211108 BALM105 Notes

[SPECIAL CIVIL ACTION CONT.]

VI. EXPROPRIATION (Rule 67)

 An act of a government claiming private property against the wishes of the owners but
will be used for the benefit of the overall public
 Being exercised by government under the power of eminent domain
 Power of the Eminent Domain of the government is under Sec.9, Art. 3 of 1987
Constitution, providing that “private property shall not be taken for public use without
just compensation”
 ED can be validly done if there’s a necessity that is public in character

Elements of Eminent Domain: (PNPCD)

1. Property should be privately owned

2. There must be genuine necessity to take the property
3. The taking must be for public use
4. The private owner must be paid just compensation
5. The taking must be complied with due process of law (Rules of Procedure, Rule 67)

(CASE: City of Manila vs. Chinese Community of Manila)

o City of Manila tried to expropriate the Chinese cemetery in Manila but the Chinese
community refused. Court rendered in favor of the Chinese community, because even if
Chinese cemetery is privately owned, there’s no necessity because it is already devoted to
public use. Thus, it cannot anymore be expropriated for public purpose.

Rule 67 / Expropriation Procedure

I. Government must file a verified complaint*

 *Affidavit stating that the person has read the pleading and that the allegations are (...)
 Under the New Rule, the petition do not only attest to the knowledge that it caused a
preparation, that it is based on facts, but it must be indicated that it is not intended to
harass the party
 Contents of Complaint:
 State the right and purpose of expropriation – explain the necessity and that it is for
public use
 Describe the property with particularity which will be expropriated
 All persons owning, claiming to own, and occupying any part of the property to be
expropriated will be named defendants since it’s a private property
  Separate interests of defendants (If practical)
II. Court will issue summons to defendant to answer the complaint
 During the pendency of the expropriation of complaint, the plaintiff (local or national
government) can already enter or take possession of the property
 ex: Local government will expropriate ABC’s property to be used as road, a public
property usable and accessible to all Naga City residents
 Requirements Before Entering the Property (to be expropriated):
 Plaintiff must deposit in court the amount equivalent to the assessed value* of
property for taxation purposes unless a court allows Certificate of Deposit (but always
a cash deposit in court)
 *How to determine assessed value?
 Tax Declaration of the property, indicating the same therein
 Once the entity expropriating the property makes deposit in court, it can already enter
the property and start to take possession
III. Court will issue Order of Possession/Expropriation
 In this procedure, plaintiff is declared the lawful right (but can only be declared upon
payment of just compensation)
 How will just compensation be determined?
 By the court, or;
 Upon the agreement of parties (as long as there’s an order of expropriation and an
order of what is the just compensation)
 Where is just compensation determined?
 On the date of the taking, or;
 At the time of the filing of the complaint (whichever comes first)
 Just compensation is appealable
 If defendants didn’t question the taking and its purpose/necessity, usually the action will
run smoothly and the only issue that’ll remain is the just compensation
 If defendants will question the necessity of the taking and its purpose, state in ANSWER
 RULE In Case the Issue is w/ Respect to Just Compensation
 Court will appoint 3 disinterested persons as commissioners. They are required to
submit a report to the court 60 days from the date the commissioners took their oath
 The parties, after receiving the report of commissioners, are given 10 days to make
comments as to the report made by commissioner
 The issue must be resolved by court within 30 days from the receipt of last comment
of the parties
 What will happen if defendants appealed the decision of court as to the complaint?
 Project will continue even during pendency of appeal
 In case of reversal order, (If defendant won in appellate court, just like in City of
Manila) the originating RTC who made the initial order of judgment granting the
expropriation will now issue order to:
  Restore the property to defendant, and;
 Determine the amount of damages sustained by the defendants

STOPPED @ 17:28

Due Process required

-Procedure in Rule 67

In addition to requirement of DP in case the local gov’t exericised power ofED and expro under

7160, Sec19 of Local ggov’t code, it’ll be addtl rule of procedure that the local gov’t should
comply

Complaint will be filed by its chief exec (If naga, mayor will file complaint)

Complaint should be accompanied by an Ordinance declaring that the expro is necessary for
public use, welfare of the poor and landless

Magkakaroon ng ordinance if it’s the local gov’t ang nag exercise ng expo

Deposit before the local gov’t can assume/take possession of subj property, they should deposit
w the court at least 15% of the fair market value of property based on current tax declaration of
property to be expropriated

Rule 67 – require deposit to be made before possession is taken

Stated that it should be the amount equivalent

In case of local govt – SeC 19 will be followed, ra7160, at least 15%

Requirements under Local Gov’t Code so that a local gov’t unit can exersice ED

-Ordinance enacted by local council

1. Authorizes local council to exercise ED over a property

2. Stated therin that it is for public use

3. Just compensation as Sec 9 Art 3 of Consti

4. valid definite offer has been prev made to the owner sought to be expropriated, and that offer
wasn’t accepted (LGU should sent to the defendant a definite offer to purchase the property and
was rejected)
ex: LGU should sent Mr. A a letter offering a certain amount to buy property and A should
reject. Once rejected, will enact ordinance authorizing that the Mayor/Chief exec to expro the
property (done by filing verified complaint)

Attach valid offer and ordinance

WHY SHOULD DEFINITE OFFER FIRST?

-Bc if it was accepted by owner, no need to expropriate

-Only expropriate if owner rejects

In relation to expro, there is another R.A. passed RA8974 (refers to acquisitions of right of way,
site, or location, but the entity involved here is this “right should be in relation to na’tl govt
infrastructure projects and others)

ex: Skyway, there’s a need for a certain property to be acquired for it to be constructed

Entity involved is the nat’l govt thru the DPWH

Now the DPWH will also file the complaint for expropriation

If the DPWH and the project is nat’l in character, procedures under 8974 should be followed

Diff b/w R.A.8974 and Rule 67

-Basic provisions of filng verified complaint, offer, (procedures) under Rule 67 is still followed
but w/ addt’l requirements

-In 7160, it was provided the deposit is 15% of fair market value in tax dec. however if for nat’l,
deposit would be 100% of the value of the property based on the BIR Zonal evaluation. 8974
favorable bc zonal eval is usually higher than the assessed/fair market value in tax dec

What if no BIR zonal valuation at time of expro

-BIR will be mandated w/in 60 days to determine the zonal valuation of subj property

Nat’l govt kailangan ipresent n

Cert of Availability of Funds (Rather than deposit)

LGU – deposit,

8974 enough na magpresent ng cert of AF

Not in detail

FORECLOSURE OF REAL ESTATE MORTGAGE (Rule 68)

REM - Contract used as security to an obligation

What kind of security? Real estate, home, land

Bc there are also security that are personal (jewelry, tax certs) used to secure the payment of a
principal obli

Rule 68 only refers to real estate mortgages, security given is a real estate (Refers to immovable
properties or any interest in those)

REM is a contract wherein it is for the purpose of securing a principal obli, how many contracts
are involved?

-Contract for the loan b/w the mortgagor and morgagee

In contract of loan, who are the parties? –Debtor and creditor

In contract of mortgage, whoa re parties? Mortgagor and mortgagee

There are 2 contracts involved

-Contract of Loan and Contract of Mortgage (REM Contract)

Contract to secure another obli

If no contract of Loan, no mortgage

Bc mortgage only an accessory contract

Principal contract – loan

Accessory contract – REM

if loan no obli to secure, no REM executed

When can you foreclose, if defaulted in payment of principal obli

Rule 68

If jewelries are mortgage, 68 not applicable (bc it only refers to REM)

File a complaint for foreclosure before the court

Date and due execution of REM, names and residences of mortgagee, mortgagor

Mortgagee vs. Mortgagor

Mortgagee –

Mortgagor –

Names and residence

Desc of subj property

Date of Loan secured by mortgage

Amount claimed to obtain

In succeeding payments

Names and residences of all persons having/claiming interst to property but subordinate to the
right of the mortgagee

Mortgagee has the 1st right to subj property

There are times that same property mortgage to several person

Sino ung unang mortgagee yung nauna, may preferred rights;

Yung mga sumusunod na mortgagees, their rights is subordinate to mortgagee

Kung ibebenta yung property ang babayaran yung 1st mortgagee

When u file foreclosure, include all persons claiming right over subj property
After claiming right for foreclosure

Court will issue summons to file respective answers

There will be trial

Issues like pwede ba talaga I mortgage, is it right for the complaint to be filed, bc under contract
of loan dapat mag default 3x, 2x pa lang nag file na kaagad si mortgagee

Under the contract of loan, only after 3 defaults, during the trial, yun ang sagot na pre-mature
ang filing of complaint for foreclosure

Pag nagkaroon n ng trial, documentary and testamentary, court will render judgment

Should state that the mortgage is true, nd will include payment within 60-100 from the day of
entry of judgment

Entry of udgment when?

^ Ineenter sa judgment book, if the judgment has become final nd executory, when is it
considered

GEN RULE: When the time of appeal has expired, and no appeal has filed to the decision

lapse of 15 days

Ngissue RTC foreclosure, lapse of 15 days after receipt of judgment from parties, nobody filed
appeal, judgment becomes final and executory

Court can already

However if raised to court of appeals will only become final and exec if both parties didn’t make
any appeal to SC

after lapse of 15 days, it become final and exec

If appealed, period will be counted from the time the SC’s decision is also the same (15 days)

15 days –GEN RULE

from the time decision is rendered 15 days

not all cases brought to SC

Judgment of RTC should include finding that the mortgage is true nd payment and other cause of
the defendant/buyer/mortgagor

Payment will only be given 60-100 days frm entry of judgment

EFFECT OF FAILURE TO PAY:

Judgment of foreclosure to court

Subj property hindi idedeliver kay mortgagee

Sold at public auction. why? bc to satisfy the unpaid claim of the lender

After it was sold in public auction, highest bidder winner, order of sale by public auction will be
issued

Right of redemption w/in 1 yr after confirmation of sale

After that redemption period, winner entitled to possession of subj propetyy

subj of mortgage sold in public auction

HOW IS THE PROCEEDS OF SALE

-public auction, winning bidder will pay (proceeds of public auction)

Propetry nabenta 2M (ex) – 2M is proceeds of sale

How will you dispose the proceeds of sale?

2M ; sherrif conducts PA

deduct 2m the cost of sale (notice, publication, etc)

ex cost of sale nag amount 100K may natirang 1.9M (balance to the foreclosing mortgagee)

1.9M kung ang loan kay mortgagee (yung nag file ng complaint)

Unclaimed amount nalang ni foreclosing mortgage is only 1.5M nabenta ng 1.9M, may excess na
400K

if there are other junior encumbrances (subordinates), 400K ibabayad according to order of
priority, if may iba pang mortgagee idedetermine kung sino yung nauna
if mortgagee C is the first, 400K will be given to him

WHAT IF WALA NANG OTHER MORTGAGEE

it will be given to mortgagor (if fully satisfied si foreclosing mortgagee)

WHAT IF KULANG (nabenta lang for

loan is 2.5M

kulang 600K

Can the mortgagee still collect 600K?

But mortgagee must file a motion in the same court w/c ordered the foreclosure, so that he’ll be
given the order of deficiency / deficiency judgment

Use against the borrower bc he may now run after borrower’s properties

But a deficiency judgment can only be obtained after a sale was done and there’s a finding of
deficieny

There can be no DJ issued by public auction

DJ can be appealed

DJ indicated the amount over the deficiency, can question court’s decision

can appeal that para tama ang order of payment

You’ll only file a motion for DJ, no need to file separate ction in order to recover the deficiency

Earlier, not all mortgagors are the borrowers bc there are cases wherein a particular person only
executes a REM in order to secure an obli of another person

Not necessarily that the mortgagor is the borrower

WHEN THIS HAPPENS THAT THE MORTGAGOR IS ANOTHER PERSON/NOT

BORROWER AND THERE’S DJ
Gen Rule: That mortgagor is not liable to the deficiency, limited only to his property’s value

XPN: under contract of mortgage, he’ll also be liable to principal debtor of any deficiency

Rule 67 JUDICIAL FORECLOSURE

EXTRAJUDICIAL FORECLOSURE

difference

extrajudicial R.A. 3135 – no complint for foreclosure required

rule 68 – there is complaint “”

extrajudicial – right of redemption 1 yr after registration of sale (public auction, winning bidder
in the sale should register the sale, 1yr after, the mortgagor can redeem the property, has to pay
everything, cost of sale, etc)

Judicial Foreclosure – there’s a right of redemption except involving banking institutions 20 days
after confirmation of sale

Extrajudicial

When there’s deficiency in the amnt of sale of auction, foreclosing mortgage will only have to
file motion from the court

for the order of judgment

Judicial Foreclosure, value of sale is less than the amount

Mortgagee has to file another action for DJ

Since both EF and JF are sold in public auction

when does the buyer becomes the absolute owner

In EF – only after the finality of the action / consolidation of the sale

Ireregister yung sale ni buyer, after 1yr na di nagredeem si mortgagor, mgkakaroon ng action si
buyer will have to go to registry of deeds

pag na consolidate, nalipat sa n

Buyer at public auction can be a diff person na nag bid

Magkakaroon ng consolidation of sal

In JF – after confirmation of sale w/c is w/in the period of 90-120 days bc equity redemption
only allowed

In EF, mortgagor has given SPA thru the mortgagee to foreclose the property

in case of default, inauuthorize na ni mortgagor si mortgagee to foreclose the property

all mortgagee

In JF, no need SPA bc mortgagee is required to file a complaint for foreclosure of mortgage

WED – PREFI

ALL CIVIL ACTIONS DISCUSSED

may 3 na din a discuss, not part (partition, forcible entry, 60, 90, 71)

Study spec civil actions

When case reaches SC, judgment will be considered final and executor