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C.

TAKING IN THE CONSTITUTIONAL SENSE

Ayala de Roxas vs City of Manila


[GR No. L-3144 – November 19, 1907]

Facts: Petitioner applied to the defendant city engineer for a license to construct a terrace over “the strip of land 3
meters in width between the main wall of her house and the edge of the said canal of Sibacon or San Jacinto, which
strip of land belongs exclusively to her”; but the defendant refused to grant the license or authorize the plaintiff to
build the terrace, because, as the plaintiff has been informed, the sole reason wherefore the license was denied is
because “the said defendants pretend to compel the plaintiff to leave vacant and without any construction whatever
thereon the said strip of 3 meters in width which is a portion of the ground belonging to her, in order to use the same
as the wharf or public way so that the plaintiff will only be able to use the said strip in the same manner and for the
same purposes as the public in general, thus losing the enjoyment, use, and exclusive possession of the said strip of
the property which the plaintiff and the former owners thereof have enjoyed quietly and peacefully during more than
seventy years. Additionally, it was agreed between both parties that the strip above referred to had not been
expropriated in whole or in part by the municipality of Manila, and that neither had the latter offered any
compensation for the same to the owner thereof.

Issue: Whether the non-issuance of a license to the petitioners is tantamount to a taking that requires just
compensation

Held: Yes.

What the defendants have therefore done is to prevent the plaintiffs from continuing to enjoy, use, and freely dispose
of such strip of their ground, as they had been doing up to the time when they applied for a license to construct a
terrace over said strip, and the defendants prevented it with the intention of establishing a public easement provided
for in an ordinance of their own which they consider is pursuant to the provisions of the Law of Waters and of the Civil
Code in force.

In the decision entered by the court on the 5th of May, 1906, regarding the demurrer, the following was set forth:

The easement of a zone for public use, authorized by article 73 of the Law of Waters of 1866, is developed in articles
160 and 161, inclusive, of said law; the general interest on behalf of which the easement is supported is determined,
for navigation, by articles 160 and 161; for flotation, by article 162; for salvage, by article 163; and for fishing, by
article 164; in all of them the owner of the riverside property supports the easement “upon being previously
indemnified for loss and damage”. Said zone for public use, the same as a towpath, is solely available for the
purposes of navigation, flotation, fishing, and salvage, being closed to any other use which be attempted; therefore, it
is erroneous to pretend that the right of the owner of the property bordering upon the stream can be reduced to the
level of the public right; on the contrary he should only be called upon to bear those burdens which are in the general
interest, but not without prior, or subsequently indemnity.

If as affirmed in statement No. 4, and accepted by the defendants, the Sibacon Creek is a canal — let us grant that it
is navigable, because it has been held by competent authority — and that under the name of a public wharf, which is
the largest in area, it is desired to establish a towpath, which is the smallest, it must be remembered that the law
does not grant it along navigable canals (art. 157), and, at all events, the establishment thereof must be preceded by
the corresponding indemnity. (Arts. 154 and 157.)

Under section 5 of the act of Congress of July 1, 1902, no legislation shall be enacted in the Philippine Islands which
shall deprive any person of life, liberty, or property without due process of law; and the due process of law in order to
deprive a person of his property is, according to the Code of Civil Procedure, reserved to the judicial authority.The
refusal to grant a license or the enactment of an ordinance whereby a person may be deprived of property or rights,
or an attempt thereat is made, without previously indemnifying him therefor, is not, nor can it be, due process of law.
Considering that the easement intended to be established, whatever may be the object thereof, is not merely a real
right that will encumber the property, but is one tending to prevent the exclusive use of one portion of the same, by
expropriating it for a public use which, be it what it may, can not be accomplished unless the owner of the property
condemned or seized be previously and duly indemnified, it is proper to protect the appellant by means of the remedy
employed in such cases, as it is the only adequate remedy when no other legal action can be resorted to, against an
intent which is nothing short of an arbitrary restriction imposed by the city by virtue of the coercive power with which
the same is invested. The question involved here is not the actual establishment of an easement which might be
objected to by an action in court, but a mere act of obstruction, a refusal which is beyond the powers of the city of
Manila, because it is not simply a measure in connection with building regulations, but is an attempt to suppress,
without due process of law, real rights which are attached to the right of ownership.

The imposition of an easement over a 3-meter strip of the plaintiff’s property could not legally be done without
payment to it of just compensation.

The Court commanded the defendant to issue said license.


National Power Corporation v. Gutierrez
[GR No. L-60077 – January 18, 1991]

Facts: Plaintiff National Power Corporation (Napocor), for the construction of its 230 KV Mexico-Limay transmission
lines, its lines have to pass the lands belonging to respondents Matias Cruz, heirs of Natalie Paule and spouses
Misericordia Gutierrez and Recardo Malit. Unsuccessful with its negotiations for the acquisition of the right of way
easements, Napocor was constrained to file eminent domain proceedings. Trial court’s ordered that the defendant
spouses were authorized to withdraw the fixed provisional value of their land in the sum of P973.00 deposited by the
plaintiff to cover the provisional value of the land to proceed their construction and for the purpose of determining the
fair and just compensation due the defendants, the court appointed three commissioners, comprised of one
representative of the plaintiff, one for the defendants and the other from the court, who then were empowered to
receive evidence, conduct ocular inspection of the premises, and thereafter, prepare their appraisals as to the fair
and just compensation to be paid to the owners of the lots. The lower court rendered judgement ordered Napocor to
pay defendant spouses the sum of P10.00 per square meter as the fair and reasonable compensation for the right-of-
way easement of the affected area and P800.00 as attorney's fees'. Napocor filed a motion for reconsideration
contending that the Court of Appeals committed gross error by adjudging the petitioner liable for the payment of the
full market value of the land traversed by its transmission lines, and that it overlooks the undeniable fact that a simple
right-of-way easemen transmits no rights, except that of the easement.

Issue: Whether or not petitioner should be made to pay simple easement fee or full compensation for the land
traversed by its transmission lines.

Ruling:: In RP v. PLDT, the SC ruled that "Normally, the power of eminent domain results in the taking or
appropriation of the title to, and possession of, the expropriated property, but no cogent reason appears why said
power may not be availed of to impose only a burden upon the owner of the condemned property, without loss of title
or possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of
right of way." In this case, the easement is definitely a taking under the power of eminent domain. Considering the
nature and effect of the installation of the transmission lines, the limitations imposed by the NPC against the use of
the land (that no plant higher than 3 meters is allowed below the lines) for an indefinite period deprives private
respondents of its ordinary use. For these reasons, the owner of the property expropriated is entitled to a just
compensation which should neither be more nor less, whenever it is possible to make the assessment, than the
money equivalent of said property. Just equivalent has always been understood to be the just and complete
equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation. The
price or value of the land and its character at the time of taking by the Govt. are the criteria for determining just
compensation.
Spouses Cabahug v. National Power Corporation
[GR No. 186069 - January 30, 2013]

Facts: The Spouses Cabahug are the owners of two parcels of land situated in Barangay Capokpok, Tabango,
Leyte, Provincial Registry. They were among the defendants in Special Civil

Action a suit for expropriation filed by NPC before the RTC, in connection with its Leyte-Cebu Interconnection
Project. The suit was dismissed when NPC opted to settle with the landowners by paying an easement fee equivalent
to 10% of value of their property. In view of the conflicting land values presented by the affected landowners, it
appears that the Leyte Provincial Appraisal Committee, upon request of NPC, fixed the valuation of the affected
properties at P45.00 per square meter.

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. Jesus Cabahug granted NPC a continuous easement of right of
way for the latter’s transmissions lines and their appurtenances. By said grant, Jesus Cabahug agreed not to
construct any building or structure, nor plant in any area within the Right of Way that will adversely affect or obstruct
the transmission line of NPC, except agricultural crops. Jesus Cabahug reserved the option to seek additional
compensation for easement fee, based on the Supreme Court’s 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 attorney’s fees against NPC before the RTC. Claiming to have been totally deprived of the use of the portions of
land, the Spouses Cabahug alleged, the reservation provided under paragraph 4 of the aforesaid grant, they have
demanded from NPC payment of the balance of the just compensation for the subject properties which, based on the
valuation fixed by the Leyte Provincial Appraisal Committee. In its answer, NPC averred that it already paid the full
easement fee mandated under 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 render a Decision brushing aside NPC, applied the ruling handed down by this Court in Gutierrez to the
effect that NPC’s easement of right of way which indefinitely deprives the owner of their proprietary rights over their
property falls within the purview of the power of eminent domain.

RTC rendered judgement for the Spouses Cabahug and ordering NPC (1) To pay the Spouses Cabahug the sum of
ONE MILLION THREE HUNDRED THIRTY SIX THOUSAND and FIVE PESOS (P1,336,005.00) together with the
legal rate of interest less the amount previously paid by NPC to the Spouses Cabahug for easement fee only . (2)To
pay the Spouses Cabahug for attorney’s fees; and actual damages and litigation expenses plus costs of the
proceedings.

Aggrieved by the foregoing decision, the NPC perfected the appeal before the CA reversing and setting aside the
RTC’s appealed decision. Finding that the facts of a case are different from those obtaining in Gutierrez and that
Section 3-A of RA 6395 only allows NPC to acquire an easement of right of way over properties traversed by its
transmission lines. The Spouses Cabahug’s motion for reconsideration was denied for lack of merit in the CA’s
Resolution.

Issues:

(a) Whether or not the Grant of Right of Way whereby Jesus Cabahug reserved the right to seek additional
compensation for easement fee

(b) Whether or not applying Court’s ruling in Gutierrez case, in representation of NPC, the Office of the Solicitor
General (OSG) argues that the sums paid in 1996 by way of easement fees represent the full amount allowed by law
and agreed upon by the parties. Considering that Gutierrez concerned the payment of just compensation for property
expropriated by the NPC, the OSG maintains the CA did not err in according scant consideration to the Spouses
Cabahug’s invocation of the ruling.

Ruling: The court ruled that the foregoing reservation, was evident that the Spouses Cabahug’s receipt of the
easement fee did not bar them from seeking further compensation from NPC. Even by the basic rules in the
interpretation of contracts, we find that the CA erred in holding that the payment of additional sums to the Spouses
Cabahug would be violative of the parties’ contract and amount to unjust enrichment. Indeed, 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.

The Court ruled that the power of eminent domain may be exercised although title is not transferred to the
expropriator in an easement of right of way. Just compensation which should be neither more nor less than the
money equivalent of the property is due where the nature and effect of the easement is to impose limitations against
the use of the land for an indefinite period and deprive the landowner its ordinary use.

Even without the reservation made by Jesus Cabahug in the Grant of Right of Way, the application of Gutierrez to
this case is not improper as NPC represents it to be. It has been ruled that the owner should be compensated for the
monetary equivalent of the land as the easement is intended to perpetually or indefinitely deprive the owner of his
proprietary rights through the imposition of conditions that affect the ordinary use, free enjoyment and disposal of the
property or through restrictions and limitations that are inconsistent with the exercise of the attributes of ownership, or
when the introduction of structures or objects which, by their nature, create or increase the probability of injury, death
upon or destruction of life and property found on the land is necessary. Measured not by the taker’s gain but the
owner’s loss, just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator.

The court granted the petition. The CA decision were reversed and set aside subject to the modifications that the
awards of attorney's fees, actual damages and/or litigation expenses are deleted.
Republic of the Philippines vs. Vda. De Castellvi
[G.R. No. L-20620 – August 15, 1974]

Facts: In 1947, the republic, through the Armed Forces of the Philippines (AFP), entered into a lease agreement over
a land in Pampanga with Castellvi on a year-to-year basis. When Castellvi gave notice to terminate the lease in 1956,
the AFP refused because of the permanent installations and other facilities worth almost P500,000.00 that were
erected and already established on the property. She then instituted an ejectment proceeding against the AFP. In
1959, however, the republic commenced the expropriation proceedings for the land in question.

Issue: Whether or not the compensation should be determined as of 1947 or 1959.

Ruling: The Supreme Court ruled that the taking should not be reckoned as of 1947, and that just compensation
should not be determined on the basis of the value of the property that year .

The requisites for taking are:

1. The expropriator must enter a private property;

2. The entry must be for more than a momentary period;

3. It must be under warrant or color of authorities;

4. The property must be devoted for public use or otherwise informally appropriated or injuriously affected; and

5. The utilization of the property for public use must be such a way as to oust the owner and deprive him of beneficial
enjoyment of the property.

Only requisites 1, 3 and 4 are present. It is clear, therefore, that the “taking” of Castellvi’s property for purposes of
eminent domain cannot be considered to have taken place in 1947 when the republic commenced to occupy the
property as lessee thereof.

Requisite number 2 is not present according to the Supreme Court, “momentary” when applied to possession or
occupancy of real property should be construed to mean “a limited period” -- not indefinite or permanent. The
aforecited lease contract was for a period of one year, renewable from year to year. The entry on the property, under
the lease, is temporary, and considered transitory. The fact that the Republic, through AFP, constructed some
installations of a permanent nature does not alter the fact that the entry into the lant was transitory, or intended to last
a year, although renewable from year to year by consent of the owner of the land. By express provision of the lease
agreement the republic, as lessee, undertook to return the premises in substantially the same condition as at the time
the property was first occupied by the AFP. It is claimed that the intention of the lessee was to occupy the land
permanently, as may be inferred from the construction of permanent improvements. But this “intention” cannot prevail
over the clear and express terms of the lease contract.

The 5th requirement is also lacking. In the instant case the entry of the Republic into the property and its utilization of
the same for public use did not oust Castellvi and deprive her of all beneficial enjoyment of the property. Cstellvi
remained as owner, and was continuously recognized as owner by the Republic, as shown by the renewal of the
lease contract from year to year, and by the provision in the lease contract whereby the Republic undertook to return
the property to Castellvi when the lease was terminated. Neither was Castellvi deprived of all the beneficial
enjoyment of the property, because the Republic was bound to pay, and had been paing, Castellvi the agreed
monthly rentals until the time when it filed the complaint for eminent domain on June 26, 1959.

It is clear, therefore, that the “taking” of Castellvi’s property for purposes of eminent domain cannot be considered to
have taken place in 1947 when the Republic commenced to occupy the property as lessee thereof, and that the just
compensation to be paid for the Castellvi’s property should not be determined on the basis of the value of the
property as of that year. The lower court did not commit an error when it held that the “taking” of the property under
expropriation commenced with the filing of the complaint in this case.

Under Sec. 4, Rule 67 of the Rules of Court, “just compensation” is to be determined as of the date of the filing of the
complaint. The Supreme Court has ruled that when the taking of the property sought to be expropriated coincides
with the commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint for
eminent domain, the just compensation should be determined as of the date of the filing of the complaint.
Republic v. Ortigas & Co. Ltd.
[G.R. No.171496 March 3, 2014]

Facts: Respondent, Ortigas and Co. Ltd. Partnership, is the owner of a parcel of land, which was for road widening
for the C-5 flyover project of the DPWH. The title was then inscribed with an encumbrance that it was for road
widening and subject to Sec. 50 of P.D. No. 1529 or the Property Registration Decree.

The C-5-Ortigas Avenue flyover was completed, utilizing only 396 square meters of the 1,445-square-meter allotment
for the project.

Ortigas filed with the RTC a petition for authority to sell to the government the unutilized portion. Respondent Ortigas
alleged that the DPWH requested the conveyance of the property for road widening purposes.

The case was set for hearing, giving opportunity to any interested person to appear, oppose, and show cause why
respondent Ortigas’ petition may not be granted.

Despite due notice to the public, including the OSG and the DPWH, no one appeared to oppose respondent Ortigas’
petition.

Finding merit in respondent Ortigas’ petition, the RTC authorized the sale of the lot to the Republic.

Petitioner Republic, represented by the OSG, filed an opposition, and a motion for reconsideration alleging that
respondent Ortigas’ property can only be conveyed by way of donation to the government, citing Sec. 50 of P.D. No.
1529.

The RTC denied petitioner’s MR.

The OSG filed a Notice of Appeal before the CA.

The CA dismissed petitioner’s appeal on the ground that an order or judgment denying a motion for reconsideration
is not appealable.

Petitioner Republic of the Philippines filed a MR of the CA Resolution.

The CA denied the motion for reconsideration on the ground of lack of jurisdiction because petitioner raised only a
question of law.

Issue: Whether the CA gravely erred in denying petitioner Republic of the Philippines’ appeal based on technicalities

Ruling: The Office of the Solicitor General argued that strict application of the rules of procedure overrides
substantial justice, in this case, to the detriment of petitioner Republic of the Philippines.

This petition lacks merit.

Appeals from the Regional Trial Court to the Court of Appeals under Rule 41 must raise both questions of fact and
law

Section 2 of Rule 50 of the Rules of Court provides that appeals taken from the Regional Trial Court to the Court of
Appeals raising only pure questions of law are not reviewable by the Court of Appeals. In which case, the appeal
shall not be transferred to the appropriate court. Instead, it shall be dismissed outright.

Appeals from the decisions of the Regional Trial Court, raising purely questions of law must, in all cases, be taken to
the Supreme Court on a petition for review on certiorari in accordance with Rule 45. An appeal by notice of appeal
from the decision of the Regional Trial Court in the exercise of its original jurisdiction to the Court of Appeals is proper
if the appellant raises questions of fact or both questions of fact and questions of law.

There is a question of law when the appellant raises an issue as to what law shall be applied on a given set of facts.
Questions of law do “not involve an examination of the probative value of the evidence presented.” Its resolution rests
solely on the application of a law given the circumstances. There is a question of fact when the court is required to
examine the truth or falsity of the facts presented. A question of fact “invites a review of the evidence.”

The sole issue raised by petitioner Republic of the Philippines to the Court of Appeals is whether respondent Ortigas’
property should be conveyed to it only by donation, in accordance with Section 50 of P.D. No. 1529. This question
involves the interpretation and application of the provision. It does not require the CA to examine the truth or falsity of
the facts presented. Neither does it invite a review of the evidence. The issue raised before the Court of Appeals
was, therefore, a question purely of law. The proper mode of appeal is through a petition for review under Rule 45.
Hence, the Court of Appeals did not err in dismissing the appeal on this ground.
Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al.,
[G.R. No. 171101, July 5, 2011]

Facts: In 1958, Tarlac Development Corporation (Tadeco), assisted by the Central Bank of the Philippines,
purchased Hacienda Luisita and the Central Azucarera de Tarlac, the sugar mill of the hacienda, from the Spanish
owners of Compañia General de Tabacos de Filipinas (Tabacalera). Tadeco was then owned and controlled by the
Jose Cojuangco Sr. Group. Also, the GSIS extended a PhP5.911 million loan in favor of Tadeco to pay the peso
price component of the sale, with the condition that “the lots comprising the Hacienda Luisita be subdivided by the
applicant-corporation and sold at cost to the tenants, should there be any, and whenever conditions should exist
warranting such action under the provisions of the Land Tenure Act.” Tadeco however did not comply with this
condition.

On May 7, 1980, the martial law administration filed a suit before the Manila RTC against Tadeco, et al., for them to
surrender Hacienda Luisita to the then Ministry of Agrarian Reform (MAR) so that the land can be distributed to
farmers at cost. Tadeco alleged that Hacienda Luisita is not covered by existing agrarian reform legislations for it
does not have tenants. The argument did not convince the Manila RTC, thus rendered judgment ordering Tadeco to
surrender Hacienda Luisita to the MAR. Tadeco appealed the case to the CA.

On March 17, 1988, the Office of the Solicitor General (OSG) moved to withdraw the government’s case against
Tadeco, et al. By Resolution of May 18, 1988, the CA dismissed the case the Marcos government initially instituted
and won against Tadeco, et al. The dismissal action was, however, made subject to the obtention by Tadeco of the
PARC’s approval of a stock distribution plan (SDP) that must initially be implemented after such approval shall have
been secured. On August 23, 1988, Tadeco organized a spin-off corporation, herein petitioner HLI, as vehicle to
facilitate stock acquisition by the farmworkers. For this purpose, Tadeco conveyed to HLI the agricultural land portion
(4,915.75 hectares) and other farm-related properties of Hacienda Luisita in exchange for HLI shares of stock.

On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) complement of Hacienda Luisita signified in
a referendum their acceptance of the proposed HLI’s Stock Distribution Option Plan (SODP). On May 11, 1989, the
SDOA was formally entered into by Tadeco, HLI, and the 5,848 qualified FWBs. This attested to by then DAR
Secretary Philip Juico. The SDOA embodied the basis and mechanics of HLI’s SDP, which was eventually approved
by the PARC after a follow-up referendum conducted by the DAR on October 14, 1989, in which 5,117 FWBs, out of
5,315 who participated, opted to receive shares in HLI.

On August 15, 1995, HLI applied for the conversion of 500 hectares of land of the hacienda from agricultural to
industrial use, pursuant to Sec. 65 of RA 6657. The DAR approved the application on August 14, 1996, subject to
payment of three percent (3%) of the gross selling price to the FWBs and to HLI’s continued compliance with its
undertakings under the SDP, among other conditions. On December 13, 1996, HLI, in exchange for subscription of
12,000,000 shares of stocks of Centennary Holdings, Inc. (Centennary), ceded 300 hectares of the converted area to
the latter. Consequently, HLI’s Transfer Certificate of Title (TCT) No. 287910 was canceled and TCT No.
292091 was issued in the name of Centennary. HLI transferred the remaining 200 hectares covered by TCT No.
287909 to Luisita Realty Corporation (LRC) in two separate transactions in 1997 and 1998, both uniformly involving
100 hectares for PhP 250 million each. Subsequently, Centennary sold the entire 300 hectares for PhP750 million
to Luisita Industrial Park Corporation (LIPCO), which used it in developing an industrial complex. Later, LIPCO
transferred these 2 parcels to the Rizal Commercial Banking Corporation (RCBC) in payment of LIPCO’s
PhP431,695,732.10 loan obligations to RCBC. LIPCO’s titles were cancelled and new ones were issued to RCBC.
Apart from the 500 hectares, another 80.51 hectares were later detached from Hacienda Luisita and acquired by the
government as part of the Subic-Clark-Tarlac Expressway (SCTEX) complex. Thus, 4,335.75 hectares remained of
the original 4,915 hectares Tadeco ceded to HLI.
Such, was the state of things when two separate petitions reached the DAR in the latter part of 2003. The first was
filed by the Supervisory Group of HLI (Supervisory Group), praying for a renegotiation of the SDOA, or, in the
alternative, its revocation. The second petition, praying for the revocation and nullification of the SDOA and the
distribution of the lands in the hacienda, was filed by Alyansa ng mga Manggagawang Bukid ng Hacienda
Luisita (AMBALA). The DAR then constituted a Special Task Force (STF) to attend to issues relating to the SDP of
HLI. After investigation and evaluation, the STF found that HLI has not complied with its obligations under RA 6657
despite the implementation of the SDP. On December 22, 2005, the PARC issued the assailed Resolution No. 2005-
32-01, recalling/revoking the SDO plan of Tadeco/HLI. It further resolved that the subject lands be forthwith placed
under the compulsory coverage or mandated land acquisition scheme of the CARP.

From the foregoing resolution, HLI sought reconsideration. Its motion notwithstanding, HLI also filed a petition before
the Supreme Court in light of what it considers as the DAR’s hasty placing of Hacienda Luisita under CARP even
before PARC could rule or even read the motion for reconsideration. PARC would eventually deny HLI’s motion for
reconsideration via Resolution No. 2006-34-01 dated May 3, 2006.

Issues:

(1) Is Sec. 31 of RA 6657, which allows stock transfer in lieu of outright land transfer, unconstitutional?

(2) Did PARC gravely abuse its discretion in revoking the subject SDP and placing the hacienda under CARP’s
compulsory acquisition and distribution scheme?

(3) Did the PARC gravely abuse its discretion when it included LIPCO’s and RCBC’s respective properties that once
formed part of Hacienda Luisita under the CARP compulsory acquisition scheme via the assailed Notice of
Coverage?

Ruling:

(1) NO, Sec. 31 of RA 6657 is not unconstitutional. The Court actually refused to pass upon the constitutional
question because it was not raised at the earliest opportunity and because the resolution thereof is not the lis mota of
the case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of the modes of
acquisition under RA 9700.

While there is indeed an actual case or controversy, it took FARM some eighteen (18) years from November 21,
1989 before it challenged the constitutionality of Sec. 31 of RA 6657 which is quite too late already. The FARM
members slept on their rights and even accepted benefits from the SDP without even a complaint on the alleged
unconstitutionality of Sec. 31 upon which the benefits were derived. The Court cannot now be goaded into resolving
a constitutional issue that FARM failed to assail after the lapse of a long period of time and the occurrence of
numerous events and activities which resulted from the application of an alleged unconstitutional legal provision.
Furthermore, the lis mota is whether or not PARC acted in grave abuse of discretion when it ordered the recall of the
SDP for such non-compliance and the fact that the SDP, as couched and implemented, offends certain constitutional
and statutory provisions. Any of these key issues may be resolved without plunging into the constitutionality of Sec.
31 of RA 6657.

By virtue of Sec. 5 of RA 9700, the stock distribution scheme under Sec. 31 of RA 6657 is no longer an available
option under existing law; thus the question of unconstitutionality should be a moot issue.

(2) NO, the PARC did not gravely abuse its discretion in revoking the subject SDP and placing the hacienda under
CARP’s compulsory acquisition and distribution scheme. The revocation of the approval of the SDP is valid: (1) the
mechanics and timelines of HLI’s stock distribution violate DAO 10 because the minimum individual allocation of
each original farm worker-beneficiaries (FWBs) of 18,804.32 shares was diluted as a result of the use of “man days”
and the hiring of additional farmworkers; (2) the 30-year timeframe for HLI-to-FWBs stock transfer is contrary to what
Sec. 11 of DAO 10 prescribes.

As explained by HLI, a beneficiary needs to work for at least 37 days in a fiscal year before he or she becomes
entitled to HLI shares. If it falls below 37 days, the FWB, unfortunately, does not get any share at year end. The
number of HLI shares distributed varies depending on the number of days the FWBs were allowed to work in one
year. Worse, HLI hired farm workers in addition to the original 6,296 FWBs, such that, as indicated in the
Compliance dated August 2, 2010 submitted by HLI to the Court, the total number of farm workers of HLI as of said
date stood at 10,502. All these farm workers, which include the original 6,296 FWBs, were given shares out of the
118,931,976.85 HLI shares representing the 33.296% of the total outstanding capital stock of HLI. Clearly, the
minimum individual allocation of each original FWB of 18,804.32 shares was diluted as a result of the use of “man
days” and the hiring of additional farm workers.

Par. 3 of the SDOA expressly provides for a 30-year timeframe for HLI-to-FWBs stock transfer is an arrangement
contrary to what Sec. 11 of DAO 10 prescribes. Said Sec. 11 provides for the implementation of the approved stock
distribution plan within three (3) months from receipt by the corporate landowner of the approval of the plan by
PARC. Evidently, the land transfer beneficiaries are given thirty (30) years within which to pay the cost of the land
thus awarded them to make it less cumbersome for them to pay the government.

DAO 10, having the force and effect of law, must be duly complied with; therefore, PARC is correct in revoking the
SDP.

(3) YES, those portions of the converted land within Hacienda Luisita that RCBC and LIPCO acquired by purchase
should be excluded from the coverage of the assailed PARC resolution. It can rightfully be said that both LIPCO and
RCBC, adduced from their foregoing actions, are purchasers in good faith for value, so entitled to the benefits arising
from such status.

First, at the time LIPCO purchased the entire three hundred (300) hectares of industrial land, there was no notice of
any supposed defect in the title of its transferor, Centennary, or that any other person has a right to or interest in such
property. The same is true with respect to RCBC. To be sure, intervenor RCBC and LIPCO knew that the lots they
bought were subjected to CARP coverage by means of a stock distribution plan, as the DAR conversion order was
annotated at the back of the titles of the lots they acquired. However, they are of the honest belief that the subject
lots were validly converted to commercial or industrial purposes and for which said lots were taken out of the CARP
coverage subject of PARC Resolution No. 89-12-2 and hence, can be legally and validly acquired by them. After all,
Sec. 65 of RA 6657 explicitly allows conversion and disposition of agricultural lands previously covered by CARP
land acquisition “after the lapse of five (5) years from its award when the land ceases to be economically feasible and
sound for agricultural purposes or the locality has become urbanized and the land will have a greater economic value
for residential, commercial or industrial purposes.” And second, both LIPCO and RCBC purchased portions of
Hacienda Luisita for value. Undeniably, LIPCO acquired 300 hectares of land from Centennary for the amount of PhP
750 million pursuant to a Deed of Sale dated July 30, 1998. On the other hand, in a Deed of Absolute Assignment
dated November 25, 2004, LIPCO conveyed portions of Hacienda Luisita in favor of RCBC by way of dacion en
pago to pay for a loan of PhP 431,695,732.10.

Both RCBC and LIPCO cannot be considered at fault for believing that certain portions of Hacienda Luisita are
industrial/commercial lands and are, thus, outside the ambit of CARP. The PARC, and consequently DAR, gravely
abused its discretion when it placed LIPCO’s and RCBC’s property which once formed part of Hacienda Luisita under
the CARP compulsory acquisition scheme.
Amigable Vs. Cuenca
[G.R. No. L-26400 - Feb. 29, 1972]

Facts: Victoria Amigable is the registered owner of a particular lot. At the back of her Transfer Certificate of Title
(1924), there was no annotation in favor of the government of any right or interest in the property. Without prior
expropriation or negotiated sale, the government used a portion of the lot for the construction of the Mango and
Gorordo Avenues. On 1958, Amigable’s counsel wrote the President of the Philippines, requesting payment of the
portion of the said lot. It was disallowed by the Auditor General in his 9th Endorsement. Petitioner then filed in the
court a quo a complaint against the Republic of the Philippines and Nicolas Cuenca, in his capacity as Commissioner
of Public Highways for the recovery of ownership and possession of the lot. According to the defendants, the action
was premature because it was not filed first at the Office of the Auditor General. According to them, the right of action
for the recovery of any amount had already prescribed, that the Government had not given its consent to be sued,
and that plaintiff had no cause of action against the defendants.

Issue: Whether or Not, under the facts of the case, appellant may properly sue the government.

Held: In the case of Ministerio v. Court of First Instance of Cebu, it was held that when the government takes away
property from a private landowner for public use without going through the legal process of expropriation or
negotiated sale, the aggrieved party may properly maintain a suit against the government without violating the
doctrine of governmental immunity from suit without its consent. In the case at bar, since no annotation in favor of the
government appears at the back of the certificate of title and plaintiff has not executed any deed of conveyance of
any portion of the lot to the government, then she remains the owner of the lot. She could then bring an action to
recover possession of the land anytime, because possession is one of the attributes of ownership. However, since
such action is not feasible at this time since the lot has been used for other purposes, the only relief left is for the
government to make due compensation—price or value of the lot at the time of the taking.
Velarma v. Court of Appeals (short ra kayo ang case)
[GR No. 113615 – Jan 25, 1996]

PANGANIBAN, J.:

Will the lot owner's agreement to sell the property to the government as evidenced by the minutes of a meeting of the
Sangguniang Bayan, absent a formal deed, constitute a sufficient ground to defeat a forcible entry suit? This was the
main question raised in this petition for review on certiorari which seeks to set aside the Decision dated January 26,
1994 of the Court of Appeals1 in CA-G.R. CV No. 33332. By a Resolution dated October 25, 1995, this case, along
with several others, was transferred from the First Division to the Third. After due deliberation on the submissions of
the parties, it was assigned to undersigned ponente for the writing of the Court's Resolution.

This case arose from an "ejectment suit"2 filed by private respondent against petitioner before the Regional Trial
Court, Branch 64, Mauban, Quezon. Private respondent alleged: (1) that sometime in May 1981, petitioner
surreptitiously built his dwelling on a portion of her land at Barangay Lual (Poblacion), Mauban, Quezon, registered
under Transfer Certificate of Title No. T-91037 in the name of private respondent's husband Publio (deceased); (2)
that the matter was reported to the Barangay Captain who conducted several conferences during which petitioner
promised to vacate the land and remove his house therefrom, notwithstanding which he still failed or refused to do
so; (3) that she instituted Criminal Case No. 1068 against petitioner in 1986 for violation of P.D. No. 772 (the Anti-
Squatting Law); (4) that the trial court convicted petitioner of the offense and imposed a fine of P1,500.00 on him; (5)
that, despite such judgment, and notwithstanding repeated demands to vacate, petitioner continued occupying the
property, compelling her to bring the suit.

The trial court in its nine-page judgment rendered on April 2, 1991 found that private respondent had satisfactorily
established her ownership over the parcel of land in question. It also found that petitioner entered and occupied
private respondent's land "without authority of law and against the will of the owner . . . through strategy and
stealth."3 Furthermore, it declared that the claim of petitioner that "by virtue of an agreement between the former
owner (Publio Pansacola) and the Municipality of Mauban . . . the lot [being occupied by petitioner] became the
property of the government, and therefore, [respondent] has no cause of action against [petitioner]" was "baseless
and unwarranted"4 since no deed had ever been executed to "perfect the deal" between the municipality and Publio
for the exchange of a portion of the abandoned provincial road with a portion of the lot owned by Publio (on which
was built petitioner's dwelling), such that the Pansacola spouses later demanded that petitioner vacate the land and
sought the help of the barangay council. They eventually instituted the criminal case against petitioner for violation of
the Anti-Squatting Law.

The trial court ordered petitioner to vacate the subject land, remove his house therefrom and pay private respondent
exemplary damages and attorney's fees in the amounts of P2,000.00 and P3,000.00, respectively.

The Court of Appeals affirmed in toto the decision of the trial court. Hence, this petition.

Petitioner insists that private respondent has no cause of action against him because the land on which his house
stands belongs to the government. Petitioner's dwelling is situated on the shoulder of the new provincial highway,
part of which was constructed on a portion of the land belonging to and titled in the name of private respondent's
husband. According to petitioner, "while it is conceded that the premises [occupied by him] is still within the area
covered by [private respondent's] title, nonetheless, . . . [the subject premises] . . . already belong to the government
by virtue of its exchange of the abandoned road and bridge."5

Petitioner's claim is anchored on a document entitled "Minutes of the Meeting of the Sangguniang Bayan of Mauban,
Quezon" dated November 5, 1974. Therein, Publio Pansacola signified before the Sangguniang Bayan of Mauban
his agreement to the transfer of that portion of his land traversed by the new provincial highway and its shoulder in
exchange for a corresponding portion of the old abandoned provincial road.
As found by the trial court, the said minutes of the meeting of the Sangguniang Bayan do not mention the execution
of any deed to perfect the agreement. An engineer was appointed to survey the old abandoned road, but this act
does not in any manner convey title over the abandoned road to the Pansacola spouses nor extinguish their
ownership over the land traversed by the new provincial highway. No evidence was introduced by petitioner to show
that the survey was actually undertaken and a specific portion of the abandoned road partitioned and conveyed to the
Pansacolas. It must be stressed that the agreement to transfer the property was made in 1974. More than twenty
years later, no actual transfer had yet been made. Unless and until the transfer is consummated, or expropriation
proceedings instituted by the government, private respondent continues to retain ownership of the land subject of this
case.

We note that the ejectment suit should have been filed before the Municipal Trial Court, and not the Regional Trial
Court. The issue of ownership, however, had been specifically raised before the Regional Trial Court by petitioner
himself, who at the same time did not move to dismiss the complaint for lack of jurisdiction. Instead, he filed his
answer and went to trial. Estoppel by laches has already set in at this point in time.6

Petitioner also challenges the findings of the respondent Court that prior referral to the Lupong Barangay had been
made before the ejectment case was filed in the lower court, and that therefore, the trial court properly acquired
jurisdiction over the case. We agree, however, with the trial court's finding that -

The compliance (with) the provision of P.D. No. 1508, Katarungang Pambarangay Law, can no longer be assailed by
the defendant [herein petitioner], its reference having been admitted (in) his affirmative allegations and affirmative
defenses in the Answer (page 3, par. 3.3 of defendant's answer).7 (emphasis supplied)

Other issues raised had already been adequately traversed and disposed of by the appellate Court.

IN VIEW OF THE FOREGOING, the petition is DENIED, with costs against petitioner.

SO ORDERED.
D. PUBLIC USE

Reyes vs. National Housing Authority


[GR No. 147511 - Jan 20, 2003]

Facts: Respondent National Housing Authority (NHA) filed complaints for the expropriation of sugarcane lands
belonging to the petitioners. The stated public purpose of the expropriation was the expansion of the Dasmariñas
Resettlement Project to accommodate the squatters who were relocated from the Metropolitan Manila area. The trial
court rendered judgment ordering the expropriation of these lots and the payment of just compensation. The
Supreme Court affirmed the judgment of the lower court.

A few years later, petitioners contended that respondent NHA violated the stated public purpose for the expansion of
the Dasmariñas Resettlement Project when it failed to relocate the squatters from the Metro Manila area, as borne
out by the ocular inspection conducted by the trial court which showed that most of the expropriated properties
remain unoccupied. Petitioners likewise question the public nature of the use by respondent NHA when it entered
into a contract for the construction of low cost housing units, which is allegedly different from the stated public
purpose in the expropriation proceedings. Hence, it is claimed that respondent NHA has forfeited its rights and
interests by virtue of the expropriation judgment and the expropriated properties should now be returned to herein
petitioners.

Issue: Whether or not the judgment of expropriation was forfeited in the light of the failure of respondent NHA to use
the expropriated property for the intended purpose but for a totally different purpose.

Ruling: The Supreme Court held in favor of the respondent NHA. Accordingly, petitioners cannot insist on a
restrictive view of the eminent domain provision of the Constitution by contending that the contract for low cost
housing is a deviation from the stated public use. It is now settled doctrine that the concept of public use is no longer
limited to traditional purposes. The term "public use" has now been held to be synonymous with "public interest,"
"public benefit," "public welfare," and "public convenience." Thus, whatever may be beneficially employed for the
general welfare satisfies the requirement of public use."

In addition, the expropriation of private land for slum clearance and urban development is for a public purpose even if
the developed area is later sold to private homeowners, commercials firms, entertainment and service companies,
and other private concerns. Moreover, the Constitution itself allows the State to undertake, for the common good and
in cooperation with the private sector, a continuing program of urban land reform and housing which will make at
affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and
resettlement areas. The expropriation of private property for the purpose of socialized housing for the marginalized
sector is in furtherance of social justice.
Estate of Salud Jimenez vs. PEZA
[GR No. 137285 – Jan 16, 2001]

Facts: In 1981, PEZA, initiate before the RTC of Cavite expropriation proceedings on thee parcels of irrigated lands.
One of the lots, Lot 1406 (A and B) is registered in the name of Salud Jimenez. More than ten years later, the trial
court upheld PEZA's right to expropriate, among others, the lot of petitioner. Petitioner sought reconsideration
alleging that the lot would only be transferred to a private corporation, and hence would not be utilized for a public
purpose. The trial court reconsidered the order and released Lot 1406 A from expropriation while the expropriation of
Lot 1406 B was maintained. PEZA appealed the order to the CA.Later on, the petitioner and PEZA entered into a
compromise agreement whereby (1) PEZA agrees to withdraw its appeal while Salud 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 PEZA
from 1981-1993; and (2) the parties agree to swap Lot 1406B with Lot434 and that instead of being paid the just
compensation for Lot 1406B, the estate of Salud shall be paid with Lot434. The compromise agreement is
immediately final and executory. The CA remanded the case to the trial court for the approval of the said compromise
agreement. The trial court approved the same.

However, PEZA failed to transfer the title of Lot434 inasmuch as it was not the registered owner of the said lot.
Petitioner thereafter filed a motion to partially annul the order. The trial court then annulled the compromise
agreement and ordered the turnover of Lot1406B to petitioner. The CA upheld the rescission of the compromise
agreement, however, set aside the order of the trial court regarding the turnover of the lot and ordered the trial judge
to proceed with the hearing of the expropriation proceedings regarding the determination of just compensation. This
is in accordance with Art 2041 of the Civil Code which states that "if one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original
demand.

Issue: Whether the phrase "original demand" pertains to the return of Lot 1406 B which is sought to be expropriated
or the determination of just compensation for the lot.

Ruling: Expropriation proceedings involve two (2) phases. The first phase ends either with an order of expropriation
(where the right of plaintiff to take the land and the public purpose to which they are to be devoted are upheld) or an
order of dismissal. Either order would be a final one since it finally disposes of the case. The second phase
concerns the determination of just compensation to be ascertained by three (3) commissioners. It ends with an
order fixing the amount to be paid to the defendant. Inasmuch as it leaves nothing more to be done, this order
finally disposes of the second stage. To both orders the remedy there from is an appeal. In the case at bar, the first
phase was terminated when the July 11, 1991 order of expropriation became final and the parties subsequently
entered into a compromise agreement regarding the mode of payment of just compensation. When respondent
failed to abide by the terms of the compromise agreement, petitioner filed an action to partially rescind the
same. Obviously, the trial court could only validly order the rescission of the compromise agreement anent the
payment of just compensation inasmuch as that was the subject of the compromise. It is crystal clear from
the contents of the agreement that the parties limited the compromise agreement to the matter of just
compensation to petitioner. Said expropriation order is not closely intertwined with the issue of payment such
that failure to pay by respondent will also nullify the right of respondent 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. Hence, the "original demand" referred to means the fixing of just compensation. When PEZA failed
to fulfill its obligation to deliver Lot 434, petitioner can again demand for the payment but not the return of the
expropriated Lot 1406-B.

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