|Vargas Case Digests|

Republic of the Philippines v. salem investment corporation

Facts and Controversy

On February 17, 1983, BP 340 passed authorizing expropriation of parcels of land in the names of defendants
in this case, including a portion of land consisting of 1, 380 sq. m. that belonged to Milagros and De la Rama.
On December 14, 1988, Milagros and De la Rama entered into a contract with Guerrero to sell the entire
property consisting of 4, 075 sq. m. for P11, 800, 000.00. The De la Ramas received P2, 200, 000.00 as partial
payment. Nov. 3, 1989, Guerrero filed with RTC a complaint for specific performance to proceed with the
sale.

While the specific performance case was pending, the Republic filed a case for expropriation pursuant to
BP Blg 340. Guerrero filed motion for intervention stating that the De la Ramas had already agreed to sell him
the entire Lot 834. Trial court ruled in favor of Guerrero as the rightful owner of 920 sq. m. property and ordered
payment to him of just compensation. Decision affirmed by CA.

De la Rama Contention: They should receive the amount of just compensation because when they agreed
to sell Lot 834 to Guerrero, it did not include the property expropriated by the Republic. At the time, the
portion had been expropriated by the government via B.P. Blg. 340 on February 17, 1983.

Guerrero Contention: The title to the expropriated portion did not immediately pass to the government upon
B.P. Blg. 340 since the payment of just compensation was not yet made. Petitioners still owned the land when
they sold it to Guerrero. Being the owner, he has the right to receive just compensation.

ISSUE: Who between the De la Ramas and Guerrero is/are entitled to receive payment of just compensation
for the taking of 920 square meters of land in question?

Decision of the Supreme Court

Guerrero should receive payment for just compensation. Completion of expropriation is only after the
completion of the two stages (Municipality of Biñan v. Garcia). First stage – determination of authority and
propriety of its exercise; second stage – determination by court of just compensation for the property sought
to be taken.

Application: first stage of expropriation completed when B.P. Blg. 340 was enacted to provide the
expropriation of 1, 380 sq. m. of land. Constitutionality upheld by Republic v. De Knecht. 1990, commenced
second stage of expropriation through the filing of a petition for the determination of just compensation.
Second stage was not completed because of the intervention of Guerrero. The title at that point did not pass
to the government.

Argument of De la Ramas that the two stages only apply to judicial expropriation, not to legislative
expropriation is untenable. Congress cannot arbitrarily take land. No need to distinguish between judicial
and legislative expropriation as far as the two stages mentioned are concerned.

Regarding the exclusion of the expropriated property from the deed and the contract, the argument is
untenable. The land described in the Contract to Sell included the land expropriated under BP Blg. 340.
According to the Deed of Absolute Sale, the deed states that the entire property consisting of 4, 075 sq. m.
was being sold free from all liens and encumbrances except the lien in favor of the government over the
portion it is expropriating – Guerrero bought the entire property that was free from claims of other parties,
except the government.

De la Rama contention that the ownership of the land was transferred to government because the equitable
and beneficial title was already acquired in 1983 is not meritorious because in Association of Small
Landowners in the Phil. Inc v. Secretary of Agrarian Reform, title of property taken remains in the owner until
payment is actually made.

Regarding the amount of money being paid by Guerrero not reaching 8, 800, 000.00 but only P7, 417, 000,
the RTC has rendered the decision final and executory; thus, it cannot be questioned in the SC proceeding.

CA Decision affirmed.