FIRST DIVISION

[ G.R. No. 127820, July 20, 1998 ]

MUNICIPALITY OF PARAÑAQUE, PETITIONER, VS. V.M. REALTY CORPORATION, RESPONDENT.

D E C I S I O N

PANGANIBAN, J.:

A local government unit (LGU), like the Municipality of Parañaque, cannot authorize an expropriation of private property through a mere resolution of its lawmaking body. The Local Government Code expressly and clearly requires an ordinance or a local law for the purpose. A resolution that merely expresses the sentiment or opinion of the Municipal Council will not suffice. On the other hand, the principle of res judicata does not bar subsequent proceedings for the expropriation of the same property when all the legal requirements for its valid exercise are complied with.

Statement of the Case

These principles are applied by this Court in resolving this petition for review on certiorari of the July 22, 1996 Decision[1] of the Court of Appeals[2] in CA GR CV No. 48048, which affirmed in toto [3] the Regional Trial Court’s August 9, 1994 Resolution.[4] The trial court dismissed the expropriation suit as follows:“The right of the plaintiff to exercise the power of eminent domain is not disputed. However, such right may be exercised only pursuant to an Ordinance (Sec. 19, R.A. No. 7160). In the instant case, there is no such ordinance passed by the Municipal Council of Parañaque enabling the Municipality, thru its Chief Executive, to exercise the power of eminent domain. The complaint, therefore, states no cause of action.

Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On September 29, 1987, the plaintiff filed a complaint for expropriation involving the same parcels of land which was docketed as Civil Case No. 17939 of this Court (page 26, record). Said case was dismissed with prejudice on May 18, 1988 (page 39, record). The order of dismissal was not appealed, hence, the same became final. The plaintiff can not be allowed to pursue the present action without violating the principle of [r]es [j]udicata. While defendant in Civil Case No. 17939 was Limpan Investment Corporation, the doctrine of res judicata still applies because the judgment in said case (C.C. No. 17939) is conclusive between the parties and their successors-in-interest (Vda. de Buncio vs. Estate of the late Anita de Leon). The herein defendant is the successor-in-interest of Limpan Investment Corporation as shown by the ‘Deed of Assignment Exchange’ executed on June 13, 1990.

WHEREFORE, defendant’s motion for reconsideration is hereby granted. The order dated February 4, 1994 is vacated and set aside.

This case is hereby dismissed. No pronouncement as to costs.

SO ORDERED.”[5]

Factual Antecedents

Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, [6] the Municipality of Parañaque filed on September 20, 1993, a Complaint for expropriation[7] against Private Respondent V.M. Realty Corporation over two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a combined area of about 10,000 square meters, located at Wakas, San Dionisio, Parañaque, Metro Manila, and covered by Torrens Certificate of Title No. 48700. Allegedly, the complaint was filed “for the purpose of alleviating the living conditions of the underprivileged by providing homes for the homeless through a socialized housing project.” [8] Parenthetically, it was also for this stated purpose that petitioner, pursuant to its Sangguniang Bayan Resolution No. 577, Series of 1991, [9] previously made an offer to enter into a negotiated sale of the property with private respondent, which the latter did not accept.

Finding the Complaint sufficient in form and substance, the Regional Trial Court of Makati, Branch 134, issued an Order dated January 10, 1994,[11] giving it due course. Acting on petitioner’s motion, said court issued an Order dated February 4, 1994,[12] authorizing petitioner to take possession of the subject property upon deposit with its clerk of court of an amount equivalent to 15 percent of its fair market value based on its current tax declaration.

On February 21, 1994, private respondent filed its Answer containing affirmative defenses and a counterclaim, [13]

alleging in the main that (a) the complaint failed to state a cause of action because it was filed pursuant to a resolution and not to an ordinance as required by RA 7160 (the Local Government Code); and (b) the cause of

action, if any, was barred by a prior judgment or res judicata. On private respondent’s motion, its Answer was treated as a motion to dismiss.[14] On March 24, 1994,[15] petitioner filed its opposition, stressing that the trial court’s Order dated February 4, 1994 was in accord with Section 19 of RA 7160, and that the principle of res judicata was not applicable.

Thereafter, the trial court issued its August 9, 1994 Resolution[16] nullifying its February 4, 1994 Order and dismissing the case. Petitioner’s motions for reconsideration and transfer of venue were denied by the trial court in a Resolution dated December 2, 1994.[17] Petitioner then appealed to Respondent Court, raising the following issues:“1. Whether or not the Resolution of the Parañaque Municipal Council No. 93-95, Series of 1993 is a substantial compliance of the statutory requirement of Section 19, R.A. 7180 [sic] in the exercise of the power of eminent domain by the plaintiff-appellant.

2. Whether or not the complaint in this case states no cause of action.

3. Whether or not the strict adherence to the literal observance to the rule of procedure resulted in technicality standing in the way of substantial justice.

4. Whether or not the principle of res judicata is applicable to the present case.”[18]

As previously mentioned, the Court of Appeals affirmed in toto the trial court’s Decision. Respondent Court, in its assailed Resolution promulgated on January 8, 1997, [19] denied petitioner’s Motion for Reconsideration for lack of merit.

Hence, this appeal.[20]

The Issues

Before this Court, petitioner posits two issues, viz.:“1. A resolution duly approved by the municipal council has the same force and effect of an ordinance and will not deprive an expropriation case of a valid cause of action.

2. The principle of res judicata as a ground for dismissal of case is not applicable when public interest is primarily involved.”[21]

The Court ’s Ruling

The petition is not meritorious.

First Issue:Resolution Different from an Ordinance

Petitioner contends that a resolution approved by the municipal council for the purpose of initiating an expropriation case “substantially complies with the requirements of the law” [22] because the terms “ordinance” and “resolution” are synonymous for “the purpose of bestowing authority [on] the local government unit through its chief executive to initiate the expropriation proceedings in court in the exercise of the power of eminent domain.”[23] Petitioner seeks to bolster this contention by citing Article 36, Rule VI of the Rules and Regulations Implementing the Local Government Code, which provides: “If the LGU fails to acquire a private property for public use, purpose, or welfare through purchase, the LGU may expropriate said property through a resolution of the Sanggunian authorizing its chief executive to initiate expropriation proceedings.” [24] (Italics supplied.)

The Court disagrees. The power of eminent domain is lodged in the legislative branch of government, which may delegate the exercise thereof to LGUs, other public entities and public utilities. [25] An LGU may therefore exercise the power to expropriate private property only when authorized by Congress and subject to the latter’s control and restraints, imposed “through the law conferring the power or in other legislations.” [26] In this case, Section 19 of RA 7160, which delegates to LGUs the power of eminent domain, also lays down the parameters for its exercise. It provides 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.” (Emphasis supplied)Thus, the following essential requisites must concur before an LGU can exercise the power of eminent domain:

1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property.

2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless.

3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws.

4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted.[27]

In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to a resolution of the municipal council. Thus, there was no compliance with the first requisite that the mayor be authorized through an ordinance. Petitioner cites Camarines Sur vs. Court of Appeals[28] to show that a resolution may suffice to support the exercise of eminent domain by an LGU. [29] This case, however, is not in point because the applicable law at that time was BP 337,[30] the previous Local Government Code, which had provided that a mere resolution would enable an LGU to exercise eminent domain. In contrast, RA 7160, [31] the present Local Government Code which was already in force when the Complaint for expropriation was filed, explicitly required an ordinance for this purpose.

We are not convinced by petitioner’s insistence that the terms “resolution” and “ordinance” are synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. [32] An ordinance possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the two are enacted differently -- a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of all the Sanggunian members.[33]

If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would have simply adopted the language of the previous Local Government Code. But Congress did not. In a clear divergence from the previous Local Government Code, Section 19 of RA 7160 categorically requires that the local chief executive act pursuant to an ordinance. Indeed, “[l]egislative intent is determined principally from the language of a statute. Where the language of a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation would be resorted to only where a literal interpretation would be either impossible or absurd or would lead to an injustice.”[34] In the instant case, there is no reason to depart from this rule, since the law requiring an ordinance is not at all impossible, absurd, or unjust.

Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private right of the people.[35] Accordingly, the manifest change in the legislative language -- from “resolution” under BP 337 to “ordinance” under RA 7160 -- demands a strict construction. “No species of property is held by individuals with greater tenacity, and is guarded by the Constitution and laws more sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right and, for greater public purposes, appropriates the land of an individual without his consent, the plain meaning of the law should not be enlarged by doubtful interpretation.”[36]

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to authorize an LGU to exercise eminent domain. This is clearly misplaced, because Section 19 of RA 7160, the law itself, surely prevails over said rule which merely seeks to implement it. [37] It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its implementation. Besides, what the discrepancy seems to indicate is a mere oversight in the wording of the implementing rules, since Article 32, Rule VI thereof, also requires that, in exercising the power of eminent domain, the chief executive of the LGU must act pursuant to an ordinance.

In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of the Constitution, which provides that “territorial and political subdivisions shall enjoy local autonomy.” It merely upholds the law as worded in RA 7160. We stress that an LGU is created by law and all its powers and rights are sourced therefrom. It has therefore no power to amend or act beyond the authority given and the limitations imposed on it by law. Strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but “inferior” domain, since it must conform to the limits imposed by the delegation, and thus partakes only of a share in

eminent domain.[38] Indeed, “the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.”[39]

Complaint Does Not State a Cause of Action

In its Brief filed before Respondent Court, petitioner argues that its Sanguniang Bayan passed an ordinance on October 11, 1994 which reiterated its Resolution No. 93-35, Series of 1993, and ratified all the acts of its mayor regarding the subject expropriation.[40]

This argument is bereft of merit. In the first place, petitioner merely alleged the existence of such an ordinance, but it did not present any certified true copy thereof. In the second place, petitioner did not raise this point before this Court. In fact, it was mentioned by private respondent, and only in passing. [41] In any event, this allegation does not cure the inherent defect of petitioner’s Complaint for expropriation filed on September 23, 1993. It is hornbook doctrine that:“ x x x in a motion to dismiss based on the ground that the complaint fails to state a cause of action, the question submitted before the court for determination is the sufficiency of the allegations in the complaint itself. Whether those allegations are true or not is beside the point, for their truth is hypothetically admitted by the motion. The issue rather is: admitting them to be true, may the court render a valid judgment in accordance with the prayer of the complaint?”[42]

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

Second Issue:

Eminent Domain Not Barred by Res Judicata

As correctly found by the Court of Appeals[43] and the trial court,[44] all the requisites for the application of res judicata are present in this case. There is a previous final judgment on the merits in a prior expropriation case involving identical interests, subject matter and cause of action, which has been rendered by a court having jurisdiction over it.

Be that as it may, the Court holds that the principle of res judicata, which finds application in generally all cases and proceedings,[45] cannot bar the right of the State or its agent to expropriate private property. The very nature of eminent domain, as an inherent power of the State, dictates that the right to exercise the power be absolute and unfettered even by a prior judgment or res judicata. The scope of eminent domain is plenary and, like police power, can “reach every form of property which the State might need for public use.” [46] “All separate interests of individuals in property are held of the government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of property, remains in the government, or in the aggregate body of the people in their sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires it.” [47] Thus, the State or its authorized agent cannot be forever barred from exercising said right by reason alone of previous non-compliance with any legal requirement.

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it does apply to specific issues decided in a previous case. For example, a final judgment dismissing an expropriation suit on the ground that there was no prior offer precludes another suit raising the same issue; it cannot, however, bar the State or its agent from thereafter complying with this requirement, as prescribed by law, and subsequently exercising its power of eminent domain over the same property.[48] By the same token, our ruling that petitioner cannot exercise its delegated power of eminent domain through a mere resolution will not bar it from reinstituting similar proceedings, once the said legal requirement and, for that matter, all others are properly complied with. Parenthetically and by parity of reasoning, the same is also true of the principle of “law of the case.” In Republic vs De Knecht,[49] the Court ruled that the power of the State or its agent to exercise eminent domain is not diminished by the mere fact that a prior final judgment over the property to be expropriated has become the law of the case as to the parties. The State or its authorized agent may still subsequently exercise its right to expropriate the same property, once all legal requirements are complied with. To rule otherwise will not only improperly diminish the power of eminent domain, but also clearly defeat social justice.

WHEREFORE, the petition is hereby DENIED without prejudice to petitioner’s proper exercise of its power of eminent domain over subject property. Costs against petitioner.SO ORDERED.

SECOND DIVISION

[ G.R. No. 107916, February 20, 1997 ]

PERCIVAL MODAY, ZOTICO MODAY (DECEASED) AND LEONORA MODAY, PETITIONERS, VS. COURT OF APPEALS, JUDGE EVANGELINE S. YUIPCO OF BRANCH 6, REGIONAL TRIAL COURT, AGUSAN DEL SUR AND MUNICIPALITY OF BUNAWAN, RESPONDENTS. D E C I S I O N

ROMERO, J.:

The main issue presented in this case is whether a municipality may expropriate private property by virtue of a municipal resolution which was disapproved by the Sangguniang Panlalawigan. Petitioner seeks the reversal of the Court of Appeals decision and resolution, promulgated on July 15, 1992 and October 22, 1992 respectively [1], and a declaration that Municipal Resolution No. 43-89 of the Bunawan Sangguniang Bayan is null and void.

On July 23, 1989, the Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed Resolution No. 43-89, "Authorizing the Municipal Mayor to Initiate the Petition for Expropriation of a One (1) Hectare Portion of Lot No. 6138-Pls-4 along the National Highway Owned by Percival Moday for the Site of Bunawan Farmers Center and Other Government Sports Facilities."[2]

In due time, Resolution No. 43-89 was approved by then Municipal Mayor Anuncio C. Bustillo and transmitted to the Sangguniang Panlalawigan for its approval. On September 11, 1989, the Sangguniang Panlalawigan disapproved said Resolution and returned it with the comment that "expropriation is unnecessary considering that there are still available lots in Bunawan for the establishment of the government center." [3]

The Municipality of Bunawan, herein public respondent, subsequently filed a Petition for Eminent Domain against petitioner Percival Moday before the Regional Trial Court at Prosperidad, Agusan del Sur. [4] The complaint was later amended to include the registered owners, Percival Moday's parents, Zotico and Leonora Moday, as party defendants.

On March 6, 1991, public respondent municipality filed a Motion to Take or Enter Upon the Possession of Subject Matter of This Case stating that it had already deposited with the municipal treasurer the necessary amount in accordance with Section 2, Rule 67 of the Revised Rules of Court and that it would be in the government's best interest for public respondent to be allowed to take possession of the property.

Despite petitioners' opposition and after a hearing on the merits, the Regional Trial Court granted respondent municipality's motion to take possession of the land. The lower court held that the Sangguniang Panlalawigan's failure to declare the resolution invalid leaves it effective. It added that the duty of the Sangguniang Panlalawigan is merely to review the ordinances and resolutions passed by the Sangguniang Bayan under Section 208 (l) of B.P. Blg. 337, old Local Government Code and that the exercise of eminent domain is not one of the two acts enumerated in Section 19 thereof requiring the approval of the Sangguniang Panlalawigan. [5] The dispositive portion of the lower court's Order dated July 2, 1991 reads:

"WHEREFORE, it appearing that the amount of P632.39 had been deposited as per Official Receipt No. 5379647 on December 12, 1989 which this Court now determines as the provisional value of the land, the Motion to Take or Enter Upon the Possession of the Property filed by petitioner through counsel is hereby GRANTED. The Sheriff of this Court is ordered to forthwith place the plaintiff in possession of the property involved.

Let the hearing be set on August 9, 1991 at 8:30 o'clock in the morning for the purpose of ascertaining the just compensation or fair market value of the property sought to be taken, with notice to all the parties concerned.

SO ORDERED."[6]

Petitioners' motion for reconsideration was denied by the trial court on October 31, 1991.

Petitioners elevated the case in a petition for certiorari alleging grave abuse of discretion on the part of the trial court, but the same was dismissed by respondent appellate court on July 15, 1992. [7] The Court of Appeals held that the public purpose for the expropriation is clear from Resolution No. 43-89 and that since the Sangguniang Panlalawigan of Agusan del Sur did not declare Resolution No. 43-89 invalid, expropriation of petitioners' property could proceed.

Respondent appellate court also denied petitioners' motion for reconsideration on October 22, 1992. [8]

Meanwhile, the Municipality of Bunawan had erected three buildings on the subject property: the Association of

Barangay Councils (ABC) Hall, the Municipal Motorpool, both wooden structures, and the Bunawan Municipal Gymnasium, which is made of concrete.

In the instant petition for review filed on November 23, 1992, petitioner seeks the reversal of the decision and resolution of the Court of Appeals and a declaration that Resolution No. 43-89 of the Municipality of Bunawan is null and void.

On December 8, 1993, the Court issued a temporary restraining order enjoining and restraining public respondent Judge Evangeline Yuipco from enforcing her July 2, 1991 Order and respondent municipality from using and occupying all the buildings constructed and from further constructing any building on the land subject of this petition.[9]

Acting on petitioners' Omnibus Motion for Enforcement of Restraining Order and for Contempt, the Court issued a Resolution on March 15, 1995, citing incumbent municipal mayor Anuncio C. Bustillo for contempt, ordering him to pay the fine and to demolish the "blocktiendas" which were built in violation of the restraining order. [10]

Former Mayor Anuncio C. Bustillo paid the fine and manifested that he lost in the May 8, 1995 election. [11] The incumbent Mayor Leonardo Barrios, filed a Manifestation, Motion to Resolve "Urgent Motion for Immediate Dissolution of the Temporary Restraining Order" and Memorandum on June 11, 1996 for the Municipality of Bunawan.[12]

Petitioners contend that the Court of Appeals erred in upholding the legality of the condemnation proceedings initiated by the municipality. According to petitioners, the expropriation was politically motivated and Resolution No. 43-89 was correctly disapproved by the Sangguniang Panlalawigan, there being other municipal properties available for the purpose. Petitioners also pray that the former Mayor Anuncio C. Bustillo be ordered to pay damages for insisting on the enforcement of a void municipal resolution.

The Court of Appeals declared that the Sangguniang Panlalawigan's reason for disapproving the resolution "could be baseless, because it failed to point out which and where are 'those available lots.'” Respondent court also concluded that since the Sangguniang Panlalawigan did not declare the municipal board's resolution as invalid, expropriation of petitioners' property could proceed. [13]

The Court finds no merit in the petition and affirms the decision of the Court of Appeals.

Eminent domain, the power which the Municipality of Bunawan exercised in the instant case, is a fundamental State power that is inseparable from sovereignty.[14] It is government's right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose.[15] Inherently possessed by the national legislature, the power of eminent domain may be validly delegated to local governments, other public entities and public utilities.[16] For the taking of private property by the government to be valid, the taking must be for public use and there must be just compensation. [17]

The Municipality of Bunawan's power to exercise the right of eminent domain is not disputed as it is expressly provided for in Batas Pambansa Blg. 337, the Local Government Code [18] in force at the time expropriation proceedings were initiated. Section 9 of said law states:

"Section 9. Eminent Domain. — A local government unit may, through its head and acting pursuant to a resolution of its sanggunian, exercise the right of eminent domain and institute condemnation proceedings for public use or purpose."

What petitioners question is the lack of authority of the municipality to exercise this right since the Sangguniang Panlalawigan disapproved Resolution No. 43-89.

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

"Sec. 153. Sangguniang Panlalawigan Review. — (1) Within thirty days after receiving copies of approved ordinances, resolutions and executive orders promulgated by the municipal mayor, the sangguniang panlalawigan shall examine the documents or transmit them to the provincial attorney, or if there be none, to the provincial fiscal, who shall examine them promptly and inform the sangguniang panlalawigan in writing of any defect or impropriety which he may discover therein and make such comments or recommendations as shall appear to him proper.

(2) If the sangguniang panlalawigan shall find that any municipal ordinance, resolution or executive order is beyond the power conferred upon the sangguniang bayan or the mayor, it shall declare such ordinance, resolution

or executive order invalid in whole or in part, entering its actions upon the minutes and advising the proper municipal authorities thereof. The effect of such an action shall be to annul the ordinance, resolution or executive order in question in whole or in part. The action of the sangguniang panlalawigan shall be final.

xxx xxx xxx." (Emphasis supplied.)

The Sangguniang Panlalawigan's disapproval of Municipal Resolution No. 43-89 is an infirm action which does not render said resolution null and void. The law, as expressed in Section 153 of B.P. Blg. 337, grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue. Although pertaining to a similar provision of law but different factual milieu then obtaining, the Court's pronouncements in Velazco v. Blas, [19] where we cited significant early jurisprudence, are applicable to the case at bar.

"The only ground upon which a provincial board may declare any municipal resolution, ordinance, or order invalid is when such resolution, ordinance, or order is 'beyond the powers conferred upon the council or president making the same.' Absolutely no other ground is recognized by the law. A strictly legal question is before the provincial board in its consideration of a municipal resolution, ordinance, or order. The provincial (board's) disapproval of any resolution, ordinance, or order must be premised specifically upon the fact that such resolution, ordinance, or order is outside the scope of the legal powers conferred by law. If a provincial board passes these limits, it usurps the legislative functions of the municipal council or president. Such has been the consistent course of executive authority."[20]

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

As regards the accusation of political oppression, it is alleged that Percival Moday incurred the ire of then Mayor Anuncio C. Bustillo when he refused to support the latter's candidacy for mayor in previous elections. Petitioners claim that then incumbent Mayor C. Bustillo used the expropriation to retaliate by expropriating their land even if there were other properties belonging to the municipality and available for the purpose. Specifically, they allege that the municipality owns a vacant seven-hectare property adjacent to petitioners' land, evidenced by a sketch plan.[21]

The limitations on the power of eminent domain are that the use must be public, compensation must be made and due process of law must be observed.[22] The Supreme Court, taking cognizance of such issues as the adequacy of compensation, necessity of the taking and the public use character or the purpose of the taking [23], has ruled that the necessity of exercising eminent domain must be genuine and of a public character. [24] Government may not capriciously choose what private property should be taken.

After a careful study of the records of the case, however, we find no evidentiary support for petitioners' allegations. The uncertified photocopy of the sketch plan does not conclusively prove that the municipality does own vacant land adjacent to petitioners' property suited to the purpose of the expropriation. In the questioned decision, respondent appellate court similarly held that the pleadings and documents on record have not pointed out any of respondent municipality's "other available properties available for the same purpose. [25] " The accusations of political reprisal are likewise unsupported by competent evidence. Consequently, the Court holds that petitioners' demand that the former municipal mayor be personally liable for damages is without basis.

WHEREFORE, the instant petition is hereby DENIED. The questioned Decision and Resolution of the Court of Appeals in the case of "Percival Moday, et al. v. Municipality of Bunawan, et al." (CA G.R. SP No. 26712) are AFFIRMED. The Temporary Restraining Order issued by the Court on December 8, 1993 is LIFTED.SO ORDERED.

THIRD DIVISION

[ G.R. No. 110478[1], October 15, 2007 ]

FERMIN MANAPAT, PETITIONER, VS. COURT OF APPEALS AND NATIONAL HOUSING AUTHORITY, RESPONDENTS.

G.R. NO. 116176

DOMINGO LIM, PETITIONER, VS. COURT OF APPEALS AND NATIONAL HOUSING AUTHORITY, RESPONDENTS.

G.R. NOS. 116491-503

NATIONAL HOUSING AUTHORITY, PETITIONER, VS. MAXIMO LOBERANES, ELADIO QUIMQUE, CESARIO VEGA, JUANITO SANTOS, ALEJANDRO ORACION AND GONZALO MERCADO, RESPONDENTS.

D E C I S I O N

NACHURA, J.:

For the resolution of the Court are three consolidated petitions for review on certiorari under Rule 45 of the Rules of Court. G.R. No. 110478 assails the May 27, 1993 Decision [2] of the Court of Appeals (CA) in CA-G.R. CV Nos. 10200-10212. G.R. No. 116176 questions the June 28, 1994 Decision[3] of the appellate court in CA-G.R. CV No. 27159. G.R. Nos. 116491-503 assails the March 2, 1994 and the July 25, 1994 Resolutions [4] of the CA also in CA-G.R. CV Nos. 10200-10212.

The three-decade saga of the parties herein has for its subject parcels of land forming part of what was originally known as the Grace Park Subdivision in Caloocan City and formerly owned by the Roman Catholic Archbishop of Manila (RCAM) and/or the Philippine Realty Corporation (PRC).

The Facts

Sometime in the 1960’s, RCAM allowed a number of individuals to occupy the Grace Park property on condition that they would vacate the premises should the former push through with the plan to construct a school in the area. The plan, however, did not materialize, thus, the occupants offered to purchase the portions they occupied. Later, as they could not afford RCAM’s proposed price, the occupants, organizing themselves as exclusive members of the Eulogio Rodriguez, Jr. Tenants Association, Inc., petitioned the Government for the acquisition of the said property, its subdivision into home lots, and the resale of the subdivided lots to them at a low price. [5]

Acting on the association’s petition, the Government, in 1963, through the Land Tenure Administration (LTA), later succeeded by the People’s Homesite and Housing Corporation (PHHC), negotiated for the acquisition of the property from RCAM/PRC. But because of the high asking price of RCAM and the budgetary constraints of the Government, the latter’s effort to purchase and/or to expropriate the property was discontinued. RCAM then decided to effect, on its own, the subdivision of the property and the sale of the individual subdivided lots to the public.[6] Petitioners Manapat and Lim and respondents Loberanes, Quimque, Vega, Santos, Oracion and Mercado in these consolidated cases were among those who purchased individual subdivided lots of Grace Park directly from RCAM and/or PRC.[7]

A significant turn of events however happened in 1977 when the late President Ferdinand E. Marcos issued Presidential Decree (PD) No. 1072,[8] appropriating P1.2M out of the President’s Special Operations Funds to cover the additional amount needed for the expropriation of Grace Park. The National Housing Authority (NHA), PHHC’s successor, then filed several expropriation proceedings over the already subdivided lots for the purpose of developing Grace Park under the Zonal Improvement Program (ZIP) and subdividing it into small lots for distribution and resale at a low cost to the residents of the area. [9] The following cases were filed by the NHA with the Regional Trial Court (RTC) of Caloocan City: C-6225, C-6226, C-6227, C-6228, C-6229, C-6230, C-6231, C-6232, C-6233, C-6234, C-6235, C-6236, C-6237, C-6238, C-6255 and C-6435. [10]

After due proceedings, the trial court rendered separate decisions dismissing the expropriation cases, with the exceptions of Cases Nos. C-6233 and C-6236 in which it ordered the condemnation of the involved lots. [11] On motion for reconsideration by the NHA in Cases Nos. C-6227, C-6228, C-6230, C-6234, C-6235, C-6238 and C-6255, the trial court later amended its decision, set aside its dismissal of the said cases, ordered the condemnation of the involved lots and fixed the amount of just compensation at P180.00 per square meter. In Cases Nos. C-6225, C-6229, C-6231, C-6232, C-6237 and C-6435, the RTC however denied NHA’s motion for reconsideration. [12]

NHA eventually appealed to the CA the decisions in Cases Nos. C-6225, C-6229, C-6231, C-6232, C-6237 and C-6435 on the issue of the necessity of the taking, and the amended ruling in Cases Nos. C-6227, C-6228, C-6230, C-6234,

C-6235, C-6238 and C-6255 on the issue of just compensation.[13] The CA consolidated the appeals and docketed them as CA-G.R. CV No. 10200-10212. NHA likewise filed with the CA an appeal from the decision in C-6226, which was docketed as CA-G.R. CV No. 27159.

On May 27, 1993, the appellate court rendered its Decision[14] in CA-G.R. CV No. 10200-10212 disposing of the appealed cases as follows:

WHEREFORE, premises considered, judgment is hereby rendered:

1) Reversing and setting aside the decisions of dismissal in Cases Nos. C-6225, C-6229, C-6231, C-6232, C-6237 and C-6435; and in lieu thereof an order of condemnation is entered declaring that plaintiff-appellant NHA has a lawful right to take the lots involved for the public use described in the complaints;

2) Affirming the decisions in Case Nos. C-6227, C-6228, C-6234, C-6235, C-6238 and C-6255 insofar as said decision granted the expropriation; declaring that plaintiff-appellant NHA has a lawful right to take the lots involved for the public use stated in the complaint; but annulling and setting aside the just compensation fixed by the trial court at P180.00 per square meter in the said cases;

3) Ordering the remand of all the appealed cases, except for Case No. C-6230, to the trial court for determination of the just compensation to which defendants are entitled in accordance with Rule 67 of the Revised Rules of Court;

4) Finding the compromise agreement in Case No. C-6230, entitled, “NHA v. Aurora Dy dela Costa, et al.” in accordance with law, and not contrary to morals or public policy, and rendering judgment in accordance therewith;

5) Ordering Remedios Macato to be joined as defendant with Julia C. Diaz in Case No. C-6227.

No pronouncement as to costs.

SO ORDERED.[15]

Rosemarie and Dolores Guanzon, two of the owners of the lots in C-6225, filed before this Court a petition for review on certiorari of the aforesaid decision of the appellate court [Their petition was docketed as G.R. Nos. 110462-74]. On September 5, 1994, we dismissed their petition for failure to sufficiently show that the CA had committed any reversible error in the challenged decision.[16] An Entry of Judgment was issued on February 2, 1995.[17]

Likewise, Julia Diez and Remedios Macato, the owners of the lots in C-6227, assailed before us the afore-quoted CA decision through a petition under Rule 45. On July 28, 1993, however, in G.R. No. 110770, we denied their Motion for Extension of Time to file a petition for review on certiorari for their failure to submit an affidavit of service of the motion as required by Circular No. 19-91.[18] After denying their motion for reconsideration, [19] we issued an Entry of Judgment on August 27, 1993.[20]

Petitioner Manapat, the defendant-landowner in C-6229, also elevated the case before us via a petition for review on certiorari docketed as G.R. No. 110478.[21] We initially dismissed this petition for having been filed out of time,[22] but we reinstated it on motion for reconsideration.[23]

In the meantime, the other defendants-landowners in the expropriation cases—RCAM/PRC in C-6225, Maximo Loberanes and Eladio Quimque in C-6231, Alejandro Oracion, Gonzalo Mercado, Cesario Vega and Juanito Santos in C-6435, and Remedios Macato in C-6227—moved for the reconsideration of the said May 27, 1993 Decision of the CA.[24] In the March 2, 1994 Resolution,[25] the appellate court resolved the motions in this wise:

WHEREFORE, premises considered, the motion for reconsideration of movants Roman Catholic Archbishop of Manila and Philippine Realty Corporation (in Special Civil Action No. 6225) and movant-intervenor Remedios Macato (in Special Civil Action No. 6227) are DENIED.

The motions for reconsideration of movants Gonzalo Mercado, Cesario Vega and Juanito Santos (in Special Civil Action No. 6435) and movants Maximo Loberanes and Eladio Quimque (in Special Civil Action No. 6231) are GRANTED. The motion for reconsideration of movant Alejandro Oracion (in Special Civil Action No. 6435) is partially granted to the extent of Three Hundred (300) square meters of Lot 22, Block 157. The decision of this Court promulgated May 27, 1993 is accordingly MODIFIED. Lot No. 26, Block No. 157 owned by Cesario Vega and Juanito Santos, and Lot No. 4, Block No. 157 owned by Maximo Loberanes and Eladio Quimque are declared exempt from expropriation and the corresponding complaints for expropriation (sic) DISMISSED insofar as said lots are concerned. Lot No. 22, Block No. 157 owned by movant Alejandro Oracion is declared exempt from expropriation to the extent of Three Hundred (300) square meters. Only the remaining Ninety (90) square meters

shall be the subject of expropriation, the portion to be determined by the lower court in the manner most beneficial to the owner and consistent with the objective of PD 1072.

SO ORDERED.[26]

Aggrieved by the said March 2, 1994 CA Resolution specifically with regard to the exemption from expropriation of the lots of Loberanes, Quimque, Mercado, Vega and Santos, and the partial exemption of the lot of Oracion, NHA moved for the reconsideration of the same. In the subsequent July 25, 1994 Resolution,[27] the appellate court denied NHA’s motion, together with the belated motion of Vivencio S. de Guzman, the defendant-landowner in C-6255. The dispositive portion of the July 25, 1994 Resolution reads:

WHEREFORE, the motions for reconsideration of defendant-appellant Vivencio S. de Guzman of the decision promulgated May 27, 1993 and of plaintiff-appellant National Housing Authority of the resolution promulgated March 2, 1994 are DENIED.

SO ORDERED.[28]

With the denial of its motion for reconsideration, NHA filed with this Court a Consolidated Petition for Review [29]

under Rule 45, as aforesaid, assailing the March 2, 1994 and the July 25, 1994 Resolutions of the appellate court. NHA’s petition was docketed as G.R. Nos. 116491-503 against respondents Loberanes and Quimque (in C-6231), Vega, Santos, Oracion and Mercado (in C-6435).

In a separate development, the CA, on June 28, 1994, rendered its Decision [30] in CA-G.R. CV No. 27159, reversing the RTC’s ruling in C-6226. The fallo of the decision reads:

WHEREFORE, FOREGOING PREMISES CONSIDERED, the appealed decision dated October 29, 1986 is hereby REVERSED for want of merit. Let the record of this case be remanded to the court of origin for further proceedings.

IT IS SO ORDERED.[31]

Discontented with the appellate court’s ruling, petitioner Domingo Lim, one of the owners of the lots subject of C-6226, elevated the case to us via a petition for review on certiorari docketed as G.R. No. 116176.[32]

The Issues

Thus, for resolution by this Court are the following consolidated cases: (1) G.R. No. 110478 of Manapat; (2) G.R. Nos. 116491-503 of the NHA; and (3) G.R. No. 116176 of Lim.

In G.R. No. 110487, petitioner Manapat argues in the main that, as he is also a member of the tenant association, the beneficiary of the expropriation, it would be incongruous to take the land away from him only to give it back to him as an intended beneficiary. Accordingly, the CA, in its May 27, 1993 Decision in CA-G.R. CV No. 10200-10212, should not have allowed the expropriation of his lot. To further support his stance, Manapat raises the following grounds:

I

THE COURT OF APPEALS ERRED IN HOLDING THAT THE ISSUANCE MADE IN THE EXERCISE OF LEGISLATIVE POWER, SPECIFYING THE LOTS TO BE EXPROPRIATED AND THE PURPOSE FOR WHICH THEY ARE INTENDED, REMOVES FROM THE JUDICIARY THE DETERMINATION OF THE NECESSITY OF THE TAKING, THERE BEING NO SHOWING OF ABUSE OF DISCRETION.[33]

II

SUPERVENING EVENT RENDERS IMPROPER THE DISPOSITION BY THE COURT OF APPEALS FOR AN ORDER OF CONDEMNATION DECLARING THAT NHA HAS A LAWFUL RIGHT TO TAKE THE LOT OF FERMIN MANAPAT FOR SUPPOSED PUBLIC USE AND FOR REMAND OF HIS CASE TO THE TRIAL COURT FOR DETERMINATION OF JUST COMPENSATION.[34]

III

THE COURT OF APPEALS SHOULD HAVE CONSIDERED THAT FERMIN MANAPAT IS NOT ONLY A BONA FIDE

OCCUPANT IN THE GRACE PARK SUBDIVISION FOR PURPOSES OF P.D. 1072 BUT LIKEWISE HAS A TRANSFER CERTIFICATE OF TITLE NO. 42370 OF THE REGISTRY OF DEEDS FOR THE CITY OF CALOOCAN OVER THE SAME LOT SOUGHT TO BE EXPROPRIATED WHICH SHOULD NOT BE SUBJECT TO COLLATERAL ATTACK AS DISPOSED BY THE COURT OF APPEALS.[35]

IV

THE COURT OF APPEALS SHOULD HAVE CONSIDERED THAT THE EVENTUAL BENEFICIARIES OF ITS BENEVOLENT EXPROPRIATION ARE SQUATTERS.[36]

NHA, in its petition in G.R. Nos. 116491-503, primarily contends that the CA erred when it issued its March 2, 1994 Resolution and modified the May 27, 1993 Decision in CA-G.R. CV No. 10200-10212 to the extent that it applied retroactively Article VI, Section 10 of Republic Act (R.A.) No. 7279, thus exempting from expropriation the 300-sq m lots of respondents Loberanes, Quimque, Vega, Santos, Oracion and Mercado. NHA summarized its arguments as follows:

I

The Honorable Court of Appeals erred in applying retroactively Article VI, Section 10 of Republic Act No. 7279 to the subject expropriation cases instituted back in 1977 by petitioner-appellant NHA.[37]

A. Republic Act 7279 passed in 1992 should operate prospectively and, therefore, should not be given retroactive effect.[38]

Republic Act 7279 is a substantive and penal law with a penalty clause which cannot apply retroactively especially to pending actions.[39]

B. Republic Act No. 7279 and PD 1072 are not in pari materia.[40]

The retroactive application of Article VI, Section 10 of RA 7279 will affect vested rights of petitioner-appellant NHA arising from its exercise of the power of eminent domain.[41]

II

The Honorable Court of Appeals erred in ignoring the impractical consequences resulting from a selective expropriation of lots.[42]

In G.R. No. 116176, petitioner Lim, a non-member of the tenant association who bought from RCAM/PRC four lots of the subdivided Grace Park Subdivision,[43] argues as follows:

1

Respondent NHA may not, as it would herein, legally re-group several smaller lots into which a much bigger lot had previously been subdivided, and consider and treat them as one again for the purpose of subdividing it once more into still smaller lots for distribution to its supposed or intended beneficiaries. [44]

2

There really was no genuine necessity for the expropriation of the lots in question to satisfy the purpose thereof as alleged in the complaint therefor.[45]

3

Respondent Court did not sustain the clear finding of the trial court that no evidence sufficient to prove its claim that the expropriation of said lots and subdividing them again into much smaller lots for resale to their present occupants would provide the latter with more healthful, decent and peaceful surroundings and thus improve the quality of their lives was ever presented by respondent NHA.[46]

Stripped of non-essentials, the petitions raise only one fundamental issue, and that is, whether the NHA may validly expropriate the parcels of land subject of these cases.

The Court’s Ruling

The power of eminent domain is an inherent and indispensable power of the State. Also called the power of expropriation, it is described as “the highest and most exact idea of property remaining in the government” that may be acquired for some public purpose through a method “in the nature of a compulsory sale to the State.” [47] By virtue of its sovereign character, the exercise of the power prevails over the non-impairment clause, [48] and is clearly superior to the final and executory judgment rendered by a court in an ejectment case.[49]

Being inherent, the power need not be specifically conferred on the government by the Constitution. Section 9, Article III of the Constitution, which mandates that “private property shall not be taken for a public use without just compensation,” merely imposes a limit on the government’s exercise of the power and provides a measure of protection to the individual’s right to property.[50]

Just like its two companion fundamental powers of the State, [51] the power of eminent domain is exercised by the Legislature. However, it may be delegated by Congress to the President, administrative bodies, local government units, and even to private enterprises performing public services. [52]

Albeit the power partakes of a sovereign character, it is by no means absolute. Its exercise is subject to limitations, one of which is, precisely, Section 9, Article III of the Constitution.

Over the years and in a plethora of cases, this Court has recognized the following requisites for the valid exercise of the power of eminent domain: (1) the property taken must be private property; (2) there must be genuine necessity to take the private property; (3) the taking must be for public use; (4) there must be payment of just compensation; and (5) the taking must comply with due process of law. [53] Accordingly, the question that this Court must resolve is whether these requisites have beenadequately addressed.

It is incontrovertible that the parcels of land subject of these consolidated petitions are private property. Thus, the first requisite is satisfied.

With respect to the second, it is well to recall that in Lagcao v. Judge Labra,[54] we declared that the foundation of the right to exercise eminent domain is genuine necessity, and that necessity must be of a public character. As a rule, the determination of whether there is genuine necessity for the exercise is ajusticiable question.[55] However, when the power is exercised by the Legislature, the question of necessity is essentially a political question.[56] Thus, in City of Manila v. Chinese Community,[57] we held:

The legislature, in providing for the exercise of the power of eminent domain, may directly determine the necessity for appropriating private property for a particular improvement for public use, and it may select the exact location of the improvement. In such a case, it is well-settled that the utility of the proposed improvement, the extent of the public necessity for its construction, the expediency of constructing it, the suitableness of the location selected and the consequent necessity of taking the land selected for its site, are all questions exclusively for the legislature to determine, and the courts have no power to interfere, or to substitute their own views for those of the representatives of the people.

In the instant cases, the authority to expropriate came from Presidential Decree No. 1072, issued by then President Ferdinand E. Marcos in 1977. At that time, and as explicitly recognized under the 1973 Constitution, President Marcos had legislative powers. Perforce, the expropriation of the subject properties – identified with specificity in the P.D. --- was directed by legislation. The issue of necessity then assumed the nature of a political question.

As to the third requisite of “public use,” we examine the purpose for which the expropriation was undertaken by NHA. As set forth in its petition, NHA justifies the taking of the subject property for the purpose of improving and upgrading the area by constructing roads and installing facilities thereon under the Government’s zonal improvement program and subdividing them into much smaller lots for distribution and sale at a low cost to qualified beneficiaries, mostly underprivileged long-time occupants of Grace Park. Around 510 families with approximately 5 members each will be benefited by the project. [58] The only remaining obstacle in the completion of this project is the lots subject of these consolidated petitions as the other lots in Grace Park have already been expropriated.[59]

The Zonal Improvement Program (ZIP), being implemented for government by NHA, draws breath from policy mandates found in the 1987 Constitution.[60] It is an integral part of the government’s “socialized housing” program

which, in Sumulong v. Guerrero,[61] we deemed compliant with the “public use” requirement, it being a program clearly devoted to a “public purpose.” Justice Irene R. Cortes, speaking eloquently for the Court, said:

“Socialized housing” is defined as, “the construction of dwelling units for the middle and lower class members 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 among others:

a) The construction and/or improvement of dwelling units for the middle and lower income groups of the society, including the construction of the supporting infrastructure and other facilities;

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

c) Slum improvement which consists basically of allocating homelots to the dwellers in the area or property involved, rearrangement and re-alignment of existing houses and other dwelling structures and the construction and provision of basic community facilities 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 commercial and industrial estates and such other facilities to enhance the total community growth; and

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

x x x x

Specifically, urban renewal or redevelopment and the construction of low-cost housing is 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 1973 Constitution made it incumbent upon the State to establish, maintain and ensure adequate social services including housing [Art. II, sec. 7]. The 1987 Constitution goes even further by providing that:

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. [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 will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the implementation of such program the State shall respect the rights of small property owners. (Art. XIII, sec. 9, Emphasis supplied)

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 “[s]eriously concerned that, despite the efforts of Governments at the national and local levels and of international organizations, the living 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 the light of the foregoing, this Court is satisfied that "socialized housing" falls within the confines of "public use". It is, particularly important to draw attention to paragraph (d) of Pres. Dec. No. 1224 which should be construed in relation with the preceding three paragraphs. 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.[62]

It need only be added, at this juncture, that the “public use” requisite for the valid exercise of the power of eminent domain is a flexible and evolving concept influenced by changing conditions. At present, it may not be amiss to state that whatever is beneficially employed for the general welfare satisfies the requirement of public

use.[63]

Still, petitioner Manapat insists that, being himself a beneficiary of the expropriation (because he has been a long-time resident of Grace Park), it would be incongruous for government to take his land away from him only to give it back to him. This contention sadly fails to comprehend the public purpose for the taking under the “socialized housing” program. The parcels of land subject of the expropriation are, precisely, being taken so that they can be subdivided into much smaller lots --- at an average of 66.5 square meters per lot [64] --- for distribution to deserving dwellers in the area. Upon the completion of the project, Manapat, and those similarly situated as he, cannot assert any right to be awarded the very same lots they currently occupy, nor be entitled to the same area of the land they now have.

Then, we have petitioner Lim and respondents Vega, Santos, Oracion, and Mercado, who argue that the lots they own should not be expropriated are already titled in their names and are very small in area, being already the subdivided portions of the original Grace Park Subdivision.

We are not persuaded.

J. M. Tuason & Co., Inc. v. Land Tenure Administration [65] is instructive. In that case, this Court adopted the dissenting opinion of Justice J. B. L. Reyes in Republic v. Baylosis,[66] that the propriety of exercising the power of eminent domain cannot be determined on a purely quantitative or area basis, given that the Constitution speaks of lands, not of landed estates. Speaking through Justice (later Chief Justice) Enrique M. Fernando, the Court said:

This is not to say of course that property rights are disregarded. This is merely to emphasize that the philosophy of our Constitution embodying as it does what Justice Laurel referred to as its “nationalistic and socialist traits discoverable upon even a sudden dip into a variety of [its] provisions” although not extending as far as the “destruction or annihilation” of the rights to property, negates the postulate which at one time reigned supreme in American constitutional law as to their well-nigh inviolable character. This is not so under our Constitution, which rejects the doctrine of laissez faire with its abhorrence for the least interference with the autonomy supposed to be enjoyed by the property owner. Laissez faire, as Justice Malcolm pointed out as far back as 1919, did not take too firm a foothold in our jurisprudence. Our Constitution is much more explicit. There is no room for it for laissez faire. So Justice Laurel affirmed not only in the above opinion but in another concurring opinion quoted with approval in at least two of our subsequent decisions. We had occasion to reiterate such a view in the ACCFA case, decided barely two months ago.

This particular grant of authority to Congress authorizing the expropriation of land is a clear manifestation of such a policy that finds expression in our fundamental law. So is the social justice principle enshrined in the Constitution of which it is an expression, as so clearly pointed out in the respective dissenting opinions of Justice J.B.L. Reyes and Chief Justice Paras in the Baylosis case. Why it should be thus is so plausibly set forth in the ACCFA decision, the opinion being penned by Justice Makalintal. We quote: “The growing complexities of modern society, however, have rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only ‘because it was better equipped to administer for the public welfare than is any private individual or group of individuals,’ continue to lose their well-defined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere else the tendency is undoubtedly towards a greater socialization of economic forces. Here of course this development was envisioned, indeed adopted as a national policy, by the Constitution itself in its declaration of principle concerning the promotion of social justice.”

In a more recent decision,[67] we had occasion to declare that the fact that the property is less than ½-hectare and that only a few would actually benefit from the expropriation does not diminish its public use character, inasmuch as “public use” now includes the broader notion of indirect public benefit or advantage, including in particular, urban land reform and housing.

The Court’s departure from the land size or area test finds further affirmation in its rulings in Mataas na Lupa Tenants Association, Inc. v. Dimayuga[68] and the aforecited Sumulong v. Guerrero.[69]

Given this discussion, it is clear that “public use,” as a requisite for the exercise of eminent domain in the instant cases, has been adequately fulfilled.

To satisfy the fourth requisite, we affirm the appellate court’s disposition that the subject cases be remanded to the trial court for the determination of the amount of just compensation. Under case law, the said determination is a judicial prerogative.[70] As to the observance of the fifth requisite, the due process clause, in the expropriation proceedings, all the parties have been given their day in court. That they are now before this Court is attestation enough that they were not denied due process of law.

From the foregoing disquisitions, it is unmistakable that all the requirements for the valid exercise of the power of eminent domain have been complied with. Thus, our answer to the singular and fundamental issue in these consolidated cases is: YES, the NHA may validly expropriate the subject parcels of land.

One final matter: the propriety of the application by the CA of R.A. No. 7279, otherwise known as the Urban Development and Housing Act of 1992.

The Court is not unaware of the condition now imposed by R.A. No. 7279 [71] that, for purposes of urban development and housing under the Act, where expropriation is resorted to, parcels of land owned by small property owners shall be exempted.[72] “Small property owners” are owners of residential lands with an area not exceeding 300 sq m in highly urbanized cities and 800 sq m in other urban areas and who do not own any other real property.[73] Invoking this limitation under the said law, the appellate court in the questioned rulings exempted from expropriation the lots owned by Loberanes, Quimque, Mercado, Vega and Santos, and partially exempted the lot of Oracion.

The CA’s ruling on this point is incorrect. R.A. No. 7279 was enacted in 1992, almost two decades after the expropriation cases against the property owners herein were instituted with the RTC in 1977. Nova constitutio futuris formam imponere debet, non praeteritis. A new statute should affect the future, not the past. The law looks forward, not backward.[74] Article 4 of the Civil Code even explicitly declares, “(l)aws shall have no retroactive effect, unless the contrary is provided.”[75] In these consolidated cases, the Court finds that the language of R.A. No. 7279 does not suggest that the Legislature has intended its provisions to have any retroactive application. On the contrary, Section 49 of the said law indicates that it “shall take effect upon its publication in at least two (2) national newspapers of general circulation.”[76] The law’s prospective application being clearly stated, the Court cannot agree with the disposition of the appellate court that the subject lots not exceeding 300 sq m are exempt from expropriation.

WHEREFORE, PREMISES CONSIDERED, the May 27, 1993 Decision of the Court of Appeals in CA-G.R. CV No. 10200-10212 and the June 28, 1994 Decision in CA-G.R. CV No. 27159 are AFFIRMED; and the March 2, 1994 and the July 25, 1994 Resolutions in CA-G.R. CV Nos. 10200-10212 are REVERSED and SET ASIDE.

SO ORDERED.