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(Represented by Brigida Arcillo) Dionisia Gabunada, Heirs of Buenaventura

Francisco (Represented by Felicidad Sadaya Francisco), Heirs of Victoria C.

EMINENT DOMAIN Cabuenas (Represented by Alberto Cabuenas) Heirs of Cipriano Gabunada
A. General considerations (Represented by Claudio Gabunada) filed their oppositions, and had a
common allegation in that the taking is allegedly not impressed with public
1. Manotok Realty Inc., vs. Clt Realty
use under the Constitution; alleging that there is no specific constitutional
provision authorizing the taking of private property for tourism purposes;
2. Heirs of Juancho Ardona v. Reyes that assuming that PTA has such power, the intended use cannot be
paramount to the determination of the land as a land reform area; that
Heirs of Juancho Ardona vs. Reyes [GR L-60549, 60553 to 60555; 26 limiting the amount of compensation by legislative fiat is constitutionally
October 1983] En Banc, Gutierrez Jr. (J): 7 concur, 1 concurs in result, repugnant; and that since the land is under the land reform program, it is the
1 on leave Court of Agrarian Relations and not the Court of First Instance (CFI), that
has jurisdiction over the expropriation cases.The Philippine Tourism
Facts: The Philippine Tourism Authority filed 4 complaints with the Court of Authority having deposited with the Philippine National Bank, Cebu City
First Instance of Cebu City for the expropriation of some 282 hectares of Branch, an amount equivalent to 10% of the value of the properties pursuant
rolling land situated in barangays Malubog and Babag, Cebu City, under to Presidential Decree No. 1533, the lower court issued separate orders
PTA's express authority "to acquire by purchase, by negotiation or by authorizing PTA to take immediate possession of the premises and directing
condemnation proceedings any private land within and without the tourist the issuance of writs of possession. The Heirs of Ardona, et. al. filed a
zones" for the purposes indicated in Section 5, paragraph B(2), of its Revised petition for certiorari with preliminary injunction before the Supreme Court.
Charter (PD 564), more specifically, for the development into integrated
resort complexes of selected and well-defined geographic areas with Issue: Whether the expropriation of parcels of land for the purpose of
potential tourism value, specifically for the construction of a sports complex constructing a sports complex, including a golf course, by the Philippine
(basketball courts, tennis courts, volleyball courts, track and field, baseball Tourism Authority be considered taking for public use.
and softball diamonds, and swimming pools), clubhouse, gold course,
children's playground and a nature area for picnics and horseback riding for Held: There are three provisions of the 1973 Constitution which directly
the use of the public. The Heirs of Juancho Ardona (Represented by Gloria provide for the exercise of the power of eminent domain. Section 2, Article
Ardona) Constitutional Law II, 2005 ( 15 ) Narratives (Berne Guerrero) IV states that private property shall not be taken for public use without just
Anastacio C. Cabilao, Heirs of Cipriano Cabilao (Represented by Jose compensation. Section 6, Article XIV allows the State, in the interest of
Cabilao) Modesta Cabilao, Heirs of Roman Cabuenas (Represented by national welfare or defense and upon payment of just compensation to
Alberto Cabuenas), Agripino Gabisay and Prudencia Mabini, Antonio transfer to public ownership, utilities and other private enterprises to be
Labrador and Lucia Gabisay, Geronimo Mabini and Marcelina Sabal, operated by the government. Section 13, Article XIV states that the Batasang
Inocencio Mabini and Arsenia Reyes, Patricio Mabini and Gregoria Borres, Pambansa may authorize upon payment of just compensation the
Aniceto Gadapan and Maxima Gabisay, Bartolome Magno and Calineca E. expropriation of private lands to be subdivided into small lots and conveyed
Magno, Alberto Cabuenas, Narciso Cabuenas and Victoria Cabuenas, at cost to deserving citizens. While not directly mentioning the expropriation
Eutiquioseno, Heirs of Esperidion Cabuenas (Represented by Alberto of private properties upon payment of just compensation, the provisions on
Cabuenas), Maximina Navaro, Sulpicio Navaro, Eduardo Navaro, Martiniano social justice and agrarian reforms which allow the exercise of police power
Roma (In Representation of Arcadio Mabini, Deceased), Martin Seno, Fausto together with the power of eminent domain in the implementation of
Arda, Maxima Cabilao, Estrella Seno, Eduvegis S. Cabilao, Rosario Cabilao, constitutional objectives are even more far reaching insofar as taxing of
Minors Danilo, Socorro, Josefina and Marites, All Surnamed Cabilao, Juan private property is concerned. The restrictive view of public use may be
Borres (Represented by Francisca Borres), Ramon Jabadan, Jesus Alipar and appropriate for a nation which circumscribes the scope of government
Leonila Kabahar, Antonio Labrador, Heirs of Nicasio Gabisay (Represented activities and public concerns and which possesses big and correctly located
by Arsenio Gabisay), Pacifico Labrador, Demetrio Labrador and Fructosa public lands that obviate the need to take private property for public
Tabura, Venancio Del Mar, Marino Del Mar, Heirs of Teodora Arcillo purposes. Neither circumstance applies to the Philippines. The Philippines
has never been a laissez faire State, and the necessities which impel the agreement, dated 4 January 1993. The compromise agreement provides "(1)
exertion of sovereign power are all too often found in areas of scarce public That plaintiff agrees to withdraw its appeal from the Order of the Honorable
land or limited government resources. There can be no doubt that Court dated October 25, 1991 which released lot 1406-A from the
expropriation for such traditional purposes as the construction of roads, expropriation proceedings. On the other hand, defendant Estate of Salud
bridges, ports, waterworks, schools, electric and telecommunications Jimenez agrees to waive, quitclaim and forfeit its claim for damages and loss
systems, hydroelectric power plants, markets and slaughterhouses, parks, of income which it sustained by reason of the possession of said lot by
hospitals, government office buildings, and flood control or irrigation plaintiff from 1981 up to the present. (2) That the parties agree that defendant
systems is valid. However, the concept of public use is not limited to Estate of Salud Jimenez shall transfer lot 1406-B with an area of 13,118
traditional purposes. Here as elsewhere the idea that "public use" is strictly square meters which forms part of the lot registered under TCT No. 113498
limited to clear cases of "use by the public" has been discarded. The of the Registry of Deeds of Cavite to the name of the plaintiff and the same
Philippine Tourism Authority has stressed that the development of the 808 shall be swapped and exchanged with lot 434 with an area of 14,167 square
hectares includes plans that would give the Heirs of Ardona, et. al. and other meters and covered by Transfer Certificate of Title No. 14772 of the Registry
displaced persons productive employment, higher incomes, decent housing, of Deeds of Cavite which lot will be transferred to the name of Estate of
water and electric facilities, and Constitutional Law II, 2005 ( 16 ) Narratives Salud Jimenez. (3) That the swap arrangement recognizes the fact that the lot
(Berne Guerrero) better living standards. The Courts dismissal of the 1406-B covered by TCT No. T-113498 of the estate of defendant Salud
petition is, in part, predicated on those assurances. The right of the PTA to Jimenez is considered expropriated in favor of the government based on
proceed with the expropriation of the 282 hectares already identified as fit for Order of the Honorable Court dated July 11, 1991. However, instead of being
the establishment of a resort complex to promote tourism is, therefore, paid Constitutional Law II, 2005 ( 20 ) Narratives (Berne Guerrero) the just
sustained compensation for said lot, the estate of said defendant shall be paid with lot
434 covered by TCT No. T-14772. (4) That the parties agree that they will
abide by the terms of the foregoing agreement in good faith and the Decision
to be rendered based on this Compromise Agreement is immediately final
3.Estate of Salud Jimenez vs. Philippines Export Proceeding Zone and executory." The Court of Appeals remanded the case to the trial court for
the approval of the said compromise agreement entered into between the
Estate of Salud Jimenez vs. Philippine Export Processing Zone [GR parties, consequent with the withdrawal of the appeal with the Court of
137285, 16 January 2001] Second Division, De Leon Jr. (J): 4 concur Appeals. In the Order dated 23 August 1993, the trial court approved the
compromise agreement. However, PEZA failed to transfer the title of Lot
Facts: On 15 May 1981, Philippine Export Processing Zone (PEZA), then
434 to the Estate inasmuch as it was not the registered owner of the covering
called as the Export Processing Zone Authority (EPZA), initiated before the
TCT T-14772 but Progressive Realty Estate, Inc. Thus, on 13 March 1997,
Regional Trial Court of Cavite expropriation proceedings on 3 parcels of
the Estate filed a "Motion to Partially Annul the Order dated August 23,
irrigated riceland in Rosario, Cavite. One of the lots, Lot 1406 (A and B) of
1993." In the Order dated 4 August 1997, the trial court annulled the said
the San Francisco de Malabon Estate, with an approximate area of 29,008
compromise agreement entered into between the parties and directed PEZA
square meters, is registered in the name of Salud Jimenez (TCT T-113498 of
to peacefully turn over Lot 1406- A to the Estate. Disagreeing with the said
the Registry of Deeds of Cavite). More than 10 years later, the said trial court
Order of the trial court, respondent PEZA moved for its reconsideration,
in an Order dated 11 July 1991 upheld the right of PEZA to expropriate,
which was denied in an order dated 3 November 1997. On 4 December 1997,
among others, Lot 1406 (A and B). Reconsideration of the said order was
the trial court, at the instance of the Estate, corrected the Orders dated 4
sought by the Estate of Salud Jimenez contending that said lot would only be
August 1997 and 3 November 1997 by declaring that it is Lot 1406-B and
transferred to a private corporation, Philippine Vinyl Corp., and hence would
not Lot 1406-A that should be surrendered and returned to the Estate. On 27
not be utilized for a public purpose. In an Order dated 25 October 1991, the
November 1997, PEZA interposed before the Court of Appeals a petition for
trial court reconsidered the Order dated 11 July 1991 and released Lot 1406-
certiorari and prohibition seeking to nullify the Orders dated 4 August 1997
A from expropriation while the expropriation of Lot 1406-B was maintained.
and 3 November 1997 of the trial court. Acting on the petition, the Court of
Finding the said order unacceptable, PEZA interposed an appeal to the Court
Appeals, in a Decision dated 25 March 1998, partially granted the petition by
of Appeals. Meanwhile, the Estate and PEZA entered into a compromise
setting aside the order of the trial court regarding "the peaceful turn over to the rest was made a transportation terminal. Said public purposes were even
the Estate of Salud Jimenez of Lot 1406- B" and instead ordered the trial reaffirmed by Republic Act 7916, a law amending PEZA's original charter.
judge to "proceed with the hearing of the expropriation proceedings As reiterated in various case, the "public use" requirement for a valid
regarding the determination of just compensation over Lot 1406-B." The exercise of the power of eminent domain is a flexible and evolving concept
Estate sought reconsideration of the Decision dated 25 March 1998. influenced by changing conditions. The term "public use" has acquired a
However, the appellate court in a Resolution dated 14 January 1999 denied more Constitutional Law II, 2005 ( 21 ) Narratives (Berne Guerrero)
the Estate's motion for reconsideration. The Estate filed a petition for review comprehensive coverage. To the literal import of the term signifying strict
on certiorari with the Supreme Court. use or employment by the public has been added the broader notion of
indirect public benefit or advantage. What ultimately emerged is a concept of
Issue: Whether the purpose of the expropriation by PEZA is of public use. public use which is just as broad as "public welfare."
Held: This is an expropriation case which involves two (2) orders: an 4. Ortega vs City of Cebu
expropriation order and an order fixing just compensation. Once the first
order becomes final and no appeal thereto is taken, the authority to B. Taking
expropriate and its public use cannot anymore be questioned. Contrary to the
Estate's contention, the incorporation of the expropriation order in the 5. Republic v. Vda. De Castellvi
compromise agreement did not subject said order to rescission but instead
constituted an admission by the Estate of PEZA's authority to expropriate the FACTS: After the owner of a parcel of land that has been rented and
subject parcel of land and the public purpose for which it was expropriated. occupied by the government in 1947 refused to extend the lease, the latter
This is evident from paragraph three (3) of the compromise agreement which commenced expropriation proceedings in 1959. During the assessment of
states that the "swap arrangement recognizes the fact that Lot 1406-B just compensation, the government argued that it had taken the property
covered by TCT T-113498 of the estate of defendant Salud Jimenez is when the contract of lease commenced and not when the proceedings begun.
considered expropriated in favor of the government based on the Order of the The owner maintains that the disputed land was not taken when the
Honorable Court dated 11 July 1991." It is crystal clear from the contents of government commenced to occupy the said land as lessee because the
the agreement that the parties limited the compromise agreement to the essential elements of the taking of property under the power of eminent
matter of just compensation to the Estate. Said expropriation order is not domain, namely (1) entrance and occupation by condemnor upon the private
closely intertwined with the issue of payment such that failure to pay by property for more than a momentary period, and (2) devoting it to a public
PEZA will also nullify the right of PEZA to expropriate. No statement to this use in such a way as to oust the owner and deprive him of all beneficial
effect was mentioned in the agreement. The Order was mentioned in the enjoyment of the property, are not present.
agreement only to clarify what was subject to payment. Since the ISSUE: Whether or not the taking of property has taken place when the
compromise agreement was only about the mode of payment by swapping of condemnor has entered and occupied the property as lesse.
lots and not about the right and purpose to expropriate the subject Lot 1406-
B, only the originally agreed form of compensation that is by cash payment, HELD: No, the property was deemed taken only when the expropriation
was rescinded. PEZA has the legal authority to expropriate the subject Lot proceedings commenced in 1959.
1406-B and that the same was for a valid public purpose. PEZA expropriated
the subject parcel of land pursuant to Proclamation 1980 dated 30 May 1980 The essential elements of the taking are: (1) Expropriator must enter a private
issued by former President Ferdinand Marcos. Meanwhile, the power of property, (2) for more than a momentary period, (3) and under warrant of
eminent domain of respondent is contained in its original charter, Presidential legal authority, (4) devoting it to public use, or otherwise informally
Decree 66. Accordingly, subject Lot 1406-B was expropriated "for the appropriating or injuriously affecting it in such a way as (5) substantially to
construction of terminal facilities, structures and approaches thereto." The oust the owner and deprive him of all beneficial enjoyment thereof.
authority is broad enough to give PEZA substantial leeway in deciding for
what public use the expropriated property would be utilized. Pursuant to this In the case at bar, these elements were not present when the government
broad authority, PEZA leased a portion of the lot to commercial banks while entered and occupied the property under a contract of lease.
6. Hacienda Luisita, Inc v. Presidential Agrarian Reform Council 8. Masikip v City of Pasig

C. Taking and Questioning of Necessity and Valuation - the power of eminent domain is not inherent in LGU and must be expressly
provided for by statute
7. City of Manila v. Chinese Community
FACTS: Petitioner (City of Manila) filed a petition praying that certain
lands be expropriated for the purpose of constructing a public improvement Lourdes Dela Paz Masikip is the registered owner of a parcel of land, which
namely, the extension of Rizal Avenue, Manila and claiming that such the City of Pasig sought to expropriate a portion thereof for the sports
expropriation was necessary. development and recreational activities of the residents of Barangay
Herein defendants, on the other hand, alleged (a) that no necessity existed for Caniogan. This was in January 1994. Masikip refused.
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 On March 23, 1994, City of Pasig sought again to expropriate said portion of
monuments, and that the same should not be converted into a street for public land for the alleged purpose that it was in line with the program of the
purposes. Municipal Government to provide land opportunities to deserving poor
sectors of our community.
The lower court ruled that there was no necessity for the expropriation of the
particular strip of land in question. Petitioner protested, so City of Pasig filed with the trial court a complaint for
Petitioner therefore assails the decision of the lower court claiming that it expropriation. The Motion to Dismiss filed by Masikip was dismissed by the
(petitioner) has the authority to expropriate any land it may desire; that the rial court on the ground that there was genuine necessity to expropriate the
only function of the court in such proceedings is to ascertain the value of the property. Case was elevated to the Court of Appeals, which dismissed
land in question; that neither the court nor the owners of the land can inquire petition for lack of merit.
into the advisable purpose of the expropriation or ask any questions
concerning the necessities therefor; that the courts are mere appraisers of the Hence, this petition.
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 ISSUE:
the defendant for its value.
W/N there was genuine necessity to expropriate the property
ISSUE: W/N the courts may inquire into and hear proof upon the necessity
of the expropriation? HELD:
HELD: Yes. The courts have the power to restrict the exercise of eminent
domain to the actual reasonable necessities of the case and for the purposes Eminent domain is the right of a government to take and appropriate private
designated by the law. When the municipal corporation or entity attempts to property to the public use, whenever the public exigency requires it, which
exercise the authority conferred, it must comply with the conditions can be done only on condition of providing a reasonably compensation
accompanying such authority. The necessity for conferring the authority therefor. It is the power of the State or its instrumentalities to take private
upon a municipal corporation to exercise the right of eminent domain is, property for public use and is inseparable from sovereignty and inherent in
without question, within the power of the legislature. But whether or not the government.
municipal corporation or entity is exercising the right in a particular case
under the conditions imposed by the general authority, is a question that the This power is lodged in the legislative branch of government. It delegates the
courts have the right to inquire into. power thereof to the LGUs, other public entities and public utility
corporations, subject only to constitutional limitations. LGUs have no
inherent power of eminent domain and may exercise it only when expressly
authorized by statute. aforesaid plan, or on 13 December 1974, then Secretary Baltazar Aquino of
the Department of Public Highways directed the City Engineer of Pasay City
Sec. 19, LGC: LGU may, through its chief executive and acting pursuant to not to issue temporary or permanent permits for the construction and/or
an ordinance, exercise the power of eminent domain for public use, purpose improvement of buildings and other structures located within the proposed
or welfare for the benefit of the poor and landless, upon payment of just extension through Cuneta Avenue. Shortly thereafter the Department of
compensation, pursuant to the provisions of the Constitution and pertinent Public Highways decided to make the proposed extension go through
laws. Fernando Rein and Del Pan Streets which are lined with old substantial
houses. Upon petition of the residents therein to the President of the
Provided: Philippines for the implementation of the original plan, the President referred
the matter to the Human Settlements Commission. The Commission
(1) power of eminent domain may not be exercised unless a valid and submitted its report recommending the reversion to the original plan passing
definite offer has been previously made to the owner and such offer was not through Cuneta Avenue. Notwithstanding said recommendation, the MPH
accepted; insisted on implementing the plan to make the extension of EDSA go
(2) LGU may immediately take possession of the property upon the filing of through Fernando Rein and Del Pan Streets. In February 1979, the
expropriation proceedings and upon making a deposit with the proper court government filed in the Court of First Instance (CFI) of Rizal, Branch III,
of at least 15% fair market value of the property based on the current tax Pasay City (Judge Pedro JL. Bautista presiding; Civil Case 7001-P), a
declaration; and complaint for expropriation against the owners of the houses standing along
(3) amount to be paid for expropriated property shall be determined by the Fernando Rein and Del Pan Streets, among them Cristina de Knecht. De
proper court, based on the fair market value at the time of the taking of the Knecht filed a motion to dismiss dated 9 March 1979. An urgent motion
property dated 28 March 1979 for preliminary injunction was also filed. In June 1979
the Republic of the Philippines filed a motion for the issuance of a writ of
There is already an established sports development and recreational activity possession of the property sought to be expropriated on the ground that said
center at Rainforest Park in Pasig City. Evidently, there is no genuine Republic had made the required deposit with the Philippine National Bank.
necessity to justify the expropriation. The records show that the Judge Bautista issued a writ of possession dated 14 June 1979 authorizing the
Certification issued by the Caniogan Barangay Council which became the Republic of the Philippines to take and enter upon the possession of the
basis for the passage of Ordinance No. 4, authorizing the expropriation, properties sought so be condemned. De Knecht filed a petition for certiorari
indicates that the intended beneficiary is the Melendres Compound and prohibition with the Supreme Court, praying that judgment be rendered
Homeowners Association, a private, non-profit organization, not the annulling the order for immediate possession issued by respondent court in
residents of Caniogan. the expropriation proceedings and commanding the Republic to desist from
further proceedings in the expropriation action or the order for immediate
possession issued in said action.
9. De Knecht v. Bautista
Issue: Whether the expropriation of the residential lots in Fernando Rein and
De Knecht vs. Bautista [GR L-51078, 30 October 1980] First Division, Del Pan Streets is genuinely necessary, in light of similar acceptable lots
Fernandez (J): 4 concur along Cuneta Avenue which were subject of the original plan.
Facts: In 1970, the government through the Department of Public Works and Held: There is no question as to the right of the Republic of the Philippines
Communications (now Ministy of Public Highways [MPH]) prepared a plan to take private property for public use upon the payment of just
to extend Epifanio de los Santos Avenue (EDSA) to Roxas Boulevard. The compensation. Section 2, Article IV of the Constitution of the Philippines
proposed extension, an adjunct of another road-building program, the provides that "Private property shall not be taken for public use without just
ManilaCavite Coastal Road Project, would pass through Cuneta Avenue compensation." It is recognized, however, that the government may not
up to Roxas Boulevard. The route was designed to be a straight one, taking capriciously or arbitrarily choose what private property should be taken. A
into account the direction of EDSA. Preparatory to the implementation of the landowner is covered by the mantle of protection due process affords. It is a
mandate of reason. It frowns on arbitrariness, it is the antithesis of any jurisdiction, pendency of appeal with the President of the Philippines,
governmental act that smacks of whim or caprice. It negates state power to prematureness of complaint and arbitrary and erroneous valuation of the
act in an oppressive manner. It is, as had been stressed so often, the properties. On 29 March 1979 de Knecht filed an ex parte urgent motion for
embodiment of the sporting idea off air play. In that sense, it stands as a the issuance by the trial court of a restraining order to restrain the Republic
guaranty of justice. That is the standard that must be met by any from proceeding with the taking of immediate possession and control of the
governmental agency in the exercise of whatever competence is entrusted to property sought to be condemned. In June 1979, the Republic filed a motion
it. As was so emphatically stressed by the present Chief Justice, Acts of for the issuance of a writ of possession of the property to be expropriated on
Congress, as well as those of the Executive, can deny due process only under the ground that it had made the required deposit with the Philippine National
pain of nullity. Herein, it is a fact that the Department of Public Highways Bank (PNB) of 10% of the amount of compensation stated in the complaint.
originally establish the extension of EDSA along Cuneta Avenue. It is to be In an order dated 14 June 1979 the lower court issued a writ of possession
presumed that the Department of Public Highways made studies before authorizing the Republic to enter into and take possession of the properties
deciding on Cuneta Avenue. It is indeed odd why suddenly the proposed sought to be condemned, and created a Committee of three to determine the
extension of EDSA to Roxas Boulevard was changed to go through Fernando just compensation for the lands involved in the proceedings. On 16 July
Rein Del Pan Streets which the Solicitor General concedes "the Del Pan 1979, de Knecht filed with this Court a petition for certiorari and prohibition
Fernando Rein Streets line follows northward and inward direction While (GR No. L-51078) and directed against the order of the lower court dated 14
admitting "that both lines, Cuneta Avenue and Del Pan Fernando Rein June 1979 praying that the Republic be commanded to desist from further
Streets lines, meet satisfactorily planning and design criteria and therefore proceeding in the expropriation action and from implementing said order. On
are both acceptable", the Solicitor General justifies the change to Del Pan 30 October 1980, the Supreme Court rendered a decision, granting the
Fernando Rein Streets on the ground that the government "wanted to petition for certiorari and prohibition and setting aside the 14 June 1979
minimize the social impact factor or problem involved." It is doubtful order of the Judge Bautista. Constitutional Law II, 2005 ( 24 ) Narratives
whether the extension of EDSA along Cuneta Avenue can be objected to on (Berne Guerrero) On 8 August 1981, Maria Del Carmen Roxas Vda. de
the ground of social impact. The improvements and buildings along Cuneta Elizalde, Francisco Elizalde and Antonio Roxas moved to dismiss the
Avenue to be affected by the extension are mostly motels. Even granting, expropriation action in compliance with the dispositive portion of the
arguendo, that more people will be affected, the Human Settlements aforesaid decision of the Supreme Court which had become final and in order
Commission has suggested coordinative efforts of said Commission with the to avoid further damage to latter who were denied possession of their
National Housing Authority and other government agencies in the relocation properties. The Republic filed a manifestation on 7 September 1981 stating,
and resettlement of those adversely affected. From the facts of record and among others, that it had no objection to the said motion to dismiss as it was
recommendations of the Human Settlements Commission, it is clear that the in accordance with the aforestated decision. However, on 2 September 1983,
choice of Fernando Rein Del Pan Streets as the line through which the the Republic filed a motion to dismiss said case due to the enactment of the
Epifanio de los Santos Avenue should be extended to Roxas Boulevard is Batas Pambansa 340 expropriating the same properties and for the same
arbitrary and should not receive judicial approval. purpose. The lower court in an order of 2 September 1983 dismissed the case
by reason of the enactment of the said law. The motion for reconsideration
10. Republic v. De Knecht thereof was denied in the order of the lower court dated 18 December 1986.
De Knecht appealed from said order to the Court of Appeals wherein in due
Republic vs. de Knecht [GR 87335, 12 February 1990] First Division, course a decision was rendered on 28 December 1988, setting aside the order
Gancayco (J): 3 concur appealed from and dismissing the expropriation proceedings. The Republic
filed the petition for review with the Supreme Court.
Facts: On 20 February 1979 the Republic of the Philippines filed in the
Court of First Instance (CFI) of Rizal in Pasay City an expropriation Issue: Whether an expropriation proceeding that was determined by a final
proceedings against the owners of the houses standing along Fernando judgment of the Supreme Court may be the subject of a subsequent
ReinDel Pan streets among them Cristina De Knecht together with legislation for expropriation.
Concepcion Cabarrus, and some 15 other defendants (Civil Case 7001-P). On
19 March 1979, de Knecht filed a motion to dismiss alleging lack of
Held: While it is true that said final judgment of the Supreme Court on the HELD: No, in expropriation proceedings, entitlement of writ of possession is
subject becomes the law of the case between the parties, it is equally true that issued only after direct payment of just compensation is given to property
the right of the Republic to take private properties for public use upon the owner on the basis of fairness. The same principle applied in the 2004
payment of the just compensation is so provided in the Constitution and our Jurisprudence Resolution and the latest expropriation law (RA No. 8974).
laws. Such expropriation proceedings may be undertaken by the Republic not
only by voluntary negotiation with the land owners but also by taking D. Just Compensation
appropriate court action or by legislation. When on 17 February 1983 the
Batasang Pambansa passed BP 340 expropriating the very properties subject 12. Export Processing Zone Authority v. Dulay
of the present proceedings, and for the same purpose, it appears that it was
based on supervening events that occurred after the decision of the Supreme Export Processing Zone Authority vs. Dulay [GR L-59603, 29 April
Court was rendered in De Knecht in 1980 justifying the expropriation 1987] En Banc, Gutierrez Jr. (J): 10 concur, 1 concurs in result, 1 on
through the Fernando ReinDel Pan Streets. The social impact factor which leave
persuaded the Court to consider this extension to be arbitrary had
disappeared. All residents in the area have been relocated and duly Facts: On 15 January 1979, the President of the Philippines, issued
compensated. 80% of the EDSA outfall and 30% of the EDSA extension had Proclamation 1811, reserving a certain parcel of land of the public domain
been completed. Only De Knecht remains as the solitary obstacle to this situated in the City of Lapu-Lapu, Island of Mactan, Cebu and covering a
project that will solve not only the drainage and flood control problem but total area of 1,193,669 square meters, more or less, for the establishment of
also minimize the traffic bottleneck in the area. Moreover, the decision, is no
an export processing zone by petitioner Export Processing Zone Authority
obstacle to the legislative arm of the Government in thereafter making its
own independent assessment of the circumstances then prevailing as to the (EPZA). Not all the reserved area, however, was public land. The
propriety of undertaking the expropriation of the properties in question and proclamation included, among others, 4 parcels of land with an aggregate
thereafter by enacting the corresponding legislation as it did in this case. The area of 22,328 square meters owned and registered in the name of the San
Court agrees in the wisdom and necessity of enacting BP 340. Thus the Antonio Development Corporation. The EPZA, therefore, offered to
anterior decision of this Court must yield to this subsequent legislative fiat. purchase the parcels of land from the corporation in accordance with the
11.Republic v. Gingoyon valuation set forth in Section 92, Presidential Decree (PD) 464, as amended.
The parties failed to reach an agreement regarding the sale of the property.
FACTS: NAIA 3, a project between the Government and the Philippine EPZA filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-
International Air Terminals Co., Inc (PIATCO) was nullified. Lapu City, a complaint for expropriation with a prayer for the issuance of a
Planning to put NAIA 3 facilities into immediate operation, the Government, writ of possession against the corporation, to expropriate the aforesaid
through expropriation filed a petition to be entitled of a writ of possession parcels of land pursuant to PD 66, as amended, which empowers EPZA to
contending that a mere deposit of the assessed value of the property with an acquire by condemnation proceedings any property for the establishment of
authorized government depository is enough for the entitlement to said writ export processing zones, in relation to Proclamation 1811, for the purpose of
(Rule 67 of the Rules of Court). establishing the Mactan Export Processing Zone. On 21 October 1980, Judge
However, respondents avers that before an entitlement of the writ of Ceferino E. Dulay issued a writ of possession authorizing EPZA to take
possession is issued, direct payment of just compensation must be made to immediate possession of the premises. At the pre-trial conference on 13
the builders of the facilities, citing RA No. 8974 and a related jurisprudence February 1981, the judge issued an order stating that the parties have agreed
(2004 Resolution). 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
ISSUE: WON expropriation can be conducted by mere deposit of the
on 2 April 1981. On 17 February 1981, the judge issued the order of
assessed value of the property.
condemnation declaring EPZA as having the lawful right to take the
properties sought to be condemned, upon the payment of just compensation 1533 provides that "In determining just compensation for private property
to be determined as of the filing of the complaint. The respondent judge also acquired through eminent domain proceedings, the compensation to be paid
issued a second order appointing certain persons as commissioners to shall not exceed the value declared by the owner or administrator or anyone
ascertain and report to the court the just compensation for the properties having legal interest in the property or determined by the assessor, pursuant
sought to be expropriated. On 19 June 1981, the three commissioners to the Real Property Tax Code, whichever value is lower, prior to the
submitted their consolidated report recommending the amount of P15.00 per recommendation or decision of the appropriate Government office to acquire
square meter as the fair and reasonable value of just compensation for the the property." The provisions of the Decrees on just compensation
properties. On 29 July 1981, EPZA filed a Motion for Reconsideration of the unconstitutional and void as the method of ascertaining just compensation
order of 19 February 1981 and Objection to Commissioner's Report on the under the said decrees constitutes impermissible encroachment on judicial
grounds that PD 1533 has superseded Sections 5 to 8 of Rule 67 of the Rules prerogatives. It tends to render the Supreme Court inutile in a matter which
of Court on the ascertainment of just compensation through commissioners; under the Constitution is reserved to it for final determination. The valuation
and that the compensation must not exceed the maximum amount set by PD in the decree may only serve as a guiding principle or one of the factors in
1533. On 14 November 1981, the trial court denied EPZA's motion for determining just compensation but it may not substitute the court's own
reconsideration. On 9 February 1982, EPZA filed the petition for certiorari judgment as to what amount should be awarded and how to arrive at such
and mandamus with preliminary restraining order, enjoining the trial court amount. Further, various factors can come into play in the valuation of
from enforcing the order dated 17 February 1981 and from further specific properties singled out for expropriation. The values given by
proceeding with the hearing of the expropriation case. provincial assessors are usually uniform for very wide areas covering several
barrios or even an entire town with the exception of the poblacion. Individual
Issue: Whether the exclusive and mandatory mode of determining just differences are never taken into account. The value of land is based on such
compensation in Presidential Decree 1533 is valid and constitutional, and generalities as its possible cultivation for rice, corn, coconuts, or other crops.
whether the lower values given by provincial assessors be the value of just Very often land described as "cogonal" has been cultivated for generations.
compensation. Buildings are described in terms of only two or three classes of building
Presidential Decree 76 provides that "For purposes of just compensation in materials and estimates of areas are more often inaccurate than correct. Thus,
cases of private property acquired by the government for public use, the basis tax values can serve as guides but cannot be absolute substitutes for just
shall be the current and fair market value declared by the owner or compensation.
administrator, or such market value as determined by the Assessor, 13. National Power Corporation v. Zabala
whichever is lower." Section 92 of PD 464 provides that "In determining just
compensation which private property is acquired by the government for 14. Republic v Court of appeals
public use, the basis shall be the market value declared by the owner or
15. Cosculluela v. Court of Appeals
administrator or anyone having legal interest in the property, or such market
value as determined by the assessor, whichever is lower." Section 92 of PD 16. Republic v. Rural Bank of Kabacan
794, on the other hand, provides that "In determining just compensation
FACTS: The National Irrigation Administration (NIA) filed with the
when private property is acquired by the government for public use, the same
Regional Trial Court of Kabacan (RTC) a complaint for expropriation of a
shall not exceed the market value declared by the owner or administrator or
portion of three parcels of land covering a total of 14,497.91 square meters
anyone having legal interest in the property, or such market value as
for its Malitubog-Marigadao irrigation project. The committee formed by the
determined by the assessor, whichever is lower." Lastly, Section 1 of PD
RTC pegged the fair market value of the land at Php 65.00 per square meter.
It also added to its computation the value of soil excavated from portions of the landowners to recover more than the value of the land at the time when it
two lots. RTC adopted the findings of the committee despite the objections of was taken, which is the true measure of the damages, or just compensation,
NIA to the inclusion of the value of the excavated soil in the computation of and would discourage the construction of important public improvements.
the value of the land.
17. Land Bank of the Philippines v. Gallego, Jr.
NIA, through the Office of the Solicitor General, appealed to the Court of
Appeals (CA) which affirmed with modification the RTCs decision. CA
deleted the value of the soil in determination of compensation but affirmed Respondents Manuel O. Gallego, Jr., Joseph L. Gallego and Christopher L.
RTCs valuation of the improvements made on the properties. Gallego are the co-owners of several parcels of agricultural lands located in
Barangay Sta. Rita and Barangay Concepcion in Cabiao, Nueva Ecija.
ISSUE: Whether or not the value of the excavated soil should be included in Sometime in 1972, the DAR placed a portion of the property under the
the computation of just compensation coverage of Presidential Decree No. 27 (P.D. No. 27). However, the DAR
and respondents failed to agree on the amount of just compensation,
HELD: Petition DENIED. prompting respondents to file on 10 December 1998 a petition before the
RTC of Cabanatuan City.
There is no legal basis to separate the value of the excavated soil from that of
the expropriated properties, contrary to what the trial court did. In the context In a Supplemental Pre-Trial Order, the trial court stated that in view of the
of expropriation proceedings, the soil has no value separate from that of the parties agreement that the property was irrigated and had an area of 120
expropriated land. Just compensation ordinarily refers to the value of the land hectares, the only factual issue to be resolved would be the correct Average
to compensate for what the owner actually loses. Such value could only be Gross Production on which just compensation would be fixed.
that which prevailed at the time of the taking.
Only petitioner LBP appealed from the trial courts Decision. According to
petitioner LBP, the trial court erred in applying values that had no basis in
In National Power Corporation v. Ibrahim, et al. The SC held that rights over
law instead of adopting the Average Gross Production established by the
lands are indivisible. This conclusion is drawn from Article 437 of the Civil Barangay Committee on Land Production under DAR Circular No. 26, series
Code which provides: The owner of a parcel of land is the owner of its of 1973, and the mandated Government Support Price ofP35 per cavan of
surface and of everything under it, and he can construct thereon any works or palay under Section 2 of Executive Order (E.O.) No. 228.
make any plantations and excavations which he may deem proper, without
detriment to servitudes and subject to special laws and ordinances. He cannot The appellate court agreed that the values applied by the trial court in fixing
complain of the reasonable requirements of aerial navigation. Thus, the just compensation had no legal basis because the formula under P.D. No. 27
and E.O. No. 228 mandated a Government Support Price ofP35.00 per cavan
ownership of land extends to the surface as well as to the subsoil under it.
of palay. Petitioner LBP sought reconsideration but was denied in a
Resolution dated 23 June 2006. Hence, the instant petition. The SC reversed
Hence, the CA correctly modified the trial courts Decision when it ruled it is
the CA decision and remanded the case to the CA for determination of just
preposterous that NIA will be made to pay not only for the value of the land compensation. Hence the CA submitted its report and recommended two
but also for the soil excavated from such land when such excavation is a solutions for determining just compensation.
necessary phase in the building of irrigation projects. That NIA will make
use of the excavated soil is of no moment and is of no concern to the In the first alternative, the CA recommended the use of the alternate formula
landowner who has been paid the fair market value of his land. As pointed "LV=(CS x 0.9) + (MV x 0.1)" as proposed by the respondents, for a just
out by the OSG, the law does not limit the use of the expropriated land to the compensation of Ninety-Five Million, Three Hundred Fifty Thousand, Forty-
Nine Pesos and 27/100 (P95,350,049.27). In the second alternative, the CA
surface area only. To sanction the payment of the excavated soil is to allow
recommended the use of the basic formula "LV = (CNI x 0.6) + (CS x 0.3) + were to strictly apply the formula laid down in DAR A.O. No. 05-98 and
(MV x 0.1)" as provided under Item II.A. of DAR A.O. No. 05-98, for a just disregard both the CNI and CS factors to be equally flawed, then the only
compensation of Fifty Million, Four Hundred Thirty-One Thousand, Five present, relevant and applicable factor left is MV, which, when used
Hundred Six Pesos (P50,431,506.00). following the third alternate formula "LV = MV x 2," will significantly
reduce the just compensation to an absurd amount. Clearly, we cannot
ISSUE: Which among the two alternative methods is correct support this, as our agrarian reform laws never intended to deprive
landowners of their property without just compensation. Just compensation
HELD: Second Computation refers to the full and fair equivalent of the property taken from the owner. In
several cases, we emphasized that to be "just," the compensation must be
Political Law- to be "just," the compensation must be real, substantial, real, substantial, full and ample.
full and ample.
18. Department of Agrarian Refoem v. Sta Romana
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value E. Delay in Payment and Abandonment or Change of Intended Use
CNI = Capitalized Net Income 19. Republic v. Lim
CS = Comparable Sales
MV = Market Value per Tax Declaration 20. Mactan-Cebu international Airport v. Lozada, Sr.,

After consideration of the record and of the parties respective arguments, we FACTS: Subject of this case is a lot (Lot No. 88) located in Lahug, Cebu
adopt the second alternative recommended by the CA using the basic City. Its original owner was Anastacio Deiparine when the same was subject
formula "LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)." We, however, to expropriation proceedings, initiated by Republic, represented by the then
arrived at the slightly different amount of Fifty Million, Four Hundred Civil Aeronautics Administration (CAA), for the expansion and
Thirty-Two Thousand, Sixty-Three Pesos and 89/100 (P50,432,063.89). improvement of the Lahug Airport. During the pendency of the expropriation
We find that the second alternative presents a more accurate formula and proceedings, respondent Bernardo L. Lozada, Sr. acquired Lot No. 88 from
computation in the determination of the just compensation due the Deiparine. The trial court ruled for the Republic and ordered the latter to pay
respondents for their property. As pointed out earlier, DAR A.O. No. 05-98 Lozada the fair market value of the lot. However, the projected improvement
provides the basic formula "LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)" for and expansion plan of the old Lahug Airport, however, was not pursued. The
valuating lands acquired pursuant to the governments agrarian reform plaintiff-respondents initiated a complaint for the recovery of possession and
program. In cases where not all three factors of CNI, CS and MV are present, reconveyance of ownership the subject lot. On the other hand, the petitioners
relevant and applicable, the same regulation provides three alternate asked for the immediate dismissal of the complaint. They specifically denied
formulae that can be used to compute for just compensation. that the Government had made assurances to reconvey Lot No. 88 to
respondents in the event that the property would no longer be needed for
In the present case, we deem all three factors of CNI, CS and MV "relevant airport operations. Petitioners instead asserted that the judgment of
and applicable" for, as the CA observed, they substantially complied with the condemnation was unconditional, and respondents were, therefore, not
prescribed formula. In disregarding the computation proposed by the LBP, entitled to recover the expropriated property notwithstanding non-use or
the CA found inapplicable the data necessary to compute the CNI because abandonment thereof. The lower court ruled for herein plaintiff-respondents,
they pertained to different locations and calendar years. which decision was affirmed by the Court of Appeals. In this petition, the
petitioners argued that the judgment in Civil Case No. R-1881 was absolute
Nevertheless, in offering the second alternative which used the prescribed and unconditional, giving title in fee simple to the Republic.
basic formula, the CA essentially pointed out that the data necessary for
determining the CS were equally inapplicable as they did not comply with ISSUE: Whether or not a constructive trust was constituted in this case, and
the requirements of Items II.C.2.b and II.C.2.c of DAR A.O. No. 05-98. If we as such, the respondents herein are entitled to the restitution of the
expropriated property which was not used for a public purpose. F. Overhead or Aerial and Subterranean Takings

HELD: YES. Art. 1454 of the Civil Code provides: If an absolute 22. National power Corporation v. Gutierrez
conveyance of property is made in order to secure the performance of an
obligation of the grantor toward the grantee, a trust by virtue of law is Facts: Petitioner filed an action to acquire a right of way over the land of
established. If the fulfillment of the obligation is offered by the grantor when Respondents for the construction of transmission lines. Petitioner was
it becomes due, he may demand the reconveyance of the property to him. adjudged to pay the full market value of land traversed by the transmission
lines. Petitioner argued that it was only asking for a right of way.
Constructive trusts are fictions of equity which are bound by no unyielding
formula when they are used by courts as devices to remedy any situation in Issue: Whether or Not the acquisition of the right of way constitutes "taking"
which the holder of legal title may not in good conscience retain the and such the case will be entitled just compensation.
beneficial interest.
Held: The acquisition of the right of way constitutes taking. It perpetually
In constructive trusts, the arrangement is temporary and passive in which the deprives Respondents of their proprietary rights. No plant higher than three
trustees sole duty is to transfer the title and possession over the property to meters is allowed below the transmission lines. Because of high tension
the plaintiff-beneficiary. Of course, the wronged party seeking the aid of a current conveyed through the transmission lines, danger to life and limbs
court of equity in establishing a constructive trust must himself do equity. cannot be discounted. The owner of the property is entitled to just
Accordingly, the court will exercise its discretion in deciding what acts are compensation.
required of the plaintiff-beneficiary as conditions precedent to obtaining such
decree and has the obligation to reimburse the trustee the consideration
received from the latter just as the plaintiff-beneficiary would if he proceeded 23. Cabahug v. National Power Corporation
on the theory of rescission. In the good judgment of the court, the trustee
may also be paid the necessary expenses he may have incurred in sustaining FACTS: The Spouses Cabahug are the owners of two parcels of
the property, his fixed costs for improvements thereon, and the monetary land situated in Barangay Capokpok, Tabango, Leyte, registered in their
value of his services in managing the property to the extent that plaintiff- names under TCT Nos. T-9813 and T-1599 of the Leyte provincial registry.
beneficiary will secure a benefit from his acts. They were among the defendants in Special Civil Action No. 0019-PN, a suit
for expropriation earlier filed by NPC before the RTC, in connection with its
The rights and obligations between the constructive trustee and the Leyte-Cebu Interconnection Project. The suit was later dismissed when NPC
beneficiary, in this case, respondent MCIAA and petitioners over Lots Nos. opted to settle with the landowners by paying an easement fee equivalent to
916 and 920, are echoed in Art. 1190 of the Civil Code, When the 10% of value of their property in accordance with Section 3-A of Republic
conditions have for their purpose the extinguishment of an obligation to give, Act (RA) No. 6395. On 9 November 1996, Jesus Cabahug executed two
the parties, upon the fulfillment of said conditions, shall return to each other documents denominated as Right of Way Grant in favor of NPC. . For and in
what they have received x x x In case of the loss, deterioration or consideration of the easement fees, Cabahug granted NPC a continuous
improvement of the thing, the provisions which, with respect to the debtor, easement of right of way for the latters transmissions lines and their
are laid down in the preceding article shall be applied to the party who is appurtenances over 24,939 and 4,750 square meters of the parcels of land
bound to return x x x. covered by TCT Nos. T-9813 and T-1599, respectively. By said grant, Jesus
Cabahug agreed not to construct any building or structure whatsoever, nor
21. Republic v. Heirs Saturnino Q. Borbon plant in any area within the Right of Way that will adversely affect
or obstruct the transmission line of NPC, except agricultural crops, the
growth of which will not exceed three meters high. Under paragraph 4 of the
grant, however, Jesus Cabahug reserved the option to seek additional
compensation for easement fee, based on the Supreme Courts 18 January
1991 Decision in G.R. No. 60077, entitled National Power
Corporation v. Spouses Misericordia Gutierrez and Ricardo Malit, et al. Maruhom demanded NAPOCOR to pay damages and to vacate the
(Gutierrez). On 21 September 1998, the Spouses Cabahug filed the complaint sub-terrain portion of the land.
for the payment of just compensation, damages and attorneys fees
against NPC before the RTC. In its answer, NPC averred that it Issue: WON Ibrahim is the rightful owner of the sub-terrain area of the land.
already paid the full easement fee mandated under Section 3-A of RA 6395 If yes, are they entitled to the payment of just compensation.
and that the reservation in the grant referred to additional compensation for
easement fee, not the full just compensation sought by the Spouses Cabahug. Held: YES. The sub-terrain portion of the property belongs to Ibrahim.
The RTC rendered a Decision dated 14 March 2000, brushing aside NPCs
reliance on Section 3-A of RA 6395. Aggrieved by the foregoing decision, The Supreme Court cited Article 437 of the Civil Code which provides that:
the NPC perfected the appeal before the CA which, on 16 May 2007, The owner of a parcel of land is the owner of its surface and of everything
rendered the herein assailed decision, reversing and setting aside the under it, and he can construct thereon any works or make any plantations and
RTCs appealed decision. On motion for reconsideration, the same was excavations which he may deem proper, without detriment to servitudes and
denied by the CA. Hence, this petition for review on certiorari. subject to special laws and ordinances. xxx
ISSUE: WON petitioners are entitled to full just compensation.
Hence, the ownership of land extends to the surface as well as to the subsoil
RULING: The rule is settled that a contract constitutes the law between the under it. Therefore, Ibrahim owns the property as well as the sub-terrain area
parties who are bound by its stipulations which, when couched in clear and of the land where the underground tunnels were constructed.
plain language, should be applied according to their literal tenor. Courts
cannot supply material stipulations, read into the contract words it does not On the issue of just compensation, the Supreme Court also said that Ibrahim
contain or, for that matter, read into it any other intention that would should be paid a just compensation.
contradict its plain import. Neither can they rewrite contracts
because they operate harshly or inequitably as to one of the parties, or alter Ibrahim could have dug upon their property and built motorized deep wells
them for the benefit of one party and to the detriment of the other, or by but was prevented from doing so by the authorities because of the
construction, relieve one of the parties from the terms which he voluntarily construction of the tunnels underneath the surface of the land.
consented to, or impose on him those which he did not.
Ibrahim still had a legal interest in the sub-terrain portion insofar as they
24. National Power Corporation v. Ibrahim could have excavated the same for the construction of the deep wells. It has
been shown that the underground tunnels have deprived the plaintiffs of the
Facts: lawful use of the land and considerably reduced its value.

Ibrahim owns a parcel of land located in Lanao del Norte. It was held that: If the government takes property without expropriation and
In 1978, NAPOCOR took possession of the sub-terrain area of the devotes the property to public use, after many years, the property owner may
land and constructed underground tunnels on the said property. demand payment of just compensation in the event restoration of possession
is neither convenient nor feasible. This is in accordance with the principle
The tunnels were apparently being used by NAPOCOR in siphoning
that persons shall not be deprived of their property except by competent
the water of Lake Lanao and in the operation of NAPOCORs Agus projects.
authority and for public use and always upon payment of just compensation.
In 1991, Maruhom (one of the co-heirs of Ibrahim) requested
Marawi City Water District for a permit to construct or install a motorized
deep well on the parcel of land but it was rejected on the grounds that the 25. National Power Corporation v. Heirs of Macabangkit Sangkay
construction would cause danger to lives and property by reason of the
presence of the underground tunnels. FACTS: Pursuant to its legal mandate under Republic Act No. 6395 (An Act
Revising the Charter of the National Power Corporation), NPC undertook the
Agus River Hydroelectric Power Plant Project in the 1970s to generate restraining order (TRO) to enjoin the RTC from implementing its
electricity for Mindanao. The project included the construction of several decision.The Heirs of Macabangkit elevated the ruling of the CA (G.R. No.
underground tunnels to be used in diverting the water flow from the Agus 141447), but the Court upheld the CA on May 4, 2006.
River to the hydroelectric plants.
On October 5, 2004, the CA affirmed the decision of the RTC.
On November 21, 1997, the respondents as the owners of land with an area
of 221,573 square meters situated in Ditucalan, Iligan City, sued NPC in the ISSUE:
RTC for the recovery of damages and of the property, with the alternative
prayer for the payment of just compensation. They alleged that they had 1) Whether the CA and the RTC erred in holding that there was an
belatedly discovered that one of the underground tunnels of NPC that
underground tunnel traversing the Heirs of Macabangkits land constructed
diverted the water flow of the Agus River for the operation of the
Hydroelectric Project in Agus V, Agus VI and Agus VII traversed their land; by NPC; and
that their discovery had occurred in 1995 after Atty. Saidali C. Gandamra,
President of the Federation of Arabic Madaris School, had rejected their offer 2) Whether the Heirs of Macabangkits right to claim just compensation had
to sell the land because of the danger the underground tunnel might pose to prescribed under section 3(i) of Republic Act No. 6395, or, alternatively,
the proposed Arabic Language Training Center and Muslims Skills under Article 620 and Article 646 of the Civil Code.
Development Center; that such rejection had been followed by the
withdrawal by Global Asia Management and Resource Corporation from
developing the land into a housing project for the same reason; that Al- HELD: We uphold the liability of NPC for payment of just
Amanah Islamic Investment Bank of the Philippines had also refused to compensation.
accept their land as collateral because of the presence of the underground
tunnel; that the underground tunnel had been constructed without their POLITICAL LAW: just compensation
knowledge and consent; that the presence of the tunnel deprived them of the
agricultural, commercial, industrial and residential value of their land; and The action to recover just compensation from the State or its expropriating
that their land had also become an unsafe place for habitation because of the
agency differs from the action for damages. The former, also known as
loud sound of the water rushing through the tunnel and the constant shaking
of the ground, forcing them and their workers to relocate to safer grounds. inverse condemnation, has the objective to recover the value of property
taken in fact by the governmental defendant, even though no formal exercise
In its answer with counterclaim, NPC countered that the Heirs of of the power of eminent domain has been attempted by the taking
Macabangkit had no right to compensation under section 3(f) of Republic agency.Just compensation is the full and fair equivalent of the property taken
Act No. 6395, under which a mere legal easement on their land was from its owner by the expropriator. The measure is not the takers gain, but
established; that their cause of action, should they be entitled to
the owner's loss. The word just is used to intensify the meaning of the word
compensation, already prescribed due to the tunnel having been constructed
in 1979; and that by reason of the tunnel being an apparent and continuous compensation in order to convey the idea that the equivalent to be rendered
easement, any action arising from such easement prescribed in five years. for the property to be taken shall be real, substantial, full, and ample. On the
other hand, the latter action seeks to vindicate a legal wrong through
After trial, the RTC ruled in favor of the plaintiffs (Heirs of Macabangkit). damages, which may be actual, moral, nominal, temperate, liquidated, or
exemplary. When a right is exercised in a manner not conformable with the
Earlier, on August 18, 1999, the Heirs of Macabangkit filed an urgent motion
norms enshrined in Article 19 and like provisions on human relations in the
for execution of judgment pending appeal. The RTC granted the motion and
issued a writ of execution, prompting NPC to assail the writ by petition for Civil Code,and the exercise results to the damage of another, a legal wrong is
certiorari in the CA. On September 15, 1999, the CA issued a temporary committed and the wrongdoer is held responsible.
The two actions are radically different in nature and purpose. The action to In disregarding this procedure and failing to recognize respondents
recover just compensation is based on the Constitution while the action for ownership of the sub-terrain portion, petitioner took a risk and exposed itself
damages is predicated on statutory enactments. Indeed, the former arises to greater liability with the passage of time. It must be emphasized that the
from the exercise by the State of its power of eminent domain against private acquisition of the easement is not without expense. The underground tunnels
property for public use, but the latter emanates from the transgression of a impose limitations on respondents use of the property for an indefinite period
right. The fact that the owner rather than the expropriator brings the former and deprive them of its ordinary use. Based upon the foregoing, respondents
does not change the essential nature of the suit as an inverse condemnation, are clearly entitled to the payment of just compensation.Notwithstanding the
for the suit is not based on tort, but on the constitutional prohibition against fact that petitioner only occupies the sub-terrain portion, it is liable to pay not
the taking of property without just compensation. It would very well be merely an easement fee but rather the full compensation for land. This is so
contrary to the clear language of the Constitution to bar the recovery of just because in this case, the nature of the easement practically deprives the
compensation for private property taken for a public use solely on the basis owners of its normal beneficial use. Respondents, as the owner of the
of statutory prescription. property thus expropriated, are entitled to a just compensation which should
be neither more nor less, whenever it is possible to make the assessment, than
Due to the need to construct the underground tunnel, NPC should have first the money equivalent of said property.
moved to acquire the land from the Heirs of Macabangkit either by voluntary
tender to purchase or through formal expropriation proceedings. In either Here, like in National Power Corporation v. Ibrahim,NPC constructed a
case, NPC would have been liable to pay to the owners the fair market value tunnel underneath the land of the Heirs of Macabangkit without going
of the land, for Section 3(h) of Republic Act No. 6395 expressly requires through formal expropriation proceedings and without procuring their
NPC to pay the fair market value of such property at the time of the taking, consent or at least informing them beforehand of the construction. NPCs
thusly: construction adversely affected the owners rights and interests because the
subterranean intervention by NPC prevented them from introducing any
(h)To acquire, promote, hold, transfer, sell, lease, rent, mortgage, encumber developments on the surface, and from disposing of the land or any portion
and otherwise dispose of property incident to, or necessary, convenient or of it, either by sale or mortgage.
proper to carry out the purposes for which the Corporation was
created:Provided, That in case a right of way is necessary for its transmission We agree with both the RTC and the CA that there was a full taking on the
lines, easement of right of way shall only be sought:Provided, however,That part of NPC, notwithstanding that the owners were not completely and
in case the property itself shall be acquired by purchase, the cost thereof shall actually dispossessed. It is settled that the taking of private property for
be the fair market value at the time of the taking of such property. public use, to be compensable, need not be an actual physical taking or
appropriation. Indeed, the expropriators action may be short of acquisition of
POLITICAL LAW: NPCs construction of the tunnel constituted taking title, physical possession, or occupancy but may still amount to a taking.
of the land, and entitled owners to just compensation Compensable taking includes destruction, restriction, diminution, or
interruption of the rights of ownership or of the common and necessary use
The Court held in National Power Corporation v. Ibrahim that NPC was and enjoyment of the property in a lawful manner, lessening or destroying its
liable to pay not merely an easement fee but rather the full compensation for value. It is neither necessary that the owner be wholly deprived of the use of
land traversed by the underground tunnels,viz: his property, nor material whether the property is removed from the
possession of the owner, or in any respect changes hands.
26. National Power Corporation v. Tarcelo
As a result, NPC should pay just compensation for the entire land. In that
regard, the RTC pegged just compensation at P500.00/square meter based on G. Constructive Excoriation and Regulatory Taking
its finding on what the prevailing market value of the property was at the
time of the filing of the complaint, and the CA upheld the RTC. 27. United States v. Causby

POLITICAL LAW: reckoning point of just compensation on the value Brief Fact Summary. Respondents claim that their property was taken,
within the meaning of the Fifth Amendment, by the regular army and navy
at the time the owners commenced these inverse condemnation
aircraft flights over their house and chicken farm.
proceedings is entirely warranted.
Synopsis of Rule of Law. The airspace is a public highway, but if the
We rule that the reckoning value is the value at the time of the filing of the landowner is to have the full enjoyment of his land, he must have exclusive
complaint, as the RTC provided in its decision. Compensation that is control over the immediate reaches of the enveloping atmosphere.
reckoned on the market value prevailing at the time either when NPC entered
or when it completed the tunnel, as NPC submits, would not be just, for it
Facts. Respondents own 2.8 acres near an airport outside of Greensboro,
would compound the gross unfairness already caused to the owners by NPCs North Carolina. Respondents property contained a house and a chicken
entering without the intention of formally expropriating the land, and without farm. The end of one of the runways of the airport was 2,220 feet from
the prior knowledge and consent of the Heirs of Macabangkit. NPCs entry Respondents property, and the glide path passed over the property at 83 feet,
denied elementary due process of law to the owners since then until the which is 67 feet above the house, 63 feet above the barn, and 18 feet above
owners commenced the inverse condemnation proceedings. The Court is the highest tree. The use by the United States of this airport is pursuant to a
more concerned with the necessity to prevent NPC from unjustly profiting lease beginning June 1, 1942, and ending June 30, 1942, with provisions for
renewal until June 30, 1967, or six months after the end of the national
from its deliberate acts of denying due process of law to the owners. As a
emergency, whichever is earlier. The United States four motored bombers
measure of simple justice and ordinary fairness to them, therefore, reckoning make loud noises when flying above the property, and have very bright
just compensation on the value at the time the owners commenced these lights. Respondents chicken farm production had to stop, because 150
inverse condemnation proceedings is entirely warranted. chickens were killed by flying into walls from fright. In the Court of Claims,
it was found that the United States had taken an easement over the property
In National Power Corporation v. Court of Appeals, a case that involved the on June 1, 1942, and that the val
ue of the property depreciation as the result of the easement was $2,000.00.
similar construction of an underground tunnel by NPC without the prior
The United States petitioned for certiorari, which was granted.
consent and knowledge of the owners, and in which we held that the basis in
fixing just compensation when the initiation of the action preceded the entry Issue. Has the Respondents property been taken within the meaning of the
into the property was the time of the filing of the complaint, not the time of Fifth Amendment?
taking, we pointed out that there was no taking when the entry by NPC was
made without intent to expropriate or was not made under warrant or color of Held. Yes. But the case is remanded for a determination of the value of the
legal authority. easement and whether the easement was permanent or temporary.
The court noted the common law doctrine of ownership of land extending to
the sky above the land. However, the court notes that an act of Congress had
given the United States exclusive national sovereignty over the air space. The
court noted that common sense made the common law doctrine inapplicable. the Ordinance, insofar as it includes motels and inns as among its prohibited
However, the court found that the common law doctrine did not control the establishments, be declared invalid and unconstitutional.
present case. The United States had conceded in oral argument that if flights
over the Respondents property rendered it uninhabitable then there would be Enacted by the City Council and approved by petitioner City Mayor, the said
a taking compensable under the Fifth Amendment. The measure of the value Ordinance is entitled
of the property taken is the owners loss, not the takers gain.
The airspace is a public highway. But it is obvious that if the landowner is to AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR
have the full enjoyment of his land, he must have exclusive control of the OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF
immediate reaches of the enveloping atmosphere. If this were not true then
landowners could not build buildings, plant trees or run fences.
The airspace, apart from the immediate reaches above the land, is part of the THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR
public domain. The court does not set the precise limits of the line of VIOLATION THEREOF, AND FOR OTHER PURPOSES.
demarcation. Flights over private land are not a taking, unless, like here, they Judge Laguio rendered the assailed Decision (in favour of respondent).
are so low and frequent as to be a direct and immediate interference with the
enjoyment of the land. The Court of Claims must, upon remand, determine On 11 January 1995, petitioners filed the present Petition, alleging that the
the value of the easement and whether it is a temporary or permanent following errors were committed by the lower court in its ruling:
(1) It erred in concluding that the subject ordinance is ultra vires, or
Dissent. The dissent would reverse the decision of the Court of Claims and otherwise, unfair, unreasonable and oppressive exercise of police power;
hold that there has been no taking within the meaning of the Fifth (2) It erred in holding that the questioned Ordinance contravenes P.D. 499
Amendment. This is because of the modern nature of the airplane, and the which allows operators of all kinds of commercial establishments, except
desire to avoid confusion.
those specified therein; and
(3) It erred in declaring the Ordinance void and unconstitutional.
Discussion. The national emergency, World War II, meant that the airport,
which was not previously used by large planes, would be the home to large ISSUE: WON the ordinance is unconstitutional.
bombers. The use of the airspace above Respondents home and farm was
HELD: The Court is of the opinion, and so holds, that the lower court did not
not a problem previously, because the flights were sporadic and not nearly as
loud as the bombers. err in declaring the Ordinance, as it did, ultra vires and therefore null and
28. City of Manila v. Laguio
The tests of a valid ordinance are well established. A long line of decisions
FACTS: Private respondent Malate Tourist Development Corporation has held that for an ordinance to be valid, it must not only be within the
(MTDC) is a corporation engaged in the business of operating hotels, motels, corporate powers of the local government unit to enact and must be passed
hostels and lodging houses. It built and opened Victoria Court in Malate according to the procedure prescribed by law, it must also conform to the
which was licensed as a motel although duly accredited with the DOT as a following substantive requirements:
hotel. On 28 June 1993, MTDC filed a Petition for Declaratory Relief with (1) must not contravene the Constitution or any statute;
Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining (2) must not be unfair or oppressive;
Order7 with the lower court impleading as defendants, herein petitioners City (3) must not be partial or discriminatory;
of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the (4) must not prohibit but may regulate trade;
members of the City Council of Manila (City Council). MTDC prayed that (5) must be general and consistent with public policy; and
(6) must not be unreasonable. The object of the Ordinance was, accordingly, the promotion and protection
The Ordinance was passed by the City Council in the exercise of its police of the social and moral values of the community. Granting for the sake of
power, an enactment of the City Council acting as agent of Congress. This argument that the objectives of the Ordinance are within the scope of the City
delegated police power is found in Section 16 of the LGC, known as the Councils police powers, the means employed for the accomplishment
general welfare clause. thereof were unreasonable and unduly oppressive.
The inquiry in this Petition is concerned with the validity of the exercise of
such delegated power. The worthy aim of fostering public morals and the eradication of the
communitys social ills can be achieved through means less restrictive of
A. The Ordinance contravenes private rights; it can be attained by reasonable restrictions rather than by an
the Constitution absolute prohibition. The closing down and transfer of businesses or their
conversion into businesses allowed under the Ordinance have no
The enactment of the Ordinance was an invalid exercise of delegated power reasonable relation to the accomplishment of its purposes. Otherwise stated,
as it is unconstitutional and repugnant to general laws. the prohibition of the enumerated establishments will not per se protect and
The police power granted to LGUs must always be exercised with utmost promote the social and moral welfare of the community; it will not in itself
observance of the rights of the people to due process and equal protection of eradicate the alluded social ills of prostitution, adultery, fornication nor will
the law. Due process requires the intrinsic validity of the law in interfering it arrest the spread of sexual disease in Manila.
with the rights of the person to his life, liberty and property.
The enumerated establishments are lawful pursuits which are not per se
Requisites for the valid exercise offensive to the moral welfare of the community. While a motel may be used
of Police Power are not met as a venue for immoral sexual activity, it cannot for that reason alone be
To successfully invoke the exercise of police power as the rationale for the punished. It cannot be classified as a house of ill-repute or as a nuisance per
enactment of the Ordinance, and to free it from the imputation of se on a mere likelihood or a naked assumption.
constitutional infirmity, not only must it appear that the interests of the public If the City of Manila so desires to put an end to prostitution, fornication and
generally, as distinguished from those of a particular class, require an other social ills, it can instead impose reasonable regulations such as daily
interference with private rights, but the means adopted must be reasonably inspections of the establishments for any violation of the conditions of their
necessary for the accomplishment of the purpose and not unduly oppressive licenses or permits; it may exercise its authority to suspend or revoke their
upon individuals.60 It must be evident that no other alternative for the licenses for these violations; and it may even impose increased license fees.
accomplishment of the purpose less intrusive of private rights can work. A In other words, there are other means to reasonably accomplish the desired
reasonable relation must exist between the purposes of the police measure end.
and the means employed for its accomplishment, for even under the guise of
protecting the public interest, personal rights and those pertaining to private It is readily apparent that the means employed by the Ordinance for the
property will not be permitted to be arbitrarily invaded. achievement of its purposes, the governmental interference itself, infringes
on the constitutional guarantees of a persons fundamental right to liberty and
Lacking a concurrence of these two requisites, the police measure shall be property.
struck down as an arbitrary intrusion into private rights a violation of the
due process clause. Modality employed is
unlawful taking
It is an ordinance which permanently restricts the use of property that it can made of it constitutes the taking of such property without just compensation.
not be used for any reasonable purpose goes beyond regulation and must be Private property which is not noxious nor intended for noxious purposes may
recognized as a taking of the property without just compensation.78 It is not, by zoning, be destroyed without compensation. Such principle finds no
intrusive and violative of the private property rights of individuals. support in the principles of justice as we know them. The police powers of
local government units which have always received broad and liberal
There are two different types of taking that can be identified. A possessory interpretation cannot be stretched to cover this particular taking.
taking occurs when the government confiscates or physically occupies
property. A regulatory taking occurs when the governments regulation Further, The Ordinance confers upon the mayor arbitrary and unrestricted
leaves no reasonable economically viable use of the property. power to close down establishments. Ordinances such as this, which make
possible abuses in its execution, depending upon no conditions or
What is crucial in judicial consideration of regulatory takings is that qualifications whatsoever other than the unregulated arbitrary will of the city
government regulation is a taking if it leaves no reasonable economically authorities as the touchstone by which its validity is to be tested, are
viable use of property in a manner that interferes with reasonable unreasonable and invalid. The Ordinance should have established a rule by
expectations for use. When the owner of real property has been called upon which its impartial enforcement could be secured. Similarly, the Ordinance
to sacrifice all economically beneficial uses in the name of the common does not specify the standards to ascertain which establishments tend to
good, that is, to leave his property economically idle, he has suffered a disturb the community, annoy the inhabitants, and adversely affect the
taking. social and moral welfare of the community.
The Ordinance gives the owners and operators of the prohibited The cited case supports the nullification of the Ordinance for lack of
establishments three (3) months from its approval within which to wind up comprehensible standards to guide the law enforcers in carrying out its
business operations or to transfer to any place outside of the Ermita-Malate provisions.
area or convert said businesses to other kinds of business allowable within
the area. The directive to wind up business operations amounts to a Petitioners cannot therefore order the closure of the enumerated
closure of the establishment, a permanent deprivation of property, and is establishments without infringing the due process clause. These lawful
practically confiscatory. Unless the owner converts his establishment to establishments may be regulated, but not prevented from carrying on their
accommodate an allowed business, the structure which housed the business.
previous business will be left empty and gathering dust. It is apparent that the
Ordinance leaves no reasonable economically viable use of property in a B. The Ordinance violates Equal
manner that interferes with reasonable expectations for use. Protection Clause
The second and third options to transfer to any place outside of the Ermita- In the Courts view, there are no substantial distinctions between motels,
Malate area or to convert into allowed businessesare confiscatory as well. inns, pension houses, hotels, lodging houses or other similar establishments.
The penalty of permanent closure in cases of subsequent violations found in By definition, all are commercial establishments providing lodging and
Section 4 of the Ordinance is also equivalent to a taking of private usually meals and other services for the public. No reason exists for
property. prohibiting motels and inns but not pension houses, hotels, lodging houses or
other similar establishments. The classification in the instant case is invalid
Petitioners cannot take refuge in classifying the measure as a zoning
as similar subjects are not similarly treated, both as to rights conferred and
ordinance. A zoning ordinance, although a valid exercise of police power,
which limits a wholesome property to a use which can not reasonably be
obligations imposed. It is arbitrary as it does not rest on substantial Not only does the Ordinance contravene the Code, it likewise runs counter to
distinctions bearing a just and fair relation to the purpose of the Ordinance. the provisions of P.D. 499. As correctly argued by MTDC, the statute had
already converted the residential Ermita-Malate area into a commercial area.
The Court likewise cannot see the logic for prohibiting the business and The decree allowed the establishment and operation of all kinds of
operation of motels in the Ermita-Malate area but not outside of this area. A commercial establishments except warehouse or open storage depot, dump or
noxious establishment does not become any less noxious if located outside yard, motor repair shop, gasoline service station, light industry with any
the area. machinery or funeral establishment. The rule is that for an ordinance to be
The standard where women are used as tools for entertainment is also valid and to have force and effect, it must not only be within the powers of
the council to enact but the same must not be in conflict with or repugnant to
discriminatory as prostitutionone of the hinted ills the Ordinance aims to
the general law.
banishis not a profession exclusive to women. Both men and women have
an equal propensity to engage in prostitution. Thus, the discrimination is Conclusion
invalid. All considered, the Ordinance invades fundamental personal and property
rights and impairs personal privileges. It is constitutionally infirm. The
C. The Ordinance is repugnant
Ordinance contravenes statutes; it is discriminatory and unreasonable in its
to general laws; it is ultra vires
operation; it is not sufficiently detailed and explicit that abuses may attend
The Ordinance is in contravention of the Code (Sec 458) as the latter merely the enforcement of its sanctions. And not to be forgotten, the City Council
empowers local government units to regulate, and not prohibit, the under the Code had no power to enact the Ordinance and is therefore ultra
establishments enumerated in Section 1 thereof. vires, null and void.

With respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension Petition Denied.
houses, lodging houses, and other similar establishments, the only power of
the City Council to legislate relative thereto is to regulate them to promote
the general welfare. The Code still withholds from cities the power to
suppress and prohibit altogether the establishment, operation and
maintenance of such establishments.

It is well to point out that petitioners also cannot seek cover under the general
welfare clause authorizing the abatement of nuisances without judicial
proceedings. That tenet applies to a nuisance per se, or one which affects the
immediate safety of persons and property and may be summarily abated
under the undefined law of necessity. It can not be said that motels are
injurious to the rights of property, health or comfort of the community. It is a
legitimate business. If it be a nuisance per accidens it may be so proven in a
hearing conducted for that purpose. A motel is not per se a nuisance
warranting its summary abatement without judicial intervention.