PEOPLE VS. FERRER [48 SCRA 382; NOS.

L-32613-14; 27 DEC 1972] Monday, February 09, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law Facts: Hon. Judge Simeon Ferrer is the Tarlac trial court judge that declared RA1700 or the AntiSubversive Act of 1957 as a bill of attainder. Thus, dismissing the information of subversion against the following: 1.) Feliciano Co for being an officer/leader of the Communist Party of the Philippines (CPP) aggravated by circumstances of contempt and insult to public officers, subversion by a band and aid of armed men to afford impunity. 2.) Nilo Tayag and 5 others, for being members/leaders of the NPA, inciting, instigating people to unite and overthrow the Philippine Government. Attended by Aggravating Circumstances of Aid or Armed Men, Craft, and Fraud. The trial court is of opinion that 1.) The Congress usurped the powers of the judge 2.) Assumed judicial magistracy by pronouncing the guilt of the CPP without any forms of safeguard of a judicial trial. 3.) It created a presumption of organizational guilt by being members of the CPP regardless of voluntariness. The Anti Subversive Act of 1957 was approved 20June1957. It is an act to outlaw the CPP and similar associations penalizing membership therein, and for other purposes. It defined the Communist Party being although a political party is in fact an organized conspiracy to overthrow the Government, not only by force and violence but also by deceit, subversion and other illegal means. It declares that the CPP is a clear and present danger to the security of the Philippines. Section 4 provided that affiliation with full knowledge of the illegal acts of the CPP is punishable. Section 5 states that due investigation by a designated prosecutor by the Secretary of Justice be made prior to filing of information in court. Section 6 provides for penalty for furnishing false evidence. Section 7 provides for 2 witnesses in open court for acts penalized by prision mayor to death. Section 8 allows the renunciation of membership to the CCP through writing under oath. Section 9 declares the constitutionality of the statute and its valid exercise under freedom if thought, assembly and association.

Issues: (1) (2) Whether Whether or not or RA1700 Not is a bill of violates attainder/ ex post of facto law.

RA1700

freedom

expression.

Held:

The

court

holds

the

VALIDITY

Of

the

Anti-Subversion

Act

of

1957.

A bill of attainder is solely a legislative act. It punishes without the benefit of the trial. It is the substitution of judicial determination to a legislative determination of guilt. In order for a statute be measured as a bill of attainder, the following requisites must be present: 1.) The statute specifies persons, groups. 2.) the statute is applied retroactively and reach past conduct. (A bill of attainder relatively is also an ex post facto law.) In the case at bar, the statute simply declares the CPP as an organized conspiracy for the overthrow of the Government for purposes of example of SECTION 4 of the Act. The Act applies not only to the CPP but also to other organizations having the same purpose and their successors. The Acts focus is on the conduct not person. Membership to this organizations, to be UNLAWFUL, it must be shown that membership was acquired with the intent to further the goals of the organization by overt acts. This is the element of MEMBERSHIP with KNOWLEDGE that is punishable. This is the required proof of a members direct participation. Why is membership punished. Membership renders aid and encouragement to the organization. Membership makes himself party to its unlawful acts. Furthermore, the statute is PROSPECTIVE in nature. Section 4 prohibits acts committed after approval of

the act. The members of the subversive organizations before the passing of this Act is given an opportunity to escape liability by renouncing membership in accordance with Section 8. The statute applies the principle of mutatis mutandis or that the necessary changes having been made. The declaration of that the CPP is an organized conspiracy to overthrow the Philippine Government should not be the basis of guilt. This declaration is only a basis of Section 4 of the Act. The EXISTENCE OF SUBSTANTIVE EVIL justifies the limitation to the exercise of Freedom of Expression and Association in this matter. Before the enactment of the statute and statements in the preamble, careful investigations by the Congress were done. The court further stresses that whatever interest in freedom of speech and association is excluded in the prohibition of membership in the CPP are weak considering NATIONAL SECURITY and PRESERVATION of DEMOCRACY. The court set basic guidelines to be observed in the prosecution under RA1700. In addition to proving circumstances/ evidences of subversion, the following elements must also be established: 1. Subversive Organizations besides the CPP, it must be proven that the organization purpose is to overthrow the present Government of the Philippines and establish a domination of a FOREIGN POWER. Membership is willfully and knowingly done by overt acts. 2. In case of CPP, the continued pursuance of its subversive purpose. Membership is willfully and knowingly done by overt acts. The court did not make any judgment on the crimes of the accused under the Act. The Supreme Court set aside the resolution of the TRIAL COURT.

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Original Author: Supreme Court of the Philippines

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HELD: NO. It is an old rule of statutory construction that restrictive statutes and acts w/c impose burdens on the public treasury or w/c diminish rights and interests, no matter how broad their terms do not embrace the Sovereign, unless the Sovereign is specifically mentioned. The Republic of the Phil. as a sovereign cannot be covered by a general term like "employer" unless the language used in the law is clear and specific to that effect. ISSUE 2: May government employees act through a labor federation which uses the collective bargaining power to secure increased compensation for its members? HELD: NO. The terms and conditions of employment in the Government including any political subdivision or instrumentality thereof are governed by law. And this is effected through statutes or administrative circulars, rules and regulations and not through Collective Bargaining agreements. Under the present constitution, (1973), GOCC's are now part of the civil service, thus, not allowed to use concerted activities to get other benefits or higher salaries different from that provided by law and regulation For more case digests and law school notes visit lizajamarga.com

Source: http://www.shvoong.com/law-and-politics/law/1831448-case-digest-alliance-governmentworkers/#ixzz2KlfQ0Pcu

SSS Employee Asso. v CA 175 SCRA 686 (July 28, 1989)

Facts: The petitioners went on strike after the SSS failed to act upon the unions demands concerning the implementation of their CBA. SSS filed before the court action for damages with prayer for writ of preliminary injunction against petitioners for staging an illegal strike. The court issued a temporary restraining order pending the resolution of the application for preliminary injunction while petitioners filed a motion to dismiss alleging the courts lack of jurisdiction over the subject matter. Petitioners contend that the court made reversible error in taking cognizance on the subject matter since the jurisdiction lies on the DOLE or the National Labor Relations Commission as the case involves a labor dispute. The SSS contends on one hand that the petitioners are covered by the Civil Service laws, rules and regulation thus have no right to strike. They are not covered by the NLRC or DOLE therefore the court may enjoin the petitioners from striking.

Issue: Whether or not SSS employers have the right to strike Whether or not the CA erred in taking jurisdiction over the subject matter.

Held: The Constitutional provisions enshrined on Human Rights and Social Justice provides guarantee among workers with the right to organize and conduct peaceful concerted activities such as strikes. On

one hand, Section 14 of E.O No. 180 provides that the Civil Service law and rules governing concerted activities and strikes in the government service shall be observed, subject to any legislation that may be enacted by Congress referring to Memorandum Circular No. 6, s. 1987 of the Civil Service Commission which states that prior to the enactment by Congress of applicable laws concerning strike by government employees enjoins under pain of administrative sanctions, all government officers and employees from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which will result in temporary stoppage or disruption of public service. Therefore in the absence of any legislation allowing govt. employees to strike they are prohibited from doing so.

In Sec. 1 of E.O. No. 180 the employees in the civil service are denominated as government employees and that the SSS is one such government-controlled corporation with an original charter, having been created under R.A. No. 1161, its employees are part of the civil service and are covered by the Civil Service Commissions memorandum prohibiting strikes.

Neither the DOLE nor the NLRC has jurisdiction over the subject matter but instead it is the Public Sector Labor-Management Council which is not granted by law authority to issue writ of injunction in labor disputes within its jurisdiction thus the resort of SSS before the general court for the issuance of a writ of injunction to enjoin the strike is appropriate

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 89980 December 14, 1992 B. H. BERKENKOTTER & CO., though its President GEORGE E. BERKENKOTTER, petitioner, vs. COURT OF APPEALS and THE REPUBLIC OF THE PHILIPPINES, respondents.

CRUZ, J.: The sole issue for resolution in this case is the just compensation to be paid for a parcel of land sought to be expropriated for the use of the Apolinario R. Apacible School of Fisheries, a government institution, in Nasugbu, Batangas.

The property has an area of 10,640 square meters and belongs to B. H. Berkenkotter & Co., the herein petitioner. On June 18, 1982, Vicente Viray, president of the said school, sent the owner a written offer to buy the land in line with the 5-year expansion program of ARASOF. In reply, Berkenkotter expressed its willingness to sell at P50.00 per square meter payable in cash. At Viray's request, the Provincial Appraisal Committee, Office of the Provincial Assessor, Batangas City, appraised the land and fixed its market value at P32.00 per square meter. Viray then wrote Berkenkotter another letter and offered to buy the property at the said price. The latter stuck to its original valuation; later it said that the property had in fact appreciated to as much as P100.00 per square meter. Further negotiations failed to resolve the impasse between ARASOF and the petitioner. In the end, expropriation proceedings were commenced against the petitioner by the Republic of the Philippines on behalf of ARASOF. In its complaint dated October 28, 1983, the Republic invoked the assessment made by the Provincial Appraisal Committee at P32.00 per square meter and sought possession of the property upon payment of the 10% deposit required by P.D. 48. Berkenkotter originally questioned the purpose of the expropriation but later abandoned this objection and concentrated only on what it called the under-appraisal of the subject land. On March 21, 1985, the Regional Trial Court of Batangas issued an order of condemnation and, pursuant to Rule 67, Section 5, of the Rules of Court, appointed a panel of commissioners to determine the just compensation to be paid for the land . 1 Just compensation is defined as the full and fair equivalent of the property sought to be expropriated. 2 The measure is not the taker's gain but the owner's loss. 3 The compensation, to be just, must be fair not only to the owner but also to the taker. Even as undervaluation would deprive the owner of his property without due process, so too would its overvaluation unduly favor him to the prejudice of the public. To determine just compensation, the trial court should first ascertain the market value of the property, to which should be added the consequential benefits which may arise from the expropriation. 4 If the consequential benefits exceed the consequential damages, these items should be disregarded altogether as the basic value of the property should be paid in every case. 5 The market value of the property is the price that may be agreed upon by parties willing but not compelled to enter into the contract of sale 6 Not unlikely, a buyer desperate to acquire a piece of property would agree to pay more, and a seller in urgent need of funds would agree to accept less, than what it is actually worth. The price agreed upon in these cases would not represent the market value of the property. Among the factors to be considered in arriving at the fair marker value of the property are the cost of acquisition, the current value of like properties, its actual or potential uses, and in the particular case of lands, their size, shape, location, and the tax declarations thereon. 7

It is settled that just compensation is to be ascertained as of the time of the taking, which usually coincides with the commencement of the expropriation proceedings. Where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint. 8 On September 23, 1985, the panel of commissioners submitted its report to the trial court and recommended that the property be appraised at the unit price of P85.00. The Republic objected and pointed to three contracts of sale the petitioner had concluded in 1985 whereby it sold three tracts of land similar in topography and adjacent to the property in question for the unit price of only P19.18. The trial court directed the commissioners to convene anew and receive additional evidence. It did and conducted more interviews. In its second report dated April 1, 1987, however, the panel reiterated its original recommendation for the valuation of the property at P85.00 per square meter. Acting on this recommendation, Judge Roseo L. Venturanza rendered judgment affirming the right of the plaintiff to expropriate the subject land upon payment to the owner of just compensation at the rate of P85.00 per square meter, for a total of P904,400.00. 9 This decision was elevated to and reversed by the Court of Appeals. 10 The respondent court noted that the three contracts of sale concluded in 1985 were practically disregarded by the trial court. Justice Jose A. R. Melo, now a member of this Court, observed that the lands covered by these deeds, which were adjacent to the subject property, were voluntarily sold by Berkenkotter for the price of only P19.18 per square meter. Moreover, the panel of commissioners relied only "on opinions and conclusions which were patently hearsay and gratuitous. Not a single document was submitted to support their recommended compensation of P85.00." Accordingly, the respondent court set aside the compensation fixed by the trial court and ordered that the subject property be paid for at the rate of P19.18 per square meter, or a total of P204,075.20, including the amount already deposited by the Republic when it took possession of the land. The present petition challenges the decision of the Court of Appeals on the following grounds:
1. The value of the subject property is more than P19.18 (a) Resolution No. 2-83 (Exh. "4"), which was passed by the Provincial Appraisal Committee, Office of the Provincial Assessor, Batangas City on April 4, 1983, provides THAT THE PREVAILING MARKET VALUE OF COMPARATIVE PROPERTIES IN THE LOCALITY WAS THIRTY-TWO PESOS (P32.00) PER SQUARE METER.

(b) Respondent REPUBLIC through Mr. VICENTE VIRAY, Superintendent of Apolinario R. Apacible School of Fisheries OFFERED TO PAY PETITIONER THIRTY TWO PESOS (P32.00) PER SQUARE METER for the subject property (Exh. "D"). (c) In the APPRAISAL REPORT OF G. AMBROSIO, INC., (Exh. "A"), the fair market value of the subject property was assessed at NINETY-FIVE PESOS (P95.00) per square meter, considering the various circumstances as testified to by its representative, Mr. Ernesto Ambrosio. (d) MR. JAIME PIMENTEL, Administrator of Roxas y Compania in Nasugbu, Batangas, which company owns land within the vicinity of ARASOF, testified that lots surrounding the property subject of these expropriation proceedings are being sold at FOUR HUNDRED (P400.00) to FIVE HUNDRED (P500.00) PESOS PER SQUARE METER. (e) MR. JUSTINO LIM, who is engaged in the selling of the lots right across the property being expropriated, testified that the very same properties which were the subject of the Deeds of Sale (properties sold by petitioner at P19.18) presented by respondent Republic were being sold for TWO HUNDRED PESOS PER SQUARE METER. 2. The Deeds of Sale are not reliable for purposes of determining just compensation as the registrants tend to undervalue the cost of property to lower the expenses they would have to pay for the documents. 3. To disregard the report of the panel of commissioner would be to violate due process. 4. No proof was presented to show that the petitioner undervalued the sale of its properties so that it should not be penalized in these expropriation proceedings.

This is our ruling. We do not agree that the commissioners' report was without sufficient basis as it was in fact made only after extensive interviews with persons who, although not necessarily experts, were nonetheless familiar with land values in the vicinity of the property sought to be expropriated. There was also an ocular inspection of the subject land, to give the panel a better idea of its real value. It is also not correct to say that the petitioner did not submit any documentary evidence to support its claim. The record shows that there was, among others, the appraisal report made by the reputable realty firm of G. Ambrosio, Inc., which Ambrosio himself explained at the trial. 11 Even so, the report and recommendations of the panel of commissioners were not conclusive upon the trial court, which had the right and discretion to arrive at its own

assessment of the land. The findings of the commissioners were at best only advisory and persuasive and by no means final or binding. As the Court held in the case of Republic v. Santos: 12
According to Section 8 of Rule 67, the Court is not bound by the commissioners' report. It may make such order or render such judgement as shall secure to the plaintiff the property essential to the exercise of his right of condemnation, and to the defendant just compensation for the property expropriated. This Court may substitute its own estimate of the value as gathered from the record.

What mystifies the Court is why, if the property was really worth P85.00 per square meter in 1985, the petitioner agreed to sell its other lands, of the same topography as the land in dispute and separated therefrom by only a road, at only P19.18 per square meter. The sales it made in favor of three different purchasers, and for the said uniform rate, are embodied in the following evidence submitted by the Republic as:
Exhibit "1" Deed of Sale dated July 18, 1985 between B. H. Berkenkotter and Co., Inc., as vendor, and Andrea Rodriguez Ilao, et al., as vendees. The property sold for P140,885.76 is covered by TCT 26382 with an area of 7,344 square meters. Exhibit "2" Deed of Sale dated July 18, 1985 between B. H. Berkenkotter and Co., Inc., as vendors, and Andrea Rodriguez Ilao, et al., as vendees. The property sold for P107,102.60, is covered by TCT 26383 with an area of 5,583 square meters. Exhibit "3" Deed of Sales dated July 18, 1985 between B. H. Berkenkotter and Co., Inc., and vendor, and Andrea Rodriguez Ilao, as vendee. The property, sold for P152,011.64 is covered by TCT 26384 with an area of 7,924 square meters.

There is no showing that the petitioner had any special reason for granting each of the individual vendees the extraordinary discount amounting to as much as 75% of its claimed real value of the land. To all appearances, they were ordinary buyers and probably even land investors or speculators who did not deserve any particular generosity of bounty form the petitioner. Given this far from extraordinary situation, we find it difficult to understand why the petitioner, while insisting that the 10,640 square meters under expropriation had a unit price of P85.00, agreed to sell as many as 7,344 square meters of similar land to the first private buyer, 5,583 square meters to the second, and 7,924 square meters to the third, and all for only P19.18 per square meter. The price demanded by the petitioner from the Republic of the Philippines is more than 4 times the price it willingly accepted from the private vendees. It is also noteworthy that the individual buyers bought the land for their own private purposes only and not for the public purpose invoked by the Republic and admitted by the petitioner itself. And no less importantly, the petitioner has not even made any efforts to differentiate the subject property from the lands sold at the lower rate, to justify the increase in its price by more than 300%. The petitioner seek to explain its curious conduct by claiming that it had liquidity problems and needed cash when it entered into the three contracts of sale. If it really was in that predicament, it is strange that it did not even bother to withdraw, as it had a

right to do so, the 10% deposit made by the Republic when it took possession of the subject property in 1985. As strangely, it also did not accept the government's standing offer, made as early as 1983, to buy the 10,640 square meters subject of the complaint at P32.00 per square meters, for a total price of P340,480.00. This would not only have relieved its financial difficulties but could also have avoided the expense and inconvenience of litigation that up to now have delayed its recovery of the cost of its property. Also, acceptance of the offer would have been a better deal than selling 20,851 square meters for only P400,000.00 from which, let it be stressed, the capital gains tax and other expenses of documentation and registration would still have to be deducted. The petitioner now submits that the consideration mentioned in deeds of sale is not a reliable index of just compensation because the parties "tend to undervalue the cost of the property to lower the expenses they would have to pay for the documents." The expenses presumably refer to the cost of the documentary stamps for the registration of the property and the capital gains tax to be paid by the vendor to the government. The suggestion is revealing. There is practically an admission here that the parties to the three transactions did not indicate the real consideration therefor so they could evade the legitimate taxes and fees that were due the government on the basis of the correct purchase price. If this was the purpose of the petitioner when it executed Exhibits 1, 2 and 3, then it is surely hoist now by its own petard. And rightly so, for it cannot be allowed to profit from its own deception and claim that the subject property should be assessed at the higher rate it clandestinely agreed upon with the buyers. That is assuming the worst. But even on the assumption that the petitioner comported itself with all propriety and rectitude and did not falsify the consideration for the sales, the result would still be the same. Such a posture would signify that it seriously believed the fair price for its property to be only P19.18 per square meter, and not any lower or higher than that, whoever the purchaser might be. The Court is disappointed that the petitioner should demand a higher price for the Republic, which needs the lands for a public purpose, when it was willing to accept less from the three individual buyers who had only their private interests to serve. But this is not only a matter of civic spirit. We recognize that the basic issue is the hard-nosed business of tit for tat. Civic altruism aside, the simple fact is that, whatever its motive, the petitioner cannot now assert that its property is worth P85.00 per square meter as far as the Republic is concerned although, by its own voluntary act, it sold similar property to private individuals for only P19.18 per square meter. There is no satisfactory explanation for this incredible discrimination. The Republic should not pay more simply because it is the Republic, as if it were a milking cow with unlimited resource to abuse. It may be asked why the petitioner should not be paid at the rate at least of P32.00, which was the price offered by Viray and in the complaint for expropriation later filled by the Republic. The Republic had no choice then because P.D. 1533 fixed the just compensation at the valuation given by the owner of the government, whichever was

lower. The price determined by the Provincial Appraisal Committee was lower. True, the decree has since been declared unconstitutional in Export Processing Zone Authority v. Dulay. 13 Even so, the fact is that the petitioner rejected that offer and has up to now been insisting on its own unit price of P85.00. We agree with the respondent court that by selling its lands in the three deed of sale indicated as Exhibits 1, 2 and 3, at the uniform rate of P19.18 per square meter, the petitioner thereby impliedly admitted that the lands subject of the expropriation proceeding, being of the same topography and virtually in the same location is the said other lands, should also be valued at the same rate. This rule of inconsistency is best expressed in the familiar saying, surely not unknown to the petitioner, that what is sauce for the goose is also sauce for the gander. WHEREFORE, the petition is DENIED, and it is hereby affirmed that the just compensation for the subject land should be computed at the rated of P19.18 per square meter. Costs against the petitioner. SO ORDERED. Padilla, Grio-Aquino and Bellosillo, JJ., concur. Footnotes Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

G.R. No. 71176 May 21, 1990 REPUBLIC OF THE PHILIPPINES (Ministry of Education and Culture), petitioner, vs. INTERMEDIATE APPELLATE COURT and AMEREX ELECTRONICS, PHILS. CORPORATION, respondents. Siguion Reyna, Montecillo and Ongsiako for private respondents.

FERNAN, C.J.: The government, in the exercise of its power of eminent domain, expropriated property owned by Amerex Electronics, Phils. Corporation. The amount of just compensation for such property is now the subject of this petition for review on certiorari.

The property involved consists of four (4) parcels of land with a total area of 9,650 square meters located at No. 2090 Dr. Manuel L. Carreon Street, Manila, a short walking distance from Herran (now Pedro Gil) Street. Its previous owner, Avegon Inc., offered it for sale to the City School Board of Manila on July 21, 1973 at P2,300,000. The school board was willing to buy at P1,800,000 but the then Mayor of Manila intervened and volunteered to negotiate with Avegon Inc. for a better price. Inasmuch as the alleged negotiation did not materialize, on June 3, 1974, Avegon Inc. sold the property and its improvements to Amerex Electronics, Phils. Corporation (Amerex for brevity) for P1,800,000. Thereafter, Transfer Certificates of Title Nos. 115571, 115572, 115573 and 115574 were issued in favor of Amerex. On August 29, 1975, the Solicitor General filed for the Department of Education and Culture (DEC) a complaint against Amerex for the expropriation of said property before the Court of First Instance of Manila (Civil Case No. 99190). The complaint stated that the property was needed by the government as a permanent site for the Manuel de la Fuente High School (later renamed Don Mariano Marcos Memorial High School); that the fair market value of the property had been declared by Amerex as P2,435,000, and that the assessor had determined its market value as P2,432,042 and assessed it for taxation purposes in the amount of P1,303,470. 1 In a motion praying that the plaintiff be authorized to take immediate possession of the property, the then Acting Solicitor General Hugo E. Gutierrez, Jr., invoking Presidential Decree No. 42, informed the court that said assessed value of the property for taxation purposes had been deposited with the Philippine National Bank (PNB) in Escolta, Manila on September 30, 1975. Consequently, on October 9, 1975, the court issued an order directing the sheriff to place the plaintiff in possession of the property. The plaintiff took actual possession thereof on October 13, 1975. Amerex filed a motion to dismiss the complaint stating that while it was not contesting the merits of the complaint, the same failed to categorically state the amount of just compensation for the property. It therefore prayed that in consonance with P.D. No. 794, the just compensation be fixed at P2,432,042, the market value of the property determined by the assessor which was lower than Amerex's own declaration. The motion to dismiss was opposed by the plaintiff reasoning that while indeed the market value as determined by the assessor was lower than that declared by Amerex, the plaintiff intended to present evidence of a much lower market value. Alleging that its motion to dismiss merely sought a clarification on the just compensation for the property, Amerex filed a motion to withdraw the plaintiffs deposit of P1,303,470 with the PNB without prejudice to its entitlement to the amount of P1,128,572, the balance of the just compensation of P2,432,042 insisted upon. The plaintiff interposed no objection to the motion provided that an order of condemnation be issued by the

court and that the plaintiff be allowed to present its evidence on the matter of just compensation. On December 3, 1975, the lower court issued an order vesting the plaintiff with the lawful light to take the property upon payment of just compensation as provided by law. On December 19, 1975, after the parties had submitted the names of their respective recommendees to the appraisal committee, the lower court appointed Atty. Narciso Pea, Aurelio V. Aquino and Atty. Higinio Sunico as commissioners. Thereafter, the lower court ordered Amerex to submit an audited financial statement on the acquisition cost of the property including expenses for its improvement. Amerex was also allowed by the court, after it had filed a second motion therefor, to withdraw the P1,303,470 deposit with the PNB. On March 12, 1976, the plaintiff filed a motion for leave of court to amend its complaint stating that after it had filed the same, P.D. No. 464 2 was amended by P.D. No. 794; that Section 92 of said Code, as amended, provided that when private property is acquired for public use, its just compensation "shall not exceed the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor, whichever is lower"; and that the amended complaint would state that the fair market value of the property could not be in excess of P1,800,000, the amount for which defendant's predecessor-in-interest had offered to sell said properties to the Division of Public Schools of Manila and which amount was also the purchase price paid by Amerex to Avegon Inc. In due course, plaintiff filed an amended complaint. Amerex, however, opposed the motion for leave to amend the complaint contending that the plaintiff was insisting on a valuation given by neither the owner nor the assessor as mandated by P.D. No. 794 but by another person in August 1973 when the peso value was much higher. The lower court denied the motion to amend the complaint; but after the plaintiff had filed a motion for reconsideration, the lower court admitted the amended complaint on April 27, 1976. In the meantime, Amerex submitted to the court "audited financial statements' consisting of an account stating that the cost of its land and buildings was P2,107,479.48, and another account stating that it incurred total expenses of P150,539 for their maintenance. 3 These statements yielded the amount of P2,258,018.48 as the total value of the property. The commissioners conducted an ocular inspection and hearing on the value of the property. On October 18, 1976, the plaintiff filed a motion seeking the disqualification of Engineer Aurelio B. Aquino as commissioner on the ground that he could not be expected to be unbiased inasmuch as in the three appraisal reports submitted by Amerex, Aquino had indicated as fair market value of the property amounts much more than the plaintiffs fair market value determination of P1,800,000. Said appraisal reports were made by Ampil Realty and Appraisal Co., Inc. with Aquino signing thereon as real

estate appraiser. One report, dated February 15, 1974 and submitted to Commonwealth Insurance Company indicated P2,100,000 as the fair market value of the property. 4 Two other reports were made at the behest of Amerex with one, dated November 15, 1974, fixing the fair market value at P2,300,000 5, and the other, dated June 5, 1975, with P2,400,000 as the fair market value. 6 Amerex opposed the motion to disqualify Aquino as commissioner, and the court, in its order of November 5, 1976, denied it. Hence, on January 24, 1977, the commissioners submitted their appraisal report finding that the fair market value of the property was P2,763,400. The commissioners, however added:
Under the provision of Presidential Decree No. 464, as amended by Presidential Decree No. 794, abovequoted, we could have safely adopted the valuation of the City Assessor in the sum of P2,432,042.00, this being lower than that declared by the owner in the sum of P2,435,000.00, although by actual appraisal of the undersigned Commissioners the property could command a fair market value of P2,763,400.00 as of the date of our ocular inspection. Considering, however, that according to the audited statement submitted by defendant, the acquisition costs and other legal expenses incurred on the subject property by AMEREX, the grand total of P2,258,018.57, are (sic) lower than the findings of the undersigned Commissioners, the explanation being the fact that the price of the sale was a real bargain possibly due to dire necessities of the seller Avegon, it is respectfully submitted that the said sum of P2,258,018.57 be adopted for purposes of determining just compensation payable to defendant AMEREX, which sum does not exceed, but is even lower than, the fair market value was determined by the City Assessor and as 7 declared by said defendant.

Both parties objected to the report of the commissioners. The plaintiff contended that the commissioners' conclusion that the fair market value of the property was P2,763,400 was unsupported by evidence and that their recommended just compensation of P2,258,018.57 was excessive. It reiterated its stand that the just compensation should only be P1,800,000 it being the price had the sale between the city school board and Avegon Inc. materialized and also the actual price of the sale between Avegon Inc. and Amerex. On the other hand, Amerex averred that the recommended just compensation was unjustified in view of the commissioners' finding that the fair market value of the property was P2,763,400. On March 15, 1977, the lower court 8 rendered a decision based on the following findings:
The court believes that the findings of the commissioners are supported by the evidence adduced during the hearings and that their recommendation is reasonable. The property was originaly owned by Avegon Inc. and was assessed at P1,079,370.00 by the City of Manila for the year 1974 (Exh. A-4). Avegon Inc. offered to sell it to the City School Board on July 21, 1973 at P2,300,000.00 but it accepted the counter-offer of P1,800,000. The negotiations, however, fell through when the city failed to act (Exhs. C, C-1, C-2, C-3 and C-4). The property was appraised on February 15, 1974 at P2,100,000.00 at the Instance of Commonwealth Insurance Company, an affiliate of Warner, Barnes & Co., Inc. (Exh. G). The defendant company introduced improvements on the property in the middle part of 1974 worth P260,690.50 (Exhs. 4, 4-A to 4-J; 11, 13, 14 to 19). After the renovation,

the property was again appraised at the instance of the defendant at P2,300,000.00 on November 15, 1974 (Exh. 2). Due to the world-wide recession, there followed a slump in the demand for electronic products. On June 4, 1975, the Traders Commodities Corporation offered to buy the property at P2,750,000.00 with a deposit of P50,000.00 as earnest money. The offer was formally made by the law firm Salonga, Ordoez, Yap, Africano and Associates (Exch. 6). The offer was accepted on June 9, 1975 (Exhs. 7 and 8). The sale was not consummated, however, when the government notified the defendant in a conference held in Malacanang on June 15, 1975 that it wanted to buy the property for the use of the Manuel de la Fuente High School (Exh. 9). Because of the failure of the parties to agree on the price and other conditions of the purchase, the government filed this action on August 2, 1975. It is apparent that the commissioners were influenced by the fact that the city assessors fixed the market value of the property at P2,432,042.00 for the year 1975 pursuant to Presidential Decree No. 464 and that there was a perfected contract to buy it at P2,750,000.00. No evidence was presented nor even an allegation made, to show that the government valuation is fraudulent or erroneous. It must therefore be regular (Rule 131, sec. m) and in view of the reliance of the Presidential Decree upon it as a standard to be followed by the courts in arriving at the just compensation of the property when it is acquired by the government, it has great evidentiary weight. The offer to buy at P2,750,000.00 was made by one of the most reputable law firms in the country. It is not likely that it would have lent itself to any fraudulent device or scheme to inflate the value of the property. Commissioner Pea is a renowned authority on land registration, and has been a realtor for many years. Atty. Higinio Sunico is the chief of the Land Management Division, Bureau of Lands, who was recommended by the plaintiff. Both are well-known for their probability Although it appears that Mr. Aquino, the commissioner recommended by the defendant, had occasion in the past to participate in transactions involving the same property, the court believes that the concurrence of the other commissioners is a safe guaranty of the correctness of their appraisal and recommendation.

Accordingly, the dispositive portion of the decision reads as follows:

WHEREFORE, judgment is hereby rendered funding the amount of P2,258.018.57 as just compensation for the property of the defendant and declaring the plaintiff entitled to possess and approximate it to the public use alleged in the complaint and to retain it upon payment of the said amount, after deducting the amount of P1,303,470.00, with legal interest from October 13, 1975 when the plaintiff was placed in possession of the real property, and upon payment to each of the commissioners of the sum of P35.00 for their attendance during the hearings held on January 23, February 16, May 11, July 23, September 17, October 12 and December 10, 1976, plus P500.00 each for the preparation of the report, and the costs.

The plaintiff elevated the case to the then Intermediate Appellate Court (IAC) for review. On October 29, 1984, it affirmed the appealed decision with the modification that the plaintiff Republic of the Philippines be exempted from the payment of the commissioners' fees, the P500.00 granted each of them for the preparation of the report and the costs. Its motion for the reconsideration of said decision having been denied, petitioner filed the instant petition submitting the following issues for resolution:

1. Whether or not respondent Court erred in not disqualifying Commissioner Aurelio B. Aquino from membership in the Committee of Appraisal. 2. Whether or not respondent Court erred in not totally disregarding the audited statement by the defendant, which is hearsay in nature and was not formally offered in evidence. 3. Whether or not respondent Court erred in totally disregarding petitioner's evidence showing that the award of just compensation should be only P1,800,000.00 and not P2,258.018.57 as awarded by said respondent Court.

The issue of the disqualification of Aquino as commissioner deserves scant attention. Under Section 8, Rule 67 of the Rules of Court, the court may take the following actions on the report submitted by commissioners: it may "accept the report and render judgment in accordance therewith; or for cause shown, it may recommit the same to the commissioners for further report of facts, or it may set aside the report and appoint new commissioners, or it may accept the report in part and reject it in part; . . . ." In other words, the report of the commissioners is merely advisory and recommendatory in character as far as the court is concerned. 9 Hence, it hardly matters that one of the three commissioners had a preconceived and biased valuation of the condemned property. The veracity or exactitude of the estimate arrived at by the commissioners may not be adversely affected thereby. In fact, the report of only two commissioners may suffice if the third commissioner dissents from the former's valuation. 10 Indeed, the participation of an allegedly biased commissioner may not result in the total disregard of an appraisal report in the absence of proof that the two other commissioners were unduly influenced by their allegedly partial colleague. The determination of just compensation for a condemned property is basically a judicial function. As the court is not bound by the commissioners' report, it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of its right of condemnation, and to the defendant just compensation for the property expropriated. For that matter, this Court may even substitute its own estimate of the value as gathered from the record. 11 Hence, although the determination of just compensation appears to be a factual matter which is ordinarily outside the ambit of its jurisdiction, this Court may disturb the lower court's factual finding on appeal when there is clear error or grave abuse of discretion. 12 We hold that the courts below made an erroneous determination of just compensation in this case. In the first place, the just compensation prescribed herein is based on the commissioners' recommendation which in turn is founded on the "audited" statements of Amerex that the property is worth P2,258,018.57. As earlier pointed out, while the court may accept the commissioners' report and render judgment in accordance therewith, it may not do so without considering whether the report is supported by evidence. The

court is also duty-bound to determine whether the commissioners had discharged the trust reposed in them according to well-established rules and formed their judgment upon correct legal principles for they are not supposed to act ad libitum . 13 Amerex's "audited" statement on the acquisition cost, cost of painting and major repairs, taxes, and insurance premiums which totals P2,107,479.48, contains the following certification:
We have checked the details of the transactions indicated in the foregoing schedule of Land and Building Account as at January 31, 1976 with the books and records of Amerex Electronics (Philippines) Corporation which were presented to us for examination and have found the details to be in accordance therewith. We have not made an audit of the books of accounts of Amerex Electronics (Philippines) Corporation. Sycip, Gorres Velayo & Co. PTR No. 4709791 January 23, 1976 Makati, Rizal (Emphasis supplied).
14

Amerex's other "audited" statement on the maintenance expenses of the property wherein it allegedly incurred the amount of P150,539.09 contains a similar certification by the same accounting firm specifically stating that the auditor did not make an audit of the books of accounts of Amerex. 15 It is clear from these certifications that the accounting firm which issued them merely compared the figures in the schedules or "audited" statements with those of the records and books of accounts of Amerex. As no investigation was made as to the veracity of the figures in the account, there was no audit in the real sense of the term. To audit is to examine an account, compare it with the vouchers, adjust the same, and to state the balance, by persons legally authorized for the purpose. 16 While the word "audit" is sometimes restricted to a mere mathematical process, it generally includes investigation, the weighing of evidence, and deciding whether items should or should not be included in the account . 17 Audit involves the exercise of discretion; it is a quasijudicial function. 18 The accuracy of the "audited" statements herein is therefore suspect. Besides the fact that the petitioner was not furnished a copy of the audited statements which were also not introduced in evidence, Enrique P. Esteban, vice-president and treasurer of Amerex, and even a representative of the accounting firm, were likewise not presented during the trial thereby depriving petitioner herein of the opportunity to crossexamine them. It would therefore be unfair to the petitioner to hold it bound by the "audited" statements of Amerex which may have been premised on false or mistaken data. 19

This Court having declared as unconstitutional the mode of fixing just compensation under P.D. No. 794 20 just compensation should be determined either at the time of the actual taking of the government or at the time of the judgment of the court, whichever comes first. 21 In this case, the issuance of the condemnation order and the actual taking of the property both occurred in October, 1975. Accordingly, the appraisal made by Ampil Realty and Appraisal Co., Inc. on June 5, 1975, which date is nearest to that of the actual taking of the property, should be the basis for the determination of just compensation the record being bereft of any indications of anomaly appertaining thereto. It should be added that Wenceslao Ampil, the president of said appraisal firm, testified at the trial and therefore petitioner had the opportunity to confront him and to question his report. The reasonableness of the June 5,1975 appraisal fixing at P2,400,000 the fair market value of the property, is bolstered by the fact that on June 4, 1975, Traders Commodities Corporation, through its lawyer, Sedfrey A. Ordoez offered to buy the property at P2,750,000. 22 It must be emphasized, however, that legal interest on the balance of the just compensation of P2,400,000 after deducting the amount of P1,303,470 which had been delivered to Amerex, should be paid by petitioner from the time the government actually took over the propert y. 23 Much as we realize the need of the government, under these trying times, to get the best possible price for the expropriated property considering the ceaseless and continuing necessity for schools, we cannot agree with the petitioner that the just compensation for the property should be the price it commanded when it was first offered for sale to the City School Board of Manila. Petitioner failed to substantiate its claim that the property is worth the lower amount of P1,800,000. In contrast, Amerex submitted evidence consisting of the aforesaid June 5, 1975 appraisal report which fixed the fair market value of the property at P2,400,000. WHEREFORE, the just compensation of the property expropriated for the use of the Manuel de la Fuente High School Don Mariano Marcos Memorial High School) is hereby fixed at Two Million Four Hundred Thousand Pesos (P2,400,000.00). After deducting the amount of P1,303,470.00 therefrom, the petitioner shall pay the balance with legal interest from October 13, 1975. SO ORDERED. Feliciano and Cortes, JJ., concur. Gutierrez, Jr. and Bidin, JJ., took no part

Republic of the Philippines SUPREME COURT Manila

FIRST DIVISION G.R. No. 77071 March 22, 1990 MUNICIPALITY OF TALISAY, petitioner, vs. SPOUSES HILARIO RAMIREZ and ERLINDA RAMIREZ and SPOUSES WILLIAM ABARQUEZ and JOSEPHINE ABARQUEZ, respondents. Carlos A. Marcos for petitioner. Raul Ha. Sesbreo for private respondents.

CRUZ, J.: This case has, to use a tired phrase, been overtaken by events. The petition has been de-fanged so to speak, and must now be retired. The facts are simple. On 13 November 1985, the Municipality of Talisay, in Cebu, filed a complaint for the expropriation of two lots belonging to the private respondents. On 25 November 1985, Judge Valeriano P. Tomol, Jr. of the Regional Trial Court of Cebu denied the defendants' motion to dismiss, after hearing, and issued a writ of possession in favor of the plaintiff. On 21 April 1986, the court ordered the parties to designate three commissioners each to assist it in fixing the just compensation for the condemned properties. Subsequently, the plaintiff not having complied, the respondent judge issued an order dated 15 August 1986 dismissing the complaint pursuant to Rule 17, Section 3, of the Rules of Court. In a motion for reconsideration filed on 12 September 1986, the plaintiff, while maintaining that the order of dismissal was invalid and praying that it be recalled, nevertheless submitted the names of its three recommendees. The motion was denied on 3 October 1986 on the ground that the new administration of the plaintiff had not "passed a resolution signifying its adoption of the expropriation sought in this case," although the order was amended "by making the dismissal as being without prejudice." A motion for clarification/ reconsideration filed by the defendants on 21 October 1986 was denied by the respondent court on 3 December 1986, but the plaintiff, still not satisfied, then came to this court in a petition for certiorari. On 2 December 1987, this Court gave due course to the petition and required the parties to submit simultaneous memoranda. The private respondents complied on 11 January 1988 but the petitioner has not done so to date. On 30 May 1988, the private respondents filed an urgent manifestation praying for the dismissal of the petition on the ground that the new government of the Municipality of Talisay was not pursuing that act taken by its predecessors, besides the fact that the just compensation for the

condemned properties could no longer be fixed in accordance with the several presidential decrees invoked by the petitioner. To ascertain the stand of the present Sangguniang Bayan of Talisay, the Court required it in a resolution dated 15 January 1990 to manifest its position regarding the pending expropriation case. In response, the said legislative body sent a copy of its Resolution No. 90-10, adopted on 25 January 1990, manifesting to the Court the intention of the government of the Municipality of Talisay to continue with the expropriation of the subject lots. Dispensing with the memorandum which the petitioner has failed to file, the Court now proceeds to examine, in the light of the memorandum of the private respondents and the other pleadings filed by the parties, the issues raised in the petition. The petitioner maintains that it was not under obligation to submit the names of three commissioners to assist in the determination of the just compensation for the condemned properties, as required by the respondent judge in his order of 21 April 1986. Such determination, it argues, is the duty of the court alone under Rule 67, Section 5, of the Rules of Court. Moreover, the just compensation is no longer fixed by commissioners under the said Rule as this has been repealed by P.D. Nos. 42, 76, 464, 794, 1224, 1259, 1313, 1517, and 1533. These decrees provide that the just compensation in expropriation cases shall be the value given to the condemned property by either the owner thereof or the government assessor, whichever valuation is lower. The rule laid down in these decrees is no longer controlling, having been declared unconstitutional in the landmark case of Export Processing Zone Authority v. Dulay, 1 where Justice Hugo E. Gutierrez, Jr. held for a unanimous Court:
The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under the Constitution is reserved to it for final determination. Thus, although in an expropriation proceeding the court technically would still have the power to determine the just compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking. However, the strict application of the decrees during the proceedings would be nothing short of a mere formality or charade as the court has only to choose between the valuation of the owner and that of the assessor, and its choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in determining what is just or fair. Even a grade school pupil could substitute for the judge insofar as the determination of constitutional just compensation is concerned. xxx xxx xxx In the present petition, we are once again confronted with the same question of whether the courts under P.D. 1533, which contains the same provision on just compensation as its predecessor decrees, still have the power and authority to determine just

compensation, independent of what is stated by the decree and to this effect, to appoint commissioners for such purpose. This time, we answer in the affirmative. xxx xxx xxx It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated.

With this decision, the rules for determining just compensation as laid down in Rule 67 of the Rules of Court have been reactivated and are again applicable. Hence, the petitioner cannot continue arguing that commissioners are no longer necessary to assist the court in determining the just compensation for the properties it seeks to expropriate. While it is true that, strictly speaking, it is the court that shall appoint the said commissioners, there is nothing to prevent it from seeking the recommendations of the parties on this matter, the better to ensure their fair representation. Indeed, the petitioner should have welcomed the chance to submit their three recommendees instead of peevishly questioning the well-meaning order of the respondent judge. We feel the petitioner was quibbling too much and needlessly belligerent. What it should have done, instead of simply ignoring the order, was to call the attention of the court to the presidential decrees which had made the commissioners unnecessary. It did not do this, except belatedly in its motion for reconsideration. Under the circumstances, the trial judge was justified in dismissing the complaint under Rule 17, Section 3, of the Rules of Court, for failure of the plaintiff to comply with his order. We feel nevertheless that, as the petitioner finally did comply with that order by submitting the names of its recommendees in its motion for reconsideration, such compliance should justify the setting aside of the order of dismissal and the reinstatement of the case below. This would avoid the further delay that would be incurred if the same complaint had to be re-filed and the parties were to go back to square one, as it were, and begin the proceedings all over again. Such delay would not be in the best interest of either party and more so of the people intended to be benefited by the expropriation. WHEREFORE, the Orders of the respondent court dated 15 August 1986, 3 October 1986, and 3 December 1986 are SET ASIDE and Civil Case No. CEB-4424 in the Regional Trial Court of Cebu is REINSTATED for hearing and decision in accordance with Rule 67 of the Rules of Court. No costs. SO ORDERED. Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-61293 February 15, 1990 DOMINGO B. MADDUMBA and ANITA C. MADDUMBA, petitioners, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, Represented by its Chairman, Board of Trustees, HONORABLE LEONILO OCAMPO, respondent. Vicente P. Leus for petitioners. The Government Corporate Counsel for GSIS.

REGALADO, J.: This petition for mandamus seeks to compel respondent Government Service Insurance System (GSIS) to accept Land Bank bonds at their face value as installments payments for a pre-existing obligation. The records disclose that on December 10, 1980, respondent GSIS conducted a public bidding of several foreclosed properties. Included in the properties offered to the public was a house and lot situated at 3377 New Panaderos Street, Sta. Ana, Manila, covered by Transfer Certificate of Title No. 4749 of the Register of Deeds of Manila. Petitioner Domingo B. Maddumba participated in the public bidding and submitted his sealed bid in the amount of P98,000.00 in Philippine currency. The bid was subject to the condition that there should be a down payment of 35% of the amount thereof, the 10% constituting the proposal bond with the remaining 25% to be paid after the receipt of the notice of award or acceptance of the bid. Accordingly, petitioner enclosed with his sealed bid a manager's check in the amount of P9,500.00 and cash in the amount of P300.00 to complete the P9,800.00 proposal bond. Upon the receipt of the notice of award, petitioner offered to pay the additional 25% in Land Bank bonds at their face value. These bonds were issued to petitioner as payment for his riceland consisting of twenty-six hectares located in Cordon, Isabela acquired by the Government from him under Presidential Decree No. 27. However, the GSIS rejected the offer, hence it was withdrawn by petitioner. Petitioner then offered to pay in cash the remaining 25% down payment "and all future installments." 1 Thereafter, on November 16, 1981, petitioner paid in cash the balance of the required down payment.

A "Deed of Conditional Sale" was executed by the parties on November 19, 1981, where the petitioner as vendee agreed to pay the vendor GSIS "the balance of the purchase price of SIXTY THREE THOUSAND SEVEN HUNDRED FIVE & 50/100 (P63,705.50) PESOS, Philippine currency, in SIXTY (60) monthly installments of ONE THOUSAND FOUR HUNDRED SIXTEEN & 69/100 (P1,416.69) PESOS, Philippine currency, at twelve (12%) percent interest per annum, compounded monthly, beginning December 1, 1981." 2 The first installment in the amount of P1,416.00 was paid by petitioner on December 3, 1981. When the second monthly installment became due, petitioner sent a letter dated January 5, 1982, to the GSIS Board of Trustees requesting that he be allowed to pay the monthly amortizations with his Land Bank bonds commencing in January, 1982 until the exhaustion of the said bonds. 3 Petitioner invoked the provisions of Secton 85 of Republic Act No. 3844, as amended by Presidential Decree No. 251. The GSIS Board of Trustees, in its Resolution No. 91 adopted on January 22, 1982, denied petitioner's offer. The board "resolved to reiterate the policy that Land Bank bonds shall be accepted as payment only at a discounted rate to yield the System 18% at maturity. 4 In a letter dated February 12, 1982, petitioner asked the Board of Trustees to reconsider Resolution No. 91. 5 Petitioner reiterated his reliance on Section 85 of Republic Act No. 3844, as amended, and further supported his position with the contention that the policy of the GSIS contravenes the ruling in the case of Gonzales, et al. vs. The Government Insurance System, etc., et al. 6 Likng in the case of ewise, petitioner submitted an opinion of the Ministry of Agrarian Reform, dated February 12, 1982, wherein it was stated,a inter alia, that "if the GSIS accepts the Land Bank bonds as payment thereof, it must accept the same at par or face value. To accept said bonds at a discounted rate would lessen the credibility of the bonds as instruments of indebtedness." 7 In a letter dated May 31, 1982, petitioner was advised by the Manager, Acquired Assets Department, GSIS that Resolution No. 415 was adopted on May 18, 1982 by the GSIS Board of Trustees denying the request of petitioner. Hence, on August 5, 1982, the instant original action for mandamus was filed by petitioner. The issue posed by this petition is whether or not under the provisions of Section 85 of Republic Act No. 3844, as amended by Presidential Decree No. 251 effective July 21, 1973, the GSIS may be compelled to accept Land Bank bonds at their face value in payment for a residential house and lot purchased by the bondholder from the GSIS. The aforesaid provision of law provides:
Sec. 85. Use of Bonds. The bonds issued by the Bank may be used by the holder thereof and shall be accepted for any of the following: xxx xxx xxx

2. Payment for the purchase of shares of stock or assets of government-owned or controlled corporations. Upon offer by the bondholders, the corporation owned or controlled by the Government shall, through its Board of Directors, negotiate with such bondholder with respect to the price and other terms and conditions of the sale. In case there are various bondholders making the offer, the one willing to purchase under the terms and conditions most favorable to the corporation shall be preferred. If no price is acceptable to the corporation, the same shall be determined by the Committee of Appraisers composed of three members, one to be appointed by the corporation, another by the bondholder making the highest or only offer, and the third by the members so chosen. The expense of appraisal shall be borne equally by the corporation and the successful purchaser. Should the Government offer for sale to the public any or all the shares of stock or the assets of any of the Government-owned or controlled corporations, the bidder who offers to pay in bonds of the Land Bank shall be preferred, provided that the various bids be equal in every respect in the medium of payment. xxx xxx xxx

It is not disputed that under the above quoted provisions, a government-owned or controlled corporation, like the GSIS, is compelled to accept Land Bank bonds as payment for the purchase of its assets. As a matter of fact, the bidder who offers to pay in bonds of the Land Bank is entitled to preference. What respondent GSIS is resisting, however, is its being compelled to accept said bonds at their face value. Respondent, in support of its stance that it can discount the bonds, avers that "(a) PD 251 has amended Section 85 of RA 3844 by deleting and eliminating the original provision that Land Bank bonds shall be accepted 'in the amount of their face value'; and (b) to accept the said bonds at their face value will impair the actuarial solvency of the GSIS and thoroughly prejudice its capacity to pay death, retirement, insurance, dividends and other benefits and claims to its more than a million members, the majority of whom are low salaried government employees and workers." 8 We cannot agree with respondent. Respondent's arguments disregard the fact that the provisions of Section 85 are primarily designed to cushion the impact of dispossession. Not only would there be inconvenience resulting from dispossession itself, but also from the modes of payment in financing the acquisition of farm lots. Acceptance of Land Bank bonds, instead of money, undoubtedly involves a certain degree of sacrifice for the landowner. This, of course, is in addition to the fact that, in case of expropriation of land covered by land reform, the landowner will seldom get the compensation he desires. Thus, discounting the Land Banks bonds, and thereby reducing their effective value, entails and imposes an additional burden on his part. It is, in fact, in consideration of this sacrifice that we extended the rule on liberality in the interpretation of the provisions of Republic Act No. 3844, then known as the Agricultural Land Reform Code, in favor not only of the actual tillers but the landowners as well. Ita semper fiat relatio ut valeat dispositio. The interpretation must always be such that the disposition may prevail.

The nature of a Land Bank bond itself fortifies our view that the respondent may be compelled to accept those bonds at their face value. As explained in an earlier case:
True, the statute does not explicitly provide that Land Bank bonds shall be accepted at their face value. There can be no question, however, that such is the intendment of the law particularly in the absence of any provision expressly permitting discounting, as differentiated from Republic Act No. 304, or the Backpay Law, as amended by Republic Acts Nos. 800 and 897, which expressly allows it. Land Bank bonds are certificates of indebtedness, approved by the Monetary Board of the Central Bank, fully tax-exempt both as to principal and income, and bear interest at the rate of 6% per annum redeemable at the option of the Land Bank at or before maturity, which in no case shall exceed 25 years. They are fully negotiable and unconditionally guaranteed by the Government of the Republic of the Philippines. These bonds are deemed contracts and the obligations resulting therefrom fall within the purview of the non-impairment clause of the Constitution, and any impairment thereof may take any encroachment in any respect upon the obligation and cannot be permitted. Thus, the value of these bonds cannot be diminished by any direct or indirect act, particularly, since said bonds are fully guaranteed by the Government of the Philippines. They are issued not in the open market nor for the primary purpose of raising funds or pooling financial resources but in the captive market of landowners and to facilitate the speedy transfer of lands to the tenant-farmers in support of the land reform program of the Government. They are not ordinary commercial paper in that sense subject to 9 discounting (Emphasis supplied).

We are aware that the above cited cases primarily involved Section 80 of the law as applied to cases where government financial institutions were compelled to accept Land Bank bonds at their face value for the discharge of existing encumbrances on parcels of land given as security even if not an the lands covered by the mortgage were acquired by the Land Bank under Presidential Decree No. 27. Evidently, however, the variance in the factual setting would not change the very nature of said bonds by reason of which payment of pre-existing obligations to government financial institutions at their face or par value is justified and authorized. It would be hermeneutically unjustified to adopt a tenuous theory which would subject the parity of Land Bank bonds to qualifications and distinctions when the law itself does not so provide. The deed of conditional sale which was executed by the parties herein is subject to the obligation of and guaranteed by the Government under said bonds. Their agreement for the payment of installments in Philippine currency cannot in any way be construed as an alteration, nor should it detract from the essence and compulsion, of said obligation While, in one instance, petitioner offered to pay his future installments in cash, that offer was obviously not voluntarily made but was exacted from him because of the refusal of respondent to accept the Land Bank bonds. That incident should not prevent petitioner from making, and allow respondent to refuse, an alternative mode of payment authorized by law and under the conditions laid down by this Court. Respondent cannot rely on the deletion by Presidential Decree No. 251 of the provision in Section 85 that the bonds shall be accepted in the amount of their face value, and wrest therefrom an interpretation in support of its thesis. Implied repeals are frowned

upon in this jurisdiction. They are not favored in law and will not be so declared unless the intent of the legislature is manifest. In the present case, no such intention to effect changes in the law exists nor is it even apparent. On the contrary, it can be said that when amendments were made to Section 85, the legislators were fully aware of the nature of Land Bank bonds, which would necessarily be concordant with the analysis and explanation subsequently made by the Court in the cases hereinbefore cited. If the legislature had really been minded to make changes in the policy on the acceptance value of said bonds, they could have expressly so provided with facility and ease. Thus, although such amendment by deletion was effected in 1973 and the cases which clarified this point were decided in 1986 and 1987 on factual situations subsequent to 1973, this argument now posited by respondent based on such amendment was not taken into account by the Court in laying down its aforequoted doctrinal rulings. Neither can the respondent complain that the acceptance of said bonds at their face value will impair its actuarial solvency. We are constrained to quote from Gonzales again, that "(w)hatever unfavorable results the acceptance may have on its finances, the effects must be deemed to have been intended by Presidential Decree No. 251, particularly, when it provided for the payment in bonds to government lending institutions their 'existing charters to the contrary notwithstanding.' If iniquitous to said institutions, it remains now with the legislative branch to make the necessary revisions if desired. The traditional role assigned to the Judiciary is to implement and not to thwart fundamental policy goals." It is apropos to recall, all this juncture, our reminder in the aforecited case of Philippine National Bank vs. Amores, et al., which applies with equal force to herein respondent and the present case:
Suffice it to mention that the petitioner is a government lending institution and as such, it has the obligation to support unequivocably government programs already on stream and not to introduce its own interpretative policies which may thwart such programs or modify them to nothingness. This is specially compelling with regard to land reform, the great venture of the government. The preamble of PD 251 eloquently articulates government intent to implement the state policy of 'diverting landlord capital in agriculture to industrial development' by 'mobilization and harnessing properly all available government resources for the realization of the desired agrarian reform program.' For agrarian reform cannot be fully realized without the intervention of the government particularly in the payment of just compensation. Surely, the tenant by himself does not have and cannot afford the wherewithal to defray the cost of the land tranferred to him. It is only with the full support and active assistance of the government principally through its financial institutions that payment of just compensation to the landowner may be realized. ... (Emphasis supplied).

WHEREFORE, the writ of mandamus prayed for is hereby GRANTED. Respondent Government Service Insurance System is ordered to accept the bonds issued by the Land Bank of the Philippines at their par or face value. SO ORDERED.

Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.

Footnotes
1 Rollo, 138.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-48685 September 30, 1987 LORENZO SUMULONG and EMILIA VIDANES-BALAOING, petitioners, vs. HON. BUENAVENTURA GUERRERO and NATIONAL HOUSING AUTHORITY, respondents.

CORTES, J.: On December 5, 1977 the National Housing Authority (NIIA) filed a complaint for expropriation of parcels of land covering approximately twenty five (25) hectares, (in Antipolo, Rizal) including the lots of petitioners Lorenzo Sumulong and Emilia VidanesBalaoing with an area of 6,667 square meters and 3,333 square meters respectively. The land sought to be expropriated were valued by the NHA at one peso (P1.00) per square meter adopting the market value fixed by the provincial assessor in accordance with presidential decrees prescribing the valuation of property in expropriation proceedings. Together with the complaint was a motion for immediate possession of the properties. The NHA deposited the amount of P158,980.00 with the Philippine National Bank, representing the "total market value" of the subject twenty five hectares of land, pursuant to Presidential Decree No. 1224 which defines "the policy on the expropriation of private property for socialized housing upon payment of just compensation." On January 17, 1978, respondent Judge issued the following Order:
Plaintiff having deposited with the Philippine National Bank, Heart Center Extension Office, Diliman, Quezon City, Metro Manila, the amount of P158,980.00 representing the total market value of the subject parcels of land, let a writ of possession be issued. SO ORDERED.

Pasig, Metro Manila, January 17, 1978. (SGD) BUENAVENTURA S. GUERRERO J u d g e

Petitioners filed a motion for reconsideration on the ground that they had been deprived of the possession of their property without due process of law. This was however, denied. Hence, this petition challenging the orders of respondent Judge and assailing the constitutionality of Pres. Decree No. 1224, as amended. Petitioners argue that:
1) Respondent Judge acted without or in excess of his jurisdiction or with grave abuse of discretion by issuing the Order of January 17, 1978 without notice and without hearing and in issuing the Order dated June 28, 1978 denying the motion for reconsideration. 2) Pres. Decree l224, as amended, is unconstitutional for being violative of the due process clause, specifically: a) The Decree would allow the taking of property regardless of size and no matter how small the area to be expropriated; b) "Socialized housing" for the purpose of condemnation proceeding, as defined in said Decree, is not really for a public purpose; c) The Decree violates procedural due process as it allows immediate taking of possession, control and disposition of property without giving the owner his day in court; d) The Decree would allow the taking of private property upon payment of unjust and unfair valuations arbitrarily fixed by government assessors; e) The Decree would deprive the courts of their judicial discretion to determine what would be the "just compensation" in each and every raise of expropriation.

Indeed, the exercise of the power of eminent domain is subject to certain limitations imposed by the constitution, to wit:
Private property shall not be taken for public use without just compensation (Art. IV, Sec. 9); No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws (Art. IV, sec. 1).

Nevertheless, a clear case of constitutional infirmity has to be established for this Court to nullify legislative or executive measures adopted to implement specific constitutional provisions aimed at promoting the general welfare. Petitioners' objections to the taking of their property subsumed under the headings of public use, just compensation, and due process have to be balanced against competing interests of the public recognized and sought to be served under declared policies of the constitution as implemented by legislation. 1. Public use a) Socialized Housing Petitioners contend that "socialized housing" as defined in Pres. Decree No. 1224, as amended, for the purpose of condemnation proceedings is not "public use" since it will benefit only "a handful of people, bereft of public character." "Socialized housing" is defined as, "the construction of dwelling units for the middle and lower class members of our society, including the construction of the supporting infrastructure and other facilities" (Pres. Decree No. 1224, par. 1). This definition was later expanded to include among others:
a) The construction and/or improvement of dwelling units for the middle and lower income groups of the society, including the construction of the supporting infrastructure and other facilities; b) Slum clearance, relocation and resettlement of squatters and slum dwellers as well as the provision of related facilities and services; c) Slum improvement which consists basically of allocating homelots to the dwellers in the area or property involved, rearrangemeant and re-alignment of existing houses and other dwelling structures and the construction and provision of basic community facilities and services, where there are none, such as roads, footpaths, drainage, sewerage, water and power system schools, barangay centers, community centers, clinics, open spaces, parks, playgrounds and other recreational facilities; d) The provision of economic opportunities, including the development of commercial and industrial estates and such other facilities to enhance the total community growth; and e) Such other activities undertaken in pursuance of the objective to provide and maintain housing for the greatest number of people under Presidential Decree No, 757, (Pres. Decree No. 1259, sec. 1)

The "public use" requirement for a and 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:
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. 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 [Heirs of Juancho Ardona v. Reyes, G.R. Nos. 60549, 60553-60555 October 26, 1983, 125 SCRA 220 (1983) at 234-5 quoting E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 523-4, (2nd ed., 1977) Emphasis supplied].

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. As discussed in the above cited case of Heirs of Juancho Ardona:
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. (p. 231)

Specifically, urban renewal or redevelopment and the construction of low-cost housing is recognized as a public purpose, not only because of the expanded concept of public use but also because of specific provisions in the Constitution. The 1973 Constitution made it incumbent upon the State to establish, maintain and ensure adequate social services including housing [Art. 11, sec. 7]. The 1987 Constitution goes even further by providing that:
The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living and an improved quality of life for all. [Art. II, sec. 9] The state shall by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban land reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the implementation of such program the State shall respect the rights of small property owners. (Art. XIII, sec. 9, Emphaisis supplied)

Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum, the general welfare. The public character of housing measures does not change because units in housing projects cannot be occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made, for it is not possible to provide housing for are who need it, all at once.

Population growth, the migration to urban areas and the mushrooming of crowded makeshift dwellings is a worldwide development particularly in developing countries. So basic and urgent are housing problems that the United Nations General Assembly proclaimed 1987 as the "International Year of Shelter for the Homeless" "to focus the attention of the international community on those problems". The General Assembly is Seriously concerned that, despite the efforts of Governments at the national and local levels and of international organizations, the driving conditions of the majority of the people in slums and squatter areas and rural settlements, especially in developing countries, continue to deteriorate in both relative and absolute terms." [G.A. Res. 37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4] In the light of the foregoing, this Court is satisfied that "socialized housing" fans within the confines of "public use". It is, particularly important to draw attention to paragraph (d) of Pres. Dec. No. 1224 which opportunities inextricably linked with low-cost housing, or slum clearance, relocation and resettlement, or slum improvement emphasize the public purpose of the project. In the case at bar, the use to which it is proposed to put the subject parcels of land meets the requisites of "public use". The lands in question are being expropriated by the NHA for the expansion of Bagong Nayon Housing Project to provide housing facilities to low-salaried government employees. Quoting respondents:
1. The Bagong Nayong Project is a housing and community development undertaking of the National Housing Authority. Phase I covers about 60 hectares of GSIS property in Antipolo, Rizal; Phase II includes about 30 hectares for industrial development and the rest are for residential housing development. It is intended for low-salaried government employees and aims to provide housing and community services for about 2,000 families in Phase I and about 4,000 families in Phase II. It is situated on rugged terrain 7.5 kms. from Marikina Town proper; 22 Kms. east of Manila; and is within the Lungs Silangan Townsite Reservation (created by Presidential Proclamation No. 1637 on April 18, 1977). The lands involved in the present petitions are parts of the expanded/additional areas for the Bagong Nayon Project totalling 25.9725 hectares. They likewise include raw, rolling hills. (Rollo, pp. 266-7)

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

According to the National Economic and Development Authority at the time of the expropriation in question, about "50 per cent of urban families, cannot afford adequate shelter even at reduced rates and will need government support to provide them with social housing, subsidized either partially or totally" [NEDA, FOUR YEAR DEVELOPMENT PLAN For 1974-1977, p. 357]. Up to the present, housing some remains to be out of the reach of a sizable proportion of the population" [NEDA, MEDIUM-TERM PHILIPPINE DEVELOPMENT PLAN 1987-1992, p. 240]. The mushrooming of squatter colonies in the Metropolitan Manila area as well as in other cities and centers of population throughout the country, and, the efforts of the government to initiate housing and other projects are matters of public knowledge [See NEDA, FOUR YEAR DEVELOPMENT PLAN For 1974-1977, pp. 357-361; NEDA, FIVE-YEAR PHILIPPINE DEVELOPMENT PLAN 1978-1982, pp. 215-228 NEDA, FIVE YEAR PHILIPPINE DEVELOPMENT PLAN 1983-1987, pp. 109-117; NEDA, MEDIUM TERM PHILIPPINE DEVELOPMENT PLAN 1987-1992, pp. 240-254]. b) Size of Property Petitioners further contend that Pres. Decree 1224, as amended, would allow the taking of "any private land" regardless of the size and no matter how small the area of the land to be expropriated. Petitioners claim that "there are vast areas of lands in Mayamot, Cupang, and San Isidro, Antipolo, Rizal hundred of hectares of which are owned by a few landowners only. It is surprising [therefore] why respondent National Housing Authority [would] include [their] two man lots ..." In J.M. Tuason Co., Inc. vs. Land Tenure Administration [G. R. No. L-21064, February 18, 1970, 31 SCRA 413 (1970) at 428] this Court earlier ruled that expropriation is not confined to landed estates. This Court, quoting the dissenting opinion of Justice J.B.L. Reyes in Republic vs. Baylosis, [96 Phil. 461 (1955)], held that:
The propriety of exercising the power of eminent domain under Article XIII, section 4 of our Constitution cannot be determined on a purely quantitative or area basis. Not only does the constitutional provision speak of lands instead of landed estates, but I see no cogent reason why the government, in its quest for social justice and peace, should exclusively devote attention to conflicts of large proportions, involving a considerable number of individuals, and eschew small controversies and wait until they grow into a major problem before taking remedial action.

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

the way of progress and the benefit of the greater may only of the inhabitants of the country." The State acting through the NHA is vested with broad discretion to designate the particular property/properties to be taken for socialized housing purposes and how much thereof may be expropriated. Absent a clear showing of fraud, bad faith, or gross abuse of discretion, which petitioners herein failed to demonstrate, the Court will give due weight to and leave undisturbed the NHA's choice and the size of the site for the project. The property owner may not interpose objections merely because in their judgment some other property would have been more suitable, or just as suitable, for the purpose. The right to the use, enjoyment and disposal of private property is tempered by and has to yield to the demands of the common good. The Constitutional provisions on the subject are clear:
The State shall promote social justice in all phases of national development. (Art. II, sec. 10) The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use and disposition of property and its increments. (Art, XIII, sec. 1)

Indeed, the foregoing provisions, which are restatements of the provisions in the 1935 and 1973 Constitutions, emphasize:
...the stewardship concept, under which private property is supposed to be held by the individual only as a trustee for the people in general, who are its real owners. As a mere steward, the individual must exercise his rights to the property not for his own exclusive and selfish benefit but for the good of the entire community or nation [Mataas na Lupa Tenants Association, Inc. supra at 42-3 citing I. CRUZ, PHILIPPINE POLITICAL LAW, 70 (1983 ed.)].

2. Just Compensation Petitioners maintain that Pres. Decree No. 1224, as amended, would allow the taking of private property upon payment of unjust and unfair valuations arbitrarily fixed by government assessors. In addition, they assert that the Decree would deprive the courts of their judicial discretion to determine what would be "just compensation". The foregoing contentions have already been ruled upon by this Court in the case of Ignacio vs. Guerrero (G.R. No. L-49088, May 29, 1987) which, incidentally, arose from the same expropriation complaint that led to this instant petition. The provisions on just compensation found in Presidential Decree Nos. 1224, 1259 and 1313 are the same provisions found in Presidential Decree Nos. 76, 464, 794 and 1533 which were declared unconstitutional in Export Processing Zone All thirty vs. Dulay (G.R. No. 5960 April 29, 1987) for being encroachments on prerogatives.

This Court abandoned the ruling in National Housing Authority vs. Reyes [G.R. No. 49439, June 29,1983, 123 SCRA 245 (1983)] which upheld Pres. Decree No. 464, as amended by - Presidential Decree Nos. 794, 1224 and 1259. In said case of Export Processing Zone Authority, this Court pointed out that:
The basic unfairness of the decrees is readily apparent. Just compensation means the value of the property at the time of the taking. It means a fair and full equivalent for the loss sustained. ALL the facts as to the condition of the property and its surroundings, its improvements and capabilities, should be considered. xxx xxx xxx Various factors can come into play in the valuation of specific properties singled out for expropriation. The values given by provincial assessors are usually uniform for very wide areas covering several barrios or even an entire total with the exception of the poblacion. Individual differences are never taken into account. The value of land is based on such generalities as its possible cultivation for rice, corn, coconuts, or other crops. Very often land described as directional has been cultivated for generations. Buildings are described in terms of only two or three classes of building materials and estimates of areas are more often inaccurate than correct. Tax values can serve as guides but cannot be absolute substitutes for just compensation. To say that the owners are estopped to question the valuations made by assessors since they had the opportunity to protest is illusory. The overwhelming mass of landowners accept unquestioningly what is found in the tax declarations prepared by local assessors or municipal clerks for them. They do not even look at, much less analyze, the statements. The Idea of expropriation simply never occurs until a demand is made or a case filed by an agency authorized to do so. (pp. 12-3)

3. Due Process Petitioners assert that Pres. Decree 1224, as amended, violates procedural due process as it allows immediate taking of possession, control and disposition of property without giving the owner his day in court. Respondent Judge ordered the issuance of a writ of possession without notice and without hearing. The constitutionality of this procedure has also been ruled upon in the Export Processing Zone Authority case, viz:
It is violative of due process to deny to the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness to allow the haphazard work of minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated. (p. 13)

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

[I]t is imperative that before a writ of possession is issued by the Court in expropriation proceedings, the following requisites must be met: (1) There must be a Complaint for expropriation sufficient in form and in substance; (2) A provisional determination of just compensation for the properties sought to be expropriated must be made by the trial court on the basis of judicial (not legislative or executive) discretion; and (3) The deposit requirement under Section 2, Rule 67 must be complied with. (p. 14)

This Court holds that "socialized housing" defined in Pres. Decree No. 1224, as amended by Pres. Decree Nos. 1259 and 1313, constitutes "public use" for purposes of expropriation. However, as previously held by this Court, the provisions of such decrees on just compensation are unconstitutional; and in the instant case the Court finds that the Orders issued pursuant to the corollary provisions of those decrees authorizing immediate taking without notice and hearing are violative of due process. WHEREFORE, the Orders of the lower court dated January 17, 1978 and June 28, 1978 issuing the writ of possession on the basis of the market value appearing therein are annulled for having been issued in excess of jurisdiction. Let this case be remanded to the court of origin for further proceedings to determine the compensation the petitioners are entitled to be paid. No costs. SO ORDERED. Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin and Sarmiento, JJ., concur. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 77765 August 15, 1988 SEBASTIAN COSCULLUELA, petitioner, vs. THE HONORABLE COURT OF APPEALS and the REPUBLIC OF THE PHILIPPINES, represented by NATIONAL IRRIGATION ADMINISTRATION, respondents. Pio G. Villoso for petitioner.

GUTIERREZ, JR., J.: This is a petition for review on certiorari which seeks to set aside the decision of the Court of Appeals nullifying the orders of the trial court on the ground that said orders in

effect, sought the enforcement of a writ of execution against government funds. The petitioner contends that to set aside the writ of execution would be an abridgment of his right to just compensation and due process of law. The public respondents on the other hand, state that government funds cannot be disbursed without proper appropriation and that a writ of execution cannot legally issue against the State. On March 8, 1976, the Republic of the Philippines filed a complaint with the Court of First Instance of Iloilo to expropriate two parcels of land in the municipality of Barotac, Iloilo owned by petitioner Sebastian Cosculluela and one Mita Lumampao, for the construction of the canal network of the Barotac Irrigation Project. On April 4, 1976, the trial court rendered a decision granting the expropriation and ordered the public respondent to pay the following amounts:
1. To Mita Lumampao, the sum of P20,000 minus P4,001.82 which she had already withdrawn plus P3,000 attorney's fees; and 2. Sebastian Cosculluela, the sum of P200,000.00 which is the reasonable estimate of his actual and consequential loss by reason of the taking of his 3 hectares of land, destruction of the sugarcane therein and the reduce in the yield of his sugarcane farm due to water lagging and seepage; plus attorney's fees of P10,000 and litigation expenses of P5,000.00. (p. 36, Rollo)

On appeal, the Court of Appeals modified the trial court's decision in that the attorney's fees and litigation expenses were reduced from P10,000.00 and P5,000.00 to P5,000.00 and P2,500.00 respectively. The decision became final and executory on September 21, 1985. On May 7, 1986, on motion of the petitioner, the trial court ordered the issuance of a writ of execution to implement the judgment of the appellate court. On August 11, 1986, the respondent Republic filed a motion to set aside the order of May 7, 1986 as well as the writ of execution issued pursuant thereto, contending that the funds of the National Irrigation Authority (NIA) are government funds and therefore, cannot be disbursed without a government appropriation. On October 6, 1986, the lower court issued an order modifying its order of May 7, 1986, directing instead that the respondenit Republic deposit with the Philippine National Bank (PNB) in the name of the petitioner, the amount adjudged in favor of the latter. The respondent filed a petition with the Court of Appeals to annul the orders of May 7 and October 6, 1986. On November 25, 1986, the appellate court rendered the questioned decision setting aside the aforementioned orders of the trial court on the ground that public or government funds are not subject to levy and execution.

In this instant petition, the petitioner assails the decision of the appellate court as being violative of his right to just compensation and due process of law. He maintains that these constitutional guarantees transcend all administrative and procedural laws and jurisprudence for as between these said laws and the constitutional rights of private citizens, the latter must prevail. As admitted by the respondent Republic, the NIA took possession of the expropriated property in 1975 and for around ten (10) years already, it has been servicing the farmers on both sides of the Barotac Viejo Irrigation Project in Iloilo Province and has been collecting fees therefor by way of taxes at the expense of the petitioner. On the other hand, the petitioner, who is already more than eighty (80) years old and sickly, is undergoing frequent hospitalization, and is made to suffer further by the unconscionable delay in the payment of just compensation based on a final and executory judgment. The respondent Republic, on the other hand, argues that while it has no intention of keeping the land and dishonoring the judgment, the manner by which the same will have to be satisfied must not be inconsistent with prevailing jurisprudence, and that is, that public funds such as those of the respondent NIA cannot be disbursed without the proper appropriation. We rule for the petitioner. One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property without due process of law; and in expropriation cases, an essential element of due process is that there must be just compensation whenever private property is taken for public use. Thus, in the case of Province of Pangasinan v. CFI Judge of Pangasinan, Branch VIII (80 SCRA 117, 120-121), this Court speaking through then Chief Justice Fernando ruled:
There is full and ample recognition of the power of eminent domain by Justice Street in a leading case of Visayan Refining Co. v. Camus (4C) Phil. 550 [1919]) decided prior to the Commonwealth, the matter being governed by the Philippine Autonomy Act of 1916, otherwise known as the Jones Law. It was characterized as "inseparable from sovereignty being essential to the existence of the State and inherent in government even in its most primitive forms." (Ibid, 558) Nonetheless, he was careful to point out: "In other words, the provisions now generally found in the modern laws of constitutions of civilized countries to the effect that private property shall not be taken for public use without just compensation have their origin in the recognition of a necessity for restraining the sovereign and protecting the individual. (Ibid, 559) Moreover, he did emphasize: "Nevertheless it should be noted that the whole problem of expropriation is resolvable in its ultimate analysis into a constitutional question of due process of law. ... Even were there no organic or constitutional provision in force requiring compensation to be paid, the seizure of one's property without payment, even though intended for a public use, would undoubtedly be held to be a taking without due process of law and a denial of the equal protection of the laws. That aspect of the matter was stressed in the recent case of J. M. Tuason and Co., Inc. v. Land Tenure Administration. (31 SCRA 413) Conformably to such a fundamental principle then, in accordance with a constitutional mandate, this Court has never hesitated to assure that there be just compensation. If it were otherwise, the element of arbitrariness certainly would enter. It is bad enough that an owner of a property, in the event of the exercise of this sovereign prerogative, has no choice but to

yield to such a taking. It is infinitely worse if thereafter, he is denied all these years the payment to which he is entitled. This is one of the instances where law and morals speak to the same effect. (Cf. Province of Tayabas v. Perez, 66 Phil. 467 [1938] and other related cases).

The property of the petitioner was taken by the government in 1975. The following year, respondent NIA made the required deposit of P2,097.30 with the Philippine National Bank and within the same year, the Barotac Viejo Irrigation Project was finished. Since then, for more than a period of ten (10) years, the project has been of service to the farmers nearby in the province of Iloilo. It is, thus, inconceivable how this project could have been started without the necessary appropriation for just compensation. Needless to state, no government instrumentality, agency, or subdivision has any business initiating expropriation proceedings unless it has adequate funds, supported by proper appropriation acts, to pay for the property to be seized from the owner. Not only was the government able to make an initial deposit of P2,097.30 but the project was finished in only a year's time. We agree with the petitioner that before the respondent NIA undertook the construction of the Barotac Viejo Irrigation Project, the same was duly authorized, with the corresponding funds appropriated for the payment of expropriated land and to pay for equipment, salaries of personnel, and other expenses incidental to the project. The NIA officials responsible for the project have to do plenty of explaining as to where they misdirected the funds intended for the expropriated property. The present case must be distinguished from earlier cases where payment for property expropriated by the National Government may not be realized upon execution. As a rule, the legislature must first appropriate the additional amount to pay the award. (See Commissioner of Public Highways v. San Diego, 31 SCRA 616 and Visayan Refining Co. v. Camus & Paredes, 40 Phil. 550). In the present case, the Barotac Viejo Project was a package project of government. Money was allocated for an entire project. Before bulldozers and ditch diggers tore up the place and before millions of pesos were put into the development of the project, the basic responsibility of paying the owners for property seized from them should have been met. Another distinction lies in the fact that the NIA collects fees for the use of the irrigation system constructed on the petitioner's land. It does not have to await an express act of Congress to locate funds for this specific purpose. The rule in earlier precedents that the functions and public services rendered by the state cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects (Commissioner of Public Highways v. San Diego, supra, at p. 625) is not applicable here. There is no showing of any public service to be disrupted if the fees collected from the farmers of Iloilo for the use of irrigation water from the disrupted property were utilized to pay for that property. We must emphasize that nowhere in any expropriation case has there been a deviation from the rule that the Government must pay for expropriated property. In the Commissioner of Public Highways case, the Court stressed that it is incumbent upon

the legislature to appropriate the necessary amount because it cannot keep the land and dishonor the judgment. This case illustrates the expanded meaning of "public use" in the eminent domain clause. (Constitution, Article III, Section 9.) The petitioner's land was not taken for the construction of a road, bridge, school, public buildings, or other traditional objects of expropriation. When the National Housing Authority expropriates raw land to convert into housing projects for rent or sale to private persons or the NIA expropriates land to construct irrigation systems and sells water rights to farmers, it would be the height of abuse and ignominy for the agencies to start earning from those properties while ignoring final judgments ordering the payment of just compensation to the former owners. Just compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. Thus, in the case of Provincial Government of Sorsogon v. Rosa E. Vda. de Villaroyo (153 SCRA 291), we ruled:
The petitioners have been waiting for more than thirty years to be paid for their land which was taken for use as a public high school. As a matter of fair procedure, it is the duty of the Government whenever it takes property from private persons against their will to supply all required documentation and facilitate payment of just compensation. The imposition of unreasonable requirements and vexatious delays before effecting payment is not only galling and arbitrary but a rich source of discontent with government. There should be some kind of swift and effective recourse against unfeeling and uncaring acts of middle or lower level bureaucrats. Under ordinary circumstances, immediate return to the owners of the unpaid property is the obvious remedy. ln cases where land is taken for public use, public interest, however, must, be considered. The children of Gubat, Sorsogon have been using the disputed land as their high school athletic grounds for thirty years. (Emphasis supplied) In the present case, the irrigation project was completed and has been in operation since 1976. The project is benefitting the farmers specifically and the community in general. Obviously, the petitioner's 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 person's 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.

WHEREFORE, the petition is hereby GRANTED. The decision and order of the respondent appellate court dated November 25, 1987 and February 16, 1987 respectively are ANNULLED and SET ASIDE. The Regional Trial Court of Iloilo City is ordered to immediately execute the final judgment in Civil Case No. 10530 and effect payment of P200,000.00 as just compensation deducting therefrom the partial payment

already deposited by the respondent at the institution of the action below with legal interest from September 21, 1985, plus P5,000.00 attorney's fees and P2,500.00 litigation expenses. SO ORDERED. Fernan, C.J., Feliciano, Bidin and Cortes, JJ., concur.