Eminent Domain, Public Use cases

8/10/2019 Eminent Domain, Public Use cases

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PUBLIC USE

LORENZO SUMULONG and EMILIA VIDANES-BALAOING, petitioners,vs.HON. BUENAVENTURA GUERRERO and NATIONAL HOUSING AUTHORITY, respondents.

CORTES, J .:

On December 5, 1977 the National Housing Authority (NIIA) filed a complaint for expropriation ofparcels of land covering approximately twenty five (25) hectares, (in Antipolo, Rizal) including thelots of petitioners Lorenzo Sumulong and Emilia Vidanes-Balaoing with an area of 6,667 squaremeters and 3,333 square meters respectively. The land sought to be expropriated were valued bythe NHA at one peso (P1.00) per square meter adopting the market value fixed by the provincialassessor in accordance with presidential decrees prescribing the valuation of property in

expropriation proceedings.

Together with the complaint was a motion for immediate possession of the properties. The NHAdeposited the amount of P158,980.00 with the Philippine National Bank, representing the "totalmarket value" of the subject twenty five hectares of land, pursuant to Presidential Decree No. 1224which defines "the policy on the expropriation of private property for socialized housing uponpayment of just compensation."

On January 17, 1978, respondent Judge issued the following Order:

Plaintiff having deposited with the Philippine National Bank, Heart Center ExtensionOffice, Diliman, Quezon City, Metro Manila, the amount of P158,980.00 representing

the total market value of the subject parcels of land, let a writ of possession beissued.

SO ORDERED.

Pasig, Metro Manila, January 17, 1978.

(SGD)BUENAVENTURA S.GUERRERO

Petitioners filed a motion for reconsideration on the ground that they had been deprived of thepossession of their property without due process of law. This was however, denied.


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Hence, this petition challenging the orders of respondent Judge and assailing the constitutionality ofPres. Decree No. 1224, as amended. Petitioners argue that:

1) Respondent Judge acted without or in excess of his jurisdiction or with graveabuse of discretion by issuing the Order of January 17, 1978 without notice andwithout hearing and in issuing the Order dated June 28, 1978 denying the motion for

reconsideration.

2) Pres. Decree l224, as amended, is unconstitutional for being violative of the dueprocess clause, specifically:

a) The Decree would allow the taking of property regardless of sizeand no matter how small the area to be expropriated;

b) "Socialized housing" for the purpose of condemnation proceeding,as defined in said Decree, is not really for a public purpose;

c) The Decree violates procedural due process as it allows immediate

taking of possession, control and disposition of property withoutgiving the owner his day in court;

d) The Decree would allow the taking of private property uponpayment of unjust and unfair valuations arbitrarily fixed bygovernment assessors;

e) The Decree would deprive the courts of their judicial discretion todetermine what would be the "just compensation" in each and everyraise of expropriation.

Indeed, the exercise of the power of eminent domain is subject to certain limitations imposed by the

constitution, to wit:

Private property shall not be taken for public use without just compensation (Art. IV,Sec. 9);

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 (Art. IV, sec. 1).

Nevertheless, a clear case of constitutional infirmity has to be established for this Court to nullifylegislative or executive measures adopted to implement specific constitutional provisions aimed atpromoting the general welfare.

Petitioners' objections to the taking of their property subsumed under the headings of public use, justcompensation, and due process have to be balanced against competing interests of the publicrecognized and sought to be served under declared policies of the constitution as implemented bylegislation.

1. Public use

a) Socialized Housing


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Petitioners contend that "socialized housing" as defined in Pres. Decree No. 1224, as amended, forthe purpose of condemnation proceedings is not "public use" since it will benefit only "a handful ofpeople, bereft of public character."

"Socialized housing" is defined as, "the construction of dwelling units for the middle and lower classmembers of our society, including the construction of the supporting infrastructure and other

facilities" (Pres. Decree No. 1224, par. 1). This definition was later expanded to include amongothers:

a) The construction and/or improvement of dwelling units for the middle and lowerincome groups of the society, including the construction of the supportinginfrastructure and other facilities;

b) Slum clearance, relocation and resettlement of squatters and slum dwellers aswell as the provision of related facilities and services;

c) Slum improvement which consists basically of allocating homelots to the dwellersin the area or property involved, rearrangemeant and re-alignment of existing houses

and other dwelling structures and the construction and provision of basic communityfacilities and services, where there are none, such as roads, footpaths, drainage,sewerage, water and power system schools, barangay centers, community centers,clinics, open spaces, parks, playgrounds and other recreational facilities;

d) The provision of economic opportunities, including the development of commercialand industrial estates and such other facilities to enhance the total communitygrowth; and

e) Such other activities undertaken in pursuance of the objective to provide andmaintain housing for the greatest number of people under Presidential Decree No,757, (Pres. Decree No. 1259, sec. 1)

The "public use" requirement for a and exercise of the power of eminent domain is a flexible andevolving concept influenced by changing conditions. In this jurisdiction, the statutory and judicialtrend has been summarized as follows:

The taking to be valid must be for public use. There was a time when it was felt that aliteral meaning should be attached to such a requirement. Whatever project isundertaken 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 purposeof the taking is public, then the power of eminent domain comes into play. As justnoted, the constitution in at least two cases, to remove any doubt, determines what ispublic use. One is the expropriation of lands to be subdivided into small lots forresale at cost to individuals. The other is in the transfer, through the exercise of thispower, of utilities and other private enterprise to the government. It is accurate tostate then that at present whatever may be beneficially employed for the generalwelfare satisfies the requirement of public use [Heirs of Juancho Ardona v. Reyes,G.R. Nos. 60549, 60553-60555 October 26, 1983, 125 SCRA 220 (1983) at 234-5quoting E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 523-4, (2nded., 1977) Emphasis supplied].


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The term "public use" has acquired a more comprehensive coverage. To the literal import of the termsignifying strict use or employment by the public has been added the broader notion of indirectpublic benefit or advantage. As discussed in the above cited case of Heirs of Juancho Ardona:

The restrictive view of public use may be appropriate for a nation whichcircumscribes the scope of government activities and public concerns and which

possesses big and correctly located public lands that obviate the need to take privateproperty for public purposes. Neither circumstance applies to the Philippines. Wehave never been a laissez faire State. And the necessities which impel the exertionof sovereign power are all too often found in areas of scarce public land or limitedgovernment resources. (p. 231)

Specifically, urban renewal or redevelopment and the construction of low-cost housing is recognizedas a public purpose, not only because of the expanded concept of public use but also because ofspecific provisions in the Constitution. The 1973 Constitution made it incumbent upon the State toestablish, maintain and ensure adequate social services including housing [Art. 11, sec. 7]. The1987 Constitution goes even further by providing that:

The State shall promote a just and dynamic social order that will ensure theprosperity and independence of the nation and free the people from poverty throughpolicies that provide adequate social services, promote full employment, a risingstandard of living and an improved quality of life for all. [Art. II, sec. 9]

The state shall by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban land reform and housing which willmake available at affordable cost decent housing and basic services tounderprivileged and homeless citizens in urban centers and resettlement areas . Itshall also promote adequate employment opportunities to such citizens. In theimplementation of such program the State shall respect the rights of small propertyowners. (Art. XIII, sec. 9, Emphaisis supplied)

Housing is a basic human need. Shortage in housing is a matter of state concern since it directly andsignificantly affects public health, safety, the environment and in sum, the general welfare. Thepublic character of housing measures does not change because units in housing projects cannot beoccupied 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 are who need it, all at once.

Population growth, the migration to urban areas and the mushrooming of crowded makeshiftdwellings is a worldwide development particularly in developing countries. So basic and urgent arehousing problems that the United Nations General Assembly proclaimed 1987 as the "InternationalYear of Shelter for the Homeless" "to focus the attention of the international community on thoseproblems". The General Assembly is Seriously concerned that, despite the efforts of Governments atthe 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 theUnited Nations 1982, Vol. 36, p. 1043-4]

In the light of the foregoing, this Court is satisfied that "socialized housing" fans within the confines of"public use". It is, particularly important to draw attention to paragraph (d) of Pres. Dec. No. 1224which opportunities inextricably linked with low-cost housing, or slum clearance, relocation andresettlement, or slum improvement emphasize the public purpose of the project.


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In the case at bar, the use to which it is proposed to put the subject parcels of land meets therequisites of "public use". The lands in question are being expropriated by the NHA for the expansionof Bagong Nayon Housing Project to provide housing facilities to low-salaried governmentemployees. Quoting respondents:

1. The Bagong Nayong Project is a housing and community development

undertaking of the National Housing Authority. Phase I covers about 60 hectares ofGSIS property in Antipolo, Rizal; Phase II includes about 30 hectares for industrialdevelopment and the rest are for residential housing development.

It is intended for low-salaried government employees and aims to provide housingand community services for about 2,000 families in Phase I and about 4,000 familiesin Phase II.

It is situated on rugged terrain 7.5 kms. from Marikina Town proper; 22 Kms. east ofManila; and is within the Lungs Silangan Townsite Reservation (created byPresidential Proclamation No. 1637 on April 18, 1977).

The lands involved in the present petitions are parts of the expanded/additional areasfor the Bagong Nayon Project totalling 25.9725 hectares. They likewise include raw,rolling hills. (Rollo, pp. 266-7)

The acute shortage of housing units in the country is of public knowledge. Official data indicate thatmore than one third of the households nationwide do not own their dwelling places. A significantnumber live in dwellings of unacceptable standards, such as shanties, natural shelters, andstructures intended for commercial, industrial, or agricultural purposes. Of these unacceptabledwelling units, more than one third is located within the National Capital Region (NCR) alone whichlies proximate to and is expected to be the most benefited by the housing project involved in thecase at bar [See, National Census and Statistics Office, 1980 Census of Population and Housing ].

According to the National Economic and Development Authority at the time of the expropriation inquestion, about "50 per cent of urban families, cannot afford adequate shelter even at reduced ratesand will need government support to provide them with social housing, subsidized either partially ortotally" [NEDA, FOUR YEAR DEVELOPMENT PLAN For 1974-1977, p. 357]. Up to the present,housing some remains to be out of the reach of a sizable proportion of the population" [NEDA,MEDIUM-TERM PHILIPPINE DEVELOPMENT PLAN 1987-1992, p. 240].

The mushrooming of squatter colonies in the Metropolitan Manila area as well as in other cities andcenters of population throughout the country, and, the efforts of the government to initiate housingand other projects are matters of public knowledge [See NEDA, FOUR YEAR DEVELOPMENTPLAN For 1974-1977, pp. 357-361; NEDA, FIVE-YEAR PHILIPPINE DEVELOPMENT PLAN 1978-1982, pp. 215-228 NEDA, FIVE YEAR PHILIPPINE DEVELOPMENT PLAN 1983-1987, pp. 109-117; NEDA, MEDIUM TERM PHILIPPINE DEVELOPMENT PLAN 1987-1992, pp. 240-254].

b) Size of Property

Petitioners further contend that Pres. Decree 1224, as amended, would allow the taking of "anyprivate land" regardless of the size and no matter how small the area of the land to be expropriated.Petitioners claim that "there are vast areas of lands in Mayamot, Cupang, and San Isidro, Antipolo,Rizal hundred of hectares of which are owned by a few landowners only. It is surprising [therefore]why respondent National Housing Authority [would] include [their] two man lots ..."


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In J.M. Tuason Co., Inc. vs. Land Tenure Administration [G. R. No. L-21064, February 18, 1970, 31SCRA 413 (1970) at 428] this Court earlier ruled that expropriation is not confined to landed estates.This Court, quoting the dissenting opinion of Justice J.B.L. Reyes in Republic vs. Baylosis, [96 Phil.461 (1955)], held that:

The propriety of exercising the power of eminent domain under Article XIII, section 4

of our Constitution cannot be determined on a purely quantitative or area basis. Notonly does the constitutional provision speak of lands instead of landed estates, but Isee no cogent reason why the government, in its quest for social justice and peace,should exclusively devote attention to conflicts of large proportions, involving aconsiderable number of individuals, and eschew small controversies and wait untilthey grow into a major problem before taking remedial action.

The said case of J.M. Tuason Co., Inc. departed from the ruling in Guido vs. Rural Progress Administration [84 Phil. 847 (1949)] which held that the test to be applied for a valid expropriation ofprivate lands was the area of the land and not the number of people who stood to be benefited.Since then "there has evolved a clear pattern of adherence to the "number of people to be benefitedtest" " [Mataas na Lupa Tenants Association, Inc. v. Dimayuga, G.R. No. 32049, June 25,1984, 130SCRA 30 (1984) at 39]. Thus, in Pulido vs. Court of Appeals [G.R. No. 57625, May 3, 1983, 122SCRA 63 (1983) at 73], this Court stated that, "[i]t is unfortunate that the petitioner would bedeprived of his landholdings, but his interest and that of his family should not stand in the way ofprogress and the benefit of the greater may only of the inhabitants of the country."

The State acting through the NHA is vested with broad discretion to designate the particularproperty/properties to be taken for socialized housing purposes and how much thereof may beexpropriated. Absent a clear showing of fraud, bad faith, or gross abuse of discretion, whichpetitioners herein failed to demonstrate, the Court will give due weight to and leave undisturbed theNHA's choice and the size of the site for the project. The property owner may not interposeobjections merely because in their judgment some other property would have been more suitable, or

just as suitable, for the purpose. The right to the use, enjoyment and disposal of private property istempered by and has to yield to the demands of the common good. The Constitutional provisions on

the subject are clear:

The State shall promote social justice in all phases of national development. (Art. II,sec. 10)

The Congress shall give highest priority to the enactment of measures that protectand enhance the right of all the people to human dignity, reduce social, economic,and political inequalities, and remove cultural inequities by equitably diffusing wealthand political power for the common good. To this end, the State shall regulate theacquisition, ownership, use and disposition of property and its increments. (Art, XIII,sec. 1)

Indeed, the foregoing provisions, which are restatements of the provisions in the 1935 and 1973Constitutions, emphasize:

...the stewardship concept, under which private property is supposed to be held bythe individual only as a trustee for the people in general, who are its real owners. Asa mere steward, the individual must exercise his rights to the property not for his ownexclusive and selfish benefit but for the good of the entire community or nation[Mataas na Lupa Tenants Association, Inc. supra at 42-3 citing I. CRUZ, PHILIPPINEPOLITICAL LAW, 70 (1983 ed.)].


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2. Just Compensation

Petitioners maintain that Pres. Decree No. 1224, as amended, would allow the taking of privateproperty upon payment of unjust and unfair valuations arbitrarily fixed by government assessors. Inaddition, they assert that the Decree would deprive the courts of their judicial discretion to determinewhat would be "just compensation".

The foregoing contentions have already been ruled upon by this Court in the case of Ignacio vs.Guerrero (G.R. No. L-49088, May 29, 1987) which, incidentally, arose from the same expropriationcomplaint that led to this instant petition. The provisions on just compensation found in PresidentialDecree Nos. 1224, 1259 and 1313 are the same provisions found in Presidential Decree Nos. 76,464, 794 and 1533 which were declared unconstitutional in Export Processing Zone All thirty vs.Dulay (G.R. No. 5960 April 29, 1987) for being encroachments on prerogatives.

This Court abandoned the ruling in National Housing Authority vs. Reyes [G.R. No. 49439, June29,1983, 123 SCRA 245 (1983)] which upheld Pres. Decree No. 464, as amended by - PresidentialDecree Nos. 794, 1224 and 1259.

In said case of Export Processing Zone Authority, this Court pointed out that:

The basic unfairness of the decrees is readily apparent.

Just compensation means the value of the property at the time of the taking. Itmeans a fair and full equivalent for the loss sustained. ALL the facts as to thecondition of the property and its surroundings, its improvements and capabilities,should be considered.

xxx xxx xxx

Various factors can come into play in the valuation of specific properties singled out

for expropriation. The values given by provincial assessors are usually uniform forvery wide areas covering several barrios or even an entire total with the exception ofthe poblacion. Individual differences are never taken into account. The value of landis based on such generalities as its possible cultivation for rice, corn, coconuts, orother crops. Very often land described as directional has been cultivated forgenerations. Buildings are described in terms of only two or three classes of buildingmaterials and estimates of areas are more often inaccurate than correct. Tax valuescan serve as guides but cannot be absolute substitutes for just compensation.

To say that the owners are estopped to question the valuations made by assessorssince they had the opportunity to protest is illusory. The overwhelming mass oflandowners accept unquestioningly what is found in the tax declarations prepared bylocal assessors or municipal clerks for them. They do not even look at, much lessanalyze, the statements. The Idea of expropriation simply never occurs until ademand is made or a case filed by an agency authorized to do so. (pp. 12-3)

3. Due Process

Petitioners assert that Pres. Decree 1224, as amended, violates procedural due process as it allowsimmediate taking of possession, control and disposition of property without giving the owner his day


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in court. Respondent Judge ordered the issuance of a writ of possession without notice and withouthearing.

The constitutionality of this procedure has also been ruled upon in the Export Processing Zone Authority case, viz:

It is violative of due process to deny to the owner the opportunity to prove that thevaluation in the tax documents is unfair or wrong. And it is repulsive to basicconcepts of justice and fairness to allow the haphazard work of minor bureaucrat orclerk to absolutely prevail over the judgment of a court promulgated only after expertcommissioners have actually viewed the property, after evidence and arguments proand con have been presented, and after all factors and considerations essential to afair and just determination have been judiciously evaluated. (p. 13)

On the matter of the issuance of a writ of possession, the ruling in the Ignacio case is reiterated,thus:

[I]t is imperative that before a writ of possession is issued by the Court in

expropriation proceedings, the following requisites must be met: (1) There must be aComplaint for expropriation sufficient in form and in substance; (2) A provisionaldetermination of just compensation for the properties sought to be expropriated mustbe made by the trial court on the basis of judicial (not legislative or executive)discretion; and (3) The deposit requirement under Section 2, Rule 67 must becomplied with. (p. 14)

This Court holds that "socialized housing" defined in Pres. Decree No. 1224, as amended by Pres.Decree Nos. 1259 and 1313, constitutes "public use" for purposes of expropriation. However, aspreviously held by this Court, the provisions of such decrees on just compensation areunconstitutional; and in the instant case the Court finds that the Orders issued pursuant to thecorollary provisions of those decrees authorizing immediate taking without notice and hearing areviolative of due process.

WHEREFORE, the Orders of the lower court dated January 17, 1978 and June 28, 1978 issuing thewrit of possession on the basis of the market value appearing therein are annulled for having beenissued in excess of jurisdiction. Let this case be remanded to the court of origin for furtherproceedings to determine the compensation the petitioners are entitled to be paid. No costs.

SO ORDERED.

ESTATE SALUD JIMENEZ, petitioner,vs.PHILIPPINES EXPORT PROCESSING ZONE, respondent.

DELEON, JR., J .:

Before us is a petition for review on certiorari of the Decision 1 and the Resolution 2 of the Court of Appeals 3 dated March 25, 1998 and January 14, 1999, respectively, which ordered thePresiding Judge of the Regional trial Court of Cavite City, Branch 17, to proceed with thehearing of the expropriation proceedings regarding the determination of just compensation forLot 1406-B while setting aside the Orders dated August 4, 1997 4 and November 3, 1997 of the


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said Regional Trial Court which ordered the peaceful turnover to petitioner Estate of SaludJimenez of said Lot 1406-B.

The facts are as follows:

On may 15, 1981, private respondent Philippines Export Processing Zone (PEZA), then calledas the Export Processing Zone Authority (EPZA), initiated before the Regional Trial Court ofCavite expropriation proceedings 5 on three (3) parcels of irrigated riceland in Rosario, Cavite.One of the lots, Lot 1406 (A and B) of the San Francisco de Malabon Estate, with anapproximate area of 29,008 square meters, is registered in the name of Salud Jimenez underTCT No. T-113498 of the Registry of Deeds of Cavite.

More than ten (10) years later 6, the said trial court in an Order 7 dated July 11, 1991 upheld theright of private respondent PEZA to expropriate, among others, Lot 1406 (A and B).Reconsideration of the said order was sought by petitioner contending that said lot would onlybe transferred to a private corporation, Philippines Vinyl Corp., and hence would not be utilizedfor a public purpose.

In an Order 8 dated October 25, 19997, the trial court reconsidered the Order dated July 11,1991 and released Lot 1406-A from expropriation while the expropriation of Lot 1406-B wasmaintained. Finding the said order unacceptable, private respondent PEZA interposed anappeal to the Court of Appeals.

Meanwhile, petitioner wrote a letter to private respondent offering two (2) proposals, namely:

1. Withdrawal of private respondent's appeal with respect to Lot 1406-A I consideration ofthe waiver of claim for damages and lass of income for the possession of said lot by privaterespondent.

2. The swap of Lot 1406-B with Lot 434 covered by TCT No. T-14772 since privaterespondent has no money yet to pay for the lot.

Private respondent's Board approved the "proposal" and the compromise agreement wassigned by private respondent through its then administrator Tagumpay Jadiniano assisted byGovernment Corporate Counsel Oscar I. Garcia. Said compromise agreement 9 dated January4, 1993 is quoted hereunder:

1. That plaintiff agrees to withdraw its appeal from the Order of the Honorable Court datedOctober 25, 1991 which released lot 1406-A from the expropriation proceedings. On theother hand, defendant Estate of Salud Jimenez agrees to waive, quit claim and forfeit itsclaim for damages and loss of income which it sustained by person of the possession of saidlot by plaintiff from 1981 up to the present.

2. That the parties agree that defendant Estate of Salud Jimenez shall transfer lot 1406-Bwith an area of 13,118 square meters which forms part of the lot registered under TCT No.113498 of the Registry of Deeds of Cavite to the name of the plaintiff and the same shall beswapped and exchanged with lot 434 with an area of 14,167 square meters and covered byTransfer Certificate of Title No. 14772 of the Registry of Deeds of Cavite which lot will betransferred to the name of Estate of Salud Jimenez. 1wphi1.nt


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3. That the swap arrangement recognized the fact that the lot 1406-B covered by TCT No. T-113498 of the state of defendant Salud Jimenez is considered expropriated in favor of thegovernment based on Order of the Honorable Court dated July 11, 1991. However, insteadof being paid the just compensation for said lot, the estate of said defendant shall be paidwith lot 434 covered by TCT No. T-14772.

4. That the parties agree that they will abide by the terms of the foregoing agreement in goodfaith and the Decision to be rendered based on this Compromise Agreement is immediatelyfinal and executory.

The Court of Appeals remanded the case to the trial court for the approval of the saidcompromise agreement entered into between the parties, consequent with the withdrawal of theappeal with the Court of Appeals. In the Order 10 dated August 23, 1993, the trial court approvedthe compromise agreement.

However, private respondent failed to transfer the title of Lot 434 to petitioner inasmuch as itwas not the registered owner of the covering TCT No. T-14772 but Progressive Realty Estate,Inc. Thus, on March 13, 1997, petitioner Estate filed a "Motion to Partially Annul the Order dated

August 23, 1993." 11

In the Order 12 dated August 4, 1997, the trial court annulled the said compromise agreemententered into between the parties and directed private respondent to peacefully turn over Lot1406-A to the petitioner. Disagreeing with the said Order of the trial court, respondent PEZAmoved 13 for its reconsideration. The same proved futile since the trial court deniedreconsideration in its Order 14 dated November 3, 1997.

On December 4, 1997, the trial court, at the instance 15 of petitioner, corrected the Orders dated August 4, 1997 and November 3, 1997 by declaring that it is Lot 1406-B and Lot 1406-A thatshould be surrendered and returned to petitioner.

On November 27, 1997, respondent interposed before the Court of Appeals a petition forcertiorari and prohibition 16seeking to nullify the Orders dated August 4, 1997 and November 3,1997 of the court. Petitioner filed its Comment 17 on January 16, 1998.

Acting on the petition, the Court of Appeals in a Decision 18 dated March 25, 1998 upheld therescission of the compromise agreement, ratiocinating thus:

A judicial compromise may be enforced by a writ of execution, and if a party fails or refusesto abide by the compromise, the other party may regard it as rescinded and insist upon hisoriginal demand. This is in accordance with Article 2041 of the Civil Code, which provides:

If one of the parties fails or refuses to abide by the compromise, the other party may eitherenforce the compromise or regard it as rescinded and insist upon his original demand."

The Supreme Court had the occasion to explain this provision of law in the case of Leonor v.Syip (1 SCRA 1215). It ruled that the language of the above mentioned provision denotesthat no action for rescission is required and that the aggrieved party by the breach ofcompromise agreement, may regard the compromise agreement already rescinded, to wit:


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It is worthy of notice, in this connection, that, unlike article 2039 of the same Code,which speaks of "a cause of annulment or rescission of the compromise" andprovides that "the compromise may be annulled or rescinded" for the cause thereinspecified, thus suggesting an action for annulment or rescission, said Article 2041confers upon the party concerned not a "cause" for rescission, or the right to"demand" rescission, of a compromise, but the authority, not only to "regard it as

rescinded," but, also, to 'insist upon his original demand." The language of this Article2041, particularly when contrasted with that of Article 2039, denotes that no actionfor rescission is required in said Article 2041, and that to party aggrieved by thebreach of a compromise agreement may, if he chooses, bring the suit contemplatedor involved in his original demand, as if there had never been any compromiseagreement, without bringing an action for rescission thereof. He need not seek a

judicial declaration of rescission, for he may "regard" the compromise agreementalready, "rescinded".

Nonetheless, it held that:

Having upheld the rescission of the compromise agreement, what is then the status of the

expropriation proceedings? As succinctly discussed in the case of Leonor vs. Sycip, theaggrieved party may insist on his original demand as if there had never been anycompromise agreement. This means that the situation of the parties will revert back to statusbefore the execution of the compromise agreement, that is, the second stage of theexpropriation proceedings, which is the determination of the just compensation .19

x x x

Thus, the appellate court partially granted the petition by setting aside the order of the trial courtregarding "the peaceful turn over to the Estate of Salud Jimenez of Lot No. 1406-B" and insteadordered the trial judge to "proceed with the hearing of the expropriation proceedings regardingthe determination of just compensation over Lot 1406-B." 20

Petitioner sought 21 reconsideration of the Decision dated March 25, 1998. However, publicrespondent in a resolution 22 dated January 14, 1999 denied petitioner's motion forreconsideration.

Hence, this petition anchored on the following assignment of errors, to wit:

I

THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR IN GIVINGDUE COURSE TO THE SPECIAL CIVIL ACTION FILED BY RESPONDENT PEZA IN CA-G.R. SP. NO. 46112 WHEN IT WAS MADE SUBSTITUTE FOR LOST APPEAL IN CLEAR

CONTRAVENTION OF THE HONORABLE COURT'S RULING IN SEMPIO VS. COURT OFAPPEALS (263 SCRA 617) AND ONGSITCO VS. COURT OF APPEALS (255 SCRA 703)AND DESPITE THE FACT THAT THE ORDER OF THE CAVITE REGIONAL TRIALCOURT IS ALREADY FINAL AND EXECUTORY.

II

GRANTING IN GRATIA ARGUMENTI THAT THE SPECIAL CIVIL ACTION OFCERTIONRARI IS PROPER, THE COURT OF APPEALS NEVERTHELESS WRONGLY


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operation of the economic zone constitutes valid and compelling reasons to entertain thepetition.

Petitioner next argues that the instances cited under Section 1 of Rule 41 of the Rules ofCourt 35 whereby an appeal is not allowed are exclusive grounds for a petition for certiorari.Inasmuch as the August 4, 1997 Order rescinding the compromise agreement does not fallunder any of the instances enumerated therein, a petition for certiorari will not prosper. Thisreasoning is severely flawed. The said section is not phrased to make the instances mentionedtherein the sole grounds for a petition for certiorari. It only states that Rule 65 may be availed ofunder the grounds mentioned therein, but it never intended said enumeration to be exclusive. Itmust be remembered that a wide breadth of discretion is granted a court of justice in certiorariproceeding. 36

In the second assignment of error, petitioner assails the interpretation by the Court of appeals ofthe phrase "original demand" in Article 2041 of the New Civil Code vis--vis the case at bar.

Article 2041 provides that, "if one of the parties fails or refuses to abide by the compromise, theother party may either enforce the compromise or regard it as rescinded and insist upon his"original demand" According to petitioner, the appellate court erred in interpreting "originaldemand" as the fixing of just compensation. Petitioner claims that the original demand is thereturn of Lot 1406-B as stated in petitioner's motion to dismiss 37 the complaint for expropriationinasmuch as the incorporation of the expropriation order in the compromise agreementsubjected the said order to rescission. Since the order of expropriation was rescinded, theauthority of respondent to expropriate and the purpose of expropriation have again becomesubject to dispute.

Petitioner cites cases 38 which provide that upon the failure to pay by the lessee, the lessor canask for the return of the lot and the ejectment of the former, this being the lessor's originaldemand in the complaint. We find said cases to be inapplicable to this instant case for thereason that the case at bar is not a simple ejectment case. This is an expropriation case whichinvolves two (2) orders: an expropriation order and an order fixing just compensation. Once thefirst order becomes final and no appeal thereto is taken, the authority to expropriate and itspublic use cannot anymore be questioned.

Contrary to petitioner's contention, the incorporation of the expropriation order in thecompromise agreement did not subject said to rescission but instead constituted an admissionby petitioner of respondent's authority to expropriate the subject parcel of land and the publicpurpose for which it was expropriated. This is evident from paragraph three (3) of thecompromise agreement which states that the "swap arrangement recognizes the fact that Lot1406-B covered by TCT No. T-113498 of the estate of defendant Salud Jimenez is consideredexpropriated in favor of the government based on the Order of the Honorable Court dated July11, 1991." It is crystal clear from the contents of the agreement that the parties limited thecompromise agreement to matter of just compensation to petitioner. Said expropriate order isnot closely intertwined with the issue of payment such that failure to pay by respondent will alsonullify the right of respondent to expropriate. No statement to this effect was mentioned in theagreement. The Order was mentioned in the agreement only to clarify what was subject topayment. 1wphi1.nt

This court therefore finds that the Court of Appeals did not err in interpreting "original demand"to mean the fixing of just compensation. The authority of respondent and the nature of thepurpose thereof have been put to rest when the Expropriation Order dated July 11, 1991


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became final and was duly admitted by petitioner in the compromise agreement. The only issuefor consideration is the manner and amount of payment due to petitioner. In fact, aside from thewithdrawal of private respondent's appeal to the Court of Appeals concerning Lot 1406-A, thematter of payment of just compensation was the only subject of the compromise agreementdated January 4, 1993. Under the compromise agreement, petitioner was supposed to receiverespondent's Lot No. 434 in exchange for Lot 1406-B. When respondent failed to fulfill itsobligation to deliver Lot 434, petitioner can again demand for the payment but not the return ofthe expropriated Lot 1406-B. This interpretation by the Court of Appeals is in according withSection 4 to 8, Rule 67 of the Rules of Court.

We also find as inapplicable the ruling in Gatchalian v. Arlegui 39 , a case cited by petitioner,where we held that even a final judgment can still be compromised so long as it is full satisfied.

As already stated, the expropriation order was not the subject of the compromise agreement. Itwas only the mode of payment which was the subject of the compromise agreement. Hence, theOrder of Expropriation dated July 11, 1991 can no longer be annulled.

After having invoked the provisions of Article 2041, petitioner inconsistently contends that saidarticle does not apply to the case at bar inasmuch as it is only applicable to cases where acompromise has not been approved by a court. In the case at bar, the trial court approved thecompromise agreement. Petitioner insists that Articles 2038, 2039 and 1330 of the New CivilCode should apply. Said articles provide that:

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

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

Article 2039. When the parties compromise generally on all differences which they mighthave with each other, the discovery of documents referring to one or more but not to all ofthe questions settled shall not itself be a cause for annulment or rescission of thecompromise, unless said documents have been concealed by one of the parties.

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

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

The applicability of the above-quoted legal provisions will not change the outcome of the subjectof the rescission. Since the compromise agreement was only about the mode of payment byswapping of lots and not about the right and purpose to expropriate the subject Lot 1406-B, onlythe originally agreed for of compensation that is by cash payment, was rescinded.

This court holds that respondent has the legal authority to expropriate the subject Lot 1406-Band that the same was for a valid public purpose. In Sumulong v. Guerrero 41 , this Court hasruled that,


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

judicial trend has been summarized as follows:

this court has ruled that the taking to be valid must be for public use. There was atime when it was felt that a literal meaning should be attached to such a requirement.

Whatever project is undertaken must be for the public to enjoy as in the case ofstreets or parks. Otherwise expropriation is not allowable. It is not anymore. As longas the purpose of the taking is public, then the power of eminent domain comes intoplayIt is accurate to beneficially employed for the general welfare satisfies therequirement of public use. [Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 (1983)at 234-235 quoting E. Fernando, the Constitution of the Philippines 523-4(2 nd Ed.1977)

The term "public use" has acquired a more comprehensive coverage. To the literal import ofthe term signifying strict use or employment by the public has been added the broader notionof indirect public benefit or advantage.

In Manosca v. Court of Appeals , this Court has also held that what ultimately emerged is aconcept of public use which is just as abroad as "public welfare." 42

Respondent PEZA expropriated the subject parcel of land pursuant to Proclamation No. 1980dated May 30, 1980 issued by former President Ferdinand Marcos. Meanwhile, the power ofeminent domain of respondent is contained in its original charter, Presidential Decree No. 66,which provides that:

Section 23. Eminent Domain . For the acquisition of rights of way, or of any property for theestablishment of export processing zones, or of low-cost housing projects for the employeesworking in such zones, or for the protection of watershed areas, or for the construction ofdams , reservoirs, wharves, piers, docks, quays, warehouses and other terminal facilities,

structures and approaches thereto , the Authority shall have the right and power to acquirethe same by purchase, by negotiation, or by condemnation proceedings. Should the authorityelect to exercise the right of eminent domain, comdemnation proceedings shall bemaintained by and in the name of the Authority and it may proceed in the manner providedfor by law. (italics supplied)

Accordingly, subject Lot 1406- B was expropriated "for the constructionof terminal facilities,structures and approaches thereto." The authority is broad enough to give the respondentsubstantial leeway in deciding for what public use the expropriated property would be utilized.Pursuant to this broad authority, respondent leased a portion of the lot to commercial bankswhile the rest was made a transportation terminal. Said public purposes were even reaffirmedby Republic Act No. 7916, a law amending respondent PEZA's original charter, which providesthat:

Sec. 7 ECOZONE to be a Decentralized Agro-Industrial, industrial, Commercial/Trading,Tourist, Investment and financial Community. Within the framework of the Constitution, theinterest of national sovereignty and territorial integrity of the Republic, ECOZONE shall bedeveloped, as much as possible, into a decentralized, self-reliant and self-sustainingindustrial, commercial/trading, agro-industrial, tourist, banking , financial and investmentcenter with minimum government intervention. Each ECOZONE shall be provided withtransportation, telecommunications and other facilities needed to generate linkage with


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industries and employment opportunities for its own habitants and those of nearby towns andcities.

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

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

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

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

x x x

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

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

other facilities is better served if respondent directly owns the areas subject of the expansionprogram.

The contention of petitioner that the leasing of the subject lot to banks and building terminalswas not expressly mentioned in the original charter of respondent PEZA and that it was onlyafter PEZA devoted the lot to said purpose the Republic Act No. 7916 took effect, is notimpressed with merit. It should be pointed out that Presidential Decree No. 66 created therespondent PEZA to be a viable commercial, industrial and investment area. According to thecomprehensive wording of Presidential Decree No. 66, the said decree did not intend to limitrespondent PEZA to the establishment of an export processing zone but it was also bestowedwith authority to expropriate parcels of land "for the construction of terminal facilities,structures and approaches thereto." Republic Act No. 7916 simply particularized the broad

language employed by Presidential Decree No. 66 by specifying the purposes for which PEZAshall devote the condemned lots, that is, for the construction and operation of an industrialestate, an export processing zone, free trade zones, and the like. The expropriation of Lot 1406-B for the purpose of being leased to banks and for the construction of a terminal has thepurpose of making banking and transportation facilities easily accessible to the persons workingat the industries located in PEZA. The expropriation of adjacent areas therefore comes as amatter of necessity to bring life to the purpose of the law. In such a manner, PEZA's goal ofbeing a major force in the economic development of the country would be realized.Furthermore, this Court has already ruled that:


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

the representatives of the people.

In the absence of some constitutional or statutory provision to the contrary, the necessity andexpediency of exercising the right of eminent domain are questions essentially political andnot judicial in their character. 45

Inasmuch as both Presidential Decree No. 66 and Republic Act No. 7916, bestow respondentwith authority to develop terminal facilities and banking centers, this Court will not question therespondent's lease of certain portions of the expropriated lot to banks, as well as theconstruction of terminal facilities.

Petitioner contends that respondent is bound by the representations of its Chief Civil Engineer

when the latter testified before the trial court that the lot was to be devoted for the constructionof government offices. Anent this issue, suffice it to say that PEZA can vary the purpose forwhich a condemned lot will be devoted to provided that the same is for public use. Petitionercannot impose or dictate on the respondent what facilities to establish for as long as the sameare for public purpose.

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

We have rules that the concept of just compensation embraces not only the correctdetermination of the amount to be paid to the owners of the land, but also the payment of theland within a reasonable time from its taking. Without prompt payment, compensation cannot beconsidered "just" inasmuch as the property owner is made to suffer the consequences of beingimmediately deprived of his land while being made to wait for a decade or more before actuallyreceiving the amount necessary to cope with his loss. 46 Payment of just compensation shouldfollow as a matter of right immediately after the order of expropriation is issued. Any delay inpayment must be counted from said order. However, the delay to constitute a violation of dueprocess must be unreasonable and inexcusable: it must be deliberately done by a party in orderto defeat the ends of justice.

We find that respondent capriciously evaded its duty of giving what is due to petitioner. In thecase at bar, the expropriation order was issued by the trial court in 1991. The compromiseagreement between the parties was approved by the trial court in 1993. However, from 1993 upto the present, respondent has failed in its obligation to pay petitioner to the prejudice of thelatter. Respondent caused damage to petitioner in making the latter to expect that it had a goodtitle to the property to be swapped with Lot 1406-B; and meanwhile, respondent has beenreaping benefits from the lease or rental income of the said expropriated lot. We cannot toleratethis oppressive exercise of the power of eminent domain by respondent. As we have ruledin Cosculluela vs. Court of Appeals :47


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In the present case, the irrigation project was completed and has been in operation since1976. The project is benefiting the farmers specifically and the community in general.Obviously, the petitioner's land cannot be returned to him. However, it is high time that thepetitioner be paid what was due him eleven years ago. It is high time that the petitioner bepaid what was due him eleven years ago. It is arbitrary and capricious for a governmentagency to initiate expropriation proceedings, seize a person's property, allow the judgment of

the court to become final and executory and then refuse to pay on the ground that there areno appropriations for the property earlier taken and profitably used. We condemn in thestrongest possible terms the cavalier attitude of government officials who adopt such adespotic and irresponsible stance.

Though the respondent has committed a misdeed to petitioner, we cannot, however, grant thepetitioner's prayer for the return of the expropriated Lot No. 1406-B. The Order of expropriationdated July 11, 1991, has long become final and executory. Petitioner cited ProvincialGovernment of Sorsogon v. Rosa E. Vda. De Villaroya 48 to support its contention that it isentitled to a return of the lot where this court ruled that "under ordinary circumstance, immediatereturn of the owners of the unpaid property is the obvious remedy." However, the said statementwas not the ruling in that case. As in order cases where there was no prompt payment by the

government, this Court declared in Sorsogon that "the Provincial Government of Sorsogon isexpected to immediately pay as directed should any further delay be encountered, the trial courtis directed to seize any patrimonial property or cash saving of the province in the amountnecessary to implement this decision." However, this Court also stressed and declared in thatcase that "In cases where land is taken for public use, public interest, however, must beconsidered."

In view of all the foregoing, justice and equity dictate that this case be remanded to the trialcourt for hearing of the expropriation proceedings on the determination of just compensation forLot 1406-B and for its prompt payment to the petitioner.

WHEREFORE, the instant petition is hereby denied. The Regional Trial Court of Cavite City is

hereby ordered to proceed with the hearing of the expropriation proceedings, docketed as CivilCase No. N-4029, regarding the determination of just compensation for Lot 1406-B, coveredand described in TCT No. T-113498-Cavite, and to resolve the same with dispatch.

SO ORDERED.

LOURDES DE LA PAZ MASIKIP, Petitioner,vs.THE CITY OF PASIG, HON. MARIETTA A. LEGASPI, in her capacity as Presiding Judge ofthe Regional Trial Court of Pasig City, Branch 165 and THE COURT OFAPPEALS, Respondents.

D E C I S I O N

SANDOVAL GUTIERREZ, J .:

Where the taking by the State of private property is done for the benefit of a small community whichseeks to have its own sports and recreational facility, notwithstanding that there is such a


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recreational facility only a short distance away, such taking cannot be considered to be for publicuse. Its expropriation is not valid. In this case, the Court defines what constitutes a genuinenecessity for public use.

This petition for review on certiorari assails the Decisio n 1 of the Court of Appeals dated October 31,1997 in CA-G.R. SP No. 41860 affirming the Orde r 2 of the Regional Trial Court, Branch 165, Pasig

City, dated May 7, 1996 in S.C.A. No. 873. Likewise assailed is the Resolutio n3

of the same courtdated November 20, 1998 denying petitioners Motion for Reconsideration.

The facts of the case are:

Petitioner Lourdes Dela Paz Masikip is the registered owner of a parcel of land with an area of 4,521square meters located at Pag-Asa, Caniogan, Pasig City, Metro Manila.

In a letter dated January 6, 1994, the then Municipality of Pasig, now City of Pasig, respondent,notified petitioner of its intention to expropriate a 1,500 square meter portion of her property to beused for the "sports development and recreational activities" of the residents of Barangay Caniogan.This was pursuant to Ordinance No. 42, Series of 1993 enacted by the then Sangguniang Bayan of

Pasig.

Again, on March 23, 1994, respondent wrote another letter to petitioner, but this time the purposewas allegedly "in line with the program of the Municipal Government to provide land opportunities todeserving poor sectors of our community."

On May 2, 1994, petitioner sent a reply to respondent stating that the intended expropriation of herproperty is unconstitutional, invalid, and oppressive, as the area of her lot is neither sufficient norsuitable to "provide land opportunities to deserving poor sectors of our community."

In its letter of December 20, 1994, respondent reiterated that the purpose of the expropriation ofpetitioners property is "to provide sports and recreational facilities to its poor res idents."

Subsequently, on February 21, 1995, respondent filed with the trial court a complaint forexpropriation, docketed as SCA No. 873. Respondent prayed that the trial court, after due notice andhearing, issue an order for the condemnation of the property; that commissioners be appointed forthe purpose of determining the just compensation; and that judgment be rendered based on thereport of the commissioners.

On April 25, 1995, petitioner filed a Motion to Dismiss the complaint on the following grounds:

I

PLAINTIFF HAS NO CAUSE OF ACTION FOR THE EXERCISE OF THE POWER OF EMINENT

DOMAIN, CONSIDERING THAT:

(A) THERE IS NO GENUINE NECESSITY FOR THE TAKING OF THE PROPERTYSOUGHT TO BE EXPROPRIATED.

(B) PLAINTIFF HAS ARBITRARILY AND CAPRICIOUSLY CHOSEN THE PROPERTYSOUGHT TO BE EXPROPRIATED.
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(C) EVEN ASSUMING ARGUENDO THAT DEFENDANTS PROPERTY MAY BEEXPROPRIATED BY PLAINTIFF, THE FAIR MARKET VALUE OF THE PROPERTY TO BEEXPROPRIATED FAR EXCEEDS SEVENTY-EIGHT THOUSAND PESOS (P78,000.00)

II

PLAINTIFFS COMPLAI NT IS DEFECTIVE IN FORM AND SUBSTANCE, CONSIDERING THAT:

(A) PLAINTIFF FAILS TO ALLEGE WITH CERTAINTY THE PURPOSE OF THEEXPROPRIATION.

(B) PLAINTIFF HAS FAILED TO COMPLY WITH THE PREREQUISITES LAID DOWN INSECTION 34, RULE VI OF THE RULES AND REGULATIONS IMPLEMENTING THELOCAL GOVERNMENT CODE; THUS, THE INSTANT EXPROPRIATION PROCEEDING ISPREMATURE.

III

THE GRANTING OF THE EXPROPRIATION WOULD VIOLATE SECTION 261 (V) OF THEOMNIBUS ELECTION CODE.

IV

PLAINTIFF CANNOT TAKE POSSESSION OF THE SUBJECT PROPERTY BY MERELYDEPOSITING AN AMOUNT EQUAL TO FIFTEEN PERCENT (15%) OF THE VALUE OF THEPROPERTY BASED ON THE CURRENT TAX DECLARATION OF THE SUBJECT PROPERTY .4

On May 7, 1996, the trial court issued an Order denying the Motion to Dismiss ,5 on the groundthat there is a genuine necessity to expropriate the property for the sports and recreationalactivities of the residents of Pasig . As to the issue of just compensation, the trial court held that

the same is to be determined in accordance with the Revised Rules of Court.

Petitioner filed a motion for reconsideration but it was denied by the trial court in its Order of July 31,1996. Forthwith, it appointed the City Assessor and City Treasurer of Pasig City as commissioners toascertain the just compensation. This prompted petitioner to file with the Court of Appeals a specialcivil action for certiorari , docketed as CA-G.R. SP No. 41860. On October 31, 1997, the AppellateCourt dismissed the petition for lack of merit. Petitioners Motion for Reconsideration was denied in aResolution dated November 20, 1998.

Hence, this petition anchored on the following grounds:

THE QUESTIONED DECISION DATED 31 OCTOBER 1997 (ATTACHMENT "A")

AND RESOLUTION DATED 20 NOVEMBER 1998 (ATTACHMENT "B") ARE CONTRARY TO LAW,THE RULES OF COURT AND JURISPRUDENCE CONSIDERING THAT:

I

A. THERE IS NO EVIDENCE TO PROVE THAT THERE IS GENUINE NECESSITY FORTHE TAKING OF THE PETITIONERS PROPERTY.
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genuine necessity to expropriate petitioners property for public use." Pursuant to the above Rule,the motion is a responsive pleading joining the issues. What the trial court should have done was toset the case for the reception of evidence to determine whether there is indeed a genuine necessityfor the taking of the property, instead of summarily making a finding that the taking is for public useand appointing commissioners to fix just compensation. This is especially so considering that thepurpose of the expropriation was squarely challenged and put in issue by petitioner in her motion to

dismiss.

Significantly, the above Rule allowing a defendant in an expropriation case to file a motion to dismissin lieu of an answer was amended by the 1997 Rules of Civil Procedure, which took effect on July 1,1997. Section 3, Rule 67 now expressly mandates that any objection or defense to the taking of theproperty of a defendant must be set forth in an answer.

The fact that the Court of Appeals rendered its Decision in CA-G.R. SP No. 41860 on October 31,after the 1997 Rules of Civil Procedure took effect, is of no moment. It is only fair that the Rule at thetime petitioner filed her motion to dismiss should govern. The new provision cannot be appliedretroactively to her prejudice.

We now proceed to address the substantive issue.

In the early case of US v. Toribio ,7 this Court defined the power of eminent domain as "the right of agovernment to take and appropriate private property to public use, whenever the public exigencyrequires it, which can be done only on condition of providing a reasonable compensation therefor." Ithas also been described as the power of the State or its instrumentalities to take private property forpublic use and is inseparable from sovereignty and inherent in government .8

The power of eminent domain is lodged in the legislative branch of the government. It delegates theexercise thereof to local government units, other public entities and public utilitycorporations ,9 subject only to Constitutional limitations. Local governments have no inherent powerof eminent domain and may exercise it only when expressly authorized by statute .10 Section 19 ofthe Local Government Code of 1991 (Republic Act No. 7160) prescribes the delegation by Congressof the power of eminent domain to local government units and lays down the parameters for itsexercise, thus:

"SEC. 19. Eminent Domain . A local government unit may, through its chief executive and actingpursuant to an ordinance, exercise the power of eminent domain for public use, purpose or welfarefor the benefit of the poor and the landless, upon payment of just compensation, pursuant to theprovisions of the Constitution and pertinent laws: Provided, however , That, the power of eminentdomain may not be exercised unless a valid and definite offer has been previously made to theowner and such offer was not accepted: Provided , further , That, the local government unit mayimmediately take possession of the property upon the filing of expropriation proceedings and uponmaking a deposit with the proper court of at least fifteen percent (15%) of the fair market value of theproperty based on the current tax declaration of the property to be expropriated: Provided , finally ,

That, the amount to be paid for expropriated property shall be determined by the proper court, basedon the fair market value at the time of the taking of the property."

Judicial review of the exercise of eminent domain is limited to the following areas of concern: (a) theadequacy of the compensation, (b) the necessity of the taking, and (c) the public use character ofthe purpose of the taking .11

In this case, petitioner contends that respondent City of Pasig failed to establish a genuine necessitywhich justifies the condemnation of her property. While she does not dispute the intended public
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purpose, nonetheless, she insists that there must be a genuine necessity for the proposed use andpurposes. According to petitioner, there is already an established sports development andrecreational activity center at Rainforest Park in Pasig City, fully operational and being utilized by itsresidents, including those from Barangay Caniogan. Respondent does not dispute this. Evidently,there is no "genuine necessity" to justify the expropriation.

The right to take private property for public purposes necessarily originates from "the necessity" andthe taking must be limited to such necessity. In City of Manila v. Chinese Community of Manila ,12 weheld that the very foundation of the right to exercise eminent domain is a genuine necessityand that necessity must be of a public character . Moreover, the ascertainment of the necessitymust precede or accompany and not follow, the taking of the land. In City of Manila v. Arellano LawCollege ,13 we ruled that "necessity within the rule that the particular property to be expropriated mustbe necessary, does not mean an absolute but only a reasonable or practical necessity, such aswould combine the greatest benefit to the public with the least inconvenience and expense to thecondemning party and the property owner consistent with such benefit."

Applying this standard, we hold that respondent City of Pasig has failed to establish that there is agenuine necessity to expropriate petitioners property. Our scrutiny of the records shows that theCertification 14 issued by the Caniogan Barangay Council dated November 20, 1994, the basis for thepassage of Ordinance No. 42 s. 1993 authorizing the expropriation, indicates that the intendedbeneficiary is the Melendres Compound Homeowners Association, a private, non-profit organization,not the residents of Caniogan. It can be gleaned that the members of the said Association aredesirous of having their own private playground and recreational facility. Petitioners lot is thenearest vacant space available. The purpose is, therefore, not clearly and categorically public. Thenecessity has not been shown, especially considering that there exists an alternative facility forsports development and community recreation in the area, which is the Rainforest Park, available toall residents of Pasig City, including those of Caniogan.

The right to own and possess property is one of the most cherished rights of men. It is sofundamental that it has been written into organic law of every nation where the rule of law prevails.Unless the requisite of genuine necessity for the expropriation of ones property is clearly

established, it shall be the duty of the courts to protect the rights of individuals to their privateproperty. Important as the power of eminent domain may be, the inviolable sanctity which theConstitution attaches to the property of the individual requires not only that the purpose for the takingof private property be specified. The genuine necessity for the taking, which must be of a publiccharacter, must also be shown to exist.

WHEREFORE , the petition for review is GRANTED . The challenged Decision and Resolution of theCourt of Appeals in CA-G.R. SP No. 41860 are REVERSED . The complaint for expropriation filedbefore the trial court by respondent City of Pasig, docketed as SCA No. 873, is ordered DISMISSED.

SO ORDERED.

HEIRS OF TIMOTEO MORENO and MARIA ROTEA, namely: ESPERANZA R. EDJEC,BERNARDA R. SUELA, RUBY C. ROTEA, BERNARDA R. ROTEA, ELIA R. VDA. DELIMBAGA, VIRGINIA R. ARBON, ROSALINDA R. ARQUISOLA, CORAZON ROTEA, FE R.EBORA, CARIDAD ROTEA, ANGELES VDA. DE RENACIA, JORGE ROTEA, MARIA LUISAROTEA-VILLEGAS, ALFREDO R. ROTEA, represented by his heirs LIZBETH ROTEA andELEPETH ROTEA; LUIS ROTEA, represented by his heir JENNIFER ROTEA; andROLANDO R. ROTEA, represented by his heir ROLANDO R. ROTEA JR., petitioners,vs.MACTAN - CEBU INTERNATIONAL AIRPORT AUTHORITY, respondent.
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D E C I S I O N

BELLOSILLO, J .:

THE HEIRS OF TIMOTEO MORENO AND MARIA ROTEA, petitioners herein, are thesuccessors-in-interest of the former registered owners of two (2) parcels of land situated inLahug, Cebu City, designated as Lot No. 916 with an area of 2,355 square meters under TCTNo. RT-7543 (106) T-13694, and Lot No. 920 consisting of 3,097 square meters under TCT No.RT-7544 (107) T-13695 .1

In 1949 the National Airport Corporation as the predecessor agency of respondent Mactan-Cebu International Airport Authority (MCIAA) wanted to acquire Lots Nos. 916 and 920 abovedescribed among other parcels of land for the proposed expansion of Lahug Airport .2 To enticethe landowners to cede their properties, the government assured them that they couldrepurchase their lands once Lahug Airport was closed or its operations transferred to Mactan

Airport .3 Some of the landowners executed deeds of sale with right of repurchase in favor of thegovernment but many others, including the owners of Lots Nos. 916 and 920 herein mentioned,refused the offer because the payment was perceived to be way below the market price .4

On 16 April 1952, as the negotiations for the purchase of the lots necessary for the expansionand improvement of Lahug Airport irredeemably broke down, the Civil Aeronautics

Administration as the successor agency of the National Airport Corporation filed a complaintwith the Court of First Instance of Cebu, for the expropriation of Lots Nos. 916 and 920 andother subject realties, docketed as Civil Case No. R-1881.

On 29 December 1961 the trial court promulgated its Decision in Civil Case No. R-1881condemning Lots Nos. 916 and 920 and other lots for public use upon payment of justcompensation .5 Petitioners predecessors were paid P7,065.00 for Lot No. 916 and P9,291.00for Lot No. 920 with consequential damages by way of legal interest from 16 November 1947.No appeal was taken from the Decision on Lots Nos. 916 and 920, and the judgment ofcondemnation became final and executory .6 Thereafter, the certificates of title for these parcelsof land were issued in the name of the Republic of the Philippines under TCT No. 58691 for LotNo. 916 and TCT No. 58692 for Lot No. 920, which under RA 6958 (1990) were subsequentlytransferred in favor of respondent MCIAA .7

At the end of 1991, or soon after the transfer of Lots Nos. 916 and 920 to MCIAA, Lahug Airportceased operations as the Mactan Airport was opened for incoming and outgoing flights .8 LotsNos. 916 and 920 which had been expropriated for the extension of Lahug Airport were notutilized .9 In fact, no expansion of Lahug Airport was undertaken by MCIAA and itspredecessors-in-interest .10 Hence, petitioners wrote then President Fidel V. Ramos and theairport manager begging them for the exercise of their alleged right to repurchase Lots Nos. 916

and 920 .11

Their pleas were not heeded .12

On 11 March 1997 petitioners filed a complaint for reconveyance and damages with RTC ofCebu City against respondent MCIAA to compel the repurchase of Lots Nos. 916 and 920,docketed as Civil Case No. CEB-20015. In the main, petitioners averred that they had beenconvinced by the officers of the predecessor agency of respondent MCIAA not to oppose theexpropriation proceedings since in the future they could repurchase the properties if the airportexpansion would not push through. MCIAA did not object to petitioners evidence establishingthese allegations.
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When the civil case was pending, one Richard E. Enchuan filed a Motion for Transfer of Interestalleging that he acquired through deeds of assignment the rights of some of herein petitionersover Lots Nos. 916 and 920 .13 The Department of Public Works and Highways (DPWH) alsosought to intervene in the civil case claiming that it leased in good faith Lot No. 920 from thepredecessor agencies of respondent MCIAA and that it built thereon its Regional EquipmentServices and its Region 7 Office .14

On 12 April 1999 the trial court found merit in the claims of petitioners and granted them theright to repurchase the properties at the amount pegged as just compensation in Civil Case No.R-1881 but subject to the alleged property rights of Richard E. Enchuan and the leasehold ofDPWH .15 The trial court opined that the expropriation became illegal or functus officio when thepurpose for which it was intended was no longer there .16

Respondent MCIAA appealed the Decision of the trial court to the Court of Appeals, docketedas CA-G.R. CV No. 64456. 1vvphi1.nt

On 20 December 2001 the Court of Appeals reversed the assailed Decision on the ground thatthe judgment of condemnation in Civil Case No. R-1881 was unconditional so that the rightsgained therefrom by respondent MCIAA were indicative of ownership in fee simple .17 Theappellate court cited Fery v. Municpality of Cabanatuan 18 which held that mere deviation fromthe public purpose for which the power of eminent domain was exercised does not justify thereversion of the property to its former owners, and Mactan-Cebu International Airport Authorityv. Court of Appeals 19 which is allegedly stare decisis to the instant case to prevent the exerciseof the right of repurchase as the former dealt with a parcel of land similarly expropriated underCivil Case No. R-1881 .20

On 28 November 2002 reconsideration of the Decision was denied. 21 Hence, this petition forreview.

Petitioners argue that Fery v. Municpality of Cabanatuan does not apply to the case at bar sincewhat was involved therein was the "right of reversion" and not the "right of repurchase" whichthey are invoking. They also differentiate Mactan-Cebu International Airport Authority v. Court of

Appeals 22 from the instant case in that the landowners in the MCIAA case offered inadmissibleevidence to show their entitlement to a right of repurchase, while petitioners herein offeredevidence based on personal knowledge for which reason MCIAA did not object and thus waivedwhatever objection it might have had to the admissibility thereof. Finally, petitioners allege thattheir right to equal protection of the laws would be infringed if some landowners are given theright to repurchase their former properties even as they are denied the exercise of suchprerogative.

On the other hand, respondent MCIAA clings to our decisions in Fery v. Municpality of

Cabanatuan and Mactan-Cebu International Airport Authority v. Court of Appeals. According torespondent MCIAA "there is only one instance when expropriated land may be repurchased byits previous owners, and that is, if the decision of expropriation itself provides [the] condition forsuch repurchase." Respondent asserts that the Decision in Civil Case No. R-1881 is absoluteand without conditions, thus, no repurchase could be validly exercised.

This is a difficult case calling for a difficult but just solution. To begin with, there exists anundeniable historical narrative that the predecessors of respondent MCIAA had suggested tothe landowners of the properties covered by the Lahug Airport expansion scheme that they
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could repurchase their properties at the termination of the airports venture .23 Some acted onthis assurance and sold their properties ;24 other landowners held out and waited for the exerciseof eminent domain to take its course until finally coming to terms w ith respondentspredecessors that they would not appeal nor block further the judgment of condemnation if thesame right of repurchase was extended to them .25 A handful failed to prove that they acted onsuch assurance when they parted with the ownership of their lands .26

In resolving this dispute, we must reckon with the rulings of this Court in Fery v. Municpality ofCabanatuan and Mactan-Cebu International Airport Authority v. Court of Appeals, which definethe rights and obligations of landowners whose properties were expropriated when the publicpurpose for which eminent domain was exercised no longer subsists. In Fery, which was cited inthe recent case of Reyes v. Court of Appeals ,27 we declared that the government acquires onlysuch rights in expropriated parcels of land as may be allowed by the character of its title overthe properties -

If x x x land is expropriated for a particular purpose, with the condition that when that purpose isended or abandoned the property shall return to its former owner, then, of course, when thepurpose is terminated or abandoned the former owner reacquires the property so expropriated.If x x x land is expropriated for a public street and the expropriation is granted upon conditionthat the city can only use it for a public street, then, of course, when the city abandons its use asa public street, it returns to the former owner, unless there is some statutory provision to thecontrary x x x x If, upon the contrary, however, the decree of expropriation gives to the entity afee simple title, then, of course, the land becomes the absolute property of the expropriator,whether it be the State, a province, or municipality, and in that case the non-user does not havethe effect of defeating the title acquired by the expropriation proceedings x x x x When land hasbeen acquired for public use in fee simple, unconditionally, either by the exercise of eminentdomain or by purchase, the former owner retains no rights in the land, and the public use maybe abandoned, or the land may be devoted to a different use, without any impairment of theestate or title acquired, or any reversion to the former owner x x x x 28

In Mactan-Cebu International Airport Authority, respondent Chiongbian sought to enforce analleged right of repurchase over her properties that had been expropriated in Civil Case No. R-1881. This Court did not allow her to adduce evidence of her claim, for to do so would unsettleas to her properties the judgment of condemnation in the eminent domain proceedings. We alsoheld therein that Chiongbians evidence was both inadmissible and lacking in probative value -

The terms of the judgment are clear and unequivocal and grant title to Lot No. 941 in fee simpleto the Republic of the Philippines. There was no condition imposed to the effect that the lotwould return to CHIONGBIAN or that CHIONGBIAN had a right to repurchase the same if thepurpose for which it was expropriated is ended or abandoned or if the property was to be usedother than as the Lahug Airport. CHIONGBIAN cannot rely on the ruling in Mactan-CebuInternational Airport vs. Court of Appeals wherein the presentation of parol evidence wasallowed to prove the existence of a written agreement containing the right to repurchase. Saidcase did not involve expropriation proceedings but a contract of sale

Documents

Eminent Domain, Public Use cases