CASES ON EMINENT DOMAIN

DEVORAH E. BARDILLON vs. BARANGAY MASILI of Calamba, Laguna,

Res JudicataExpropriation not capable of pecuniary estimation

Facts:Two   lots   measuring   144   square 

meters   was   to   be   expropriated   by Bargy   Masili   for   the   purpose   of constructing   a   barangay   hall. However,   the   barangay   and   the   lot owners   could   not   agree   with   the purchase price of Php 200,000.

The first complaint was filed before the   MTC.     Whereas,   the   second complaint was filed before the RTC.

The  MTC  dismissed   the   complaint for lack of interest of the petitioner lot owners.

The RTC stated that the MTC has no jurisdiction over the case.  It also ruled in favor of Brgy Masili.

Issue/s:1.   WON   the   MTC   has   jurisdiction 

over the case of expropriation;2. WON   the   State   is   barred   from 

expropriating   the   property   by reason of res judicata; and

3. Legality of entry into the premises subject of expropriation.

Ruling:

The SC held that the expropriation proceedings   is  within   the   jurisdiction 

of   the RTC because  it   is   incapable  of pecuniary estimation.  As discussed:

“xx An expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise by the government of its authority and right to take property for public use. As such, it is incapable of pecuniary estimation and should be filed with the regional trial courts. xx”

As regards to the second issue, the principle of res judicata does not apply against   the   inherent   powers   of   the State.   The SC has this to say:

“xx Res judicata literally means a matter adjudged, judicially acted upon or decided, or settled by judgment. It provides that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand or cause of action.

The following are the requisites of res judicata: (1) the former judgment must be final; (2) the court that rendered it had jurisdiction over the subject matter and the parties; (3) it is a judgment on the merits; and (4) there is -- between the first and the second actions -- an identity of parties, subject matter and cause of action.

Since the MTC had no jurisdiction over expropriation proceedings, the doctrine of res judicata finds no application

even if the Order of dismissal may have been an adjudication on the merits. xx”

The   entry   in   the   premises   of   the expropriated   property   was   held   to   be justified by the SC.  It ruled that:

“xx The requirements for the issuance of a writ of possession in an expropriation case are expressly and specifically governed by Section 2 of Rule 67 of the 1997 Rules of Civil Procedure. On the part of local government units, expropriation is also governed by Section 19 of the Local Government Code. Accordingly, in expropriation proceedings, the requisites for authorizing immediate entry are as follows: (1) the filing of a complaint for expropriation sufficient in form and substance; and (2) the deposit of the amount equivalent to 15 percent of the fair market value of the property to be expropriated based on its current tax declaration.

In the instant case, the issuance of the Writ of Possession in favor of respondent after it had filed the Complaint for expropriation and deposited the amount required was proper, because it had complied with the foregoing requisites.

The issue of the necessity of the expropriation is a matter properly addressed to the RTC in the course of the expropriation proceedings. If

petitioner objects to the necessity of the takeover of her property, she should say so in her Answer to the Complaint. The RTC has the power to inquire into the legality of the exercise of the right of eminent domain and to determine whether there is a genuine necessity for it. xx”

PERCIVAL MODAY, ZOTICO MODAY (deceased) and LEONORA MODAYvs.COURT OF APPEALS, JUDGE EVANGELINE S. YUIPCO OF BRANCH 6, REGIONAL TRIAL COURT, AGUSAN DEL SUR AND MUNICIPALITY OF BUNAWAN

Facts:The   Sangguniang   Bayan   passed   a 

resolution   authorizing   the   municipal mayor   to   expropriate   1   hectare portion   of   the   property   owned   by Percival Moday.   The mayor approved the said resolution and submitted the same to Sangguniang Panlalawigan.  

The   latter   denied   the   resolution stating that there are other properties which may be expropriated.

Notwithstanding   the  denial   of   the resiolution   by   the   Sangguniang Panlalawigan,   the   Municipality   of Bunawan   filed   a   complaint   for   the expropriation   of   the   property   of Moday.         The   RTC   granted   the municipality’s   motion   to   take possession of the parcel of lot.

The Court of Appeals, upon petition for   certiorari,   stated   that   the   public 

purpose for the expropriation is clear from   Resolution  No.   43-89   and   that since the Sangguniang Panlalawigan of Agusan   del   Sur   did   not   declare Resolution   No.   43-89   invalid, expropriation  of  petitioners'  property could proceed.

Issue: whether   a   municipality   may expropriate private property by virtue of   a  municipal   resolution  which  was disapproved   by   the   Sangguniang Panlalawigan

Ruling: The SC upheld  the decision of  the 

Court  of  Appeals.     It   stated   that   the only ground by which the Sangguniang Panlalawigan may deny a resolution or an ordinance  is  the  lack of  authority. Thus:

The Sangguniang Panlalawigan's disapproval of Municipal Resolution No. 43-89 is an infirm action which does not render said resolution null and void. The law, as expressed in Section 153 of B.P. Blg. 337, grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue. Although pertaining to a similar provision of law but different factual milieu then obtaining, the Court's pronouncements in Velazco v. Blas, where we cited significant early jurisprudence, are applicable to the case at bar.

The only ground upon which a provincial board may declare any municipal

resolution, ordinance, or order invalid is when such resolution, ordinance, or order is "beyond the powers conferred upon the council or president making the same." Absolutely no other ground is recognized by the law. A strictly legal question is before the provincial board in its consideration of a municipal resolution, ordinance, or order. The provincial (board's) disapproval of any resolution, ordinance, or order must be premised specifically upon the fact that such resolution, ordinance, or order is outside the scope of the legal powers conferred by law. If a provincial board passes these limits, it usurps the legislative function of the municipal council or president. Such has been the consistent course of executive authority.

Thus, the Sangguniang Panlalawigan was without the authority to disapprove Municipal Resolution No. 43-89 for the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and its Sangguniang Bayan the capacity to promulgate said resolution, pursuant to the earlier-quoted Section 9 of B.P. Blg. 337. Perforce, it follows that Resolution No. 43-89 is valid and binding and could be used as lawful authority to petition for the condemnation of petitioners' property.

Section 153 of B.P. Blg. 337 provides:

Sec. 153. Sangguniang Panlalawigan Review. — (1)

Within thirty days after receiving copies of approved ordinances, resolutions and executive orders promulgated by the municipal mayor, the sangguniang panlalawigan shall examine the documents or transmit them to the provincial attorney, or if there be none, to the provincial fiscal, who shall examine them promptly and inform the sangguniang panlalawigan in writing of any defect or impropriety which he may discover therein and make such comments or recommendations as shall appear to him proper.

(2) If the sangguniang panlalawigan shall find that any municipal ordinance, resolution or executive order is beyond the power conferred upon the sangguniang bayan or the mayor, it shall declare such ordinance, resolution or executive order invalid in whole or in part, entering its actions upon the minutes and advising the proper municipal authorities thereof. The effect of such an action shall be to annul the ordinance, resolution or executive order in question in whole or in part. The action of the sangguniang panlalawigan shall be final.

xxx xxx xxx (Emphasis supplied.)

Diosdado Lagcao vs Hon Judge Generosa Labra

Facts:The Province of Cebu donated 210 

lots  to the City  of  Cebu.     Included  in the said donation is Lot 1029.   In 1965, petitioners Lagcao purchased Lot 1029 in installment basis  from the City of Cebu.

The   same   lots,   however,   reverted back to the province and the sale f Lot 1029 to Lagcao was being annulled by the   province.     The   appellate   court ordered the issuance of Deed of Sale in favor of Lagcao.

Lagcao   initiated   demolition proceedings   against   the   squatters occupying Lot 1029.  This was enjoined by the MTC granting the motion filed by the Province of Cebu.

The   Province   of   Cebu   filed expropriation   proceedings   against Lagcao.     The  purpose  of  which   is   to construct in the lots socialized housing. 

Issue: WON the private property may be   expropriated   for   the   purpose   of socialized housing thereon

Ruling:The   SC   granted   the   petition   of 

Lagcao and declared that the purpose was   not   public   use   but   is   only beneficial   to   few   a   handful   few.     It explained:

“xx We have found nothing in the records indicating that the City of Cebu

complied strictly with Sections 9 and 10 of RA 7279. Ordinance No. 1843 sought to expropriate petitioners’ property without any attempt to first acquire the lands listed in (a) to (e) of Section 9 of RA 7279. Likewise, Cebu City failed to establish that the other modes of acquisition in Section 10 of RA 7279 were first exhausted. Moreover, prior to the passage of Ordinance No. 1843, there was no evidence of a valid and definite offer to buy petitioners’ property as required by Section 19 of RA 7160.[20] We therefore find Ordinance No. 1843 to be constitutionally infirm for being violative of the petitioners’ right to due process.

It should also be noted that, as early as 1998, petitioners had already obtained a favorable judgment of eviction against the illegal occupants of their property. The judgment in this ejectment case had, in fact, already attained finality, with a writ of execution and an order of demolition. But Mayor Garcia requested the trial court to suspend the demolition on the pretext that the City was still searching for a relocation site for the squatters. However, instead of looking for a relocation site during the suspension period, the city council suddenly enacted Ordinance No. 1843 for the expropriation of petitioners’ lot. It was trickery and bad faith, pure and simple. The unconscionable manner in which the questioned ordinance

was passed clearly indicated that respondent City transgressed the Constitution, RA 7160 and RA 7279.

For an ordinance to be

valid, it must not only be within the corporate powers of the city or municipality to enact but must also be passed according to the procedure prescribed by law. It must be in accordance with certain well-established basic principles of a substantive nature. These principles require that an ordinance (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.[21]

Ordinance No. 1843

failed to comply with the foregoing substantive requirements. A clear case of constitutional infirmity having been thus established, this Court is constrained to nullify the subject ordinance. We recapitulate:

first, as earlier discussed, the questioned ordinance is repugnant to the pertinent provisions of the Constitution, RA 7279 and RA 7160; second, the precipitate manner in which it was enacted was plain oppression masquerading as a pro-poor ordinance;

third, the fact that petitioners’ small property was singled out for expropriation for the purpose of awarding it to no more than a few squatters indicated manifest partiality against petitioners, and fourth, the ordinance failed to show that there was a reasonable relation between the end sought and the means adopted. While the objective of the City of Cebu was to provide adequate housing to slum dwellers, the means it employed in pursuit of such objective fell short of what was legal, sensible and called for by the circumstances.

Indeed, experience has

shown that the disregard of basic liberties and the use of short-sighted methods in expropriation proceedings have not achieved the desired results. Over the years, the government has tried to remedy the worsening squatter problem. Far from solving it, however, government’s kid-glove approach has only resulted in the multiplication and proliferation of squatter colonies and blighted areas. A pro-poor program that is well-studied, adequately funded, genuinely sincere and truly respectful of everyone’s basic rights is what this problem calls for, not the improvident enactment of politics-based ordinances targeting small private lots in no rational fashion. xx”

Jesus Is Lord Church School Foundation (JILCSF) vs Municipality of Pasig

Facts:

The   Sangguniang   Bayan   of   Pasig approved   the   ordinance   submitted thereto  by   the  Municipality  of   Pasig, the purpose of which is to expropriate private lots to be used as public roads. Stated in the complaint was averment that the private owners were informed of the expropriation.

A   complaint   was   filed   against owners Ching Cuancos to expropriate their   property   pursuant   to   the   Local Govt Code.   The complaint included a photocopy of a letter to intent sent to Lorenzo Ching Cuanco.

The   Municipality   of   Pasig   caused the   annotation   of   a   notice   of  lis pendens with the complaint under the name of Jesus is Lord Christian School Foundation   (JILCSF).     The   latter   was alleged to have bought the private lots from the Ching Cuancos.

JILCSF   averred   that   there  was   no valid and definite offer to acquire the property   and   that   the   property   in dispute was already being used by the public.    

Issue: WON   there  was   a   valid   and definite offer

Ruling:

The   SC   held   that   there   was   no definite and valid offer.  The letter sent to   the   Lorenzo   Ching   Cuanco   was merely  a   letter  of   intent   stating   that the property was to be expropriated.  

An   extensive   discussion   on   the matter was as follows:

“xx An offer is a unilateral proposition which one party makes to the other for the celebration of a contract. It creates a power of acceptance permitting the offeree, by accepting the offer, to transform the offeror’s promise into a contractual obligation. Corollarily, the offer must be complete, indicating with sufficient clearness the kind of contract intended and definitely stating the essential conditions of the proposed contract. An offer would require, among other things, a clear certainty on both the object and the cause or consideration of the envisioned contract.

The purpose of the requirement of a valid and definite offer to be first made to the owner is to encourage settlements and voluntary acquisition of property needed for public purposes in order to avoid the expense and delay of a court action. The law is designed to give to the owner the opportunity to sell his land without the expense and inconvenience of a protracted and expensive litigation. This is a substantial right which should be protected in every instance. It encourages acquisition without litigation and spares not only the landowner but also the condemnor, the expenses and delays of litigation.

It permits the landowner to receive full compensation, and the entity acquiring the property, immediate use and enjoyment of the property. A reasonable offer in good faith, not merely perfunctory or pro forma offer, to acquire the property for a reasonable price must be made to the owner or his privy. A single bona fide offer that is rejected by the owner will suffice.

The expropriating authority is burdened to make known its definite and valid offer to all the owners of the property. However, it has a right to rely on what appears in the certificate of title covering the land to be expropriated. Hence, it is required to make its offer only to the registered owners of the property. After all, it is well-settled that persons dealing with property covered by a Torrens certificate of title are not required to go beyond what appears on its face. xx”

As   regards   to   the   second   contention   of Public Necessity, the SC held:

The subject property is expropriated for the purpose of constructing a road. The respondent is not mandated to comply with the essential requisites for an easement of right-of-way under the New Civil Code. Case law has it that in the absence of legislative restriction, the grantee of the power of eminent domain may determine the location and route of the land to be taken unless such determination is capricious and wantonly injurious. Expropriation is justified so long as it is for the public good and there is genuine necessity of public character. Government may not capriciously choose what private property should be taken.

The respondent has demonstrated the necessity for constructing a road from E. R. Santos Street to Sto. Tomas Bukid. The witnesses, who were residents of Sto. Tomas Bukid, testified that although there were other ways through which one can enter the vicinity, no vehicle, however, especially fire trucks, could enter the area except through the newly constructed Damayan Street. This is more than sufficient to establish that there is a genuine necessity for the construction of a road in the area. After all, absolute necessity is not required, only reasonable and practical necessity will suffice.

Nonetheless, the respondent failed to show the necessity for constructing the road particularly in the petitioner’s property and not elsewhere. We note that the whereas clause of the ordinance states that the 51-square meter lot is the shortest and most suitable access road to connect Sto. Tomas Bukid to E. R. Santos Street. The respondent’s complaint also alleged that the said portion of the petitioner’s lot has been surveyed as the best possible ingress and egress. However, the respondent failed to adduce a preponderance of evidence to prove its claims.

FILSTREAM INTERNATIONAL, INC. vs. COURT OF APPEALS, JUDGE FELIPE S. TONGCO and THE CITY OF MANILA

Facts:Petitioner,   Filstream   International 

Inc.,   is   the   registered   owner   of   the properties   subject   of   this   dispute consisting of  adjacent  parcels  of   land located in Manila.

Petitioner   filed   an   ejectment   suit against   occupants   of   the abovementioned   parcels   of   land   on the   grounds   of   termination   of   the lease   contract   and   non-payment   of rentals.  

During   the   pendency   of   the ejectment   proceedings,   the   City   of Manila   government   approved Ordinance  No.   7813   authorizing Mayor Lim to expropriate the parcels of   land   which   form   part   of   the properties of Filstream then occupied by   private   respondents.     The   said properties   were   to   be   sold   and distributed to qualified tenants of the area   pursuant   to   the   Land   Use Development   Program  of   the  City  of Manila.

Judgment was rendered by the MTC ordering private respondents to vacate the premises and pay back rentals to petitioner.

Filstream filed a motion to dismiss the  expropriation proceedings  on the grounds that there was no valid cause, no public necessity, and that there was no   just   compensation   because   the price offered was too low.

Issue:    WON   the   private   property which  was  adjudged   in  an  ejectment case   be   the   subject   of   expropriation proceedings for socialized housing

Ruling:The   SC   held   that   the   City 

Government of Manila has the right to expropriate   private   properties   for   its public use.  Thus:

“xx the City of Manila has an undeniable right to exercise its power of eminent domain within its jurisdiction. The right to expropriate private property for public use is expressly granted to it under Section 19 of the 1991 Local Government Code, to wit:

SECTION 19. Eminent Domain – A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, that the 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; Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.” (Italics supplied)

More specifically, the City of Manila has the power to expropriate private property in the pursuit of its urban land reform and housing program as explicitly laid out in the Revised Charter of the City of Manila (R.A. No. 409) as follows:

“General powers – The city may have a common seal and alter the same at pleasure, and may take, purchase, receive, hold, lease, convey, and dispose of real and personal property for the general interest of the city, condemn private property for public use, contract and be contracted with, sue and be sued, and prosecute and defend to final judgment and execution, and exercise all the powers hereinafter conferred.” (R.A. 409, Sec. 3; Italics supplied).

x x x x x x x x x

“Sec. 100. The City of Manila is authorized to acquire private lands in the city and to subdivide the same into home lots for sale on easy terms to city residents, giving first priority to the bona fide tenants or occupants of said lands, and second priority to laborers and low-salaried employees. For the purpose of this section, the city may raise necessary funds by appropriations of general funds, by securing loans or by issuing bonds, and, if necessary, may acquire the lands through expropriation proceedings in accordance with law, with the approval of the President x x x”. (Italics supplied).

In fact, the City of Manila’s right to exercise these prerogatives notwithstanding the existence of a final and executory judgment over the property to be expropriated has been upheld by this Court in the case of Philippine Columbian Association vs. Panis, G.R. No. 106528, December 21, 1993.[32] Relying on the aforementioned provisions of the Revised Charter of the City of Manila, the Court declared that:

“The City of Manila, acting through its legislative branch, has the

express power to acquire private lands in the city and subdivide these lands into home lots for sale to bona-fide tenants or occupants thereof, and to laborers and low-salaried employees of the city.

That only a few could actually benefit from the expropriation of the property does not diminish its public use character. It is simply not possible to provide all at once land and shelter for all who need them (Sumulong v. Guerrero, 154 SCRA 461 [1987]).

Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts of land and landed estates (Province of Camarines Sur v. Court of Appeals, G.R. Nol 103125, May 17, 1993; J. M. Tuason and Co., Inc. v. Land Tenure Administration, 31 SCRA 413 [1970]). It is therefore of no moment that the land sought to be expropriated in this case is less than the half a hectare only (Pulido v. Court of Appeals, 122 SCRA 63 [1983]).

Through the years, the public use requirement in eminent domain has evolved into a flexible concept, influenced by changing conditions (Sumulong v. Guerrero, supra; Manotok v. National Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]). Public use now includes the broader notion of indirect public benefit or advantage, including a particular, urban land reform  and housing.” xx”

THE CITY OF MANILAvs.CHINESE COMMUNITY OF MANILA, ET AL

Facts:The City  of  Manila  filed a  petition 

for expropriation or private properties for the purpose of constructing public improvement.   Included in the private properties   to   be   expropriated   is   the parcel  of   lot   covered  by   the  Chinese Cemetery.

The   Chinese   Community   refused the   offer   on   the   ground   that expropriation   is   not   necessary,   there will  be more expenses to be incurred and   that   parcels   of   lots   to   be expropriated were already devoted for public use.  

Issue:  WON the parcel  of  lot  forming part of Chinese Cemetery and owned by   the   Chinese   Community   be expropriated

Ruling:The SC ruled in the negative.  Thus, 

it stated:

“xx Where a cemetery is open to public, it is a public use and no part of the ground can be taken for other public uses under a general authority. And this immunity extends to the unimproved and unoccupied parts which are held in good faith for future use… It is alleged, and not denied, that the cemetery in question may be used by the general community of Chinese, which fact, in the general acceptation of the definition of a public cemetery,

would make the cemetery in question public property. If that is true, then, of course, the petition of the plaintiff must be denied, for the reason that the city of Manila has no authority or right under the law to expropriate public property. xx”

The Supreme Court also added“xx But, whether or not the

cemetery is public or private property, its appropriation for the uses of a public street, especially during the lifetime of those specially interested in its maintenance as a cemetery, should be a question of great concern, and its appropriation should not be made for such purposes until it is fully established that the greatest necessity exists therefor. xx”

On   the   issue   on   whether   the eminent domain may be exercised by a municipality, the Supreme Court ruled in the wise:

“xx It can scarcely be contended that a municipality would be permitted to take property for some public use unless some public necessity existed therefor. The right to take private property for public use originates in the necessity, and the taking must be limited by such necessity. The appellant contends that inasmuch as the legislature has given it general authority to take private property for public use, that the legislature has, therefore, settled the question of the necessity in every case and that the courts are closed to the owners of the property upon that question. Can it be imagined, when the legislature adopted section 2429 of Act No. 2711,

that it thereby declared that it was necessary to appropriate the property of Juan de la Cruz, whose property, perhaps, was not within the city limits at the time the law was adopted? The legislature, then, not having declared the necessity, can it be contemplated that it intended that a municipality should be the sole judge of the necessity in every case, and that the courts, in the face of the provision that "if upon trial they shall find that a right exists," cannot in that trial inquire into and hear proof upon the necessity for the appropriation in a particular case?

The Charter of the city of Manila authorizes the taking of private property for public use. Suppose the owner of the property denies and successfully proves that the taking of his property serves no public use: Would the courts not be justified in inquiring into that question and in finally denying the petition if no public purpose was proved? Can it be denied that the courts have a right to inquire into that question? If the courts can ask questions and decide, upon an issue properly presented, whether the use is public or not, is not that tantamount to permitting the courts to inquire into the necessity of the appropriation? If there is no public use, then there is no necessity, and if there is no necessity, it is difficult to understand how a public use can necessarily exist. If the courts can inquire into the question whether a public use exists or not, then it seems that it must follow that they can examine into the question of the necessity.

The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity must be of a public character. The

ascertainment of the necessity must precede or accompany, and not follow, the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind., 511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72 Ohio St., 368.)

The general power to exercise the right of eminent domain must not be confused with the right to exercise it in a particular case. The power of the legislature to confer, upon municipal corporations and other entities within the State, general authority to exercise the right of eminent domain cannot be questioned by the courts, but that general authority of municipalities or entities must not be confused with the right to exercise it in particular instances. The moment the municipal corporation or entity attempts to exercise the authority conferred, it must comply with the conditions accompanying the authority. The necessity for conferring the authority upon a municipal corporation to exercise the right of eminent domain is admittedly 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 which the courts have the right to inquire into.

The conflict in the authorities upon the question whether the necessity for the exercise of the right of eminent domain is purely legislative and not judicial, arises generally in the wisdom and propriety of the legislature in authorizing the exercise of the right of eminent domain instead of in the question of the right to exercise it in a

particular case. (Creston Waterworks Co. vs. McGrath, 89 Iowa, 502.)

By the weight of authorities, the courts have the power of restricting the exercise of eminent domain to the actual reasonable necessities of the case and for the purposes designated by the law. (Fairchild vs. City of St. Paul. 48 Minn., 540.) xx”

CAMARINES NORTE ELECTRIC COOPERATIVE, INC. (CANORECO) vs. COURT OF APPEALS, HON. LUIS L. DICTADO, Presiding Judge, RTC, Branch 39, Daet, Camarines Norte, EDUARDO R. MORENO, LT. COL. RUFINO CHAVEZ, CAPT. ALFREDO BORJA, CONRAD C. LEVISTE and VINES REALTY CORPORATION

Facts: Conrad Leviste filed a complaint for 

the   foreclosure   of   mortgage   against Philippines Smelter Co. Judgment was made in favor of Leviste.   Two parcels of lot were levied upon and were sold at public auction.   The lots were sold to Vines Realty Co.

Owner   Vines   Realty   Co.   filed   a petition   for   the   removal   of   the improvements on the lot.   Included in such   improvements   are   the   power lines owned by petitioner CANORECO.  

Issue:  WON the installed power lines and  posts  constitute  expropriation  of property   that   would   required CANORECO to pay just compensation

Ruling:

The   Supreme  Court   held   that   the simple   right-of-way  easement  do  not require the owner to be compensated. However,   due   to   the   nature   of   the power   lines,   the   private   owner   is constricted  in  its  use of the  lot.    The Supreme Court stated:

“xx Electric cooperatives, like CANORECO, are vested with the power of eminent domain.

The acquisition of an easement of a right-of-way falls within the purview of the power of eminent domain. Such conclusion finds support in easements of right-of-way where the Supreme Court sustained the award of just compensation for private property condemned for public use. The Supreme Court, in Republic vs. PLDT thus held that:

"Normally, of course, the power of eminent domain results in the taking or appropriation of 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 condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right-of-way."

However, a simple right-of-way easement transmits no rights, except the easement. Vines Realty retains full ownership and it is not totally deprived of the use of the land. It can continue doing what it wants to do with the land, except those that would result in contact with the wires.

The acquisition of this easement, nevertheless, is not gratis. Considering the nature and effect of the installation power lines, the limitations on the use of the land for an indefinite period deprives private

respondents of its ordinary use. For these reasons, Vines Realty is entitled to payment of just compensation, which must be neither more nor less than the money equivalent of the property.

Just compensation has been understood to be the just and complete equivalent of the loss, which the owner of the res expropriated has to suffer by reason of the expropriation. The value of the land and its character at the time it was taken by the Government are the criteria for determining just compensation. No matter how commendable petitioner’s purpose is, it is just and equitable that Vines Realty be compensated the fair and full equivalent for the taking of its property, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity.

Moreover, CANORECO only sought the continuation of the exercise of its right-of-way easement and not ownership over the land. Public utilities’ power of eminent domain may be exercised although title is not transferred to the expropriator.

Consequently, we rule that a court’s writ of demolition cannot prevail over the easement of a right-of-way which falls within the power of eminent domain. xx”

ESTATE OF SALUD JIMENEZ, petitioner, vs. PHILIPPINE EXPORT PROCESSING ZONE, respondent.

Facts:In   1981,   Private   respondent   PEZA 

filed   a   complaint   before   the   RTC   to expropriate three parcels of lot owned by Salud Jimenez.  

Ten years thereafter, the trial court decide in favor of PEZA.  However, the petitioner   filed   a   motion   for reconsideration on the ground that the properties will  only  be transferred to Philippine Vinyl, Co.

PEZA and the petitioner executed a compromise  agreement.    One  of   the provisions therein is that the disputed property   of   Salud   Jimenez   will   be swapped with one of  the  lots  owned by PEZA.  Thus:

“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.

However,   PEZA   failed   to   transfer the parcel of lot to petitioner  because the same was not registered under the name of PEZA but under Progressive Realty, Inc.

The   trial   court   annulled   the compromise   agreement   and   ordered PEZA to return the property.

The   Court   of   Appeals   decided   in favor of Salud Jimenez.

Issue:    WON   the   disputed   property may be returned to the estate of Salud Jimenez

Ruling:The   SC   held   that   the   property 

cannot be remanded back to petitioner Salud Jimenez despite the nonpayment of just compensation for 11 years.  the SC has this to say:

“xx In the case at bar, the trial court approved the compromise agreement. Petitioner insists that Articles 2038, 2039 and 1330 of the New Civil Code should apply. Said articles provide that:

Article 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence, or falsity of documents, is subject to the provisions of Article 1330 of this Code.

However, one of the parties cannot set up a mistake of fact as against the other if the latter, by virtue of the compromise, has withdrawn from a litigation already commenced.

Article 2039. When the parties compromise generally on all differences which they might have with each other, the discovery of documents referring to one or more but not to all of the questions settled shall not

itself be a cause for annulment or rescission of the compromise, unless said documents have been concealed by one of the parties.

But the compromise may be annulled or rescinded if it refers only to one thing to which one of the parties has no right, as shown by the newly discovered documents.(n)”

Article 1330. A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable.[40]

The applicability of the above-quoted legal provisions will not change the outcome of the subject of the rescission. 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.

This Court holds that respondent has the legal authority to expropriate the subject Lot 1406-B and that the same was for a valid public purpose. In Sumulong v. Guerrero[41], this Court has ruled that,

the “public use” requirement for a valid exercise of the power of eminent domain is a flexible and evolving concept influenced by changing conditions. In this jurisdiction, the statutory and

judicial trend has been summarized as follows:

this Court has ruled that the taking to be valid must be for public use. There was a time when it was felt that a literal meaning should be attached to such a requirement. Whatever project is undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise expropriation is not allowable. It is not anymore. 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. [Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 (1983) at 234-235 quoting E. Fernando, the Constitution of the Philippines 523-4 (2nd Ed. 1977)

The term “public use” has acquired a more 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.

In Manosca v. Court of Appeals, this Court has also held that what ultimately emerged is a concept of public use which is just as broad as “public welfare.”[42]

Respondent PEZA expropriated the subject parcel of land pursuant to Proclamation No. 1980 dated May 30, 1980

issued by former President Ferdinand Marcos. Meanwhile, the power of eminent domain of respondent is contained in its original charter, Presidential Decree No. 66, which provides that:

Section 23. Eminent Domain. – For the acquisition of rights of way, or of any property for the establishment of export processing zones, or of low-cost housing projects for the employees working in such zones, or for the protection of watershed areas, or for the construction of dams, reservoirs, wharves, piers, docks, quays, warehouses and other terminal facilities, structures and approaches thereto, the Authority shall have the right and power to acquire the same by purchase, by negotiation, or by condemnation proceedings. Should the authority elect to exercise the right of eminent domain, condemnation proceedings shall be maintained by and in the name of the Authority and it may proceed in the manner provided for by law. (italics supplied)

Accordingly, subject Lot 1406-B was expropriated “for the construction … of terminal facilities, structures and approaches thereto.” The authority is broad enough to give the respondent substantial leeway in deciding for what public use the expropriated property would be utilized. Pursuant to this broad authority, respondent 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 No. 7916, a law amending respondent PEZA’s original charter, which provides that:

Sec. 7. ECOZONE to be a Decentralized Agro-Industrial, Industrial, Commercial/Trading, Tourist, Investment and Financial Community. Within the framework of the Constitution, the interest of national sovereignty and territorial integrity of the Republic, ECOZONE shall be developed, as much as possible, into a decentralized, self-reliant and self-sustaining industrial, commercial/trading, agro-industrial, tourist, banking, financial and investment center with minimum government intervention. Each ECOZONE shall be provided with transportation, telecommunications and other facilities needed to generate linkage with industries and employment opportunities for its own habitants and those of nearby towns and cities.

The ECOZONE shall administer itself on economic, financial, industrial, tourism development and such other matters within the exclusive competence of the national government. (italics supplied)

Among the powers of PEZA enumerated by the same law are:

Sec. 12. Functions and Powers of PEZA Board. ---- The Philippine Economic Zone Authority (PEZA) Board shall have the following function and powers:

(a) Set the general policies on the establishment and operations of the ECOZONE, Industrial estate, exports processing zones, free trade zones, and the like;

x x x

(c) Regulate and undertake the establishment, operation and maintenance of utilities, other services and infrastructure in the ECOZONE, such as heat, light and power, water supply, telecommunications, transport, toll roads and bridges, port services, etc. and to fix just, reasonable and competitive rates, fares, charges and fees thereof.[43]

In Manila Railroad Co. v. Mitchel[44], this Court has ruled that in the exercise of eminent domain, only as much land can be taken as is necessary for the legitimate purpose of the condemnation. The term “necessary”, in this connection, does not mean absolutely indispensable but requires only a reasonable necessity of the taking for the stated purpose, growth and future needs of the enterprise. The respondent cannot attain a self-sustaining and viable ECOZONE if inevitable needs in the expansion in the surrounding areas are hampered by the mere refusal of the private landowners to part with

their properties. The purpose of creating an ECOZONE and other facilities is better served if respondent directly owns the areas subject of the expansion program.

The contention of petitioner that the leasing of the subject lot to banks and building terminals was not expressly mentioned in the original charter of respondent PEZA and that it was only after PEZA devoted the lot to said purpose that Republic Act No. 7916 took effect, is not impressed with merit. It should be pointed out that Presidential Decree No. 66 created the respondent PEZA to be a viable commercial, industrial and investment area. According to the comprehensive wording of Presidential Decree No. 66, the said decree did not intend to limit respondent PEZA to the establishment of an export processing zone but it was also bestowed with authority to expropriate parcels of land “for the construction … of terminal facilities, structures and approaches thereto.” Republic Act No. 7916 simply particularized the broad language employed by Presidential Decree No. 66 by specifying the purposes for which PEZA shall devote the condemned lots, that is, for the construction and operation of an industrial estate, an export processing zone, free trade zones, and the like. The expropriation of Lot 1406-B for the purpose of being leased to banks and for the construction of a terminal has the purpose of

making banking and transportation facilities easily accessible to the persons working at the industries located in PEZA. The expropriation of adjacent areas therefore comes as a matter of necessity to bring life to the purpose of the law. In such a manner, PEZA’s goal of being a major force in the economic development of the country would be realized. Furthermore, this Court has already ruled that:

…(T)he Legislature may directly determine the necessity for appropriating private property for a particular improvement for public use, and it may select the exact location of the improvement. In such a case, it is well-settled that the utility of the proposed improvement, the existence of the public necessity for its construction, the expediency of constructing it, the suitableness of the location selected, are all questions exclusively for the legislature to determine, and the courts have no power to interfere or to substitute their own views for those of the representatives of the people.

In the absence of some constitutional or statutory provision to the contrary, the necessity and expediency of exercising the right of eminent domain are questions essentially political and not judicial in their character.[45]

Inasmuch as both Presidential Decree No. 66 and Republic Act No. 7916, bestow respondent

with authority to develop terminal facilities and banking centers, this Court will not question the respondent’s lease of certain portions of the expropriated lot to banks, as well as the construction of terminal facilities.

Petitioner contends that respondent is bound by the representations of its Chief Civil Engineer when the latter testified before the trial court that the lot was to be devoted for the construction of government offices. Anent this issue, suffice it to say that PEZA can vary the purpose for which a condemned lot will be devoted to, provided that the same is for public use. Petitioner cannot impose or dictate on the respondent what facilities to establish for as long as the same are for public purpose.

Lastly, petitioner appeals to the sense of justice and equity to this Court in restoring the said lot to its possession. From the time of the filing of the expropriation case in 1981 up to the present, respondent has not yet remunerated the petitioner although respondent has already received earnings from the rental payments by lessees of the subject property.

We have ruled that the concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot

be considered “just” inasmuch as the property owner is made to suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss.[46] Payment of just compensation should follow as a matter of right immediately after the order of expropriation is issued. Any delay in payment must be counted from said order. However, the delay to constitute a violation of due process must be unreasonable and inexcusable; it must be deliberately done by a party in order to defeat the ends of justice.

We find that respondent capriciously evaded its duty of giving what is due to petitioner. In the case at bar, the expropriation order was issued by the trial court in 1991. The compromise agreement between the parties was approved by the trial court in 1993. However, from 1993 up to the present, respondent has failed in its obligation to pay petitioner to the prejudice of the latter. Respondent caused damage to petitioner in making the latter to expect that it had a good title to the property to be swapped with Lot 1406-B; and meanwhile, respondent has been reaping benefits from the lease or rental income of the said expropriated lot. We cannot tolerate this oppressive exercise of the power of eminent domain by respondent. As we have ruled

in Cosculluela vs. Court of Appeals:[47]

In the present case, the irrigation project was completed and has been in operation since 1976. The project is benefiting the farmers specifically and the community in general. Obviously, the petitioner’s land cannot be returned to him. However, it is high time that the petitioner be paid what was due him eleven years ago. It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a person’s property, allow the judgment of the court to become final and executory and then refuse to pay on the ground that there are no appropriations for the property earlier taken and profitably used. We condemn in the strongest possible terms the cavalier attitude of government officials who adopt such a despotic and irresponsible stance.

Though the respondent has committed a misdeed to petitioner, we cannot, however, grant the petitioner’s prayer for the return of the expropriated Lot No. 1406-B. The Order of expropriation dated July 11, 1991, has long become final and executory. Petitioner cited Provincial Government of Sorsogon v. Rosa E. Vda. De Villaroya[48] to support its contention that it is entitled to a return of the lot where this Court ruled that “under ordinary circumstances, immediate return to the owners of the unpaid

property is the obvious remedy.” However, the said statement was not the ruling in that case. As in other cases where there was no prompt payment by the government, this Court declared in Sorsogon that “the Provincial Government of Sorsogon is expected to immediately pay as directed. Should any further delay be encountered, the trial court is directed to seize any patrimonial property or cash savings of the province in the amount necessary to implement this decision.” However, this Court also stressed and declared in that case that “In cases where land is taken for public use, public interest, however, must be considered.” xx”

REPUBLIC OF THE PHILIPPINES vs. SALEM INVESTMENT CORPORATION, MARIA DEL CARMEN ROXAS DE ELIZALDE, CONCEPCION CABARRUS VDA. DE SANTOS

MILAGROS AND INOCENTES DE LA RAMA

Facts:Expropriation proceedings was filed 

against   the   properties   owned   by Milagros  and  Inocentes  dela  Rama  in 1983.  

In   1988,   a   contract   to   sell   was executed   by  Milagros   and   Inocentes dela Rama in favor of Alfredo Guerrero wherein the former received a partial payment   of   Php  2,200,000.    Gerrero filed an action for specific performance to enforce the contract to sell.

While   the   case   for   specific performance   was   pending.   The Republic of the Philippines filed a case for   expropriation   and   deposited   an amount   of   Php   12,970,350 representing   the   10%   of   the approximate  fair  market  value of   the property.   Guerrero filed a motion for intervention   alleging   that   the   de Ramas   agreed   to   sell   the   disputed property to him.

In   1991,   the   petition   for   specific performance was granted by the RTC.

In   1995,   the   RTC   declared   that Guerrero was the rightful owner of the property   in   dispute   and   that   just compensation should be paid to him.

Issue:    WON Guerrero   is   the   rightful owner   of   the   property   to   be expropriated   and   in   effect,   just compensation whould be paid to him

Ruling:The SC held that Guerrero has the 

rightful title.  It was explained thus:“xx It is true that the contract to sell did not convey to Guerrero the subject parcel of land described therein. However, it created an obligation on the part of the De la Ramas to convey the land, subject to the fulfillment of the suspensive conditions therein stated. The declaration of this contract’s validity, which paved the way for the subsequent execution of the Deed of Absolute Sale on March 8, 1994, following the order of the Regional Trial

Court for its execution, by the Clerk of Court, Branch 113, Pasay City, effectively conveyed ownership of said parcel of lot xx”

As regards to the amount to be paid by Guerrero to the de Ramas, the SC stated that the RTC has already ruled on the matter and the purchase price with    legal   interest  was fixed by said court at Php 1,383,000.  Thus:

“xx Petitioners can no longer question a judgment which has already become final and executory. The order of the Regional Trial Court on the payment of legal interest was issued on September 18, 1991 in the case for specific performance against the De la Ramas (Civil Case No. 6974-P). Hence, they are already barred from questioning it now in this proceeding.

Finally, we take note of the fact that the De la Ramas have withdrawn and appropriated for themselves the amount paid by Guerrero. This amount represented the purchase price of the entire 4,075 square meters of land, including the expropriated portion, which was the subject of their agreement. The payment, therefore, to them of the value of the expropriated portion would unjustly enrich them. xx”

NATIONAL POWER CORPORATION vs.SPS. MISERICORDIA GUTIERREZ and RICARDO MALIT and THE HONORABLE COURT OF APPEALS

Facts: In order for NAPOCOR to construct 

230   KV   Mexico-Limay   transmission lines, the power lines will have to pass though several  parcels  of   lots  owned by private respondents.  A commission was created to determine the amount of just compensation to be awarded to the private owners.  

However,   the   private   respondents contested   the   findings   of   the commission   that   the  award  was  only Php 10.00.    The contention was   that the amunt should be the market value of the parcel of lot which is Php 50.00 pr square meter.Issue: WON the amount to be awarded to   the  private  owners   should  be   the full   market   value   considering   the nature   of   the   installation   of   power lines

Ruling:The   Supreme  Court   held   that   the 

just   compensation   should   be equivalent to the amount of loss which the   owner   shall   suffer   by   reason   of such   expropriation.     Thus   the   High Court has promptly observed:

". . . While it is true that plaintiff are (sic) only after a right-of-way easement, it nevertheless perpetually deprives defendants of their proprietary rights as manifested by the

imposition by the plaintiff upon defendants that below said transmission lines no plant higher than three (3) meters is allowed. Furthermore, because of the high-tension current conveyed through said transmission lines, danger to life and limbs that may be caused beneath said wires cannot altogether be discounted, and to cap it all plaintiff only pays the fee to defendants once, while the latter shall continually pay the taxes due on said affected portion of their property."

The foregoing facts considered, the acquisition of the right-of-way easement falls within the purview of the power of eminent domain. Such conclusion finds support in similar cases of easement of right-of-way where the Supreme Court sustained the award of just compensation for private property condemned for public use (See National Power Corporation vs. Court of Appeals, 129 SCRA 665, 1984; Garcia vs. Court of Appeals, 102 SCRA 597,1981). The Supreme Court, in Republic of the Philippines vs. PLDT, * thus held that:

Normally, of course, the power of eminent domain results in the taking or appropriation of 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 condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right-of-way.

In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain. Considering the nature and effect of

the installation of the 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use of the land 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 be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. Just compensation 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 (Province of Tayabas vs. Perez, 66 Phil. 467 [1938]; Assoc. of Small Land Owners of the Phils., Inc. vs. Secretary of Agrarian Reform, G.R. No. 78742; Acuna vs. Arroyo, G.R. No. 79310; Pabrico vs. Juico, G.R. No. 79744; Manaay v. Juico, G.R. No. 79777,14 July 1989, 175 SCRA 343 [1989]). The price or value of the land and its character at the time it was taken by the Government are the criteria for determining just compensation (National Power Corp. v. Court of Appeals, 129 SCRA 665, [1984]). The above price refers to the market value of the land which may be the full market value thereof. According to private respondents, the market value of their lot is P50.00 per square meter because the said lot is adjacent to the National and super highways of Gapan, Nueva Ecija and Olongapo City.

Private respondents recognize the inherent power of eminent domain being exercised by NPC when it finally consented to the expropriation of the said portion of their land, subject however to payment of just compensation. No matter how

laudable NPC's purpose is, for which expropriation was sought, it is just and equitable that they be compensated the fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity (EPZA v. Dulay, 149 SCRA 305 [1987]; Mun. of Daet v. Court of Appeals, 93 SCRA 503 (1979]).

MUNICIPALITY OF PARAÑAQUE vs. V.M. REALTY CORPORATION

Facts:Sangguniang   Bayan   of   Paranaque 

passed a resolution to expropriate two parcels  of   lots  with a total  of  10,000 square meters belonging to VM Realty Co.  A complaint for expropriation was filed against the private owner and the trial court gave tit due course.

The   private   corporation   in   its answer argued that the expropriation proceedings   was   not   valid   because there   was   no   ordinance   authorizing such   proceedings.     mere   resolution was not tantamount to an ordinance.

Issue:  WON   the   resolution   of   the SAngguniang Bayan of Paranaque is a substantial compliance of the staturoy requirement   of   R.A.   7160   on expropriation proceedings.

Ruling:The SC held that there was no cause 

of action.  Thus, it was stated:“xx The fact that there is no cause of action is evident from the face of the 

Complaint for expropriation which was based   on   a   mere   resolution.   The absence   of   an   ordinance   authorizing the same is equivalent to lack of cause of  action.  Consequently,  the Court  of Appeals committed no reversible error in   affirming   the   trial   court’s  Decision which   dismissed   the   expropriation suit.  xx”

Another issue raised in this case is whether the State may expropriate the same   property   once   all   the   legally requirements were meant.   As the SC discussed:

“xx The scope of eminent domain is plenary and, like police power, can “reach every form of property which the State might need for public use. “All separate interests of individuals in property are held of the government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of property, remains in the government, or in the aggregate body of the people in their sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires it. Thus, the State or its authorized agent cannot be forever barred from exercising said right by reason alone of previous non-compliance with any legal requirement.

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it does apply to specific issues decided in a previous case. For example, a final

judgment dismissing an expropriation suit on the ground that there was no prior offer precludes another suit raising the same issue; it cannot, however, bar the State or its agent from thereafter complying with this requirement, as prescribed by law, and subsequently exercising its power of eminent domain over the same property. By the same token, our ruling that petitioner cannot exercise its delegated power of eminent domain through a mere resolution will not bar it from reinstituting similar proceedings, once the said legal requirement and, for that matter, all others are properly complied with. Parenthetically and by parity of reasoning, the same is also true of the principle of “law of the case.” In Republic vs De Knecht, the Court ruled that the power of the State or its agent to exercise eminent domain is not diminished by the mere fact that a prior final judgment over the property to be expropriated has become the law of the case as to the parties. The State or its authorized agent may still subsequently exercise its right to expropriate the same property, once all legal requirements are complied with. To rule otherwise will not only improperly diminish the power of eminent domain, but also clearly defeat social justice. xx”

REPUBLIC OF THE PHILIPPINES, GENERAL ROMEO ZULUETA, COMMODORE EDGARDO GALEOS, ANTONIO CABALUNA, DOROTEO MANTOS & FLORENCIO BELOTINDOS vs. VICENTE G. LIM

Facts:In 1938, Republic of the Philippines 

expropriated   two   lots   owned   by Gervasia  Denzon  and  Eulalia  Denzon. A deposit amounting to Php 9,500 was made with PNB pursuant to the order of   the   CFI.     The   Republic   took possession of the lot thereafter but the just   compensation  held  by   the   same court   amounting   to   Php   4.062   was never made to the Denzons.

Jose   Galeos,   heir   of   the   Denzons filed  a   claims   for   rentals   on   the   lots from   National   Airports   Commission. The claim was rejected.  

In 1961, there being no payment of just   compensation   from   the government,   successors-in-interests, Valdehueza   and   Panerio,   filed   a complaint for recovery in possession of the   properties.     The   CFI   decided   in their   favor,   stating   that   they   retain ownership   over   the   properties. However,   they   were   ordered   to   sell the same to the Republic.

In   1964,   Valdehueza   and   Panerio executed   a   mortgage   over   the disputed properties in favor of Vicente Lim.

In   1992,   there   still   being   no payment   of   just   compensation,   Lim filed  a  complaint   for  quieting  of  title over the properties.

Issue:    whether   the   Republic   has retained ownership of Lot 932 despite its   failure   to   pay   respondent’s predecessors-in-interest   the   just compensation therefor pursuant to the judgment of the CFI rendered as early as May 14, 1940

Ruling:The SC held that the two parcels of 

lots are still owned by the Valdehueza and Panerio.  The rights of Vicente Lim as a mortgagee is still protected.  Thus, it is held:

“xx Here, the annotation merely served as a caveat that the Republic had a preferential right to acquire Lot 932 upon its payment of a “reasonable market value.” It did not proscribe Valdehueza and Panerio from exercising their rights of ownership including their right to mortgage or even to dispose of their property. In Republic vs. Salem Investment Corporation we recognized the owner’s absolute right over his property pending completion of the expropriation proceeding, thus:

“It is only upon the completion of these two stages that expropriation is said to have been completed. Moreover, it is only upon payment of just compensation that title over the property passes to the government. Therefore, until the action for expropriation has been completed and terminated, ownership over the property being expropriated remains with the registered owner. Consequently, the latter can exercise all rightspertaining to an owner, including the right to dispose of his property subject to the power of the State

ultimately to acquire it through expropriation.

It bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to respondent in 1964, they were still the owners thereof and their title had not yet passed to the petitioner Republic. In fact, it never did. Such title or ownership was rendered conclusive when we categorically ruled in Valdehueza that: “It is true that plaintiffs are still the registered owners of the land, there not having been a transfer of said lots in favor of the Government.”

For respondent’s part, it is reasonable to conclude that he entered into the contract of mortgage with Valdehueza and Panerio fully aware of the extent of his right as a mortgagee. A mortgage is merely an accessory contract intended to secure the performance of the principal obligation. One of its characteristics is that it is inseparable from the property. It adheres to the property regardless of who its owner may subsequently be.[25] Respondent must have known that even if Lot 932 is ultimately expropriated by the Republic, still, his right as a mortgagee is protected. In this regard, Article 2127 of the Civil Code provides:

“Art. 2127. The mortgage extends to the natural accessions, to the

improvements, growing fruits, and the rents or income not yet received when the obligation becomes due, and to the amount of the indemnity granted or owing to the proprietor from the insurers of the property mortgaged, or in virtue of expropriation for public use, with the declarations, amplifications, and limitations established by law, whether the estate remains in the possession of the mortgagor or it passes in the hands of a third person.

In summation, while the prevailing doctrine is that “the non-payment of just compensation does not entitle the private landowner to recover possession of the expropriated lots, however, in cases where the government failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation proceedings, the owners concerned shall have the right to recover possession of their property. This is in consonance with the principle that “the government cannot keep the property and dishonor the judgment.” To be sure, the five-year period limitation will encourage the government to pay just compensation punctually. This is in keeping with justice and equity. After all, it is the duty of the government, whenever it takes property from private persons against their will, to facilitate the payment of just compensation. In Cosculluela v.

Court of Appeals, we defined just compensation as not only the correct determination of the amount to be paid to the property owner but also the payment of the property within a reasonable time. Without prompt payment, compensation cannot be considered “just.” xx”

It was also held that Vicente Lim did not act in bad faith.  

“xx 932 by its failure to pay just compensation. The issue of bad faith would have assumed relevance if the Republic actually acquired title over Lot 932. In such a case, even if respondent’s title was registered first, it would be the Republic’s title or right of ownership that shall be upheld. But now, assuming that respondent was in bad faith, can such fact vest upon the Republic a better title over Lot 932? We believe not. This is because in the first place, the Republic has no title to speak of. xx”

CASES ON EMINENT DOMAIN

• CAMARINES NORTE ELECTRIC

COOPERATIVE, INC. v. COURT OF APPEALS

Facts:

Conrad   L.   Leviste   filed   with   the 

Regional   Trial   Court   a   complaint for 

collection   of   a   sum   of   money   and 

foreclosure  of  mortgage against  Philippine 

Smelter  Corporation   (PSC).   The   trial   court 

rendered   decision   in   favor   of   Leviste   for 

failure   of   PSC   to   file   an   answer   to   the 

complaint.

When   the   decision   was   final   and 

executory,   the   trial   court   issued a  writ  of 

execution and the respondent sheriff levied 

upon two parcels of land which were sold at 

a   public   auction   in   favor   of   Vines   Realty 

Corporation (Vines Realty).

After   the   writ   of   possession   was 

granted to Vines Realty, it filed an amended 

motion   for   an   order   of   demolition   and 

removal   of   improvements   on   the   subject 

land,   included  were   the   power   lines   and 

electric posts belonging to the petitioner.

Petitioner opposed the motion on the 

ground that petitioner was not the party to 

the  case and  therefore  not  bound by   the 

judgment of the trial court and that it had 

subsisting   right-of-way   agreements   over 

said property.

The   trial   court,   however,   directed   to 

shut off the power lines energizing several 

business establishments  in the area. Vines 

Realty  cut down petitioner’s  electric  posts 

professedly using a chainsaw.

After   the   petition   filed   before   the 

Court   of   Appeals   was   dismissed,   the 

petitioner   re-constructed   its   power   lines 

along   the   provincial   road   upon   the 

authority   of   the   District   Engineer   of   the 

DPWH   due   to   public   need.   Vines   Realty 

however  sent  a   letter  prohibiting the said 

construction   without   its   permission. 

Petitioner replied that the power lines were 

constructed within the right of way of the 

provincial road.

Hence, this petition.

Issue/s:

1. Whether   the  petitioner   is   entitled 

to   retain  possession  of   the  power 

lines   located   in   the   land   sold   at 

public auction as a result of extra-

judicial foreclosure of mortgage.

Ruling:

The   Court   finds   that   the   trial   court 

gravely   abused   its   discretion   in   hastily 

ordering the removal of the electric posts.

The trial court failed to appreciate the 

nature   of   electric   cooperatives   as   public 

utilities.

Among the powers granted to electric 

cooperatives   by   virtue   of   Presidential 

Decree No. 269 are:

“Section 16 Powers-

(j) To construct, maintain

and operate electric

transmission and

distribution lines along,

upon, under and across

publicly owned lands and

public thoroughfares,

including, without

limitation, all roads,

highways, streets, alleys,

bridges and causeways;

Provided, that such shall

not prevent or unduly

impair the primary public

uses to which such lands

and thoroughfares are

otherwise devoted;

“(k) To exercise the power

of eminent domain in the

manner provided by law for

the exercise of such power

by other corporations

constructing or operating

electric generating plants

and electric transmission

and distribution lines or

systems.”

Electric  cooperatives,   like  CANORECO, 

are   vested   with   the   power   of   eminent 

domain.

The   acquisition  of   an   easement   of   a 

right-of-way falls within the purview of the 

power of eminent domain.  Such conclusion 

finds support in easements of right-of-way 

where   the   Supreme   Court   sustained   the 

award   of   just   compensation   for   private 

property   condemned for public use. The 

Supreme  Court,   in   Republic   vs.   PLDT thus 

held that:

"Normally, of course, the

power of eminent domain

results in the taking or

appropriation of 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

condemned property,

without loss of title and

possession. It is

unquestionable that real

property may, through

expropriation, be subjected

to an easement of right-of-

way."

However,   a   simple   right-of-way 

easement   transmits   no   rights,   except   the 

easement.   Vines   Realty   retains   full 

ownership and it is not totally deprived of 

the use of the land.  It  can continue doing 

what  it  wants to do with the land, except 

those that would result in contact with the 

wires.

The   acquisition   of   this   easement, 

nevertheless,  is not gratis.  Considering the 

nature and effect of the installation power 

lines, the limitations on the use of the land 

for   an   indefinite   period   deprives   private 

respondents of  its ordinary use.  For these 

reasons, Vines Realty is entitled to payment 

of   just   compensation,  which   must   be 

neither   more   nor   less   than   the   money 

equivalent of the property.

Just   compensation   has   been 

understood   to   be   the   just   and   complete 

equivalent of the loss, which the owner of 

the res expropriated has to suffer by reason 

of the expropriation. The value of the land 

and its character at the time it was taken by 

the   Government   are   the   criteria   for 

determining   just   compensation. No  matter 

how commendable petitioner’s purpose is, 

it   is   just and  equitable that Vines Realty be 

compensated the fair and full equivalent for 

the   taking   of   its   property,   which   is   the 

measure   of   the   indemnity,   not  whatever 

gain   would   accrue   to   the   expropriating 

entity.

Moreover, CANORECO only sought the 

continuation of the exercise of its right-of-

way easement and not ownership over the 

land.  Public   utilities’   power   of   eminent 

domain may be exercised although title  is 

not transferred to the expropriator.

Consequently,  the Supreme Court

ruled that a court’s writ of demolition

cannot prevail over the easement of a

right-of-way which falls within the power

of eminent domain.

Private   respondents   are   ordered   to 

restore   or   restitute   petitioner’s   electric 

posts   and   power   lines   or   otherwise 

indemnify   petitioner   for   the   cost   of   the 

restoration   thereof.  Finally,   private 

respondents   are   permanently   enjoined  or 

prohibited   from   disturbing   or   interfering 

with the operation and maintenance of the 

business of petitioner.

• PHILIPPINE PRESS INSTITUTE v.

COMMISSION ON ELECTIONS

Facts:

The  Philippine  Press   Institute,   Inc. 

(PPI),   a   non-stock,   non-profit  organization 

of  newspaper  and magazine  publishers,   is 

assailing   the   constitutional   validity   of 

Resolution No. 2772 issued by respondent 

COMELEC and  its  corresponding COMELEC 

directive dated 22 March 1995,  through a 

petition for Certiorari and Prohibition.

Resolution   No.   2772   asks   the 

allocation   of free print space of not less

than one half (1/2) page in at least one

newspaper of general circulation in every

province or city for use as "Comelec Space."

PPI   asks   the   Court   to   declare 

COMELEC   Resolution   No.   2772 

unconstitutional   and   void   on   the   ground 

that it violates the prohibition imposed by 

the Constitution upon the government, and 

any  of   its   agencies,   against   the   taking   of 

private property for public use without just 

compensation.

The   Solicitor   General   argued   that 

the   questioned   Resolution   and   its 

implementing   letter   directives   do   not 

provide   any   criminal   or   administrative 

sanction   for   non-compliance.   Moreover, 

even if they are viewed as mandatory, the 

same would be valid as an exercise of the 

police power of the State. 

Issue/s:

1. Whether or not Section 2 of

COMELEC Resolution No. 2772 can

be classified as “taking” of private

property for public use without

just compensation.

2. Whether or not Section 2 of

COMELEC Resolution No. 2772 is a

valid exercise of the police power

of the State.

Ruling:

Section 2 of Resolution No. 2772 is 

clearly   susceptible   of   the   reading   that 

petitioner PPI has given it.

That Resolution No. 2772 does not, 

in express  terms,  threaten publishers who 

would   disregard   it   or   its   implementing 

letters   with   some   criminal   or   other 

sanction,   does not by   itself   demonstrate 

that   the   Comelec's   original   intention  was 

simply   to   solicit   or   request   voluntary 

donations of print space from publishers. A 

written communication officially directing a 

print  media   company   to supply free print

space, dispatched by a government (here a 

constitutional)   agency   and   signed   by   a 

member   of   the   Commission   presumably 

legally   authorized   to   do   so,   is   bound   to 

produce   a   coercive   effect   upon   the 

company   so   addressed.   That   the   agency 

may not be legally authorized to impose, or 

cause  the  imposition of,  criminal  or  other 

sanctions   for  disregard  of   such  directions, 

only   aggravates   the   constitutional 

difficulties   inhearing   in   the   present 

situation.   The   enactment   or   addition   of 

such sanctions  by   the   legislative  authority 

itself   would   be   open   to   serious 

constitutional objection.

To compel print   media 

companies to donate " COMELEC -space" of 

the   dimensions   specified   in   Section   2   of 

Resolution No. 2772 (not less than one-half 

page),   amounts   to   "taking"   of   private 

personal   property   for   public   use   or 

purposes.   Section   2   failed   to   specify   the 

intended frequency of   such   compulsory 

"donation:"   only once during   the   period 

from 6 March 1995 (or 21 March 1995) until 

12 May 1995? or everyday or once a week? 

or as often as COMELEC may direct during 

the same period? The extent of the taking 

or  deprivation   is   not   insubstantial;   this   is 

not   a   case   of   a de minimis temporary 

limitation   or   restraint   upon   the   use   of 

private property. The monetary value of the 

compulsory   "donation,"  measured   by   the 

advertising   rates   ordinarily   charged   by 

newspaper publishers whether in cities or in 

non-urban  areas,  may  be  very   substantial 

indeed.

The   taking   of   print   space   here 

sought to be effected may first be appraised 

under the rubric of expropriation of private 

personal   property   for   public   use.   The 

threshold   requisites   for  a   lawful   taking  of 

private property for public use need to be 

examined here: 

one is the necessity for the

taking; another is the legal

authority to effect the

taking.

The   element   of   necessity 

for the taking has not been 

shown   by   respondent 

COMELEC.

It has not been suggested that the 

members   of   PPI   are   unwilling to sell print 

space at their normal rates to COMELEC for 

election   purposes.   Indeed,   the 

unwillingness or reluctance of COMELEC to

buy print   space   lies   at   the   heart   of   the 

problem. 

Similarly, it has not been

suggested, let alone demonstrated, that

COMELEC has been granted the power of

eminent domain either by the Constitution

or by the legislative authority. A

reasonable relationship between that

power and the enforcement and

administration of election laws by

COMELEC must be shown; it is not casually

to be assumed.

That   the   taking   is   designed   to 

subserve  "public  use"   is  not   contested  by 

petitioner   PPI.  We   note   only   that,   under 

Section 3 of Resolution No. 2772, the free 

"COMELEC   space"   sought   by   the 

respondent Commission would be used not 

only   for   informing   the   public   about   the 

identities,   qualifications   and   programs   of 

government of candidates for elective office 

but also for "dissemination of vital election 

information"   (including,   presumably, 

circulars,   regulations,   notices,   directives, 

etc.   issued by  COMELEC).   It   seems to   the 

Court   a   matter   of   judicial   notice   that 

government offices and agencies (including 

the Supreme Court)   simply  purchase print 

space,   in   the   ordinary   course   of   events, 

when their rules and regulations, circulars, 

notices  and   so   forth  need  officially   to  be 

brought   to   the   attention   of   the   general 

public.

The   taking  of  private  property   for 

public use is,  of course,  authorized by the 

Constitution,  but  not  without  payment  of 

"just compensation" (Article III,  Section 9). 

And   apparently   the   necessity   of   paying 

compensation   for   "COMELEC   space"   is 

precisely  what  is  sought to be avoided by 

respondent Commission, whether Section 2 

of Resolution No. 2772 is read as petitioner 

PPI reads it, as an assertion of authority to 

require  newspaper  publishers   to   "donate" 

free print space for COMELEC purposes, or 

as an exhortation, or perhaps an appeal, to 

publishers   to   donate   free   print   space,   as 

Section   1   of   Resolution   No.   2772-A 

attempts to suggest. There is nothing at all 

to   prevent   newspaper   and   magazine 

publishers from voluntarily giving free print 

space   to   COMELEC   for   the   purposes 

contemplated in Resolution No. 2772. 

Section   2   of   Resolution  No.   2772 

does not, however, provide a constitutional 

basis   for   compelling   publishers,   against 

their will, in the kind of factual context here 

present,   to   provide   free   print   space   for 

COMELEC   purposes.  Section 2 does not

constitute a valid exercise of the power of

eminent domain.

As   earlier   noted,   the   Solicitor 

General   also   contended   that  Section  2  of 

Resolution   No.   2772,   even   if   read   as 

compelling   publishers   to   "donate" 

"COMELEC space, " may be sustained as a 

valid   exercise   of   the  police   power  of   the 

state.  This  argument  was,  however,  made 

too   casually   to   require   prolonged 

consideration on our part. 

Firstly,   there   was   no   effort   (and 

apparently   no   inclination   on   the   part   of 

COMELEC) to show that the police power — 

essentially   a   power   of   legislation  —   has 

been   constitutionally   delegated   to 

respondent   Commission.   Secondly,   while 

private   property   may   indeed   be   validly 

taken   in   the   legitimate   exercise   of   the 

police   power   of   the   state,   there  was   no 

attempt to show compliance in the instant 

case with the requisites of a  lawful  taking 

under the police power.

Section 2 of Resolution No. 2772 is 

a blunt and heavy instrument that purports, 

without a showing of existence of a national 

emergency   or   other   imperious   public 

necessity,   indiscriminately   and   without 

regard to the individual business condition 

of   particular   newspapers   or   magazines 

located in differing parts of the country, to 

take   private   property   of   newspaper   or 

magazine publishers. No attempt was made 

to demonstrate that a real and palpable or 

urgent   necessity   for   the   taking   of   print 

space   confronted   the   COMELEC   and   that 

Section 2 of Resolution No. 2772 was itself 

the   only   reasonable   and   calibrated 

response to such necessity available to the 

COMELEC.  Section 2 does not constitute a

valid exercise of the police power of the

State.

Section 2 of Resolution No. 2772, in 

its   present   form   and   as   interpreted   by 

COMELEC   in   its   22   March   1995   letter 

directives,  purports to require print media 

enterprises to "donate" free print space to 

COMELEC. As such, Section 2 suffers from a 

fatal   constitutional   vice   and  must   be  set

aside and nullified.

• TELECOMMUNICATIONS AND

BROADCAST ATTORNEYS OF THE

PHILIPPINES, INC. v. COMELEC

Facts:

In   the   present   case,   the   Court 

considers the validity of §92 of B.P. Blg. No. 

881   against   claims   that   the   requirement 

that radio and television time be given free 

takes property without due process of law; 

that it violates the eminent domain clause 

of the Constitution which provides for the 

payment   of   just   compensation;   that   it 

denies   broadcast   media   the   equal 

protection   of   the   laws;   and   that,   in   any 

event, it violates the terms of the franchise 

of petitioner GMA Network, Inc.

Petitioner Telecommunications and 

Broadcast Attorneys of the Philippines, Inc. 

is  an organization of   lawyers of   radio and 

television   broadcasting   companies.   They 

are   suing   as   citizens,   taxpayers,   and 

registered   voters.   The   other   petitioner, 

GMA   Network,   Inc.,   operates   radio   and 

television broadcasting stations throughout 

the Philippines under a franchise granted by 

Congress.

Petitioner   claims   that   it   suffered 

losses   running   to   several  million  pesos   in 

providing   COMELEC   Time   in   connection 

with the 1992 presidential election and the 

1995 senatorial election and that it stands 

to suffer even more should it be required to 

do so again this year. Petitioner's allegation 

that it will suffer losses again because it is 

required to provide free air time is sufficient 

to give it standing to question the validity of 

§92.

. Petitioners claim that the primary 

source   of   revenue   of   the   radio   and 

television stations is the sale of air time to 

advertisers   and   that   to   require   these 

stations   to   provide   free   air   time   is   to 

authorize   a   taking   which   is   not   "a de

minimis temporary   limitation   or   restraint 

upon the use of private property.

B.P. Blg. 881, (Omnibus

Election Code)

Sec.   92.  Comelec time.  — 

The   commission   shall 

procure radio and television 

time   to   be   known   as 

"Comelec Time" which shall 

be   allocated   equally   and 

impartially   among   the 

candidates  within   the  area 

of coverage of all radio and 

television stations.  For   this 

purpose, the franchise of all 

radio   broadcasting   and 

television   stations   are 

hereby   amended   so   as   to 

provide   radio   or   television 

time, free of charge, during 

the period of the campaign. 

(Sec. 46, 1978 EC)

Thus, the law prohibits mass media 

from selling or donating print space and air 

time   to   the   candidates   and   requires   the 

COMELEC   instead   to   procure   print   space 

and   air   time   for   allocation   to   the 

candidates. It will be noted that while §90 

of  B.P.  Blg.  881  requires   the  COMELEC  to 

procure print space which, as we have held, 

should be paid for, §92 states that air time 

shall be procured by the COMELEC free of 

charge.

Petitioners challenge the validity of 

§92 on the ground (1) that it takes property 

without due process of law and without just 

compensation; (2) that it denies radio and 

television   broadcast   companies   the   equal 

protection of the laws; and (3) that it is in 

excess of the power given to the COMELEC 

to   supervise  or   regulate   the  operation  of 

media   of   communication   or   information 

during the period of election.

Issue/s:

1. Whether or not §92 of B.P. Blg. No.

881 violates the eminent domain

clause of the Constitution which

provides for the payment of just

compensation.

Ruling:

Radio   and   television   broadcasting 

companies,  which are given franchises,  do 

not   own   the   airwaves   and   frequencies 

through   which   they   transmit   broadcast 

signals and images. They are merely given 

the   temporary   privilege   of   using   them. 

Since   a   franchise   is   a  mere  privilege,   the 

exercise of the privilege may reasonably be 

burdened   with   the   performance   by   the 

grantee of some form of public service.  

In   the  granting  of   the  privilege   to 

operate  broadcast   stations   and   thereafter 

supervising   radio   and   television   stations, 

the state spends considerable public funds 

in   licensing   and   supervising   such 

stations. 18 It  would be strange  if   it  cannot 

even require the licensees to render public 

service by giving free air time.

The claim that petitioner would be 

losing   P52,380,000   in   unrealized   revenue 

from advertising is based on the assumption 

that air time is "finished product" which, it 

is   said,   become   the   property   of   the 

company, like oil produced from refining or 

similar natural resources after undergoing a 

process for their production. But air time is 

not owned by broadcast companies.

As   held   in Red Lion Broadcasting

Co. v. F.C.C., 19 which  upheld   the   right  of  a 

party personally attacked to reply, "licenses 

to   broadcast   do   not   confer   ownership   of 

designated   frequencies,   but   only   the 

temporary   privilege   of   using   them." 

Consequently,   "a   license   permits 

broadcasting,   but   the   license   has   no 

constitutional right to be the one who holds 

the   license   or   to   monopolize   a   radio 

frequency   to   the   exclusion   of   his   fellow 

citizens.   There   is   nothing   in   the   First 

Amendment   which   prevents   the 

Government   from   requiring   a   licensee   to 

share   his   frequency   with   others   and   to 

conduct himself as a proxy or fiduciary with 

obligations   to   present   those   views   and 

voices   which   are   representative   of   his 

community and which would otherwise, by 

necessity, be barred from the airwaves." As

radio and television broadcast stations do

not own the airwaves, no private property

is taken by the requirement that they

provide air time to the COMELEC.

The   basic   flaw   in   petitioner's 

argument   is   that   it   assumes   that   the 

provision for COMELEC Time constitutes the 

use   and  operation  of   the   stations   of   the 

GMA Network,   Inc.,  This   is  not   so.  Under 

§92 of B.P. Blg. 881, the COMELEC does not 

take   over   the   operation   of   radio   and 

television stations but only the allocation of 

air time to the candidates for the purpose 

of   ensuring,   among   other   things,   equal 

opportunity, time, and the right to reply as 

mandated by the Constitution. 23

For   the   fact   is   that   the   duty 

imposed on the GMA Network,   Inc.  by  its 

franchise   to   render   "adequate   public 

service  time"   implements  §92  of  B.P.  Blg. 

881. Undoubtedly, its purpose is to enable 

the government to communicate with the 

people on matters of public interest.

In sum, B.P. Blg. 881, §92 is not an 

invalid amendment of petitioner's franchise 

but the enforcement of  a duty voluntarily 

assumed by petitioner in accepting a public 

grant of privilege.

Thus   far,   we   have   confined   the 

discussion   to   the  provision  of  §92  of  B.P. 

Blg. 881 for free air time without taking into 

account  COMELEC  Resolution  No.   2983-A, 

§2 of which states:

Sec.   2.  Grant of "Comelec

Time." —   Every   radio 

broadcasting and television 

station   operating   under 

franchise   shall   grant   the 

Commission, upon payment

of just compensation,   at 

least thirty (30) minutes of 

prime   time   daily,   to   be 

known as  "Comelec  Time", 

effective February 10, 1998 

for   candidates   for 

President,   Vice-President 

and Senators, and effective 

March   27,   1998,   for 

candidates for local elective 

offices,   until  May  9,   1998. 

(Emphasis added).

This   is   because   the   amendment 

providing   for   the   payment   of   "just 

compensation"   is   invalid,   being   in 

contravention of §92 of B.P.  Blg.  881 that 

radio and television time given during the 

period   of   the   campaign   shall   be   "free   of 

charge."   Indeed,   Resolution   No.   2983 

originally  provided that the time allocated 

shall   be   "free   of   charge,"   just   as   §92 

requires   such   time   to   be   given   "free   of 

charge."  The amendment appears  to  be a 

reaction   to   petitioner's   claim   in   this   case 

that   the   original   provision   was 

unconstitutional   because   it   allegedly 

authorized  the   taking  of  property  without 

just compensation. Hence, the amendment 

cannot be invoked by the parties.

Petitioners   complain   that  B.P.  Blg. 

881,   §92   singles   out   radio   and   television 

stations   to   provide   free   air   time.   They 

contend   that   newspapers   and  magazines 

are   not   similarly   required   as,   in   fact, 

in Philippine Press Institute v. COMELEC, the 

Court upheld their right to the payment of 

just compensation for the print space they 

may provide under §90.

The argument will not bear analysis. 

It rests on the fallacy that broadcast media 

are entitled to the same treatment  under 

the   free   speech   guarantee   of   the 

Constitution as the print media. There are 

important differences in the characteristics 

of   the   two  media,  however,  which   justify 

their differential treatment for free speech 

purposes.   Because   of   the   physical 

limitations of the broadcast  spectrum, the 

government   must,   of   necessity,   allocate 

broadcast   frequencies   to  those wishing  to 

use   them.  There   is  no  similar   justification 

for government allocation and regulation of 

the print media.

In   the   allocation   of   limited 

resources,   relevant   conditions  may  validly 

be   imposed  on   the  grantees  or   licensees. 

The reason for this is that, as already noted, 

the government spends public funds for the 

allocation and regulation of   the broadcast 

industry, which it does not do in the case of 

the print  media.  To require the radio and 

television   broadcast   industry   to   provide 

free air time for the COMELEC Time is a fair 

exchange for what the industry gets.

From   another   point   of   view,   this 

Court   has   also   held   that   because   of   the 

unique   and   pervasive   influence   of   the 

broadcast   media,   "[n]ecessarily   .   .   .   the 

freedom   of   television   and   radio 

broadcasting   is   somewhat   lesser   in   scope 

than  the  freedom accorded  to  newspaper 

and print media."

Petitioners' assertion therefore that 

§92 of B.P. Blg. 881 denies them the equal 

protection   of   the   law   has   no   basis.   In 

addition, their plea that §92 (free air time) 

and §11(b)  of  R.A.  No. 6646 (ban on paid 

political   ads)   should  be   invalidated  would 

pave the way for a return to the old regime 

where   moneyed   candidates   could 

monopolize   media   advertising   to   the 

disadvantage   of   candidates   with   less 

resources.   That   is  what  Congress   tried   to 

reform in 1987 with the enactment of R.A. 

No. 6646. We are not free to set aside the 

judgment of Congress, especially in light of 

the   recent   failure  of   interested  parties   to 

have the law repealed or at least modified.

With   the   prohibition   on   media 

advertising  by   candidates   themselves,   the 

COMELEC   Time   and   COMELEC   Space   are 

about   the   only   means   through   which 

candidates can advertise their qualifications 

and  programs  of   government.  More   than 

merely   depriving   their   qualifications   and 

programs of government. More than merely 

depriving candidates of time for their ads, 

the failure of broadcast stations to provide 

air   time   unless   paid   by   the   government 

would   clearly  deprive   the  people  of   their 

right to know. Art III, §7 of the Constitution 

provides   that   "the   right  of   the  people   to 

information  on  matters   of   public   concern 

shall be recognized," while Art. XII, §6 states 

that   "the   use   of   property   bears   a   social 

function [and]  the right   to own,  establish, 

and   operate   economic   enterprises   [is] 

subject to the duty of the State to promote 

distributive   justice  and  to   intervene  when 

the common good so demands."

To affirm the validity of §92 of B.P. 

Blg.  881  is   to  hold  public  broadcasters   to 

their obligation to see to it that the variety 

and vigor of public debate on issues in an 

election is maintained. For while broadcast 

media  are  not  mere common carriers  but 

entities  with   free   speech   rights,   they   are 

also public trustees charged with the duty 

of ensuring that the people have access to 

the   diversity   of   views   on   political   issues. 

This right of the people is paramount to the 

autonomy of broadcast media. To affirm the 

validity   of   §92,   therefore,   is   likewise   to 

uphold the people's right to information on 

matters   of   public   concern.   The   use   of 

property   bears   a   social   function   and   is 

subject to the state's duty to intervene for 

the   common   good.   Broadcast  media   can 

find their just and highest reward in the fact 

that  whatever   altruistic   service   they  may 

render   in   connection  with   the  holding  of 

elections is for that common good.

• REPUBLIC OF THE PHILIPPINES v. PLDT

Facts:

This   case   arose   from   a   complaint 

filed   on   May   17,   1972   by   the   Republic 

Telephone Company [RETELCO] (now PLDT), 

seeking to enjoin the respondents Director 

or   Acting   Director   of   the   Bureau   of 

Telecommunications   (now   DOTC);   its 

Regional   Superintendent;   the   Exchange 

Manager and Chief Operator of the Bureau 

of Telecommunications at Malolos, Bulacan, 

and the agents  and representatives  acting 

in   their   behalf,   from   operating   and 

maintaining their local telephone system in 

Malolos,   Bulacan   and   from   soliciting 

subscribers   in   that   municipality   and   its 

environs,   alleging inter alia that   such 

operations   and   maintenance   of   the 

telephone   system   and   solicitation   of 

subscribers  by respondents  constituted an 

unfair   and   ruinous   competition   to   the 

detriment of petitioner [RETELCO] who is a 

grantee   of   both  municipal   and   legislative 

franchises for the purpose. 

Order was issued on June 30, 1972, 

restraining   respondents   [BUTELCO]   from 

operating   and   maintaining   the   local 

telephone   system   in   Malolos   and   from 

soliciting customers. 

The Republic of the Philippines,  on 

behalf   of   the   Bureau   of 

Telecommunications, begged leave of court 

to   intervene   in   the   proceedings   on   the 

ground that the suit affected state property 

and   accordingly   the   state   has   a   legal 

interest involved.  There being no essential 

dispute between the parties over the fact 

that   the   suit   indeed   involved  property  of 

the  state,   the  Answer   in   Intervention was 

admitted and the case proceeded to trial.

Republic Telephone Company, Inc., 

or   RETELCO,   is   a   domestic   corporation 

engaged   in   the   business   of   installing, 

operating and maintaining nationwide local 

telephone   services. On  December   1959,   it 

had acquired a municipal franchise from the 

Municipal  Council  of  Malolos,  Bulacan per 

Resolution No. 190, Series of 1959 to install, 

maintain   and   operate   a   local   telephone 

system within   the municipality  of  Malolos 

for a period of thirty-five years x x x.  The 

municipal   franchise  was   approved  by   the 

Provincial Board of Bulacan thus certificate 

of   public   convenience   and   necessity   was 

secured from the Public Service Commission 

which   the   President   of   the   Philippines 

approved   x   x   x.  RETELCO   accepted   the 

commission   certificate   and   filed   the 

required   deposit   with   the   Treasurer   of 

the Philippines x   x   x.   RETELCO  obtained   a 

legislative franchise under Republic Act No. 

3662 of the then Congress of the Philippines 

for   the   construction,   operation   and 

maintenance   of   a   nationwide   telephone 

service   with   exchanges   in   various   areas 

including   the   municipality   of   Malolos.  It 

was   approved   by   the   President   of   the 

Philippines for a period of fifty years x x x 

and the correspondent certificate of public 

convenience   and   necessity   was   granted 

under Public  Service Commission case No. 

67-4023 x x x.

Way   back   in   February,   1969 

RETELCO   learned   through   public 

announcements of government projects to 

be   launched   that   the   Bureau   of 

Telecommunications   would   establish   and 

operate   telephone   system   in  Malolos   to 

serve   government   offices   and   the  private 

[sector]   as   well   thus   exposing   x   x   x 

appellee’s   [RETELCO’s]   telephone  business 

operation   to   the   risk   of   undue 

competition.  Immediately,   they   filed 

protests,   and   sought   for   administrative 

remedies   and   reliefs   from   the 

Telecommunications   Board,   the   President 

of   the   Philippines,   the   Secretary   of   the 

Department   of   Public   Works   and 

Communication,   the   then  Speaker   Jose  B. 

Laurel, Jr. of the House of Representatives, 

and the Philippine National Bank which was 

financing the project x x x but all were to no 

avail.  In   May,   1969,   the   Bureau   of 

Telecommunications   commenced   its 

operation   of   the   telephone   exchange   in 

Malolos   and,   incidentally,   number   of   the 

telephone subscribers of RETELCO dropped. 

The Bureau of Telecommunications 

was  not   subject   to   the   jurisdiction  of   the 

Public   Service   Commission   on  matters   of 

fixing   the   rates   of   fees   to   be   charged   to 

telephone   subscribers,   thus   RETELCO 

attributed the sharp decline in the number 

of   telephone subscribers  to the difference 

in rates individually charged by them x x x.

The  lower court,  finding after  trial 

that   BUTELCO   and   intervenors-appellants 

were duplicating the functions of RETELCO 

in contravention of Executive Order No. 94, 

Series   of   1947,   rendered   a   judgment 

making   the   preliminary   injunction 

PERMANENT.

Respondent   appellate   court 

sustained   the   court a quo’s   finding   that 

Section 79 of Executive Order No. 94, Series 

of 1947 prohibited any other entity, besides 

the present operator, from maintaining and 

selling   telephone   services   in   Malolos, 

Bulacan, unless there was first executed a 

mutually   acceptable   arrangement   or 

agreement between such other entity and 

the   present   operator   as   regards   the 

utilization   of   the   latter’s   existing 

facilities.  Respondent   court   found 

respondent   RETELCO   to   be   the   present 

operator of telephone services  in Malolos, 

Bulacan, and BUTELCO having failed to first 

make arrangements with the former before 

establishing   its   own   telephone   system, 

respondent   appellate   court   upheld   the 

propriety   of   the   permanent   injunction 

issued by the court a quo.

In   rendering   judgment   in   favor  of 

respondent   RETELCO,   the   appellate   court 

rejected   BUTELCO’s   main   argument   that 

Section 79 of Executive Order No. 94, Series 

of 1947, has been repealed by Presidential 

Decree   No.   1   promulgated   by   then 

President   Marcos   in   the   exercise   of   his 

martial   law   powers,   by   virtue   of   which 

decree   the  Integrated  Reorganization Plan 

was   made   part   of   the   law   of   the 

land.  Under such plan,  in turn, BUTELCO’s 

functions had been expanded to include the 

operation   of   telephone   systems   for 

government   offices   for   purposes   of 

augmenting   inadequate   private 

communications   services.   However,   this 

was rebuffed by the appellate court.

Issue/s:

1. Whether or not RETELCO have the

exclusive right to operate and

maintain a telephone system in

Malolos, Bulacan.

Ruling:

There   is   no   clear   showing   by 

RETELCO, however, that its franchises are of 

an exclusive character. At any rate, it may 

very well be pointed out as well that neither 

did the franchise of PLDT at the time of the 

controversy   confer   exclusive   rights   upon 

PLDT   in   the   operation   of   a   telephone 

system.

In  fact,  we have made  it  a  matter of 

judicial notice that all  legislative franchises 

for   the   operation   of   a   telephone   system 

contain the following provision:

“It   is   expressly   provided 

that   in   the   event   the 

Philippine   Government 

should   desire   to   maintain 

and   operate   for   itself   the 

system   and   enterprise 

herein   authorized,   the 

grantee shall   surrender  his 

franchise and will turn over 

to   the   Government   said 

system   and   all   serviceable 

equipment therein, at cost, 

less   reasonable 

depreciation”.

BUTELCO’s   initiative   to   operate   and 

maintain   a   telephone   system   in  Malolos, 

Bulacan,   was   undertaken   pursuant   to 

Section 79   (b)  of  Executive  Order  No.  94, 

Series of 1947.  

While we affirmed that “[t]he Bureau 

of   Telecommunications,   under   section   79 

(b) of Executive Order No. 94, may operate 

and   maintain   wire   telephone   or   radio 

telephone communications throughout the 

Philippines  by  utilizing  existing   facilities   in 

cities,   towns,   and   provinces   under   such 

terms and conditions or arrangement with 

present   owners   or   operators   as   may   be 

agreed   upon   to   the   satisfaction   of   all 

concerned,”   we   also   at   the   same   time 

clarified   that   “nothing   in   these  provisions 

limits   the   Bureau   to   non-commercial 

activities   or   prevents   it   from   serving   the 

general public.”

“x x x It may be that in its 

original   prospectuses   the 

Bureau  officials  had  stated 

that   the   service  would   be 

limited   to   government 

offices; but such limitations 

could   not   block   future 

expansion of the system, as 

authorized by the terms of 

the   Executive   Order,   nor 

could   the   officials   of   the 

Bureau   bind   the 

Government not to engage 

in   services   that   are 

authorized by law.”

In other words, BUTELCO cannot be 

said to be prohibited under the aforecited 

legal   provision   from   operating   and 

maintaining   its   own   telephone   system   in 

Malolos, Bulacan.

Now in the subsequent case of Director

of the Bureau of Telecommunications v.

Aligaen, we   emphasized   the   relevance   of 

the   latter   portion   of   Section   79   (b)   of 

Executive   Order   No.   94   as   providing   a 

caveat to any initiative on the part of the 

government   to   operate   and   maintain   a 

telephone system in an area where there is 

an   existing   franchise   holder.  In   the   said 

case of Aligaen, we foregrounded the need 

for BUTELCO to first enter into negotiation 

or arrangement with the operator or owner 

of  the existing telephone system.  We had 

stated, thus:

“x   x   x   The   Bureau   of 

Telecommunications   may 

take   steps   to   improve   the 

telephone   service   in   any 

locality   in   the   Philippines, 

but in so doing it must first 

enter   into   negotiation   or 

arrangement   with   the 

operator   or   owner   of   the 

existing   telephone   system. 

x x x When a private person 

or   entity   is   granted   a 

legislative   franchise   to 

operate   a   telephone 

system, or any public utility 

for   that   matter   the 

government   has   the 

correlative   obligation   to 

afford   the   grantee   of   the 

franchise all the chances or 

opportunity   to   operate 

profitably, as long as public 

convenience   is   properly 

served rather than promote 

a   competition   with   the 

grantee. x x x”

This is not to say, however, that the lack of 

prior   negotiation   with   the   existing 

telephone   system  operator   renders   illegal 

the operation by BUTELCO of a telephone 

system.  After   all,   the   very   provision   in 

question   phrases   the   prior   negotiation 

requirement   in   less   than   mandatory 

terms.  Section   79   (b)   of   Executive   Order 

No. 94, Series of 1947 provides:

“(b) To x x x negotiate for, 

operate and maintain wire-

telephone   or   radio 

telecommunications service 

throughout   the   Philippines 

by   utilizing   such   existing 

facilities   in   cities,   towns, 

and   provinces as may

be found   feasible   and 

under   such   terms   and 

conditions or arrangements 

with the present owners or 

operators   thereof as may

be agreed   upon   to   the 

satisfaction   of   all 

concerned”   [emphasis 

supplied].

The right of the prior operator under 

the aforecited provision is to be unfailingly 

and seriously considered in case it chooses 

to propose arrangements or such terms and 

conditions   whereby   BUTELCO   is   to 

coordinate its efforts to set up and operate 

a   telephone   system   with   the   existing 

operator.  BUTELCO, in that case, would be 

obligated to exercise good faith and exert 

optimal  cooperative efforts  so that  it  may 

save government some money and prevent 

competition by “utilizing existing facilities in 

cities,   towns  and  provinces   x   x   x   [of]   the 

present owners or operators,” as mandated 

by Section 79 (b) of Executive Order No. 94.

In   the   case   at   bench,   BUTELCO 

admittedly   did   not   fulfill   this 

obligation.  Such   failure,   however,   is   not 

violative   of   any   mandatory   provision   of 

law.  There was no violation of  Section 79 

(b) of Executive Order No. 94 but only an 

irregularity   in   the   procedure   by   which 

BUTELCO   undertook   the   operation   of   a 

telephone system in Malolos, Bulacan.  

It   cannot   be   denied   that,   even   if 

prior   negotiations   were   undertaken   by 

BUTELCO   with   RETELCO,   and   they   both 

could   not   agree   on   mutually   acceptable 

terms and conditions, nothing in Section 79 

(b)   of   Executive   Order   No.   94   prohibits 

BUTELCO from proceeding with the setting 

up and operation of a telephone system in 

Malolos, Bulacan, despite the presence of a 

prior   operator   in   the   person   of 

RETELCO.  Thus,   any   injunction  prohibiting 

BUTELCO   from   operating   its   telephone 

system finds  no   sufficiently   legal   and   just 

basis   under   Section   79   (b)   of   Executive 

Order No. 94.

To   read   from   Section   79   (b)   of 

Executive   Order   No.   94   an   ultra-

protectionist   policy   in   favor   of   telephone 

franchise holders, smacks of a promotion of 

the   monopolization   of   the   country’s 

telephone  industry  which,  undeniably,  has 

contributed   to   the   slackened   pace   of 

national development.  

As we have pointed out in the case 

of PLDT v. National Telecommunications

Commission[16]:

“Free   competition   in   the 

industry  may   also   provide 

the   answer   to   a   much-

desired improvement in the 

quality and delivery of this 

type   of   public   utility,   to 

improved   technology,   fast 

and   handly   mobil   service, 

and   reduced   user 

dissatisfaction.  After   all, 

neither PLDT nor any other 

public   utility   has   a 

constitutional   right   to   a 

monopoly  position   in   view 

of   the   Constitutional 

proscription   that   no 

franchise   certificate   or 

authorization   shall   be 

exclusive   in   character   or 

shall   last   longer   than   fifty 

(50) years (ibid., Section 11; 

Article XIV, Section 5, 1973 

Constitution;   Article   XIV, 

Section   8,   1935 

Constitution).”

• REPUBLIC OF THE PHILIPPINES v.

CASTELLVI

Facts:

The   Republic   of   the   Philippines, 

(hereinafter   referred   to   as   the   Republic) 

filed,   on   June   26,   1959,   a   complaint   for 

eminent   domain   against   defendant-

appellee,   Carmen   M.   Vda.   de   Castellvi, 

judicial  administratrix  of  the estate of   the 

late   Alfonso   de   Castellvi   (hereinafter 

referred   to   as  Castellvi),   over   a  parcel   of 

land   situated   in   the   barrio   of   San   Jose, 

Floridablanca,   Pampanga   and   against 

defendant-appellee   Maria   Nieves   Toledo 

Gozun   (hereinafter   referred   to  as  Toledo-

Gozun) over two parcels of land.

In   its   complaint,   the   Republic 

alleged,  among  other   things,   that   the   fair 

market   value   of   the   above-mentioned 

lands,   according   to   the   Committee   on 

Appraisal   for   the   Province   of   Pampanga, 

was not more than P2,000 per hectare, or a 

total   market   value   of   P259,669.10;   and 

prayed,   that   the   provisional   value   of   the 

lands   be   fixed   at   P259.669.10  which   the 

court granted.

In her "motion to dismiss" filed on 

July   14,   1959,   Castellvi   alleged,   among 

other   things,   that   the   land   under   her 

administration  (occupied  by  the Philippine 

Air   Force   since   1947  under   a   contract   of 

lease),  being a  residential   land,  had a  fair 

market value of P15.00 per square meter, 

so   it   had   a   total   market   value   of 

P11,389,485.00; that the Republic, through 

the   Armed   Forces   of   the   Philippines, 

particularly   the   Philippine   Air   Force,   had 

been,   despite   repeated  demands,   illegally 

occupying her property since July 1, 1956, 

thereby   preventing   her   from   using   and 

disposing of it, thus causing her damages by 

way of unrealized profits.

The Commissioners submitted their 

report and recommendation, wherein, after 

having determined that the lands sought to 

be expropriated were residential lands, they 

recommended unanimously that the lowest 

price   that   should  be  paid  was  P10.00  per 

square meter, for both the lands of Castellvi 

and   Toledo-Gozun;   that   an   additional 

P5,000.00   be   paid   to   Toledo-Gozun   for 

improvements found on her land; that legal 

interest   on   the   compensation,   computed 

from   August   10,   1959,   be   paid   after 

deducting the amounts already paid to the 

owners, and that no consequential damages 

be awarded.

The   Commissioners'   report   was 

objected to by all the parties in the case — 

by defendants Castellvi  and Toledo-Gozun, 

who insisted that the fair  market value of 

their   lands   should  be  fixed  at  P15.00  per 

square meter;  and by the Republic,  which 

insisted   that   the  price   to  be  paid   for   the 

lands should be fixed at  P0.20 per square 

meter.

The trial court finds:

“That the unanimous

recommendation of the

commissioners of ten

(P10.00) pesos per square

meter for the three lots of

the defendants subject of

this action is fair and just.

The plaintiff will pay 6%

interest per annum on the

total value of the lands of

defendant Toledo-Gozun

since (sic) the amount

deposited as provisional

value from August 10, 1959

until full payment is made

to said defendant or deposit

therefor is made in court.

In respect to the defendant

Castellvi, interest at 6% per

annum will also be paid by

the plaintiff to defendant

Castellvi from July 1, 1956

when plaintiff commenced

its illegal possession of the

Castellvi land when the

instant action had not yet

been commenced to July 10,

1959 when the provisional

value thereof was actually

deposited in court, on the

total value of the   said 

(Castellvi)   land   as   herein 

adjudged.xxx”

Issue/s:

1. Whether the price of P10

per square meter of the

subject lands is a just

compensation.

2. Whether the “taking” of

the properties commenced

with the filing of this

action.

3. Whether the plaintiff-

appellant shall pay 6%

interest on the adjudged

value of the Castellvi

property starting from July

1956.

Ruling:

1. A  number of circumstances must 

be present   in the "taking" of  property for 

purposes of eminent domain.

First, the expropriator must enter a

private property.

This   circumstance   is  present   in   the 

instant  case,  when by virtue of  the 

lease   agreement   the   Republic, 

through the AFP, took possession of 

the property of Castellvi.

Second, the entrance into private

property must be for more than a

momentary period.

"Momentary"  means,  "lasting but a 

moment;   of   but   a   moment's 

duration"

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   the   AFP, 

constructed   some   installations  of  a 

permanent nature does not alter the 

fact that the entry into the land 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. 

Intent   is   to   be   deduced   from   the 

language   employed   by   the   parties, 

and the terms 'of the contract, when 

unambiguous, as in the instant case, 

are   conclusive   in   the   absence   of 

averment   and   proof   of  mistake   or 

fraud — the question being not what 

the   intention   was,   but   what   is 

expressed in the language used. (City 

of  Manila v.  Rizal  Park Co.,   Inc.,  53 

Phil. 515, 525)

Moreover,   in   order   to   judge   the 

intention of the contracting parties, 

their   contemporaneous   and 

subsequent  acts  shall  be principally 

considered (Art. 1371, Civil Code). If 

the intention of the lessee (Republic) 

in   1947   was   really   to   occupy 

permanently   Castellvi's   property, 

why   was   the   contract   of   lease 

entered into on year to year basis? 

Why   was   the   lease   agreement 

renewed from year to year? Why did 

not   the   Republic   expropriate   this 

land   of   Castellvi   in   1949   when, 

according   to   the   Republic   itself,   it 

expropriated   the   other   parcels   of 

land   that   it   occupied   at   the   same 

time   as   the   Castellvi   land,   for   the 

purpose  of   converting   them  into   a 

jet   air   base? 14 It  might   really   have 

been the intention of the Republic to 

expropriate the lands in question at 

some future time, but certainly mere 

notice - much less an implied notice 

— of such  intention on the part  of 

the Republic to expropriate the lands 

in the future did not, and could not, 

bind   the   landowner,   nor   bind   the 

land   itself.   The   expropriation  must 

be   actually   commenced   in   court 

(Republic vs. Baylosis, et al., 96 Phil. 

461, 484).

Third, the entry into the property

should be under warrant or color of

legal authority.

This   circumstance   in   the   "taking" 

may be considered as present in the 

instant   case,   because   the   Republic 

entered   the   Castellvi   property   as 

lessee.

Fourth, the property must be

devoted to a public use or otherwise

informally appropriated or

injuriously affected. 

It   may   be   conceded   that   the 

circumstance  of   the  property  being 

devoted   to   public   use   is   present 

because   the  property  was  used  by 

the air force of the AFP.

Fifth, the utilization of the property

for public use must be in such a way

as to oust the owner and deprive

him of all beneficial enjoyment of

the property. 

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.   Castellvi   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   paying,   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 Catellvi'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.   We   find   merit   in   the 

contention   of   Castellvi   that   two   essential 

elements in the "taking" of property under 

the power of eminent domain, namely: (1) 

that   the   entrance   and  occupation  by   the 

condemnor  must   be   for   a   permanent,   or 

indefinite  period,  and  (2)   that   in  devoting 

the property to public  use the owner was 

ousted from the property and deprived of 

its  beneficial  use,  were  not  present  when 

the   Republic   entered   and   occupied   the 

Castellvi property in 1947.

Untenable   also   is   the   Republic's 

contention   that   although   the   contract 

between the parties was one of lease on a 

year to year basis, it was "in reality a more 

or   less   permanent   right   to   occupy   the 

premises under the guise of lease with the 

'right   and   privilege'   to   buy   the   property 

should   the   lessor   wish   to   terminate   the 

lease," and "the right to buy the property is 

merged   as   an   integral   part   of   the   lease 

relationship   ...   so   much   so   that   the   fair 

market value has been agreed upon, not, as 

of the time of purchase, but as of the time 

of occupancy." 

“We cannot accept the

Republic's contention that a

lease on a year to year basis

can give rise to a

permanent right to occupy,

since by express legal

provision a lease made for a

determinate time, as was

the lease of Castellvi's land

in the instant case, ceases

upon the day fixed, without

need of a demand (Article

1669, Civil Code). Neither

can it be said that the right

of eminent domain may be

exercised by simply leasing

the premises to be

expropriated (Rule 67,

Section 1, Rules of Court).

Nor can it be accepted that

the Republic would enter

into a contract of lease

where its real intention was

to buy, or why the Republic

should enter into a

simulated contract of lease

("under the guise of lease",

as expressed by counsel for

the Republic) when all the

time the Republic had the

right of eminent domain,

and could expropriate

Castellvi's land if it wanted

to without resorting to any

guise whatsoever. Neither

can we see how a right to

buy could be merged in a

contract of lease in the

absence of any agreement

between the parties to that

effect. To sustain the

contention of the Republic

is to sanction a practice

whereby in order to secure

a low price for a land which

the government intends to

expropriate (or would

eventually expropriate) it

would first negotiate with

the owner of the land to

lease the land (for say ten

or twenty years) then

expropriate the same when

the lease is about to

terminate, then claim that

the "taking" of the property

for the purposes of the

expropriation be reckoned

as of the date when the

Government started to

occupy the property under

the lease, and then assert

that the value of the

property being expropriated

be reckoned as of the start

of the lease, in spite of the

fact that the value of the

property, for many good

reasons, had in the

meantime increased during

the period of the lease. This

would be sanctioning what

obviously is a deceptive

scheme, which would have

the effect of depriving the

owner of the property of its

true and fair market value

at the time when the

expropriation proceedings

were actually instituted in

court. The Republic's claim

that it had the "right and

privilege" to buy the

property at the value that it

had at the time when it first

occupied the property as

lessee nowhere appears in

the lease contract. What

was agreed expressly in

paragraph No. 5 of the

lease agreement was that,

should the lessor require

the lessee to return the

premises in the same

condition as at the time the

same was first occupied by

the AFP, the lessee would

have the "right and

privilege" (or option) of

paying the lessor what it

would fairly cost to put the

premises in the same

condition as it was at the

commencement of the

lease, in lieu of the lessee's

performance of the

undertaking to put the land

in said condition. The "fair

value" at the time of

occupancy, mentioned in

the lease agreement, does

not refer to the value of the

property if bought by the

lessee, but refers to the cost

of restoring the property in

the same condition as of the

time when the lessee took

possession of the property.

Such fair value cannot refer

to the purchase price, for

purchase was never

intended by the parties to

the lease contract. It is a

rule in the interpretation of

contracts that "However

general the terms of a

contract may be, they shall

not be understood to

comprehend things that are

distinct and cases that are

different from those upon

which the parties intended

to agree" (Art. 1372, Civil

Code).”

We   hold,   therefore,   that   the 

"taking" of the Castellvi property should not 

be reckoned as of the year 1947 when the 

Republic  first  occupied the same pursuant 

to the contract of  lease, and that the  just 

compensation   to  be  paid   for   the  Castellvi 

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 Section 4 of  Rule 67 of  the 

Rules of Court, 16 the "just compensation" is 

to be determined as of the date of the filing 

of the complaint. This 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   vs.   Philippine 

National  Bank,   L-14158,  April   12,   1961,  1 

SCRA 957, 961-962). In the instant case, it is 

undisputed that the Republic was placed in 

possession   of   the   Castellvi   property,   by 

authority of the court, on August 10, 1959. 

The   "taking"   of   the  Castellvi   property   for 

the   purposes   of   determining   the   just 

compensation to be paid  must,   therefore, 

be reckoned as of June 26, 1959 when the 

complaint for eminent domain was filed.

2. In   determining   the   value   of   land 

appropriated   for   public 

purposes, the same consideration

are to be regarded as in a sale of

property between private parties.

The inquiry, in such cases, must be 

what   is   the  property  worth   in  the 

market,   viewed   not   merely   with 

reference to the uses to which it is 

at   the   time   applied,   but   with 

reference to the uses to which it is 

plainly adapted, that is to say, What 

is   it  worth   from  its  availability   for 

valuable uses?

In   expropriation   proceedings, 

therefore,   the  owner  of   the   land  has   the 

right   to   its  value   for   the  use   for  which   it 

would  bring   the  most   in   the  market.  The 

owner may thus show every advantage that 

his   property   possesses,   present   and 

prospective, in order that the price it could 

be   sold   for   in   the   market   may   be 

satisfactorily   determined. The   owner   may 

also show that the property is suitable for 

division into village or town lots.

We agree with the findings, and the 

conclusions,   of   the   lower   court   that   the 

lands that are the subject of expropriation 

in the present case, as of August 10, 1959 

when the same were taken possession of by 

the   Republic,   were   residential   lands   and 

were   adaptable   for   use   as   residential 

subdivisions.   Indeed,   the  owners  of   these 

lands have the right to their value for the 

use for which they would bring the most in 

the market at the time the same were taken 

from them. The most important issue to be 

resolved in the present case relates to the 

question of what is the just compensation 

that should be paid to the appellees.

The Court arrived at the conclusion 

that the price of P10.00 per square meter, 

as recommended by the commissioners and 

adopted by the lower court, is quite high. It 

is  Our   considered   view   that   the   price   of 

P5.00   per   square  meter   would   be   a   fair 

valuation   of   the   lands   in   question   and 

would constitute a just compensation to the 

owners   thereof.   In   arriving   at   this 

conclusion We have particularly taken into 

consideration   the   resolution   of   the 

Provincial   Committee  on  Appraisal   of   the 

province   of   Pampanga   informing,   among 

others,   that   in   the  year  1959   the   land  of 

Castellvi   could  be   sold   for   from  P3.00   to 

P4.00 per square meter, while the land of 

Toledo-Gozun could be sold for from P2.50 

to P3.00 per square meter.  The Court has 

weighed   all   the   circumstances   relating   to 

this   expropriations   proceedings,   and   in 

fixing the price of the lands that are being 

expropriated the Court  arrived at a happy 

medium   between   the   price   as 

recommended   by   the   commissioners   and 

approved   by   the   court,   and   the   price 

advocated by the Republic.  This Court has 

also taken judicial notice of the fact that the 

value   of   the   Philippine   peso   has 

considerably   gone   down   since   the   year 

1959. 30Considering   that   the   lands   of 

Castellvi   and   Toledo-Gozun   are   adjoining 

each other, and are of the same nature, the 

Court has deemed it proper to fix the same 

price for all these lands.

3. If   Castellvi   had   agreed   to   receive 

the rentals   from June 30,  1956 to 

August   10,   1959,   she   should   be 

considered   as   having   allowed   her 

land   to  be   leased   to   the  Republic 

until   August   10,   1959,   and  she

could not at the same time be

entitled to the payment of interest

during the same period  on   the 

amount   awarded   her   as   the   just 

compensation   of   her   land.   The 

Republic,   therefore,   should   pay 

Castellvi   interest at the rate of 6% 

per annum on the value of her land, 

minus   the   provisional   value   that 

was  deposited,   only   from  July   10, 

1959 when it deposited in court the 

provisional value of the land.

WHEREFORE, the decision appealed from is 

modified, as follows:

(a) the lands of appellees Carmen Vda. de 

Castellvi and Maria Nieves Toledo-Gozun, as 

described   in   the   complaint,   are   declared 

expropriated for public use;

(b) the fair market value of the lands of the 

appellees   is   fixed   at   P5.00   per   square 

meter;

(c) the Republic must pay appellee Castellvi 

the   sum   of   P3,796,495.00   as   just 

compensation   for   her   one   parcel   of   land 

that has an area of 759,299 square meters, 

minus   the   sum   of   P151,859.80   that   she 

withdrew   out   of   the   amount   that   was 

deposited in court as the provisional value 

of the land, with interest at the rate of 6% 

per annum from July 10, 1959 until the day 

full payment is made or deposited in court;

(d) the Republic must pay appellee Toledo-

Gozun the sum of P2,695,225.00 as the just 

compensation  for  her   two parcels  of   land 

that  have  a   total   area  of   539,045   square 

meters, minus the sum of P107,809.00 that 

she withdrew out of the amount that was 

deposited in court as the provisional value 

of her lands, with interest at the rate of 6%, 

per annum from July 10, 1959 until the day 

full payment is made or deposited in court; 

(e)   the   attorney's   lien   of   Atty.   Alberto 

Cacnio is enforced; and

(f)   the   costs   should  be  paid   by   appellant 

Republic of the Philippines,  as provided in 

Section 12, Rule 67, and in Section 13, Rule 

141, of the Rules of Court.

1. • REPUBLIC OF THE PHILIPPINES v.

COURT OF APPEALS

Facts:

Both   Republic   and   respondents 

Alfredo   V.   de   Ocampo   and   Oscar   Anglo 

claim   ownership   over   the   same   lots   i.e., 

Nos.  817 and 2509 of  the Sagay-Escalante 

Cadastre, Negros Occidental, subject matter 

of this litigation. The basis of the Republic’s 

claim is that the said lots were bequeathed 

to the Bureau of Education (now Bureau of 

Public   Schools)   by   the   late   Esteban 

Jalandoni through his will.

Respondent   de   Ocampo,   on   the 

other   hand,   predicates   his   claim   on   an 

application for registration of the same lots. 

He averred that the lots were unregistered 

lands belonging  to and possessed by him, 

by virtue of a donation from Luis Mosquera.

Respondent Anglo intervened in the 

case having allegedly bought the same lots 

from de Ocampo

De Ocampo averred  in  his  answer 

that   the   properties   alleged   to   have  been 

donated  by   Esteban   Jalandoni   to   the   the 

then   Bureau   of   Education  were   different 

from the  properties   involved   in   this   case. 

The   lots   applied   for   by   de   Ocampo   and 

which the Republic sought to recover were 

unregistered   lands,   and   that   granting, 

without admitting, that they are the same 

lands, the court no longer had jurisdiction 

over the subject matter of the action since 

the  issue of  possession over said  lots  was 

already   decided   by   the   Court   of   First 

Instance of Negros Occidental. The subject 

two lots were registered in the name of the 

then applicant Ocampo.

The   Republic   contend   that   actual 

fraud had been perpetrated by Respondent 

de  Ocampo   in   securing   the   lower   court’s 

decision ordering the registration of the lots 

in his name,  as well as the issuance of the 

decree   of   registration   and   the 

corresponding   certificate   of   title,   on   the 

grounds  which,  briefly   restated.  advert   to 

respondent   de   Ocampo's   alleged 

misrepresentations that the two parcels of 

land   applied   for   by   him   in   the   land 

registration case were "different   from the 

two   parcels   of   land   of   the   same   lot 

numbers,   technical  descriptions  and areas 

belonging   to   the   Government,   knowing 

such allegations to be false, the truth of the 

matter being that said parcels  of   land are 

the   same   property   owned   by   the 

Government";  that   there   was   previous 

registration   of   the   same   parcels   of   land, 

Lots Nos. 817 and 2509, under the Torrens 

System in favor of Meerkamp and Company 

which later sold the same to Jalandoni who, 

in   turn,   gave   the   lots   to   the   Bureau   of 

Education as a legacy and that the Court of 

First Instance no longer had jurisdiction to 

decree  again   the  registration of   Lots  Nos. 

817  and  2509,   in   favor  of   respondent  de 

Ocampo, in view of the earlier registration 

of the same lands in favor of Meerkamp and 

Company.

The  trial   court   concluded   that   the 

evidence adduced by the petitioner in this 

incident   does   not   establish   actual   and 

constructive fraud which is the only kind of 

fraud that   is  considered a  legal  ground to 

review,   reopen   or   set   aside   the   decree 

which has already been issued in the name 

of Alfredo V. de Ocampo.

The   Republic   appealed   but   was 

dismissed.

Issue/s:

1. Whether the dismissal by the Court

of Appeals of Republic's appeal

from the decision of the trial court

denying its Amended Petition, is

not proper and should be set aside

as contended by Republic, or

correct and should be maintained,

as argued by respondents.

Ruling:

A   consideration   in   depth   of   the 

unique and peculiar facts attendant to this 

case   and   the   procedural   and   substantive 

implications of the dismissal of the appeal 

now   sought   to   be   reviewed   and 

reconsidered; and a due and proper regard 

to   the  merits   of   the   case   rather   than   a 

fascile reliance on procedural rules, compel 

this   Court   to   reverse   and   set   aside   the 

dismissal   of   Republic's   appeal   by 

respondent Court of Appeals.

1.  The   documentary   exhibits 

adduced by Republic  in the hearing of the 

Amended   Petition   below   signed   by   the 

Register   of   Deeds   of   Negros   Occidental, 

stating   that   there   was   registered   a   sale 

executed   by  Meerkamp   and   Company   in 

favor of Esteban Jalandoni and as a result 

the  name  of   the  Company  was   cancelled 

and the title was issued to Jalandoni;  that 

the title was later cancelled by virtue of the 

will of Jalandoni leaving the parcel of land 

to the then Bureau of Education.

The   trial   court   also   made   the 

express   finding   that   the   alleged   deed   of 

donation   by   Luis   Mosquera   in   favor   of 

respondent de Ocampo does not appear in 

his   notarial   book  which   is   on   file   in   the 

Bureau of Record Management, Manila. 

The   Provincial   Assessor   of   Negros 

Occidental   likewise   issued   a   certification 

stating that  Lots  Nos.  817 and 2509 were 

never  declared  in  the name of  Mosquera. 

His   later   certification   states   that   the   said 

lots   were   assessed   in   the   name   of   the 

Bureau of Education, and that the technical 

descriptions in the Bureau of Lands records 

show that the same lots were in the name 

of Meerkamp and Company.

Authorities are in agreement that a 

land   registration   court   is   without 

jurisdiction to decree again the registration 

of   land   already   registered   in   an   earlier 

registration   case,   and   that   the   second 

decree entered for the same land is null and 

void. 

2. There is a serious charge, which 

is   also   crucial   to   the   issue   between   the 

parties,   that   respondent  de  Ocampo used 

fraudulent   misrepresentations   and 

machinations   in   securing   his   title.   If   the 

charge is true, there is the element of wilfull 

intent   to   deprive   Republic   of   just   rights 

which   constitutes   the   essential 

characteristics of actual — as distinguished 

from legal — fraud. 

3.  The   foregoing   overriding 

considerations  then — the alleged  lack  of 

jurisdiction   and   the   alleged   fraudulent 

misrepresentations   and   machinations, 

which,  buttressed by strong evidence,  can 

nullify   the   second   registration   and/or   set 

aside OCT No. 576 issued to respondent de 

Ocampo   —   taken   in   relation   with   the 

procedural   and   substantive   implications 

which could and would arise if  the appeal 

were  dismissed,  namely,   the   risk   that   the 

holdings may be transacted to third parties 

and   the   fact   that   Republic's   action   to 

recover   tile   holdings   would   give   rise   to 

multiplicity   of   suits   —   compel   Us   to 

conclude that   the  only   recourse  —  in   the 

interest of just and expeditious proceedings 

considering  that  these have been pending 

for close to twenty (20) years now — is to 

suspend   Our   rules   and/or   to   except   this 

case   from   their   operation.   For  when   the 

operation  of   the  Rules  of  will   lead   to   an 

injustice  we  have,   in   justifiable   instances, 

resorted   to   this   extraordinary   remedy   to 

prevent it. 

While   the   above   exceptions   are 

predicated   on   different   grounds,   they 

nevertheless support the view that the rigid 

adherence   to   the   rules   on   perfection   of 

appeals may and should be relaxed where 

compelling reasons so warrant. The grounds 

invoked   in   this   case  —   not   only   lack   of 

jurisdiction but gross injustice itself — more 

than   justify   the   exception  —   considering 

further that the delay in the perfection of 

the appeal involved six (6) days only.

4. Finally, enshrined in our legal and 

judicial annals is the maxim that no person 

should   enrich   himself   at   the   expense   or 

prejudice of others. The commendable and 

determined   efforts   on   the   part   of   the 

citizenry   to   fashion   a  New   Society   rid   of 

graft, corruption and the persistent malaise 

of   land   grabbing,  will   be   set   back,   if   the 

subject   lots  —  consisting  of   close   to   300 

hectares which are devoted to educational 

purposes  — have   indeed  been  wrongfully 

titled to respondent de Ocampo.

The Court set aside the dismissal of

the Republic’s appeal and according to the 

parties the opportunity in this proceeding, 

and without further need to re-litigate,  to 

terminate   this   litigation,   which   has   been 

pending   for   close   to   twenty   years   –   in 

fairness to both parties.