The City of Manila intends to construct a new building over a lot in Delpan, Tondo,

which will be used to house the informal settlers in Baseco Compound. In initiating such
project, the City of Manila, thus, needs the following parcels of land: (1) a two-hectare
land covered by TCT No. T-12345 in the name of spouses Juan and Juanita Bonanza,
and (2) a three-hectare land covered by TCT No. T-54321 registered in the name of
Reynaldo Dela Cruz. The zonal value of the lands located in Delpan, Tondo is
P10,000.00 per square meter, although the zonal valuation was last updated in 2014. 
Upon investigation of the City Engineering Department of the City of Manila, however, it
turned out that the land covered by TCT No. T-12345 was mortgaged by Spouses Juan
and Juanita Bonanza to Bank of the Philippine Islands under entry number 12031991,
and to the Philippine National Bank under entry number 03121991. There is also an
uncanceled encumbrance over TCT No. T-12345 with entry number 19911203 in favor
of Jose Protacio executed in January 2000 when Spouses Juan and Juanita Bonanza
obtained a loan from him on the same year, although the loan was already paid. It was
further found out that Jose Protacio died in May 2015 and was survived by his heirs,
namely, Andres Protacio, Emilio Protacio, and Gabriela Protacio.
As to the land covered by TCT No. T-54321, it appears on the title that the same is
mortgaged to Security Bank under entry number 19910312. It was further found out that
the land covered by TCT No. T-54321 was already sold by Reynaldo Dela Cruz to
Megawide Corporation, although the title of Reynaldo Dela Cruz was not yet cancelled
and transferred to Megawide Corporation. 
Additionally, when the engineers of the City of Manila made an ocular inspection of the
properties that they intend to use for the project, they discovered that two (2) families
were occupying certain portions of the lands covered by TCT Nos. T-12345 and T-
54321, these are the families of Lilia Bahing and Lilo Morano.
Confused as to whom they will make the letter-offer for the expropriation of the land, the
engineers of the City of Manila sent everyone a letter-offer for the purchase of the land.
All of the letter-offers were rejected by the concerned persons, thus, the engineers of
the City of Manila wrote a letter to the Legal Department of the City to render an opinion
as to the proper course of action. In response, the Legal Department recommended the
filing of an expropriation complaint in order to take the properties covered by TCT Nos.
T-12345 and T-54321. However, since the zonal valuation of the lands in Delpan,
Tondo is outdated, and considering the requirement under the law that the basis of
zonal valuation should be the most recent ones, meaning at least three (3) years at the
time of the filing of expropriation, some of the legal staff in the Legal Department are
unsure as to whether there is a need to include the Bureau of Internal Revenue as party
to the looming expropriation case.
You are a legal staff of the Legal Department of the City of Manila and you are being
asked to render an opinion as to who will be impleaded in the expropriation case in
order to take possession of the subject lands, i.e., parcels of land covered by TCT Nos.
T-12345 and T-54321.