[G.R. NO. 154411 JUNE 19, 2003]NATIONAL HOUSING AUTHORITY VS. HEIRS OF ISIDRO GUIVELONDO

On February 23, 1999, petitioner National Housing Authority filed with the Regional Trial Court of Cebu City, Branch 11, an Amended Complaint for eminent domain against Associacion Benevola de Cebu, Engracia Urot and the Heirs of Isidro Guivelondo, docketed as Civil Case No. CEB-23386. Petitioner alleged that defendant Associacion Benevola de Cebu was the claimant/owner of Lot 108-C located in the Banilad Estate, Cebu City; that defendant Engracia Urot was the claimant/owner of Lots Nos. 108-F, 108-I, 108-G, 6019-A and 6013-A, all of the Banilad Estate; that defendant Heirs of Isidro Guivelondo were the claimants/owners of Cadastral Lot No. 1613-D located at Carreta, Mabolo, Cebu City; and that the lands are within a blighted urban center which petitioner intends to develop as a socialized housing project.[1]

On November 12, 1999, the Heirs of Isidro Guivelondo, respondents herein, filed a Manifestation stating that they were waiving their objections to petitioners power to expropriate their properties. Hence, the trial court issued an Order as follows:

WHEREFORE, the Court hereby declares that the plaintiff has a lawful right to expropriate the properties of the defendants who are heirs of Isidro Guivelondo.

The appointment of commissioners who would ascertain and report to the Court the just compensation for said properties will be done as soon as the parties shall have submitted to the Court the names of persons desired by them to be appointed as such commissioners. SO ORDERED.[2]

Thereafter, the trial court appointed three Commissioners to ascertain the correct and just compensation of the properties of respondents. On April 17, 2000, the Commissioners submitted their report wherein they recommended that the just compensation of the subject properties be fixed at P11,200.00 per square meter.[3] On August 7, 2000, the trial court rendered Partial Judgment adopting the recommendation of the Commissioners and fixing the just compensation of the lands of respondent Heirs of Isidro Guivelondo at P11,200.00 per square meter, to wit:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by the Court in this case fixing the just compensation for the lands of the defendants who are the heirs of Isidro Guivelondo, more particularly Lots Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 19, 20, 6016-F, 6016-H, 6016-E and 6016-D of Csd-10219, which were sought to be expropriated by the plaintiff at P11,200.00 per square meter and ordering the plaintiff to pay to the said defendants the just compensation for the said lands computed at P11,200.00 per square meter. IT IS SO ORDERED.[4]

Petitioner NHA filed two motions for reconsideration dated August 30, 2000 and August 31, 2000, assailing the inclusion of Lots 12, 13 and 19 as well as the amount of just compensation, respectively. Respondent Heirs also filed a motion for reconsideration of the Partial Judgment.On October 11, 2000, the trial court issued an Omnibus Order denying the motion for reconsideration of respondent Heirs and the August 31, 2000 motion of petitioner, on the ground that the fixing of the just compensation had adequate basis and support. On the other hand, the trial court granted petitioners August 30, 2000 motion for reconsideration on the ground that the Commissioners Report did not include Lots 12, 13 and 19 within its coverage. Thus:

WHEREFORE, in view of the foregoing premises, the Court hereby denies the motion of the heirs of Isidro Guivelondo (with the exception of Carlota Mercado and Juanita Suemith) for reconsideration of the partial judgment rendered in this case on August 7, 2000 and plaintiffs motion for reconsideration of said judgment, dated August 31, 2000.

However, the Court hereby grants the plaintiffs motion for reconsideration of said judgment, dated August 30, 2000. Accordingly, the judgment rendered in this case on August 7, 2000 is hereby set aside insofar as it has fixed just compensations for Lots Nos. 12, 13 and 19 of Csd-10219 because the fixing of said just compensations appears to lack adequate basis. SO ORDERED.[5]

Petitioner filed with the Court of Appeals a petition for certiorari, which was docketed as CA-G.R. SP No. 61746.[6] Meanwhile, on October 31, 2000, the trial court issued an Entry of Judgment over the Partial Judgment dated August 7, 2000 as modified by the Omnibus Order dated October 11, 2000.[7] Subsequently, respondent Heirs filed a Motion for Execution, which was granted on November 22, 2000.

On January 31, 2001, the Court of Appeals dismissed the petition for certiorari on the ground that the Partial Judgment and Omnibus Order became final and executory when petitioner failed to appeal the same.[8]

Petitioners Motion for Reconsideration and Urgent Ex-Parte Motion for a Clarificatory Ruling were denied in a Resolution dated March 18, 2001.[9] A petition for review was filed by petitioner with this Court, which was docketed as G.R. No. 147527. However, the same was denied in a Minute Resolution dated May 9, 2001 for failure to show that the Court of Appeals committed a reversible error.[10]

Petitioner filed a Motion for Reconsideration which was however denied with finality on August 20, 2001.[11]

Prior to the aforesaid denial of the Motion for Reconsideration, petitioner, on July 16, 2001, filed with the trial court a Motion to Dismiss Civil Case No. CEB-23386, complaint for eminent domain, alleging that the implementation of its socialized housing project was rendered impossible by the unconscionable value of the land sought to be expropriated, which the intended beneficiaries can not afford.[12] The Motion was denied on September 17, 2001, on the ground that the Partial Judgment had already become final and executory and there was no just and equitable reason to warrant the dismissal of the case. [13] Petitioner filed a Motion for Reconsideration, which was denied in an Order dated November 20, 2001.[14]

Petitioner thus filed a petition for certiorari with the Court of Appeals, which was docketed as CA-G.R. SP No. 68670, praying for the annulment of the Order of the trial court denying its Motion to Dismiss and its Motion for Reconsideration.[15]

On February 5, 2002, the Court of Appeals summarily dismissed the petition. Immediately thereafter, respondent Sheriff Pascual Y. Abordo of the Regional Trial Court of Cebu City, Branch 11, served on petitioner a Notice of Levy pursuant to the Writ of Execution issued by the trial court to enforce the Partial Judgment of August 7, 2000 and the Omnibus Order of October 11, 2000. On February 18, 2002, the Court of Appeals set aside the dismissal of the petition and reinstated the same.[17] Thereafter, a temporary restraining order was issued enjoining respondent sheriff to preserve the status quo.[18]

On May 27, 2002, respondent sheriff served on the Landbank of the Philippines a Notice of Third Garnishment against the deposits, moneys and interests of petitioner therein.[19] Subsequently, respondent sheriff levied on funds and personal properties of petitioner. [20] On July 16, 2002, the Court of Appeals rendered the assailed decision dismissing the petition for certiorari.[21]

Hence, petitioner filed this petition for review, raising the following issues:

1. WHETHER OR NOT THE STATE CAN BE COMPELLED AND COERCED BY THE COURTS TO EXERCISE OR CONTINUE WITH THE EXERCISE OF ITS INHERENT POWER OF EMINENT DOMAIN;

2. WHETHER OR NOT JUDGMENT HAS BECOME FINAL AND EXECUTORY AND IF ESTOPPEL OR LACHES APPLIES TO GOVERNMENT;

3. WHETHER OR NOT WRITS OF EXECUTION AND GARNISHMENT MAY BE ISSUED AGAINST THE STATE IN AN EXPROPRIATION WHEREIN THE EXERCISE OF THE POWER OF EMINENT DOMAIN WILL NOT SERVE PUBLIC USE OR PURPOSE {APPLICATION OF SUPREME COURT ADMINISTRATIVE CIRCULAR NO. 10-2000}.[22]

Respondent Heirs of Isidro Guivelondo filed their Comment, arguing as follows:

1. AS EARLIER UPHELD BY THE HONORABLE COURT, THE JUDGMENT OF THE TRIAL COURT IS ALREADY FINAL AND EXECUTORY, HENCE, COULD NO LONGER BE DISTURBED NOR SET ASIDE

2. THE FUNDS AND ASSETS OF THE PETITIONER ARE NOT EXEMPT FROM LEVY AND GARNISHMENT

3. THE ISSUES RAISED IN THIS SECOND PETITION FOR REVIEW WERE ALREADY RESOLVED BY THE HONORABLE COURT[23]

In the early case of City of Manila v. Ruymann,[24] the Court was confronted with the question: May the petitioner, in an action for expropriation, after he has been placed in possession of the property and before the termination of the action, dismiss the petition? It resolved the issue in the affirmative and held: The right of the plaintiff to dismiss an action with the consent of the court is universally recognized with certain well-defined exceptions. If the plaintiff discovers that the action which he commenced was brought for the purpose of enforcing a right or a benefit, the advisability or necessity of which he later discovers no longer exists, or that the result of the action would be different from what he had intended, then he should be permitted to withdraw his action, subject to the approval of the court.The plaintiff should not be required to continue the action, subject to some well-defined exceptions, when it is not to his advantage to do so. Litigation should be discouraged and not encouraged. Courts should not require parties to litigate when they no longer desire to do so. Courts, in granting permission to dismiss an action, of course, should always take into consideration the effect which said dismissal would have upon the rights of the defendant.[25]

Subsequently, in Metropolitan Water District v. De Los Angeles,[26] the Court had occasion to apply the above-quoted ruling when the petitioner, during the pendency of the expropriation case, resolved that the land sought to be condemned was no longer necessary in the maintenance and operation of its system of waterworks. It was held:

It is not denied that the purpose of the plaintiff was to acquire the land in question for a public use. The fundamental basis then of all actions brought for the expropriation of lands, under the power of eminent domain, is public use. That being true, the very moment that it appears at any stage of the proceedings that the expropriation is not for a public use, the action must necessarily fail and should be dismissed, for the reason that the action cannot be maintained at all except when the expropriation is for some public use. That must be true even during the pendency of the appeal of at any other stage of the proceedings. If, for example, during the trial in the lower court, it should be made to appear to the satisfaction of the court that the expropriation is not for some public use, it would be the duty and the obligation of the trial court to dismiss the action. And even during the pendency of the appeal, if it should be made to appear to the satisfaction of the appellate court that the expropriation is not for public use, then it would become the duty and the obligation of the appellate court to dismiss it.[27]

Notably, the foregoing cases refer to the dismissal of an action for eminent domain at the instance of the plaintiff during the pendency of the case. The rule is different where the case had been decided and the judgment had already become final and executory.

Expropriation proceedings consists of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of private property to be made by the court with the assistance of not more than three commissioners.[28] Thus:

There are two (2) stages in every action for expropriation. The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter, as the Rules expressly state, in the proceedings before the Trial Court, no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard.

The second phase of the eminent domain action is concerned with the determination by the Court of the just compensation for the property sought to be taken. This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. Obviously, one or another of the parties may believe the order to be erroneous in its appreciation of the evidence or findings of fact or otherwise.Obviously, too, such a dissatisfied party may seek a reversal of the order by taking an appeal therefrom.[29]

The outcome of the first phase of expropriation proceedings, which is either an order of expropriation or an order of dismissal, is final since it finally disposes of the case. On the other hand, the second phase ends with an order fixing the amount of just compensation. Both orders, being final, are appealable.[30] An order of condemnation or dismissal is final, resolving the question of whether or not the plaintiff has properly and legally exercised its power of eminent domain.[31] Once the first order becomes final and no appeal thereto is taken, the authority to expropriate and its public use can no longer be questioned.[32]

The above rule is based on Rule 67, Section 4 of the 1997 Rules of Civil Procedure, which provides: Order of expropriation. If the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first.

A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just compensation to be paid. After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable. (underscoring ours)

In the case at bar, petitioner did not appeal the Order of the trial court dated December 10, 1999, which declared that it has a lawful right to expropriate the properties of respondent Heirs of Isidro Guivelondo. Hence, the Order became final and may no longer be subject to review or reversal in any court.[33] A final and executory decision or order can no longer be disturbed or reopened no matter how erroneous it may be.Although judicial determinations are not infallible, judicial error should be corrected through appeals, not through repeated suits on the same claim.[34] Petitioner anchors its arguments on the last paragraph of the above-quoted Rule 67, Section 4. In essence, it contends that there are just and equitable grounds to allow dismissal or discontinuance of the expropriation proceedings. More specifically, petitioner alleges that the intended public use was rendered nugatory by the unreasonable just compensation fixed by the court, which is beyond the means of the intended beneficiaries of the socialized housing project. The argument is tenuous.

Socialized housing has been recognized as public use for purposes of exercising the power of eminent domain. Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum, the general welfare. The public character of housing measures does not change because units in housing projects cannot be occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made, for it is not possible to provide housing for all who need it, all at once. In the light of the foregoing, this Court is satisfied that socialized housing falls with the confines of public use.  Provisions on economic opportunities inextricably linked with low-cost housing, or slum clearance, relocation and resettlement, or slum improvement emphasize the public purpose of the project.[35]

The public purpose of the socialized housing project is not in any way diminished by the amount of just compensation that the court has fixed.The need to provide decent housing to the urban poor dwellers in the locality was not lost by the mere fact that the land cost more than petitioner had expected. It is worthy to note that petitioner pursued its petition for certiorari with the Court of Appeals assailing the amount of just compensation and its petition for review with this Court which eloquently indicates that there still exists a public use for the housing project.  It was only after its appeal and petitions for review were dismissed that petitioner made a complete turn-around and decided it did not want the property anymore.

Respondent landowners had already been prejudiced by the expropriation case. Petitioner cannot be permitted to institute condemnation proceedings against respondents only to abandon it later when it finds the amount of just compensation unacceptable. Indeed, our reprobation in the case of Cosculluela v. Court of Appeals[36] is apropos: It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a persons 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.

In order to resolve the issue of the propriety of the garnishment against petitioners funds and personal properties, there is a need to first determine its true character as a government entity. Generally, funds and properties of the government cannot be the object of garnishment proceedings even if the consent to be sued had been previously granted and the state liability adjudged. The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimants action only up to the completion of proceedings anterior to the stage of execution and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law.[38]

However, if the funds belong to a public corporation or a government-owned or controlled corporation which is clothed with a personality of its own, separate and distinct from that of the government, then its funds are not exempt from garnishment. [39] This is so because when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other corporation.[40]

In the case of petitioner NHA, the matter of whether its funds and properties are exempt from garnishment has already been resolved squarely against its predecessor, the Peoples Homesite and Housing Corporation (PHHC), to wit: The plea for setting aside the notice of garnishment was premised on the funds of the Peoples Homesite and Housing Corporation deposited with petitioner being public in character. There was not even a categorical assertion to that effect. It is only the possibility of its being public in character. The tone was thus irresolute, the approach diffident. The premise that the funds cold be spoken of as public in character may be accepted in the sense that the Peoples Homesite and Housing Corporation was a government-owned entity. It does not follow though that they were exempt from garnishment.[41]

This was reiterated in the subsequent case of Philippine Rock Industries, Inc. v. Board of Liquidators[ Having a juridical personality separate and distinct from the government, the funds of such government-owned and controlled corporations and non-corporate agency, although considered public in character, are not exempt from garnishment. This doctrine was applied to suits filed against the Philippine Virginia Tobacco Administration (PNB vs. Pabalan, et al., 83 SCRA 695); the National Shipyard & Steel Corporation (NASSCO vs. CIR, 118 Phil. 782); the Manila Hotel Company (Manila Hotel Employees Asso. vs. Manila Hotel Co., 73 Phil. 374); and the People's Homesite and Housing Corporation (PNB vs. CIR, 81 SCRA 314).

Hence, it is clear that the funds of petitioner NHA are not exempt from garnishment or execution. Petitioners prayer for injunctive relief to restrain respondent Sheriff Pascual Abordo from enforcing the Notice of Levy and Garnishment against its funds and properties must, therefore, be denied.

WHEREFORE, in view of the foregoing, the instant petition for review is DENIED. The decision of the Court of Appeals in CA-G.R. SP No. 68670, affirming the trial courts Order denying petitioners Motion to Dismiss the expropriation proceedings in Civil Case No. CEB-23386, is AFFIRMED. Petitioners prayer for injunctive relief against the levy and garnishment of its funds and personal properties is DENIED. The Temporary Restraining Order dated January 22, 2003 is LIFTED. SO ORDERED.

[G.R. NO. 161656 JUNE 29, 2009]REPUBLIC OF THE PHILIPPINES VS VICENTE LIM

Justice is the first virtue of social institutions. [1] When the state wields its power of eminent domain, there arises a correlative obligation on its part to pay the owner of the expropriated property a just compensation. If it fails, there is a clear case of injustice that must be redressed. In the present case, fifty-seven (57) years have lapsed from the time the Decision in the subject expropriation proceedings became final, but still the Republic of the Philippines, herein petitioner, has not compensated the owner of the property. To tolerate such prolonged inaction on its part is to encourage distrust and resentment among our people the very vices that corrode the ties of civility and tempt men to act in ways they would otherwise shun.

A revisit of the pertinent facts in the instant case is imperative.On September 5, 1938, the Republic of the Philippines (Republic) instituted a special civil

action for expropriation with the Court of First Instance (CFI) of Cebu, docketed as Civil Case No. 781, involving Lots 932 and 939 of the Banilad Friar Land Estate, Lahug, Cebu City, for the purpose of establishing a military reservation for the Philippine Army. Lot 932 was registered in the name of Gervasia Denzon under Transfer Certificate of Title (TCT) No. 14921 with an area of 25,137 square meters, while Lot 939 was in the name of Eulalia Denzon and covered by TCT No. 12560 consisting of 13,164 square meters.

After depositing P9,500.00 with the Philippine National Bank, pursuant to the Order of the CFI dated October 19, 1938, the Republic took possession of the lots. Thereafter, or on May 14, 1940, the CFI rendered its Decision ordering the Republic to pay the Denzons the sum ofP4,062.10 as just compensation. The Denzons interposed an appeal to the Court of Appeals but it was dismissed on March 11, 1948. An entry of judgment was made onApril 5, 1948.

In 1950, Jose Galeos, one of the heirs of the Denzons, filed with the National Airports Corporation a claim for rentals for the two lots, but it denied knowledge of the matter. Another heir, Nestor Belocura, brought the claim to the Office of then President Carlos Garcia who wrote the Civil Aeronautics Administration and the Secretary of National Defense to expedite action on said claim. On September 6, 1961, Lt. Manuel Cabal rejected the claim but expressed willingness to pay the appraised value of the lots within a reasonable time.

For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons successors-in-interest, Francisca Galeos-Valdehueza and Josefina Galeos-Panerio,[2] filed with the same CFI an action for recovery of possession with damages against the Republic and officers of the Armed Forces of the Philippines in possession of the property. The case was docketed as Civil Case No. R-7208. In the interim or on November 9, 1961, TCT Nos. 23934 and 23935 covering Lots 932 and 939 were issued in the names of Francisca Valdehueza and Josefina Panerio, respectively. Annotated thereon was the phrase subject to the priority of the National Airports Corporation to acquire said parcels of land, Lots 932 and 939 upon previous payment of a reasonable market value.

On July 31, 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding that they are the owners and have retained their right as such over Lots 932 and 939 because of the Republics failure to pay the amount of P4,062.10, adjudged in the expropriation proceedings. However, in view of the annotation on their land titles, they were ordered to execute a deed of sale in favor of the Republic. In view of the differences in money value from 1940 up to the present, the court adjusted the market value at P16,248.40, to be paid with 6% interest per annum from April 5, 1948, date of entry in the expropriation proceedings, until full payment.

After their motion for reconsideration was denied, Valdehueza and Panerio appealed from the CFI Decision, in view of the amount in controversy, directly to this Court. The case was docketed as No. L-21032.[3] On May 19, 1966, this Court rendered its Decision affirming the CFI Decision. It held that Valdehueza and Panerio are still the registered owners of Lots 932 and 939, there having been no payment of just compensation by the Republic. Apparently, this Court found nothing in the records to show that the Republic paid the owners or their successors-in-interest according to the CFI decision. While it deposited the amount of P9,500,00, and said deposit was allegedly disbursed, however, the payees could not be ascertained.

Notwithstanding the above finding, this Court still ruled that Valdehueza and Panerio are not entitled to recover possession of the lots but may only demand the payment of their fair market value, ratiocinating as follows:

Appellants would contend that: (1) possession of Lots 932 and 939 should be restored to them as owners of the same; (2) the Republic should be ordered to pay rentals for the use of said lots, plus attorneys fees; and (3) the court a quo in the present suit had no power to fix the value of the lots and order the execution of the deed of sale after payment.

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. The records do not show that the Government paid the owners or their successors-in-interest according to the 1940 CFI decision although, as stated, P9,500.00 was deposited by it, and said deposit had been disbursed. With the records lost, however, it cannot be known who received the money (Exh. 14 says: It is further certified that the corresponding Vouchers and pertinent Journal and Cash Book were destroyed during the last World War, and therefore the names of the payees concerned cannot be ascertained.) And the Government now admits that there is no available record showing that payment for the value of the lots in question has been made  (Stipulation of Facts, par. 9, Rec. on Appeal, p. 28).

The points in dispute are whether such payment can still be made and, if so, in what amount. Said lots have been the subject of expropriation proceedings. By final and executory judgment in said proceedings, they were condemned for public use, as part of an airport, and ordered sold to the Government. In fact, the abovementioned title certificates secured by plaintiffs over said lots contained annotations of the right of the National Airports Corporation (now CAA) to pay for and acquire them. It follows that both by virtue of the judgment, long final, in the expropriation suit, as well as the annotations upon their title certificates, plaintiffs are not entitled to recover possession of their expropriated lots which are still devoted to the public use for which they were expropriated but only to demand the fair market value of the same.

Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein respondent,[4] as security for their loans. For their failure to pay Lim despite demand, he had the mortgage foreclosed in 1976. Thus, TCT No. 23934 was cancelled, and in lieu thereof, TCT No. 63894 was issued in his name.

On August 20, 1992, respondent Lim filed a complaint for quieting of title with the Regional Trial Court (RTC), Branch 10, Cebu City, against General Romeo Zulueta, as Commander of the Armed Forces of the Philippines, Commodore Edgardo Galeos, as Commander of Naval District V of the Philippine Navy, Antonio Cabaluna, Doroteo Mantos and Florencio Belotindos, herein petitioners. Subsequently, he amended the complaint to implead the Republic.

On May 4, 2001, the RTC rendered a decision in favor of respondent, thus: WHEREFORE, judgment is hereby rendered in favor of plaintiff Vicente Lim and against all defendants, public and private, declaring plaintiff Vicente Lim the absolute and exclusive owner of Lot No. 932 with all the rights of an absolute owner including the right to possession. The monetary claims in the complaint and in the counter claims contained in the answer of defendants are ordered Dismissed.

Petitioners elevated the case to the Court of Appeals, docketed therein as CA-G.R. CV No. 72915. In its Decision[5] dated September 18, 2003, the Appellate Court sustained the RTC Decision, thus: Obviously, defendant-appellant Republic evaded its duty of paying what was due to the landowners. The expropriation proceedings had already become final in the late 1940s and yet, up to now, or more than fifty (50) years after, the Republic had not yet paid the compensation fixed by the court while continuously reaping benefits from the expropriated property to the prejudice of the landowner. x x x. This is contrary to the rules of fair play because 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 for the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered just for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more, in this case more than 50 years, before actually receiving the amount necessary to cope with the loss. To allow the taking of the landowners properties, and in the meantime leave them empty-handed by withholding payment of compensation while the government speculates on whether or not it will pursue expropriation, or worse, for government to subsequently decide to abandon the property and return it to the

landowners, is undoubtedly an oppressive exercise of eminent domain that must never be sanctioned. (Land Bank of the Philippines vs. Court of Appeals, 258 SCRA 404).

An action to quiet title is a common law remedy for the removal of any cloud or doubt or uncertainty on the title to real property. It is essential for the plaintiff or complainant to have a legal or equitable title or interest in the real property, which is the subject matter of the action. Also the deed, claim, encumbrance or proceeding that is being alleged as cloud on plaintiffs title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy (Robles vs. Court of Appeals, 328 SCRA 97). In view of the foregoing discussion, clearly, the claim of defendant-appellant Republic constitutes a cloud, doubt or uncertainty on the title of plaintiff-appellee Vicente Lim that can be removed by an action to quiet title. WHEREFORE, in view of the foregoing, and finding no reversible error in the appealed May 4, 2001 Decision of Branch 9, Regional Trial Court of Cebu City, in Civil Case No. CEB-12701, the said decision is UPHELD AND AFFIRMED. Accordingly, the appeal is DISMISSED for lack of merit.

Undaunted, petitioners, through the Office of the Solicitor General, filed with this Court a petition for review on certiorari alleging that the Republic has remained the owner of Lot 932 as held by this Court in Valdehueza vs. Republic.[6]

In our Resolution dated March 1, 2004, we denied the petition outright on the ground that the Court of Appeals did not commit a reversible error. Petitioners filed an urgent motion for reconsideration but we denied the same with finality in our Resolution of May 17, 2004.

On May 18, 2004, respondent filed an ex-parte motion for the issuance of an entry of judgment. We only noted the motion in our Resolution of July 12, 2004.

On July 7, 2004, petitioners filed an urgent plea/motion for clarification, which is actually a second motion for reconsideration. Thus, in our Resolution of September 6, 2004, we simply noted without action the motion considering that the instant petition was already denied with finality in our Resolution of May 17, 2004.

On October 29, 2004, petitioners filed a very urgent motion for leave to file a motion for reconsideration of our Resolution dated September 6, 2004 (with prayer to refer the case to the En Banc). They maintain that the Republics right of ownership has been settled in Valdehueza.

The basic issue for our resolution is whether the Republic has retained ownership of Lot 932 despite its failure to pay respondents predecessors-in-interest the just compensation therefor pursuant to the judgment of the CFI rendered as early as May 14, 1940.

Initially, we must rule on the procedural obstacle.While we commend the Republic for the zeal with which it pursues the present case, we

reiterate that its urgent motion for clarification filed on July 7, 2004 is actually a second motion for reconsideration. This motion is prohibited under Section 2, Rule 52, of the 1997 Rules of Civil Procedure, as amended, which provides: Sec. 2. Second motion for reconsideration. No second motion for reconsideration of a judgment or final resolution by the same party shall be entertained.

Consequently, as mentioned earlier, we simply noted without action the motion since petitioners petition was already denied with finality.

Considering the Republics urgent and serious insistence that it is still the owner of Lot 932 and in the interest of justice, we take another hard look at the controversial issue in order to determine the veracity of petitioners stance.

One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property without due process of law; and in expropriation cases, an essential element of due process is that there must be just compensation whenever private property is taken for public use.[7] Accordingly, Section 9, Article III, of our Constitution mandates: Private property shall not be taken for public use without just compensation.

The Republic disregarded the foregoing provision when it failed and refused to pay respondents predecessors-in-interest the just compensation for Lots 932 and 939. The length of time and the manner with which it evaded payment demonstrate its arbitrary high-handedness and confiscatory attitude. The final judgment in the expropriation proceedings (Civil Case No. 781) was entered on April 5, 1948. More than half of a century has passed, yet, to this day, the landowner, now respondent, has remained empty-handed. Undoubtedly, over 50 years of delayed payment cannot, in any way, be viewed as fair. This is more so when such delay is accompanied by bureaucratic hassles. Apparent fromValdehueza is the fact that respondents

predecessors-in-interest were given a run around by the Republics officials and agents. In 1950, despite the benefits it derived from the use of the two lots, the National Airports Corporation denied knowledge of the claim of respondents predecessors-in-interest. Even President Garcia, who sent a letter to the Civil Aeronautics Administration and the Secretary of National Defense to expedite the payment, failed in granting relief to them. And, on September 6, 1961, while the Chief of Staff of the Armed Forces expressed willingness to pay the appraised value of the lots, nothing happened.

The Court of Appeals is correct in saying that Republics delay is contrary to the rules of fair play, as just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment for the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered just. In jurisdictions similar to ours, where an entry to the expropriated property precedes the payment of compensation, it has been held that if the compensation is not paid in areasonable time, the party may be treated as a trespasser ab initio.[8]

Corollarily, in Provincial Government of Sorsogon vs. Vda. De Villaroya,[9] similar to the present case, this Court expressed its disgust over the governments vexatious delay in the payment of just compensation, thus: The petitioners have been waiting for more than thirty years to be paid for their land which was taken for use as a public high school.  As a matter of fair procedure, it is the duty of the Government, whenever it takes property from private persons against their will, to supply all required documentation and facilitate payment of just compensation. The imposition of unreasonable requirements and vexatious delays before effecting payment is not only galling and arbitrary but a rich source of discontent with government. There should be some kind of swift and effective recourse against unfeeling and uncaring acts of middle or lower level bureaucrats.We feel the same way in the instant case.

More than anything else, however, it is the obstinacy of the Republic that prompted us to dismiss its petition outright. As early as May 19, 1966, in Valdehueza, this Court mandated the Republic to pay respondents predecessors-in-interest the sum of P16,248.40 as reasonable market value of the two lots in question. Unfortunately, it did not comply and allowed several decades to pass without obeying this Courts mandate. Such prolonged obstinacy bespeaks of lack of respect to private rights and to the rule of law, which we cannot countenance. It is tantamount to confiscation of private property. While it is true that all private properties are subject to the need of government, and the government may take them whenever the necessity or the exigency of the occasion demands, however, the Constitution guarantees that when this governmental right of expropriation is exercised, it shall be attended by compensation.[10] From the taking of private property by the government under the power of eminent domain, there arises an implied promise to compensate the owner for his loss.[11]

Significantly, the above-mentioned provision of Section 9, Article III of the Constitution is not a grant but a limitation of power. This limiting function is in keeping with the philosophy of the Bill of Rights against the arbitrary exercise of governmental powers to the detriment of the individuals rights. Given this function, the provision should therefore be strictly interpreted against the expropriator, the government, andliberally in favor of the property owner.[12]

Ironically, in opposing respondents claim, the Republic is invoking this Courts Decision in Valdehueza, a Decision it utterly defied. How could the Republic acquire ownership over Lot 932 when it has not paid its owner the just compensation, required by law, for more than 50 years? The recognized rule is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. In Association of Small Landowners in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform,[13] thus:

Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation is entered and paid, but the condemnors title relates back to the date on which the petition under the Eminent Domain Act, or the commissioners report under the Local Improvement Act, is filed.

Although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the owner until payment is actually made. (Emphasis supplied.)

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until just compensation had actually been made. In

fact, the decisions appear to be uniform to this effect. As early as 1838, in Rubottom v. McLure, it was held that actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State albeit not to the appropriation of it to public use. In Rexford v. Knight, the Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that both on principle and authority the rule is . . . that the right to enter on and use the property is complete, as soon as the property is actually appropriated under the authority of law for a public use, but that the title does not pass from the owner without his consent, until just compensation has been made to him.

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that: If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until compensation is paid.

Clearly, without full payment of just compensation, there can be no transfer of title from the landowner to the expropriator. Otherwise stated, the Republics acquisition of ownership is conditioned upon the full payment of just compensation within a reasonable time.[14] Significantly, in Municipality of Bian v. Garcia[15] this Court ruled that the expropriation of lands consists of two stages, to wit: The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint x x x.

The second phase of the eminent domain action is concerned with the determination by the court of the just compensation for the property sought to be taken. This is done by the court with the assistance of not more than three (3) commissioners.

It is only upon the completion of these two stages that expropriation is said to have been completed. In Republic v. Salem Investment Corporation,[16] we ruled that, the process is not completed until payment of just compensation. Thus, here, the failure of the Republic to pay respondent and his predecessors-in-interest for a period of 57 years rendered the expropriation process incomplete.

The Republic now argues that under Valdehueza, respondent is not entitled to recover possession of Lot 932 but only to demand payment of its fair market value. Of course, we are aware of the doctrine that non-payment of just compensation (in an expropriation proceedings) does not entitle the private landowners to recover possession of the expropriated lots. This is our ruling in the recent cases of Republic of the Philippines vs. Court of Appeals, et al.,[17] and Reyes vs. National Housing Authority.[18] However, the facts of the present case do not justify its application. It bears stressing that the Republic was ordered to pay just compensation twice, the first was in the expropriation proceedings and the second, in Valdehueza. Fifty-seven (57) years have passed since then. We cannot but construe the Republics failure to pay just compensation as a deliberate refusal on its part.  Under such circumstance, recovery of possession is in order. In several jurisdictions, the courts held that recovery of possession may be had when property has been wrongfully taken or is wrongfully retained by one claiming to act under the power of eminent domain [19] or where a rightful entry is made and the party condemning refuses to pay the compensation which has been assessed or agreed upon;[20] or fails or refuses to have the compensation assessed and paid

The Republic also contends that where there have been constructions being used by the military, as in this case, public interest demands that the present suit should not be sustained.

It must be emphasized that an individual cannot be deprived of his property for the public convenience.[22] In Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform,[23] we ruled: One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is

no question that not even the strongest moral conviction or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a person invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the nation who would deny him that right.

The right covers the person’s life, his liberty and his property under Section 1 of Article III of the Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that private property shall not be taken for public use without just compensation.

The Republics assertion that the defense of the State will be in grave danger if we shall order the reversion of Lot 932 to respondent is an overstatement. First, Lot 932 had ceased to operate as an airport. What remains in the site is just the National Historical Institutes marking stating that Lot 932 is the former location of Lahug Airport. And second, there are only thirteen (13) structures located on Lot 932, eight (8) of which are residence apartments of military personnel. Only two (2) buildings are actually used as training centers. Thus, practically speaking, the reversion of Lot 932 to respondent will only affect a handful of military personnel. It will not result to irreparable damage or damage beyond pecuniary estimation, as what the Republic vehemently claims.

We thus rule that the special circumstances prevailing in this case entitle respondent to recover possession of the expropriated lot from the Republic. Unless this form of swift and effective relief is granted to him, the grave injustice committed against his predecessors-in-interest, though no fault or negligence on their part, will be perpetuated. Let this case, therefore, serve as a wake-up call to the Republic that in the exercise of its power of eminent domain, necessarily in derogation of private rights, it must comply with the Constitutional limitations. This Court, as the guardian of the peoples right, will not stand still in the face of the Republics oppressive and confiscatory taking of private property, as in this case.

At this point, it may be argued that respondent Vicente Lim acted in bad faith in entering into a contract of mortgage with Valdehueza and Panerio despite the clear annotation in TCT No. 23934 that Lot 932 is subject to the priority of the National Airports Corporation [to acquire said parcels of land] x x x upon previous payment of a reasonable market value.

The issue of whether or not respondent acted in bad faith is immaterial considering that the Republic did not complete the expropriation process. In short, it failed to perfect its title over Lot 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 respondents title was registered first, it would be the Republics 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.

At any rate, assuming that respondent had indeed knowledge of the annotation, still nothing would have prevented him from entering into a mortgage contract involving Lot 932 while the expropriation proceeding was pending. Any person who deals with a property subject of an expropriation does so at his own risk, taking into account the ultimate possibility of losing the property in favor of the government. 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,[24] we recognized the owners 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 rights pertaining 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 respondents 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,[26] however, in cases where the government failed to pay just compensation within five (5)[27] 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. [28] 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,[29] 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. WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 72915 is AFFIRMED in toto. The Republics motion for reconsideration of our Resolution dated March 1, 2004 is DENIED with FINALITY. No further pleadings will be allowed.

Let an entry of judgment be made in this case. SO ORDERED.

G.R. NO. 72126 JANUARY 29, 1988MUNICIPALITY OF MEYCAUAYAN VS. INTERMEDIATE APPELLATE COURT AND PHILIPPINE PIPES & MERCHANDIZING CORPORATION

 This is a petition for review on certiorari of the resolution dated April 24,1985 by the former

Intermediate Appellate Court, now Court of Appeals, setting aside its earlier decision dated January 10, 1985 and dismissing the special civil action for expropriation filed by the petitioner.

In 1975, respondent Philippine Pipes and Merchandising Corporation filed with the Office of the Municipal Mayor of Meycauayan, Bulacan, an application for a permit to fence a parcel of land with a width of 26.8 meters and a length of 184.37 meters covered by Transfer Certificates of Title Nos. 215165 and 37879. The fencing of said property was allegedly to enable the storage of the respondent's heavy equipment and various finished products such as large diameter steel pipes, pontoon pipes for ports, wharves, and harbors, bridge components, pre-stressed girders and piles, large diameter concrete pipes, and parts for low cost housing.

In the same year, the Municipal Council of Meycauayan, headed by then Mayor Celso R. Legaspi, passed Resolution No. 258, Series of 1975, manifesting the intention to expropriate the respondent's parcel of land covered by Transfer Certificate of Title No. 37879. An opposition to the resolution was filed by the respondent with the Office of the Provincial Governor, which, in turn, created a special committee of four members to investigate the matter. On March 10, 1976, the Special Committee recommended that the Provincial Board of Bulacan disapprove or annul the resolution in question because there was no genuine necessity for the Municipality of Meycauayan to expropriate the respondent's property for use as a public road. On the basis of this report, the Provincial Board of Bulacan passed Resolution No. 238, Series of 1976, disapproving and annulling Resolution No. 258, Series of 1975, of the Municipal Council of Meycauayan. The respondent, then, reiterated to the Office of the Mayor its petition for the approval of the permit to fence the aforesaid parcels of land. On October 21, 1983, however, the Municipal Council of Meycauayan, now headed by Mayor Adriano D. Daez, passed Resolution No. 21, Series of 1983, for the purpose of expropriating anew the respondent's land. The Provincial Board of Bulacan approved the aforesaid resolution on January 25, 1984. Thereafter, the petitioner, on February 14, 1984, filed with the Regional Trial Court of Malolos, Bulacan, Branch VI, a special civil action for expropriation. Upon deposit of the amount of P24,025.00, which is the market value of the land, with the Philippine National Bank, the trial court on March 1, 1984 issued a writ of possession in favor of the petitioner. On August 27, 1984, the trial court issued an order declaring the taking of the property as lawful and appointing the Provincial Assessor of Bulacan as court commissioner who shall hold the hearing to ascertain the just compensation for the property.

The respondent went to the Intermediate Appellate Court on petition for review. On January 10, 1985, the appellate court affirmed the trial court's decision. However, upon motion for reconsideration by the respondent, the decision was re-examined and reversed. The appellate court held that there is no genuine necessity to expropriate the land for use as a public road as there were several other roads for the same purpose and another more appropriate lot for the proposed public road. The court, taking into consideration the location and size of the land, also opined that the land is more Ideal for use as storage area for respondent's heavy equipment and finished products.

After its motion for reconsideration was denied, the petitioner went to this Court on petition for review on certiorari on October 25, 1985, with the following arguments: Petitioners most respectfully submit that respondent Court has decided a question of substance not in accord with law or with applicable decisions of this Honorable Supreme Court; that the judgment is based on a misapprehension of facts and the conclusion is a finding grounded entirely on speculation, surmises, and conjectures, because:

i. It concluded, that by dismissing the complaint for expropriation the existence of legal and factual circumstance of grave abuse of discretion amounting to lack of jurisdiction committed by the respondent Judge without any shred of evidence at all contrary to the law on evidence;

ii. It concluded, in its decision that respondent Philippine Pipes and Merchandising Corporation has no need of the property sought to be condemned on the use to which it is devoted as a private road but allegedly for storage contrary to the allegations of respondent Philippine Pipes and Merchandising Corporation itself;

iii. It anchored its decision on factual situations obtaining a long, long time ago without regard to the relatively present situation now obtaining. (Rollo, pp. 8-9)

In refuting the petitioner's arguments, the private respondent contends that this Court may only resolve questions of law and not questions of fact such as those which the petitioner puts in issue in this case. The respondent further argues that this Court may not also interfere with an action of the Court of Appeals which involves the exercise of discretion.

We agree with the respondent. The jurisdiction of this Court in cases brought to us from the Court of Appeals is limited to the review of errors of law (Rizal Cement Co., Inc. v. Villareal, 135 SCRA 15, 24), factual issues not being proper in certiorari proceedings (See Ygay et al. v. Hon. Escareal et al., 135 SCRA 78, 82). This Court reviews and rectifies the findings of fact of the Court of Appeals only under certain established exceptions such as: (1) when the conclusion is a finding grounded entirely on speculations, surmises and conjectures; (2) when the inference made is manifestly mistaken, absurd and impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; and (5) when the court, in making its finding, went beyond the issues of the case and the same is contrary to the admissions of both the appellant and the appellee (Moran, Jr. v. Court of Appeals, 133 SCRA 88). None of the exceptions warranting non-application of the rule is present in this case. On the contrary, we find that the appellate court's decision is supported by substantial evidence. The petitioner's purpose in expropriating the respondent's property is to convert the same into a public road which would provide a connecting link between Malhacan Road and Bulac Road in Valenzuela, Bulacan and thereby ease the traffic in the area of vehicles coming from MacArthur Highway. The records, however, reveals that there are other connecting links between the aforementioned roads. The petitioner itself admits that there are four such cross roads in existence. The respondent court stated that with the proposed road, there would be seven.

Appreciating the evidence presented before it, with particular emphasis on the Special Committee's report dated March 10, 1976, the Court of Appeals declared:

FACTS ESTABLISHED ON OCULAR INSPECTIONIn the ocular inspection, the following facts came into the limelight:

a. The property in question of the Philippine Pipes and Merchandazing Corporation intended to be expropriated by the Municipality of Meycauayan is embraced under Transfer Certificate of Title No. 37879 and is a private road of the company used in the conduct and operation of its business, with the inhabitation in nearby premises tolerated to pass the same. It extends from Bulac Road to the south, to Malhacan Road on the north, with a width of about 6 to 7 meters, more or less.

b. Adjoining this private road on the eastern side, is a vacant property also belonging to the Philippine Pipes and Merchandising Corporation and extending also from Bulac Road to Malhacan Road, with a high wall along the property line on the east side thereof serving as a fence.

c. Opposite the private road, after crossing Bulac Road, is the gate of the factory of the Philippine Pipes and Merchandising Corporation.

d. From the private road of the firm on the eastern direction about 30 to 40 meters distance are subdivision roads of an existing subdivision with a width of 6 to 7 meters, more or less, running parallel to the said private road of the firm and likewise extending from Bulac Road to Malhacan Road. Whether said subdivision roads had already been donated to the municipality is not known.

e. On the western side of the private road is a vacant lot with an area of l6,071 square meters offered for sale by its owner extending also from Bulac Road to Malhacan Road.

f. Bulac road, a municipal road with a width of about 6 to 7 meters and all the nearby subdivision roads are obviously very poorly developed and maintained, and are in dire need of repair. Like the Malhacan Road, Bulac road extends from the McArthur Highway with exit to North Diversion Road.

The Sketch Plan (Rollo, p. 26 or p. 97) clearly and conclusively shows that petitioner does not need this strip of land as a private road. The Sketch Plan clearly shows that petitioner's factory site is adjacent to Bulac Road which has a width of about seven meters, more or less. Petitioner can use Bulac Road in reaching McArthur Highway on the west or in reaching the

Manila North Expressway on the east for the purpose of transporting its products. Petitioner does not need to go to Malhacan Road via this so-called private road before going to McArthur Highway or to the Manila North Expressway. Why should petitioner go first to Malhacan Road via this so called "private road" before going to McArthur Highway or to the Manila North Expressway when taking the Bulac Road in going to McArthur Highway or to the Manila North Expressway is more direct, nearer and more advantageous. Hence, it is beyond doubt that petitioner acquired this strip of land for the storage of its heavy equipments and various finished products and for growth and expansion and never to use it as a private road. This is the very reason why petitioner filed an application with the Office of the Municipal Mayor of Meycauayan, Bulacan to fence with hollow blocks this strip of land.

Third, We will determine whether there is a genuine necessity to expropriate this strip of land for use as a public road. We hereby quote a relevant part of the Special Committee's Report dated March 10, 1976, which is as follows:

OBSERVATION OF COMMITTEEFrom the foregoing facts, it appears obvious to this Special Committee that there is no genuine necessity for the Municipality of' Meycauayan to expropriate the aforesaid property of the Philippine Pipes and Merchandising Corporation for use as a public road. Considering that in the vicinity there are other available road and vacant lot offered for sale situated similarly as the lot in question and lying Idle, unlike the lot sought to be expropriated which was found by the Committee to be badly needed by the company as a site for its heavy equipment after it is fenced together with the adjoining vacant lot, the justification to condemn the same does not appear to be very imperative and necessary and would only cause unjustified damage to the firm. The desire of the Municipality of Meycauayan to build a public road to decongest the volume of traffic can be fully and better attained by acquiring the other available roads in the vicinity maybe at lesser costs without causing harm to an establishment doing legitimate business therein. Or, the municipality may seek to expropriate a portion of the vacant lot also in the vicinity offered for sale for a wider public road to attain decongest (sic) of traffic because as observed by the Committee, the lot of the Corporation sought to be taken will only accommodate a one-way traffic lane and therefore, will not suffice to improve and decongest the flow of traffic and pedestrians in the Malhacan area. ...

It must be noted that this strip of land covered by Transfer Certificates of Titles Nos. 215165 and 37879 were acquired by petitioner from Dr. Villacorta. The lot for sale and lying Idle with an area of 16,071 square meter which is adjacent and on the western side of the aforesaid strip of land and extends likewise from Bulac Road to Malhacan Road belongs also to Dr. Villacorta. This lot for sale and lying Idle is most Ideal for use as a public road because it is more than three (3) times wider that the said strip of land.

Since there is another lot ready for sale and lying Idle, adjacent and on the western side of the strip of land, and extending also from Malhacan Road to Bulac Road and most Ideal for a public road because it is very much wider than the lot sought to be expropriated, it seems that it is more just, fair, and reasonable if this lot is the one to be expropriated. (Rollo, pp. 22-26)

The petitioner objects to the appellate court's findings contending that they were based on facts obtaining long before the present action to expropriate took place. We note, however, that there is no evidence on record which shows a change in the factual circumstances of the case. There is no showing that some of the six other available cross roads have been closed or that the private roads in the subdivision may not be used for municipal purposes. What is more likely is that these roads have already been turned over to the government. The petitioner alleges that surely the environmental progress during the span of seven years between the first and second attempts to expropriate has brought about a change in the facts of the case. This allegation does not merit consideration absent a showing of concrete evidence attesting to it.

There is no question here as to the right of the State to take private property for public use upon payment of just compensation. What is questioned is the existence of a genuine necessity therefor. As early as City of Manila v. Chinese Community of Manila (40 Phil. 349) this Court held that the foundation of the right to exercise the power of eminent domain is genuine necessity and that necessity must be of a public character. Condemnation of private property is justified only if it is for the public good and there is a genuine necessity of a public character. Consequently, the courts have 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 therefor (Republic v. La Orden de PP. Benedictos de Filipinas, 1 SCRA 646; J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413).

In the recent case of De Knecht v. Bautista, (100 SCRA 660) this court further ruled that the government may not capriciously choose what private property should be taken. Citing the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration (supra), the Court held: With due recognition then of the power of Congress to designate the particular property to be taken and how much thereof may be condemned in the exercise of the power of expropriation, it is still a judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and prejudice. That the equal protection clause will not allow. (At p. 436)

There is absolutely no showing in the petition why the more appropriate lot for the proposed road which was offered for sale has not been the subject of the petitioner's attempt to expropriate assuming there is a real need for another connecting road.

WHEREFORE, the petition is hereby DISMISSED for lack of merit. The questioned resolution of the respondent court is AFFIRMED. SO ORDERED.

G.R. NO. L-51078 OCTOBER 30, 1980CRISTINA DE KNECHT VS. HON. PEDRO JL. BAUTISTA, AS JUDGE PRESIDING OVER BRANCH III OF THE COURT OF FIRST INSTANCE (PASAY CITY) AND THE REPUBLIC OF THE PHILIPPINES

 This is a petition for certiorari and prohibition filed by Cristina de Knecht against the

Honorable Pedro JL. Bautista, as Judge presiding over Branch III of the Court of First Instance of Rizal (Pasay City), and the Republic of the Philippines pines seeking the following relief:

WHEREFORE, petitioner respectfully prays that judgment be rendered annulling the order for immediate possession issued by respondent court in the expropriation proceedings and commanding respondents to desist from further proceedings in the expropriation action or the order for immediate possession issued in said action, with costs.

Petitioner prays that a restraint order or writ of preliminary injunction be issued ex-parte enjoining respondents, their representative representative and agents from enforcing the here questioned order for mediate posession petitioner offering to post a bond executed to the parties enjoined in an amount to be fixed by the Court to the effect that she will pay to such parties all damages which they may sustain by reason of the injunction if the Court should finally decide she is not entitled there

She prays for such other remedy as the Court may deem just and equitable in the premises.Quezon City for July 1979. 1

The petitioner alleges that than ten (10) years ago, the government through the Department of Public Workmen's and Communication (now MPH) prepared a to Epifanio de los Santos Avenue (EDSA) to Roxas Boulevard; that the proposed extension, an adjunct of building program, the Manila — Cavite Coastal Read Project, would pass through Cuneta Avenue up to Roxas Boulevard that this route would be a straight one taking into account the direction of EDSA; that preparation to the implementation of the aforesaid plan, or on December 13, 1974, then Secretary Baltazar Aquino of the Department of Public Highways directed the City Engineer of Pasay City not to issue temporary or permanent permits for the construction and/or improvement of buildings and other structures located within the proposed extension through Cuneta Avenue that shortly thereafter the Department of Public Highways decided to make the proposed extension go through Fernando Rein and Del Pan Streets which are lined with old substantial houses; that upon learning of the changed the owners of the residential houses that would be affected, the herein petitioner being one of them, filed on April 15, 1977 a formal petition to President Ferdinand E. Marcos asking him to order the Ministry of Public Highways to adoption, the original plan of making the extension of EDSA through Araneta Avenue instead of the new plan going through Fernando Rein and Del Pan Streets; that President Marcos directed then Minister Baltazar Aquino to explain within twenty-four (24) hours why the proposed project should not be suspended; that on April 21, 1977 then Minister Aquino submitted his explanation defending the new proposed route; that the President then referred the matter to the Human Settlements Commission for investigation and recommendation; that after formal hearings to which all the parties proponents and oppositors were given full opportunity to ventilate their views and to present their evidence, the Settlements Commission submitted a report recommending the reversion of the extension of EDSA to the original plan passing through Cuneta Avenue; and that notwithstanding the said report and recommendation, the Ministry of Public Highways insisted on implementing the plan to make the extension of EDSA go through Fernando Rein and Del Pan Streets. 2

In February 1979, the government filed in the Court of First Instance of Rizal, Branch III, Pascual City presided by the respondent Judge, a complaint for expropriation against the owners of the houses standing along Fernando Rein and Del Pan Streets, among them the herein petitioner. The complaint was docketed as Civil Case No. 7001-P and entitled"Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, etc."

The herein petitioner filed a motion to dismiss dated March 19, 1979 on the following grounds:

(a) court had no jurisdiction over the subject matter of the action because the complaint failed to allege that the instant project for expropriation bore the approval of the Ministry of Human Settlements and the Metro Manila Government nor pursuant to Presidential Decrees Nos. 824, 1396 and 1517;

(b) The choice of properties to be expropriated made by the Ministry of Public Highways was arbitrary and erroneous;

(c) The complaint was premature as the plaintiff never really had gone through serious negotiations with the defendant for the purchase of her property; and

(d) The complaint relied on an arbitrary and erroneous valuation of properties and disregarded consequential damages.

An urgent motion dated March 28, 1979 for preliminary junction was also filed.In June 1979 the Republic of the Philippines filed a motion for the issuance of a writ of

possession of the property sought to be expropriated on the ground that said Republic had made the required deposit with the Philippine National Bank.

The respondent judge issued a writ of possession dated June 14, 1979 authorizing the Republic of the Philippines to take and enter upon the possession of the properties sought be condemned. 3

The petitioner contends that "Respondent court lacked or exceeded its jurisdiction or gravely abused its discretion in issuing the order to take over and enter upon the possession of the properties sought to be expropriated-petitioner having raised a constitutional question which respondent court must resolve before it can issue an order to take or enter upon the possession of properties sought to be expropriated." 4

The petitioner assails the choice of the Fernando Rein and Del Pan Streets route on the following grounds: The choice of property to be expropriated cannot be without rhyme or reason. The condemnor may not choose any property it wants. Where the legislature has delegated a power of eminent do-main, the question of the necessity for taking a particular fine for the intended improvement rests in the discretion of the grantee power subject however to review by the courts in case of fraud, bad faith or gross abuse of discretion. The choice of property must be examined for bad faith, arbitrariness or capriciousness and due process determination as to whether or not the proposed location was proper in terms of the public interests. Even the claim of respondent's Secretary Baltazar Aquino that there would be a saving of P2 million under his new plan must be reviewed for it bears no relation to the site of the proposed EDSA extension As envisioned by the government, the EDSA extension would be linked to the Cavite Expressway. Logically then, the proposed extension must point to the south and not detour to the north. Also, the equal protection of the law must be accorded, not on to the motel owners along Cuneta (Fisher) Avenue, but also to the owners of solid and substantial homes and quality residential lands occupied for generations. 5

The respondents maintain that the respondent court did not act without jurisdiction or exceed its jurisdiction or gravel abuse its discretion in issuing the order dated June 14, 1979 authorizing the Republic of the Philippines to take over and enter the possession of the properties sought to be appropriated because the Republic has complied with all the statutory requirements which entitled it to have immediate possession of the properties involved. 6

Defending the change of the EDSA extension to pass through Fernando Rein — Del Pan Streets, the respondents aver: 'There was no sudden change of plan in the selection of the site of the EDSA Extension to Roxas Blvd. As a matter of fact, when the Ministry of Public Highways decided to change the site of EDSA Ex- tension to Roxas Boulevard from Cuneta Avenue to the Del Pan — Fernando Item Streets the residents of Del Pan and Fernando Rein Streets who were to be adversely affected by the construction of ED — SA Extension to Roxas Boulevard along Del Pan - Fernando Rein Streets were duly notified of such proposed project. Petitioner herein was one of those notified Annex 1). It be conceded that the Cuneta Avenue line goes southward and outward (from the city center while the Del Pan — Fernando Rein Streets line follows northward and inward direction. It must be stated that both lines, Cuneta Avenue and Del Pan — Fernando Rein Streets lines, meet satisfactorily planning and design criteria and therefore are both acceptable. In selecting the Del Pan — Fernando Rein Streets line the Government did not do so because it wanted to save the motel located along Cuneta Avenue but because it wanted to minimize the social impact factor or problem involved. 7

There is no question as to the right of the Republic of the Philippines to take private property for public use upon the payment of just compensation. Section 2, Article IV of the Constitution of the Philippines provides: "Private property shall not be taken for public use without just compensation."

It is recognized, was, that the government may not capriciously or arbitrarily' choose what private property should be taken. In J. M. Tuazon & Co., Inc. vs. Land Tenure administration 31 SCRA, 413, 433, the Supreme Court said: For the purpose of obtaining a judicial declaration of nullity, it is enough if the respondents or defendants named be the government officials who would give operation and effect to official action allegedly tainted with unconstitutionality. Thus, where the statute assailed was sought to be enforced by the Land Tenure Administrative and the Solicitor General, the two officials may be made respondents in the action without need of including the Executive Secretary as a party in the action. The failure to meet tile exacting standard of due process would likewise constitute a valid objection to the exercise of this congressional power. That was so intimated in the above leading Guido Case. There was an earlier pronouncement to that effect in a decision rendered long before the adoption of the Constitution under the previous organic law then in force, while the Philippines was still an unincorporated territory of the United States. It is obvious then that a landowner is covered by the mantle of protection due process affords. It is a mandate of reason. It frowns on arbitrariness, it is the antithesis of any governmental act that smacks of whim or caprice. It negates state power to act in an impressive manner. It is, as had been stressed so often, the embodiment of the sporting Idea of fair play. In that sense, it stands as a guaranty of justice. That is the standard that must be met by any government talk agency in the exercise of whatever competence is entrusted to it. As was so emphatically stressed by the present Chief Justice, 'Acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity,

In the same case the Supreme Court concluded: With due recognition then of the power of Congress to designate the particular property to be taken and how much thereof may be condemned in the exercise of the power of expropriation, it is still a judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and prejudice. That the equal protection clause will not allow. (p. 436)

In the instant case, it is a fact that the Department of Public Highways originally establish the extension of EDSA along Cuneta Avenue. It is to be presumed that the Department of Public Highways made studies before deciding on Cuneta Avenue. It is indeed odd why suddenly the proposed extension of EDSA to Roxas Boulevard was changed to go through Fernando Rein-Del Pan Streets which the Solicitor General con- cedes "... the Del Pan — Fernando Rein Streets line follows northward and inward direction. While admit "that both lines, Cuneta Avenue and Del Pan — Fernando Rein Streets lines, meet satisfactorily planning and design criteria and therefore are both acceptable ... the Solicitor General justifies the change to Del Pan — Fernando Rein Streets on the ground that the government "wanted to the social impact factor or problem involved." 8

It is doubtful whether the extension of EDSA along Cuneta Avenue can be objected to on the ground of social impact. The improvements and buildings along Cuneta Avenue to be affected by the extension are mostly motels. Even granting,arguendo, that more people be affected, the Human Setlements Commission has suggested coordinative efforts of said Commission with the National Housing Authority and other government agencies in the relocation and resettlement of those adversely affected. 9

The Human Settlements Commission considered conditionality social impact and cost. The pertinent portion of its report reads: Comparison of Alignment 1 (Cuneta Fisher) and Alignment 2 (Del Pan — Fernando Rein) based on the criteria of functionality, social impact and costA. FunctionalityThis issue has to do with the physical design of a highway, inclusive of engineering factors and management considerationFrom both engineering and traffic management viewpoints, it is incontestable that the straighter and shorter alignment is preferable to one which is not. Systematically and diagramatically, alignment 1 is straighter than alignment 2. In fact, Director Antonio Goco of the Department of Public Highways admitted that alignment 2 is three (3) meters longer than alignment 1. Furthermore, alignment 1 is definitely the contour conforming alignment to EDSA whereas alignment 2 affords a greater radius of unnatural curvature as it hooks slightly northward before finally joining with Roxas Boulevard. Besides, whichever alignment is adopted, there will be a need for a grade separator or interchange at the Roxas Boulevard junction. From the of highway design, it is imperative to have interchanges as far apart as possible to avoid traffic from slow

down in negotiating the slope on the interchanges. Up north would be the future Buendia Avenue- Roxas Boulevard Interchange. Consequently, alignment 1 which is farther away from Buendia Avenue than alignment 2 is the better alignment from the viewpoint of the construction of the grade separator or interchange, a necessary corollary to the extension project. Finally, the choice of alignment 2 which is longer by three (3) meters than alignment 1 could have serious repercussions on our energy conservation drive and from the larger perspective of the national economy, considering that, by ad- statistical data, no less than fifty thousand (50,000) vehicles a day will have to traverse an extra three (3) meters.B. Social ImpactThe following factual data which have a direct bearing on the issue of social impact were culled from the records of the case and the evidence presented during the public hearings:Below P350 P350 – P500 P 500 – P 800 P800 – Pl000 Over P1000 16 (28%) 24 (42%) 0 (14%) 5 (9%) 4 (7%)Alignment 2: Figures not available.It is evident from the foregoing figures that social impact is greater on the residents of alignment

C. CostThe resolution of the issue of right-of-way acquisition cost depends to a large extend on the nature of the properties to be affected and the relative value thereof. A comparison of alignment 1 and alignment 2 on these two points has produced the following results:It is obvious from the immediately table that the right- of-way acquisition cost difference factor of the two alignment is only P269,196 and not P2M as alleged by the Department of Public Highways and P1.2M as claimed by the oppositors. Consequently, the cost difference factor between the two alignments is so minimal as to be practically nil in the consideration of the issues involved in this case. 10

After considering all the issues and factors, the Human Setlements Commission made the following recommendations:Weighing in the balance the issues and factors of necessity, functionality, impact, cost and property valuation as basis for scheme of compensation to be adopted in the instant case, the Hearing Board takes cognizance of the following points:1. The EDSA extension to Roxas Boulevard is necessary and desirable from the strictly technical viewpoint and the overall perspective of the Metro Manila transport system.2. The right-of-way acquisition cost difference factor is so minimal as to influence in any way the choice of either alignment as the extension of EDSA to Roxas Boulevard.3. The negotiated sale approach to compensation as proposed should apply to a whichever alignment is selected.4. The factor of functionality states strongly against the selection of alignment 2 while the factor of great social and economic impact bears grieviously on the residents of alignment 1.The course of the decision in this case consequently boils down to the soul-searching and heart-rending choice between people on one hand and progress and development on the other. In deciding in favor of the latter, the Hearing Board is not unmindful that progress and development are carried out by the State precisely and ultimately for the benefit of its people and therefore, recommends the reverend of the extension project to alignment 1. However, before the Government, through its implementing agencies, particularly the Department of Public Highways, undertakes the actual step of appropriating properties on alignment I to pave the way for the extension the hearing Board recommends the following as absolute. binding and imperative preconditions:

1. The preparation, and ignore importantly, the execution of a comprehensive and detailed plan for the relocation and resettlement of the adversely and genuinely affected residents of alignment I which will necessitate the coordinative efforts of such agencies as the Human Settlements Commission, the National Housing Authority and other such governmental agencies. To be concrete, a self sufficient community or human settlement complete with infrastructure capture market, school, church and industries for employment should be set up to enable the affected residents of alignment 1 to maintain, their present social and economic standing.

2. The prompt payment of fair and just compensation through the negotiated sale approach.

Finally, the Hearing Board recommends that the Department of Public Highways conduct public hearings before undertaking on future expropriations of private properties for public use. Respectfully submitted to the Human Settlements Commission Commissioners for consideration, final disposition and endorsement thereof to His Excellency, the President of the Philippines.Makati, Metro Manila, July 4, 1977. 11

From all the foregoing, the facts of record and recommendations of the Human Settlements Commission, it is clear that the choice of Fernando Rein — Del Pan Streets as the line through which the Epifanio de los Santos Avenue should be extended to Roxas Boulevard is arbitrary and should not receive judicial approval. The respondent judge committed a grave abuse of discretion in allowing the Republic of the Philippines to take immediate possession of the properties sought to be expropriated.

WHEREFORE, the petition for certiorari and prohibition is hereby granted. The order of June 14, 1979 authorizing the Republic of the Philippines to take or enter upon the possession of the properties sought to be condemned is set aside and the respondent Judge is permanently enjoined from taking any further action on Civil Case No. 7001-P, entitled"Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, etc." except to dismiss said case.

SO ORDERED.

G.R. NO. 87335 FEBRUARY 12, 1990REPUBLIC OF THE PHILIPPINES VS.CRISTINA DE KNECHT AND THE COURT OF APPEALS

 The issue posed in this case is whether an expropriation proceeding that was determined by a final judgment of this Court may be the subject of a subsequent legislation for expropriation.

On February 20, 1979 the Republic of the Philippines filed in the Court of First Instance (CFI) of Rizal in Pasay City an expropriation proceedings against the owners of the houses standing along Fernando Rein-Del Pan streets among them Cristina De Knecht (de Knecht for short) together with Concepcion Cabarrus, and some fifteen other defendants, docketed as Civil Case No. 7001-P.

On March 19, 1979 de Knecht filed a motion to dismiss alleging lack of jurisdiction, pendency of appeal with the President of the Philippines, prematureness of complaint and arbitrary and erroneous valuation of the properties. On March 29, 1979 de Knecht filed an ex parte urgent motion for the issuance by the trial court of a restraining order to restrain the Republic from proceeding with the taking of immediate possession and control of the property sought to be condemned. In June, 1979 the Republic filed a motion for the issuance of a writ of possession of the property to be expropriated on the ground that it had made the required deposit with the Philippine National Bank (PNB) of 10% of the amount of compensation stated in the complaint. In an order dated June 14, 1979 the lower court issued a writ of possession authorizing the Republic to enter into and take possession of the properties sought to be condemned, and created a Committee of three to determine the just compensation for the lands involved in the proceedings.

On July 16, 1979 de Knecht filed with this Court a petition for certiorari and prohibition docketed as G.R. No. L-51078 and directed against the order of the lower court dated June 14, 1979 praying that the respondent be commanded to desist from further proceeding in the expropriation action and from implementing said order. On October 30, 1980 this Court rendered a decision, the dispositive part of which reads as follows:

WHEREFORE, the petition for certiorari and prohibition is hereby granted. The order of June 14, 1979 authorizing the Republic of the Philippines to take c enter upon the possession of the properties sought to be condemned is set aside and the respondent Judge is permanently enjoined from taking any further action on Civil Case No. 7001-P, entitled  'Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, et al.' except to dismiss said case. 1

On August 8, 1981 defendants Maria Del Carmen Roxas Vda. de Elizalde, Francisco Elizalde and Antonio Roxas moved to dismiss the expropriation action in compliance with the dispositive portion of the aforesaid decision of this Court which had become final and in order to avoid further damage to same defendants who were denied possession of their properties. The Republic filed a manifestation on September 7, 1981 stating, among others, that it had no objection to the said motion to dismiss as it was in accordance with the aforestated decision.

On September 2, 1983, the Republic filed a motion to dismiss said case due to the enactment of the Batas Pambansa Blg. 340 expropriating the same properties and for the same purpose. The lower court in an order of September 2, 1983 dismissed the case by reason of the enactment of the said law. The motion for reconsideration thereof was denied in the order of the lower court dated December 18, 1986.

De Knecht appealed from said order to the Court of Appeals wherein in due course a decision was rendered on December 28, 1988, 2 the dispositive part of which reads as follows:PREMISES CONSIDERED, the order appealed from is hereby SET ASIDE. As prayed for in the appellant's brief another Order is hereby issued dismissing the expropriation proceedings (Civil Case No. 51078) before the lower court on the ground that the choice of Fernando Rein-Del Pan Streets as the line through which the Epifanio de los Santos Avenue should be extended is arbitrary and should not receive judicial approval. No pronouncement as to Costs. 3

Hence the Republic filed that herein petition for review of the A aforestated decision whereby the following issues were raised:

I. WHETHER OR NOT THE ENACTMENT OF BATAS PAMBANSA BLG. 340 IS THE PROPER GROUND FOR THE DISMISSAL OF THE EXPROPRIATION CASE. (PROPERLY PUT, WHETHER OR NOT THE LOWER COURT COMMITTED GRAVE

ABUSE OF DIS CRETION IN DISMISSING CIVIL CASE NO. 7001-P UPON JUDICIAL NOTICE OF B.P. BLG. 340).

II. WHETHER OR NOT THE DPWH'S "CHOICE" OF LAND TO BE EXPROPRIATED IS STILL AN ISSUE UNDER THE CIRCUMSTANCES, SAID "CHOICE" HAVING BEEN SUPPLANTED BY THE LEGISLATURE'S CHOICE.

III. WHETHER OR NOT THE LAW OF THE CASE THEORY SHOULD BE APPLIED TO THE CASE AT BAR

The petition is impressed with merit. There is no question that as early as 1977, pursuant to the Revised Administrative Code, the national government, through the Department of Public Works and Highways began work on what was to be the westward extension of Epifanio de los Santos Avenue (EDSA) outfall (or outlet) of the Manila and suburbs flood control and drainage project and the Estero Tripa de Gallina. These projects were aimed at: (1) easing traffic congestion in the Baclaran and outlying areas; (2) controlling flood by the construction of the outlet for the Estero Tripa de Gallina (which drains the area of Marikina, Pasay, Manila and Paranaque); and (3) thus completing the Manila Flood and Control and Drainage Project.

So the petitioner acquired the needed properties through negotiated purchase starting with the lands from Taft Avenue up to Roxas Boulevard including the lands in Fernando Rein-Del Pan streets. It acquired through negotiated purchases about 80 to 85 percent of the lands involved in the project whose owners did not raise any objection as to arbitrariness on the choice of the project and of the route. It is only with respect to the remaining 10 to 15 percent along the route that the petitioner cannot negotiate through a sales agreement with a few land owners, including de Knecht whose holding is hardly 5% of the whole route area. Thus, as above related on February 20, 1979 the petitioner filed the expropriation proceedings in the Court of First Instance.

There is no question that in the decision of this Court dated October 30, 1980 in De Knecht vs. Bautista, G.R. No. L-51078, this Court held that the "choice of the Fernando Rein-Del Pan streets as the line through which the EDSA should be extended to Roxas Boulevard is arbitrary and should not receive judicial approval." 5 It is based on the recommendation of the Human Settlements Commission that the choice of Cuneta street as the line of the extension will minimize the social impact factor as the buildings and improvement therein are mostly motels. 6

In view of the said finding, this Court set aside the order of the trial court dated June 14, 1979 authorizing the Republic of the Philippines to take possession of the properties sought to be condemned and enjoined the respondent judge from taking any further action in the case except to dismiss the same.

Said decision having become final no action was taken by the lower court on the said directive of this Court to dismiss the case. Subsequently B.P. Blg. 340 was enacted by the Batasang Pambansa on February 17, 1983. On the basis of said law petitioner filed a motion to dismiss the case before the trial court and this was granted.

On appeal by de Knecht to the Court of Appeals the appellate court held that the decision of the Supreme Court having become final, the petitioner's right as determined therein should no longer be disturbed and that the same has become the law of the case between the parties involved. Thus, the appellate court set aside the questioned order of the trial court and issued another order dismissing the expropriation proceedings before the lower court pursuant to the ruling in De Knecht case.

While it is true that said final judgment of this Court on the subject becomes the law of the case between the parties, it is equally true that the right of the petitioner to take private properties for public use upon the payment of the just compensation is so provided in the Constitution and our laws. 7 Such expropriation proceedings may be undertaken by the petitioner not only by voluntary negotiation with the land owners but also by taking appropriate court action or by legislation. 8

When on February 17, 1983 the Batasang Pambansa passed B.P. Blg. 340 expropriating the very properties subject of the present proceedings, and for the same purpose, it appears that it was based on supervening events that occurred after the decision of this Court was rendered in De Knecht in 1980 justifying the expropriation through the Fernando Rein-Del Pan Streets.

The social impact factor which persuaded the Court to consider this extension to be arbitrary had disappeared. All residents in the area have been relocated and duly compensated. Eighty percent of the EDSA outfall and 30% of the EDSA extension had been completed. Only

private respondent remains as the solitary obstacle to this project that will solve not only the drainage and flood control problem but also minimize the traffic bottleneck in the area.

The Solicitor General summarizing the situation said —The construction and completion of the Metro Manila Flood Control and Drainage

Project and the EDSA extension are essential to alleviate the worsening traffic problem in the Baclaran and Pasay City areas and the perennial flood problems. Judicial notice may be taken that these problems bedevil life and property not only in the areas directly affected but also in areas much beyond. Batas Pambansa Blg. 340 was enacted to hasten 'The Project' and thus solve these problems, and its implementation has resulted so far in an 80% completion of the EDSA outfall and a 30% completion of the EDSA extension, all part of 'The Project'.

This instant case stands in the way of the final solution of the above-mentioned problems, solely because the single piece of property I occupied' by De Knecht, although already expropriated under B.P. Blg. 340, is the only parcel of land where Government engineers could not enter due to the 'armed' resistance offered by De Knecht, guarded and surrounded as the lot is perennially by De Knecht's fierce private security guards. It may thus be said that De Knecht, without any more legal interest in the land, single-handedly stands in the way of the completion of 'The Project' essential to the progress of Metro Manila and surrounding areas. Without the property she persists in occupying and without any bloodletting, the EDSA outfall construction on both sides of the said property cannot be joined together, and the flood waters of Pasay, Parañaque and Marikina — which flow through the Estero Tripa de Gallina will continue to have no way or outlet that could drain into Manila Bay. Without said property, the EDSA extension, already 30% completed, can in no way be finished, and traffic will continue to clog and jam the intersections of EDSA and Taft Avenue in Baclaran and pile up along the airport roads.

In sum, even in the face of BP340, De Knecht holds the Legislative sovereign will and choice inutile. The Court finds justification in proceeding with the said expropriation proceedings through the Fernando Rein-Del Pan streets from ESDA to Roxas Boulevard due to the aforestated supervening events after the rendition of the decision of this Court in De Knecht.

B.P. Blg. 340 therefore effectively superseded the aforesaid final and executory decision of this Court. And the trial court committed no grave abuse of discretion in dismissing the case pending before it on the ground of the enactment of B.P. Blg. 340.

Moreover, the said decision, is no obstacle to the legislative arm of the Government in thereafter (over two years later in this case) making its own independent assessment of the circumstances then prevailing as to the propriety of undertaking the expropriation of the properties in question and thereafter by enacting the corresponding legislation as it did in this case. The Court agrees in the wisdom and necessity of enacting B.P. Blg. 340. Thus the anterior decision of this Court must yield to this subsequent legislative flat.

WHEREFORE, the petition is hereby GRANTED and the questioned decision of the Court of Appeals dated December 28, 1988 and its resolution dated March 9, 1989 are hereby REVERSED and SET ASIDE and the order of Branch III of the then Court of First Instance of Rizal in Pasay City in Civil Case No. 7001-P dated September 2, 1983 is hereby reinstated without pronouncement as to costs. SO ORDERED.

 Separate Opinions

 CRUZ, J., concurring:

While the ponencia is plain enough, I wish to make it even plainer that B.P. Blg. 340 is not a legislative reversal of our finding in De Knecht v. Bautista, 100 SCRA 660, that the expropriation of the petitioner's property was arbitrary. As Justice Gancayco clearly points out, supervening events have changed the factual basis of that decision to justify the subsequent enactment of the statute. If we are sustaining that legislation, it is not because we concede that the lawmakers can nullify the findings of the Court in the exercise of its discretion. It is simply because we ourselves have found that under the changed situation, the present expropriation is no longer arbitrary.

I must add that this decision is not a reversal either of the original De Knecht case, which was decided under a different set of facts.

Separate OpinionsCRUZ, J., concurring:While the ponencia is plain enough, I wish to make it even plainer that B.P. Blg. 340 is not

a legislative reversal of our finding in De Knecht v. Bautista, 100 SCRA 660, that the expropriation of the petitioner's property was arbitrary. As Justice Gancayco clearly points out, supervening events have changed the factual basis of that decision to justify the subsequent enactment of the statute. If we are sustaining that legislation, it is not because we concede that the lawmakers can nullify the findings of the Court in the exercise of its discretion. It is simply because we ourselves have found that under the changed situation, the present expropriation is no longer arbitrary.

I must add that this decision is not a reversal either of the original De Knecht case, which was decided under a different set of facts.

[G.R. No. 142971. May 7, 2002]THE CITY OF CEBU, petitioner, vs. SPOUSES APOLONIO and BLASA DEDAMO, respondents.

In its petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner City of Cebu assails the decision of 11 October 1999 of the Court of Appeals in CA-G.R. CV No. 59204[1] affirming the judgment of 7 May 1996 of the Regional Trial Court, Branch 13, Cebu City, in Civil Case No. CEB-14632, a case for eminent domain, which fixed the valuation of the land subject thereof on the basis of the recommendation of the commissioners appointed by it.

The material operative facts are not disputed. On 17 September 1993, petitioner City of Cebu filed in Civil Case No. CEB-14632 a complaint for eminent domain against respondents spouses Apolonio and Blasa Dedamo. The petitioner alleged therein that it needed the following parcels of land of respondents, to wit: for a public purpose, i.e., for the construction of a public road which shall serve as an access/relief road of Gorordo Avenue to extend to the General Maxilum Avenue and the back of Magellan International Hotel Roads in Cebu City. The lots are the most suitable site for the purpose. The total area sought to be expropriated is 1,624 square meters with an assessed value of P1,786,400. Petitioner deposited with the Philippine National Bank the amount of P51,156 representing 15% of the fair market value of the property to enable the petitioner to take immediate possession of the property pursuant to Section 19 of R.A. No. 7160. Respondents, filed a motion to dismiss the complaint because the purpose for which their property was to be expropriated was not for a public purpose but for benefit of a single private entity, the Cebu Holdings, Inc. Petitioner could simply buy directly from them the property at its fair market value if it wanted to, just like what it did with the neighboring lots.  Besides, the price offered was very low in light of the consideration of P20,000 per square meter, more or less, which petitioner paid to the neighboring lots. Finally, respondents alleged that they have no other land in Cebu City.

A pre-trial was thereafter hadOn 23 August 1994, petitioner filed a motion for the issuance of a writ of possession

pursuant to Section 19 of R.A. No. 7160. The motion was granted by the trial court on 21 September 1994. On 14 December 1994, the parties executed and submitted to the trial court an Agreement[4] wherein they declared that they have partially settled the case and in consideration thereof they agreed:1. That the SECOND PARTY hereby conforms to the intention to [sic] the FIRST PARTY in

expropriating their parcels of land in the above-cited case as for public purpose and for the benefit of the general public;

2. That the SECOND PARTY agrees to part with the ownership of the subject parcels of land in favor of the FIRST PARTY provided the latter will pay just compensation for the same in the amount determined by the court after due notice and hearing;

3. That in the meantime the SECOND PARTY agrees to receive the amount of ONE MILLION SEVEN HUNDRED EIGHTY SIX THOUSAND FOUR HUNDRED PESOS (1,786,400.00) as provisional payment for the subject parcels of land, without prejudice to the final valuation as maybe determined by the court;

4. That the FIRST PARTY in the light of the issuance of the Writ of Possession Order dated September 21, 1994 issued by the Honorable Court, agreed to take possession over that portion of the lot sought to be expropriated where the house of the SECOND PARTY was located only after fifteen (15) days upon the receipt of the SECOND PARTY of the amount of P1,786,400.00;

5. That the SECOND PARTY upon receipt of the aforesaid provisional amount, shall turn over to the FIRST PARTY the title of the lot and within the lapse of the fifteen (15) days grace period will voluntarily demolish their house and the other structure that may be located thereon at their own expense

6. That the FIRST PARTY and the SECOND PARTY jointly petition the Honorable Court to render judgment in said Civil Case No. CEB-14632 in accordance with this AGREEMENT;

7. That the judgment sought to be rendered under this agreement shall be followed by a supplemental judgment fixing the just compensation for the property of the SECOND

PARTY after the Commissioners appointed by this Honorable Court to determine the same shall have rendered their report and approved by the court.

Pursuant to said agreement, the trial court appointed three commissioners to determine the just compensation of the lots sought to be expropriated. The commissioners were Palermo M. Lugo, who was nominated by petitioner and who was designated as Chairman; Alfredo Cisneros, who was nominated by respondents; and Herbert E. Buot, who was designated by the trial court. The parties agreed to their appointment. Thereafter, the commissioners submitted their report, which contained their respective assessments of and recommendation as to the valuation of the property. On the basis of the commissioners report and after due deliberation thereon, the trial court rendered its decision on 7 May 1996,[5] the decretal portion of which reads: WHEREFORE, in view of the foregoing, judgment is hereby rendered in accordance with the report of the commissioners. Plaintiff is directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the sum of pesos: TWENTY FOUR MILLION EIGHT HUNDRED SIXTY-FIVE THOUSAND AND NINE HUNDRED THIRTY (P24,865.930.00) representing the compensation mentioned in the Complaint.

Plaintiff and defendants are directed to pay the following commissioners fee;1. To Palermo Lugo - P21,000.002. To Herbert Buot - P19,000.003. To Alfredo Cisneros - P19,000.00

Without pronouncement as to cost. SO ORDERED.Petitioner filed a motion for reconsideration on the ground that the commissioners report

was inaccurate since it included an area which was not subject to expropriation. More specifically, it contended that Lot No. 1528 contains 793 square meters but the actual area to be expropriated is only 478 square meters. The remaining 315 square meters is the subject of a separate expropriation proceeding in Civil Case No. CEB-8348, then pending before Branch 9 of the Regional Trial Court of Cebu City. On 16 August 1996, the commissioners submitted an amended assessment for the 478 square meters of Lot No. 1528 and fixed it at P12,824.10 per square meter, or in the amount of P20,826,339.50. The assessment was approved as the just compensation thereof by the trial court in its Order of 27 December 1996. [6]Accordingly, the dispositive portion of the decision was amended to reflect the new valuation.

Petitioner elevated the case to the Court of Appeals, which docketed the case as CA-G.R. CV No. 59204. Petitioner alleged that the lower court erred in fixing the amount of just compensation at P20,826,339.50. The just compensation should be based on the prevailing market price of the property at the commencement of the expropriation proceedings. The petitioner did not convince the Court of Appeals. In its decision of 11 October 1999,[7] the Court of Appeals affirmed in toto the decision of the trial court.

Still unsatisfied, petitioner filed with us the petition for review in the case at bar.  It raises the sole issue of whether just compensation should be determined as of the date of the filing of the complaint. It asserts that it should be, which in this case should be 17 September 1993 and not at the time the property was actually taken in 1994, pursuant to the decision in National Power Corporation vs. Court of Appeals.[8] In their Comment, respondents maintain that the Court of Appeals did not err in affirming the decision of the trial court because (1) the trial court decided the case on the basis of the agreement of the parties that just compensation shall be fixed by commissioners appointed by the court; (2) petitioner did not interpose any serious objection to the commissioners report of 12 August 1996 fixing the just compensation of the 1,624-square meter lot at P20,826,339.50; hence, it was estopped from attacking the report on which the decision was based; and (3) the determined just compensation fixed is even lower than the actual value of the property at the time of the actual taking in 1994.

Eminent domain is a fundamental State power that is inseparable from sovereignty. It is the Governments right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose.[9] However, the Government must pay the owner thereof just compensation as consideration therefor. In the case at bar, the applicable law as to the point of reckoning for the determination of just compensation is Section 19 of R.A. No. 7160, which expressly provides that just compensation shall be determined as of the time of actual taking. The Section reads as follows:

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 percent (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.

The petitioner has misread our ruling in The National Power Corp. vs. Court of Appeals.[10] We did not categorically rule in that case that just compensation should be determined as of the filing of the complaint. We explicitly stated therein that although the general rule in determining just compensation in eminent domain is the value of the property as of the date of the filing of the complaint, the rule admits of an exception: where this Court fixed the value of the property as of the date it was taken and not at the date of the commencement of the expropriation proceedings.

Also, the trial court followed the then governing procedural law on the matter, which was Section 5 of Rule 67 of the Rules of Court, which provided as follows:

SEC. 5. Ascertainment of compensation. -- Upon the entry of the order of condemnation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report is to be filed with the court. More than anything else, the parties, by a solemn document freely and voluntarily agreed upon by them, agreed to be bound by the report of the commission and approved by the trial court. The agreement is a contract between the parties. It has the force of law between them and should be complied with in good faith. Article 1159 and 1315 of the Civil Code explicitly provides:

Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. Furthermore, during the hearing on 22 November 1996, petitioner did not interpose a serious objection.[11] It is therefore too late for petitioner to question the valuation now without violating the principle of equitable estoppel. Estoppel in pais arises when one, by his acts, representations or admissions, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts.[12] Records show that petitioner consented to conform with the valuation recommended by the commissioners. It cannot detract from its agreement now and assail correctness of the commissioners assessment. Finally, while Section 4, Rule 67 of the Rules of Court provides that just compensation shall be determined at the time of the filing of the complaint for expropriation,[13]such law cannot prevail over R.A. 7160, which is a substantive law.]WHEREFORE, finding no reversible error in the assailed judgment of the Court of Appeals in CA-G.R. CV No. 59204, the petition in this case is hereby DENIED. No pronouncement as to costs. SO ORDERED.

[G.R. NO. 142304. JUNE 20, 2001]CITY OF MANILA VS. OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA, AND ADELAIDA, ALL SURNAMED SERRANO

This is a petition for review on certiorari of the decision, dated November 16, 1999, and resolution, dated February 23, 2000, of the Court of Appeals reversing the order, dated December 15, 1998, of the Regional Trial Court, Branch 16, Manila and perpetually enjoining it from proceeding with petitioners complaint for eminent domain in Civil Case No. 94-72282.

The facts are as follows:On December 21, 1993, the City Council of Manila enacted Ordinance No. 7833,

authorizing the expropriation of certain properties in Manilas First District in Tondo, covered by TCT Nos. 70869, 105201, 105202, and 138273 of the Register of Deeds of Manila, which are to be sold and distributed to qualified occupants pursuant to the Land Use Development Program of the City of Manila. One of the properties sought to be expropriated, denominated as Lot 1-C, consists of 343.10 square meters. It is covered by TCT No. 138272 which was derived from TCT No. 70869 issued in the name of Feliza De Guia. [1] After her death, the estate of Feliza De Guia was settled among her heirs by virtue of a compromise agreement, which was duly approved by the Regional Trial Court, Branch 53, Manila in its decision, dated May 8, 1986.[2] In 1989, Alberto De Guia, one of the heirs of Feliza De Guia, died, as a result of which his estate, consisting of his share in the properties left by his mother, was partitioned among his heirs. Lot 1-C was assigned to Edgardo De Guia, one of the heirs of Alberto De Guia. [3] On April 15, 1994, Edgardo De Guia was issued TCT No. 215593, covering Lot 1-C.[4] On July 29, 1994, the said property was transferred to Lee Kuan Hui, in whose name TCT No. 217018 was issued. [5] The property was subsequently sold on January 24, 1996 to Demetria De Guia to whom TCT No. 226048 was issued.[6]

On September 26, 1997, petitioner City of Manila filed an amended complaint for expropriation, docketed as Civil Case No. 94-72282, with the Regional Trial Court, Branch 16, Manila, against the supposed owners of the lots covered by TCT Nos. 70869 (including Lot 1-C), 105201, 105202, and 138273, which included herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida, all surnamed Serrano. [7] On November 12, 1997, respondents filed a consolidated answer, in which they alleged that their mother, the late Demetria De Guia, had acquired Lot 1-C from Lee Kian Hui; that they had been the bona fide occupants of the said parcel of land for more than 40 years; that the expropriation of Lot 1-C would result in their dislocation, it being the only residential land left to them by their deceased mother; and that the said lot was exempt from expropriation because dividing the said parcel of land among them would entitle each of them to only about 50 square meters of land. Respondents, therefore, prayed that judgment be rendered declaring Lot 1-C exempt from expropriation and ordering the cancellation of the notice annotated on the back of TCT No. 226048,[8] regarding the pendency of Civil Case No. 94-72282 for eminent domain filed by petitioner.[9]Upon motion by petitioner, the trial court issued an order, dated October 9, 1998, directing petitioner to deposit the amount of P1,825,241.00 equivalent to the assessed value of the properties.[10] After petitioner had made the deposit, the trial court issued another order, dated December 15, 1998, directing the issuance of a writ of possession in favor of petitioner.[11]

Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot 1-C would render respondents, who are actual occupants thereof, landless; that Lot 1-C is exempt from expropriation because R.A. No. 7279 provides that properties consisting of residential lands not exceeding 300 square meters in highly urbanized cities are exempt from expropriation; that respondents would only receive around 49 square meters each after the partition of Lot 1-C which consists of only 343.10 square meters; and that R.A. No. 7279 was not meant to deprive an owner of the entire residential land but only that in excess of 300 square meters.[12] On November 16, 1999, the Court of Appeals rendered a decision holding that Lot 1-C is not exempt from expropriation because it undeniably exceeds 300 square meters which is no longer considered a small property within the framework of R.A. No. 7279. However, it held that in accordance with the ruling inFilstream International Inc. v. Court of Appeals,[13] the other modes of acquisition of lands enumerated in 9-10 of the law must first be tried by the city government before it can resort to expropriation. As petitioner failed to show that it had done so, the Court of Appeals gave judgment for respondents and enjoined petitioner from expropriating

Lot 1-C. The dispositive portion of its decision reads: WHEREFORE, in view of all the foregoing, the instant petition is hereby GIVEN DUE COURSE and accordingly GRANTED. The Order, dated December 15, 1998, denying petitioners motion for reconsideration issued by respondent Regional Trial Court of Manila, Branch 16, in Civil Case No. 94-72282 is hereby REVERSED and SET ASIDE. Let a writ of injunction issue perpetually enjoining the same respondent court from proceeding with the complaint for eminent domain in Civil Case No. 94-72282.[14]

In its resolution, dated February 23, 2000, the Court of Appeals likewise denied two motions for reconsideration filed by petitioner.[15] Hence this petition.Petitioner contends that the Court of Appeals erred in1. Giving due course to the Petition of the Serranos under Rule 65 notwithstanding its own

declaration of the impropriety of the resort to the writ and filing thereof with the wrong appellate court;

2. Concluding that the Order of October 9, 1998 which authorizes the immediate entry of the City as the expropriating agency into the property sought to be expropriated upon the deposit of the provisionally fixed fair market value thereof as tantamount to condemnation of the property without prior showing of compliance with the acquisition of other lands enumerated in Sec. 9 of R.A. 7279 ergo a violation of due process to the Serranos by the doctrinaire application of FILSTREAM ruling and corrollarily,

3. In prohibiting permanently, by writ of injunction, the trial court from proceeding with a complaint for expropriation of the City in Civil Case No. 94-72282.[16]

We will deal with these contentions in the order they are presented.First. Petitioner contends that respondents remedy against the order of the trial court granting a writ of possession was not to file a petition for certiorari under Rule 65 but a petition for review under Rule 45 which should have been filed in the Supreme Court.[17] This contention has no merit. A petition for review under Rule 45 is a mode of appeal. Accordingly, it could not have been resorted to by respondents inasmuch as the order of the trial court granting a writ of possession was merely interlocutory from which no appeal could be taken. Rule 45, 1 of the 1997 Rules of Civil Procedure applies only to final judgments or orders of the Court of Appeals, the Sandiganbayan, and the Regional Trial Court. On the other hand, a petition for certiorari is the suitable remedy in view of Rule 65, 1 which provides When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

Respondents petition before the Court of Appeals alleged that the trial court had acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the order, dated December 15, 1998, resolving that Lot 1-C is not exempt from expropriation and ordering the issuance of the writ of possession in favor of petitioner.[18]

Second. Petitioner faults the Court of Appeals for deciding issues not raised in the trial court, specifically the question of whether or not there was compliance with 9 and 10 of R.A. No. 7279. It argues that the sole defense set up by respondents in their petition before the Court of Appeals was that their property was exempted from expropriation because it comes within the purview of a small property as defined by R.A. No. 7279. Accordingly, the Court of Appeals should not have applied the doctrine laid down by this Court in the Filstream[19] case as such issue was not raised by respondents in their petition before the Court of Appeals.

This contention likewise has no merit. In their petition before the Court of Appeals, respondents raised the following issues:

1. Whether or not the subject Lot 1-C with an area of 343.10 square meters covered by T.C.T. No. 226048 in the name of petitioners mother, the late Demetria [De Guia] Serrano, may be lawfully expropriated for the public purpose of providing landless occupants thereof homelots of their own under the land-for-the-landless program of respondent City of Manila.

2. Whether or not the expropriation of the said Lot 1-C by respondent City of Manila violates the equal protection clause of the Constitution, since petitioners, with the exception of petitioner Oscar G. Serrano, who are likewise landless are actual occupants hereo

3. Whether or not Lot 1-C is or may be exempted from expropriation pursuant to R.A. 7279, otherwise known as the Urban Development and Housing Act of 1992.[20]

It is clear that respondents raised in issue the propriety of the expropriation of their property in connection with R.A. No. 7279. Although what was discussed at length in their petition before the Court of Appeals was whether or not the said property could be considered a small property within the purview of the exemption under the said law, the other provisions of the said law concerning expropriation proceedings need also be looked into to address the first issue raised by respondents and to determine whether or not expropriation of Lot 1-C was proper under the circumstances. The Court of Appeals properly considered relevant provisions of R.A. No. 7279 to determine the issues raised by respondents. Whether or not it correctly applied the doctrine laid down in Filstream in resolving the issues raised by respondents, however, is a different matter altogether, and this brings us to the next point.Third. Petitioner contends that the Court of Appeals erroneously presumed that Lot 1-C has been ordered condemned in its favor when the fact is that the order of the trial court, dated December 15, 1998, merely authorized the issuance of a writ of possession and petitioners entry into the property pursuant to Rule 67, 2. At that stage, it was premature to determine whether the requirements of R.A. No. 7279, 9-10 have been complied with since no evidentiary hearing had yet been conducted by the trial court.[21]

This contention is well taken. Rule 67, 2 provides:Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of the Philippines payable on demand to the authorized government depositary.

If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be fixed by the court. After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of copies to the parties. Thus, a writ of execution may be issued by a court upon the filing by the government of a complaint for expropriation sufficient in form and substance and upon deposit made by the government of the amount equivalent to the assessed value of the property subject to expropriation. Upon compliance with these requirements, the issuance of the writ of possession becomes ministerial.[22] In this case, these requirements were satisfied and, therefore, it became the ministerial duty of the trial court to issue the writ of possession. The Court of Appeals, however, ruled that petitioner failed to comply with the requirements laid down in 9-10 of R.A. No. 7279 and reiterated in the Filstreamruling. This is error. The ruling in Filstream was necessitated because an order of condemnation had already been issued by the trial court in that case. Thus, the judgment in that case had already become final. In this case, the trial court has not gone beyond the issuance of a writ of possession. Hearing is still to be held to determine whether or not petitioner indeed complied with the requirements provided in R.A. No. 7279. It is, therefore, premature at this stage of the proceedings to find that petitioner resorted to expropriation without first trying the other modes of acquisition enumerated in 10 of the law.

R.A. No. 7279 in pertinent parts provide: SEC. 9. Priorities in the Acquisition of Land.--- Lands for socialized housing shall be acquired in the following order:

a. Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including government-owned and controlled corporations and their subsidiaries;

b. Alienable lands of the public domain;c. Unregistered or abandoned and idle lands;d. Those within the declared Areas or Priority Development, Zonal Improvement Program

sites, and Slum Improvement and Resettlement Program sites which have not yet been acquired;

e. Bagong Lipunan Improvement of Sites and Services or BLISS sites which have not yet been acquired; and

f. Privately-owned lands.b. Where on-site development is found more practicable and advantageous to the

beneficiaries, the priorities mentioned in this section shall not apply. the local government units shall give budgetary priority to on-site development of government lands.

SEC. 10. Modes for Land Acquisition.--- The modes of acquiring lands for purposes of this Act shall include, amount others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, joint-venture agreement, negotiated purchase, and expropriation: Provided, however,That expropriation shall be resorted to only when other modes of acquisition have been exhausted: Provided, further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.

For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by the local government units, or by the National Housing Authority primarily through negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the right of first refusal. Whether petitioner has complied with these provisions requires the presentation of evidence, although in its amended complaint petitioner did allege that it had complied with the requirements.[23] The determination of this question must await the hearing on the complaint for expropriation, particularly the hearing for the condemnation of the properties sought to be expropriated. Expropriation proceedings consists of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of private property to be made by the court with the assistance of not more than three commissioners. WHEREFORE, the decision, dated November 16, 1999, and resolution, dated February 23, 2000, of the Court of Appeals are REVERSED and the order of the trial court, dated December 15, 1998, is REINSTATED. This case is REMANDED to the trial court for further proceedings. SO ORDERED.

 

[G.R. NO. 169263 SEPTEMBER 21, 2011]CITY OF MANILA VS. MELBA TAN TE

 In this Petition for Review,[1] the City of Manila assails the April 29, 2005 Decision[2] of the

Court of Appeals in CA-G.R. CV No. 71894, as well as the August 12, 2005 Resolution, [3] in the said case denying reconsideration.

The assailed decision affirmed the June 13, 2001 Order [4] of the Regional Trial Court of Manila, Branch 24 issued in Civil Case No. 00-99264 one for expropriation filed by petitioner, the City of Manila. The said Order, in turn, granted the motion to dismiss the complaint that was filed by respondent Melba Tan Te, in lieu of an answer.

 The facts follow.On March 15, 1998, then Manila City Mayor Joselito L. Atienza approved Ordinance No.

7951 an expropriation measure enacted on February 3, 1998 by the city council authorizing him to acquire by negotiation or expropriation certain pieces of real property along Maria Clara and Governor Forbes Streets where low-cost housing units could be built and then awarded to  bona fide residents therein. For this purpose, the mayor was also empowered to access the citys funds or utilize funding facilities of other government agencies.[5] In the aggregate, the covered property measures 1,425 square meters, and includes the 475-square-meter lot owned by respondent Melba Tan Te.[6]

 The records bear that respondent had acquired the property from the heirs of Emerlinda Dimayuga Reyes in 1996, and back then it was being occupied by a number of families whose leasehold rights had long expired even prior to said sale. In 1998, respondent had sought before the Metropolitan Trial Court of Manila, Branch 15 the ejectment of these occupants from the premises. The favorable ruling in that case evaded execution; hence, the court, despite opposition of the City of Manila, issued a Writ of Demolition at respondents instance. [7] It appears that in the interim between the issuance of the writ of execution and the order of demolition, the City of Manila had instituted an expropriation case[8] affecting the same property. Respondent had moved for the dismissal of that first expropriation case for lack of cause of action, lack of showing of an ordinance authorizing the expropriation, and non-compliance with the provisions of Republic Act (R.A.) No. 7279, otherwise known as the Urban Development and Housing Act of 1992.[9] The trial court found merit in the motion and dismissed the complaint without prejudice.[10]On November 16, 2000, petitioner[11] filed this second Complaint[12] for expropriation before the Regional Trial Court of Manila, Branch 24. [13] This time, it attached a copy of Ordinance No. 7951 and alleged that pursuant thereto, it had previously offered to purchase the subject property from respondent for P824,330.00.[14] The offer was contained in a letter sent to respondent by the City Legal Officer on May 21, 1999,[15] but respondent allegedly failed to retrieve it despite repeated notices,[16] thereby compelling petitioner to institute the present expropriation proceedings after depositing in trust with the Land Bank of the PhilippinesP1,000,000.00 cash, representing the just compensation required by law to be paid to respondent.[17]

Respondent did not file an answer and in lieu of that, she submitted a Motion to Dismiss[18] and raised the following grounds: that Ordinance No. 7951 was an invalid expropriation measure because it violated the rule against taking private property without just compensation; that petitioner did not comply with the requirements of Sections 9[19] and 10[20] of R.A. No. 7279; and that she qualified as a small property owner and, hence, exempt from the operation of R.A. No. 7279, the subject lot being the only piece of realty that she owned.

 Petitioner moved that it be allowed to enter the property, but before it could be resolved, the trial court issued its June 13, 2001 Order [21] dismissing the complaint. First, the trial court held that while petitioner had deposited with the bank the alleged P1M cash in trust for respondent, petitioner nevertheless did not submit any certification from the City Treasurers Office of the amount needed to justly compensate respondent for her property. Second, it emphasized that the provisions of Sections 9 and 10 of R.A. No. 7279 are mandatory in character, yet petitioner had failed to show that it exacted compliance with them prior to the commencement of this suit. Lastly, it conceded that respondent had no other real property except the subject lot which, considering its total area, should well be considered a small property exempted by law from expropriation. In view of the dismissal of the complaint, petitioners motion to enter was rendered moot and academic.[22]

 Petitioner interposed an appeal to the Court of Appeals which, finding no merit therein,

dismissed the same.[23] Petitioner sought reconsideration,[24] but it was denied.[25]

In this Petition,[26] petitioner posits that the trial courts dismissal of its complaint was premature, and it faults the Court of Appeals for having failed to note that by such dismissal it has been denied an opportunity to show previous compliance with the requirements of Sections 9 and 10 of R.A. No. 7279 as well as to establish that respondent actually owns other realty apart from the subject property. Besides, continues petitioner, whether or not it had truly complied with the requirements of the law is a matter which can be determined only after a trial of the case on the merits and not, as what happened in this case, at the hearing of the motion to dismiss.[27]

Respondent, for her part, points out that Ordinance No. 7951 is an invalid expropriation measure as it does not even contain an appropriation of funds in its implementation. In this respect, respondent believes that the P1M cash deposit certified by the bank seems to be incredible, since petitioner has not shown any certification from the City Treasurers Office on the amount necessary to implement the expropriation measure. More importantly, she believes that the dismissal of the complaint must be sustained as it does not allege previous compliance with Sections 9 and 10 of R.A. No. 7279 and, hence, it does not present a valid cause of action.[28]She theorizes that the expropriation for socialized housing must abide by the priorities in land acquisition and the available modes of land acquisition laid out in the law, and that expropriation of privately-owned lands avails only as the last resort. [29] She also invokes the exemptions provided in the law. She professes herself to be a small property owner under Section 3 (q),[30] and claims that the subject property is the only piece of land she owns where she, as of yet, has not been able to build her own home because it is still detained by illegal occupants whom she had already successfully battled with in the ejectment court.[31]

In its Reply, petitioner adopts a different and bolder theory. It claims that by virtue of the vesture of eminent domain powers in it by its charter, it is thereby not bound by the requirements of Sections 9 and 10 of R.A. No. 7279. It also asserts its right to immediately enter the subject property because not only is its complaint supposedly sufficient in form and substance but also because it has already deposited P1M cash with the bank in trust for respondent. It reiterates that the dismissal of its complaint constitutes a denial of due process because all the issues propounded by respondent, initially in her motion to dismiss and all the way in the present appeal, must be resolved in a full-blown trial.

Prefatorily, the concept of socialized housing, whereby housing units are distributed and/or sold to qualified beneficiaries on much easier terms, has already been included in the expanded definition of public use or purpose in the context of the States exercise of the power of eminent domain. Said the Court in Sumulong v. Guerrero,[32] citing the earlier case of Heirs of Juancho Ardona v. Reyes:[33]

The public use requirement for a valid exercise of the power of eminent domain is a flexible and evolving concept influenced by changing conditions. The taking to be valid must be for public use. There was a time where 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. The constitution in at least two cases, to remove any doubt, determines what is public use. One is the expropriation of lands to be divided into small lots for resale at cost to individuals. The other is in the transfer, through the exercise of this power, of utilities and other enterprise to the government. It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirement of public use. 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.  The restrictive view of public use may be appropriate for a nation which circumscribes the scope of government activities and public concerns and which possesses big and correctly located public lands that obviate the need to take private property for public purposes. Neither circumstance applies to the Philippines. We have never been a laissez-faire state. And the necessities which impel the exertion of sovereign power are all too often found in areas of scarce public land or limited government resources.

 Specifically, urban renewal or development and the construction of low-cost

housing are recognized as a public purpose, not only because of the expanded concept of public use but also because of specific provisions in the Constitution.

The 1987 Constitution [provides]: The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living and an improved quality of life for all. (Article II, Section 9)The State shall, by law and for the common good, undertake, in cooperation with the private sector, a continuing program for urban land reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas. x xx In the implementation of such program the State shall respect the rights of small property owners. (Article XIII, Section 9) Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum, the general welfare. The public character of housing measures does not change because units in housing projects cannot be occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made, for it is not possible to provide housing for all who need it, all at once. Population growth, the migration to urban areas and the mushrooming of crowded makeshift dwellings is a worldwide development particularly in developing countries. So basic and urgent are housing problems that the United Nations General Assembly proclaimed 1987 as the "International Year of Shelter for the Homeless" "to focus the attention of the international community on those problems." The General Assembly is seriously concerned that, despite the efforts of Governments at the national and local levels and of international organizations, the driving conditions of the majority of the people in slums and squatter areas and rural settlements, especially in developing countries, continue to deteriorate in both relative and absolute terms." [G.A. Res. 37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4]

 In light of the foregoing, the Court is satisfied that socialized housing falls within the confines of public use.[34]

Congress passed R.A. No. 7279,[35] to provide a comprehensive and continuing urban development and housing program as well as access to land and housing by the underprivileged and homeless citizens; uplift the conditions of the underprivileged and homeless citizens in urban areas by making available decent housing at affordable cost; optimize the use and productivity of land and urban resources; reduce urban dysfunctions which affect public health, safety and ecology; and improve the capability of local governments in undertaking urban development and housing programs and projects, among others. [36] Accordingly, all city and municipal governments are mandated to inventory all lands and improvements within their respective locality and identify lands which may be utilized for socialized housing and as resettlement sites for acquisition and disposition to qualified beneficiaries.[37] Section 10 thereof authorizes local government units to exercise the power of eminent domain to carry out the objectives of the law, but subject to the conditions stated therein and in Section 9. [38] It is precisely this aspect of the law which constitutes the core of the present controversy, yet this case presents a serious procedural facet overlooked by both the trial court and the Court of Appeals which needs foremost attention ahead of the issues propounded by the parties.

 Expropriation is a two-pronged proceeding: first, the determination of the authority of the

plaintiff to exercise the power and the propriety of its exercise in the context of the facts which terminates in an order of dismissal or an order of condemnation affirming the plaintiff's lawful right to take the property for the public use or purpose described in the complaint and second, the determination by the court of the just compensation for the property sought to be expropriated.[39]Expropriation proceedings are governed by Rule 67 of the Rules of Court. Under the Rules of Court of 1940 and 1964, where the defendant in an expropriation case conceded to the plaintiffs right to expropriate (or where the trial court affirms the existence of such right), the court-appointed commissioners would then proceed to determine the just compensation to be paid.[40] Otherwise, where the defendant had objections to and defenses

against the expropriation of his property, he was required to file a single motion to dismiss containing all such objections and defenses.[41]

This motion to dismiss was not covered by Rule 15 which governed ordinary motions, and was then the required responsive pleading, taking the place of an answer, where the plaintiffs right to expropriate the defendants property could be put in issue. [42]Any relevant and material fact could be raised as a defense, such as that which would tend to show that the exercise of the power to condemn was unauthorized, or that there was cause for not taking defendants property for the purpose alleged in the petition, or that the purpose for the taking was not public in character. With that, the hearing of the motion and the presentation of evidence would follow. The rule is based on fundamental constitutional provisions affecting the exercise of the power of eminent domain, such as those that seek to protect the individual property owner from the aggressions of the government.[43] However, the rule, which was derived from the practice of most American states, proved indeed to be a source of confusion because it likewise permitted the filing of another motion to dismiss, such as that referred to in Rule 16, where the defendant could raise, in addition, the preliminary objections authorized under it.[44]

The Supreme Court, in its en banc Resolution in Bar Matter No. 803 dated April 8, 1997, has provided that the revisions made in the Rules of Court were to take effect on July 1, 1997. Thus, with said amendments, the present state of Rule 67 dispenses with the filing of an extraordinary motion to dismiss such as that required before in response to a complaint for expropriation. The present rule requires the filing of an answer as responsive pleading to the complaint. Section 3 thereof provides:

 Sec. 3. Defenses and objections. If a defendant has no objection or defense to the action or the taking of his property, he may and serve a notice or appearance and a manifestation to that effect, specifically designating or identifying the property in which he claims to be interested, within the time stated in the summons. Thereafter, he shall be entitled to notice of all proceedings affecting the same.

 If a defendant has any objection to the filing of or the allegations in the complaint, or any objection or defense to the taking of his property, he shall serve his answer within the time stated in the summons. The answer shall specifically designate or identify the property in which he claims to have an interest, state the nature and extent of the interest claimed, and adduce all his objections and defenses to the taking of his property. No counterclaim, cross-claim or third-party complaint shall be alleged or allowed in the answer or any subsequent pleading.

A defendant waives all defenses and objections not so alleged but the court, in the interest of justice, may permit amendments to the answer to be made not later than ten (10) days from the filing thereof. However, at the trial of the issue of just compensation, whether or not a defendant has previously appeared or answered, he may present evidence as to the amount of the compensation to be paid for his property, and he may share in the distribution of the award.[45]

The defendant in an expropriation case who has objections to the taking of his property is now required to file an answer and in it raise all his available defenses against the allegations in the complaint for eminent domain. While the answer is bound by the omnibus motion rule under Section 8,[46] Rule 15, much leeway is nevertheless afforded to the defendant because amendments may be made in the answer within 10 days from its filing. Also, failure to file the answer does not produce all the disastrous consequences of default in ordinary civil actions, because the defendant may still present evidence on just compensation.[47]

 At the inception of the case at bar with the filing of the complaint on November 16, 2000, the amended provisions of Rule 67 have already been long in force. Borre v. Court of Appeals[48] teaches that statutes which regulate procedure in the courts apply to actions pending and undetermined at the time those statutes were passed. And in Laguio v. Gamet,[49] it is said that new court rules apply to proceedings which take place after the date of their effectivity.

 In the case of Robern Development Corporation v. Quitain,[50] a similar motion to dismiss was filed by the private property owner, petitioner therein, in an expropriation case filed by the National Power Corporation (NPC), alleging certain jurisdictional defects as well as issues on the impropriety of the expropriation measure being imposed on the property. The trial court in that case denied the motion inasmuch as the issues raised therein should be dealt with during the

trial proper. On petition for certiorari, the Court of Appeals affirmed the trial courts denial of the motion to dismiss. On appeal, the Supreme Court affirmed the Court of Appeals, but declared that under the amended provisions of Section 3, Rule 67, which were already in force at about the time the motion to dismiss had been submitted for resolution, all objections and defenses that could be availed of to defeat the expropriators exercise of the power of eminent domain must be contained in an answer and not in a motion to dismiss because these matters require the presentation of evidence. Accordingly, while the Court in that case sustained the setting aside of the motion to dismiss, it nevertheless characterized the order of dismissal as a nullity. Hence, it referred the case back to the trial court and required the NPC to submit its answer to the complaint within 10 days from the finality of the decision.

 Thus, the trial court in this case should have denied respondents motion to dismiss and

required her to submit in its stead an answer within the reglementary period. This, because whether petitioner has observed the provisions of Sections 9 and 10 of R.A. No. 7279 before resorting to expropriation, and whether respondent owns other properties than the one sought to be expropriated, and whether she is actually a small property owner beyond the reach of petitioners eminent domain powers, are indeed issues in the nature of affirmative defenses which require the presentation of evidence aliunde.[51] Besides, Section 1, Rule 16 of the Rules of Court does not consider these matters grounds for a motion to dismiss, and an action can be dismissed only on the grounds authorized by this provision.[52]

 The Court declared in Robern Development Corporation, thus: 

Accordingly, Rule 16, Section 1 of the Rules of Court, does not consider as grounds for a motion to dismiss the allotment of the disputed land for another public purpose or the petition for a mere easement of right-of-way in the complaint for expropriation. The grounds for dismissal are exclusive to those specifically mentioned in Section 1, Rule 16 of the Rules of Court, and an action can be dismissed only on a ground authorized by this provision.

 To be exact, the issues raised by the petitioner are affirmative

defenses that should be alleged in an answer, since they require presentation of evidence aliunde. Section 3 of Rule 67 provides that if a defendant has any objection to the filing of or the allegations in the complaint, or any objection or defense to the taking of his property, he should include them in his answer. Naturally, these issues will have to be fully ventilated in a full-blown trial and hearing. It would be precipitate to dismiss the Complaint on such grounds as claimed by the petitioner. Dismissal of an action upon a motion to dismiss constitutes a denial of due process if, from a consideration of the pleadings, it appears that there are issues that cannot be decided without a trial of the case on the merits.

 Inasmuch as the 1997 Rules had just taken effect when this case

arose, we believe that in the interest of substantial justice, the petitioner should be given an opportunity to file its answer to the Complaint for expropriation in accordance with Section 3, Rule 67 of the 1997 Rules of Civil Procedure.x x x[53]

  WHEREFORE, the Petition is hereby GRANTED. The Order of the Regional Trial Court of

Manila, Branch 24 in Civil Case No. 00-99264 dated June 13, 2001, as well as the April 29, 2005 Decision of the Court of Appeals in CA-G.R. CV No. 71894 affirming said order, and the August 12, 2005 Resolution therein which denied reconsideration, are hereby SET ASIDE. The case is hereby REMANDED to the trial court for further proceedings. Respondent is DIRECTED to file her Answer to the complaint within ten (10) days from the finality of this Decision.

 SO ORDERED.

G.R. No. 148357 June 30, 2006ANIANO A. ALBON vs. BAYANI F. FERNANDO, City Mayor of Marikina, ENGR. ALFONSO ESPIRITO, City Engineer of Marikina, ENGR. ANAKI MADERAL, Assistant City Engineer of Marikina, and NATIVIDAD CABALQUINTO, City Treasurer of Marikina

May a local government unit (LGU) validly use public funds to undertake the widening, repair and improvement of the sidewalks of a privately-owned subdivision?

This is the issue presented for the Court’s resolution inthis petition for review on certiorari1 which assails the December 22, 2000 decision2 and

May 30, 2001 resolution of the Court of Appeals in CA-G.R. SP No. 56767.In May 1999, the City of Marikina undertook a public works project to widen, clear and

repair the existing sidewalks of Marikina Greenheights Subdivision. It was undertaken by the city government pursuant to Ordinance No. 59, s. 19933 like other infrastructure projects relating to roads, streets and sidewalks previously undertaken by the city.

On June 14, 1999, petitioner Aniano A. Albon filed with the Regional Trial Court of Marikina, Branch 73, a taxpayer’s suit for certiorari, prohibition and injunction with damages against respondents (who were at that time officials of Marikina), namely, City Mayor Bayani F. Fernando, City Engineer Alfonso Espirito, Assistant City Engineer Anaki Maderal and City Treasurer Natividad Cabalquinto. It was docketed as SCA Case No. 99-331-MK.

Petitioner claimed that it was unconstitutional and unlawful for respondents to use government equipment and property, and to disburse public funds, of the City of Marikina for the grading, widening, clearing, repair and maintenance of the existing sidewalks of Marikina Greenheights Subdivision. He alleged that the sidewalks were private property because Marikina Greenheights Subdivision was owned by V.V. Soliven, Inc. Hence, the city government could not use public resources on them. In undertaking the project, therefore, respondents allegedly violated the constitutional proscription against the use of public funds for private purposes4 as well as Sections 335 and 336 of RA 71605 and the Anti-Graft and Corrupt Practices Act. Petitioner further alleged that there was no appropriation for the project.

On June 22, 1999, the trial court denied petitioner’s application for a temporary restraining order (TRO) and writ of preliminary injunction. The trial court reasoned that the questioned undertaking was covered by PD 1818 and Supreme Court Circular No. 68-94 which prohibited courts from issuing a TRO or injunction in any case, dispute or controversy involving an infrastructure project of the government.

On November 15, 1999, the trial court rendered its decision6 dismissing the petition. It ruled that the City of Marikina was authorized to carry out the contested undertaking pursuant to its inherent police power. Invoking this Court’s 1991 decision in White Plains Association v. Legaspi,7 the roads and sidewalks inside the Marikina Greenheights Subdivision were deemed public property.

Petitioner sought a reconsideration of the trial court’s decision but it was denied.Thereafter, petitioner elevated the case to the Court of Appeals via a petition for certiorari,

prohibition, injunction and damages. On December 22, 2000, the appellate court sustained the ruling of the trial court and held that Ordinance No. 59, s. 1993, was a valid enactment. The sidewalks of Marikina Greenheights Subdivision were public in nature and ownership thereof belonged to the City of Marikina or the Republic of the Philippines following the 1991 White Plains Association decision. Thus, the improvement and widening of the sidewalks pursuant to Ordinance No. 59, s. 1993 was well within the LGU’s powers. On these grounds, the petition was dismissed. Petitioner moved for reconsideration of the appellate court’s decision but it was denied. Undaunted, he instituted this petition.

Like all LGUs, the City of Marikina is empowered to enact ordinances for the purposes set forth in the Local Government Code (RA 7160). It is expressly vested with police powers delegated to LGUs under the general welfare clause of RA 7160.8 With this power, LGUs may prescribe reasonable regulations to protect the lives, health, and property of their constituents and maintain peace and order within their respective territorial jurisdictions.9

Cities and municipalities also have the power to exercise such powers and discharge such functions and responsibilities as may be necessary, appropriate or incidental to efficient and effective provisions of the basic services and facilities, including infrastructure facilities intended primarily to service the needs of their residents and which are financed by their own funds.10 These infrastructure facilities include municipal or city roads and bridges and similar

facilities. There is no question about the public nature and use of the sidewalks in the Marikina Greenheights Subdivision. One of the "whereas clauses" of PD 121612 (which amended PD 95713) declares that open spaces,14 roads, alleys and sidewalks in a residential subdivision are for public use and beyond the commerce of man. In conjunction herewith, PD 957, as amended by PD 1216, mandates subdivision owners to set aside open spaces which shall be devoted exclusively for the use of the general public. Thus, the trial and appellate courts were correct in upholding the validity of Ordinance No. 59, s. 1993. It was enacted in the exercise of the City of Marikina’s police powers to regulate the use of sidewalks. However, both the trial and appellate courts erred when they invoked our 1991 decision in White Plains Association and automatically applied it in this case. This Court has already resolved three interrelated White Plains Association cases:15 (1) G.R. No. 5568516resolved in 1985; (2) G.R. No. 9552217 decided in 1991 and (3) G.R. No. 12813118 decided in 1998.

The ruling in the 1991 White Plains Association decision relied on by both the trial and appellate courts was modified by this Court in 1998 in White Plains Association v. Court of Appeals.19 Citing Young v. City of Manila,20this Court held in its 1998 decision that subdivision streets belonged to the owner until donated to the government or until expropriated upon payment of just compensation. The word "street," in its correct and ordinary usage, includes not only the roadway used for carriages and vehicular traffic generally but also the portion used for pedestrian travel.21 The part of the street set aside for the use of pedestrians is known as a sidewalk. Moreover, under subdivision laws,23 lots allotted by subdivision developers as road lots include roads, sidewalks, alleys and planting strips.24 Thus, what is true for subdivision roads or streets applies to subdivision sidewalks as well. Ownership of the sidewalks in a private subdivision belongs to the subdivision owner/developer until it is either transferred to the government by way of donation or acquired by the government through expropriation.

Section 335 of RA 7160 is clear and specific that no public money or property shall be appropriated or applied for private purposes. This is in consonance with the fundamental principle in local fiscal administration that local government funds and monies shall be spent solely for public purposes.25 In Pascual v. Secretary of Public Works, the Court laid down the test of validity of a public expenditure: it is the essential character of the direct object of the expenditure which must determine its validity and not the magnitude of the interests to be affected nor the degree to which the general advantage of the community, and thus the public welfare, may be ultimately benefited by their promotion.27 Incidental advantage to the public or to the State resulting from the promotion of private interests and the prosperity of private enterprises or business does not justify their aid by the use of public money.28

In Pascual, the validity of RA 920 ("An Act Appropriating Funds for Public Works") which appropriated P85,000 for the construction, repair, extension and improvement of feeder roads within a privately-owned subdivision was questioned. The Court held that where the land on which the projected feeder roads were to be constructed belonged to a private person, an appropriation made by Congress for that purpose was null and void.29 In Young v. City of Manila, the City of Manila undertook the filling of low-lying streets of the Antipolo Subdivision, a privately-owned subdivision. The Court ruled that as long as the private owner retained title and ownership of the subdivision, he was under the obligation to reimburse to the city government the expenses incurred in land-filling the streets.

Moreover, the implementing rules of PD 957, as amended by PD 1216, provide that it is the registered owner or developer of a subdivision who has the responsibility for the maintenance, repair and improvement of road lots and open spaces of the subdivision prior to their donation to the concerned LGU. The owner or developer shall be deemed relieved of the responsibility of maintaining the road lots and open space only upon securing a certificate of completion and executing a deed of donation of these road lots and open spaces to the LGU.31

Therefore, the use of LGU funds for the widening and improvement of privately-owned sidewalks is unlawful as it directly contravenes Section 335 of RA 7160. This conclusion finds further support from the language of Section 17 of RA 7160 which mandates LGUs to efficiently and effectively provide basic services and facilities. The law speaks of infrastructure facilities intended primarily to service the needs of the residents of the LGU and "which are funded out of municipal funds."32 It particularly refers to "municipal roads and bridges" and "similar facilities."33

Applying the rules of ejusdem generis, the phrase "similar facilities" refers to or includes infrastructure facilities like sidewalks owned by the LGU. Thus, RA 7160 contemplates that only

the construction, improvement, repair and maintenance of infrastructure facilities owned by the LGU may be bankrolled with local government funds.

Clearly, the question of ownership of the open spaces (including the sidewalks) in Marikina Greenheights Subdivision is material to the determination of the validity of the challenged appropriation and disbursement made by the City of Marikina. Similarly significant is the character of the direct object of the expenditure, that is, the sidewalks.

Whether V.V. Soliven, Inc. has retained ownership of the open spaces and sidewalks or has already donated them to the City of Marikina, and whether the public has full and unimpeded access to the roads and sidewalks of Marikina Greenheights Subdivision, are factual matters. There is a need for the prior resolution of these issues before the validity of the challenged appropriation and expenditure can be determined.

WHEREFORE, this case is hereby ordered REMANDED to the Regional Trial Court of Marikina City for the reception of evidence to determine (1) whether V.V. Soliven, Inc. has retained ownership of the open spaces and sidewalks of Marikina Greenheights Subdivision or has donated them to the City of Marikina and (2) whether the public has full and unimpeded access to, and use of, the roads and sidewalks of the subdivision. The Marikina City Regional Trial Court is directed to decide the case with dispatch.

SO ORDERED.

ENBANC HON. MA. LOURDES C. FERNANDO VS. ST. SCHOLASTICA'S COLLEGE G.R. No. 161107 March 12, 2013

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court, which seeks to set aside the December 1, 2003.

The FactsRespondents St. Scholastica’s College (SSC) and St. Scholastica’s Academy-Marikina,

Inc. (SSA-Marikina) are educational institutions organized under the laws of the Republic of the Philippines, with principal offices and business addresses at Leon Guinto Street, Malate, Manila, and at West Drive, Marikina Heights, Marikina City, respectively.

Respondent SSC is the owner of four (4) parcels of land measuring a total of 56,306.80 square meters, located in Marikina Heights and covered by Transfer Certificate Title (TCT) No. 91537. Located within the property are SSA-Marikina, the residence of the sisters of the Benedictine Order, the formation house of the novices, and the retirement house for the elderly sisters. The property is enclosed by a tall concrete perimeter fence built some thirty (30) years ago. Abutting the fence along the West Drive are buildings, facilities, and other improvements.

The petitioners are the officials of the City Government of Marikina. On September 30, 1994, the Sangguniang Panlungsod of Marikina City enacted Ordinance No. 192,4 entitled “Regulating the Construction of Fences and Walls in the Municipality of Marikina.” In 1995 and 1998, Ordinance Nos. 2175 and 2006 were enacted to amend Sections 7 and 5, respectively. Ordinance No. 192, as amended, is reproduced hereunder, as follows:

ORDINANCE No. 192 Series of 1994 ORDINANCE REGULATING THE CONSTRUCTION OF FENCES AND WALLS IN THE MUNICIPALITY OF MARIKINA WHEREAS, under Section 447.2 of Republic Act No. 7160 otherwise known as the Local Government Code of 1991 empowers the Sangguniang Bayan as the local legislative body of the municipality to Prescribe reasonable limits and restraints on the use of property within the jurisdiction of the municipality, WHEREAS the effort of the municipality to accelerate its economic and physical development, coupled with urbanization and modernization, makes imperative the adoption of an ordinance which shall embody up-to-date and modern technical design in the construction of fences of residential, commercial and industrial buildings;

WHEREAS, Presidential Decree No. 1096, otherwise known as the National Building Code of the Philippines, does not adequately provide technical guidelines for the construction of fences, in terms of design, construction, and criteria; WHEREAS, the adoption of such technical standards shall provide more efficient and effective enforcement of laws on public safety and security; WHEREAS, it has occurred in not just a few occasions that high fences or walls did not actually discourage but, in fact, even protected burglars, robbers, and other lawless elements from the view of outsiders once they have gained ingress into these walls, hence, fences not necessarily providing security, but becomes itself a “security problem”; WHEREAS, to discourage, suppress or prevent the concealment of prohibited or unlawful acts earlier enumerated, and as guardian of the people of Marikina, the municipal government seeks to enact and implement rules and ordinances to protect and promote the health, safety and morals of its constituents; WHEREAS, consistent too, with the “Clean and Green Program” of the government, lowering of fences and walls shall encourage people to plant more trees and ornamental plants in their yards, and when visible, such trees and ornamental plants are expected to create an aura of a clean, green and beautiful environment for Marikeños; WHEREAS, high fences are unsightly that, in the past, people planted on sidewalks to “beautify” the façade of their residences but, however, become hazards and obstructions to pedestrians; WHEREAS, high and solid walls as fences are considered “unneighborly” preventing community members to easily communicate and socialize and deemed to create “boxed-in” mentality among the populace; WHEREAS, to gather as wide-range of opinions and comments on this proposal, and as a requirement of the Local Government Code of 1991 (R.A. 7160), the Sangguniang Bayan of

Marikina invited presidents or officers of homeowners associations, and commercial and industrial establishments in Marikina to two public hearings held on July 28, 1994 and August 25, 1994; WHEREAS, the rationale and mechanics of the proposed ordinance were fully presented to the attendees and no vehement objection was presented to the municipal government;

NOW, THEREFORE, BE IT ORDAINED BY THE SANGGUINANG BAYAN OF MARIKINA IN SESSION DULY ASSEMBLED: DECISION G.R. No. 161107 4

Section 1. Coverage: This Ordinance regulates the construction of all fences, walls and gates on lots classified or used for residential, commercial, industrial, or special purposes. Section 2. Definition of Terms: a. Front Yard – refers to the area of the lot fronting a street, alley or public thoroughfare. b. Back Yard – the part of the lot at the rear of the structure constructed therein. c. Open fence – type of fence which allows a view of “thru-see” of the inner yard and the improvements therein. (Examples: wrought iron, wooden lattice, cyclone wire) d. Front gate – refers to the gate which serves as a passage of persons or vehicles fronting a street, alley, or public thoroughfare. Section 3. The standard height of fences or walls allowed under this ordinance are as follows: (1) Fences on the front yard – shall be no more than one (1) meter in height. Fences in excess of one (1) meter shall be of an open fence type, at least eighty percent (80%) see-thru; and (2) Fences on the side and back yard – shall be in accordance with the provisions of P.D. 1096 otherwise known as the National Building Code. Section 4. No fence of any kind shall be allowed in areas specifically reserved or classified as parks. Section 5. In no case shall walls and fences be built within the five (5) meter parking area allowance located between the front monument line and the building line of commercial and industrial establishments and educational and religious institutions.7Section 6. Exemption. (1) The Ordinance does not cover perimeter walls of residential subdivisions. (2)When public safety or public welfare requires, the Sangguniang Bayan may allow the construction and/or maintenance of walls higher than as prescribed herein and shall issue a special permit or exemption.

Section 7. Ordinance No. 200, Series of 1998, id. DECISION G.R. No. 161107 5Section 7. Transitory Provision. Real property owners whose existing fences and walls do not conform to the specifications herein are allowed adequate period of time from the passage of this Ordinance within which to conform, as follows: (1) Residential houses – eight (8) years (2)Commercial establishments – five (5) years (3)Industrial establishments – three (3) years (4)Educational institutions – five (5) years8 (public and privately owned)

Section 8. Penalty. Walls found not conforming to the provisions of this Ordinance shall be demolished by the municipal government at the expense of the owner of the lot or structure. Section 9. The Municipal Engineering Office is tasked to strictly implement this ordinance, including the issuance of the necessary implementing guidelines, issuance of building and fencing permits, and demolition of non-conforming walls at the lapse of the grace period herein provided. Section 10. Repealing Clause. All existing Ordinances and Resolutions, Rules and Regulations inconsistent with the foregoing provisions are hereby repealed, amended or modified. Section 11. Separability Clause. If for any reason or reasons, local executive orders, rules and regulations or parts thereof in conflict with this Ordinance are hereby repealed and/or modified accordingly. Section 12. Effectivity. This ordinance takes effect after publication. APPROVED: September 30, 1994

On April 2, 2000, the City Government of Marikina sent a letter to the respondents ordering them to demolish and replace the fence of their Marikina property to make it 80% see-thru, and, at the same time, to move it back about six (6) meters to provide parking space for vehicles to park.9

On April 26, 2000, the respondents requested for an extension of time to comply with the directive.10 In response, the petitioners, through then City Mayor Bayani F. Fernando, insisted on the enforcement of the subject ordinance.

Not in conformity, the respondents filed a petition for prohibition with an application for a writ of preliminary injunction and temporary restraining order before the Regional Trial Court, Marikina, Branch 273 (RTC), docketed as SCA Case No. 2000-381-MK.118 Ordinance No. 217, Series of 1995,The respondents argued that the petitioners were acting in excess of jurisdiction in enforcing Ordinance No. 192, asserting that such contravenes Section 1, Article III of the 1987 Constitution. That demolishing their fence and constructing it six (6) meters back would result in the loss of at least 1,808.34 square meters, worth about P9,041,700.00, along West Drive, and at least 1,954.02 square meters, worth roughly P9,770,100.00, along East Drive. It would also result in the destruction of the garbage house, covered walk, electric house, storage house, comfort rooms, guards’ room, guards’ post, waiting area for visitors, waiting area for students, Blessed Virgin Shrine, P.E. area, and the multi-purpose hall, resulting in the permanent loss of their beneficial use. The respondents, thus, asserted that the implementation of the ordinance on their property would be tantamount to an appropriation of property without due process of law; and that the petitioners could only appropriate a portion of their property through eminent domain. They also pointed out that the goal of the provisions to deter lawless elements and criminality did not exist as the solid concrete walls of the school had served as sufficient protection for many years.12

The petitioners, on the other hand, countered that the ordinance was a valid exercise of police power, by virtue of which, they could restrain property rights for the protection of public safety, health, morals, or the promotion of public convenience and general prosperity.13

On June 30, 2000, the RTC issued a writ of preliminary injunction, enjoining the petitioners from implementing the demolition of the fence at SSC’s Marikina property.14

Ruling of the RTCOn the merits, the RTC rendered a Decision,15 dated October 2, 2002, granting the petition

and ordering the issuance of a writ of prohibition commanding the petitioners to permanently desist from enforcing or implementing Ordinance No. 192 on the respondents’ property.

The RTC agreed with the respondents that the order of the petitioners to demolish the fence at the SSC property in Marikina and to move it back six (6) meters would amount to an appropriation of property which could only be done through the exercise of eminent domain. It held that the petitioners could not take the respondents’ property under the guise of police power to evade the payment of just compensation.

Penned by Judge Olga Palanca-Enriquez. DECISION G.R. No. 161107 7 It did not give weight to the petitioners’ contention that the parking space was for the benefit of the students and patrons of SSA-Marikina, considering that the respondents were already providing for sufficient parking in compliance with the standards under Rule XIX of the National Building Code. It further found that the 80% see-thru fence requirement could run counter to the respondents’ right to privacy, considering that the property also served as a residence of the Benedictine sisters, who were entitled to some sense of privacy in their affairs. It also found that the respondents were able to prove that the danger to security had no basis in their case. Moreover, it held that the purpose of beautification could not be used to justify the exercise of police power. It also observed that Section 7 of Ordinance No. 192, as amended, provided for retroactive application. It held, however, that such retroactive effect should not impair the respondents’ vested substantive rights over the perimeter walls, the six-meter strips of land along the walls, and the building, structures, facilities, and improvements, which would be destroyed by the demolition of the walls and the seizure of the strips of land.

The RTC also found untenable the petitioners’ argument that Ordinance No. 192 was a remedial or curative statute intended to correct the defects of buildings and structures, which were brought about by the absence or insufficiency of laws. It ruled that the assailed ordinance was neither remedial nor curative in nature, considering that at the time

the respondents’ perimeter wall was built, the same was valid and legal, and the ordinance did not refer to any previous legislation that it sought to correct.

The RTC noted that the petitioners could still take action to expropriate the subject property through eminent domain. The RTC, thus, disposed: WHEREFORE, the petition is GRANTED. The writ of prohibition is hereby issued commanding the respondents to permanently desist from enforcing or implementing Ordinance No. 192, Series of 1994, as amended, on petitioners’ property in question located at Marikina Heights, Marikina, Metro Manila. No pronouncement as to costs. SO ORDERED.

Ruling of the CAIn its December 1, 2003 Decision, the CA dismissed the petitioners’ appeal and affirmed the RTC decision. The CA reasoned out that the objectives stated in Ordinance No. 192 did not justify the exercise of police power, as it did not only seek to regulate, but also involved the taking of the respondents’ property without due process of law. The respondents were bound to lose an unquantifiable sense of security, the beneficial use of their structures, and a total of 3,762.36 square meters of property. It, thus, ruled that the assailed ordinance could not be upheld as valid as it clearly invaded the personal and property rights of the respondents and “[f]or being unreasonable, and undue restraint of trade.”17It noted that although the petitioners complied with procedural due process in enacting Ordinance No. 192, they failed to comply with substantive due process. Hence, the failure of the respondents to attend the public hearings in order to raise objections did not amount to a waiver of their right to question the validity of the ordinance. The CA also shot down the argument that the five-meter setback provision for parking was a legal easement, the use and ownership of which would remain with, and inure to, the benefit of the respondents for whom the easement was primarily intended. It found that the real intent of the setback provision was to make the parking space free for use by the public, considering that such would cease to be for the exclusive use of the school and its students as it would be situated outside school premises and beyond the school administration’s control. In affirming the RTC ruling that the ordinance was not a curative statute, the CA found that the petitioner failed to point out any irregularity or invalidity in the provisions of the National Building Code that required correction or cure. It noted that any correction in the Code should be properly undertaken by the Congress and not by the City Council of Marikina through an ordinance.

The CA, thus, disposed: WHEREFORE, all foregoing premises considered, the instant appeal is DENIED. The October 2, 2002 Decision and the January 13, 2003 Order of the Regional Trial Court (RTC) of Marikina City, Branch 273, granting petitioners-appellees’ petition for Prohibition in SCA Case No. 2000-381-MK are hereby AFFIRMED. SO ORDERED.

Aggrieved by the decision of the CA, the petitioners are now before this Court presenting the following ASSIGNMENT OF ERRORS

1. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT CITY ORDINANCE NO. 192, SERIES OF 1994 IS NOT A VALID EXERCISE OF POLICE POWER;

2. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE AFOREMENTIONED ORDINANCE IS AN EXERCISE OF THE CITY OF THE POWER OF EMINENT DOMAIN;

3. WHETHER OR NOT THE HONORABLE COURT OF APPEALSERRED IN DECLARING THAT THE CITY VIOLATED THE DUE PROCESS CLAUSE IN IMPLEMENTING ORDINANCE NO. 192, SERIES OF 1994; AND

4. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE ABOVE-MENTIONED ORDINANCE CANNOT BE GIVEN RETROACTIVE APPLICATION.

In this case, the petitioners admit that Section 5 of the assailed ordinance, pertaining to the five-meter setback requirement is, as held by the lower courts, invalid. 20 Nonetheless, the petitioners argue that such invalidity was subsequently cured by Zoning Ordinance No. 303,

series of 2000. They also contend that Section 3, relating to the 80% see-thru fence requirement, must be complied with, as it remains to be valid.

Ruling of the CourtThe ultimate question before the Court is whether Sections 3.1 and 5 of Ordinance No. 192 are valid exercises of police power by the City Government of Marikina. “Police power is the plenary power vested in the legislature to make statutes and ordinances to promote the health, morals, peace, education, good order or safety and general welfare of the people.”21 The State, through the legislature, has delegated the exercise of police power to local government units, as agencies of the State. This delegation of police power is embodied in Section 1622 of the Local Government Code of 1991 (R.A. No. 7160), known as the General Welfare Clause,23 which has two branches. “The first, known as the general legislative power, authorizes the municipal council to enact ordinances and make regulations not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred upon the municipal council by law. The second, known as the police power proper, authorizes the municipality to enact ordinances as may be necessary and proper for the health and safety, prosperity, morals, peace, good order, comfort, and convenience of the municipality and its inhabitants, and for the protection of their property.”24White Light Corporation v. City of Manila,25 discusses the test of a valid ordinance: The test of a valid ordinance is well established. A long line of decisions including City of Manila has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and pass according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.

Ordinance No. 192 was passed by the City Council of Marikina in the apparent exercise of its police power. To successfully invoke the exercise of police power as the rationale for the enactment of an ordinance and to free it from the imputation of constitutional infirmity, two tests have been used by the Court – the rational relationship test and the strict scrutiny test:

22 Sec. 16. General Welfare. - Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

We ourselves have often applied the rational basis test mainly in analysis of equal protection challenges. Using the rational basis examination, laws or ordinances are upheld if they rationally further a legitimate governmental interest. Under intermediate review, governmental interest is extensively examined and the availability of less restrictive measures is considered. Applying strict scrutiny, the focus is on the presence of compelling, rather than substantial, governmental interest and on the absence of less restrictive means for achieving that interest.

Even without going to a discussion of the strict scrutiny test, Ordinance No. 192, series of 1994 must be struck down for not being reasonably necessary to accomplish the City’s purpose. More importantly, it is oppressive of private rights. Under the rational relationship test, an ordinance must pass the following requisites as discussed in Social Justice Society (SJS) v. Atienza, As with the State, local governments may be considered as having properly exercised their police power only if the following requisites are met: (1) the interests of the public generally, as distinguished from those of a particular class, require its exercise and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. In short, there must

be a concurrence of a lawful subject and lawful method.29 Lacking a concurrence of these two requisites, the police power measure shall be struck down as an arbitrary intrusion into private rights and a violation of the due process clause. 30 Section 3.1 and 5 of the assailed ordinance are pertinent to the issue at hand, to wit: Section 3. The standard height of fences of walls allowed under this ordinance are as follows: (1) Fences on the front yard – shall be no more than one (1) meter in height. Fences in excess of one (1) meter shall be an open fence type, at least eighty percent (80%) see-thru;

Section 5. In no case shall walls and fences be built within the five (5) meter parking area allowance located between the front monument line and the building line of commercial and industrial establishments and educational and religious institutions. The respondents, thus, sought to prohibit the petitioners from requiring them to (1) demolish their existing concrete wall, (2) build a fence (in excess of one meter) which must be 80% see-thru, and (3) build the said fence six meters back in order to provide a parking area.

Setback Requirement The Court first turns its attention to Section 5 which requires the five meter setback of the fence to provide for a parking area. The petitioners initially argued that the ownership of the parking area to be created would remain with the respondents as it would primarily be for the use of its students and faculty, and that its use by the public on non-school days would only be incidental. In their Reply, however, the petitioners admitted that

Section 5 was, in fact, invalid for being repugnant to the Constitution.31The Court agrees with the latter position. The Court joins the CA in finding that the real intent of the setback requirement was to make the parking space free for use by the public, considering that it would no longer be for the exclusive use of the respondents as it would also be available for use by the general public.

Section 9 of Article III of the 1987 Constitution, a provision on eminent domain, provides that private property shall not be taken for public use without just compensation. The petitioners cannot justify the setback by arguing that the ownership of the property will continue to remain with the respondents. It is a settled rule that neither the acquisition of title nor the total destruction of value is essential to taking. In fact, it is usually in cases where the title remains with the private owner that inquiry should be made to determine whether the impairment of a property is merely regulated or amounts to a compensable taking.32 The Court is of the view that the implementation of the setback requirement would be tantamount to a taking of a total of 3,762.36 square meters of the respondents’ private property for public use without just compensation, in contravention to the Constitution.

Anent the objectives of prevention of concealment of unlawful acts and “un-neighborliness,” it is obvious that providing for a parking area has no logical connection to, and is not reasonably necessary for, the accomplishment of these goals.

Regarding the beautification purpose of the setback requirement, it has long been settled that the State may not, under the guise of police power, permanently divest owners of the beneficial use of their property solely to preserve or enhance the aesthetic appearance of the community.33 The Court, thus, finds Section 5 to be unreasonable and oppressive as it will substantially divest the respondents of the beneficial use of their property solely for aesthetic purposes. Accordingly, Section 5 of Ordinance No. 192 is invalid. The petitioners, however, argue that the invalidity of Section 5 was properly cured by Zoning Ordinance No. 303, 34 Series of 2000, which classified the respondents’ property to be within an institutional zone, under which a five-meter setback has been required. The petitioners are mistaken. Ordinance No. 303, Series of 2000, has no bearing to the case at hand. The Court notes with displeasure that this argument was only raised for the first time on appeal in this Court in the petitioners’ Reply. Considering that Ordinance No. 303 was enacted on December 20, 2000, the petitioners could very well have raised it in their defense before the RTC in 2002. The settled rule in this jurisdiction is that a party cannot change the legal theory of this case under which the controversy was heard and decided in the trial court. It should be the same theory under which the review on appeal is conducted. Points of law, theories, issues, and

arguments not adequately brought to the attention of the lower court will not be ordinarily considered by a reviewing court, inasmuch as they cannot be raised for the first time on appeal. This will be offensive to the basic rules of fair play, justice, and due process.35Furthermore, the two ordinances have completely different purposes and subjects. Ordinance No. 192 aims to regulate the construction of fences, while Ordinance No. 303 is a zoning ordinance which classifies the city into specific land uses. In fact, the five-meter setback required by Ordinance No. 303 does not even appear to be for the purpose of providing a parking area.

By no stretch of the imagination, therefore, can Ordinance No. 303, “cure” Section 5 of Ordinance No. 192. In any case, the clear subject of the petition for prohibition filed by the respondents is Ordinance No. 192 and, as such, the precise issue to be determined is whether the petitioners can be prohibited from enforcing the said ordinance, and no other, against the respondents. 80% See-Thru Fence Requirement The petitioners argue that while Section 5 of Ordinance No. 192 may be invalid, Section 3.1 limiting the height of fences to one meter and requiring fences in excess of one meter to be at least 80% see-thru, should remain valid and enforceable against the respondents. The Court cannot accommodate the petitioner. For Section 3.1 to pass the rational relationship test, the petitioners must show the reasonable relation between the purpose of the police power measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.36The principal purpose of Section 3.1 is “to discourage, suppress or prevent the concealment of prohibited or unlawful acts.” The ultimate goal of this objective is clearly the prevention of crime to ensure public safety and security. The means employed by the petitioners, however, is not reasonably necessary for the accomplishment of this purpose and is unduly oppressive to private rights. The petitioners have not adequately shown, and it does not appear obvious to this Court, that an 80% see-thru fence would provide better protection and a higher level of security, or serve as a more satisfactory criminal deterrent, than a tall solid concrete wall. It may even be argued that such exposed premises could entice and tempt would-be criminals to the property, and that a see-thru fence would be easier to bypass and breach. It also appears that the respondents’ concrete wall has served as more than sufficient protection over the last 40 years. `

As to the beautification purpose of the assailed ordinance, as previously discussed, the State may not, under the guise of police power, infringe on private rights solely for the sake of the aesthetic appearance of the community. Similarly, the Court cannot perceive how a see-thru fence will foster “neighborliness” between members of a community. 36 City of Manila v. Laguio, Jr., supra note 30, at 312-313. DECISION G.R. No. 161107 15Compelling the respondents to construct their fence in accordance with the assailed ordinance is, thus, a clear encroachment on their right to property, which necessarily includes their right to decide how best to protect their property. It also appears that requiring the exposure of their property via a seethru fence is violative of their right to privacy, considering that the residence of the Benedictine nuns is also located within the property. The right to privacy has long been considered a fundamental right guaranteed by the Constitution that must be protected from intrusion or constraint. The right to privacy is essentially the right to be let alone,37 as governmental powers should stop short of certain intrusions into the personal life of its citizens. It is inherent in the concept of liberty, enshrined in the Bill of Rights (Article III) in Sections 1, 2, 3(1), 6, 8, and 17, Article III of the 1987 Constitution. The enforcement of Section 3.1 would, therefore, result in an undue interference with the respondents’ rights to property and privacy. Section 3.1 of Ordinance No. 192 is, thus, also invalid and cannot be enforced against the respondents.

No Retroactivity Ordinance No. 217 amended Section 7 of Ordinance No. 192 by including the regulation of educational institutions which was unintentionally omitted, and giving said educational institutions five (5) years from the passage of Ordinance No. 192 (and not Ordinance No. 217) to conform to its provisions.40 The petitioners argued that the amendment Sec. 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. Sec. 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable,

and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized.Sec. 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise as prescribed by law. Sec. 6. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. Neither shall the right to travel be impaired except in the interest of national security, public safety, or public health as may be provided by law. Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Sec. 17. No person shall be compelled to be a witness against himself. Could be retroactively applied because the assailed ordinance is a curative statute which is retroactive in nature.

Considering that Sections 3.1 and 5 of Ordinance No. 192 cannot be enforced against the respondents, it is no longer necessary to rule on the issue of retroactivity. The Court shall, nevertheless, pass upon the issue for the sake of clarity. “Curative statutes are enacted to cure defects in a prior law or to validate legal proceedings which would otherwise be void for want of conformity with certain legal requirements. They are intended to supply defects, abridge superfluities and curb certain evils. They are intended to enable persons to carry into effect that which they have designed or intended, but has failed of expected legal consequence by reason of some statutory disability or irregularity in their own action. They make valid that which, before the enactment of the statute was invalid. Their purpose is to give validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with. Curative statutes, therefore, by their very essence, are retroactive.”41

The petitioners argue that Ordinance No. 192 is a curative statute as it aims to correct or cure a defect in the National Building Code, namely, its failure to provide for adequate guidelines for the construction of fences. They ultimately seek to remedy an insufficiency in the law. In aiming to cure this insufficiency, the petitioners attempt to add lacking provisions to the National Building Code. This is not what is contemplated by curative statutes, which intend to correct irregularities or invalidity in the law. The petitioners fail to point out any irregular or invalid provision. As such, the assailed ordinance cannot qualify as curative and retroactive in nature. At any rate, there appears to be no insufficiency in the National Building Code with respect to parking provisions in relation to the issue of the respondents. Paragraph 1.16.1, Rule XIX of the Rules and Regulations of the said code requires an educational institution to provide one parking slot for every ten classrooms. As found by the lower courts, the respondents provide a total of 76 parking slots for their 80 classrooms and, thus, had more than sufficiently complied with the law. Ordinance No. 192, as amended, is, therefore, not a curative statute which may be applied retroactively. Separability, Sections 3.1 and 5 of Ordinance No. 192, as amended, are, thus, invalid and cannot be enforced against the respondents. Nonetheless, "the general rule is that where part of a statute is void as repugnant to the Constitution, while another part is valid, the valid portion, if susceptible to being separated from the invalid, may stand and be enforced."42 Thus, the other sections of the assailed ordinance remain valid and enforceable.

Conclusion Considering the invalidity of Sections 3.1 and 5, it is clear that the petitioners were acting in excess of their jurisdiction in enforcing Ordinance No. 192 against the respondents. The CA was correct in affirming the decision of the RTC in issuing the writ of prohibition. The petitioners must permanently desist from enforcing Sections 3.1 and 5 of the assailed ordinance on the respondents' property in Marikina City. WHEREFORE, the petition is DENIED. The October 2, 2002 Decision of the Regional Trial Court in SCA Case No. 2000-381-MK is AFFIRMED but MODIFIED to read as follows: WHEREFORE, the petition is GRANTED. The writ of prohibition is hereby issued commanding the respondents to permanently desist from enforcing or implementing Sections 3.1 and 5 of Ordinance No. 192, Series of 1994, as amended, on the petitioners' property in question located in Marikina Heights, Marikina, Metro Manila. No pronouncement as to costs. SO ORDERED