(Represented by Brigida Arcillo) Dionisia Gabunada, Heirs of Buenaventura
Francisco (Represented by Felicidad Sadaya Francisco), Heirs of Victoria C.
EMINENT DOMAIN
A. General considerations
1. Manotok Realty Inc., vs. Clt Realty
2. Heirs of Juancho Ardona v. Reyes
Heirs of Juancho Ardona vs. Reyes [GR L-60549, 60553 to 60555; 26
October 1983] En Banc, Gutierrez Jr. (J): 7 concur, 1 concurs in result,
1 on leave
Facts: The Philippine Tourism Authority filed 4 complaints with the Court of
First Instance of Cebu City for the expropriation of some 282 hectares of
rolling land situated in barangays Malubog and Babag, Cebu City, under
PTA's express authority "to acquire by purchase, by negotiation or by
condemnation proceedings any private land within and without the tourist
zones" for the purposes indicated in Section 5, paragraph B(2), of its Revised
Charter (PD 564), more specifically, for the development into integrated
resort complexes of selected and well-defined geographic areas with
potential tourism value, specifically for the construction of a sports complex
(basketball courts, tennis courts, volleyball courts, track and field, baseball
and softball diamonds, and swimming pools), clubhouse, gold course,
children's playground and a nature area for picnics and horseback riding for
the use of the public. The Heirs of Juancho Ardona (Represented by Gloria
Ardona) Constitutional Law II, 2005 ( 15 ) Narratives (Berne Guerrero)
Anastacio C. Cabilao, Heirs of Cipriano Cabilao (Represented by Jose
Cabilao) Modesta Cabilao, Heirs of Roman Cabuenas (Represented by
Alberto Cabuenas), Agripino Gabisay and Prudencia Mabini, Antonio
Labrador and Lucia Gabisay, Geronimo Mabini and Marcelina Sabal,
Inocencio Mabini and Arsenia Reyes, Patricio Mabini and Gregoria Borres,
Aniceto Gadapan and Maxima Gabisay, Bartolome Magno and Calineca E.
Magno, Alberto Cabuenas, Narciso Cabuenas and Victoria Cabuenas,
Eutiquioseno, Heirs of Esperidion Cabuenas (Represented by Alberto
Cabuenas), Maximina Navaro, Sulpicio Navaro, Eduardo Navaro, Martiniano
Roma (In Representation of Arcadio Mabini, Deceased), Martin Seno, Fausto
Arda, Maxima Cabilao, Estrella Seno, Eduvegis S. Cabilao, Rosario Cabilao,
Minors Danilo, Socorro, Josefina and Marites, All Surnamed Cabilao, Juan
Borres (Represented by Francisca Borres), Ramon Jabadan, Jesus Alipar and
Leonila Kabahar, Antonio Labrador, Heirs of Nicasio Gabisay (Represented
by Arsenio Gabisay), Pacifico Labrador, Demetrio Labrador and Fructosa
Tabura, Venancio Del Mar, Marino Del Mar, Heirs of Teodora Arcillo
Cabuenas (Represented by Alberto Cabuenas) Heirs of Cipriano Gabunada
(Represented by Claudio Gabunada) filed their oppositions, and had a
common allegation in that the taking is allegedly not impressed with public
use under the Constitution; alleging that there is no specific constitutional
provision authorizing the taking of private property for tourism purposes;
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
limiting the amount of compensation by legislative fiat is constitutionally
repugnant; and that since the land is under the land reform program, it is the
Court of Agrarian Relations and not the Court of First Instance (CFI), that
has jurisdiction over the expropriation cases.The Philippine Tourism
Authority having deposited with the Philippine National Bank, Cebu City
Branch, an amount equivalent to 10% of the value of the properties pursuant
to Presidential Decree No. 1533, the lower court issued separate orders
authorizing PTA to take immediate possession of the premises and directing
the issuance of writs of possession. The Heirs of Ardona, et. al. filed a
petition for certiorari with preliminary injunction before the Supreme Court.
Issue: Whether the expropriation of parcels of land for the purpose of
constructing a sports complex, including a golf course, by the Philippine
Tourism Authority be considered taking for public use.
Held: There are three provisions of the 1973 Constitution which directly
provide for the exercise of the power of eminent domain. Section 2, Article
IV states that private property shall not be taken for public use without just
compensation. Section 6, Article XIV allows the State, in the interest of
national welfare or defense and upon payment of just compensation to
transfer to public ownership, utilities and other private enterprises to be
operated by the government. Section 13, Article XIV states that the Batasang
Pambansa may authorize upon payment of just compensation the
expropriation of private lands to be subdivided into small lots and conveyed
at cost to deserving citizens. While not directly mentioning the expropriation
of private properties upon payment of just compensation, the provisions on
social justice and agrarian reforms which allow the exercise of police power
together with the power of eminent domain in the implementation of
constitutional objectives are even more far reaching insofar as taxing of
private property is concerned. The restrictive view of public use may be
appropriate for a nation which circumscribes the scope of government
activities and public concerns and which possesses big and correctly located
public lands that obviate the need to take private property for public
purposes. Neither circumstance applies to the Philippines. The Philippines
has never been a laissez faire State, and the necessities which impel the
exertion of sovereign power are all too often found in areas of scarce public
land or limited government resources. There can be no doubt that
expropriation for such traditional purposes as the construction of roads,
bridges, ports, waterworks, schools, electric and telecommunications
systems, hydroelectric power plants, markets and slaughterhouses, parks,
hospitals, government office buildings, and flood control or irrigation
systems is valid. However, the concept of public use is not limited to
traditional purposes. Here as elsewhere the idea that "public use" is strictly
limited to clear cases of "use by the public" has been discarded. The
Philippine Tourism Authority has stressed that the development of the 808
hectares includes plans that would give the Heirs of Ardona, et. al. and other
displaced persons productive employment, higher incomes, decent housing,
water and electric facilities, and Constitutional Law II, 2005 ( 16 ) Narratives
(Berne Guerrero) better living standards. The Courts dismissal of the
petition is, in part, predicated on those assurances. The right of the PTA to
proceed with the expropriation of the 282 hectares already identified as fit for
the establishment of a resort complex to promote tourism is, therefore,
sustained
3.Estate of Salud Jimenez vs. Philippines Export Proceeding Zone
Estate of Salud Jimenez vs. Philippine Export Processing Zone [GR
137285, 16 January 2001] Second Division, De Leon Jr. (J): 4 concur
Facts: On 15 May 1981, Philippine Export Processing Zone (PEZA), then
called as the Export Processing Zone Authority (EPZA), initiated before the
Regional Trial Court of Cavite expropriation proceedings on 3 parcels of
irrigated riceland in Rosario, Cavite. One of the lots, Lot 1406 (A and B) of
the San Francisco de Malabon Estate, with an approximate area of 29,008
square meters, is registered in the name of Salud Jimenez (TCT T-113498 of
the Registry of Deeds of Cavite). More than 10 years later, the said trial court
in an Order dated 11 July 1991 upheld the right of PEZA to expropriate,
among others, Lot 1406 (A and B). Reconsideration of the said order was
sought by the Estate of Salud Jimenez contending that said lot would only be
transferred to a private corporation, Philippine Vinyl Corp., and hence would
not be utilized for a public purpose. In an Order dated 25 October 1991, the
trial court reconsidered the Order dated 11 July 1991 and released Lot 1406-
A from expropriation while the expropriation of Lot 1406-B was maintained.
Finding the said order unacceptable, PEZA interposed an appeal to the Court
of Appeals. Meanwhile, the Estate and PEZA entered into a compromise
agreement, dated 4 January 1993. The compromise agreement provides "(1)
That plaintiff agrees to withdraw its appeal from the Order of the Honorable
Court dated October 25, 1991 which released lot 1406-A from the
expropriation proceedings. On the other hand, defendant Estate of Salud
Jimenez agrees to waive, quitclaim and forfeit its claim for damages and loss
of income which it sustained by reason of the possession of said lot by
plaintiff from 1981 up to the present. (2) That the parties agree that defendant
Estate of Salud Jimenez shall transfer lot 1406-B with an area of 13,118
square meters which forms part of the lot registered under TCT No. 113498
of the Registry of Deeds of Cavite to the name of the plaintiff and the same
shall be swapped and exchanged with lot 434 with an area of 14,167 square
meters and covered by Transfer Certificate of Title No. 14772 of the Registry
of Deeds of Cavite which lot will be transferred to the name of Estate of
Salud Jimenez. (3) That the swap arrangement recognizes the fact that the lot
1406-B covered by TCT No. T-113498 of the estate of defendant Salud
Jimenez is considered expropriated in favor of the government based on
Order of the Honorable Court dated July 11, 1991. However, instead of being
paid Constitutional Law II, 2005 ( 20 ) Narratives (Berne Guerrero) the just
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
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
parties, consequent with the withdrawal of the appeal with the Court of
Appeals. In the Order dated 23 August 1993, the trial court approved the
compromise agreement. However, PEZA failed to transfer the title of Lot
434 to the Estate inasmuch as it was not the registered owner of the covering
TCT T-14772 but Progressive Realty Estate, Inc. Thus, on 13 March 1997,
the Estate filed a "Motion to Partially Annul the Order dated August 23,
1993." In the Order dated 4 August 1997, the trial court annulled the said
compromise agreement entered into between the parties and directed PEZA
to peacefully turn over Lot 1406- A to the Estate. Disagreeing with the said
Order of the trial court, respondent PEZA moved for its reconsideration,
which was denied in an order dated 3 November 1997. On 4 December 1997,
the trial court, at the instance of the Estate, corrected the Orders dated 4
August 1997 and 3 November 1997 by declaring that it is Lot 1406-B and
not Lot 1406-A that should be surrendered and returned to the Estate. On 27
November 1997, PEZA interposed before the Court of Appeals a petition for
certiorari and prohibition seeking to nullify the Orders dated 4 August 1997
and 3 November 1997 of the trial court. Acting on the petition, the Court of
Appeals, in a Decision dated 25 March 1998, partially granted the petition by
setting aside the order of the trial court regarding "the peaceful turn over to
the Estate of Salud Jimenez of Lot 1406- B" and instead ordered the trial
judge to "proceed with the hearing of the expropriation proceedings
regarding the determination of just compensation over Lot 1406-B." The
Estate sought reconsideration of the Decision dated 25 March 1998.
However, the appellate court in a Resolution dated 14 January 1999 denied
the Estate's motion for reconsideration. The Estate filed a petition for review
on certiorari with the Supreme Court.
Issue: Whether the purpose of the expropriation by PEZA is of public use.
Held: This is an expropriation case which involves two (2) orders: an
expropriation order and an order fixing just compensation. Once the first
order becomes final and no appeal thereto is taken, the authority to
expropriate and its public use cannot anymore be questioned. Contrary to the
Estate's contention, the incorporation of the expropriation order in the
compromise agreement did not subject said order to rescission but instead
constituted an admission by the Estate of PEZA's authority to expropriate the
subject parcel of land and the public purpose for which it was expropriated.
This is evident from paragraph three (3) of the compromise agreement which
states that the "swap arrangement recognizes the fact that Lot 1406-B
covered by TCT T-113498 of the estate of defendant Salud Jimenez is
considered expropriated in favor of the government based on the Order of the
Honorable Court dated 11 July 1991." It is crystal clear from the contents of
the agreement that the parties limited the compromise agreement to the
matter of just compensation to the Estate. Said expropriation order is not
closely intertwined with the issue of payment such that failure to pay by
PEZA will also nullify the right of PEZA to expropriate. No statement to this
effect was mentioned in the agreement. The Order was mentioned in the
agreement only to clarify what was subject to payment. Since the
compromise agreement was only about the mode of payment by swapping of
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,
was rescinded. PEZA has the legal authority to expropriate the subject Lot
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
issued by former President Ferdinand Marcos. Meanwhile, the power of
eminent domain of respondent is contained in its original charter, Presidential
Decree 66. Accordingly, subject Lot 1406-B was expropriated "for the
construction of terminal facilities, structures and approaches thereto." The
authority is broad enough to give PEZA substantial leeway in deciding for
what public use the expropriated property would be utilized. Pursuant to this
broad authority, PEZA leased a portion of the lot to commercial banks while
the rest was made a transportation terminal. Said public purposes were even
reaffirmed by Republic Act 7916, a law amending PEZA's original charter.
As reiterated in various case, the "public use" requirement for a valid
exercise of the power of eminent domain is a flexible and evolving concept
influenced by changing conditions. The term "public use" has acquired a
more Constitutional Law II, 2005 ( 21 ) Narratives (Berne Guerrero)
comprehensive coverage. To the literal import of the term signifying strict
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
public use which is just as broad as "public welfare."
4. Ortega vs City of Cebu
B. Taking
5. Republic v. Vda. De Castellvi
FACTS: After the owner of a parcel of land that has been rented and
occupied by the government in 1947 refused to extend the lease, the latter
commenced expropriation proceedings in 1959. During the assessment of
just compensation, the government argued that it had taken the property
when the contract of lease commenced and not when the proceedings begun.
The owner maintains that the disputed land was not taken when the
government commenced to occupy the said land as lessee because the
essential elements of the taking of property under the power of eminent
domain, namely (1) entrance and occupation by condemnor upon the private
property for more than a momentary period, and (2) devoting it to a public
use in such a way as to oust the owner and deprive him of all beneficial
enjoyment of the property, are not present.
ISSUE: Whether or not the taking of property has taken place when the
condemnor has entered and occupied the property as lesse.
HELD: No, the property was deemed taken only when the expropriation
proceedings commenced in 1959.
The essential elements of the taking are: (1) Expropriator must enter a private
property, (2) for more than a momentary period, (3) and under warrant of
legal authority, (4) devoting it to public use, or otherwise informally
appropriating or injuriously affecting it in such a way as (5) substantially to
oust the owner and deprive him of all beneficial enjoyment thereof.
In the case at bar, these elements were not present when the government
entered and occupied the property under a contract of lease.
 6. Hacienda Luisita, Inc v. Presidential Agrarian Reform Council
C. Taking and Questioning of Necessity and Valuation
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
namely, the extension of Rizal Avenue, Manila and claiming that such
expropriation was necessary.
Herein defendants, on the other hand, alleged (a) that no necessity existed for
said expropriation and (b) that the land in question was a cemetery, which
had been used as such for many years, and was covered with sepulchres and
monuments, and that the same should not be converted into a street for public
purposes.
The lower court ruled that there was no necessity for the expropriation of the
particular strip of land in question.
Petitioner therefore assails the decision of the lower court claiming that it
(petitioner) has the authority to expropriate any land it may desire; that the
only function of the court in such proceedings is to ascertain the value of the
land in question; that neither the court nor the owners of the land can inquire
into the advisable purpose of the expropriation or ask any questions
concerning the necessities therefor; that the courts are mere appraisers of the
land involved in expropriation proceedings, and, when the value of the land
is fixed by the method adopted by the law, to render a judgment in favor of
the defendant for its value.
ISSUE: W/N the courts may inquire into and hear proof upon the necessity
of the expropriation?
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
designated by the law. When the municipal corporation or entity attempts to
exercise the authority conferred, it must comply with the conditions
accompanying such authority. The necessity for conferring the authority
upon a municipal corporation to exercise the right of eminent domain is,
without question, within the power of the legislature. But whether or not the
municipal corporation or entity is exercising the right in a particular case
under the conditions imposed by the general authority, is a question that the
courts have the right to inquire into.
8. Masikip v City of Pasig
- the power of eminent domain is not inherent in LGU and must be expressly
provided for by statute
FACTS:
Lourdes Dela Paz Masikip is the registered owner of a parcel of land, which
the City of Pasig sought to expropriate a portion thereof for the sports
development and recreational activities of the residents of Barangay
Caniogan. This was in January 1994. Masikip refused.
On March 23, 1994, City of Pasig sought again to expropriate said portion of
land for the alleged purpose that it was in line with the program of the
Municipal Government to provide land opportunities to deserving poor
sectors of our community.
Petitioner protested, so City of Pasig filed with the trial court a complaint for
expropriation. The Motion to Dismiss filed by Masikip was dismissed by the
rial court on the ground that there was genuine necessity to expropriate the
property. Case was elevated to the Court of Appeals, which dismissed
petition for lack of merit.
Hence, this petition.
ISSUE:
W/N there was genuine necessity to expropriate the property
HELD:
Eminent domain is the right of a government to take and appropriate private
property to the public use, whenever the public exigency requires it, which
can be done only on condition of providing a reasonably compensation
therefor. It is the power of the State or its instrumentalities to take private
property for public use and is inseparable from sovereignty and inherent in
government.
This power is lodged in the legislative branch of government. It delegates the
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.
Sec. 19, LGC: LGU may, through its chief executive and acting pursuant to
an ordinance, exercise the power of eminent domain for public use, purpose
or welfare for the benefit of the poor and landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and pertinent
laws.
Provided:
(1) power of eminent domain may not be exercised unless a valid and
definite offer has been previously made to the owner and such offer was not
accepted;
(2) LGU may immediately take possession of the property upon the filing of
expropriation proceedings and upon making a deposit with the proper court
of at least 15% fair market value of the property based on the current tax
declaration; and
(3) amount to be paid for expropriated property shall be determined by the
proper court, based on the fair market value at the time of the taking of the
property
There is already an established sports development and recreational activity
center at Rainforest Park in Pasig City. Evidently, there is no genuine
necessity to justify the expropriation. The records show that the
Certification issued by the Caniogan Barangay Council which became the
basis for the passage of Ordinance No. 4, authorizing the expropriation,
indicates that the intended beneficiary is the Melendres Compound
Homeowners Association, a private, non-profit organization, not the
residents of Caniogan.
9. De Knecht v. Bautista
De Knecht vs. Bautista [GR L-51078, 30 October 1980] First Division,
Fernandez (J): 4 concur
Facts: In 1970, the government through the Department of Public Works and
Communications (now Ministy of Public Highways [MPH]) prepared a plan
to extend Epifanio de los Santos Avenue (EDSA) to Roxas Boulevard. The
proposed extension, an adjunct of another road-building program, the
ManilaCavite Coastal Road Project, would pass through Cuneta Avenue
up to Roxas Boulevard. The route was designed to be a straight one, taking
into account the direction of EDSA. Preparatory to the implementation of the
aforesaid plan, or on 13 December 1974, then Secretary Baltazar Aquino of
the Department of Public Highways directed the City Engineer of Pasay City
not to issue temporary or permanent permits for the construction and/or
improvement of buildings and other structures located within the proposed
extension through Cuneta Avenue. Shortly thereafter the Department of
Public Highways decided to make the proposed extension go through
Fernando Rein and Del Pan Streets which are lined with old substantial
houses. Upon petition of the residents therein to the President of the
Philippines for the implementation of the original plan, the President referred
the matter to the Human Settlements Commission. The Commission
submitted its report recommending the reversion to the original plan passing
through Cuneta Avenue. Notwithstanding said recommendation, the MPH
insisted on implementing the plan to make the extension of EDSA go
through Fernando Rein and Del Pan Streets. In February 1979, the
government filed in the Court of First Instance (CFI) of Rizal, Branch III,
Pasay City (Judge Pedro JL. Bautista presiding; Civil Case 7001-P), a
complaint for expropriation against the owners of the houses standing along
Fernando Rein and Del Pan Streets, among them Cristina de Knecht. De
Knecht filed a motion to dismiss dated 9 March 1979. An urgent motion
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
possession of the property sought to be expropriated on the ground that said
Republic had made the required deposit with the Philippine National Bank.
Judge Bautista issued a writ of possession dated 14 June 1979 authorizing the
Republic of the Philippines to take and enter upon the possession of the
properties sought so be condemned. De Knecht filed a petition for certiorari
and prohibition with the Supreme Court, praying that judgment be rendered
annulling the order for immediate possession issued by respondent court in
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.
Issue: Whether the expropriation of the residential lots in Fernando Rein and
Del Pan Streets is genuinely necessary, in light of similar acceptable lots
along Cuneta Avenue which were subject of the original plan.
Held: There is no question as to the right of the Republic of the Philippines
to take private property for public use upon the payment of just
compensation. Section 2, Article IV of the Constitution of the Philippines
provides that "Private property shall not be taken for public use without just
compensation." It is recognized, however, that the government may not
capriciously or arbitrarily choose what private property should be taken. A
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
governmental act that smacks of whim or caprice. It negates state power to
act in an oppressive manner. It is, as had been stressed so often, the
embodiment of the sporting idea off air play. In that sense, it stands as a
guaranty of justice. That is the standard that must be met by any
governmental agency in the exercise of whatever competence is entrusted to
it. As was so emphatically stressed by the present Chief Justice, Acts of
Congress, as well as those of the Executive, can deny due process only under
pain of nullity. Herein, it is a fact that the Department of Public Highways
originally establish the extension of EDSA along Cuneta Avenue. It is to be
presumed that the Department of Public Highways made studies before
deciding on Cuneta Avenue. It is indeed odd why suddenly the proposed
extension of EDSA to Roxas Boulevard was changed to go through Fernando
Rein Del Pan Streets which the Solicitor General concedes "the Del Pan
Fernando Rein Streets line follows northward and inward direction While
admitting "that both lines, Cuneta Avenue and Del Pan Fernando Rein
Streets lines, meet satisfactorily planning and design criteria and therefore
are both acceptable", the Solicitor General justifies the change to Del Pan
Fernando Rein Streets on the ground that the government "wanted to
minimize the social impact factor or problem involved." It is doubtful
whether the extension of EDSA along Cuneta Avenue can be objected to on
the ground of social impact. The improvements and buildings along Cuneta
Avenue to be affected by the extension are mostly motels. Even granting,
arguendo, that more people will be affected, the Human Settlements
Commission has suggested coordinative efforts of said Commission with the
National Housing Authority and other government agencies in the relocation
and resettlement of those adversely affected. From the facts of record and
recommendations of the Human Settlements Commission, it is clear that the
choice of Fernando Rein Del Pan Streets as the line through which the
Epifanio de los Santos Avenue should be extended to Roxas Boulevard is
arbitrary and should not receive judicial approval.
10. Republic v. De Knecht
Republic vs. de Knecht [GR 87335, 12 February 1990] First Division,
Gancayco (J): 3 concur
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
proceedings against the owners of the houses standing along Fernando
ReinDel Pan streets among them Cristina De Knecht together with
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
jurisdiction, pendency of appeal with the President of the Philippines,
prematureness of complaint and arbitrary and erroneous valuation of the
properties. On 29 March 1979 de Knecht filed an ex parte urgent motion for
the issuance by the trial court of a restraining order to restrain the Republic
from proceeding with the taking of immediate possession and control of the
property sought to be condemned. In June 1979, the Republic filed a motion
for the issuance of a writ of possession of the property to be expropriated on
the ground that it had made the required deposit with the Philippine National
Bank (PNB) of 10% of the amount of compensation stated in the complaint.
In an order dated 14 June 1979 the lower court issued a writ of possession
authorizing the Republic to enter into and take possession of the properties
sought to be condemned, and created a Committee of three to determine the
just compensation for the lands involved in the proceedings. On 16 July
1979, de Knecht filed with this Court a petition for certiorari and prohibition
(GR No. L-51078) and directed against the order of the lower court dated 14
June 1979 praying that the Republic be commanded to desist from further
proceeding in the expropriation action and from implementing said order. On
30 October 1980, the Supreme Court rendered a decision, granting the
petition for certiorari and prohibition and setting aside the 14 June 1979
order of the Judge Bautista. Constitutional Law II, 2005 ( 24 ) Narratives
(Berne Guerrero) On 8 August 1981, Maria Del Carmen Roxas Vda. de
Elizalde, Francisco Elizalde and Antonio Roxas moved to dismiss the
expropriation action in compliance with the dispositive portion of the
aforesaid decision of the Supreme Court which had become final and in order
to avoid further damage to latter who were denied possession of their
properties. The Republic filed a manifestation on 7 September 1981 stating,
among others, that it had no objection to the said motion to dismiss as it was
in accordance with the aforestated decision. However, on 2 September 1983,
the Republic filed a motion to dismiss said case due to the enactment of the
Batas Pambansa 340 expropriating the same properties and for the same
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
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
course a decision was rendered on 28 December 1988, setting aside the order
appealed from and dismissing the expropriation proceedings. The Republic
filed the petition for review with the Supreme Court.
Issue: Whether an expropriation proceeding that was determined by a final
judgment of the Supreme Court may be the subject of a subsequent
legislation for expropriation.
Held: While it is true that said final judgment of the Supreme Court on the
subject becomes the law of the case between the parties, it is equally true that
the right of the Republic to take private properties for public use upon the
payment of the just compensation is so provided in the Constitution and our
laws. Such expropriation proceedings may be undertaken by the Republic not
only by voluntary negotiation with the land owners but also by taking
appropriate court action or by legislation. When on 17 February 1983 the
Batasang Pambansa passed BP 340 expropriating the very properties subject
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
Court was rendered in De Knecht in 1980 justifying the expropriation
through the Fernando ReinDel Pan Streets. The social impact factor which
persuaded the Court to consider this extension to be arbitrary had
disappeared. All residents in the area have been relocated and duly
compensated. 80% of the EDSA outfall and 30% of the EDSA extension had
been completed. Only De Knecht remains as the solitary obstacle to this
project that will solve not only the drainage and flood control problem but
also minimize the traffic bottleneck in the area. Moreover, the decision, is no
obstacle to the legislative arm of the Government in thereafter making its
own independent assessment of the circumstances then prevailing as to the
propriety of undertaking the expropriation of the properties in question and
thereafter by enacting the corresponding legislation as it did in this case. The
Court agrees in the wisdom and necessity of enacting BP 340. Thus the
anterior decision of this Court must yield to this subsequent legislative fiat.
11.Republic v. Gingoyon
FACTS: NAIA 3, a project between the Government and the Philippine
International Air Terminals Co., Inc (PIATCO) was nullified.
Planning to put NAIA 3 facilities into immediate operation, the Government,
through expropriation filed a petition to be entitled of a writ of possession
contending that a mere deposit of the assessed value of the property with an
authorized government depository is enough for the entitlement to said writ
(Rule 67 of the Rules of Court).
However, respondents avers that before an entitlement of the writ of
possession is issued, direct payment of just compensation must be made to
the builders of the facilities, citing RA No. 8974 and a related jurisprudence
(2004 Resolution).
ISSUE: WON expropriation can be conducted by mere deposit of the
assessed value of the property.
HELD: No, in expropriation proceedings, entitlement of writ of possession is
issued only after direct payment of just compensation is given to property
owner on the basis of fairness. The same principle applied in the 2004
Jurisprudence Resolution and the latest expropriation law (RA No. 8974).
D. Just Compensation
12. Export Processing Zone Authority v. Dulay
Export Processing Zone Authority vs. Dulay [GR L-59603, 29 April
1987] En Banc, Gutierrez Jr. (J): 10 concur, 1 concurs in result, 1 on
leave
Facts: On 15 January 1979, the President of the Philippines, issued
Proclamation 1811, reserving a certain parcel of land of the public domain
situated in the City of Lapu-Lapu, Island of Mactan, Cebu and covering a
total area of 1,193,669 square meters, more or less, for the establishment of
an export processing zone by petitioner Export Processing Zone Authority
(EPZA). Not all the reserved area, however, was public land. The
proclamation included, among others, 4 parcels of land with an aggregate
area of 22,328 square meters owned and registered in the name of the San
Antonio Development Corporation. The EPZA, therefore, offered to
purchase the parcels of land from the corporation in accordance with the
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.
EPZA filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-
Lapu City, a complaint for expropriation with a prayer for the issuance of a
writ of possession against the corporation, to expropriate the aforesaid
parcels of land pursuant to PD 66, as amended, which empowers EPZA to
acquire by condemnation proceedings any property for the establishment of
export processing zones, in relation to Proclamation 1811, for the purpose of
establishing the Mactan Export Processing Zone. On 21 October 1980, Judge
Ceferino E. Dulay issued a writ of possession authorizing EPZA to take
immediate possession of the premises. At the pre-trial conference on 13
February 1981, the judge issued an order stating that the parties have agreed
that the only issue to be resolved is the just compensation for the properties
and that the pre-trial is thereby terminated and the hearing on the merits is set
on 2 April 1981. On 17 February 1981, the judge issued the order of
condemnation declaring EPZA as having the lawful right to take the
properties sought to be condemned, upon the payment of just compensation
to be determined as of the filing of the complaint. The respondent judge also
issued a second order appointing certain persons as commissioners to
ascertain and report to the court the just compensation for the properties
sought to be expropriated. On 19 June 1981, the three commissioners
submitted their consolidated report recommending the amount of P15.00 per
square meter as the fair and reasonable value of just compensation for the
properties. On 29 July 1981, EPZA filed a Motion for Reconsideration of the
order of 19 February 1981 and Objection to Commissioner's Report on the
grounds that PD 1533 has superseded Sections 5 to 8 of Rule 67 of the Rules
of Court on the ascertainment of just compensation through commissioners;
and that the compensation must not exceed the maximum amount set by PD
1533. On 14 November 1981, the trial court denied EPZA's motion for
reconsideration. On 9 February 1982, EPZA filed the petition for certiorari
and mandamus with preliminary restraining order, enjoining the trial court
from enforcing the order dated 17 February 1981 and from further
proceeding with the hearing of the expropriation case.
Issue: Whether the exclusive and mandatory mode of determining just
compensation in Presidential Decree 1533 is valid and constitutional, and
whether the lower values given by provincial assessors be the value of just
compensation.
Presidential Decree 76 provides that "For purposes of just compensation in
cases of private property acquired by the government for public use, the basis
shall be the current and fair market value declared by the owner or
administrator, or such market value as determined by the Assessor,
whichever is lower." Section 92 of PD 464 provides that "In determining just
compensation which private property is acquired by the government for
public use, the basis shall be the market value declared by the owner or
administrator or anyone having legal interest in the property, or such market
value as determined by the assessor, whichever is lower." Section 92 of PD
794, on the other hand, provides that "In determining just compensation
when private property is acquired by the government for public use, the same
shall not exceed the market value declared by the owner or administrator or
anyone having legal interest in the property, or such market value as
determined by the assessor, whichever is lower." Lastly, Section 1 of PD
1533 provides that "In determining just compensation for private property
acquired through eminent domain proceedings, the compensation to be paid
shall not exceed the value declared by the owner or administrator or anyone
having legal interest in the property or determined by the assessor, pursuant
to the Real Property Tax Code, whichever value is lower, prior to the
recommendation or decision of the appropriate Government office to acquire
the property." The provisions of the Decrees on just compensation
unconstitutional and void as the method of ascertaining just compensation
under the said decrees constitutes impermissible encroachment on judicial
prerogatives. It tends to render the Supreme Court inutile in a matter which
under the Constitution is reserved to it for final determination. The valuation
in the decree may only serve as a guiding principle or one of the factors in
determining just compensation but it may not substitute the court's own
judgment as to what amount should be awarded and how to arrive at such
amount. Further, various factors can come into play in the valuation of
specific properties singled out for expropriation. The values given by
provincial assessors are usually uniform for very wide areas covering several
barrios or even an entire town with the exception of the poblacion. Individual
differences are never taken into account. The value of land is based on such
generalities as its possible cultivation for rice, corn, coconuts, or other crops.
Very often land described as "cogonal" has been cultivated for generations.
Buildings are described in terms of only two or three classes of building
materials and estimates of areas are more often inaccurate than correct. Thus,
tax values can serve as guides but cannot be absolute substitutes for just
compensation.
13. National Power Corporation v. Zabala
14. Republic v Court of appeals
15. Cosculluela v. Court of Appeals
16. Republic v. Rural Bank of Kabacan
FACTS: The National Irrigation Administration (NIA) filed with the
Regional Trial Court of Kabacan (RTC) a complaint for expropriation of a
portion of three parcels of land covering a total of 14,497.91 square meters
for its Malitubog-Marigadao irrigation project. The committee formed by the
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
two lots. RTC adopted the findings of the committee despite the objections of
NIA to the inclusion of the value of the excavated soil in the computation of
the value of the land.
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
RTCs valuation of the improvements made on the properties.
ISSUE: Whether or not the value of the excavated soil should be included in
the computation of just compensation
HELD: Petition DENIED.
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
of expropriation proceedings, the soil has no value separate from that of the
expropriated land. Just compensation ordinarily refers to the value of the land
to compensate for what the owner actually loses. Such value could only be
that which prevailed at the time of the taking.
In National Power Corporation v. Ibrahim, et al. The SC held that rights over
lands are indivisible. This conclusion is drawn from Article 437 of the Civil
Code which provides: The owner of a parcel of land is the owner of its
surface and of everything under it, and he can construct thereon any works or
make any plantations and excavations which he may deem proper, without
detriment to servitudes and subject to special laws and ordinances. He cannot
complain of the reasonable requirements of aerial navigation. Thus, the
ownership of land extends to the surface as well as to the subsoil under it.
Hence, the CA correctly modified the trial courts Decision when it ruled it is
preposterous that NIA will be made to pay not only for the value of the land
but also for the soil excavated from such land when such excavation is a
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
landowner who has been paid the fair market value of his land. As pointed
out by the OSG, the law does not limit the use of the expropriated land to the
surface area only. To sanction the payment of the excavated soil is to allow
the landowners to recover more than the value of the land at the time when it
was taken, which is the true measure of the damages, or just compensation,
and would discourage the construction of important public improvements.
17. Land Bank of the Philippines v. Gallego, Jr.
FACTS:
Respondents Manuel O. Gallego, Jr., Joseph L. Gallego and Christopher L.
Gallego are the co-owners of several parcels of agricultural lands located in
Barangay Sta. Rita and Barangay Concepcion in Cabiao, Nueva Ecija.
Sometime in 1972, the DAR placed a portion of the property under the
coverage of Presidential Decree No. 27 (P.D. No. 27). However, the DAR
and respondents failed to agree on the amount of just compensation,
prompting respondents to file on 10 December 1998 a petition before the
RTC of Cabanatuan City.
In a Supplemental Pre-Trial Order, the trial court stated that in view of the
parties agreement that the property was irrigated and had an area of 120
hectares, the only factual issue to be resolved would be the correct Average
Gross Production on which just compensation would be fixed.
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
law instead of adopting the Average Gross Production established by the
Barangay Committee on Land Production under DAR Circular No. 26, series
of 1973, and the mandated Government Support Price ofP35 per cavan of
palay under Section 2 of Executive Order (E.O.) No. 228.
The appellate court agreed that the values applied by the trial court in fixing
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
of palay. Petitioner LBP sought reconsideration but was denied in a
Resolution dated 23 June 2006. Hence, the instant petition. The SC reversed
the CA decision and remanded the case to the CA for determination of just
compensation. Hence the CA submitted its report and recommended two
solutions for determining just compensation.
In the first alternative, the CA recommended the use of the alternate formula
"LV=(CS x 0.9) + (MV x 0.1)" as proposed by the respondents, for a just
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
recommended the use of the basic formula "LV = (CNI x 0.6) + (CS x 0.3) +
(MV x 0.1)" as provided under Item II.A. of DAR A.O. No. 05-98, for a just
compensation of Fifty Million, Four Hundred Thirty-One Thousand, Five
Hundred Six Pesos (P50,431,506.00).
ISSUE: Which among the two alternative methods is correct
HELD: Second Computation
Political Law- to be "just," the compensation must be real, substantial,
full and ample.
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
After consideration of the record and of the parties respective arguments, we
adopt the second alternative recommended by the CA using the basic
formula "LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)." We, however,
arrived at the slightly different amount of Fifty Million, Four Hundred
Thirty-Two Thousand, Sixty-Three Pesos and 89/100 (P50,432,063.89).
We find that the second alternative presents a more accurate formula and
computation in the determination of the just compensation due the
respondents for their property. As pointed out earlier, DAR A.O. No. 05-98
provides the basic formula "LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)" for
valuating lands acquired pursuant to the governments agrarian reform
program. In cases where not all three factors of CNI, CS and MV are present,
relevant and applicable, the same regulation provides three alternate
formulae that can be used to compute for just compensation.
In the present case, we deem all three factors of CNI, CS and MV "relevant
and applicable" for, as the CA observed, they substantially complied with the
prescribed formula. In disregarding the computation proposed by the LBP,
the CA found inapplicable the data necessary to compute the CNI because
they pertained to different locations and calendar years.
Nevertheless, in offering the second alternative which used the prescribed
basic formula, the CA essentially pointed out that the data necessary for
determining the CS were equally inapplicable as they did not comply with
the requirements of Items II.C.2.b and II.C.2.c of DAR A.O. No. 05-98. If we
were to strictly apply the formula laid down in DAR A.O. No. 05-98 and
disregard both the CNI and CS factors to be equally flawed, then the only
present, relevant and applicable factor left is MV, which, when used
following the third alternate formula "LV = MV x 2," will significantly
reduce the just compensation to an absurd amount. Clearly, we cannot
support this, as our agrarian reform laws never intended to deprive
landowners of their property without just compensation. Just compensation
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
real, substantial, full and ample.
18. Department of Agrarian Refoem v. Sta Romana
E. Delay in Payment and Abandonment or Change of Intended Use
19. Republic v. Lim
20. Mactan-Cebu international Airport v. Lozada, Sr.,
FACTS: Subject of this case is a lot (Lot No. 88) located in Lahug, Cebu
City. Its original owner was Anastacio Deiparine when the same was subject
to expropriation proceedings, initiated by Republic, represented by the then
Civil Aeronautics Administration (CAA), for the expansion and
improvement of the Lahug Airport. During the pendency of the expropriation
proceedings, respondent Bernardo L. Lozada, Sr. acquired Lot No. 88 from
Deiparine. The trial court ruled for the Republic and ordered the latter to pay
Lozada the fair market value of the lot. However, the projected improvement
and expansion plan of the old Lahug Airport, however, was not pursued. The
plaintiff-respondents initiated a complaint for the recovery of possession and
reconveyance of ownership the subject lot. On the other hand, the petitioners
asked for the immediate dismissal of the complaint. They specifically denied
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
airport operations. Petitioners instead asserted that the judgment of
condemnation was unconditional, and respondents were, therefore, not
entitled to recover the expropriated property notwithstanding non-use or
abandonment thereof. The lower court ruled for herein plaintiff-respondents,
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
and unconditional, giving title in fee simple to the Republic.
ISSUE: Whether or not a constructive trust was constituted in this case, and
as such, the respondents herein are entitled to the restitution of the
expropriated property which was not used for a public purpose.
HELD: YES. Art. 1454 of the Civil Code provides: If an absolute
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
established. If the fulfillment of the obligation is offered by the grantor when
it becomes due, he may demand the reconveyance of the property to him.
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
which the holder of legal title may not in good conscience retain the
beneficial interest.
In constructive trusts, the arrangement is temporary and passive in which the
trustees sole duty is to transfer the title and possession over the property to
the plaintiff-beneficiary. Of course, the wronged party seeking the aid of a
court of equity in establishing a constructive trust must himself do equity.
Accordingly, the court will exercise its discretion in deciding what acts are
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
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
the property, his fixed costs for improvements thereon, and the monetary
value of his services in managing the property to the extent that plaintiff-
beneficiary will secure a benefit from his acts.
The rights and obligations between the constructive trustee and the
beneficiary, in this case, respondent MCIAA and petitioners over Lots Nos.
916 and 920, are echoed in Art. 1190 of the Civil Code, When the
conditions have for their purpose the extinguishment of an obligation to give,
the parties, upon the fulfillment of said conditions, shall return to each other
what they have received x x x In case of the loss, deterioration or
improvement of the thing, the provisions which, with respect to the debtor,
are laid down in the preceding article shall be applied to the party who is
bound to return x x x.
21. Republic v. Heirs Saturnino Q. Borbon
F. Overhead or Aerial and Subterranean Takings
22. National power Corporation v. Gutierrez
Facts: Petitioner filed an action to acquire a right of way over the land of
Respondents for the construction of transmission lines. Petitioner was
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.
Issue: Whether or Not the acquisition of the right of way constitutes "taking"
and such the case will be entitled just compensation.
Held: The acquisition of the right of way constitutes taking. It perpetually
deprives Respondents of their proprietary rights. No plant higher than three
meters is allowed below the transmission lines. Because of high tension
current conveyed through the transmission lines, danger to life and limbs
cannot be discounted. The owner of the property is entitled to just
compensation.
23. Cabahug v. National Power Corporation
FACTS: The Spouses Cabahug are the owners of two parcels of
land situated in Barangay Capokpok, Tabango, Leyte, registered in their
names under TCT Nos. T-9813 and T-1599 of the Leyte provincial registry.
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
Leyte-Cebu Interconnection Project. The suit was later dismissed when NPC
opted to settle with the landowners by paying an easement fee equivalent to
10% of value of their property in accordance with Section 3-A of Republic
Act (RA) No. 6395. On 9 November 1996, Jesus Cabahug executed two
documents denominated as Right of Way Grant in favor of NPC. . For and in
consideration of the easement fees, Cabahug granted NPC a continuous
easement of right of way for the latters transmissions lines and their
appurtenances over 24,939 and 4,750 square meters of the parcels of land
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
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.
(Gutierrez). On 21 September 1998, the Spouses Cabahug filed the complaint
for the payment of just compensation, damages and attorneys fees
against NPC before the RTC. In its answer, NPC averred that it
already paid the full easement fee mandated under Section 3-A of RA 6395
and that the reservation in the grant referred to additional compensation for
easement fee, not the full just compensation sought by the Spouses Cabahug.
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 NPC perfected the appeal before the CA which, on 16 May 2007,
rendered the herein assailed decision, reversing and setting aside the
RTCs appealed decision. On motion for reconsideration, the same was
denied by the CA. Hence, this petition for review on certiorari.
ISSUE: WON petitioners are entitled to full just compensation.
RULING: The rule is settled that a contract constitutes the law between the
parties who are bound by its stipulations which, when couched in clear and
plain language, should be applied according to their literal tenor. Courts
cannot supply material stipulations, read into the contract words it does not
contain or, for that matter, read into it any other intention that would
contradict its plain import. Neither can they rewrite contracts
because they operate harshly or inequitably as to one of the parties, or alter
them for the benefit of one party and to the detriment of the other, or by
construction, relieve one of the parties from the terms which he voluntarily
consented to, or impose on him those which he did not.
24. National Power Corporation v. Ibrahim
Facts:
Ibrahim owns a parcel of land located in Lanao del Norte.
In 1978, NAPOCOR took possession of the sub-terrain area of the
land and constructed underground tunnels on the said property.
The tunnels were apparently being used by NAPOCOR in siphoning
the water of Lake Lanao and in the operation of NAPOCORs Agus projects.
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
construction would cause danger to lives and property by reason of the
presence of the underground tunnels.
Maruhom demanded NAPOCOR to pay damages and to vacate the
sub-terrain portion of the land.
Issue: WON Ibrahim is the rightful owner of the sub-terrain area of the land.
If yes, are they entitled to the payment of just compensation.
Held: YES. The sub-terrain portion of the property belongs to Ibrahim.
The Supreme Court cited Article 437 of the Civil Code which provides that:
The owner of a parcel of land is the owner of its surface and of everything
under it, and he can construct thereon any works or make any plantations and
excavations which he may deem proper, without detriment to servitudes and
subject to special laws and ordinances. xxx
Hence, the ownership of land extends to the surface as well as to the subsoil
under it. Therefore, Ibrahim owns the property as well as the sub-terrain area
of the land where the underground tunnels were constructed.
On the issue of just compensation, the Supreme Court also said that Ibrahim
should be paid a just compensation.
Ibrahim could have dug upon their property and built motorized deep wells
but was prevented from doing so by the authorities because of the
construction of the tunnels underneath the surface of the land.
Ibrahim still had a legal interest in the sub-terrain portion insofar as they
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
lawful use of the land and considerably reduced its value.
It was held that: If the government takes property without expropriation and
devotes the property to public use, after many years, the property owner may
demand payment of just compensation in the event restoration of possession
is neither convenient nor feasible. This is in accordance with the principle
that persons shall not be deprived of their property except by competent
authority and for public use and always upon payment of just compensation.
25. National Power Corporation v. Heirs of Macabangkit Sangkay
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
electricity for Mindanao. The project included the construction of several
underground tunnels to be used in diverting the water flow from the Agus
River to the hydroelectric plants.
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
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
belatedly discovered that one of the underground tunnels of NPC that
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;
that their discovery had occurred in 1995 after Atty. Saidali C. Gandamra,
President of the Federation of Arabic Madaris School, had rejected their offer
to sell the land because of the danger the underground tunnel might pose to
the proposed Arabic Language Training Center and Muslims Skills
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-
Amanah Islamic Investment Bank of the Philippines had also refused to
accept their land as collateral because of the presence of the underground
tunnel; that the underground tunnel had been constructed without their
knowledge and consent; that the presence of the tunnel deprived them of the
agricultural, commercial, industrial and residential value of their land; and
that their land had also become an unsafe place for habitation because of the
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.
In its answer with counterclaim, NPC countered that the Heirs of
Macabangkit had no right to compensation under section 3(f) of Republic
Act No. 6395, under which a mere legal easement on their land was
established; that their cause of action, should they be entitled to
compensation, already prescribed due to the tunnel having been constructed
in 1979; and that by reason of the tunnel being an apparent and continuous
easement, any action arising from such easement prescribed in five years.
After trial, the RTC ruled in favor of the plaintiffs (Heirs of Macabangkit).
Earlier, on August 18, 1999, the Heirs of Macabangkit filed an urgent motion
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
certiorari in the CA. On September 15, 1999, the CA issued a temporary
restraining order (TRO) to enjoin the RTC from implementing its
decision.The Heirs of Macabangkit elevated the ruling of the CA (G.R. No.
141447), but the Court upheld the CA on May 4, 2006.
On October 5, 2004, the CA affirmed the decision of the RTC.
ISSUE:
1) Whether the CA and the RTC erred in holding that there was an
underground tunnel traversing the Heirs of Macabangkits land constructed
by NPC; and
2) Whether the Heirs of Macabangkits right to claim just compensation had
prescribed under section 3(i) of Republic Act No. 6395, or, alternatively,
under Article 620 and Article 646 of the Civil Code.
HELD: We uphold the liability of NPC for payment of just
compensation.
POLITICAL LAW: just compensation
The action to recover just compensation from the State or its expropriating
agency differs from the action for damages. The former, also known as
inverse condemnation, has the objective to recover the value of property
taken in fact by the governmental defendant, even though no formal exercise
of the power of eminent domain has been attempted by the taking
agency.Just compensation is the full and fair equivalent of the property taken
from its owner by the expropriator. The measure is not the takers gain, but
the owner's loss. The word just is used to intensify the meaning of the word
compensation in order to convey the idea that the equivalent to be rendered
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
damages, which may be actual, moral, nominal, temperate, liquidated, or
exemplary. When a right is exercised in a manner not conformable with the
norms enshrined in Article 19 and like provisions on human relations in the
Civil Code,and the exercise results to the damage of another, a legal wrong is
committed and the wrongdoer is held responsible.
The two actions are radically different in nature and purpose. The action to
recover just compensation is based on the Constitution while the action for
damages is predicated on statutory enactments. Indeed, the former arises
from the exercise by the State of its power of eminent domain against private
property for public use, but the latter emanates from the transgression of a
right. The fact that the owner rather than the expropriator brings the former
does not change the essential nature of the suit as an inverse condemnation,
for the suit is not based on tort, but on the constitutional prohibition against
the taking of property without just compensation. It would very well be
contrary to the clear language of the Constitution to bar the recovery of just
compensation for private property taken for a public use solely on the basis
of statutory prescription.
Due to the need to construct the underground tunnel, NPC should have first
moved to acquire the land from the Heirs of Macabangkit either by voluntary
tender to purchase or through formal expropriation proceedings. In either
case, NPC would have been liable to pay to the owners the fair market value
of the land, for Section 3(h) of Republic Act No. 6395 expressly requires
NPC to pay the fair market value of such property at the time of the taking,
thusly:
(h)To acquire, promote, hold, transfer, sell, lease, rent, mortgage, encumber
and otherwise dispose of property incident to, or necessary, convenient or
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
lines, easement of right of way shall only be sought:Provided, however,That
in case the property itself shall be acquired by purchase, the cost thereof shall
be the fair market value at the time of the taking of such property.
POLITICAL LAW: NPCs construction of the tunnel constituted taking
of the land, and entitled owners to just compensation
The Court held in National Power Corporation v. Ibrahim that NPC was
liable to pay not merely an easement fee but rather the full compensation for
land traversed by the underground tunnels,viz:
In disregarding this procedure and failing to recognize respondents
ownership of the sub-terrain portion, petitioner took a risk and exposed itself
to greater liability with the passage of time. It must be emphasized that the
acquisition of the easement is not without expense. The underground tunnels
impose limitations on respondents use of the property for an indefinite period
and deprive them of its ordinary use. Based upon the foregoing, respondents
are clearly entitled to the payment of just compensation.Notwithstanding the
fact that petitioner only occupies the sub-terrain portion, it is liable to pay not
merely an easement fee but rather the full compensation for land. This is so
because in this case, the nature of the easement practically deprives the
owners of its normal beneficial use. Respondents, as the owner of the
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
the money equivalent of said property.
Here, like in National Power Corporation v. Ibrahim,NPC constructed a
tunnel underneath the land of the Heirs of Macabangkit without going
through formal expropriation proceedings and without procuring their
consent or at least informing them beforehand of the construction. NPCs
construction adversely affected the owners rights and interests because the
subterranean intervention by NPC prevented them from introducing any
developments on the surface, and from disposing of the land or any portion
of it, either by sale or mortgage.
We agree with both the RTC and the CA that there was a full taking on the
part of NPC, notwithstanding that the owners were not completely and
actually dispossessed. It is settled that the taking of private property for
public use, to be compensable, need not be an actual physical taking or
appropriation. Indeed, the expropriators action may be short of acquisition of
title, physical possession, or occupancy but may still amount to a taking.
Compensable taking includes destruction, restriction, diminution, or
interruption of the rights of ownership or of the common and necessary use
and enjoyment of the property in a lawful manner, lessening or destroying its
value. It is neither necessary that the owner be wholly deprived of the use of
his property, nor material whether the property is removed from the
possession of the owner, or in any respect changes hands.
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
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.
POLITICAL LAW: reckoning point of just compensation on the value
at the time the owners commenced these inverse condemnation
proceedings is entirely warranted.
We rule that the reckoning value is the value at the time of the filing of the
complaint, as the RTC provided in its decision. Compensation that is
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
would compound the gross unfairness already caused to the owners by NPCs
entering without the intention of formally expropriating the land, and without
the prior knowledge and consent of the Heirs of Macabangkit. NPCs entry
denied elementary due process of law to the owners since then until the
owners commenced the inverse condemnation proceedings. The Court is
more concerned with the necessity to prevent NPC from unjustly profiting
from its deliberate acts of denying due process of law to the owners. As a
measure of simple justice and ordinary fairness to them, therefore, reckoning
just compensation on the value at the time the owners commenced these
inverse condemnation proceedings is entirely warranted.
In National Power Corporation v. Court of Appeals, a case that involved the
similar construction of an underground tunnel by NPC without the prior
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
into the property was the time of the filing of the complaint, not the time of
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
legal authority.
26. National Power Corporation v. Tarcelo
G. Constructive Excoriation and Regulatory Taking
27. United States v. Causby
Brief Fact Summary. Respondents claim that their property was taken,
within the meaning of the Fifth Amendment, by the regular army and navy
aircraft flights over their house and chicken farm.
Synopsis of Rule of Law. The airspace is a public highway, but if the
landowner is to have the full enjoyment of his land, he must have exclusive
control over the immediate reaches of the enveloping atmosphere.
Facts. Respondents own 2.8 acres near an airport outside of Greensboro,
North Carolina. Respondents property contained a house and a chicken
farm. The end of one of the runways of the airport was 2,220 feet from
Respondents property, and the glide path passed over the property at 83 feet,
which is 67 feet above the house, 63 feet above the barn, and 18 feet above
the highest tree. The use by the United States of this airport is pursuant to a
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
emergency, whichever is earlier. The United States four motored bombers
make loud noises when flying above the property, and have very bright
lights. Respondents chicken farm production had to stop, because 150
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
on June 1, 1942, and that the val
ue of the property depreciation as the result of the easement was $2,000.00.
The United States petitioned for certiorari, which was granted.
Issue. Has the Respondents property been taken within the meaning of the
Fifth Amendment?
Held. Yes. But the case is remanded for a determination of the value of the
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.
However, the court found that the common law doctrine did not control the
present case. The United States had conceded in oral argument that if flights
over the Respondents property rendered it uninhabitable then there would be
a taking compensable under the Fifth Amendment. The measure of the value
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
have the full enjoyment of his land, he must have exclusive control of the
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
public domain. The court does not set the precise limits of the line of
demarcation. Flights over private land are not a taking, unless, like here, they
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
the value of the easement and whether it is a temporary or permanent
easement.
Dissent. The dissent would reverse the decision of the Court of Claims and
hold that there has been no taking within the meaning of the Fifth
Amendment. This is because of the modern nature of the airplane, and the
desire to avoid confusion.
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
bombers. The use of the airspace above Respondents home and farm was
not a problem previously, because the flights were sporadic and not nearly as
loud as the bombers.
28. City of Manila v. Laguio
FACTS: Private respondent Malate Tourist Development Corporation
(MTDC) is a corporation engaged in the business of operating hotels, motels,
hostels and lodging houses. It built and opened Victoria Court in Malate
which was licensed as a motel although duly accredited with the DOT as a
hotel. On 28 June 1993, MTDC filed a Petition for Declaratory Relief with
Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining
Order7 with the lower court impleading as defendants, herein petitioners City
of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the
members of the City Council of Manila (City Council). MTDC prayed that
the Ordinance, insofar as it includes motels and inns as among its prohibited
establishments, be declared invalid and unconstitutional.
Enacted by the City Council and approved by petitioner City Mayor, the said
Ordinance is entitled
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR
OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF
AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN
THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR
VIOLATION THEREOF, AND FOR OTHER PURPOSES.
Judge Laguio rendered the assailed Decision (in favour of respondent).
On 11 January 1995, petitioners filed the present Petition, alleging that the
following errors were committed by the lower court in its ruling:
(1) It erred in concluding that the subject ordinance is ultra vires, or
otherwise, unfair, unreasonable and oppressive exercise of police power;
(2) It erred in holding that the questioned Ordinance contravenes P.D. 499
which allows operators of all kinds of commercial establishments, except
those specified therein; and
(3) It erred in declaring the Ordinance void and unconstitutional.
ISSUE: WON the ordinance is unconstitutional.
HELD: The Court is of the opinion, and so holds, that the lower court did not
err in declaring the Ordinance, as it did, ultra vires and therefore null and
void.
The tests of a valid ordinance are well established. A long line of decisions
has held that for an ordinance to be valid, it must not only be within the
corporate powers of the local government unit to enact and must be passed
according to the procedure prescribed by law, it must also conform to the
following substantive requirements:
(1) must not contravene the Constitution or any statute;
(2) must not be unfair or oppressive;
(3) must not be partial or discriminatory;
(4) must not prohibit but may regulate trade;
(5) must be general and consistent with public policy; and
(6) must not be unreasonable.
The Ordinance was passed by the City Council in the exercise of its police
power, an enactment of the City Council acting as agent of Congress. This
delegated police power is found in Section 16 of the LGC, known as the
general welfare clause.
The inquiry in this Petition is concerned with the validity of the exercise of
such delegated power.
A. The Ordinance contravenes
the Constitution
The enactment of the Ordinance was an invalid exercise of delegated power
as it is unconstitutional and repugnant to general laws.
The police power granted to LGUs must always be exercised with utmost
observance of the rights of the people to due process and equal protection of
the law. Due process requires the intrinsic validity of the law in interfering
with the rights of the person to his life, liberty and property.
Requisites for the valid exercise
of Police Power are not met
To successfully invoke the exercise of police power as the rationale for the
enactment of the Ordinance, and to free it from the imputation of
constitutional infirmity, not only must it appear that the interests of the public
generally, as distinguished from those of a particular class, require an
interference with private rights, but the means adopted must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive
upon individuals.60 It must be evident that no other alternative for the
accomplishment of the purpose less intrusive of private rights can work. A
reasonable relation must exist between the purposes of the police measure
and the means employed for its accomplishment, for even under the guise of
protecting the public interest, personal rights and those pertaining to private
property will not be permitted to be arbitrarily invaded.
Lacking a concurrence of these two requisites, the police measure shall be
struck down as an arbitrary intrusion into private rights a violation of the
due process clause.
The object of the Ordinance was, accordingly, the promotion and protection
of the social and moral values of the community. Granting for the sake of
argument that the objectives of the Ordinance are within the scope of the City
Councils police powers, the means employed for the accomplishment
thereof were unreasonable and unduly oppressive.
The worthy aim of fostering public morals and the eradication of the
communitys social ills can be achieved through means less restrictive of
private rights; it can be attained by reasonable restrictions rather than by an
absolute prohibition. The closing down and transfer of businesses or their
conversion into businesses allowed under the Ordinance have no
reasonable relation to the accomplishment of its purposes. Otherwise stated,
the prohibition of the enumerated establishments will not per se protect and
promote the social and moral welfare of the community; it will not in itself
eradicate the alluded social ills of prostitution, adultery, fornication nor will
it arrest the spread of sexual disease in Manila.
The enumerated establishments are lawful pursuits which are not per se
offensive to the moral welfare of the community. While a motel may be used
as a venue for immoral sexual activity, it cannot for that reason alone be
punished. It cannot be classified as a house of ill-repute or as a nuisance per
se on a mere likelihood or a naked assumption.
If the City of Manila so desires to put an end to prostitution, fornication and
other social ills, it can instead impose reasonable regulations such as daily
inspections of the establishments for any violation of the conditions of their
licenses or permits; it may exercise its authority to suspend or revoke their
licenses for these violations; and it may even impose increased license fees.
In other words, there are other means to reasonably accomplish the desired
end.
It is readily apparent that the means employed by the Ordinance for the
achievement of its purposes, the governmental interference itself, infringes
on the constitutional guarantees of a persons fundamental right to liberty and
property.
Modality employed is
unlawful taking
It is an ordinance which permanently restricts the use of property that it can
not be used for any reasonable purpose goes beyond regulation and must be
recognized as a taking of the property without just compensation.78 It is
intrusive and violative of the private property rights of individuals.
There are two different types of taking that can be identified. A possessory
taking occurs when the government confiscates or physically occupies
property. A regulatory taking occurs when the governments regulation
leaves no reasonable economically viable use of the property.
What is crucial in judicial consideration of regulatory takings is that
government regulation is a taking if it leaves no reasonable economically
viable use of property in a manner that interferes with reasonable
expectations for use. When the owner of real property has been called upon
to sacrifice all economically beneficial uses in the name of the common
good, that is, to leave his property economically idle, he has suffered a
taking.
The Ordinance gives the owners and operators of the prohibited
establishments three (3) months from its approval within which to wind up
business operations or to transfer to any place outside of the Ermita-Malate
area or convert said businesses to other kinds of business allowable within
the area. The directive to wind up business operations amounts to a
closure of the establishment, a permanent deprivation of property, and is
practically confiscatory. Unless the owner converts his establishment to
accommodate an allowed business, the structure which housed the
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
manner that interferes with reasonable expectations for use.
The second and third options to transfer to any place outside of the Ermita-
Malate area or to convert into allowed businessesare confiscatory as well.
The penalty of permanent closure in cases of subsequent violations found in
Section 4 of the Ordinance is also equivalent to a taking of private
property.
Petitioners cannot take refuge in classifying the measure as a zoning
ordinance. A zoning ordinance, although a valid exercise of police power,
which limits a wholesome property to a use which can not reasonably be
made of it constitutes the taking of such property without just compensation.
Private property which is not noxious nor intended for noxious purposes may
not, by zoning, be destroyed without compensation. Such principle finds no
support in the principles of justice as we know them. The police powers of
local government units which have always received broad and liberal
interpretation cannot be stretched to cover this particular taking.
Further, The Ordinance confers upon the mayor arbitrary and unrestricted
power to close down establishments. Ordinances such as this, which make
possible abuses in its execution, depending upon no conditions or
qualifications whatsoever other than the unregulated arbitrary will of the city
authorities as the touchstone by which its validity is to be tested, are
unreasonable and invalid. The Ordinance should have established a rule by
which its impartial enforcement could be secured. Similarly, the Ordinance
does not specify the standards to ascertain which establishments tend to
disturb the community, annoy the inhabitants, and adversely affect the
social and moral welfare of the community.
The cited case supports the nullification of the Ordinance for lack of
comprehensible standards to guide the law enforcers in carrying out its
provisions.
Petitioners cannot therefore order the closure of the enumerated
establishments without infringing the due process clause. These lawful
establishments may be regulated, but not prevented from carrying on their
business.
B. The Ordinance violates Equal
Protection Clause
In the Courts view, there are no substantial distinctions between motels,
inns, pension houses, hotels, lodging houses or other similar establishments.
By definition, all are commercial establishments providing lodging and
usually meals and other services for the public. No reason exists for
prohibiting motels and inns but not pension houses, hotels, lodging houses or
other similar establishments. The classification in the instant case is invalid
as similar subjects are not similarly treated, both as to rights conferred and
obligations imposed. It is arbitrary as it does not rest on substantial
distinctions bearing a just and fair relation to the purpose of the Ordinance.
The Court likewise cannot see the logic for prohibiting the business and
operation of motels in the Ermita-Malate area but not outside of this area. A
noxious establishment does not become any less noxious if located outside
the area.
The standard where women are used as tools for entertainment is also
discriminatory as prostitutionone of the hinted ills the Ordinance aims to
banishis not a profession exclusive to women. Both men and women have
an equal propensity to engage in prostitution. Thus, the discrimination is
invalid.
C. The Ordinance is repugnant
to general laws; it is ultra vires
The Ordinance is in contravention of the Code (Sec 458) as the latter merely
empowers local government units to regulate, and not prohibit, the
establishments enumerated in Section 1 thereof.
Not only does the Ordinance contravene the Code, it likewise runs counter to
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 decree allowed the establishment and operation of all kinds of
commercial establishments except warehouse or open storage depot, dump or
yard, motor repair shop, gasoline service station, light industry with any
machinery or funeral establishment. The rule is that for an ordinance to be
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
the general law.
Conclusion
All considered, the Ordinance invades fundamental personal and property
rights and impairs personal privileges. It is constitutionally infirm. The
Ordinance contravenes statutes; it is discriminatory and unreasonable in its
operation; it is not sufficiently detailed and explicit that abuses may attend
the enforcement of its sanctions. And not to be forgotten, the City Council
under the Code had no power to enact the Ordinance and is therefore ultra
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.