the compensation which
has been assessed or agreed upon; or fails or refuses
to have the compensation assessed and paid.
It must be emphasized that an individual cannot be
deprived of his property for the public convenience.—
The Republic also contends that where there have
been constructions being used by the military, as in this
case, public interest demands that the present suit
should not be sustained. It must be emphasized that an
individual cannot be deprived of his property for the
public convenience. In Association of Small
Landowners in the Philippines, Inc. vs. Secretary of
Agrarian Reform, we ruled: “One of the basic principles
of the democratic system is that where the rights of the
individual are concerned, the end does not justify the
means. It is not enough that there be a valid objective; it
is also necessary that the means employed to pursue it
be in keeping with the Constitution. Mere expediency
will not excuse constitutional shortcuts. There is no
question that not even the strongest moral conviction or
the most urgent public need, subject only to a few
notable exceptions, will excuse the bypassing of an
individual’s rights. It is no exaggeration to say that a
person invoking a right guaranteed under Article III of
the Constitution is a majority of one even as against the
rest of the nation who would deny him that right. The
right covers the person’s life, his liberty and his property
under Section 1 of Article III of the Constitution. With
regard to his property, the owner enjoys the added
protection of Section 9, which reaffirms the familiar rule
that private property shall not be taken for public use
without just compensation.”
The special circumstances prevailing in this case entitle
the landowner to recover possession of the
expropriated lot from the Republic.—We thus rule that
the special circumstances prevailing in this case entitle
respondent to recover possession of the expropriated
lot from the Republic. Unless this form of swift and
effective relief is granted to him, the grave injustice
committed against his predecessors-in-interest, though
no fault or negligence on their part, will be perpetuated.
Let this case, therefore, serve as a wake-up call to the
Republic that in the exercise of its power of eminent
domain, necessarily in derogation of private rights, it
must comply with the Constitutional limitations. This
Court, as the guardian of the people’s right, will not
stand still in the face of the Republic’s oppressive and
confiscatory taking of private property, as in this case.
Real Estate Mortgages; Any person who deals with a
property subject of an expropriation does so at his own
risk, taking into account the ultimate possibility of losing
the property in favor of the government; Until the action
for expropriation has been completed and terminated,
ownership over the property being expropriated
JDSPECA | Cases | Rule 67 | 80
remains with the registered owner who can exercise all
rights pertaining to an owner, including the right to
dispose of his property subject to the power of the State
ultimately to acquire it through expropriation.—
Assuming that respondent had indeed knowledge of the
annotation, still nothing would have prevented him from
entering into a mortgage contract involving Lot 932
while the expropriation proceeding was pending. Any
person who deals with a property subject of an
expropriation does so at his own risk, taking into
account the ultimate possibility of losing the property in
favor of the government. Here, the annotation merely
served as a caveat that the Republic had a preferential
right to acquire Lot 932 upon its payment of a
“reasonable market value.” It did not proscribe
Valdehueza and Panerio from exercising their rights of
ownership including their right to mortgage or even to
dispose of their property. In Republic vs. Salem
Investment Corporation, we recognized the owner’s
absolute right over his property pending completion of
the expropriation proceeding, thus: “It is only upon the
completion of these two stages that expropriation is
said to have been completed. Moreover, it is only upon
payment of just compensation that title over the
property passes to the government. Therefore, until the
action for expropriation has been completed and
terminated, ownership over the property being
expropriated remains with the registered owner.
Consequently, the latter can exercise all rights
pertaining to an owner, including the right to dispose of
his property subject to the power of the State ultimately
to acquire it through expropriation.”
A mortgage is merely an accessory contract intended to
secure the performance of the principal obligation, and
one of its characteristics is that it is inseparable from
the property.—For respondent’s part, it is reasonable to
conclude that he entered into the contract of mortgage
with Valdehueza and Panerio fully aware of the extent
of his right as a mortgagee. A mortgage is merely an
accessory contract intended to secure the performance
of the principal obligation. One of its characteristics is
that it is inseparable from the property. It adheres to the
property regardless of who its owner may subsequently
be. Respondent must have known that even if Lot 932
is ultimately expropriated by the Republic, still, his right
as a mortgagee is protected. In this regard, Article 2127
of the Civil Code provides: “Art. 2127. The mortgage
extends to the natural accessions, to the improvements,
growing fruits, and the rents or income not yet received
when the obligation becomes due, and to the amount of
the indemnity granted or owing to the proprietor from
the insurers of the property mortgaged, or in virtue of
expropriation for public use, with the declarations,
amplifications, and limitations established by law,
whether the estate remains in the possession of the
mortgagor or it passes in the hands of a third person.”
While the prevailing doctrine is that the non-payment of
just compensation does not entitle the private
landowner to recover possession of the expropriated
lots, in cases where the government failed to pay just
compensation within five (5) years from the finality of
the judgment in the expropriation proceedings, the
owner concerned shall have the right to recover
possession of his property.—In summation, while the
prevailing doctrine is that “the non-payment of just
compensation does not entitle the private landowner to
recover possession of the expropriated lots,” however,
in cases where the government failed to pay just
compensation within five (5) years from the finality of
the judgment in the expropriation proceedings, the
owners concerned shall have the right to recover
possession of their property. This is in consonance with
the principle that “the government cannot keep the
property and dishonor the judgment.” To be sure, the
five-year period limitation will encourage the
government to pay just compensation punctually. This
is in keeping with justice and equity. After all, it is the
duty of the government, whenever it takes property
from private persons against their will, to facilitate the
payment of just compensation. In Cosculluela v. Court
of Appeals, we defined just compensation as not only
the correct determination of the amount to be paid to
the property owner but also the payment of the property
within a reasonable time. Without prompt payment,
compensation cannot be considered “just.”
SANDOVAL-GUTIERREZ, J.:
Justice is the first virtue of social institutions.1 When the
state wields its power of eminent domain, there arises a
correlative obligation on its part to pay the owner of the
expropriated property a just compensation. If it fails,
there is a clear case of injustice that must be redressed.
In the present case, fifty-seven (57) years have lapsed
from the time the Decision in the subject expropriation
proceedings became final, but still the Republic of the
Philippines, herein petitioner, has not compensated the
owner of the property. To tolerate such prolonged
inaction on its part is to encourage distrust and
resentment among our people – the very vices that
corrode the ties of civility and tempt men to act in ways
they would otherwise shun.
JDSPECA | Cases | Rule 67 | 81
A revisit of the pertinent facts in the instant case is
imperative.
On September 5, 1938, the Republic of the Philippines
(Republic) instituted a special civil action for
expropriation with the Court of First Instance (CFI) of
Cebu, docketed as Civil Case No. 781, involving Lots
932 and 939 of the Banilad Friar Land Estate, Lahug,
Cebu City, for the purpose of establishing a military
reservation for the Philippine Army. Lot 932 was
registered in the name of Gervasia Denzon under
Transfer Certificate of Title (TCT) No. 14921 with an
area of 25,137 square meters, while Lot 939 was in the
name of Eulalia Denzon and covered by TCT No.
12560 consisting of 13,164 square meters.
After depositing ₱9,500.00 with the Philippine National
Bank, pursuant to the Order of the CFI dated October
19, 1938, the Republic took possession of the lots.
Thereafter, or on May 14, 1940, the CFI rendered its
Decision ordering the Republic to pay the Denzons the
sum of ₱4,062.10 as just compensation.
The Denzons interposed an appeal to the Court of
Appeals but it was dismissed on March 11, 1948. An
entry of judgment was made on April 5, 1948.
In 1950, Jose Galeos, one of the heirs of the Denzons,
filed with the National Airports Corporation a claim for
rentals for the two lots, but it "denied knowledge of the
matter." Another heir, Nestor Belocura, brought the
claim to the Office of then President Carlos Garcia who
wrote the Civil Aeronautics Administration and the
Secretary of National Defense to expedite action on
said claim. On September 6, 1961, Lt. Manuel Cabal
rejected the claim but expressed willingness to pay the
appraised value of the lots within a reasonable time.
For failure of the Republic to pay for the lots, on
September 20, 1961, the Denzons’ successors-in-
interest, Francisca Galeos-Valdehueza and Josefina
Galeos-Panerio,2 filed with the same CFI an action for
recovery of possession with damages against the
Republic and officers of the Armed Forces of the
Philippines in possession of the property. The case was
docketed as Civil Case No. R-7208.
In the interim or on November 9, 1961, TCT Nos. 23934
and 23935 covering Lots 932 and 939 were issued in
the names of Francisca Valdehueza and Josefina
Panerio, respectively. Annotated thereon was the
phrase "subject to the priority of the National Airports
Corporation to acquire said parcels of land, Lots 932
and 939 upon previous payment of a reasonable
market value."
On July 31, 1962, the CFI promulgated its Decision in
favor of Valdehueza and Panerio, holding that they are
the owners and have retained their right as such over
Lots 932 and 939 because of the Republic’s failure to
pay the amount of ₱4,062.10, adjudged in the
expropriation proceedings. However, in view of the
annotation on their land titles, they were ordered to
execute a deed of sale in favor of the Republic. In view
of "the differences in money value from 1940 up to the
present," the court adjusted the market value at
₱16,248.40, to be paid with 6% interest per annum
from April 5, 1948, date of entry in the expropriation
proceedings, until full payment.
After their motion for reconsideration was denied,
Valdehueza and Panerio appealed from the CFI
Decision, in view of the amount in controversy, directly
to this Court. The case was docketed as No. L-
21032.3 On May 19, 1966, this Court rendered its
Decision affirming the CFI Decision. It held that
Valdehueza and Panerio are still the registered owners
of Lots 932 and 939, there having been no payment of
just compensation by the Republic. Apparently, this
Court found nothing in the records to show that the
Republic paid the owners or their successors-in-interest
according to the CFI decision. While it deposited the
amount of ₱9,500,00, and said deposit was allegedly
disbursed, however, the payees could not be
ascertained.
Notwithstanding the above finding, this Court still ruled
that Valdehueza and Panerio are not entitled to recover
possession of the lots but may only demand the
payment of their fair market value, ratiocinating as
follows:
"Appellants would contend that: (1) possession of Lots
932 and 939 should be restored to them as owners of
the same; (2) the Republic should be ordered to pay
rentals for the use of said lots, plus attorney’s fees;
and (3) the court a quo  in the present suit had no power
to fix the value of the lots and order the execution of the
deed of sale after payment.
It is true that plaintiffs are still the registered owners of
the land, there not having been a transfer of said lots in
favor of the Government. The records do not show that
the Government paid the owners or their successors-in-
interest according to the 1940 CFI decision although, as
stated, ₱9,500.00 was deposited by it, and said deposit
had been disbursed. With the records lost, however, it
cannot be known who received the money (Exh. 14
says: ‘It is further certified that the corresponding
Vouchers and pertinent Journal and Cash Book were
destroyed during the last World War, and therefore the
names of the payees concerned cannot be
JDSPECA | Cases | Rule 67 | 82
ascertained.’) And the Government now admits that
there is no available record showing that payment for
the value of the lots in question has been
made (Stipulation of Facts, par. 9, Rec. on Appeal, p.
28).
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. In fact, the
abovementioned title certificates secured by plaintiffs
over said lots contained annotations of the right of the
National Airports Corporation (now CAA) to pay for and
acquire them. It follows that both by virtue of the
judgment, long final, in the expropriation suit, as well as
the annotations upon their title certificates, plaintiffs are
not entitled to recover possession of their expropriated
lots – which are still devoted to the public use for which
they were expropriated – but only to demand the fair
market value of the same."
Meanwhile, in 1964, Valdehueza and Panerio
mortgaged Lot 932 to Vicente Lim, herein
respondent,4 as security for their loans. For their failure
to pay Lim despite demand, he had the mortgage
foreclosed in 1976. Thus, TCT No. 23934 was
cancelled, and in lieu thereof, TCT No. 63894 was
issued in his name.
On August 20, 1992, respondent Lim filed a complaint
for quieting of title with the Regional Trial Court (RTC),
Branch 10, Cebu City, against General Romeo Zulueta,
as Commander of the Armed Forces of the Philippines,
Commodore Edgardo Galeos, as Commander of Naval
District V of the Philippine Navy, Antonio Cabaluna,
Doroteo Mantos and Florencio Belotindos, herein
petitioners. Subsequently, he amended the complaint to
implead the Republic.
On May 4, 2001, the RTC rendered a decision in favor
of respondent, thus:
"WHEREFORE, judgment is hereby rendered in favor
of plaintiff Vicente Lim and against all defendants,
public and private, declaring plaintiff Vicente Lim the
absolute and exclusive owner of Lot No. 932 with all the
rights of an absolute owner including the right to
possession. The monetary claims in the complaint and
in the counter claims contained in the answer of
defendants are ordered Dismissed.
Petitioners elevated the case to the Court of Appeals,
docketed therein as CA-G.R. CV No. 72915. In its
Decision5 dated September 18, 2003, the Appellate
Court sustained the RTC Decision, thus:
"Obviously, defendant-appellant Republic evaded its
duty of paying what was due to the landowners. The
expropriation proceedings had already become final in
the late 1940’s and yet, up to now, or more than fifty
(50) years after, the Republic had not yet paid the
compensation fixed by the court while continuously
reaping benefits from the expropriated property to the
prejudice of the landowner. x x x. 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 for 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, in this case more
than 50 years, before actually receiving the amount
necessary to cope with the loss. 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 landowners, is undoubtedly
an oppressive exercise of eminent domain that must
never be sanctioned. (Land Bank of the Philippines vs.
Court of Appeals, 258 SCRA 404).
xxxxxx
An action to quiet title is a common law remedy for the
removal of any cloud or doubt or uncertainty on the title
to real property. It is essential for the plaintiff or
complainant to have a legal or equitable title or interest
in the real property, which is the subject matter of the
action. Also the deed, claim, encumbrance or
proceeding that is being alleged as cloud on plaintiff’s
title must be shown to be in fact invalid or inoperative
despite its prima facie  appearance of validity or legal
efficacy (Robles vs. Court of Appeals, 328 SCRA
97). In view of the foregoing discussion, clearly, the
claim of defendant-appellant Republic constitutes a
cloud, doubt or uncertainty on the title of plaintiff-
appellee Vicente Lim that can be removed by an action
to quiet title.
WHEREFORE, in view of the foregoing, and finding no
reversible error in the appealed May 4, 2001 Decision
of Branch 9, Regional Trial Court of Cebu City, in Civil
Case No. CEB-12701, the said decision is UPHELD
AND AFFIRMED. Accordingly, the appeal
is DISMISSED for lack of merit."
JDSPECA | Cases | Rule 67 | 83
Undaunted, petitioners, through the Office of the
Solicitor General, filed with this Court a petition for
review on certiorari alleging that the Republic has
remained the owner of Lot 932 as held by this Court
in Valdehueza vs. Republic.6
In our Resolution dated March 1, 2004, we denied the
petition outright on the ground that the Court of Appeals
did not commit a reversible error. Petitioners filed an
urgent motion for reconsideration but we denied the
same with finality in our Resolution of May 17, 2004.
On May 18, 2004, respondent filed an ex-parte motion
for the issuance of an entry of judgment. We only noted
the motion in our Resolution of July 12, 2004.
On July 7, 2004, petitioners filed an urgent plea/motion
for clarification, which is actually a second motion for
reconsideration. Thus, in our Resolution of September
6, 2004, we simply noted without action the motion
considering that the instant petition was already
denied with finality in our Resolution of May 17, 2004.
On October 29, 2004, petitioners filed a very urgent
motion for leave to file a motion for reconsideration of
our Resolution dated September 6, 2004 (with prayer to
refer the case to the En Banc). They maintain that the
Republic’s right of ownership has been settled
in Valdehueza.
The basic issue for our resolution is whether the
Republic has retained ownership of Lot 932 despite its
failure to pay respondent’s predecessors-in-interest the
just compensation therefor pursuant to the judgment of
the CFI rendered as early as May 14, 1940.
Initially, we must rule on the procedural obstacle.
While we commend the Republic for the zeal with which
it pursues the present case, we reiterate that its urgent
motion for clarification filed on July 7, 2004 is actually a
second motion for reconsideration. This motion is
prohibited under Section 2, Rule 52, of the 1997 Rules
of Civil Procedure, as amended, which provides:
"Sec. 2. Second motion for reconsideration.  – No
second motion for reconsideration of a judgment or final
resolution by the same party shall be entertained."
Consequently, as mentioned earlier, we simply noted
without action the motion since petitioners’ petition was
already denied with finality.
Considering the Republic’s urgent and serious
insistence that it is still the owner of Lot 932 and in the
interest of justice, we take another hard look at the
controversial issue in order to determine the veracity of
petitioner’s stance.
One of the basic principles enshrined in our
Constitution is that no person shall be deprived of his
private property without due process of law; and in
expropriation cases, an essential element of due
process is that there must be just compensation
whenever private property is taken for public
use.7 Accordingly, Section 9, Article III, of our
Constitution mandates: "Private property shall not be
taken for public use without just compensation."
The Republic disregarded the foregoing provision when
it failed and refused to pay respondent’s predecessors-
in-interest the just compensation for Lots 932 and 939.
The length of time and the manner with which it evaded
payment demonstrate its arbitrary high-handedness
and confiscatory attitude. The final judgment in the
expropriation proceedings (Civil Case No. 781) was
entered on April 5, 1948. More than half of a century
has passed, yet, to this day, the landowner, now
respondent, has remained empty-handed. Undoubtedly,
over 50 years of delayed payment cannot, in any way,
be viewed as fair. This is more so when such delay is
accompanied by bureaucratic hassles. Apparent
from Valdehueza  is the fact that respondent’s
predecessors-in-interest were given a "run around" by
the Republic’s officials and agents. In 1950, despite the
benefits it derived from the use of the two lots, the
National Airports Corporation   denied knowledge of the
claim of respondent’s predecessors-in-interest. Even
President Garcia, who sent a letter to the Civil
Aeronautics Administration and the Secretary of
National Defense to expedite the payment, failed in
granting relief to them. And, on September 6, 1961,
while the Chief of Staff of the Armed Forces expressed
willingness to pay the appraised value of the lots,
nothing happened.lawphil.net
The Court of Appeals is correct in saying that
Republic’s delay is contrary to the rules of fair play,
as "just compensation embraces not only the correct
determination of the amount to be paid to the owners of
the land, but also the payment for the land within a
reasonable time from its taking. Without prompt
payment, compensation cannot be considered ‘just.’" In
jurisdictions similar to ours, where an entry to the
expropriated property precedes the payment of
compensation, it has been held that if the compensation
is not paid in a reasonable time, the party may be
treated as a trespasser ab initio.8
Corollarily, in Provincial Government of Sorsogon vs.
Vda. De Villaroya,9 similar to the present case, this
Court expressed its disgust over the government’s
JDSPECA | Cases | Rule 67 | 84
vexatious delay in the payment of just compensation,
thus:
"The petitioners have been waiting for more than thirty
years to be paid for their land which was taken for use
as a public high school. As a matter of fair procedure, it
is the duty of the Government, whenever it takes
property from private persons against their will, to
supply all required documentation and facilitate
payment of just compensation. The imposition of
unreasonable requirements and vexatious delays
before effecting payment is not only galling and
arbitrary but a rich source of discontent with
government. There should be some kind of swift and
effective recourse against unfeeling and uncaring acts
of middle or lower level bureaucrats."
We feel the same way in the instant case.
More than anything else, however, it is the obstinacy of
the Republic that prompted us to dismiss its petition
outright. As early as May 19, 1966, in Valdehueza, this
Court mandated the Republic to pay respondent’s
predecessors-in-interest the sum of ₱16,248.40 as
"reasonable market value of the two lots in question."
Unfortunately, it did not comply and allowed several
decades to pass without obeying this Court’s mandate.
Such prolonged obstinacy bespeaks of lack of respect
to private rights and to the rule of law, which we cannot
countenance. It is tantamount to confiscation of private
property. While it is true that all private properties are
subject to the need of government, and the government
may take them whenever the necessity or the exigency
of the occasion demands, however, the Constitution
guarantees that when this governmental right of
expropriation is exercised, it shall be attended by
compensation.10 From the taking of private property by
the government under the power of eminent domain,
there arises an implied promise to compensate the
owner for his loss.11
Significantly, the above-mentioned provision of Section
9, Article III of the Constitution is not a grant but
a limitation of power. This limiting function is in keeping
with the philosophy of the Bill of Rights against the
arbitrary exercise of governmental powers to the
detriment of the individual’s rights. Given this function,
the provision should therefore be strictly interpreted
against the expropriator, the government,
and liberally in favor of the property owner.12
Ironically, in opposing respondent’s claim, the Republic
is invoking this Court’s Decision in Valdehueza, a
Decision it utterly defied. How could the Republic
acquire ownership over Lot 932 when it has not paid its
owner the just compensation, required by law, for more
than 50 years?  The recognized rule is that title to the
property expropriated shall pass from the owner to the
expropriator only upon full payment of the just
compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic
jurisdictions. In Association of Small Landowners in the
Philippines, Inc. et al., vs. Secretary of Agrarian
Reform,13 thus:
"Title to property which is the subject of condemnation
proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and
paid, but the condemnor’s title relates back to the date
on which the petition under the Eminent Domain Act, or
the commissioner’s report under the Local Improvement
Act, is filed.
x x x Although the right to appropriate and use land
taken for a canal is complete at the time of entry, title to
the property taken remains in the owner until payment
is actually made. (Emphasis supplied.)
In Kennedy v. Indianapolis, the US Supreme Court
cited several cases holding that title to property does
not pass to the condemnor until just compensation had
actually been made. In fact, the decisions appear to be
uniform to this effect. As early as 1838, in Rubottom v.
McLure, it was held that ‘actual payment to the owner of
the condemned property was a condition precedent to
the investment of the title to the property in the State’
albeit ‘not to the appropriation of it to public
use.’ In Rexford v. Knight, the Court of Appeals of New
York said that the construction upon the statutes was
that the fee did not vest in the State until the payment of
the compensation although the authority to enter upon
and appropriate the land was complete prior to the
payment. Kennedy further said that ‘both on principle
and authority the rule is . . . that the right to enter on
and use the property is complete, as soon as the
property is actually appropriated under the authority of
law for a public use, but that the title does not pass from
the owner without his consent, until just compensation
has been made to him."
Our own Supreme Court has held in Visayan Refining
Co. v. Camus and Paredes, that:
‘If the laws which we have exhibited or cited in the
preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in
this jurisdiction is such as to afford absolute
reassurance that no piece of land can be finally and
irrevocably taken from an unwilling owner until
compensation is paid...’"(Emphasis supplied.)
JDSPECA | Cases | Rule 67 | 85
Clearly, without full payment of just compensation,
there can be no transfer of title from the landowner to
the expropriator. Otherwise stated, the Republic’s
acquisition of ownership is conditioned upon the full
payment of just compensation within a reasonable
time.14
Significantly, in Municipality of Biñan v. Garcia 15 this
Court ruled that the expropriation of lands consists of
two stages, to wit:
"x x x The first is concerned with the determination of
the authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, "of condemnation
declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment
of just compensation to be determined as of the date of
the filing of the complaint" x x x.
The second phase of the eminent domain action is
concerned with the determination by the court of "the
just compensation for the property sought to be taken."
This is done by the court with the assistance of not
more than three (3) commissioners. x x x.
It is only upon the completion of these two stages that
expropriation is said to have been completed.
In Republic v. Salem Investment Corporation,16 we
ruled that, "the process is not completed until payment
of just compensation." Thus, here, the failure of the
Republic to pay respondent and his predecessors-in-
interest for a period of 57 years rendered the
expropriation process incomplete.
The Republic now argues that under Valdehueza,
respondent is not entitled to recover possession of Lot
932 but only to demand payment of its fair market
value. Of course, we are aware of the doctrine that
"non-payment of just compensation (in an expropriation
proceedings) does not entitle the private landowners to
recover possession of the expropriated lots." This is our
ruling in the recent cases of Republic of the Philippines
vs. Court of Appeals, et al.,17 and Reyes vs. National
Housing Authority.18 However, the facts of the present
case do not justify its application. It bears stressing that
the Republic was ordered to pay just
compensation twice,  the first was in the expropriation
proceedings and the second, in Valdehueza. Fifty-
seven (57) years have passed since then. We cannot
but construe the Republic’s failure to pay just
compensation as a deliberate refusal on its part. Under
such circumstance, recovery of possession is in
order.  In several jurisdictions, the courts held that
recovery of possession may be had when property has
been wrongfully taken or is wrongfully retained by one
claiming to act under the power of eminent domain 19 or
where a rightful entry is made and the party
condemning refuses to pay the compensation which
has been assessed or agreed upon; 20 or fails or refuses
to have the compensation assessed and paid.21
The Republic also contends that where there have
been constructions being used by the military, as in this
case, public interest demands that the present suit
should not be sustained.
It must be emphasized that an individual cannot be
deprived of his property for the public
convenience.22 In Association of Small Landowners in
the Philippines, Inc. vs. Secretary of Agrarian
Reform,23 we ruled:
"One of the basic principles of the democratic system is
that where the rights of the individual are concerned,
the end does not justify the means. It is not enough that
there be a valid objective; it is also necessary that the
means employed to pursue it be in keeping with the
Constitution. Mere expediency will not excuse
constitutional shortcuts. There is no question that not
even the strongest moral conviction or the most urgent
public need, subject only to a few notable exceptions,
will excuse the bypassing of an individual's rights. It is
no exaggeration to say that a person invoking a right
guaranteed under Article III of the Constitution is a
majority of one even as against the rest of the nation
who would deny him that right.
The right covers the person’s life, his liberty and his
property under Section 1 of Article III of the
Constitution. With regard to his property, the owner
enjoys the added protection of Section 9, which
reaffirms the familiar rule that private property shall not
be taken for public use without just compensation."
The Republic’s assertion that the defense of the State
will be in grave danger if we shall order the reversion of
Lot 932 to respondent is an overstatement. First, Lot
932 had ceased to operate as an airport. What remains
in the site is just the National Historical Institute’s
marking stating that Lot 932 is the " former location of
Lahug Airport." And second, there are only thirteen (13)
structures located on Lot 932, eight (8) of which
are residence apartments  of military personnel. Only
two (2) buildings are actually used as training centers.
Thus, practically speaking, the reversion of Lot 932 to
respondent will only affect a handful of military
personnel. It will not result to "irreparable damage" or
"damage beyond pecuniary estimation," as what the
Republic vehemently claims.
JDSPECA | Cases | Rule 67 | 86
We thus rule that the special circumstances prevailing
in this case entitle respondent to recover possession of
the expropriated lot from the Republic. Unless this form
of swift and effective relief is granted to him, the grave
injustice committed against his predecessors-in-
interest, though no fault or negligence on their part, will
be perpetuated. Let this case, therefore, serve as a
wake-up call to the Republic that in the exercise of its
power of eminent domain, necessarily in derogation of
private rights, it must comply with the Constitutional
limitations. This Court, as the guardian of the people’s
right, will not stand still in the face of the Republic’s
oppressive and confiscatory taking of private property,
as in this case.
At this point, it may be argued that respondent Vicente
Lim acted in bad faith in entering into a contract of
mortgage with Valdehueza and Panerio despite the
clear annotation in TCT No. 23934 that Lot 932 is
"subject to the priority of the National Airports
Corporation [to acquire said parcels of land] x x x upon
previous payment of a reasonable market value."
The issue of whether or not respondent acted in bad
faith is immaterial considering that the Republic did not
complete the expropriation process. In short, it failed to
perfect its title over Lot 932 by its failure to pay just
compensation. The issue of bad faith would have
assumed relevance if the Republic actually acquired
title over Lot 932. In such a case, even if respondent’s
title was registered first, it would be the Republic’s title
or right of ownership that shall be upheld. But now,
assuming that respondent was in bad faith, can such
fact vest upon the Republic a better title over Lot
932? We believe not. This is because in the first place,
the Republic has no title to speak of.
At any rate, assuming that respondent had indeed
knowledge of the annotation, still nothing would have
prevented him from entering into a mortgage contract
involving Lot 932 while the expropriation proceeding
was pending. Any person who deals with a property
subject of an expropriation does so at his own risk,
taking into account the ultimate possibility of losing the
property in favor of the government. Here, the
annotation merely served as a caveat that the Republic
had a preferential right to acquire Lot 932 upon its
payment of a "reasonable market value." It did not
proscribe Valdehueza and Panerio from exercising their
rights of ownership including their right to mortgage or
even to dispose of their property. In Republic vs. Salem
Investment Corporation,24 we recognized the owner’s
absolute right over his property pending completion of
the expropriation proceeding, thus:
"It is only upon the completion of these two stages that
expropriation is said to have been completed.
Moreover, it is only upon payment of just compensation
that title over the property passes to the government.
Therefore, until the action for expropriation has been
completed and terminated, ownership over the property
being expropriated remains with the registered
owner. Consequently, the latter can exercise all
rights pertaining to an owner, including the right to
dispose of his property subject to the power of the State
ultimately to acquire it through expropriation.
It bears emphasis that when Valdehueza and Panerio
mortgaged Lot 932 to respondent in 1964, they were
still the owners thereof and their title had not yet passed
to the petitioner Republic. In fact, it never did. Such title
or ownership was rendered conclusive when we
categorically ruled in Valdehueza that: "It is true that
plaintiffs are still the registered owners of the land,
there not having been a transfer of said lots in favor of
the Government."
For respondent’s part, it is reasonable to conclude that
he entered into the contract of mortgage with
Valdehueza and Panerio fully aware of the extent of his
right as a mortgagee. A mortgage is merely an
accessory contract intended to secure the performance
of the principal obligation. One of its characteristics is
that it is inseparable from the property. It adheres to the
property regardless of who its owner may subsequently
be.25 Respondent must have known that even if Lot 932
is ultimately expropriated by the Republic, still, his right
as a mortgagee is protected. In this regard, Article 2127
of the Civil Code provides:
"Art. 2127. The mortgage extends to the natural
accessions, to the improvements, growing fruits, and
the rents or income not yet received when the
obligation becomes due, and to the amount of the
indemnity granted or owing to the proprietor from the
insurers of the property mortgaged, or in virtue of
expropriation for public use, with the declarations,
amplifications, and limitations established by
law, whether the estate remains in the possession of
the mortgagor or it passes in the hands of a third
person.
In summation, while the prevailing doctrine is that "the
non-payment of just compensation does not entitle the
private landowner to recover possession of the
expropriated lots,26 however, in cases where the
government failed to pay just compensation within five
(5)27 years from the finality of the judgment in the
expropriation proceedings, the owners concerned shall
have the right to recover possession of their property.
This is in consonance with the principle that "the
JDSPECA | Cases | Rule 67 | 87
government cannot keep the property and dishonor the
judgment."28 To be sure, the five-year period limitation
will encourage the government to pay just
compensation punctually. This is in keeping with justice
and equity. After all, it is the duty of the government,
whenever it takes property from private persons against
their will, to facilitate the payment of just compensation.
In Cosculluela v. Court of Appeals ,29 we defined just
compensation as not only the correct determination of
the amount to be paid to the property owner but also
the payment of the property within a reasonable time.
Without prompt payment, compensation cannot be
considered "just."
WHEREFORE, the assailed Decision of the Court of
Appeals in CA-G.R. CV No. 72915 is AFFIRMED in
toto.
The Republic’s motion for reconsideration of our
Resolution dated March 1, 2004 is DENIED with
FINALITY. No further pleadings will be allowed.
Let an entry of judgment be made in this case.
SO ORDERED.
Vda De Ouano v. Republic, G.R. No. 168770, 09
February 2011  In G.R. No. 168812 MCIAA is hereby ordered by court
G.R. No. 168770               February 9, 2011
ANUNCIACION VDA. DE OUANO, MARIO P. OUANO,
LETICIA OUANO ARNAIZ, and CIELO OUANO
MARTINEZ, Petitioners,
vs. THE REPUBLIC OF THE PHILIPPINES, THE
MACTAN-CEBU INTERNATIONAL AIRPORT
AUTHORITY, and THE REGISTER OF DEEDS FOR
THE CITY OF CEBU, Respondents.
G.R. No. 168812
MACTAN-CEBU INTERNATIONAL AIRPORT
AUTHORITY (MCIAA), Petitioner,
vs. RICARDO L. INOCIAN, in his personal capacity and
as Attorney-in-Fact of OLYMPIA E. ESTEVES, EMILIA
E. BACALLA, RESTITUTA E. MONTANA, and RAUL L.
INOCIAN; and ALETHA SUICO MAGAT, in her
personal capacity and as Attorney-in-Fact of PHILIP M.
SUICO, DORIS S. DELA CRUZ, JAMES M. SUICO,
EDWARD M. SUICO, ROSELYN SUICO-LAWSIN,
REX M. SUICO, KHARLA SUICO-GUTIERREZ,
ALBERT CHIONGBIAN, and JOHNNY
CHAN, Respondents.
FACTS: In 1949, the National Airport Corporation
(NAC), MCIAA’s predecessor agency pursued a
program to expand the Lahug Airport in Cebu City.
As an assurance from the government, there is a
promise of reconveyance or repurchase of said
property so long as Lahug ceases its operation or
transfer its operation to Mactan – Cebu Airport.
Some owners refused to sell, and that the Civil
Aeronautics Administration filed a complaint for the
expropriation of said properties for the expansion of the
Lahug Airport.
The trial court then declared said properties to be used
upon the expansion of said projects and order for just
compensation to the land owners, at the same time
directed the latter to transfer certificate or ownership or
title in the name of the plaintiff.
At the end of 1991, Lahug Airport completely ceased its
operation while the Mactan-Cebu airport opened to
accommodate incoming and outgoing commercial
flights.
This then prompted the land owners to demand for the
reconveynace of said properties being expropriated by
the trial court under the power of eminent domain.
Hence these two consolidated cases arise.
to reconvey said properties to the land owners plus
attorney’s fee and cost of suit, while in G.R. No.
168770, the RTC ruled in favor of the petitioners
Oaunos and against the MCIAA for the reconveynace
of their properties but was appealed by the latter and
the earlier decision was reversed, the case went up to
the CA but the CA affirmed the reversed decision of the
RTC.
ISSUE: W/n the abandonment of public use of the
expropriated properties entitles the petitioner to
reacquire them? YES
(Should MCIAA reconvey the lands to petitioner – YES)
JDSPECA | Cases | Rule 67 | 88
HELD: YES. The notion that the government via
expropriation proceedings acquires unrestricted
ownership over or a fee simple title to the covered land
is no longer tenable. Expropriated lands should be
differentiated from a piece of land, ownership of which
was absolutely transferred by way of an unconditional
purchase and sale contract freely entered by two
parties, one without obligation to buy and the other
without the duty to sell. In that case, the fee simple
concept really comes into play. There is really no
occasion to apply the “fee simple concept” if the
transfer is conditional.
The taking of a private land in expropriation
proceedings is always conditioned on its continued
devotion to its public purpose. Once the purpose is
terminated or peremptorily abandoned, then the former
owner, if he so desires, may seek its reversion subject
of course to the return at the very least of the just
compensation received.
In expropriation, the private owner is deprived of
property against his will. The mandatory requirement of
due process ought to be strictly followed such that the
state must show, at the minimum, a genuine need, an
exacting public purpose to take private property, the
purpose to be specifically alleged or least reasonably
deducible from the complaint.
Public use, as an eminent domain concept, has now
acquired an expansive meaning to include any use that
is of “usefulness, utility, or advantage, or what is
productive of general benefit [of the public].” If the
genuine public necessity—the very reason or condition
as it were—allowing, at the first instance, the
expropriation of a private land ceases or disappears,
then there is no more cogent point for the government’s
retention of the expropriated land. The same legal
situation should hold if the government devotes the
property to another public use very much different from
the original or deviates from the declared purpose to
benefit another private person. It has been said that the
direct use by the state of its power to oblige landowners
to renounce their productive possession to another
citizen, who will use it predominantly for that citizen’s
own private gain, is offensive to our laws.
The government cannot plausibly keep the property it
expropriated in any manner it pleases and in the
process dishonor the judgment of expropriation. A
condemnor should commit to use the property pursuant
to the purpose stated in the petition for expropriation,
failing which it should file another petition for the new
purpose. If not, then it behooves the condemnor to
return the said property to its private owner, if the latter
so desires.
Hence, equity and justice demand the reconveyance by
MCIAA of the litigated lands in question to the Ouanos
and Inocians. In the same token, justice and fair play
also dictate that the Ouanos and Inocian return to
MCIAA what they received as just compensation for the
expropriation of their respective properties plus legal
interest to be computed from default, which in this case
should run from the time MCIAA complies with the
reconveyance obligation.
SYLLABUS
Remedial Law; Evidence; Statute of Frauds; Mactan-
Cebu International Airport Authority (MCIAA) invocation
of the Statute of Frauds is misplaced primarily because
the statute applies only to executor and not to
completed, executed or partially consummated
contracts.—Under the rule on the Statute of Frauds, as
expressed in Article 1403 of the Civil Code, a contract
for the sale or acquisition of real property shall be
unenforceable unless the same or some note of the
contract be in writing and subscribed by the party
charged. Subject to defined exceptions, evidence of the
agreement cannot be received without the writing, or
secondary evidence of its contents. MCIAA’s invocation
of the Statute of Frauds is misplaced primarily because
the statute applies only to executory and not to
completed, executed, or partially consummated
contracts.
The objection on the admissibility of evidence on the
basis of the Statute of Frauds may be waived if not
timely raised.—The objection on the admissibility of
evidence on the basis of the Statute of Frauds may be
waived if not timely raised. Records tend to support the
conclusion that MCIAA did not, as the Ouanos and the
Inocians posit, object to the introduction of parol
evidence to prove its commitment to allow the former
landowners to repurchase their respective properties
upon the occurrence of certain events.
Constitutional Law; Eminent Domain; Expropriation; In
expropriation, the private owner is deprived of property
against his will; The mandatory requirement of due
process ought to be strictly followed.—In esse,
expropriation is forced private property taking, the
landowner being really without a ghost of a chance to
defeat the case of the expropriating agency. In other
words, in expropriation, the private owner is deprived of
property against his will. Withal, the mandatory
requirement of due process ought to be strictly
followed, such that the state must show, at the
minimum, a genuine need, an exacting public purpose
to take private property, the purpose to be specifically
JDSPECA | Cases | Rule 67 | 89
alleged or least reasonably deducible from the
complaint.
Public use as an eminent domain concept, has now
acquired an expansive meaning to include any use that
is of “usefulness, utility or advantage or what is
productive of general benefit (of the public).”—Public
use, as an eminent domain concept, has now acquired
an expansive meaning to include any use that is of
“usefulness, utility, or advantage, or what is productive
of general benefit [of the public].” If the genuine public
necessity—the very reason or condition as it were—
allowing, at the first instance, the expropriation of a
private land ceases or disappears, then there is no
more cogent point for the government’s retention of the
expropriated land. The same legal situation should hold
if the government devotes the property to another
public use very much different from the original or
deviates from the declared purpose to benefit another
private person. It has been said that the direct use by
the state of its power to oblige landowners to renounce
their productive possession to another citizen, who will
use it predominantly for that citizen’s own private gain,
is offensive to our laws.
The government cannot plausibly keep the property it
expropriated in any manner it pleases and in the
process dishonor the judgment of expropriation.—A
condemnor should commit to use the property pursuant
tso the purpose stated in the petition for expropriation,
failing which it should file another petition for the new
purpose. If not, then it behooves the condemnor to
return the said property to its private owner, if the latter
so desires. The government cannot plausibly keep the
property it expropriated in any manner it pleases and, in
the process, dishonor the judgment of expropriation.
This is not in keeping with the idea of fair play.
The notion that the government via expropriation
proceedings acquires unrestricted ownership over or a
fee simple title to the covered land is no longer tenable;
The taking of a private land in expropriation
proceedings is always conditioned on its continued
devotion to its public purpose; Once the purpose is
terminated or peremptorily abandoned, then the former
owner, if he so desires, may seek its reversion subject
of course to the return at the very least of the just
compensation received.—The notion, therefore, that the
government, via expropriation proceedings, acquires
unrestricted ownership over or a fee simple title to the
covered land, is no longer tenable. We suggested as
much in Heirs of Moreno and in Tudtud and more
recently in Lozada, Sr. Expropriated lands should be
differentiated from a piece of land, ownership of which
was absolutely transferred by way of an unconditional
purchase and sale contract freely entered by two
parties, one without obligation to buy and the other
without the duty to sell. In that case, the fee simple
concept really comes into play. There is really no
occasion to apply the “fee simple concept” if the
transfer is conditional. The taking of a private land in
expropriation proceedings is always conditioned on its
continued devotion to its public purpose. As a
necessary corollary, once the purpose is terminated or
peremptorily abandoned, then the former owner, if he
so desires, may seek its reversion, subject of course to
the return, at the very least, of the just compensation
received.
VELASCO, JR., J.:
At the center of these two (2) Petitions for Review on
Certiorari under Rule 45 is the issue of the right of the
former owners of lots acquired for the expansion of the
Lahug Airport in Cebu City to repurchase or secure
reconveyance of their respective properties.
In the first petition, docketed as G.R. No. 168770,
petitioners Anunciacion vda. de Ouano, Mario Ouano,
Leticia Ouano Arnaiz and Cielo Ouano Martinez (the
Ouanos) seek to nullify the Decision1 dated September
3, 2004 of the Court of Appeals (CA) in CA-G.R. CV
No. 78027, affirming the Order dated December 9,
2002 of the Regional Trial Court (RTC), Branch 57 in
Cebu City, in Civil Case No. CEB-20743, a suit to
compel the Republic of the Philippines and/or the
Mactan-Cebu International Airport Authority (MCIAA) to
reconvey to the Ouanos a parcel of land.
The second petition, docketed as G.R. No. 168812, has
the MCIAA seeking principally to annul and set aside
the Decision2 and Resolution3 dated January 14, 2005
and June 29, 2005, respectively, of the CA in CA-G.R.
CV No. 64356, sustaining the RTC, Branch 13 in Cebu
City in its Decision of October 7, 1988 in Civil Case No.
CEB-18370.
Per its October 19, 2005 Resolution, the Court ordered
the consolidation of both cases.
Except for the names of the parties and the specific lot
designation involved, the relevant factual antecedents
which gave rise to these consolidated petitions are, for
the most part, as set forth in the Court’s Decision 4 of
October 15, 2003, as reiterated in a Resolution 5 dated
August 9, 2005, in G.R. No. 156273 entitled Heirs of
Timoteo Moreno and Maria Rotea v. Mactan-Cebu
International Airport Authority  (Heirs of Moreno), and in
other earlier related cases.6
JDSPECA | Cases | Rule 67 | 90
In 1949, the National Airport Corporation (NAC),
MCIAA’s predecessor agency, pursued a program to
expand the Lahug Airport in Cebu City. Through its
team of negotiators, NAC met and negotiated with the
owners of the properties situated around the airport,
which included Lot Nos. 744-A, 745-A, 746, 747, 761-A,
762-A, 763-A, 942, and 947 of the Banilad Estate. As
the landowners would later claim, the government
negotiating team, as a sweetener, assured them that
they could repurchase their respective lands should the
Lahug Airport expansion project do not push through or
once the Lahug Airport closes or its operations
transferred to Mactan-Cebu Airport. Some of the
landowners accepted the assurance and executed
deeds of sale with a right of repurchase. Others,
however, including the owners of the aforementioned
lots, refused to sell because the purchase price offered
was viewed as way below market, forcing the hand of
the Republic, represented by the then Civil Aeronautics
Administration (CAA), as successor agency of the NAC,
to file a complaint for the expropriation of Lot Nos. 744-
A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947,
among others, docketed as Civil Case No. R-1881
entitled Republic v. Damian Ouano, et al.
On December 29, 1961, the then Court of First Instance
(CFI) of Cebu rendered judgment for the Republic,
disposing, in part, as follows:
IN VIEW OF THE FOREGOING, judgment is hereby
rendered:
1. Declaring the expropriation of Lots Nos. 75, 76, 76,
89, 90, 91, 92, 105, 106, 107, 108, 104, 921-A, 88, 93,
913-B, 72, 77, 916, 777-A, 918, 919, 920, 764-A, 988,
744-A, 745-A, 746, 747, 762-A, 763-A, 951, 942, 720-A,
x x x and 947, included in the Lahug Airport, Cebu City,
justified in and in lawful exercise of the right of eminent
domain.
xxxx
3. After the payment of the foregoing financial obligation
to the landowners, directing the latter to deliver to the
plaintiff the corresponding Transfer Certificates of Title
to their respective lots; and upon the presentation of the
said titles to the Register of Deeds, ordering the latter to
cancel the same and to issue, in lieu thereof, new
Transfer Certificates of Title in the name of the plaintiff.7
In view of the adverted buy-back assurance made by
the government, the owners of the lots no longer
appealed the decision of the trial court. 8 Following the
finality of the judgment of condemnation, certificates of
title for the covered parcels of land were issued in the
name of the Republic which, pursuant to Republic Act
No. 6958,9 were subsequently transferred to MCIAA.
At the end of 1991, or soon after the transfer of the
aforesaid lots to MCIAA, Lahug Airport completely
ceased operations, Mactan Airport having opened to
accommodate incoming and outgoing commercial
flights. On the ground, the expropriated lots were never
utilized for the purpose they were taken as no
expansion of Lahug Airport was undertaken. This
development prompted the former lot owners to
formally demand from the government that they be
allowed to exercise their promised right to repurchase.
The demands went unheeded. Civil suits followed.
G.R. No. 168812 (MCIAA Petition)
On February 8, 1996, Ricardo L. Inocian and four
others (all children of Isabel Limbaga who originally
owned six [6] of the lots expropriated); and Aletha Suico
Magat and seven others, successors-in-interest of
Santiago Suico, the original owner of two (2) of the
condemned lots (collectively, the Inocians), filed before
the RTC in Cebu City a complaint for reconveyance of
real properties and damages against MCIAA. The
complaint, docketed as Civil Case No. CEB-18370, was
eventually raffled to Branch 13 of the court.
On September 29, 1997, one Albert Chiongbian
(Chiongbian), alleging to be the owner of Lot Nos. 761-
A and 762-A but which the Inocians were now claiming,
moved and was later allowed to intervene.
During the pre-trial, MCIAA admitted the following facts:
1. That the properties, which are the subject matter of
Civil Case No. CEB-18370, are also the properties
involved in Civil Case R-1881;
2. That the purpose of the expropriation was for the
expansion of the old Lahug Airport; that the Lahug
Airport was not expanded;
3. That the old Lahug Airport was closed sometime in
June 1992;
4. That the price paid to the lot owners in the
expropriation case is found in the decision of the court;
and
5. That some properties were reconveyed by the
MCIAA because the previous owners were able to
secure express waivers or riders wherein the
government agreed to return the properties should the
expansion of the Lahug Airport not materialize.
JDSPECA | Cases | Rule 67 | 91
During trial, the Inocians adduced evidence which
included the testimony of Ricardo Inocian (Inocian) and
Asterio Uy (Uy). Uy, an employee of the CAA, testified
that he was a member of the team which negotiated for
the acquisition of certain lots in Lahug for the proposed
expansion of the Lahug Airport. He recalled that he
acted as the interpreter/spokesman of the team since
he could speak the Cebuano dialect. He stated that the
other members of the team of negotiators were Atty.
Pedro Ocampo, Atty. Lansang, and Atty. Saligumba. He
recounted that, in the course of the negotiation, their
team assured the landowners that their landholdings
would be reconveyed to them in the event the Lahug
Airport would be abandoned or if its operation were
transferred to the Mactan Airport. Some landowners
opted to sell, while others were of a different bent owing
to the inadequacy of the offered price.
Inocian testified that he and his mother, Isabel
Lambaga, attended a meeting called by the NAC team
of negotiators sometime in 1947 or 1949 where he and
the other landowners were given the assurance that
they could repurchase their lands at the same price in
the event the Lahug Airport ceases to operate. He
further testified that they rejected the NAC’s offer.
However, he said that they no longer appealed the
decree of expropriation due to the repurchase
assurance adverted to.
The MCIAA presented Michael Bacarizas (Bacarizas),
who started working for MCIAA as legal assistant in
1996. He testified that, in the course of doing research
work on the lots subject of Civil Case No. CEB-18370,
he discovered that the same lots were covered by the
decision in Civil Case No. R-1881. He also found out
that the said decision did not expressly contain any
condition on the matter of repurchase.
Ruling of the RTC
On October 7, 1998, the RTC rendered a Decision in
Civil Case No. CEB-18370, the dispositive portion of
which reads as follows:
WHEREFORE, in view of the foregoing, judgment is
hereby rendered directing defendant Mactan Cebu
International Airport Authority (MCIAA) to reconvey
(free from liens and encumbrances) to plaintiffs Ricardo
Inocian, Olimpia E. Esteves, Emilia E. Bacalla,
Restituta E. Montana and Raul Inocian Lots No. 744-A,
745-A, 746, 762-A, 747, 761-A and to plaintiffs Aletha
Suico Magat, Philip M. Suico, Doris S. dela Cruz,
James M. Suico, Edward M. Suico, Roselyn S. Lawsin,
Rex M. Suico and Kharla Suico-Gutierrez Lots No. 942
and 947, after plaintiffs shall have paid MCIAA the
sums indicated in the decision in Civil Case No. R-
1881. Defendant MCIAA is likewise directed to pay the
aforementioned plaintiffs the sum or P50,000.00 as and
for attorney’s fees and P10,000.00 for litigation
expenses.
Albert Chiongbian’s intervention should be, as it is
hereby DENIED for utter lack of factual basis.
With costs against defendant MCIAA.10
Therefrom, MCIAA went to the CA on appeal, docketed
as CA-G.R. CV No. 64356.
Ruling of the CA
On January 14, 2005, the CA rendered judgment for the
Inocians, declaring them entitled to the reconveyance of
the questioned lots as the successors-in-interest of the
late Isabel Limbaga and Santiago Suico, as the case
may be, who were the former registered owners of the
said lots. The decretal portion of the CA’s Decision
reads:
WHEREFORE, in view of the foregoing premises,
judgment is hereby rendered by us DISMISSING the
appeal filed in this case and AFFFIRMING the decision
rendered by the court a quo on October 7, 1998 in Civil
Case No. CEB-18370.
SO ORDERED.
The CA, citing and reproducing excerpts from Heirs of
Moreno,11 virtually held that the decision in Civil Case
No. R-1881 was conditional, stating "that the
expropriation of [plaintiff-appellees’] lots for the
proposed expansion of the Lahug Airport was ordered
by the CFI of Cebu under the impression that Lahug
Airport would continue in operation." 12 The condition, as
may be deduced from the CFI’s decision, was that
should MCIAA, or its precursor agency, discontinue
altogether with the operation of Lahug Airport, then the
owners of the lots expropriated may, if so minded,
demand of MCIAA to make good its verbal assurance
to allow the repurchase of the properties. To the CA,
this assurance, a demandable agreement of
repurchase by itself, has been adequately established.
On September 21, 2005, the MCIAA filed with Us a
petition for review of the CA’s Decision, docketed as
G.R. No. 168812.
G.R. No. 168770 (Ouano Petition)
Soon after the MCIAA jettisoned the Lahug Airport
expansion project, informal settlers entered and
occupied Lot No. 763-A which, before its expropriation,
belonged to the Ouanos. The Ouanos then formally
JDSPECA | Cases | Rule 67 | 92
asked to be allowed to exercise their right to
repurchase the aforementioned lot, but the MCIAA
ignored the demand. On August 18, 1997, the Ouanos
instituted a complaint before the Cebu City RTC against
the Republic and the MCIAA for reconveyance,
docketed as Civil Case No. CEB-20743.
Answering, the Republic and MCIAA averred that the
Ouanos no longer have enforceable rights whatsoever
over the condemned Lot No. 763-A, the decision in Civil
Case No. R-1881 not having found any reversionary
condition.
Ruling of the RTC
By a Decision dated November 28, 2000, the RTC,
Branch 57 in Cebu City ruled in favor of the Ouanos,
disposing as follows:
WHEREFORE, in the light of the foregoing, the Court
hereby renders judgment in favor of the plaintiffs,
Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia
Ouano Arnaiz and Cielo Ouano Martinez and against
the Republic of the Philippines and Mactan Cebu
International Airport Authority (MCIAA) to restore to
plaintiffs, the possession and ownership of their land,
Lot No. 763-A upon payment of the expropriation price
to defendants; and
2. Ordering the Register of Deeds to effect the transfer
of the Certificate of Title from defendant Republic of the
Philippines on Lot 763-A, canceling TCT No. 52004 in
the name of defendant Republic of the Philippines and
to issue a new title on the same lot in the names of
Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia
Ouano Arnaiz and Cielo Ouano Martinez.
No pronouncement as to costs.13
Acting on the motion of the Republic and MCIAA for
reconsideration, however, the RTC, Branch 57 in Cebu
City, presided this time by Judge Enriqueta L.
Belarmino, issued, on December 9, 2002, an
Order14 that reversed its earlier decision of November
28, 2000 and dismissed the Ouanos’ complaint.
Ruling of the CA
In time, the Ouanos interposed an appeal to the CA,
docketed as CA-G.R. CV No. 78027. Eventually, the
appellate court rendered a Decision15 dated September
3, 2004, denying the appeal, thus:
WHEREFORE, premises considered, the Order dated
December 9, 2002, of the Regional Trial Court, 7th
Judicial Region, Branch 57, Cebu City, in Civil Case
No. CEB-20743, is hereby AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
Explaining its case disposition, the CA stated that the
decision in Civil Case No. R-1881 did not state any
condition that Lot No. 763-A of the Ouanos––and all
covered lots for that matter––would be returned to them
or that they could repurchase the same property if it
were to be used for purposes other than for the Lahug
Airport. The appellate court also went on to declare the
inapplicability of the Court’s pronouncement in MCIAA
v. Court of Appeals, RTC, Branch 9, Cebu City, Melba
Limbago, et al.,16 to support the Ouanos’ cause, since
the affected landowners in that case, unlike the
Ouanos, parted with their property not through
expropriation but via a sale and purchase transaction.
The Ouanos filed a motion for reconsideration of the
CA’s Decision, but was denied per the CA’s May 26,
2005 Resolution.17 Hence, they filed this petition in G.R.
No. 168770.
The Issues
G.R. No. 168812
GROUNDS FOR ALLOWANCE OF THE PETITION
l. THE ASSAILED ISSUANCES ILLEGALLY
STRIPPED THE REPUBLIC OF ITS ABSOLUTE AND
UNCONDITIONAL TITLE TO THE SUBJECT
EXPROPRIATED PROPERTIES.
ll. THE IMPUNGED DISPOSITIONS INVALIDLY
OVERTURNED THIS HONORABLE COURT’S FINAL
RULINGS IN FERY V. MUNICIPALITY OF
CABANATUAN, MCIAA V. COURT OF APPEALS AND
REYES V. NATIONAL HOUSING AUTHORITY.
lll. THE COURT OF APPEALS GRAVELY ERRED IN
APPLYING THIS HONORABLE COURT’S RULING IN
MORENO, ALBEIT IT HAS NOT YET ATTAINED
FINALITY.18
G.R. No. 168770
Questions of law presented in this Petition
Whether or not the testimonial evidence of the
petitioners proving the promises, assurances and
representations by the airport officials and lawyers are
inadmissbale under the Statute of Frauds.
Whether or not under the ruling of this Honorable Court
in the heirs of Moreno Case, and pursuant to the
JDSPECA | Cases | Rule 67 | 93
principles enunciated therein, petitioners herein are
entitiled to recover their litigated property.
Reasons for Allowances of this Petition
Respondents did not object during trial to the
admissibility of petitioners’ testimonial evidence under
the Statute of Frauds and have thus waived such
objection and are now barred from raising the same. In
any event, the Statute of Frauds is not applicable
herein. Consequently, petitioners’ evidence is
admissible and should be duly given weight and
credence, as initially held by the trial court in its original
Decision.19
While their respective actions against MCIAA below
ended differently, the Ouanos and the Inocians’
proffered arguments presented before this Court run
along parallel lines, both asserting entitlement to
recover the litigated property on the strength of the
Court’s ruling in Heirs of Moreno. MCIAA has, however,
formulated in its Consolidated Memorandum the key
interrelated issues in these consolidated cases, as
follows:
I evidence and duly considered in the initial decision of
WHETHER ABANDONMENT OF THE PUBLIC USE
FOR WHICH THE SUBJECT PROPERTIES WERE
EXPROPRIATED ENTITLES PETITIONERS OUANOS,
ET AL. AND RESPONDENTS INOCIAN, ET AL. TO
REACQUIRE THEM.
II
WHETHER PETITIONERS OUANOS, ET AL. AND
RESPONDENTS INOCIAN, ET AL. ARE ENTITLED
TO RECONVEYANCE OF THE SUBJECT
PROPERTIES SIMPLY ON THE BASIS OF AN
ALLEGED VERBAL PROMISE OR ASSURANCE OF
SOME NAC OFFICIALS THAT THE SUBJECT
PROPERTIES WILL BE RETUNRED IF THE AIRPORT
PROJECT WOULD BE ABANDONED.
The Court’s Ruling
The Republic and MCIAA’s petition in G.R. No. 168812
is bereft of merit, while the Ouano petition in G.R. No.
168770 is meritorious.
At the outset, three (3) fairly established factual
premises ought to be emphasized:
First, the MCIAA and/or its predecessor agency had not
actually used the lots subject of the final decree of
expropriation in Civil Case No. R-1881 for the purpose
they were originally taken by the government, i.e., for
the expansion and development of Lahug Airport.
Second, the Lahug Airport had been closed and
abandoned. A significant portion of it had, in fact, been
purchased by a private corporation for development as
a commercial complex.20
Third, it has been preponderantly established by
evidence that the NAC, through its team of negotiators,
had given assurance to the affected landowners that
they would be entitled to repurchase their respective
lots in the event they are no longer used for airport
purposes.21 "No less than Asterio Uy," the Court noted
in Heirs of Moreno, "one of the members of the CAA
Mactan Legal Team, which interceded for the
acquisition of the lots for the Lahug Airport’s expansion,
affirmed that persistent assurances were given to the
landowners to the effect that as soon as the Lahug
Airport is abandoned or transferred to Mactan, the lot
owners would be able to reacquire their properties." 22 In
Civil Case No. CEB-20743, Exhibit "G," the transcript of
the deposition23 of Anunciacion vda. de Ouano covering
the assurance made had been formally offered in
the RTC Cebu City. In Civil Case No. CEB-18370, the
trial court, on the basis of testimonial evidence, and
later the CA, recognized the reversionary rights of the
suing former lot owners or their successors in
interest24 and resolved the case accordingly. In point
with respect to the representation and promise of the
government to return the lots taken should the planned
airport expansion do not materialize is what the Court
said in Heirs of Moreno,  thus:
This is a difficult case calling for a difficult but just
solution. To begin with there exists an undeniable
historical narrative that the predecessors of respondent
MCIAA had suggested to the landowners of the
properties covered by the Lahug Airport expansion
scheme that they could repurchase their properties at
the termination of the airport’s venue. Some acted on
this assurance and sold their properties; other
landowners held out and waited for the exercise of
eminent domain to take its course until finally coming to
terms with respondent’s predecessors that they would
not appeal nor block further judgment of condemnation
if the right of repurchase was extended to them. A
handful failed to prove that they acted on such
assurance when they parted with ownership of their
land.25 (Emphasis supplied; citations omitted.)
For perspective, Heirs of Moreno––later followed
by MCIAA v. Tudtud (Tudtud)26  and the consolidated
cases at bar––is cast under the same factual setting
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and centered on the expropriation of privately-owned
lots for the public purpose of expanding the Lahug
Airport and the alleged promise of reconveyance given
by the negotiating NAC officials to the private lot
owners. All the lots being claimed by the former owners
or successors-in-interest of the former owners in
the Heirs of Moreno, Tudtud, and the present cases
were similarly adjudged condemned in favor of the
Republic in Civil Case No. R-1881. All the claimants
sought was or is to have the condemned lots
reconveyed to them upon the payment of the
condemnation price since the public purpose of the
expropriation was never met. Indeed, the expropriated
lots were never used and were, in fact, abandoned by
the expropriating government agencies.
In all then, the issues and supporting arguments
presented by both sets of petitioners in these
consolidated cases have already previously been
passed upon, discussed at length, and practically
peremptorily resolved in Heirs of Moreno and the
November 2008 Tudtud ruling. The Ouanos, as
petitioners in G.R. No. 168770, and the Inocians, as
respondents in G.R. No. 168812, are similarly situated
as the heirs of Moreno in Heirs of Moreno and
Benjamin Tudtud in Tudtud. Be that as it may, there is
no reason why the ratio decidendi in Heirs of
Moreno and Tudtud should not be made to apply to
petitioners Ouanos and respondents Inocians such that
they shall be entitled to recover their or their
predecessors’ respective properties under the same
manner and arrangement as the heirs of Moreno and
Tudtud. Stare decisis et non quieta movere  (to adhere
to precedents, and not to unsettle things which are
established).27
Just like in Tudtud and earlier in Heirs of Moreno,
MCIAA would foist the theory that the judgment of
condemnation in Civil Case No. R-1881 was without
qualification and was unconditional. It would, in fact,
draw attention to the fallo of the expropriation court’s
decision to prove that there is nothing in the decision
indicating that the government gave assurance or
undertook to reconvey the covered lots in case the
Lahug airport expansion project is aborted. Elaborating
on this angle, MCIAA argues that the claim of the
Ouanos and the Inocians regarding the alleged verbal
assurance of the NAC negotiating team that they can
reacquire their landholdings is barred by the Statute of
Frauds.28
Under the rule on the Statute of Frauds, as expressed
in Article 1403 of the Civil Code, a contract for the sale
or acquisition of real property shall be unenforceable
unless the same or some note of the contract be in
writing and subscribed by the party charged. Subject to
defined exceptions, evidence of the agreement cannot
be received without the writing, or secondary evidence
of its contents.
MCIAA’s invocation of the Statute of Frauds is
misplaced primarily because the statute applies only to
executory and not to completed, executed, or partially
consummated contracts.29 Carbonnel v. Poncio, et al.,
quoting Chief Justice Moran, explains the rationale
behind this rule, thusly:
x x x "The reason is simple. In executory contracts
there is a wide field for fraud because unless they may
be in writing there is no palpable evidence of the
intention of the contracting parties. The statute has
been precisely been enacted to prevent fraud." x x x
However, if a contract has been totally or partially
performed, the exclusion of parol evidence would
promote fraud or bad faith , for it would enable the
defendant to keep the benefits already derived by him
from the transaction in litigation, and at the same time,
evade the obligations, responsibilities or liabilities
assumed or contracted by him thereby. 30 (Emphasis in
the original.)
Analyzing the situation of the cases at bar, there can be
no serious objection to the proposition that the
agreement package between the government and the
private lot owners was already partially performed by
the government through the acquisition of the lots for
the expansion of the Lahug airport. The parties,
however, failed to accomplish the more important
condition in the CFI decision decreeing the
expropriation of the lots litigated upon: the expansion of
the Lahug Airport. The project––the public purpose
behind the forced property taking––was, in fact, never
pursued and, as a consequence, the lots expropriated
were abandoned. Be that as it may, the two groups of
landowners can, in an action to compel MCIAA to make
good its oral undertaking to allow repurchase, adduce
parol evidence to prove the transaction.
At any rate, the objection on the admissibility of
evidence on the basis of the Statute of Frauds may be
waived if not timely raised. Records tend to support the
conclusion that MCIAA did not, as the Ouanos and the
Inocians posit, object to the introduction of parol
evidence to prove its commitment to allow the former
landowners to repurchase their respective properties
upon the occurrence of certain events.
In a bid to deny the lot owners the right to repurchase,
MCIAA, citing cases,31 points to the dispositive part of
the decision in Civil Case R-1881 which, as couched,
granted the Republic absolute title to the parcels of land
declared expropriated. The MCIAA is correct about the
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unconditional tone of the dispositive portion of the
decision, but that actuality would not carry the day for
the agency. Addressing the matter of the otherwise
absolute tenor of the CFI’s disposition in Civil Case No.
R-1881, the Court, in Heirs of Moreno , after taking
stock of the ensuing portion of the body of the CFI’s
decision, said:
As for the public purpose of the expropriation
proceeding, it cannot now be doubted. Although Mactan
Airport is being constructed, it does not take away the
actual usefulness and importance of the Lahug Airport:
it is handling the air traffic of both civilian and military.
From it aircrafts fly to Mindanao and Visayas and pass
thru it on their flights to the North and Manila. Then, no
evidence was adduced to show how soon is the
Mactan Airport to be placed in operation and whether
the Lahug Airport will be closed immediately
thereafter. It is up to the other departments of the
Government to determine said matters. The Court
cannot substitute its judgments for those of the said
departments or agencies. In the absence of such
showing,  the court will presume that the Lahug Airport
will continue to be in operation.32 (Emphasis supplied.)
We went on to state as follows:
While the trial court in Civil Case No. R-1881 could
have simply acknowledged the presence of public
purpose for the exercise of eminent domain regardless
of the survival of the Lahug Airport, the trial court in
its Decision  chose not to do so but instead prefixed its
finding of public purpose upon its understanding
that ‘Lahug Airport will continue to be in operation’ .
Verily, these meaningful statements in the body of
the Decision warrant the conclusion that the
expropriated properties would remain to be so until it
was confirmed that Lahug Airport was no longer ‘in
operation’. This inference further implies two (2) things:
(a) after the Lahug Airport ceased its undertaking as
such and the expropriated lots were not being used for
any airport expansion project, the rights vis-à-vis the
expropriated lots x x x as between the State and their
former owners, petitioners herein, must be equitably
adjusted; and (b) the foregoing unmistakable
declarations in the body of the Decision should merge
with and become an intrinsic part of the fallo thereof
which under the premises is clearly inadequate since
the dispositive portion is not in accord with the findings
as contained in the body thereof.33
Not to be overlooked of course is what the Court said in
its Resolution disposing of MCIAA’s motion to
reconsider the original ruling in Heirs of Moreno. In that
resolution, We stated that the fallo of the decision in
Civil Case R-1881 should be viewed and understood in
connection with the entire text, which contemplated a
return of the property taken if the airport expansion
project were abandoned. For ease of reference,
following is what the Court wrote:
Moreover, we do not subscribe to the [MCIAA’s]
contention that since the possibility of the Lahug
Airport’s closure was actually considered by the trial
court, a stipulation on reversion or repurchase was so
material that it should not have been discounted by the
court a quo in its decision in Civil Case No. R-1881, if,
in fact, there was one. We find it proper to cite, once
more, this Court’s ruling that the fallo of the decision in
Civil Case No. R-1881 must be read in reference to the
other portions of the decision in which it forms a part. A
reading of the Court’s judgment must not be confined to
the dispositive portion alone; rather it should be
meaningfully construed in unanimity with the ratio
decidendi thereof to grasp the true intent and meaning
of a decision.34
The Court has, to be sure, taken stock of Fery v.
Municipality of Cabanatuan,35 a case MCIAA cites at
every possible turn, where the Court made these
observations:
If, for example, land is expropriated for a particular
purpose, with the condition that when that purpose is
ended or abandoned the property shall return to its
former owner, then of course, when the purpose is
terminated or abandoned, the former owner reacquires
the property so expropriated. x x x If, upon the contrary,
however the decree of expropriation gives to the entity
a fee simple title, then, of course, the land becomes the
absolute property of the expropriator x x x and in that
case the non-user does not have the effect of defeating
the title acquired by the expropriation proceedings x x x.
Fery notwithstanding, MCIAA cannot really rightfully say
that it has absolute title to the lots decreed expropriated
in Civil Case No. R-1881. The correct lesson of Fery is
captured by what the Court said in that case, thus: "the
government acquires only such rights in expropriated
parcels of land as may be allowed by the character of
its title over the properties." In light of our disposition
in Heirs of Moreno and Tudtud, the statement
immediately adverted to means that in the event the
particular public use for which a parcel of land is
expropriated is abandoned, the owner shall not be
entitled to recover or repurchase it as a matter of right,
unless such recovery or repurchase is expressed in or
irresistibly deducible from the condemnation judgment.
But as has been determined below, the decision in Civil
Case No. R-1881 enjoined MCIAA, as a condition of
approving expropriation, to allow recovery or
repurchase upon abandonment of the Lahug airport
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project. To borrow from our underlying decision in Heirs
of Moreno, "[n]o doubt, the return or repurchase of the
condemned properties of petitioners could readily be
justified as the manifest legal effect of consequence of
the trial court’s underlying presumption that ‘Lahug
Airport will continue to be in operation’ when it granted
the complaint for eminent domain and the airport
discontinued its activities."36
Providing added support to the Ouanos and the
Inocians’ right to repurchase is what in Heirs of
Moreno was referred to as constructive trust, one that is
akin to the implied trust expressed in Art. 1454 of the
Civil Code,37 the purpose of which is to prevent unjust
enrichment.38 In the case at bench, the Ouanos and the
Inocians parted with their respective lots in favor of the
MCIAA, the latter obliging itself to use the realties for
the expansion of Lahug Airport; failing to keep its end of
the bargain, MCIAA can be compelled by the former
landowners to reconvey the parcels of land to them,
otherwise, they would be denied the use of their
properties upon a state of affairs that was not
conceived nor contemplated when the expropriation
was authorized. In effect, the government merely held
the properties condemned in trust until the proposed
public use or purpose for which the lots were
condemned was actually consummated by the
government. Since the government failed to perform the
obligation that is the basis of the transfer of the
property, then the lot owners Ouanos and Inocians can
demand the reconveyance of their old properties after
the payment of the condemnation price.
Constructive trusts are fictions of equity that courts use
as devices to remedy any situation in which the holder
of the legal title, MCIAA in this case, may not, in good
conscience, retain the beneficial interest. We add,
however, as in Heirs of Moreno, that the party seeking
the aid of equity––the landowners in this instance, in
establishing the trust––must himself do equity in a
manner as the court may deem just and reasonable.
The Court, in the recent MCIAA v. Lozada, Sr., revisited
and abandoned the Fery ruling that the former owner is
not entitled to reversion of the property even if the
public purpose were not pursued and were abandoned,
thus:
On this note, we take this opportunity to revisit our
ruling in Fery, which involved an expropriation suit
commenced upon parcels of land to be used as a site
for a public market. Instead of putting up a public
market, respondent Cabanatuan constructed residential
houses for lease on the area. Claiming that the
municipality lost its right to the property taken since it
did not pursue its public purpose, petitioner Juan Fery,
the former owner of the lots expropriated, sought to
recover his properties. However, as he had admitted
that, in 1915, respondent Cabanatuan acquired a fee
simple title to the lands in question, judgment was
rendered in favor of the municipality, following
American jurisprudence, particularly City of Fort Wayne
v. Lake Shore & M.S. RY. Co.,  McConihay v. Theodore
Wright, and Reichling v. Covington Lumber Co.,  all
uniformly holding that the transfer to a third party of the
expropriated real property, which necessarily resulted in
the abandonment of the particular public purpose for
which the property was taken, is not a ground for the
recovery of the same by its previous owner, the title of
the expropriating agency being one of fee
simple.1avvphi1
Obviously, Fery  was not decided pursuant to our now
sacredly held constitutional right that private property
shall not be taken for public use without just
compensation. It is well settled that the taking of private
property by the Governments power of eminent domain
is subject to two mandatory requirements: (1) that it is
for a particular public purpose; and (2) that just
compensation be paid to the property owner. These
requirements partake of the nature of implied conditions
that should be complied with to enable the condemnor
to keep the property expropriated.
More particularly, with respect to the element of public
use, the expropriator should commit to use the property
pursuant to the purpose stated in the petition for
expropriation filed, failing which, it should file another
petition for the new purpose. If not, it is then incumbent
upon the expropriator to return the said property to its
private owner, if the latter desires to reacquire the
same. Otherwise, the judgment of expropriation suffers
an intrinsic flaw, as it would lack one indispensable
element for the proper exercise of the power of eminent
domain, namely, the particular public purpose for which
the property will be devoted. Accordingly, the private
property owner would be denied due process of law,
and the judgment would violate the property owners
right to justice, fairness, and equity.
In light of these premises, we now expressly hold that
the taking of private property, consequent to the
Governments exercise of its power of eminent domain,
is always subject to the condition that the property be
devoted to the specific public purpose for which it was
taken. Corollarily, if this particular purpose or intent is
not initiated or not at all pursued, and is peremptorily
abandoned, then the former owners, if they so desire,
may seek the reversion of the property, subject to the
return of the amount of just compensation received. In
such a case, the exercise of the power of eminent
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domain has become improper for lack of the required
factual justification.39 (Emphasis supplied.)
Clinging to Fery,  specifically the fee simple concept
underpinning it, is no longer compelling, considering the
ensuing inequity such application entails. Too, the
Court resolved Fery not under the cover of any of the
Philippine Constitutions, each decreeing that private
property shall not be taken for public use without just
compensation. The twin elements of just compensation
and public purpose are, by themselves, direct
limitations to the exercise of eminent domain, arguing,
in a way, against the notion of fee simple
title.1avvphi1 The fee does not vest until payment of
just compensation.40
In esse, expropriation is forced private property taking,
the landowner being really without a ghost of a chance
to defeat the case of the expropriating agency. In other
words, in expropriation, the private owner is deprived of
property against his will. Withal, the mandatory
requirement of due process ought to be strictly
followed, such that the state must show, at the
minimum, a genuine need, an exacting public purpose
to take private property, the purpose to be specifically
alleged or least reasonably deducible from the
complaint.
Public use, as an eminent domain concept, has now
acquired an expansive meaning to include any use that
is of "usefulness, utility, or advantage, or what is
productive of general benefit [of the public]." 41 If the
genuine public necessity—the very reason or condition
as it were—allowing, at the first instance, the
expropriation of a private land ceases or disappears,
then there is no more cogent point for the government’s
retention of the expropriated land. The same legal
situation should hold if the government devotes the
property to another public use very much different from
the original or deviates from the declared purpose to
benefit another private person. It has been said that the
direct use by the state of its power to oblige landowners
to renounce their productive possession to another
citizen, who will use it predominantly for that citizen’s
own private gain, is offensive to our laws.42
A condemnor should commit to use the property
pursuant to the purpose stated in the petition for
expropriation, failing which it should file another petition
for the new purpose. If not, then it behooves the
condemnor to return the said property to its private
owner, if the latter so desires. The government cannot
plausibly keep the property it expropriated in any
manner it pleases and, in the process, dishonor the
judgment of expropriation. This is not in keeping with
the idea of fair play,
The notion, therefore, that the government,
via  expropriation proceedings, acquires unrestricted
ownership over or a fee simple title to the covered land,
is no longer tenable. We suggested as much in Heirs of
Moreno and in Tudtud  and more recently in Lozada, Sr.
Expropriated lands should be differentiated from a
piece of land, ownership of which was absolutely
transferred by way of an unconditional purchase and
sale contract freely entered by two parties, one without
obligation to buy and the other without the duty to sell.
In that case, the fee simple concept really comes into
play. There is really no occasion to apply the "fee
simple concept" if the transfer is conditional. The taking
of a private land in expropriation proceedings is always
conditioned on its continued devotion to its public
purpose. As a necessary corollary, once the purpose is
terminated or peremptorily abandoned, then the former
owner, if he so desires, may seek its reversion, subject
of course to the return, at the very least, of the just
compensation received.
To be compelled to renounce dominion over a piece of
land is, in itself, an already bitter pill to swallow for the
owner. But to be asked to sacrifice for the common
good and yield ownership to the government which
reneges on its assurance that the private property shall
be for a public purpose may be too much. But it would
be worse if the power of eminent domain were
deliberately used as a subterfuge to benefit another
with influence and power in the political process,
including development firms. The mischief thus
depicted is not at all far-fetched with the continued
application of Fery. Even as the Court deliberates on
these consolidated cases, there is an uncontroverted
allegation that the MCIAA is poised to sell, if it has not
yet sold, the areas in question to Cebu Property
Ventures, Inc. This provides an added dimension to
abandon Fery.
Given the foregoing disquisitions, equity and justice
demand the reconveyance by MCIAA of the litigated
lands in question to the Ouanos and Inocians. In the
same token, justice and fair play also dictate that the
Ouanos and Inocian return to MCIAA what they
received as just compensation for the expropriation of
their respective properties plus legal interest to be
computed from default, which in this case should run
from the time MCIAA complies with the reconveyance
obligation.43 They must likewise pay MCIAA the
necessary expenses it might have incurred in
sustaining their respective lots and the monetary value
of its services in managing the lots in question to the
extent that they, as private owners, were benefited
thereby.
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In accordance with Art. 1187 of the Civil Code on
mutual compensation, MCIAA may keep whatever
income or fruits it may have obtained from the parcels
of land expropriated. In turn, the Ouanos and Inocians
need not require the accounting of interests earned by
the amounts they received as just compensation.44
it in the name of respondents within a period of fifteen
(15) days from finality of judgment.
The foregoing dispositions are subject to
QUALIFICATIONS, to apply to these consolidated
petitions, when appropriate, as follows:

Following Art. 1189 of the Civil Code providing that "[i]f
the thing is improved by its nature, or by time, the
improvement shall inure to the benefit of the creditor x x
x," the Ouanos and Inocians do not have to settle the
appreciation of the values of their respective lots as part
of the reconveyance process, since the value increase
is merely the natural effect of nature and time.
(1) Petitioners Ouano, et al. in G.R. No. 168770 and
respondents Ricardo L Inocian, et al. in G.R. No.
168812 are ordered to return to the MCIAA the just
compensation they or their predecessors-in-interest
received for the expropriation of their respective lots as
stated in Civil Case No. R-1881, within a period of sixty
(60) days from finality of judgment;

Finally, We delete the award of PhP 50,000 and PhP (2) The MCIAA shall be entitled to RETAIN whatever
10,000, as attorney’s fees and litigation expenses, fruits and income it may have obtained from the subject
respectively, made in favor of the Inocians by the Cebu expropriated lots without any obligation to refund the
City RTC in its judgment in Civil Case No. CEB-18370, same to the lot owners; and
as later affirmed by the CA. As a matter of sound policy,
no premium should be set on the right to litigate where (3) Petitioners Ouano, et al. in G.R. No. 168770 and
there is no doubt about the bona fides of the exercise of respondents Ricardo L. Inocian, et al. in G.R. No.
such right,45 as here, albeit the decision of MCIAA to 168812 shall RETAIN whatever interests the amounts
resist the former landowners’ claim eventually turned they received as just compensation may have earned in
out to be untenable. the meantime without any obligation to refund the same
to MCIAA.
WHEREFORE, the petition in G.R. No. 168770
is GRANTED. Accordingly, the CA Decision dated SO ORDERED.
September 3, 2004 in CA-G.R. CV No. 78027
is REVERSED and SET ASIDE. Mactan-Cebu
International Airport Authority is ordered to reconvey
subject Lot No. 763-A to petitioners Anunciacion vda.
de Ouano, Mario P. Ouano, Leticia Ouano Arnaiz, and
Cielo Ouano Martinez. The Register of Deeds of Cebu
City is ordered to effect the necessary cancellation of
title and transfer it in the name of the petitioners within
fifteen (15) days from finality of judgment.

The petition of the Mactan-Cebu International Airport

Authority in G.R. No. 168812 is DENIED, and the CA’s
Decision and Resolution dated January 14, 2005 and
June 29, 2005, respectively, in CA-G.R. CV No. 64356
are AFFIRMED, except insofar as they awarded
attorney’s fees and litigation expenses that are hereby
DELETED. Accordingly, Mactan-Cebu International
Airport Authority is ordered to reconvey to respondents
Ricardo L. Inocian, Olympia E. Esteves, Emilia E.
Bacalla, Restituta E. Montana, and Raul L. Inocian the
litigated Lot Nos. 744-A, 745-A, 746, 762-A, 747, and
761-A; and to respondents Aletha Suico Magat, Philip
M. Suico, Dolores S. dela Cruz, James M. Suico,
Edward M. Suico, Roselyn S. Lawsin, Rex M. Suico,
and Kharla Suico-Gutierrez the litigated Lot Nos. 942
and 947. The Register of Deeds of Cebu City is ordered
to effect the necessary cancellation of title and transfer

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