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Export Processing Zone Authority vs. Dulay [148 SCRA 305; G.R. No.

L-59603;
29 Apr 1987]

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

Issue:
Whether or Not the exclusive and mandatory mode of determining just
compensation in PD 1533 is unconstitutional?

Held:
The Supreme Court ruled that the mode of determination of just compensation in
PD 1533 is unconstitutional.

The method of ascertaining just compensation constitutes impermissible


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

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