Valid Offer

[G.R. No. 211231. April 3, 2019.]

CITY GOVERNMENT OF VALENZUELA, REPRESENTED BY ITS CITY

MAYOR, HON. SHERWIN T. GATCHALIAN, petitioner, vs. SPOUSES
SILVINO ABACAN AND REMEDIOS LAZARO, respondents.

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution
dated April 3, 2019, which reads as follows:
"G.R. No. 211231 (CITY GOVERNMENT OF VALENZUELA,
represented by its City Mayor, HON. SHERWIN T.
GATCHALIAN, petitioner, v. SPOUSES SILVINO ABACAN and
REMEDIOS LAZARO, respondents). — This resolves the Petition for
Review on Certiorari filed by the City Government of Valenzuela (Valenzuela
City), represented by its Mayor, Sherwin T. Gatchalian (Mayor Gatchalian),
assailing the August 30, 2013 Decision  and February 7, 2014 Resolution  of
the Court of Appeals in CA-G.R. CV No. 98581. The Court of Appeals
affirmed the Regional Trial Court November 17, 2011 Decision in Civil
Case No. 102-V-10. 

Spouses Silvino Abacan and Remedios Lazaro (the Abacan Spouses) are the
registered owners of a 1,203-square meter parcel of land located on G. Lazaro
Street, Dalandanan, Valenzuela City.  The property is covered by Transfer
Certificate of Title No. B-54073. 
In a September 9, 2009 Letter, Valenzuela City formally offered the Abacan
Spouses to purchase their property at P400.00 per square meter, or a total of
P481,200.00. However, the Abacan Spouses rejected the offer. 
Subsequently, the Sangguniang Panlungsod of Valenzuela City enacted City
Ordinance No. 75, series of 2010, which authorized Mayor Gatchalian to initiate
expropriation proceedings over the Abacan Spouses' property for the
construction of a public school building and appropriation of the project's funds. 
On August 12, 2010, Valenzuela City, represented by Mayor Gatchalian, filed
before the Regional Trial Court a Complaint for expropriation against the
Abacan Spouses.
On August 26, 2010, the Abacan Spouses filed their Answer. They
averred that Valenzuela City's offer was way below the current Bureau of
Internal Revenue zonal valuation. 
On September 16, 2010, Valenzuela City manifested that it issued Land
Bank of the Philippines Check No. 0000392622 worth P72,180.00, under
Section 19 of Republic Act No. 7160. The check was issued payable to the
Abacan Spouses, representing around 15% of the total fair market value of
the property based on current tax declarations. 
In its September 30, 2010 Order, the Regional Trial Court authorized
the issuance of a Writ of Possession in Valenzuela City's favor. It directed the
Branch Sheriff to place the property in the city government's possession. 
During pre-trial, the parties agreed that the lone issue for resolution was
the amount of just compensation. 
In its January 14, 2011 Order, the Regional Trial Court ruled that
Valenzuela City had the right to take the property to construct the school
building.  Following Rule 67, Section 5 of the 1997 Rules of Civil Procedure,
the trial court appointed three (3) Commissioners tasked with determining the
amount of just compensation due on Valenzuela City. 
Subsequently, the Board of Commissioners set the just compensation
at P7,500.00 per square meter, or a total of P9,022,500.00. 16 This was
assailed by Valenzuela City, insisting that the just compensation must be
based on the property's fair market value per the tax declaration, which was
P400.00 per square meter. 
In its November 17, 2011 Decision, the Regional Trial Court directed
Valenzuela City to pay the Abacan Spouses P6,000.00 per square meter, or a
total of P7,218,000.00, for the property.  The dispositive portion of the
Decision read:
PREMISES CONSIDERED, the Court hereby ORDERS plaintiff
to pay defendant Spouses Silvino Abacan and Remedios Lazaro the
just compensation for the expropriated property covered by Transfer
Certificate of Title No. B-54073, in the amount of P6,000.00 per square
meter, or a total of P7,218,000.00 for the 1,203 square meter property,
with interest at the legal rate of 6% per annum from November 5, 2010,
until full payment is made.
Defendants, on the other hand, are hereby DIRECTED to
present the Owner's Duplicate of said TCT No. B-54073 to the Register
of Deeds of Valenzuela City, which is in turn directed, upon payment
 by defendant of the corresponding capital gains tax, to cancel said title
and issue, in lieu thereof, a new transfer certificate of title under the
name of plaintiff, City Government of Valenzuela.
SO ORDERED. 

Valenzuela City filed a Motion for Reconsideration, but it was denied in the
Regional Trial Court March 5, 2012 Order. 

On appeal, the Court of Appeals, in its August 30, 2013 Decision,  affirmed

the November 17, 2011 Decision of the Regional Trial Court. It held that the
trial court had carefully studied the expropriated property when it fixed the
amount of just compensation. It also found that the trial court not only relied
on the Bureau of Internal Revenue zonal valuation, but also evaluated the
Commissioners' Report. It also noted how the trial court considered that
Valenzuela City, in August 2001, had purchased a 3,000-square meter
property for P5,000.00 per square meter, and that the properties in that
vicinity were valued at P5,300 per square meter by 2003. 
The dispositive portion of the Court of Appeals Decision read:
WHEREFORE, premises considered, the instant appeal
is DISMISSED. The Decision dated November 17, 2011 of the
Regional Trial Court (RTC), Branch 269 of Valenzuela City in Civil
Case No. 102-V-10 is AFFIRMED.
SO ORDERED.  (Emphasis in the original)

Valenzuela City filed a Motion for Reconsideration,  which was denied in the

Court of Appeals February 7, 2014 Resolution. 
Undeterred, Valenzuela City filed this Petition for Review
on Certiorari  against the Abacan Spouses on February 28, 2014.
Petitioner claims that the Court of Appeals erred in affirming the trial court's
Decision in fixing the amount of just compensation. The Court of Appeals
allegedly based its judgment on a misapprehension of facts, "speculations,
surmises and conjectures." 
Similarly, petitioner argues that the Court of Appeals erred in considering only
the Bureau of Internal Revenue zonal valuation and the price of the property it
had purchased in 2001 as sufficient bases to determine the amount of just
compensation.  According to petitioner, the property in question is not a
commercial lot, but a vacant or idle residential lot  per Tax Declaration No. C-
015-04245. That the Court of Appeals disregarded this allegedly violates the
power bestowed upon local government units to prescribe zoning
classifications, as held in Republic of the Philippines v. Far East Enterprises,
Inc. 
Further, petitioner claims that the just compensation of P6,000.00 per
square meter valuation was arbitrary  and unjustified. 
In a June 4, 2014 Resolution,  this Court required respondents to
comment on the Petition within 10 days from notice.

In their Comment/Opposition to Petition for Review on Certiorari  filed on July

15, 2014, respondents counter that the trial court did not err in determining the
just compensation. They note that the trial court based its determination on
the Commissioners' Report and documentary evidence presented in court.
Such documentary evidence include: (1) the Bureau of Internal Revenue
zonal valuation, which pegged the just compensation at P5,300.00 per square
meter; (2) a 2000 Deed of Sale, showing that petitioner purchased the
property where Dalandanan National High School and the Astrodome were
erected at P5,000.00 per square meter; and (3) a 2001 Deed of Sale, showing
that petitioner purchased another property on G. Lazaro Street as the
expropriated property at P12,500.00 per square meter. 35
In its August 18, 2014 Resolution, 36 this Court noted respondents'
Comment/Opposition and required petitioner to file a reply within 10 days from
notice.
Petitioner filed its Reply 37 on September 29, 2014. It asserts that the
three (3) parameters laid down in Land Bank of the Philippines v. Livioco 38 —
(1) character of the property; (2) price; and (3) time of actual taking — should
have been considered in setting the amount of just compensation. 39 It cites
Section 5 of Republic Act No. 8974, which lists, among others: (1) the
classification and use for which the property is suited; (2) development costs
for improving the land; and (3) the value declared by owners, as standards for
assessment of land value. Petitioner points out that the property, prior to
expropriation, was a vacant or idle residential land without improvements, low-
lying, and situated in a flood-prone area. 40
For this Court's resolution is the lone issue of whether or not the
classification of a property in the tax declaration must prevail over that in the
Bureau of Internal Revenue zonal valuation and Commissioners' Report in the
determination of the amount of just compensation.
This Petition is denied for lack of merit.
I
 This Court is not a trier of facts. Under Rule 45 of the Rules of Court,
only questions of law may be raised in a petition for review on certiorari. 41
A question of fact exists when the truth or falsity of the alleged facts is
doubted 42 or when the issue entails a review of the evidence
presented. 43 Factual issues of an expropriated property's valuation are
generally beyond the scope of a petition under Rule 45.
Further, factual findings of the trial court, especially when affirmed by
the Court of Appeals, shall not be disturbed by this Court, unless they are
grounded entirely on speculations, surmises, or conjectures. 44 That is not the
case here.
Jurisprudence, however, has provided several exceptions to the rule.
For this Court to review the facts, the "exceptions must be alleged,
substantiated, and proved by the parties[.]" 45 Here, petitioner alleges that the
Court of Appeals Decision was "based on [a] misapprehension of facts and/or
are based on speculations, surmises[,] and conjectures." 46 Petitioner,
however, fails to substantiate its allegation.
On these procedural grounds alone, the Petition ought to be denied.
Nonetheless, even if its propriety is admitted, this Court finds no reason to
depart from the findings of the Court of Appeals, which affirmed the trial
court's ruling.
II
Among the State's inherent powers that need not be expressly granted
is eminent domain, which "enables it to forcibly acquire private lands intended
for public use upon payment of just compensation to the owner." 47 The
exercise of this power is limited by Article III, Section 9 of the Constitution,
which states that "[p]rivate property [shall] not be taken for public use without
just compensation.
Section 19  of the Local Government Code confers the power of
eminent domain to local government units. The requisites for the local
government's exercise of eminent domain are:
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. 
aDSIHc

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. 50 (Citation omitted)
The procedure on the exercise of the power of eminent domain or
expropriation is governed by Rule 67 of the Rules of Court. As explained
in National Power Corporation v. Posada: 51
It undergoes two phases. The first phase determines the propriety of
the action. The second phase determines the compensation to be paid
to the landowner. Thus:
There are two (2) stages in every action for
expropriation. The first is concerned with the
determination of the authority of the plaintiff to exercise
the power of eminent domain and the propriety of its
exercise in the context of the facts involved in the suit. It
ends with an order, if not of dismissal of the action, "of
condemnation declaring that the plaintiff has a lawful right
to take the property sought to be condemned, for the
public use or purpose described in the complaint, upon
the payment of just compensation to be determined as of
the date of the filing of the complaint." An order of
dismissal, if this be ordained, would be a final one, of
course, since it finally disposes of the action and leaves
nothing more to be done by the Court on the merits. So,
too, would an order of condemnation be a final one, for
thereafter, as the Rules expressly state, in the
proceedings before the Trial Court, "no objection to the
exercise of the right of condemnation (or the propriety
thereof) shall be filed or heard."
The second phase of the eminent domain action is
concerned with the determination by the Court of "the just
compensation for the property sought to be taken." This
is done by the Court with the assistance of not more than
three (3) commissioners. The order fixing the just
compensation on the basis of the evidence before, and
findings of, the commissioners would be final, too. It
would finally dispose of the second stage of the suit, and
leave nothing more to be done by the Court regarding the
issue. Obviously, one or another of the parties may
believe the order to be erroneous in its appreciation of
the evidence or findings of fact or otherwise. Obviously,
too, such a dissatisfied party may seek a reversal of the
order by taking an appeal therefrom. 52 (Emphasis
supplied, citation omitted)
 Here, the parties agreed that only the issue of just compensation
remains.
In expropriation cases, just compensation is "the full and fair equivalent
of the property taken from its owner by the expropriator." 53 It means:
. . . an equivalent for the value of the land (property) taken. Anything
beyond that is more and anything short of that is less than
compensation. To compensate is to render something which is equal
to that taken or received. The word "just" is used to intensify the
meaning of the word "compensation;" to convey the idea that the
equivalent to be rendered for the property taken shall be real,
substantial, full, ample. "Just compensation," therefore, . . . means a
fair and full equivalent for the loss sustained.
The exercise of the power being necessary for the public good,
and all [the] property being held subject to its exercise when, and as
the public good requires it, it would be unjust to the public that it should
be required to pay the owner more than a fair indemnity for such loss.
To arrive at this fair indemnity, the interests of the public and of the
owner and all the circumstances of the particular appropriation should
be taken into consideration. 54 (Emphasis supplied, citation omitted)  ETHIDa

In Manila Electric Company v. Pineda, 55 this Court held that where the

issue is determining the amount of just compensation in an expropriation suit,
a trial before the commissioners 56 is indispensable. Trial with the aid of
commissioners gives the parties the opportunity to present evidence on the
issue of just compensation. As such, it is a substantial right that may not be
whimsically waived. 57
However, while the appointment of commissioners is mandatory in
resolving the issue of just compensation, courts are not bound by their
findings. 58 Rule 67, Section 8 of the Rules of Court provides:
SECTION 8. Action upon Commissioners' Report. — Upon the
expiration of the period of ten (10) days referred to in the preceding
section, or even before the expiration of such period but after all the
interested parties have filed their objections to the report or their
statement of agreement therewith, the court may, after hearing, accept
the report and render judgment in accordance therewith; or, for cause
shown, it may recommit the same to the commissioners for further
report of facts; or it may set aside the report and appoint new
commissioners; or it may accept the report in part and reject it in part;
and it may make such order or render such judgment as shall secure
to the plaintiff the property essential to the exercise of his right of
expropriation, and to the defendant just compensation for the property
so taken. (Emphasis supplied)
 The determination of just compensation remains a judicial function to be
performed by courts. 59 Courts may render judgment that secures just
compensation for the defendant and the expropriated property for the plaintiff.
Courts may substitute their estimate of the value, as long as it is supported by
the evidence on record. 60
In Association of Small Landowners in the Philippines, Inc. v. Secretary
of Agrarian Reform, 61 this Court explained the import of Export Processing
Zone Authority v. Dulay 62 on the court's function of determining just
compensation:
EPZA v. Dulay resolved a challenge to several decrees promulgated by
President Marcos providing that the just compensation for property under
expropriation should be either the assessment of the property by the
government or the sworn valuation thereof by the owner, whichever was lower.
In declaring these decrees unconstitutional, the Court held through Mr. Justice
Hugo E. Gutierrez, Jr.:
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
this Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically
would still have the power to determine the just compensation for the
property, following the applicable decrees, its task would be relegated to
simply stating the lower value of the property as declared either by the
owner or the assessor. As a necessary consequence, it would be
useless for the court to appoint commissioners under Rule 67 of the
Rules of Court. Moreover, the need to satisfy the due process clause in
the taking of private property is seemingly fulfilled since it cannot be said
that a judicial proceeding was not had before the actual taking. However,
the strict application of the decrees during the proceedings would be
nothing short of a mere formality or charade as the court has only to
choose between the valuation of the owner and that of the assessor, and
its choice is always limited to the lower of the two. The court cannot
exercise its discretion or independence in determining what is just or fair.
Even a grade school pupil could substitute for the judge insofar as the
determination of constitutional just compensation is concerned.  cSEDTC

xxx xxx xxx

In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains the
same provision on just compensation as its predecessor decrees, still
have the power and authority to determine just compensation,
independent of what is stated by the decree and to this effect, to appoint
commissioners for such purpose.
This time, we answer in the affirmative.
 xxx xxx xxx
It is violative of due process to deny the owner the opportunity to prove
that the valuation in the tax documents is unfair or wrong. And it is
repulsive to the 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. 63 (Emphasis in the original, citation omitted)
Petitioner's assertion on the property's classification indicated in Tax
Declaration No. C-015-04245, as it is allegedly in accord with the local
government's power to prescribe zoning classifications, is erroneous. Insisting
that the trial court solely rely on this encroaches on its judicial power to
determine just compensation. Courts are mandated to evaluate and consider
competent evidence in determining just compensation. Not one (1) factor shall
prevail over the other, especially that which was determined by public officers
in the performance of their official functions. 64
Furthermore, petitioner did not substantiate any of its allegations. Proof
of its zoning classification, the alleged tax declaration, the Bureau of Internal
Revenue zonal valuation, the Commissioners' Report, among other relevant
documents, do not appear on record despite having been repeatedly cited by
petitioner.
Thus, we affirm the finding of the Court of Appeals, which stated:
Contrary to the City Government of Valenzuela's claim, the RTC did not solely
rely on the BIR zonal valuation when it fixed the just compensation at
P6,000.00 per square meter. Evidentiary records disclose that the RTC
evaluated the Commissioners' Report dated August 10, 2011. In the said
report, it is very evident that the commissioners' recommendation of P7,500.00
per square meter was not merely based on the zonal valuation made by the
BIR. The commissioners recommended said amount after taking into
consideration the factors set forth under Section 5 of Republic Act No. 8974.
This can be gleaned from the following pertinent portion:
"Considering that the zonal valuation of the subject property as
determined by the Bureau of Internal Revenue, which is Pesos: Five
Thousand Three Hundred (P5,300.00) per square meter, and the
prevalent market value of neighboring developed properties which are
today being sold at Twelve Thousand Five Hundred Pesos (P12,500.00),
we decided to propose that the subject property be valued at Seven
Thousand Five Hundred Pesos (P7,500.00) per square meter. This is a
more realistic value of the subject property taking into account the
development in the vicinity and its neighboring areas. In our ocular
inspection, we observed that the subject property is indeed located in a
busy and highly commercialized area. . . ."
The RTC likewise considered that the City Government of Valenzuela
purchased a 3,000-square meter property within the same vicinity as the
subject property at a value of P5,000.00 per square meter. Said transaction
was done sometime in August 2001. It further considered that in 2003, the BIR
has valued the properties in the same zone or area at P5,300.00 per square
meter. SDA

Verily, the RTC had carefully studied the expropriated property when it fixed the
just compensation at P6,000.00 per square meter. Inasmuch as the
determination of just compensation is a judicial function, We see no plausible
reason to disturb the RTC's findings as to the valuation of the subject
property. 65 (Citations omitted)
Notably, petitioner's invocation of Republic of the Philippines is
misplaced and does not support its cause.
In Republic of the Philippines, the expropriation was for a national
government infrastructure project, governed by Republic Act No. 8974.
Among the requirements for authorizing the government's immediate entry in
expropriation proceedings is the payment of 100% of the property's value
based on the current Bureau of Internal Revenue zonal valuation. There, the
petitioner questioned the expropriated properties' classification, which would
be used to determine the 100% value of the property based on the current
Bureau of Internal Revenue zonal valuation. In disposing the issue, this Court
ruled:
Inasmuch as what is involved in this case is the payment of the amount
equivalent to 100% of the value of the property based on the current relevant
zonal valuation of the BIR, we must distinguish the same from just
compensation. In Capitol Steel Corporation v. PHIVIDEC Industrial Authority,
we ruled:
To clarify, the payment of the provisional value as a prerequisite to the
issuance of a writ of possession differs from the payment of just
compensation for the expropriated property. While the provisional value
is based on the current relevant zonal valuation, just compensation is
based on the prevailing fair market value of the property. As the
appellate court explained:
The first refers to the preliminary or provisional determination of the
value of the property. It serves a double-purpose of pre-payment if the
property is fully expropriated, and of an indemnity for damages if the
proceedings are dismissed. It is not a final determination of just
compensation and may not necessarily be equivalent to the prevailing
fair market value of the property. Of course, it may be a factor to be
considered in the determination of just compensation.
Just compensation, on the other hand, is the final determination of the
fair market value of the property. It has been described as "the just and
complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation." Market
values, has also been described in a variety of ways as the "price fixed
by the buyer and seller in the open market in the usual and ordinary
course of legal trade and competition; the price and value of the article
established as shown by sale, public or private, in the ordinary way of
business; the fair value of the property between one who desires to
purchase and one who desires to sell; the current price; the general or
ordinary price for which property may be sold in that locality.["]
As the preliminary or provisional determination of the value of the property
equivalent to 100% of the value of the property based on the current relevant
zonal valuation of the BIR, said amount serves a double purpose of pre-
payment if the property is fully expropriated, and of indemnity for damages if
the proceedings are dismissed. Said provisional value must be paid to the
owner of the land before a writ of possession may be issued. The issuance of a
certificate of availability of funds will not suffice for the purpose of issuance of a
writ of possession.
After payment of the provisional amount, the court may now proceed to
determine the amount of just compensation. Petitioner can now present its
evidence relative to the properties' fair market value as provided in Section 5 of
Republic Act No. 8974. 66 (Citations omitted)In stark contrast, at issue here is
the amount of just compensation.
Moreover, this Court deemed that the more important issue in Republic
of the Philippines was if "the courts, in the first instance, [were] the proper
venue in which to resolve any dispute involving the classification of
lands[.]" 67 This Court ruled in the negative. While the power of a local
government to reclassify and convert lands through local ordinance was
recognized, this Court explained that courts must refrain from resolving
judicial questions that "demand the special competence of administrative
agencies[.]" Such is the case here, where the issue of land classification is
raised.  acEHCD

Similarly, Land Bank of the Philippines, which involved an expropriated

property under the Comprehensive Agrarian Reform Program, does not apply
here. The just distribution of agricultural lands, as mandated by the
Constitution, 68 is primarily governed by Republic Act No. 6657 or the
Comprehensive Agrarian Reform Law.

WHEREFORE, the Petition for Review on Certiorari is DENIED for lack of

merit. The Court of Appeals August 30, 2013 Decision and February 7, 2014
Resolution in CA-G.R. CV No. 98581 are AFFIRMED.
SO ORDERED."
|||

Among the State's inherent powers that need not be expressly granted is
eminent domain, which "enables it to forcibly acquire private lands intended
for public use upon payment of just compensation to the owner."  The
exercise of this power is limited by Article III, Section 9 of the Constitution,
which states that private property Shall not be taken for public use without just
compensation.

The Supreme Court has directed the Valenzuela City government to pay the full amount of
PHP6,000 per square meter instead of only PHP400 to a couple whose 1,203-square meter lot
was expropriated by the city nine years ago for the construction of a public school building.

In a resolution made available to the public recently, the SC’s third division upheld the Court of
Appeals (CA) which in turn upheld the 2011 ruling of the regional trial court on the payment of
just compensation at PHP6,000 per square meter or a total of PHP7.2 million to spouses Silvino
Abacan and Remedios Lazaro Abacan. The rulings by the high court turns down the appeal filed
by the city government.

Valenzuela City in 2009 offered to purchase the Abacan property in Barangay Dalandanan at
PHP400 per square meter or a total of PHP481,200, an offer rejected by the couple.

The Sangguniang Panglungsod passed an ordinance authorizing Gatchalian to initiate

expropriation proceedings. The Abacan spouses told the RTC that the offer was below the zonal
valuation set by the Bureau of Internal Revenue (BIR).

The city government then issued to the couple a check for PHP72,180 representing 15 percent
of the total fair market value of the property.

On Sept. 30, 2010, the RTC issued a writ of possession in favor of Valenzuela City with a ruling
that the city has the right to take the property for the construction of a school building.

The trial court then appointed three commissioners to determine just compensation. The
commissioners set the just compensation at PHP7,500 per square-meter which was opposed by
the city government. On Nov. 17, 2011, the RTC handed down a decision which ordered the city
government to pay the Abacan spouses PHP7.2 million for their 1,203-square meter lot at
PHP6,000 per square meter.
 The SC cited the RTC’s decision as upheld by the CA. “Inasmuch as the determination of just
compensation is a judicial function, we see no plausible reason to disturb the RTC's findings as
to the valuation of the subject property.

Section 19  of the Local Government Code confers the power of eminent
domain to local government units. The requisites for the local government's
exercise of eminent domain are:
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. 
The procedure on the exercise of the power of eminent domain or
expropriation is governed by Rule 67 of the Rules of Court. As explained
in National Power Corporation v. Posada: 
It undergoes two phases. The first phase determines the propriety of the action.
The second phase determines the compensation to be paid to the landowner.
Thus:
There are two (2) stages in every action for expropriation. The first is concerned
with the determination of the authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the context of the facts
involved in the suit. It ends with an order, if not of dismissal of the action, "of
condemnation declaring that the plaintiff has a lawful right to take the property
sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be determined as of the
date of the filing of the complaint." An order of dismissal, if this be ordained,
would be a final one, of course, since it finally disposes of the action and leaves
nothing more to be done by the Court on the merits. So, too, would an order of
condemnation be a final one, for thereafter, as the Rules expressly state, in the
proceedings before the Trial Court, "no objection to the exercise of the right of
condemnation (or the propriety thereof) shall be filed or heard." The second
phase of the eminent domain action is concerned with the determination by the
Court of "the just compensation for the property sought to be taken." This is
done by the Court with the assistance of not more than three (3)
commissioners. The order fixing the just compensation on the basis of the
evidence before, and findings of, the commissioners would be final, too. It
would finally dispose of the second stage of the suit, and leave nothing more to
be done by the Court regarding the issue. Obviously, one or another of the
parties may believe the order to be erroneous in its appreciation of the
evidence or findings of fact or otherwise. Obviously, too, such a dissatisfied
party may seek a reversal of the order by taking an appeal therefrom.