Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-3212 December 28, 1907 THE ROMAN CATHOLIC APOSTOLIC CHURCH, ET AL., plaintiff, vs. THE MUNICIPALITIES OF TARLAC AND VICTORIA, Province of Tarlac, ET AL., defendants. Hartigan, Rohde and Gutierrez, for plaintiffs. Buencamino and Diokno, for defendants.

WILLARD, J.: This is an original action brought in this court by virtue of the provisions of Act No. 1376. The construction of certain sections of this act has been twice before us in The Roman Catholic Church vs. The Municipality of Badoc, et al. (6 Phil. Rep., 345) and The Roman Catholic Church vs. The Municipality of Badoc, et al. (7 Phil. Rep., 566). The complaint as amended alleged that the Roman Catholic Church was the owner of, and till within a few years before the filing of the complaint had been in possession of, the following described lands: V.
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(a) In the said municipality of Tarlac: 1. The open square known as the plaza of the church of Tarlac, situated within the area which formerly constituted the pueblo of Tarlac. 2. In the territory which formerly constituted the pueblo of La Paz and is now the barrio of La Paz in the municipality of Tarlac: The grounds of the old church of La Paz, known as the grounds of the old church and convent of La Paz; The grounds of the old cemetery of La Paz, known as the old cemetery of La Paz; The new cemetery of La Paz, known as the new cemetery of La Paz.
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The above mentioned lands are at present in the possession of and under the administration of the defendants, Gregorio Aglipay and the municipality of Tarlac. (b) In the said municipality of Victoria:

1. The grounds of the church of Victoria, bounded by the four streets called procesionales and known as the plaza of the church of Victoria; 2. The chapels and their corresponding grounds, situated in the barrios of Calibungan, San Andres, Balbaloto, and Bantog. The above-mentioned properties are at present in the possession of and under the administration of the defendants, Gregorio Aglipay, Antonio Mariano, Canuto Aglipay, Geronimo Velasco, municipal president of Victoria, and the municipality of Victoria. The prayer of the amended complaint was that the Roman Catholic Church be declared to be the owner of the property described therein and that no one of the defendants had any right or interest therein. It also asked for the appointment of a receiver and a preliminary injunction prohibiting the use of the property, during the pendency of the action, by the Independent Filipino Church. The complaint was duly served on all of the defendants except Antonio Mariano. The only answer which was filed purported to be the answer of la parte demandada. In the case above cited, reported in Volume VI, PhilippineReports, page 345, we said that on its face this was an answer of all the defendants. Whether in this particular case it was intended as such is rendered doubtful by other circumstances which appear therein. However, as it was the only answer filed in the case, if it is to be considered as the answer only of Gregorio Aglipay, all the other defendants would be in default, and by the terms of section 4 of said act judgment could be entered against them without proof of any of the allegations of the complaint. A commissioner was appointed to take evidence and such evidence was taken and reported to the court. Thereafter the plaintiffs and the Attorney-General, acting by direction of Governor-General, as the representative of the defendant municipalities of Tarlac and Victoria, made an agreement as follows: That the plaintiff's complaint herein, so far as it alleges ownership and right of occupation of all public highways and plazas, and especially the plazas in the municipalities of Tarlac and Victoria, in the Province of Tarlac, shall be dismissed without prejudice and all claim on the part of the plaintiffs thereto shall be eliminated from said action. In the brief filed by the plaintiffs, they say that the matter in dispute in the case is reduced to the lands described in Paragraph V, (a) 2 that is to say, to the lot on which the church of the former pueblo of La Paz, now a barrio of the municipality of Tarlac, was situated, and the old cemetery and the new cemetery of the same barrio. The only questions to be considered, thereto, relate to this property in the barrio of La Paz, in the municipality of Tarlac, and the only defendants interested therein are the defendants Gregorio Aglipay and the municipality of Tarlac. The evidence presented by the plaintiffs in regard to this property showed that the church in the barrio of La Paz had been destroyed during the revolution, and that prior to its destruction it, and the two cemeteries, had been for more than twenty-five years under the control of, and administered by, the Roman Catholic priest of that pueblo. The defendants presented before the commissioner no evidence at all relating to this property. In the answer above referred to it is alleged that the property described in the complaint is public property belonging to the Government of the Philippine Islands; that the possession enjoyed by the

plaintiff church of the property was only for the purpose of administration, and that all its rights thereto ceased when the Spanish sovereignty ceased in these Islands. It also alleged that the Independent Filipino Church took possession of the property by virtue of the circular of the Insular Government of the 10th of January, 1903, for the purpose of administering it for the benefit of the inhabitants of the municipality. It will thus be seen that upon this branch of the case the only question presented either by the answer or by the brief is the question as to whether the property in controversy is or is not owned by the Government of the Philippine Islands, and the brief is devoted principally to an argument of this question, a question which has been discussed and decided adversely to the claim of the defendants in the cases of Barlin vs. Ramirez (7 Phil. Rep., 41), Roman Catholic Church vs. Santos (7 Phil. Rep., 66), and the City of Manila vs. The Roman Catholic Church(8 Phil. Rep., 763). It was there held that the King of Spain was not the owner of the property involved in those cases, and that the title thereto did not, therefore, pass by the treaty of Paris to the Government of the United States. It was further held that the municipalities were not the owners of such property and had no right or interest therein. Applying the principle of those cases to this case, the result is that the plaintiffs are entitled to judgment for possession as prayed for in the complaint. There is, moreover, another line of reasoning by which the same result is reached, without taking into consideration the peculiar nature of the property here in controversy, and without considering that it is property devoted to religious worship. It was proven at the trial that the plaintiff church had been in possession of this property for more than twenty-five years. It was admitted in the answer and in the briefs that such possession had existed up to at least 1898. The defendants, in or after that year, took possession of the property. As we have seen, they did so without any right whatever. Under such circumstances, we have held that the plaintiff church can maintain an action to recover the possession of which it has thus been deprived, notwithstanding the fact that it did not commence such action within one year from the time when it lost possession. In other words, where the defendant is able to show no title or interest in himself, a plaintiff who has been in possession of the property for the great number of years may recover such possession of the defendant, although the plaintiff has no written evidence of ownership. This was held in the case of the Bishop of Cebu vs. Mangaron (6 Phil. Rep., 286). In that case it was said, at page 299: Article 1635 of the old Code of Civil Procedure not having been repealed by the Civil Code, if the accion publiciana existed prior to its enactment, it must necessarily exist after such enactment. We consequently conclude that action brought by the plaintiff in this case to recover the possession of which he was unlawfully deprived by the defendant can be properly maintained under the provisions of the present Civil Code considered as a substantive law, without prejudice to any right which he may have to the ownership of the property, which ownership he must necessarily establish in order to overcome the presumption of title which exist in favor of the lawful possessor, the plaintiff in this case, who had been in the quiet and peaceful possession of the lands for twenty years, more or less, at the time he was wrongfully dispossessed by the defendant. During the progress of this case the defendant, Gregorio Aglipay, made a motion to dismiss the same of the ground that Act No. 1376 was void because it was inconsistent with the provisions of the act of Congress of July 1, 1902, relating to the Philippine Islands.

We held in the case reported in Volume VI, Philippine Reports, page 345, above cited, that this objection could not be raised by motion, but must be considered when the case was decided upon its merits. The same question has been presented by the answer and argued in the brief. The particular ground on which this claim is based is that the law denies to the Independent Filipino Church and the municipalities the equal protection of the laws, and is therefore in violation of the first paragraph of section 5 of the act of Congress above cited, which provides: That no law shall be enacted in said Islands which shall deprive any person of life, liberty, or property without due process of law, or deny to any person therein the equal protection of the laws. Act No. 1376 gives original jurisdiction to this court of controversies between the Roman Catholic Church and the Filipino Independent Church and the municipalities of the Islands relating to the ownership of church property therein. It provides that the Roman Catholic Church may commence an action in this court against the Independent Filipino Church and the municipalities in relation to the property above mentioned. It also provides that the municipalities may commence such action in this court against the Roman Catholic Church. But it is said that the law discriminates against the municipalities in that it does not allow them to commence such actions without the consent of the Attorney-General and that the municipalities are thereby deny the equal protection of the laws. We see nothing whatever in this point, nor in any other of the suggestions made in the motion and brief of the defendants. In the case of the United States vs. The Union Pacific Railroad Co. (98 U. S., 569) there was under discussion an act of Congress which directed the Attorney-General to commence suit in equity in any circuit court of the United States against the Union Pacific Railroad Company and other defendants. That law gave to the plaintiff in that case rights which were not enjoyed by other plaintiffs suing in the same court and imposed obligations upon the defendants which were not imposed upon other persons sued as defendants therein. It was claimed that the act was void as being in violation of the fifth amendment to the Constitution, and it was also said that it violated "the fundamental right of citizens under a free government to equality before the law." In holding the law constitutional, the court said, at page 608: We are of opinion, therefore, that the act in question was intended not to change the substantial rights of the parties to the suit which it authorized, but to provide a specific method of procedure, which, by removing restrictions on the jurisdiction, process, and pleading in ordinary cases, would give a larger scope for the action of the court, and a more economical and efficient remedy than before existed, and that it is a valid and constitutional exercise of legislative power. By section 9 of the act of Congress of July 1, 1902, above cited, it is provided as follows: That the Supreme Court and the Court of First Instance of the Philippine Islands shall possess and exercise jurisdiction as heretofore provided, and such additional jurisdiction as shall hereafter be prescribed by the Government of said Islands, . . . . This provision did not take away from the Commission the power to pass the act in question. It is therefore by the court adjudged and decreed that this action be dismissed without costs as to the defendants Canuto Aglipay, Geronimo Velasco, and the municipality of Victoria. It is further adjudged and decreed that all of the property described in the complaint, as amended, be eliminated therefrom, except that relating to the land upon which the church of the barrio of La Paz, in the municipality of Tarlac, was situated, and the old cemetery of said barrio and the new cemetery

of said barrio, and as to the property thus eliminated this court makes no determination in regard to the rights of the parties to this action in relation thereto. It is further adjudged and decreed that the plaintiff, the Roman Catholic Apostolic Church, is entitled to the immediate possession of the following-described property situated in the municipality of Tarlac, Province of Tarlac, to wit: The grounds of the old church of La Paz, known as the grounds of the old church and convent of La Paz; the grounds of the old cemetery of La Paz, known as the old cemetery of La Paz, and the new cemetery of La Paz, known as the new cemetery of La Paz; and that neither the municipality of Tarlac nor the defendant, Gregorio Aglipay, obispo maximo of the Independent Filipino Church, has any right, title, or interest therein. It is further adjudged and decreed that the property last hereinbefore mentioned be returned to the plaintiffs and that the said defendants be ousted from the possession thereof, and that such possession be awarded to the plaintiffs. It is further adjudged and decreed that a writ of possession issue out of this court against the defendants, the municipality of Tarlac and Gregorio Aglipay, obispo maximo of the Independent Filipino Church, in the manner and form prescribed by Act No. 190. No costs will be allowed to any party. So ordered. Arellano, C.J., Torres, Mapa and Tracey, JJ., concur.
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Separate Opinions JOHNSON and CARSON, JJ., concurring: We agree with the dispositive part of the foregoing decision, which adjudges the right of possession in favor of the plaintiffs, adopting in this case the reasoning of the concurring opinion in the case of Barlin vs. Ramirez (7 Phil. Rep., 41.

DIGEST NOT AVAILABLE

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

G.R. No. L-60077 January 18, 1991 NATIONAL POWER CORPORATION, petitioner, vs. SPS. MISERICORDIA GUTIERREZ and RICARDO MALIT and THE HONORABLE COURT OF APPEALS,respondents. Pedro S. Dabu for private respondents.

BIDIN, J.:p This is a petition for review on certiorari filed by the National Power Corporation (NPC) seeking the reversal or modification of the March 9, 1986 Decision of the Court of Appeals in CA G.R. No. 54291-R entitled "National Power Corporation v. Sps. Misericordia Gutierrez and Ricardo Malit", affirming the December 4, 1972 Decision of the then Court of First Instance of Pampanga, Fifth Judicial District, Branch II, in Civil Case No. 2709, entitledNational Power Corporation v. Matias Cruz, et al. The undisputed facts of the case, as found by the Court of Appeals, are as follows: Plaintiff National Power Corporation, a government owned and controlled entity, in accordance with Commonwealth Act No. 120, is invested with the power of eminent domain for the purpose of pursuing its objectives, which among others is the construction, operation, and maintenance of electric transmission lines for distribution throughout the Philippines. For the construction of its 230 KV MexicoLimay transmission lines, plaintiff's lines have to pass the lands belonging to defendants Matias Cruz, Heirs of Natalia Paule and spouses Misericordia Gutierrez and Ricardo Malit covered by tax declarations Nos. 907, 4281 and 7582, respectively. Plaintiff initiated negotiations for the acquisition of right of way easements over the aforementioned lots for the construction of its transmission lines but unsuccessful in this regard, said corporation was constrained to file eminent domain proceedings against the herein defendants on January 20, 1965. Upon filing of the corresponding complaint, plaintiff corporation deposited the amount of P973.00 with the Provincial Treasurer of Pampanga, tendered to cover the provisional value of the land of the defendant spouses Ricardo Malit and Misericordia Gutierrez. And by virtue of which, the plaintiff corporation was placed in possession of the property of the defendant spouses so it could immediately proceed with the

construction of its Mexico-Limay 230 KV transmission line. In this connection, by the trial court's order of September 30, 1965, the defendant spouses were authorized to withdraw the fixed provisional value of their land in the sum of P973.00. The only controversy existing between the parties litigants is the reasonableness and adequacy of the disturbance or compensation fee of the expropriated properties. Meanwhile, for the purpose of determining the fair and just compensation due the defendants, the court appointed three commissioners, comprised of one representative of the plaintiff, one for the defendants and the other from the court, who then were empowered to receive evidence, conduct ocular inspection of the premises, and thereafter, prepare their appraisals as to the fair and just compensation to be paid to the owners of the lots. Hearings were consequently held before said commissioners and during their hearings, the case of defendant Heirs of Natalia Paule was amicably settled by virtue of a Right of Way Grant (Exh. C) executed by Guadalupe Sangalang for herself and in behalf of her co-heirs in favor of the plaintiff corporation. The case against Matias Cruz was earlier decided by the court, thereby leaving only the case against the defendant spouses Ricardo Malit and Misericordia Gutierrez still to be resolved. Accordingly, the commissioners submitted their individual reports. The commissioner for the plaintiff corporation recommended the following: . . . that plaintiff be granted right of way easement over the 760 square meters of the defendants Malit and Gutierrez land for plaintiff transmission line upon payment of an easement fee of P1.00 therefor. . . . (Annex M) The commissioner for the defendant spouses recommended the following: . . . that Mr. and Mrs. Ricardo Malit be paid as disturbance compensation the amount of P10.00 sq. meter or the total amount of P7,600.00' (Annex K) The Court's commissioner recommended the following: . . . the payment of Five (P 5.OO) Pesos per square meter of the area covered by the Right-of-way to be granted, . . .(Annex L) The plaintiff corporation urged the Court that the assessment as recommended by their commissioner be the one adopted. Defendant spouses, however, dissented and objected to the price recommended by both the representative of the court and of the plaintiff corporation. With these reports submitted by the three commissioners and on the evidence adduced by the defendants as well as the plaintiff for the purpose of proving the fair market value of the property sought to be expropriated, the lower court rendered a decision the dispositive portion of which reads as follows: WHEREFORE, responsive to the foregoing considerations, judgment is hereby rendered ordering plaintiff National Power Corporation to pay defendant spouses Ricardo Malit and Misericordia Gutierrez the sum of P10.00 per square meter as the fair and reasonable

compensation for the right-of-way easement of the affected area, which is 760 squares, or a total sum of P7,600.00 and P800.00 as attorney's fees' (Record on Appeal, p. 83) Dissatisfied with the decision, the plaintiff corporation filed a motion for reconsideration which was favorably acted upon by the lower court, and in an order dated June 10, 1973, it amended its previous decision in the following tenor: On the basis of an ocular inspection made personally by the undersigned, this court finally classified the land of the spouses Ricardo Malit and Misericordia to be partly commercial and partly agricultural, for which reason the amount of P10.00 per sq. meter awarded in the decision of December 4,1972 is hereby reduced to P5.00 per square meter as the fair and reasonable market value of the 760 square meters belonging to the said spouses. There being no claim and evidence for attorney's fees, the amount of P800.00 awarded as attorney's fees, in the decision of December 4, 1972 is hereby reconsidered and set aside. (Annex S) Still not satisfied, an appeal was filed by petitioner (NPC) with the Court of Appeals but respondent Court of Appeals in its March 9, 1982, sustained the trial court, as follows: WHEREFORE, finding no reversible error committed by the court a quo, the appealed judgment is hereby affirmed with costs against the plaintiff-appellant. Hence, the instant petition. The First Division of this Court gave due course to the petition and required both parties to submit their respective memoranda (Resolution of January 12, 1983). It also noted in an internal resolution of August 17, 1983 that petitioner flied its memorandum while the respondents failed to file their memorandum within the period which expired on February 24,1983; hence, the case was considered submitted for decision. The sole issue raised by petitioner is WHETHER PETITIONER SHOULD BE MADE TO PAY SIMPLE EASEMENT FEE OR FULL COMPENSATION FOR THE LAND TRAVERSED BY ITS TRANSMISSION LINES. It is the contention of petitioner that the Court of Appeals committed gross error by adjudging the petitioner liable for the payment of the full market value of the land traversed by its transmission lines, and that it overlooks the undeniable fact that a simple right-of-way easement (for the passage of transmission lines) transmits no rights, except that of the easement. Full ownership is retained by the private respondents and they are not totally deprived of the use of the land. They can continue planting the same agricultural crops, except those that would result in contact with the wires. On this premise, petitioner submits that if full market value is required, then full transfer of ownership is only the logical equivalent.

The petition is devoid of merit. The resolution of this case hinges on the determination of whether the acquisition of a mere right-of-way is an exercise of the power of eminent domain contemplated by law. The trial court's observation shared by the appellate court show that ". . . While it is true that plaintiff are (sic) only after a right-of-way easement, it nevertheless perpetually deprives defendants of their proprietary rights as manifested by the imposition by the plaintiff upon defendants that below said transmission lines no plant higher than three (3) meters is allowed. Furthermore, because of the high-tension current conveyed through said transmission lines, danger to life and limbs that may be caused beneath said wires cannot altogether be discounted, and to cap it all plaintiff only pays the fee to defendants once, while the latter shall continually pay the taxes due on said affected portion of their property." The foregoing facts considered, the acquisition of the right-of-way easement falls within the purview of the power of eminent domain. Such conclusion finds support in similar cases of easement of rightof-way where the Supreme Court sustained the award of just compensation for private property condemned for public use (See National Power Corporation vs. Court of Appeals, 129 SCRA 665, 1984; Garcia vs. Court of Appeals, 102 SCRA 597,1981). The Supreme Court, in Republic of the Philippines vs. PLDT, * thus held that: Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why said power may not be availed of to impose only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right-of-way. In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain. Considering the nature and effect of the installation of the 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use of the land for an indefinite period deprives private respondents of its ordinary use. For these reasons, the owner of the property expropriated is entitled to a just compensation, which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. Just compensation has always been understood to be the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation (Province of Tayabas vs. Perez, 66 Phil. 467 [1938]; Assoc. of Small Land Owners of the Phils., Inc. vs. Secretary of Agrarian Reform, G.R. No. 78742; Acuna vs. Arroyo, G.R. No. 79310; Pabrico vs. Juico, G.R. No. 79744; Manaay v. Juico, G.R. No. 79777,14 July 1989, 175 SCRA 343 [1989]). The price or value of the land and its character at the time it was taken by the Government are the criteria for determining just compensation (National Power Corp. v. Court of Appeals, 129 SCRA 665, [1984]). The above price refers to the market value of the land which may be the full market value thereof. According to private respondents, the market value of their lot is P50.00 per square meter because the said lot is adjacent to the National and super highways of Gapan, Nueva Ecija and Olongapo City. Private respondents recognize the inherent power of eminent domain being exercised by NPC when it finally consented to the expropriation of the said portion of their land, subject however to payment of just compensation. No matter how laudable NPC's purpose is, for which expropriation was sought, it is just and equitable that they be compensated the fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity (EPZA v. Dulay, 149 SCRA 305 [1987]; Mun. of Daet v. Court of Appeals, 93 SCRA 503 (1979]).

It appearing that the trial court did not act capriciously and arbitrarily in setting the price of P5.00 per square meter of the affected property, the said award is proper and not unreasonable. On the issue of ownership being claimed by petitioner in the event that the price of P5.00 per square meter be sustained, it is well settled that an issue which has not been raised in the Court a quo cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process . . . (Filipino Merchants v. Court of Appeals, G.R. No. 85141, November 8, 1989, 179 SCRA 638; Commissioner of Internal Revenue v. Procter and Gamble Philippines Manufacturing Corporation, 160 SCRA 560 [1988]; Commissioner of Internal Revenue v. Wander Philippines, Inc., 160 SCRA 573 1988]). Petitioner only sought an easement of right-of-way, and as earlier discussed, the power of eminent domain may be exercised although title was not transferred to the expropriator. WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED. SO ORDERED. Fernan, C.J. and Feliciano, J., concur. Gutierrez, Jr., J., I concur but believe payment should be P10.00 a sq. meter at the very least.

Footnotes * 26 SCRA 620 (1969).

DIGEST

Case Digest on NAPOCOR v. Gutierrez, 193 SCRA 1 (1991) FACTS: Plaintiff National Power Corporation (Napocor), for the construction of its 230KVM e x i c o L i m a y t r a n s m i s s i o n l i n e s , i t s l i n e s h a v e t o p a s s t h e l a n d s b e l o n g i n g t o respondents Matias Cruz, heirs of Natalie Paule and spouses Misericordia Gutierrezand Recardo Malit. Unsuccessful with its negotiations for the acquisition of the rightof way easements, Napocor was constrained to file eminent domain proceedings. Trial courts ordered that the defendant spouses were authorized to withdraw thefixed provisional value of their land in the sum of P973.00 deposited by the plaintiff to cover the provisional value of the land to proceed their construction and for thepurpose of determining the fair and just compensation due the defendants, thec o u r t a p p o i n t e d t h r e e c o m m i s s i o n e r s , c o m p r i s e d o f o n e r e presentative of theplaintiff, one for the defendants and t h e o t h e r f r o m t h e c o u r t , w h o t h e n w e r e empowered to receive evidence, conduct ocular inspection of the premises, andthereafter, prepare their appraisals as to the fair and just compensation to be paidto the owners of the lots. The lower court rendered judgement ordered Napocor top a y d e f e n d a n t s p o u s e s t h e s u m o f P 1 0 . 0 0 p e r s q u a r e m e t e r a s t h e f a i r a n d reasonable compensation for the right-ofway easement of the affected area andP800.00 as attorney's fees'. Napocor filed a motion for reconsideration contendingthat the Court of Appeals committed gross error by adjudging the petitioner liablefor the payment of the full market value of the land traversed by its transmissionlines, and that it overlooks the undeniable fact that a simple right-of-way easementransmits no rights, except that of the easement. ISSUE: Whether or not petitioner should be made to pay simple easement fee orfull compensation for the land traversed by its transmission lines. RULING: In RP v. PLDT, the SC ruled that "Normally, the power of eminent domainr e s u l t s i n t h e t a k i n g o r a p p r o p r i a t i o n o f t h e t i t l e t o , a n d p o s s e s s i o n o f , t h e expropriated property, but no cogent reason appears why said power may not beavailed of to impose only a burden upon the owner of the condemned property,w i t h o u t l o s s o f t i t l e o r p o s s e s s i o n . I t i s u n q u e s t i o n a b l e t h a t r e a l p r o p e r t y m a y , through expropriation, be subjected to an easement of right of way." In this case,the easement is definitely a taking under the power of eminent domain. Consideringthe nature and effect of the installation of the transmission lines, the

limitationsimposed by the NPC against the use of the land (that no plant higher than 3 metersis allowed below the lines) for an indefinite period deprives private respondents of i t s o r d i n a r y u s e . F o r t h e s e r e a s o n s , t h e o w n e r o f t h e p r o p e r t y e x p r o p r i a t e d i s entitled to a just compensation which should neither be more nor less, whenever itis possible to make the assessment, than the money equivalent of said property. Just equivalent has always been understood to be the just and complete equivalentof the loss which the owner of the thing expropriated has to suffer by reason of theexpropriation. The price or value of the land and its character at the time of takingby the Govt. are the criteria for determining just compensation.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

G.R. Nos. 89898-99 October 1, 1990 MUNICIPALITY OF MAKATI, petitioner, vs. THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA,respondents. Defante & Elegado for petitioner. Roberto B. Lugue for private respondent Admiral Finance Creditors' Consortium, Inc. RESOLUTION

CORTS, J.: The present petition for review is an off-shoot of expropriation proceedings initiated by petitioner Municipality of Makati against private respondent Admiral Finance Creditors Consortium, Inc., Home Building System & Realty Corporation and one Arceli P. Jo, involving a parcel of land and improvements thereon located at Mayapis St., San Antonio Village, Makati and registered in the name of Arceli P. Jo under TCT No. S-5499. It appears that the action for eminent domain was filed on May 20, 1986, docketed as Civil Case No. 13699. Attached to petitioner's complaint was a certification that a bank account (Account No. S/A 265-537154-3) had been opened with the PNB Buendia Branch under petitioner's name containing the sum of P417,510.00, made pursuant to the provisions of Pres. Decree No. 42. After due hearing where the parties presented their respective appraisal reports regarding the value of the property, respondent RTC judge rendered a decision on June 4, 1987, fixing the appraised value of the property at P5,291,666.00, and ordering petitioner to pay this amount minus the advanced payment of P338,160.00 which was earlier released to private respondent. After this decision became final and executory, private respondent moved for the issuance of a writ of execution. This motion was granted by respondent RTC judge. After issuance of the writ of execution, a Notice of Garnishment dated January 14, 1988 was served by respondent sheriff Silvino R. Pastrana upon the manager of the PNB Buendia Branch. However, respondent sheriff was informed that a "hold code" was placed on the account of petitioner. As a result of this, private respondent filed a motion dated January 27, 1988 praying that an order be issued directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance due under the RTC decision dated June 4, 1987.

Petitioner filed a motion to lift the garnishment, on the ground that the manner of payment of the expropriation amount should be done in installments which the respondent RTC judge failed to state in his decision. Private respondent filed its opposition to the motion. Pending resolution of the above motions, petitioner filed on July 20, 1988 a "Manifestation" informing the court that private respondent was no longer the true and lawful owner of the subject property because a new title over the property had been registered in the name of Philippine Savings Bank, Inc. (PSB) Respondent RTC judge issued an order requiring PSB to make available the documents pertaining to its transactions over the subject property, and the PNB Buendia Branch to reveal the amount in petitioner's account which was garnished by respondent sheriff. In compliance with this order, PSB filed a manifestation informing the court that it had consolidated its ownership over the property as mortgagee/purchaser at an extrajudicial foreclosure sale held on April 20, 1987. After several conferences, PSB and private respondent entered into a compromise agreement whereby they agreed to divide between themselves the compensation due from the expropriation proceedings. Respondent trial judge subsequently issued an order dated September 8, 1988 which: (1) approved the compromise agreement; (2) ordered PNB Buendia Branch to immediately release to PSB the sum of P4,953,506.45 which corresponds to the balance of the appraised value of the subject property under the RTC decision dated June 4, 1987, from the garnished account of petitioner; and, (3) ordered PSB and private respondent to execute the necessary deed of conveyance over the subject property in favor of petitioner. Petitioner's motion to lift the garnishment was denied. Petitioner filed a motion for reconsideration, which was duly opposed by private respondent. On the other hand, for failure of the manager of the PNB Buendia Branch to comply with the order dated September 8, 1988, private respondent filed two succeeding motions to require the bank manager to show cause why he should not be held in contempt of court. During the hearings conducted for the above motions, the general manager of the PNB Buendia Branch, a Mr. Antonio Bautista, informed the court that he was still waiting for proper authorization from the PNB head office enabling him to make a disbursement for the amount so ordered. For its part, petitioner contended that its funds at the PNB Buendia Branch could neither be garnished nor levied upon execution, for to do so would result in the disbursement of public funds without the proper appropriation required under the law, citing the case of Republic of the Philippines v. Palacio [G.R. No. L-20322, May 29, 1968, 23 SCRA 899]. Respondent trial judge issued an order dated December 21, 1988 denying petitioner's motion for reconsideration on the ground that the doctrine enunciated in Republic v. Palacio did not apply to the case because petitioner's PNB Account No. S/A 265-537154-3 was an account specifically opened for the expropriation proceedings of the subject property pursuant to Pres. Decree No. 42. Respondent RTC judge likewise declared Mr. Antonio Bautista guilty of contempt of court for his inexcusable refusal to obey the order dated September 8, 1988, and thus ordered his arrest and detention until his compliance with the said order. Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions for certiorari with the Court of Appeals, which were eventually consolidated. In a decision promulgated on June 28, 1989, the Court of Appeals dismissed both petitions for lack of merit, sustained the jurisdiction of respondent RTC judge over the funds contained in petitioner's PNB Account No. 265-537154-3, and affirmed his authority to levy on such funds. Its motion for reconsideration having been denied by the Court of Appeals, petitioner now files the present petition for review with prayer for preliminary injunction.

On November 20, 1989, the Court resolved to issue a temporary restraining order enjoining respondent RTC judge, respondent sheriff, and their representatives, from enforcing and/or carrying out the RTC order dated December 21, 1988 and the writ of garnishment issued pursuant thereto. Private respondent then filed its comment to the petition, while petitioner filed its reply. Petitioner not only reiterates the arguments adduced in its petition before the Court of Appeals, but also alleges for the first time that it has actually two accounts with the PNB Buendia Branch, to wit: xxx xxx xxx (1) Account No. S/A 265-537154-3 exclusively for the expropriation of the subject property, with an outstanding balance of P99,743.94. (2) Account No. S/A 263-530850-7 for statutory obligations and other purposes of the municipal government, with a balance of P170,098,421.72, as of July 12, 1989. xxx xxx xxx [Petition, pp. 6-7; Rollo, pp. 11-12.] Because the petitioner has belatedly alleged only in this Court the existence of two bank accounts, it may fairly be asked whether the second account was opened only for the purpose of undermining the legal basis of the assailed orders of respondent RTC judge and the decision of the Court of Appeals, and strengthening its reliance on the doctrine that public funds are exempted from garnishment or execution as enunciated in Republic v. Palacio[supra.] At any rate, the Court will give petitioner the benefit of the doubt, and proceed to resolve the principal issues presented based on the factual circumstances thus alleged by petitioner. Admitting that its PNB Account No. S/A 265-537154-3 was specifically opened for expropriation proceedings it had initiated over the subject property, petitioner poses no objection to the garnishment or the levy under execution of the funds deposited therein amounting to P99,743.94. However, it is petitioner's main contention that inasmuch as the assailed orders of respondent RTC judge involved the net amount of P4,965,506.45, the funds garnished by respondent sheriff in excess of P99,743.94, which are public funds earmarked for the municipal government's other statutory obligations, are exempted from execution without the proper appropriation required under the law. There is merit in this contention. The funds deposited in the second PNB Account No. S/A 263530850-7 are public funds of the municipal government. In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless otherwise provided for by statute [Republic v. Palacio, supra.; The Commissioner of Public Highways v. San Diego, G.R. No. L-30098, February 18, 1970, 31 SCRA 616]. More particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution [See Viuda De Tan Toco v. The Municipal Council of Iloilo, 49 Phil. 52 (1926): The Municipality of Paoay, Ilocos Norte v. Manaois, 86 Phil. 629 (1950); Municipality of San Miguel, Bulacan v. Fernandez, G.R. No. 61744, June 25, 1984, 130 SCRA 56]. The foregoing rule finds application in the case at bar. Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4, 1987,

less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7. Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor [SeeViuda De Tan Toco v. The Municipal Council of Iloilo, supra; Baldivia v. Lota, 107 Phil. 1099 (1960); Yuviengco v. Gonzales, 108 Phil. 247 (1960)]. In the case at bar, the validity of the RTC decision dated June 4, 1987 is not disputed by petitioner. No appeal was taken therefrom. For three years now, petitioner has enjoyed possession and use of the subject property notwithstanding its inexcusable failure to comply with its legal obligation to pay just compensation. Petitioner has benefited from its possession of the property since the same has been the site of Makati West High School since the school year 1986-1987. This Court will not condone petitioner's blatant refusal to settle its legal obligation arising from expropriation proceedings it had in fact initiated. It cannot be over-emphasized that, within the context of the State's inherent power of eminent domain, . . . [j]ust compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss [Cosculluela v. The Honorable Court of Appeals, G.R. No. 77765, August 15, 1988, 164 SCRA 393, 400. See also Provincial Government of Sorsogon v. Vda. de Villaroya, G.R. No. 64037, August 27, 1987, 153 SCRA 291]. The State's power of eminent domain should be exercised within the bounds of fair play and justice. In the case at bar, considering that valuable property has been taken, the compensation to be paid fixed and the municipality is in full possession and utilizing the property for public purpose, for three (3) years, the Court finds that the municipality has had more than reasonable time to pay full compensation. WHEREFORE, the Court Resolved to ORDER petitioner Municipality of Makati to immediately pay Philippine Savings Bank, Inc. and private respondent the amount of P4,953,506.45. Petitioner is hereby required to submit to this Court a report of its compliance with the foregoing order within a non-extendible period of SIXTY (60) DAYS from the date of receipt of this resolution. The order of respondent RTC judge dated December 21, 1988, which was rendered in Civil Case No. 13699, is SET ASIDE and the temporary restraining order issued by the Court on November 20, 1989 is MADE PERMANENT. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

Municipality of Makati vs. Court of Appeals G.R. Nos. 89898-99 October 1, 1990 Facts: Petitioner Municipality of Makati expropriated a portion of land owned by private respondents, Admiral Finance Creditors Consortium, Inc. After proceedings, the RTC of Makati determined the cost of the said land which the petitioner must pay to the private respondents amounting to P5,291,666.00 minus the advanced payment of P338,160.00. It issued the corresponding writ of execution accompanied with a writ of garnishment of funds of the petitioner which was deposited in PNB. However, such order was opposed by petitioner through a motion for reconsideration, contending that its funds at the PNB could neither be garnished nor levied upon execution, for to do so would result in the disbursement of public funds without the proper appropriation required under the law, citing the case of Republic of the Philippines v. Palacio.The RTC dismissed such motion, which was appealed to the Court of Appeals; the latter affirmed said dismissal and petitioner now filed this petition for review.

Issue: Whether or not funds of the Municipality of Makati are exempt from garnishment and levy upon execution.

Held: It is petitioner's main contention that the orders of respondent RTC judge involved the net amount of P4,965,506.45, wherein the funds garnished by respondent sheriff are in excess of P99,743.94, which are public fund and thereby are exempted from execution without the proper appropriation required under the law. There is merit in this contention. In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless otherwise provided for by statute. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution. Absent a showing that the municipal council of Makati has passed an ordinance appropriating the said amount from its public funds deposited in their PNB account, no levy under execution may be validly effected. However, this court orders petitioner to pay for the said land which has been in their use already. This Court will not condone petitioner's blatant refusal to settle its legal obligation arising from expropriation of land they are already enjoying. The State's power of eminent domain should be exercised within the bounds of fair play and justice. .

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-55166 May 2l, 1987 TIONGSON, married to CAYETANO TIONGSON, PACITA L. GO married to EDUARDO GO, ROBERTO LAPERAL III, MIGUEL SISON, PHILIP L. MANOTOK, MARIA TERESA L. MANOTOK, JOSE CLEMENTE MANOTOK, RAMON SEVERINO MANOTOK, JOSE MARIA MANOTOK and JESUS JUDE MANOTOK, JR., assisted by their father and judicial guardian, JESUS MANOTOK, MILAGROS V. MANOTOK, IGNACIO V. MANOTOK, JR., FELISA V. MANOTOK, MARY-ANN V. MANOTOK, MICHAEL V. MANOTOK, FAUSTO C. MANOTOK, SEVERINO MANOTOK III, and JESUS MANOTOK, petitioners, vs. NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents. No. L-55167 May 21,1987 PATRICIA L. TIONGSON, PATRICIA L. GO, assisted by her husband EDWARD GO, ROBERTO LAPERAL III, ELISA R. MANOTOK, JESUS R. MANOTOK, MIGUEL A. B. SISON, SEVERINO MANOTOK III, JOSE MARIA MANOTOK and JESUS MANOTOK, represented herein by their father and judicial guardian JESUS MANOTOK, JR., IGNACIO R. MANOTOK., and FAUSTO C. MANOTOK, petitioners, vs. NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents

GUTIERREZ, JR., J.: Before us are two petitions. The first one challenges the constitutionality of Presidential Decree No. 1669 which provides for the expropriation of the property known as the "Tambunting Estate" and the second challenges the constitutionality of Presidential Decree No.1670 which provides for the expropriation of the property along the Estero de SunogApog. In both cases, the petitioners maintain that the two decrees are unconstitutional and should be declared null and void because: (1) They deprived the petitioners of their properties without due process of law. (2) The petitioners were denied to their right to just compensation (3) The petitioners' right to equal protection of the law was violated. (4) The decrees are vague, defective, and patently erroneous. (5) The petitioners' properties are not proper subjects for expropriation considering their location and other relevant circumstances.

On June 11, 1977, the President of the Philippines issued Letter of Instruction (LOI) No. 555 instituting a nationwide slum improvement and resettlement program (SIR). On the same date, the President also issued LOI No. 557, adopting slum improvement as a national housing policy. In compliance with LOI No. 555, the Governor of Metro Manila issued, on July 21, 1977, Executive Order No.6-77 adopting the Metropolitan Manila Zonal Improvement Program which included the properties known as the Tambunting Estate and the Sunog-Apog area in its priority list for a zonal improvement program (ZIP) because the findings of the representative of the City of Manila and the National Housing Authority (NHA) described these as blighted communities. On March 18, 1978, a fire razed almost the entire Tambunting Estate. Following this calamity, the President and the Metro Manila Governor made public announcement that the national government would acquire the property for the fire victims. The President also designated the NHA to negotiate with the owners of the property for the acquisition of the same. This, however, did not materialize as the negotiations for the purchase of the property failed. On December 22, 1978, the President issued Proclamation No. 1810 declaring all sites Identified by the Metro Manila local governments and approved by the Ministry of Human Settlements to be included in the ZIP upon proclamation of the President. The Tambunting Estate and the Sunog-Apog area were among the sites included. On January 28, 1980, the President issued the challenged Presidential Decrees Nos. 1669 and 1670 which respectively declared the Tambunting Estate and the Sunog-Apog area expropriated. Presidential Decree No. 1669, provides, among others: Section 1. The real properties known as the "Tambunting Estate" and covered by TCT Nos. 119059, 122450, 122459, 122452 and Lots Nos. 1- A, 1-C, 1-D, l-E, 1-F and 1-H of (LRC) Psd-230517 (Previously covered by TCT No. 119058) of the Register of Deeds of Manila with an area of 52,688.70 square meters, more or less are hereby declared expropriated. The National Housing Authority hereinafter referred to as the "Authority" is designated administrator of the National Government with authority to immediately take possession, control, disposition, with the power of demolition of the expropriated properties and their improvements and shall evolve and implement a comprehensive development plan for the condemned properties. xxx xxx xxx Section 6. Notwithstanding any provision of law or decree to the contrary and for the purpose of expropriating this property pegged at the -.market value determined by the City Assessor pursuant to Presidential Decree No. 76, as amended, particularly by Presidential Decree No. 1533 which is in force and in effect at the time of the issuance of this decree. In assessing the market value, the City Assessor pursuant consider existing conditions in the area notably, that no improvement has been undertaken on the land and that the land is squatted upon by resident families which should considerably depress the expropriation cost. Subject to the foregoing, the just compensation for the above property should not exceed a maximum of SEVENTEEN MILLION

PESOS (Pl7,000,000.00) which shall be payable to the owners within a period of five (5) years in five (5) equal installments. Presidential Decree No. 1670, on the other hand, provides: Section 1. The real property along the Estero de Sunog-Apog in Tondo, Manila formerly consisting of Lots Nos 55-A, 55-B and 55-C, Block 2918 of the subdivision plan Psd-1 1746, covered by TCT Nos. 49286, 49287 and 49288, respectively, of the Registry of Deeds of Manila, and formerly owned by the Manotok Realty, Inc., with an area of 72,428.6 square meters, more or less, is hereby declared expropriated. The National Housing Authority hereinafter referred to as the 'Authority' is designated administrator of the National Government with authority to immediately take possession, control and disposition, with the power of demolition of the expropriated properties and their improvements and shall evolve and imagine implement a comprehensive development plan for the condemned properties. xxx xxx xxx Section 6. Notwithstanding any provision of law or decree to the contrary and for the purpose of expropriating this property pegged at the market value determined by the City Assessor pursuant to Presidential Decree No. 76, as amended, particularly by Presidential Decree No. 1533 which is in force and in effect at the time of the issuance of this decree. In assessing the market value, the City Assessor shall consider existing conditions in the area notably, that no improvement has been undertaken on the land and that the land is squatted upon by resident families which should considerably depress the expropriation cost. Subject to the foregoing, the just compensation for the above property should not exceed a maximum of EIGHT MILLION PESOS (P8,000,000.00), which shall be payable to the owners within a period of five (5) years in five equal installment. On April 4, 1980, the National Housing Authority, through its general-manager, wrote the Register of Deeds of Manila, furnishing it with a certified copy of P.D. Nos. 1669 and 1670 for registration, with the request that the certificates of title covering the properties in question be cancelled and new certificates of title be issued in the name of the Republic of the Philippines. However, the Register of Deeds in her letter to NHA's general-manager, requested the submission of the owner's copy of the certificates of title of the properties in question to enable her to implement the aforementioned decrees. Subsequently, petitioner Elisa R. Manotok, one of the owners of the properties to be expropriated, received from the NHA a letter informing her that the latter had deposited, on July 16, 1980, with the Philippine National Bank the total amount of P5,000,000.00 which included the amount of P3,400,000.00 representing the first annual installment for the Tambunting Estate pursuant to P.D. No. 1669; and another P5,000,000.00 which also included the amount of P1,600,000.00 representing the first annual installment for the Sunog-Apog area under P.D. No. 1670. The petitioner was also informed that she was free to withdraw her share in the properties upon surrender by her of the titles pertaining to said properties and that if petitioner failed to avail herself of the said offer, the NHA would be constrained to take the necessary legal steps to implement the decrees.

On August 19, 1980, petitioner Elisa R. Manotok wrote a letter to the NHA alleging, inter alia, that the amounts of compensation for the expropriation of the properties of the petitioners as fixed in the decrees do not constitute the "just compensation" envisioned in the Constitution. She expressed veritable doubts about the constitutionality of the said decrees and informed the NHA that she did not believe that she was obliged to withdraw the amount of P5,000,000.00 or surrender her titles over the properties. In the meantime, some officials of the NHA circulated instructions to the tenants-occupants of the properties in dispute not to pay their rentals to the petitioners for their leaseoccupancy of the properties in view of the passage of P.D. Nos. 1669 and 1670. Hence, the owners of the Tambunting Estate filed a petition to declare P.D. No. 1669 unconstitutional. The owners of the Sunog-Apog area also filed a similar petition attacking the constitutionality of P.D. No. 1670. On September 27, 1982, the lessees of the Tambunting Estate and the Sunog-Apog area filed a motion for leave to intervene together with their petition for intervention alleging that they are themselves owners of the buildings and houses built on the properties to be expropriated and as such, they are real parties-in-interest to the present petitions. The petitioners maintain that the Presidential Decrees providing for the direct expropriation of the properties in question violate their constitutional right to due process and equal protection of the law because by the mere passage of the said decrees their properties were automatically expropriated and they were immediately deprived of the ownership and possession thereof without being given the chance to oppose such expropriation or to contest the just compensation to which they are entitled. The petitioners argue that the government must first have filed a complaint with the proper court under Rule 67 of the Revised Rules of Court in order to fulfill the requirements of due process. 'They contend that the determination of just compensation should not have been vested solely with the City Assessor and that a maximum or fixed amount of compensation should not have been imposed by the said decrees. Petitioners likewise state that by providing for the maximum amount of just compensation and by directing the City Assessor to take into consideration the alleged existing conditions of the properties in question, namely: that no "improvement has been undertaken on the land and that the land is squatted upon by resident families which should considerably depress the expropriation costs," the City Assessor is forced to accept, as actual and existing conditions of the property, the foregoing statements in the decrees when in fact the Sunog-Apog area has been subdivided into subdivision lots and leased to the occupants thereof under contracts of lease, making them lessees and not squatters as assumed by Presidential Decree No. 1670. Moreover, each subdivision lot is surrounded by adobe walls constructed by the particular owner of the property: the houses were required to have septic tanks by the City Hall and the, owners themselves: there is a drainage system; and there are adequate water facilities. As far as the Tambunting Estate is concerned, the petitioners maintain that aside from the residential houses in the area, there are buildings and structures of strong materials on the lots fronting Rizal Avenue Extension, most of which are leased to proprietors of business establishments under long term contracts of lease which use the same for their furniture business from which they secure substantial income. The Government as represented by the Solicitor-General and the NHA, on the other hand, contends that the power of eminent domain is inherent in the State and when the legislature itself or the President through his law-making prerogatives exercises this power, the public

use and public necessity of the expropriation, and the fixing of the just compensation become political in nature, and the courts must respect the decision of the law-making body, unless the legislative decision is clearly and evidently arbitrary, unreasonable, and devoid of logic and reason; and that all that is required is that just compensation be determined with due process of law which does not necessarily entail judicial process. The public respondents, further argue that since the Constitution lays down no procedure by which the authority to expropriate may be carried into effect, Rule 67 of the Revised Rules of Court which is invoked by the petitioners may be said to have been superseded by the challenged decrees insofar as they are applicable to the properties in question and, therefore, there is no need to follow the said rule for due process to be observed. Moreover, the public respondents maintain that it cannot be fairly said that the petitioners' valuations were ignored in fixing the ceiling amount of the properties in question because the only reason why the determination appeared unilateral was because said petitioners did not actually state any valuation in their sworn declaration of true market value of their respective properties, and as far as payment in installments is concerned, the same can be justified by the fact that the properties in question are only two of the four hundred and fifteen (415) slums and blighted areas in Metro Manila and two of the two hundred and fifty one (251) sites for ungrading under the ZIP and that to immediately acquire and upgrade all those sites would obviously entail millions and millions of pesos. The financial constraints, therefore, require a system of payment of just compensation. Thus, the respondent states that the payment of just compensation in installments did not arise out of ill will or the desire to discriminate. We start with fundamentals. The power of eminent domain is inherent in every state and the provisions in the Constitution pertaining to such power only serve to limit its exercise in order to protect the individual against whose property the power is sought to be enforced. We pointed out the constitutional limitations in the case of Republic vs. Juan (92 SCRA 26, 40): To begin with, it must be emphasized that plaintiff-appellee in this instant case is the Republic of the Philippines which is exercising its right of eminent domain inherent in it as a body sovereign. In the exercise of its sovereign right the State is not subject to any limitation other than those imposed by the Constitution which are: first, the taking must be for a public use; secondly, the payment of just compensation must be made: and thirdly, due process must be observed in the taking... The challenged decrees are uniquely unfair in the procedures adopted and the powers given to the respondent NHA. The Tambunting subdivision is summarily proclaimed a blighted area and directly expropriated by decree without the slightest semblance of a hearing or any proceeding whatsoever. The expropriation is instant and automatic to take effect immediately upon the signing of the decree. No deposit before taking is required under the decree. The P3,400,000.00 appropriated from the general fund is not a deposit but constitutes an installment payment for the property, the maximum price of which is fixed so as not to exceed P17,000,000.00. There is no provision for any interests to be paid on the unpaid installments spread out over a period of five years. Not only are the owners given absolutely no opportunity to contest the expropriation, plead their side, or question the amount of payments fixed by decree, but the decisions, rulings, orders, or resolutions of the NHA are expressly declared as beyond the reach of judicial review. An appeal may be made to the

Office of the President but the courts are completely enjoined from any inquiry or participation whatsoever in the expropriation of the subdivision or its incidents. In some decisions promulgated before the February, 1986 political upheaval, this Court presumed the validity of the beautiful "whereases" in presidential decrees governing expropriations and legitimated takings of private property which, in normal times, would have been constitutionally suspect. There were then the avowed twin purposes of martial law to first quell the Communist rebellion and second to reform society. Thus, in Haguisan v. Emilia (131 SCRA 517) the Court sustained the contention that prior hearing is no longer necessary under P.D. No. 42 in ascertaining the value of the property to be expropriated and before the government may take possession. There was a disregard in the decree for Section 2 of Rule 67 which requires the court having jurisdiction over the proceedings to promptly ascertain and fix the provisional value of the property for purposes of the initial taking or entry by the Government into the premises. In National Housing Authority v. Reyes (123 SCRA 245) the Court upheld the decrees which state that the basis for just compensation shall be the market value declared by the owner for tax purposes or such market value as determined by the government assessor, whichever is lower. Subsequent developments have shown that a disregard for basic liberties and the shortcut methods embodied in the decrees on expropriation do not achieve the desired results. Far from disappearing, squatter colonies and blighted areas have multiplied and proliferated. It appears that constitutionally suspect methods or authoritarian procedures cannot, be the basis for social justice. A program to alleviate problems of the urban poor which is well studied, adequately funded, genuinely sincere, and more solidly grounded on basic rights and democratic procedures is needed. We re-examine the decisions validating expropriations under martial law and apply established principles of justice and fairness which have been with us since the advent of constitutional government. We return to older and more sound precedents. The due process clause cannot be rendered nugatory everytime a specific decree or law orders the expropriation of somebody's property and provides its own peculiar manner of taking the same. Neither should the courts adopt a hands-off policy just because the public use has been ordained as existing by the decree or the just compensation has been fixed and determined beforehand by a statute. The case of Dohany v. Rogers, (74 L.ed. 904.'912, 281. U.S. 362-370) underscores the extent by which the due process clause guarantees protection from arbitrary exercise of the power of eminent domain. The due process clause does not guarantee to the citizen of a state any particular form or method of state procedure. Under it he may neither claim a right to trial by jury nor a right of appeal. Its requirements are satisfied if he has reasonable opportunity to be heard and to present his claim or defense, due regard being had to the nature of the proceeding and the character of the rights which may be affected by it. Reetz v. Michigan, 188 U.S. 505, 508, 47 L.ed. 563, 566, 23 Sup. Ct. Rep. 390; Missouri ex rel. Hurwitz v. North, 271 U.S. 40, 70 L.ed. 818, 46 Sup. Ct. Rep. 384: Bauman v. Ross, 167 U.S. 548, 593, 42 L.ed. 270, 289, 17 Sup. Ct. Rep. 966; A. Backus Jr. & Sons v. Fort Street Union Depot Co. 169 U.S. 569, 42 L. ed. 859, 18 Sup. Ct. Rep. 445.

In other words, although due process does not always necessarily demand that a proceeding be had before a court of law, it still mandates some form of proceeding wherein notice and reasonable opportunity to be heard are given to the owner to protect his property rights. We agree with the public respondents that there are exceptional situations when, in the exercise of the power of eminent domain, the requirement of due process may not necessarily entail judicial process. But where it is alleged that in the taking of a person's property, his right to due process of law has been violated, the courts will have to step in and probe into such an alleged violation. Thus, certain portions of the decision in De Knecht v. Bautista, (100 SCRA 660, 666-667) state: There is no question as to the right of the Republic of the Philippines to take private property for public use upon the payment of just compensation. Section 2, Article IV of the Constitution of the Philippines provides: 'Private property shall not be taken for public use without just compensation. It is recognized, however, that the government may not capriciously or arbitrarily choose what private property should be taken. In J.M. Tuazon & Co., Inc. v. Land tenure Administration, 31 SCRA 413, 433, the Supreme Court said: xxx xxx xxx It is obvious then that a land-owner is covered by the mantle of protection due process affords. It is a mandate of reason. It frowns on arbitrariness, it is the antithesis of any governmental act that smacks of whim or caprice. It negates state power to act in an oppressive manner. It is, as had been stressed so often, the embodiment of the sporting Idea of fair play. In that sense, it stands as a guaranty of justice. 'That is the standard that must be met by any governmental agency in the exercise of whatever competence is entrusted to it As was so emphatically stressed by the present Chief Justice, 'Acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity... In the same case the Supreme Court concluded: With due recognition then of the power of Congress to designate the particular property to be taken and how much thereof may be condemned in the exercise of the power of expropriation, it is still a judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and prejudice, That the equal protection clause will not allow. (p. 436) The basis for the exercise of the power of eminent domain is necessity. This Court stated in City of Manila v. Chinese Community of Manila (40 Phil. 349) that "(t)he very foundation of the right to exercise eminent domain is a genuine necessity and that necessity must be of a public character. In City of Manila v. Arellano Law Colleges (85 Phil. 663), we reiterated that a necessity must exist for the taking of private property for the proposed uses and purposes but accepted the fact that modern decisions do not call for absolute necessity. It is enough if the condemnor can show a reasonable or practical necessity, which of course, varies with the time and peculiar circumstances of each case.

In the instant petitions, there is no showing whatsoever as to why the properties involved were singled out for expropriation through decrees or what necessity impelled the particular choices or selections. In expropriations through legislation, there are, at least, debates in Congress open to the public, scrutiny by individual members of the legislature, and very often, public hearings before the statute is enacted. Congressional records can be examined. In these petitions, the decrees show no reasons whatsoever for the choice of the properties as housing projects. The anonymous adviser who drafted the decrees for the President's signature cannot be questioned as to any possible error or partiality, act of vengeance, or other personal motivations which may have led him to propose the direct expropriation with its onerous provisions. The Tambunting estate or at least the western half of the subdivision fronting Rizal Avenue Extension is valuable commercial property. It is located at the junction where three main city streets converge Rizal Avenue from downtown Manila, Jose Abad Santos Street from Binondo, and Aurora Boulevard leading to Retiro Street and other points in Quezon City. The Libiran Furniture Company, alone, which fronts the entrance to Jose Abad Santos Street is clearly a multi-million peso enterprise. It is a foregone conclusion that the favored squatters allowed to buy these choice lots would lose no time, once it is possible to do so, to either lease out or sell their lots to wealthy merchants even as they seek other places where they can set up new squatter colonies. The public use and social justice ends stated in the whereas clauses of P.D. 1669 and P.D. 1670 would not be served thereby. The provision of P.D. 1669 which allows NHA, at its sole option, to put portions of the expropriated area to commercial use in order to defray the development costs of its housing projects cannot stand constitutional scrutiny. The Government, for instance, cannot expropriate the flourishing Makati commercial area in order to earn money that would finance housing projects all over the country. The leading case of Guido v. Rural Progress Administration (84 Phil. 847) may have been modified in some ways by the provisions of the new Constitution on agrarian and urban land reform and on housing. The principle of nonappropriation of private property for private purposes, however, remains. The legislature, according to the Guido case, may not take the property of one citizen and transfer it to another, even for a full compensation, when the public interest is not thereby promoted. The Government still has to prove that expropriation of commercial properties in order to lease them out also for commercial purposes would be "public use" under the Constitution. P.D. No. 1670 suffers from a similar infirmity. There is no showing how the President arrived at the conclusion that the Sunog-Apog area is a blighted community. The many pictures submitted as exhibits by the petitioners show a well-developed area subdivided into residential lots with either middle-income or upper class homes. There are no squatters. The provisions of the decree on the relocation of qualified squatter families and on the reblocking and re-alignment of existing structures to allow the introduction of basic facilities and services have no basis in fact The area is well-developed with roads, drainage and sewer facilities, water connection to the Metropolitan Waterworks and Sewerage System electric connections to Manila Electric Company, and telephone connections to the Philippine Long Distance Telephone Company. There are many squatter colonies in Metro Manila in need of upgrading. The Government should have attended to them first. There is no showing for a need to demolish the existing valuable improvements in order to upgrade Sunog-Apog. After a careful examination of the questioned decrees, we find P.D. Nos. 1669 and 1670 to be violative of the petitioners' right to due process of law and, therefore, they must fail the test of constitutionality.

The decrees, do not by themselves, provide for any form of hearing or procedure by which the petitioners can question the propriety of the expropriation of their properties or the reasonableness of the just compensation. Having failed to provide for a hearing, the Government should have filed an expropriation case under Rule 67 of the Revised Rules of Court but it did not do so. Obviously, it did not deem it necessary because of the enactment of the questioned decrees which rendered, by their very passage, any questions with regard to the expropriation of the properties, moot and academic. In effect, the properties, under the decrees were "automatically expropriated." This became more evident when the NHA wrote the Register of Deeds and requested her to cancel the certificate of titles of the petitioners, furnishing said Register of Deeds only with copies of the decrees to support its request. This is hardly the due process of law which the state is expected to observe when it exercises the power of eminent domain. The government states that there is no arbitrary determination of the fair market value of the property by the government assessors because if the owner is not satisfied with the assessor's action, he may within sixty (60) days appeal to the Board of Assessment Appeals of the province or city as the case may be and if said owner is still unsatisfied, he may appeal further to the Central Board of Assessment Appeals pursuant to P.D. No. 464. The Government argues that with this procedure, the due process requirement is fulfilled. We cannot sustain this argument. Presidential Decree No. 464, as amended, otherwise known as the Real Property Tax Code, provides for the procedure on how to contest assessments but does not deal with questions as to the propriety of the expropriation and the manner of payment of just compensation in the exercise of the power of eminent domain. We find this wholly unsatisfactory. It cannot in anyway substitute for the expropriation proceeding under Rule 67 of the Revised Rules of Court. Another infirmity from which the questioned decrees suffer is the determination of just compensation. Pursuant to P.D. 1533, the basis of the just compensation is the market value of the property "prior to the recommendation or decision of the appropriate Government Office to acquire the property." (see also Republic v. Santos, (1 41 SCRA 30, 35). In these petitions, a maximum amount of compensation was imposed by the decrees and these amounts were only a little more than the assessed value of the properties in 1978 when, according to the government, it decided to acquire said properties. The fixing of the maximum amounts of compensation and the bases thereof which are the assessed values of the properties in 1978 deprive the petitioner of the opportunity to prove a higher value because, the actual or symbolic taking of such properties occurred only in 1980 when the questioned decrees were promulgated. According to the government, the cut-off year must be 1978 because it was in this year that the government decided to acquire the properties and in the case of the Tambunting Estate, the President even made a public announcement that the government shall acquire the estate for the fire victims.

The decision of the government to acquire a property through eminent domain should be made known to the property owner through a formal notice wherein a hearing or a judicial proceeding is contemplated as provided for in Rule 67 of the Rules of Court. This shall be the time of reckoning the value of the property for the purpose of just compensation. A television or news announcement or the mere fact of the property's inclusion in the Zonal Improvement Program (ZIP) cannot suffice because for the compensation to be just, it must approximate the value of the property at the time of its taking and the government can be said to have decided to acquire or take the property only after it has, at the least, commenced a proceeding, judicial or otherwise, for this purpose. In the following cases, we have upheld the determination of just compensation and the rationale behind it either at the time of the actual taking of the government or at the time of the judgment by the court, whichever came first. Municipality of Daet v. Court of Appeals, (93 SCRA 503, 506, 519): ...And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413, the Court, speaking thru now Chief Justice Fernando, reiterated the 'wen-settled (rule) that just compensation means the equivalent for the value of the property at the time of its taking. Anything beyond that is more and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity. xxx xxx xxx We hold that the decision of the Court of Appeals fixing the market value of the property to be that obtaining, at least, as of the date of the rendition of the judgment on December 2, 1969 as prayed by private respondent, which the Court fixed at P200.00 per square meter is in conformity with doctrinal rulings hereinabove cited that the value should be fixed as of the time of the taking of the possession of the property because firstly, at the time judgment was rendered on December 2, 1969, petitioner had not actually taken possession of the property sought to be expropriated and secondly, We find the valuation determined by the Court of Appeals to be just, fair and reasonable. National Power Corporation v. Court of Appeals, (1 29 SCRA 665, 673): xxx xxx xxx (5) And most importantly,on the issue of just compensation, it is now settled doctrine, following the leading case of Alfonso v. Pasay City, (1,06 PhiL 1017 (1960)), that no determine due compensation for lands appropriated by the Government, the basis should be the price or value at the time it was taken from the owner and appropriated by the Government. The owner of property expropriated by the State is entitled to how much it was worth at the time of the taking. This has been clarified in Republic v. PNB (1 SCRA 957) thus: 'It is apparent from the foregoing that, when plaintiff takes possession before the institution of the condemnation proceedings, the value should be fixed as of the time of the taking of said possession, not of filing of the complainant, and that the latter should be the basis for the determination

of the value, when the of the property involved coincides with or is subsequent to, the commencement of the proceedings. Indeed, otherwise, the provision of Rule 619, section 3, directing that compensation "be determined as of the date of the filing of the complaints" would never be operative. municipality of La Carlota v. The Spouses Baltazar, et al., 45 SCRA 235 (1972)). Furthermore, the so-called "conditions" of the properties should not be determined through a decree but must be shown in an appropriate proceeding in order to arrive at a just valuation of the property. In the case of Garcia v. Court of Appeals, (102 SCRA 597, 608) we ruled: ...Hence, in estimating the market value, all the capabilities of the property and all the uses to which it may be applied or for which it is adapted are to be considered and not merely the condition it is in at the time and the use to which it is then applied by the owner. All the facts as to the condition of the property and its surroundings, its improvements and capabilities may be shown and considered in estimating its value. In P.D. No. 76, P.D. No. 464, P.D. No. 794, and P.D. No. 1533, the basis for determining just compensation was fixed at the market value declared by the owner or the market value determined by the assessor, whichever is lower. P.D.s 1669 and 1670 go further. There is no mention of any market value declared by the owner. Sections 6 of the two decrees peg just compensation at the market value determined by the City Assessor. The City Assessor is warned by the decrees to "consider existing conditions in the area notably, that no improvement has been undertaken on the land and that the land is squatted upon by resident families which should considerably depress the expropriation costs." In other cases involving expropriations under P.D. Nos. 76, 464, 794, and 1533, this Court has decided to invalidate the mode of fixing just compensation under said decrees. (See Export Processing Zone Authority v. Hon. Ceferino E. Dulay, et al. G.R. No. 59603) With more reason should the method in P.D.s 1669 and 1670 be declared infirm. The market value stated by the city assessor alone cannot substitute for the court's judgment in expropriation proceedings. It is violative of the due process and the eminent domain provisions of the Constitution to deny to a property owner the opportunity to prove that the valuation made by a local assessor is wrong or prejudiced. The statements made in tax documents by the assessor may serve as one of the factors to be considered but they cannot exclude or prevail over a court determination made after expert commissioners have examined the property and all pertinent circumstances are taken into account and after the parties have had the opportunity to fully plead their cases before a competent and unbiased tribunal. To enjoin this Court by decree from looking into alleged violations of the due process, equal protection, and eminent domain clauses of the Constitution is impermissible encroachment on its independence and prerogatives. The maximum amounts, therefore, which were provided for in the questioned decrees cannot adequately reflect the value of the property and, in any case, should not be binding on the property owners for, as stated in the above cases, there are other factors to be taken into consideration. We, thus, find the questioned decrees to likewise transgress the petitioners' right to just compensation. Having violated the due process and just compensation guarantees, P. D. Nos. 1669 and 1670 are unconstitutional and void.

WHEREFORE, the petitions in G.R. No. 55166 and G.R. No. 55167 are hereby GRANTED. Presidential Decree Numbers 1669 and 1670 which respectively proclaimed the Tambunting Estate and the Estero de Sunog-Apog area expropriated, are declared unconstitutional and, therefore, null and void ab initio. SO ORDERED. Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur. Yap, J., is on leave.

Separate Opinions

TEEHANKEE, C.J., concurring: The judgment of the Court invalidates Presidential Decrees numbered 1669 and 1670 which unilaterally proclaimed the Tambunting Estate and the Estero de Sunog-Apog area as expropriated without further recourse, for being violative of the due process and eminent domain provisions of the Constitution in the particulars stated in the opinion ably penned by Mr. Justice Gutierrez. This is in line with my concurring and dissenting opinion in the six-to-five decision in J.M. Tuason & Co., Inc. v. Land Tenure Administration 1 wherein the Congress through Republic Act No. 2616 "authorized the expropriation of the Tatalon Estate" comprising about 109 hectares in Quezon City for subdivision into small lots and conveyed at cost to individuals. I concurred with the tenuous majority's ruling there setting aside the lower court's ruling granting therein petitioner appellee's petition to prohibit respondents-appellees from instituting proceedings for expropriation of the "Tatalon Estate" as specifically authorized by R.A. 2616, with the result that the expropriation proceedings could then be properly filed but subject to such proper and valid objections and defenses to the action as petitioner-owner may raise. I dissented, however, from the majority ruling, insofar as it held that the constitutional power of Congress for the expropriation of lands is well-nigh all embracing and forecloses the courts from inquiring into the necessity for the taking of the property. I noted that "this is the first case where Congress has singled out a particular property for condemnation under the constitutional power conferred upon it. Does this square with the due process and equal protection clauses of the Constitution? Is the explanatory note of the bill later enacted as Republic Act 2616, without any evidence as to a hearing with the affected parties having been given the opportunity to be heard, and citing merely the population increase of Quezon City and the land-for-the-landless program sufficient compliance with these basic constitutional guarantees? Rather, does not the need for a more serious scrutiny as to the power of Congress to single out a particular piece of property for expropriation, acknowledged in the

main opinion, call for judicial scrutiny, with all the acts in, as to the need for the expropriation for full opportunity to dispute the legislative appraisal of the matter?" 2 I added that there were prejudicial questions raised which could only be threshed out in trial court proceedings, (and not in the special civil action filed with the Court to set aside the trial court's declaring of unconstitutionality of the questioned Expropriation Act), viz., with therein petitioner maintaining that only 11.68% or less than 39 hectares of its Sta. Mesa Heights Subdivision (of which the "Tatalon Estate" formed part) remained unsold; that existing contractual rights acquired by vendors and purchasers of subdivided lots should be accorded the appropriate constitutional protection of non impairment; and that in view of the cardinal principle of eminent domain for payment of just compensation of the market value of the land "respondents may well consider that the objectives of the Act may be accomplished more expeditiously by a direct purchase of the available unsold lots for resale at cost to the remaining bona fide occupants in accordance with the Act's provisions or by extending financial assistance to enable them to purchase directly the unsold lots from petitioner. I do not see anything to be gained by respondents from the institution of expropriation proceedings, when petitioner-owner is actually selling the property in subdivided lots." 3 The judgment at bar now clearly overturns the majority ruling in Tuason that "the power of Congress to designate the particular property to be taken and how much thereof may be condemned in the exercise of the power of "expropriation" must be duly recognized, leaving only as "a judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and prejudice. That the equal protection clause will not allow." 4 The Court now clearly rules that such singling out of properties to be expropriated by Presidential Decree as in the case at bar, or by act of the legislature as in Tuason, does not foreclose judicial scrutiny and determination as to whether such expropriation by legislative act transgresses the due process and equal protection, 5 and just compensation 6 guarantees of the Constitution. As we hold now expressly in consonance with my above-quoted separate opinion in Tuason: "To enjoin this Court by decree from looking into alleged violations of the due process, equal protection, and eminent domain clauses of the Constitution is impermissible encroachment on its independence and prerogatives." 7 As in all eminent domain proceedings, the State may not capriciously or arbitrarily single-out specific property for condemnation and must show the necessity of the taking for public use.

Separate Opinions TEEHANKEE, C.J., concurring: The judgment of the Court invalidates Presidential Decrees numbered 1669 and 1670 which unilaterally proclaimed the Tambunting Estate and the Estero de Sunog-Apog area as expropriated without further recourse, for being violative of the due process and eminent domain provisions of the Constitution in the particulars stated in the opinion ably penned by Mr. Justice Gutierrez. This is in line with my concurring and dissenting opinion in the six-to-five decision in J.M. Tuason & Co., Inc. v. Land Tenure Administration 1 wherein the Congress through Republic Act No. 2616 "authorized the expropriation of the Tatalon Estate" comprising about 109 hectares in Quezon City for subdivision into small lots and conveyed at cost to individuals.

I concurred with the tenuous majority's ruling there setting aside the lower court's ruling granting therein petitioner appellee's petition to prohibit respondents-appellees from instituting proceedings for expropriation of the "Tatalon Estate" as specifically authorized by R.A. 2616, with the result that the expropriation proceedings could then be properly filed but subject to such proper and valid objections and defenses to the action as petitioner-owner may raise. I dissented, however, from the majority ruling, insofar as it held that the constitutional power of Congress for the expropriation of lands is well-nigh all embracing and forecloses the courts from inquiring into the necessity for the taking of the property. I noted that "this is the first case where Congress has singled out a particular property for condemnation under the constitutional power conferred upon it. Does this square with the due process and equal protection clauses of the Constitution? Is the explanatory note of the bill later enacted as Republic Act 2616, without any evidence as to a hearing with the affected parties having been given the opportunity to be heard, and citing merely the population increase of Quezon City and the land-for-the-landless program sufficient compliance with these basic constitutional guarantees? Rather, does not the need for a more serious scrutiny as to the power of Congress to single out a particular piece of property for expropriation, acknowledged in the main opinion, call for judicial scrutiny, with all the acts in, as to the need for the expropriation for full opportunity to dispute the legislative appraisal of the matter?" 2 I added that there were prejudicial questions raised which could only be threshed out in trial court proceedings, (and not in the special civil action filed with the Court to set aside the trial court's declaring of unconstitutionality of the questioned Expropriation Act), viz., with therein petitioner maintaining that only 11.68% or less than 39 hectares of its Sta. Mesa Heights Subdivision (of which the "Tatalon Estate" formed part) remained unsold; that existing contractual rights acquired by vendors and purchasers of subdivided lots should be accorded the appropriate constitutional protection of non impairment; and that in view of the cardinal principle of eminent domain for payment of just compensation of the market value of the land "respondents may well consider that the objectives of the Act may be accomplished more expeditiously by a direct purchase of the available unsold lots for resale at cost to the remaining bona fide occupants in accordance with the Act's provisions or by extending financial assistance to enable them to purchase directly the unsold lots from petitioner. I do not see anything to be gained by respondents from the institution of expropriation proceedings, when petitioner-owner is actually selling the property in subdivided lots." 3 The judgment at bar now clearly overturns the majority ruling in Tuason that "the power of Congress to designate the particular property to be taken and how much thereof may be condemned in the exercise of the power of "expropriation" must be duly recognized, leaving only as "a judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and prejudice. That the equal protection clause will not allow." 4 The Court now clearly rules that such singling out of properties to be expropriated by Presidential Decree as in the case at bar, or by act of the legislature as in Tuason, does not foreclose judicial scrutiny and determination as to whether such expropriation by legislative act transgresses the due process and equal protection, 5 and just compensation 6 guarantees of the Constitution. As we hold now expressly in consonance with my above-quoted separate opinion in Tuason: "To enjoin this Court by decree from looking into alleged violations of the due process, equal protection, and eminent domain clauses of the Constitution is impermissible encroachment on its independence and prerogatives." 7 As in all eminent domain proceedings, the State may not capriciously or arbitrarily single-out specific property for condemnation and must show the necessity of the taking for public use.

Footnotes 1 31 SCRA 413, 506 (1970), The majority judgment with Fernando, ponente, was concurred by Zaldivar, Sanchez, Barredo and Villamor, JJ. with Makalintal, J. concurring in the result. Concepcion, C.J. and Reyes, J.B.L., Dizon and Castro, JJ. concurred in my separate concurring and dissenting opinion. 2 Idem at page 509. 3 Idem, at page 511. 4 Idem, at page 436. 5 Art. III, Bill of Rights, Sec. 1, 1987 Constitution. 6 Idem Section 9. 7 Majority Opinion, at page 23.

DIGEST

[G.R. No. 137034. February 23, 2004]

NATIONAL POWER CORPORATION , PABLO V. MALIXI and MEMBERS OF THE BOARD OF INQUIRY AND DISCIPLINE, petitioners, vs. COURT OF APPEALS , RAMON AREL, LEE LICUP and ROMY L. FUENTES, respondents. DECISION
CARPIO, J.:

This is a petition for review on certiorari to annul the Resolution dated 23 September 1998 of the Court of Appeals in CA-G.R. SP No. 48171, as well as its Resolution dated 6 January 1999 denying the motion for reconsideration. The Court of Appeals dismissed the appeal of the National Power Corporation (NPC), NPCs President Pablo Malixi (Malixi), and the members of the Board of Inquiry and Discipline (BID) for non-observance of Section 10, Rule 44 of the 1997 Rules of Civil Procedure.
[1] [2]

Antecedent Facts In August 1990, Oscar R. Verdeflor of Nymex Industrial Corporation (Nymex) executed a sworn statement reporting alleged anomalous practices in the bidding for the Fiberglass Reinforced Plastic (FRP) Ejector Headers of the Tiwi Geothermal Power Plant Units 1 and 4. The sworn statement identified Atty. Romy L. Fuentes (Fuentes) and Ramon Arel (Arel) as participants in the anomaly. NPCs Internal Audit Department (IAD) investigated the complaint and subsequently recommended the filing of a formal administrative charge against Fuentes, Arel, Lee Licup (Licup) and other members of the Bidding Committee. NPC then proceeded to conduct a formal administrative investigation. The IAD submitted its report on 4 July 1991. NPC issued an order on 8 August 1991 administratively charging and preventively suspending Fuentes, Arel, Licup (private respondents), and other members of the Bidding Committee from the service. The next day, 9 August 1991, NPC issued an order banning private respondents from the NPC office premises.
[3] [4]

Instead of immediately filing an answer within seventy-two hours (three days), private respondents requested for several motions for
[5]

extension. Private respondents received their charge sheets on 8 August 1991, thus the seventy-two hour period should have expired on 11 August 1991. The first motion for extension filed on 9 August 1991 was for one hundred and twenty hours (five days) from the expiration of the original seventy-two hour period. NPC partially granted this by extending the period for ninety-six hours (four days), or until 15 August 1991. On 14 August 1991, private respondents filed a second motion for extension for thirty days from 15 August 1991. NPC partially granted this by extending the period for five days, or until 20 August 1991, with a warning that the same is the final extension. Private respondents filed yet another motion for extension of thirty days. NPC denied this request and considered the case submitted for resolution. Private respondents were effectively in default for failing to file their answer despite having been given an extension period of nine days.
[6]

On 4 September 1991, private respondents filed a petition against NPC before the Civil Service Commission (CSC), docketed as Merit Systems Protection Board (MSPB) Case No. 91-1247. Private respondents prayed that the CSC take cognizance of the administrative case filed against them due to NPCs partiality in conducting the investigation. On 21 October 1991, the MSPB-CSC dismissed the petition for lack of merit.
[7]

Meanwhile, NPCs BID proceeded with its formal hearing and investigation against private respondents. On 23 September 1991, the BID ruled that: In accordance with the above-stated findings, the respondents have been found guilty as follows:
PENALTY 1) Ramon Arel Gross Neglect of Duty Forced Resignation 2) Romy L. Fuentes Grave Misconduct Dismissal 3) Lee N. Licup Gross Neglect of Duty Forced Resignation[8]

Malixi approved the recommendation. Sometime in September 1991, after having been in default before the NPC proceedings, private respondents filed a Petition for Certiorari, Prohibition and Mandamus with a prayer for a temporary restraining order against NPC, Malixi, and members of the BID (petitioners) before the Regional Trial Court of Quezon City, Branch 101 (trial court), docketed as Sp. Civil Case No. Q91-10192. Private respondents prayed that: (1) a writ of prohibition be issued commanding petitioners to desist from proceeding with the administrative cases; (2) judgment be rendered annulling the proceedings and the

questioned orders; (3) a writ of mandamus be issued commanding petitioners to reinstate private respondents immediately, and to pay their backwages and other benefits retroactive as of 8 August 1991, and allowing availment of the early retirement package as granted by NPC management; and (4) petitioners solidarily pay each of private respondents not less than P1,000,000 as moral damages, P150,000 as attorneys fees, P150,000 as litigation expenses and costs of suit.
[9]

On 2 October 1991, NPC implemented the BID recommendation. The trial court subsequently issued an order granting private respondents Motion for Issuance of a Writ of Preliminary Injunction on 17 October 1991. The order was premised on the supposed denial of due process of law and alleged persecution behind the filing of the administrative charges against private respondents.
[10]

On 14 November 1991, the Office of the Solicitor General (OSG), filed on NPCs behalf, an Answer to the petition pending before the trial court. NPC claimed that private respondents: (1) failed to exhaust all available administrative remedies; (2) do not have a valid and enforceable cause of action against NPC; and that (3) heads of government agencies have exclusive original jurisdiction to investigate and decide matters involving officers and employees under their employ.
[11]

On 10 February 1992, the BID recommended the exoneration of three of Licups companions in the Bidding Committee. Malixi exonerated Aquino, Legados and Maranca soon thereafter.
[12] [13]

It also appears in the records that Malixi filed a complaint against private respondents with the Office of the Ombudsman (Ombudsman), docketed as OMB Case No. 92-0753. On 26 June 1996, the Ombudsman dismissed the complaint against the private respondents for lack of merit. The Ombudsman stated:
[14]

Since the NPC Board of Inquiry and Discipline has found that the members of the Bidding Committee has [sic] acted properly in declaring the bidding in question a failure, then there is no basis for the charges against herein respondents Lee Licup who is also a member of the said Committee, and Romy L. Fuentes, who merely acted on the basis of said valid declaration of the second bidding. With more reason with respect to respondent Ramon V. Arel who had no participation in the declaration of failure of bidding.
[15]

On 19 March 1992, the trial court issued another order setting aside NPCs implementation of the BID recommendation. The trial court stated that NPCs act of placing private respondents immediately under preventive

suspension was issued without jurisdiction and with abuse of authority. The trial court ordered NPC to reinstate private respondents.
[16]

Petitioners later filed a Petition for Certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 27702. Petitioners sought to annul the 19 March 1992 trial court order and to prohibit Judge Pedro T. Santiago from proceeding with the case. On 18 May 1994, the Court of Appeals issued a resolution dismissing petitioners petition for lack of merit. The Court of Appeals found that the trial court did not gravely abuse its discretion in issuing the 19 March 1992 order. Petitioners did not appeal the Court of Appeals 18 May 1994 resolution dismissing CA-G.R. SP No. 27702.
[17]

In accordance with the 18 May 1994 Court of Appeals resolution, NPC issued Office Order No. 94-1320 on 13 June 1994, reinstating private respondents to their former positions and ordering payment of their corresponding backwages.
[18]

On 28 November 1997, the trial court finally handed down its decision in Civil Case No. Q-91-10192. The dispositive portion of the trial courts decision reads:
[19]

WHEREFORE, judgment is hereby rendered: 1. Declaring as permanent the writ of preliminary injunction, thereby barring and enjoining the respondents National Power Corporation and NPC Board of Inquiry and Discipline from further initiating, conducting, and proceeding with any administrative case against the petitioners involving their acts in the public biddings for the fabrication and installation of second stage FRP ejector headers for Units 3 and 4, Tiwi Geothermal Power Plant; 2. Ordering the immediate reinstatement and return to [sic] of petitioner Atty. Romy L. Fuentes to the position of Division Manager A, National Power Corporation, with station at the SLRC offices at Bian, Laguna, without loss of seniority, and with the privilege of early retirement under the latest terms granted by respondent NPC when said petitioner shall opt for early retirement; 3. Ordering respondent National Power Corporation to recall the temporary assignment/detail of petitioner Lee N. Licup at the office of the NPC President or at whatever temporary assignment he now has, and assign said petitioner to a specific department, with specific duties and responsibilities, as befits his new position of Department Manager A, the position equivalent to his old position of Assistant to the VP-SLRC, without loss of seniority rights, and

with the right to early retirement priviletes [sic] under the latest NPC retirement plan, whenever said petitioner opts to go on early retirement; 4. Directing the respondents, jointly and severally, to pay the petitioners as follows: a. To petitioner [Ramon] Arel: Representation and Transportation Allowance (RATA) of P312,000.00 for the period from August 8, 1991 to June 14,1994 Moral damages of P2,000,000.00 Exemplary damages of P1,000,000.00 Attorneys fees of P100,000.00 Litigation expenses of P50,000.00 To petitioner [Lee] Licup: Actual damages of P997,073.20 Representation and Transportation Allowance (RATA) of P287,710.00 for the period from August 8, 1991 to June 14,1994 Moral damages of P2,000,000.00 Exemplary damages of P1,000,000.00 Attorneys fees of P100,000.00 Litigation expenses of P50,000.00 To petitioner Romy L. Fuentes: Actual damages of P307,721.30 Representation and Transportation Allowance (RATA) of P236,240.00 for the period from August 8, 1991 to June 14,1994 Moral damages of P2,000,000.00 Exemplary damages of P1,000,000.00 Attorneys fees of P100,000.00 Litigation expenses of P50,000.00
[20]

b.

c.

SO ORDERED.

Petitioners appealed the trial courts decision to the Court of Appeals on 16 December 1997, docketed as CA-G.R. SP No. 48171. Petitioners received private respondents motion for execution pending appeal also on 16 December 1997. Petitioners filed their opposition to private respondents motion for execution pending appeal on 29 December 1997.
[21] [22] [23]

On 13 January 1998, the trial court issued an order directing petitioners to pay additional docket fees. The trial court issued another order on 26 January 1998 granting private respondents motion for execution pending appeal. The

next day, the Philippine National Bank, NPC branch, notified NPC that the sheriff had garnished NPCs deposit worth P11,000,000.
[24]

On 30 January 1998, petitioners sought recourse in the Court of Appeals for the third time by way of a Petition for Certiorari, Prohibition, and Preliminary Injunction with a prayer for a temporary restraining order, docketed as CA-G.R. SP No. 46674. Petitioners assailed the trial courts grant of the writ of execution pending appeal. The Court of Appeals resolved this petition on 7 April 1998, disposing as follows: WHEREFORE, the petition for certiorari is GIVEN DUE COURSE, and judgment is hereby rendered SETTING ASIDE the Order of respondent court dated January 26, 1998 granting execution pending appeal, insofar as the award for moral and exemplary damages, attorneys fees and litigation expenses is concerned, but AFFIRMING the same insofar as the award for actual damages, in the total amount of P2,140,744.50 is concerned. The supersedeas bond of P11 Million posted by private respondents may accordingly be reduced to P2,140,744.50. SO ORDERED. Petitioners did not appeal this decision.
[25]

On 6 July 1998, the Court of Appeals sent a notice to petitioners regarding its petition in CA-G.R. SP No. 48171. Portions of the notice read: In pursuance with the Resolution No. 231 of this Court En Banc and Supreme Court Circular No. 22-92, which took effect on June 1, 1992, you are hereby required to file in lieu of briefs, your respective memoranda within a non-extendible period of THIRTY (30) DAYS from receipt hereof. Failure of the PETITIONER(S)/RESPONDENT(S) APPELLANT(S) to comply with this rule may be a ground for dismissal of the appeal. However, the case shall be deemed submitted for decision with or without memorandum from the petitioner(s)/respondent(s) appellee(s) after the lapse of the thirty day period. (Emphasis supplied) Petitioners received the notice on 21 July 1998.
[26]

Petitioners filed on 24 August 1998 an Urgent Motion for Extension of Time to File Memorandum. The motion prayed for an additional period of 15 days within which to file their memorandum. On 25 August 1998, private respondents filed their memorandum with the Court of Appeals. Private
[27] [28]

respondents filed their opposition to the motion for extension on 27 August 1998. Private respondents prayed to expunge the motion for extension from the records and to dismiss NPCs appeal because no factual and legal issues were timely raised before the Court and the trial courts decision was supported by a preponderance of evidence. Petitioners finally filed their memorandum on 7 September 1998.
[29] [30]

Resolution of the Court of Appeals The Court of Appeals issued on 23 September 1998 a resolution in CAG.R. SP No. 48171 denying the motion for extension of time to file a memorandum and dismissing the case, as follows:
[31]

WHEREFORE, the motion for the extension of time to file memorandum by the respondents-appellants is hereby DENIED, and, pursuant to Rule 44, section 10 of the 1997 Rules of Civil Procedure, the appeal of the respondents-appellants is hereby DISMISSED. SO ORDERED. Petitioners moved to reconsider the dismissal of their petition in CA-G.R. SP No. 48171 on 15 October 1998. On 6 January 1999, the Court of Appeals issued its resolution denying petitioners motion for reconsideration. The resolution reads:
[32] [33]

After due consideration of the motion for reconsideration of the respondentsappellants, the opposition thereto by the petitioners-appellees, the reply of the respondents-appellants, and the manifestation and comment on reply of petitionersappellees, the Court finds no cogent reason for modifying its Resolution dated September 23, 1998. WHEREFORE, the aforesaid motion for the extension of time is hereby DENIED. SO ORDERED. Petitioners filed with this Court on 26 February 1999 a Petition for Review on Certiorari under Rule 45. Petitioners questioned the dismissal of their appeal by the Court of Appeals pursuant to Section 10, Rule 44 of the 1997 Rules of Court.
[34]

Issue Petitioners lone assignment of error reads: THE COURT OF APPEALS ERRED IN DISMISSING NPCS APPEAL PURSUANT TO SECTION 10, RULE 44 OF THE 1997 RULES OF CIVIL PROCEDURE.
[35]

The Courts Ruling The petition is meritorious. Dismissal of petitioners appeal pursuant to Section 10, Rule 44 of the 1997 Rules of Civil Procedure Petitioners urge us to rule that the Court of Appeals erred in applying Section 10, Rule 44 of the 1997 Rules of Civil Procedure in dismissing their appeal. Section 10 of Rule 44 gives the Court of Appeals the discretion to dismiss petitioners appeal for failure to file their memorandum within the prescribed period. Section 10 of Rule 44 reads: SECTION 10. Time of filing memoranda in special cases. In certiorari, prohibition, mandamus, quo warranto and habeas corpus cases, the parties shall file, in lieu of briefs, their respective memoranda within a non-extendible period of thirty (30) days from receipt of the notice issued by the clerk that all the evidence, oral and documentary, is already attached to the record. The failure of the appellant to file his memorandum within the period therefor may be a ground for dismissal of the appeal. However, realizing the heavy workload of the OSG, the Court under A.M. No. 99-2-03-SC grants the OSG an extension of 60 to 90 days to file its comment or brief. We agree with the OSG that the non-extendible 30-day period granted by the appellate court is not enough for the preparation of the memorandum.
[36]

Even if an appellant failed to file a motion for extension of time to file his brief before the expiration of the reglementary period, the Court of Appeals does not necessarily lose jurisdiction to decide the appealed case. The Court

of Appeals has discretion to dismiss or not to dismiss appellants appeal, which discretion must be soundly exercised in accordance with the tenets of justice and fair play having in mind the circumstances obtaining in each case.
[37]

The trial court enjoined NPC from proceeding with the administrative investigation, thus ignoring the twin principles of primary administrative jurisdiction and exhaustion of administrative remedies. The settled rule is before a party may seek the intervention of the courts, he should first avail of all the means afforded by administrative processes. Hence, if a remedy within the administrative machinery is still available, with a procedure prescribed pursuant to law for an administrative officer to decide the controversy, a party should first exhaust such remedy before resorting to the courts.
[38]

In this case, the trial court became overzealous since it not only ordered the reinstatement of private respondents during the pendency of the administrative case, it also took over the administrative case by rendering a decision on the merits. The trial court should have allowed the administrative process, from the administrative investigation by NPC to the appeal to the Civil Service Commission, to continue after ordering the reinstatement of private respondents. In assuming the functions of administrative agencies involving administrative investigation of government personnel, the trial court transgressed the boundaries of administrative jurisdiction in its exercise of judicial power. We remand the case to the Court of Appeals for a thorough examination of the evidence and a judicious disposal of the case.
[39]

WHEREFORE, the petition is GRANTED. The Resolution of the Court of Appeals in CA-G.R. SP No. 48171 dated 23 September 1998 and its Resolution dated 6 January 1999 denying the motion for reconsideration are SET ASIDE. Petitioners appeal is REINSTATED and the instant case REMANDED to the Court of Appeals for further proceedings. SO ORDERED. Davide, Jr., C.J., (Chairman), Panganiban, Ynares-Santiago, and Azcuna, JJ., concur.

NAPOCOR vs CA
GR 103442-45 May 21, 1993 FACTS: This is a consolidated case comprising of four separate complaints., filed against NPC and a particular Chavez. Plaintiffs filed a complaint against respondent for the lost of lives and destruction of properties due to the negligence of the latter in releasing water from Angat dam during the typhoon Kading Benjamin Chavez, being the supervisor at that time of a multi-purpose hydroelectric plant in the Angat River at Hilltop, Norzagaray, Bulacan, failed to exercise due diligence in monitoring the water level at the dam. NPCs allegations were as follows: 1) the NPC exercised due care, diligence and prudence in the operation and maintenanceof the hydroelectric plant; 2) the NPC exercised the diligence of a good father in the selection of its employees; 3) written notices were sent to the different municipalities of Bulacan warning the residents therein about the impending release of a large volume of water with the onset of typhoon "Kading" and advise them to take the necessary precautions; 4) the water released during the typhoon was needed to prevent the collapse of the dam and avoid greater damage to people and property; 5) in spite of the precautions undertaken and the diligence exercised, they could still not contain or control the flood that resulted and; 6) the damages incurred by the private respondents were caused by a fortuitous event orforce majeure and are in the nature and character of damnum absque injuria. By way of special affirmative defense, the defendants averred that the NPC cannot be sued because it performs a purely governmental function. The trial court dismissed the complaints as against the NPC on the ground that the provision of its charter allowing it to sue and be sued does not contemplate actions based on tort. Its decision on 30 April 1990 dismissing the complaints "for lack of sufficient and credible evidence." Court of Appeals reversed the appealed decision and awarded damages in favor of the private respondents. Based on the findings that From the mass of evidence extant in the record, We are convinced, and so hold that the flash flood on October 27, 1978, was caused not by rain waters (sic), but by stored waters (sic) suddenly and simultaneously released from the Angat Dam by defendantsappellees, particularly from midnight of October 26, 1978 up to the morning hours of October 27, 1978. ISSUE: Whether or not respondent is negligent? Whether or not the notices of warning were insufficient? Whether or not The damages suffered was not DAMNUM ABSQUE INJURIA?

HELD: We declared therein that the proximate cause of the loss and damage sustained by the plaintiffs therein who were similarly situated as the private respondents herein was the negligence of the petitioners, and that the 24 October 1978 "early warning notice" supposedly sent to the affected municipalities, the same notice involved in the case at bar, was insufficient. The petitioners were guilty of "patent gross and evident lack of foresight, imprudence and negligence in the management and operation of Angat Dam," and that "the extent of the opening of the spillways, and the magnitude of the water released, are all but products of defendants-appellees' headlessness, slovenliness, and carelessness." To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach of an obligation due to an "act of God," the following must concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor; (b) the event must be either unforseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a moral manner; and (d) the debtor must be free from any participation in, or aggravation of the injury to the creditor. (Vasquez v. Court of Appeals, 138 SCRA 553; Estrada v. Consolacion, 71 SCRA 423; Austria v. Court of Appeals, 39 SCRA 527; Republic of the Phil. v. Luzon Stevedoring Corp., 21 SCRA 279; Lasam v. Smith, 45 Phil. 657).

Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to escape liability for the loss or damage sustained by private respondents since they, the petitioners, were guilty of negligence. The event then was not occasioned exclusively by an act of God or force majeure; a human factor negligence or imprudence had intervened. The effect then of the force majeure in question may be deemed to have, even if only partly, resulted from the participation of man. Thus, the whole occurrence was thereby humanized, as it were, and removed from the laws applicable to acts of God.