44. SUMULONG vs.

GUERRERO
Case Digest by: Geremae Mata
Public Use. “It is accurate to state then that at present whatever may be beneficially employed for the general welfare
satisfies the requirement of public use.” [Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 (1983)]

FACTS: The National Housing Authority (NHA) filed a complaint for expropriation of parcels of land covering the lots
of the petitioners Lorenzo Sumulong and Emilia Vidanes-Balaoing. The land sought to be expropriated were valued by
the NHA at P1.00 per square meter. Together with the complaint was a motion for immediate possession of the
properties. NHA deposited the amount of P158,980.00 with the PNB, representing the “total market value” of the
lots, pursuant to PD No 1224 which defines “the policy on the expropriation of private property for socialized housing
upon payment for socialized housing upon payment of just compensation.”

Respondent Judge Guerrero issued the writ of possession in favor of the NHA since the latter had already deposited
the total market value of the disputed property. Sumulong and Vidanes-Balaoing filed for a motion for reconsideration
on the ground that they had been deprived of the possession of their property without due process of law. Said motion
was however denied.

ISSUES: Whether “socialized housing” comes within the ambit of “public use”

RULING: Yes. Socialized housing falls within the confines of “public use”. “Socialized housing” is defined as, “the
construction of dwelling units for the middle and lower class members of our society, including the construction of
the supporting infrastructure and other facilities.” The “public use” requirement for a valid exercise of the power of
eminent domain is a flexible and evolving concept influenced by changing conditions. As long as the purpose of the
taking is public, then the power of eminent domain comes into play. It is accurate to state then that at present
whatever may be beneficially employed for the general welfare satisfies the requirement of public use.

Housing is a basic human need and is thus a matter of state concern since it directly and significantly affects public
health, safety, the environment and in sum, the general welfare. The public character of housing measures does not
change because units in housing projects cannot be occupied by all but only by those who satisfy prescribed
qualifications.

88. WYCOCO vs. JUDGE CASPILLO

Case Digest by: Geremae Mata
Legal Interest for Expropriation Cases. The imposition of interest was in the nature of damages for delay in payment
which in effect makes the obligation on the part of the government one of forbearance. It follows that the interest in
the form of damages cannot be applied where there was prompt and valid payment of just compensation. Conversely,
where there was delay in tendering a valid payment of just compensation, imposition of interest is in order.

FACTS: Feliciano Wycoco is a registered owner of an unirrigated and untenanted rice land in Nueva Ecija. In line with
the Comprehensive Agrarian Reform Program (CARP) of the government, Wycoco voluntarily offered to sell the land
to the Department of Agrarian Reform (DAR) for P14.9 million. However, DAR’s evaluation revealed a lower amount
which was rejected by Wycoco prompting the DAR to indorse the case to the Department of Agrarian Reform
Adjudication Board (DARAB) for the purpose of fixing the just compensation. Additionally, DARAB requested the Land
Bank of the Phils. to open a trust account in the name of the Wycoco and deposited the compensation offered by
DAR. Wycoco, on the other hand, had other ideas. He decided to forego with the filing of the required pleadings and
instead filed with RTC Cabanatuan City.

Wycoco filed a manifestation informing DARAB of the pendency of the agrarian case in Cabanatuan. DARAB,
subsequently, issued an order dismissing the (administrative) case to give way to the determination of just
compensation by the Cabanatuan court.

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The court thus took judicial notice thereof and fixed the compensation for the entire 94.1690 hectare land at
P142,500.00 per hectare or a total of P13,428,082.00 and awarded Wycoco actual damages for unrealized profits plus
legal interest. DAR and LBP appealed in the CA which was dismissed because of jurisdictional and procedural issues.
Upon finality of the decision, Wycoco filed a petition in the SC for the execution of the decision of the RTC and prayed
that Judge Rodrigo Caspillo (presiding judge of RTC) be compelled to inhibit himself from hearing the case.

ISSUES: Were the awards of interest and damages for unrealized profits valid?

RULING: Yes. In Land Bank of the Philippines v. Court of Appeals, this Court struck down as void DAR Administrative
Circular No. 9, Series of 1990, which provides for the opening of trust accounts in lieu of the deposit in cash or in
bonds contemplated in Section 16 (e) of RA 6657. It is very explicit from [Section 16 (e)] that the deposit must be made
only in cash or in LBP bonds. Nowhere does it appear nor can it be inferred that the deposit can be made in any other
form.
In light of the foregoing, the trust account opened by LBP in the name of Wycoco as the mode of payment
of just compensation should be converted to a deposit account. Such conversion should be retroactive in application
in order to rectify the error committed by the DAR in opening a trust account and to grant the landowners the benefits
concomitant to payment in cash or LBP bonds prior to the ruling of the Court in Land Bank of the Philippines v. Court
of Appeals. Otherwise, petitioners right to payment of just and valid compensation for the expropriation of his
property would be violated. The interest earnings accruing on the deposit account of landowners would suffice to
compensate them pending payment of just compensation.
It must be stressed, however, that in these cases, the imposition of interest was in the nature of damages
for delay in payment which in effect makes the obligation on the part of the government one of forbearance. It follows
that the interest in the form of damages cannot be applied where there was prompt and valid payment of just
compensation. Conversely, where there was delay in tendering a valid payment of just compensation, imposition of
interest is in order. This is because the replacement of the trust account with cash or LBP bonds did not ipso facto cure
the lack of compensation; for essentially, the determination of this compensation was marred by lack of due process.
The amount determined by the Special Agrarian Court would also be the basis of the interest income on the
cash and bond deposits due Wycoco from the time of the taking of the property up to the time of actual payment of
just compensation. The award of actual damages for unrealized profits should be deleted. The amount of loss must
not only be capable of proof, but must be proven with a reasonable degree of certainty.

93. ZAMBOANGA DEL NORTE vs. CITY OF ZAMBOANGA

Case Digest by: Geremae Mata
Expropriation of Utilities, Landed Estates and Municipal Property. (State vs. Province) The principle itself is simple: If
the property is owned by the municipality (meaning municipal corporation) in its public and governmental capacity,
the property is public and Congress has absolute control over it. But if the property is owned in its private or
proprietary capacity, then it is patrimonial and Congress has no absolute control. The municipality cannot be deprived
of it without due process and payment of just compensation. The capacity in which the property is held is, however,
dependent on the use to which it is intended and devoted.

FACTS: When RA 711 was approved, it divided the province of Zamboanga into two: Zamboanga del Norte and
Zamboanga del Sur. Its funds, assets and other properties and the obligations were to be divided equitably between
the Province of Zamboanga del Norte and the Province of Zamboanga del Sur. Pursuant to the Act, the Auditor General
apportioned the assets and obligations of the defunct Province of Zamboanga with Zamboanga del Norte being
entitled to 54.39% of P1,294,244.00 (total fixed value of the properties and buildings of Zamboanga Province after its
separation from Zamboanga City) or P704,220.05 payable by Zamboanga City. CA 39 was approved into converting the
Municipality of Zamboanga into Zamboanga City long before Zamboanga Province was further divided into
Zamboanga del Norte and Zamboanga del Sur.

By order of the President, the Executive Secretary issued a ruling holding that Zamboanga del Norte had a vested right
as owner (should be co-owner pro-indiviso) of the properties mentioned in Sec. 50 of CA 39, and is entitled to the
price thereof, payable by Zamboanga City. The Secretary of Finance then authorized the Commissioner of Internal

2
Revenue (CIR) to deduct an amount equal to 25% of the regular internal revenue allotment for the City of Zamboanga
and deductions aggregating P57,373.46, was credited to the province of Zamboanga del Norte, in partial payment of
the P704,220.05 due it.

However, RA 3039 was approved amending Sec. 50 of CA 39 and provided that all buildings, properties and assets
belonging to the former province of Zamboanga and located within the City of Zamboanga are hereby transferred,
free of charge, in favor of the said City of Zamboanga. Because of this, the Secretary of Finance ordered the CIR to
stop from effecting further payments and to return to Zamboanga City the sum of P57,373.46 taken from it out of
the internal revenue allotment of Zamboanga del Norte.

This act prompted Zamboanga del Norte to file a complaint in court praying that RA 3039 be declared
unconstitutional for depriving it of property without due process and just compensation. The lower court ruled in
favor of Zamboanga del Norte declaring RA 3039 unconstitutional and ordered the City of Zamboanga to pay ZdN
the sum of P704,220.05 (by deducting 25% from the regular quarterly internal revenue allotment) until its fully paid.

Subsequently, plaintiff province filed a motion to reconsider praying that Zamboanga City be ordered instead to pay
the P704,220.05 in lump sum with 6% interest per annum which was thereafter granted by the lower court. The
defendants then brought the case before the Court on appeal.

ISSUES: Is the City of Zamboanga liable to pay for the amount of the land that was properly determined to be
Zamboanga del Norte’s?

RULING: Yes. The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon in question.
For, the matter involved here is the extent of legislative control over the properties of a municipal corporation, of
which a province is one. The principle itself is simple: If the property is owned by the municipality (meaning municipal
corporation) in its public and governmental capacity, the property is public and Congress has absolute control over it.
But if the property is owned in its private or proprietary capacity, then it is patrimonial and Congress has no absolute
control. The municipality cannot be deprived of it without due process and payment of just compensation.

The capacity in which the property is held is, however, dependent on the use to which it is intended and devoted.
Now, which of two norms, i.e., that of the Civil Code or that obtaining under the law of Municipal Corporations, must
be used in classifying the properties in question?

The Civil Code under Arts. 423 and 424 provides:

ART. 423. The property of provinces, cities, and municipalities is divided into property for public use and
patrimonial property.

ART. 424. Property for public use, in the provinces, cities, and municipalities, consists of the provincial roads,
city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public
service paid for by said provinces, cities, or municipalities.

All other property possessed by any of them is patrimonial and shall be governed by this Code, without
prejudice to the provisions of special laws.

On the other hand, applying the norm obtaining under the principles constituting the law of Municipal
Corporations, all those of the 50 properties in question which are devoted to public service are deemed public; the
rest remain patrimonial. Under this norm, to be considered public, it is enough that the property be held and, devoted
for governmental purposes like local administration, public education, public health, etc.
The Court is more inclined to uphold this latter view. The controversy here is more along the domains of the
Law of Municipal Corporations — State vs. Province — than along that of Civil Law. Moreover, this Court is not inclined
to hold that municipal property held and devoted to public service is in the same category as ordinary private property.
The consequences are dire. As ordinary private properties, they can be levied upon and attached. They can even be

3
acquired thru adverse possession — all these to the detriment of the local community. Lastly, the classification of
properties other than those for public use in the municipalities as patrimonial under Art. 424 of the Civil Code — is "...
without prejudice to the provisions of special laws." For purpose of this article, the principles, obtaining under the
Law of Municipal Corporations can be considered as "special laws". Hence, the classification of municipal property
devoted for distinctly governmental purposes as public should prevail over the Civil Code classification in this
particular case.
It results then that Zamboanga del Norte is still entitled to collect from the City of Zamboanga the former's
54.39% share in the 26 properties which are patrimonial in nature.

102. PUNSALAN vs. MUNICIPAL BOARD OF MANILA

Case Digest by: Geremae Mata
Double Taxation. The argument against double taxation may not be invoked where one tax is imposed by the state
and the other is imposed by the city, it being widely recognized that there is nothing inherently obnoxious in the
requirement that license fees or taxes be exacted with respect to the same occupation, calling or activity by both the
state and the political subdivisions thereof.

FACTS: A suit was filed in CFI Manila by two lawyers, a medical practitioner, a public accountant, a dental surgeon and
a pharmacist, purportedly "in their own behalf and in behalf of other professionals practising in the City of Manila who
may desire to join it." Object of the suit is the annulment of Ordinance No. 3398 together with the provision of the
Manila charter authorizing it and the refund of taxes collected under the ordinance but paid under protest.

The ordinance in question imposes a municipal occupation tax on persons exercising various professions in the city
and penalizes non-payment of the tax. Among the professions taxed were those to which plaintiffs belong.

ISSUE: Whether the ordinance and the law authorizing it are unjust and oppressive, and authorize to what amounts
to double taxation

RULING: No. The ordinance imposes the tax upon every person "exercising" or "pursuing" — in the City of Manila
naturally — any one of the occupations named, but does not say that such person must have his office in Manila.
What constitutes exercise or pursuit of a profession in the city is a matter of judicial determination. The argument
against double taxation may not be invoked where one tax is imposed by the state and the other is imposed by the
city, it being widely recognized that there is nothing inherently obnoxious in the requirement that license fees or taxes
be exacted with respect to the same occupation, calling or activity by both the state and the political subdivisions
thereof.