CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila vs. HON.

PERFECTO
A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST DEVELOPMENT
CORPORATION, respondents
(G.R. No, 118127, April 12, 2005)
DECISION
I know only that what is moral is what you feel good after and what is immoral is what you feel bad after.
It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if
performed by someone else, who would be well-intentioned in his dishonesty.
The Courts commitment to the protection of morals is secondary to its fealty to the fundamental law of
the land. It is foremost a guardian of the Constitution but not the conscience of individuals. And if it need
be, the Court will not hesitate to make the hammer fall, and heavily in the words of Justice Laurel, and
uphold the constitutional guarantees when faced with laws that, though not lacking in zeal to promote
morality, nevertheless fail to pass the test of constitutionality.
The pivotal issue in this Petition[1] under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure
seeking the reversal of the Decision[2] in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of
Manila, Branch 18 (lower court),[3] is the validity of Ordinance No. 7783 (the Ordinance) of the City of
Manila.[4]
The antecedents are as follows:
Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in
the business of operating hotels, motels, hostels and lodging houses.[5] It built and opened Victoria Court
in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a
hotel.[6] On 28 June 1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of
Preliminary Injunction and/or Temporary Restraining Order[7] (RTC Petition) with the lower court
impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L.
Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance,
insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and
unconstitutional.
Enacted by the City Council [9] on 9 March 1993 and approved by petitioner City Mayor on 30
March 1993, the said Ordinance is entitled
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES
PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN
THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR
OTHER PURPOSES
The Ordinance is reproduced in full, hereunder:
SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no person,
partnership, corporation or entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr.
Street in the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the
West, pursuant to P.D. 499 be allowed or authorized to contract and engage in, any business
providing certain forms of amusement, entertainment, services and facilities where women are
used as tools in entertainment and which tend to disturb the community, annoy the inhabitants,
and adversely affect the social and moral welfare of the community, such as but not limited to:
Sauna Parlors, Massage Parlors, Karaoke Bars, Beerhouses, Night Clubs, Day Clubs, Super
Clubs, Discotheques, Cabarets, Dance Halls, Motels, Inns
SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said officials are
prohibited from issuing permits, temporary or otherwise, or from granting licenses and accepting
payments for the operation of business enumerated in the preceding section.
SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the businesses
enumerated in Section 1 hereof are hereby given three (3) months from the date of approval of this
ordinance within which to wind up business operations or to transfer to any place outside of the

Ermita-Malate area or convert said businesses to other kinds of business allowable within the
area, such as but not limited to:
Curio or antique shop, Souvenir Shops, Handicrafts display centers, Art galleries, Records and
music shops, Restaurants, Coffee shops, Flower shops, Music lounge and sing-along restaurants,
with well-defined activities for wholesome family entertainment that cater to both local and foreign
clientele.
Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows, stage
and theatrical plays, art exhibitions, concerts and the like.
11. Businesses allowable within the law and medium intensity districts as provided for in the zoning
ordinances for Metropolitan Manila, except new warehouse or open-storage depot, dock or yard,
motor repair shop, gasoline service station, light industry with any machinery, or funeral
establishments.
SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be
punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both,
at the discretion of the Court, PROVIDED, that in case of juridical person, the President, the General
Manager, or person-in-charge of operation shall be liable thereof; PROVIDED FURTHER, that in case of
subsequent violation and conviction, the premises of the erring establishment shall be closed
and padlocked permanently.
SEC. 5. This ordinance shall take effect upon approval.
Enacted by the City Council of Manila at its regular session today, March 9, 1993.
Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)
In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its
enumeration of prohibited establishments, motels and inns such as MTDCs Victoria Court considering
that these were not establishments for amusement or entertainment and they were not services or
facilities for entertainment, nor did they use women as tools for entertainment, and neither did they
disturb the community, annoy the inhabitants or adversely affect the social and moral welfare of the
community.
MTDC further advanced that the Ordinance was invalid and unconstitutional for the following
reasons: (1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv) of
the Local Government Code of 1991 (the Code) grants to the City Council only the power to regulate the
establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and
other similar establishments; (2) The Ordinance is void as it is violative of Presidential Decree (P.D.) No.
499which specifically declared portions of the Ermita-Malate area as a commercial zone with certain
restrictions; (3) The Ordinance does not constitute a proper exercise of police power as the compulsory
closure of the motel business has no reasonable relation to the legitimate municipal interests sought to
be protected; (4) The Ordinance constitutes an ex post facto law by punishing the operation of Victoria
Court which was a legitimate business prior to its enactment; (5) The Ordinance violates MTDCs
constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiffs property rights;
(b) the City Council has no power to find as a fact that a particular thing is a nuisance per se nor does it
have the power to extrajudicially destroy it; and (6) The Ordinance constitutes a denial of equal
protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns,
but not pension houses, hotels, lodging houses or other similar establishments, and for prohibiting said
business in the Ermita-Malate area but not outside of this area.
In their Answer[15] dated 23 July 1993, petitioners City of Manila and Lim maintained that the City
Council had the power to prohibit certain forms of entertainment in order to protect the social and moral
welfare of the community as provided for in Section 458 (a) 4 (vii) of the Local Government Code,
[16]
which reads, thus:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the
legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the
general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper
exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:
(4) Regulate activities relative to the use of land, buildings and structures within the city in order to
promote the general welfare and for said purpose shall:

(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement
facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance
halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such
other events or activities for amusement or entertainment, particularly those which tend to disturb the
community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit
certain forms of amusement or entertainment in order to protect the social and moral welfare of the
community.
Citing Kwong Sing v. City of Manila,[17] petitioners insisted that the power of regulation spoken of in
the above-quoted provision included the power to control, to govern and to restrain places of exhibition
and amusement.[18]
Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to
protect the social and moral welfare of the community in conjunction with its police power as found in
Article III, Section 18(kk) of Republic Act No. 409, [19] otherwise known as the Revised Charter of the City
of Manila (Revised Charter of Manila)[20] which reads, thus:
ARTICLE III
THE MUNICIPAL BOARD
Section 18. Legislative powers. The Municipal Board shall have the following legislative powers:
...
To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance
of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and
general welfare of the city and its inhabitants, and such others as may be necessary to carry into effect
and discharge the powers and duties conferred by this chapter; and to fix penalties for the violation of
ordinances which shall not exceed two hundred pesos fine or six months imprisonment, or both such fine
and imprisonment, for a single offense.
Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private respondent
had the burden to prove its illegality or unconstitutionality.[21]
Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as the
latter simply disauthorized certain forms of businesses and allowed the Ermita-Malate area to remain a
commercial zone.[22] The Ordinance, the petitioners likewise claimed, cannot be assailed as ex post
facto as it was prospective in operation. [23] The Ordinance also did not infringe the equal protection
clause and cannot be denounced as class legislation as there existed substantial and real differences
between the Ermita-Malate area and other places in the City of Manila.[24]
On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte
temporary restraining order against the enforcement of the Ordinance.[25] And on 16 July 1993, again in
an intrepid gesture, he granted the writ of preliminary injunction prayed for by MTDC.[26]
After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the
petitioners from implementing the Ordinance. The dispositive portion of said Decision reads:[27]
WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City
of Manila null and void, and making permanent the writ of preliminary injunction that had been issued by
this Court against the defendant. No costs.
SO ORDERED.[28]
Petitioners filed with the lower court a Notice of Appeal[29] on 12 December 1994, manifesting that
they are elevating the case to this Court under then Rule 42 on pure questions of law.[30]
On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were
committed by the lower court in its ruling: (1) It erred in concluding that the subject ordinance is ultra
vires, or otherwise, unfair, unreasonable and oppressive exercise of police power; (2) It erred in holding
that the questioned Ordinance contravenes P.D. 499[31] which allows operators of all kinds of commercial
establishments, except those specified therein; and (3) It erred in declaring the Ordinance void and
unconstitutional.[32]
In the Petition and in its Memorandum,[33] petitioners in essence repeat the assertions they made
before the lower court. They contend that the assailed Ordinance was enacted in the exercise of the
inherent and plenary power of the State and the general welfare clause exercised by local government
units provided for in Art. 3, Sec. 18 of the Revised Charter of Manila and conjunctively, Section 458 (a) 4
(vii) of the Code.[34] They allege that the Ordinance is a valid exercise of police power; it does not
contravene P.D. 499; and that it enjoys the presumption of validity.[35]

In its Memorandum[36] dated 27 May 1996, private respondent maintains that the Ordinance is ultra
vires and that it is void for being repugnant to the general law. It reiterates that the
questioned Ordinance is not a valid exercise of police power; that it is violative of due process,
confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative of the
equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated discretion
in the execution of the Ordinance absent rules to guide and control his actions.
This is an opportune time to express the Courts deep sentiment and tenderness for the ErmitaMalate area being its home for several decades. A long-time resident, the Court witnessed the areas
many turn of events. It relished its glory days and endured its days of infamy. Much as the Court harks
back to the resplendent era of the Old Manila and yearns to restore its lost grandeur, it believes that
the Ordinance is not the fitting means to that end. The Court is of the opinion, and so holds, that the
lower court did not err in declaring the Ordinance, as it did, ultra viresand therefore null and void.
The Ordinance is so replete with constitutional infirmities that almost every sentence thereof
violates a constitutional provision. The prohibitions and sanctions therein transgress the cardinal rights of
persons enshrined by the Constitution. The Court is called upon to shelter these rights from attempts at
rendering them worthless.
The tests of a valid ordinance are well established. A long line of decisions has held that for an
ordinance to be valid, it must not only be within the corporate powers of the local government unit to
enact and must be passed according to the procedure prescribed by law, it must also conform to the
following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not
be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate
trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.[37]
Anent the first criterion, ordinances shall only be valid when they are not contrary to the
Constitution and to the laws.[38] The Ordinance must satisfy two requirements: it must pass muster under
the test of constitutionality and the test of consistency with the prevailing laws. That ordinances should
be constitutional uphold the principle of the supremacy of the Constitution. The requirement that the
enactment must not violate existing law gives stress to the precept that local government units are able
to legislate only by virtue of their derivative legislative power, a delegation of legislative power from the
national legislature. The delegate cannot be superior to the principal or exercise powers higher than
those of the latter.[39]
This relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. The
national legislature is still the principal of the local government units, which cannot defy its will or modify
or violate it.[40]
The Ordinance was passed by the City Council in the exercise of its police power, an enactment of
the City Council acting as agent of Congress. Local government units, as agencies of the State, are
endowed with police power in order to effectively accomplish and carry out the declared objects of their
creation.[41] This delegated police power is found in Section 16 of the Code, known as the general welfare
clause, viz:
SECTION 16. General Welfare.Every local government unit shall exercise the powers expressly granted,
those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its
efficient and effective governance, and those which are essential to the promotion of the general welfare.
Within their respective territorial jurisdictions, local government units shall ensure and support, among
other things, the preservation and enrichment of culture, promote health and safety, enhance the right of
the people to a balanced ecology, encourage and support the development of appropriate and selfreliant scientific and technological capabilities, improve public morals, enhance economic prosperity and
social justice, promote full employment among their residents, maintain peace and order, and preserve
the comfort and convenience of their inhabitants.
Local government units exercise police power through their respective legislative bodies; in this
case, the sangguniang panlungsod or the city council. The Code empowers the legislative bodies to
enact ordinances, approve resolutions and appropriate funds for the general welfare of the
province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper
exercise of the corporate powers of the province/city/ municipality provided under the Code. [42] The
inquiry in this Petition is concerned with the validity of the exercise of such delegated power.
The Ordinance contravenes the Constitution
The police power of the City Council, however broad and far-reaching, is subordinate to the
constitutional limitations thereon; and is subject to the limitation that its exercise must be reasonable and

for the public good.[43] In the case at bar, the enactment of the Ordinance was an invalid exercise of
delegated power as it is unconstitutional and repugnant to general laws.
The relevant constitutional provisions are the following:
SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and the
promotion of the general welfare are essential for the enjoyment by all the people of the blessings of
democracy.[44]
SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental
equality before the law of women and men.[45]
SEC. 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any
person be denied the equal protection of laws.[46]
Sec. 9. Private property shall not be taken for public use without just compensation.[47]
A. The Ordinance infringes the Due Process Clause
The constitutional safeguard of due process is embodied in the fiat (N)o person shall be deprived
of life, liberty or property without due process of law. . . .[48]
There is no controlling and precise definition of due process. It furnishes though a standard to
which governmental action should conform in order that deprivation of life, liberty or property, in each
appropriate case, be valid. This standard is aptly described as a responsiveness to the supremacy of
reason, obedience to the dictates of justice, [49] and as such it is a limitation upon the exercise of the
police power.[50]
The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and
property of individuals; to secure the individual from the arbitrary exercise of the powers of the
government, unrestrained by the established principles of private rights and distributive justice; to protect
property from confiscation by legislative enactments, from seizure, forfeiture, and destruction without a
trial and conviction by the ordinary mode of judicial procedure; and to secure to all persons equal and
impartial justice and the benefit of the general law.[51]
The guaranty serves as a protection against arbitrary regulation, and private corporations and
partnerships are persons within the scope of the guaranty insofar as their property is concerned. [52]
This clause has been interpreted as imposing two separate limits on government, usually called
procedural due process and substantive due process.
Procedural due process, as the phrase implies, refers to the procedures that the government must
follow before it deprives a person of life, liberty, or property. Classic procedural due process issues are
concerned with what kind of notice and what form of hearing the government must provide when it takes
a particular action.[53]
Substantive due process, as that phrase connotes, asks whether the government has an adequate
reason for taking away a persons life, liberty, or property. In other words, substantive due process looks
to whether there is a sufficient justification for the governments action. [54] Case law in the United States
(U.S.) tells us that whether there is such a justification depends very much on the level of scrutiny used.
[55]
For example, if a law is in an area where only rational basis review is applied, substantive due
process is met so long as the law is rationally related to a legitimate government purpose. But if it is an
area where strict scrutiny is used, such as for protecting fundamental rights, then the government will
meet substantive due process only if it can prove that the law is necessary to achieve a compelling
government purpose.[56]
The police power granted to local government units must always be exercised with utmost
observance of the rights of the people to due process and equal protection of the law. Such power
cannot be exercised whimsically, arbitrarily or despotically[57] as its exercise is subject to a qualification,
limitation or restriction demanded by the respect and regard due to the prescription of the fundamental
law, particularly those forming part of the Bill of Rights. Individual rights, it bears emphasis, may be
adversely affected only to the extent that may fairly be required by the legitimate demands of public
interest or public welfare.[58] Due process requires the intrinsic validity of the law in interfering with the
rights of the person to his life, liberty and property.[59]
Requisites for the valid exercise of Police Power are not met
To successfully invoke the exercise of police power as the rationale for the enactment of
the Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear that
the interests of the public generally, as distinguished from those of a particular class, require an
interference with private rights, but the means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals.[60] It must be evident that no

other alternative for the accomplishment of the purpose less intrusive of private rights can work. A
reasonable relation must exist between the purposes of the police measure and the means employed for
its accomplishment, for even under the guise of protecting the public interest, personal rights and those
pertaining to private property will not be permitted to be arbitrarily invaded.[61]
Lacking a concurrence of these two requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights[62] a violation of the due process clause.
The Ordinance was enacted to address and arrest the social ills purportedly spawned by the
establishments in the Ermita-Malate area which are allegedly operated under the deceptive veneer of
legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges, hotels
and motels. Petitioners insist that even the Court in the case of Ermita-Malate Hotel and Motel Operators
Association, Inc. v. City Mayor of Manila [63] had already taken judicial notice of the alarming increase in
the rate of prostitution, adultery and fornication in Manila traceable in great part to existence of motels,
which provide a necessary atmosphere for clandestine entry, presence and exit and thus become the
ideal haven for prostitutes and thrill-seekers.[64]
The object of the Ordinance was, accordingly, the promotion and protection of the social and moral
values of the community. Granting for the sake of argument that the objectives of the Ordinance are
within the scope of the City Councils police powers, the means employed for the accomplishment thereof
were unreasonable and unduly oppressive.
It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable
regulations looking to the promotion of the moral and social values of the community. However, the
worthy aim of fostering public morals and the eradication of the communitys social ills can be achieved
through means less restrictive of private rights; it can be attained by reasonable restrictions rather than
by an absolute prohibition. The closing down and transfer of businesses or their conversion into
businesses allowed under the Ordinance have no reasonable relation to the accomplishment of its
purposes. Otherwise stated, the prohibition of the enumerated establishments will not per se protect and
promote the social and moral welfare of the community; it will not in itself eradicate the alluded social ills
of prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila.
Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and
establishments of the like which the City Council may lawfully prohibit, [65] it is baseless and insupportable
to bring within that classification sauna parlors, massage parlors, karaoke bars, night clubs, day clubs,
super clubs, discotheques, cabarets, dance halls, motels and inns. This is not warranted under the
accepted definitions of these terms. The enumerated establishments are lawful pursuits which are
not per se offensive to the moral welfare of the community.
That these are used as arenas to consummate illicit sexual affairs and as venues to further the
illegal prostitution is of no moment. We lay stress on the acrid truth that sexual immorality, being a
human frailty, may take place in the most innocent of places that it may even take place in the substitute
establishments enumerated under Section 3 of the Ordinance. If the flawed logic of the Ordinance were
to be followed, in the remote instance that an immoral sexual act transpires in a church cloister or a court
chamber, we would behold the spectacle of the City of Manila ordering the closure of the church or court
concerned. Every house, building, park, curb, street or even vehicles for that matter will not be exempt
from the prohibition. Simply because there are no pure places where there are impure men. Indeed,
even the Scripture and the Tradition of Christians churches continually recall the presence
and universality of sin in mans history.[66]
The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be
said to be injurious to the health or comfort of the community and which in itself is amoral, but the
deplorable human activity that may occur within its premises. While a motel may be used as a venue for
immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a house of
ill-repute or as a nuisance per se on a mere likelihood or a naked assumption. If that were so and if that
were allowed, then the Ermita-Malate area would not only be purged of its supposed social ills, it would
be extinguished of its soul as well as every human activity, reprehensible or not, in its every nook and
cranny would be laid bare to the estimation of the authorities.
The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as
the Ordinance may to shape morality, it should not foster the illusion that it can make a moral man out of
it because immorality is not a thing, a building or establishment; it is in the hearts of men. The City
Council instead should regulate human conduct that occurs inside the establishments, but not to the
detriment of liberty and privacy which are covenants, premiums and blessings of democracy.
While petitioners earnestness at curbing clearly objectionable social ills is commendable, they
unwittingly punish even the proprietors and operators of wholesome, innocent establishments. In the

instant case, there is a clear invasion of personal or property rights, personal in the case of those
individuals desirous of owning, operating and patronizing those motels and property in terms of the
investments made and the salaries to be paid to those therein employed. If the City of Manila so desires
to put an end to prostitution, fornication and other social ills, it can instead impose reasonable
regulations such as daily inspections of the establishments for any violation of the conditions of their
licenses or permits; it may exercise its authority to suspend or revoke their licenses for these violations;
[67]
and it may even impose increased license fees. In other words, there are other means to reasonably
accomplish the desired end.
Means employed are constitutionally infirm
The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars,
beerhouses, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns in
the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the enumerated establishments
are given three (3) months from the date of approval of the Ordinance within which to wind up business
operations or to transfer to any place outside the Ermita-Malate area or convert said businesses to other
kinds of business allowable within the area. Further, it states in Section 4 that in cases of subsequent
violations of the provisions of the Ordinance, the premises of the erring establishment shall be closed
and padlocked permanently.
It is readily apparent that the means employed by the Ordinance for the achievement of its
purposes, the governmental interference itself, infringes on the constitutional guarantees of a persons
fundamental right to liberty and property.
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include the right to
exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere
freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man to
enjoy the facilities with which he has been endowed by his Creator, subject only to such restraint as are
necessary for the common welfare.[68] In accordance with this case, the rights of the citizen to be free to
use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful
calling; and to pursue any avocation are all deemed embraced in the concept of liberty.[69]
The U.S. Supreme Court in the case of Roth v. Board of Regents, [70] sought to clarify the meaning
of liberty. It said:
While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the Fifth and
Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also the right of
the individual to contract, to engage in any of the common occupations of life, to acquire useful
knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of
his own conscience, and generally to enjoy those privileges long recognized as essential to the orderly
pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that the
meaning of liberty must be broad indeed.
In another case, it also confirmed that liberty protected by the due process clause includes
personal decisions relating to marriage, procreation, contraception, family relationships, child rearing,
and education. In explaining the respect the Constitution demands for the autonomy of the person in
making these choices, the U.S. Supreme Court explained:
These matters, involving the most intimate and personal choices a person may make in a lifetime,
choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth
Amendment. At the heart of liberty is the right to define ones own concept of existence, of meaning, of
universe, and of the mystery of human life. Beliefs about these matters could not define the attributes of
personhood where they formed under compulsion of the State.[71]
Persons desirous to own, operate and patronize the enumerated establishments under Section 1
of the Ordinance may seek autonomy for these purposes.
Motel patrons who are single and unmarried may invoke this right to autonomy to consummate
their bonds in intimate sexual conduct within the motels premisesbe it stressed that their consensual
sexual behavior does not contravene any fundamental state policy as contained in the Constitution.
[72]
Adults have a right to choose to forge such relationships with others in the confines of their own
private lives and still retain their dignity as free persons. The liberty protected by the Constitution allows
persons the right to make this choice.[73] Their right to liberty under the due process clause gives them
the full right to engage in their conduct without intervention of the government, as long as they do not run
afoul of the law. Liberty should be the rule and restraint the exception.
Liberty in the constitutional sense not only means freedom from unlawful government restraint; it
must include privacy as well, if it is to be a repository of freedom. The right to be let alone is the

beginning of all freedomit is the most comprehensive of rights and the right most valued by civilized men.
[74]

The concept of liberty compels respect for the individual whose claim to privacy and interference
demands respect. As the case of Morfe v. Mutuc,[75] borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are
indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations are
built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that his
experience is private, and the will built out of that experience personal to himself. If he surrenders his will
to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of
himself. I cannot believe that a man no longer a master of himself is in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which
should be justified by a compelling state interest. Morfe accorded recognition to the right to privacy
independently of its identification with liberty; in itself it is fully deserving of constitutional protection.
Governmental powers should stop short of certain intrusions into the personal life of the citizen.[76]
There is a great temptation to have an extended discussion on these civil liberties but the Court
chooses to exercise restraint and restrict itself to the issues presented when it should. The previous
pronouncements of the Court are not to be interpreted as a license for adults to engage in criminal
conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms and guarantees
their right to make this choice. Should they be prosecuted for their illegal conduct, they should suffer the
consequences of the choice they have made. That, ultimately, is their choice.
Modality employed is unlawful taking
In addition, the Ordinance is unreasonable and oppressive as it substantially divests the
respondent of the beneficial use of its property.[77]The Ordinance in Section 1 thereof forbids the running
of the enumerated businesses in the Ermita-Malate area and in Section 3 instructs its owners/operators
to wind up business operations or to transfer outside the area or convert said businesses into allowed
businesses. An ordinance which permanently restricts the use of property that it can not be used for any
reasonable purpose goes beyond regulation and must be recognized as a taking of the property without
just compensation.[78] It is intrusive and violative of the private property rights of individuals.
The Constitution expressly provides in Article III, Section 9, that private property shall not be taken
for public use without just compensation. The provision is the most important protection of property rights
in the Constitution. This is a restriction on the general power of the government to take property. The
constitutional provision is about ensuring that the government does not confiscate the property of some
to give it to others. In part too, it is about loss spreading. If the government takes away a persons
property to benefit society, then society should pay. The principal purpose of the guarantee is to bar the
Government from forcing some people alone to bear public burdens which, in all fairness and justice,
should be borne by the public as a whole.[79]
There are two different types of taking that can be identified. A possessory taking occurs when the
government confiscates or physically occupies property. A regulatory taking occurs when the
governments regulation leaves no reasonable economically viable use of the property.[80]
In the landmark case of Pennsylvania Coal v. Mahon,[81] it was held that a taking also could be
found if government regulation of the use of property went too far. When regulation reaches a certain
magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to
support the act. While property may be regulated to a certain extent, if regulation goes too far it will be
recognized as a taking.[82]
No formula or rule can be devised to answer the questions of what is too far and when regulation
becomes a taking. In Mahon, Justice Holmes recognized that it was a question of degree and therefore
cannot be disposed of by general propositions. On many other occasions as well, the U.S. Supreme
Court has said that the issue of when regulation constitutes a taking is a matter of considering the facts
in each case. The Court asks whether justice and fairness require that the economic loss caused by
public action must be compensated by the government and thus borne by the public as a whole, or
whether the loss should remain concentrated on those few persons subject to the public action. [83]
What is crucial in judicial consideration of regulatory takings is that government regulation is a
taking if it leaves no reasonable economically viable use of property in a manner that interferes with
reasonable expectations for use.[84] A regulation that permanently denies all economically beneficial or
productive use of land is, from the owners point of view, equivalent to a taking unless principles of
nuisance or property law that existed when the owner acquired the land make the use prohibit able.
[85]
When the owner of real property has been called upon to sacrifice all economically beneficial uses in

the name of the common good, that is, to leave his property economically idle, he has suffered a taking.
[86]

A regulation which denies all economically beneficial or productive use of land will require
compensation under the takings clause. Where a regulation places limitations on land that fall short of
eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a
complex of factors including the regulations economic effect on the landowner, the extent to which the
regulation interferes with reasonable investment-backed expectations and the character of government
action. These inquiries are informed by the purpose of the takings clause which is to prevent the
government from forcing some people alone to bear public burdens which, in all fairness and justice,
should be borne by the public as a whole.[87]
A restriction on use of property may also constitute a taking if not reasonably necessary to the
effectuation of a substantial public purpose or if it has an unduly harsh impact on the distinct investmentbacked expectations of the owner.[88]
The Ordinance gives the owners and operators of the prohibited establishments three (3) months
from its approval within which to wind up business operations or to transfer to any place outside of the
Ermita-Malate area or convert said businesses to other kinds of business allowable within the area. The
directive to wind up business operations amounts to a closure of the establishment, a permanent
deprivation of property, and is practically confiscatory. Unless the owner converts his establishment to
accommodate an allowed business, the structure which housed the previous business will be left empty
and gathering dust. Suppose he transfers it to another area, he will likewise leave the entire
establishment idle. Consideration must be given to the substantial amount of money invested to build the
edifices which the owner reasonably expects to be returned within a period of time. It is apparent that
the Ordinance leaves no reasonable economically viable use of property in a manner that interferes with
reasonable expectations for use.
The second and third options to transfer to any place outside of the Ermita-Malate area or to
convert into allowed businessesare confiscatory as well. The penalty of permanent closure in cases of
subsequent violations found in Section 4 of the Ordinance is also equivalent to a taking of private
property.
The second option instructs the owners to abandon their property and build another one outside
the Ermita-Malate area. In every sense, it qualifies as a taking without just compensation with an
additional burden imposed on the owner to build another establishment solely from his coffers. The
proffered solution does not put an end to the problem, it merely relocates it. Not only is this impractical, it
is unreasonable, onerous and oppressive. The conversion into allowed enterprises is just as ridiculous.
How may the respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge
without essentially destroying its property? This is a taking of private property without due process of law,
nay, even without compensation.
The penalty of closure likewise constitutes unlawful taking that should be compensated by the
government. The burden on the owner to convert or transfer his business, otherwise it will be closed
permanently after a subsequent violation should be borne by the public as this end benefits them as a
whole.
Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning
ordinance, although a valid exercise of police power, which limits a wholesome property to a use which
cannot reasonably be made of it constitutes the taking of such property without just compensation.
Private property which is not noxious or intended for noxious purposes may not, by zoning, be destroyed
without compensation. Such principle finds no support in the principles of justice as we know them. The
police powers of local government units which have always received broad and liberal interpretation
cannot be stretched to cover this particular taking.
Distinction should be made between destruction from necessity and eminent domain. It needs
restating that the property taken in the exercise of police power is destroyed because it is noxious or
intended for a noxious purpose while the property taken under the power of eminent domain is intended
for a public use or purpose and is therefore wholesome. [89] If it be of public benefit that a wholesome
property remains unused or relegated to a particular purpose, then certainly the public should bear the
cost of reasonable compensation for the condemnation of private property for public use.[90]
Further, the Ordinance fails to set up any standard to guide or limit the petitioners actions. It in no
way controls or guides the discretion vested in them. It provides no definition of the establishments
covered by it and it fails to set forth the conditions when the establishments come within its ambit of
prohibition. The Ordinance confers upon the mayor arbitrary and unrestricted power to close down
establishments. Ordinances such as this, which make possible abuses in its execution, depending upon

no conditions or qualifications whatsoever other than the unregulated arbitrary will of the city authorities
as the touchstone by which its validity is to be tested, are unreasonable and invalid.
The Ordinance should have established a rule by which its impartial enforcement could be secured.[91]
Ordinances placing restrictions upon the lawful use of property must, in order to be valid and
constitutional, specify the rules and conditions to be observed and conduct to avoid; and must not admit
of the exercise, or of an opportunity for the exercise, of unbridled discretion by the law enforcers in
carrying out its provisions.[92]
Thus, in Coates v. City of Cincinnati,[93] as cited in People v. Nazario,[94] the U.S. Supreme Court
struck down an ordinance that had made it illegal for three or more persons to assemble on any sidewalk
and there conduct themselves in a manner annoying to persons passing by. The ordinance was nullified
as it imposed no standard at all because one may never know in advance what annoys some people but
does not annoy others.
Similarly, the Ordinance does not specify the standards to ascertain which establishments tend to
disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the
community. The cited case supports the nullification of the Ordinance for lack of comprehensible
standards to guide the law enforcers in carrying out its provisions.
Petitioners cannot therefore order the closure of the enumerated establishments without infringing
the due process clause. These lawful establishments may be regulated, but not prevented from carrying
on their business. This is a sweeping exercise of police power that is a result of a lack of imagination on
the part of the City Council and which amounts to interference into personal and private rights which the
Court will not countenance. In this regard, we take a resolute stand to uphold the constitutional
guarantee of the right to liberty and property.
Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry
from the ill-considered Ordinance enacted by the City Council.
In FW/PBS, INC. v. Dallas,[95] the city of Dallas adopted a comprehensive ordinance regulating
sexually oriented businesses, which are defined to include adult arcades, bookstores, video stores,
cabarets, motels, and theaters as well as escort agencies, nude model studio and sexual encounter
centers. Among other things, the ordinance required that such businesses be licensed. A group of motel
owners were among the three groups of businesses that filed separate suits challenging the ordinance.
The motel owners asserted that the city violated the due process clause by failing to produce adequate
support for its supposition that renting room for fewer than ten (10) hours resulted in increased crime and
other secondary effects. They likewise argued than the ten (10)-hour limitation on the rental of motel
rooms placed an unconstitutional burden on the right to freedom of association. Anent the first
contention, the U.S. Supreme Court held that the reasonableness of the legislative judgment combined
with a study which the city considered, was adequate to support the citys determination that motels
permitting room rentals for fewer than ten (10 ) hours should be included within the licensing scheme. As
regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no
discernible effect on personal bonds as those bonds that are formed from the use of a motel room for
fewer than ten (10) hours are not those that have played a critical role in the culture and traditions of the
nation by cultivating and transmitting shared ideals and beliefs.
The ordinance challenged in the above-cited case merely regulated the targeted businesses. It
imposed reasonable restrictions; hence, its validity was upheld.
The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila,[96] it
needs pointing out, is also different from this case in that what was involved therein was a measure
which regulated the mode in which motels may conduct business in order to put an end to practices
which could encourage vice and immorality. Necessarily, there was no valid objection on due process or
equal protection grounds as the ordinance did not prohibit motels. The Ordinance in this case however is
not a regulatory measure but is an exercise of an assumed power to prohibit. [97]
The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of
property and personal rights of citizens. For being unreasonable and an undue restraint of trade, it
cannot, even under the guise of exercising police power, be upheld as valid.
B. The Ordinance violates Equal Protection Clause
Equal protection requires that all persons or things similarly situated should be treated alike, both
as to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be
treated differently, so as to give undue favor to some and unjustly discriminate against others. [98] The
guarantee means that no person or class of persons shall be denied the same protection of laws which
is enjoyed by other persons or other classes in like circumstances. [99] The equal protection of the laws is

a pledge of the protection of equal laws. [100] It limits governmental discrimination. The equal protection
clause extends to artificial persons but only insofar as their property is concerned.[101]
The Court has explained the scope of the equal protection clause in this wise:
What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: The ideal situation
is for the laws benefits to be available to all, that none be placed outside the sphere of its coverage. Only
thus could chance and favor be excluded and the affairs of men governed by that serene and impartial
uniformity, which is of the very essence of the idea of law. There is recognition, however, in the opinion
that what in fact exists cannot approximate the ideal. Nor is the law susceptible to the reproach that it
does not take into account the realities of the situation. The constitutional guarantee then is not to be
given a meaning that disregards what is, what does in fact exist. To assure that the general welfare be
promoted, which is the end of law, a regulatory measure may cut into the rights to liberty and property.
Those adversely affected may under such circumstances invoke the equal protection clause only if they
can show that the governmental act assailed, far from being inspired by the attainment of the common
weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in
reason. Classification is thus not ruled out, it being sufficient to quote from the Tuason decision anew
that the laws operate equally and uniformly on all persons under similar circumstances or that all
persons must be treated in the same manner, the conditions not being different, both in the privileges
conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the
principle is that equal protection and security shall be given to every person under circumstances which,
if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within
a class should be treated in the same fashion, whatever restrictions cast on some in the group equally
binding on the rest.[102]
Legislative bodies are allowed to classify the subjects of legislation. If the classification is
reasonable, the law may operate only on some and not all of the people without violating the equal
protection clause.[103] The classification must, as an indispensable requisite, not be arbitrary. To be valid,
it must conform to the following requirements:
1) It must be based on substantial distinctions.
2) It must be germane to the purposes of the law.
3) It must not be limited to existing conditions only.
4) It must apply equally to all members of the class.
In the Courts view, there are no substantial distinctions between motels, inns, pension houses,
hotels, lodging houses or other similar establishments. By definition, all are commercial establishments
providing lodging and usually meals and other services for the public. No reason exists for prohibiting
motels and inns but not pension houses, hotels, lodging houses or other similar establishments. The
classification in the instant case is invalid as similar subjects are not similarly treated, both as to rights
conferred and obligations imposed. It is arbitrary as it does not rest on substantial distinctions bearing a
just and fair relation to the purpose of the Ordinance.
The Court likewise cannot see the logic for prohibiting the business and operation of motels in the
Ermita-Malate area but not outside of this area. A noxious establishment does not become any less
noxious if located outside the area.
The standard where women are used as tools for entertainment is also discriminatory as
prostitutionone of the hinted ills the Ordinance aims to banishis not a profession exclusive to women.
Both men and women have an equal propensity to engage in prostitution. It is not any less grave a sin
when men engage in it. And why would the assumption that there is an ongoing immoral activity apply
only when women are employed and be inapposite when men are in harness? This discrimination based
on gender violates equal protection as it is not substantially related to important government objectives.
[105]
Thus, the discrimination is invalid.
Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with
prevailing laws.
C.

The Ordinance is repugnant to general laws; it is ultra vires

The Ordinance is in contravention of the Code as the latter merely empowers local government
units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof.
The power of the City Council to regulate by ordinances the establishment, operation, and
maintenance of motels, hotels and other similar establishments is found in Section 458 (a) 4 (iv), which
provides that:

Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the
legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the
general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper
exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:
...
(4) Regulate activities relative to the use of land, buildings and structures within the city in order to
promote the general welfare and for said purpose shall:
...
(iv) Regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels,
motels, inns, pension houses, lodging houses, and other similar establishments, including tourist guides
and transports . . . .
While its power to regulate the establishment, operation and maintenance of any entertainment or
amusement facilities, and to prohibit certain forms of amusement or entertainment is provided under
Section 458 (a) 4 (vii) of the Code, which reads as follows:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the
legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the
general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper
exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:
(4) Regulate activities relative to the use of land, buildings and structures within the city in order to
promote the general welfare and for said purpose shall:
(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement
facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance
halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such
other events or activities for amusement or entertainment, particularly those which tend to disturb the
community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit
certain forms of amusement or entertainment in order to protect the social and moral welfare of the
community.
Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses,
lodging houses, and other similar establishments, the only power of the City Council to legislate relative
thereto is to regulate them to promote the general welfare. The Code still withholds from cities the power
to suppress and prohibit altogether the establishment, operation and maintenance of such
establishments. It is well to recall the rulings of the Court in Kwong Sing v. City of Manila[106] that:
The word regulate, as used in subsection (l), section 2444 of the Administrative Code, means and
includes the power to control, to govern, and to restrain; but regulate should not be construed as
synonymous with suppress or prohibit. Consequently, under the power to regulate laundries, the
municipal authorities could make proper police regulations as to the mode in which the employment or
business shall be exercised.[107]
And in People v. Esguerra,[108] wherein the Court nullified an ordinance of the Municipality of
Tacloban which prohibited the selling, giving and dispensing of liquor ratiocinating that the municipality is
empowered only to regulate the same and not prohibit. The Court therein declared that:
(A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to
license and regulate the liquor traffic, power to prohibit is impliedly withheld.[109]
These doctrines still hold contrary to petitioners assertion [110] that they were modified by the Code
vesting upon City Councils prohibitory powers.
Similarly, the City Council exercises regulatory powers over public dancing schools, public dance
halls, sauna baths, massage parlors, and other places for entertainment or amusement as found in the
first clause of Section 458 (a) 4 (vii). Its powers to regulate, suppress and suspend such other events or
activities for amusement or entertainment, particularly those which tend to disturb the community or
annoy the inhabitants and to prohibit certain forms of amusement or entertainment in order to protect the
social and moral welfare of the community are stated in the second and third clauses, respectively of the
same Section. The several powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code,
it is pertinent to emphasize, are separated by semi-colons (;), the use of which indicates that the clauses
in which these powers are set forth are independent of each other albeit closely related to justify being
put together in a single enumeration or paragraph. [111] These powers, therefore, should not be confused,
commingled or consolidated as to create a conglomerated and unified power of regulation, suppression
and prohibition.[112]

The Congress unequivocably specified the establishments and forms of amusement or

entertainment subject to regulation among which are beerhouses, hotels, motels, inns, pension houses,
lodging houses, and other similar establishments (Section 458 (a) 4 (iv)), public dancing schools, public
dance halls, sauna baths, massage parlors, and other places for entertainment or amusement (Section
458 (a) 4 (vii)). This enumeration therefore cannot be included as among other events or activities for
amusement or entertainment, particularly those which tend to disturb the community or annoy the
inhabitants or certain forms of amusement or entertainment which the City Council may suspend,
suppress or prohibit.
The rule is that the City Council has only such powers as are expressly granted to it and those
which are necessarily implied or incidental to the exercise thereof. By reason of its limited powers and
the nature thereof, said powers are to be construed strictissimi juris and any doubt or ambiguity arising
out of the terms used in granting said powers must be construed against the City Council. [113] Moreover, it
is a general rule in statutory construction that the express mention of one person, thing, or consequence
is tantamount to an express exclusion of all others.Expressio unius est exclusio alterium. This maxim is
based upon the rules of logic and the natural workings of human mind. It is particularly applicable in the
construction of such statutes as create new rights or remedies, impose penalties or punishments, or
otherwise come under the rule of strict construction.[114]
The argument that the City Council is empowered to enact the Ordinance by virtue of the general
welfare clause of the Code and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is likewise without
merit. On the first point, the ruling of the Court in People v. Esguerra,[115] is instructive. It held that:
The powers conferred upon a municipal council in the general welfare clause, or section 2238 of the
Revised Administrative Code, refers to matters not covered by the other provisions of the same Code,
and therefore it cannot be applied to intoxicating liquors, for the power to regulate the selling, giving
away and dispensing thereof is granted specifically by section 2242 (g) to municipal councils. To hold
that, under the general power granted by section 2238, a municipal council may enact the ordinance in
question, notwithstanding the provision of section 2242 (g), would be to make the latter superfluous and
nugatory, because the power to prohibit, includes the power to regulate, the selling, giving away and
dispensing of intoxicating liquors.
On the second point, it suffices to say that the Code being a later expression of the legislative will
must necessarily prevail and override the earlier law, the Revised Charter of Manila. Legis posteriores
priores contrarias abrogant, or later statute repeals prior ones which are repugnant thereto. As between
two laws on the same subject matter, which are irreconcilably inconsistent, that which is passed later
prevails, since it is the latest expression of legislative will. [116] If there is an inconsistency or repugnance
between two statutes, both relating to the same subject matter, which cannot be removed by any fair and
reasonable method of interpretation, it is the latest expression of the legislative will which must prevail
and override the earlier.[117]
Implied repeals are those which take place when a subsequently enacted law contains provisions
contrary to those of an existing law but no provisions expressly repealing them. Such repeals have been
divided into two general classes: those which occur where an act is so inconsistent or irreconcilable with
an existing prior act that only one of the two can remain in force and those which occur when an act
covers the whole subject of an earlier act and is intended to be a substitute therefor. The validity of such
a repeal is sustained on the ground that the latest expression of the legislative will should prevail. [118]
In addition, Section 534(f) of the Code states that All general and special laws, acts, city charters,
decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which
are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly.
Thus, submitting to petitioners interpretation that the Revised Charter of Manila empowers the City
Council to prohibit motels, that portion of the Charter stating such must be considered repealed by the
Code as it is at variance with the latters provisions granting the City Council mere regulatory powers.
It is well to point out that petitioners also cannot seek cover under the general welfare clause
authorizing the abatement of nuisances without judicial proceedings. That tenet applies to a
nuisance per se, or one which affects the immediate safety of persons and property and may be
summarily abated under the undefined law of necessity. It can not be said that motels are injurious to the
rights of property, health or comfort of the community. It is a legitimate business. If it be a nuisance per
accidens it may be so proven in a hearing conducted for that purpose. A motel is not per se a nuisance
warranting its summary abatement without judicial intervention. [119]
Notably, the City Council was conferred powers to prevent and prohibit certain activities and
establishments in another section of the Code which is reproduced as follows:

Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the
legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the
general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper
exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government,
and in this connection, shall:
(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual
drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and maintenance of
houses of ill repute, gambling and other prohibited games of chance, fraudulent devices and ways to
obtain money or property, drug addiction, maintenance of drug dens, drug pushing, juvenile delinquency,
the printing, distribution or exhibition of obscene or pornographic materials or publications, and such
other activities inimical to the welfare and morals of the inhabitants of the city;
If it were the intention of Congress to confer upon the City Council the power to prohibit the
establishments enumerated in Section 1 of the Ordinance, it would have so declared in uncertain terms
by adding them to the list of the matters it may prohibit under the above-quoted Section.
The Ordinance now vainly attempts to lump these establishments with houses of ill-repute and expand
the City Councils powers in the second and third clauses of Section 458 (a) 4 (vii) of the Code in an effort
to overreach its prohibitory powers. It is evident that these establishments may only be regulated in their
establishment, operation and maintenance.
It is important to distinguish the punishable activities from the establishments themselves. That
these establishments are recognized legitimate enterprises can be gleaned from another Section of the
Code. Section 131 under the Title on Local Government Taxation expressly mentioned proprietors or
operators of massage clinics, sauna, Turkish and Swedish baths, hotels, motels and lodging houses as
among the contractors defined in paragraph (h) thereof. The same Section also defined amusement as a
pleasurable diversion and entertainment, synonymous to relaxation, avocation, pastime or fun; and
amusement places to include theaters, cinemas, concert halls, circuses and other places of amusement
where one seeks admission to entertain oneself by seeing or viewing the show or performances. Thus, it
can be inferred that the Code considers these establishments as legitimate enterprises and activities. It
is well to recall the maxim reddendo singula singuliswhich means that words in different parts of a statute
must be referred to their appropriate connection, giving to each in its place, its proper force and effect,
and, if possible, rendering none of them useless or superfluous, even if strict grammatical construction
demands otherwise. Likewise, where words under consideration appear in different sections or are
widely dispersed throughout an act the same principle applies.[120]
Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D.
499. As correctly argued by MTDC, the statute had already converted the residential Ermita-Malate area
into a commercial area. The decree allowed the establishment and operation of all kinds of commercial
establishments except warehouse or open storage depot, dump or yard, motor repair shop, gasoline
service station, light industry with any machinery or funeral establishment. The rule is that for an
ordinance to be valid and to have force and effect, it must not only be within the powers of the council to
enact but the same must not be in conflict with or repugnant to the general law.[121] As succinctly
illustrated inSolicitor General v. Metropolitan Manila Authority:
The requirement that the enactment must not violate existing law explains itself. Local political
subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national
legislature (except only that the power to create their own sources of revenue and to levy taxes is
conferred by the Constitution itself). They are mere agents vested with what is called the power of
subordinate legislation. As delegates of the Congress, the local government units cannot contravene but
must obey at all times the will of their principal. In the case before us, the enactment in question, which
are merely local in origin cannot prevail against the decree, which has the force and effect of a statute.
Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the
rule, it has already been held that although the presumption is always in favor of the validity or
reasonableness of the ordinance, such presumption must nevertheless be set aside when the invalidity
or unreasonableness appears on the face of the ordinance itself or is established by proper evidence.
The exercise of police power by the local government is valid unless it contravenes the fundamental law
of the land, or an act of the legislature, or unless it is against public policy or is unreasonable,
oppressive, partial, discriminating or in derogation of a common right.
Conclusion
All considered, the Ordinance invades fundamental personal and property rights and impairs
personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory

and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses may attend the
enforcement of its sanctions. And not to be forgotten, the City Council under the Code had no power to
enact the Ordinance and is therefore ultra vires, null and void.
Concededly, the challenged Ordinance was enacted with the best of motives and shares the
concern of the public for the cleansing of the Ermita-Malate area of its social sins. Police power
legislation of such character deserves the full endorsement of the judiciary we reiterate our support for it.
But inspite of its virtuous aims, the enactment of the Ordinance has no statutory or constitutional
authority to stand on. Local legislative bodies, in this case, the City Council, cannot prohibit the operation
of the enumerated establishments under Section 1 thereof or order their transfer or conversion without
infringing the constitutional guarantees of due process and equal protection of laws not even under the
guise of police power.
WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court
declaring the Ordinance void is AFFIRMED. Costs against petitioners.
SO ORDERED.

would require the expenditure of a large sum of money in the transfer or removal of the bodies to some
other place or site and in the purchase of such new sites, would involve the destruction of existing
monuments and the erection of new monuments in their stead, and would create irreparable loss and
injury to the defendant and to all those persons owning and interested in the graves and monuments
which would have to be destroyed; that the plaintiff was without right or authority to expropriate said
cemetery or any part or portion thereof for street purposes; and that the expropriation, in fact, was not
necessary as a public improvement.
The defendant Ildefonso Tambunting, answering the petition, denied each and every allegation of the
complaint, and alleged that said expropriation was not a public improvement; that it was not
necessary for the plaintiff to acquire the parcels of land in question; that a portion of the lands in question
was used as a cemetery in which were the graves of his ancestors; that monuments and tombstones of
great value were found thereon; that the land had become quasi-public property of a benevolent
association, dedicated and used for the burial of the dead and that many dead were buried there; that if
the plaintiff deemed it necessary to extend Rizal Avenue, he had offered and still offers to grant a right of
way for the said extension over other land, without cost to the plaintiff, in order that the sepulchers,
chapels and graves of his ancestors may not be disturbed; that the land so offered, free of charge, would
answer every public necessity on the part of the plaintiff.
The defendant Feliza Concepcion de Delgado, with her husband, Jose Maria Delgado, and
each of the other defendants, answering separately, presented substantially the same defense as that
presented by the Comunidad de Chinos de Manila and Ildefonso Tambunting above referred to.
The foregoing parts of the defense presented by the defendants have been inserted in order to
show the general character of the defenses presented by each of the defendants. The plaintiff alleged
that the expropriation was necessary. The defendants each alleged (a) that no necessity existed for said
expropriation and (b) that the land in question was a cemetery, which had been used as such for many
years, and was covered with sepulchres and monuments, and that the same should not be converted
into a street for public purposes.
Upon the issue thus presented by the petition and the various answers, the Honorable
Simplicio del Rosario, judge, in a very elucidated opinion, with very clear and explicit reasons, supported
by ambulance of authorities, decided that there was no necessity for the expropriation of the particular
strip of land in question, and absolved each and all of the defendants from all liability under the
complaint, without any finding as to costs.

EMINENT DOMAIN
G.R. No. L-14355 October 31, 1919 THE CITY OF MANILA, plaintiff-appellant, vs. CHINESE
COMMUNITY OF MANILA, ET AL., defendants-appellees.
The important question presented by this appeal is: In expropriation proceedings by the city of Manila,
may the courts inquire into, and hear proof upon, the necessity of the expropriation?
That question arose in the following manner: On the 11th day of December, 1916, the city of Manila
presented a petition in the Court of First Instance of said city, praying that certain lands, therein
particularly described, be expropriated for the purpose of constructing a public improvement. The
petitioner, in the second paragraph of the petition, alleged:
That for the purpose of constructing a public improvement, namely, the extension of Rizal Avenue,
Manila, it is necessary for the plaintiff to acquire ownership in fee simple of certain parcels of land
situated in the district of Binondo of said city within Block 83 of said district, and within the jurisdiction of
this court.
The defendant, the Comunidad de Chinos de Manila [Chinese Community of Manila], answering the
petition of the plaintiff, alleged that it was a corporation organized and existing under and by virtue of the
laws of the Philippine Islands, having for its purpose the benefit and general welfare of the Chinese
Community of the City of Manila; that it was the owner of parcels one and two of the land described in
paragraph 2 of the complaint; that it denied that it was either necessary or expedient that the said
parcels be expropriated for street purposes; that existing street and roads furnished ample means of
communication for the public in the district covered by such proposed expropriation; that if the
construction of the street or road should be considered a public necessity, other routes were available,
which would fully satisfy the plaintiff's purposes, at much less expense and without disturbing the resting
places of the dead; that it had a Torrens title for the lands in question; that the lands in question had
been used by the defendant for cemetery purposes; that a great number of Chinese were buried in said
cemetery; that if said expropriation be carried into effect, it would disturb the resting places of the dead,

From that judgment the plaintiff appealed and presented the above question as its principal ground of
appeal.
The theory of the plaintiff is, that once it has established the fact, under the law, that it
has authority to expropriate land, it may expropriate any land it may desire; that the only function of the
court in such proceedings is to ascertain the value of the land in question; that neither the court nor the
owners of the land can inquire into the advisible purpose of purpose of the expropriation or ask any
questions concerning the necessities therefor; that the courts are mere appraisers of the land involved in
expropriation proceedings, and, when the value of the land is fixed by the method adopted by the law, to
render a judgment in favor of the defendant for its value.
That the city of Manila has authority to expropriate private lands for public purposes, is not denied.
Section 2429 of Act No. 2711 (Charter of the city of Manila) provides that "the city (Manila) . . . may
condemn private property forpublic use."
The Charter of the city of Manila contains no procedure by which the said authority may be
carried into effect. We are driven, therefore, to the procedure marked out by Act No. 190 to ascertain
how the said authority may be exercised. From an examination of Act No. 190, in its section 241, we
find how the right of eminent domain may be exercised. Said section 241 provides that, "The
Government of the Philippine Islands, or of any province or department thereof, or of any municipality,
and any person, or public or private corporation having, by law, the right to condemn private property for
public use, shall exercise that right in the manner hereinafter prescribed."
Section 242 provides that a complaint in expropriation proceeding shall be presented; that the complaint
shall state with certainty the right of condemnation, with a description of the property sought to be
condemned together with the interest of each defendant separately.

Section 243 provides that if the court shall find upon trial that the right to expropriate the land in question
exists, it shall then appoint commissioners.
Sections 244, 245 and 246 provide the method of procedure and duty of the commissioners. Section 248
provides for an appeal from the judgment of the Court of First Instance to the Supreme Court. Said
section 248 gives the Supreme Court authority to inquire into the right of expropriation on the part of the
plaintiff. If the Supreme Court on appeal shall determine that no right of expropriation existed, it shall
remand the cause to the Court of First Instance with a mandate that the defendant be replaced in the
possession of the property and that he recover whatever damages he may have sustained by reason of
the possession of the plaintiff.
It is contended on the part of the plaintiff that the phrase in said section, "and if the court shall
find the right to expropriate exists," means simply that, if the court finds that there is some
law authorizing the plaintiff to expropriate, then the courts have no other function than to authorize the
expropriation and to proceed to ascertain the value of the land involved; that the necessity for the
expropriation is a legislative and not a judicial question.
Upon the question whether expropriation is a legislative function exclusively, and that the courts cannot
intervene except for the purpose of determining the value of the land in question, there is much legal
legislature. Much has been written upon both sides of that question. A careful examination of the
discussions pro and con will disclose the fact that the decisions depend largely upon particular
constitutional or statutory provisions. It cannot be denied, if the legislature under proper authority should
grant the expropriation of a certain or particular parcel of land for some specified public purpose, that the
courts would be without jurisdiction to inquire into the purpose of that legislation.
If, upon the other hand, however, the Legislature should grant general authority to a municipal
corporation to expropriate private land for public purposes, we think the courts have ample authority in
this jurisdiction, under the provisions above quoted, to make inquiry and to hear proof, upon an issue
properly presented, concerning whether or not the lands were private and whether the purpose was, in
fact, public. In other words, have no the courts in this jurisdiction the right, inasmuch as the questions
relating to expropriation must be referred to them (sec. 241, Act No. 190) for final decision, to ask
whether or not the law has been complied with? Suppose in a particular case, it should be denied that
the property is not private property but public, may not the courts hear proof upon that question? Or,
suppose the defense is, that the purpose of the expropriation is not public but private, or that there exists
no public purpose at all, may not the courts make inquiry and hear proof upon that question?
The city of Manila is given authority to expropriate private lands for public purposes. Can it be
possible that said authority confers the right to determine for itself that the land is private and that the
purpose is public, and that the people of the city of Manila who pay the taxes for its support, especially
those who are directly affected, may not question one or the other, or both, of these questions? Can it be
successfully contended that the phrase used in Act No. 190, "and if the court upon trial shall find that
such right exists," means simply that the court shall examine the statutes simply for the purpose of
ascertaining whether a law exists authorizing the petitioner to exercise the right of eminent domain? Or,
when the case arrives in the Supreme Court, can it be possible that the phrase, "if the Supreme Court
shall determine that no right of expropriation exists," that that simply means that the Supreme Court shall
also examine the enactments of the legislature for the purpose of determining whether or not a law exists
permitting the plaintiff to expropriate?
We are of the opinion that the power of the court is not limited to that question. The right of expropriation
is not an inherent power in a municipal corporation, and before it can exercise the right some law must
exist conferring the power upon it. When the courts come to determine the question, they must only find
(a) that a law or authority exists for the exercise of the right of eminent domain, but (b) also that the right
or authority is being exercised in accordance with the law. In the present case there are two conditions
imposed upon the authority conceded to the City of Manila: First, the land must be private; and, second,
the purpose must be public. If the court, upon trial, finds that neither of these conditions exists or that
either one of them fails, certainly it cannot be contended that the right is being exercised in accordance
with law.

Whether the purpose for the exercise of the right of eminent domain is public, is a question of
fact. Whether the land is public, is a question of fact; and, in our opinion, when the legislature conferred
upon the courts of the Philippine Islands the right to ascertain upon trial whether the right exists for the
exercise of eminent domain, it intended that the courts should inquire into, and hear proof upon, those
questions. Is it possible that the owner of valuable land in this jurisdiction is compelled to stand mute
while his land is being expropriated for a use not public, with the right simply to beg the city of Manila to
pay him the value of his land? Does the law in this jurisdiction permit municipalities to expropriate lands,
without question, simply for the purpose of satisfying the aesthetic sense of those who happen for the
time being to be in authority? Expropriation of lands usually calls for public expense. The taxpayers are
called upon to pay the costs. Cannot the owners of land question the public use or the public necessity?
As was said above, there is a wide divergence of opinion upon the authority of the court to question the
necessity or advisability of the exercise of the right of eminent domain. The divergence is usually found
to depend upon particular statutory or constitutional provisions.
It has been contended and many cases are cited in support of that contention, and section
158 of volume 10 of Ruling Case Law is cited as conclusive that the necessity for taking property
under the right of eminent domain is not a judicial question. But those who cited said section evidently
overlooked the section immediately following (sec. 159), which adds: "But it is obvious that if the property
is taken in the ostensible behalf of a public improvement which it can never by any possibility serve, it is
being taken for a use not public, and the owner's constitutional rights call for protection by the courts.
While many courts have used sweeping expression in the decisions in which they have disclaimed the
power of supervising the power of supervising the selection of the sites of public improvements, it may
be safely said that the courts of the various states would feel bound to interfere to prevent an abuse of
the discretion delegated by the legislature, by an attempted appropriation of land in utter disregard of the
possible necessity of its use, or when the alleged purpose was a cloak to some sinister scheme."
(Norwich City vs. Johnson, 86 Conn., 151; Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544; Wheeling,
etc. R. R. Co. vs. Toledo Ry. etc. Co., 72 Ohio St., 368; State vs. Stewart, 74 Wis., 620.)
Said section 158 (10 R. C. L., 183) which is cited as conclusive authority in support of the contention of
the appellant, says: The legislature, in providing for the exercise of the power of eminent domain, may
directly determine the necessity for appropriating private property for a particular improvement for public
use, and it may select the exact location of the improvement. In such a case, it is well settled that the
utility of the proposed improvement, the extent of the public necessity for its construction, the
expediency of constructing it, the suitableness of the location selected and the consequent necessity of
taking the land selected for its site, are all questions exclusively for the legislature to determine, and the
courts have no power to interfere, or to substitute their own views for those of the representatives of the
people.
Practically every case cited in support of the above doctrine has been examined, and we are
justified in making the statement that in each case the legislature directly determined the necessity for
the exercise of the right of eminent domain in the particular case. It is not denied that if the necessity for
the exercise of the right of eminent domain is presented to the legislative department of the government
and that department decides that there exists a necessity for the exercise of the right in a particular case,
that then and in that case, the courts will not go behind the action of the legislature and make inquiry
concerning the necessity. But, in the case of Wheeling, etc. R. R. Co. vs. Toledo, Ry, etc., Co. (72 Ohio
St., 368 [106 Am. St. rep., 622, 628]), which was cited in support of the doctrine laid down in section 158
above quoted, the court said:
But when the statute does not designate the property to be taken nor how may be taken, then
the necessity of taking particular property is a question for the courts. Where the application to condemn
or appropriate is made directly to the court, the question (of necessity) should be raised and decided in
limene.
The legislative department of the government was rarely undertakes to designate the precise
property which should be taken for public use. It has generally, like in the present case, merely conferred
general authority to take land for public use when a necessity exists therefor. We believe that it can be

confidently asserted that, under such statute, the allegation of the necessity for the appropriation is an
issuable allegation which it is competent for the courts to decide. (Lynch vs. Forbes, 161 Mass., 302 [42
Am. St. Rep., 402, 407].)
There is a wide distinction between a legislative declaration that a municipality is given
authority to exercise the right of eminent domain, and a decision by the municipality that there exist a
necessity for the exercise of that right in a particular case. The first is a declaration simply that there exist
reasons why the right should be conferred upon municipal corporation, while the second is the
application of the right to a particular case. Certainly, the legislative declaration relating to the advisability
of granting the power cannot be converted into a declaration that a necessity exists for its exercise in a
particular case, and especially so when, perhaps, the land in question was not within the territorial
authority was granted. Whether it was wise, advisable, or necessary to confer upon a municipality the
power to exercise the right of eminent domain, is a question with which the courts are not concerned. But
when that right or authority is exercised for the purpose of depriving citizens of their property, the courts
are authorized, in this jurisdiction, to make inquiry and to hear proof upon the necessity in the particular
case, and not the general authority.
Volume 15 of the Cyclopedia of Law and Procedure (Cyc.), page 629, is cited as a further conclusive
authority upon the question that the necessity for the exercise of the right of eminent domain is a
legislative and not a judicial question. Cyclopedia, at the page stated, says:
In the absence of some constitutional or statutory provision to the contrary,
the necessity and expediency of exercising the right of eminent domain are questions essentially political
and not judicial in their character. The determination of those questions (the necessity and the
expediency) belongs to the sovereign power; the legislative department is final and conclusive, and the
courts have no power to review it (the necessity and the expediency) . . . . It (the legislature) may
designate the particular property to be condemned, and its determination in this respect cannot be
reviewed by the courts.
The volume of Cyclopedia, above referred to, cites many cases in support of the doctrine
quoted. While time has not permitted an examination of all of said citations, many of them have been
examined, and it can be confidently asserted that said cases which are cited in support of the assertion
that, "the necessity and expediency of exercising the right of eminent domain are questions essentially
political and not judicial," show clearly and invariably that in each case the legislature itself usually, by a
special law, designated the particular case in which the right of eminent domain might be exercised by
the particular municipal corporation or entity within the state. (Eastern R. Co. vs. Boston, etc., R. Co., 11
Mass., 125 [15 Am. Rep., 13]; Brooklyn Park Com'rs vs. Armstrong, 45 N.Y., 234 [6 Am. Rep., 70];
Hairston vs. Danville, etc. Ry. Co., 208 U. S. 598; Cincinnati vs. Louisville, etc. Ry. Co., 223 U. S., 390;
U.S. vs. Chandler-Dunbar Water Power Co., 229 U. S., 53; U.S. vs. Gettysburg, etc. Co., 160 U. S., 668;
Traction Co. vs. Mining Co., 196 U.S., 239; Sears vs. City of Akron, 246 U.S., 351 [erroneously cited as
242 U.S.].)
In the case of Traction Co. vs. Mining Co. (196 U.S., 239), the Supreme Court of the United
States said: "It is erroneous to suppose that the legislature is beyond the control of the courts in
exercising the power of eminent domain, either as to the nature of the use or the necessity to the use of
any particular property. For if the use be not public or no necessity for the taking exists, the legislature
cannot authorize the taking of private property against the will of the owner, notwithstanding
compensation may be required."
In the case of School Board of Carolina vs. Saldaa (14 Porto Rico, 339, 356), we find the
Supreme Court of Porto Rico, speaking through Justice MacLeary, quoting approvingly the following,
upon the question which we are discussing: "It is well settled that although the legislature must
necessarily determine in the first instance whether the use for which they (municipalities, etc.) attempt to
exercise the power is a public one or not, their (municipalities, etc.) determination is not final, but is
subject to correction by the courts, who may undoubtedly declare the statute unconstitutional, if it shall
clearly appear that the use for which it is proposed to authorize the taking of private property is in reality
not public but private." Many cases are cited in support of that doctrine.

Later, in the same decision, we find the Supreme Court of Porto Rico says: "At any rate, the
rule is quite well settled that in the cases under consideration the determination of the necessity of taking
a particular piece or a certain amount of land rests ultimately with the courts." (Spring Valley etc.
Co. vs. San Mateo, etc. Co., 64 Cal., 123.) .
In the case of Board of Water Com'rs., etc. vs. Johnson (86 Conn., 571 [41 L. R. A., N. S., 1024]), the
Supreme Court of Connecticut approvingly quoted the following doctrine from Lewis on Eminent Domain
(3d ed.), section 599: "In all such cases the necessity of public utility of the proposed work or
improvement is a judicial question. In all such cases, where the authority is to take property necessary
for the purpose, the necessity of taking particular property for a particular purpose is a judicial one, upon
which the owner is entitled to be heard." (Riley vs.Charleston, etc. Co., 71 S. C., 457, 489 [110 Am. St.
Rep., 579]; Henderson vs. Lexington 132 Ky., 390, 403.)
The taking of private property for any use which is not required by the necessities or
convenience of the inhabitants of the state, is an unreasonable exercise of the right of eminent domain,
and beyond the power of the legislature to delegate. (Bennett vs. Marion, 106 Iowa, 628, 633;
Wilson vs. Pittsburg, etc. Co., 222 Pa. St., 541, 545; Greasy, etc. Co. vs. Ely, etc. Co., 132 Ky., 692,
697.) In the case of New Central Coal Co. vs. George's etc. Co. (37 Md., 537, 564), the Supreme Court
of the State of Maryland, discussing the question before us, said: "To justify the exercise of this extreme
power (eminent domain) where the legislature has left it to depend upon the necessity that may be found
to exist, in order to accomplish the purpose of the incorporation, as in this case, the party claiming the
right to the exercise of the power should be required to show at least a reasonable degree of necessity
for its exercise. Any rule less strict than this, with the large and almost indiscriminate delegation of the
right to corporations, would likely lead to oppression and the sacrifice of private right to corporate power."
In the case of Dewey vs. Chicago, etc. Co. (184 Ill., 426, 433), the court said: "Its right to condemn
property is not a general power of condemnation, but is limited to cases where a necessity for resort to
private property is shown to exist. Such necessity must appear upon the face of the petition to condemn.
If the necessary is denied the burden is upon the company (municipality) to establish it." (Highland, etc.
Co. vs. Strickley, 116 Fed., 852, 856; Kiney vs. Citizens' Water & Light Co., 173 Ind., 252, 257 ;
Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544 [137 Am. St. Rep. 338].)
It is true that naby decisions may be found asserting that what is a public use is a legislative
question, and many other decisions declaring with equal emphasis that it is a judicial question. But, as
long as there is a constitutional or statutory provision denying the right to take land for any use other
than a public use, it occurs to us that the question whether any particular use is a public one or not is
ultimately, at least, a judicial question. The legislative may, it is true, in effect declare certain uses to be
public, and, under the operation of the well-known rule that a statute will not be declared to be
unconstitutional except in a case free, or comparatively free, from doubt, the courts will certainly sustain
the action of the legislature unless it appears that the particular use is clearly not of a public nature. The
decisions must be understood with this limitation; for, certainly, no court of last resort will be willing to
declare that any and every purpose which the legislative might happen to designate as a public use shall
be conclusively held to be so, irrespective of the purpose in question and of its manifestly private
character Blackstone in his Commentaries on the English Law remarks that, so great is the regard of the
law for private property that it will not authorize the least violation of it, even for the public good, unless
there exists a very great necessity therefor.
In the case of Wilkinson vs. Leland (2 Pet. [U.S.], 657), the Supreme Court of the United States said:
"That government can scarcely be deemed free where the rights of property are left solely defendant on
the legislative body, without restraint. The fundamental maxims of free government seem to require that
the rights of personal liberty and private property should be held sacred. At least no court of justice in
this country would be warranted in assuming that the power to violate and disregard them a power so
repugnant to the common principles of justice and civil liberty lurked in any general grant of
legislature authority, or ought to be implied from any general expression of the people. The people ought
no to be presumed to part with rights so vital to their security and well-being without very strong and

10

direct expression of such intention." (Lewis on Eminent Domain, sec. 603; Lecoul vs. Police Jury 20 La.
Ann., 308; Jefferson vs. Jazem, 7 La. Ann., 182.)
Blackstone, in his Commentaries on the English Law said that the right to own and possess
land a place to live separate and apart from others to retain it as a home for the family in a way not
to be molested by others is one of the most sacred rights that men are heirs to. That right has been
written into the organic law of every civilized nation. The Acts of Congress of July 1, 1902, and of August
29, 1916, which provide that "no law shall be enacted in the Philippine Islands which shall deprive any
person of his property without due process of law," are but a restatement of the time-honored protection
of the absolute right of the individual to his property. Neither did said Acts of Congress add anything to
the law already existing in the Philippine Islands. The Spaniard fully recognized the principle and
adequately protected the inhabitants of the Philippine Islands against the encroachment upon the private
property of the individual. Article 349 of the Civil Code provides that: "No one may be deprived of his
property unless it be by competent authority, for some purpose of proven public utility, and after payment
of the proper compensation Unless this requisite (proven public utility and payment) has been complied
with, it shall be the duty of the courts to protect the owner of such property in its possession or to restore
its possession to him , as the case may be."
The exercise of the right of eminent domain, whether directly by the State, or by its authorized
agents, is necessarily in derogation of private rights, and the rule in that case is that the authority must
be strictly construed. No species of property is held by individuals with greater tenacity, and none is
guarded by the constitution and laws more sedulously, than the right to the freehold of inhabitants. When
the legislature interferes with that right, and, for greater public purposes, appropriates the land of an
individual without his consent, the plain meaning of the law should not be enlarged by doubtly
interpretation. (Bensely vs. Mountainlake Water Co., 13 Cal., 306 and cases cited [73 Am. Dec., 576].)
The statutory power of taking property from the owner without his consent is one of the most delicate
exercise of government authority. It is to be watched with jealous scrutiny. Important as the power may
be to the government, the inviolable sanctity which all free constitutions attach to the right of property of
the citizens, constrains the strict observance of the substantial provisions of the law which
are prescribed as modes of the exercise of the power, and to protect it from abuse. Not only must the
authority of municipal corporations to take property be expressly conferred and the use for which it is
taken specified, but the power, with all constitutional limitation and directions for its exercise, must be
strictly pursued. (Dillon on Municipal Corporations [5th Ed.], sec. 1040, and cases cited;
Tenorio vs. Manila Railroad Co., 22 Phil., 411.)
It can scarcely be contended that a municipality would be permitted to take property for some
public use unless some public necessity existed therefor. The right to take private property for public use
originates in the necessity, and the taking must be limited by such necessity. The appellant contends that
inasmuch as the legislature has given it general authority to take private property for public use, that the
legislature has, therefore, settled the question of the necessity in every case and that the courts are
closed to the owners of the property upon that question. Can it be imagined, when the legislature
adopted section 2429 of Act No. 2711, that it thereby declared that it was necessary to appropriate the
property of Juan de la Cruz, whose property, perhaps, was not within the city limits at the time the law
was adopted? The legislature, then, not having declared the necessity, can it be contemplated that it
intended that a municipality should be the sole judge of the necessity in every case, and that the courts,
in the face of the provision that "if upon trial they shall find that a right exists," cannot in that trial inquire
into and hear proof upon the necessity for the appropriation in a particular case?
The Charter of the city of Manila authorizes the taking of private property for public use.
Suppose the owner of the property denies and successfully proves that the taking of his property serves
no public use: Would the courts not be justified in inquiring into that question and in finally denying the
petition if no public purpose was proved? Can it be denied that the courts have a right to inquire into that
question? If the courts can ask questions and decide, upon an issue properly presented, whether the use
is public or not, is not that tantamount to permitting the courts to inquire into the necessity of the
appropriation? If there is no public use, then there is no necessity, and if there is no necessity, it is

difficult to understand how a public use can necessarily exist. If the courts can inquire into the question
whether a public use exists or not, then it seems that it must follow that they can examine into the
question of the necessity.
The very foundation of the right to exercise eminent domain is a genuine necessity, and that
necessity must be of a public character. The ascertainment of the necessity must precede or
accompany, and not follow, the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind., 511;
Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72 Ohio St., 368.)
The general power to exercise the right of eminent domain must not be confused with the right to
exercise it in aparticular case. The power of the legislature to confer, upon municipal corporations and
other entities within the State, general authority to exercise the right of eminent domain cannot be
questioned by the courts, but that general authority of municipalities or entities must not be confused
with the right to exercise it in particular instances. The moment the municipal corporation or entity
attempts to exercise the authority conferred, it must comply with the conditions accompanying the
authority. The necessity for conferring the authority upon a municipal corporation to exercise the right of
eminent domain is admittedly within the power of the legislature. But whether or not the municipal
corporation or entity is exercising the right in a particular case under the conditions imposed by the
general authority, is a question which the courts have the right to inquire into.
The conflict in the authorities upon the question whether the necessity for the exercise of the
right of eminent domain is purely legislative and not judicial, arises generally in the wisdom and propriety
of the legislature in authorizing the exercise of the right of eminent domain instead of in the question of
the right to exercise it in a particular case. (Creston Waterworks Co. vs. McGrath, 89 Iowa, 502.)
By the weight of authorities, the courts have the power of restricting the exercise of eminent domain to
the actual reasonable necessities of the case and for the purposes designated by the law.
(Fairchild vs. City of St. Paul. 48 Minn., 540.)
And, moreover, the record does not show conclusively that the plaintiff has definitely decided
that their exists a necessity for the appropriation of the particular land described in the complaint.
Exhibits 4, 5, 7, and E clearly indicate that the municipal board believed at one time that other land might
be used for the proposed improvement, thereby avoiding the necessity of distributing the quiet resting
place of the dead.
Aside from insisting that there exists no necessity for the alleged improvements, the defendants further
contend that the street in question should not be opened through the cemetery. One of the defendants
alleges that said cemetery is public property. If that allegations is true, then, of course, the city of Manila
cannot appropriate it for public use. The city of Manila can only expropriate private property.
It is a well known fact that cemeteries may be public or private. The former is a cemetery used
by the general community, or neighborhood, or church, while the latter is used only by a family, or a small
portion of the community or neighborhood. (11 C. J., 50.)
Where a cemetery is open to public, it is a public use and no part of the ground can be taken for other
public uses under a general authority. And this immunity extends to the unimproved and unoccupied
parts which are held in good faith for future use. (Lewis on Eminent Domain, sec. 434, and cases cited.)
The cemetery in question seems to have been established under governmental authority. The Spanish
Governor-General, in an order creating the same, used the following language:
The cemetery and general hospital for indigent Chinese having been founded and maintained by the
spontaneous and fraternal contribution of their protector, merchants and industrials, benefactors of
mankind, in consideration of their services to the Government of the Islands its internal administration,
government and regime must necessarily be adjusted to the taste and traditional practices of those born
and educated in China in order that the sentiments which animated the founders may be perpetually
effectuated.
It is alleged, and not denied, that the cemetery in question may be used by the general community of
Chinese, which fact, in the general acceptation of the definition of a public cemetery, would make the
cemetery in question public property. If that is true, then, of course, the petition of the plaintiff must be

11

denied, for the reason that the city of Manila has no authority or right under the law to expropriate public
property. But, whether or not the cemetery is public or private property, its appropriation for the uses of a
public street, especially during the lifetime of those specially interested in its maintenance as a cemetery,
should be a question of great concern, and its appropriation should not be made for such purposes until
it is fully established that the greatest necessity exists therefore.
While we do not contend that the dead must not give place to the living, and while it is a matter of public
knowledge that in the process of time sepulchres may become the seat of cities and cemeteries
traversed by streets and daily trod by the feet of millions of men, yet, nevertheless such sacrifices and
such uses of the places of the dead should not be made unless and until it is fully established that there
exists an eminent necessity therefore. While cemeteries and sepulchres and the places of the burial of
the dead are still within the memory and command of the active care of the living; while they are still
devoted to pious uses and sacred regard, it is difficult to believe that even the legislature would adopt a
law expressly providing that such places, under such circumstances, should be violated.
In such an appropriation, what, we may ask, would be the measure of damages at law, for the wounded
sensibilities of the living, in having the graves of kindred and loved ones blotted out and desecrated by a
common highway or street for public travel? The impossibility of measuring the damage and inadequacy
of a remedy at law is too apparent to admit of argument. To disturb the mortal remains of those endeared
to us in life sometimes becomes the sad duty of the living; but, except in cases of necessity, or for
laudable purposes, the sanctity of the grave, the last resting place of our friends, should be maintained,
and the preventative aid of the courts should be invoked for that object. (Railroad
Company vs. Cemetery Co., 116 Tenn., 400; Evergreen Cemetery Associations. The City of New Haven,
43 Conn., 234; Anderson vs. Acheson, 132 Iowa, 744; Beatty vs. Kurtz, 2 Peters, 566.)
In the present case, even granting that a necessity exists for the opening of the street in question, the
record contains no proof of the necessity of opening the same through the cemetery. The record shows
that adjoining and adjacent lands have been offered to the city free of charge, which will answer every
purpose of the plaintiff.
For all of the foregoing, we are fully persuaded that the judgment of the lower court should be and is
hereby affirmed, with costs against the appellant. So ordered.
G.R. No. 107916 February 20, 1997
PERCIVAL MODAY, ZOTICO MODAY (deceased) and LEONORA MODAY, petitioners,
vs.COURT OF APPEALS, JUDGE EVANGELINE S. YUIPCO OF BRANCH 6, REGIONAL TRIAL
COURT, AGUSAN DEL SUR AND MUNICIPALITY OF BUNAWAN, respondents.
The main issue presented in this case is whether a municipality may expropriate private property by
virtue of a municipal resolution which was disapproved by the Sangguniang Panlalawigan. Petitioner
seeks the reversal of the Court of Appeals decision and resolution, promulgated on July 15, 1992 and
October 22, 1992 respectively, 1 and a declaration that Municipal Resolution No. 43-89 of the Bunawan
Sangguniang Bayan is null and void.
On July 23, 1989, the Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed
Resolution No. 43-89, "Authorizing the Municipal Mayor to Initiate the Petition for Expropriation of a One
(1) Hectare Portion of Lot No. 6138-Pls-4 Along the National Highway Owned by Percival Moday for the
Site of Bunawan Farmers Center and Other Government Sports Facilities." 2
In due time, Resolution No. 43-89 was approved by then Municipal Mayor Anuncio C. Bustillo and
transmitted to the Sangguniang Panlalawigan for its approval. On September 11, 1989, the Sangguniang
Panlalawigan disapproved said Resolution and returned it with the comment that "expropriation is
unnecessary considering that there are still available lots in Bunawan for the establishment of the
government center." 3
The Municipality of Bunawan, herein public respondent, subsequently filed a petition for Eminent Domain
against petitioner Percival Moday before the Regional Trial Court at Prosperidad, Agusan del Sur. 4 The

complaint was later amended to include the registered owners, Percival Moday's parents, Zotico and
Leonora Moday, as party defendants.
On March 6, 1991, public respondent municipality filed a Motion to Take or Enter Upon the Possession of
Subject Matter of This Case stating that it had already deposited with the municipal treasurer the
necessary amount in accordance with Section 2, Rule 67 of the Revised Rules of Court and that it would
be in the government's best interest for public respondent to be allowed to take possession of the
property.
Despite petitioners' opposition and after a hearing on the merits, the Regional Trial Court granted
respondent municipality's motion to take possession of the land. The lower court held that the
Sangguniang Panlalawigan's failure to declare the resolution invalid leaves it effective. It added that the
duty of the Sangguniang Panlalawigan is merely to review the ordinances and resolutions passed by the
Sangguniang Bayan under Section 208 (1) of B.P. Blg. 337, old Local Government Code and that the
exercise of eminent domain is not one of the two acts enumerated in Section 19 thereof requiring the
approval of the Sangguniang Panlalawigan. 5 The dispositive portion of the lower court's Order dated
July 2, 1991 reads:
WHEREFORE, it appearing that the amount of P632.39 had been deposited as per Official Receipt
No. 5379647 on December 12, 1989 which this Court now determines as the provisional value of
the land, the Motion to Take or Enter Upon the Possession of the Property filed by petitioner
through counsel is hereby GRANTED. The Sheriff of this Court is ordered to forthwith place the
plaintiff in possession of the property involved.
Let the hearing be set on August 9, 1991 at 8:30 o'clock in the morning for the purpose of
ascertaining the just compensation or fair market value of the property sought to be taken, with
notice to all the parties concerned.
SO ORDERED. 6
Petitioners' motion for reconsideration was denied by the trial court on October 31, 1991.
Petitioners elevated the case in a petition for certiorari alleging grave abuse of discretion on the part of
the trial court, but the same was dismissed by respondent appellate court on July 15, 1992. 7 The Court
of Appeals held that the public purpose for the expropriation is clear from Resolution No. 43-89 and that
since the Sangguniang Panlalawigan of Agusan del Sur did not declare Resolution No. 43-89 invalid,
expropriation of petitioners' property could proceed.
Respondent appellate court also denied petitioners' motion for reconsideration on October 22, 1992. 8
Meanwhile, the Municipality of Bunawan had erected three buildings on the subject property: the
Association of Barangay Councils (ABC) Hall, the Municipal Motorpool, both wooden structures, and the
Bunawan Municipal Gymnasium, which is made of concrete.
In the instant petition for review filed on November 23, 1992, petitioner seeks the reversal of the decision
and resolution of the Court of Appeals and a declaration that Resolution No. 43-89 of the Municipality of
Bunawan is null and void.
On December 8, 1993, the Court issued a temporary restraining order enjoining and restraining public
respondent Judge Evangeline Yuipco from enforcing her July 2, 1991 Order and respondent municipality
from using and occupying all the buildings constructed and from further constructing any building on the
land subject of this petition. 9
Acting on petitioners' Omnibus Motion for Enforcement of Restraining Order and for Contempt, the Court
issued a Resolution on March 15, 1995, citing incumbent municipal mayor Anuncio C. Bustillo for
contempt, ordering him to pay the fine and to demolish the "blocktiendas" which were built in violation of
the restraining order. 10
Former Mayor Anuncio C. Bustillo paid the fine and manifested that he lost in the May 8, 1995
election. 11 The incumbent Mayor Leonardo Barrios, filed a Manifestation, Motion to Resolve "Urgent
Motion for Immediate Dissolution of the Temporary Restraining Order" and Memorandum on June 11,
1996 for the Municipality of Bunawan. 12
Petitioners contend that the Court of Appeals erred in upholding the legality of the condemnation
proceedings initiated by the municipality. According to petitioners, the expropriation was politically
motivated and Resolution No. 43-89 was correctly disapproved by the Sangguniang Panlalawigan, there

12

being other municipal properties available for the purpose. Petitioners also pray that the former Mayor
Anuncio C. Bustillo be ordered to pay damages for insisting on the enforcement of a void municipal
resolution.
The Court of Appeals declared that the Sangguniang Panlalawigan's reason for disapproving the
resolution "could be baseless, because it failed to point out which and where are those available lots.'"
Respondent court also concluded that since the Sangguniang Panlalawigan did not declare the
municipal board's resolution as invalid, expropriation of petitioners' property could
proceed. 13
The Court finds no merit in the petition and affirms the decision of the Court of Appeals.
Eminent domain, the power which the Municipality of Bunawan exercised in the instant case, is a
fundamental State power that is inseparable from sovereignty. 14 It is government's right to appropriate,
in the nature of a compulsory sale to the State, private property for public use or purpose. 15 Inherently
possessed by the national legislature, the power of eminent domain may be validly delegated to local
governments, other public entities and public utilities. 16 For the taking of private property by the
government to be valid, the taking must be for public use and there must be just compensation. 17
The Municipality of Bunawan's power to exercise the right of eminent domain is not disputed as it is
expressly provided for in Batas Pambansa Blg. 337, the local Government Code 18 in force at the time
expropriation proceedings were initiated. Section 9 of said law states:
Sec. 9. Eminent Domain. A local government unit may, through its head and acting pursuant to
a resolution of its sanggunian, exercise the right of eminent domain and institute condemnation
proceedings for public use or purpose.
What petitioners question is the lack of authority of the municipality to exercise this right since the
Sangguniang Panlalawigan disapproved Resolution No. 43-89.
Section 153 of B.P. Blg. 337 provides:
Sec. 153. Sangguniang Panlalawigan Review. (1) Within thirty days after receiving copies of
approved ordinances, resolutions and executive orders promulgated by the municipal mayor, the
sangguniang panlalawigan shall examine the documents or transmit them to the provincial
attorney, or if there be none, to the provincial fiscal, who shall examine them promptly and inform
the sangguniang panlalawigan in writing of any defect or impropriety which he may discover
therein and make such comments or recommendations as shall appear to him proper.
(2) If the sangguniang panlalawigan shall find that any municipal ordinance, resolution or
executive order is beyond the power conferred upon the sangguniang bayan or the mayor, it shall
declare such ordinance, resolution or executive order invalid in whole or in part, entering its
actions upon the minutes and advising the proper municipal authorities thereof. The effect of
such an action shall be to annul the ordinance, resolution or executive order in question in whole
or in part. The action of the sangguniang panlalawigan shall be final.
The Sangguniang Panlalawigan's disapproval of Municipal Resolution No. 43-89 is an infirm action which
does not render said resolution null and void. The law, as expressed in Section 153 of B.P. Blg. 337,
grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole
ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue. Although pertaining
to a similar provision of law but different factual milieu then obtaining, the Court's pronouncements
in Velazco v. Blas, 19 where we cited significant early jurisprudence, are applicable to the case at bar.
The only ground upon which a provincial board may declare any municipal resolution, ordinance,
or order invalid is when such resolution, ordinance, or order is "beyond the powers conferred
upon the council or president making the same." Absolutely no other ground is recognized by
the law. A strictly legal question is before the provincial board in its consideration of a municipal
resolution, ordinance, or order. The provincial (board's) disapproval of any resolution, ordinance,
or order must be premised specifically upon the fact that such resolution, ordinance, or order is
outside the scope of the legal powers conferred by law. If a provincial board passes these limits,
it usurps the legislative function of the municipal council or president. Such has been the
consistent course of executive authority.

Thus, the Sangguniang Panlalawigan was without the authority to disapprove Municipal Resolution No.
43-89 for the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and
its Sangguniang Bayan the capacity to promulgate said resolution, pursuant to the earlier-quoted Section
9 of B.P. Blg. 337. Perforce, it follows that Resolution No. 43-89 is valid and binding and could be used
as lawful authority to petition for the condemnation of petitioners' property.
As regards the accusation of political oppression, it is alleged that Percival Moday incurred the ire of then
Mayor Anuncio C. Bustillo when he refused to support the latter's candidacy for mayor in previous
elections. Petitioners claim that then incumbent Mayor C. Bustillo used the expropriation to retaliate by
expropriating their land even if there were other properties belonging to the municipality and available for
the purpose. Specifically, they allege that the municipality owns a vacant seven-hectare property
adjacent to petitioners' land, evidenced by a sketch plan. 21
The limitations on the power of eminent domain are that the use must be public, compensation must be
made and due process of law must be
observed. 22 The Supreme Court, taking cognizance of such issues as the adequacy of compensation,
necessity of the taking and the public use character or the purpose of the taking, 23 has ruled that the
necessity of exercising eminent domain must be genuine and of a public character. 24 Government may
not capriciously choose what private property should be taken.
After a careful study of the records of the case, however, we find no evidentiary support for petitioners'
allegations. The uncertified photocopy of the sketch plan does not conclusively prove that the
municipality does own vacant land adjacent to petitioners' property suited to the purpose of the
expropriation. In the questioned decision, respondent appellate court similarly held that the pleadings
and documents on record have not pointed out any of respondent municipality's "other available
properties available for the same purpose." 25 The accusations of political reprisal are likewise
unsupported by competent evidence. Consequently, the Court holds that petitioners' demand that the
former municipal mayor be personally liable for damages is without basis.
WHEREFORE, the instant petition is hereby DENIED. The questioned Decision and Resolution of the
Court of Appeals in the case of "Percival Moday." et al. v. Municipality of Bunawan, et al." (CA G.R. SP
No. 26712) are AFFIRMED. The Temporary Restraining Order issued by the Court on December 8, 1993
is LIFTED.
SO ORDERED.

MUNICIPALITY OF PARAAQUE, petitioner, vs. V.M. REALTY CORPORATION, respondent.

A local government unit (LGU), like the Municipality of Paraaque, cannot authorize an expropriation of
private property through a mere resolution of its lawmaking body. The Local Government Code expressly

13

and clearly requires an ordinance or a local law for the purpose. A resolution that merely expresses the
sentiment or opinion of the Municipal Council will not suffice. On the other hand, the principle of res
judicatadoes not bar subsequent proceedings for the expropriation of the same property when all the
legal requirements for its valid exercise are complied with.
Statement of the Case
These principles are applied by this Court in resolving this petition for review on certiorari of the July 22,
1996 Decision[1] of the Court of Appeals[2] in CA GR CV No. 48048, which affirmed in toto[3] the Regional
Trial Courts August 9, 1994 Resolution.[4] The trial court dismissed the expropriation suit as follows:
The right of the plaintiff to exercise the power of eminent domain is not disputed. However, such right
may be exercised only pursuant to an Ordinance (Sec. 19, R.A. No. 7160). In the instant case, there is
no such ordinance passed by the Municipal Council of Paraaque enabling the Municipality, thru its Chief
Executive, to exercise the power of eminent domain. The complaint, therefore, states no cause of action.
Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On September 29,
1987, the plaintiff filed a complaint for expropriation involving the same parcels of land which was
docketed as Civil Case No. 17939 of this Court (page 26, record). Said case was dismissed with
prejudice on May 18, 1988 (page 39, record). The order of dismissal was not appealed, hence, the same
became final. The plaintiff can not be allowed to pursue the present action without violating the principle
of [r]es [j]udicata. While defendant in Civil Case No. 17939 was Limpan Investment Corporation, the
doctrine of res judicata still applies because the judgment in said case (C.C. No. 17939) is conclusive
between the parties and their successors-in-interest (Vda. de Buncio vs. Estate of the late Anita de
Leon). The herein defendant is the successor-in-interest of Limpan Investment Corporation as shown by
the Deed of Assignment Exchange executed on June 13, 1990.
WHEREFORE, defendants motion for reconsideration is hereby granted. The order dated February 4,
1994 is vacated and set aside.This case is hereby dismissed. No pronouncement as to costs. SO
ORDERED.[5]
Factual Antecedents
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993,[6] the Municipality of Paraaque
filed on September 20, 1993, a Complaint for expropriation [7] against Private Respondent V.M. Realty
Corporation over two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a
combined area of about 10,000 square meters, located at Wakas, San Dionisio, Paraaque, Metro Manila,
and coveredby Torrens Certificate of Title No. 48700. Allegedly, the complaint was filed for the purpose
of alleviating the living conditions of theunderprivileged by providing homes for the homeless through a
socialized housing project.[8] Parenthetically, it was also for this stated purpose that petitioner, pursuant to
its Sangguniang Bayan Resolution No. 577, Series of 1991, [9] previously made an offer to enter into a
negotiated sale of the property with private respondent, which the latter did not accept.[10]
Finding the Complaint sufficient in form and substance, the Regional Trial Court of Makati, Branch
134, issued an Order dated January 10, 1994,[11] giving it due course. Acting on petitioners motion, said
court issued an Order dated February 4, 1994,[12] authorizing petitioner to take possession of the subject
property upon deposit with its clerk of court of an amount equivalent to 15 percent of its fair market value
based on its current tax declaration.
On February 21, 1994, private respondent filed its Answer containing affirmative defenses and a
counterclaim,[13] alleging in the main that (a) the complaint failed to state a cause of action because it
was filed pursuant to a resolution and not to an ordinance as required by RA 7160 (the Local
Government Code); and (b) the cause of action, if any, was barred by a prior judgment or res
judicata. On private respondents motion, its Answer was treated as a motion to dismiss. [14] On March 24,
1994,[15] petitioner filed its opposition, stressing that the trial courts Order dated February 4, 1994 was in
accord with Section 19 of RA 7160, and that the principle of res judicata was not applicable.
Thereafter, the trial court issued its August 9, 1994 Resolution [16] nullifying its February 4, 1994
Order and dismissing the case. Petitioners motions for reconsideration and transfer of venue were

denied by the trial court in a Resolution dated December 2, 1994. [17] Petitioner then appealed to
Respondent Court, raising the following issues:
1.

2.
3.
4.

Whether or not the Resolution of the Paraaque Municipal Council No. 93-95, Series of 1993 is a
substantial compliance of the statutory requirement of Section 19, R.A. 7180 [sic] in the exercise of
the power of eminent domain by the plaintiff-appellant.
Whether or not the complaint in this case states no cause of action.
Whether or not the strict adherence to the literal observance to the rule of procedure resulted in
technicality standing in the way of substantial justice.
Whether or not the principle of res judicata is applicable to the present case.[18]

As previously mentioned, the Court of Appeals affirmed in toto the trial courts Decision. Respondent
Court, in its assailed Resolution promulgated on January 8, 1997, [19] denied petitioners Motion for
Reconsideration for lack of merit. Hence, this appeal
The Issues
Before this Court, petitioner posits two issues, viz.:
1.
2.

A resolution duly approved by the municipal council has the same force and effect of an ordinance
and will not deprive an expropriation case of a valid cause of action.
The principle of res judicata as a ground for dismissal of case is not applicable when public interest
is primarily involved

The Courts Ruling

The petition is not meritorious.
First Issue: Resolution Different from an Ordinance
Petitioner contends that a resolution approved by the municipal council for the purpose of initiating an
expropriation case substantially complies with the requirements of the law[22] because the terms
ordinance and resolution are synonymous for the purpose of bestowing authority [on] the local
government unit through its chief executive to initiate the expropriation proceedings in court in the
exercise of the power of eminent domain.[23] Petitioner seeks to bolster this contention by citing Article 36,
Rule VI of the Rules and Regulations Implementing the Local Government Code, which provides: If the
LGU fails to acquire a private property for public use, purpose, or welfare through purchase, the LGU
may expropriate said property through a resolution of the Sanggunian authorizing its chief executive to
initiate expropriation proceedings.[24](Italics supplied.)
The Court disagrees. The power of eminent domain is lodged in the legislative branch of government,
which may delegate the exercise thereof to LGUs, other public entities and public utilities. [25] An LGU
may therefore exercise the power to expropriate private property only when authorized by Congress and
subject to the latters control and restraints, imposed through the law conferring the power or in other
legislations.[26]In this case, Section 19 of RA 7160, which delegates to LGUs the power of eminent
domain, also lays down the parameters for its exercise. It provides as follows:
Section 19. Eminent Domain. A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare
for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain
may not be exercised unless a valid and definite offer has been previously made to the owner, and such
offer was not accepted: Provided, further, That the local government unit may immediately take
possession of the property upon the filing of the expropriation proceedings and upon making a deposit
with the proper court of at least fifteen percent (15%) of the fair market value of the property based on

14

the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to be
paid for the expropriated property shall be determined by the proper court, based on the fair market
value at the time of the taking of the property. (Emphasis supplied)
Thus, the following essential requisites must concur before an LGU can exercise the power of eminent
domain:
1.

2.
3.
4.

An ordinance is enacted by the local legislative council authorizing the local chief
executive, in behalf of the LGU, to exercise the power of eminent domain or
pursue expropriation proceedings over a particular private property.
The power of eminent domain is exercised for public use, purpose or welfare, or
for the benefit of the poor and the landless.
There is payment of just compensation, as required under Section 9, Article III of
the Constitution, and other pertinent laws.
A valid and definite offer has been previously made to the owner of the property
sought to be expropriated, but said offer was not accepted.[27]

In the case at bar, the local chief executive sought to exercise the power of eminent domain
pursuant to a resolution of the municipal council.Thus, there was no compliance with the first requisite
that the mayor be authorized through an ordinance. Petitioner cites Camarines Sur vs. Court of
Appeals[28] to show that a resolution may suffice to support the exercise of eminent domain by an LGU.
[29]
This case, however, is not in point because the applicable law at that time was BP 337, [30] the previous
Local Government Code, which had provided that a mere resolution would enable an LGU to exercise
eminent domain. In contrast, RA 7160,[31] the present Local Government Code which was already in force
when the Complaint for expropriation was filed, explicitly required an ordinance for this purpose. We are
not convinced by petitioners insistence that the terms resolution and ordinance are synonymous. A
municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely a
declaration of the sentiment or opinion of a lawmaking body on a specific matter. [32] An ordinance
possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the
two are enacted differently -- a third reading is necessary for an ordinance, but not for a resolution,
unless decided otherwise by a majority of all the Sanggunianmembers.[33]
If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it
would have simply adopted the language of the previous Local Government Code. But Congress did
not. In a clear divergence from the previous Local Government Code, Section 19 of RA 7160
categorically requires that the local chief executive act pursuant to an ordinance. Indeed, [l]egislative
intent is determined principally from the language of a statute. Where the language of a statute is clear
and unambiguous, the law is applied according to its express terms, and interpretation would be resorted
to only where a literal interpretation would be either impossible or absurd or would lead to an injustice.
[34]
In the instant case, there is no reason to depart from this rule, since the law requiring an ordinance is
not at all impossible, absurd, or unjust.
Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or
private right of the people.[35] Accordingly, the manifest change in the legislative language -- from
resolution under BP 337 to ordinance under RA 7160 -- demands a strict construction. No species of
property is held by individuals with greater tenacity, and is guarded by the Constitution and laws more
sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right
and, for greater public purposes, appropriates the land of an individual without his consent, the plain
meaning of the law should not be enlarged by doubtful interpretation.[36]
Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution
to authorize an LGU to exercise eminent domain. This is clearly misplaced, because Section 19 of RA
7160, the law itself, surely prevails over said rule which merely seeks to implement it. [37] It is axiomatic
that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued
for its implementation. Besides, what the discrepancy seems to indicate is a mere oversight in the

wording of the implementing rules, since Article 32, Rule VI thereof, also requires that, in exercising the
power of eminent domain, the chief executive of the LGU must act pursuant to an ordinance.
In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of the
Constitution, which provides that territorial and political subdivisions shall enjoy local autonomy. It merely
upholds the law as worded in RA 7160. We stress that an LGU is created by law and all its powers and
rights are sourced therefrom. It has therefore no power to amend or act beyond the authority given and
the limitations imposed on it by law. Strictly speaking, the power of eminent domain delegated to an LGU
is in reality not eminent but inferior domain, since it must conform to the limits imposed by the delegation,
and thus partakes only of a share in eminent domain. [38] Indeed, the national legislature is still the
principal of the local government units, which cannot defy its will or modify or violate it.[39]
Complaint Does Not State a Cause of Action
In its Brief filed before Respondent Court, petitioner argues that its Sanguniang Bayan passed an
ordinance on October 11, 1994 which reiterated its Resolution No. 93-35, Series of 1993, and ratified all
the acts of its mayor regarding the subject expropriation.[40]
This argument is bereft of merit. In the first place, petitioner merely alleged the existence of such
an ordinance, but it did not present any certified true copy thereof. In the second place, petitioner did not
raise this point before this Court. In fact, it was mentioned by private respondent, and only in passing.
[41]
In any event, this allegation does not cure the inherent defect of petitioners Complaint for
expropriation filed on September 23, 1993. It is hornbook doctrine that: in a motion to dismiss based on
the ground that the complaint fails to state a cause of action, the question submitted before the court for
determination is the sufficiency of the allegations in the complaint itself. Whether those allegations are
true or not is beside the point, for their truth is hypothetically admitted by the motion.The issue rather is:
admitting them to be true, may the court render a valid judgment in accordance with the prayer of the
complaint?[42]
The fact that there is no cause of action is evident from the face of the Complaint for expropriation
which was based on a mere resolution. The absence of an ordinance authorizing the same is equivalent
to lack of cause of action. Consequently, the Court of Appeals committed no reversible error in affirming
the trial courts Decision which dismissed the expropriation suit.
Second Issue: Eminent Domain Not Barred by Res Judicata
As correctly found by the Court of Appeals[43] and the trial court,[44] all the requisites for the
application of res judicata are present in this case. There is a previous final judgment on the merits in a
prior expropriation case involving identical interests, subject matter and cause of action, which has been
rendered by a court having jurisdiction over it.
Be that as it may, the Court holds that the principle of res judicata, which finds application in
generally all cases and proceedings, [45] cannot bar the right of the State or its agent to expropriate private
property. The very nature of eminent domain, as an inherent power of the State, dictates that the right to
exercise the power be absolute and unfettered even by a prior judgment or res judicata. The scope of
eminent domain is plenary and, like police power, can reach every form of property which the State might
need for public use.[46] All separate interests of individuals in property are held of the government under
this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain,
the highest and most exact idea of property, remains in the government, or in the aggregate body of the
people in their sovereign capacity; and they have the right to resume the possession of the property
whenever the public interest requires it. [47] Thus, the State or its authorized agent cannot be forever
barred from exercising said right by reason alone of previous non-compliance with any legal
requirement.
While the principle of res judicata does not denigrate the right of the State to exercise eminent
domain, it does apply to specific issues decided in a previous case. For example, a final judgment
dismissing an expropriation suit on the ground that there was no prior offer precludes another suit raising
the same issue; it cannot, however, bar the State or its agent from thereafter complying with this
requirement, as prescribed by law, and subsequently exercising its power of eminent domain over the

15

same property.[48] By the same token, our ruling that petitioner cannot exercise its delegated power of
eminent domain through a mere resolution will not bar it from reinstituting similar proceedings, once the
said legal requirement and, for that matter, all others are properly complied with. Parenthetically and by
parity of reasoning, the same is also true of the principle of law of the case. In Republic vs De Knecht,
[49]
the Court ruled that the power of the State or its agent to exercise eminent domain is not diminished
by the mere fact that a prior final judgment over the property to be expropriated has become the law of
the case as to the parties. The State or its authorized agent may still subsequently exercise its right to
expropriate the same property, once all legal requirements are complied with. To rule otherwise will not
only improperly diminish the power of eminent domain, but also clearly defeat social justice.
WHEREFORE, the petition is hereby DENIED without prejudice to petitioners proper exercise of its
power of eminent domain over subject property. Costs against petitioner.
SO ORDERED.

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs.

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, defendant-appellant.
Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the dismissal,
after hearing, by the Court of First Instance of Manila, in its Civil Case No. 35805, of their respective
complaint and counterclaims, but making permanent a preliminary mandatory injunction theretofore
issued against the defendant on the interconnection of telephone facilities owned and operated by said
parties.
The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers through its
branches and instrumentalities, one of which is the Bureau of Telecommunications. That office was
created on 1 July 1947, under Executive Order No. 94, with the following powers and duties, in addition
to certain powers and duties formerly vested in the Director of Posts: 1awphil.t
SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties:
a) To operate and maintain existing wire-telegraph and radio-telegraph offices, stations, and facilities,
and those to be established to restore the pre-war telecommunication service under the Bureau of
Posts, as well as such additional offices or stations as may hereafter be established to provide
telecommunication service in places requiring such service;
b) To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio telephone
communication service throughout the Philippines by utilizing such existing facilities in cities, towns,
and provinces as may be found feasible and under such terms and conditions or arrangements with
the present owners or operators thereof as may be agreed upon to the satisfaction of all concerned;
c) To prescribe, subject to approval by the Department Head, equitable rates of charges for messages
handled by the system and/or for time calls and other services that may be rendered by said
system;
d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when public
interest so requires, to engage in the international telecommunication service in agreement with
other countries desiring to establish such service with the Republic of the Philippines; and

e)

To abide by all existing rules and regulations prescribed by the International Telecommunication
Convention relative to the accounting, disposition and exchange of messages handled in the
international service, and those that may hereafter be promulgated by said convention and adhered
to by the Government of the Republic of the Philippines. 1
The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service
corporation holding a legislative franchise, Act 3426, as amended by Commonwealth Act 407, to install,
operate and maintain a telephone system throughout the Philippines and to carry on the business of
electrical transmission of messages within the Philippines and between the Philippines and the
telephone systems of other countries. 2 The RCA Communications, Inc., (which is not a party to the
present case but has contractual relations with the parties) is an American corporation authorized to
transact business in the Philippines and is the grantee, by assignment, of a legislative franchise to
operate a domestic station for the reception and transmission of long distance wireless messages (Act
2178) and to operate broadcasting and radio-telephone and radio-telegraphic communications services
(Act 3180). 3
Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an
agreement whereby telephone messages, coming from the United States and received by RCA's
domestic station, could automatically be transferred to the lines of PLDT; and vice-versa, for calls
collected by the PLDT for transmission from the Philippines to the United States. The contracting parties
agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was amended in 1941
to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis. The arrangement was
later extended to radio-telephone messages to and from European and Asiatic countries. Their contract
contained a stipulation that either party could terminate it on a 24-month notice to the other. 4 On 2
February 1956, PLDT gave notice to RCA to terminate their contract on 2 February 1958. 5
Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government
Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the
PLDT to enable government offices to call private parties. 6 Its application for the use of these trunk lines
was in the usual form of applications for telephone service, containing a statement, above the signature
of the applicant, that the latter will abide by the rules and regulations of the PLDT which are on file with
the Public Service Commission. 7 One of the many rules prohibits the public use of the service furnished
the telephone subscriber for his private use. 8 The Bureau has extended its services to the general public
since 1948, 9 using the same trunk lines owned by, and rented from, the PLDT, and prescribing its (the
Bureau's) own schedule of rates. 10 Through these trunk lines, a Government Telephone System (GTS)
subscriber could make a call to a PLDT subscriber in the same way that the latter could make a call to
the former.
On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an agreement
with RCA Communications, Inc., for a joint overseas telephone service whereby the Bureau would
convey radio-telephone overseas calls received by RCA's station to and from local residents. 11 Actually,
they inaugurated this joint operation on 2 February 1958, under a "provisional" agreement. 12
On 7 April 1958, the defendant Philippine Long Distance Telephone Company, complained to the
Bureau of Telecommunications that said bureau was violating the conditions under which their Private
Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented trunk lines,
for the Bureau had used the trunk lines not only for the use of government offices but even to serve
private persons or the general public, in competition with the business of the PLDT; and gave notice that
if said violations were not stopped by midnight of 12 April 1958, the PLDT would sever the telephone
connections. 13 When the PLDT received no reply, it disconnected the trunk lines being rented by the
Bureau at midnight on 12 April 1958. 14 The result was the isolation of the Philippines, on telephone
services, from the rest of the world, except the United States. 15
At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for
telephone connection. 16 The PLDT was also maintaining 60,000 telephones and had also 20,000
pending applications. 17Through the years, neither of them has been able to fill up the demand for
telephone service.

16

The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter into
an interconnecting agreement, with the government paying (on a call basis) for all calls passing through
the interconnecting facilities from the Government Telephone System to the PLDT. 18 The PLDT replied
that it was willing to enter into an agreement on overseas telephone service to Europe and Asian
countries provided that the Bureau would submit to the jurisdiction and regulations of the Public Service
Commission and in consideration of 37 1/2% of the gross revenues. 19 In its memorandum in lieu of oral
argument in this Court dated 9 February 1964, on page 8, the defendant reduced its offer to 33 1/3 %
(1/3) as its share in the overseas telephone service. The proposals were not accepted by either party.
On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long Distance
Telephone Company, in the Court of First Instance of Manila (Civil Case No. 35805), praying in its
complaint for judgment commanding the PLDT to execute a contract with plaintiff, through the Bureau,
for the use of the facilities of defendant's telephone system throughout the Philippines under such terms
and conditions as the court might consider reasonable, and for a writ of preliminary injunction against the
defendant company to restrain the severance of the existing telephone connections and/or restore those
severed.
Acting on the application of the plaintiff, and on the ground that the severance of telephone connections
by the defendant company would isolate the Philippines from other countries, the court a quo, on 14 April
1958, issued an order for the defendant:
1. to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has disconnected
between the facilities of the Government Telephone System, including its overseas telephone
services, and the facilities of defendant;
2. to refrain from carrying into effect its threat to sever the existing telephone communication between
the Bureau of Telecommunications and defendant, and not to make connection over its telephone
system of telephone calls coming to the Philippines from foreign countries through the said
Bureau's telephone facilities and the radio facilities of RCA Communications, Inc.; and
3. to accept and connect through its telephone system all such telephone calls coming to the
Philippines from foreign countries until further order of this Court.
On 28 April 1958, the defendant company filed its answer, with counterclaims.
It denied any obligation on its part to execute a contrary of services with the Bureau of
Telecommunications; contested the jurisdiction of the Court of First Instance to compel it to enter into
interconnecting agreements, and averred that it was justified to disconnect the trunk lines heretofore
leased to the Bureau of Telecommunications under the existing agreement because its facilities were
being used in fraud of its rights. PLDT further claimed that the Bureau was engaging in commercial
telephone operations in excess of authority, in competition with, and to the prejudice of, the PLDT, using
defendants own telephone poles, without proper accounting of revenues.
After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties were not in agreement; that under Executive Order 94,
establishing the Bureau of Telecommunications, said Bureau was not limited to servicing government
offices alone, nor was there any in the contract of lease of the trunk lines, since the PLDT knew, or ought
to have known, at the time that their use by the Bureau was to be public throughout the Islands, hence
the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and, in view of serious
public prejudice that would result from the disconnection of the trunk lines, declared the preliminary
injunction permanent, although it dismissed both the complaint and the counterclaims.
Both parties appealed.
Taking up first the appeal of the Republic, the latter complains of the action of the trial court in
dismissing the part of its complaint seeking to compel the defendant to enter into an interconnecting
contract with it, because the parties could not agree on the terms and conditions of the interconnection,
and of its refusal to fix the terms and conditions therefor.
We agree with the court below that parties can not be coerced to enter into a contract where no
agreement is had between them as to the principal terms and conditions of the contract. Freedom to
stipulate such terms and conditions is of the essence of our contractual system, and by express
provision of the statute, a contract may be annulled if tainted by violence, intimidation, or undue influence

(Articles 1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has apparently overlooked
that while the Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in the
exercise of the sovereign power of eminent domain, require the telephone company to permit
interconnection of the government telephone system and that of the PLDT, as the needs of the
government service may require, subject to the payment of just compensation to be determined by the
court. Nominally, 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 the 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. The use of the PLDT's lines and services to allow inter-service connection
between both telephone systems is not much different. In either case private property is subjected to a
burden for public use and benefit. If, under section 6, Article XIII, of the Constitution, the State may, in
the interest of national welfare, transfer utilities to public ownership upon payment of just compensation,
there is no reason why the State may not require a public utility to render services in the general interest,
provided just compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service
would be the users of both telephone systems, so that the condemnation would be for public use.
The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94, may operate and
maintain wire telephone or radio telephone communications throughout the Philippines by utilizing
existing facilities in cities, towns, and provinces under such terms and conditions or arrangement with
present owners or operators as may be agreed upon to the satisfaction of all concerned; but there is
nothing in this section that would exclude resort to condemnation proceedings where unreasonable or
unjust terms and conditions are exacted, to the extent of crippling or seriously hampering the operations
of said Bureau.
A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio
telephonic isolation of the Bureau's facilities from the outside world if the severance of interconnection
were to be carried out by the PLDT, thereby preventing the Bureau of Telecommunications from properly
discharging its functions, to the prejudice of the general public. Save for the prayer to compel the PLDT
to enter into a contract (and the prayer is no essential part of the pleading), the averments make out a
case for compulsory rendering of inter-connecting services by the telephone company upon such terms
and conditions as the court may determine to be just. And since the lower court found that both parties
"are practically at one that defendant (PLDT) is entitled to reasonable compensation from plaintiff for the
reasonable use of the former's telephone facilities" (Decision, Record on Appeal, page 224), the lower
court should have proceeded to treat the case as one of condemnation of such services independently of
contract and proceeded to determine the just and reasonable compensation for the same, instead of
dismissing the petition.
This view we have taken of the true nature of the Republic's petition necessarily results in overruling the
plea of defendant-appellant PLDT that the court of first instance had no jurisdiction to entertain the
petition and that the proper forum for the action was the Public Service Commission. That body, under
the law, has no authority to pass upon actions for the taking of private property under the sovereign right
of eminent domain. Furthermore, while the defendant telephone company is a public utility corporation
whose franchise, equipment and other properties are under the jurisdiction, supervision and control of
the Public Service Commission (Sec. 13, Public Service Act), yet the plaintiff's telecommunications
network is a public service owned by the Republic and operated by an instrumentality of the National
Government, hence exempt, under Section 14 of the Public Service Act, from such jurisdiction,
supervision and control. The Bureau of Telecommunications was created in pursuance of a state policy
reorganizing the government offices to meet the exigencies attendant upon the establishment of the
free and independent Government of the Republic of the Philippines, and for the purpose of promoting
simplicity, economy and efficiency in its operation (Section 1, Republic Act No. 51) and the
determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville Bus Line, 290
Ill. 574; 124 N.E. 373).

17

Defendant PLDT, as appellant, contends that the court below was in error in not holding that the Bureau
of Telecommunications was not empowered to engage in commercial telephone business, and in ruling
that said defendant was not justified in disconnecting the telephone trunk lines it had previously leased to
the Bureau. We find that the court a quo ruled correctly in rejecting both assertions.
Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly
empowered the latter in its Section 79, subsection (b), to "negotiate for, operate and maintain wire
telephone or radio telephone communication service throughout the Philippines", and, in subsection (c),
"to prescribe, subject to approval by the Department Head, equitable rates of charges for messages
handled by the system and/or for time calls and other services that may be rendered by the system".
Nothing in these provisions limits the Bureau to non-commercial activities or prevents it from serving the
general public. It may be that in its original prospectuses the Bureau officials had stated that the service
would be limited to government offices: but such limitations could not block future expansion of the
system, as authorized by the terms of the Executive Order, nor could the officials of the Bureau bind the
Government not to engage in services that are authorized by law. It is a well-known rule that erroneous
application and enforcement of the law by public officers do not block subsequent correct application of
the statute (PLDT vs. Collector of Internal Revenue, 90 Phil. 676), and that the Government is never
estopped by mistake or error on the part of its agents (Pineda vs. Court of First Instance of Tayabas, 52
Phil. 803, 807; Benguet Consolidated Mining Co. vs. Pineda, 98 Phil. 711, 724).
The theses that the Bureau's commercial services constituted unfair competition, and that the Bureau
was guilty of fraud and abuse under its contract, are, likewise, untenable.
First, the competition is merely hypothetical, the demand for telephone service being very much more
than the supposed competitors can supply. As previously noted, the PLDT had 20,000 pending
applications at the time, and the Bureau had another 5,000. The telephone company's inability to meet
the demands for service are notorious even now. Second, the charter of the defendant expressly
provides:
SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to
grant to any corporation, association or person other than the grantee franchise for the
telephone or electrical transmission of message or signals shall not be impaired or
affected by the granting of this franchise: (Act 3436)
And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to the
trunk lines, defendant knew or should have known that their use by the subscriber was more or less
public and all embracing in nature, that is, throughout the Philippines, if not abroad" (Decision, Record on
Appeal, page 216).
The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had
extended the use of the trunk lines to commercial purposes, continuously since 1948, implies assent by
the defendant to such extended use. Since this relationship has been maintained for a long time and the
public has patronized both telephone systems, and their interconnection is to the public convenience, it
is too late for the defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally sever
the physical connection of the trunk lines.
But there is high authority for the position that, when such physical connection has been voluntarily
made, under a fair and workable arrangement and guaranteed by contract and the continuous line has
come to be patronized and established as a great public convenience, such connection shall not in
breach of the agreement be severed by one of the parties. In that case, the public is held to have such
an interest in the arrangement that its rights must receive due consideration. This position finds approval
in State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87 N.E. 650, and is stated in the elaborate and learned
opinion of Chief Justice Myers as follows: "Such physical connection cannot be required as of right, but if
such connection is voluntarily made by contract, as is here alleged to be the case, so that the public
acquires an interest in its continuance, the act of the parties in making such connection is equivalent to a
declaration of a purpose to waive the primary right of independence, and it imposes upon the property
such a public status that it may not be disregarded" citing Mahan v. Mich. Tel. Co., 132 Mich. 242, 93
N.W. 629, and the reasons upon which it is in part made to rest are referred to in the same opinion, as
follows: "Where private property is by the consent of the owner invested with a public interest or privilege

for the benefit of the public, the owner can no longer deal with it as private property only, but must hold it
subject to the right of the public in the exercise of that public interest or privilege conferred for their
benefit." Allnut v. Inglis (1810) 12 East, 527. The doctrine of this early case is the acknowledged law.
(Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 74 S.E. 636, 638).
It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did not
expect that the Bureau's telephone system would expand with such rapidity as it has done; but this
expansion is no ground for the discontinuance of the service agreed upon.
The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles for
bearing telephone wires of the Bureau of Telecommunications. Admitting that section 19 of the PLDT
charter reserves to the Government the privilege without compensation of using the poles of the
grantee to attach one ten-pin cross-arm, and to install, maintain and operate wires of its telegraph
system thereon; Provided, however, That the Bureau of Posts shall have the right to place additional
cross-arms and wires on the poles of the grantee by paying a compensation, the rate of which is to be
agreed upon by the Director of Posts and the grantee; the defendant counterclaimed for P8,772.00 for
the use of its poles by the plaintiff, contending that what was allowed free use, under the aforequoted
provision, was one ten-pin cross-arm attachment and only for plaintiff's telegraph system, not for its
telephone system; that said section could not refer to the plaintiff's telephone system, because it did not
have such telephone system when defendant acquired its franchise. The implication of the argument is
that plaintiff has to pay for the use of defendant's poles if such use is for plaintiff's telephone system and
has to pay also if it attaches more than one (1) ten-pin cross-arm for telegraphic purposes.
As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph
wires, nor that they cause more damage than the wires of the telegraph system, or that the Government
has attached to the poles more than one ten-pin cross-arm as permitted by the PLDT charter, we see no
point in this assignment of error. So long as the burden to be borne by the PLDT poles is not increased,
we see no reason why the reservation in favor of the telegraph wires of the government should not be
extended to its telephone lines, any time that the government decided to engage also in this kind of
communication.
In the ultimate analysis, the true objection of the PLDT to continue the link between its network and that
of the Government is that the latter competes "parasitically" (sic) with its own telephone services.
Considering, however, that the PLDT franchise is non-exclusive; that it is well-known that defendant
PLDT is unable to adequately cope with the current demands for telephone service, as shown by the
number of pending applications therefore; and that the PLDT's right to just compensation for the services
rendered to the Government telephone system and its users is herein recognized and preserved, the
objections of defendant-appellant are without merit. To uphold the PLDT's contention is to subordinate
the needs of the general public to the right of the PLDT to derive profit from the future expansion of its
services under its non-exclusive franchise.
WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in so
far as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long Distance
Telephone Company to continue servicing the Government telephone system upon such terms, and for a
compensation, that the trial court may determine to be just, including the period elapsed from the filing of
the original complaint or petition. And for this purpose, the records are ordered returned to the court of
origin for further hearings and other proceedings not inconsistent with this opinion. No costs.

18

Discussion. The national emergency, World War II, meant that the airport, which was not
previously used by large planes, would be the home to large bombers. The use of the airspace
above Respondents home and farm was not a problem previously, because the flights were
sporadic and not nearly as loud as the bombers.

US VS. CAUSBY
Brief Fact Summary. Respondents claim that their property was taken, within the meaning of the
Fifth Amendment, by the regular army and navy aircraft flights over their house and chicken farm.

BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner, vs. Heirs of FRANCISCO PASTOR
respondents.

Synopsis of Rule of Law. The airspace is a public highway, but if the landowner is to have the full
enjoyment of his land, he must have exclusive control over the immediate reaches of the
enveloping atmosphere.

An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within the jurisdiction of the
regional trial courts, regardless of the value of the subject property.

Facts. Respondents own 2.8 acres near an airport outside of Greensboro, North Carolina.
Respondents property contained a house and a chicken farm. The end of one of the runways of the
airport was 2,220 feet from Respondents property, and the glide path passed over the property at
83 feet, which is 67 feet above the house, 63 feet above the barn, and 18 feet above the highest
tree. The use by the United States of this airport is pursuant to a lease beginning June 1, 1942, and
ending June 30, 1942, with provisions for renewal until June 30, 1967, or six months after the end
of the national emergency, whichever is earlier. The United States four motored bombers make
loud noises when flying above the property, and have very bright lights. Respondents chicken farm
production had to stop, because 150 chickens were killed by flying into walls from fright. In the
Court of Claims, it was found that the United States had taken an easement over the property on
June 1, 1942, and that the val
ue of the property depreciation as the result of the easement was $2,000.00. The United States
petitioned for certiorari, which was granted.
Issue. Has the Respondents property been taken within the meaning of the Fifth Amendment?
Held. Yes. But the case is remanded for a determination of the value of the easement and whether
the easement was permanent or temporary.
The court noted the common law doctrine of ownership of land extending to the sky above the land.
However, the court notes that an act of Congress had given the United States exclusive national
sovereignty over the air space. The court noted that common sense made the common law doctrine
inapplicable.
However, the court found that the common law doctrine did not control the present case. The United
States had conceded in oral argument that if flights over the Respondents property rendered it
uninhabitable then there would be a taking compensable under the Fifth Amendment. The measure
of the value of the property taken is the owners loss, not the takers gain.
The airspace is a public highway. But it is obvious that if the landowner is to have the full enjoyment
of his land, he must have exclusive control of the immediate reaches of the enveloping atmosphere.
If this were not true then landowners could not build buildings, plant trees or run fences.
The airspace, apart from the immediate reaches above the land, is part of the public domain. The
court does not set the precise limits of the line of demarcation. Flights over private land are not a
taking, unless, like here, they are so low and frequent as to be a direct and immediate interference
with the enjoyment of the land. The Court of Claims must, upon remand, determine the value of the
easement and whether it is a temporary or permanent easement.
Dissent. The dissent would reverse the decision of the Court of Claims and hold that there has
been no taking within the meaning of the Fifth Amendment. This is because of the modern nature of
the airplane, and the desire to avoid confusion.

The Case
Before us is a Petition for Review on Certiorari assailing the March 29, 1999 Order[1] of the Regional Trial
Court (RTC) of Cebu City (Branch 58) in Civil Case No. CEB-21978, in which it dismissed a Complaint
for eminent domain. It ruled as follows: "Premises considered, the motion to dismiss is hereby granted
on the ground that this Court has no jurisdiction over the case. Accordingly, the Orders dated February
19, 1999 and February 26, 1999, as well as the Writ of Possession issued by virtue of the latter Order
are hereby recalled for being without force and effect."[2]
Petitioner also challenges the May 14, 1999 Order of the RTC denying reconsideration.
The Facts
Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu (Branch 1) [3] a Complaint to
expropriate a property of the respondents. In an Order dated April 8, 1997, the MTC dismissed the
Complaint on the ground of lack of jurisdiction. It reasoned that "[e]minent domain is an exercise of the
power to take private property for public use after payment of just compensation. In an action for eminent
domain, therefore, the principal cause of action is the exercise of such power or right. The fact that the
action also involves real property is merely incidental. An action for eminent domain is therefore within
the exclusive original jurisdiction of the Regional Trial Court and not with this Court."[4]
Assailed RTC Ruling
The RTC also dismissed the Complaint when filed before it, holding that an action for eminent domain
affected title to real property; hence, the value of the property to be expropriated would determine
whether the case should be filed before the MTC or the RTC. Concluding that the action should have
been filed before the MTC since the value of the subject property was less than P20,000, the RTC
ratiocinated in this wise: "The instant action is for eminent domain. It appears from the current Tax
Declaration of the land involved that its assessed value is only One Thousand Seven Hundred Forty
Pesos (P1,740.00). Pursuant to Section 3, paragraph (3), of Republic Act No. 7691, all civil actions
involving title to, or possession of, real property with an assessed value of less than P20,000.00 are
within the exclusive original jurisdiction of the Municipal Trial Courts. In the case at bar, it is within the
exclusive original jurisdiction of the Municipal Trial Court of Talisay, Cebu, where the property involved is
located.
"The instant action for eminent domain or condemnation of real property is a real action affecting title to
or possession of real property, hence, it is the assessed value of the property involved which determines
the jurisdiction of the court. That the right of eminent domain or condemnation of real property is
included in a real action affecting title to or possession of real property, is pronounced by retired Justice

19

Jose Y. Feria, thus, Real actions are those affecting title to or possession of real property. These include
partition or condemnation of, or foreclosures of mortgage on, real property.
Aggrieved, petitioner appealed directly to this Court, raising a pure question of law.[6] In a Resolution
dated July 28, 1999, the Court denied the Petition for Review "for being posted out of time on July 2,
1999, the due date being June 2, 1999, as the motion for extension of time to file petition was denied in
the resolution of July 14, 1999."[7] In a subsequent Resolution dated October 6, 1999, the Court
reinstated the Petition.[8] Respondents, on the other hand, contend that the Complaint for Eminent
Domain affects the title to or possession of real property. Thus, they argue that the case should have
been brought before the MTC, pursuant to BP 129 as amended by Section 3 (3) of RA 7691. This law
provides that MTCs shall have exclusive original jurisdiction over all civil actions that involve title to or
possession of real property, the assessed value of which does not exceed twenty thousand pesos or, in
civil actions in Metro Manila, fifty thousand pesos exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses and costs. We agree with the petitioner that an expropriation suit is
incapable of pecuniary estimation. The test to determine whether it is so was laid down by the Court in
this wise: "A review of the jurisprudence of this Court indicates that in determining whether an action is
one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the
criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the
recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the
claim. However, where the basic issue is something other than the right to recover a sum of money, or
where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in
suits to have the defendant perform his part of the contract (specific performance) and in actions for
support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such
actions as cases where the subject of the litigation may not be estimated in terms of money, and are
cognizable exclusively by courts of first instance. The rationale of the rule is plainly that the second class
cases, besides the determination of damages, demand an inquiry into other factors which the law has
deemed to be more within the competence of courts of first instance, which were the lowest courts of
record at the time that the first organic laws of the Judiciary were enacted allocating jurisdiction (Act 136
of the Philippine Commission of June 11, 1901)
In the present case, an expropriation suit does not involve the recovery of a sum of money. Rather, it
deals with the exercise by the government of its authority and right to take private property for public
use.11 In National Power Corporation v. Jocson,12 the Court ruled that expropriation proceedings have
two phases: "The first is concerned with the determination of the authority of the plaintiff to exercise the
power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit.
It ends with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a
lawful right to take the property sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be determined as of the date of the filing of the
complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally
disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an
order of condemnation be a final one, for thereafter as the Rules expressly state, in the proceedings
before the Trial Court, no objection to the exercise of the right of condemnation (or the propriety thereof)
shall be filed or heard.
"The second phase of the eminent domain action is concerned with the determination by the court of the
just compensation for the property sought to be taken. This is done by the Court with the assistance of
not more than three (3) commissioners. The order fixing the just compensation on the basis of the
evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the
second stage of the suit, and leave nothing more to be done by the Court regarding the issue.
It should be stressed that the primary consideration in an expropriation suit is whether the government or
any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the

courts determine the authority of the government entity, the necessity of the expropriation, and the
observance of due process.13 In the main, the subject of an expropriation suit is the governments
exercise of eminent domain, a matter that is incapable of pecuniary estimation.
True, the value of the property to be expropriated is estimated in monetary terms, for the court is dutybound to determine the just compensation for it. This, however, is merely incidental to the expropriation
suit. Indeed, that amount is determined only after the court is satisfied with the propriety of the
expropriation. Verily, the Court held in Republic of the Philippines v. Zurbano that "condemnation
proceedings are within the jurisdiction of Courts of First Instance,"14 the forerunners of the regional trial
courts. The said case was decided during the effectivity of the Judiciary Act of 1948 which, like BP 129 in
respect to RTCs, provided that courts of first instance had original jurisdiction over "all civil actions in
which the subject of the litigation is not capable of pecuniary estimation." 15 The 1997 amendments to the
Rules of Court were not intended to change these jurisprudential precedents.
We are not persuaded by respondents argument that the present action involves the title to or
possession of a parcel of land. They cite the observation of retired Justice Jose Y. Feria, an eminent
authority in remedial law, that condemnation or expropriation proceedings are examples of real actions
that affect the title to or possession of a parcel of land.16
Their reliance is misplaced. Justice Feria sought merely to distinguish between real and personal
actions. His discussion on this point pertained to the nature of actions, not to the jurisdiction of courts. In
fact, in his pre-bar lectures, he emphasizes that jurisdiction over eminent domain cases is still within the
RTCs under the 1997 Rules.
To emphasize, the question in the present suit is whether the government may expropriate private
property under the given set of circumstances. The government does not dispute respondents title to or
possession of the same. Indeed, it is not a question of who has a better title or right, for the government
does not even claim that it has a title to the property. It merely asserts its inherent sovereign power to
"appropriate and control individual property for the public benefit, as the public necessity, convenience or
welfare may demand."17
WHEREFORE, the Petition is hereby GRANTED and the assailed Orders SET ASIDE. The Regional
Trial Court is directed to HEAR the case. No costs. SO ORDERED.
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. CARMEN M. VDA. DE CASTELLVI,
defendants-appellees. G.R. No. L-20620 August 15, 1974
Appeal from the decision of the Court of First Instance of Pampanga in its Civil Case No. 1623, an
expropriation proceeding.
Plaintiff-appellant, the Republic of the Philippines, (hereinafter referred to as the Republic) filed, on June
26, 1959, a complaint for eminent domain against defendant-appellee, Carmen M. Vda. de Castellvi,
judicial administratrix of the estate of the late Alfonso de Castellvi (hereinafter referred to as Castellvi),
over a parcel of land situated in the barrio of San Jose, Floridablanca, Pampanga, described as follows:
A parcel of land, Lot No. 199-B Bureau of Lands Plan Swo 23666. Bounded on the NE by
Maria Nieves Toledo-Gozun; on the SE by national road; on the SW by AFP reservation, and on the NW
by AFP reservation. Containing an area of 759,299 square meters, more or less, and registered in the
name of Alfonso Castellvi under TCT No. 13631 of the Register of Pampanga ...;
and against defendant-appellee Maria Nieves Toledo Gozun (hereinafter referred to as Toledo-Gozun
over two parcels of land described as follows: A parcel of land (Portion Lot Blk-1, Bureau of Lands Plan
Psd, 26254. Bounded on the NE by Lot 3, on the SE by Lot 3; on the SW by Lot 1-B, Blk. 2 (equivalent to
Lot 199-B Swo 23666; on the NW by AFP military reservation. Containing an area of 450,273 square
meters, more or less and registered in the name of Maria Nieves Toledo-Gozun under TCT No. 8708 of
the Register of Deeds of Pampanga. ..., and A parcel of land (Portion of lot 3, Blk-1, Bureau of Lands
Plan Psd 26254. Bounded on the NE by Lot No. 3, on the SE by school lot and national road, on the SW
by Lot 1-B Blk 2 (equivalent to Lot 199-B Swo 23666), on the NW by Lot 1-B, Blk-1. Containing an area
of 88,772 square meters, more or less, and registered in the name of Maria Nieves Toledo Gozun under
TCT No. 8708 of the Register of Deeds of Pampanga

20

In its complaint, the Republic alleged, among other things, that the fair market value of the abovementioned lands, according to the Committee on Appraisal for the Province of Pampanga, was not more
than P2,000 per hectare, or a total market value of P259,669.10; and prayed, that the provisional value
of the lands be fixed at P259.669.10, that the court authorizes plaintiff to take immediate possession of
the lands upon deposit of that amount with the Provincial Treasurer of Pampanga; that the court appoints
three commissioners to ascertain and report to the court the just compensation for the property sought to
be expropriated, and that the court issues thereafter a final order of condemnation.
On June 29, 1959 the trial court issued an order fixing the provisional value of the lands at P259,669.10.
In her "motion to dismiss" filed on July 14, 1959, Castellvi alleged, among other things, that the land
under her administration, being a residential land, had a fair market value of P15.00 per square meter, so
it had a total market value of P11,389,485.00; that the Republic, through the Armed Forces of the
Philippines, particularly the Philippine Air Force, had been, despite repeated demands, illegally
occupying her property since July 1, 1956, thereby preventing her from using and disposing of it, thus
causing her damages by way of unrealized profits. This defendant prayed that the complaint be
dismissed, or that the Republic be ordered to pay her P15.00 per square meter, or a total of
P11,389,485.00, plus interest thereon at 6% per annum from July 1, 1956; that the Republic be ordered
to pay her P5,000,000.00 as unrealized profits, and the costs of the suit.
By order of the trial court, dated August, 1959, Amparo C. Diaz, Dolores G. viuda de Gil, Paloma
Castellvi, Carmen Castellvi, Rafael Castellvi, Luis Castellvi, Natividad Castellvi de Raquiza, Jose
Castellvi and Consuelo Castellvi were allowed to intervene as parties defendants. Subsequently, Joaquin
V. Gozun, Jr., husband of defendant Nieves Toledo Gozun, was also allowed by the court to intervene as
a party defendant.
After the Republic had deposited with the Provincial Treasurer of Pampanga the amount of P259,669.10,
the trial court ordered that the Republic be placed in possession of the lands. The Republic was actually
placed in possession of the lands on August 10, 1959. 1
In her "motion to dismiss", dated October 22, 1959, Toledo-Gozun alleged, among other things, that her
two parcels of land were residential lands, in fact a portion with an area of 343,303 square meters had
already been subdivided into different lots for sale to the general public, and the remaining portion had
already been set aside for expansion sites of the already completed subdivisions; that the fair market
value of said lands was P15.00 per square meter, so they had a total market value of P8,085,675.00;
and she prayed that the complaint be dismissed, or that she be paid the amount of P8,085,675.00, plus
interest thereon at the rate of 6% per annum from October 13, 1959, and attorney's fees in the amount of
P50,000.00. Intervenors Jose Castellvi and Consuelo Castellvi in their answer, filed on February 11,
1960, and also intervenor Joaquin Gozun, Jr., husband of defendant Maria Nieves Toledo-Gozun, in his
motion to dismiss, dated May 27, 1960, all alleged that the value of the lands sought to be expropriated
was at the rate of P15.00 per square meter.
On November 4, 1959, the trial court authorized the Provincial Treasurer of Pampanga to pay defendant
Toledo-Gozun the sum of P107,609.00 as provisional value of her lands. 2 On May 16, 1960 the trial
Court authorized the Provincial Treasurer of Pampanga to pay defendant Castellvi the amount of
P151,859.80 as provisional value of the land under her administration, and ordered said defendant to
deposit the amount with the Philippine National Bank under the supervision of the Deputy Clerk of Court.
In another order of May 16, 1960 the trial Court entered an order of condemnation. 3
The trial Court appointed three commissioners: Atty. Amadeo Yuzon, Clerk of Court, as commissioner for
the court; Atty. Felicisimo G. Pamandanan, counsel of the Philippine National Bank Branch at
Floridablanca, for the plaintiff; and Atty. Leonardo F. Lansangan, Filipino legal counsel at Clark Air Base,
for the defendants. The Commissioners, after having qualified themselves, proceeded to the
performance of their duties.
On March 15,1961 the Commissioners submitted their report and recommendation, wherein, after having
determined that the lands sought to be expropriated were residential lands, they recommended
unanimously that the lowest price that should be paid was P10.00 per square meter, for both the lands of
Castellvi and Toledo-Gozun; that an additional P5,000.00 be paid to Toledo-Gozun for improvements
found on her land; that legal interest on the compensation, computed from August 10, 1959, be paid after

deducting the amounts already paid to the owners, and that no consequential damages be
awarded. 4 The Commissioners' report was objected to by all the parties in the case by defendants
Castellvi and Toledo-Gozun, who insisted that the fair market value of their lands should be fixed at
P15.00 per square meter; and by the Republic, which insisted that the price to be paid for the lands
should be fixed at P0.20 per square meter. 5
After the parties-defendants and intervenors had filed their respective memoranda, and the Republic,
after several extensions of time, had adopted as its memorandum its objections to the report of the
Commissioners, the trial court, on May 26, 1961, rendered its decision 6 the dispositive portion of which
reads as follows: WHEREFORE, taking into account all the foregoing circumstances, and that the lands
are titled, ... the rising trend of land values ..., and the lowered purchasing power of the Philippine peso,
the court finds that the unanimous recommendation of the commissioners of ten (P10.00) pesos per
square meter for the three lots of the defendants subject of this action is fair and just.
The plaintiff will pay 6% interest per annum on the total value of the lands of defendant Toledo-Gozun
since (sic) the amount deposited as provisional value from August 10, 1959 until full payment is made to
said defendant or deposit therefor is made in court.
In respect to the defendant Castellvi, interest at 6% per annum will also be paid by the plaintiff to
defendant Castellvi from July 1, 1956 when plaintiff commenced its illegal possession of the Castellvi
land when the instant action had not yet been commenced to July 10, 1959 when the provisional value
thereof was actually deposited in court, on the total value of the said (Castellvi) land as herein adjudged.
The same rate of interest shall be paid from July 11, 1959 on the total value of the land herein adjudged
minus the amount deposited as provisional value, or P151,859.80, such interest to run until full payment
is made to said defendant or deposit therefor is made in court. All the intervenors having failed to
produce evidence in support of their respective interventions, said interventions are ordered dismissed.
The costs shall be charged to the plaintiff.
On June 21, 1961 the Republic filed a motion for a new trial and/or reconsideration, upon the grounds of
newly-discovered evidence, that the decision was not supported by the evidence, and that the decision
was against the law, against which motion defendants Castellvi and Toledo-Gozun filed their respective
oppositions. On July 8, 1961 when the motion of the Republic for new trial and/or reconsideration was
called for hearing, the Republic filed a supplemental motion for new trial upon the ground of additional
newly-discovered evidence. This motion for new trial and/or reconsideration was denied by the court on
July 12, 1961.
On July 17, 1961 the Republic gave notice of its intention to appeal from the decision of May 26, 1961
and the order of July 12, 1961. Defendant Castellvi also filed, on July 17, 1961, her notice of appeal from
the decision of the trial court.
The Republic filed various ex-parte motions for extension of time within which to file its record on appeal.
The Republic's record on appeal was finally submitted on December 6, 1961.
Defendants Castellvi and Toledo-Gozun filed not only a joint opposition to the approval of the Republic's
record on appeal, but also a joint memorandum in support of their opposition. The Republic also filed a
memorandum in support of its prayer for the approval of its record on appeal. On December 27, 1961 the
trial court issued an order declaring both the record on appeal filed by the Republic, and the record on
appeal filed by defendant Castellvi as having been filed out of time, thereby dismissing both appeals.
On January 11, 1962 the Republic filed a "motion to strike out the order of December 27, 1961 and for
reconsideration", and subsequently an amended record on appeal, against which motion the defendants
Castellvi and Toledo-Gozun filed their opposition. On July 26, 1962 the trial court issued an order, stating
that "in the interest of expediency, the questions raised may be properly and finally determined by the
Supreme Court," and at the same time it ordered the Solicitor General to submit a record on appeal
containing copies of orders and pleadings specified therein. In an order dated November 19, 1962, the
trial court approved the Republic's record on appeal as amended.
Defendant Castellvi did not insist on her appeal. Defendant Toledo-Gozun did not appeal.

21

The motion to dismiss the Republic's appeal was reiterated by appellees Castellvi and Toledo-Gozun
before this Court, but this Court denied the motion.
In her motion of August 11, 1964, appellee Castellvi sought to increase the provisional value of her land.
The Republic, in its comment on Castellvi's motion, opposed the same. This Court denied Castellvi's
motion in a resolution dated October 2,1964.
The motion of appellees, Castellvi and Toledo-Gozun, dated October 6, 1969, praying that they be
authorized to mortgage the lands subject of expropriation, was denied by this Court or October 14, 1969.
On February 14, 1972, Attys. Alberto Cacnio, and Associates, counsel for the estate of the late Don
Alfonso de Castellvi in the expropriation proceedings, filed a notice of attorney's lien, stating that as per
agreement with the administrator of the estate of Don Alfonso de Castellvi they shall receive by way of
attorney's fees, "the sum equivalent to ten per centum of whatever the court may finally decide as the
expropriated price of the property subject matter of the case."
Before this Court, the Republic contends that the lower court erred:
1. In finding the price of P10 per square meter of the lands subject of the instant proceedings as just
compensation;
2. In holding that the "taking" of the properties under expropriation commenced with the filing of this
action;
3. In ordering plaintiff-appellant to pay 6% interest on the adjudged value of the Castellvi property to
start from July of 1956;
4. In denying plaintiff-appellant's motion for new trial based on newly discovered evidence.
In its brief, the Republic discusses the second error assigned as the first issue to be considered. We
shall follow the sequence of the Republic's discussion.
1. In support of the assigned error that the lower court erred in holding that the "taking" of the properties
under expropriation commenced with the filing of the complaint in this case, the Republic argues that the
"taking" should be reckoned from the year 1947 when by virtue of a special lease agreement between
the Republic and appellee Castellvi, the former was granted the "right and privilege" to buy the property
should the lessor wish to terminate the lease, and that in the event of such sale, it was stipulated that the
fair market value should be as of the time of occupancy; and that the permanent improvements
amounting to more that half a million pesos constructed during a period of twelve years on the land,
subject of expropriation, were indicative of an agreed pattern of permanency and stability of occupancy
by the Philippine Air Force in the interest of national Security. 7
Appellee Castellvi, on the other hand, maintains that the "taking" of property under the power of eminent
domain requires two essential elements, to wit: (1) entrance and occupation by condemn or upon the
private property for more than a momentary or limited period, and (2) devoting it to a public use in such a
way as to oust the owner and deprive him of all beneficial enjoyment of the property. This appellee
argues that in the instant case the first element is wanting, for the contract of lease relied upon provides
for a lease from year to year; that the second element is also wanting, because the Republic was paying
the lessor Castellvi a monthly rental of P445.58; and that the contract of lease does not grant the
Republic the "right and privilege" to buy the premises "at the value at the time of occupancy." 8
Appellee Toledo-Gozun did not comment on the Republic's argument in support of the second error
assigned, because as far as she was concerned the Republic had not taken possession of her lands
prior to August 10, 1959. 9
In order to better comprehend the issues raised in the appeal, in so far as the Castellvi property is
concerned, it should be noted that the Castellvi property had been occupied by the Philippine Air Force
since 1947 under a contract of lease, typified by the contract marked Exh. 4-Castellvi, the pertinent
portions of which read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND ENTERED into by and between INTESTATE ESTATE OF
ALFONSO DE CASTELLVI, represented by CARMEN M. DE CASTELLVI, Judicial Administratrix ...
hereinafter called the LESSOR and THE REPUBLIC OF THE PHILIPPINES represented by MAJ. GEN.
CALIXTO DUQUE, Chief of Staff of the ARMED FORCES OF THE PHILIPPINES, hereinafter called the
LESSEE, WITNESSETH:

1.

2.

3.

4.

5.
6.

7.
8.

9.

For and in consideration of the rentals hereinafter reserved and the mutual terms, covenants and
conditions of the parties, the LESSOR has, and by these presents does, lease and let unto the
LESSEE the following described land together with the improvements thereon and appurtenances
thereof, viz:
Un Terreno, Lote No. 27 del Plano de subdivision Psu 34752, parte de la hacienda de Campauit,
situado en el Barrio de San Jose, Municipio de Floridablanca Pampanga. ... midiendo una
extension superficial de cuatro milliones once mil cuatro cientos trienta y cinco (4,001,435) [sic]
metros cuadrados, mas o menos. Out of the above described property, 75.93 hectares thereof are
actually occupied and covered by this contract. Above lot is more particularly described in TCT No.
1016, province of
Pampanga of which premises, the LESSOR warrants that he/she/they/is/are the registered
owner(s) and with full authority to execute a contract of this nature.
The term of this lease shall be for the period beginning July 1, 1952 the date the premises were
occupied by the PHILIPPINE AIR FORCE, AFP until June 30, 1953, subject to renewal for another
year at the option of the LESSEE or unless sooner terminated by the LESSEE as hereinafter
provided.
The LESSOR hereby warrants that the LESSEE shall have quiet, peaceful and undisturbed
possession of the demised premises throughout the full term or period of this lease and the
LESSOR undertakes without cost to the LESSEE to eject all trespassers, but should the LESSOR
fail to do so, the LESSEE at its option may proceed to do so at the expense of the LESSOR. The
LESSOR further agrees that should he/she/they sell or encumber all or any part of the herein
described premises during the period of this lease, any conveyance will be conditioned on the right
of the LESSEE hereunder.
The LESSEE shall pay to the LESSOR as monthly rentals under this lease the sum of FOUR
HUNDRED FIFTY-FIVE PESOS & 58/100 (P455.58) ...
The LESSEE may, at any time prior to the termination of this lease, use the property for any
purpose or purposes and, at its own costs and expense make alteration, install facilities and fixtures
and errect additions ... which facilities or fixtures ... so placed in, upon or attached to the said
premises shall be and remain property of the LESSEE and may be removed therefrom by the
LESSEE prior to the termination of this lease. The LESSEE shall surrender possession of the
premises upon the expiration or termination of this lease and if so required by the LESSOR, shall
return the premises in substantially the same condition as that existing at the time same were first
occupied by the AFP, reasonable and ordinary wear and tear and damages by the elements or by
circumstances over which the LESSEE has no control excepted: PROVIDED, that if the LESSOR
so requires the return of the premises in such condition, the LESSOR shall give written notice
thereof to the LESSEE at least twenty (20) days before the termination of the lease and provided,
further, that should the LESSOR give notice within the time specified above, the LESSEE shall have
the right and privilege to compensate the LESSOR at the fair value or the equivalent, in lieu of
performance of its obligation, if any, to restore the premises. Fair value is to be determined as the
value at the time of occupancy less fair wear and tear and depreciation during the period of this
lease.
The LESSEE may terminate this lease at any time during the term hereof by giving written notice to
the LESSOR at least thirty (30) days in advance ...
The LESSEE should not be responsible, except under special legislation for any damages to the
premises by reason of combat operations, acts of GOD, the elements or other acts and deeds not
due to the negligence on the part of the LESSEE.
This LEASE AGREEMENT supersedes and voids any and all agreements and undertakings, oral or
written, previously entered into between the parties covering the property herein leased, the same
having been merged herein. This AGREEMENT may not be modified or altered except by
instrument in writing only duly signed by the parties. 10

22

It was stipulated by the parties, that "the foregoing contract of lease (Exh. 4, Castellvi) is 'similar in terms
and conditions, including the date', with the annual contracts entered into from year to year between
defendant Castellvi and the Republic of the Philippines (p. 17, t.s.n., Vol. III)". 11 It is undisputed,
therefore, that the Republic occupied Castellvi's land from July 1, 1947, by virtue of the above-mentioned
contract, on a year to year basis (from July 1 of each year to June 30 of the succeeding year) under the
terms and conditions therein stated.
Before the expiration of the contract of lease on June 30, 1956 the Republic sought to renew the same
but Castellvi refused. When the AFP refused to vacate the leased premises after the termination of the
contract, on July 11, 1956, Castellvi wrote to the Chief of Staff, AFP, informing the latter that the heirs of
the property had decided not to continue leasing the property in question because they had decided to
subdivide the land for sale to the general public, demanding that the property be vacated within 30 days
from receipt of the letter, and that the premises be returned in substantially the same condition as before
occupancy (Exh. 5 Castellvi). A follow-up letter was sent on January 12, 1957, demanding the delivery
and return of the property within one month from said date (Exh. 6 Castellvi). On January 30, 1957,
Lieutenant General Alfonso Arellano, Chief of Staff, answered the letter of Castellvi, saying that it was
difficult for the army to vacate the premises in view of the permanent installations and other facilities
worth almost P500,000.00 that were erected and already established on the property, and that, there
being no other recourse, the acquisition of the property by means of expropriation proceedings would be
recommended to the President (Exhibit "7" Castellvi).
Defendant Castellvi then brought suit in the Court of First Instance of Pampanga, in Civil Case No. 1458,
to eject the Philippine Air Force from the land. While this ejectment case was pending, the Republic
instituted these expropriation proceedings, and, as stated earlier in this opinion, the Republic was placed
in possession of the lands on August 10, 1959, On November 21, 1959, the Court of First Instance of
Pampanga, dismissed Civil Case No. 1458, upon petition of the parties, in an order which, in part, reads
as follows:
1. Plaintiff has agreed, as a matter of fact has already signed an agreement with defendants, whereby
she has agreed to receive the rent of the lands, subject matter of the instant case from June 30,
1966 up to 1959 when the Philippine Air Force was placed in possession by virtue of an order of the
Court upon depositing the provisional amount as fixed by the Provincial Appraisal Committee with
the Provincial Treasurer of Pampanga;
2. That because of the above-cited agreement wherein the administratrix decided to get the rent
corresponding to the rent from 1956 up to 1959 and considering that this action is one of illegal
detainer and/or to recover the possession of said land by virtue of non-payment of rents, the instant
case now has become moot and academic and/or by virtue of the agreement signed by plaintiff, she
has waived her cause of action in the above-entitled case.
The Republic urges that the "taking " of Castellvi's property should be deemed as of the year 1947 by
virtue of afore-quoted lease agreement. In American Jurisprudence, Vol. 26, 2nd edition, Section 157, on
the subject of "Eminent Domain, we read the definition of "taking" (in eminent domain) as follows:
Taking' under the power of eminent domain may be defined generally as entering upon private
property for more than a momentary period, and, under the warrant or color of legal authority,
devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such
a way as substantially to oust the owner and deprive him of all beneficial enjoyment thereof.
Pursuant to the aforecited authority, a number of circumstances must be present in the "taking" of
property for purposes of eminent domain.
First, the expropriator must enter a private property. This circumstance is present in the instant case,
when by virtue of the lease agreement the Republic, through the AFP, took possession of the property of
Castellvi. Second, the entrance into private property must be for more than a momentary period.
"Momentary" means, "lasting but a moment; of but a moment's duration" (The Oxford English Dictionary,
Volume VI, page 596); "lasting a very short time; transitory; having a very brief life; operative or recurring
at every moment" (Webster's Third International Dictionary, 1963 edition.) The word "momentary" when
applied to possession or occupancy of (real) property should be construed to mean "a limited period"
not indefinite or permanent. The aforecited lease contract was for a period of one year, renewable from

year to year. The entry on the property, under the lease, is temporary, and considered transitory. The fact
that the Republic, through the AFP, constructed some installations of a permanent nature does not alter
the fact that the entry into the land was transitory, or intended to last a year, although renewable from
year to year by consent of 'The owner of the land. By express provision of the lease agreement the
Republic, as lessee, undertook to return the premises in substantially the same condition as at the time
the property was first occupied by the AFP. It is claimed that the intention of the lessee was to occupy the
land permanently, as may be inferred from the construction of permanent improvements. But this
"intention" cannot prevail over the clear and express terms of the lease contract. Intent is to be deduced
from the language employed by the parties, and the terms 'of the contract, when unambiguous, as in the
instant case, are conclusive in the absence of averment and proof of mistake or fraud the question
being not what the intention was, but what is expressed in the language used. (City of Manila v. Rizal
Park Co., Inc., 53 Phil. 515, 525); Magdalena Estate, Inc. v. Myrick, 71 Phil. 344, 348). Moreover, in
order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall
be principally considered (Art. 1371, Civil Code). If the intention of the lessee (Republic) in 1947 was
really to occupy permanently Castellvi's property, why was the contract of lease entered into on year to
year basis? Why was the lease agreement renewed from year to year? Why did not the Republic
expropriate this land of Castellvi in 1949 when, according to the Republic itself, it expropriated the other
parcels of land that it occupied at the same time as the Castellvi land, for the purpose of converting them
into a jet air base? 14 It might really have been the intention of the Republic to expropriate the lands in
question at some future time, but certainly mere notice - much less an implied notice of such intention
on the part of the Republic to expropriate the lands in the future did not, and could not, bind the
landowner, nor bind the land itself. The expropriation must be actually commenced in court (Republic vs.
Baylosis, et al., 96 Phil. 461, 484).
Third, the entry into the property should be under warrant or color of legal authority. This circumstance in
the "taking" may be considered as present in the instant case, because the Republic entered the
Castellvi property as lessee.
Fourth, the property must be devoted to a public use or otherwise informally appropriated or injuriously
affected. It may be conceded that the circumstance of the property being devoted to public use is
present because the property was used by the air force of the AFP.
Fifth, the utilization of the property for public use must be in such a way as to oust the owner and deprive
him of all beneficial enjoyment of the property. In the instant case, the entry of the Republic into the
property and its utilization of the same for public use did not oust Castellvi and deprive her of all
beneficial enjoyment of the property. Castellvi remained as owner, and was continuously recognized as
owner by the Republic, as shown by the renewal of the lease contract from year to year, and by the
provision in the lease contract whereby the Republic undertook to return the property to Castellvi when
the lease was terminated. Neither was Castellvi deprived of all the beneficial enjoyment of the property,
because the Republic was bound to pay, and had been paying, Castellvi the agreed monthly rentals until
the time when it filed the complaint for eminent domain on June 26, 1959.
It is clear, therefore, that the "taking" of Catellvi's property for purposes of eminent domain cannot be
considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee
thereof. We find merit in the contention of Castellvi that two essential elements in the "taking" of property
under the power of eminent domain, namely: (1) that the entrance and occupation by the condemnor
must be for a permanent, or indefinite period, and (2) that in devoting the property to public use the
owner was ousted from the property and deprived of its beneficial use, were not present when the
Republic entered and occupied the Castellvi property in 1947.
Untenable also is the Republic's contention that although the contract between the parties was
one of lease on a year to year basis, it was "in reality a more or less permanent right to occupy the
premises under the guise of lease with the 'right and privilege' to buy the property should the lessor wish
to terminate the lease," and "the right to buy the property is merged as an integral part of the lease
relationship ... so much so that the fair market value has been agreed upon, not, as of the time of
purchase, but as of the time of occupancy" 15 We cannot accept the Republic's contention that a lease on

23

a year to year basis can give rise to a permanent right to occupy, since by express legal provision a
lease made for a determinate time, as was the lease of Castellvi's land in the instant case, ceases upon
the day fixed, without need of a demand (Article 1669, Civil Code). Neither can it be said that the right of
eminent domain may be exercised by simply leasing the premises to be expropriated (Rule 67, Section
1, Rules of Court). Nor can it be accepted that the Republic would enter into a contract of lease where its
real intention was to buy, or why the Republic should enter into a simulated contract of lease ("under the
guise of lease", as expressed by counsel for the Republic) when all the time the Republic had the right of
eminent domain, and could expropriate Castellvi's land if it wanted to without resorting to any guise
whatsoever. Neither can we see how a right to buy could be merged in a contract of lease in the absence
of any agreement between the parties to that effect. To sustain the contention of the Republic is to
sanction a practice whereby in order to secure a low price for a land which the government intends to
expropriate (or would eventually expropriate) it would first negotiate with the owner of the land to lease
the land (for say ten or twenty years) then expropriate the same when the lease is about to terminate,
then claim that the "taking" of the property for the purposes of the expropriation be reckoned as of the
date when the Government started to occupy the property under the lease, and then assert that the
value of the property being expropriated be reckoned as of the start of the lease, in spite of the fact that
the value of the property, for many good reasons, had in the meantime increased during the period of the
lease. This would be sanctioning what obviously is a deceptive scheme, which would have the effect of
depriving the owner of the property of its true and fair market value at the time when the expropriation
proceedings were actually instituted in court. The Republic's claim that it had the "right and privilege" to
buy the property at the value that it had at the time when it first occupied the property as lessee nowhere
appears in the lease contract. What was agreed expressly in paragraph No. 5 of the lease agreement
was that, should the lessor require the lessee to return the premises in the same condition as at the time
the same was first occupied by the AFP, the lessee would have the "right and privilege" (or option) of
paying the lessor what it would fairly cost to put the premises in the same condition as it was at the
commencement of the lease, in lieu of the lessee's performance of the undertaking to put the land in said
condition. The "fair value" at the time of occupancy, mentioned in the lease agreement, does not refer to
the value of the property if bought by the lessee, but refers to the cost of restoring the property in the
same condition as of the time when the lessee took possession of the property. Such fair value cannot
refer to the purchase price, for purchase was never intended by the parties to the lease contract. It is a
rule in the interpretation of contracts that "However general the terms of a contract may be, they shall not
be understood to comprehend things that are distinct and cases that are different from those upon which
the parties intended to agree" (Art. 1372, Civil Code).
We hold, therefore, that the "taking" of the Castellvi property should not be reckoned as of the
year 1947 when the Republic first occupied the same pursuant to the contract of lease, and that the just
compensation to be paid for the Castellvi property should not be determined on the basis of the value of
the property as of that year. The lower court did not commit an error when it held that the "taking" of the
property under expropriation commenced with the filing of the complaint in this case.
Under Section 4 of Rule 67 of the Rules of Court, 16 the "just compensation" is to be determined as of the
date of the filing of the complaint. This Court has ruled that when the taking of the property sought to be
expropriated coincides with the commencement of the expropriation proceedings, or takes place
subsequent to the filing of the complaint for eminent domain, the just compensation should be
determined as of the date of the filing of the complaint. (Republic vs. Philippine National Bank, L-14158,
April 12, 1961, 1 SCRA 957, 961-962). In the instant case, it is undisputed that the Republic was placed
in possession of the Castellvi property, by authority of the court, on August 10, 1959. The "taking" of the
Castellvi property for the purposes of determining the just compensation to be paid must, therefore, be
reckoned as of June 26, 1959 when the complaint for eminent domain was filed.
Regarding the two parcels of land of Toledo-Gozun, also sought to be expropriated, which had
never been under lease to the Republic, the Republic was placed in possession of said lands, also by
authority of the court, on August 10, 1959, The taking of those lands, therefore, must also be reckoned
as of June 26, 1959, the date of the filing of the complaint for eminent domain.

2. Regarding the first assigned error discussed as the second issue the Republic maintains that,
even assuming that the value of the expropriated lands is to be determined as of June 26, 1959, the
price of P10.00 per square meter fixed by the lower court "is not only exhorbitant but also
unconscionable, and almost fantastic". On the other hand, both Castellvi and Toledo-Gozun maintain that
their lands are residential lands with a fair market value of not less than P15.00 per square meter.
The lower court found, and declared, that the lands of Castellvi and Toledo-Gozun are residential lands.
The finding of the lower court is in consonance with the unanimous opinion of the three commissioners
who, in their report to the court, declared that the lands are residential lands.
The Republic assails the finding that the lands are residential, contending that the plans of the appellees
to convert the lands into subdivision for residential purposes were only on paper, there being no overt
acts on the part of the appellees which indicated that the subdivision project had been commenced, so
that any compensation to be awarded on the basis of the plans would be speculative. The Republic's
contention is not well taken. We find evidence showing that the lands in question had ceased to be
devoted to the production of agricultural crops, that they had become adaptable for residential purposes,
and that the appellees had actually taken steps to convert their lands into residential subdivisions even
before the Republic filed the complaint for eminent domain. In the case of City of Manila vs. Corrales (32
Phil. 82, 98) this Court laid down basic guidelines in determining the value of the property expropriated
for public purposes. This Court said: In determining the value of land appropriated for public
purposes, the same consideration is to be regarded as in a sale of property between private parties. The
inquiry, in such cases, must be what is the property worth in the market, viewed not merely with
reference to the uses to which it is at the time applied, but with reference to the uses to which it is plainly
adapted, that is to say, what is it worth from its availability for valuable uses?
So many and varied are the circumstances to be taken into account in determining the value of
property condemned for public purposes, that it is practically impossible to formulate a rule to govern its
appraisement in all cases. Exceptional circumstances will modify the most carefully guarded rule, but, as
a general thing, we should say that the compensation of the owner is to be estimated by reference to the
use for which the property is suitable, having regard to the existing business or wants of the community,
or such as may be reasonably expected in the immediate future. (Miss. and Rum River Boom Co. vs.
Patterson, 98 U.S., 403).
In expropriation proceedings, therefore, the owner of the land has the right to its value for the use for
which it would bring the most in the market. 17 The owner may thus show every advantage that his
property possesses, present and prospective, in order that the price it could be sold for in the market
may be satisfactorily determined. 18 The owner may also show that the property is suitable for division
into village or town lots.
The trial court, therefore, correctly considered, among other circumstances, the proposed
subdivision plans of the lands sought to be expropriated in finding that those lands are residential lots.
This finding of the lower court is supported not only by the unanimous opinion of the commissioners, as
embodied in their report, but also by the Provincial Appraisal Committee of the province of Pampanga
composed of the Provincial Treasurer, the Provincial Auditor and the District Engineer. In the minutes of
the meeting of the Provincial Appraisal Committee, held on May 14, 1959 (Exh. 13-Castellvi) We read in
its Resolution No. 10 the following:
3. Since 1957 the land has been classified as residential in view of its proximity to the air base and due
to the fact that it was not being devoted to agriculture. In fact, there is a plan to convert it into a
subdivision for residential purposes. The taxes due on the property have been paid based on its
classification as residential land;
The evidence shows that Castellvi broached the idea of subdividing her land into residential
lots as early as July 11, 1956 in her letter to the Chief of Staff of the Armed Forces of the Philippines.
(Exh. 5-Castellvi) As a matter of fact, the layout of the subdivision plan was tentatively approved by the
National Planning Commission on September 7, 1956. (Exh. 8-Castellvi). The land of Castellvi had not
been devoted to agriculture since 1947 when it was leased to the Philippine Army. In 1957 said land was
classified as residential, and taxes based on its classification as residential had been paid since then
(Exh. 13-Castellvi). The location of the Castellvi land justifies its suitability for a residential subdivision.

24

As found by the trial court, "It is at the left side of the entrance of the Basa Air Base and bounded on two
sides by roads (Exh. 13-Castellvi), paragraphs 1 and 2, Exh. 12-Castellvi), the poblacion, (of
Floridablanca) the municipal building, and the Pampanga Sugar Mills are closed by. The barrio
schoolhouse and chapel are also near (T.S.N. November 23,1960, p. 68)." 20
The lands of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the same condition as the land of
Castellvi. The lands of Toledo-Gozun adjoin the land of Castellvi. They are also contiguous to the Basa
Air Base, and are along the road. These lands are near the barrio schoolhouse, the barrio chapel, the
Pampanga Sugar Mills, and the poblacion of Floridablanca (Exhs. 1, 3 and 4-Toledo-Gozun). As a matter
of fact, regarding lot 1-B it had already been surveyed and subdivided, and its conversion into a
residential subdivision was tentatively approved by the National Planning Commission on July 8, 1959
(Exhs. 5 and 6 Toledo-Gozun). As early as June, 1958, no less than 32 man connected with the
Philippine Air Force among them commissioned officers, non-commission officers, and enlisted men had
requested Mr. and Mrs. Joaquin D. Gozun to open a subdivision on their lands in question (Exhs. 8, 8-A
to 8-ZZ-Toledo-Gozun). 21
We agree with the findings, and the conclusions, of the lower court that the lands that are the subject of
expropriation in the present case, as of August 10, 1959 when the same were taken possession of by the
Republic, were residential lands and were adaptable for use as residential subdivisions. Indeed, the
owners of these lands have the right to their value for the use for which they would bring the most in the
market at the time the same were taken from them. The most important issue to be resolved in the
present case relates to the question of what is the just compensation that should be paid to the
appellees.
The Republic asserts that the fair market value of the lands of the appellees is P.20 per square meter.
The Republic cites the case of Republic vs. Narciso, et al., L-6594, which this Court decided on May 18,
1956. The Narciso case involved lands that belonged to Castellvi and Toledo-Gozun, and to one Donata
Montemayor, which were expropriated by the Republic in 1949 and which are now the site of the Basa
Air Base. In the Narciso case this Court fixed the fair market value at P.20 per square meter. The lands
that are sought to be expropriated in the present case being contiguous to the lands involved in the
Narciso case, it is the stand of the Republic that the price that should be fixed for the lands now in
question should also be at P.20 per square meter.
We can not sustain the stand of the Republic. We find that the price of P.20 per square meter, as fixed by
this Court in the Narciso case, was based on the allegation of the defendants (owners) in their answer to
the complaint for eminent domain in that case that the price of their lands was P2,000.00 per hectare
and that was the price that they asked the court to pay them. This Court said, then, that the owners of
the land could not be given more than what they had asked, notwithstanding the recommendation of the
majority of the Commission on Appraisal which was adopted by the trial court that the fair market
value of the lands was P3,000.00 per hectare. We also find that the price of P.20 per square meter in the
Narciso case was considered the fair market value of the lands as of the year 1949 when the
expropriation proceedings were instituted, and at that time the lands were classified as sugar lands, and
assessed for taxation purposes at around P400.00 per hectare, or P.04 per square meter. 22 While the
lands involved in the present case, like the lands involved in the Narciso case, might have a fair market
value of P.20 per square meter in 1949, it can not be denied that ten years later, in 1959, when the
present proceedings were instituted, the value of those lands had increased considerably. The evidence
shows that since 1949 those lands were no longer cultivated as sugar lands, and in 1959 those lands
were already classified, and assessed for taxation purposes, as residential lands. In 1959 the land of
Castellvi was assessed at P1.00 per square meter. 23
The Republic also points out that the Provincial Appraisal Committee of Pampanga, in its resolution No.
5 of February 15, 1957 (Exhibit D), recommended the sum of P.20 per square meter as the fair valuation
of the Castellvi property. We find that this resolution was made by the Republic the basis in asking the
court to fix the provisional value of the lands sought to be expropriated at P259,669.10, which was
approved by the court. 24 It must be considered, however, that the amount fixed as the provisional value
of the lands that are being expropriated does not necessarily represent the true and correct value of the

land. The value is only "provisional" or "tentative", to serve as the basis for the immediate occupancy of
the property being expropriated by the condemnor. The records show that this resolution No. 5 was
repealed by the same Provincial Committee on Appraisal in its resolution No. 10 of May 14, 1959 (Exhibit
13-Castellvi). In that resolution No. 10, the appraisal committee stated that "The Committee has
observed that the value of the land in this locality has increased since 1957 ...", and recommended the
price of P1.50 per square meter. It follows, therefore, that, contrary to the stand of the Republic, that
resolution No. 5 of the Provincial Appraisal Committee can not be made the basis for fixing the fair
market value of the lands of Castellvi and Toledo-Gozun.
The Republic further relied on the certification of the Acting Assistant Provincial Assessor of Pampanga,
dated February 8, 1961 (Exhibit K), to the effect that in 1950 the lands of Toledo-Gozun were classified
partly as sugar land and partly as urban land, and that the sugar land was assessed at P.40 per square
meter, while part of the urban land was assessed at P.40 per square meter and part at P.20 per square
meter; and that in 1956 the Castellvi land was classified as sugar land and was assessed at P450.00 per
hectare, or P.045 per square meter. We can not also consider this certification of the Acting Assistant
Provincial Assessor as a basis for fixing the fair market value of the lands of Castellvi and Toledo-Gozun
because, as the evidence shows, the lands in question, in 1957, were already classified and assessed
for taxation purposes as residential lands. The certification of the assessor refers to the year 1950 as far
as the lands of Toledo-Gozun are concerned, and to the year 1956 as far as the land of Castellvi is
concerned. Moreover, this Court has held that the valuation fixed for the purposes of the assessment of
the land for taxation purposes can not bind the landowner where the latter did not intervene in fixing it. 25
On the other hand, the Commissioners, appointed by the court to appraise the lands that were being
expropriated, recommended to the court that the price of P10.00 per square meter would be the fair
market value of the lands. The commissioners made their recommendation on the basis of their
observation after several ocular inspections of the lands, of their own personal knowledge of land values
in the province of Pampanga, of the testimonies of the owners of the land, and other witnesses, and of
documentary evidence presented by the appellees. Both Castellvi and Toledo-Gozun testified that the
fair market value of their respective land was at P15.00 per square meter. The documentary evidence
considered by the commissioners consisted of deeds of sale of residential lands in the town of San
Fernando and in Angeles City, in the province of Pampanga, which were sold at prices ranging from
P8.00 to P20.00 per square meter (Exhibits 15, 16, 17, 18, 19, 20, 21, 22, 23-Castellvi). The
commissioners also considered the decision in Civil Case No. 1531 of the Court of First Instance of
Pampanga, entitled Republic vs. Sabina Tablante, which was expropriation case filed on January 13,
1959, involving a parcel of land adjacent to the Clark Air Base in Angeles City, where the court fixed the
price at P18.00 per square meter (Exhibit 14-Castellvi). In their report, the commissioners, among other
things, said: This expropriation case is specially pointed out, because the circumstances and factors
involved therein are similar in many respects to the defendants' lands in this case. The land in Civil Case
No. 1531 of this Court and the lands in the present case (Civil Case No. 1623) are both near the air
bases, the Clark Air Base and the Basa Air Base respectively. There is a national road fronting them and
are situated in a first-class municipality. As added advantage it may be said that the Basa Air Base land
is very near the sugar mill at Del Carmen, Floridablanca, Pampanga, owned by the Pampanga Sugar
Mills. Also just stone's throw away from the same lands is a beautiful vacation spot at Palacol, a sitio of
the town of Floridablanca, which counts with a natural swimming pool for vacationists on weekends.
These advantages are not found in the case of the Clark Air Base. The defendants' lands are nearer to
the poblacion of Floridablanca then Clark Air Base is nearer (sic) to the poblacion of Angeles,
Pampanga.
The deeds of absolute sale, according to the undersigned commissioners, as well as the land in Civil
Case No. 1531 are competent evidence, because they were executed during the year 1959 and before
August 10 of the same year. More specifically so the land at Clark Air Base which coincidentally is the
subject matter in the complaint in said Civil Case No. 1531, it having been filed on January 13, 1959 and

25

the taking of the land involved therein was ordered by the Court of First Instance of Pampanga on
January 15, 1959, several months before the lands in this case were taken by the plaintiffs ....
From the above and considering further that the lowest as well as the highest price per square
meter obtainable in the market of Pampanga relative to subdivision lots within its jurisdiction in the year
1959 is very well known by the Commissioners, the Commission finds that the lowest price that can be
awarded to the lands in question is P10.00 per square meter. 26
The lower court did not altogether accept the findings of the Commissioners based on the
documentary evidence, but it considered the documentary evidence as basis for comparison in
determining land values. The lower court arrived at the conclusion that "the unanimous recommendation
of the commissioners of ten (P10.00) pesos per square meter for the three lots of the defendants subject
of this action is fair and just". 27 In arriving at its conclusion, the lower court took into consideration,
among other circumstances, that the lands are titled, that there is a rising trend of land values, and the
lowered purchasing power of the Philippine peso.
In the case of Manila Railroad Co. vs. Caligsihan, 40 Phil. 326, 328, this Court said:
A court of first instance or, on appeal, the Supreme Court, may change or modify the report of the
commissioners by increasing or reducing the amount of the award if the facts of the case so
justify. While great weight is attached to the report of the commissioners, yet a court may
substitute therefor its estimate of the value of the property as gathered from the record in certain
cases, as, where the commissioners have applied illegal principles to the evidence submitted to
them, or where they have disregarded a clear preponderance of evidence, or where the amount
allowed is either palpably inadequate or excessive.
The report of the commissioners of appraisal in condemnation proceedings are not binding,
but merely advisory in character, as far as the court is concerned. 29 In our analysis of the report of the
commissioners, We find points that merit serious consideration in the determination of the just
compensation that should be paid to Castellvi and Toledo-Gozun for their lands. It should be noted that
the commissioners had made ocular inspections of the lands and had considered the nature and
similarities of said lands in relation to the lands in other places in the province of Pampanga, like San
Fernando and Angeles City. We cannot disregard the observations of the commissioners regarding the
circumstances that make the lands in question suited for residential purposes their location near the
Basa Air Base, just like the lands in Angeles City that are near the Clark Air Base, and the facilities that
obtain because of their nearness to the big sugar central of the Pampanga Sugar mills, and to the
flourishing first class town of Floridablanca. It is true that the lands in question are not in the territory of
San Fernando and Angeles City, but, considering the facilities of modern communications, the town of
Floridablanca may be considered practically adjacent to San Fernando and Angeles City. It is not out of
place, therefore, to compare the land values in Floridablanca to the land values in San Fernando and
Angeles City, and form an idea of the value of the lands in Floridablanca with reference to the land
values in those two other communities.
The important factor in expropriation proceeding is that the owner is awarded the just
compensation for his property. We have carefully studied the record, and the evidence, in this case, and
after considering the circumstances attending the lands in question We have arrived at the conclusion
that the price of P10.00 per square meter, as recommended by the commissioners and adopted by the
lower court, is quite high. It is Our considered view that the price of P5.00 per square meter would be a
fair valuation of the lands in question and would constitute a just compensation to the owners thereof. In
arriving at this conclusion We have particularly taken into consideration the resolution of the Provincial
Committee on Appraisal of the province of Pampanga informing, among others, that in the year 1959 the
land of Castellvi could be sold for from P3.00 to P4.00 per square meter, while the land of Toledo-Gozun
could be sold for from P2.50 to P3.00 per square meter. The Court has weighed all the circumstances
relating to this expropriations proceedings, and in fixing the price of the lands that are being expropriated
the Court arrived at a happy medium between the price as recommended by the commissioners and
approved by the court, and the price advocated by the Republic. This Court has also taken judicial notice
of the fact that the value of the Philippine peso has considerably gone down since the year

1959. 30Considering that the lands of Castellvi and Toledo-Gozun are adjoining each other, and are of the
same nature, the Court has deemed it proper to fix the same price for all these lands. The third issue
raised by the Republic relates to the payment of interest. The Republic maintains that the lower court
erred when it ordered the Republic to pay Castellvi interest at the rate of 6% per annum on the total
amount adjudged as the value of the land of Castellvi, from July 1, 1956 to July 10, 1959. We find merit
in this assignment of error. In ordering the Republic to pay 6% interest on the total value of the land of
Castellvi from July 1, 1956 to July 10, 1959, the lower court held that the Republic had illegally
possessed the land of Castellvi from July 1, 1956, after its lease of the land had expired on June 30,
1956, until August 10, 1959 when the Republic was placed in possession of the land pursuant to the writ
of possession issued by the court. What really happened was that the Republic continued to occupy the
land of Castellvi after the expiration of its lease on June 30, 1956, so much so that Castellvi filed an
ejectment case against the Republic in the Court of First Instance of Pampanga. 31 However, while that
ejectment case was pending, the Republic filed the complaint for eminent domain in the present case
and was placed in possession of the land on August 10, 1959, and because of the institution of the
expropriation proceedings the ejectment case was later dismissed. In the order dismissing the ejectment
case, the Court of First Instance of Pampanga said: Plaintiff has agreed, as a matter of fact has already
signed an agreement with defendants, whereby she had agreed to receive the rent of the lands, subject
matter of the instant case from June 30, 1956 up to 1959 when the Philippine Air Force was placed in
possession by virtue of an order of the Court upon depositing the provisional amount as fixed by the
Provincial Appraisal Committee with the Provincial Treasurer of Pampanga;
If Castellvi had agreed to receive the rentals from June 30, 1956 to August 10, 1959, she
should be considered as having allowed her land to be leased to the Republic until August 10, 1959, and
she could not at the same time be entitled to the payment of interest during the same period on the
amount awarded her as the just compensation of her land. The Republic, therefore, should pay Castellvi
interest at the rate of 6% per annum on the value of her land, minus the provisional value that was
deposited, only from July 10, 1959 when it deposited in court the provisional value of the land.
The fourth error assigned by the Republic relates to the denial by the lower court of its motion
for a new trial based on nearly discovered evidence. We do not find merit in this assignment of error.
After the lower court had decided this case on May 26, 1961, the Republic filed a motion for a new trial,
supplemented by another motion, both based upon the ground of newly discovered evidence. The
alleged newly discovered evidence in the motion filed on June 21, 1961 was a deed of absolute saleexecuted on January 25, 1961, showing that a certain Serafin Francisco had sold to Pablo L. Narciso a
parcel of sugar land having an area of 100,000 square meters with a sugar quota of 100 piculs, covered
by P.A. No. 1701, situated in Barrio Fortuna, Floridablanca, for P14,000, or P.14 per square meter.
In the supplemental motion, the alleged newly discovered evidence were: (1) a deed of sale of some
35,000 square meters of land situated at Floridablanca for P7,500.00 (or about P.21 per square meter)
executed in July, 1959, by the spouses Evelyn D. Laird and Cornelio G. Laird in favor of spouses
Bienvenido S. Aguas and Josefina Q. Aguas; and (2) a deed of absolute sale of a parcel of land having
an area of 4,120,101 square meters, including the sugar quota covered by Plantation Audit No. 161
1345, situated at Floridablanca, Pampanga, for P860.00 per hectare (a little less than P.09 per square
meter) executed on October 22, 1957 by Jesus Toledo y Mendoza in favor of the Land Tenure
Administration. We find that the lower court acted correctly when it denied the motions for a new
trial. To warrant the granting of a new trial based on the ground of newly discovered evidence, it must
appear that the evidence was discovered after the trial; that even with the exercise of due diligence, the
evidence could not have been discovered and produced at the trial; and that the evidence is of such a
nature as to alter the result of the case if admitted. 32 The lower court correctly ruled that these requisites
were not complied with. The lower court, in a well-reasoned order, found that the sales made by Serafin
Francisco to Pablo Narciso and that made by Jesus Toledo to the Land Tenure Administration were
immaterial and irrelevant, because those sales covered sugarlands with sugar quotas, while the lands
sought to be expropriated in the instant case are residential lands. The lower court also concluded that
the land sold by the spouses Laird to the spouses Aguas was a sugar land.

26

We agree with the trial court. In eminent domain proceedings, in order that evidence as to the sale price
of other lands may be admitted in evidence to prove the fair market value of the land sought to be
expropriated, the lands must, among other things, be shown to be similar.
But even assuming, gratia argumenti, that the lands mentioned in those deeds of sale were residential,
the evidence would still not warrant the grant of a new trial, for said evidence could have been
discovered and produced at the trial, and they cannot be considered newly discovered evidence as
contemplated in Section 1(b) of Rule 37 of the Rules of Court. Regarding this point, the trial court said:
The Court will now show that there was no reasonable diligence employed.
The land described in the deed of sale executed by Serafin Francisco, copy of which is attached to the
original motion, is covered by a Certificate of Title issued by the Office of the Register of Deeds of
Pampanga. There is no question in the mind of the court but this document passed through the Office of
the Register of Deeds for the purpose of transferring the title or annotating the sale on the certificate of
title. It is true that Fiscal Lagman went to the Office of the Register of Deeds to check conveyances
which may be presented in the evidence in this case as it is now sought to be done by virtue of the
motions at bar, Fiscal Lagman, one of the lawyers of the plaintiff, did not exercise reasonable diligence
as required by the rules. The assertion that he only went to the office of the Register of Deeds 'now and
then' to check the records in that office only shows the half-hazard [sic] manner by which the plaintiff
looked for evidence to be presented during the hearing before the Commissioners, if it is at all true that
Fiscal Lagman did what he is supposed to have done according to Solicitor Padua. It would have been
the easiest matter for plaintiff to move for the issuance of a subpoena duces tecum directing the Register
of Deeds of Pampanga to come to testify and to bring with him all documents found in his office
pertaining to sales of land in Floridablanca adjacent to or near the lands in question executed or
recorded from 1958 to the present. Even this elementary precaution was not done by plaintiff's numerous
attorneys. The same can be said of the deeds of sale attached to the supplementary motion. They refer
to lands covered by certificate of title issued by the Register of Deeds of Pampanga. For the same
reason they could have been easily discovered if reasonable diligence has been exerted by the
numerous lawyers of the plaintiff in this case. It is noteworthy that all these deeds of sale could be found
in several government offices, namely, in the Office of the Register of Deeds of Pampanga, the Office of
the Provincial Assessor of Pampanga, the Office of the Clerk of Court as a part of notarial reports of
notaries public that acknowledged these documents, or in the archives of the National Library. In respect
to Annex 'B' of the supplementary motion copy of the document could also be found in the Office of the
Land Tenure Administration, another government entity. Any lawyer with a modicum of ability handling
this expropriation case would have right away though [sic] of digging up documents diligently showing
conveyances of lands near or around the parcels of land sought to be expropriated in this case in the
offices that would have naturally come to his mind such as the offices mentioned above, and had
counsel for the movant really exercised the reasonable diligence required by the Rule' undoubtedly they
would have been able to find these documents and/or caused the issuance of subpoena duces tecum. ...
It is also recalled that during the hearing before the Court of the Report and Recommendation of the
Commissioners and objection thereto, Solicitor Padua made the observation:
I understand, Your Honor, that there was a sale that took place in this place of land recently where the
land was sold for P0.20 which is contiguous to this land. The Court gave him permission to submit said
document subject to the approval of the Court. ... This was before the decision was rendered, and later
promulgated on May 26, 1961 or more than one month after Solicitor Padua made the above
observation. He could have, therefore, checked up the alleged sale and moved for a reopening to
adduce further evidence. He did not do so. He forgot to present the evidence at a more propitious time.
Now, he seeks to introduce said evidence under the guise of newly-discovered evidence. Unfortunately
the Court cannot classify it as newly-discovered evidence, because tinder the circumstances, the correct
qualification that can be given is 'forgotten evidence'. Forgotten however, is not newly-discovered
evidence. 33

The granting or denial of a motion for new trial is, as a general rule, discretionary with the trial court,
whose judgment should not be disturbed unless there is a clear showing of abuse of discretion. 34 We do
not see any abuse of discretion on the part of the lower court when it denied the motions for a new trial.
WHEREFORE, the decision appealed from is modified, as follows:
a) the lands of appellees Carmen Vda. de Castellvi and Maria Nieves Toledo-Gozun, as described in
the complaint, are declared expropriated for public use;
b) the fair market value of the lands of the appellees is fixed at P5.00 per square meter;
c) the Republic must pay appellee Castellvi the sum of P3,796,495.00 as just compensation for her
one parcel of land that has an area of 759,299 square meters, minus the sum of P151,859.80 that
she withdrew out of the amount that was deposited in court as the provisional value of the land, with
interest at the rate of 6% per annum from July 10, 1959 until the day full payment is made or
deposited in court;
d) the Republic must pay appellee Toledo-Gozun the sum of P2,695,225.00 as the just compensation
for her two parcels of land that have a total area of 539,045 square meters, minus the sum of
P107,809.00 that she withdrew out of the amount that was deposited in court as the provisional
value of her lands, with interest at the rate of 6%, per annum from July 10, 1959 until the day full
payment is made or deposited in court; (e) the attorney's lien of Atty. Alberto Cacnio is enforced;
and
e) the costs should be paid by appellant Republic of the Philippines, as provided in Section 12, Rule
67, and in Section 13, Rule 141, of the Rules of Court.

CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON CITY, petitioners,
vs. HON. JUDGE VICENTE G. ERICTA as Judge of the Court of First Instance of Rizal, Quezon
City, Branch XVIII; HIMLAYANG PILIPINO, INC., respondents.
This is a petition for review which seeks the reversal of the decision of the Court of First Instance of
Rizal, Branch XVIII declaring Section 9 of Ordinance No. 6118, S-64, of the Quezon City Council null and
void. Section 9 of Ordinance No. 6118, S-64, entitled "ORDINANCE REGULATING THE
ESTABLISHMENT, MAINTENANCE AND OPERATION OF PRIVATE MEMORIAL TYPE CEMETERY
OR BURIAL GROUND WITHIN THE JURISDICTION OF QUEZON CITY AND PROVIDING
PENALTIES FOR THE VIOLATION THEREOF" provides: Sec. 9. At least six (6) percent of the total
area of the memorial park cemetery shall be set aside for charity burial of deceased persons who are
paupers and have been residents of Quezon City for at least 5 years prior to their death, to be
determined by competent City Authorities. The area so designated shall immediately be developed and
should be open for operation not later than six months from the date of approval of the application.
For several years, the aforequoted section of the Ordinance was not enforced by city authorities but
seven years after the enactment of the ordinance, the Quezon City Council passed the following
resolution:
RESOLVED by the council of Quezon assembled, to request, as it does hereby request the City
Engineer, Quezon City, to stop any further selling and/or transaction of memorial park lots in Quezon City
where the owners thereof have failed to donate the required 6% space intended for paupers burial.
Pursuant to this petition, the Quezon City Engineer notified respondent Himlayang Pilipino, Inc. in writing
that Section 9 of Ordinance No. 6118, S-64 would be enforced
Respondent Himlayang Pilipino reacted by filing with the Court of First Instance of Rizal Branch XVIII at
Quezon City, a petition for declaratory relief, prohibition and mandamus with preliminary injunction (Sp.
Proc. No. Q-16002) seeking to annul Section 9 of the Ordinance in question The respondent alleged that

27

the same is contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and the
Revised Administrative Code.
There being no issue of fact and the questions raised being purely legal both petitioners and respondent
agreed to the rendition of a judgment on the pleadings. The respondent court, therefore, rendered the
decision declaring Section 9 of Ordinance No. 6118, S-64 null and void.
A motion for reconsideration having been denied, the City Government and City Council filed the instant
petition.
Petitioners argue that the taking of the respondent's property is a valid and reasonable exercise of police
power and that the land is taken for a public use as it is intended for the burial ground of paupers. They
further argue that the Quezon City Council is authorized under its charter, in the exercise of local police
power, " to make such further ordinances and resolutions not repugnant to law as may be necessary to
carry into effect and discharge the powers and duties conferred by this Act and such as it shall deem
necessary and proper to provide for the health and safety, promote the prosperity, improve the morals,
peace, good order, comfort and convenience of the city and the inhabitants thereof, and for the
protection of property therein."
On the other hand, respondent Himlayang Pilipino, Inc. contends that the taking or confiscation of
property is obvious because the questioned ordinance permanently restricts the use of the property such
that it cannot be used for any reasonable purpose and deprives the owner of all beneficial use of his
property.
The respondent also stresses that the general welfare clause is not available as a source of power for
the taking of the property in this case because it refers to "the power of promoting the public welfare by
restraining and regulating the use of liberty and property." The respondent points out that if an owner is
deprived of his property outright under the State's police power, the property is generally not taken for
public use but is urgently and summarily destroyed in order to promote the general welfare. The
respondent cites the case of a nuisance per se or the destruction of a house to prevent the spread of a
conflagration.
We find the stand of the private respondent as well as the decision of the respondent Judge to be wellfounded. We quote with approval the lower court's ruling which declared null and void Section 9 of the
questioned city ordinance: The issue is: Is Section 9 of the ordinance in question a valid exercise of
the police power?
An examination of the Charter of Quezon City (Rep. Act No. 537), does not reveal any provision that
would justify the ordinance in question except the provision granting police power to the City. Section 9
cannot be justified under the power granted to Quezon City to tax, fix the license fee, and regulate such
other business, trades, and occupation as may be established or practised in the City.' (Subsections 'C',
Sec. 12, R.A. 537).
The power to regulate does not include the power to prohibit (People vs. Esguerra, 81 PhiL 33, Vega vs.
Municipal Board of Iloilo, L-6765, May 12, 1954; 39 N.J. Law, 70, Mich. 396). A fortiori, the power to
regulate does not include the power to confiscate. The ordinance in question not only confiscates but
also prohibits the operation of a memorial park cemetery, because under Section 13 of said ordinance,
'Violation of the provision thereof is punishable with a fine and/or imprisonment and that upon conviction
thereof the permit to operate and maintain a private cemetery shall be revoked or cancelled.' The
confiscatory clause and the penal provision in effect deter one from operating a memorial park cemetery.
Neither can the ordinance in question be justified under sub- section "t", Section 12 of Republic Act 537
which authorizes the City Council to- 'prohibit the burial of the dead within the center of population of the
city and provide for their burial in such proper place and in such manner as the council may determine,
subject to the provisions of the general law regulating burial grounds and cemeteries and governing
funerals and disposal of the dead.' (Sub-sec. (t), Sec. 12, Rep. Act No. 537).
There is nothing in the above provision which authorizes confiscation or as euphemistically
termed by the respondents, 'donation'
We now come to the question whether or not Section 9 of the ordinance in question is a valid exercise of
police power. The police power of Quezon City is defined in sub-section 00, Sec. 12, Rep. Act 537 which

reads as follows: (00) To make such further ordinance and regulations not repugnant to law as may be
necessary to carry into effect and discharge the powers and duties conferred by this act and such as it
shall deem necessary and proper to provide for the health and safety, promote, the prosperity, improve
the morals, peace, good order, comfort and convenience of the city and the inhabitants thereof, and for
the protection of property therein; and enforce obedience thereto with such lawful fines or penalties as
the City Council may prescribe under the provisions of subsection (jj) of this section.
We start the discussion with a restatement of certain basic principles. Occupying the forefront
in the bill of rights is the provision which states that 'no person shall be deprived of life, liberty or property
without due process of law' (Art. Ill, Section 1 subparagraph 1, Constitution).
On the other hand, there are three inherent powers of government by which the state
interferes with the property rights, namely-. (1) police power, (2) eminent domain, (3) taxation. These are
said to exist independently of the Constitution as necessary attributes of sovereignty.
Police power is defined by Freund as 'the power of promoting the public welfare by restraining
and regulating the use of liberty and property' (Quoted in Political Law by Tanada and Carreon, V-11, p.
50). It is usually exerted in order to merely regulate the use and enjoyment of property of the owner. If he
is deprived of his property outright, it is not taken for public use but rather to destroy in order to promote
the general welfare. In police power, the owner does not recover from the government for injury
sustained in consequence thereof (12 C.J. 623). It has been said that police power is the most essential
of government powers, at times the most insistent, and always one of the least limitable of the powers of
government (Ruby vs. Provincial Board, 39 PhiL 660; Ichong vs. Hernandez, 1,7995, May 31, 1957).
This power embraces the whole system of public regulation (U.S. vs. Linsuya Fan, 10 PhiL 104). The
Supreme Court has said that police power is so far-reaching in scope that it has almost become
impossible to limit its sweep. As it derives its existence from the very existence of the state itself, it does
not need to be expressed or defined in its scope. Being coextensive with self-preservation and survival
itself, it is the most positive and active of all governmental processes, the most essential insistent and
illimitable Especially it is so under the modern democratic framework where the demands of society and
nations have multiplied to almost unimaginable proportions. The field and scope of police power have
become almost boundless, just as the fields of public interest and public welfare have become almost all
embracing and have transcended human foresight. Since the Courts cannot foresee the needs and
demands of public interest and welfare, they cannot delimit beforehand the extent or scope of the police
power by which and through which the state seeks to attain or achieve public interest and welfare.
(Ichong vs. Hernandez, L-7995, May 31, 1957). The police power being the most active power of the
government and the due process clause being the broadest station on governmental power, the conflict
between this power of government and the due process clause of the Constitution is oftentimes
inevitable. It will be seen from the foregoing authorities that police power is usually exercised in the form
of mere regulation or restriction in the use of liberty or property for the promotion of the general welfare.
It does not involve the taking or confiscation of property with the exception of a few cases where there is
a necessity to confiscate private property in order to destroy it for the purpose of protecting the peace
and order and of promoting the general welfare as for instance, the confiscation of an illegally possessed
article, such as opium and firearms.
It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of Quezon City is not a mere
police regulation but an outright confiscation. It deprives a person of his private property without due
process of law, nay, even without compensation.
In sustaining the decision of the respondent court, we are not unmindful of the heavy burden shouldered
by whoever challenges the validity of duly enacted legislation whether national or local As early as 1913,
this Court ruled in Case v. Board of Health (24 PhiL 250) that the courts resolve every presumption in
favor of validity and, more so, where the ma corporation asserts that the ordinance was enacted to
promote the common good and general welfare.
In the leading case of Ermita-Malate Hotel and Motel Operators Association Inc. v. City Mayor of
Manila (20 SCRA 849) the Court speaking through the then Associate Justice and now Chief Justice
Enrique M. Fernando stated: Primarily what calls for a reversal of such a decision is the a of any

28

evidence to offset the presumption of validity that attaches to a statute or ordinance. As was expressed
categorically by Justice Malcolm 'The presumption is all in favor of validity. ... The action of the elected
representatives of the people cannot be lightly set aside. The councilors must, in the very nature of
things, be familiar with the necessities of their particular ... municipality and with all the facts and lances
which surround the subject and necessitate action. The local legislative body, by enacting the ordinance,
has in effect given notice that the regulations are essential to the well-being of the people. ... The
Judiciary should not lightly set aside legislative action when there is not a clear invasion of personal or
property rights under the guise of police regulation. (U.S. v. Salaveria (1918], 39 Phil. 102, at p. 111.
There was an affirmation of the presumption of validity of municipal ordinance as announced in the
leading Salaveria decision in Ebona v. Daet, [1950]85 Phil. 369.)
We have likewise considered the principles earlier stated in Case v. Board of Health supra :
Under the provisions of municipal charters which are known as the general welfare clauses, a city, by
virtue of its police power, may adopt ordinances to the peace, safety, health, morals and the best and
highest interests of the municipality. It is a well-settled principle, growing out of the nature of well-ordered
and society, that every holder of property, however absolute and may be his title, holds it under the
implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal
right to the enjoyment of their property, nor injurious to the rights of the community. An property in the
state is held subject to its general regulations, which are necessary to the common good and general
welfare. Rights of property, like all other social and conventional rights, are subject to such reasonable
limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable
restraints and regulations, established by law, as the legislature, under the governing and controlling
power vested in them by the constitution, may think necessary and expedient. The state, under the
police power, is possessed with plenary power to deal with all matters relating to the general health,
morals, and safety of the people, so long as it does not contravene any positive inhibition of the organic
law and providing that such power is not exercised in such a manner as to justify the interference of the
courts to prevent positive wrong and oppression but find them not applicable to the facts of this case.
There is no reasonable relation between the setting aside of at least six (6) percent of the total area of an
private cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals,
good order, safety, or the general welfare of the people. The ordinance is actually a taking without
compensation of a certain area from a private cemetery to benefit paupers who are charges of the
municipal corporation. Instead of building or maintaining a public cemetery for this purpose, the city
passes the burden to private cemeteries.
The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t)
of Republic Act 537, the Revised Charter of Quezon City which empowers the city council to prohibit the
burial of the dead within the center of population of the city and to provide for their burial in a proper
place subject to the provisions of general law regulating burial grounds and cemeteries. When the Local
Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang
panlungsod may "provide for the burial of the dead in such place and in such manner as prescribed by
law or ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate
private properties to construct public cemeteries. This has been the law and practise in the past. It
continues to the present. Expropriation, however, requires payment of just compensation. The
questioned ordinance is different from laws and regulations requiring owners of subdivisions to set aside
certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to buyers
of subdivision lots. The necessities of public safety, health, and convenience are very clear from said
requirements which are intended to insure the development of communities with salubrious and
wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the subdivision
developer when individual lots are sold to home-owners.
As a matter of fact, the petitioners rely solely on the general welfare clause or on implied powers of the
municipal corporation, not on any express provision of law as statutory basis of their exercise of power.
The clause has always received broad and liberal interpretation but we cannot stretch it to cover this
particular taking. Moreover, the questioned ordinance was passed after Himlayang Pilipino, Inc. had

incorporated. received necessary licenses and permits and commenced operating. The sequestration of
six percent of the cemetery cannot even be considered as having been impliedly acknowledged by the
private respondent when it accepted the permits to commence operations.
WHEREFORE, the petition for review is hereby DISMISSED. The decision of the respondent court is
affirmed. SO ORDERED
NATIONAL POWER CORPORATION, petitioner, vs. SPS. MISERICORDIA GUTIERREZ and
RICARDO MALIT and THE HONORABLE COURT OF APPEALS, respondents.

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)

29

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.1wphi1 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 right-of-way
where the Supreme Court sustained the award of just compensation for private property condemned for
public use (See National Power Corporation vs. Court of Appeals, 129 SCRA 665, 1984; Garcia vs.

Court of Appeals, 102 SCRA 597,1981). The Supreme Court, in Republic of the Philippines vs.
PLDT, * thus held that: Normally, of course, the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why
said power may not be availed of to impose only a burden upon the owner of condemned property,
without loss of title and possession. It is unquestionable that real property may, through expropriation, be
subjected to an easement of right-of-way.
In the case at bar, the easement of right-of-way is definitely a taking under the power of
eminent domain. Considering the nature and effect of the installation of the 230 KV Mexico-Limay
transmission lines, the limitation imposed by NPC against the use of the land for an indefinite period
deprives private respondents of its ordinary use.
For these reasons, the owner of the property expropriated is entitled to a just compensation, which
should be neither more nor less, whenever it is possible to make the assessment, than the money
equivalent of said property. Just compensation has always been understood to be the just and complete
equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the
expropriation (Province of Tayabas vs. Perez, 66 Phil. 467 [1938]; Assoc. of Small Land Owners of the
Phils., Inc. vs. Secretary of Agrarian Reform, G.R. No. 78742; Acuna vs. Arroyo, G.R. No. 79310;
Pabrico vs. Juico, G.R. No. 79744; Manaay v. Juico, G.R. No. 79777,14 July 1989, 175 SCRA 343
[1989]). The price or value of the land and its character at the time it was taken by the Government are
the criteria for determining just compensation (National Power Corp. v. Court of Appeals, 129 SCRA 665,
[1984]). The above price refers to the market value of the land which may be the full market value
thereof. According to private respondents, the market value of their lot is P50.00 per square meter
because the said lot is adjacent to the National and super highways of Gapan, Nueva Ecija and
Olongapo City.
Private respondents recognize the inherent power of eminent domain being exercised by NPC when it
finally consented to the expropriation of the said portion of their land, subject however to payment of just
compensation. No matter how laudable NPC's purpose is, for which expropriation was sought, it is just
and equitable that they be compensated the fair and full equivalent for the loss sustained, which is the
measure of the indemnity, not whatever gain would accrue to the expropriating entity (EPZA v. Dulay,
149 SCRA 305 [1987]; Mun. of Daet v. Court of Appeals, 93 SCRA 503 (1979]).
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.

30

PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139 members, represented by its
President, Amado P. Macasaet and its Executive Director Ermin F. Garcia, Jr., petitioner, vs.
COMMISSION ON ELECTIONS, respondent.
The Philippine Press Institute, Inc. ("PPI") is before this Court assailing the constitutional validity of
Resolution No. 2772 issued by respondent Commission on Elections ("Comelec") and its corresponding
Comelec directive dated 22 March 1995, through a Petition for Certiorari and Prohibition. Petitioner PPI
is a non-stock, non-profit organization of newspaper and magazine publishers.
On 2 March 1995, Comelec promulgated Resolution No. 2772, which reads in part:
Sec. 2. Comelec Space. The Commission shall procure free print space of not less than one half (1/2)
page in at least one newspaper of general circulation in every province or city for use as "Comelec
Space" from March 6, 1995 in the case of candidates for senator and from March 21, 1995 until May 12,
1995. In the absence of said newspaper, "Comelec Space" shall be obtained from any magazine or
periodical of said province or city.
Sec. 3. Uses of Comelec Space. "Comelec Space" shall be allocated by the Commission, free of
charge, among all candidates within the area in which the newspaper, magazine or periodical is
circulated to enable the candidates to make known their qualifications, their stand on public issues and
their platforms and programs of government.
"Comelec Space" shall also be used by the Commission for dissemination of vital election information.
Sec. 4. Allocation of Comelec Space. (a) "Comelec Space" shall also be available to
all candidatesduring the periods stated in Section 2 hereof. Its allocation shall be equal and impartial
among all candidates for the same office. All candidates concerned shall be furnished a copy of the
allocation of "Comelec Space" for their information, guidance and compliance. (b) Any candidate desiring
to avail himself of "Comelec Space" from newspapers or publications based in the Metropolitan Manila
Area shall submit an application therefor, in writing, to the Committee on Mass Media of the Commission.
Any candidate desiring to avail himself of "Comelec Space" in newspapers or publications based in the
provinces shall submit his application therefor, in writing, to the Provincial Election Supervisor
concerned. Applications for availment of "Comelec Space" maybe filed at any time from the date of
effectivity of this Resolution. (c) The Committee on Mass Media and the Provincial Election Supervisors
shall allocate available"Comelec Space" among the candidates concerned by lottery of which said
candidates shall be notified in advance, in writing, to be present personally or by representative to
witness the lottery at the date, time and place specified in the notice. Any party objecting to the result of
the lottery may appeal to the Commission. (d) The candidates concerned shall be notified by the
Committee on Mass Media or the Provincial Election Supervisor, as the case maybe, sufficiently in
advance and in writing of the date of issue and the newspaper or publication allocated to him, and the
time within which he must submit the written material for publication in the "Comelec Space".
Sec. 8. Undue Reference to Candidates/Political Parties in Newspapers. No newspaper or publication
shall allow to be printed or published in the news, opinion, features, or other sections of the newspaper
or publication accounts or comments which manifestly favor or oppose any candidate or political party by
unduly or repeatedly referring to or including therein said candidate or political party. However, unless the
facts and circumstances clearly indicate otherwise, the Commission will respect the determination by the
publisher and/or editors of the newspapers or publications that the accounts or views published are
significant, newsworthy and of public interest. (Emphasis supplied)
Apparently in implementation of this Resolution, Comelec through Commissioner Regalado E.
Maambong sent identical letters, dated 22 March 1995, to various publishers of newspapers like
the Business World, the Philippine Star, the Malaya and the Philippine Times Journal, all members of
PPI. These letters read as follows:
This is to advise you that pursuant to Resolution No. 2772 of the Commission on Elections, you
aredirected to provide free print space of not less than one half (1/2) page for use as "Comelec Space"or
similar to the print support which you have extended during the May 11, 1992 synchronized elections

which was 2 full pages for each political party fielding senatorial candidates, from March 6, 1995 to May
6, 1995, to make known their qualifications, their stand on public issues and their platforms and
programs of government.
We shall be informing the political parties and candidates to submit directly to you their pictures,
biographical data, stand on key public issues and platforms of government either as raw data or in the
form of positives or camera-ready materials.
Please be reminded that the political parties/candidates may be accommodated in your publication any
day upon receipt of their materials until May 6, 1995 which is the last day for campaigning.
We trust you to extend your full support and cooperation in this regard. (Emphasis supplied)
In this Petition for Certiorari and Prohibition with prayer for the issuance of a Temporary Restraining
Order, PPI asks us to declare Comelec Resolution No. 2772 unconstitutional and void on the ground that
it violates the prohibition imposed by the Constitution upon the government, and any of its agencies,
against the taking of private property for public use without just compensation. Petitioner also contends
that the 22 March 1995 letter directives of Comelec requiring publishers to give free "Comelec Space"
and at the same time process raw data to make it camera-ready, constitute impositions of involuntary
servitude, contrary to the provisions of Section 18 (2), Article III of the 1987 Constitution. Finally, PPI
argues that Section 8 of Comelec Resolution No. 2772 is violative of the constitutionally guaranteed
freedom of speech, of the press and of expression. 1
On 20 April 1995, this Court issued a Temporary Restraining Order enjoining Comelec from enforcing
and implementing Section 2 of Resolution No. 2772, as well as the Comelec directives addressed to
various print media enterprises all dated 22 March 1995. The Court also required the respondent to file a
Comment on the Petition.
The Office of the Solicitor General filed its Comment on behalf of respondent Comelec alleging that
Comelec Resolution No. 2772 does not impose upon the publishers any obligation to provide free print
space in the newspapers as it does not provide any criminal or administrative sanction for noncompliance with that Resolution. According to the Solicitor General, the questioned Resolution merely
established guidelines to be followed in connection with the procurement of "Comelec space," the
procedure for and mode of allocation of such space to candidates and the conditions or requirements for
the candidate's utilization of the "Comelec space" procured. At the same time, however, the Solicitor
General argues that even if the questioned Resolution and its implementing letter directives are viewed
as mandatory, the same would nevertheless be valid as an exercise of the police power of the State. The
Solicitor General also maintains that Section 8 of Resolution No. 2772 is a permissible exercise of the
power of supervision or regulation of the Comelec over the communication and information operations of
print media enterprises during the election period to safeguard and ensure a fair, impartial and credible
election. 2
At the oral hearing of this case held on 28 April 1995, respondent Comelec through its Chairman, Hon.
Bernardo Pardo, in response to inquiries from the Chief Justice and other Members of the Court, stated
that Resolution No. 2772, particularly Section 2 thereof and the 22 March 1995 letters dispatched to
various members of petitioner PPI, were not intended to compel those members to supply Comelec with
free print space. Chairman Pardo represented to the Court that Resolution and the related letterdirectives were merely designed to solicit from the publishers the same free print space which many
publishers had voluntarily given to Comelec during the election period relating to the 11 May 1992
elections. Indeed, the Chairman stated that the Comelec would, that very afternoon, meet and adopt an
appropriate amending or clarifying resolution, a certified true copy of which would forthwith be filed with
the Court.
On 5 May 1995, the Court received from the Office of the Solicitor General a manifestation which
attached a copy of Comelec Resolution No. 2772-A dated 4 May 1995. The operative portion of this
Resolution follows: NOW THEREFORE, pursuant to the powers vested in it by the Constitution, the
Omnibus Election Code, Republic Acts No. 6646 and 7166 and other election laws, the Commission on
Elections RESOLVED to clarify Sections 2 and 8 of Res. No. 2772 as follows:
1. Section 2 of Res. No. 2772 shall not be construed to mean as requiring publishers of the different
mass media print publications to provide print space under pain of prosecution, whether administrative,

31

civil or criminal, there being no sanction or penalty for violation of said Section provided for either in said
Resolution or in Section 90 of Batas Pambansa Blg. 881, otherwise known as the Omnibus Election
Code, on the grant of "Comelec space."
2. Section 8 of Res. No. 2772 shall not be construed to mean as constituting prior restraint on the part of
publishers with respect to the printing or publication of materials in the news, opinion, features or other
sections of their respective publications or other accounts or comments, it being clear from the last
sentence of said Section 8 that the Commission shall, "unless the facts and circumstances clearly
indicate otherwise . . . respect the determination by the publisher and/or editors of the newspapers or
publications that the accounts or views published are significant, newsworthy and of public interest."
This Resolution shall take effect upon approval. While, at this point, the Court could perhaps simply
dismiss the Petition for Certiorari and Prohibition as having become moot and academic, we consider it
not inappropriate to pass upon the first constitutional issue raised in this case. Our hope is to put this
issue to rest and prevent its resurrection.
Section 2 of Resolution No. 2772 is not a model of clarity in expression. Section 1 of Resolution No.
2772-A did not try to redraft Section 2; accordingly, Section 2 of Resolution No. 2772 persists in its
original form. Thus, we must point out that, as presently worded, and in particular as interpreted and
applied by the Comelec itself in its 22 March 1995 letter-directives to newspaper publishers, Section 2 of
Resolution No. 2772 is clearly susceptible of the reading that petitioner PPI has given it. That Resolution
No. 2772 does not, in express terms, threaten publishers who would disregard it or its implementing
letters with some criminal or other sanction, does not by itself demonstrate that the Comelec's original
intention was simply to solicit or request voluntary donations of print space from publishers. A written
communication officially directing a print media company to supply free print space, dispatched by a
government (here a constitutional) agency and signed by a member of the Commission presumably
legally authorized to do so, is bound to produce a coercive effect upon the company so addressed. That
the agency may not be legally authorized to impose, or cause the imposition of, criminal or other
sanctions for disregard of such directions, only aggravates the constitutional difficulties inhearing in the
present situation. The enactment or addition of such sanctions by the legislative authority itself would be
open to serious constitutional objection.
To compel print media companies to donate "Comelec-space" of the dimensions specified in Section 2 of
Resolution No. 2772 (not less than one-half page), amounts to "taking" of private personal property for
public use or purposes. Section 2 failed to specify the intended frequency of such compulsory
"donation:" only once during the period from 6 March 1995 (or 21 March 1995) until 12 May 1995? or
everyday or once a week? or as often as Comelec may direct during the same period? The extent of the
taking or deprivation is not insubstantial; this is not a case of a de minimis temporary limitation or
restraint upon the use of private property. The monetary value of the compulsory "donation," measured
by the advertising rates ordinarily charged by newspaper publishers whether in cities or in non-urban
areas, may be very substantial indeed.
The taking of print space here sought to be effected may first be appraised under the rubric of
expropriation of private personal property for public use. The threshold requisites for a lawful taking of
private property for public use need to be examined here: one is the necessity for the taking; another is
the legal authority to effect the taking. The element of necessity for the taking has not been shown by
respondent Comelec. It has not been suggested that the members of PPI are unwilling to sell print space
at their normal rates to Comelec for election purposes. Indeed, the unwillingness or reluctance of
Comelec to buy print space lies at the heart of the problem. 3Similarly, it has not been suggested, let
alone demonstrated, that Comelec has been granted the power of eminent domain either by the
Constitution or by the legislative authority. A reasonable relationship between that power and the
enforcement and administration of election laws by Comelec must be shown; it is not casually to be
assumed. That the taking is designed to subserve "public use" is not contested by petitioner PPI. We
note only that, under Section 3 of Resolution No. 2772, the free "Comelec space" sought by the
respondent Commission would be used not only for informing the public about the identities,
qualifications and programs of government of candidates for elective office but also for "dissemination of

vital election information" (including, presumably, circulars, regulations, notices, directives, etc. issued by
Comelec). It seems to the Court a matter of judicial notice that government offices and agencies
(including the Supreme Court) simply purchase print space, in the ordinary course of events, when their
rules and regulations, circulars, notices and so forth need officially to be brought to the attention of the
general public. The taking of private property for public use is, of course, authorized by the Constitution,
but not without payment of "just compensation" (Article III, Section 9). And apparently the necessity of
paying compensation for "Comelec space" is precisely what is sought to be avoided by respondent
Commission, whether Section 2 of Resolution No. 2772 is read as petitioner PPI reads it, as an assertion
of authority to require newspaper publishers to "donate" free print space for Comelec purposes, or as an
exhortation, or perhaps an appeal, to publishers to donate free print space, as Section 1 of Resolution
No. 2772-A attempts to suggest. There is nothing at all to prevent newspaper and magazine publishers
from voluntarily giving free print space to Comelec for the purposes contemplated in Resolution No.
2772. Section 2 of Resolution No. 2772 does not, however, provide a constitutional basis for compelling
publishers, against their will, in the kind of factual context here present, to provide free print space for
Comelec purposes. Section 2 does not constitute a valid exercise of the power of eminent domain.
We would note that the ruling here laid down by the Court is entirely in line with the theory of democratic
representative government. The economic costs of informing the general public about the qualifications
and programs of those seeking elective office are most appropriately distributed as widely as possible
throughout our society by the utilization of public funds, especially funds raised by taxation, rather than
cast solely on one small sector of society, i.e., print media enterprises. The benefits which flow from a
heightened level of information on and the awareness of the electoral process are commonly thought to
be community-wide; the burdens should be allocated on the same basis.
As earlier noted, the Solicitor General also contended that Section 2 of Resolution No. 2772, even if read
as compelling publishers to "donate" "Comelec space, " may be sustained as a valid exercise of the
police power of the state. This argument was, however, made too casually to require prolonged
consideration on our part. Firstly, there was no effort (and apparently no inclination on the part of
Comelec) to show that the police power essentially a power of legislation has been constitutionally
delegated to respondent Commission. 4 Secondly, while private property may indeed be validly taken in
the legitimate exercise of the police power of the state, there was no attempt to show compliance in the
instant case with the requisites of a lawful taking under the police power. 5
Section 2 of Resolution No. 2772 is a blunt and heavy instrument that purports, without a showing of
existence of a national emergency or other imperious public necessity, indiscriminately and without
regard to the individual business condition of particular newspapers or magazines located in differing
parts of the country, to take private property of newspaper or magazine publishers. No attempt was
made to demonstrate that a real and palpable or urgent necessity for the taking of print space confronted
the Comelec and that Section 2 of Resolution No. 2772 was itself the only reasonable and calibrated
response to such necessity available to the Comelec. Section 2 does not constitute a valid exercise of
the police power of the State.
We turn to Section 8 of Resolution No. 2772, which needs to be quoted in full again:
Sec. 8. Undue Reference to Candidates/Political Parties in Newspapers. No newspaper or publication
shall allow to be printed or published in the news, opinion, features, or other sections of the newspaper
or publication accounts or comments which manifestly favor or oppose any candidate or political party by
unduly or repeatedly referring to or including therein said candidate or political party. However, unless the
facts and circumstances clearly indicate otherwise, the Commission will respect the determination by the
publisher and/or editors of the newspapers or publications that the accounts or views published are
significant, newsworthy and of public interest.
It is not easy to understand why Section 8 was included at all in Resolution No. 2772. In any case,
Section 8 should be viewed in the context of our decision in National Press Club v. Commission on
Elections. 6 There the Court sustained the constitutionality of Section 11 (b) of R.A. No. 6646, known as
the Electoral Reforms Law of 1987, which prohibits the sale or donation of print space and airtime for
campaign or other political purposes, except to the Comelec. In doing so, the Court carefully

32

distinguished (a) paid political advertisements which are reached by the prohibition of Section 11 (b),
from (b) the reporting of news, commentaries and expressions of belief or opinion by reporters,
broadcasters, editors, commentators or columnists which fall outside the scope of Section 11 (b) and
which are protected by the constitutional guarantees of freedom of speech and of the press:
Secondly, and more importantly, Section 11 (b) is limited in its scope of application. Analysis ofSection 11
(b) shows that it purports to apply only to the purchase and sale, including purchase and sale disguised
as a donation, of print space and air time for campaign or other political purposes.Section 11 (b) does
not purport in any way to restrict the reporting by newspapers or radio ortelevision stations of news or
news-worthy events relating to candidates, their qualifications, political parties and programs of
government. Moreover, Section 11 (b) does not reach commentaries and expressions of belief or opinion
by reporters or broadcaster or editors or commentators or columnists in respect of candidates, their
qualifications, and programs and so forth, so long at least as such comments, opinions and beliefs are
not in fact advertisements for particular candidates covertly paid for. In sum, Section 11 (b) is not to be
read as reaching any report or commentary or other coverage that, in responsible media, is not paid for
by candidates for political office. We read Section 11 (b) as designed to cover only paid political
advertisements of particular candidates.
The above limitation in scope of application of Section 11 (b) that it does not restrict either the
reporting of or the expression of belief or opinion or comment upon the qualifications and programs and
activities of any and all candidates for office constitutes the critical distinction which must be made
between the instant case and that of Sanidad v. Commission on Elections. . . . 7 (Citations omitted;
emphasis supplied)
Section 8 of Resolution No. 2772 appears to represent the effort of the Comelec to establish a guideline
for implementation of the above-quoted distinction and doctrine in National Press Club an effort not
blessed with evident success. Section 2 of Resolution No. 2772-A while possibly helpful, does not add
substantially to the utility of Section 8 of Resolution No. 2772. The distinction between paid political
advertisements on the one hand and news reports, commentaries and expressions of belief or opinion
by reporters, broadcasters, editors, etc. on the other hand, can realistically be given operative meaning
only in actual cases or controversies, on a case-to-case basis, in terms of very specific sets of facts.
At all events, the Court is bound to note that PPI has failed to allege any specific affirmative action on the
part of Comelec designed to enforce or implement Section 8. PPI has not claimed that it or any of its
members has sustained actual or imminent injury by reason of Comelec action under Section 8. Put a
little differently, the Court considers that the precise constitutional issue here sought to be raised
whether or not Section 8 of Resolution No. 2772 constitutes a permissible exercise of the Comelec's
power under Article IX, Section 4 of the Constitution to supervise or regulate the enjoyment or utilization
of all franchise or permits for the operation of media of communication or information [for the
purpose of ensuring] equal opportunity, time and space, and the right of reply, including reasonable,
equal rates therefore, for public information campaigns and forums among candidates in connection with
the objective of holding free, orderly honest, peaceful and credible elections
is not ripe for judicial review for lack of an actual case or controversy involving, as the very lis
mota thereof, the constitutionality of Section 8.
Summarizing our conclusions:
1. Section 2 of Resolution No. 2772, in its present form and as interpreted by Comelec in its 22
March 1995 letter directives, purports to require print media enterprises to "donate" free print
space to Comelec. As such, Section 2 suffers from a fatal constitutional vice and must be set
aside and nullified.
2. To the extent it pertains to Section 8 of Resolution No. 2772, the Petition for Certiorari and
Prohibition must be dismissed for lack of an actual, justiciable case or controversy.
(a) WHEREFORE, for all the foregoing, the Petition for Certiorari and Prohibition is
GRANTED in part and Section 2 of Resolution No. 2772 in its present form and
the related letter-directives dated 22 March 1995 are hereby SET ASIDE as
null and void, and the Temporary Restraining Order is hereby MADE

PERMANENT. The Petition is DISMISSED in part, to the extent it relates to

Section 8 of Resolution No. 2772. No pronouncement as to costs.

FILSTREAM INTERNATIONAL INCORPORATED, petitioner, vs. COURT OF APPEALS, JUDGE FELIPE

S. TONGCO and THE CITY OF MANILA, respondent. GR NO 125218, JANUARY 23, 1998
FILSTREAM INTERNATIONAL INCORPORATED, petitioner, vs., COURT OF APPEALS, ORLANDO
MALIT, ANTONIO CAGUIAT, ALICIA CABRERA, ARMANDO LACHICA, JACINTO CAGUIAT, GLORIA
ANTONIO, ELIZALDE NAVARRA, DOLORES FUENTES, SUSANA ROY, ANTONIO IBANEZ, BENIGNO
BASILIO, LUCERIA DEMATULAC, FLORENCIA GOMEZ, LAZARO GOMEZ, JOSE GOMEZ,
VENANCIO MANALOTO, CRISTINO UMALI, DEMETRIA GATUS, PRISCILLA MALONG, DOMINGO
AGUILA, RAMON SAN AGUSTIN, JULIAN FERRER, JR., FRANCISCO GALANG, FLORENTINO
MALIWAT, SEVERINA VILLAR, TRINIDAD NAGUIT, JOSE NAGUIT, FORTUNATO AGUSTIN
CABRERA, GAUDENCIO INTAL, DANILO DAVID, ENRIQUE DAVID, VICENTE DE GUZMAN,

33

POLICARPIO LUMBA, BELEN PALMA, ELEN SOMVILLO, LEONARDO MANICAD, OPRENG MICLAT,
BENITA MATA, GREGORIO LOPEZ, MARCELINA SAPNO, JESUS MERCADO, and CALIXTO
GOMEZ, respondent. GR. NO. 128077, JANUARY 23, 1998
In resolving the instant petitions, the Court is tasked to strike a balance between the contending interests
when the state exercised its power of eminent domain. On one side we have the owners of the property
to be expropriated who must be duly compensated for the loss of their property, while on the other is the
State which must take the property for public use.
Petitioner, Filstream International Inc., is the registered owner of the properties subject of this dispute
consisting of adjacent parcels of land situated in Antonio Rivera Street, Tondo II, Manila, with a total area
of 3,571.10 square meters and covered by T.C.T. Nos. 203937, 203936, 169198, 169199, 169200 and
169202 of the Register of Deeds of Manila. On January 7, 1993, petitioner filed an ejectment suit before
the Metropolitan Trial Court of Manila (Branch 15) docketed as Civil Case No. 140817-CV against the
occupants of the abovementioned parcels of land (herein private respondents in G.R. No. 128077) on
the grounds of termination of the lease contract and non-payment of rentals. Judgment was rendered by
the MTC on September 14, 1993 ordering private respondents to vacate the premises and pay back
rentals to petitioner.[1] Not satisfied, private respondents appealed the decision to the Regional Trial Court
of Manila, Branch 4 (Civil Case No. 93-68130) which in turn affirmed the decision of the MTC in its
decision dated February 22, 1994. Still not content, private respondents proceeded to the Court of
Appeals via a petition for review (CA-G.R. SP No. 33714). The result however remained the same as the
CA affirmed the decision of the RTC in its decision dated August 25, 1994. [2] Thereafter, no further action
was taken by the private respondents, as a result of which the decision in the ejectment suit became
final and executory. However, it appeared that during the pendency of the ejectment proceedings private
respondents filed on May 25, 1993, a complaint for Annulment of Deed of Exchange against petitioner
Filstream which was docketed in Civil Case No. 93-66059 before the RTC of Manila, Branch 43. It was at
this stage that respondent City of Manila came into the picture when the city government approved
Ordinance No. 7813[3] on November 5, 1993, authorizing Mayor Alfredo S. Lim to initiate the acquisition
by negotiation, expropriation, purchase, or other legal means certain parcels of land registered under
T.C.T. Nos. 169193, 169198, 169190, 169200, 169202, and 169192 of the Registry of Deeds of Manila
which formed part of the properties of petitioner then occupied by private respondents. Subsequently, the
City of Manila approved Ordinance No. 7855[4] declaring the expropriation of certain parcels of land
situated along Antonio Rivera and Fernando Ma. Guerero streets in Tondo, Manila which were owned by
Mr. Enrique Quijano Gutierez, petitioners predecessor-in-interest. The said properties were to be sold
and distributed to qualified tenants of the area pursuant to the Land Use Development Program of the
City of Manila. On May 23, 1994, respondent City of Manila filed a complaint for eminent domain (Civil
Case No. 94-70560) before the RTC of Manila, Branch 42, [5] seeking to expropriate the aforecited
parcels of land owned by petitioner Filstream which are situated at Antonio Rivera Street, Tondo II,
Manila.[6] Pursuant to the complaint filed by respondent City of Manila,the trial court issued a Writ of
Possession[7] in favor of the former which ordered the transfer of possession over the disputed premises
to the City of Manila. At this juncture, petitioner Filstream filed a motion to dismiss the complaint for
eminent domain as well as a motion to quash the writ of possession. The motion to dismiss was
premised on the following grounds: no valid cause of action; the petition does not satisfy the
requirements of public use and a mere clandestine maneuver to circumvent the writ execution issued by
the RTC of Manila, Branch 4 in the ejectment suit; violation of the constitutional guarantee against nonimpairment of obligation and contract; price offered was too low hence violative of the just compensation
provision of the constitution and the said amount is without the certification of the City Treasurer for
availability of funds.[8] With respect to the motion to quash the writ of possession, petitioner raised the
following objections: failure to comply with Section 2 of Rule 67 of the Rules of Court, Ordinance No.
7813 is a void enactment for it was approved without a public hearing and violative of the constitutional
guarantee against impairment of obligation and contracts; the price is too low and unconscionable

violating the just compensation provision of the constitution, and the said writ is tainted with infirmity
considering the absence of a certification from the City of Manila that there is an immediately available
fund for the subject expropriation.[9]
Respondent City of Manila filed its opposition[10] to petitioner Filstreams two motion and to which
petitioner accordingly filed a reply.[11] On September 30, 1994, the RTC of Manila, Branch 42, issued an
order denying petitioner Filstreams motion to dismiss and the motion to quash the Writ of Possession
and declared as follows:
IN FINE, the defendants motion to dismiss and motion to quash writ of possession are both without
merit and are hereby DENIED and the subject parcels of lands covered by TCT Nos. 203937, 203936,
169198, 169199, 169200, and 169202 (of the Register of Deeds of Manila) located at Antonio Rivera
Street, Tondo II, Manila with a total area of 3,571.10 square meters are hereby declared CONDEMNED
in favor of the City of Manila for distribution and resale to all poor and landless qualified residents/tenants
in the said area under the citys land-for-the-landless program upon payment of just compensation which
is yet to be determined by this Court.[12] Petitioner filed a motion for reconsideration[13] as well as a
supplemental motion for reconsideration [14] seeking the reversal of the above-quoted order but the same
were denied.[15] Still, petitioner filed a subsequent motion to be allowed to file a second motion for
reconsideration but it was also denied. Aggrieved, petitioner filed on March 31, 1996, a Petition
for Certiorari with the Court of Appeals (CA-G.R. SP No. 36904) seeking to set aside the September 30,
1994 order of the RTC of Manila, Branch 42. However, on March 18, 1996, respondent CA issued a
resolution dismissing the petition in this wise: It appearing that the above-entitled petition is insufficient in
form and substance -- it does not comply with Section 2(a), Rule 6 of the Revised Internal Rules of the
Court of Appeals which requires that the petition shall be x x x accompanied by x x x other pertinent
documents and papers, aside from the fact that copies of the pleadings attached to the petition are
blurred and unreadable -- this Court resolved to summarily DISMISS the same (petition). [16] Petitioner
filed a motion for reconsideration and attached clearer copies of the pertinent documents and papers
pursuant to Section 2(a) Rule 6 of the Revised Internal Rules of the Court of Appeals. But on May 20,
1996, respondent CA issued a resolution denying the motion as petitioner failed to submit clearer and
readable copies of the pleadings. [17] This prompted petitioner to proceed to this Court giving rise to the
instant petition for review on certiorari under Rule 45 and docketed herein as G.R. No. 125218, assailing
the dismissal of its petition by the CA in its resolution dated March 18, 1996 as well as that of its motion
for reconsideration in the resolution dated May 20, 1996. Meanwhile, owing to the finality of the decision
in the ejectment suit (Civil Case No 140817 CV), the MTC of Manila, Branch 15, upon motion of
petitioner Filstream, issued a Writ of Execution as well as a Notice to Vacate the disputed premises.
[18]
Private respondents filed a Motion to Recall/Quash the Writ of Execution and Notice to
Vacate[19] alleging the existence of a supervening event in that the properties subject of the dispute have
already been ordered condemned in an expropriation proceeding in favor of the City of Manila for the
benefit of the qualified occupants thereof, thus execution shall be stayed. Petitioner opposed the motion,
reiterating that the decision in the ejectment case is already final and executory and disputed private
respondents right to interpose the expropriation proceedings as a defense because the latter were not
parties to the same.
For its part, the City of Manila filed on March 13, 1996, a motion for intervention with prayer to
stay/quash the writ of execution on the ground that it is the present possessor of the property subject of
execution. In its order dated March 14, 1996, the MTC of Manila, Branch 14, denied private respondents
motion as it found the allegations therein bereft of merit and upheld the issuance of the Writ of Execution
and Notice to Vacate in petitioners favor.[20] Subsequently, the trial court also denied the motion filed by
the City of Manila. On April 22, 1996, the trial court issued an order commanding the demolition of the
structure erected on the disputed premises. To avert the demolition, private respondents filed before the
RTC of Manila, Branch 14, a Petition for Certiorari and Prohibition with prayer for the issuance of a
temporary restraining order and preliminary injunction (docketed as Civil Case No. 96-78098). On April
29, 1996, the RTC of Manila, Branch 33, issued a TRO enjoining the execution if the writ issued in Civil
Case No. 140817-CV by the MTC of Manila, Branch 14. [21] Subsequently, the RTC issued a writ of

34

preliminary injunction on May 14, 1996.[22] On May 15, 1996, the City of Manila filed its Petition
for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order and
preliminary injunction which was raffled to Branch 23 of the RTC of Manila (docketed as Civil Case No.
96-78382), seeking the reversal of the orders issued by the MTC of Manila, Branch 14, which denied its
motion to intervene and quash the writ of execution in Civil Case No. 140817-CV. Thereafter, upon
motion filed by the City of Manila, an order was issued by the RTC of Manila, Branch 10, ordering the
consolidation of Civil Case No. 96-78382 with Civil Case No. 96-78098 pending before Branch 14 of the
RTC of Manila.[23] On May 21, 1996, the RTC of Manila, Branch 14, issued an injunction in Civil Case No.
96-78098 enjoining the implementation of the writ of execution until further orders from the court.
[24]
Petitioner Filstream filed a Motion to Dissolve the Writ of Preliminary Injunction and to be allowed to
post a counter-bond but the trial court denied the same. Filstream then filed a motion for reconsideration
from the order of denial but pending resolution of this motion for voluntary inhibition of the presiding
judge of the RTC of Manila, Branch 14. The motion for inhibition was granted[25] and as a result, the
consolidated cases (Civil Case No. 96-78382 and 96-78098) were re-raffled to the RTC of Manila,
Branch 33. During the proceedings before the RTC of Manila, Branch 33, petitioner Filstream moved for
the dismissal of the consolidated cases (Civil Case No. 96-78382 and 96-78098) for violation of
Supreme Court Circular No. 04-94 (forum shopping) because the same parties, causes of action and
subject matter involved therein have already been disposed of in the decision in the ejectment case (Civil
Case No. 140817) which has already become final and executory prior to the filing of these consolidated
cases. On December 9, 1996, an order was issued by the RTC of Manila, Branch 33, ordering the
dismissal of Civil Cases Nos. 96-78382 and 96-78098 for violation of Supreme Court Circular No. 04-94.
[26]
Immediately thereafter, petitioner Filstream filed an Ex-parte Motion for Issuance of an Alias Writ of
Demolition and Ejectment and a supplemental motion to the same dated January 10 and 13, 1997,
respectively,[27] before the MTC of Manila, Branch 15, which promulgated the decision in the ejectment
suit (Civil Case No. 140817-CV). On January 23, 1997, the court granted the motion and issued the
corresponding writ of demolition.
As a consequence of the dismissal of the consolidated cases, herein private respondents filed a Petition
for Certiorari and Prohibition with prayer for the issuance of a temporary restraining order and
preliminary injunction before the Court of Appeals (docketed as CA-G.R. SP No. 43101) [28] assailing the
above-mentioned order of dismissal by the RTC of Manila, Branch 33, as having been issued with grave
abuse of discretion tantamount to lack or in excess of jurisdiction. In a resolution dated January 28,
1997, the Court of Appeals granted herein private respondents prayer for the issuance of a temporary
restraining order and directed the MTC of Manila, Branch 15, to desist from implementing the order of
demolition dated January 23, 1997, unless otherwise directed. [29] At the conclusion of the hearing for the
issuance of a writ of preliminary injunction, the Court of Appeals, in its resolution dated February 18,
1997, found merit in private respondents allegations in support of their application of the issuance of the
writ and granted the same, to wit: Finding that the enforcement or implementation of the writ of execution
and notice to vacate issued in Civil Case No. 140817-CV, the ejectment case before respondent Judge
Jiro, during the pendency of the instant petition, would probably be in violation of petitioners right, and
would tend to render the judgment in the instant case ineffectual, and probably work injustice to the
petitioners, the application for the issuance of a writ of preliminary injunction is hereby GRANTED.
WHEREFORE, upon the filing of a bond in the amount of P150,000.00, let a writ of preliminary injunction
be issued enjoining respondents, their employees, agents, representatives and anyone acting in their
behalf from enforcing or executing the writ of execution and notice to vacate issued in Civil Case No.
140817-CV of the court of respondent Judge Jiro, or otherwise disturbing the status quo, until further
orders of this Court. In turn, petitioner Filstream is now before this Court via a Petition
for Certiorari under Rule 65 (G.R. No. 128077), seeking to nullify the Resolutions of the Court of Appeals
dated January 28, 1997 and February 18, 1997 which granted herein private respondents prayer for a

TRO and Writ of Preliminary Injunction, the same being null and void for having been issued in grave
abuse of discretion.
Upon motion filed by petitioner Filstream, in order to avoid any conflicting decision on the legal issues
raised in the petitions, the Court ordered that the later petition, G.R. No. 128077 be consolidated with
G.R. No. 128077 in the resolution of March 5, 1997.[31] The issue raised in G.R. No. 125218 is purely
procedural and technical matter. Petitioner takes exception to the resolutions of respondent CA dated
March 18, 1996 and May 20, 1996 which ordered the dismissal of its Petition for Certiorari for noncompliance with Sec. 2(a) of Rule 6 of the Revised Internal Rules of the Court of Appeals by failing to
attach to its petition other pertinent documents and papers and for attaching copies of pleadings which
are blurred and unreadable. Petitioner argues that respondent appellate court seriously erred in giving
more premium to form rather than the substance. We agree with the petitioner. A strict adherence to the
technical and procedural rules in this case would defeat rather than meet the ends of justice as it would
result in the violation of the substantial rights of petitioner. At stake in the appeal filed by petitioner before
the CA is the exercise of their property rights over the disputed premises which have been expropriated
and have in fact been ordered condemned in favor of the City of Manila. In effect, the dismissal of their
appeal in the expropriation proceedings based on the aforementioned grounds is tantamount to a
deprivation of property without due process of law as it would automatically validate the expropriation
proceedings based on the aforementioned grounds is tantamount to a deprivation of property without
due process of law as it would automatically validate the expropriation proceedings which the petitioner
is still disputing. It must be emphasized that where substantial rights are affected, as in this case, the
stringent application of procedural rules may be relaxed if only to meet the ends of substantial justice.
In these instances, respondent CA can exercise its discretion to suspend its internal rules and allow the
parties to present and litigate their causes of action so that the Court can make an actual and complete
disposition of the issues presented in the case. Rather than simply dismissing the petition summarily for
non-compliance with respondent courts internal rules, respondent CA should have instead entertained
petitioner Filstreams petition for review on Certiorari, and ordered petitioner to submit the corresponding
pleadings which it deems relevant and replace those which are unreadable. This leniency could not have
caused any prejudiced to the rights of the other parties. With regard to the other petition, G.R. No.
128077, petitioner Filstream objects to the issuance by respondent CA of the restraining order and the
preliminary injunction enjoining the execution of the writ of demolition issued in the ejectment suit (Civil
Case No. 140817-CV) as an incident to private respondents pending petition assailing the dismissal by
the RTC of Manila, Branch 33, of the consolidated petitions forcertiorari filed by private respondents and
the City of Manila on the ground of forum shopping. The propriety of the issuance of the restraining order
and the writ of preliminary injunction is but a mere incient to the actual controversywhich is rooted in the
assertion of the conflicting rights of the parties in this case over the disputed premises. In order to
determine whether private respondents are entitled to the injunctive reliefs granted by respondent CA,
we deemed it proper to extract the source of discord. Petitioner Filstream anchors its claim by virtue of
its ownership over the properties and the existence of a final and executory judgment against private
respondents ordering the latters ejectment from the premises (Civil Case No. 140817-CV).
Private respondents claim on the other hand hinges on an alleged supervening event which has
rendered the enforcement of petitioners rights moot, that is, the expropriation proceedings (Civil Case
No. 94-70560) undertaken by the City of Manila over the disputed premises for the benefit of herein
private respondents. For its part, the City of Manila is merely exercising its power of eminent domain
within its jurisdiction by expropriating petitioners properties for public use. There is no dispute as to the
existence of a final and executory judgment in favor of petitioner Filstream ordering the ejectment of
private respondents from the properties subject of this dispute. The judgment in the ejectment suit
became final and executory after private respondents failed to interpose any appeal from the adverse
decision of the Court of Appeals dated August 25, 1994 in CA-G.R. SP No. 33714. Thus, petitioner has
every right to assert the execution of this decision as it had already became final and executory.

35

However, it must also be conceded that the City of Manila has an undeniable right to exercise its power
of eminent domain within its jurisdiction. The right to expropriate private property for public use is
expressly granted to it under Section 19 of the 1991 Local Government Code, to wit:
SECTION 19. Eminent Domain A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare
for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws: Provided, however, that the power of eminent domain
may not be exercised unless a valid and definite offer has been previously made to the owner, and such
offer was not accepted; Provided, further, That the local government unit may immediately take
possession of the property upon the filing of the expropriation proceedings and upon making a deposit
with the proper court of at least fifteen (15%) of the fair market value of the property based on the current
tax declaration of the property to be expropriated: Provided, finally, That the amount to be paid for the
expropriated property shall be determined by the proper court, based on the fair market value at the time
of the taking of the property. (Italics supplied)
More specifically, the City of Manila has the power to expropriate private property in the pursuit of its
urban land reform and housing program as explicitly laid out in the Revised Charter of the City of Manila
(R.A. No. 409) as follows: General powers The city may have a common seal and alter the same at
pleasure, and may take, purchase, receive, hold, lease, convey, and dispose of real and personal
property for the general interest of the city, condemn private property for public use, contract and be
contracted with, sue and be sued, and prosecute and defend to final judgment and execution, and
exercise all the powers hereinafter conferred. (R.A. 409, Sec. 3; Italics supplied).
Sec. 100. The City of Manila is authorized to acquire private lands in the city and to subdivide the same
into home lots for sale on easy terms to city residents, giving first priority to the bona fide tenants or
occupants of said lands, and second priority to laborers and low-salaried employees. For the purpose of
this section, the city may raise necessary funds by appropriations of general funds, by securing loans or
by issuing bonds, and, if necessary, may acquire the lands through expropriation proceedings in
accordance with law, with the approval of the President x x x. (Italics supplied).
In fact, the City of Manilas right to exercise these prerogatives notwithstanding the existence of a final
and executory judgment over the property to be expropriated has been upheld by this Court in the case
of Philippine Columbian Association vs. Panis, G.R. No. 106528, December 21, 1993.[32] Relying on the
aforementioned provisions of the Revised Charter of the City of Manila, the Court declared that:
The City of Manila, acting through its legislative branch, has the express power to acquire private lands
in the city and subdivide these lands into home lots for sale to bona-fide tenants or occupants thereof,
and to laborers and low-salaried employees of the city. That only a few could actually benefit from the
expropriation of the property does not diminish its public use character. It is simply not possible to
provide all at once land and shelter for all who need them (Sumulong v. Guerrero, 154 SCRA 461
[1987]). Corollary to the expanded notion of public use, expropriation is not anymore confined to vast
tracts of land and landed estates (Province of Camarines Sur v. Court of Appeals, G.R. Nol 103125, May
17, 1993; J. M. Tuason and Co., Inc. v. Land Tenure Administration, 31 SCRA 413 [1970]). It is therefore
of no moment that the land sought to be expropriated in this case is less than the half a hectare only
(Pulido v. Court of Appeals, 122 SCRA 63 [1983]).
Through the years, the public use requirement in eminent domain has evolved into a flexible concept,
influenced by changing conditions (Sumulong v. Guerrero, supra; Manotok v. National Housing Authority,
150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]). Public use now
includes the broader notion of indirect public benefit or advantage, including a particular, urban land
reform and housing.[33]
We take judicial notice of the fact that urban land reform has become a paramount task in view of the
acute shortage of decent housing in urban areas particularly in Metro Manila. Nevertheless, despite the
existence of a serious dilemma, local government units are not given an unbridled authority when

exercising their power of eminent domain in pursuit of solutions to these problems. The basic rules still
have to be followed, which are as follows: no person shall be deprived of life, liberty, or property without
due process of law, nor shall any person be denied the equal protection of the laws (Art. 3, Sec. 1, 1987
Constitution); private property shall not be taken for public use without just compensation (Art. 3, Section
9, 1987 Constitution). Thus the exercise by local government units of the power of eminent domain is not
without limitations. Even Section 19 of the 1991 Local Government Code is very explicit that it must
comply with the provisions of the Constitution and pertinent laws, to wit:
SECTION 19. Eminent Domain. A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare
for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws: x x x. (Italics supplied). The governing law that deals
with the subject of expropriation for purposed of urban land reform and housing in Republic Act No. 7279
(Urban Development and Housing Act of 1992) and Sections 9 and 10 of which specifically provide as
follows:
Sec. 9. Priorities in the acquisition of Land Lands for socialized housing shall be acquired in the following
order:
(a)
(b)
(c)
(d)
(e)
(f)

Those owned by the Government or any of its sub-divisions, instrumentalities, or agencies,

including government-owned or controlled corporations and their subsidiaries;
Alienable lands of the public domain;
Unregistered or abandoned and idle lands;
Those within the declared Areas of Priority Development, Zonal Improvement sites, and Slum
Improvement and Resettlement Program sites which have not yet been acquired;
Bagong Lipunan Improvement sites and Services or BLISS sites which have not yet been acquired;
and
Privately-owned lands.

Where on-site development is found more practicable and advantageous to the beneficiaries, the
priorities mentioned in this section shall not apply. The local government units shall give budgetary
priority to on-site development of government lands.
Sec. 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall include,
among others, community mortgage, land swapping, land assembly or consolidation, land banking,
donation to the Government, joint venture agreement, negotiated purchase, and expropriation: Provided,
however, That expropriation shall be resorted to only when other modes of acquisition have been
exhausted:Provided further, That where expropriation is resorted to, parcels of land owned by small
property owners shall be exempted for purposes of this Act: Provided, finally, That abandoned property,
as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the
procedure laid down in Rule 91 of the Rules of Court.
For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired
by the local government units, or by the National Housing Authority primarily through negotiated
purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the
right of first refusal. (Italics supplied).
Very clear from the abovequoted provisions are the limitations with respect to the order of priority in
acquiring private lands and in resorting to expropriation proceedings as means to acquire the
same. Private lands rank last in the order of priority for purposes of socialized housing. In the same vein,
expropriation proceedings are to be resorted to only when the other modes of acquisition have been
exhausted. Compliance with these conditions must be deemed mandatory because these are the only
safeguards in securing the right of owners of private property to due process when their property is
expropriated for public use.

36

Proceeding from the parameters laid out in the above disquisitions, we now pose the crucial
question: Did the city of Manila comply with the abovementioned conditions when it expropriated
petitioner Filstreams properties? We have carefully scrutinized the records of this case and found
nothing that would indicate the respondent City of Manila complied with Sec. 9 and Sec. 10 of R.A.
7279. Petitioners Filstreams properties were expropriated and ordered condemned in favor of the City of
Manila sans any showing that resort to the acquisition of other lands listed under Sec. 9 of RA 7279 have
proved futile. Evidently, there was a violation of petitioner Filstreams right to due process which must
accordingly be rectified.
Indeed, it must be emphasized that the State has a paramount interest in exercising its power of eminent
domain for the general good considering that the right of the State to expropriate private property as long
as it is for public use always takes precedence over the interest of private property owners. However we
must not lose sight of the fact that the individual rights affected by the exercise of such right are also
entitled to protection, bearing in mind that the exercise of this superior right cannot override the
guarantee of due process extended by the law to owners of the property to be expropriated. In this
regard, vigilance over compliance with the due process requirements is in order.
WHEREFORE, the petitions are hereby GRANTED. In G.R. 125218, the resolutions of the Court of
Appeals in CA-G.R. SP No. 36904 dated March 18, 1996 and May 20, 1996 are hereby REVERSED and
SET ASIDE. In G.R. No. 128077, the resolution of the Court of Appeals in CA-G.R. SP No. 43101 dated
January 28, 1997 and February 18, 1997 are REVERSED and SET ASIDE. SO ORDERED.

CITY OF MANDALUYONG, petitioner, vs. ANTONIO N., FRANCISCO N., THELMA N., EUSEBIO N.,
RODOLFO N., all surnamed AGUILAR, respondents.
This is a petition for review under Rule 45 of the Rules of Court of the Orders dated September 17, 1998
and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City [1] dismissing the petitioners
Amended Complaint in SCA No. 1427 for expropriation of two (2) parcels of land in Mandaluyong City.

The antecedent facts are as follows: On August 4, 1997, petitioner filed with the Regional Trial Court,
Branch 168, Pasig City a complaint for expropriation entitled City of Mandaluyong, plaintiff v. Antonio N.,
Francisco N., Thelma N., Eusebio N., Rodolfo N., all surnamed Aguilar, defendants. Petitioner sought to
expropriate three (3) adjoining parcels of land with an aggregate area of 1,847 square meters registered
under Transfer Certificates of Title Nos. 59780, 63766 and 63767 in the names of the defendants, herein
respondents, located at 9 de Febrero Street, Barangay Mauwag, City of Mandaluyong; on a portion of
the 3 lots, respondents constructed residential houses several decades ago which they had since leased
out to tenants until the present; on the vacant portion of the lots, other families constructed residential
structures which they likewise occupied; in 1983, the lots were classified by Resolution No. 125 of the
Board of the Housing and Urban Development Coordinating Council as an Area for Priority Development
for urban land reform under Proclamation Nos. 1967 and 2284 of then President Marcos; as a result of
this classification, the tenants and occupants of the lots offered to purchase the land from respondents,
but the latter refused to sell; on November 7, 1996, the Sangguniang Panlungsod of petitioner, upon
petition of the Kapitbisig, an association of tenants and occupants of the subject land, adopted
Resolution No. 516, Series of 1996 authorizing Mayor Benjamin Abalos of the City of Mandaluyong to
initiate action for the expropriation of the subject lots and construction of a medium-rise condominium for
qualified occupants of the land; on January 10, 1996, Mayor Abalos sent a letter to respondents offering
to purchase the said property at P3,000.00 per square meter; respondents did not answer the
letter. Petitioner thus prayed for the expropriation of the said lots and the fixing of just compensation at
the fair market value ofP3,000.00 per square meter.[2]
In their answer, respondents, except Eusebio N. Aguilar who died in 1995, denied having received
a copy of Mayor Abalos offer to purchase their lots. They alleged that the expropriation of their land is
arbitrary and capricious, and is not for a public purpose; the subject lots are their only real property and
are too small for expropriation, while petitioner has several properties inventoried for socialized housing;
the fair market value of P3,000.00 per square meter is arbitrary because the zonal valuation set by the
Bureau of Internal Revenue is P7,000.00 per square meter. As counterclaim, respondents prayed for
damages of P21 million. Respondents filed a Motion for Preliminary Hearing claiming that the defenses
alleged in their Answer are valid grounds for dismissal of the complaint for lack of jurisdiction over the
person of the defendants and lack of cause of action. Respondents prayed that the affirmative defenses
be set for preliminary hearing and that the complaint be dismissed.[4] Petitioner replied.
On November 5, 1997, petitioner filed an Amended Complaint and named as an additional defendant
Virginia N. Aguilar and, at the same time, substituted Eusebio Aguilar with his heirs. Petitioner also
excluded from expropriation TCT No. 59870 and thereby reduced the area sought to be expropriated
from three (3) parcels of land to two (2) parcels totalling 1,636 square meters under TCT Nos. 63766 and
63767. The Amended Complaint was admitted by the trial court on December 18, 1997. Respondents,
who, with the exception of Virginia Aguilar and the Heirs of Eusebio Aguilar had yet to be served with
summons and copies of the Amended Complaint, filed a Manifestation and Motion adopting their Answer
with Counterclaim and Motion for Preliminary Hearing as their answer to the Amended Complaint. [6]
The motion was granted. At the hearing of February 25, 1998, respondents presented Antonio Aguilar
who testified and identified several documentary evidence. Petitioner did not present any
evidence. Thereafter, both parties filed their respective memoranda. [7] On September 17, 1998, the trial
court issued an order dismissing the Amended Complaint after declaring respondents as small property
owners whose land is exempt from expropriation under Republic Act No. 7279. The court also found that
the expropriation was not for a public purpose for petitioners failure to present any evidence that the
intended beneficiaries of the expropriation are landless and homeless residents of Mandaluyong. The
court thus disposed of as follows: WHEREFORE, the Amended Complaint is hereby ordered dismissed
without pronouncement as to cost. SO ORDERED.[8]
Petitioner moved for reconsideration. On December 29, 1998, the court denied the motion. Hence this
petition. Petitioner claims that the trial court erred IN UPHOLDING RESPONDENTS CONTENTION

37

THAT THEY QUALIFY AS SMALL PROPERTY OWNERS AND ARE THUS EXEMPT FROM
EXPROPRIATION.[9]
Petitioner mainly claims that the size of the lots in litigation does not exempt the same from expropriation
in view of the fact that the said lots have been declared to be within the Area for Priority Development
(APD) No. 5 of Mandaluyong by virtue of Proclamation No. 1967, as amended by Proclamation No. 2284
in relation to Presidential Decree No. 1517. [10] This declaration allegedly authorizes petitioner to
expropriate the property, ipso facto, regardless of the area of the land.
Presidential Decree (P.D.) No. 1517, the Urban Land Reform Act, was issued by then President
Marcos in 1978. The decree adopted as a State policy the liberation of human communities from blight,
congestion and hazard, and promotion of their development and modernization, the optimum use of land
as a national resource for public welfare. [11] Pursuant to this law, Proclamation No. 1893 was issued in
1979 declaring the entire Metro Manila as Urban Land Reform Zone for purposes of urban land
reform. This was amended in 1980 by Proclamation No. 1967 and in 1983 by Proclamation No. 2284
which identified and specified 245 sites in Metro Manila as Areas for Priority Development and Urban
Land Reform Zones.In 1992, the Congress of the Philippines passed Republic Act No. 7279, the Urban
Development and Housing Act of 1992. The law lays down as a policy that the state, in cooperation with
the private sector, undertake a comprehensive and continuing Urban Development and Housing
Program; uplift the conditions of the underprivileged and homeless citizens in urban areas and
resettlement areas by making available to them decent housing at affordable cost, basic services and
employment opportunities and provide for the rational use and development of urban land to bring about,
among others, equitable utilization of residential lands; encourage more effective people's participation in
the urban development process and improve the capability of local government units in undertaking
urban development and housing programs and projects.[12] Towards this end, all city and municipal
governments are mandated to conduct an inventory of all lands and improvements within their
respective localities, and in coordination with the National Housing Authority, the Housing and Land Use
Regulatory Board, the National Mapping Resource Information Authority, and the Land Management
Bureau, identify lands for socialized housing and resettlement areas for the immediate and future needs
of the underprivileged and homeless in the urban areas, acquire the lands, and dispose of said lands to
the beneficiaries of the program.[13]
The acquisition of lands for socialized housing is governed by several provisions in the law. Section 9 of
R.A. 7279 provides: Sec. 9. Priorities in the Acquisition of Land.Lands for socialized housing shall be
acquired in the following order:
(a) Those owned by the Government or any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas for Priority Development, Zonal Improvement Program
sites, and Slum Improvement and Resettlement Program sites which have not yet been
acquired;
(e) Bagong Lipunan Improvement of Sites and Services or BLISS Sites which have not yet
been acquired;
(f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to the beneficiaries, the
priorities mentioned in this section shall not apply. The local government units shall give budgetary
priority to on-site development of government lands. Lands for socialized housing are to be acquired in
the following order: (1) government lands; (2) alienable lands of the public domain; (3) unregistered or
abandoned or idle lands; (4) lands within the declared Areas for Priority Development (APD), Zonal
Improvement Program (ZIP) sites, Slum Improvement and Resettlement (SIR) sites which have not yet
been acquired; (5) BLISS sites which have not yet been acquired; and (6) privately-owned lands. There

is no dispute that the two lots in litigation are privately-owned and therefore last in the order of priority
acquisition. However, the law also provides that lands within the declared APDs which have not yet been
acquired by the government are fourth in the order of priority. According to petitioner, since the subject
lots lie within the declared APD, this fact mandates that the lots be given priority in acquisition. [14]
Section 9, however, is not a single provision that can be read separate from the other provisions of the
law. It must be read together with Section 10 of R.A. 7279 which also provides:
Section 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall
include, among others, community mortgage, land swapping, land assembly or consolidation, land
banking, donation to the Government, joint-venture agreement, negotiated purchase, and
expropriation: Provided, however, That expropriation shall be resorted to only when other modes of
acquisition have been exhausted: Provided, further, That where expropriation is resorted to,
parcels of land owned by small property owners shall be exempted for purposes of this
Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and escheated to
the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.[15]
For the purposes of socialized housing, government-owned and foreclosed properties shall be acquired
by the local government units, or by the National Housing Authority primarily through negotiated
purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the
right of first refusal.
Lands for socialized housing under R.A. 7279 are to be acquired in several modes. Among these modes
are the following: (1) community mortgage; (2) land swapping, (3) land assembly or consolidation; (4)
land banking; (5) donation to the government; (6) joint venture agreement; (7) negotiated purchase; and
(8) expropriation. The mode of expropriation is subject to two conditions: (a) it shall be resorted to only
when the other modes of acquisition have been exhausted; and (b) parcels of land owned by small
property owners are exempt from such acquisition.
Section 9 of R.A. 7279 speaks of priorities in the acquisition of lands. It enumerates the type of
lands to be acquired and the heirarchy in their acquisition.Section 10 deals with the modes of land
acquisition or the process of acquiring lands for socialized housing. These are two different things. They
mean that the type of lands that may be acquired in the order of priority in Section 9 are to be
acquired only in the modes authorized under Section 10. The acquisition of the lands in the priority
list must be made subject to the modes and conditions set forth in the next provision. In other words,
land that lies within the APD, such as in the instant case, may be acquired only in the modes under, and
subject to the conditions of, Section 10.
Petitioner claims that it had faithfully observed the different modes of land acquisition for socialized
housing under R.A. 7279 and adhered to the priorities in the acquisition for socialized housing under said
law.[16] It, however, did not state with particularity whether it exhausted the other modes of acquisition in
Section 9 of the law before it decided to expropriate the subject lots. The law states expropriation shall
be resorted to when other modes of acquisition have been exhausted. Petitioner alleged only one mode
of acquisition, i.e., by negotiated purchase. Petitioner, through the City Mayor, tried to purchase the lots
from respondents but the latter refused to sell. [17] As to the other modes of acquisition, no mention has
been made. Not even Resolution No. 516, Series of 1996 of the Sangguniang Panlungsod authorizing
the Mayor of Mandaluyong to effect the expropriation of the subject property states whether the city
government tried to acquire the same by community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the government, or joint venture agreement under Section 9 of
the law. Section 9 also exempts from expropriation parcels of land owned by small property owners.
[18]
Petitioner argues that the exercise of the power of eminent domain is not anymore conditioned on the
size of the land sought to be expropriated.[19] By the expanded notion of public use, present
jurisprudence has established the concept that expropriation is not anymore confined to the vast tracts of
land and landed estates, but also covers small parcels of land.[20] That only a few could actually benefit
from the expropriation of the property does not diminish its public use character.[21] It simply is not
possible to provide, in one instance, land and shelter for all who need them.[22]

38

While we adhere to the expanded notion of public use, the passage of R.A. No. 7279, the Urban
Development and Housing Act of 1992 introduced a limitation on the size of the land sought to be
expropriated for socialized housing. The law expressly exempted small property owners from
expropriation of their land for urban land reform. R.A. No. 7279 originated as Senate Bill No. 234
authored by Senator Joey Lina[23] and House Bill No. 34310. Senate Bill No. 234 then provided that one
of those lands not covered by the urban land reform and housing program was land actually used by
small property owners within the just and equitable retention limit as provided under this Act. [24] Small
property owners were defined in Senate Bill No. 234 as: 4. Small Property Ownersare those whose
rights are protected under Section 9, Article XIII of the Constitution of the Philippines, who own small
parcels of land within the fair and just retention limit provided under this Act and which are adequate to
meet the reasonable needs of the small property owners family and their means of livelihood.[25]
The exemption from expropriation of lands of small-property owners was never questioned on the
Senate floor.[26] This exemption, although with a modified definition, was actually retained in the
consolidation of Senate Bill No. 234 and House Bill No. 34310 which became R.A. No. 7279.[27]
The question now is whether respondents qualify as small property owners as defined in Section 3
(q) of R.A. 7279. Section 3 (q) provides: Section 3 (q). Small property owners refers to those whose only
real property consists of residential lands not exceeding three hundred square meters (300 sq.m.) in
highly urbanized cities and eight hundred square meters (800 sq.m.) in other urban areas.
Small-property owners are defined by two elements: (1) those owners of real property whose property
consists of residential lands with an area of not more than 300 square meters in highly urbanized cities
and 800 square meters in other urban areas; and (2) that they do not own real property other than the
same.
The case at bar involves two (2) residential lots in Mandaluyong City, a highly urbanized city. The
lot under TCT No. 63766 is 687 square meters in area and the second under TCT No. 63767 is 949
square meters, both totalling 1,636 square meters in area. TCT No. 63766 was issued in the names of
herein five (5) respondents, viz: FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single;
EUSEBIO N. AGUILAR, JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR,
married to Teresita Puig; all of legal age, Filipinos. [28]
TCT No. 63767 was issued in the names of the five (5) respondents plus Virginia Aguilar,
thus:FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR.,
widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; and
VIRGINIA N. AGUILAR, single, all of legal age, Filipinos.[29]
Respondent Antonio Aguilar testified that he and the other registered owners are all siblings who
inherited the subject property by intestate succession from their parents. [30] Their father died in 1945 and
their mother in 1976.[31] Both TCTs were issued in the siblings names on September 2, 1987. [32] In 1986,
however, the siblings agreed to extrajudicially partition the lots among themselves, but no action was
taken by them to this end. It was only eleven (11) years later, on November 28, 1997 that a survey of the
two lots was made[33] and on February 10, 1998, a consolidation subdivision plan was approved by the
Lands Management Service of the Department of Environment and Natural Resources. [34] The co-owners
signed a Partition Agreement on February 24, 1998[35] and on May 21, 1998, TCT Nos. 63766 and 63767
were cancelled and new titles issued in the names of the individual owners pursuant to the Partition
Agreement. Petitioner argues that the consolidation of the subject lots and their partition was made more
than six (6) months after the complaint for expropriation was filed on August 4, 1997, hence, the partition
was made in bad faith, for the purpose of circumventing the provisions of R.A. 7279.[36]
At the time of filing of the complaint for expropriation, the lots subject of this case were owned in
common by respondents. Under a co-ownership, the ownership of an undivided thing or right belongs to
different persons.[37] During the existence of the co-ownership, no individual can claim title to any definite
portion of the community property until the partition thereof; and prior to the partition, all that the coowner has is an ideal or abstract quota or proportionate share in the entire land or thing. [38] Article 493 of
the Civil Code however provides that: Art. 493. Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it,
and even substitute another person in its enjoyment, except when personal rights are involved. But the

effect of the alienation or the mortgage, with respect to the co-owners shall be limited to the portion
which may be allotted to him in the division upon termination of the co-ownership. [39]
Before partition in a co-ownership, every co-owner has the absolute ownership of his undivided interest
in the common property. The co-owner is free to alienate, assign or mortgage his interest, except as to
purely personal rights.[40] He may also validly lease his undivided interest to a third party independently of
the other co-owners.[41] The effect of any such transfer is limited to the portion which may be awarded to
him upon the partition of the property.[42]
Article 493 therefore gives the owner of an undivided interest in the property the right to freely sell and
dispose of his undivided interest.[43] The co-owner, however, has no right to sell or alienate a concrete
specific or determinate part of the thing owned in common, because his right over the thing is
represented by a quota or ideal portion without any physical adjudication.[44] If the co-owner sells a
concrete portion, this, nonetheless, does not render the sale void. Such a sale affects only his own
share, subject to the results of the partition but not those of the other co-owners who did not consent to
the sale.[45] In the instant case, the titles to the subject lots were issued in respondents names as coowners in 1987ten (10) years before the expropriation case was filed in 1997. As co-owners, all that the
respondents had was an ideal or abstract quota or proportionate share in the lots. This, however, did not
mean that they could not separately exercise any rights over the lots. Each respondent had the full
ownership of his undivided interest in the property. He could freely sell or dispose of his interest
independently of the other co-owners. And this interest could have even been attached by his creditors.
[46]
The partition in 1998, six (6) months after the filing of the expropriation case, terminated the coownership by converting into certain and definite parts the respective undivided shares of the co-owners.
[47]
The subject property is not a thing essentially indivisible. The rights of the co-owners to have the
property partitioned and their share in the same delivered to them cannot be questioned for "[n]o coowner shall be obliged to remain in the co-ownership."[48] The partition was merely a necessary incident
of the co-ownership;[49] and absent any evidence to the contrary, this partition is presumed to have been
done in good faith.
Upon partition, four (4) co-owners, namely, Francisco, Thelma, Rodolfo and Antonio Aguilar each
had a share of 300 square meters under TCT Nos. 13849, 13852, 13850, 13851. [50] Eusebio Aguilars
share was 347 square meters under TCT No. 13853 [51] while Virginia Aguilars was 89 square meters
under TCT No. 13854.
It is noted that Virginia Aguilar, although granted 89 square meters only of the subject lots, is, at
the same time, the sole registered owner of TCT No. 59780, one of the three (3) titles initially sought to
be expropriated in the original complaint. TCT No. 59780, with a land area of 211 square meters, was
dropped in the amended complaint. Eusebio Aguilar was granted 347 square meters, which is 47 square
meters more than the maximum of 300 square meters set by R.A. 7279 for small property owners. In
TCT No. 13853, Eusebios title, however, appears the following annotation: subject to and to the prov. of
Sec. 4 Rule 74 of the Rules of Court with respect to the inheritance left by the deceased Eusebio N.
Aguilar.[53]
Eusebio died on March 23, 1995,[54] and, according to Antonios testimony, the former was survived
by five (5) children.[55] Where there are several co-owners, and some of them die, the heirs of those who
die, with respect to that part belonging to the deceased, become also co-owners of the property together
with those who survive.[56] After Eusebio died, his five heirs became co-owners of his 347 square-meter
portion. Dividing the 347 square meters among the five entitled each heir to 69.4 square meters of the
land subject of litigation. Consequently, the share of each co-owner did not exceed the 300 square meter
limit set in R.A. 7279. The second question, however, is whether the subject property is the only real
property of respondents for them to comply with the second requisite for small property owners.
Antonio Aguilar testified that he and most of the original co-owners do not reside on the subject
property but in their ancestral home in Paco, Manila. [57]Respondents therefore appear to own real
property other than the lots in litigation. Nonetheless, the records do not show that the ancestral home in

39

Paco, Manila and the land on which it stands are owned by respondents or any one of them. Petitioner
did not present any title or proof of this fact despite Antonio Aguilars testimony. On the other hand,
respondents claim that the subject lots are their only real property[58] and that they, particularly two of the
five heirs of Eusebio Aguilar, are merely renting their houses and therefore do not own any other real
property in Metro Manila.[59] To prove this, they submitted certifications from the offices of the City and
Municipal Assessors in Metro Manila attesting to the fact that they have no registered real property
declared for taxation purposes in the respective cities.Respondents were certified by the City Assessor
of Manila;[60] Quezon City;[61] Makati City;[62] Pasay City;[63] Paranaque;[64] Caloocan City;[65] Pasig City;
[66]
Muntinlupa;[67] Marikina;[68] and the then municipality of Las Pias[69] and the municipality of San Juan del
Monte[70] as having no real property registered for taxation in their individual names.
Finally, this court notes that the subject lots are now in the possession of respondents. Antonio Aguilar
testified that he and the other co-owners filed ejectment cases against the occupants of the land before
the Metropolitan Trial Court, Mandaluyong, Branches 59 and 60. Orders of eviction were issued and
executed on September 17, 1997 which resulted in the eviction of the tenants and other occupants from
the land in question.[71]
IN VIEW WHEREOF, the petition is DENIED and the orders dated September 17, 1998 and December
29, 1998 of the Regional Trial Court, Branch 168, Pasig City in SCA No. 1427 are AFFIRMED. SO
ORDERED.

DIOSDADO LAGCAO, DOROTEO LAGCAO and URSULA LAGCAO,Petitioners, - versus - JUDGE

GENEROSA G. LABRA, Branch 23, Regional Trial Court, Cebu, and the CITY OF CEBU,
Respondent. G.R. No. 155746 October 13, 2004
Before us is a petition for review of the decision dated July 1, 2002 of the Regional Trial Court, Branch
23, Cebu City[1] upholding the validity of the City of Cebus Ordinance No. 1843, as well as the lower
courts order dated August 26, 2002 denying petitioners motion for reconsideration.
In 1964, the Province of Cebu donated 210 lots to the City of Cebu. One of these lots was Lot 1029,
situated in Capitol Hills, Cebu City, with an area of 4,048 square meters. In 1965, petitioners purchased
Lot 1029 on installment basis. But then, in late 1965, the 210 lots, including Lot 1029, reverted to the
Province of Cebu.[2] Consequently, the province tried to annul the sale of Lot 1029 by the City of Cebu to
the petitioners. This prompted the latter to sue the province for specific performance and damages in the
then Court of First Instance.
On July 9, 1986, the court a quo ruled in favor of petitioners and ordered the Province of Cebu to
execute the final deed of sale in favor of petitioners. On June 11, 1992, the Court of Appeals affirmed the
decision of the trial court. Pursuant to the ruling of the appellate court, the Province of Cebu executed on

June 17, 1994 a deed of absolute sale over Lot 1029 in favor of petitioners. Thereafter, Transfer
Certificate of Title (TCT) No. 129306 was issued in the name of petitioners and Crispina Lagcao.[3]
After acquiring title, petitioners tried to take possession of the lot only to discover that it was already
occupied by squatters. Thus, on June 15, 1997, petitioners instituted ejectment proceedings against the
squatters. The Municipal Trial Court in Cities (MTCC), Branch 1, Cebu City, rendered a decision on April
1, 1998, ordering the squatters to vacate the lot. On appeal, the RTC affirmed the MTCCs decision and
issued a writ of execution and order of demolition.
However, when the demolition order was about to be implemented, Cebu City Mayor Alvin Garcia wrote
two letters[4] to the MTCC, requesting the deferment of the demolition on the ground that the City was still
looking for a relocation site for the squatters. Acting on the mayors request, the MTCC issued two orders
suspending the demolition for a period of 120 days from February 22, 1999. Unfortunately for petitioners,
during the suspension period, the Sangguniang Panlungsod (SP) of Cebu City passed a resolution which
identified Lot 1029 as a socialized housing site pursuant to RA 7279. [5] Then, on June 30, 1999, the SP
of Cebu City passed Ordinance No. 1772 [6] which included Lot 1029 among the identified sites for
socialized housing. On July, 19, 2000, Ordinance No. 1843 [7] was enacted by the SP of Cebu City
authorizing the mayor of Cebu City to initiate expropriation proceedings for the acquisition of Lot 1029
which was registered in the name of petitioners. The intended acquisition was to be used for the benefit
of the homeless after its subdivision and sale to the actual occupants thereof. For this purpose, the
ordinance appropriated the amount of P6,881,600 for the payment of the subject lot. This ordinance was
approved by Mayor Garcia on August 2, 2000.
On August 29, 2000, petitioners filed with the RTC an action for declaration of nullity of Ordinance No.
1843 for being unconstitutional. The trial court rendered its decision on July 1, 2002 dismissing the
complaint filed by petitioners whose subsequent motion for reconsideration was likewise denied on
August 26, 2002.
In this appeal, petitioners argue that Ordinance No. 1843 is unconstitutional as it sanctions the
expropriation of their property for the purpose of selling it to the squatters, an endeavor contrary to the
concept of public use contemplated in the Constitution. [8] They allege that it will benefit only a handful of
people. The ordinance, according to petitioners, was obviously passed for politicking, the squatters
undeniably being a big source of votes.
In sum, this Court is being asked to resolve whether or not the intended expropriation by the City of
Cebu of a 4,048-square-meter parcel of land owned by petitioners contravenes the Constitution and
applicable laws. Under Section 48 of RA 7160, [9] otherwise known as the Local Government Code of
1991,[10] local legislative power shall
be exercised by the Sangguniang Panlungsod of the city. The legislative acts of the Sangguniang
Panlungsod in the exercise of its lawmaking authority are denominated ordinances. Local government
units have no inherent power of eminent domain and can exercise it only when expressly authorized by
the legislature.[11] By virtue of RA 7160, Congress conferred upon local government units the power to
expropriate. Ordinance No. 1843 was enacted pursuant to Section 19 of RA 7160:
SEC. 19. Eminent Domain. A local government unit may, through its chief executive and
acting pursuant to an ordinance, exercise the power of eminent domain for public use, or
purpose, or welfare for the benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and pertinent laws xxx. (italics
supplied).
Ordinance No. 1843 which authorized the expropriation of petitioners lot was enacted by the SP of Cebu
City to provide socialized housing for the homeless and low-income residents of the City.
However, while we recognize that housing is one of the most serious social problems of the country, local
government units do not possess unbridled authority to exercise their power of eminent domain in
seeking solutions to this problem. There are two legal provisions which limit the exercise of this power:
(1) no person shall be deprived of life, liberty, or property without due process of law, nor shall any
person be denied the equal protection of the laws; [12] and (2) private property shall not be taken for public
use without just compensation.[13]Thus, the exercise by local government units of the power of eminent
domain is not absolute. In fact, Section 19 of RA 7160 itself explicitly states that such exercise must
comply with the provisions of the Constitution and pertinent laws.
The exercise of the power of eminent domain drastically affects a landowners right to private property,
which is as much a constitutionally-protected right necessary for the preservation and enhancement of
personal dignity and intimately connected with the rights to life and liberty.[14] Whether directly exercised

40

by the State or by its authorized agents, the exercise of eminent domain is necessarily in derogation of
private rights.[15] For this reason, the need for a painstaking scrutiny cannot be overemphasized.
The due process clause cannot be trampled upon each time an ordinance orders the expropriation of a
private individuals property. The courts cannot even adopt a hands-off policy simply because public use
or public purpose is invoked by an ordinance, or just compensation has been fixed and determined. InDe
Knecht vs. Bautista,[16] we said: 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.
The foundation of the right to exercise eminent domain is genuine necessity and that necessity must be
of public character.[17] Government may not capriciously or arbitrarily choose which private property
should be expropriated. In this case, there was no showing at all why petitioners property was singled
out for expropriation by the city ordinance or what necessity impelled the particular choice or selection.
Ordinance No. 1843 stated no reason for the choice of petitioners property as the site of a socialized
housing project.
Condemnation of private lands in an irrational or piecemeal fashion or the random expropriation of small
lots to accommodate no more than a few tenants or squatters is certainly not the condemnation for
public use contemplated by the Constitution. This is depriving a citizen of his property for the
convenience of a few without perceptible benefit to the public.[18]
RA 7279 is the law that governs the local expropriation of property for purposes of urban land reform and
housing. Sections 9 and 10 thereof provide: SEC 9. Priorities in the Acquisition of Land. Lands for
socialized housing shall be acquired in the following order:
1. Those owned by the Government or any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their
subsidiaries;
2. Alienable lands of the public domain;
3. Unregistered or abandoned and idle lands;
4. Those within the declared Areas or Priority Development, Zonal Improvement
Program sites, and Slum Improvement and Resettlement Program sites which have
not yet been acquired;
5. Bagong Lipunan Improvement of Sites and Services or BLISS which have not yet
been acquired; and
6. Privately-owned lands.
Where on-site development is found more practicable and advantageous to the beneficiaries,
the priorities mentioned in this section shall not apply. The local government units shall give
budgetary priority to on-site development of government lands. (Emphasis supplied).
SEC. 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act
shall include, among others, community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the Government, joint venture agreement, negotiated
purchase, and expropriation: Provided, however, That expropriation shall be resorted to
only when other modes of acquisition have been exhausted: Provided further, That where
expropriation is resorted to, parcels of land owned by small property owners shall be
exempted for purposes of this Act: xxx. (Emphasis supplied).
In the recent case of Estate or Heirs of the Late Ex-Justice Jose B.L. Reyes et al. vs. City of Manila,
[19]
we ruled that the above-quoted provisions are strict limitations on the exercise of the power of
eminent domain by local government units, especially with respect to (1) the order of priority in acquiring
land for socialized housing and (2) the resort to expropriation proceedings as a means to acquiring it.
Private lands rank last in the order of priority for purposes of socialized housing. In the same vein,
expropriation proceedings may be resorted to only after the other modes of acquisition are exhausted.
Compliance with these conditions is mandatory because these are the only safeguards of oftentimes
helpless owners of private property against what may be a tyrannical violation of due process when their
property is forcibly taken from them allegedly for public use.

We have found nothing in the records indicating that the City of Cebu complied strictly with Sections 9
and 10 of RA 7279. Ordinance No. 1843 sought to expropriate petitioners property without any attempt to
first acquire the lands listed in (a) to (e) of Section 9 of RA 7279. Likewise, Cebu City failed to establish
that the other modes of acquisition in Section 10 of RA 7279 were first exhausted. Moreover, prior to the
passage of Ordinance No. 1843, there was no evidence of a valid and definite offer to buy petitioners
property as required by Section 19 of RA 7160. [20] We therefore find Ordinance No. 1843 to be
constitutionally infirm for being violative of the petitioners right to due process.
It should also be noted that, as early as 1998, petitioners had already obtained a favorable judgment of
eviction against the illegal occupants of their property. The judgment in this ejectment case had, in fact,
already attained finality, with a writ of execution and an order of demolition. But Mayor Garcia requested
the trial court to suspend the demolition on the pretext that the City was still searching for a relocation
site for the squatters. However, instead of looking for a relocation site during the suspension period, the
city council suddenly enacted Ordinance No. 1843 for the expropriation of petitioners lot. It was trickery
and bad faith, pure and simple. The unconscionable manner in which the questioned ordinance was
passed clearly indicated that respondent City transgressed the Constitution, RA 7160 and RA 7279.
For an ordinance to be valid, it must not only be within the corporate powers of the city or municipality to
enact but must also be passed according to the procedure prescribed by law. It must be in accordance
with certain well-established basic principles of a substantive nature. These principles require that an
ordinance (1) must not contravene the Constitution or any statute (2) must not be unfair or oppressive (3)
must not be partial or discriminatory (4) must not prohibit but may regulate trade (5) must be general and
consistent with public policy, and (6) must not be unreasonable.[21]
Ordinance No. 1843 failed to comply with the foregoing substantive requirements. A clear case of
constitutional infirmity having been thus established, this Court is constrained to nullify the subject
ordinance. We recapitulate:
first, as earlier discussed, the questioned ordinance is repugnant to the pertinent provisions of the
Constitution, RA 7279 and RA 7160;
second, the precipitate manner in which it was enacted was plain oppression masquerading as a propoor ordinance;
third, the fact that petitioners small property was singled out for expropriation for the purpose of
awarding it to no more than a few squatters indicated manifest partiality against petitioners, and
fourth, the ordinance failed to show that there was a reasonable relation between the end sought and
the means adopted. While the objective of the City of Cebu was to provide adequate housing to slum
dwellers, the means it employed in pursuit of such objective fell short of what was legal, sensible and
called for by the circumstances.
Indeed, experience has shown that the disregard of basic liberties and the use of short-sighted methods
in expropriation proceedings have not achieved the desired results. Over the years, the government has
tried to remedy the worsening squatter problem. Far from solving it, however, governments kid-glove
approach has only resulted in the multiplication and proliferation of squatter colonies and blighted areas.
A pro-poor program that is well-studied, adequately funded, genuinely sincere and truly respectful of
everyones basic rights is what this problem calls for, not the improvident enactment of politics-based
ordinances targeting small private lots in no rational fashion. WHEREFORE, the petition is
hereby GRANTED. The July 1, 2002 decision of Branch 23 of the Regional Trial Court of Cebu City
is REVERSED and SET ASIDE. SO ORDERED.

JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC., petitioner, vs. MUNICIPALITY (now
CITY) OF PASIG, METRO MANILA, respondent. (GR NO 152230, August 9, 2005)
Before us is a petition for review of the Decision [1] of the Court of Appeals (CA) in CA-G.R. CV No.
59050, and its Resolution dated February 18, 2002, denying the motion for reconsideration thereof. The
assailed decision affirmed the order of the Regional Trial Court (RTC) of Pasig, Branch 160, declaring

41

the respondent Municipality (now City) of Pasig as having the right to expropriate and take possession of
the subject property.
The Antecedents
The Municipality of Pasig needed an access road from E. R. Santos Street, a municipal road near the
Pasig Public Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to 70 houses, mostly made of light
materials, were located. The road had to be at least three meters in width, as required by the Fire Code,
so that fire trucks could pass through in case of conflagration. [2] Likewise, the residents in the area
needed the road for water and electrical outlets. [3] The municipality then decided to acquire 51 square
meters out of the 1,791-square meter property of Lorenzo Ching Cuanco, Victor Ching Cuanco and
Ernesto Ching Cuanco Kho covered by Transfer Certificate of Title (TCT) No. PT-66585, [4]which is
abutting E. R. Santos Street. On April 19, 1993, the Sangguniang Bayan of Pasig approved an
Ordinance[5] authorizing the municipal mayor to initiate expropriation proceedings to acquire the said
property and appropriate the fund therefor. The ordinance stated that the property owners were notified
of the municipalitys intent to purchase the property for public use as an access road but they rejected the
offer. On July 21, 1993, the municipality filed a complaint, amended on August 6, 1993, against the
Ching Cuancos for the expropriation of the property under Section 19 of Republic Act (R.A.) No. 7160,
otherwise known as the Local Government Code. The plaintiff alleged therein that it notified the
defendants, by letter, of its intention to construct an access road on a portion of the property but they
refused to sell the same portion. The plaintiff appended to the complaint a photocopy of the letter
addressed to defendant Lorenzo Ching Cuanco.[6] The plaintiff deposited with the RTC 15% of the market
value of the property based on the latest tax declaration covering the property. On plaintiffs motion, the
RTC issued a writ of possession over the property sought to be expropriated. On November 26, 1993,
the plaintiff caused the annotation of a notice of lis pendens at the dorsal portion of TCT No. PT-92579
under the name of the Jesus Is Lord Christian School Foundation, Incorporated (JILCSFI) which had
purchased the property.[7] Thereafter, the plaintiff constructed therein a cemented road with a width of
three meters; the road was called Damayan Street. In their answer,[8] the defendants claimed that, as
early as February 1993, they had sold the said property to JILCSFI as evidenced by a deed of
sale[9] bearing the signature of defendant Ernesto Ching Cuanco Kho and his wife.
When apprised about the complaint, JILCSFI filed a motion for leave to intervene as defendant-inintervention, which motion the RTC granted on August 26, 1994. [10] In its answer-in-intervention, JILCSFI
averred, by way of special and affirmative defenses, that the plaintiffs exercise of eminent domain was
only for a particular class and not for the benefit of the poor and the landless. It alleged that the property
sought to be expropriated is not the best portion for the road and the least burdensome to it. The
intervenor filed a crossclaim against its co-defendants for reimbursement in case the subject property is
expropriated.[11] In its amended answer, JILCSFI also averred that it has been denied the use and
enjoyment of its property because the road was constructed in the middle portion and that the plaintiff
was not the real party-in-interest. The intervenor, likewise, interposed counterclaims against the plaintiff
for moral damages and attorneys fees. [12] During trial, Rolando Togonon, the plaintiffs messenger,
testified on direct examination that on February 23, 1993, he served a letter of Engr. Jose Reyes, the
Technical Assistant to the Mayor on Infrastructure, to Lorenzo Ching Cuanco at his store at No. 18
Alkalde Jose Street, Kapasigan, Pasig. A lady received the same and brought it inside the store. When
she returned the letter to him, it already bore the signature of Luz Bernarte. He identified a photocopy of
the letter as similar to the one he served at the store. On cross-examination, he admitted that he never
met Luz Bernarte. [13] Edgardo del Rosario, a resident of Sto. Tomas Bukid since 1982 declared that he
would pass through a wooden bridge to go to E. R. Santos Street. At times, the bridge would be slippery
and many had met accidents while walking along the bridge. Because of this, they requested Mayor
Vicente Eusebio to construct a road therein. He attested that after the construction of the cemented
access road, the residents had water and electricity. [14] Augusto Paz of the City Engineers Office testified
that, sometime in 1992, the plaintiff constructed a road perpendicular from E. R. Santos Street to Sto.
Tomas Bukid; he was the Project Engineer for the said undertaking. Before the construction of the road,

the lot was raw and they had to put filling materials so that vehicles could use it. According to him, the
length of the road which they constructed was 70 meters long and 3 meters wide so that a fire truck
could pass through. He averred that there is no other road through which a fire truck could pass to go to
Sto. Tomas Bukid.[15] Manuel Tembrevilla, the Fire Marshall, averred that he had seen the new road, that
is, Damayan Street, and found that a fire truck could pass through it. He estimated the houses in the
area to be around 300 to 400. Tembrevilla also stated that Damayan Street is the only road in the area. [16]
Finally, Bonifacio Maceda, Jr., Tax Mapper IV, testified that, according to their records, JILCSFI became
the owner of the property only on January 13, 1994. [17] The plaintiff offered in evidence a photocopy of
the letter of Engr. Jose Reyes addressed to Lorenzo Ching Cuanco to prove that the plaintiff made a
definite and valid offer to acquire the property to the co-owners. However, the RTC rejected the same
letter for being a mere photocopy.[18] For the defendant-intervenor, Normita del Rosario, owner of the
property located across the subject property, testified that there are other roads leading to E. R. Santos
Street. She asserted that only about ten houses of the urban poor are using the new road because the
other residents are using an alternative right-of-way. She averred that she did not actually occupy her
property; but there were times that she visited it. [19] Danilo Caballero averred that he had been a resident
of Sto. Tomas Bukid for seven years. From his house, he could use three streets to go to E. R. Santos
Street, namely, Catalina Street, Damayan Street and Bagong Taon Street. On cross-examination, he
admitted that no vehicle could enter Sto. Tomas Bukid except through the newly constructed Damayan
Street.[20]
Eduardo Villanueva, Chairman of the Board of Trustees and President of JILCSFI, testified that the
parcel of land was purchased for purposes of constructing a school building and a church as worship
center. He averred that the realization of these projects was delayed due to the passing of the ordinance
for expropriation.[21] The intervenor adduced documentary evidence that on February 27, 1993, Lorenzo
Ching Cuanco and the co-owners agreed to sell their property covered by TCT No. PT-66585
for P1,719,000.00.[22] It paid a down payment of P1,000,000.00 for the property. After payment of the total
purchase price, the Ching Cuancos executed a Deed of Absolute Sale [23] over the property on December
13, 1993. On December 21, 1993, TCT No. PT-92579 was issued in the name of JILCSFI. [24] It declared
the property for taxation purposes under its name.[25] On September 3, 1997, the RTC issued an Order in
favor of the plaintiff, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing and in accordance with Section 4, Rule 67 of the Revised Rules
of Court, the Court Resolves to DECLARE the plaintiff as having a lawful right to take the property in
question for purposes for which the same is expropriated.
The plaintiff and intervenor are hereby directed to submit at least two (2) names of their recommended
commissioners for the determination of just compensation within ten (10) days from receipt hereof.
SO ORDERED.[26] The RTC held that, as gleaned from the declaration in Ordinance No. 21, there was
substantial compliance with the definite and valid offer requirement of Section 19 of R.A. No. 7160, and
that the expropriated portion is the most convenient access to the interior of Sto. Tomas Bukid.
Dissatisfied, JILCSFI elevated the case to the CA on the following assignment of errors:
First Assignment of Error
THE LOWER COURT SERIOUS[LY] ERRED WHEN IT RULED THAT PLAINTIFF-APPELLEE
SUBSTANTIALLY COMPLIED WITH THE LAW WHEN IT EXPROPRIATED JILS PROPERTY TO BE
USED AS A RIGHT OF WAY.
Second Assignment of Error
THE LOWER COURT ERRED IN DISREGARDING JILS EVIDENCE PROVING THAT THERE WAS NO
PUBLIC NECESSITY TO WARRANT THE EXPROPRIATION OF THE SUBJECT PROPERTY.[27]
The Court of Appeals Decision
In a Decision dated March 13, 2001, the CA affirmed the order of the RTC.[28] The CA agreed with the
trial court that the plaintiff substantially complied with Section 19 of R.A. No. 7160, particularly the
requirement that a valid and definite offer must be made to the owner. The CA declared that the letter of

42

Engr. Reyes, inviting Lorenzo Ching Cuanco to a conference to discuss with him the road project and the
price of the lot, was a substantial compliance with the valid and definite offer requirement under said
Section 19. In addition, the CA noted that there was also constructive notice to the defendants of the
expropriation proceedings since a notice of lis pendens was annotated at the dorsal portion of TCT No.
PT-92579 on November 26, 1993. Finally, the CA upheld the public necessity for the subject property
based on the findings of the trial court that the portion of the property sought to be expropriated appears
to be, not only the most convenient access to the interior of Sto. Tomas Bukid, but also an easy path for
vehicles entering the area, particularly fire trucks. Moreover, the CA took into consideration the provision
of Article 33 of the Rules and Regulations Implementing the Local Government Code, which regards the
construction or extension of roads, streets, sidewalks as public use, purpose or welfare.[30]
On April 6, 2001, JILCSFI filed a motion for reconsideration of the said decision alleging that the CA
erred in relying on the photocopy of Engr. Reyes letter to Lorenzo Ching Cuanco because the same was
not admitted in evidence by the trial court for being a mere photocopy. It also contended that the CA
erred in concluding that constructive notice of the expropriation proceeding, in the form of annotation of
the notice oflis pendens, could be considered as a substantial compliance with the requirement under
Section 19 of the Local Government Code for a valid and definite offer. JILCSFI also averred that no
inspection was ever ordered by the trial court to be conducted on the property, and, if there was one, it
had the right to be present thereat since an inspection is considered to be part of the trial of the case. [31]
The CA denied the motion for reconsideration for lack of merit. It held that it was not precluded from
considering the photocopy[32] of the letter, notwithstanding that the same was excluded by the trial court,
since the fact of its existence was duly established by corroborative evidence. This corroborative
evidence consisted of the testimony of the plaintiffs messenger that he personally served the letter to
Lorenzo Ching Cuanco, and Municipal Ordinance No. 21 which expressly stated that the property
owners were already notified of the expropriation proceeding. The CA noted that JILCSFI failed to
adduce controverting evidence, thus the presumption of regularity was not overcome.[33]
The Present Petition
In this petition, petitioner JILCSFI raises the following issues: (1) whether the respondent complied with
the requirement, under Section 19 of the Local Government Code, of a valid and definite offer to acquire
the property prior to the filing of the complaint; (2) whether its property which is already intended to be
used for public purposes may still be expropriated by the respondent; and (3) whether the requisites for
an easement for right-of-way under Articles 649 to 657 of the New Civil Code may be dispensed with.
The petitioner stresses that the law explicitly requires that a valid and definite offer be made to the owner
of the property and that such offer was not accepted. It argues that, in this case, there was no evidence
to show that such offer has been made either to the previous owner or the petitioner, the present owner.
The petitioner contends that the photocopy of the letter of Engr. Reyes, notifying Lorenzo Ching Cuanco
of the respondents intention to construct a road on its property, cannot be considered because the trial
court did not admit it in evidence. And assuming that such letter is admissible in evidence, it would not
prove that the offer has been made to the previous owner because mere notice of intent to purchase is
not equivalent to an offer to purchase. The petitioner further argues that the offer should be made to the
proper party, that is, to the owner of the property. It noted that the records in this case show that as of
February 1993, it was already the owner of the property. Assuming, therefore, that there was an offer to
purchase the property, the same should have been addressed to the petitioner, as present owner.[34]
The petitioner maintains that the power of eminent domain must be strictly construed since its exercise is
necessarily in derogation of the right to property ownership. All the requirements of the enabling law
must, therefore, be strictly complied with. Compliance with such requirements cannot be presumed but
must be proved by the local government exercising the power. The petitioner adds that the local
government should, likewise, comply with the requirements for an easement of right-of-way; hence, the
road must be established at a point least prejudicial to the owner of the property. Finally, the petitioner
argues that, if the property is already devoted to or intended to be devoted to another public use, its

expropriation should not be allowed. For its part, the respondent avers that the CA already squarely
resolved the issues raised in this petition, and the petitioner failed to show valid and compelling reason
to reverse the CAs findings. Moreover, it is not the function of the Supreme Court to weigh the evidence
on factual issues all over again.[36] The respondent contends that the Ching Cuancos were deemed to
have admitted that an offer to purchase has been made and that they refused to accept such offer
considering their failure to specifically deny such allegation in the complaint. In light of such admission,
the exclusion of the photocopy of the letter of Engr. Reyes, therefore, is no longer significant. [37]
The Ruling of the Court The petition is meritorious.
At the outset, it must be stressed that only questions of law may be raised by the parties and passed
upon by the Supreme Court in petitions for review on certiorari.[38] Findings of fact of the CA, affirming
those of the trial court, are final and conclusive and may not be reviewed on appeal. Nonetheless, where
it is shown that the conclusion is a finding grounded on speculations, surmises or conjectures or where
the judgment is based on misapprehension of facts, the Supreme Court may reexamine the evidence on
record.
Eminent Domain: Nature and Scope
The right of eminent domain is usually understood to be an ultimate right of the sovereign power to
appropriate any property within its territorial sovereignty for a public purpose. The nature and scope of
such power has been comprehensively described as follows:
It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government to
serve the common need and advance the general welfare. Thus, the right of eminent domain appertains
to every independent government without the necessity for constitutional recognition. The provisions
found in modern constitutions of civilized countries relating to the taking of property for the public use do
not by implication grant the power to the government, but limit the power which would, otherwise, be
without limit. Thus, our own Constitution provides that [p]rivate property shall not be taken for public use
without just compensation. Furthermore, the due process and equal protection clauses act as additional
safeguards against the arbitrary exercise of this governmental power.[41]
Strict Construction and Burden of Proof
The exercise of the right of eminent domain, whether directly by the State or by its authorized agents, is
necessarily in derogation of private rights.[42] It is one of the harshest proceedings known to the law.
Consequently, when the sovereign delegates the power to a political unit or agency, a strict construction
will be given against the agency asserting the power.[43] The authority to condemn is to be strictly
construed in favor of the owner and against the condemnor.[44] When the power is granted, the extent to
which it may be exercised is limited to the express terms or clear implication of the statute in which the
grant is contained.[45]
Corollarily, the respondent, which is the condemnor, has the burden of proving all the essentials
necessary to show the right of condemnation.[46] It has the burden of proof to establish that it has
complied with all the requirements provided by law for the valid exercise of the power of eminent domain.
The grant of the power of eminent domain to local government units is grounded on Section 19 of R.A.
No. 7160 which reads: SEC. 19. Eminent Domain. A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or
purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation,
pursuant to the provisions of the Constitution and pertinent laws; Provided, however, That the power of
eminent domain may not be exercised unless a valid and definite offer has been previously made to the
owner, and such offer was not accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the expropriation proceedings and upon
making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the
property based on the current tax declaration of the property to be expropriated: Provided, finally, That

43

the amount to be paid for the expropriated property shall be determined by the proper court based on the
fair market value at the time of the taking of the property.
The Court declared that the following requisites for the valid exercise of the power of eminent domain by
a local government unit must be complied with:
1.

2.
3.
4.

An ordinance is enacted by the local legislative council authorizing the local chief executive, in
behalf of the local government unit, to exercise the power of eminent domain or pursue
expropriation proceedings over a particular private property.
The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of
the poor and the landless.
There is payment of just compensation, as required under Section 9, Article III of the Constitution,
and other pertinent laws.
A valid and definite offer has been previously made to the owner of the property sought to be
expropriated, but said offer was not accepted.

Valid and Definite Offer

Article 35 of the Rules and Regulations Implementing the Local Government Code provides:
ARTICLE 35. Offer to Buy and Contract of Sale
1.
2.
3.

4.

The offer to buy private property for public use or purpose shall be in writing. It shall specify
the property sought to be acquired, the reasons for its acquisition, and the price offered.
If the owner or owners accept the offer in its entirety, a contract of sale shall be executed and
payment forthwith made.
If the owner or owners are willing to sell their property but at a price higher than that offered to
them, the local chief executive shall call them to a conference for the purpose of reaching an
agreement on the selling price. The chairman of the appropriation or finance committee of
the sanggunian, or in his absence, any member of the sanggunian duly chosen as its
representative, shall participate in the conference. When an agreement is reached by the
parties, a contract of sale shall be drawn and executed.
The contract of sale shall be supported by the following documents:

(1) Resolution of the sanggunian authorizing the local chief executive to enter into a contract of sale. The
resolution shall specify the terms and conditions to be embodied in the contract;
(2) Ordinance appropriating the amount specified in the contract; and
(3) Certification of the local treasurer as to availability of funds together with a statement that such fund
shall not be disbursed or spent for any purpose other than to pay for the purchase of the property
involved.
The respondent was burdened to prove the mandatory requirement of a valid and definite offer to the
owner of the property before filing its complaint and the rejection thereof by the latter. [48] It is incumbent
upon the condemnor to exhaust all reasonable efforts to obtain the land it desires by agreement.
[49]
Failure to prove compliance with the mandatory requirement will result in the dismissal of the
complaint. An offer is a unilateral proposition which one party makes to the other for the celebration of a
contract.[51] It creates a power of acceptance permitting the offeree, by accepting the offer, to transform
the offerors promise into a contractual obligation.[52] Corollarily, the offer must be complete, indicating
with sufficient clearness the kind of contract intended and definitely stating the essential conditions of the
proposed contract.[53] An offer would require, among other things, a clear certainty on both the object and
the cause or consideration of the envisioned contract. The purpose of the requirement of a valid and
definite offer to be first made to the owner is to encourage settlements and voluntary acquisition of
property needed for public purposes in order to avoid the expense and delay of a court action. [55] The law

is designed to give to the owner the opportunity to sell his land without the expense and inconvenience
of a protracted and expensive litigation. This is a substantial right which should be protected in every
instance.[56] It encourages acquisition without litigation and spares not only the landowner but also the
condemnor, the expenses and delays of litigation. It permits the landowner to receive full compensation,
and the entity acquiring the property, immediate use and enjoyment of the property. A reasonable offer in
good faith, not merely perfunctory or pro forma offer, to acquire the property for a reasonable price must
be made to the owner or his privy.[57] A single bona fide offer that is rejected by the owner will suffice. The
expropriating authority is burdened to make known its definite and valid offer to all the owners of the
property. However, it has a right to rely on what appears in the certificate of title covering the land to be
expropriated. Hence, it is required to make its offer only to the registered owners of the property. After all,
it is well-settled that persons dealing with property covered by a Torrens certificate of title are not
required to go beyond what appears on its face. In the present case, the respondent failed to prove that
before it filed its complaint, it made a written definite and valid offer to acquire the property for public use
as an access road. The only evidence adduced by the respondent to prove its compliance with Section
19 of the Local Government Code is the photocopy of the letter purportedly bearing the signature of
Engr. Jose Reyes, to only one of the co-owners, Lorenzo Ching Cuanco. The letter reads:
MR. LORENZO CHING CUANCO 18 Alcalde Jose Street, Capasigan, Pasig, Metro Manila
Dear Mr. Cuanco:
This refers to your parcel of land located along E. Santos Street, Barangay Palatiw, Pasig, Metro Manila
embraced in and covered by TCT No. 66585, a portion of which with an area of fifty-one (51) square
meters is needed by the Municipal Government of Pasig for conversion into a road-right of way for the
benefit of several residents living in the vicinity of your property. Attached herewith is the sketch plan for
your information.
In this connection, may we respectfully request your presence in our office to discuss this project and the
price that may be mutually agreed upon by you and the Municipality of Pasig.
Thank you.
Very truly yours, ENGR. JOSE L. REYES
Technical Asst. to the Mayor on Infrastructure
It bears stressing, however, that the respondent offered the letter only to prove its desire or intent to
acquire the property for a right-of-way.[60]The document was not offered to prove that the respondent
made a definite and valid offer to acquire the property. Moreover, the RTC rejected the document
because the respondent failed to adduce in evidence the original copy thereof. [61] The respondent,
likewise, failed to adduce evidence that copies of the letter were sent to and received by all the coowners of the property, namely, Lorenzo Ching Cuanco, Victor Ching Cuanco and Ernesto Kho.
The respondent sought to prove, through the testimony of its messenger, Rolando Togonon, that
Lorenzo Ching Cuanco received the original of the said letter. But Togonon testified that he merely gave
the letter to a lady, whom he failed to identify. He stated that the lady went inside the store of Lorenzo
Ching Cuanco, and later gave the letter back to him bearing the signature purportedly of one Luz
Bernarte. However, Togonon admitted, on cross-examination, that he did not see Bernarte affixing her
signature on the letter. Togonon also declared that he did not know and had never met Lorenzo Ching
Cuanco and Bernarte:
Even if the letter was, indeed, received by the co-owners, the letter is not a valid and definite offer to
purchase a specific portion of the property for a price certain. It is merely an invitation for only one of the
co-owners, Lorenzo Ching Cuanco, to a conference to discuss the project and the price that may be
mutually acceptable to both parties. There is no legal and factual basis to the CAs ruling that the
annotation of a notice of lis pendens at the dorsal portion of petitioners TCT No. PT-92579 is a
substantial compliance with the requisite offer. A notice of lis pendens is a notice to the whole world of
the pendency of an action involving the title to or possession of real property and a warning that those

44

who acquire an interest in the property do so at their own risk and that they gamble on the result of the
litigation over it.[63] Moreover, the lis pendens was annotated at the dorsal portion of the title only on
November 26, 1993, long after the complaint had been filed in the RTC against the Ching Cuancos.
Neither is the declaration in one of the whereas clauses of the ordinance that the property owners
were already notified by the municipality of the intent to purchase the same for public use as a municipal
road, a substantial compliance with the requirement of a valid and definite offer under Section 19 of R.A.
No. 7160. Presumably, the Sangguniang Bayan relied on the erroneous premise that the letter of Engr.
Reyes reached the co-owners of the property. In the absence of competent evidence that, indeed, the
respondent made a definite and valid offer to all the co-owners of the property, aside from the letter of
Engr. Reyes, the declaration in the ordinance is not a compliance with Section 19 of R.A. No. 7160.
The respondent contends, however, that the Ching Cuancos, impliedly admitted the allegation in
its complaint that an offer to purchase the property was made to them and that they refused to accept
the offer by their failure to specifically deny such allegation in their answer. This contention is wrong. As
gleaned from their answer to the complaint, the Ching Cuancos specifically denied such allegation for
want of sufficient knowledge to form a belief as to its correctness. Under Section 10, [64] Rule 8 of the
Rules of Court, such form of denial, although not specific, is sufficient.
Public Necessity
We reject the contention of the petitioner that its property can no longer be expropriated by the
respondent because it is intended for the construction of a place for religious worship and a school for its
members. As aptly explained by this Court in Manosca v. Court of Appeals,[65]thus:
It has been explained as early as Sea v. Manila Railroad Co., that: A historical research discloses the
meaning of the term public use to be one of constant growth. As society advances, its demands upon the
individual increases and each demand is a new use to which the resources of the individual may be
devoted. for whatever is beneficially employed for the community is a public use.
Chief Justice Enrique M. Fernando states: The taking to be valid must be for public use. There was a
time when it was felt that a literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is
not allowable. It is not so any more. As long as the purpose of the taking is public, then the power of
eminent domain comes into play. As just noted, the constitution in at least two cases, to remove any
doubt, determines what is public use. One is the expropriation of lands to be subdivided into small lots
for resale at cost to individuals. The other is the transfer, through the exercise of this power, of utilities
and other private enterprise to the government. It is accurate to state then that at present whatever may
be beneficially employed for the general welfare satisfies the requirements of public use.
Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land Tenure Administration, has
viewed the Constitution a dynamic instrument and one thatis not to be construed narrowly or
pedantically so as to enable it to meet adequately whatever problems the future has in store. Fr. Joaquin
Bernas, a noted constitutionalist himself, has aptly observed that what, in fact, has ultimately emerged is
a concept of public use which is just as broad as public welfare.
Petitioners ask: But (w)hat is the so-called unusual interest that the expropriation of (Felix Manalos)
birthplace become so vital as to be a public use appropriate for the exercise of the power of eminent
domain when only members of the Iglesia ni Cristo would benefit? This attempt to give some religious
perspective to the case deserves little consideration, for what should be significant is the principal
objective of, not the casual consequences that might follow from, the exercise of the power. The purpose
in setting up the marker is essentially to recognize the distinctive contribution of the late Felix Manalo to
the culture of the Philippines, rather than to commemorate his founding and leadership of the Iglesia ni
Cristo. The practical reality that greater benefit may be derived by members of the Iglesia ni Cristo than
by most others could well be true but such a peculiar advantage still remains to be merely incidental and
secondary in nature. Indeed, that only a few would actually benefit from the expropriation of property,

does not necessarily diminish the essence and character of public use. The petitioner asserts that the
respondent must comply with the requirements for the establishment of an easement of right-of-way,
more specifically, the road must be constructed at the point least prejudicial to the servient state, and
that there must be no adequate outlet to a public highway. The petitioner asserts that the portion of the
lot sought to be expropriated is located at the middle portion of the petitioners entire parcel of land,
thereby splitting the lot into two halves, and making it impossible for the petitioner to put up its school
building and worship center.
The subject property is expropriated for the purpose of constructing a road. The respondent is not
mandated to comply with the essential requisites for an easement of right-of-way under the New Civil
Code. Case law has it that in the absence of legislative restriction, the grantee of the power of eminent
domain may determine the location and route of the land to be taken[66] unless such determination is
capricious and wantonly injurious.[67] Expropriation is justified so long as it is for the public good and there
is genuine necessity of public character.[68]Government may not capriciously choose what private
property should be taken.
The respondent has demonstrated the necessity for constructing a road from E. R. Santos Street to Sto.
Tomas Bukid. The witnesses, who were residents of Sto. Tomas Bukid, testified that although there were
other ways through which one can enter the vicinity, no vehicle, however, especially fire trucks, could
enter the area except through the newly constructed Damayan Street. This is more than sufficient to
establish that there is a genuine necessity for the construction of a road in the area. After all, absolute
necessity is not required, only reasonable and practical necessity will suffice.[70]
Nonetheless, the respondent failed to show the necessity for constructing the road particularly in the
petitioners property and not elsewhere.[71] We note that the whereas clause of the ordinance states that
the 51-square meter lot is the shortest and most suitable access road to connect Sto. Tomas Bukid to E.
R. Santos Street. The respondents complaint also alleged that the said portion of the petitioners lot has
been surveyed as the best possible ingress and egress. However, the respondent failed to adduce a
preponderance of evidence to prove its claims.
On this point, the trial court made the following findings:
The contention of the defendants that there is an existing alley that can serve the purpose of the
expropriator is not accurate. An inspection of the vicinity reveals that the alley being referred to by the
defendants actually passes thru Bagong Taon St. but only about one-half (1/2) of its entire length is
passable by vehicle and the other half is merely a foot-path. It would be more inconvenient to widen the
alley considering that its sides are occupied by permanent structures and its length from the municipal
road to the area sought to be served by the expropriation is considerably longer than the proposed
access road. The area to be served by the access road is composed of compact wooden houses and
literally a slum area. As a result of the expropriation of the 51-square meter portion of the property of the
intervenor, a 3-meter wide road open to the public is created. This portion of the property of the
intervenor is the most convenient access to the interior of Sto. Tomas Bukid since it is not only a short
cut to the interior of the Sto. Tomas Bukid but also an easy path for vehicles entering the area, not to
mention the 3-meter wide road requirement of the Fire Code.[72]
However, as correctly pointed out by the petitioner, there is no showing in the record that an ocular
inspection was conducted during the trial. If, at all, the trial court conducted an ocular inspection of the
subject property during the trial, the petitioner was not notified thereof. The petitioner was, therefore,
deprived of its right to due process. It bears stressing that an ocular inspection is part of the trial as
evidence is thereby received and the parties are entitled to be present at any stage of the trial.
[73]
Consequently, where, as in this case, the petitioner was not notified of any ocular inspection of the
property, any factual finding of the court based on the said inspection has no probative weight. The
findings of the trial court based on the conduct of the ocular inspection must, therefore, be rejected.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and Resolution of the
Court of Appeals are REVERSED AND SET ASIDE. The RTC is ordered to dismiss the complaint of the
respondent without prejudice to the refiling thereof.SO ORDERED.

45

G.R. Nos. L-60549, 60553 to 60555 October 26, 1983

HEIRS OF JUANCHO ARDONA petitioners, vs. HON. JUAN Y. REYES, Executive Judge and
Presiding Judge of Branch I, COURT OF FIRST instance OF CEBU, and the PHILIPPINE TOURISM
AUTHORITY, respondents.
This is a petition for certiorari with preliminary injunction challenging the constitutionality of Presidential
Decree No. 564, the Revised Charter of the Philippine Tourism Authority, and Proclamation No. 2052
declaring the barangays of Sibugay, Malubog, Babag and Sirao including the proposed Lusaran Dam in
the City of Cebu and in the municipalities of Argao and Dalaguete in the province of Cebu as tourist
zones. The petitioners ask that we restrain respondent Court of First Instance of Cebu and the Philippine
Tourism Authority (PTA) from enforcing and implementing the writs of possession issued in four (4)
expropriation cases filed by PTA against the petitioners: Civil Cases Nos. R-19562, R-19684, R-20701,
and R-21608 of the Court of First Instance of Cebu (Branch 1).
The Philippine Tourism Authority filed four (4) Complaints with the Court of First Instance of Cebu City for
the expropriation of some 282 hectares of rolling land situated in barangays Malubog and Babag, Cebu
City, under PTA's express authority "to acquire by purchase, by negotiation or by condemnation
proceedings any private land within and without the tourist zones" for the purposes indicated in Section
5, paragraph B(2), of its Revised Charter (PD 564), more specifically, for the development into integrated
resort complexes of selected and well-defined geographic areas with potential tourism value. As
uniformly alleged in the complaints, the purposes of the expropriation are:
Plaintiff, in line with the policy of the government to promote tourism and development of tourism projects
will construct in Barangays Malubog, Busay and Babag, all of Cebu City, a sports complex (basketball
courts, tennis courts, volleyball courts, track and field, baseball and softball diamonds, and swimming
pools), clubhouse, gold course, children's playground and a nature area for picnics and horseback riding
for the use of the public.
The development plan, covering approximately 1,000 hectares, includes the establishment of an electric
power grid in the area by the National Power Corporation, thus assuring the supply of electricity therein
for the benefit of the whole community. Deep wells will also be constructed to generate water supply
within the area. Likewise, a complex sewerage and drainage system will be devised and constructed to
protect the tourists and nearby residents from the dangers of pollution.
Complimentary and support facilities for the project will be constructed, including public rest houses,
lockers, dressing rooms, coffee shops, shopping malls, etc. Said facilities will create and offer
employment opportunities to residents of the community and further generate income for the whole of
Cebu City.
Plaintiff needs the property above described which is directly covered by the proposed golf court.
The defendants in Civil Cases Nos. R-20701 and R-21608 filed their respective Opposition with Motion
to Dismiss and/or Reconsideration. The defendants in Civil Case No. R-19562 filed a manifestation
adopting the answer of defendants in Civil Case No. R-19864. The defendants, now petitioners, had a
common allegation in that the taking is allegedly not impressed with public use under the Constitution.
In their motions to dismiss, the petitioners alleged, in addition to the issue of public use, that there is no
specific constitutional provision authorizing the taking of private property for tourism purposes; that
assuming that PTA has such power, the intended use cannot be paramount to the determination of the
land as a land reform area; that limiting the amount of compensation by Legislative fiat is constitutionally
repugnant; and that since the land is under the land reform program, it is the Court of Agrarian Relations
and not the Court of First Instance that has jurisdiction over the expropriation cases.
The Philippine Tourism Authority having deposited with The Philippine National Bank, Cebu City Branch,
an amount equivalent to 10% of the value of the properties pursuant to Presidential Decree No. 1533.
the lower court issued separate orders authorizing PTA to take immediate possession of the premises
and directing the issuance of writs of possession.

On May 25, 1982, petitioners filed this petition questioning the orders of the respondent Judge, The
respondents have correctly restated the grounds in the petition as follows:
(a) The complaints for expropriation lack basis because the Constitution does not provide for the
expropriation of private property for tourism or other related purposes;
(b) The writs of possession or orders authorizing PTA to take immediate possession is premature
because the "public use" character of the taking has not been previously demonstrated;
(c) The taking is not for public use in contemplation of eminent domain law;
(d) The properties in question have been previously declared a land reform area; consequently, the
implementation of the social justice pro- ,vision of the Constitution on agrarian reform is paramount
to the right of the State to expropriate for the purposes intended;
(e) Proclamation No. 2052 declaring certain barangays in Cebu City, which include the lands subject of
expropriation as within a tourist zone, is unconstitutional for it impairs the obligation of contracts; "F.
Since the properties are within a land reform area, it is the Court of Agrarian Relations, not the
lower court, that has jurisdiction pursuant to Pres. Decree No. 946;
(f) The forcible ejectment of defendants from the premises constitutes a criminal act under Pres.
Decree No. 583;
In their memorandum, the petitioners have summarized the issues as follows:
a. Enforcement of the Writ of Possession is Premature:
b. Presidential Decree 564 Amending Presidential Decree l89 is Constitutionally Repugnant:
c. The Condemnation is not for Public Use, Therefore, Unconstitutional:
d. The Expropriation for Tourism Purposes of Lands Covered by the Land Reform Program Violates
the Constitution:
e. Presidential Proclamation 2052 is Unconstitutional:
f.
Presidential Decree No 1533 is Unconstitutional:
g. The Court of First Instance has no Jurisdiction:
h. The Filing of the Present Petition is not Premature.
The issues raised by the petitioners revolve around the proposition that the actions to expropriate their
properties are constitutionally infirm because nowhere in the Constitution can a provision be found which
allows the taking of private property for the promotion of tourism.
The petitioners' arguments in their pleadings in support of the above proposition are subsumed under the
following headings:
i. Non-compliance with the "public use" requirement under the eminent domain provision of the Bill of
Rights.
ii. Disregard of the land reform nature of the property being expropriated.
iii. Impairment of the obligation of contracts.
There are three provisions of the Constitution which directly provide for the exercise of the power of
eminent domain. Section 2, Article IV states that private property shall not be taken for public use without
just compensation. Section 6, Article XIV allows the State, in the interest of national welfare or defense
and upon payment of just compensation to transfer to public ownership, utilities and other private
enterprises to be operated by the government. Section 13, Article XIV states that the Batasang
Pambansa may authorize upon payment of just compensation the expropriation of private lands to be
subdivided into small lots and conveyed at cost to deserving citizens.
While not directly mentioning the expropriation of private properties upon payment of just compensation,
the provisions on social justice and agrarian reforms which allow the exercise of police power together
with the power of eminent domain in the implementation of constitutional objectives are even more farreaching insofar as taking of private property is concerned.
Section 6, Article II provides: Sec. 6. The State shall promote social justice to ensure the dignity, welfare,
and security of all the people. Towards its end, the State shall regulate the acquisition, ownership, use,
enjoyment, and disposition of private property, and equitably diffuse property ownership and profits.

46

Section 12, Article XIV provides: See. 12. The State shall formulate and implement an agrarian reform
program aimed at emancipating the tenant from the bondage of the soil and achieving the goals
enunciated in this Constitution.
The equitable diffusion of property ownership in the promotion of social justice implies the exercise,
whenever necessary, of the power to expropriate private property. Likewise there can be no meaningful
agrarian reform program unless the power to expropriate is utilized.
We cite all the above provisions on the power to expropriate because of the petitioners' insistence on a
restrictive view of the eminent domain provision. The thrust of all constitutional provisions on
expropriation is in the opposite direction.
As early as 1919, this Court in Visayan Refining Co. v. Samus (40 Phil. 550) categorized the restrictive
view as wholly erroneous and based on a misconception of fundamentals.
The petitioners look for the word "tourism" in the Constitution. Understandably the search would be in
vain. The policy objectives of the framers can be expressed only in general terms such as social justice,
local autonomy, conservation and development of the national patrimony, public interest, and general
welfare, among others. The programs to achieve these objectives vary from time to time and according
to place, To freeze specific programs like Tourism into express constitutional provisions would make the
Constitution more prolix than a bulky code and require of the framers a prescience beyond Delphic
proportions. The particular mention in the Constitution of agrarian reform and the transfer of utilities and
other private enterprises to public ownership merely underscores the magnitude of the problems sought
to be remedied by these programs. They do not preclude nor limit the exercise of the power of eminent
domain for such purposes like tourism and other development programs.
In the leading case of Visayan Refining Co. v. Camus (supra), this Court emphasized that the power of
eminent domain is inseparable from sovereignty being essential to the existence of the State and
inherent in government even in its most primitive forms. The only purpose of the provision in the Bill of
Rights is to provide some form of restraint on the sovereign power. It is not a grant of authority The power of eminent domain does not depend for its existence on a specific grant in the constitution. It
is inherent in sovereignty and exists in a sovereign state without any recognition of it in the constitution.
The provision found in most of the state constitutions relating to the taking of property for the public use
do not by implication grant the power to the government of the state, but limit a power which would
otherwise be without limit.
The constitutional restraints are public use and just compensation.
Do the purposes of the taking in this case constitute "public use"?
The petitioners ask us to adopt a strict construction and declare that "public use" means literally use by
the public and that "public use" is not synonymous with "public interest", "public benefit", or "public
welfare" and much less "public convenience. "
The petitioners face two major obstacles. First, their contention which is rather sweeping in its call for a
retreat from the public welfare orientation is unduly restrictive and outmoded. Second, no less than the
lawmaker has made a policy determination that the power of eminent domain may be exercised in the
promotion and development of Philippine tourism.
The restrictive view of public use may be appropriate for a nation which circumscribes the scope of
government activities and public concerns and which possesses big and correctly located public lands
that obviate the need to take private property for public purposes. Neither circumstance applies to the
Philippines. We have never been a laissez faire State, And the necessities which impel the exertion of
sovereign power are all too often found in areas of scarce public land or limited government resources.
Certain aspects of parliamentary government were introduced by the 1973 amendments to the
Constitution with further modifications in the 1976 and 1981 amendments. Insofar as the executive and
legislative departments are concerned, the traditional concept of checks and balances in a presidential
form was considerably modified to remove some roadblocks in the expeditious implementation of
national policies. There was no such change for the judiciary. We remain as a checking and balancing
department even as all strive to maintain respect for constitutional boundaries. At the same time, the
philosophy of coordination in the pursuit of developmental goals implicit in the amendments also
constrains in the judiciary to defer to legislative discretion iii the judicial review of programs for economic

development and social progress unless a clear case of constitutional infirmity is established. We cannot
stop the legitimate exercise of power on an invocation of grounds better left interred in a bygone age and
time.* As we review the efforts of the political departments to bring about self-sufficiency, if not eventual
abundance, we continue to maintain the liberal approach because the primary responsibility and the
discretion belong to them. There can be no doubt that expropriation for such traditions' purposes as the
construction of roads, bridges, ports, waterworks, schools, electric and telecommunications systems,
hydroelectric power plants, markets and slaughterhouses, parks, hospitals, government office buildings,
and flood control or irrigation systems is valid. However, the concept of public use is not limited to
traditional purposes. Here as elsewhere the Idea that "public use" is strictly limited to clear cases of "use
by the public" has been discarded.
In the United States, the rule was enunciated in Berman v. Parker (348 U.S. 25; 99 L. ed. 27) as follows:
We do not sit to determine whether a particular housing project is or is not desirable. The concept of the
public welfare is broad and inclusive. See DayBrite Lighting, Inc. v. Missouri, 342 US 421, 424, 96 L ed
469, 472, 72 S Ct 405. The values it represents are spiritual as well as physical, aesthetic as well as
monetary. It is within the power of the legislature to determine that the community should be beautiful as
well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled. In the present
case, the Congress and its authorized agencies have made determinations that take into account a wide
variety of values. It is not for us to reappraise them. If those who govern the District of Columbia decide
that the Nation's Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment
that stands in the way.
Once the object is within the authority of Congress, the right to realize it through the exercise of eminent
domain is clear. For the power of eminent domain is merely the means to the end. See Luxton v. North
River Bridge Co. 153 US 525, 529, 530, 38 L ed 808, 810, 14 S Ct 891; United States v. Gettysburg
Electric R. Co. 160 US 668, 679, 40 L ed 576, 580, 16 S Ct 427.
In an earlier American case, where a village was isolated from the rest of North Carolina because of the
flooding of the reservoir of a dam thus making the provision of police, school, and health services
unjustifiably expensive, the government decided to expropriate the private properties in the village and
the entire area was made part of an adjoining national park. The district court and the appellate court
ruled against the expropriation or excess condemnation. The Court of Appeals applied the "use by the
public" test and stated that the only land needed for public use was the area directly flooded by the
reservoir. The village may have been cut off by the dam but to also condemn it was excess
condemnation not valid under the "Public use" requirement. The U.S. Supreme Court inUnited States ex
rel TVA v. Welch (327 U.S, 546; 90 L. ed 843) unanimously reversed the lower courts. It stated:
The Circuit Court of Appeals, without expressly relying on a compelling rule of construction that would
give the restrictive scope to the T.V.A. Act given it by the district court, also interpreted the statute
narrowly. It first analyzed the facts by segregating the total problem into distinct parts, and thus came to
the conclusion that T.V.A.'s purpose in condemning the land in question was only one to reduce its
liability arising from the destruction of the highway. The Court held that use of the lands for that purpose
is a "private" and not a "public use" or, at best, a "public use" not authorized by the statute. we are
unable to agree with the reasoning and conclusion of the Circuit Court of Appeals.
We think that it is the function of Congress to decide what type of taking is for a public use and that the
agency authorized to do the taking may do so to the still extent of its statutory authority, United States v.
Gettysburg Electric R. Co. 160 US 668, 679, 40 L ed 576, 580, 16 S Ct 427. ...
But whatever may be the scope of the judicial power to determine what is a "public use" in Fourteenth
Amendment controversies, this Court has said that when Congress has spoken on this subject "Its
decision is entitled to deference until it is shown to involve an impossibility." Old Dominion Land Co. v.
United States, 269, US 55, 66, 70 L ed 162, 46 S Ct 39. Any departure from this judicial restraint would
result in courts deciding on what is and is not a governmental function and in their invalidating legislation
on the basis of their view on that question at the moment of decision, a practice which has proved
impracticable in other fields. See Case v. Bowles decided February 4, 1946, 437 US 92, 101, ante, 552,
559, 66 S Ct 438. New York v. United States, 326 US 572 ante 326, 66 S Ct 310). We hold that the

47

T.V.A. took the tracts here involved for a public purpose, if, as we think is the case, Congress authorized
the Authority to acquire, hold, and use the lands to carry out the purposes of the T.V.A. Act.
In the Philippines, Chief Justice Enrique M. Fernando has aptly summarized the statutory and judicial
trend as follows:
The taking to be valid must be for public use. There was a time when it was felt that a literal meaning
should be attached to such a requirement. Whatever project is undertaken must be for the public to
enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It is not any more. As
long as the purpose of the taking is public, then the power of eminent domain comes into play. As just
noted, the constitution in at least two cases, to remove any doubt, determines what is public use. One is
the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The other is in
the transfer, through the exercise of this power, of utilities and other private enterprise to the government.
It is accurate to state then that at present whatever may be beneficially employed for the general welfare
satisfies the requirement of public use. (Fernando, The Constitution of the Philippines, 2nd ed., pp. 523524)
The petitioners' contention that the promotion of tourism is not "public use" because private
concessioners would be allowed to maintain various facilities such as restaurants, hotels, stores, etc.
inside the tourist complex is impressed with even less merit. Private bus firms, taxicab fleets, roadside
restaurants, and other private businesses using public streets end highways do not diminish in the least
bit the public character of expropriations for roads and streets. The lease of store spaces in underpasses
of streets built on expropriated land does not make the taking for a private purpose. Airports and piers
catering exclusively to private airlines and shipping companies are still for public use. The expropriation
of private land for slum clearance and urban development is for a public purpose even if the developed
area is later sold to private homeowners, commercial firms, entertainment and service companies, and
other private concerns.
The petitioners have also failed to overcome the deference that is appropriately accorded to formulations
of national policy expressed in legislation. The rule in Berman u. Parker (supra) of deference to
legislative policy even if such policy might mean taking from one private person and conferring on
another private person applies as well as in the Philippines.
Once the object is within the authority of Congress, the means by which it will be attained is also for
Congress to determine. Here one of the means chosen is the use of private enterprise for redevelopment
of the area. Appellants argue that this makes the project a taking from one businessman for the benefit
of another businessman. But the means of executing the project are for Congress and Congress alone to
determine, once the public purpose has been established. Selb Luxton v. North River Bridge Co. (US)
supra; cf. Highland v. Russel Car & Snow Plow Co. 279 US 253, 73 L ed 688, 49 S Ct 314. The public
end may be as well or better served through an agency of private enterprise than through a department
of government-or so the Congress might conclude. We cannot say that public ownership is the sole
method of promoting the public purposes of community redevelopment projects. What we have said also
disposes of any contention concerning the fact that certain property owners in the area may be permitted
to repurchase their properties for redevelopment in harmony with the over-all plan. That, too, is a
legitimate means which Congress and its agencies may adopt, if they choose. (Berman v. Parker, 99 L
ed 38, 348 US 33, 34) An examination of the language in the 1919 cases of City of Manila v. Chinese
Community of Manila (40 Phil, 349) and Visayan Refining Co. vs. Camus, earlier cited, shows that from
the very start of constitutional government in our country judicial deference to legislative policy has been
clear and manifest in eminent domain proceedings.
The expressions of national policy are found in the revised charter of the Philippine Tourism Authority,
Presidential Decree No. 564: WHEREAS, it is the avowed aim of the government to promote Philippine
tourism and work for its accelerated and balanced growth as well as for economy and expediency in the
development of the tourism plant of the country;

SECTION 1. Declaration of Policy. - It is hereby declared to be the policy of the State to promote,
encourage, and develop Philippine tourism as an instrument in accelerating the development of the
country, of strengthening the country's foreign exchange reserve position, and of protecting Philippine
culture, history, traditions and natural beauty, internationally as well as domestically.
The power of eminent domain is expressly provided for under Section 5 B(2) as follows:
2. Acquisition of Private Lands, Power of Eminent Domain. To acquire by purchase, by negotiation or
by condemnation proceedings any private land within and without the tourist zones for any of the
following reasons: (a) consolidation of lands for tourist zone development purposes, (b) prevention of
land speculation in areas declared as tourist zones, (c) acquisition of right of way to the zones, (d)
protection of water shed areas and natural assets with tourism value, and (e) for any other purpose
expressly authorized under this Decree and accordingly, to exercise the power of eminent domain under
its own name, which shall proceed in the manner prescribed by law and/or the Rules of Court on
condemnation proceedings. The Authority may use any mode of payment which it may deem expedient
and acceptable to the land owners: Provided, That in case bonds are used as payment, the conditions
and restrictions set forth in Chapter III, Section 8 to 13 inclusively, of this Decree shall apply.
The petitioners rely on the Land Reform Program of the government in raising their second argument.
According to them, assuming that PTA has the right to expropriate, the properties subject of expropriation
may not be taken for the purposes intended since they are within the coverage of "operation land
transfer" under the land reform program. Petitioners claim that certificates of land transfer (CLT'S) and
emancipation patents have already been issued to them thereby making the lands expropriated within
the coverage of the land reform area under Presidential Decree No. 2; that the agrarian reform program
occupies a higher level in the order of priorities than other State policies like those relating to the health
and physical well- being of the people; and that property already taken for public use may not be taken
for another public use.
We have considered the above arguments with scrupulous and thorough circumspection. For indeed any
claim of rights under the social justice and land reform provisions of the Constitution deserves the most
serious consideration. The Petitioners, however, have failed to show that the area being developed is
indeed a land reform area and that the affected persons have emancipation patents and certificates of
land transfer.
The records show that the area being developed into a tourism complex consists of more than 808
hectares, almost all of which is not affected by the land reform program. The portion being expropriated
is 282 hectares of hilly and unproductive land where even subsistence farming of crops other than rice
and corn can hardly survive. And of the 282 disputed hectares, only 8,970 square meters-less than one
hectare-is affected by Operation Land Transfer. Of the 40 defendants, only two have emancipation
patents for the less than one hectare of land affected. And this 8,970 square meters parcel of land is not
even within the sports complex proper but forms part of the 32 hectares resettlement area where the
petitioners and others similarly situated would be provided with proper housing, subsidiary employment,
community centers, schools, and essential services like water and electricity-which are non-existent in
the expropriated lands. We see no need under the facts of this petition to rule on whether one public
purpose is superior or inferior to another purpose or engage in a balancing of competing public interests.
The petitioners have also failed to overcome the showing that the taking of the 8,970 square meters
covered by Operation Land Transfer forms a necessary part of an inseparable transaction involving the
development of the 808 hectares tourism complex. And certainly, the human settlement needs of the
many beneficiaries of the 32 hectares resettlement area should prevail over the property rights of two of
their compatriots.
The invocation of the contracts clause has no merit. The non-impairment clause has never been a
barrier to the exercise of police power and likewise eminent domain. As stated in Manigault v.
Springs (199 U.S. 473) "parties by entering into contracts may not stop the legislature from enacting laws
intended for the public good."
The applicable doctrine is expressed in Arce v. Genato (69 SCRA 544) which involved the expropriation
of land for a public plaza. The Court stated:

48

What is claimed is that there must be a showing of necessity for such condemnation and that it was not
done in this case in support of such a view, reliance is placed on City of Manila v. Arenano Law Colleges.
(85 Phil. 663 [1950]) That doctrine itself is based on the earlier case of City of Manila v. Chinese
Community of Manila, (50 Phil. 349) also, like Camus, a 1919 decision. As could be discerned, however,
in the Arellano Law Colleges decision. it was the antiquarian view of Blackstone with its sanctification of
the right to one's estate on which such an observation was based. As did appear in his Commentaries:
"So great is the regard of the law for private property that it will not, authorize the least violation of it,
even for the public good, unless there exists a very great necessity thereof." Even the most , cursory
glance at such well-nigh absolutist concept of property would show its obsolete character at least for
Philippine constitutional law. It cannot survive the test of the 1935 Constitution with its mandates on
social justice and protection to labor. (Article II, Section 5 of the 1935 Constitution reads: "The promotion
of social justice to unsure the well-being and economic security of all the people should be the concern
of the State." Article XI, Section 6 of the same Constitution provides: "The State shall afford protection to
labor, especially to working women and minors, and shall regulate the relation between landowner and
tenant, and between labor and capital in industry and in agriculture. The State may provide for
compulsory arbitration.") What is more, the present Constitution pays even less heed to the claims of
property and rightly so. After stating that the State shall promote social justice, it continues: "Towards this
end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private
property, and equitably diffuse property ownership and profits." (That is the second sentence of Article II,
Section 6 of the Constitution) If there is any need for explicit confirmation of what was set forth in
Presidential Decree No. 42, the above provision supplies it. Moreover, that is merely to accord to what of
late has been the consistent course of decisions of this Court whenever property rights are pressed
unduly. (Cf. Alalayan v. National Power Corporation, L-24396, July 29, 1968, 24 SCRA 172; Agricultural
Credit and Cooperative Financing Administration v. Confederation of Unions, L-21484, Nov. 29, 1969, 30
SCRA 649; Edu v. Ericta, L-32096, Oct. 24, 1970, 35 SCRA 481; Phil. Virginia Tobacco Administration v.
Court of Industrial Relations, L-32052, July 25, 1975, 65 SCRA 416) The statement therefore, that there
could be discerned a constitutional objection to a lower court applying a Presidential Decree, when it
leaves no doubt that a grantee of the power of eminent domain need not prove the necessity for the
expropriation, carries its own refutation.
The issue of prematurity is also raised by the petitioners. They claim that since the necessity for the
taking has not been previously established, the issuance of the orders authorizing the PTA to take
immediate possession of the premises, as well as the corresponding writs of possession was premature.
Under Presidential Decree No. 42, as amended by Presidential Decree No. 1533, the government, its
agency or instrumentality, as plaintiff in an expropriation proceedings is authorized to take immediate
possession, control and disposition of the property and the improvements, with power of demolition,
notwithstanding the pendency of the issues before the court, upon deposit with the Philippine National
Bank of an amount equivalent to 10% of the value of the property expropriated. The issue of immediate
possession has been settled in Arce v. Genato (supra). In answer to the issue: whether the order of
respondent Judge in an expropriation case allowing the other respondent, ... to take immediate
possession of the parcel of land sought to be condemned for the beautification of its public plaza, without
a prior hearing to determine the necessity for the exercise of the power of eminent domain, is vitiated by
jurisdictional defect,
This Court held that: It is not disputed that in issuing such order, respondent Judge relied on
Presidential Decree No. 42 issued on the 9th of November, 1972. (Presidential Decree No. 42 is entitled
"Authorizing the Plaintiff in Eminent Domain Proceedings to Take Possession of the Property involved
Upon Depositing the Assessed Value for Purposes of Taxation.") The question as thus posed does not
occasion any difficulty as to the answer to be given. This petition for certiorari must fail, there being no
showing that compliance with the Presidential Decree, which under the Transitory Provisions is deemed
a part of the law of the land, (According to Article XVII, Section 3 par. (2) of the Constitution: "All

proclamations, orders, decrees, instructions and acts promulgated, issued, or done by the incumbent
President shall be part of the law of the land, and shall remain valid, legal, binding, and effective even
after lifting of martial law or the ratification of this Constitution, unless modified, revoked, or superseded
by subsequent proclamations. orders, decrees instructions, or other acts of the incumbent President, or
unless expressly and explicitly modified or repealed by the regular National Assembly") would be
characterized as either an act in excess of jurisdiction or a grave abuse of discretion. So we rule.
Likewise in Ramos v. Philippine Tourism Authority (G.R. Nos. 52449-50, June 9, 1980), this Court held:
condemnation or expropriation proceedings is in the nature of one that is quasi-in-rem wherein the fact
that the owner of the property is made a party is not essentially indispensable insofar was least as it
concerns is the immediate taking of possession of the property and the preliminary determination of its
value, including the amount to be deposited.
In their last argument, the petitioners claim that a consequence of the expropriation proceedings would
be their forcible ejectment. They contend that such forcible ejectment is a criminal act under Presidential
Decree No. 583. This contention is not valid. Presidential Decree No. 583 prohibits the taking cognizance
or implementation of orders designed to obstruct the land reform program. It refers to the harassment of
tenant- farmers who try to enforce emancipation rights. It has nothing to do with the expropriation by the
State of lands needed for public purposes. As a matter of fact, the expropriated area does not appear in
the master lists of the Ministry of Agrarian Reforms as a teranted area. The petitioners' bare allegations
have not been supported with particulars pointing to specific parcels which are subject of tenancy
contracts. The petitioners may be owner-tillers or may have some form of possessory or ownership rights
but there has been no showing of their being tenants on the disputed lands.
The petitioners have failed to overcome the burden of anyone trying to strike down a statute or decree
whose avowed purpose is the legislative perception is the public good. A statute has in its favor the
presumption of validity. All reasonable doubts should be resolved in favor of the constitutionality of a law.
The courts will not set aside a law as violative of the Constitution except in a clear case (People v. Vera,
65 Phil. 56). And in the absence of factual findings or evidence to rebut the presumption of validity, the
presumption prevails (Ermita-Malate Hotel, etc. v. Mayor of Manila, 20 SCRA 849; Morfe v. Mutuc, 22
SCRA 424).
The public respondents have stressed that the development of the 808 hectares includes plans that
would give the petitioners and other displaced persons productive employment, higher incomes, decent
housing, water and electric facilities, and better living standards. Our dismissing this petition is, in part,
predicated on those assurances. The right of the PTA to proceed with the expropriation of the 282
hectares already Identified as fit for the establishment of a resort complex to promote tourism is,
therefore, sustained.
WHEREFORE, the instant petition for certiorari is hereby DISMISSE D for lack of merit.
SO ORDERED.

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

ZONE, respondent.
Before us is a petition for review on certiorari of the Decision[1] and the Resolution[2]of the Court of
Appeals[3] dated March 25, 1998 and January 14, 1999, respectively, which ordered the Presiding Judge
of the Regional Trial Court of Cavite City, Branch 17, to proceed with the hearing of the expropriation
proceedings regarding the determination of just compensation for Lot 1406-B while setting aside the

49

Orders dated August 4, 1997[4] and November 3, 1997 of the said Regional Trial Court which ordered the
peaceful turnover to petitioner Estate of Salud Jimenez of said Lot 1406-B.
The facts are as follows: On May 15, 1981, private respondent Philippine Export Processing Zone
(PEZA), then called as the Export Processing Zone Authority (EPZA), initiated before the Regional Trial
Court of Cavite expropriation proceedings[5] on three (3) parcels of irrigated riceland in Rosario,
Cavite. One of the lots, Lot 1406 (A and B) of the San Francisco de Malabon Estate, with an approximate
area of 29,008 square meters, is registered in the name of Salud Jimenez under TCT No. T-113498 of
the Registry of Deeds of Cavite.
More than ten (10) years later[6], the said trial court in an Order [7] dated July 11, 1991 upheld the right of
private respondent PEZA to expropriate, among others, Lot 1406 (A and B). Reconsideration of the said
order was sought by petitioner contending that said lot would only be transferred to a private corporation,
Philippine Vinyl Corp., and hence would not be utilized for a public purpose.
In an Order[8] dated October 25, 1991, the trial court reconsidered the Order dated July 11, 1991 and
released Lot 1406-A from expropriation while the expropriation of Lot 1406-B was maintained. Finding
the said order unacceptable, private respondent PEZA interposed an appeal to the Court of Appeals.
Meanwhile, petitioner wrote a letter to private respondent offering two (2) proposals, namely:
1.

2.

Withdrawal of private respondents appeal with respect to Lot 1406-A in consideration of

the waiver of claim for damages and loss of income for the possession of said lot by
private respondent.
The swap of Lot 1406-B with Lot 434 covered by TCT No. T-14772 since private
respondent has no money yet to pay for the lot.

Private respondents Board approved the proposal and the compromise agreement was signed by private
respondent through its then administrator Tagumpay Jardiniano assisted by Government Corporate
Counsel Oscar I. Garcia. Said compromise agreement[9] dated January 4, 1993 is quoted hereunder:
1.

2.

3.

4.

That plaintiff agrees to withdraw its appeal from the Order of the Honorable Court
dated October 25, 1991 which released lot 1406-A from the expropriation
proceedings. On the other hand, defendant Estate of Salud Jimenez agrees to
waive, quitclaim and forfeit its claim for damages and loss of income which it
sustained by reason of the possession of said lot by plaintiff from 1981 up to the
present.
That the parties agree that defendant Estate of Salud Jimenez shall transfer lot
1406-B with an area of 13,118 square meters which forms part of the lot registered
under TCT No. 113498 of the Registry of Deeds of Cavite to the name of the
plaintiff and the same shall be swapped and exchanged with lot 434 with an area
of 14,167 square meters and covered by Transfer Certificate of Title No. 14772 of
the Registry of Deeds of Cavite which lot will be transferred to the name of Estate
of Salud Jimenez.
That the swap arrangement recognizes the fact that the lot 1406-B covered by
TCT No. T-113498 of the estate of defendant Salud Jimenez is considered
expropriated in favor of the government based on Order of the Honorable Court
dated July 11, 1991. However, instead of being paid the just compensation for said
lot, the estate of said defendant shall be paid with lot 434 covered by TCT No. T14772.
That the parties agree that they will abide by the terms of the foregoing agreement
in good faith and the Decision to be rendered based on this Compromise
Agreement is immediately final and executory.

The Court of Appeals remanded the case to the trial court for the approval of the said compromise
agreement entered into between the parties, consequent with the withdrawal of the appeal with the Court
of Appeals. In the Order[10] dated August 23, 1993, the trial court approved the compromise agreement.
However, private respondent failed to transfer the title of Lot 434 to petitioner inasmuch as it was
not the registered owner of the covering TCT No. T-14772 but Progressive Realty Estate, Inc. Thus, on
March 13, 1997, petitioner Estate filed a Motion to Partially Annul the Order dated August 23, 1993.[11]
In the Order[12] dated August 4, 1997, the trial court annulled the said compromise agreement entered
into between the parties and directed private respondent to peacefully turn over Lot 1406-A to the
petitioner. Disagreeing with the said Order of the trial court, respondent PEZA moved [13] for its
reconsideration. The same proved futile since the trial court denied reconsideration in its Order [14] dated
November 3, 1997.
On December 4, 1997, the trial court, at the instance [15] of petitioner, corrected the Orders dated August
4, 1997 and November 3, 1997 by declaring that it is Lot 1406-B and not Lot 1406-A that should be
surrendered and returned to petitioner.
On November 27, 1997, respondent interposed before the Court of Appeals a petition for certiorari and
prohibition[16] seeking to nullify the Orders dated August 4, 1997 and November 3, 1997 of the trial
court. Petitioner filed its Comment[17]on January 16, 1998.
Acting on the petition, the Court of Appeals in a Decision [18]dated March 25, 1998 upheld the rescission
of the compromise agreement, ratiocinating thus: A judicial compromise may be enforced by a writ of
execution, and if a party fails or refuses to abide by the compromise, the other party may regard it as
rescinded and insist upon his original demand. This is in accordance with Article 2041 of the Civil Code
which provides: If one of the parties fails or refuses to abide by the compromise, the other party may
either enforce the compromise or regard it as rescinded and insist upon his original demand.
The Supreme Court had the occasion to explain this provision of law in the case of Leonor v. Sycip (1
SCRA 1215). It ruled that the language of the abovementioned provision denotes that no action for
rescission is required and that the aggrieved party by the breach of compromise agreement, may regard
the compromise agreement already rescinded, to wit: It is worthy of notice, in this connection, that, unlike
Article 2039 of the same Code, which speaks of a cause of annulment or rescission of the compromise
and provides that the compromise may be annulled or rescinded for the cause therein specified, thus
suggesting an action for annulment or rescission, said Article 2041 confers upon the party concerned not
a cause for rescission, or the right to demand rescission, of a compromise, but the authority, not only to
regard it as rescinded, but, also, to insist upon his original demand. The language of this Article 2041,
particularly when contrasted with that of Article 2039, denotes that no action for rescission is required in
said Article 2041, and that the party aggrieved by the breach of a compromise agreement may, if he
chooses, bring the suit contemplated or involved in his original demand, as if there had never been any
compromise agreement, without bringing an action for rescission thereof. He need not seek a judicial
declaration of rescission, for he may regard the compromise agreement already, rescinded.
Nonetheless, it held that: Having upheld the rescission of the compromise agreement, what is then the
status of the expropriation proceedings? As succinctly discussed in the case of Leonor v. Sycip, the
aggrieved party may insist on his original demand as if there had never been any compromise
agreement. This means that the situation of the parties will revert back to status before the execution of
the compromise agreement, that is, the second stage of the expropriation proceedings which is the
determination of the just compensation.
Thus, the appellate court partially granted the petition by setting aside the order of the trial
court regarding the peaceful turn over to the Estate of Salud Jimenez of Lot No. 1406-B and instead
ordered the trial judge to proceed with the hearing of the expropriation proceedings regarding the
determination of just compensation over Lot 1406-B.[20]
Petitioner sought[21] reconsideration of the Decision dated March 25, 1998. However, public respondent
in a Resolution[22] dated January 14, 1999 denied petitioners motion for reconsideration.

50

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

I.

THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE ERROR IN GIVING DUE
COURSE TO THE SPECIAL CIVIL ACTION FILED BY RESPONDENT PEZA IN CA-G.R. SP. NO.
46112 WHEN IT WAS MADE A SUBSTITUTE FOR LOST APPEAL IN CLEAR CONTRAVENTION
OF THE HONORABLE COURTS RULING IN SEMPIO VS. COURT OF APPEALS (263 SCRA 617)
AND ONGSITCO VS. COURT OF APPEALS (255 SCRA 703) AND DESPITE THE FACT THAT
THE ORDER OF THE CAVITE REGIONAL TRIAL COURT IS ALREADY FINAL AND EXECUTORY.

II.

GRANTING IN GRATIA ARGUMENTI THAT THE SPECIAL CIVIL ACTION OF CERTIORARI IS

PROPER, THE COURT OF APPEALS NEVERTHELESS WRONGLY INTERPRETED THE
PHRASE ORIGINAL DEMAND CONTAINED IN ARTICLE 2041 OF THE CIVIL CODE.THE
ORIGINAL DEMAND OF PETITIONER ESTATE IS THE RETURN OF THE SUBJECT LOT (LOT
1406-B) WHICH IS SOUGHT TO BE EXPROPRIATED AND NOT THE DETERMINATION OF JUST
COMPENSATION FOR THE LOT. FURTHERMORE, EVEN IF THE INTERPRETATION OF THE
COURT OF APPEALS OR THE IMPORT OF THE PHRASE IN QUESTION IS CORRECT, IT IS
ARTICLE 2039 OF THE CIVIL CODE AND NOT ARTICLE 2041 WHICH IS APPLICABLE TO
COMPROMISE AGREEMENTS APPROVED BY THE COURTS.[23]

We rule in favor of the respondent.

Petitioner contends that the Court of Appeals erred in entertaining the petition for certiorari filed by
respondent under Rule 65 of the Rules of Court, the same being actually a substitute for lost appeal. It
appeared that on August 11, 1997, respondent received the Order of the trial court dated August 4, 1997
annulling the compromise agreement. On August 26, 1997, the last day for the filing of a notice of
appeal, respondent filed instead a motion for reconsideration. The Order of the trial court denying the
motion for reconsideration was received by respondent on November 23, 1997. The reglementary period
to appeal therefore lapsed on November 24, 1997. On November 27, 1997, however, respondent filed
with the Court of Appeals a petition for certiorari docketed as CA-G.R. SP. No. 46112.Petitioner claims
that appeal is the proper remedy inasmuch as the Order dated August 4, 1997 of the Regional Trial
Court is a final order that completely disposes of the case. Besides, according to petitioner, respondent
is estopped in asserting that certiorari is the proper remedy inasmuch as it invoked the fifteen (15) day
reglementary period for appeal when it filed a motion for reconsideration on August 26, 1997 and not the
sixty (60) day period for filing a petition for certiorariunder Rule 65 of the Rules of Court.
The Court of Appeals did not err in entertaining the petition for certiorari under Rule 65 of The
Rules of Court. A petition for certiorari is the proper remedy when any tribunal, board, or officer
exercising judicial or quasi-judicial functions has acted without or in excess of its jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal, nor any
plain, speedy, and adequate remedy at law.[24] Grave abuse of discretion is defined as the capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction. An error of judgment committed in
the exercise of its legitimate jurisdiction is not the same as grave abuse of discretion. An abuse of
discretion is not sufficient by itself to justify the issuance of a writ of certiorari. The abuse must be grave
and patent, and it must be shown that the discretion was exercised arbitrarily and despotically.[25]
As a general rule, a petition for certiorari will not lie if an appeal is the proper remedy thereto such
as when an error of judgment as well as of procedure are involved. As long as a court acts within its
jurisdiction and does not gravely abuse its discretion in the exercise thereof, any supposed error
committed by it will amount to nothing more than an error of judgment reviewable by a timely appeal and
not assailable by a special civil action of certiorari. However, in certain exceptional cases, where the rigid
application of such rule will result in a manifest failure or miscarriage of justice, the provisions of the
Rules of Court which are technical rules may be relaxed. Certiorari has been deemed to be justified, for
instance, in order to prevent irreparable damage and injury to a party where the trial judge has
capriciously and whimsically exercised his judgment, or where there may be danger of clear failure of

justice, or where an ordinary appeal would simply be inadequate to relieve a party from the injurious
effects of the judgment complained of. Expropriation proceedings involve two (2) phases. The first
phase ends either with an order of expropriation (where the right of plaintiff to take the land and the
public purpose to which they are to be devoted are upheld) or an order of dismissal. Either order would
be a final one since it finally disposes of the case. The second phase concerns the determination of just
compensation to be ascertained by three (3) commissioners. It ends with an order fixing the amount to
be paid to the defendant. Inasmuch as it leaves nothing more to be done, this order finally disposes of
the second stage. To both orders the remedy therefrom is an appeal. In the case at bar, the first phase
was terminated when the July 11, 1991 order of expropriation became final and the parties subsequently
entered into a compromise agreement regarding the mode of payment of just compensation. When
respondent failed to abide by the terms of the compromise agreement, petitioner filed an action to
partially rescind the same. Obviously, the trial could only validly order the rescission of the compromise
agreement anent the payment of just compensation inasmuch as that was the subject of the
compromise. However, on August 4, 1991, the trial court gravely abused its discretion when it ordered
the return of Lot 1406-B. It, in effect, annulled the Order of Expropriation dated July 11, 1991 which was
already final and executory. We affirm the appellate courts reliance on the cases of Aguilar v.
Tan[28] and Bautista v. Sarmiento[29] wherein it was ruled that the remedies of certiorari and appeal are not
mutually exclusive remedies in certain exceptional cases, such as when there is grave abuse of
discretion, or when public welfare so requires. The trial court gravely abused its discretion by setting
aside the order of expropriation which has long become final and executory and by ordering the return of
Lot 1406-B to the petitioner. Its action was clearly beyond its jurisdiction for it cannot modify a final and
executory order. A final and executory order can only be annulled by a petition to annul the same on the
ground of extrinsic fraud and lack of jurisdiction[30] or a petition for relief from a final order or judgment
under Rule 38 of the Rules of Court. However, no petition to that effect was filed. Hence, though an order
completely and finally disposes of the case, if appeal is not a plain, speedy and adequate remedy at law
or the interest of substantial justice requires, a petition for certiorari may be availed of upon showing of
lack or excess of jurisdiction or grave abuse of discretion on the part of the trial court.
According to petitioner the rule that a petition for certiorari can be availed of despite the fact that
the proper remedy is an appeal only applies in cases where the petition is filed within the reglementary
period for appeal. Inasmuch as the petition in the case at bar was filed after the fifteen (15) day
regulatory period to appeal, said exceptional rule as enshrined in the cases of Aguilar v.
Tan[31] and Bautista v. Sarmiento[32] is not applicable. We find this interpretation too restrictive. The said
cases do not set as a condition sine qua non the filing of a petition for certiorari within the fifteen (15) day
period to appeal in order for the said petition to be entertained by the court. To espouse petitioners
contention would render inutile the sixty (60) day period to file a petition for certiorari under Rule
65. In Republic v. Court of Appeals [33], which also involved an expropriation case where the parties
entered into a compromise agreement on just compensation, this Court entertained the petition
for certiorari despite the existence of an appeal and despite its being filed after the lapse of the fifteen
(15) day period to appeal the same. We ruled that the Court has not too infrequently given due course to
a petition for certiorari, even when the proper remedy would have been an appeal, where valid and
compelling considerations would warrant such a recourse. [34] If compelled to return the subject parcel of
land, the respondent would divert its budget already allocated for economic development in order to pay
petitioner the rental payments from the lessee banks. Re-adjusting its budget would hamper and disrupt
the operation of the economic zone. We believe that the grave abuse of discretion committed by the trial
court and the consequent disruption in the operation of the economic zone constitutes valid and
compelling reasons to entertain the petition.
Petitioner next argues that the instances cited under Section 1 of Rule 41 of the Rules of
Court[35] whereby an appeal is not allowed are exclusive grounds for a petition for certiorari. Inasmuch as
the August 4 1997 Order rescinding the compromise agreement does not fall under any of the instances
enumerated therein, a petition for certiorari will not prosper. This reasoning is severely flawed. The said
section is not phrased to make the instances mentioned therein the sole grounds for a petition

51

for certiorari. It only states that Rule 65 may be availed of under the grounds mentioned therein, but it
never intended said enumeration to be exclusive. It must be remembered that a wide breadth of
discretion is granted a court of justice in certiorari proceedings.[36]
In the second assignment of error, petitioner assails the interpretation by the Court of Appeals of
the phrase original demand in Article 2041 of the New Civil Code vis-a-vis the case at bar. Article 2041
provides that, If one of the parties fails or refuses to abide by the compromise, the other party may either
enforce the compromise or regard it as rescinded and insist upon his original demand. According to
petitioner, the appellate court erred in interpreting original demand as the fixing of just
compensation. Petitioner claims that the original demand is the return of Lot 1406-B as stated in
petitioners motion to dismiss[37] the complaint for expropriation inasmuch as the incorporation of the
expropriation order in the compromise agreement subjected the said order to rescission. Since the order
of expropriation was rescinded, the authority of respondent to expropriate and the purpose of
expropriation have again become subject to dispute.
Petitioner cites cases[38] which provide that upon the failure to pay by the lessee, the lessor can
ask for the return of the lot and the ejectment of the former, this being the lessors original demand in the
complaint. We find said cases to be inapplicable to this instant case for the reason that the case at bar is
not a simple ejectment case. This is an expropriation case which involves two (2) orders: an
expropriation order and an order fixing just compensation. Once the first order becomes final and no
appeal thereto is taken, the authority to expropriate and its public use cannot anymore be questioned.
Contrary to petitioners contention, the incorporation of the expropriation order in the compromise
agreement did not subject said order to rescission but instead constituted an admission by petitioner of
respondents authority to expropriate the subject parcel of land and the public purpose for which it was
expropriated. This is evident from paragraph three (3) of the compromise agreement which states that
the swap arrangement recognizes the fact that Lot 1406-B covered by TCT No. T-113498 of the estate of
defendant Salud Jimenez is considered expropriated in favor of the government based on the Order of
the Honorable Court dated July 11, 1991. It is crystal clear from the contents of the agreement that the
parties limited the compromise agreement to the matter of just compensation to petitioner. Said
expropriation order is not closely intertwined with the issue of payment such that failure to pay by
respondent will also nullify the right of respondent to expropriate.No statement to this effect was
mentioned in the agreement. The Order was mentioned in the agreement only to clarify what was subject
to payment.
This Court therefore finds that the Court of Appeals did not err in interpreting original demand to
mean the fixing of just compensation. The authority of respondent and the nature of the purpose thereof
have been put to rest when the Expropriation Order dated July 11, 1991 became final and was duly
admitted by petitioner in the compromise agreement. The only issue for consideration is the manner and
amount of payment due to petitioner. In fact, aside from the withdrawal of private respondents appeal to
the Court of Appeals concerning Lot 1406-A, the matter of payment of just compensation was the only
subject of the compromise agreement dated January 4, 1993. Under the compromise agreement,
petitioner was supposed to receive respondents Lot No. 434 in exchange for Lot 1406-B.When
respondent failed to fulfill its obligation to deliver Lot 434, petitioner can again demand for the payment
but not the return of the expropriated Lot 1406-B.This interpretation by the Court of Appeals is in
accordance with Sections 4 to 8, Rule 67 of the Rules of Court.
We also find as inapplicable the ruling in Gatchalian v. Arlegui[39], a case cited by petitioner, where
we held that even a final judgment can still be compromised so long as it is not fully satisfied. As already
stated, the expropriation order was not the subject of the compromise agreement. It was only the mode
of payment which was the subject of the compromise agreement. Hence, the Order of Expropriation
dated July 11, 1991 can no longer be annulled.
After having invoked the provisions of Article 2041, petitioner inconsistently contends that said
article does not apply to the case at bar inasmuch as it is only applicable to cases where a compromise
has not been approved by a court. In the case at bar, the trial court approved the compromise

agreement. Petitioner insists that Articles 2038, 2039 and 1330 of the New Civil Code should apply. Said
articles provide that:
Article 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence, or
falsity of documents, is subject to the provisions of Article 1330 of this Code.
However, one of the parties cannot set up a mistake of fact as against the other if the latter, by virtue of
the compromise, has withdrawn from a litigation already commenced.
Article 2039. When the parties compromise generally on all differences which they might have with each
other, the discovery of documents referring to one or more but not to all of the questions settled shall not
itself be a cause for annulment or rescission of the compromise, unless said documents have been
concealed by one of the parties.
But the compromise may be annulled or rescinded if it refers only to one thing to which one of the parties
has no right, as shown by the newly discovered documents.(n)
Article 1330. A contract where consent is given through mistake, violence, intimidation, undue influence,
or fraud is voidable.[40]
The applicability of the above-quoted legal provisions will not change the outcome of the subject of the
rescission. Since the compromise agreement was only about the mode of payment by swapping of lots
and not about the right and purpose to expropriate the subject Lot 1406-B, only the originally agreed
form of compensation that is by cash payment, was rescinded.
This Court holds that respondent has the legal authority to expropriate the subject Lot 1406-B and that
the same was for a valid public purpose. In Sumulong v. Guerrero[41], this Court has ruled that,
The public use requirement for a valid exercise of the power of eminent domain is a flexible and evolving
concept influenced by changing conditions. In this jurisdiction, the statutory and judicial trend has been
summarized as follows: This Court has ruled that the taking to be valid must be for public use. There was
a time when it was felt that a literal meaning should be attached to such a requirement. Whatever project
is undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise expropriation
is not allowable. It is not anymore. As long as the purpose of the taking is public, then the power of
eminent domain comes into play It is accurate to state then that at present whatever may be beneficially
employed for the general welfare satisfies the requirement of public use. [Heirs of Juancho Ardona v.
Reyes, 125 SCRA 220 (1983) at 234-235 quoting E. Fernando, the Constitution of the Philippines 523-4
(2nd Ed. 1977)
The term public use has acquired a more comprehensive coverage. To the literal import of the term
signifying strict use or employment by the public has been added the broader notion of indirect public
benefit or advantage.
In Manosca v. Court of Appeals, this Court has also held that what ultimately emerged is a concept
of public use which is just as broad as public welfare.[42]
Respondent PEZA expropriated the subject parcel of land pursuant to Proclamation No. 1980
dated May 30, 1980 issued by former President Ferdinand Marcos. Meanwhile, the power of eminent
domain of respondent is contained in its original charter, Presidential Decree No. 66, which provides that:
Section 23. Eminent Domain. For the acquisition of rights of way, or of any property for the establishment
of export processing zones, or of low-cost housing projects for the employees working in such zones, or
for the protection of watershed areas, or for the construction of dams, reservoirs, wharves, piers, docks,
quays, warehouses and other terminal facilities, structures and approaches thereto, the Authority shall
have the right and power to acquire the same by purchase, by negotiation, or by condemnation
proceedings. Should the authority elect to exercise the right of eminent domain, condemnation
proceedings shall be maintained by and in the name of the Authority and it may proceed in the manner
provided for by law. (italics supplied)
Accordingly, subject Lot 1406-B was expropriated for the construction of terminal facilities,
structures and approaches thereto. The authority is broad enough to give the respondent substantial
leeway in deciding for what public use the expropriated property would be utilized. Pursuant to this broad

52

authority, respondent leased a portion of the lot to commercial banks while the rest was made a
transportation terminal. Said public purposes were even reaffirmed by Republic Act No. 7916, a law
amending respondent PEZAs original charter, which provides that: Sec. 7. ECOZONE to be a
Decentralized Agro-Industrial, Industrial, Commercial/Trading, Tourist, Investment and Financial
Community. Within the framework of the Constitution, the interest of national sovereignty and territorial
integrity of the Republic, ECOZONE shall be developed, as much as possible, into a decentralized, selfreliant and self-sustaining industrial, commercial/trading, agro-industrial, tourist, banking, financial and
investment center with minimum government intervention. Each ECOZONE shall be provided with
transportation, telecommunications and other facilities needed to generate linkage with industries and
employment opportunities for its own habitants and those of nearby towns and cities.
The ECOZONE shall administer itself on economic, financial, industrial, tourism development and such
other matters within the exclusive competence of the national government. (italics supplied)
Among the powers of PEZA enumerated by the same law are: Sec. 12. Functions and Powers of PEZA
Board. ---- The Philippine Economic Zone Authority (PEZA) Board shall have the following function and
powers: (a) Set the general policies on the establishment and operations of the ECOZONE, Industrial
estate, exports processing zones, free trade zones, and the like; (c) Regulate and undertake the
establishment, operation and maintenance of utilities, other services and infrastructure in the ECOZONE,
such as heat, light and power, water supply, telecommunications, transport, toll roads and bridges, port
services, etc. and to fix just, reasonable and competitive rates, fares, charges and fees thereof.[43]
In Manila Railroad Co. v. Mitchel[44], this Court has ruled that in the exercise of eminent domain, only as
much land can be taken as is necessary for the legitimate purpose of the condemnation. The term
necessary, in this connection, does not mean absolutely indispensable but requires only a reasonable
necessity of the taking for the stated purpose, growth and future needs of the enterprise. The respondent
cannot attain a self-sustaining and viable ECOZONE if inevitable needs in the expansion in the
surrounding areas are hampered by the mere refusal of the private landowners to part with their
properties. The purpose of creating an ECOZONE and other facilities is better served if respondent
directly owns the areas subject of the expansion program.
The contention of petitioner that the leasing of the subject lot to banks and building terminals was not
expressly mentioned in the original charter of respondent PEZA and that it was only after PEZA devoted
the lot to said purpose that Republic Act No. 7916 took effect, is not impressed with merit. It should be
pointed out that Presidential Decree No. 66 created the respondent PEZA to be a viable commercial,
industrial and investment area. According to the comprehensive wording of Presidential Decree No. 66,
the said decree did not intend to limit respondent PEZA to the establishment of an export processing
zone but it was also bestowed with authority to expropriate parcels of land for the construction of
terminal facilities, structures and approaches thereto. Republic Act No. 7916 simply particularized the
broad language employed by Presidential Decree No. 66 by specifying the purposes for which PEZA
shall devote the condemned lots, that is, for the construction and operation of an industrial estate, an
export processing zone, free trade zones, and the like. The expropriation of Lot 1406-B for the purpose
of being leased to banks and for the construction of a terminal has the purpose of making banking and
transportation facilities easily accessible to the persons working at the industries located in PEZA. The
expropriation of adjacent areas therefore comes as a matter of necessity to bring life to the purpose of
the law. In such a manner, PEZAs goal of being a major force in the economic development of the
country would be realized. Furthermore, this Court has already ruled that:
(T)he Legislature may directly determine the necessity for appropriating private property for a particular
improvement for public use, and it may select the exact location of the improvement. In such a case, it is
well-settled that the utility of the proposed improvement, the existence of the public necessity for its
construction, the expediency of constructing it, the suitableness of the location selected, are all questions
exclusively for the legislature to determine, and the courts have no power to interfere or to substitute
their own views for those of the representatives of the people.

In the absence of some constitutional or statutory provision to the contrary, the necessity and expediency
of exercising the right of eminent domain are questions essentially political and not judicial in their
character.
Inasmuch as both Presidential Decree No. 66 and Republic Act No. 7916, bestow respondent with
authority to develop terminal facilities and banking centers, this Court will not question the respondents
lease of certain portions of the expropriated lot to banks, as well as the construction of terminal facilities.
Petitioner contends that respondent is bound by the representations of its Chief Civil Engineer when the
latter testified before the trial court that the lot was to be devoted for the construction of government
offices. Anent this issue, suffice it to say that PEZA can vary the purpose for which a condemned lot will
be devoted to, provided that the same is for public use. Petitioner cannot impose or dictate on the
respondent what facilities to establish for as long as the same are for public purpose.
Lastly, petitioner appeals to the sense of justice and equity to this Court in restoring the said lot to
its possession. From the time of the filing of the expropriation case in 1981 up to the present, respondent
has not yet remunerated the petitioner although respondent has already received earnings from the
rental payments by lessees of the subject property.
We have ruled that the concept of just compensation embraces not only the correct determination
of the amount to be paid to the owners of the land, but also the payment of the land within a reasonable
time from its taking. Without prompt payment, compensation cannot be considered just inasmuch as the
property owner is made to suffer the consequences of being immediately deprived of his land while
being made to wait for a decade or more before actually receiving the amount necessary to cope with his
loss.[46] Payment of just compensation should follow as a matter of right immediately after the order of
expropriation is issued. Any delay in payment must be counted from said order. However, the delay to
constitute a violation of due process must be unreasonable and inexcusable; it must be deliberately done
by a party in order to defeat the ends of justice.
We find that respondent capriciously evaded its duty of giving what is due to petitioner. In the case
at bar, the expropriation order was issued by the trial court in 1991. The compromise agreement
between the parties was approved by the trial court in 1993. However, from 1993 up to the present,
respondent has failed in its obligation to pay petitioner to the prejudice of the latter. Respondent caused
damage to petitioner in making the latter to expect that it had a good title to the property to be swapped
with Lot 1406-B; and meanwhile, respondent has been reaping benefits from the lease or rental income
of the said expropriated lot. We cannot tolerate this oppressive exercise of the power of eminent domain
by respondent. As we have ruled in Cosculluela vs. Court of Appeals:[47]
In the present case, the irrigation project was completed and has been in operation since 1976.
The project is benefiting the farmers specifically and the community in general. Obviously, the petitioners
land cannot be returned to him. However, it is high time that the petitioner be paid what was due him
eleven years ago. It is arbitrary and capricious for a government agency to initiate expropriation
proceedings, seize a persons property, allow the judgment of the court to become final and executory
and then refuse to pay on the ground that there are no appropriations for the property earlier taken and
profitably used. We condemn in the strongest possible terms the cavalier attitude of government officials
who adopt such a despotic and irresponsible stance.
Though the respondent has committed a misdeed to petitioner, we cannot, however, grant the
petitioners prayer for the return of the expropriated Lot No. 1406-B. The Order of expropriation dated
July 11, 1991, has long become final and executory. Petitioner cited Provincial Government of Sorsogon
v. Rosa E. Vda. De Villaroya[48] to support its contention that it is entitled to a return of the lot where this
Court ruled that under ordinary circumstances, immediate return to the owners of the unpaid property is
the obvious remedy. However, the said statement was not the ruling in that case. As in other cases
where there was no prompt payment by the government, this Court declared in Sorsogon that the
Provincial Government of Sorsogon is expected to immediately pay as directed. Should any further delay
be encountered, the trial court is directed to seize any patrimonial property or cash savings of the

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province in the amount necessary to implement this decision. However, this Court also stressed and
declared in that case that In cases where land is taken for public use, public interest, however, must be
considered.
In view of all the foregoing, justice and equity dictate that this case be remanded to the trial court
for hearing of the expropriation proceedings on the determination of just compensation for Lot 1406-B
and for its prompt payment to the petitioner.

WHEREFORE, the instant petition is hereby denied. The Regional Trial Court of Cavite City is
hereby ordered to proceed with the hearing of the expropriation proceedings, docketed as Civil Case No.
N-4029, regarding the determination of just compensation for Lot 1406-B, covered and described in TCT
No. T-113498-Cavite, and to resolve the same with dispatch. SO ORDERED.

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