G.R. No.

L-59603 April 29, 1987

EXPORT PROCESSING ZONE AUTHORITY, petitioner,

vs.
HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge, Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, and
SAN ANTONIO DEVELOPMENT CORPORATION, respondents.
Elena M. Cuevas for respondents.

FACTS:

The four parcels of land which are the subject of this case is where the Mactan Export Processing Zone Authority in Cebu (EPZA) is
to be constructed. Private respondent San Antonio Development Corporation (San Antonio, for brevity), in which these lands are
registered under, claimed that the lands were expropriated to the government without them reaching the agreement as to the
compensation. Respondent Judge Dulay then issued an order for the appointment of the commissioners to determine the just
compensation. It was later found out that the payment of the government to San Antonio would be P15 per square meter, which
was objected to by the latter contending that under PD 1533, the basis of just compensation shall be fair and according to the
fair market value declared by the owner of the property sought to be expropriated, or by the assessor, whichever is lower. Such
objection and the subsequent Motion for Reconsideration were denied and hearing was set for the reception of the
commissioner’s report. EPZA then filed this petition for certiorari and mandamus enjoining the respondent from further hearing
the case.

ISSUE:

Whether or not the exclusive and mandatory mode of determining just compensation in PD 1533 is unconstitutional.

RULINGS:

The Supreme Court ruled that the mode of determination of just compensation in PD 1533 is unconstitutional. The method of
ascertaining just compensation constitutes impermissible encroachment to judicial prerogatives. It tends to render the courts
inutile in a matter in which under the Constitution is reserved to it for financial determination. The valuation in the decree may
only serve as guiding principle or one of the factors in determining just compensation, but it may not substitute the court’s own
judgment as to what amount should be awarded and how to arrive at such amount. The determination of just compensation is a
judicial function. The executive department or the legislature may make the initial determination but when a party claims a
violation of the guarantee in the Bill of Rights that the private party may not be taken for public use without just compensation, no
statute, decree, or executive order can mandate that its own determination shall prevail over the court’s findings. Much less can
the courts be precluded from looking into the justness of the decreed compensation.