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G.R. No.

129079 December 2, 1998 REPUBLIC OF THE PHILIPPINES represented by the Department of Trade and Industry, petitioner, vs. HON. LUCENITO N. TAGLE, Presiding Judge of RTC, Imus, Cavite, Branch 20; and HELENA Z. BENITEZ,respondents.

PANGANIBAN, J.: Executive Order No. 1035 1 (EO 1035) was enacted to facilitate government acquisition of private property to be used for infrastructure or other development projects. Under Section 7 thereof, it is the ministerial duty of courts to issue a writ of possession within five days from the time the government deposits 10 percent of just compensation payable. Moreover, such writ cannot be nullified by an adverse decision in an ejectment proceeding involving the same property and the same parties. Statement of the Case This principium is used by this Court in resolving this petition for certiorari under Rule 65 assailing the Orders dated July 26, 1996 2 and February 20, 1997, 3 promulgated by the Regional Trial Court 4 of Imus, Cavite Civil Case No. 1277-96. The first ruling quashed the May 21, 1996 writ of possession issued earlier, pursuant to EO 1035, and the second denied petitioner's plea for reconsideration. The Antecedent Facts The facts, as narrated in the solicitor general's Memorandum, are as follows: Private respondent Helena Z. Benitez is the registered owner of two (2) parcels of land located in Barangay Salawag, Dasmarias, Cavite covered [by] TCT No. 14701 containing an area of Four Hundred Eighty Three Thousand Three Hundred Thirty One (483,331) square meters more or less. Sometime in September 1982, the Philippine Government, through the Philippine Human Resources Development Center (PHRDC for short), an agency under the then Ministry of Human Settlements, negotiated with the Japanese International Cooperation Agency

(JICA) Survey Team on the technicalities of the establishment of the ASEAN Human Resources Development Project in the Philippines. Among the five (5) main programs of the proposed project was Program III (Construction Manpower Development) which involved the establishment of a Construction Manpower Development Center (CMDC for short), an agency now under the Department of Trade and Industry. On March 30, 1983, PHRDC and private respondent Helena Z. Benitez (BENITEZ for short), signed a Memorandum of Agreement (Annex 'C', Petition) which provides, among others, [that] BENITEZ "undertakes to lease within the period of twenty (20) years and/or sell a portion of that property (which is no less than ten-hectares)" in favor of PHRDC "which likewise agrees to lease" within period of twenty (20) years and/or buy said property site". On September 22, 1983, the Philippine Women's University (PWU for short) and BENITEZ granted a permit to PHRDC "to occupy and use" the land in question and "to undertake land development, electrical and road network installations and other related works necessary to attain its objectives . . .". Pursuant thereto, the CMDF took possession of the property and erected buildings and other related facilities necessary for its operations. Accordingly, in December 1983, PWU entered into a purported contract of lease with PHRDC on a ten (10)-hectare piece of land which stipulated, among other things, a rental of P200,000.00 per annum for an initial term of four (4) years from January 1, 1984 to January 1, 1988, with an option granted to PHRDC to renew the lease, upon agreement of both parties, "for a further period up to, but not exceeding twenty (20) years from the expiration of the initial term hereof . . .". PWU entered into the aforesaid lease contract, dated December 3, 1983, purporting to be the donee of the property involved in a deed of donation executed by BENITEZ in its favor; which deed of donation, however, was executed only in December 1984, much later than the execution of the lease contract. After the expiration of the lease contract on January 1, 1988, negotiations began on the purchase of the property in question on a plain offer of BENITEZ to sell the same. In her letter of 21 August 1989, BENITEZ advised the PHRDC, through its General Manager

Mr. Juvenal Catajoy, to "pursue the successful completion of the sale of the subject 7-hectare property within 30 days from August 31, 1989 at the agreed price of P70.00 per square meter". Again, in BENITEZ' letter of February 4, 1991, she stated the position of the University regarding the negotiated sale of the 7hectare property in Dasmarias, Cavite' and "confirme(d) that the agreed purchase price in 1989 [was] P70.00 per sq. m. . . .". In view of the agreement on the sale of the land in question, PHRDC prepared a Deed of Absolute Sale with BENITEZ, as vendor, and PHRDC and CMDF, as vendees, duly represented by then Undersecretary Gloria M. Arroyo, for the signature of BENITEZ. Subsequently, BENITEZ and PHRDC, represented by PHRDC General Manager Juvenal Catajoy, Jr., agreed that the payment of "rentals for the Dasmarias lot [would] cease effective July 1, 1989 in view of on-going negotiations for the eventual sale of the lot". However, for reasons known only to her, BENITEZ did not sign the Deed of Absolute Sale thus reneging on her commitment to sell the lot in question. Thereafter, in a letter dated August 15, 1995, BENITEZ and PWU demanded from PHRDC the payment of rentals and to vacate the premises within 30 days from notice. It later filed an unlawful detainer suit against petitioner. Falling to acquire the properly involved through negotiated sale, petitioner through the Department of Trade and Industry, to which CMDF is attached, instituted a complaint for Eminent Domain, pursuant to be provisions of Executive Order No. 1035, dated June 25, 1985. In compliance with Section 2, Rule 67 of the Rules of Court, as amended by Presidential Decree No. 42, petitioner deposited with the Philippine National Bank (PNB), Makati Avenue Branch, in favor of defendant, Seven Hundred Eight Thousand Four Hundred Ninety Pesos (P708,490.00) an amount equivalent to the provisional value of the land sought to be expropriated. On May 16, 1996, petitioner filed a Motion for Issuance of a Writ of Possession.

On May 24, 1996 respondent Judge issued an Order (Annex 'D', Petition) granting petitioner's Motion for issuance of a Writ of Possession. In compliance with the Order of May 24, 1996, the Clerk of Court issued a Writ of Possession (Annex 'E', Petition) which the Sheriff duly implemented. Private respondent filed a Motion for Reconsideration of the Order of May 24, 1996 . . . which petitioner opposed. On July 26, 1996, respondent Judge issued the assailed Order (Annex 'A', Petition) the dispositive portion of which reads: WHEREFORE, in view of the foregoing, defendant's Motion for Reconsideration is granted. Accordingly, the Order dated May 24, 1996 is hereby set aside and reconsidered. The Writ of Possession issued in consonance therewith is hereby quashed. On August 21, 1996, petitioner filed a Motion for Reconsideration (Annex 'F', Petition) of the above Order. Private respondent filed an Opposition (Annex 'G', Petition) thereto.
On February 20, 1997, respondent Judge denied petitioner's motion for reconsideration (Annex 'B', Petition). 5

The foregoing narration of the facts was not contradicted by private respondent. 6 Not satisfied by the court a quo's rulings, petitioner thus elevated the matter to this Court. 7 The Issue In its Memorandum, petitioner submits that "[t]he only legal issue raised in the petition is whether or not respondent judge committed grave abuse of discretion when he quashed the writ of possession which he had previously issued. 8 Put differently, the issue is whether the respondent judge may quash a writ of possession on the ground that the expropriating government agency is already occupying the property sought to be expropriated. The Court's Ruling The petition is impressed with merit.

Issuance of Writ of Possession: A Duty Mandated by Law It is undisputed that the expropriation proceeding in the case at bar involves a development project covered by EO 1035. The site, which is being used by the Philippine Human Resources Development Center (PHRDC), is sought to be expropriated for the establishment and operation of the Association of Southeast Asian Nations (ASEAN) Human Resources Development Project of the Philippines, a component of which is the Construction Manpower Development Center (CMDC), an agency now under the Department of Trade and Industry (DTI). Plainly, the respondent judge is required to issue a writ of possession in favor of petitioner, pursuant to Section 7 of EO 1035, which reads: Sec 7. Expropriation. If the parties fail to agree in negotiation of the sale of the land as provided in the preceding section, the government implementing agency/instrumentality concerned shall have authority to immediately institute expropriation proceedings through the Office of the Solicitor General, as the case may be. The just compensation to be paid for the property acquired through expropriation shall be in accordance with the provisions of P.D. No. 1533. Courts shall give priority to the adjudication of cases on expropriation and shall immediately issue the necessary writ of possession upon deposit by the government implementing agency/instrumentality concerned of an amount equivalent to ten percent (10%) of the amount of just compensation provided under P.D. No. 1533; Provided, That the period within which said writ of possession shall be issued shall in no case extend beyond five (5) days from the date such deposit was made. Under this statutory provision, when the government or its authorized agent makes the required deposit, the trial court has a ministerial duty to issue a writ of possession. We note that the respondent judge indeed issued such writ in favor of petitioner, aptly stating:
There being a deposit made by the plaintiff with the Philippine National Bank (PNB) in the amount of P708,490.00 which is equivalent to the assessed value of the property subject matter hereof based on defendant's 1990 tax declaration, coupled with the fact that notice to defendant as landowner has been effected, the Motion for Issuance of Writ of Possession is hereby GRANTED. Forthwith, let a Writ of Possession be issued ordering the Sheriff to place plaintiff in possession of the property involved in this case. 9

Writ of Possession Necessary

As previously mentioned, the trial court reversed itself by later issuing an Order quashing the writ of possession, reasoning as follows:
While this Court fully agrees with the plaintiff that it is entitled to be placed in possession of the property subject of the Complaint at once, the position of the parties in the case at bar is different. For, plaintiff admitted that it is already in possession of subject premises. Such being the case, it is obvious that plaintiff's purpose in securing a writ of possession is only to utilize it as leverage in the ejectment suit filed against it by defendant Benitez 10 wherein the issue is possession.

In denying the motion for reconsideration of said Order, the respondent judge reiterated his position, adding that "the present case is different from the ordinary action for eminent domain because prior to the filing of this case, there was already an ejectment suit instituted against plaintiff-corporation." 11 Agreeing with the trial court, private respondent contends that "the writ of possession is warranted only in cases where the party seeking [it] is nor yet in possession [of] the property sought to be expropriated." 12 Private respondent underscores Section 2, Rule 67 of the 1997 Rules on Civil Procedure, which in part states that "the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation . . . . 13 She also points out that since Presidential Decree (PD) 42 provides that the "plaintiff shall have the right to take or enter upon the possession of the real property involved," the writ of possession it requires to be issued "is not to maintain possession but intended for the purpose of taking or entering possession." 14 The Court is not persuaded. The expropriation of real property does not include mere physical entry or occupation of land. Although eminent domain usually involves a taking of title, there may also be compensable taking of only some, not all, of the property interests in the bundle of rights that constitute ownership. 15 In the instant case, it is manifest that the petitioner, in pursuit of an objective beneficial to public interest, seeks to realize the same through its power of eminent domain. In exercising this power, petitioner intended to acquire not only physical possession but also the legal right to possess and ultimately to own the subject property. Hence, its mere physical entry and occupation of the property fall short of the taking of title, which includes all the rights that may be exercised by an owner over the subject property. Its actual occupation, which renders academic the need for it to enter, does not by itself include its acquisition of all the rights of ownership. Its right to possess did not attend its initial physical possession of the property because the lease, which had authorized said

possession, lapsed. In short, petitioner wanted not merely possession de facto but possession de jure as well. What will happen if the required writ of possession is not issued? This question becomes very important because the Municipal Trial Court (MTC), where private respondent sued petitioner for unlawful detainer, has rendered a decision ordering petitioner to vacate the property. 16 It would be circuitous, if not legally absurd, for this Court to require petitioner to first vacate the property in view of the adverse judgement in the unlawful detainer case, and soon afterwards, order the trial court to issue in petitioner's favor a writ of possession pursuant to the expropriation proceedings. Such a scenario is a bureaucratic waste of precious time and resources. This precisely is the sort of pernicious and unreasonable delay of government infrastructure or development projects, which EO 1035 intended to address by requiring the immediate issuance of a writ of possession. Ineludibly, said writ is both necessary and practical, because mere physical possession that is gained by entering the property is not equivalent to expropriating it with the aim of acquiring ownership over, or even the right to possess, the expropriated property. Citing J. M. Tuason & Co., Inc. v. Court of Appeals 17 and Cuatico v. Court of Appeals, 18 private respondent further submits that "the eminent domain case, much less the writ of possession, cannot be entertained to defeat the ejectment case." 19 Such argument is untenable. It is well-settled that eminent domain is an inherent power of the State that need not be granted even by the fundamental law." 20 Section 9, Article III of the Constitution, in mandating that "[p]rivate property shall not be taken for public use without just compensation," merely imposes a limit on the government's exercise of this power and provides a measure of protection to the individual's right to property. 21 Thus, in J. M. Tuason & Co. and Cuatico, the Court merely enforced the constitutional limitation regarding the payment of just compensation. Clearly, an ejectment suit ordinarily should not prevail over the State's power of eminent domain. We note that in the present case, petitioner has deposited not just the 10 percent required under EO 1035, but the whole amount of the just compensation that private respondent is entitled to. Thus, we are unable to find any legal impediment for the issuance of a writ of possession in favor of petitioner. Precisely, the purpose of instituting expropriation proceedings is to prevent petitioner from being ejected from the subject property; otherwise, the abovementioned absurd and circuitous rulings would arise. Assailed Orders Tainted by

Grave Abuse of Discretion It is clear that, in quashing the writ of possession, respondent judge violated EO 1035 on the quaint and whimsical ground that petitioner was already in actual possession of the property. 22 His assailed Orders dated July 26, 1996 and February 20, 1997 are therefore void for having been issued with grave abuse of discretion. 23 WHEREFORE, the petition is GRANTED, and the assailed Orders dated July 26, 1996 and February 20, 1997 are hereby ANNULLED and SET ASIDE. No costs. SO ORDERED. Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur. G.R. No. L-14355 October 31, 1919

THE CITY OF MANILA, plaintiff-appellant, vs. CHINESE COMMUNITY OF MANILA, ET AL., defendants-appellees. City Fiscal Diaz for appellant. Crossfield and O'Brien, Williams, Ferrier and Sycip, Delgado and Delgado, Filemon Sotto, and Ramon Salinas for appellees.

JOHNSON, J.: The important question presented by this appeal is: In expropriation proceedings by the city of Manila, may the courts inquire into, and hear proof upon, the necessity of the expropriation? That question arose in the following manner: On the 11th day of December, 1916, the city of Manila presented a petition in the Court of First Instance of said city, praying that certain lands, therein particularly described, be expropriated for the purpose of constructing a public improvement. The petitioner, in the second paragraph of the petition, alleged: That for the purpose of constructing a public improvement, namely, the extension of Rizal Avenue, Manila, it is necessary for the plaintiff to acquire ownership in fee simple of certain parcels of land situated in the

district of Binondo of said city within Block 83 of said district, and within the jurisdiction of this court. The defendant, the Comunidad de Chinos de Manila [Chinese Community of Manila], answering the petition of the plaintiff, alleged that it was a corporation organized and existing under and by virtue of the laws of the Philippine Islands, having for its purpose the benefit and general welfare of the Chinese Community of the City of Manila; that it was the owner of parcels one and two of the land described in paragraph 2 of the complaint; that itdenied that it was either necessary or expedient that the said parcels be expropriated for street purposes; that existing street and roads furnished ample means of communication for the public in the district covered by such proposed expropriation; that if the construction of the street or road should be considered a public necessity, other routes were available, which would fully satisfy the plaintiff's purposes, at much less expense and without disturbing the resting places of the dead; that it had a Torrens title for the lands in question; that the lands in question had been used by the defendant for cemetery purposes; that a great number of Chinese were buried in said cemetery; that if said expropriation be carried into effect, it would disturb the resting places of the dead, would require the expenditure of a large sum of money in the transfer or removal of the bodies to some other place or site and in the purchase of such new sites, would involve the destruction of existing monuments and the erection of new monuments in their stead, and would create irreparable loss and injury to the defendant and to all those persons owning and interested in the graves and monuments which would have to be destroyed; that the plaintiff was without right or authority to expropriate said cemetery or any part or portion thereof for street purposes; and that the expropriation, in fact, was not necessary as a public improvement. The defendant Ildefonso Tambunting, answering the petition, denied each and every allegation of the complaint, and alleged that said expropriation was not a public improvement; that it was not necessary for the plaintiff to acquire the parcels of land in question; that a portion of the lands in question was used as a cemetery in which were the graves of his ancestors; that monuments and tombstones of great value were found thereon; that the land had become quasipublic property of a benevolent association, dedicated and used for the burial of the dead and that many dead were buried there; that if the plaintiff deemed it necessary to extend Rizal Avenue, he had offered and still offers to grant a right of way for the said extension over other land, without cost to the plaintiff, in order that the sepulchers, chapels and graves of his ancestors may not be disturbed; that the land so offered,free of charge, would answer every public necessity on the part of the plaintiff.

The defendant Feliza Concepcion de Delgado, with her husband, Jose Maria Delgado, and each of the other defendants, answering separately, presented substantially the same defense as that presented by theComunidad de Chinos de Manila and Ildefonso Tambunting above referred to. The foregoing parts of the defense presented by the defendants have been inserted in order to show the general character of the defenses presented by each of the defendants. The plaintiff alleged that the expropriation was necessary. The defendants each alleged (a) that no necessity existed for said expropriation and (b) that the land in question was a cemetery, which had been used as such for many years, and was covered with sepulchres and monuments, and that the same should not be converted into a street for public purposes. Upon the issue thus presented by the petition and the various answers, the Honorable Simplicio del Rosario, judge, in a very elucidated opinion, with very clear and explicit reasons, supported by ambulance of authorities, decided that there was no necessity for the expropriation of the particular strip of land in question, and absolved each and all of the defendants from all liability under the complaint, without any finding as to costs. From that judgment the plaintiff appealed and presented the above question as its principal ground of appeal. The theory of the plaintiff is, that once it has established the fact, under the law, that it has authority to expropriate land, it may expropriate any land it may desire; that the only function of the court in such proceedings is to ascertain the value of the land in question; that neither the court nor the owners of the land can inquire into the advisible purpose of purpose of the expropriation or ask any questions concerning the necessities therefor; that the courts are mere appraisers of the land involved in expropriation proceedings, and, when the value of the land is fixed by the method adopted by the law, to render a judgment in favor of the defendant for its value. That the city of Manila has authority to expropriate private lands for public purposes, is not denied. Section 2429 of Act No. 2711 (Charter of the city of Manila) provides that "the city (Manila) . . . may condemn privateproperty for public use." The Charter of the city of Manila contains no procedure by which the said authority may be carried into effect. We are driven, therefore, to the procedure marked out by Act No. 190 to ascertain how the said authority may be exercised. From an examination of Act No. 190, in its section 241, we find how the right of eminent domain may be exercised. Said section 241 provides that, "The

Government of the Philippine Islands, or of any province or department thereof, or of any municipality, and any person, or public or private corporation having, by law, the right to condemn private property for public use, shall exercise that right in the manner hereinafter prescribed." Section 242 provides that a complaint in expropriation proceeding shall be presented; that the complaint shall state with certainty the right of condemnation, with a description of the property sought to be condemned together with the interest of each defendant separately. Section 243 provides that if the court shall find upon trial that the right to expropriate the land in question exists, it shall then appoint commissioners. Sections 244, 245 and 246 provide the method of procedure and duty of the commissioners. Section 248 provides for an appeal from the judgment of the Court of First Instance to the Supreme Court. Said section 248 gives the Supreme Court authority to inquire into the right of expropriation on the part of the plaintiff. If the Supreme Court on appeal shall determine that no right of expropriation existed, it shall remand the cause to the Court of First Instance with a mandate that the defendant be replaced in the possession of the property and that he recover whatever damages he may have sustained by reason of the possession of the plaintiff. It is contended on the part of the plaintiff that the phrase in said section, "and if the court shall find the rightto expropriate exists," means simply that, if the court finds that there is some law authorizing the plaintiff to expropriate, then the courts have no other function than to authorize the expropriation and to proceed to ascertain the value of the land involved; that the necessity for the expropriation is a legislative and not a judicial question. Upon the question whether expropriation is a legislative function exclusively, and that the courts cannot intervene except for the purpose of determining the value of the land in question, there is much legal legislature. Much has been written upon both sides of that question. A careful examination of the discussions pro and con will disclose the fact that the decisions depend largely upon particular constitutional or statutory provisions. It cannot be denied, if the legislature under proper authority should grant the expropriation of a certain or particular parcelof land for some specified public purpose, that the courts would be without jurisdiction to inquire into the purpose of that legislation. If, upon the other hand, however, the Legislature should grant general authority to a municipal corporation to expropriate private land for public purposes, we think the courts have ample authority in this

jurisdiction, under the provisions above quoted, to make inquiry and to hear proof, upon an issue properly presented, concerning whether or not the lands were private and whether the purpose was, in fact, public. In other words, have no the courts in this jurisdiction the right, inasmuch as the questions relating to expropriation must be referred to them (sec. 241, Act No. 190) for final decision, to ask whether or not the law has been complied with? Suppose in a particular case, it should be denied that the property is not private property but public, may not the courts hear proof upon that question? Or, suppose the defense is, that the purpose of the expropriation is not public butprivate, or that there exists no public purpose at all, may not the courts make inquiry and hear proof upon that question? The city of Manila is given authority to expropriate private lands for public purposes. Can it be possible that said authority confers the right to determine for itself that the land is private and that the purpose is public, and that the people of the city of Manila who pay the taxes for its support, especially those who are directly affected, may not question one or the other, or both, of these questions? Can it be successfully contended that the phrase used in Act No. 190, "and if the court upon trial shall find that such right exists," means simply that the court shall examine the statutes simply for the purpose of ascertaining whether a law exists authorizing the petitioner to exercise the right of eminent domain? Or, when the case arrives in the Supreme Court, can it be possible that the phrase, "if the Supreme Court shall determine that no right of expropriation exists," that that simply means that the Supreme Court shall also examine the enactments of the legislature for the purpose of determining whether or not a law exists permitting the plaintiff to expropriate? We are of the opinion that the power of the court is not limited to that question. The right of expropriation is not an inherent power in a municipal corporation, and before it can exercise the right some law must exist conferring the power upon it. When the courts come to determine the question, they must only find (a) that a law or authority exists for the exercise of the right of eminent domain, but (b) also that the right or authority is being exercised in accordance with the law. In the present case there are two conditions imposed upon the authority conceded to the City of Manila: First, the land must be private; and, second, the purpose must be public. If the court, upon trial, finds that neither of these conditions exists or that either one of them fails, certainly it cannot be contended that the right is being exercised in accordance with law. Whether the purpose for the exercise of the right of eminent domain is public, is a question of fact. Whether the land is public, is a question of fact; and, in our opinion, when the legislature conferred upon the courts of the Philippine Islands the right to ascertain upon trial whether the right exists for the exercise of

eminent domain, it intended that the courts should inquire into, and hear proof upon, those questions. Is it possible that the owner of valuable land in this jurisdiction is compelled to stand mute while his land is being expropriated for a use not public, with the right simply to beg the city of Manila to pay him the value of his land? Does the law in this jurisdiction permit municipalities to expropriate lands, without question, simply for the purpose of satisfying the aesthetic sense of those who happen for the time being to be in authority? Expropriation of lands usually calls for public expense. The taxpayers are called upon to pay the costs. Cannot the owners of land question the public use or the public necessity? As was said above, there is a wide divergence of opinion upon the authority of the court to question the necessity or advisability of the exercise of the right of eminent domain. The divergence is usually found to depend upon particular statutory or constitutional provisions. It has been contended and many cases are cited in support of that contention, and section 158 of volume 10 of Ruling Case Law is cited as conclusive that the necessity for taking property under the right of eminent domain is not a judicial question. But those who cited said section evidently overlooked the section immediately following (sec. 159), which adds: "But it is obvious that if the property is taken in the ostensible behalf of a public improvement which it can never by any possibility serve, it is being taken for a use not public, and the owner's constitutional rights call for protection by the courts. While many courts have used sweeping expression in the decisions in which they have disclaimed the power of supervising the power of supervising the selection of the sites of public improvements, it may be safely said that the courts of the various states would feel bound to interfere to prevent an abuse of the discretion delegated by the legislature, by an attempted appropriation of land in utter disregard of the possible necessity of its use, or when the alleged purpose was a cloak to some sinister scheme." (Norwich City vs. Johnson, 86 Conn., 151; Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544; Wheeling, etc. R. R. Co. vs. Toledo Ry. etc. Co., 72 Ohio St., 368; State vs. Stewart, 74 Wis., 620.) Said section 158 (10 R. C. L., 183) which is cited as conclusive authority in support of the contention of the appellant, says: The legislature, in providing for the exercise of the power of eminent domain, may directly determine the necessity for appropriating private property for a particular improvement for public use, and it may select the exact location of the improvement. In such a case, it is well settled that the utility of the proposed improvement, the extent of the public necessity for its construction, the expediency of constructing it, the suitableness of the

location selected and the consequent necessity of taking the land selected for its site, are all questions exclusively for the legislature to determine, and the courts have no power to interfere, or to substitute their own views for those of the representatives of the people. Practically every case cited in support of the above doctrine has been examined, and we are justified in making the statement that in each case the legislature directly determined the necessity for the exercise of the right of eminent domain in the particular case. It is not denied that if the necessity for the exercise of the right of eminent domain is presented to the legislative department of the government and that department decides that there exists a necessity for the exercise of the right in a particular case, that then and in that case, the courts will not go behind the action of the legislature and make inquiry concerning the necessity. But, in the case ofWheeling, etc. R. R. Co. vs. Toledo, Ry, etc., Co. (72 Ohio St., 368 [106 Am. St. rep., 622, 628]), which was cited in support of the doctrine laid down in section 158 above quoted, the court said: But when the statute does not designate the property to be taken nor how may be taken, then the necessity of taking particular property is a question for the courts. Where the application to condemn or appropriate is made directly to the court, the question (of necessity) should be raised and decided in limene. The legislative department of the government was rarely undertakes to designate the precise property which should be taken for public use. It has generally, like in the present case, merely conferred general authority to take land for public use when a necessity exists therefor. We believe that it can be confidently asserted that, under such statute, the allegation of the necessity for the appropriation is an issuable allegation which it is competent for the courts to decide. (Lynch vs. Forbes, 161 Mass., 302 [42 Am. St. Rep., 402, 407].) There is a wide distinction between a legislative declaration that a municipality is given authority to exercise the right of eminent domain, and a decision by the municipality that there exist a necessity for the exercise of that right in a particular case. The first is a declaration simply that there exist reasons why the right should be conferred upon municipal corporation, while the second is the application of the right to a particular case. Certainly, the legislative declaration relating to the advisability of granting the power cannot be converted into a declaration that a necessity exists for its exercise in a particular case, and especially so when, perhaps, the land in question was not within the territorial authority was granted.

Whether it was wise, advisable, or necessary to confer upon a municipality the power to exercise the right of eminent domain, is a question with which the courts are not concerned. But when that right or authority is exercised for the purpose of depriving citizens of their property, the courts are authorized, in this jurisdiction, to make inquiry and to hear proof upon the necessity in the particular case, and not the general authority. Volume 15 of the Cyclopedia of Law and Procedure (Cyc.), page 629, is cited as a further conclusive authority upon the question that the necessity for the exercise of the right of eminent domain is a legislative and not a judicial question. Cyclopedia, at the page stated, says: In the absence of some constitutional or statutory provision to the contrary, the necessity andexpediency of exercising the right of eminent domain are questions essentially political and not judicial in their character. The determination of those questions (the necessity and the expediency) belongs to the sovereign power; the legislative department is final and conclusive, and the courts have no power to review it (the necessity and the expediency) . . . . It (the legislature) may designate the particular property to be condemned, and its determination in this respect cannot be reviewed by the courts. The volume of Cyclopedia, above referred to, cites many cases in support of the doctrine quoted. While time has not permitted an examination of all of said citations, many of them have been examined, and it can be confidently asserted that said cases which are cited in support of the assertion that, "the necessity and expediency of exercising the right of eminent domain are questions essentially political and not judicial," show clearly and invariably that in each case the legislature itself usually, by a special law, designated the particular case in which the right of eminent domain might be exercised by the particular municipal corporation or entity within the state. (Eastern R. Co. vs. Boston, etc., R. Co., 11 Mass., 125 [15 Am. Rep., 13]; Brooklyn Park Com'rs vs. Armstrong, 45 N.Y., 234 [6 Am. Rep., 70]; Hairston vs. Danville, etc. Ry. Co., 208 U. S. 598; Cincinnati vs. Louisville, etc. Ry. Co., 223 U. S., 390; U.S. vs. Chandler-Dunbar Water Power Co., 229 U. S., 53; U.S. vs. Gettysburg, etc. Co., 160 U. S., 668; Traction Co. vs. Mining Co., 196 U.S., 239; Sears vs. City of Akron, 246 U.S., 351 [erroneously cited as 242 U.S.].) In the case of Traction Co. vs. Mining Co. (196 U.S., 239), the Supreme Court of the United States said: "It is erroneous to suppose that the legislature is beyond the control of the courts in exercising the power of eminent domain, either as to the nature of the use or the necessity to the use of any particular property. For if the use be not public or no necessity for the taking exists, the

legislature cannot authorize the taking of private property against the will of the owner, notwithstanding compensation may be required." In the case of School Board of Carolina vs. Saldaa (14 Porto Rico, 339, 356), we find the Supreme Court of Porto Rico, speaking through Justice MacLeary, quoting approvingly the following, upon the question which we are discussing: "It is well settled that although the legislature must necessarily determine in the first instance whether the use for which they (municipalities, etc.) attempt to exercise the power is a public one or not, their (municipalities, etc.) determination is not final, but is subject to correction by the courts, who may undoubtedly declare the statute unconstitutional, if it shall clearly appear that the use for which it is proposed to authorize the taking of private property is in reality not public but private." Many cases are cited in support of that doctrine. Later, in the same decision, we find the Supreme Court of Porto Rico says: "At any rate, the rule is quite well settled that in the cases under consideration the determination of the necessity of taking a particular piece or a certain amount of land rests ultimately with the courts." (Spring Valley etc. Co. vs. San Mateo, etc. Co., 64 Cal., 123.) . In the case of Board of Water Com'rs., etc. vs. Johnson (86 Conn., 571 [41 L. R. A., N. S., 1024]), the Supreme Court of Connecticut approvingly quoted the following doctrine from Lewis on Eminent Domain (3d ed.), section 599: "In all such cases the necessity of public utility of the proposed work or improvement is a judicial question. In all such cases, where the authority is to take property necessary for the purpose, the necessity of taking particular property for a particular purpose is a judicial one, upon which the owner is entitled to be heard." (Riley vs. Charleston, etc. Co., 71 S. C., 457, 489 [110 Am. St. Rep., 579]; Henderson vs. Lexington 132 Ky., 390, 403.) The taking of private property for any use which is not required by the necessities or convenience of the inhabitants of the state, is an unreasonable exercise of the right of eminent domain, and beyond the power of the legislature to delegate. (Bennett vs. Marion, 106 Iowa, 628, 633; Wilson vs. Pittsburg, etc. Co., 222 Pa. St., 541, 545; Greasy, etc. Co. vs. Ely, etc. Co., 132 Ky., 692, 697.) In the case of New Central Coal Co. vs. George's etc. Co. (37 Md., 537, 564), the Supreme Court of the State of Maryland, discussing the question before us, said: "To justify the exercise of this extreme power (eminent domain) where the legislature has left it to depend upon the necessity that may be found to exist, in order to accomplish the purpose of the incorporation, as in this case, the party claiming the right to the exercise of the power should be required to show at least a reasonable degree of necessity for its exercise. Any rule less strict than this,

with the large and almost indiscriminate delegation of the right to corporations, would likely lead to oppression and the sacrifice of private right to corporate power." In the case of Dewey vs. Chicago, etc. Co. (184 Ill., 426, 433), the court said: "Its right to condemn property is not a general power of condemnation, but is limited to cases where a necessity for resort to private property is shown to exist. Such necessity must appear upon the face of the petition to condemn. If the necessary is denied the burden is upon the company (municipality) to establish it." (Highland, etc. Co. vs. Strickley, 116 Fed., 852, 856; Kiney vs. Citizens' Water & Light Co., 173 Ind., 252, 257 ; Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544 [137 Am. St. Rep. 338].) It is true that naby decisions may be found asserting that what is a public use is a legislative question, and many other decisions declaring with equal emphasis that it is a judicial question. But, as long as there is a constitutional or statutory provision denying the right to take land for any use other than a public use, it occurs to us that the question whether any particular use is a public one or not is ultimately, at least, a judicial question. The legislative may, it is true, in effect declare certain uses to be public, and, under the operation of the wellknown rule that a statute will not be declared to be unconstitutional except in a case free, or comparatively free, from doubt, the courts will certainly sustain the action of the legislature unless it appears that the particular use is clearly not of a public nature. The decisions must be understood with this limitation; for, certainly, no court of last resort will be willing to declare that any and every purpose which the legislative might happen to designate as a public use shall be conclusively held to be so, irrespective of the purpose in question and of its manifestly private character Blackstone in his Commentaries on the English Law remarks that, so great is the regard of the law for private property that it will not authorize the least violation of it, even for the public good, unless there exists a very great necessity therefor. In the case of Wilkinson vs. Leland (2 Pet. [U.S.], 657), the Supreme Court of the United States said: "That government can scarcely be deemed free where the rights of property are left solely defendant on the legislative body, without restraint. The fundamental maxims of free government seem to require that the rights of personal liberty and private property should be held sacred. At least no court of justice in this country would be warranted in assuming that the power to violate and disregard them a power so repugnant to the common principles of justice and civil liberty lurked in any general grant of legislature authority, or ought to be implied from any general expression of the people. The people ought no to be presumed to part with rights so vital to their security and well-being without very strong and direct expression of such intention." (Lewis on Eminent

Domain, sec. 603; Lecoul vs. Police Jury 20 La. Ann., 308; Jefferson vs. Jazem, 7 La. Ann., 182.) Blackstone, in his Commentaries on the English Law said that the right to own and possess land a place to live separate and apart from others to retain it as a home for the family in a way not to be molested by others is one of the most sacred rights that men are heirs to. That right has been written into the organic law of every civilized nation. The Acts of Congress of July 1, 1902, and of August 29, 1916, which provide that "no law shall be enacted in the Philippine Islands which shall deprive any person of his property without due process of law," are but a restatement of the time-honored protection of the absolute right of the individual to his property. Neither did said Acts of Congress add anything to the law already existing in the Philippine Islands. The Spaniard fully recognized the principle and adequately protected the inhabitants of the Philippine Islands against the encroachment upon the private property of the individual. Article 349 of the Civil Code provides that: "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 (proven public utility and payment) has been complied with, it shall be the duty of the courts to protect the owner of such property in its possession or to restore its possession to him , as the case may be." The exercise of the right of eminent domain, whether directly by the State, or by its authorized agents, is necessarily in derogation of private rights, and the rule in that case is that the authority must be strictly construed. No species of property is held by individuals with greater tenacity, and none is guarded by the constitution and laws more sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right, and, for greater public purposes, appropriates the land of an individual without his consent, the plain meaning of the law should not be enlarged by doubtly interpretation. (Bensely vs. Mountainlake Water Co., 13 Cal., 306 and cases cited [73 Am. Dec., 576].) The statutory power of taking property from the owner without his consent is one of the most delicate exercise of government authority. It is to be watched with jealous scrutiny. Important as the power may be to the government, the inviolable sanctity which all free constitutions attach to the right of property of the citizens, constrains the strict observance of the substantial provisions of the law which are prescribed as modes of the exercise of the power, and to protect it from abuse. Not only must the authority of municipal corporations to take property be expressly conferred and the use for which it is taken specified, but the power, with all constitutional limitation and directions for its exercise, must be

strictly pursued. (Dillon on Municipal Corporations [5th Ed.], sec. 1040, and cases cited; Tenorio vs. Manila Railroad Co., 22 Phil., 411.) It can scarcely be contended that a municipality would be permitted to take property for some public use unless some public necessity existed therefor. The right to take private property for public use originates in the necessity, and the taking must be limited by such necessity. The appellant contends that inasmuch as the legislature has given it general authority to take private property for public use, that the legislature has, therefore, settled the question of the necessity in every case and that the courts are closed to the owners of the property upon that question. Can it be imagined, when the legislature adopted section 2429 of Act No. 2711, that it thereby declared that it was necessary to appropriate the property of Juan de la Cruz, whose property, perhaps, was not within the city limits at the time the law was adopted? The legislature, then, not having declared the necessity, can it be contemplated that it intended that a municipality should be the sole judge of the necessity in every case, and that the courts, in the face of the provision that "if upon trial they shall find that a right exists," cannot in that trial inquire into and hear proof upon the necessity for the appropriation in a particular case? The Charter of the city of Manila authorizes the taking of private property for public use. Suppose the owner of the property denies and successfully proves that the taking of his property serves no public use: Would the courts not be justified in inquiring into that question and in finally denying the petition if no public purpose was proved? Can it be denied that the courts have a right to inquire into that question? If the courts can ask questions and decide, upon an issue properly presented, whether the use is public or not, is not that tantamount to permitting the courts to inquire into the necessity of the appropriation? If there is no public use, then there is no necessity, and if there is no necessity, it is difficult to understand how a public use can necessarily exist. If the courts can inquire into the question whether a public use exists or not, then it seems that it must follow that they can examine into the question of the necessity. The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity must be of a public character. The ascertainment of the necessity must precede or accompany, and not follow, the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind., 511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72 Ohio St., 368.) The general power to exercise the right of eminent domain must not be confused with the right to exercise it in a particular case. The power of the legislature to confer, upon municipal corporations and other entities within the State, general authority to exercise the right of eminent domain cannot be

questioned by the courts, but that general authority of municipalities or entities must not be confused with the right to exercise it in particular instances. The moment the municipal corporation or entity attempts to exercise the authority conferred, it must comply with the conditions accompanying the authority. The necessity for conferring the authority upon a municipal corporation to exercise the right of eminent domain is admittedly within the power of the legislature. But whether or not the municipal corporation or entity is exercising the right in a particular case under the conditions imposed by the general authority, is a question which the courts have the right to inquire into. The conflict in the authorities upon the question whether the necessity for the exercise of the right of eminent domain is purely legislative and not judicial, arises generally in the wisdom and propriety of the legislature in authorizing the exercise of the right of eminent domain instead of in the question of the right to exercise it in a particular case. (Creston Waterworks Co. vs. McGrath, 89 Iowa, 502.) By the weight of authorities, the courts have the power of restricting the exercise of eminent domain to the actual reasonable necessities of the case and for the purposes designated by the law. (Fairchild vs. City of St. Paul. 48 Minn., 540.) And, moreover, the record does not show conclusively that the plaintiff has definitely decided that their exists a necessity for the appropriation of the particular land described in the complaint. Exhibits 4, 5, 7, and E clearly indicate that the municipal board believed at one time that other land might be used for the proposed improvement, thereby avoiding the necessity of distributing the quiet resting place of the dead. Aside from insisting that there exists no necessity for the alleged improvements, the defendants further contend that the street in question should not be opened through the cemetery. One of the defendants alleges that said cemetery is public property. If that allegations is true, then, of course, the city of Manila cannot appropriate it for public use. The city of Manila can only expropriate private property. It is a well known fact that cemeteries may be public or private. The former is a cemetery used by the general community, or neighborhood, or church, while the latter is used only by a family, or a small portion of the community or neighborhood. (11 C. J., 50.) Where a cemetery is open to public, it is a public use and no part of the ground can be taken for other public uses under a general authority. And this

immunity extends to the unimproved and unoccupied parts which are held in good faith for future use. (Lewis on Eminent Domain, sec. 434, and cases cited.) The cemetery in question seems to have been established under governmental authority. The Spanish Governor-General, in an order creating the same, used the following language: The cemetery and general hospital for indigent Chinese having been founded and maintained by the spontaneous and fraternal contribution of their protector, merchants and industrials, benefactors of mankind, in consideration of their services to the Government of the Islands its internal administration, government and regime must necessarily be adjusted to the taste and traditional practices of those born and educated in China in order that the sentiments which animated the founders may be perpetually effectuated. It is alleged, and not denied, that the cemetery in question may be used by the general community of Chinese, which fact, in the general acceptation of the definition of a public cemetery, would make the cemetery in question public property. If that is true, then, of course, the petition of the plaintiff must be denied, for the reason that the city of Manila has no authority or right under the law to expropriate public property. But, whether or not the cemetery is public or private property, its appropriation for the uses of a public street, especially during the lifetime of those specially interested in its maintenance as a cemetery, should be a question of great concern, and its appropriation should not be made for such purposes until it is fully established that the greatest necessity exists therefor. While we do not contend that the dead must not give place to the living, and while it is a matter of public knowledge that in the process of time sepulchres may become the seat of cities and cemeteries traversed by streets and daily trod by the feet of millions of men, yet, nevertheless such sacrifices and such uses of the places of the dead should not be made unless and until it is fully established that there exists an eminent necessity therefor. While cemeteries and sepulchres and the places of the burial of the dead are still within the memory and command of the active care of the living; while they are still devoted to pious uses and sacred regard, it is difficult to believe that even the legislature would adopt a law expressly providing that such places, under such circumstances, should be violated. In such an appropriation, what, we may ask, would be the measure of damages at law, for the wounded sensibilities of the living, in having the graves

of kindred and loved ones blotted out and desecrated by a common highway or street for public travel? The impossibility of measuring the damage and inadequacy of a remedy at law is too apparent to admit of argument. To disturb the mortal remains of those endeared to us in life sometimes becomes the sad duty of the living; but, except in cases of necessity, or for laudable purposes, the sanctity of the grave, the last resting place of our friends, should be maintained, and the preventative aid of the courts should be invoked for that object. (Railroad Company vs. Cemetery Co., 116 Tenn., 400; Evergreen Cemetery Associationvs. The City of New Haven, 43 Conn., 234; Anderson vs. Acheson, 132 Iowa, 744; Beatty vs. Kurtz, 2 Peters, 566.) In the present case, even granting that a necessity exists for the opening of the street in question, the record contains no proof of the necessity of opening the same through the cemetery. The record shows that adjoining and adjacent lands have been offered to the city free of charge, which will answer every purpose of the plaintiff. For all of the foregoing, we are fully persuaded that the judgment of the lower court should be and is hereby affirmed, with costs against the appellant. So ordered. Arellano, C.J., Torres, Araullo and Avancea, JJ., concur.

Separate Opinions

MALCOLM, J., concurring: The Government of the Philippine Islands is authorized by the Philippine Bill to acquire real estate for public use by the exercise of the right of eminent domain. (Act of Congress of July 1, 1902, sec. 63.) A portion of this power has been delegated by the Philippine Legislature to the city of Manila, which is permitted to "condemn private property for public use." (Administrative Code of 1917, sec. 2429.) The Code of Civil Procedure, in prescribing how the right of eminent domain may be exercised, also limits the condemnation to "private property for public use." (Sec. 241.) As under the facts actually presented, there

can be no question that a public street constitutes a public use, the only remaining question is whether or not the Chinese Cemetery and the other property here sought to be taken by the exercise of the right of eminent domain is "private property." As narrowing our inquiry still further, let it be noted that cemeteries are of two classes, public and private. A public cemetery is one used by the general community, or neighborhood, or church; while a private cemetery is one used only by a family, or small portion of a community. (Lay vs. State, 12 Ind. App., 362; Cemetery Associationvs. Meninger [1875], 14 Kan., 312.) Our specific question, then, is, whether the Chinese Cemetery in the city of Manila is a public, or a private graveyard. If it be found to be the former, it is not subject to condemnation by the city of Manila; if it be found to be the latter, it is subject to condemnation. The Chinese Cemetery of Manila was established during the Spanish administration in the Philippines by public spirited Chinese. The order of the Governor-General giving governmental recognition to the cemetery reads as follows: "The cemetery and general hospital for indigent Chinese having been founded and maintained by the spontaneous and fraternal contribution of their protectors, merchants and industrials, benefactors of mankind, in consideration of their services to the Government of the Islands, its internal administration, government and regime, must necessarily be adjusted to the taste and traditional practices of those born and educated in China in order that the sentiments which animated the founders may be perpetually effectuated." Sometimes after the inauguration of the new regime in the Philippines, a corporation was organized to control the cemetery, and a Torrens title for the lands in question was obtained. From the time of its creation until the present the cemetery has been used by the Chinese community for the burial of their dead. It is said that not less than four hundred graves, many of them with handsome monuments, would be destroyed by the proposed street. This desecration is attempted as to the las t resting places of the dead of a people who, because of their peculiar and ingrained ancestral workship, retain more than the usual reverence for the departed. These facts lead us straight to the conclusion that the Chinese Cemetery is not used by a family or a small portion of a community but by a particular race long existing in the country and of considerable numbers. The case, then, is one of where the city of Manila, under a general authority permitting it to condemn private property for public use, is attempting to convert a property already dedicated to a public use to an entirely different public use; and this, not directly pursuant to legislative authority, but primarily through the sole advice of the consulting architect.

Two well considered decisions coming from the American state courts on almost identical facts are worthy of our consideration. The first is the case of The Evergreen Cemetery Association vs. The City of New Haven ([1875], 43 Conn., 234), of cited by other courts. Here the City of New Haven, Connecticut, under the general power conferred upon it to lay out, construct, and maintain all necessary highways within its limits, proceeded to widen and straighten one of its streets and in so doing took a small piece of land belonging to the Evergreen Cemetery Association. This association was incorporated under the general statute. The city had no special power to take any part of the cemetery for such purposes. It was found that the land taken was needed for the purposes of the cemetery and was not needed for the purpose of widening and straightening the avenue. The court said that it is unquestionable that the Legislature has the power to authorize the taking of land already applied to one public use and devote it to another. When the power is granted to municipal or private corporations in express words, no question can arise. But, it was added, "The same land cannot properly be used for burial lots and for a public highway at the same time. . . . Land therefore applied to one use should not be taken for the other except in cases on necessity. . . . There is no difficulty in effecting the desired improvement by taking land on the other side of the street. . . . The idea of running a public street, regardless of graves, monuments, and the feelings of the living, through one of our public cemeteries, would be shocking to the moral sense of the community, and would not be tolerated except upon the direst necessity." It was then held that land already devoted to a public use cannot be taken by the public for another use which is inconsistent with the first, without special authority from the Legislature, or authority granted by necessary and reasonable implication. The second decision is that of Memphis State Line Railroad Company vs. Forest Hill Cemetery Co. ([1906], 116 Tenn., 400.) Here the purpose of the proceedings was to condemn a right of way for the railway company through the Forest Hill Cemetery. The railroad proposed to run through the southeast corner of the cemetery where no bodies were interred. The cemetery had been in use for about eight years, and during this period thirteen hundred bodies had been buried therein. The cemetery was under the control of a corporation which, by its character, held itself out as being willing to sell lots to any one who applies therefor and pays the price demanded, except to members of the Negro race.
1awph!l.net

It was found that there were two other routes along which the railroad might be located without touching the cemetery, while the present line might be pursued without interfering with Forest Hill Cemetery by making a curve around it. In the court below the railroad was granted the right of condemnation through the cemetery and damages were assessed. On appeal, the certiorari applied for

was granted, and the supersedeas awarded. The court, in effect, found that the land of the Cemetery Company was devoted to a public purpose, and that under the general language of the Tennessee statute of eminent domain it could not be taken for another public purpose. The court said that in process of time the sepulchres of the dead "are made the seats of cities, and are traversed by streets, and daily trodden by the feet of man. This is inevitable in the course of ages. But while these places are yet within the memory and under the active care of the living, while they are still devoted to pious uses, they are sacred, and we cannot suppose that the legislature intended that they should be violated, in the absence of special provisions upon the subject authorizing such invasion, and indicating a method for the disinterment, removal, and reinterment of the bodies buried, and directing how the expense thereof shall be borne." Two members of the court, delivering a separate concurring opinion, concluded with this significant and eloquent sentence: "The wheels of commerce must stop at the grave." For the foregoing reasons, and for others which are stated in the principal decision, I am of the opinion that the judgment of the lower court should be affirmed. STREET, J., dissenting: It may be admitted that, upon the evidence before us, the projected condemnation of the Chinese Cemetery is unnecessary and perhaps illconsidered. Nevertheless I concur with Justice Moir in the view that the authorities of the city of Manila are the proper judges of the propriety of the condemnation and that this Court should have nothing to do with the question of the necessity of the taking. MOIR, J., dissenting: I dissent from the majority opinion in this case, which has not yet been written, and because of the importance of the question involved, present my dissent for the record. This is an action by the city of Manila for the expropriation of land for an extension of Rizal Avenue north. The petition for condemnation was opposed by the "Comunidad de Chinos de Manila" and Ildefonso Tambunting and various other who obtained permission of the trial court to intervene in the case. All of the defendants allege in their opposition that the proposed extension of Rizal Avenue cuts through a part of the Chinese Cemetery, North of Manila, and necessitates the destruction of many monuments and the removal of many graves.

The Court of First Instance of Manila, Honorable S. del Rosario, judge after hearing the parties, decided that there was no need for constructing the street as and where proposed by the city, and dismissed the petition. The plaintiff appealed and sets up the following errors: 1. The court erred in deciding that the determination of the necessity and convenience of the expropriation of the lands of the defendants lies with the court and not with the Municipal Board of the city of Manila. 2. The court erred in permitting the presentation of proofs over the objection and exception of the plaintiff tending to demonstrate the lack of necessity of the projected street and the need of the lands in question. 3. The court erred in declaring that the plaintiff had no right to expropriate the lands in question. 4. The court erred in dismissing the complaint. The right of the plaintiff to expropriate property for public use cannot be denied. The "right of eminent domain is inherent in all sovereignties and therefore would exist without any constitutional recognition . . . . The right of eminent domain antedates constitutions . . . . The right can only be denied or restricted by fundamental law and is right inherent in society." (15 Cyc., pp. 557-8.) . This general right was recognized in the Philippine Code of Civil Procedure effective October 1st, 1901, which prescribed the manner of exercising the right. (Sections 241 et seq.) It was further recognized in the Organic Act of July 1st, 1902, which provides in section 74 "that the Government of the Philippine Islands may grant franchises . . . including the authority to exercise the right of eminent domain for the construction and operation of works of public utility and service, and may authorize said works to be constructed and maintained over and across the public property of the United States including . . . reservations." This provisions is repeated in the Jones Law of August, 1916. The legislature of the Islands conferred the right on the city of Manila. (Section 2429, Administrative Code of 1917; section 2402, Administrative Code of 1916.) Clearly having the right of expropriation, the city of Manila selected the line of its street and asked the court by proper order to place the plaintiff in

possession of the land described in the complaint, and to appoint Commissioners to inspect the property, appraise the value, and assess the damages. Instead of doing so, the court entered upon the question of the right of the city to take the property and the necessity for the taking. The court says: The controversy relates to whether or not the Chinese Cemetery, where a great majority of this race is buried and other persons belonging to other nationalities have been formerly inhumed, is private orpublic; whether or not said cemetery, in case it is public, would be susceptible to expropriation for the purpose of public improvements proposed by the city of Manila; whether or not the latter is justified of the necessity and expediency of similar expropriation before its right to the same would be upheld by the courts of justice; and whether or not the appreciation of said necessity pertains to the legislative or the judicial department before which the expropriation proceedings have been brought. Relative to the first point, it is not necessary for the court to pass upon its consideration, in view of the conclusion it has arrived at the appreciation of the other points connected with each other. From the testimony of two reputable engineers produced by some of the defendants, it appears that the land chosen by the plaintiff for the extension of Rizal Avenue to the municipality of Caloocan is not the best or the less expensive, although upon it there may be constructed a straight road, without curves or winding; but that in order to construct said road upon said land, the city of Manila would have to remove and transfer to other places about four hundred graves and monuments, make some grubbings, undergo some leveling and build some bridges the works thereon, together with the construction of the road and the value of the lands expropriated, would mean an expenditure which will not be less than P180,000. Beside that considerable amount, the road would have a declivity of 3 per cent which, in order to cover a distance of one kilometer, would require an energy equivalent to that which would be expanded in covering a distance of two and one-half kilometers upon a level road. On the other hand, if the road would be constructed with the deviation proposed by Ildefonso Tambunting, one of the defendants, who even offered to donate gratuitously to the city of Manila part of the land upon which said road will have to be constructed, the plaintiff entity would

be able to save more than hundreds of thousand of pesos, which can be invested in other improvements of greater pressure and necessity for the benefit of the taxpayers; and it will not have to employ more time and incur greater expenditures in the removal and transfer of the remains buried in the land of the Chinese Community and of Sr. Tambunting, although with the insignificant disadvantage that the road would be little longer by a still more insignificant extension of 426 meters and 55 centimeters less than one-half kilometer, according to the plan included in the records; but it would offer a better panorama to those who would use it, and who would not have to traverse in their necessary or pleasure-making trips or walks any cemetery which, on account of its nature, always deserves the respect of the travellers. It should be observed that the proposed straight road over the cemetery, which the city of Manila is proposing to expropriate, does not lead to any commercial, industrial, or agricultural center, and if with said road it is endeavored to benefit some community or created interest, the same object may be obtained by the proposed deviation of the road by the defendants. The road traced by the plaintiffs has the disadvantage that the lands on both sides thereof would not serve for residential purposes, for the reason that no one has the pleasure to construct buildings upon cemeteries, unless it be in very overcrowded cities, so exhausted of land that every inch thereof represents a dwelling house. And it is against the ruling, that it lies with the court to determine the necessity of the proposed street and not with the municipal board, that the appellant directs its first assignment of error. It is a right of the city government to determine whether or not it will construct streets and where, and the court's sole duty was to see that the value of the property was paid the owners after proper legal proceedings ascertaining the value. The law gives the city the right to take private property for public use. It is assumed it is unnecessary to argue that a public road is a public use. But it is argued that plaintiff must show that it is necessary to take this land for a public improvement. The law does not so read, and it is believed that the great weight of authority, including the United States Supreme Court, is against the contention. The question of necessity is distinct from the question of public use, and former question is exclusively for the legislature, except that if the constitution or statute authorizes the taking of property only in cases of

necessity, then the necessity becomes a judicial question. (McQuillen Municipal Corporations, Vol. IV, pp. 3090-3091.) In the absence of some constitutional or statutory provision to the contrary, the necessity and expediency of exercising the right of eminent domain are questions essentially political and not judicial in their character. The determination of those questions belongs to the sovereign power; the legislative determination is final and conclusive, and the courts have no power to review it. It rests with the legislature not only to determine when the power of eminent domain may be exercised, but also the character, quality, method, and extent of such exercise. And this power is unqualified, other than by the necessity of providing that compensation shall be made. Nevertheless, under the express provisions of the constitution of some states the question of necessity is made a judicial one, to be determined by the courts and not by the legislature. While the legislature may itself exercise the right of determining the necessity for the exercise of the power of eminent domain, it may, unless prohibited by the constitution, delegate this power to public officers or to private corporations established to carry on enterprises in which the public are interested, and their determination that a necessity for the exercise of the power exists is conclusive. There is no restraint upon the power except that requiring compensation to be made. And when the power has been so delegated it is a subject of legislative discretion to determine what prudential regulations shall be established to secure a discreet and judicious exercise of the authority. It has been held that in the absence of any statutory provision submitting the matter to a court or jury the decision of the question of necessity lies with the body of individuals to whom the state has delegated the authority to take, and the legislature may be express provision confer this power on a corporation to whom the power of eminent domain is delegated unless prohibited by the constitution. It is of course competent for the legislature to declare that the question shall be a judicial one, in which case the court and not the corporation determines the question of necessity. (15 Cyc., pp. 629-632.) To the same effect is Lewis on Eminen Domain (3d Edition, section 597). I quote from the notes to Vol. 5, Encyclopedia of United States Supreme Court Reports, p. 762, as follows: Neither can it be said that there is any fundamental right secured by the constitution of the United States to have the questions of compensation and necessity both passed upon by one and the same jury. In many states

the question of necessity is never submitted to the jury which passes upon the question of compensation. It is either settled affirmatively by the legislature, or left to the judgment of the corporation invested with the right to take property by condemnation. The question of necessity is not one of a judicial character, but rather one for determination by the lawmaking branch of the government. (Boom Co. vs.Patterson, 98 U.S., 403, 406 [25 L. ed., 206]; United States vs. Jones, 109 U.S., 513 [27 L. ed., 1015]; Backus vs. Fort Street Union Depot Co., 169 U.S., 557, 568 [42 L. ed., 853].) Speaking generally, it is for the state primarily and exclusively, to declare for what local public purposes private property, within its limits may be taken upon compensation to the owner, as well as to prescribe a mode in which it may be condemned and taken. (Madisonville Tract. Co. vs. St. Bernard Min. Co., 196 U.S., 239, 252 [49 L. ed., 462].) Courts have no power to control the legislative authority in the exercise of their right to determine when it is necessary or expedient to condemn a specific piece of property for public purposes. (Adirondack R. Co. vs. New York States, 176 U.S., 335 [44 L. ed., 492].) 10 R. C. L. (p. 183), states the law as follows: 158. Necessity for taking ordinarily not judicial question. The legislature, in providing for the exercise the power of eminent domain, may directly determine the necessity for appropriating private property for a particular improvement or public use, and it may select the exact location of the improvement. In such a case, it is well settled that the utility of the proposed improvement, the extent of the public necessity for its construction, the expediency of constructing it, the suitableness of the location selected and the consequent necessity of taking the land selected for its site, are all questions exclusively for the legislature to determine, and the courts have no power to interfere, or to substitute their own views for theseof the representatives of the people. Similarly, when the legislature has delegated the power of eminent domain to municipal or public service corporation or other tribunals or bodies, and has given them discretion as to when the power is to be called into exercise and to what extent, the court will not inquire into the necessity or propriety of the taking. The United States Supreme Court recently said: The uses to which this land are to be put are undeniably public uses. When that is the case the propriety or expediency of the appropriation

cannot be called in question by any other authority. (Cinnati vs.S. & N. R. R. Co., 223 U.S., 390, quoting U.S. vs. Jones, 109, U.S., 519.) And in Sears vs. City of Akron (246 U.S., 242), decided March 4th, 1918, it said: Plaintiff contends that the ordinance is void because the general statute which authorized the appropriation violates both Article 1, paragraph 10, of the Federal Constitution, and the Fourteenth Amendment, in that it authorizes the municipality to determine the necessity for the taking of private propertywithout the owners having an opportunity to be hear as to such necessity; that in fact no necessity existed for any taking which would interfere with the company's project; since the city might have taken water from the Little Cuyahoga or the Tuscarawas rivers; and furthermore, that it has taken ten times as much water as it can legitimately use. It is well settled that while the question whether the purpose of a taking is a public one is judicial (Hairston vs. Danville & W. R. Co., 208 U.S. 598 [52 L. ed., 637; 28 Sup. Ct. Rep., 331; 13 Ann. Cas., 1008]), the necessity and the proper extent of a taking is a legislative question. (Shoemaker vs.United States, 147 U.S., 282, 298 [57 L. ed., 170, 184; 13 Supt. Ct. Rep., 361]; United States vs. Gettysburg Electric R. Co., 160 U.S. 668, 685 [40 L. ed., 576, 582; 16 Sup. Ct. Rep., 427]; United States vs. Chandler-Dunbar Water Power Co., 229 U.S., 53, 65 [57 L. ed., 1063, 1076; 33 Sup. Ct. Rep., 667].) I think the case should be decided in accordance with foregoing citations, but one other point has been argued so extensively that it ought to be considered. It is contended for the defense that this Chinese Cemetery is a public cemetery and that it cannot therefore be taken for public use. In its answer the "Comunidad de Chinos de Manila" says it is "a corporation organized and existing under and by virtue of the laws of the Philippine Islands," and that it owns the land which plaintiff seeks to acquire. The facts that it is private corporation owning land would seem of necessity to make the land it owns private land. The fact that it belongs to the Chinese community deprives it of any public character. But admitting that it is a public cemetery, although limited in its use to the Chinese Community of the city of Manila, can it not be taken for public use? Must we let the reverence we feel for the dead and the sanctity of their final restingplace obstruct the progress of the living? It will be instructive to inquire what other jurisdictions have held on that point.

On the Application of Board of Street Openings of New York City to acquire St. Johns Cemetery (133 N.Y., 329) the court of appeal said: . . . The board instituted this proceeding under the act to acquire for park purposes the title to land below One Hundred and Fifty-fifth street known as St. John's cemetery which belonged to a religious corporation in the city of New York, commonly called Trinity Church. It was established as a cemetery as early as 1801, and used for that purpose until 1839, during which time about ten thousand human bodies had been buried therein. In 1839 an ordinance was passed by the city of New York forbidding interments south of Eighty-sixth street, and since that time no interments have been made in the cemetery, but Trinity Church has preserved and kept it in order and prevented any disturbance thereof. It is contended on behalf of Trinity Church that under the general authority given by statute of 1887, this land which had been devoted to cemetery purposes could not be taken for a park. The authority conferred upon the board by the act is broad and general. It is authorized to take for park purposes any land south of One Hundred and Fifty-fifth street. . . . . The fact that lands have previously been devoted to cemetery purposes does not place them beyond the reach of the power of eminent domain. That is an absolute transcendent power belonging to the sovereign which can be exercised for the public welfare whenever the sovereign authority shall determine that a necessity for its exercise exists. By its existence the homes and the dwellings of the living, and the restingplaces of the dead may be alike condemned. It seems always to have been recognized in the laws of this state, that under the general laws streets and highways could be laid out through cemeteries, in the absence of special limitation or prohibition. . . . In Re Opening of Twenty-second Street (102 Penn. State Reports, 108) the Supreme Court of the State said: This was an action for the opening of a street through a cemetery in the City of Philadelphia. It was contended for the United American Mechanics and United Daughters of America Cemetery Association that by an act of the legislature of the State approved March 20th, 1849, they were forever exempt from the taking of any their property for streets, roads or alleys and this Act was formally accepted by the Cemetery Company on April 9th, 1849, and there was, therefore, a contract between the Cemetery Company and the State of Pennsylvania, which would be violated by the

taking of any part of their property for street purposes. It was further contended that there were 11,000 persons buried in the cemetery. The court held that property and contracts of all kinds must yield to the demand of the sovereign and that under the power of eminent domain all properties could be taken, and that if there was a contract between the State of Pennsylvania and the Cemetery Association, the contract itself could be taken for public use, and ordered the opening of the street through the cemetery. In Vol. 5, Encyclopedia of United States Supreme Court Reports (p. 759), it is said: Although it has been held, that where a state has delegated the power of eminent domain to a person or corporation and where by its exercise lands have been subject to a public use, they cannot be applied to another public use without specific authority expressed or implied to that effect, yet, the general rule seems to be that the fact that property is already devoted to a public use, does not exempt it from being appropriated under the right of eminent domain but it may be so taken for a use which is clearly superior or paramount to the one to which it is already devoted. (Citing many United States Supreme Court decisions.) A few cases have been cited where the courts refused to allow the opening of streets through cemeteries, but in my opinion they are not as well considered as the cases and authorities relied upon herein. The holding of this court in this case reverses well settled principles of law of long standing and almost universal acceptance. The other assignments of error need not be considered as they are involved in the foregoing. The decision should be reversed and the record returned to the Court of First Instance with instructions to proceed with the case in accordance with this decision.

G.R. No. L-18841

January 27, 1969

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, defendant-appellant. Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and Solicitor Camilo D. Quiason for plaintiff-appellant. Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellant. REYES, J.B.L., J.: Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the dismissal, after hearing, by the Court of First Instance of Manila, in its Civil Case No. 35805, of their respective complaint and counterclaims, but making permanent a preliminary mandatory injunction theretofore issued against the defendant on the interconnection of telephone facilities owned and operated by said parties. The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers through its branches and instrumentalities, one of which is the Bureau of Telecommunications. That office was created on 1 July 1947, under Executive Order No. 94, with the following powers and duties, in addition to certain powers and duties formerly vested in the Director of Posts:
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SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties: (a) To operate and maintain existing wire-telegraph and radio-telegraph offices, stations, and facilities, and those to be established to restore the pre-war telecommunication service under the Bureau of Posts, as well as such additional offices or stations as may hereafter be established to provide telecommunication service in places requiring such service; (b) To investigate, consolidate, negotiate for, operate and maintain wiretelephone or radio telephone communication service throughout the Philippines by utilizing such existing facilities in cities, towns, and provinces as may be found feasible and under such terms and conditions or arrangements with the present owners or operators thereof as may be agreed upon to the satisfaction of all concerned; (c) To prescribe, subject to approval by the Department Head, equitable rates of charges for messages handled by the system and/or for time calls and other services that may be rendered by said system;

(d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when public interest so requires, to engage in the international telecommunication service in agreement with other countries desiring to establish such service with the Republic of the Philippines; and (e) To abide by all existing rules and regulations prescribed by the International Telecommunication Convention relative to the accounting, disposition and exchange of messages handled in the international service, and those that may hereafter be promulgated by said convention and adhered to by the Government of the Republic of the Philippines. 1 The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service corporation holding a legislative franchise, Act 3426, as amended by Commonwealth Act 407, to install, operate and maintain a telephone system throughout the Philippines and to carry on the business of electrical transmission of messages within the Philippines and between the Philippines and the telephone systems of other countries. 2The RCA Communications, Inc., (which is not a party to the present case but has contractual relations with the parties) is an American corporation authorized to transact business in the Philippines and is the grantee, by assignment, of a legislative franchise to operate a domestic station for the reception and transmission of long distance wireless messages (Act 2178) and to operate broadcasting and radio-telephone and radio-telegraphic communications services (Act 3180). 3 Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an agreement whereby telephone messages, coming from the United States and received by RCA's domestic station, could automatically be transferred to the lines of PLDT; and vice-versa, for calls collected by the PLDT for transmission from the Philippines to the United States. The contracting parties agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was amended in 1941 to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis. The arrangement was later extended to radio-telephone messages to and from European and Asiatic countries. Their contract contained a stipulation that either party could terminate it on a 24-month notice to the other. 4 On 2 February 1956, PLDT gave notice to RCA to terminate their contract on 2 February 1958. 5 Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the PLDT to enable government offices to call private parties. 6 Its application for the use of these trunk lines was in the usual form of applications for telephone service, containing a statement, above

the signature of the applicant, that the latter will abide by the rules and regulations of the PLDT which are on file with the Public Service Commission. 7 One of the many rules prohibits the public use of the service furnished the telephone subscriber for his private use. 8 The Bureau has extended its services to the general public since 1948, 9 using the same trunk lines owned by, and rented from, the PLDT, and prescribing its (the Bureau's) own schedule of rates. 10 Through these trunk lines, a Government Telephone System (GTS) subscriber could make a call to a PLDT subscriber in the same way that the latter could make a call to the former. On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an agreement with RCA Communications, Inc., for a joint overseas telephone service whereby the Bureau would convey radio-telephone overseas calls received by RCA's station to and from local residents. 11 Actually, they inaugurated this joint operation on 2 February 1958, under a "provisional" agreement. 12 On 7 April 1958, the defendant Philippine Long Distance Telephone Company, complained to the Bureau of Telecommunications that said bureau was violating the conditions under which their Private Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented trunk lines, for the Bureau had used the trunk lines not only for the use of government offices but even to serve private persons or the general public, in competition with the business of the PLDT; and gave notice that if said violations were not stopped by midnight of 12 April 1958, the PLDT would sever the telephone connections. 13 When the PLDT received no reply, it disconnected the trunk lines being rented by the Bureau at midnight on 12 April 1958. 14 The result was the isolation of the Philippines, on telephone services, from the rest of the world, except the United States. 15 At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for telephone connection. 16 The PLDT was also maintaining 60,000 telephones and had also 20,000 pending applications. 17 Through the years, neither of them has been able to fill up the demand for telephone service. The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter into an interconnecting agreement, with the government paying (on a call basis) for all calls passing through the interconnecting facilities from the Government Telephone System to the PLDT. 18 The PLDT replied that it was willing to enter into an agreement on overseas telephone service to Europe and Asian countries provided that the Bureau would submit to the jurisdiction and regulations of the Public Service Commission and in consideration of 37 1/2% of the gross revenues. 19 In its

memorandum in lieu of oral argument in this Court dated 9 February 1964, on page 8, the defendant reduced its offer to 33 1/3 % (1/3) as its share in the overseas telephone service. The proposals were not accepted by either party. On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long Distance Telephone Company, in the Court of First Instance of Manila (Civil Case No. 35805), praying in its complaint for judgment commanding the PLDT to execute a contract with plaintiff, through the Bureau, for the use of the facilities of defendant's telephone system throughout the Philippines under such terms and conditions as the court might consider reasonable, and for a writ of preliminary injunction against the defendant company to restrain the severance of the existing telephone connections and/or restore those severed. Acting on the application of the plaintiff, and on the ground that the severance of telephone connections by the defendant company would isolate the Philippines from other countries, the court a quo, on 14 April 1958, issued an order for the defendant: (1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has disconnected between the facilities of the Government Telephone System, including its overseas telephone services, and the facilities of defendant; (2) to refrain from carrying into effect its threat to sever the existing telephone communication between the Bureau of Telecommunications and defendant, and not to make connection over its telephone system of telephone calls coming to the Philippines from foreign countries through the said Bureau's telephone facilities and the radio facilities of RCA Communications, Inc.; and (3) to accept and connect through its telephone system all such telephone calls coming to the Philippines from foreign countries until further order of this Court. On 28 April 1958, the defendant company filed its answer, with counterclaims. It denied any obligation on its part to execute a contrary of services with the Bureau of Telecommunications; contested the jurisdiction of the Court of First Instance to compel it to enter into interconnecting agreements, and averred that it was justified to disconnect the trunk lines heretofore leased to the Bureau of Telecommunications under the existing agreement because its facilities were being used in fraud of its rights. PLDT further claimed that the Bureau was engaging in commercial telephone operations in excess of authority, in competition with, and to the prejudice of, the PLDT, using defendants own telephone poles, without proper accounting of revenues.

After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an agreement with the Bureau because the parties were not in agreement; that under Executive Order 94, establishing the Bureau of Telecommunications, said Bureau was not limited to servicing government offices alone, nor was there any in the contract of lease of the trunk lines, since the PLDT knew, or ought to have known, at the time that their use by the Bureau was to be public throughout the Islands, hence the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and, in view of serious public prejudice that would result from the disconnection of the trunk lines, declared the preliminary injunction permanent, although it dismissed both the complaint and the counterclaims. Both parties appealed. Taking up first the appeal of the Republic, the latter complains of the action of the trial court in dismissing the part of its complaint seeking to compel the defendant to enter into an interconnecting contract with it, because the parties could not agree on the terms and conditions of the interconnection, and of its refusal to fix the terms and conditions therefor. We agree with the court below that parties can not be coerced to enter into a contract where no agreement is had between them as to the principal terms and conditions of the contract. Freedom to stipulate such terms and conditions is of the essence of our contractual system, and by express provision of the statute, a contract may be annulled if tainted by violence, intimidation, or undue influence (Articles 1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has apparently overlooked that while the Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in the exercise of the sovereign power of eminent domain, require the telephone company to permit interconnection of the government telephone system and that of the PLDT, as the needs of the government service may require, subject to the payment of just compensation to be determined by the court. Nominally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of to impose only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right of way. The use of the PLDT's lines and services to allow interservice connection between both telephone systems is not much different. In either case private property is subjected to a burden for public use and benefit. If, under section 6, Article XIII, of the Constitution, the State may, in the interest of national welfare, transfer utilities to public ownership upon payment of just compensation, there is no reason why the State may not require a public utility to

render services in the general interest, provided just compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would be the users of both telephone systems, so that the condemnation would be for public use. The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94, may operate and maintain wire telephone or radio telephone communications throughout the Philippines by utilizing existing facilities in cities, towns, and provinces under such terms and conditions or arrangement with present owners or operators as may be agreed upon to the satisfaction of all concerned; but there is nothing in this section that would exclude resort to condemnation proceedings where unreasonable or unjust terms and conditions are exacted, to the extent of crippling or seriously hampering the operations of said Bureau. A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio telephonic isolation of the Bureau's facilities from the outside world if the severance of interconnection were to be carried out by the PLDT, thereby preventing the Bureau of Telecommunications from properly discharging its functions, to the prejudice of the general public. Save for the prayer to compel the PLDT to enter into a contract (and the prayer is no essential part of the pleading), the averments make out a case for compulsory rendering of inter-connecting services by the telephone company upon such terms and conditions as the court may determine to be just. And since the lower court found that both parties "are practically at one that defendant (PLDT) is entitled to reasonable compensation from plaintiff for the reasonable use of the former's telephone facilities" (Decision, Record on Appeal, page 224), the lower court should have proceeded to treat the case as one of condemnation of such services independently of contract and proceeded to determine the just and reasonable compensation for the same, instead of dismissing the petition. This view we have taken of the true nature of the Republic's petition necessarily results in overruling the plea of defendant-appellant PLDT that the court of first instance had no jurisdiction to entertain the petition and that the proper forum for the action was the Public Service Commission. That body, under the law, has no authority to pass upon actions for the taking of private property under the sovereign right of eminent domain. Furthermore, while the defendant telephone company is a public utility corporation whose franchise, equipment and other properties are under the jurisdiction, supervision and control of the Public Service Commission (Sec. 13, Public Service Act), yet the plaintiff's telecommunications network is a public service owned by the Republic and operated by an instrumentality of the National Government, hence exempt, under Section 14 of the Public Service Act, from such jurisdiction, supervision and

control. The Bureau of Telecommunications was created in pursuance of a state policy reorganizing the government offices to meet the exigencies attendant upon the establishment of the free and independent Government of the Republic of the Philippines, and for the purpose of promoting simplicity, economy and efficiency in its operation (Section 1, Republic Act No. 51) and the determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville Bus Line, 290 Ill. 574; 124 N.E. 373). Defendant PLDT, as appellant, contends that the court below was in error in not holding that the Bureau of Telecommunications was not empowered to engage in commercial telephone business, and in ruling that said defendant was not justified in disconnecting the telephone trunk lines it had previously leased to the Bureau. We find that the court a quo ruled correctly in rejecting both assertions. Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly empowered the latter in its Section 79, subsection (b), to "negotiate for, operate and maintain wire telephone or radio telephone communication service throughout the Philippines", and, in subsection (c), "to prescribe, subject to approval by the Department Head, equitable rates of charges for messages handled by the system and/or for time calls and other services that may be rendered by the system". Nothing in these provisions limits the Bureau to non-commercial activities or prevents it from serving the general public. It may be that in its original prospectuses the Bureau officials had stated that the service would be limited to government offices: but such limitations could not block future expansion of the system, as authorized by the terms of the Executive Order, nor could the officials of the Bureau bind the Government not to engage in services that are authorized by law. It is a well-known rule that erroneous application and enforcement of the law by public officers do not block subsequent correct application of the statute (PLDT vs. Collector of Internal Revenue, 90 Phil. 676), and that the Government is never estopped by mistake or error on the part of its agents (Pineda vs. Court of First Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co. vs. Pineda, 98 Phil. 711, 724). The theses that the Bureau's commercial services constituted unfair competition, and that the Bureau was guilty of fraud and abuse under its contract, are, likewise, untenable.

First, the competition is merely hypothetical, the demand for telephone service being very much more than the supposed competitors can supply. As previously noted, the PLDT had 20,000 pending applications at the time, and the Bureau had another 5,000. The telephone company's inability to meet the demands for service are notorious even now. Second, the charter of the defendant expressly provides: SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to grant to any corporation, association or person other than the grantee franchise for the telephone or electrical transmission of message or signals shall not be impaired or affected by the granting of this franchise: (Act 3436) And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to the trunk lines, defendant knew or should have known that their use by the subscriber was more or less public and all embracing in nature, that is, throughout the Philippines, if not abroad" (Decision, Record on Appeal, page 216). The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had extended the use of the trunk lines to commercial purposes, continuously since 1948, implies assent by the defendant to such extended use. Since this relationship has been maintained for a long time and the public has patronized both telephone systems, and their interconnection is to the public convenience, it is too late for the defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally sever the physical connection of the trunk lines. ..., but there is high authority for the position that, when such physical connection has been voluntarily made, under a fair and workable arrangement and guaranteed by contract and the continuous line has come to be patronized and established as a great public convenience, such connection shall not in breach of the agreement be severed by one of the parties. In that case, the public is held to have such an interest in the arrangement that its rights must receive due consideration. This position finds approval in State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87 N.E. 650, and is stated in the elaborate and learned opinion of Chief Justice Myers as follows: "Such physical connection cannot be required as of right, but if such connection is voluntarily made by contract, as is here alleged to be the case, so that the public acquires an interest in its continuance, the act of the parties in making such connection is equivalent to a declaration of a purpose to waive the primary right of independence, and it imposes upon the property such a public status that it may not be disregarded"

citing Mahan v. Mich. Tel. Co., 132 Mich. 242, 93 N.W. 629, and the reasons upon which it is in part made to rest are referred to in the same opinion, as follows: "Where private property is by the consent of the owner invested with a public interest or privilege for the benefit of the public, the owner can no longer deal with it as private property only, but must hold it subject to the right of the public in the exercise of that public interest or privilege conferred for their benefit." Allnut v. Inglis (1810) 12 East, 527. The doctrine of this early case is the acknowledged law. (Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 74 S.E. 636, 638). It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did not expect that the Bureau's telephone system would expand with such rapidity as it has done; but this expansion is no ground for the discontinuance of the service agreed upon. The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles for bearing telephone wires of the Bureau of Telecommunications. Admitting that section 19 of the PLDT charter reserves to the Government the privilege without compensation of using the poles of the grantee to attach one ten-pin cross-arm, and to install, maintain and operate wires of its telegraph system thereon; Provided, however, That the Bureau of Posts shall have the right to place additional cross-arms and wires on the poles of the grantee by paying a compensation, the rate of which is to be agreed upon by the Director of Posts and the grantee; the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff, contending that what was allowed free use, under the aforequoted provision, was one ten-pin cross-arm attachment and only for plaintiff's telegraph system, not for its telephone system; that said section could not refer to the plaintiff's telephone system, because it did not have such telephone system when defendant acquired its franchise. The implication of the argument is that plaintiff has to pay for the use of defendant's poles if such use is for plaintiff's telephone system and has to pay also if it attaches more than one (1) ten-pin cross-arm for telegraphic purposes. As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph wires, nor that they cause more damage than the wires of the telegraph system, or that the Government has attached to the poles more than one ten-pin cross-arm as permitted by the PLDT charter, we see no point in this assignment of error. So long as the burden to be borne by the PLDT poles is not increased, we see no reason why the reservation in favor of the telegraph

wires of the government should not be extended to its telephone lines, any time that the government decided to engage also in this kind of communication. In the ultimate analysis, the true objection of the PLDT to continue the link between its network and that of the Government is that the latter competes "parasitically" (sic) with its own telephone services. Considering, however, that the PLDT franchise is non-exclusive; that it is well-known that defendant PLDT is unable to adequately cope with the current demands for telephone service, as shown by the number of pending applications therefor; and that the PLDT's right to just compensation for the services rendered to the Government telephone system and its users is herein recognized and preserved, the objections of defendant-appellant are without merit. To uphold the PLDT's contention is to subordinate the needs of the general public to the right of the PLDT to derive profit from the future expansion of its services under its non-exclusive franchise. WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in so far as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long Distance Telephone Company to continue servicing the Government telephone system upon such terms, and for a compensation, that the trial court may determine to be just, including the period elapsed from the filing of the original complaint or petition. And for this purpose, the records are ordered returned to the court of origin for further hearings and other proceedings not inconsistent with this opinion. No costs. Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur. G.R. No. L-12172 August 29, 1958

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. JUAN F. FAJARDO, ET AL., defendants-appellants. Assistant Solicitor General Esmeraldo Umali and Higinio V. Catalan for appellee. Prila, Pardalis and Pejo for appellants. REYES, J. B. L., J.: Appeal from the decision of the Court of First Instance of Camarines Sur convicting defendants-appellants Juan F. Fajardo and Pedro Babilonia of a violation of Ordinance No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur, for having constructed without a permit from the municipal mayor a building that destroys the view of the public plaza.

It appears that on August 15, 1950, during the incumbency of defendantappellant Juan F. Fajardo as mayor of the municipality of Baao, Camarines Sur, the municipal council passed the ordinance in question providing as follows: SECTION 1. Any person or persons who will construct or repair a building should, before constructing or repairing, obtain a written permit from the Municipal Mayor. SEC. 2. A fee of not less than P2.00 should be charged for each building permit and P1.00 for each repair permit issued. SEC. 3. PENALTY Any violation of the provisions of the above, this ordinance, shall make the violation liable to pay a fine of not less than P25 nor more than P50 or imprisonment of not less than 12 days nor more than 24 days or both, at the discretion of the court. If said building destroys the view of the Public Plaza or occupies any public property, it shall be removed at the expense of the owner of the building or house. SEC. 4. EFFECTIVITY This ordinance shall take effect on its approval. (Orig. Recs., P. 3) Four years later, after the term of appellant Fajardo as mayor had expired, he and his son in-law, appellant Babilonia, filed a written request with the incumbent municipal mayor for a permit to construct a building adjacent to their gasoline station on a parcel of land registered in Fajardo's name, located along the national highway and separated from the public plaza by a creek (Exh. D). On January 16, 1954, the request was denied, for the reason among others that the proposed building would destroy the view or beauty of the public plaza (Exh. E). On January 18, 1954, defendants reiterated their request for a building permit (Exh. 3), but again the request was turned down by the mayor. Whereupon, appellants proceeded with the construction of the building without a permit, because they needed a place of residence very badly, their former house having been destroyed by a typhoon and hitherto they had been living on leased property. On February 26, 1954, appellants were charged before and convicted by the justice of the peace court of Baao, Camarines Sur, for violation of the ordinance in question. Defendants appealed to the Court of First Instance, which affirmed the conviction, and sentenced appellants to pay a fine of P35 each and the costs, as well as to demolish the building in question because it destroys the view of the public plaza of Baao, in that "it hinders the view of travelers from the National Highway to the said public plaza." From this decision, the accused appealed to

the Court of Appeals, but the latter forwarded the records to us because the appeal attacks the constitutionality of the ordinance in question. We find that the appealed conviction can not stand. A first objection to the validity of the ordinance in question is that under it the mayor has absolute discretion to issue or deny a permit. The ordinance fails to state any policy, or to set up any standard to guide or limit the mayor's action. No purpose to be attained by requiring the permit is expressed; no conditions for its grant or refusal are enumerated. It is not merely a case of deficient standards; standards are entirely lacking. The ordinance thus confers upon the mayor arbitrary and unrestricted power to grant or deny the issuance of building permits, and it is a settled rule that such an undefined and unlimited delegation of power to allow or prevent an activity, per se lawful, is invalid (People vs. Vera, 65 Phil., 56; Primicias vs. Fugoso, 80 Phil., 71; Schloss Poster Adv. Co. vs. Rock Hill, 2 SE (2d) 392) The ordinance in question in no way controls or guides the discretion vested thereby in the respondents. It prescribes no uniform rule upon which the special permission of the city is to be granted. Thus the city is clothed with the uncontrolled power to capriciously grant the privilege to some and deny it others; to refuse the application of one landowner or lessee and to grant that of another, when for all material purposes, the two applying for precisely the same privileges under the same circumstances. The danger of such an ordinance is that it makes possible arbitrary discriminations and abuses in its execution, depending upon no conditions or qualifications whatever, other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested. Fundamental rights under our government do not depend for their existence upon such a slender and uncertain thread. Ordinances which thus invest a city council with a discretion which is purely arbitrary, and which may be exercised in the interest of a favored few, are unreasonable and invalid. The ordinance should have established a rule by which its impartial enforcement could be secured. All of the authorities cited above sustain this conclusion. As was said in City of Richmond vs. Dudley, 129 Ind. 112,28 N. E. 312, 314 13 L. R. A. 587, 28 Am. St. Rep. 180: "It seems from the foregoing authorities to be well established that municipal ordinances placing restrictions upon lawful conduct or the lawful use of property must, in order to be valid, specify the rules and conditions to be observed in such conduct or business; and must admit of the exercise of the privilege of all citizens alike who will comply with such rules and conditions; and must not admit of

the exercise, or of an opportunity for the exercise, of any arbitrary discrimination by the municipal authorities between citizens who will so comply. (Schloss Poster Adv. Co., Inc. vs. City of Rock Hill, et al., 2 SE (2d), pp. 394-395). It is contended, on the other hand, that the mayor can refuse a permit solely in case that the proposed building "destroys the view of the public plaza or occupies any public property" (as stated in its section 3); and in fact, the refusal of the Mayor of Baao to issue a building permit to the appellant was predicated on the ground that the proposed building would "destroy the view of the public plaza" by preventing its being seen from the public highway. Even thus interpreted, the ordinance is unreasonable and oppressive, in that it operates to permanently deprive appellants of the right to use their own property; hence, it oversteps the bounds of police power, and amounts to a taking of appellants property without just compensation. We do not overlook that the modern tendency is to regard the beautification of neighborhoods as conducive to the comfort and happiness of residents. But while property may be regulated in the interest of the general welfare, and in its pursuit, the State may prohibit structures offensive to the sight (Churchill and Tait vs. Rafferty, 32 Phil. 580), the State may not, under the guise of police power, permanently divest owners of the beneficial use of their property and practically confiscate them solely to preserve or assure the aesthetic appearance of the community. As the case now stands, every structure that may be erected on appellants' land, regardless of its own beauty, stands condemned under the ordinance in question, because it would interfere with the view of the public plaza from the highway. The appellants would, in effect, be constrained to let their land remain idle and unused for the obvious purpose for which it is best suited, being urban in character. To legally achieve that result, the municipality must give appellants just compensation and an opportunity to be heard. An ordinance which permanently so restricts the use of property that it can not be used for any reasonable purpose goes, it is plain, beyond regulation and must be recognized as a taking of the property. The only substantial difference, in such case, between restriction and actual taking, is that the restriction leaves the owner subject to the burden of payment of taxation, while outright confiscation would relieve him of that burden. (Arverne Bay Constr. Co. vs. Thatcher (N.Y.) 117 ALR. 1110, 1116). A regulation which substantially deprives an owner of all beneficial use of his property is confiscation and is a deprivation within the meaning of the 14th Amendment. (Sundlum vs. Zoning Bd., 145 Atl. 451; also Eatonvs. Sweeny, 177 NE 412; Taylor vs. Jacksonville, 133 So. 114).

Zoning which admittedly limits property to a use which can not reasonably be made of it cannot be said to set aside such property to a use but constitutes the taking of such property without just compensation. Use of property is an element of ownership therein. Regardless of the opinion of zealots that property may properly, by zoning, be utterly destroyed without compensation, such principle finds no support in the genius of our government nor in the principles of justice as we known them. Such a doctrine shocks the sense of justice. If it be of public benefit that property remain open and unused, then certainly the public, and not the private individuals, should bear the cost of reasonable compensation for such property under the rules of law governing the condemnation of private property for public use. (Tews vs. Woolhiser (1933) 352 I11. 212, 185 N.E. 827) (Emphasis supplied.) The validity of the ordinance in question was justified by the court below under section 2243, par. (c), of the Revised Administrative Code, as amended. This section provides: SEC. 2243. Certain legislative powers of discretionary character. The municipal council shall have authority to exercise the following discretionary powers: xxx xxx xxx

(c) To establish fire limits in populous centers, prescribe the kinds of buildings that may be constructed or repaired within them, and issue permits for the creation or repair thereof, charging a fee which shall be determined by the municipal council and which shall not be less than two pesos for each building permit and one peso for each repair permit issued. The fees collected under the provisions of this subsection shall accrue to the municipal school fund. Under the provisions of the section above quoted, however, the power of the municipal council to require the issuance of building permits rests upon its first establishing fire limits in populous parts of the town and prescribing the kinds of buildings that may be constructed or repaired within them. As there is absolutely no showing in this case that the municipal council had either established fire limits within the municipality or set standards for the kind or kinds of buildings to be constructed or repaired within them before it passed the ordinance in question, it is clear that said ordinance was not conceived and promulgated under the express authority of sec. 2243 (c) aforequoted.

We rule that the regulation in question, Municipal Ordinance No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur, was beyond the authority of said municipality to enact, and is therefore null and void. Hence, the conviction of herein appellants is reversed, and said accused are acquitted, with costs de oficio. So ordered. Paras, C. J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion, Endencia and Felix, JJ.,concur. G.R. No. L-12032 August 31, 1959

CITY OF BAGUIO, plaintiff-appelle, vs. THE NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, defendantappellant. City Attorney Sixto A. Domondom for appellee. Office of the Solicitor General Ambrosio Padilla, First Assistant Government Corporate Counsel Simeon Gopengco and Solicitor Troadio T. Quinzon, Jr. for appellant. BAUTISTA ANGELO, J.: Plaintiff, a municipal corporation, filed on April 25, 1956, in the Court of First Instance of Baguio, a complaint for declaratory relief against defendant, a public corporation created by Republic Act No. 1383, contending that said Act does not include within its preview the Baguio Workshop System; that assuming that it does, said Act is unconstitutional because it has the effect of depriving plaintiff of the ownership, control and operation of said waterworks system without compensation and without due process of law, and that it is oppressive, unreasonable and unjust to plaintiff and other cities, municipalities and municipal districts similarly situated. On My 22, 1956, defendant filed a motion to dismiss on the ground that Republic Act No. 1383 is a proper exercise of the police power of the State; that assuming that said Act contemplates an act of expropriation, it is still a constitutional exercise of the power of eliminate domain; that at any rate the Baguio Waterworks System is not a private property but "public works of public service" over which the Legislature has control; and that the provision of the said Act being clear and unambiguous, there is no necessity for construction. On June 21, 1956, the Court, acting on the motion to dismiss as well as on the answer and rejoinder filed by both parties, denied the motion and ordered

defendant to file its answer to the complaint. On July 6, 1956, defendant filed its answer reiterating and amplifying the ground already advanced in this motion to dismiss, adding thereto that the action for the declaratory relief is improper for the reason that the Baguio waterworks System has already been transferred to defendant pursuant to Republic Act No. 1383 or, if such has not been done, there has already been a breach of said Act. On August 14, 1956, the parties submitted a written stipulation of the facts and filed written memoranda. And after allowing plaintiff to file a suplementary complaint, the Court on November 5, 1956, rendered decision the dispositive part of which reads: "This Court, . . . holds that the workshop system of the City of Baguio falls filed within the category of 'private property', as contemplated by our constitution and may not expropriated without just compensation and that section 8 of republic act No. 1383 provides for the exchange of the NAWASA assets for the value of workshop system of Baguio is unconstitutional as this is not 'just compensation,'" Defendant filed a motion for reconsideration, and upon its denial. It took the present appeal. The issues posed in this appeal are: (1) plaintiff's action for declatory relief is improper because there has already been a breach by plaintiff of Republic Act No. 1383 (2) Republic Act No. 1383 does not contemplates the exercise of the power of eliminate domain but the exertion of the police power of the State; and (3) assuming arguendo that Republic Act No. 1383 involves the exercise of the power of eminent domain the same does not violate our Constitution. Before we proceed with the discussion of this issues, there is need to state some facts necessarily for their determination since the proper application of the principles of law that may be pertinent would greatly depend upon them. Plaintiff is a municipal corporation organized under its Charter with principal place of business in the City of Baguio, while defendant is in the public corporation created by Republic Act No. 1383 with provincial place of business in the City of manila. Under section 2553 of its Charter, plaintiffs is maintaining the Baguio Waterworks System under a certificates of public convenience, the same being financed by its own funds, the Baguio general fund, and funds advanced by the national Government. The assets of said system as of December 31, 1955 were reported to be P1,408.795.98. The system supplies only the City of Baguio, its inhabitants, and transient visitors, and, as provided for in accordance, it grants to the employees of the City one fifth (1/5) of cubic meter free from every one peso of their total salary per annum as part of their compensation. The employees of the national Government are not given this privilege but there is a provision plaintiff Charter which says: "in consideration of the exemption from the taxation to the extensive real state holdings of the national Government within

the limit of the City, of the expenses of the improvements which the Government of the said City is required to make a reason for the location therein of the offenses of the national Government, and of free services in connection of the said offices, there is created a permanent and continuing appropriation from the funds in the national Treasury not otherwise appropriated, equal to fifty per centum of the expenses of the Government of the City exclusive of this accounts which appear as expenses by reason of inter-department charges and charges against the national Government for services and supplies." The purposes for which defendants was created is expressed in section 1 of republic Act No. 1383, which we quote: Creation of the national Waterworks and Sewerage Authority;' its general purposes; Zone and extends of the jurisdiction comprised by it; domicile and place of business of the corporation. For purposes of consolidating and centralizing all waterworks, sewerage and drainage systems in the Philippines under one control, direction and general supervision, there is hereby created a public corporation to be known as the National workshop and Sewerage authority, which shall be organized within one month after the approval of this Act. The National Waterworks and Sewerage authority shall own and/or have jurisdiction, supervision and control over all territory now embraced by the Metropolitan Water Districts as well as all areas now served by existing government-owned waterworks in the boundaries of cities, municipalities and municipality districts in the Philippines including those served by the waterworks and wells and drills sections of the national Waterworks and Sewerage authority, any from time to time extends its territory by the admission of or the inclusion of any municipal or municipal districts in the Philippines. The jurisdiction of the national waterworks and Sewerage Authority shall extend to the construction, maintenance, operation and control of nonsupporting and/or non-revenue producing water systems and sanitary works, whether undertaken at the expense of the Authority or through subsidy of the national Government as provided in Section 10 of this act. And to accomplish the above purpose, the following was provided in section 8 of the same act: Dissolution of the Metropolitan Water District; transfer to the Authority of its records, assets and liabilities; transfer to the Authority of entities, waterworks and sewerage systems in the cities, municipalities, municipal

district and other government waterworks and sewerage systems. The present Metropolitan Water District created Under Act Number Two Thousand eight hundred thirty-two, as amended, is hereby dissolved, and its records, assets and liabilities are transferred to the authority. All existing government owned waterworks and sewerage systems are transferred to the National waterworks and Sewerage Authority, and in turn to pledge such assets as security for the payment of the waterworks and sewerage bonded debt. The net book value of the properties and assets of the Metropolitan Water District and of government-owned waterworks and sewerage systems in cities, municipalities, or municipal districts, and other government-owned waterworks and sewerage systems shall be received by the Authority in payment for an equal value of the assets of the National Waterworks and sewerage Authority. The references made to the Metropolitan Water District or to any existing government-owned waterworks and sewerage system in any city, municipality or municipal district and other waterworks and sewerage system under the Bureau of Public Works, in any Act or Executive Order or Proclamation of the President of the Philippines or in any city or municipal ordinance which is still in force, shall be deemed to be a reference to the National Waterworks and Sewerage Authority created by this Act. On September 19, 1955, the President of the Philippines issued Executive Order No. 127 outlining the procedure for the transfer of government-owned waterworks and sewerage systems in the provinces, cities and municipalities to defendant and provided for a time limit for such transfer, which is "at the earliest time possible but not exceeding 90 days from the date of said order." And on March 15, 1956, defendant, implementing said Executive Order, issued Office Memorandum No. 7 providing, among other things, the following: (1) Pending the establishment of the Waterworks district offices of the Authority, District and City Engineers, shall continue to be in charge of the operation and maintenance of all existing waterworks systems, including the repair and improvement thereof and the construction of new waterworks projects in their respective districts in accordance with the Memorandum of the Secretary of Public Works and Communications dated October 25, 1955, quoted in the Memorandum of the Director of Public Works dated October 27, 1955. Likewise, they shall continue approving vouchers and payrolls for salaries and essential services chargeable against waterworks funds heretofore, provided that said expenses do not

exceed the appropriations in the approved budget for the preceeding fiscal year. (2) Pending the establishment of the Waterworks district offices of the Authority which shall ultimately include an auditing force, Provincial and City auditors shall, as heretofore, audit the accounts of the different waterworks systems in their respective jurisdictions in accordance with Provincial Auditor's Memorandum No. 151 to Provincial and City Auditors dated December 7, 1955. (3) Pending the establishment of the waterworks district offices of the Authority, provincial, city and municipal treasurers shall continue to perform the work of handling the collections and disbursements of funds of the waterworks systems and artesian wells projects in their respective jurisdictions in accordance with provincial circular of the Secretary of Finance to all provincial and City Treasurers dated November 23, 1955. (4) Provincial Waterworks Boards, provincial Boards, Municipal Boards, or City councils of cities and municipal councils of Municipalities and municipal districts ipso facto ceased to have control and supervision over waterworks systems within their respective territorial jurisdictions upon the formal organization of the National Waterworks and sewerage Authority in accordance with the provisions of Republic Act No. 1383. All budgets and plantillas of personnel of said waterworks personnel, including collectors who were formerly directly under the Provincial, City or Municipal Treasurers, whether permanent, temporary or emergency, shall be effective only after their approval by the Board of directors of the Authority. Let us now discussed the issues raised.. As regards the first issue, appellant contends that appellee's action for declaratory relief is improper because there has already been a breach of the Republic Act No. 1383, invoking section 2 of rule 66 which provides; "A contract or statue may be construed before there has been a breach thereof." This contention is untenable. To begin with, the answer filed by defendant through its counsel the Solicitor General contains a express admission of the avernment in appellee's complaint that "although Republic Act No. 1383 took effect upon its approval on June 18, 1955, and notwithstanding Executive Order No. 127 of the President, there has been no breach of said law because no actual physical turn-over of the Baguio Waterworks System has so far been made." Because of such admission, it has always been assumed in the trial court that the present action is proper because there has not been such breach so

much so that appellant desisted from raising the point in the rest of the proceedings in the trial court and in the long memorandum it has submitted, for which reason the trial court made in its decision the following comment: In its memorandum, however, the NAWASA has failed to argue this point. the omission is significant and this Court takes that in any objection to the declaratory relief proceedings are waived." That appellant would now take an inconsistent stand is strange in any event, we find that such is the situation obtaining here. Republic Act No. 1383 provides that government-owned waterworks system should be transferred to appellant at the earliest time possible, and unless by administrative action this provision is actually carried out, it cannot be said that the transfer has been effected. The most that appellant did to carry out such provision is to issue its Office memorandum No. 7 which prescribes the preparatory steps for such transfer pending the establishment of the branch office of the NAWASA that would take over the waterworks concerned, but before any definite step could be taken to comply with said directive the present action was instituted. We agree with the trial court that so far there has not been a breach of the law and that the other requisites necessary for an action for declaratory relief are present. The contention that the Republic Act No. 1383 constitutes a valid exercise of police power rather than a directive to expropriate the waterworks of the appellee by the exercise of the power of eminent domain cannot also be entertained. This is far from the intent and purpose of the law. The act does not confiscate, nor destroy, nor appropriate property belonging to the appellee. It merely directs that all waterworks belonging to cities, municipalities, and municipal districts in the Philippines be transferred to the NAWASA for the purpose of placing them under the control and supervision of one agency with a view to promoting their efficient management, but in so doing it does not confiscate them because it directs that they be paid with an equal value of the assets of the NAWASA. This is clearly inferred from the context of the law (section 8, Rep. Act No. 1383). But appellant invites our attention to some authorities purporting to show the Republic Act No. 1383 could at least be considered as a legitimate exercise of police power such that Congress may in the exercise of such power enact a law transferring Government property from one agency to another, and laying stress one said authorities it contends that although Congress cannot deprive the citizens of a municipal corporation of the use of property held in trust for their benefit it may however change the trustee with or without its consent or compensation provided the citizens are not deprived of its enjoyment. In other words, appellant invokes the principle that the transfer of property and authority by an act of Congress from one class of public officer to another where the property continues devoted to its original purpose does not impair any vested right of the city owning the property.

But the authorities cited are not in point. They in substance point out that the transfer, if any, of the property of municipal corporation from one agency to another is merely done for purposes of administration, its ownership and benefits being retained by the corporation. Such is not the clear intent of Republic Act No. 1383. Here, as we have already shown, its purpose is to effect a real transfer of the ownership of the waterworks to the new agency and does not merely encompass a transfer of administration. At any rate, the authorities cited do not bear out the proposition of appellant as clearly pointed out by counsel for appellee in his brief. But it is insisted that the waterworks system of Baguio City does not have the character of patrimonial property but comes under the phrase "public works for public service" mentioned in Article 424 of the New Civil Code and as such is subjected to the control of Congress. This contention is also untenable. The Baguio Waterworks System is not like any public road, park, street or any other public property held in trust by a municipal corporation held for the benefit of the public but it is rather a property owned by appellee in its proprietary character. While the cases may differ as to the public or private character of waterworks, the weight of authority as far as the legislature is concerned classes them as private affairs. (sec. 239, Vol. I, Revised, McQuillin Municipal Corporation, p. 239; Shrik vs. City of Lancaster, 313 Pa. 158, 169 Atl. 557). And in this jurisdiction, this court has already expressed the view that the waterworks system is patrimonial property of the city that has established it.(Mendoza vs. De Leon, 33 Phil. 509). And being owned by the municipal corporation in a proprietary character, waterworks cannot be taken away without observing the safeguards set by our Constitution for the protection of private property. While the judicial opinions on this subject are more or less uncertain in expression, and court judgment apparently conflicting, perhaps it is correct to affirm that a majority of decision recognize the private rights of the municipal corporation, and hence support the view that all its property of a distinctly private character is fully protected by the constitutional provisions protecting private property of the individual or the private corporation. Accordingly the right of state as to the private property of municipal corporation is a right of regulation to be exercised in harmony with the general policy of the state, and though broader than exists in the case of individuals, or private corporations, is not a right of appropriation. xxx xxx xxx

The decision maintain that the property held by a municipal corporation units private capacity is not subject to the unrestricted control of the legislature, and the municipality cannot be deprived of such property

against its will, except by the exercise of eminent domain with payment of full compensation. (McQuillin Municipal Corporation, 2nd Ed., Vol. I, pp. 670-681). In its private capacity a municipal corporation is wholly different. The people of a compact community usually require certain conveniences which cannot be furnished without a franchise from the State and which are either unnecessary in the rural districts, such as a system of sewers, or parks and open spaces, or which on account of the expenses it would be financially impossible to supply except where the population is reasonably dense, such as water or gas. But in so far as the municipality is thus authorized to exercise the functions of a private corporation, it is clothed with the capacities of a private corporation and may claim its rights and immunities, even as against the sovereign, and is subject to the liabilities of such a corporation, even as against third parties. (19 R.C. L. p. 698) The attempt of appellant in having waterworks considered as public property subject to the control of Congress or one which can be regulated by the exercise of police power having failed, that question that now arises is: Does Republic Act No. 1383 provide for the automatic expropriation of the waterworks in question in the light of our Constitution? In other words, does said law comply with the requirements of section 6, Article XIII, in relation to section 1(2), Article III, of our Constitution? Section 6, Article XIII of our Constitution provides: SEC. 6. The State may, in the interest of National Welfare and defense, establish and operate industries and means of transportation and communication, and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government. Section 1 (2), Article III, of our Constitution provides: (2) Private property shall not be taken for public use without just compensation. It is clear that the State may, in the interest of National welfare, transfer to public ownership any private enterprise upon payment of just compensation. At the same time, one has to bear in mind that no person can be deprived of his property except for public use and upon payment of just compensation. There is an attempt to observe this requirement in Republic Act No. 1383 when in providing for the transfer of appellee's waterworks system to a national agency it

was directed that the transfer be made upon payment of an equivalent value of the property. Has this been implemented? Has appellant actually transferred to appellee any asset of the NAWASA that may be considered just compensation for the property expropriated? There is nothing in the record to show that such was done. Neither is there anything to this effect in Office Memorandum No. 7 issued by the NAWASA in implementation of the provision of the Republic Act No. 1383. The law speaks of assets of the NAWASA by they are not specified. While the Act empowers the NAWASA to contract indebtedness and issue bonds subject to the approval of the Secretary of Finance when necessary for the transaction of its business (sec. 2, par. (L), sec. 5, Act No. 1383), no such action has been taken to comply with appellant's commitment in so far as payment of compensation of appellee is concerned. As to when such action should be taken no one knows. And unless this aspect of the law is clarified and appellee is given its due compensation, appellee cannot be deprived of its property even if appellant desires to take over its administration in line with the spirit of the law. We are therefore persuaded to conclude that the law, insofar as it expropriates the waterworks in question without providing for an effective payment of just compensation, violates our Constitution. In this respect, the decision of the trial court is correct. Wherefore, the decision appealed from is affirmed, without pronouncement as to costs. Paras, C. J., Bengzon, Padilla, Montemayor, Endencia, and Barrera, JJ., concur. Conception, J., concurs in the result. G.R. No. L-60077 January 18, 1991 NATIONAL POWER CORPORATION, petitioner, vs. SPS. MISERICORDIA GUTIERREZ and RICARDO MALIT and THE HONORABLE COURT OF APPEALS,respondents. Pedro S. Dabu for private respondents.

BIDIN, J.:p This is a petition for review on certiorari filed by the National Power Corporation (NPC) seeking the reversal or modification of the March 9, 1986 Decision of the Court of Appeals in CA G.R. No. 54291-R entitled "National Power Corporation v. Sps. Misericordia Gutierrez and Ricardo Malit", affirming the December 4, 1972

Decision of the then Court of First Instance of Pampanga, Fifth Judicial District, Branch II, in Civil Case No. 2709, entitledNational Power Corporation v. Matias Cruz, et al. The undisputed facts of the case, as found by the Court of Appeals, are as follows: Plaintiff National Power Corporation, a government owned and controlled entity, in accordance with Commonwealth Act No. 120, is invested with the power of eminent domain for the purpose of pursuing its objectives, which among others is the construction, operation, and maintenance of electric transmission lines for distribution throughout the Philippines. For the construction of its 230 KV Mexico-Limay transmission lines, plaintiff's lines have to pass the lands belonging to defendants Matias Cruz, Heirs of Natalia Paule and spouses Misericordia Gutierrez and Ricardo Malit covered by tax declarations Nos. 907, 4281 and 7582, respectively. Plaintiff initiated negotiations for the acquisition of right of way easements over the aforementioned lots for the construction of its transmission lines but unsuccessful in this regard, said corporation was constrained to file eminent domain proceedings against the herein defendants on January 20, 1965. Upon filing of the corresponding complaint, plaintiff corporation deposited the amount of P973.00 with the Provincial Treasurer of Pampanga, tendered to cover the provisional value of the land of the defendant spouses Ricardo Malit and Misericordia Gutierrez. And by virtue of which, the plaintiff corporation was placed in possession of the property of the defendant spouses so it could immediately proceed with the construction of its Mexico-Limay 230 KV transmission line. In this connection, by the trial court's order of September 30, 1965, the defendant spouses were authorized to withdraw the fixed provisional value of their land in the sum of P973.00. The only controversy existing between the parties litigants is the reasonableness and adequacy of the disturbance or compensation fee of the expropriated properties. Meanwhile, for the purpose of determining the fair and just compensation due the defendants, the court appointed three commissioners, comprised of one representative of the plaintiff, one

for the defendants and the other from the court, who then were empowered to receive evidence, conduct ocular inspection of the premises, and thereafter, prepare their appraisals as to the fair and just compensation to be paid to the owners of the lots. Hearings were consequently held before said commissioners and during their hearings, the case of defendant Heirs of Natalia Paule was amicably settled by virtue of a Right of Way Grant (Exh. C) executed by Guadalupe Sangalang for herself and in behalf of her co-heirs in favor of the plaintiff corporation. The case against Matias Cruz was earlier decided by the court, thereby leaving only the case against the defendant spouses Ricardo Malit and Misericordia Gutierrez still to be resolved. Accordingly, the commissioners submitted their individual reports. The commissioner for the plaintiff corporation recommended the following: . . . that plaintiff be granted right of way easement over the 760 square meters of the defendants Malit and Gutierrez land for plaintiff transmission line upon payment of an easement fee of P1.00 therefor. . . . (Annex M) The commissioner for the defendant spouses recommended the following: . . . that Mr. and Mrs. Ricardo Malit be paid as disturbance compensation the amount of P10.00 sq. meter or the total amount of P7,600.00' (Annex K) The Court's commissioner recommended the following: . . . the payment of Five (P 5.OO) Pesos per square meter of the area covered by the Right-of-way to be granted, . . .(Annex L) The plaintiff corporation urged the Court that the assessment as recommended by their commissioner be the one adopted. Defendant spouses, however, dissented and objected to the price recommended by both the representative of the court and of the plaintiff corporation. With these reports submitted by the three commissioners and on the evidence adduced by the defendants as well as the plaintiff for the purpose of proving the fair market value of the property sought to be expropriated, the lower court rendered a decision the dispositive portion of which reads as follows:

WHEREFORE, responsive to the foregoing considerations, judgment is hereby rendered ordering plaintiff National Power Corporation to pay defendant spouses Ricardo Malit and Misericordia Gutierrez the sum of P10.00 per square meter as the fair and reasonable compensation for the right-of-way easement of the affected area, which is 760 squares, or a total sum of P7,600.00 and P800.00 as attorney's fees' (Record on Appeal, p. 83) Dissatisfied with the decision, the plaintiff corporation filed a motion for reconsideration which was favorably acted upon by the lower court, and in an order dated June 10, 1973, it amended its previous decision in the following tenor: On the basis of an ocular inspection made personally by the undersigned, this court finally classified the land of the spouses Ricardo Malit and Misericordia to be partly commercial and partly agricultural, for which reason the amount of P10.00 per sq. meter awarded in the decision of December 4,1972 is hereby reduced to P5.00 per square meter as the fair and reasonable market value of the 760 square meters belonging to the said spouses. There being no claim and evidence for attorney's fees, the amount of P800.00 awarded as attorney's fees, in the decision of December 4, 1972 is hereby reconsidered and set aside. (Annex S) Still not satisfied, an appeal was filed by petitioner (NPC) with the Court of Appeals but respondent Court of Appeals in its March 9, 1982, sustained the trial court, as follows: WHEREFORE, finding no reversible error committed by the court a quo, the appealed judgment is hereby affirmed with costs against the plaintiff-appellant. Hence, the instant petition. The First Division of this Court gave due course to the petition and required both parties to submit their respective memoranda (Resolution of January 12, 1983). It also noted in an internal resolution of August 17, 1983 that petitioner flied its memorandum while the respondents failed to file their memorandum within the

period which expired on February 24,1983; hence, the case was considered submitted for decision. The sole issue raised by petitioner is WHETHER PETITIONER SHOULD BE MADE TO PAY SIMPLE EASEMENT FEE OR FULL COMPENSATION FOR THE LAND TRAVERSED BY ITS TRANSMISSION LINES. It is the contention of petitioner that the Court of Appeals committed gross error by adjudging the petitioner liable for the payment of the full market value of the land traversed by its transmission lines, and that it overlooks the undeniable fact that a simple right-of-way easement (for the passage of transmission lines) transmits no rights, except that of the easement. Full ownership is retained by the private respondents and they are not totally deprived of the use of the land. They can continue planting the same agricultural crops, except those that would result in contact with the wires. On this premise, petitioner submits that if full market value is required, then full transfer of ownership is only the logical equivalent. The petition is devoid of merit. The resolution of this case hinges on the determination of whether the acquisition of a mere right-of-way is an exercise of the power of eminent domain contemplated by law. The trial court's observation shared by the appellate court show that ". . . While it is true that plaintiff are (sic) only after a right-of-way easement, it nevertheless perpetually deprives defendants of their proprietary rights as manifested by the imposition by the plaintiff upon defendants that below said transmission lines no plant higher than three (3) meters is allowed. Furthermore, because of the hightension current conveyed through said transmission lines, danger to life and limbs that may be caused beneath said wires cannot altogether be discounted, and to cap it all plaintiff only pays the fee to defendants once, while the latter shall continually pay the taxes due on said affected portion of their property." The foregoing facts considered, the acquisition of the right-of-way easement falls within the purview of the power of eminent domain. Such conclusion finds support in similar cases of easement of right-of-way where the Supreme Court sustained the award of just compensation for private property condemned for public use (See National Power Corporation vs. Court of Appeals, 129 SCRA 665, 1984; Garcia vs. Court of Appeals, 102 SCRA 597,1981). The Supreme Court, in Republic of the Philippines vs. PLDT, * thus held that: Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated

property; but no cogent reason appears why said power may not be availed of to impose only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right-of-way. In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain. Considering the nature and effect of the installation of the 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use of the land for an indefinite period deprives private respondents of its ordinary use. For these reasons, the owner of the property expropriated is entitled to a just compensation, which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. Just compensation has always been understood to be the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation (Province of Tayabas vs. Perez, 66 Phil. 467 [1938]; Assoc. of Small Land Owners of the Phils., Inc. vs. Secretary of Agrarian Reform, G.R. No. 78742; Acuna vs. Arroyo, G.R. No. 79310; Pabrico vs. Juico, G.R. No. 79744; Manaay v. Juico, G.R. No. 79777,14 July 1989, 175 SCRA 343 [1989]). The price or value of the land and its character at the time it was taken by the Government are the criteria for determining just compensation (National Power Corp. v. Court of Appeals, 129 SCRA 665, [1984]). The above price refers to the market value of the land which may be the full market value thereof. According to private respondents, the market value of their lot is P50.00 per square meter because the said lot is adjacent to the National and super highways of Gapan, Nueva Ecija and Olongapo City. Private respondents recognize the inherent power of eminent domain being exercised by NPC when it finally consented to the expropriation of the said portion of their land, subject however to payment of just compensation. No matter how laudable NPC's purpose is, for which expropriation was sought, it is just and equitable that they be compensated the fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity (EPZA v. Dulay, 149 SCRA 305 [1987]; Mun. of Daet v. Court of Appeals, 93 SCRA 503 (1979]). It appearing that the trial court did not act capriciously and arbitrarily in setting the price of P5.00 per square meter of the affected property, the said award is proper and not unreasonable.

On the issue of ownership being claimed by petitioner in the event that the price of P5.00 per square meter be sustained, it is well settled that an issue which has not been raised in the Court a quo cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process . . . (Filipino Merchants v. Court of Appeals, G.R. No. 85141, November 8, 1989, 179 SCRA 638; Commissioner of Internal Revenue v. Procter and Gamble Philippines Manufacturing Corporation, 160 SCRA 560 [1988]; Commissioner of Internal Revenue v. Wander Philippines, Inc., 160 SCRA 573 1988]). Petitioner only sought an easement of right-of-way, and as earlier discussed, the power of eminent domain may be exercised although title was not transferred to the expropriator. WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED. SO ORDERED. Fernan, C.J. and Feliciano, J., concur. Gutierrez, Jr., J., I concur but believe payment should be P10.00 a sq. meter at the very least.

G.R. No. L-20620 August 15, 1974 REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. CARMEN M. VDA. DE CASTELLVI, ET AL., defendants-appellees. ZALDIVAR, J.: Appeal from the decision of the Court of First Instance of Pampanga in its Civil Case No. 1623, an expropriation proceeding.
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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 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 1B, 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
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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.
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On June 29, 1959 the trial court issued an order fixing the provisional value of the lands at P259,669.10.
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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.
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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.
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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
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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.
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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.
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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
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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.
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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
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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 decision 6 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.
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xxx xxx xxx

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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.
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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.
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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.
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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.

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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.
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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.
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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 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.
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Defendant Castellvi did not insist on her appeal. Defendant Toledo-Gozun did not appeal.
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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.
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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.
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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.
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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."
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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;
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2. In holding that the "taking" of the properties under expropriation commenced with the filing of this action;
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3. In ordering plaintiff-appellant to pay 6% interest on the adjudged value of the Castellvi property to start from July of 1956;
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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.
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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
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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
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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
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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
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This AGREEMENT OF LEASE MADE AND ENTERED into by and between INTESTATE ESTATE OF 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,
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WITNESSETH:

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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:
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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.
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Out of the above described property, 75.93 hectares thereof are actually occupied and covered by this contract. .
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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.
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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.
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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) ...
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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.
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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 ...
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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.
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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
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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 (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.
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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).
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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;
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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
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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
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Pursuant to the aforecited authority, a number of circumstances must be present in the "taking" of property for purposes of eminent domain.
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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.
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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 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).
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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.

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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.
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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.
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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.
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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 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).
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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.
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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.
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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.
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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.
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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.
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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 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?
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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
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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
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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
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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 relates to the question of what is the just compensation that should be paid to the appellees.
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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., L6594, 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.
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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
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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.
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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
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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, 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.
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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 ....
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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
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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.
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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
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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 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.
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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.
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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.
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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.
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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.
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We find that the lower court acted correctly when it denied the motions for a new trial.
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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.
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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.
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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.
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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.
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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.
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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 been able to find these documents and/or caused the issuance of subpoena duces tecum. ...
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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:
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I understand, Your Honor, that there was a sale that took place in this place of land recently where the land was sold for P0.20 which is contiguous to this land.
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The Court gave him permission to submit said 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
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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.
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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;
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(b) the fair market value of the lands of the appellees is fixed at P5.00 per square meter;
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(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;
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(d) the Republic must pay appellee Toledo-Gozun the sum of P2,695,225.00 as the just compensation for her 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
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(f) the costs should be paid by appellant Republic of the Philippines, as provided in Section 12, Rule 67, and in Section 13, Rule 141, of the Rules of Court. IT IS SO ORDERED. Makalintal, C.J., Barredo, Antonio, Esguerra, Fernandez, Muoz Palma and Aquino, JJ., concur.
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Castro, Fernando, Teehankee and Makasiar, JJ., took no part.

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.

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 sate 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 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 ha,.,ing the lawful right to take the properties sought to be condemned, upon the payment of just compensation to be determined as of the fuing 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 ffle 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 conunissioners 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 shan 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 conunissioners 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 fun 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), xxx xxx xxx ... 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 fun 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), xxx xxx xxx

... Hence, in estimating the market value, afl 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. An 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. Republic v. Santos (141 SCRA 30, 35-36), According to section 8 of Rule 67, the court is not bound by the conunissioners' report. It may niake 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 evidenceladen, well argued, fully heard, studiously deliberated. and judiciously considered court proceedings. The decrees categorically and peremptorilylimited the definition of just compensation thus: P.D. No. 76:
xxx xxx xxx

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 adminiqtrator, 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. Indeterminingjustcompensationforprivateproperty 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 valu46 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 processclause 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 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 recognizethat the mle introduced by P.D. No. 76 and reiterated in subw quent 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, none. theless, 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 conunissioners for such purpose. This time, we answer in the affirmative.

In overruling the petitioner's motion for reconsideration and objection to the conunissioner'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 wen-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 thelegal 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 impheations of the paramount principle of independence of the judiciary should ever think of doing." (Lina v. Purisinia, 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 earher weu-estabhshed 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 Patio, 134 SCRA 438, 462; citing Mercado v. Court of Pirst 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. 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 pubhc use without just compensation, no statute, decree, or executive order can mandate that its own determination shag 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 unconstitution 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. Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.

Teehankee, C.J., concur in the result. Yap, J., is on leave. G.R. No. L-26400 February 29, 1972 VICTORIA AMIGABLE, plaintiff-appellant, vs. NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE PHILIPPINES, defendants-appellees.

MAKALINTAL, J.:p This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No. R-5977, dismissing the plaintiff's complaint. Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad Estate in Cebu City as shown by Transfer Certificate of Title No. T18060, which superseded Transfer Certificate of Title No. RT-3272 (T-3435) issued to her by the Register of Deeds of Cebu on February 1, 1924. No annotation in favor of the government of any right or interest in the property appears at the back of the certificate. Without prior expropriation or negotiated sale, the government used a portion of said lot, with an area of 6,167 square meters, for the construction of the Mango and Gorordo Avenues. It appears that said avenues were already existing in 1921 although "they were in bad condition and very narrow, unlike the wide and beautiful avenues that they are now," and "that the tracing of said roads was begun in 1924, and the formal construction in 1925." * On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting payment of the portion of her lot which had been appropriated by the government. The claim was indorsed to the Auditor General, who disallowed it in his 9th Indorsement dated December 9, 1958. A copy of said indorsement was transmitted to Amigable's counsel by the Office of the President on January 7, 1959. On February 6, 1959 Amigable filed in the court a quo a complaint, which was later amended on April 17, 1959 upon motion of the defendants, against the Republic of the Philippines and Nicolas Cuenca, in his capacity as Commissioner

of Public Highways for the recovery of ownership and possession of the 6,167 square meters of land traversed by the Mango and Gorordo Avenues. She also sought the payment of compensatory damages in the sum of P50,000.00 for the illegal occupation of her land, moral damages in the sum of P25,000.00, attorney's fees in the sum of P5,000.00 and the costs of the suit. Within the reglementary period the defendants filed a joint answer denying the material allegations of the complaint and interposing the following affirmative defenses, to wit: (1) that the action was premature, the claim not having been filed first with the Office of the Auditor General; (2) that the right of action for the recovery of any amount which might be due the plaintiff, if any, had already prescribed; (3) that the action being a suit against the Government, the claim for moral damages, attorney's fees and costs had no valid basis since as to these items the Government had not given its consent to be sued; and (4) that inasmuch as it was the province of Cebu that appropriated and used the area involved in the construction of Mango Avenue, plaintiff had no cause of action against the defendants. During the scheduled hearings nobody appeared for the defendants notwithstanding due notice, so the trial court proceeded to receive the plaintiff's evidence ex parte. On July 29, 1959 said court rendered its decision holding that it had no jurisdiction over the plaintiff's cause of action for the recovery of possession and ownership of the portion of her lot in question on the ground that the government cannot be sued without its consent; that it had neither original nor appellate jurisdiction to hear, try and decide plaintiff's claim for compensatory damages in the sum of P50,000.00, the same being a money claim against the government; and that the claim for moral damages had long prescribed, nor did it have jurisdiction over said claim because the government had not given its consent to be sued. Accordingly, the complaint was dismissed. Unable to secure a reconsideration, the plaintiff appealed to the Court of Appeals, which subsequently certified the case to Us, there being no question of fact involved. The issue here is whether or not the appellant may properly sue the government under the facts of the case. In the case of Ministerio vs. Court of First Instance of Cebu, 1 involving a claim for payment of the value of a portion of land used for the widening of the Gorordo Avenue in Cebu City, this Court, through Mr. Justice Enrique M. Fernando, held that where the government takes away property from a private landowner for public use without going through the legal process of expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the government without thereby violating the doctrine of governmental immunity from suit without its consent. We there said: .

... . If the constitutional mandate that the owner be compensated for property taken for public use were to be respected, as it should, then a suit of this character should not be summarily dismissed. The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen. Had the government followed the procedure indicated by the governing law at the time, a complaint would have been filed by it, and only upon payment of the compensation fixed by the judgment, or after tender to the party entitled to such payment of the amount fixed, may it "have the right to enter in and upon the land so condemned, to appropriate the same to the public use defined in the judgment." If there were an observance of procedural regularity, petitioners would not be in the sad plaint they are now. It is unthinkable then that precisely because there was a failure to abide by what the law requires, the government would stand to benefit. It is just as important, if not more so, that there be fidelity to legal norms on the part of officialdom if the rule of law were to be maintained. It is not too much to say that when the government takes any property for public use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine of immunity from suit could still be appropriately invoked. Considering that no annotation in favor of the government appears at the back of her certificate of title and that she has not executed any deed of conveyance of any portion of her lot to the government, the appellant remains the owner of the whole lot. As registered owner, she could bring an action to recover possession of the portion of land in question at anytime because possession is one of the attributes of ownership. However, since restoration of possession of said portion by the government is neither convenient nor feasible at this time because it is now and has been used for road purposes, the only relief available is for the government to make due compensation which it could and should have done years ago. To determine the due compensation for the land, the basis should be the price or value thereof at the time of the taking. 2 As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the price of the land from the time it was taken up to the time that payment is made by the government. 3 In addition, the government should pay for attorney's fees, the amount of which should be fixed by the trial court after hearing.

WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the court a quo for the determination of compensation, including attorney's fees, to which the appellant is entitled as above indicated. No pronouncement as to costs. Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo, Villamor and Makasiar JJ., concur. G.R. No. L-119694 May 22, 1995 PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139 members, represented by its President, Amado P. Macasaet and its Executive Director Ermin F. Garcia, Jr., petitioner, vs. COMMISSION ON ELECTIONS, respondent. RESOLUTION

FELICIANO, J.: The Philippine Press Institute, Inc. ("PPI") is before this Court assailing the constitutional validity of Resolution No. 2772 issued by respondent Commission on Elections ("Comelec") and its corresponding Comelec directive dated 22 March 1995, through a Petition for Certiorari and Prohibition. Petitioner PPI is a non-stock, non-profit organization of newspaper and magazine publishers. On 2 March 1995, Comelec promulgated Resolution No. 2772, which reads in part: xxx xxx xxx Sec. 2. Comelec Space. The Commission shall procure free print space of not less than one half (1/2) page in at least one newspaper of general circulation in every province or city for use as "Comelec Space" from March 6, 1995 in the case of candidates for senator and from March 21, 1995 until May 12, 1995. In the absence of said newspaper, "Comelec Space" shall be obtained from any magazine or periodical of said province or city. Sec. 3. Uses of Comelec Space. "Comelec Space" shall be allocated by the Commission, free of charge, among all candidates within the area in which the newspaper, magazine or

periodical is circulated to enable the candidates to make known their qualifications, their stand on public issues and their platforms and programs of government. "Comelec Space" shall also be used by the Commission for dissemination of vital election information. Sec. 4. Allocation of Comelec Space. (a) "Comelec Space" shall also be available to all candidatesduring the periods stated in Section 2 hereof. Its allocation shall be equal and impartial among all candidates for the same office. All candidates concerned shall be furnished a copy of the allocation of "Comelec Space" for their information, guidance and compliance. (b) Any candidate desiring to avail himself of "Comelec Space" from newspapers or publications based in the Metropolitan Manila Area shall submit an application therefor, in writing, to the Committee on Mass Media of the Commission. Any candidate desiring to avail himself of "Comelec Space" in newspapers or publications based in the provinces shall submit his application therefor, in writing, to the Provincial Election Supervisor concerned. Applications for availment of "Comelec Space" maybe filed at any time from the date of effectivity of this Resolution. (c) The Committee on Mass Media and the Provincial Election Supervisors shall allocate available"Comelec Space" among the candidates concerned by lottery of which said candidates shall be notified in advance, in writing, to be present personally or by representative to witness the lottery at the date, time and place specified in the notice. Any party objecting to the result of the lottery may appeal to the Commission. (d) The candidates concerned shall be notified by the Committee on Mass Media or the Provincial Election Supervisor, as the case maybe, sufficiently in advance and in writing of the date of issue and the newspaper or publication allocated to him, and the time within which he must submit the written material for publication in the "Comelec Space". xxx xxx xxx Sec. 8. Undue Reference to Candidates/Political Parties in Newspapers. No newspaper or publication shall allow to be

printed or published in the news, opinion, features, or other sections of the newspaper or publication accounts or comments which manifestly favor or oppose any candidate or political party by unduly or repeatedly referring to or including therein said candidate or political party. However, unless the facts and circumstances clearly indicate otherwise, the Commission will respect the determination by the publisher and/or editors of the newspapers or publications that the accounts or views published are significant, newsworthy and of public interest. (Emphasis supplied) Apparently in implementation of this Resolution, Comelec through Commissioner Regalado E. Maambong sent identical letters, dated 22 March 1995, to various publishers of newspapers like the Business World, the Philippine Star, the Malaya and the Philippine Times Journal, all members of PPI. These letters read as follows: This is to advise you that pursuant to Resolution No. 2772 of the Commission on Elections, you aredirected to provide free print space of not less than one half (1/2) page for use as "Comelec Space"or similar to the print support which you have extended during the May 11, 1992 synchronized elections which was 2 full pages for each political party fielding senatorial candidates, from March 6, 1995 to May 6, 1995, to make known their qualifications, their stand on public issues and their platforms and programs of government. We shall be informing the political parties and candidates to submit directly to you their pictures, biographical data, stand on key public issues and platforms of government either as raw data or in the form of positives or camera-ready materials. Please be reminded that the political parties/candidates may be accommodated in your publication any day upon receipt of their materials until May 6, 1995 which is the last day for campaigning. We trust you to extend your full support and cooperation in this regard. (Emphasis supplied) In this Petition for Certiorari and Prohibition with prayer for the issuance of a Temporary Restraining Order, PPI asks us to declare Comelec Resolution No. 2772 unconstitutional and void on the ground that it violates the prohibition imposed by the Constitution upon the government, and any of its agencies, against the taking of private property for public use without just compensation.

Petitioner also contends that the 22 March 1995 letter directives of Comelec requiring publishers to give free "Comelec Space" and at the same time process raw data to make it camera-ready, constitute impositions of involuntary servitude, contrary to the provisions of Section 18 (2), Article III of the 1987 Constitution. Finally, PPI argues that Section 8 of Comelec Resolution No. 2772 is violative of the constitutionally guaranteed freedom of speech, of the press and of expression. 1 On 20 April 1995, this Court issued a Temporary Restraining Order enjoining Comelec from enforcing and implementing Section 2 of Resolution No. 2772, as well as the Comelec directives addressed to various print media enterprises all dated 22 March 1995. The Court also required the respondent to file a Comment on the Petition. The Office of the Solicitor General filed its Comment on behalf of respondent Comelec alleging that Comelec Resolution No. 2772 does not impose upon the publishers any obligation to provide free print space in the newspapers as it does not provide any criminal or administrative sanction for non-compliance with that Resolution. According to the Solicitor General, the questioned Resolution merely established guidelines to be followed in connection with the procurement of "Comelec space," the procedure for and mode of allocation of such space to candidates and the conditions or requirements for the candidate's utilization of the "Comelec space" procured. At the same time, however, the Solicitor General argues that even if the questioned Resolution and its implementing letter directives are viewed as mandatory, the same would nevertheless be valid as an exercise of the police power of the State. The Solicitor General also maintains that Section 8 of Resolution No. 2772 is a permissible exercise of the power of supervision or regulation of the Comelec over the communication and information operations of print media enterprises during the election period to safeguard and ensure a fair, impartial and credible election. 2 At the oral hearing of this case held on 28 April 1995, respondent Comelec through its Chairman, Hon. Bernardo Pardo, in response to inquiries from the Chief Justice and other Members of the Court, stated that Resolution No. 2772, particularly Section 2 thereof and the 22 March 1995 letters dispatched to various members of petitioner PPI, were not intended to compel those members to supply Comelec with free print space. Chairman Pardo represented to the Court that Resolution and the related letter-directives were merely designed to solicit from the publishers the same free print space which many publishers had voluntarily given to Comelec during the election period relating to the 11 May 1992 elections. Indeed, the Chairman stated that the Comelec would, that very afternoon, meet and adopt an appropriate amending or clarifying resolution, a certified true copy of which would forthwith be filed with the Court.

On 5 May 1995, the Court received from the Office of the Solicitor General a manifestation which attached a copy of Comelec Resolution No. 2772-A dated 4 May 1995. The operative portion of this Resolution follows: NOW THEREFORE, pursuant to the powers vested in it by the Constitution, the Omnibus Election Code, Republic Acts No. 6646 and 7166 and other election laws, the Commission on Elections RESOLVED to clarify Sections 2 and 8 of Res. No. 2772 as follows: 1. Section 2 of Res. No. 2772 shall not be construed to mean as requiring publishers of the different mass media print publications to provide print space under pain of prosecution, whether administrative, civil or criminal, there being no sanction or penalty for violation of said Section provided for either in said Resolution or in Section 90 of Batas Pambansa Blg. 881, otherwise known as the Omnibus Election Code, on the grant of "Comelec space." 2. Section 8 of Res. No. 2772 shall not be construed to mean as constituting prior restraint on the part of publishers with respect to the printing or publication of materials in the news, opinion, features or other sections of their respective publications or other accounts or comments, it being clear from the last sentence of said Section 8 that the Commission shall, "unless the facts and circumstances clearly indicate otherwise . . . respect the determination by the publisher and/or editors of the newspapers or publications that the accounts or views published are significant, newsworthy and of public interest." This Resolution shall take effect upon approval. (Emphasis in the original) While, at this point, the Court could perhaps simply dismiss the Petition for Certiorari and Prohibition as having become moot and academic, we consider

it not inappropriate to pass upon the first constitutional issue raised in this case. Our hope is to put this issue to rest and prevent its resurrection. Section 2 of Resolution No. 2772 is not a model of clarity in expression. Section 1 of Resolution No. 2772-A did not try to redraft Section 2; accordingly, Section 2 of Resolution No. 2772 persists in its original form. Thus, we must point out that, as presently worded, and in particular as interpreted and applied by the Comelec itself in its 22 March 1995 letter-directives to newspaper publishers, Section 2 of Resolution No. 2772 is clearly susceptible of the reading that petitioner PPI has given it. That Resolution No. 2772 does not, in express terms, threaten publishers who would disregard it or its implementing letters with some criminal or other sanction, does not by itself demonstrate that the Comelec's original intention was simply to solicit or request voluntary donations of print space from publishers. A written communication officially directing a print media company to supply free print space, dispatched by a government (here a constitutional) agency and signed by a member of the Commission presumably legally authorized to do so, is bound to produce a coercive effect upon the company so addressed. That the agency may not be legally authorized to impose, or cause the imposition of, criminal or other sanctions for disregard of such directions, only aggravates the constitutional difficulties inhearing in the present situation. The enactment or addition of such sanctions by the legislative authority itself would be open to serious constitutional objection. To compel print media companies to donate "Comelec-space" of the dimensions specified in Section 2 of Resolution No. 2772 (not less than one-half page), amounts to "taking" of private personal property for public use or purposes. Section 2 failed to specify the intended frequency of such compulsory "donation:" only once during the period from 6 March 1995 (or 21 March 1995) until 12 May 1995? or everyday or once a week? or as often as Comelec may direct during the same period? The extent of the taking or deprivation is not insubstantial; this is not a case of a de minimis temporary limitation or restraint upon the use of private property. The monetary value of the compulsory "donation," measured by the advertising rates ordinarily charged by newspaper publishers whether in cities or in non-urban areas, may be very substantial indeed. The taking of print space here sought to be effected may first be appraised under the rubric of expropriation of private personal property for public use. The threshold requisites for a lawful taking of private property for public use need to be examined here: one is the necessity for the taking; another is the legal authority to effect the taking. The element of necessity for the taking has not been shown by respondent Comelec. It has not been suggested that the members of PPI are unwilling to sell print space at their normal rates to Comelec for election purposes. Indeed, the unwillingness or reluctance of Comelec to

buy print space lies at the heart of the problem. 3Similarly, it has not been suggested, let alone demonstrated, that Comelec has been granted the power of eminent domain either by the Constitution or by the legislative authority. A reasonable relationship between that power and the enforcement and administration of election laws by Comelec must be shown; it is not casually to be assumed. That the taking is designed to subserve "public use" is not contested by petitioner PPI. We note only that, under Section 3 of Resolution No. 2772, the free "Comelec space" sought by the respondent Commission would be used not only for informing the public about the identities, qualifications and programs of government of candidates for elective office but also for "dissemination of vital election information" (including, presumably, circulars, regulations, notices, directives, etc. issued by Comelec). It seems to the Court a matter of judicial notice that government offices and agencies (including the Supreme Court) simply purchase print space, in the ordinary course of events, when their rules and regulations, circulars, notices and so forth need officially to be brought to the attention of the general public. The taking of private property for public use is, of course, authorized by the Constitution, but not without payment of "just compensation" (Article III, Section 9). And apparently the necessity of paying compensation for "Comelec space" is precisely what is sought to be avoided by respondent Commission, whether Section 2 of Resolution No. 2772 is read as petitioner PPI reads it, as an assertion of authority to require newspaper publishers to "donate" free print space for Comelec purposes, or as an exhortation, or perhaps an appeal, to publishers to donate free print space, as Section 1 of Resolution No. 2772-A attempts to suggest. There is nothing at all to prevent newspaper and magazine publishers from voluntarily giving free print space to Comelec for the purposes contemplated in Resolution No. 2772. Section 2 of Resolution No. 2772 does not, however, provide a constitutional basis for compelling publishers, against their will, in the kind of factual context here present, to provide free print space for Comelec purposes. Section 2 does not constitute a valid exercise of the power of eminent domain. We would note that the ruling here laid down by the Court is entirely in line with the theory of democratic representative government. The economic costs of informing the general public about the qualifications and programs of those seeking elective office are most appropriately distributed as widely as possible throughout our society by the utilization of public funds, especially funds raised by taxation, rather than cast solely on one small sector of society, i.e., print media enterprises. The benefits which flow from a heightened level of information

on and the awareness of the electoral process are commonly thought to be community-wide; the burdens should be allocated on the same basis. As earlier noted, the Solicitor General also contended that Section 2 of Resolution No. 2772, even if read as compelling publishers to "donate" "Comelec space, " may be sustained as a valid exercise of the police power of the state. This argument was, however, made too casually to require prolonged consideration on our part. Firstly, there was no effort (and apparently no inclination on the part of Comelec) to show that the police power essentially a power of legislation has been constitutionally delegated to respondent Commission. 4 Secondly, while private property may indeed be validly taken in the legitimate exercise of the police power of the state, there was no attempt to show compliance in the instant case with the requisites of a lawful taking under the police power.5 Section 2 of Resolution No. 2772 is a blunt and heavy instrument that purports, without a showing of existence of a national emergency or other imperious public necessity, indiscriminately and without regard to the individual business condition of particular newspapers or magazines located in differing parts of the country, to take private property of newspaper or magazine publishers. No attempt was made to demonstrate that a real and palpable or urgent necessity for the taking of print space confronted the Comelec and that Section 2 of Resolution No. 2772 was itself the only reasonable and calibrated response to such necessity available to the Comelec. Section 2 does not constitute a valid exercise of the police power of the State. We turn to Section 8 of Resolution No. 2772, which needs to be quoted in full again: Sec. 8. Undue Reference to Candidates/Political Parties in Newspapers. No newspaper or publication shall allow to be printed or published in the news, opinion, features, or other sections of the newspaper or publication accounts or comments which manifestly favor or oppose any candidate or political party by unduly or repeatedly referring to or including therein said candidate or political party. However, unless the facts and circumstances clearly indicate otherwise, the Commission will respect the determination by the publisher and/or editors of the newspapers or publications that the accounts or views published are significant, newsworthy and of public interest. It is not easy to understand why Section 8 was included at all in Resolution No. 2772. In any case, Section 8 should be viewed in the context of our decision

in National Press Club v. Commission on Elections. 6 There the Court sustained the constitutionality of Section 11 (b) of R.A. No. 6646, known as the Electoral Reforms Law of 1987, which prohibits the sale or donation of print space and airtime for campaign or other political purposes, except to the Comelec. In doing so, the Court carefully distinguished (a) paid political advertisements which are reached by the prohibition of Section 11 (b), from (b) the reporting of news, commentaries and expressions of belief or opinion by reporters, broadcasters, editors, commentators or columnists which fall outside the scope of Section 11 (b) and which are protected by the constitutional guarantees of freedom of speech and of the press: Secondly, and more importantly, Section 11 (b) is limited in its scope of application. Analysis ofSection 11 (b) shows that it purports to apply only to the purchase and sale, including purchase and sale disguised as a donation, of print space and air time for campaign or other political purposes.Section 11 (b) does not purport in any way to restrict the reporting by newspapers or radio ortelevision stations of news or news-worthy events relating to candidates, their qualifications, political parties and programs of government. Moreover, Section 11 (b) does not reach commentaries and expressions of belief or opinion by reporters or broadcaster or editors or commentators or columnists in respect of candidates, their qualifications, and programs and so forth, so long at least as such comments, opinions and beliefs are not in fact advertisements for particular candidates covertly paid for. In sum, Section 11 (b) is not to be read as reaching any report or commentary or other coverage that, in responsible media, is not paid for by candidates for political office. We read Section 11 (b) as designed to cover only paid political advertisements of particular candidates.
The above limitation in scope of application of Section 11 (b) that it does not restrict either the reporting of or the expression of belief or opinion or comment upon the qualifications and programs and activities of any and all candidates for office constitutes the critical distinction which must be made between the instant case and that 7 of Sanidad v. Commission on Elections. . . . (Citations omitted; emphasis supplied)

Section 8 of Resolution No. 2772 appears to represent the effort of the Comelec to establish a guideline for implementation of the above-quoted distinction and doctrine in National Press Club an effort not blessed with evident success. Section 2 of Resolution No. 2772-A while possibly helpful, does not add substantially to the utility of Section 8 of Resolution No. 2772. The distinction between paid political advertisements on the one hand and news reports, commentaries and expressions of belief or opinion by reporters, broadcasters,

editors, etc. on the other hand, can realistically be given operative meaning only in actual cases or controversies, on a case-to-case basis, in terms of very specific sets of facts. At all events, the Court is bound to note that PPI has failed to allege any specific affirmative action on the part of Comelec designed to enforce or implement Section 8. PPI has not claimed that it or any of its members has sustained actual or imminent injury by reason of Comelec action under Section 8. Put a little differently, the Court considers that the precise constitutional issue here sought to be raised whether or not Section 8 of Resolution No. 2772 constitutes a permissible exercise of the Comelec's power under Article IX, Section 4 of the Constitution to supervise or regulate the enjoyment or utilization of all franchise or permits for the operation of media of communication or information [for the purpose of ensuring] equal opportunity, time and space, and the right of reply, including reasonable, equal rates therefore, for public information campaigns and forums among candidates in connection with the objective of holding free, orderly honest, peaceful and credible elections is not ripe for judicial review for lack of an actual case or controversy involving, as the very lis mota thereof, the constitutionality of Section 8. Summarizing our conclusions: 1. Section 2 of Resolution No. 2772, in its present form and as interpreted by Comelec in its 22 March 1995 letter directives, purports to require print media enterprises to "donate" free print space to Comelec. As such, Section 2 suffers from a fatal constitutional vice and must be set aside and nullified. 2. To the extent it pertains to Section 8 of Resolution No. 2772, the Petition for Certiorari and Prohibition must be dismissed for lack of an actual, justiciable case or controversy. WHEREFORE, for all the foregoing, the Petition for Certiorari and Prohibition is GRANTED in part and Section 2 of Resolution No. 2772 in its present form and the related letter-directives dated 22 March 1995 are hereby SET ASIDE as null and void, and the Temporary Restraining Order is hereby MADE PERMANENT. The Petition is DISMISSED in part, to the extent it relates to Section 8 of Resolution No. 2772. No pronouncement as to costs.

Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza and Francisco, JJ., concur. Quiason, J., is on leave. G.R. No. 147511 January 20, 2003

MARINA Z. REYES; ALFREDO A. FRANCISCO; ANGELITA Z. GARCIA; ALFREDO Z. FRANCISCO, JR; ARMANDO Z. FRANCISCO; ALMA C. FRANCISCO; EUGENIA Z. LUNA; CLARITA Z. ZABALLERO, LEONARDO Z. ZABALLERO, JR, and TEODORO Z. ZABALLERO, in substitution of LEONARDO M. ZABALLERO; AUGUSTO M. ZABALLERO; FRINE A. ZABALLERO; ELENA FRONDA ZABALLERO; VICTOR GREGORIO F. ZABALLERO; MARIA ELENA F. ZABALLERO; LOURDES ZABALLEROLAVA; SOCORRO EMILIA ZABALLERO-YAP; and TERESITA F. ZABALLERO, petitioners, vs. NATIONAL HOUSING AUTHORITY, respondent. PUNO, J.: This is an appeal by certiorari from the decision of the Court of Appeals in CAGR CV No. 51641 dated September 29, 20001 affirming the judgment of the Regional Trial Court of Quezon City, Branch 79 which dismissed the complaint for forfeiture of rights filed by herein petitioners, as well as the Resolution dated March 13, 2001 denying petitioners' motion for reconsideration. Records show that in 1977, respondent National Housing Authority (NHA) filed separate complaints for the expropriation of sugarcane lands, particularly Lot Nos. 6450, 6448-E, 6198-A and 6199 of the cadastral survey of Dasmarias, Cavite belonging to the petitioners, before the then Court of First Instance of Cavite, and docketed as Civil Case Nos. T.G.-392, T.G.-396 and T.G.-417. The stated public purpose of the expropriation was the expansion of the Dasmarias Resettlement Project to accommodate the squatters who were relocated from the Metropolitan Manila area. The trial court rendered judgment ordering the expropriation of these lots and the payment of just compensation. This was affirmed by the Supreme Court in a decision rendered on October 29, 1987 in the case of NHA vs. Zaballero2 and which became final on November 26, 1987.3 On February 24, 1989, the expropriation court (now Branch 18, Regional Trial Court of Tagaytay City) issued an Order4 the dispositive portion of which reads:

"WHEREFORE, and resolving thus, let an Alias Writ of Execution be immediately issued and that: (1) The Register of Deeds of the Province of Cavite is hereby ordered to transfer, in the name of the plaintiff National Housing Authority, the following: (a) Transfer Certificate No. RT-638 containing an area of 79,167 square meters situated in Barrio Bangkal, Dasmarias, Cavite; (b) Transfer Certificate of Title No. T-55702 containing an area of 20,872 square meters situated in Barrio Bangkal, Dasmarias, Cavite; (c) Transfer Certificate of Title No. RT-639 and RT-4641 covering Lot Nos. 6198-A and 6199 with an aggregate area of 159,985 square meters also situated in Barrio Bangkal, Dasmarias, Cavite. (2) Plaintiff National Housing Authority is likewise hereby ordered, under pain of contempt, to immediately pay the defendants, the amounts stated in the Writ of Execution as the adjudicated compensation of their expropriated properties, which process was received by it according to the records, on September 26, 1988, segregating therefrom, and in separate check, the lawyer's fees in favor of Atty. Bobby P. Yuseco, in the amount of P322,123.05, as sustained by their contract as gleaned from the records, with no other deduction, paying on its own (NHA) account, the necessary legal expenses incident to the registration or issuance of new certificates of title, pursuant to the provisions of the Property Registration Law (PD 1529); (3) Defendants, however, are directed to pay the corresponding capital gains tax on the subject properties, directing them additionally, to coordinate with the plaintiff NHA in this regard, in order to facilitate the termination of this case, put an end to this controversy and consign the same to its final rest." For the alleged failure of respondent NHA to comply with the above order, petitioners filed on April 28, 1992 a complaint5 for forfeiture of rights before the Regional Trial Court of Quezon City, Branch 79, in Civil Case No. Q-92-12093. They alleged that respondent NHA had not relocated squatters from the Metropolitan Manila area on the expropriated lands in violation of the stated public purpose for expropriation and had not paid the just compensation fixed by the court. They prayed that respondent NHA be enjoined from disposing and

alienating the expropriated properties and that judgment be rendered forfeiting all its rights and interests under the expropriation judgment. In its Answer,6respondent NHA averred that it had already paid a substantial amount to herein petitioners and that the expropriation judgment could not be executed in view of several issues raised by respondent NHA before the expropriation court (now Branch 18, RTC, Tagaytay City) concerning capital gains tax, registration fees and other expenses for the transfer of title to respondent NHA, as well as the claims for attorney's fees of Atty. Joaquin Yuseco, Jr., collaborating counsel for petitioners. Ocular inspections7 conducted by the trial court on the subject properties show that: "1. 80% of Lot No. 6198-A with an area of 120,146 square meters is already occupied by relocatees whose houses are made of light materials with very few houses partly made of hollow blocks. The relocatees were relocated only on (sic) March of 1994; 2. Most of the area covered by Lot No. 2075 is almost occupied by houses and structures, most of which are made of concrete materials. These houses are not being occupied by squatters relocated to the said lot by the defendant NHA; 3. Lot No. 6199 is also occupied by concrete houses and structures but likewise there are no relocatees in said lot. A large area of the same is still unoccupied." On September 29, 1995, the trial court rendered judgment dismissing the complaint. Finding that the failure of respondent NHA to pay just compensation and of petitioners to pay capital gains tax are both unjustified and unreasonable, the trial court held that: (1) respondent NHA is not deemed to have abandoned the public purpose for which the subject properties were expropriated because the relocation of squatters involves a long and tedious process. It ruled that respondent NHA actually pursued the public purpose of the expropriation when it entered into a contract with Arceo C. Cruz involving the construction of low cost housing on the expropriated lots to be sold to qualified low income beneficiaries; (2) there is no condition imposed in the expropriation judgment that the subject properties shall revert back to its original owners in case the purpose of expropriation is terminated or abandoned; (3) the payment of just compensation is independent of the obligation of herein petitioners to pay capital gains tax; and (4) in the payment of just compensation, the basis should be the value at the time the property was taken. On appeal, the Court of Appeals affirmed the decision of the trial court.

Petitioners are now before us raising the following assignment of errors: "1. The Honorable Court of Appeals had decided a question of substance not in accord with justice and equity when it ruled that, as the judgment of the expropriation court did not contain a condition that should the expropriated property be not used for the intended purpose it would revert to the condemnee, the action to declare the forfeiture of rights under the expropriation judgment can not prosper; 2. The Honorable Court of Appeals decided a question of substance not in accord with jurisprudence, justice and equity when it ruled that the nonpayment is not a ground for forfeiture; 3. The Honorable Court of Appeals erred in not declaring the judgment of expropriation forfeited in light of the failure of respondent to use the expropriated property for the intended purpose but for a totally different purpose." The petition is not impressed with merit. Petitioners contend that respondent NHA violated the stated public purpose for the expansion of the Dasmarias Resettlement Project when it failed to relocate the squatters from the Metro Manila area, as borne out by the ocular inspection conducted by the trial court which showed that most of the expropriated properties remain unoccupied. Petitioners likewise question the public nature of the use by respondent NHA when it entered into a contract for the construction of low cost housing units, which is allegedly different from the stated public purpose in the expropriation proceedings. Hence, it is claimed that respondent NHA has forfeited its rights and interests by virtue of the expropriation judgment and the expropriated properties should now be returned to herein petitioners. We are not persuaded. The 1987 Constitution explicitly provides for the exercise of the power of eminent domain over private properties upon payment of just compensation. More specifically, section 9, Article III states that private property shall not be taken for public use without just compensation. The constitutional restraints are public use and just compensation. Petitioners cannot insist on a restrictive view of the eminent domain provision of the Constitution by contending that the contract for low cost housing is a deviation from the stated public use. It is now settled doctrine that the concept of public use is no longer limited to traditional purposes. Here, as elsewhere, the idea that "public use" is strictly limited to clear cases of "use by the public" has

been abandoned. The term "public use" has now been held to be synonymous with "public interest," "public benefit," "public welfare," and "public convenience."8 The rationale for this new approach is well explained in the case of Heirs of Juancho Ardona, et al. vs. Reyes, et al.,9 to wit: "The restrictive view of public use may be appropriate for a nation which circumscribes the scope of government activities and public concerns and which possesses big and correctly located public lands that obviate the need to take private property for public purposes. Neither circumstance applies to the Philippines. We have never been a laissez faire State. And the necessities which impel the exertion of sovereign power are all too often found in areas of scarce public land or limited government resources. xxx xxx xxx

The taking to be valid must be for public use. There was a time when it was felt that a literal meaning should be attached to such a requirement. Whatever project is undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It is not anymore. As long as the purpose of the taking is public, then the power of eminent domain comes into play. As just noted, the constitution in at least two cases, to remove any doubt, determines what is public use. One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The other is in the transfer, through the exercise of this power, of utilities and other private enterprise to the government. It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirement of public use." (emphasis supplied) The act of respondent NHA in entering into a contract with a real estate developer for the construction of low cost housing on the expropriated lots to be sold to qualified low income beneficiaries cannot be taken to mean as a deviation from the stated public purpose of their taking. Jurisprudence has it that the expropriation of private land for slum clearance and urban development is for a public purpose even if the developed area is later sold to private homeowners, commercials firms, entertainment and service companies, and other private concerns.10 Moreover, the Constitution itself allows the State to undertake, for the common good and in cooperation with the private sector, a continuing program of urban land reform and housing which will make at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas.11 The expropriation of private property for the purpose

of socialized housing for the marginalized sector is in furtherance of the social justice provision under Section 1, Article XIII of the Constitution which provides that: "SECTION 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall require the acquisition, ownership, use and disposition of property and its increments." It follows that the low cost housing project of respondent NHA on the expropriated lots is compliant with the "public use" requirement. We likewise do not subscribe to petitioners' contention that the stated public purpose was abandoned when respondent NHA failed to occupy the expropriated lots by relocating squatters from the Metro Manila area. The expropriation judgment declared that respondent NHA has a lawful right to take petitioners properties "for the public use or purpose of expanding the Dasmarias Resettlement Project." The taking here is absolute, without any condition, restriction or qualification. Contrary to petitioners' submission, the ruling enunciated in the early case of Fery vs. Municipality of Cabanatuan,12 is still good and sound doctrine, viz.: "x x x 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. When land has been acquired for public use in fee simple unconditionally, either by the exercise of eminent domain or by purchase, the former owner retains no rights in the land, and the public use may be abandoned, or the land may be devoted to a different use, without any impairment of the estate or title acquired, or any reversion to the former owner." Petitioners further aver that the continued failure of respondent NHA to pay just compensation for a long period of time justifies the forfeiture of its rights and

interests over the expropriated lots. They demand the return of the expropriated lots. Respondent NHA justifies the delay to pay just compensation by reason of the failure of petitioners to pay the capital gains tax and to surrender the owners' duplicate certificates of title. In the recent case of Republic of the Philippines vs. Court of Appeals, et al.,13 the Court ruled that non-payment of just compensation does not entitle the private landowners to recover possession of their expropriated lots. Thus: "Thus, in Valdehueza vs. Republic where the private landowners had remained unpaid ten years after the termination of the expropriation proceedings, this Court ruled 'The points in dispute are whether such payment can still be made and, if so, in what amount. Said lots have been the subject of expropriation proceedings. By final and executory judgment in said proceedings, they were condemned for public use, as part of an airport, and ordered sold to the government. x x x. It follows that both by virtue of the judgment, long final, in the expropriation suit, as well as the annotations upon their title certificates, plaintiffs are not entitled to recover possession of their expropriated lots which are still devoted to the public use for which they were expropriated but only to demand the market value of the same. Said relief may be granted under plaintiffs' prayer for such other remedies, which may be deemed just and equitable under the premises.' The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay City where the recovery of possession of property taken for public use prayed for by the unpaid landowner was denied even while no requisite expropriation proceedings were first instituted. The landowner was merely given the relief of recovering compensation for his property computed at its market value at the time it was taken and appropriated by the State. The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides not only for the payment of just compensation to herein respondents but likewise adjudges the property condemned in favor of petitioner over which parties, as well as their privies, are bound. Petitioner has occupied, utilized and, for all intents and purposes, exercised dominion over the property pursuant to the judgment. The exercise of such rights vested to it as the condemnee indeed has amounted to at least a partial compliance or satisfaction of the 1979 judgment, thereby preempting any claim of bar by prescription on grounds of non-execution. In arguing for the return of

their property on the basis of non-payment, respondents ignore the fact that the right of the expropriating authority is far from that of an unpaid seller in ordinary sales, to which the remedy of rescission might perhaps apply. An in rem proceeding, condemnation acts upon the property. After condemnation, the paramount title is in the public under a new and independent title; thus, by giving notice to all claimants to a disputed title, condemnation proceedings provide a judicial process for securing better title against all the world than may be obtained by voluntary conveyance." (emphasis supplied) We, however, likewise find the refusal of respondent NHA to pay just compensation, allegedly for failure of petitioners to pay capital gains tax and surrender the owners' duplicate certificates of title, to be unfounded and unjustified. First, under the expropriation judgment the payment of just compensation is not subject to any condition. Second, it is a recognized rule that although the right to enter upon and appropriate the land to public use is completed prior to payment, title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. In the case of Association of Small Landowners in the Phils., Inc., et al. vs. Secretary of Agrarian Reform,14 it was held that: "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. 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 uniformly 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 x x x 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. x x x." (emphasis supplied) With respect to the amount of the just compensation still due and demandable from respondent NHA, the lower courts erred in not awarding interest computed from the time the property is actually taken to the time when compensation is actually paid or deposited in court. In Republic, et al. vs. Court of Appeals, et al.,15 the Court imposed interest at 12% per annum in order to help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time, thus: "The constitutional limitation of 'just compensation' is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, it being fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred. x x x This allowance of interest on the amount found to be the value of the property as of the time of the taking computed, being an effective forbearance, at 12% per annum should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time. Article 1250 of the Civil Code, providing that, in case of extraordinary

inflation or deflation, the value of the currency at the time of the establishment of the obligation shall be the basis for the payment when no agreement to the contrary is stipulated, has strict application only to contractual obligations. In other words, a contractual agreement is needed for the effects of extraordinary inflation to be taken into account to alter the value of the currency." Records show that there is an outstanding balance of P1,218,574.35 that ought to be paid to petitioners.16 It is not disputed that respondent NHA took actual possession of the expropriated properties in 1977.17 Perforce, while petitioners are not entitled to the return of the expropriated property, they are entitled to be paid the balance of P1,218,574.35 with legal interest thereon at 12% per annum computed from the taking of the property in 1977 until the due amount shall have been fully paid. WHEREFORE, the appealed judgment is modified as follows: 1. Ordering respondent National Housing Authority to pay petitioners the amount of P1,218,574.35 with legal interest thereon at 12% per annum computed from the taking of the expropriated properties in 1997 until the amount due shall have been fully paid; 2. Ordering petitioners to pay the capital gains tax; and 3. Ordering petitioners to surrender to respondent National Housing Authority the owners' duplicate certificates of title of the expropriated properties upon full payment of just compensation. SO ORDERED. Panganiban, Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur. G.R. No. 127820 July 20, 1998 MUNICIPALITY OF PARAAQUE, petitioner, vs. V.M. REALTY CORPORATION, respondent.

PANGANIBAN, J.:

A local government unit (LGU), like the Municipality of Paraaque, cannot authorize an expropriation of private property through a mere resolution of its lawmaking body. The Local Government Code expressly and clearly requires an ordinance or a local law for the purpose. A resolution that merely expresses the sentiment or opinion of the Municipal Council will not suffice. On the other hand, the principle of res judicata does not bar subsequent proceedings for the expropriation of the same property when all the legal requirements for its valid exercise are complied with. Statement of the Case These principles are applied by this Court in resolving this petition for review on certiorari of the July 22, 1996 Decision 1 of the Court of Appeals 2 in CA GR CV No. 48048, which affirmed in toto 3 the Regional Trial Court's August 9, 1994 Resolution. 4 The trial court dismissed the expropriation suit as follows: The right of the plaintiff to exercise the power of eminent domain is not disputed. However, such right may be exercised only pursuant to an Ordinance (Sec. 19, R.A No. 7160). In the instant case, there is no such ordinance passed by the Municipal Council of Paraaque enabling the Municipality, thru its Chief Executive, to exercise the power of eminent domain. The complaint, therefore, states no cause of action. Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On September 29, 1987, the plaintiff filed a complaint for expropriation involving the same parcels of land which was docketed as Civil Case No. 17939 of this Court (page 26, record). Said case was dismissed with prejudice on May 18, 1988 (page 39, record). The order of dismissal was not appealed, hence, the same became final. The plaintiff can not be allowed to pursue the present action without violating the principle of [r]es [j]udicata. While defendant in Civil Case No. 17939 was Limpan Investment Corporation, the doctrine of res judicata still applies because the judgment in said case (C.C. No. 17939) is conclusive between the parties and their successors-in-interest (Vda. de Buncio vs. Estate of the late Anita de Leon). The herein defendant is the successor-ininterest of Limpan Investment Corporation as shown by the "Deed of Assignment Exchange" executed on June 13, 1990. WHEREFORE, defendant's motion for reconsideration is hereby granted. The order dated February 4, 1994 is vacated and set aside.

This case is hereby dismissed. No pronouncement as to costs.


SO ORDERED. 5

Factual Antecedents Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, 6 the Municipality of Paraaque filed on September 20, 1993, a Complaint for expropriation 7 against Private Respondent V.M. Realty Corporation over two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a combined area of about 10,000 square meters, located at Wakas, San Dionisio, Paraaque, Metro Manila, and covered by Torrens Certificate of Title No. 48700. Allegedly, the complaint was filed "for the purpose of alleviating the living conditions of the underprivileged by providing homes for the homeless through a socialized housing project." 8 Parenthetically, it was also for this stated purpose that petitioner, pursuant to its Sangguniang Bayan Resolution No. 577, Series of 1991, 9 previously made an offer to enter into a negotiated sale of the property with private respondent, which the latter did not accept. 10 Finding the Complaint sufficient in form and substance, the Regional Trial Court of Makati, Branch 134, issued an Order dated January 10, 1994, 11 giving it due course. Acting on petitioner's motion, said court issued an Order dated February 4, 1994, 12 authorizing petitioner to take possession of the subject property upon deposit with its clerk of court of an amount equivalent to 15 percent of its fair market value based on its current tax declaration. On February 21, 1994, private respondent filed its Answer containing affirmative defenses and a counterclaim, 13alleging in the main that (a) the complaint failed to state a cause of action because it was filed pursuant to a resolution and not to an ordinance as required by RA 7160 (the Local Government Code); and (b) the cause of action, if any, was barred by a prior judgment or res judicata. On private respondent's motion, its Answer was treated as a motion to dismiss. 14 On March 24, 1991, 15 petitioner filed its opposition, stressing that the trial court's Order dated February 4, 1994 was in accord with Section 19 of RA 7160, and that the principle of res judicata was not applicable. Thereafter, the trial court issued its August 9, 1994 Resolution 16 nullifying its February 4, 1994 Order and dismissing the case. Petitioner's motions for reconsideration and transfer of venue were denied by the trial court in a Resolution dated December 2, 1994. 17 Petitioner then appealed to Respondent Court, raising the following issues:

1. Whether or not the Resolution of the Paraaque Municipal Council No. 93-95, Series of 1993 is a substantial compliance of the statutory requirement of Section 19, R.A. 7180 [sic] in the exercise of the power of eminent domain by the plaintiff-appellant. 2. Whether or not the complaint in this case states no cause of action. 3. Whether or not the strict adherence to the literal observance to the rule of procedure resulted in technicality standing in the way of substantial justice.
4. Whether or not the principle of res judicata is applicable to the present case. 18

As previously mentioned, the Court of Appeals affirmed in toto the trial court's Decision. Respondent Court, in its assailed Resolution promulgated on January 8, 1997, 19 denied petitioner's Motion for Reconsideration for lack of merit. Hence, this appeal. 20 The Issues Before this Court, petitioner posits two issues, viz.: 1. A resolution duly approved by the municipal council has the same force and effect of an ordinance and will not deprive an expropriation case of a valid cause of action.
2. The principle of res judicata as a ground for dismissal of case is not applicable when 21 public interest is primarily involved.

The Court's Ruling The petition is not meritorious. First Issue: Resolution Different from an Ordinance Petitioner contends that a resolution approved by the municipal council for the purpose of initiating an expropriation case "substantially complies with the requirements of the law" 22 because the terms "ordinance" and "resolution" are synonymous for "the purpose of bestowing authority [on] the local government

unit through its chief executive to initiate the expropriation proceedings in court in the exercise of the power of eminent domain."23 Petitioner seeks to bolster this contention by citing Article 36, Rule VI of the Rules and Regulations Implementing the Local Government Code, which provides. "If the LGU fails to acquire a private property for public use, purpose, or welfare through purchase, the LGU may expropriate said property through a resolution of theSanggunian authorizing its chief executive to initiate expropriation proceedings." 24 (Emphasis supplied.) The Court disagrees. The power of eminent domain is lodged in the legislative branch of government, which may delegate the exercise thereof to LGUs, other public entities and public utilities. 25 An LGU may therefore exercise the power to expropriate private property only when authorized by Congress and subject to the latter's control and restraints, imposed "through the law conferring the power or in other legislations." 26 In this case, Section 19 of RA 7160, which delegates to LGUs the power of eminent domain, also lays down the parameters for its exercise. It provides as follows: Sec. 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided,finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property. (Emphasis supplied) Thus, the following essential requisites must concur before an LGU can exercise the power of eminent domain: 1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property.

2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless. 3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws. 4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted. 27 In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to a resolution of the municipal council. Thus, there was no compliance with the first requisite that the mayor be authorized through an ordinance. Petitioner cites Camarines Sur vs. Court of Appeals 28 to show that a resolution may suffice to support the exercise of eminent domain by an LGU. 29 This case, however, is not in point because the applicable law at that time was BP 337, 30 the previous Local Government Code, which had provided that a mere resolution would enable an LGU to exercise eminent domain. In contrast, RA 7160, 31 the present Local Government Code which was already in force when the Complaint for expropriation was filed, explicitly required an ordinance for this purpose. We are not convinced by petitioner's insistence that the terms "resolution" and "ordinance" are synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. 32 An ordinance possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the two are enacted differently a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of all the Sanggunian members. 33 If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would have simply adopted the language of the previous Local Government Code. But Congress did not. In a clear divergence from the previous Local Government Code, Section 19 of RA 7160 categorically requires that the local chief executive act pursuant to an ordinance. Indeed, "[l]egislative intent is determined principally from the language of a statute. Where the language of a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation would be resorted to only where a literal interpretation would be resorted to only where a literal interpretation would be either impossible or absurd or would lead to an injustice." 34 In the instant case, there is no reason to depart from this rule, since the law requiring an ordinance is not at all impossible, absurd, or unjust.

Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private right of the people. 35 Accordingly, the manifest change in the legislative language from "resolution" under BP 337 to "ordinance" under RA 7160 demands a strict construction. "No species of property is held by individuals with greater tenacity, and is guarded by the Constitution and laws more sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right and, for greater public purposes, appropriates the land of an individual without his consent, the plain meaning of the law should not be enlarged by doubtful interpretation." 36 Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to authorize an LGU to exercise eminent domain. This is clearly misplaced, because Section 19 of RA 7160, the law itself, surely prevails over said rule which merely seeks to implement it. 37 It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its implementation. Besides, what the discrepancy seems to indicate is a mere oversight in the wording of the implementing rules, since Article 32, Rule VI thereof, also requires that, in exercising the power of eminent domain, the chief executive of the LGU act pursuant to an ordinance. In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of the Constitution, which provides that "territorial and political subdivisions shall enjoy local autonomy." It merely upholds the law as worded in RA 7160. We stress that an LGU is created by law and all its powers and rights are sourced therefrom. It has therefore no power to amend or act beyond the authority given and the limitations imposed on it by law. Strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but "inferior" domain, since it must conform to the limits imposed by the delegation, and thus partakes only of a share in eminent domain. 38Indeed, "the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it." 39 Complaint Does Not State a Cause of Action In its Brief filed before Respondent Court, petitioner argues that its Sangguniang Bayan passed an ordinance on October 11, 1994 which reiterated its Resolution No. 93-35, Series of 1993, and ratified all the acts of its mayor regarding the subject expropriation. 40 This argument is bereft of merit. In the first place, petitioner merely alleged the existence of such an ordinance, but it did not present any certified true copy

thereof. In the second place, petitioner did not raise this point before this Court. In fact, it was mentioned by private respondent, and only in passing. 41 In any event, this allegation does not cure the inherent defect of petitioner's Complaint for expropriation filed on September 23, 1993. It is hornbook doctrine that
. . . in a motion to dismiss based on the ground that the complaint fails to state a cause of action, the question submitted before the court for determination is the sufficiency of the allegations in the complaint itself. Whether those allegations are true or not is beside the point, for their truth is hypothetically admitted by the motion. The issue rather is: admitting them to be true, may the court render a valid judgment in accordance with the prayer of 42 the complaint?

The fact that there is no cause of action is evident from the face of the Complaint for expropriation which was based on a mere resolution. The absence of an ordinance authorizing the same is equivalent to lack of cause of action. Consequently, the Court of Appeals committed no reversible error in affirming the trial court's Decision which dismissed the expropriation suit. Second Issue: Eminent Domain Not Barred by Res Judicata As correctly found by the Court of Appeals 43 and the trial court, 44 all the requisites for the application of res judicata are present in this case. There is a previous final judgment on the merits in a prior expropriation case involving identical interests, subject matter and cause of action, which has been rendered by a court having jurisdiction over it. Be that as it may, the Court holds that the principle of res judicata, which finds application in generally all cases and proceedings, 45 cannot bar the right of the State or its agent to expropriate private property. The very nature of eminent domain, as an inherent power of the State, dictates that the right to exercise the power be absolute and unfettered even by a prior judgment or res judicata. The scope of eminent domain is plenary and, like police power, can "reach every form of property which the State might need for public use." 46 "All separate interests of individuals in property are held of the government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of property, remains in the government, or in the aggregate body of the people in their sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires it." 47 Thus, the State or its authorized agent cannot be forever barred from exercising said right by reason alone of previous non-compliance with any legal requirement.

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it does apply to specific issues decided in a previous case. For example, a final judgment dismissing an expropriation suit on the ground that there was no prior offer precludes another suit raising the same issue; it cannot, however, bar the State or its agent from thereafter complying with this requirement, as prescribed by law, and subsequently exercising its power of eminent domain over the same property. 48 By the same token, our ruling that petitioner cannot exercise its delegated power of eminent domain through a mere resolution will not bar it from reinstituting similar proceedings, once the said legal requirement and, for that matter, all others are properly complied with. Parenthetically and by parity of reasoning, the same is also true of the principle of "law of the case." In Republic vs. De Knecht, 49 the Court ruled that the power of the State or its agent to exercise eminent domain is not diminished by the mere fact that a prior final judgment over the property to be expropriated has become the law of the case as to the parties. The State or its authorized agent may still subsequently exercise its right to expropriate the same property, once all legal requirements are complied with. To rule otherwise will not only improperly diminish the power of eminent domain, but also clearly defeat social justice. WHEREFORE, the petition is hereby DENIED without prejudice to petitioner's proper exercise of its power of eminent domain over subject property. Costs against petitioner. SO ORDERED. Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur. G.R. No. 146062 June 28, 2001

SANTIAGO ESLABAN, JR., in his capacity as Project Manager of the National Irrigation Administration, petitioner, vs. CLARITA VDA. DE ONORIO, respondent. MENDOZA, J.: This is a petition for review of the decision1 of the Court of Appeals which affirmed the decision of the Regional Trial Court, Branch 26, Surallah, South Cotabato, ordering the National Irrigation Administration (NIA for brevity) to pay respondent the amount of P107,517.60 as just compensation for the taking of the latters property.

The facts are as follows: Respondent Clarita Vda. de Enorio is the owner of a lot in Barangay M. Roxas, Sto. Nio, South Cotabato with an area of 39,512 square meters. The lot, known as Lot 1210-A-Pad-11-000586, is covered by TCT No. T-22121 of the Registry of Deeds, South Cotabato. On October 6, 1981, Santiago Eslaban, Jr., Project Manager of the NIA, approved the construction of the main irrigation canal of the NIA on the said lot, affecting a 24,660 square meter portion thereof. Respondents husband agreed to the construction of the NIA canal provided that they be paid by the government for the area taken after the processing of documents by the Commission on Audit. Sometime in 1983, a Right-of-Way agreement was executed between respondent and the NIA (Exh. 1). The NIA then paid respondent the amount of P4,180.00 as Right-of-Way damages. Respondent subsequently executed an Affidavit of Waiver of Rights and Fees whereby she waived any compensation for damages to crops and improvements which she suffered as a result of the construction of a right-of-way on her property (Exh. 2). The same year, petitioner offered respondent the sum of P35,000.00 by way of amicable settlement pursuant to Executive Order No. 1035, 18, which provides in part that Financial assistance may also be given to owners of lands acquired under C.A. 141, as amended, for the area or portion subject to the reservation under Section 12 thereof in such amounts as may be determined by the implementing agency/instrumentality concerned in consultation with the Commission on Audit and the assessors office concerned. Respondent demanded payment for the taking of her property, but petitioner refused to pay. Accordingly, respondent filed on December 10, 1990 a complaint against petitioner before the Regional Trial Court, praying that petitioner be ordered to pay the sum of P111,299.55 as compensation for the portion of her property used in the construction of the canal constructed by the NIA, litigation expenses, and the costs. Petitioner, through the Office of the Solicitor-General, filed an Answer, in which he admitted that NIA constructed an irrigation canal over the property of the plaintiff and that NIA paid a certain landowner whose property had been taken for irrigation purposes, but petitioner interposed the defense that: (1) the government had not consented to be sued; (2) the total area used by the NIA for its irrigation canal was only 2.27 hectares, not 24,600 square meters; and (3) respondent was not entitled to compensation for the taking of her property considering that she secured title over the property by virtue of a homestead patent under C.A. No. 141.

At the pre-trial conference, the following facts were stipulated upon: (1) that the area taken was 24,660 square meters; (2) that it was a portion of the land covered by TCT No. T-22121 in the name of respondent and her late husband (Exh. A); and (3) that this area had been taken by the NIA for the construction of an irrigation canal.2 On October 18, 1993, the trial court rendered a decision, the dispositive portion of which reads: In view of the foregoing, decision is hereby rendered in favor of plaintiff and against the defendant ordering the defendant, National Irrigation Administration, to pay to plaintiff the sum of One Hundred Seven Thousand Five Hundred Seventeen Pesos and Sixty Centavos (P107,517.60) as just compensation for the questioned area of 24,660 square meters of land owned by plaintiff and taken by said defendant NIA which used it for its main canal plus costs.3 On November 15, 1993, petitioner appealed to the Court of Appeals which, on October 31, 2000, affirmed the decision of the Regional Trial Court. Hence this petition. The issues in this case are: 1. WHETHER OR NOT THE PETITION IS DISMISSIBLE FOR FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 5, RULE 7 OF THE REVISED RULES OF CIVIL PROCEDURE. 2. WHETHER OR NOT LAND GRANTED BY VIRTUE OF A HOMESTEAD PATENT AND SUBSEQUENTLY REGISTERED UNDER PRESIDENTIAL DECREE 1529 CEASES TO BE PART OF THE PUBLIC DOMAIN. 3. WHETHER OR NOT THE VALUE OF JUST COMPENSATION SHALL BE DETERMINED FROM THE TIME OF THE TAKING OR FROM THE TIME OF THE FINALITY OF THE DECISION. 4. WHETHER THE AFFIDAVIT OF WAIVER OF RIGHTS AND FEES EXECUTED BY RESPONDENT EXEMPTS PETITIONER FROM MAKING PAYMENT TO THE FORMER. We shall deal with these issues in the order they are stated. First. Rule 7, 5 of the 1997 Revised Rules on Civil Procedure provides

Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report the fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing . . . . By reason of Rule 45, 4 of the 1997 Revised Rules on Civil Procedure, in relation to Rule 42, 2 thereof, the requirement of a certificate of non-forum shopping applies to the filing of petitions for review on certiorari of the decisions of the Court of Appeals, such as the one filed by petitioner. As provided in Rule 45, 5, "The failure of the petitioner to comply with any of the foregoing requirements regarding . . . the contents of the document which should accompany the petition shall be sufficient ground for the dismissal thereof." The requirement in Rule 7, 5 that the certification should be executed by the plaintiff or the principal means that counsel cannot sign the certificate against forum-shopping. The reason for this is that the plaintiff or principal knows better than anyone else whether a petition has previously been filed involving the same case or substantially the same issues. Hence, a certification signed by counsel alone is defective and constitutes a valid cause for dismissal of the petition.4 In this case, the petition for review was filed by Santiago Eslaban, Jr., in his capacity as Project Manager of the NIA. However, the verification and certification against forum-shopping were signed by Cesar E. Gonzales, the administrator of the agency. The real party-in-interest is the NIA, which is a body corporate. Without being duly authorized by resolution of the board of the corporation, neither Santiago Eslaban, Jr. nor Cesar E. Gonzales could sign the certificate against forum-shopping accompanying the petition for review. Hence, on this ground alone, the petition should be dismissed.

Second. Coming to the merits of the case, the land under litigation, as already stated, is covered by a transfer certificate of title registered in the Registry Office of Koronadal, South Cotabato on May 13, 1976. This land was originally covered by Original Certificate of Title No. (P-25592) P-9800 which was issued pursuant to a homestead patent granted on February 18, 1960. We have held: Whenever public lands are alienated, granted or conveyed to applicants thereof, and the deed grant or instrument of conveyance [sales patent] registered with the Register of Deeds and the corresponding certificate and owners duplicate of title issued, such lands are deemed registered lands under the Torrens System and the certificate of title thus issued is as conclusive and indefeasible as any other certificate of title issued to private lands in ordinary or cadastral registration proceedings.5 The Solicitor-General contends, however, that an encumbrance is imposed on the land in question in view of 39 of the Land Registration Act (now P.D. No. 1529, 44) which provides: Every person receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land who takes a certificate of title for value in good faith shall hold the same free from all encumbrances except those noted on said certificate, and any of the following encumbrances which may be subsisting, namely: .... Third. Any public highway, way, private way established by law, or any government irrigation canal or lateral thereof, where the certificate of title does not state that the boundaries of such highway, way, irrigation canal or lateral thereof, have been determined. As this provision says, however, the only servitude which a private property owner is required to recognize in favor of the government is the easement of a "public highway, way, private way established by law, or any government canal or lateral thereof where the certificate of title does not state that the boundaries thereof have been pre-determined." This implies that the same should have been pre-existing at the time of the registration of the land in order that the registered owner may be compelled to respect it. Conversely, where the easement is not pre-existing and is sought to be imposed only after the land has been registered under the Land Registration Act, proper expropriation proceedings should be had, and just compensation paid to the registered owner thereof.6

In this case, the irrigation canal constructed by the NIA on the contested property was built only on October 6, 1981, several years after the property had been registered on May 13, 1976. Accordingly, prior expropriation proceedings should have been filed and just compensation paid to the owner thereof before it could be taken for public use. Indeed, the rule is that where private property is needed for conversion to some public use, the first thing obviously that the government should do is to offer to buy it.7 If the owner is willing to sell and the parties can agree on the price and the other conditions of the sale, a voluntary transaction can then be concluded and the transfer effected without the necessity of a judicial action. Otherwise, the government will use its power of eminent domain, subject to the payment of just compensation, to acquire private property in order to devote it to public use. Third. With respect to the compensation which the owner of the condemned property is entitled to receive, it is likewise settled that it is the market value which should be paid or "that sum of money which a person, desirous but not compelled to buy, and an owner, willing but not compelled to sell, would agree on as a price to be given and received therefor."8 Further, just compensation means not only the correct 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 then 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.9 Nevertheless, as noted in Ansaldo v. Tantuico, Jr.,10 there are instances where the expropriating agency takes over the property prior to the expropriation suit, in which case just compensation shall be determined as of the time of taking, not as of the time of filing of the action of eminent domain. Before its amendment in 1997, Rule 67, 4 provided: Order of condemnation. When such a motion is overruled or when any party fails to defend as required by this rule, the court may enter an order 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. . . . It is now provided that SEC. 4. Order of expropriation. If the objections to and the defense against the right of the plaintiff to expropriate the property are overruled, or

when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first. A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just compensation to be paid. After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable. (Emphasis added) Thus, the value of the property must be determined either as of the date of the taking of the property or the filing of the complaint, "whichever came first." Even before the new rule, however, it was already held in Commissioner of Public Highways v. Burgos11 that the price of the land at the time of taking, not its value after the passage of time, represents the true value to be paid as just compensation. It was, therefore, error for the Court of Appeals to rule that the just compensation to be paid to respondent should be determined as of the filing of the complaint in 1990, and not the time of its taking by the NIA in 1981, because petitioner was allegedly remiss in its obligation to pay respondent, and it was respondent who filed the complaint. In the case of Burgos,12 it was also the property owner who brought the action for compensation against the government after 25 years since the taking of his property for the construction of a road. Indeed, the value of the land may be affected by many factors. It may be enhanced on account of its taking for public use, just as it may depreciate. As observed in Republic v. Lara:13 [W]here property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or there may have been a natural increase in the value of the property from the time it is taken to the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is taken. This is the only way that compensation to be paid can be truly just, i.e., "just" not

only to the individual whose property is taken, "but to the public, which is to pay for it" . . . . In this case, the proper valuation for the property in question is P16,047.61 per hectare, the price level for 1982, based on the appraisal report submitted by the commission (composed of the provincial treasurer, assessor, and auditor of South Cotabato) constituted by the trial court to make an assessment of the expropriated land and fix the price thereof on a per hectare basis.14 Fourth. Petitioner finally contends that it is exempt from paying any amount to respondent because the latter executed an Affidavit of Waiver of Rights and Fees of any compensation due in favor of the Municipal Treasurer of Barangay Sto. Nio, South Cotabato. However, as the Court of Appeals correctly held: [I]f NIA intended to bind the appellee to said affidavit, it would not even have bothered to give her any amount for damages caused on the improvements/crops within the appellees property. This, apparently was not the case, as can be gleaned from the disbursement voucher in the amount of P4,180.00 (page 10 of the Folder of Exhibits in Civil Case 396) issued on September 17, 1983 in favor of the appellee, and the letter from the Office of the Solicitor General recommending the giving of "financial assistance in the amount of P35,000.00" to the appellee. Thus, We are inclined to give more credence to the appellees explanation that the waiver of rights and fees "pertains only to improvements and crops and not to the value of the land utilized by NIA for its main canal."15 WHEREFORE, premises considered, the assailed decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION to the extent that the just compensation for the contested property be paid to respondent in the amount of P16,047.61 per hectare, with interest at the legal rate of six percent (6%) per annum from the time of taking until full payment is made. Costs against petitioner.
1wphi1.nt

SO ORDERED. Bellosillo, Quisumbing, Buena, De Leon, Jr., JJ., concur. G.R. No. 108015 May 20, 1998 CRISTINA DE KNECHT and RENE KNECHT, petitioners, vs. HON. COURT OF APPEALS; HON. MANUEL DUMATOL, as Judge, Regional

Trial Court, Branch 112, Pasay City; HON. CONCHITA C. MORALES, as Judge, Regional Trial Court, Branch 110, Pasay City; HON, AURORA NAVARETTE-RECINA, as Judge, Regional Trial Court, Branch 119, Pasay City; HON. SOFRONIO G. SAYO, as Judge, Regional Trial Court, Branch 111, Pasay City; REPUBLIC OF THE PHILIPPINES; SPS. MARIANO & ANACORETA NOCOM; SALEM INVESTMENT CORPORATION; SPS. ANASTACIO & FELISA BABIERA; and SPS. ALEJANDRO & FLOR SANGALANG, respondents. G.R. No. 109234 May 20, 1998 CRISTINA DE KNECHT and RENE KNECHT, petitioner, vs. HON. SOFRONIO SAYO, as Judge, Regional Trial Court, Branch 111, Pasay City; REPUBLIC OF THE PHILIPPINES; PHILIPPINE NATIONAL BANK; and MARIANO NOCOM, respondent.

PUNO, J.: In G.R. No. 108015, petitioners Cristina de Knecht and Rene Knecht seek to annul and set aside the decision of the Court of Appeals 1 in CA-G.R. SP No. 28089 dismissing an action to annul (1) the decision and order of the Regional Trial Court, Branch 112, Pasay City, 2 in LRC Case No. 2636-P; (2) the order of the Regional Trial Court, Branch 110, Pasay City 3 in LRC Case No. 2652-P; and (3) the orders of dismissal by Regional Trial Court, Branch 119, Pasay City in Civil Case No. 2961-P; 4 and (4) the orders and the writ of possession issued by the Regional Trial Court, Branch 111, Pasay City, 5 in Civil Case No. 7327. In G.R. No. 109234, petitioners Cristina de Knecht and Rene Knecht seek to annul the decision of the Court of Appeals 6 in CA-G.R. SP No. 27817 which dismissed the petition for certiorari questioning the order of the Regional Trial Court, Branch 111, Pasay City 7 denying its "Motion for Intervention and to Implead Additional Parties" in Civil Case No. 7327. The instant case is an unending sequel to several suits commenced almost twenty years ago over the same subject matter. This involves a parcel of land with an area of 8,102.68 square meters, more or less, located at the corner of the south end of the E. de los Santos Avenue (EDSA) 8 and F.B. Harrison in Pasay City. The land was owned by petitioners Cristina de Knecht and her son, Rene Knecht , under Transfer Certificate of Title (TCT) No. 9032 issued in their names by the Register of Deeds of Pasay City. On the land, the Knechts constructed

eight (8) houses of strong materials, leased out the seven and occupied one of them as their residence. In 1979, the Republic of the Philippines initiated Civil Case No. 7001-P for expropriation against the Knechts' property before the then Court of First Instance of Rizal, Branch 111, Pasay City. 9 The government sought to utilize the land for the completion of the Manila Flood Control and Drainage Project and the extension of the EDSA towards Roxas Boulevard. The CFI issued a writ of possession. On petition of the Knechts, however, this Court, in G.R. No. L-51078, held that the choice of area for the extension of EDSA was arbitrary. We annulled the writ of possession and enjoined the trial court from taking further action Civil Case No. 7001-P. 10 In 1982, the City Treasurer of Pasay discovered that the Knechts failed to pay real estate taxes on the property from 1980 to 1982. 11 As a consequence of this deficiency, the City Treasurer sold the property at public auction on May 27, 1982 for the sum of P63,000.00, the amount of the deficiency taxes. 12 The highest bidders were respondent Spouses Anastacio and Felisa Babiera (the Babieras) and respondent Spouses Alejandro and Flor Sangalang (the Sangalangs). Petitioners failed to redeem the property within one year from the date of sale. In August 1983, Anastacio Babiera filed with respondent Regional Trial Court, Branch 112, Pasay City, a petition for registration of his name as co-owner proindiviso of the subject land. This case was docketed as LRC Case No. 2636p 13 and was filed allegedly without notice to the Knechts. On September 15, 1983, the trial court ordered the Register of Deeds to register Babiera's name and the Knechts to surrender to the Register of Deeds the owner's duplicate of the title. In October 1983, Alejandro Sangalang filed LRC Case No. 2652-P before the Regional Trial Court, Branch 110, Pasay City. 14 Sangalang also sought to register his name as co-owner pro-indiviso of the subject property. The proceedings were also conducted allegedly without notice to the Knechts. The trial court granted the petition and ordered the Register of Deeds, Pasay City to cancel TCT No. 9032 in the name of the Knechts and issue a new one in the names of Babiera and Sangalang. Pursuant to said orders, the Register of Deeds cancelled TCT No. 9032 and issued TCT No. 86670 in the names of Sangalang and Babiera. The Knechts, who were in possession of the property, allegedly learned of the auction sale only by the time they received the orders of the land registration courts.

On March 12, 1985, Sangalang and Babiera sold the land to respondent Salem Investment Corporation (Salem) for P400,000.00. TCT No. 86670 was cancelled and TCT No. 94059 was issued in the name of Salem. Meanwhile, on February 17, 1983, the Batasang Pambansa passed B.P. Blg. 340 authorizing the national government to expropriate certain properties in Pasay City for the EDSA Extension, the EDSA Outfall of the Manila Flood Control and Drainage Project, and the "Cut-Off" of the Estero Tripa de Gallina which were all projects of the National Government. 15 The property of the Knechts was part of those expropriated under B.P. Blg. 340. In view of this Court's previous ruling in G.R. No. L-51078 16 annulling the expropriation proceedings in Civil Case No. 7001-P, the government apprised this Court of the subsequent enactment of B.P. Blg. 340. On February 12, 1990, we rendered a decision upholding the validity of B.P. Blg. 340 in G.R. No. 87335. 17 While G.R. No. 87335 was pending in court, on June 24, 1985, the Knechts filed Civil Case No. 2961-P before the Regional Trial Court, Branch 119, Pasay City. 18 They prayed for reconveyance, annulment of the tax sale and the titles of the Babieras and Sangalangs. The Knechts based their action on lack of the required notices to the tax sale. In the same case, Salem filed on September 26, 1985 a petition for appointment of a receiver. The court granted the petition and on November 7, 1985, appointed Metropolitan Bank and Trust Company as receiver. The Knechts questioned this appointment on a petition for certiorari before the Court of Appeals in CA-G.R. SP No. 08178. The Court of Appeals dismissed the petition which this Court affirmed in G.R. No. 75609 on January 28, 1987. Meanwhile, Civil Case No. 2961-P proceeded before Branch 119. The Knechts presented their evidence. They, however, repeatedly requested for postponements. 19 At the hearing of September 13, 1988, they and their counsel failed to appear. Accordingly, the trial court dismissed the case for "apparent lack of interest of plaintiffs" . . . "considering that the case had been pending for an unreasonable length of time." 20 The Knechts moved to set aside the order of dismissal. The motion was denied for late filing and failure to furnish a copy to the other parties. 21 The Knechts questioned the order of dismissal before the Court of Appeals. The appellate court sustained the trial court. They elevated the case to this Court in G.R. No. 89862. The petition was denied for late payment of filing fees and for failure to

sufficiently show any reversible error 22. On January 17, 1990, the petition was denied with finality 23 and entry of judgment was made on February 19, 1990. 24 Three (3) months later, on May 15, 1990, the Republic of the Philippines, through the Solicitor General, filed before the Regional Trial Court, Branch 111, Pasay City Civil Case No. 7327 "[f]or determination of just compensation of lands expropriated under B.P. Blg. 340." 25 In its amended petition, the National Government named as defendants Salem, Maria del Carmen Roxas de Elizalde, Concepcion Cabarrus Vda. de Santos, Mila de la Rama and Inocentes de la Rama, the heirs of Eduardo Lesaca and Carmen Padilla. 26 As prayed for, the trial court issued a writ of possession on August 29, 1990. 27 The following day, August 30, seven of the eight houses of the Knechts were demolished and the government took possession of the portion of land on which the houses stood. 28 Meanwhile, Salem conveyed 5,611.92 square meters of the subject property to respondent spouses Mariano and Anacoreta Nocom for which TCT No. 130323 was issued in their names. Salem remained the owner of 2,490.69 square meters under TCT Nos. 130434 and 130435. Since the Knechts refused to vacate their one remaining house, Salem instituted against them Civil Case No. 85-263 for unlawful detainer before the Municipal Trial Court, Branch 46, Pasay City. As defense, the Knechts claimed ownership of the land and building. 29 The Municipal Trial Court, however, granted the complaint and ordered the Knechts' ejectment. Pursuant to a writ of execution, the last house of the Knechts was demolished on April 6, 1991. 30 The proceedings in Civil Case No. 7327 continued. As prayed for by Salem, the trial court issued an order on September 13, 1990 for the release of P5,763,650.00 to Salem by the Philippine National Bank (PNB) as partial payment of just compensation. 31 On June 7, 1991, the trial court issued another order to the PNB for the release of P15,000,000.00 as another partial payment to Salem. 32 On September 9, 1991, the trial court issued an order fixing the compensation of all the lands sought to be expropriated by the government. The value of the subject land was set at P28,961.00 per square meter. 33 This valuation did not include the improvements. 34 It was after these orders that the Knechts, on September 25, 1991, filed a "Motion for Intervention and to Implead Additional Parties" in Civil Case No. 7327. They followed this with a "Motion to Inhibit Respondent Judge Sayo and to Consolidate Civil Case No. 7327 with Civil Case No. 8423."

Earlier, prior to the "Motion to Inhibit Respondent Judge Sayo and to Consolidate Civil Case No. 7327 with Civil Case No. 8423," the Knechts instituted Civil Case No. 8423 before the Regional Trial Court, Branch 117, Pasay City for recovery of ownership and possession of the property. On January 2, 1992, the trial court dismissed Civil Case No. 8423 on the ground of res judicata. The Knechts challenged the order of dismissal in G.R. No. 103448 before this Court. On February 5, 1992, we dismissed the Knechts' "Motion for Extension of Time to File Petition for Certiorari" for non-compliance with Circular No. 1-88 35 and for late filing of the Petition. 36 Entry of judgment was made on May 21, 1992. 37 In Civil Case No. 7327, the trial court issued an order on April 14, 1992 denying the Knechts' "Motion for Intervention and to Implead Additional Parties." The court did not rule on the "Motion to Inhibit Respondent Judge Sayo and to Consolidate Civil Case No. 7327 with Civil Case No. 8423," declaring it moot and academic. On April 23, 1992, as prayed for by Mariano Nocom, the trial court ordered the release of P11,526,000.00 as third installment for his 5,611.92 square meters of the subject land. The Knechts questioned the release of this amount before the Court of Appeals in CA-G.R. SP No. 27817. The Knechts later amended their petition to limit their cause of action to a review of the order of April 14, 1992 which denied their "Motion for Intervention and to Implead Additional Parties." On March 5, 1993, the Court of Appeals dismissed the petition in CA-G.R. SP No. 27817 and denied the Knechts' intervention in Civil Case No. 7327 after finding that the Knechts had no legal interest on the subject property after the dismissal of Civil Case No. 2961-P. Hence the petition in G.R. No. 109234. On June 9, 1992, while CA-G.R. SP No. 27817 was pending, the Knechts instituted also before the Court of Appeals an original action for annulment of judgment of the trial courts. This case was docketed as CA-G.R. SP No. 28089. Therein, the Knechts challenged the validity of the orders of the land registration courts in the two petitions of the Sangalangs and Babieras for registration 38, the reconveyance case 39 and the just compensation proceedings. 40 The Knechts questioned the validity of the validity of the titles of the Babieras and Sangalangs, and those of Salem and the Nocoms, and prayed for the issuance of new titles in their names. They also sought to restrain further releases of payment of just compensation to Salem and the Nocoms in Civil Case No. 7327. The Court of Appeals dismissed the petition for lack of merit on November 24, 1992. Hence the filing of G.R. No. 108015. In a Resolution dated February 1,

1993, we denied the petition finding "no reversible error" committed by the Court of Appeals. The Knechts moved for reconsideration. Pending a resolution of this Court on the Knechts' motion for reconsideration, respondents Nocom moved for consolidation of the two actions. 41 We granted the motion. In their petition in G.R. No. 109234, the Knechts alleged that: I THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW IN HOLDING THAT CIVIL CASE NO. 7327 IS NOT AN EMINENT DOMAIN PROCEEDING; II THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW IN HOLDING THAT RES JUDICATA HAS SET IN TO BAR THE MOTION FOR INTERVENTION;
III THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW IN NOT 42 ORDERING RESPONDENT JUDGE TO RULE ON THE MOTION FOR INHIBITION.

In their Motion for Reconsideration in G.R. No. 108015, the Knechts reiterate that: I THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW IN HOLDING THAT THE PETITION FOR ANNULMENT OF JUDGMENT IS BARRED BY RES JUDICATA;
II THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW IN UPHOLDING THE DEFENSE OF RES JUDICATA EVEN AS ITS APPLICATION 43 INVOLVES THE SACRIFICE OF JUSTICE TO TECHNICALITY.

We rule against the petitioners. In its decision, the Court of Appeals held that the Knechts had no right to intervene in Civil Case No. 7327 for lack of any legal right or interest in the property subject of expropriation. The appellate court declared that Civil Case No. 7327 was not an expropriation proceeding under Rule 67 of the Revised Rules of Court but merely a case for the fixing of just compensation. 44 The Knechts' right to the land had been foreclosed after they failed to redeem it one year after the sale at public auction. Whatever right remained on the property vanished after Civil Case No. 2961-P, the reconveyance case, was dismissed by the trial court. Since the petitions questioning the order of dismissal were likewise dismissed by the Court of Appeals and this Court, the order of dismissal became final andres judicata on the issue of ownership of the land. 45

The Knechts urge this Court, in the interest of justice, to take a second look at their case. They claim that they were deprived of their property without due process of law. They allege that they did not receive notice of their tax delinquency and that the Register of Deeds did not order them to surrender their owner's duplicate for annotation of the tax lien prior to the sale. Neither did they receive notice of the auction sale. After the sale, the certificate of sale was not annotated in their title nor in the title with the Register of Deeds. In short, they did not know of the tax delinquency and the subsequent proceedings until 1983 when they received the orders of the land registration courts in LRC Cases Nos. 2636-P and 2652-P filed by the Babieras and Sangalangs. 46 This is the reason why they were unable to redeem the property. It has been ruled that the notices and publication, as well as the legal requirements for a tax delinquency sale, are mandatory; 47 and the failure to comply therewith can invalidate the sale. 48 The prescribed notices must be sent to comply with the requirements of due process. 49 The claim of lack of notice, however, is a factual question. This Court is not a trier of facts. Moreover, this factual question had been raised repeatedly in all the previous cases filed by the Knechts. These cases have laid to rest the question of notice and all the other factual issues they raised regarding the property. Res judicata had already set in. Res judicata is a ground for dismissal of an action. 50 It is a rule that precludes parties from relitigating issues actually litigated and determined by a prior and final judgment. It pervades every well-regulated system of jurisprudence, and is based upon two grounds embodied in various maxims of the common law one, public policy and necessity, that there should be a limit to litigation; 51 and another, the individual should not be vexed twice for the same cause. 52 When a right of fact has been judicially tried and determined by a court of competent jurisdiction, or an opportunity for such trial has been given, the judgment of the court, so long as it remains unreversed, should be conclusive upon the parties and those in privity with them in law or estate. 53 To follow a contrary doctrine would subject the public peace and quiet to the will and neglect of individuals and prefer the gratification of the litigious disposition of the parties to the preservation of the public tranquility. 54 Res judicata applies when: (1) the former judgment or order is final; (2) the judgment or order is one on the merits; (3) it was rendered by a court having jurisdiction over the subject matter and the parties; (4) there is between the first and second actions, identity of parties, of subject matter and of cause of action. 55

Petitioners claim that Civil Case No. 2961-P is not res judicata on CA-G.R. SP No. 28089. They contend that there was no judgment on the merits in Civil Case No. 2961-P, i.e., one rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the case. 56 They stress that Civil Case No. 2961-P was dismissed upon petitioners' failure to appear at several hearings and was based on "lack of interest." We are not impressed by petitioners' contention. "Lack of interest" is analogous to "failure to prosecute." Section 3 of Rule 17 of the Revised Rules of Court provides: Sec. 3. Failure to Prosecute. If plaintiff fails to appear at the time of the trial, or to prosecute his action for an unreasonable length of time, or to comply with these rules or any order of the court, the action may be dismissed upon motion of the defendant or upon the court's own motion. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise provided by court. An action may be dismissed for failure to prosecute in any of the following instances: (1) if the plaintiff fails to appear at the time of trial; or (2) if he fails to prosecute the action for an unreasonable length of time; or (3) if he fails to comply with the Rules of Court or any order of the court. Once a case is dismissed for failure to prosecute, this has the effect of an adjudication on the merits and is understood to be with prejudice to the filing of another action unless otherwise provided in the order of dismissal. 57 In other words, unless there be a qualification in the order of dismissal that it is without prejudice, the dismissal should be regarded as an adjudication on the merits and is with prejudice. 58 Prior to the dismissal of Civil Case No. 2961-P, the Knechts were presenting their evidence. They, however, repeatedly requested for postponements and failed to appear at the last scheduled hearing. This prompted Salem to move for dismissal of the case. The court ordered thus: ORDER It appearing that counsel for the plaintiff has been duly notified of today's hearing but despite notice failed to appear and considering that this case has been pending for quite a considerable length of time, on motion of counsel for the defendant Salem Investment joined by Atty. Jesus Paredes for the defendant City of Pasay, for apparent lack of interest of plaintiffs, let their complaint be DISMISSED.

As prayed for, let this case be reset to September 29, 1988 at 8:30 in the morning for the reception of evidence of defendant's Salem Investment on its counterclaim.
SO ORDERED.
59

The order of dismissal was based on the following factors: (1) pendency of the complaint for a considerable length of time; (2) failure of counsel to appear at the scheduled hearing despite notice; and (3) lack of interest of the petitioners. Under Section 3, Rule 17, a dismissal order which does not provide that it is without prejudice to the filing of another action is understood to be an adjudication on the merits. Hence, it is one with prejudice to the filing of another action. The order of dismissal was questioned before the Court of Appeals and this Court. The petitions were dismissed and the order affirming dismissal became final in February 1990. Since the dismissal order is understood to be an adjudication on the merits, then all the elements of res judicata have been complied with. Civil Case No. 2961-P is therefore res judicata on the issue of ownership of the land. The Knechts contend, however, that the facts of the case do not call for the application of res judicata because this amounts to "a sacrifice of justice to technicality." We cannot sustain this argument. It must be noted that the Knechts were given the opportunity to assail the tax sale and present their evidence on its validity in Civil Case No. 2961-P, the reconveyance case. Through their and their counsel's negligence, however, this case was dismissed. They filed for reconsideration, but their motion was denied. The Court of Appeals upheld this dismissal. We affirmed the dismissal not on the basis of a mere technicality. This Court reviewed the merits of petitioners' case and found that the Court of Appeals committed no reversible error in its questioned judgment. 60 After years of litigation and several cases raising essentially the same issues, the Knechts cannot now be allowed to avoid the effects of res judicata. 61 Neither can they be allowed to vary the form of their action or adopt a different method of presenting their case to escape the operation of the principle. 62 To grant what they seek will encourage endless litigations and forumshopping. Hence, the Court of Appeals correctly dismissed CA-G.R. SP No. 28089. We find, however, that the Court of Appeals erred in declaring that Civil Case No. 7327 was not an expropriation case. It was precisely in the exercise of the state's power of eminent domain under B.P. Blg. 340 that expropriation proceedings

were instituted against the owners of the lots sought to be expropriated. B.P. Blg. 340 did not, by itself, lay down the procedure for expropriation. The law merely described the specific properties expropriated and declared that just compensation was to be determined by the court. It designated the then Ministry of Public Works and Highways as the administrator in the "prosecution of the project." Thus, in the absence of a procedure in the law for expropriation, reference must be made to the provisions on eminent domain in Rule 67 of the Revised Rules of Court. Section 1 of Rule 67 of the Revised Rules of Court provides: Sec. 1. The complaint. The right of eminent domain shall be exercised by the filing of a complaint which shall state with certainty the right and purpose of condemnation, describe the real or personal property sought to be condemned, and join as defendants all persons owning or claiming to own, or occupying, any part thereof or interest therein, showing, so far as practicable, the interest of each defendant separately. If the title to any property sought to be condemned appears to be in the Republic of the Philippines, although occupied by private individuals, or if the title is otherwise obscure or doubtful so that the plaintiff cannot with accuracy or certainty specify who are the real owners, averment to that effect may be made in the complaint. The power of eminent domain is exercised by the filing of a complaint which shall join as defendants all persons owning or claiming to own, or occupying, any part of the expropriated land or interest therein. 63 If a known owner is not joined as defendant, he is entitled to Intervene in the proceeding; or its he is joined but not served with process and the proceeding is already closed before he came to know of the condemnation, he may maintain an independent suit for damages. 64 The defendants in an expropriation case are not limited to the owners of the property condemned. They include all other persons owning, occupying or claiming to own the property. When a parcel of land is taken by eminent domain, the owner of the fee is not necessarily the only person who is entitled to compensation. 65 In the American jurisdiction, the term "owner" when employed in statutes relating to eminent domain to designate the persons who are to be made parties to the proceeding, refers, as is the rule in respect of those entitled to compensation, to all those who have lawful interest in the property to be condemned, 66 including a mortgagee, 67 a lessee 68 and a vendee in possession under an executory contract. 69 Every person having an estate or interest at law or in equity in the land taken is entitled to share in the award. 70 If a person

claiming an interest in the land sought to be condemned is not made a party, he is given the right to intervene and lay claim to the compensation. 71 The Knechts insist that although they were no longer the registered owners of the property at the time Civil Case No. 7327 was filed, they still occupied the property and therefore should have been joined as defendants in the expropriation proceedings. When the case was filed, all their eight (8) houses were still standing; seven (7) houses were demolished on August 29, 1990 and the last one on April 6, 1991. They claim that as occupants of the land at the time of expropriation, they are entitled to a share in the just compensation. Civil Case No. 7327, the expropriation case, was filed on May 15, 1990. Four months earlier, in January 1990, Civil Case No. 2961-P for reconveyance was dismissed with finality by this Court and judgment was entered in February 1990. The Knechts lost whatever right or colorable title they had to the property after we affirmed the order of the trial court dismissing the conveyance case. The fact that the Knechts remained in physical possession cannot give them another cause of action and resurrect an already settled case. The Knechts' possession of the land and buildings was based on their claim of ownership, 72 not on any juridical title such as a lessee, mortgagee, or vendee. Since the issue of ownership was put to rest in Civil Case No. 2961-P, it follows that their physical possession of the property after the finality of said case was bereft of any legality and merely subsisted at the tolerance of the registered owners. 73 This tolerance ended when Salem filed Civil Case No. 85-263 for unlawful detainer against the Knechts. As prayed for, the trial court ordered their ejectment and the demolition of their remaining house. Indeed, the Knechts had no legal interest in the property by the time the expropriation proceedings were instituted. They had no right to intervene and the trial court did not err in denying their "Motion for Intervention and to Implead Additional Parties." Their intervention having been denied, the Knechts had no personality to move for the inhibition of respondent Judge Sayo from the case. The Court of Appeals therefore did not err in dismissing CA-G.R. SP No. 27817. IN VIEW WHEREOF, the Petition in G.R. No. 109234 is dismissed and the Motion for Reconsideration in G.R. No. 108015 is denied. The decisions of the Court of Appeals in CA-G.R. SP No. 27817 and CA-G.R. SP No. 28089 are affirmed. SO ORDERED. Regalado, Melo, Mendoza and Martinez, JJ., concur.

G.R. No. 136171

July 2, 2002

REPUBLIC OF THE PHILIPPINES, petitioner, vs. KER AND COMPANY LIMITED, respondent. RESOLUTION AUSTRIA-MARTINEZ, J.: Before us is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner Republic of the Philippines, represented by the Department of Public Works and Highways, assailing the decision rendered by the Court of Appeals in CA G.R. CV No. 54256 entitled, "Republic of the Philippines v. Ker and Company Limited." The decision in question affirmed the trial court in ordering petitioner to pay herein respondent Ker Company Limited the sum of Six Thousand Pesos (P6,000.00) per square meter as just compensation for the 1,186 square meter lot (Site I) which was expropriated by the government. The factual background: Petitioner filed before the Regional Trial Court (RTC) of Davao City a petition for expropriation of portions of two (2) parcels of land owned by respondent described as follows: Lot No. TCT No. Total Area Site I 2-D-1-A- T2 212616 Site 2-D-1-B- TII 1 212617 Affected Area 29.583 sq. 1,186 sq. m. m. 2,902 sq. 1,035 sq. m. m.

Petitioner needed the parcels of land for the widening of the road component of J.P. Laurel-Buhangin Interchange in Davao City. The provisional value of the properties sought to be expropriated was fixed at the aggregate sum of Two Million Two Hundred Twenty One Thousand Pesos (P2,221,000.00) or One Thousand Pesos (P1,000.00) per square meter. Respondent claimed that the value of the properties subject for expropriation is more than Four Thousand Pesos (P4,000.00) per square meter. After study and investigation, the duly appointed commissioners, Ms. Lucia E. Pelayo and Mr. Oliver Morales of Cuervo Appraisers, Inc. gave the following estimates as just compensation for the areas affected:

Site I 1,186 sq. m. Site II 1,035 sq. m.

= P 8,788.70/square meter = P 5,423.48/square meter

While petitioner found the valuation of respondents property in Site II reasonable, petitioner, in its comment on the Report of the Appraisers found the estimate for Site I excessive, stating that: 1) the provincial Appraisal Committee in a joint Appraisal Report dated January 14, 1993 recommended the market value of Ker and Companys property at P1,000.00 per square meter; 2) the highest valuation of lots within the JP Laurel-Buhangin area adjudicated by the RTC, Davao City in a decision rendered on December 23, 1993 is at P4,000.00 per sq. meter; and, 3) the appraisers did not take into account that the areas in the proceedings are being expropriated for use in a government project vested with public interest. On September 27, 1996, the RTC rendered a decision the dispositive portion of which reads as follows: "With the determination of just compensation, judgment is hereby rendered: 1. Declaring plaintiff to have a lawful right to acquire possession of and title to: a) 1,186 square meters only of defendant Kers parcel of land covered by Certificate of Title T-212616 described as Site I; b) 1,035 square meters only of defendant Kers parcel of land covered by Certificate of Title T-212617 described as Site II; 2. Condemning portions of the above-described parcels of land including improvements thereon, if there be any, free from all liens and encumbrances; 3. Ordering plaintiff to pay: a) Defendant Ker P6,000.00 per square meter for the P1,186 in Site I;

b) Defendant Ker P5,423.48 per square meter for the 1,035 in Site II as fair and just compensation."1 Petitioner appealed to the Court of Appeals alleging that the value fixed by the trial court as just compensation for Site I should be reduced. Petitioner alleged that when the petition for expropriation was filed, the tax declaration of the property indicated its assessed value at only Four Hundred Twenty-Five Pesos (P425.00) per square meter while its market value was only Eight Hundred Forty Nine Pesos (P849.00) per square meter. Petitioner cited the case of Civil Case No. 22-052-93 entitled "Republic v. Laong"2 where the RTC of Davao City (Branch 17) fixed the value of the lots within the area of J.P. Laurel Buhangin at Four Thousand Pesos (P4,000.00) per square meter. The appellate court affirmed the decision of the lower court in toto, ruling that just compensation cannot be measured by the assessed value of the property as stated in the tax declaration and schedule of market values approved by the Provincial Appraisal Committee and that for the purpose of appraisal, the fair market value of the property is taken into account and such value refers to the highest price in terms of money which a property will bring if exposed for sale in the public market. The appellate court brushed aside petitioners reliance on Republic v. Laong. Petitioner in the present petition raises essentially the same issues which were raised before the trial court and the appellate court. In addition however, petitioner avers that since Site I is adjacent to Site II, there are no substantial distinctions to warrant different valuations. The appellate court did not err in not upholding petitioners claim that the valuation for the lot in Site I is excessive and unreasonable since the tax declaration of the property indicated its assessed value at only Four Hundred Twenty-Five Pesos (P425.00) per square meter while its market value was only Eight Hundred Forty-Nine Pesos (P849.00) per square meter based on the revised 1993 schedule of market values. We have declared in Manotok v. National Housing Authority3, that the statements made in tax documents by the assessor may serve as one of the factors to be considered but they cannot exclude or prevail over a court determination after expert commissioners have examined the property and all pertinent circumstances are taken into account and after all the parties have had the opportunity to fully plead their cases before a competent and unbiased tribunal. That the tax declaration of the property in Site I indicated a much lower assessed or market value therefore does not make commissioners valuation of just

compensation for the property excessive or unreasonable. The duly appointed commissioners of both parties made a careful study of the properties subject of expropriation. They considered factors such as the location, the most profitable likely use of the remaining area, size, shape, accessibility as well as listings of other properties within the vicinity to arrive at a reasonable estimate of just compensation for both lots due the respondent. Petitioner, in fact, does not question the commissioners appraisal value as just compensation for the area affected in Site II. Petitioner maintains that the assessment of just compensation for the lot in Site I is excessive since the highest valuation made for the properties within the vicinity of J.P. Laurel-Buhangin Road was pegged at Four Thousand Pesos (P4,000.00) in a decision rendered by Branch 17 of the Regional Trial Court of Davao in December 1993. This contention is not plausible. In computing just compensation for expropriation proceedings, it is the value of the land at the time of the taking or at the time of the filing of the complaint not at the time of the rendition of judgment which should be taken into consideration.4 Section 4, Rule 67 of the 1997 Rules of Civil Procedure provides that just compensation is to be determined as of the date of the taking or the filing of the complaint whichever came first. On this matter, the appellate court is correct in disregarding petitioners claim. Nonetheless, we find merit in petitioners contention that there are no substantial distinctions between the lot in Site I and the lot in Site II to warrant different valuations. The lots subject of expropriation are adjacent to each other. The Appraisal Report even indicated that the remaining area of the lot in Site II has the same problem as in Site I with respect to access. The construction of the service road has created a problem pertaining to ingress or egress to the remaining portions of both Sites.5Considering that there is no evidence showing substantial distinctions between the lots affected by Site I and Site II and no explanation was given by the commissioners as to why Site I had been given a higher valuation than Site II, we find it just and reasonable that the undisputed sum of Five Thousand Four Hundred Twenty-Three Pesos and Forty-Eight Centavos (P5,423.48) per square meter as just compensation for Site II should likewise apply to Site I. Wherefore, the petition is partially GRANTED. The assailed decision of the appellate court in C.A. G.R. CV No. 54256 is AFFIRMED with MODIFICATION only in so far as the value for the lot in Site I is concerned. Petitioner Republic of the Philippines is ordered to pay respondent Ker Company Limited Five Thousand Four Hundred Twenty-Three Pesos and

Forty-Eight Centavos (P5,423.48) per square meter as just compensation for the 1,186 square meter lot expropriated in Site I. No pronouncement as to costs. SO ORDERED. Davide, Jr., Vitug, Kapunan, and Ynares-Santiago, JJ., concur. G.R. No. 106440 January 29, 1996

ALEJANDRO MANOSCA, ASUNCION MANOSCA and LEONICA MANOSCA, petitioners, vs. HON. COURT OF APPEALS, HON. BENJAMIN V. PELAYO, Presiding Judge, RTC-Pasig, Metro Manila, Branch 168, HON. GRADUACION A. REYES CLARAVAL, Presiding Judge, RTC-Pasig, Metro Manila, Branch 71, and REPUBLIC OF THE PHILIPPINES, respondents. DECISION VITUG, J.: In this appeal, via a petition for review on certiorari, from the decision1 of the Court of Appeals, dated 15 January 1992, in CA-G.R. SP No. 24969 (entitled "Alejandro Manosca, et al. v. Hon. Benjamin V. Pelayo, et al."), this Court is asked to resolve whether or not the "public use" requirement of Eminent Domain is extant in the attempted expropriation by the Republic of a 492-square-meter parcel of land so declared by the National Historical Institute ("NHI") as a national historical landmark. The facts of the case are not in dispute. Petitioners inherited a piece of land located at P. Burgos Street, Calzada, Taguig. Metro Manila, with an area of about four hundred ninety-two (492) square meters. When the parcel was ascertained by the NHI to have been the birthsite of Felix Y. Manalo, the founder of Iglesia Ni Cristo, it passed Resolution No. 1, Series of 1986, pursuant to Section 42 of Presidential Decree No. 260, declaring the land to be a national historical landmark. The resolution was, on 06 January 1986, approved by the Minister of Education, Culture and Sports. Later, the opinion of the Secretary of Justice was asked on the legality of the measure. In his Opinion No. 133, Series of 1987, the Secretary of Justice replied in the affirmative; he explained:

According to your guidelines, national landmarks are places or objects that are associated with an event, achievement, characteristic, or modification that makes a turning point or stage in Philippine history. Thus, the birthsite of the founder of the Iglesia ni Cristo, the late Felix Y. Manalo, who, admittedly, had made contributions to Philippine history and culture has been declared as a national landmark. It has been held that places invested with unusual historical interest is a public use for which the power of eminent domain may be authorized . . . . In view thereof, it is believed that the National Historical Institute as an agency of the Government charged with the maintenance and care of national shrines, monuments and landmarks and the development of historical sites that may be declared as national shrines, monuments and/or landmarks, may initiate the institution of condemnation proceedings for the purpose of acquiring the lot in question in accordance with the procedure provided for in Rule 67 of the Revised Rules of Court. The proceedings should be instituted by the Office of the Solicitor General in behalf of the Republic. Accordingly, on 29 May 1989, the Republic, through the Office of the SolicitorGeneral, instituted a complaint for expropriation3 before the Regional Trial Court of Pasig for and in behalf of the NHI alleging, inter alia, that: Pursuant to Section 4 of Presidential Decree No. 260, the National Historical Institute issued Resolution No. 1, Series of 1986, which was approved on January, 1986 by the then Minister of Education, Culture and Sports, declaring the above described parcel of land which is the birthsite of Felix Y. Manalo, founder of the "Iglesia ni Cristo," as a National Historical Landrnark. The plaintiff perforce needs the land as such national historical landmark which is a public purpose. At the same time, respondent Republic filed an urgent motion for the issuance of an order to permit it to take immediate possession of the property. The motion was opposed by petitioners. After a hearing, the trial court issued, on 03 August 1989,4 an order fixing the provisional market (P54,120.00) and assessed (P16,236.00) values of the property and authorizing the Republic to take over the property once the required sum would have been deposited with the Municipal Treasurer of Taguig, Metro Manila. Petitioners moved to dismiss the complaint on the main thesis that the intended expropriation was not for a public purpose and, incidentally, that the act would constitute an application of public funds, directly or indirectly, for the use, benefit, or support of Iglesia ni Cristo, a religious entity, contrary to the provision of

Section 29(2), Article VI, of the 1987 Constitution.5 Petitioners sought, in the meanwhile, a suspension in the implementation of the 03rd August 1989 order of the trial court. On 15 February 1990, following the filing by respondent Republic of its reply to petitioners' motion seeking the dismissal of the case, the trial court issued its denial of said motion to dismiss.6 Five (5) days later, or on 20 February 1990,7 another order was issued by the trial court, declaring moot and academic the motion for reconsideration and/or suspension of the order of 03 August 1989 with the rejection of petitioners' motion to dismiss. Petitioners' motion for the reconsideration of the 20th February 1990 order was likewise denied by the trial court in its 16th April 1991 order.8 Petitioners then lodged a petition for certiorari and prohibition with the Court of Appeals. In its now disputed 15th January 1992 decision, the appellate court dismissed the petition on the ground that the remedy of appeal in the ordinary course of law was an adequate remedy and that the petition itself, in any case, had failed to show any grave abuse of discretion or lack of jurisdictional competence on the part of the trial court. A motion for the reconsideration of the decision was denied in the 23rd July 1992 resolution of the appellate court. We begin, in this present recourse of petitioners, with a few known postulates. Eminent domain, also often referred to as expropriation and, with less frequency, as condemnation, is, like police power and taxation, an inherent power of sovereignty. It need not be clothed with any constitutional gear to exist; instead, provisions in our Constitution on the subject are meant more to regulate, rather than to grant, the exercise of the power. Eminent domain is generally so described as "the highest and most exact idea of property remaining in the government" that may be acquired for some public purpose through a method in the nature of a forced purchase by the State.9 It is a right to take or reassert dominion over property within the state for public use or to meet a public exigency. It is said to be an essential part of governance even in its most primitive form and thus inseparable from sovereignty. 10 The only direct constitutional qualification is that "private property shall not be taken for public use without just compensation." 11 This proscription is intended to provide a safeguard against possible abuse and so to protect as well the individual against whose property the power is sought to be enforced. Petitioners assert that the expropriation has failed to meet the guidelines set by this Court in the case of Guido v.Rural Progress Administration, 12 to wit: (a) the size of the land expropriated; (b) the large number of people benefited; and, (c)

the extent of social and economic reform.13 Petitioners suggest that we confine the concept of expropriation only to the following public uses, 14 i.e., the . . . taking of property for military posts, roads, streets, sidewalks, bridges, ferries, levees, wharves, piers, public buildings including schoolhouses, parks, playgrounds, plazas, market places, artesian wells, water supply and sewerage systems, cemeteries, crematories, and railroads. This view of petitioners is much too limitative and restrictive. The court, in Guido, merely passed upon the issue of the extent of the President's power under Commonwealth Act No. 539 to, specifically, acquire private lands for subdivision into smaller home lots or farms for resale to bona fide tenants or occupants. It was in this particular context of the statute that the Court had made the pronouncement. The guidelines in Guido were not meant to be preclusive in nature and, most certainly, the power of eminent domain should not now be understood as being confined only to the expropriation of vast tracts of land and landed estates. 15 The term "public use," not having been otherwise defined by the constitution, must be considered in its general concept of meeting a public need or a public exigency. 16 Black summarizes the characterization given by various courts to the term; thus: Public Use. Eminent domain. The constitutional and statutory basis for taking property by eminent domain. For condemnation purposes, "public use" is one which confers same benefit or advantage to the public; it is not confined to actual use by public. It is measured in terms of right of public to use proposed facilities for which condemnation is sought and, as long as public has right of use, whether exercised by one or many members of public, a "public advantage" or "public benefit" accrues sufficient to constitute a public use. Montana Power Co. vs. Bokma, Mont. 457 P. 2d 769, 772, 773. Public use, in constitutional provisions restricting the exercise of the right to take private property in virtue of eminent domain, means a use concerning the whole community as distinguished from particular individuals. But each and every member of society need not be equally interested in such use, or be personally and directly affected by it; if the object is to satisfy a great public want or exigency, that is sufficient. Rindge Co. vs. Los Angeles County, 262 U.S. 700, 43 S.Ct. 689, 692, 67 L.Ed. 1186. The term may be said to mean public usefulness, utility, or advantage, or what is productive of general benefit. It may be limited to the

inhabitants of a small or restricted locality, but must be in common, and not for a particular individual. The use must be a needful one for the public, which cannot be surrendered without obvious general loss and inconvenience. A "public use" for which land may be taken defies absolute definition for it changes with varying conditions of society, new appliances in the sciences, changing conceptions of scope and functions of government, and other differing circumstances brought about by an increase in population and new modes of communication and transportation. Katz v. Brandon, 156 Conn., 521, 245 A.2d 579,586. 17 The validity of the exercise of the power of eminent domain for traditional purposes is beyond question; it is not at all to be said, however, that public use should thereby be restricted to such traditional uses. The idea that "public use" is strictly limited to clear cases of "use by the public" has long been discarded. This Court in Heirs of Juancho Ardona v. Reyes,18 quoting from Berman v. Parker (348 U.S. 25; 99 L. ed. 27), held: We do not sit to determine whether a particular housing project is or is not desirable. The concept of the public welfare is broad and inclusive. See DayBrite Lighting, Inc. v. Missouri, 342 US 421, 424, 96 L. Ed. 469, 472, 72 S Ct 405. The values it represents are spiritual as well as physical, aesthetic as well as monetary. It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled. In the present case, the Congress and its authorized agencies have made determinations that take into account a wide variety of values. It is no for us to reappraise them. If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way. Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear. For the power of eminent domain is merely the means to the end. See Luxton v. North River Bridge Co. 153 US 525, 529, 530, 38 L. ed. 808, 810, 14 S Ct 891; United States v. Gettysburg Electric R. Co. 160 US 668, 679, 40 L. ed. 576, 580, 16 S Ct 427. It has been explained as early as Sea v. Manila Railroad Co., 19 that: . . . A historical research discloses the meaning of the term "public use" to be one of constant growth. As society advances, its demands upon the individual increase and each demand is a new use to which the resources

of the individual may be devoted. . . . for "whatever is beneficially employed for the community is a public use. Chief Justice Enrique M. Fernando states: The taking to be valid must be for public use. There was a time when it was felt that a literal meaning should be attached to such a requirement. Whatever project is undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It is not so any more. As long as the purpose of the taking is public, then the power of eminent domain comes into play. As just noted, the constitution in at least two cases, to remove any doubt, determines what is public use. One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The other is the transfer, through the exercise of this power, of utilities and other private enterprise to the government. It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirement of public use. 20 Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land Tenure Administration, 21 has viewed the Constitution a dynamic instrument and one that "is not to be construed narrowly or pedantically" so as to enable it "to meet adequately whatever problems the future has in store." Fr. Joaquin Bernas, a noted constitutionalist himself, has aptly observed that what, in fact, has ultimately emerged is a concept of public use which is just as broad as "public welfare." 22 Petitioners ask: But "(w)hat is the so-called unusual interest that the expropriation of (Felix Manalo's) birthplace become so vital as to be a public use appropriate for the exercise of the power of eminent domain" when only members of the Iglesia ni Cristo would benefit? This attempt to give some religious perspective to the case deserves little consideration, for what should be significant is the principal objective of, not the casual consequences that might follow from, the exercise of the power. The purpose in setting up the marker is essentially to recognize the distinctive contribution of the late Felix Manalo to the culture of the Philippines, rather than to commemorate his founding and leadership of the Iglesia ni Cristo. The practical reality that greater benefit may be derived by members of the Iglesia ni Cristo than by most others could well be true but such a peculiar advantage still remains to be merely incidental and secondary in nature. Indeed, that only a few would actually benefit from the expropriation of property does not necessarily diminish the essence and character of public use. 23

Petitioners contend that they have been denied due process in the fixing of the provisional value of their property. Petitioners need merely to be reminded that what the law prohibits is the lack of opportunity to be heard;24contrary to petitioners' argument, the records of this case are replete with pleadings 25 that could have dealt, directly or indirectly, with the provisional value of the property. Petitioners, finally, would fault respondent appellate court in sustaining the trial court's order which considered inapplicable the case of Noble v. City of Manila. 26 Both courts held correctly. The Republic was not a party to the alleged contract of exchange between the Iglesia ni Cristo and petitioners which (the contracting parties) alone, not the Republic, could properly be bound. All considered, the Court finds the assailed decision to be in accord with law and jurisprudence. WHEREFORE, the petition is DENIED. No costs. SO ORDERED. Padilla, Bellosillo, Kapunan and Hermosisima, Jr., JJ., concur.