XI.
EMINENT DOMAIN
A. GENERAL CONSIDERATIONS
1. MANOTOK REALTY, INC. AND MANOTOK
ESTATE CORPORATION, VS. CLT REALTY
DEVELOPMENT CORPORATION, G.R. NO.
123346
FACTS:
On 10 August 1992, CLT Realty Development
Corporation (CLT) sought to recover from Manotok
Realty, Inc. and Manotok Estate Corporation
(Manotoks) the possession of Lot 26 of the Maysilo
Estate in an action filed before the Regional
TrialCourt of Caloocan City, Branch 129. CLTs claim
was anchored on Transfer Certificate of Title (TCT)
No. T-177013 issued in its name by the Caloocan City
Register of Deeds, which title in turn was derived
from Estelita Hipolito (Hipolito) by virtue of a Deed
of Sale with Real Estate Mortgage dated 10 December
1988. Hipolitos title emanated from Jose Dimsons
(Dimson) TCT No. R-15169, a title issued pursuant
to an order of the Court of First Instance (CFI) of
Caloocan City, Branch 33. Dimsons title appears to
have been sourced from OCT No. 994.
For their part, the Manotoks challenged the validity
of the title relied on by CLT, claiming that Dimsons
title, the proximate source of CLTs title, was
irregularly issued and, hence, the same and
subsequent titles flowing therefrom are likewise void.
The Manotoks asserted their ownership over Lot 26
and claimed that they derived it from several
awardees and/or vendees of the National Housing
Authority. The Manotok title likewise traced as its
primary source OCT No. 994 which, on 9 September
1918, was transferred to Alejandro Ruiz and Mariano
Leuterio who had previously acquired the property on
21 August 1918 by virtue of an Escritura de Venta
executed by Don Tomas Arguelles and Don Enrique
Llopis. On 3 March 1920, Ruiz and Leuterio sold the
property to Francisco Gonzalez who held title thereto
until 22 August 1938 when the property was
transferred to Jose Leon Gonzalez, Consuelo Susana
Gonzalez, Juana Francisca Gonzalez, Maria Clara
Gonzalez, Francisco Felipe Gonzalez and
Concepcion Maria Gonzalez under TCT No. 35486.
The lot was then, per annotation dated 21 November
1946, subdivided into seven (7) parcels each in the
name of each of the Gonzalezes.
The trial court, ruling for CLT, adopted the factual
findings and conclusions arrived at by the majority
commissioners appointed to resolve the conflict of
titles. It was established that the entire Maysilo Estate
was registered under Act No. 496 by virtue of which
OCT No. 994 was issued by the Register of Deeds of
Rizal; that Lot 26 was transferred to CLT by Hipolito
whose title was derived from the Dimson title and that
on the basis of the technical descriptions of the
property appearing in the Manotok titles, the latters
property indeed encroached on the property described
in CLTs title.
The Manotoks appealed to the Court of Appeals,
which affirmed the decision of the trial court. Their
motion for reconsideration having been denied, they
filed a petition for review with the Supreme Court,
ascribing error to the appellate court in upholding the
trial courts decision which decided the case on the
basis of the majority commissioners report and
overlooked relevant facts in the minority
commissioners report.
ISSUE:
Whether the titles issued in the name of Dimson and
of CLT are valid.
RULING:
YES. Nonetheless, the Court proceeded to
discuss the absence of merit in the petitions. First,
particularly with respect to G.R. No. 123346, the
Court upheld the validity of the trial courts adoption
of the commissioners majority report as part of the
decision inasmuch as the same is allowed by Section
11, Rule 32 of the Rules of Court and that a case of
overlapping titles absolutely necessitates the
assistance of experts in the field of geodetic
engineering who, on account of their experience and
expertise, are in a better position to determine which
of the contending titles is valid. For this reason, the
Court emphasized, the trial court may wellrely on
their findings and conclusions. Second, the Court
pointed out that the titles of respondents in all three
cases were derived from OCT No. 994 of the Registry
of Deeds of Caloocan City registered on 19 April
1917. However, because the validity of said mother
title was upheld by the Court itself in MWSS and
reiterated in Heirs of Gonzaga, the Court chose not to
delve anymore into the correctness of the said
1
decisions which had already attained finality and The taking to be valid must be for public use. Before
immutability. the requirement is 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
2. HEIRS OF JUANCHO ARDONA V. HON. case of streets or parks. Otherwise, expropriation is
JUAN Y. REYES, EXECUTIVE JUDGE AND not allowable. It is not any more. As long as the
PRESIDING JUDGE OF BRANCH I, COURT purpose of the taking is public, then the power of
OF FIRST INSTANCE OF CEBU, AND THE eminent domain comes into play. It is accurate to state
PHILIPPINE TOURISM AUTHORITY then that at present whatever may be beneficially
employed for the general welfare satisfies the
G.R. Nos. L-60549, 60553 to 60555, October 26, requirement of public use.
1983, Gutierrez, Jr., J.
As long as the purpose of the taking is public, then the
power of eminent domain comes into play. Whatever
may be beneficially employed for the general welfare
satisfies the requirement of public use.
FACTS:
Philippine Tourism Authority filed 4 complaints with
the CFI of Cebu City for the expropriation of some
282 hectares of rolling land situated in barangays
Malubog and Babag, Cebu City for purposes of
developing into integrated resort complexes of
selected and well- defined geographic areas with
potential tourism value. A sports complex will be
constructed on the said area. The development plan
also includes the establishment of electric power grid,
deep wells, and complex sewerage and drainage
system for the benefit of the community and the
tourists. Complimentary and support facilities for the
project will also be constructed ill create and offer
employment opportunities to residents of the
community and further generate income for the whole
of Cebu City.
Petitioners challenged that the taking is not for public
use under the Constitution for there is no specific
constitutional provision authorizing the taking of
private property for tourism purposes; hence,
unconstitutional.
ISSUE:
Whether the public use requirement under the power
of eminent domain is satisfied.
RULING:
YES. The concept of public use is not limited to
traditional purposes. Here as elsewhere the idea that
public use is strictly limited to clear cases of use by
the public has been discarded.
2
B. TAKING
3. REPUBLIC VS. VDA. DE CASTELLVI
FACTS:
In 1947, the republic, through the Armed Forces of
the Philippines (AFP), entered into a lease agreement
over a land in Pampanga with Castellvi on a year-to-
year basis. When Castellvi gave notice to terminate
the lease in 1956, the AFP refused because of the
permanent installations and other facilities worth
almost P500,000.00 that were erected and already
established on the property. She then instituted an
ejectment proceeding against the AFP. In 1959,
however, the republic commenced the expropriation
proceedings for the land in question.
ISSUE: Whether or not the compensation should be
determined as of 1947 or 1959.
RULING:
The Supreme Court ruled that the taking should not
be reckoned as of 1947, and that just compensation
should not be determined on the basis of the value of
the property that year .
The requisites for taking are:
1. The expropriator must enter a private property;
2. The entry must be for more than a momentary
period;
3. It must be under warrant or color of authorities;
4. The property must be devoted for public use or
otherwise informally appropriated or injuriously
affected; and
5. The utilization of the property for public use must
be such a way as to oust the owner and deprive him
of beneficial enjoyment of the property.
Only requisites 1, 3 and 4 are present. It is clear,
therefore, that the “taking” of Castellvi’s property for
purposes of eminent domain cannot be considered to
have taken place in 1947 when the republic
commenced to occupy the property as lessee thereof.
Requisite number 2 is not present according to the
Supreme Court, “momentary” when applied to
possession or occupancy of real property should be
construed to mean “a limited period” -- not indefinite
or permanent. The aforecited lease contract was for a
period of one year, renewable from year to year. The
entry on the property, under the lease, is temporary,
and considered transitory. The fact that the Republic,
through AFP, constructed some installations of a
permanent nature does not alter the fact that the entry
into the land was transitory, or intended to last a year,
although renewable from year to year by consent of
the owner of the land. By express provision of the
lease agreement the republic, as lessee, undertook to
return the premises in substantially the same
condition as at the time the property was first
occupied by the AFP. It is claimed that the intention
of the lessee was to occupy the land permanently, as
may be inferred from the construction of permanent
improvements. But this “intention” cannot prevail
over the clear and express terms of the lease contract.
The 5th requirement is also lacking. In the instant case
the entry of the Republic into the property and its
utilization of the same for public use did not oust
Castellvi and deprive her of all beneficial enjoyment
of the property. Cstellvi remained as owner, and was
continuously recognized as owner by the Republic, as
shown by the renewal of the lease contract from year
to year, and by the provision in the lease contract
whereby the Republic undertook to return the
property to Castellvi when the lease was terminated.
Neither was Castellvi deprived of all the beneficial
enjoyment of the property, because the Republic was
bound to pay, and had been paing, Castellvi the
agreed monthly rentals until the time when it filed the
complaint for eminent domain on June 26, 1959.
It is clear, therefore, that the “taking” of Castellvi’s
property for purposes of eminent domain cannot be
considered to have taken place in 1947 when the
Republic commenced to occupy the property as lessee
thereof, and that the just compensation to be paid for
the Castellvi’s property should not be determined on
the basis of the value of the property as of that year.
The lower court did not commit an error when it held
that the “taking” of the property under expropriation
commenced with the filing of the complaint in this
case.
Under Sec. 4, Rule 67 of the Rules of Court, “just
compensation” is to be determined as of the date of
the filing of the complaint. The Supreme Court has
ruled that when the taking of the property sought to
be expropriated coincides with the commencement of
the expropriation proceedings, or takes place
subsequent to the filing of the complaint for eminent
3
domain, the just compensation should be determined as this was the only time that the agricultural lands of
as of the date of the filing of the complaint. Hacienda Luisita were placed under compulsory
acquisition in view of its failure to perform certain
obligations under the SDP.
4. HACIENDA LUISITA V. PRESIDENTIAL
ISSUE:
AGRARIAN REFORM COUNCIL
Whether the Court erred in ruling that the time of
G.R. No. 171101, April 24, 2012, Velasco, Jr., J. “taking” was on November 21, 1989 and not January
“Taking” does not only take place upon the issuance 2, 2006.
of title either in the name of the Republic or the
RULING:
beneficiaries of the Comprehensive Agrarian Reform
Program (CARP). “Taking” also occurs when NO. In Land Bank of the Philippines v. Livioco, 631
agricultural lands are voluntarily offered by a SCRA 86 (2010), the Court held that the ‘time of
landowner and approved by PARC for CARP taking’ is the time when the landowner was deprived
coverage through the stock distribution scheme. of the use and benefit of his property, such as when
title is transferred to the Republic. It should be noted,
FACTS: however, that “taking” does not only take place upon
In its July 5, 2011 Decision, the Supreme Court the issuance of title either in the name of the Republic
denied the petition for review filed by Hacienda or the beneficiaries of the Comprehensive Agrarian
Luisita Inc. (HLI) and affirmed the assailed Reform Program (CARP). “Taking” also occurs when
Presidential Agrarian Reform Council (PARC) agricultural lands are voluntarily offered by a
Resolutions with the modification that the original landowner and approved by PARC for CARP
6,296 qualified farmworker-beneficiaries of coverage through the stock distribution scheme, as in
Hacienda Luisita (FWBs) shall have the option to the instant case. Thus, HLI’s submitting its SDP for
remain as stockholders of HLI. approval is an acknowledgment on its part that the
agricultural lands of Hacienda Luisita are covered by
Upon separate motions of the parties for CARP. However, it was the PARC approval which
reconsideration, the Court, by Resolution dated should be considered as the effective date of “taking”
November 22, 2011, recalled and set aside the option as it was only during this time that the government
thus granted to the original FWBs to remain as officially confirmed the CARP coverage of these
stockholders of HLI, while maintaining that all the lands.
benefits and homelots received by all the FWBs shall
be respected with no obligation to refund or return
them. HLI filed a Motion to Clarify and Reconsider
Resolution of November 22, 2011 dated December
16, 2011 contending among others, that since the
Stock Distribution Plan (SDP) is a modality which the
agrarian reform law gives the landowner as
alternative to compulsory coverage, then the FWBs
cannot be considered as owners and possessors of the
agricultural lands of Hacienda Luisita at the time the
SDP was approved by PARC on November 21, 1989.
It further claims that the approval of the SDP is not
akin to a Notice of Coverage in compulsory coverage
situations because stock distribution option and
compulsory acquisition are two (2) different
modalities with independent and separate rules and
mechanisms. Concomitantly, HLI maintains that the
Notice of Coverage issued on January 2, 2006 may,
at the very least, be considered as the date of taking

4
C. TAKING AND QUESTIONS OF NECESSITY
5. CITY OF MANILA VS. CHINESE
COMMUNITY OF MANILA
FACTS: Petitioner (City of Manila) filed a petition
praying that certain lands be expropriated for the
purpose of constructing a public improvement
namely, the extension of Rizal Avenue, Manila and
claiming that such expropriation was necessary.
Herein defendants, on the other hand, alleged (a) that
no necessity existed for said expropriation and (b) that
the land in question was a cemetery, which had been
used as such for many years, and was covered with
sepulchres and monuments, and that the same should
not be converted into a street for public purposes.
The lower court ruled that there was no necessity for
the expropriation of the particular strip of land in
question.
Petitioner therefore assails the decision of the lower
court claiming that it (petitioner) has the authority to
expropriate any land it may desire; that the only
function of the court in such proceedings is to
ascertain the value of the land in question; that neither
the court nor the owners of the land can inquire into
the advisable purpose of the expropriation or ask any
questions concerning the necessities therefor; that the
courts are mere appraisers of the land involved in
expropriation proceedings, and, when the value of the
land is fixed by the method adopted by the law, to
render a judgment in favor of the defendant for its
value.
ISSUE: W/N the courts may inquire into and hear
proof upon the necessity of the expropriation?
HELD: Yes. The very foundation of the right to
exercise eminent domain is a genuine necessity, and
that necessity must be of a public character. The
ascertainment of the necessity must precede or
accompany, and not follow, the taking of the
land. (Morrison vs. Indianapolis, etc. Ry. Co., 166
Ind., 511; Stearns vs. Barre, 73 Vt., 281; Wheeling,
etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72 Ohio St.,
368.)
The general power to exercise the right of eminent
domain must not be confused with the right to
exercise it in a particular case. The power of the
legislature to confer, upon municipal corporations
and other entities within the State, general authority
to exercise the right of eminent domain cannot be
questioned by the courts, but that general authority of
municipalities or entities must not be confused with
the right to exercise it in particular instances. The
moment the municipal corporation or entity attempts
to exercise the authority conferred, it must comply
with the conditions accompanying the authority. The
necessity for conferring the authority upon a
municipal corporation to exercise the right of eminent
domain is admittedly within the power of the
legislature. But whether or not the municipal
corporation or entity is exercising the right in a
particular case under the conditions imposed by the
general authority, is a question which the courts have
the right to inquire into.
The conflict in the authorities upon the question
whether the necessity for the exercise of the right of
eminent domain is purely legislative and not
judicial, arises generally in the wisdom and propriety
of the legislature in authorizing the exercise of the
right of eminent domain instead of in the question of
the right to exercise it in a particular case. (Creston
Waterworks Co. vs. McGrath, 89 Iowa, 502.)
By the weight of authorities, the courts have the
power of restricting the exercise of eminent domain
to the actual reasonable necessities of the case and for
the purposes designated by the law.
(Fairchild vs. City of St. Paul. 48 Minn., 540.)
6. DE KNECHI VS. BAUTISTA
FACTS:
The petitioner alleges that than ten (10) years ago, the
government through the Department of Public
Workmen's and Communication (now MPH)
prepared a extension to Epifanio de los Santos
Avenue (EDSA) to Roxas Boulevard; that the
proposed extension, an adjunct of building program,
the Manila — Cavite Coastal Read Project, would
pass through Cuneta Avenue up to Roxas Boulevard
that this route would be a straight one taking into
account the direction of EDSA.
That shortly thereafter the Department of Public
Highways decided to make the proposed extension go
through Fernando Rein and Del Pan Streets which are
lined with old substantial houses; that upon learning
of the changed the owners of the residential houses
5
that would be affected, the herein petitioner being one
of them, filed on April 15, 1977 a formal petition to
President Ferdinand E. Marcos asking him to order
the Ministry of Public Highways to adoption, the
original plan of making the extension of EDSA
through Araneta Avenue instead of the new plan
going through Fernando Rein and Del Pan Streets.
that the President then referred the matter to the
Human Settlements Commission for investigation
and recommendation
the Settlements Commission submitted a report
recommending the reversion of the extension of
EDSA to the original plan passing through Cuneta
Avenue;
and that notwithstanding the said report and
recommendation, the Ministry of Public Highways
insisted on implementing the plan to make the
extension of EDSA go through Fernando Rein and
Del Pan Streets. 2
In February 1979, the government filed in the Court
of First Instance of Rizal, Branch III, Pascual City
presided by the respondent Judge, a complaint for
expropriation against the owners of the houses
standing along Fernando Rein and Del Pan Streets,
among them the herein petitioner. The complaint was
docketed as Civil Case No. 7001-P and
entitled "Republic of the Philippines vs. Concepcion
Cabarrus Vda. de Santos, etc.
"In June 1979 the Republic of the Philippines filed a
motion for the issuance of a writ of possession of the
property sought to be expropriated on the ground that
said Republic had made the required deposit with the
Philippine National Bank.
The respondent judge issued a writ of possession
dated June 14, 1979 authorizing the Republic of the
Philippines to take and enter upon the possession of
the properties sought be condemned. 3
The petitioner contends that "Respondent court
lacked or exceeded its jurisdiction or gravely abused
its discretion in issuing the order to take over and
enter upon the possession of the properties sought to
be expropriated-petitioner having raised a
constitutional question which respondent court must
resolve before it can issue an order to take or enter
upon the possession of properties sought to be
expropriated." 4
ISSUE
WON the respondent court lacked or exceeded its
jurisdiction or gravely abused its discretion in issuing
the order to take over and enter upon the possession
of the properties sought to be expropriated.
WON there is a genuine need to expropriate the
properties owned by De knecht and others.
RULING
In the same case the Supreme Court concluded:
There is no question as to the right of the Republic of
the Philippines to take private property for public use
upon the payment of just compensation. Section 2,
Article IV of the Constitution of the Philippines
provides: "Private property shall not be taken for
public use without just compensation."
It is recognized, was, that the government may not
capriciously or arbitrarily' choose what private
property should be taken. In J. M. Tuazon & Co., Inc.
vs. Land Tenure administration 31 SCRA, 413, 433,
the Supreme Court said:
With due recognition then of the power of Congress
to designate the particular property to be taken and
how much thereof may be condemned in the exercise
of the power of expropriation, it is still a judicial
question whether in the exercise of such competence,
the party adversely affected is the victim of partiality
and prejudice. That the equal protection clause will
not allow. (p. 436)
In the instant case, it is a fact that the Department of
Public Highways originally establish the extension of
EDSA along Cuneta Avenue. It is to be presumed that
the Department of Public Highways made studies
before deciding on Cuneta Avenue. It is indeed odd
why suddenly the proposed extension of EDSA to
Roxas Boulevard was changed to go through
Fernando Rein-Del Pan Streets which the Solicitor
General con- cedes "... the Del Pan — Fernando Rein
Streets line follows northward and inward direction.
While admit "that both lines, Cuneta Avenue and Del
Pan — Fernando Rein Streets lines, meet
satisfactorily planning and design criteria and
therefore are both acceptable ... the Solicitor General
justifies the change to Del Pan — Fernando Rein
Streets on the ground that the government "wanted to
the social impact factor or problem involved." 8
6
It is doubtful whether the extension of EDSA along
Cuneta Avenue can be objected to on the ground of
social impact. The improvements and buildings along
Cuneta Avenue to be affected by the extension are
mostly motels. Even granting, arguendo, that more
people be affected, the Human Setlements
Commission has suggested coordinative efforts of
said Commission with the National Housing
Authority and other government agencies in the
relocation and resettlement of those adversely
affected. 9
The course of the decision in this case consequently
boils down to the soul-searching and heart-rending
choice between people on one hand and progress and
development on the other. In deciding in favor of the
latter, the Hearing Board is not unmindful that
progress and development are carried out by the State
precisely and ultimately for the benefit of its people
and therefore, recommends the reverend of the
extension project to alignment 1.
From all the foregoing, the facts of record and
recommendations of the Human Settlements
Commission, it is clear that the choice of Fernando
Rein — Del Pan Streets as the line through which the
Epifanio de los Santos Avenue should be extended to
Roxas Boulevard is arbitrary and should not receive
judicial approval. The respondent judge committed a
grave abuse of discretion in allowing the Republic of
the Philippines to take immediate possession of the
properties sought to be expropriated.
7. REPUBLIC VS. DE KNECHI
FACTS
The issue posed in this case is whether an
expropriation proceeding that was determined by a
final judgment of this Court may be the subject of a
subsequent legislation for expropriation.
On August 8, 1981 defendants Maria Del Carmen
Roxas Vda. de Elizalde, Francisco Elizalde and
Antonio Roxas moved to dismiss the expropriation
action in compliance with the dispositive portion of
the aforesaid decision of this Court which had become
final and in order to avoid further damage to same
defendants who were denied possession of their
properties. The Republic filed a manifestation on
September 7, 1981 stating, among others, that it had
no objection to the said motion to dismiss as it was in
accordance with the aforestated decision.
On September 2, 1983, the Republic filed a motion to
dismiss said case due to the enactment of the Batas
Pambansa Blg. 340 expropriating the same properties
and for the same purpose. The lower court in an order
of September 2, 1983 dismissed the case by reason of
the enactment of the said law. The motion for
reconsideration thereof was denied in the order of the
lower court dated December 18, 1986.
De Knecht appealed from said order to the Court of
Appeals wherein in due course a decision was
rendered, dismissing the expropriation proceedings
(Civil Case No. 51078) before the lower court on the
ground that the choice of Fernando Rein-Del Pan
Streets as the line through which the Epifanio de los
Santos Avenue should be extended is arbitrary and
should not receive judicial approval.
I
WHETHER OR NOT THE ENACTMENT OF
BATAS PAMBANSA BLG. 340 IS THE PROPER
GROUND FOR THE DISMISSAL OF THE
EXPROPRIATION CASE. (PROPERLY PUT,
WHETHER OR NOT THE LOWER COURT
COMMITTED GRAVE ABUSE OF DIS CRETION
IN DISMISSING CIVIL CASE NO. 7001-P UPON
JUDICIAL NOTICE OF B.P. BLG. 340).
II
WHETHER OR NOT THE DPWH'S "CHOICE" OF
LAND TO BE EXPROPRIATED IS STILL AN
ISSUE UNDER THE CIRCUMSTANCES, SAID
"CHOICE" HAVING BEEN SUPPLANTED BY
THE LEGISLATURE'S CHOICE.
III
WHETHER OR NOT THE LAW OF THE CASE
THEORY SHOULD BE APPLIED TO THE CASE
AT BAR.
HELD
There is no question that in the decision of this Court
dated October 30, 1980 in De Knecht vs.
Bautista, G.R. No. L-51078, this Court held that the
"choice of the Fernando Rein-Del Pan streets as the
line through which the EDSA should be extended to
Roxas Boulevard is arbitrary and should not receive
7
judicial approval." 5 It is based on the as the solitary obstacle to this project that will solve
recommendation of the Human Settlements not only the drainage and flood control problem but
Commission that the choice of Cuneta street as the also minimize the traffic bottleneck in the area.
line of the extension will minimize the social impact
The Court finds justification in proceeding with the
factor as the buildings and improvement therein are
said expropriation proceedings through the Fernando
mostly motels. 6
Rein-Del Pan streets from ESDA to Roxas Boulevard
Said decision having become final no action was due B.P. Blg. 340 therefore effectively superseded the
taken by the lower court on the said directive of this aforesaid final and executory decision of this Court.
Court to dismiss the case. Subsequently B.P. Blg. 340 And the trial court committed no grave abuse of
was enacted by the Batasang Pambansa on February discretion in dismissing the case pending before it on
17, 1983. On the basis of said law petitioner filed a the ground of the enactment of B.P. Blg. 340.
motion to dismiss the case before the trial court and
Moreover, the said decision, is no obstacle to the
this was granted.
legislative arm of the Government in thereafter (over
On appeal by de Knecht to the Court of Appeals the two years later in this case) making its own
appellate court held that the decision of the Supreme independent assessment of the circumstances then
Court having become final, the petitioner's right as prevailing as to the propriety of undertaking the
determined therein should no longer be disturbed and expropriation of the properties in question and
that the same has become the law of the case between thereafter by enacting the corresponding legislation
the parties involved. Thus, the appellate court set as it did in this case. The Court agrees in the wisdom
aside the questioned order of the trial court and issued and necessity of enacting B.P. Blg. 340. Thus the
another order dismissing the expropriation anterior decision of this Court must yield to this
proceedings before the lower court pursuant to the subsequent legislative flat.
ruling in De Knecht case.
While it is true that said final judgment of this Court
on the subject becomes the law of the case between
the parties, it is equally true that the right of the
petitioner to take private properties for public use
upon the payment of the just compensation is so
provided in the Constitution and our laws. 7 Such
expropriation proceedings may be undertaken by the
petitioner not only by voluntary negotiation with the
land owners but also by taking appropriate court
action or by legislation. 8
When on February 17, 1983 the Batasang Pambansa
passed B.P. Blg. 340 expropriating the very
properties subject of the present proceedings, and for
the same purpose, it appears that it was based on
supervening events that occurred after the decision of
this Court was rendered in De Knecht in 1980
justifying the expropriation through the Fernando
Rein-Del Pan Streets.
The social impact factor which persuaded the Court
to consider this extension to be arbitrary had
disappeared. All residents in the area have been
relocated and duly compensated. Eighty percent of
the EDSA outfall and 30% of the EDSA extension
had been completed. Only private respondent remains

8
D. JUST COMPENSATION
8. EXPORT PROCESSING ZONE AUTHORITY
v. HON. CEFERINO E. DULAY
G.R. No. L-59603, April 29, 1987, Gutierrez, Jr., J.
The determination of "just compensation" in eminent
domain cases is a judicial function.
FACTS:
The Export Processing Zone Authority (EPZA) filed
a complaint for expropriation against San Antonio
Development Corporation (San Antonio) to
expropriate 4 parcels of land owned and registered in
the name of San Antonio pursuant to P.D. No. 66 in
relation to Proclamation No. 1811, for the purpose of
establishing the Mactan Export Processing Zone. The
respondent judge issued an order declaring the
petitioner as having the lawful right to take the
properties sought to be condemned, upon the payment
of just compensation to be determined as of the filing
of the complaint. He also issued a second order
appointing certain persons as commissioners to
ascertain and report to the court the just compensation
for the properties sought to be expropriated.
Petitioner contended that under Section 1 of P.D. No.
1533, which is the applicable law herein, the basis of
just compensation shall be the fair and current market
value declared by the owner of the property sought to
be expropriated or such market value as determined
by the assessor, whichever is lower. Hence, there is
no more need to appoint commissioners as prescribed
by Rule 67 of the Revised Rules of Court.
ISSUE:
Whether the court has the power to appoint
commissioners to determine just compensation in
expropriation cases.
RULING:
YES. The method of ascertaining just compensation
under the aforecited decree constitutes impermissible
encroachment on judicial prerogatives. It tends to
render the Court inutile in a matter which under the
Constitution is reserved to it for final determination.
The determination of "just compensation" in eminent
domain cases is a judicial function. The executive
department or the legislature may make the initial
determinations but when a party claims a violation of
the guarantee in the Bill of Rights that private
property may not be taken for public use without just
compensation, no statute, decree, or executive order
can mandate that its own determination shall prevail
over the court's findings. Much less can the courts be
precluded from looking into the "just-ness" of the
decreed compensation.
9. NATIONAL POWER CORPORATION VS.
ZABALA
FACTS:
On October 27, 1994, plaintiff-appellant National
Power Corporation (Napocor) filed a complaint for
Eminent Domain against defendants-appellees Sps.
R. Zabala & L. Baylon, before the RTC, Balanga
City, Bataan alleging that Spouses Zabala and Baylon
own parcels of land located in Balanga City, Bataan
and that it urgently needed an easement of right of
way over the affected areas for its 230 KV Limay-
Hermosa Transmission Lines. The Commissioners
submitted their Report/ Recommendation fixing the
just compensation at P150.00 per square meter.
Napocor prayed that the report be recommitted to the
commissioners for the modification of the report and
the substantiation of the same with reliable and
competent documentary evidence based on the value
of the property at the time of its taking. The
Commissioners submitted their Final Report fixing
the just compensation at P500.00 per square meter.
On June 28, 2004, the RTC rendered its Partial
Decision and ordered Napocor to pay Php150.00 per
square meter for the 6,820 square meters determined
as of the date of the taking of the property.
Napocor appealed to the CA arguing that the
Commissioners reports are not supported by
documentary evidence. Napocor argued that the RTC
did not apply Section 3A of R.A. No. 6395 which
limits its liability to easement fee of not more than
10% of the market value of the property traversed by
its transmission lines. CA affirmed the RTCs Partial
Decision.
ISSUE:
Whether or not the RTC erred in fixing the amount of
Php150.00 per square meter as the fair market value
of the property subject of the easement right of way
9
of Napocor?
RULING:
The petition is partially meritorious.
Sec. 3A of RA No. 6395 cannot restrict the
constitutional power of the courts to determine just
compensation. The payment of just compensation for
private property taken for public use is guaranteed no
less by our Constitution and is included in the Bill of
Rights. As such, no legislative enactments or
executive issuances can prevent the courts from
determining whether the right of the property owners
to just compensation has been violated. It is a judicial
function that cannot be usurped by any other branch
or official of the government. Statutes and executive
issuances fixing or providing for the method of
computing just compensation are not binding on
courts and, at best, are treated as mere guidelines in
ascertaining the amount thereof.
The Supreme Court has held in a long line of cases
that since the high- tension electric current passing
through the transmission lines will perpetually
deprive the property owners of the normal use of their
land, it is only just and proper to require Napocor to
recompense them for the full market value of their
property.
The just compensation of P150.00 per square meter
as fixed by the RTC is not supported by evidence. Just
compensation cannot be arrived at arbitrarily. Several
factors must be considered, such as, but not limited
to, acquisition cost, current market value of like
properties, tax value of the condemned property, its
size, shape, and location. But before these factors can
be considered and given weight, the same must be
supported by documentary evidence.
Under Section 8, Rule 67 of the Rules of Court, the
trial court may accept or reject, whether in whole or
in part, the commissioners report which is merely
advisory and recommendatory in character. It may
also recommit the report or set aside the same and
appoint new commissioners. In this case, however, in
spite of the insufficient and flawed reports of the
Commissioners and Napocors objections thereto, the
RTC eventually adopted the same. It shrugged off
Napocors protestations and limited itself to the
reports submitted by the Commissioners.
Lastly, it should be borne in mind that just
compensation should be computed based on the fair
value of the subject property at the time of its taking
or the filing of the complaint, whichever came first.
Since in this case the filing of the eminent domain
case came ahead of the taking, just compensation
should be based on the fair market value of spouses
Zabalas property at the time of the filing of Napocors
Complaint on October 27, 1994 or thereabouts.
10. REPUBLIC VS. GINGOYON
FACTS:
This case is a motion for reconsideration for a
previous decision of the SC. In the assailed decision
of the SC, it ruled that PIATCO should be justly
compensated before the Government can take over
the NAIA Terminal 3. Now, the Government is
arguing that PIATCO should not be paid because it
has pending obligations with
Takenaka Corporation (Takenaka)
and Asahikosan (Asahikosan) Corporation for
services rendered by the said corporations in building
the Terminal. It argues that the said corporations still
has pending liens on the Terminal. The situation the
Republic now faces is that if any part of its
Php3,002,125,000 deposit is released directly to
PIATCO, and PIATCO, as in the past, does not wish
to settle its obligations directly
to Takenaka, Asahikosan and Fraport, the Republic
may end up having expropriated a terminal with liens
and claims far in excess of its actual value, the liens
remain unextinguished, and PIATCO on the other
hand, ends up with the Php3,0002,125,000 in its
pockets gratuitously.
ISSUE:
Should the Government pay PIATCO just
compensation before taking over the Terminal?
HELD:
Yes.
The Court is wont to reverse its previous rulings
based on factual premises that are not yet conclusive
or judicially established. Certainly, whatever claims
or purported liens Takenaka and Asahikosan against
10
PIATCO or over the NAIA 3 have not been judicially
established. Neither Takenaka norAsahikosan are
parties to the present action, and thus have not
presented any claim which could be acted upon by
this Court. The earlier adjudications in Aganv.
PIATCO made no mention of
either Takenaka or Asahikosan, and certainly made
no declaration as to their rights to any form of
compensation. If there is indeed any right to
remuneration due to these two entities arising from
NAIA 3, they have not yet been established by the
courts of the land.
It must be emphasized that the conclusive ruling in
the Resolution dated 21 January 2004 in Agan v.
PIATCO (Agan 2004) is that PIATCO, as builder of
the facilities, must first be justly compensated in
accordance with law and equity for the Government
to take over the facilities. It is on that premise that the
Court adjudicated this case in its 19 December
2005 Decision.
While the Government refers to a judgment rendered
by a London court in favor
of Takenaka and Asahikosan against PIATCO in the
amount of US$82 Million, it should be noted that this
foreign judgment is not yet binding on Philippine
courts. It is entrenched in Section 48, Rule 39 of the
Rules of Civil Procedure that a foreign judgment on
the mere strength of its promulgation is not yet
conclusive, as it can be annulled on the grounds of
want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact. It is
likewise recognized in Philippine jurisprudence and
international law that a foreign judgment may be
barred from recognition if it runs counter to public
policy.
Assuming that PIATCO indeed has corresponding
obligations to other parties relating to NAIA 3, the
Court does not see how such obligations, yet
unproven, could serve to overturn the Decision
mandating that the Government first pay PIATCO the
amount of 3.02 Billion Pesos before it may acquire
physical possession over the facilities. This directive
enjoining payment is in accordance with Republic
Act No. 8974, and under the mechanism established
by the law the amount to be initially paid is that which
is provisionally determined as just compensation. The
provisional character of this payment means that it is
not yet final, yet sufficient under the law to entitle the
Government to the writ of possession over the
expropriated property.
There are other judicial avenues outside of this
Motion for Reconsideration wherein all other claims
relating to the airport facilities may be ventilated,
proved and determined. Since such claims involve
factual issues, they must first be established by the
appropriate trier of facts before they can be accorded
any respect by or binding force on this Court.
E. CONSEQUENTIAL DAMAGES
11. REPUBLIC VS. C.C. UNSON COMPANY,
INC.
FACTS:
On August 3, 2005, a complaint for expropriation was
filed by the Republic of the Philippines through the
Toll Regulatory Board (TRB). Under Section 3(c) of
Presidential Decree No. 1112,6 the TRB was
authorized to condemn private property for public use
upon payment of just compensation. Petitioner,
through the TRB, sought to implement the South
Luzon Tollway Extension Project (SLEP),
particularly the Calamba City, Laguna – Sto. Tomas,
Batangas Section, which aimed to extend the South
Luzon Expressway for faster travel in the region.TRB
sought to expropriate two lots (6B and 4C2) owned
by C.C. Unson in the amount of P2,250.00 per square
meter. Unson, by way affirmative defense, alleged
that both properties had been classified and assessed
as residential. Thus, Lot 4C2 should have a higher
value ranging from P5,000.00 to P10,000.00 per
sq.m. Unson filed the Urgent Twin Motion: To
Release Initial Deposit and to Order Plaintiff to make
Additional Deposit (twin motion). It reiterated that
Lot 4C2 should have a higher valuation because the
affected areas were classified as residential with zonal
value in the amount of P2,250.00 per sq.m. On
December 21, 2006, the RTC issued the
Order granting the motion to release initial deposit. In
its Order, dated June 15, 2007, the RTC directed
petitioner to pay the additional amount of
P20,336,400.00. To quote the RTC: To the mind of
the Court, the affected portion of TCT No. T-51596,
particularly lot 4-C-2, is classified as residential and
the corresponding BIR zonal value of said affected
portion should be computed at Php2,250.00 per
square meter. Hence, plaintiff should make an
11
additional deposit equivalent to Php20,336,400.00. In
sum, Unson received the total amount of
P57,886,750.00 from petitioner. Through a
motion, dated August 14, 2007, Unson asked the trial
court to include the remaining 750 sq.m. dangling lot
in the expropriation proceedings. Although by no
means a small area, the said 750 sq.m. lot had been
rendered without value to Unson considering its
resultant shape. Commissioner Oscianas opined that
the consequential damages suffered by Unson should
also be taken into consideration. The expropriation
left two dangling lots which could no longer be
utilized. It would be unfair for Unson to continue
paying taxes on the lots as industrial when these could
no longer be utilized for such purposes.
Commissioner Amata, on the other hand, posited that
Unson was already fully compensated and that the
amount of P2,250.00 per sq.m. for the two lots should
be enough. To break the stalemate, Chairman Hilbero
suggested that they consider the amount of P3,000.00
as compromise amount.
ISSUE:
Whether or not Unson must be compensated for the
dangling lots which are not covered by the
expropriation.
RULING:
In Republic v. Asia Pacific Integrated Steel
Corporation, the Court defined just compensation "as
the full and fair equivalent of the property taken from
its owner by the expropriator. The measure is not the
taker’s gain, but the owner’s loss. The word ‘just’ is
used to intensify the meaning of the word
‘compensation’ and to convey thereby the idea that
the equivalent to be rendered for the property to be
taken shall be real, substantial, full, and ample.” The
Court further stated in National Power Corporation v.
Tuazon, 40 that "[t]he determination of just
compensation in expropriation cases is a function
addressed to the discretion of the courts, and may not
be usurped by any other branch or official of the
government. Legislative enactments, as well as
executive issuances, fixing or providing for the
method of computing just compensation are
tantamount to impermissible encroachment on
judicial prerogatives.
There is no question that the remaining 750 sq.m.
dangling lots were not expropriated by petitioner. The
RTC and the CA, however, agreed that Unson was
entitled to just compensation with respect to the said
portions. Both courts took cognizance of the report of
Commissioner Oscianas that the remaining 750 sq.m.
dangling lots could no longer be used for any business
purpose, viz.:
This Court likewise takes cognizance on the expert
opinion of Engr. Oscianas Jr., a highly qualified
appraiser relative to the consequential damages
suffered by the defendant corporation as a result of
the ongoing expropriation proceedings. Based on
their ocular inspection and the other documents
attached to the records of this case, this Court agrees
with the position of the defendant corporation that the
remaining areas left to the latter will be practically
unutilizable. This conclusion is arrived at because
what was left to the defendant after the taking of the
properties are two dangling lots with irregular shapes
which can no longer be utilized for any business
purposes by the defendant corporation. In fact, even
if these lots are sold by the defendant corporation,
there will be no takers because the remaining lots
have become practically useless. Worse, the land
owner will be required to pay taxes for the remaining
lots as industrial when these lots can no longer be
utilized for industrial purposes.
As a general rule, just compensation, to which the
owner of the property to be expropriated is
entitled, is equivalent to the market value.
"Market value is that sum of money which a
person desirous but not compelled to buy, and an
owner willing but not compelled to sell, would
agree on as a price to be paid by the buyer and
received by the seller. The general rule, however,
is modified where only a part of a certain property
is expropriated. In such a case, the owner is not
restricted to compensation for the portion actually
taken, he is also entitled to recover the
consequential damage, if any, to the remaining
part of the property."
Section 6 of Rule 67 speaks of consequential
damages. It specifically provides:
Section 6. Proceedings by commissioners. — Before
entering upon the performance of their duties, the
commissioners shall take and subscribe an oath that
they will faithfully perform their duties as
commissioners, which oath shall be filed in court with
the other proceedings in the case. Evidence may be
12
introduced by either party before the commissioners CA-G.R. CV No. 96407 and its October 22, 2014
who are authorized to administer oaths on hearings Resolution are AFFIRMED. The Republic of the
before them, and the commissioners shall, unless the Philippines, through the Toll Regulatory Board,
parties consent to the contrary, after due notice to the is ORDERED to pay C.C. Unson Company, Inc., the
parties, to attend, view and examine the property amount of P32,158,750.00 which represents the
sought to be expropriated and its surroundings, and difference between the amount of P57,885,750.00
may measure the same, after which either party may, already received by the respondent and the amount of
by himself or counsel, argue the case. The P90,044,500.00 computed at the rate of P3,500.00 per
commissioners shall assess the consequential square meter for the 25,727-square meter property
damages to the property not taken and deduct and the dangling lots.
from such consequential damages the
After full payment for the subject properties and
consequential benefits to be derived by the owner
dangling lots, ownership and title should be registered
from the public use or purpose of the property
in the name of the petitioner.
taken, the operation of its franchise by the
corporation or the carrying on of the business of
the corporation or person taking the property. But
in no case shall the consequential benefits assessed
exceed the consequential damages assessed, or the
owner be deprived of the actual value of his
property so taken.
In arriving at P3,500.00 as the amount of just
compensation, the RTC already factored in the
consequential damages suffered by Unson for the
unusable 750 sq.m. lots. In essence, petitioner was
already ordered to pay for the dangling lots when the
just compensation was pegged at P3,500.00. If the
ownership of the dangling lots was to be retained by
Unson, it would run against the equitable proscription
of unjust enrichment. The principle of unjust
enrichment requires two conditions: (1) that a person
is benefited without a valid basis or justification, and
(2) that such benefit is derived at the expense of
another.
Having established that there was no serious error on
the part of the lower courts in fixing the amount of
just compensation, the Court deems it proper that the
ownership over the dangling lots is transferred to
petitioner upon payment thereof.
To effectuate the transfer of ownership, it is necessary
for petitioner to pay Unson the full amount of just
compensation. At this point, there is still no full
payment yet. Hence, upon paying the amount of
P32,158,750.00, the ownership of both the 25,727
sq.m. expropriated property and the remaining
unutilized 750 sq.m. dangling lots should be
transferred to petitioner.
WHEREFORE, the petition is DENIED. The
March 21, 2014 Decision of the Court of Appeals in
13
F. EXEMPLARY DAMAGES
12. SY. VS. LOCAL GOVERNMENT OF QC
FACTS:
In 1950s, retired justice Emilio Gancayco bought a
parcel of land located in EDSA. Then on March 1956,
Quezon City Council issued Ordinance No. 2904
requiring the construction of arcades for commercial
buildings to be constructed. At the outset, it bears
emphasis that at the time Ordinance No. 2904 was
passed by the city council, there was yet no building
code passed by the national legislature. Thus, the
regulation of the construction of buildings was left to
the discretion of local government units. Under this
particular ordinance, the city council required that the
arcade is to be created by constructing the wall of the
ground floor facing the sidewalk a few meters away
from the property line. Thus, the building owner is not
allowed to construct his wall up to the edge of the
property line, thereby creating a space or shelter
under the first floor. In effect, property owners
relinquish the use of the space for use as an arcade for
pedestrians, instead of using it for their own purposes.
The ordinance covered the property of Justice
Gancayco. Subsequently, sometime in 1965, Justice
Gancayco sought the exemption of a two-storey
building being constructed on his property from the
application of Ordinance No. 2904 that he be
exempted from constructing an arcade on his
property.
 On 2 February 1966, the City Council
acted favorably on Justice Gancayco’s request and
issued Resolution No. 7161, S-66, “subject to the
condition that upon notice by the City Engineer, the
owner shall, within reasonable time, demolish the
enclosure of said arcade at his own expense when
public interest so demands.”
Decades after, in March 2003, MMDA conducted
operations to clear obstructions along EDSA, in
consequence, they sent a notice of demolition to
Justice Gancayco alleging that a portion of his
building violated the National Building Code.
Gancayco did not comply with the notice and filed a
petition for TRO with the RTC Quezon City to
prohibit the MMDA from demolishing his property.
The RTC rendered its Decision on 30 September
2003 in favor of Justice Gancayco. It held that the
questioned ordinance was unconstitutional, ruling
that it allowed the taking of private property for
public use without just compensation. The RTC said
that because 67.5 square meters out of Justice
Gancayco’s 375 square meters of property were being
taken without compensation for the public’s benefit,
the ordinance was confiscatory and oppressive. It
likewise held that the ordinance violated owners’
right to equal protection of laws.
MMDA appealed with the CA. CA held that the
MMDA went beyond its powers when it demolished
the subject property. It further found that Resolution
No. 02-28 only refers to sidewalks, streets, avenues,
alleys, bridges, parks and other public places in Metro
Manila, thus excluding Justice Gancayco’s private
property. Lastly, the CA stated that the MMDA is not
clothed with the authority to declare, prevent or abate
nuisances.
ISSUES:
(1) WHETHER OR NOT JUSTICE GANCAYCO
WAS ESTOPPED FROM ASSAILING THE
VALIDITY OF ORDINANCE NO. 2904. 

(2) WHETHER OR NOT ORDINANCE NO. 2904
IS CONSTITUTIONAL. 

(3) WHETHER OR NOT THE WING WALL OF
JUSTICE GANCAYCO’S BUILDING IS A
PUBLIC 
 NUISANCE. 

(4) WHETHER OR NOT THE MMDA LEGALLY
DEMOLISHED THE PROPERTY OF JUSTICE 

GANCAYCO. 

RULING:
(1) We find that petitioner was not guilty of estoppel.
When it made the undertaking to comply with all
issuances of the BIR, which at that time it considered
as valid, petitioner did not commit any false
misrepresentation or misleading act.

(2) Justice Gancayco may not question the ordinance
on the ground of equal protection when he also
benefited from the exemption. It bears emphasis that
Justice Gancayco himself requested for an exemption
from the application of the ordinance in 1965 and was
eventually granted one. Moreover, he was still
enjoying the exemption at the time of the demolition
as there was yet no valid notice from the city
engineer. Thus, while the ordinance may be attacked
with regard to its different treatment of properties that
14
appears to be similarly situated, Justice Gancayco is
not the proper person to do so.
(3) The fact that in 1966 the City Council gave Justice
Gancayco an exemption from constructing an arcade
is an indication that the wing walls of the building are
not nuisances per se. The wing walls do not per se
immediately and adversely affect the safety of
persons and property. The fact that an ordinance may
declare a structure illegal does not necessarily make
that structure a nuisance. Clearly, when Justice
Gancayco was given a permit to construct the
building, the city council or the city engineer did not
consider the building, or
its demolished portion, to be a threat to the safety of
persons and property. This fact alone should have
warned the MMDA against summarily demolishing
the structure.
Sangguniang Bayan cannot declare a particular thing
as a nuisance per se and order its condemnation. It
does not have the power to find, as a fact, that a
particular thing is a nuisance when such thing is not a
nuisance per se; nor can it authorize the extrajudicial
condemnation and destruction of that as a nuisance
which in its nature, situation or use is not such. Those
things must be determined and resolved in the
ordinary courts of law.
MMDA illegally demolished Gancayco's property.
G. DELAY IN THE PAYMENT AND
ABANDONMENT OR CHANGE OF
INTENDED USE
13. REPUBLIC OF THE PHILIPPINES v.
VICENTE G. LIM
G.R. No. 161656, June 29, 2005, Sandoval-
Gutierrez, J.
Just compensation embraces not only the correct
determination of the amount to be paid to the owners
of the land but also the payment for the land within a
reasonable time from its taking.
FACTS:
The Republic instituted a special civil action for
expropriation of a land in Lahug, Cebu City for the
purpose of establishing a military reservation for the
Philippine Army. The said lots were registered in the
name of Gervasia and Eulalia Denzon.
For failure of the Republic to pay for the lots the
Denzons, successors-in-interest, Valdehueza and
Panerio, filed with the same CFI an action for
recovery of possession with damages against the
Republic and AFP officers in possession of the
property. The CFI promulgated its Decision in favor
of Valdehueza and Panerio, holding that they are the
owners and have retained their right as such over lots
because of the Republic’s failure to pay the amount
adjudged in the expropriation proceedings. Hence,
the petition.
ISSUE:
Whether the Republic has retained ownership of the
property despite its failure to pay respondent’s
predecessors-in-interest the amount adjudged for
expropriation.
RULING:
NO. The Republic disregarded the Section 9, Article
III of our Constitution when it failed and refused to
pay respondent’s predecessors-in-interest the just
compensation for Lots 932 and 939. The length of
time and the manner with which it evaded payment
demonstrate its arbitrary high-handedness and
confiscatory attitude. More than half of a century has
passed, yet, to this day, the landowner, now
respondent, has remained empty-handed.
Undoubtedly, over 50 years of delayed payment
cannot, in any way, be viewed as fair.
Just compensation embraces not only the correct
determination of the amount to be paid to the owners
of the land but also the payment for the land within a
reasonable time from its taking. The Republic’s
failure to pay just compensation for 57 years cannot
but be construed as a deliberate refusal to pay which
makes the recovery of possession in order.
While the prevailing doctrine is that the non-payment
of just compensation does not entitle the private
landowner to recover possession of the expropriated
lots, in cases where the government failed to pay just
compensation within five (5) years from the finality
of the judgment in the expropriation proceedings, the
owner concerned shall have the right to recover
possession of his property.
15
14. MACTAN-CEBU INTERNATIONAL and is peremptorily abandoned, then the former
AIRPORT AUTHORITY and AIR owners, if they so desire, may seek the reversion of
TRANSPORTATION OFFICE v. BERNARDO the property, subject to the return of the amount of
L. LOZADA, SR., et al. just compensation received. In such a case, the
exercise of the power of eminent domain has become
G.R. No. 176625, February 25, 2010, Nachura, J. improper for lack of the required factual justification.
If the particular public purpose or intent for which an
In sum, the expropriator should commit to use the
expropriation was sought is not initiated or not at all
property pursuant to the purpose stated in the petition
pursued, and is peremptorily abandoned, then the
for expropriation filed, failing which, it should file
former owners, if they so desire, may seek the
another petition for the new purpose. If not, it is then
reversion of the property, subject to the return of the
incumbent upon the expropriator to return the said
amount of just compensation received. Should the
property to its private owner, if the latter desires to
expropriator commit to use the property for a purpose
reacquire the same.
other than that stated in the petition for expropriation
filed, then it should file another petition for the new
purpose.
15. REPUBLIC OF THE PHILIPPINES,
FACTS: represented by the NATIONAL POWER
CORPORATION v. HEIRS OF SATURNINO Q.
Bernardo L. Lozada, Sr. was the registered owner of
BORBON, and COURT OF APPEALS
a parcel of land located in Lahug, Cebu City. The said
lot was expropriated by the Republic in connection G.R. No. 165354, January 12, 2015, Bersamin, J.
with its program for the improvement and expansion
It is essential that the element of public use of the
of the Lahug Airport. The projected expansion and
property be maintained throughout the proceedings
improvement of the Airport, however, did not
for expropriation. To continue with the expropriation
materialize because the general aviation operations at
proceedings despite the definite cessation of the
the Lahug Airport were transferred to the Mactan-
public purpose of the project would result in the
Cebu International Airport Authority. Subsequently,
rendition of an invalid judgment in favor of the
Lozada sought to repurchase his property from the
expropriator due to the absence of the essential
Republic.
element of public use.
ISSUE:
FACTS:
Whether Lozada may repurchase the disputed
National Power Corporation (NAPOCOR) filed a
property after the purpose for which the same was
complaint for expropriation seeking the acquisition of
expropriated has been abandoned.
an easement of right of way over a portion of the
RULING: property. The respondents maintained that
NAPOCOR should compensate them for the entire
YES. It is well settled that the taking of private
property since even if the area being expropriated
property by the Governments power of eminent
only covered the portion directly affected by the
domain is subject to two mandatory requirements: (1)
transmission lines, the remaining portion of the
that it is for a particular public purpose; and (2) that
property was also affected because the transmission
just compensation be paid to the property owner.
line passed through the center of the land, thereby
These requirements partake of the nature of implied
dividing the land into three lots and that the presence
conditions that should be complied with to enable the
of the high tension transmission line had rendered the
condemnor to keep the property expropriated. For this
entire property inutile for any future use and
reason, the taking of private property, consequent to
capabilities. RTC ordered NAPOCOR to pay the
the Government's exercise of its power of eminent
respondents just compensation for the whole area.
domain, is always subject to the condition that the
The case was appealed before CA which affirmed
property be devoted to the specific public purpose for
with modification the ruling of RTC. The case was
which it was taken. Corollarily, if this particular
then elevated to SC. Pending appeal, NAPOCOR
purpose or intent is not initiated or not at all pursued,
16
filed a Manifestation and Motion to Discontinue
Expropriation Proceedings, contending that the
property sought to be expropriated was no longer
necessary for public purpose because of the
intervening retirement of the transmission lines
installed on the respondents’ property and that
because the public purpose for which such property
would be used thereby ceased to exist, the
proceedings for expropriation should no longer
continue, and the State was now duty-bound to return
the property to its owners.
ISSUE:
Whether the expropriation proceedings should be
discontinued or dismissed by reason of the fact that
the public purpose of the expropriation ceased to
exist.
RULING:
YES. It is essential that the element of public use of
the property be maintained throughout the
proceedings for expropriation. Here, NAPOCOR
seeks to discontinue the expropriation proceedings on
the ground that the transmission lines constructed on
the respondents’ property had already been retired.
Verily, the retirement of the transmission lines
necessarily stripped the expropriation proceedings of
the element of public use. To continue with the
expropriation proceedings despite the definite
cessation of the public purpose of the project would
result in the rendition of an invalid judgment in favor
of the expropriator due to the absence of the essential
element of public use.
In view of the discontinuance of the proceedings and
the eventual return of the property to the respondents,
there is no need to pay just compensation to them
because their property would not be taken by
NAPOCOR. Instead of full market value of the
property, therefore, NAPOCOR should compensate
the respondents for the disturbance of their property
rights from the time of entry in March 1993 until the
time of restoration of the possession by paying to
them actual or other compensatory damages.
16. NATIONAL POWER
CORPORATION, PETITIONER, V. POSADA,
RESPONDENTS. G.R. NO. 191945, MARCH 11,
2015
When the taking of private property is no longer for a
public purpose, the expropriation complaint should be
dismissed by the trial court. The case will proceed
only if the trial court's order of expropriation became
final and executory and the expropriation causes
prejudice to the property owner.
Facts:
The National Power Corporation instituted
expropriation proceedings for the acquisition of a
right-of-way easement over parcels of land located in
Barangay Marinawa, Bato, Catanduanes owned by
respondents Socorro T. Posada, Renato Bueno, Alice
Balin, Adrian Tablizo, Teofilo Tablizo, and Lydia
Tablizo.4 The expropriation was for the construction
and maintenance of its Substation Island Grid Project.
The National Power Corporation offered the, price of
P500.00 per square meter. In their Answer,
respondents objected to the offer and alleged that the
value of the properties was P2,000.00 per square
meter.
In the Order dated December 16, 2002, Branch 438 of
the Regional Trial Court of Virac, Catanduanes
confirmed the National Power Corporation's right to
expropriate the properties and ordered the creation of
a commission to determine the amount of just
compensation to be paid to respondents.
The court-appointed commissioners recommended a
fair market value of P1,500.00 per square meter
based.
The National Power Corporation opposed the
recommendation of the commissioners, arguing that:
a. the opinion given by the persons who live in the
area should not be given weight because they are not
experts in real estate appraisal;
b. the value of the land at the time of taking and not
its potential as a building site is the criteria for
determination of just compensation.
c. The Provincial Appraisal Committee valued the lot
at P500.00 per square meter;
d. The approved zonal values of real properties in
Catanduanes classified as Residential Regular (RR) is
P105.00;
17

e. The Schedule of Fair Market Values prescribed
P160.00 for all lots along the national road from
Marinawa Bridge to FICELCO;
f. Only an easement of right-of-way shall be acquired
over the properties of the other defendants which
remain classified as cocoland and as provided in
[Republic Act No.] 6395 (NPC Charter), shall not
exceed 10% of the market value declared by the
owner or administrator or anyone having legal
interest in the property, or as determined by the
assessor, whichever is lower.
On November 19, 2003, the National Power
Corporation amended its Complaint stating that it
needed to acquire portions of the properties, instead
of just an easement of right of way, for the
construction of the Substation Island Grid Project.
For this reason, it deposited with Land Bank of the
Philippines the amount of P580,769.93, alleging that
this represented the value of the 3,954 square meters
sought to be expropriated.
The National Power Corporation filed an Urgent Ex
Parte Motion for the Issuance of a Writ of
Possession. It also served respondents with a Notice
to Take Possession stating that "it shall enter and take
possession of the property on September 26, 2005."
In the Order dated July 14, 2005, the trial court
granted the Urgent Ex Parte Motion for the Issuance
of a Writ of Possession and issued a Writ of
Possession.
Respondents filed a Motion to Lift and/or Suspend
the Issuance of the Writ of Possession, which the trial
court denied.
Undaunted, respondents filed an Urgent Motion to
Grant Defendants Time to Remove their Houses and
Improvements as well as Additional Deposit for Use
in Land Acquisition and Expenses for Transfer of
their Respective Residential Houses. The trial court
granted respondents' Motion in its Order dated June
5, 2006 The National Power Corporation appealed the
trial court's Decision to the Court of Appeals. On
August 7, 2009, the Court of Appeals rendered a
Decision denying the appeal.
In a turn of events, the National Power Corporation
informed its counsel on July 24, 2014 that it no longer
needed the properties as it was set to acquire an
alternative site. It also requested its counsel to
withdraw Civil Case No. 0008 before the trial court
because "it [was] impractical to pursue the acquisition
of the original site
The National Power Corporation now requests this
court for leave to withdraw this Petition on the ground
that it was in the process of acquiring a vacant lot
owned by FICELCO. Considering that eminent
domain is the taking of private property for public
use, no expropriation proceeding can continue if the
property to be expropriated will not be for public use.
ISSUE:
Whether or not just compensation can even be
considered by this court, any question on the validity
of the exercise of the power of eminent domain must
first pertain to its necessity.
RULING:
In esse, expropriation is forced private property
taking, the landowner being really without a ghost of
a chance to defeat the case of the expropriating
agency. In other words, in expropriation, the private
owner is deprived of property against his will. Withal,
the mandatory requirement of due process ought to be
strictly followed, such that the state must show, at the
minimum, a genuine need, an exacting public purpose
to take private property, the purpose to be specifically
alleged or least reasonably deducible from the
complaint.
Respondents filed a Motion for Leave to File
Comment to Petitioner's Motion to Withdraw Appeal.
They argue that the grant of a Motion to Withdraw
would be unjust. From their point of view, the
National Power Corporation cannot resort to a
withdrawal of an appeal in order to invalidate a
judgment duly rendered by the trial court and
affirmed by the Court of Appeals. They state that they
have no objection to the withdrawal of the appeal, but
they object to the dismissal of the Amended
Complaint before the trial court. They propose that
the effect of withdrawing the Petition for Review is to
make the Court of Appeals' Decision final and
executory
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
18
final and executory and then refuse to pay on the The Motion for Leave to File Comment (to
ground that there are no appropriations for the Petitioner's Motion to Withdraw Appeal) dated
property earlier taken and profitably used. We September 30, 2014 is NOTED. This case
condemn in the strongest possible terms the cavalier is REMANDED to the Regional Trial Court of
attitude of government officials who adopt such a Virac, Catanduanes, Branch 43 for appropriate action.
despotic and irresponsible stance.
The rule, therefore, is that expropriation proceedings
must be dismissed when it is determined that it is not
for a public purpose, except when:

First, the trial court's order already became final and

executory;

Second, the government already took possession of

the property; and

Lastly, the expropriation case already caused

prejudice to the landowner.

The expropriation case is not automatically dismissed

when the property ceases to be for public use. The
state must first file the appropriate Motion to
Withdraw before the trial court having jurisdiction
over the proceedings. The grant or denial of any
Motion to Withdraw in an expropriation proceeding
is always subject to judicial discretion.

Respondents have not yet been deprived of their

property since the National Power Corporation was
never able to take possession. We cannot determine
whether damages have been suffered as a result of the
expropriation. This case needs to be remanded to the
trial court to determine whether respondents have
already been prejudiced by the expropriation.

The withdrawal of the Petition before this court will

have no practical effect other than to make the trial
court's order of condemnation final and executory. In
order to prevent this absurdity, the National Power
Corporation should file the proper Motion to
Withdraw before the trial court. It is now the burden
of the National Power Corporation to plead and prove
to the trial court its reasons for discontinuing with the
expropriation. Respondents may also plead and prove
damages incurred from the commencement of the
expropriation, if any.
WHEREFORE, the Motion to Withdraw Appeal
dated August 28, 2014 is GRANTED insofar as it
withdraws the Petition for Review dated June 4, 2010.

19
H. OVERHEAD OR AERIAL AND
SUBTERRANEAN TAKINGS
17. CABAHUG VS. NATIONAL POWER
CORPORATION
FACTS:
The Spouses Cabahug are the owners of two parcels
of land situated in Barangay Capokpok, Tabango,
Leyte, registered in their names under TCT Nos. T-
9813 and T-1599 of the Leyte provincial registry.
They were among the defendants in Special Civil
Action No. 0019-PN, a suit for expropriation
earlier filed by NPC before the RTC, in connection
with its Leyte-CebuInterconnection Project. The suit
was later dismissed when NPC opted to settle with the
landowners by paying an easement fee equivalent to
10% of value of their property in accordance with
Section 3-A of Republic Act (RA)No. 6395. On 9
November 1996, Jesus Cabahug executed two
documents
denominated as Right of Way Grant in favor of NPC
. For and inconsideration of the easement fees, Caba
hug granted NPC a continuouseasement of right of
way for the latter’s transmissions lines and theirappu
rtenances over 24,939 and 4,750 square meters of the
parcels of land covered by TCT Nos. T-9813 and T-
1599, respectively. By said grant, Jesus Cabahug
agreed not to construct any building or structure
whatsoever,
norplant in any area within the Right of Way that wil
l adversely affect orobstruct the transmission line of
NPC, except agricultural crops, the growth of which
will not exceed three meters high. Under paragraph 4
of the grant,
however, Jesus Cabahug reserved the option to seek
additionalcompensation for easement fee, based on
the Supreme Court’s 18
January1991 Decision in G.R. No. 60077, entitled N
ational Power Corporation v. Spouses Misericordia
Gutierrez and Ricardo Malit, et al. (Gutierrez). On
21September 1998, the Spouses Cabahug filed the
complaint for the payment of just compensation,
damages and attorney’s fees against NPC before the
RTC. In its answer, NPC averred that it already
paid the full easement fee mandated under Section 3-
A of RA 6395 and that the reservation in the
grantreferred to additional compensation for easeme
nt fee, not the full justcompensation sought by the
Spouses Cabahug. The RTC rendered a Decision
dated 14 March 2000, brushing aside NPC’s reliance
on Section 3-A of RA6395. Aggrieved by the
foregoing decision, the NPC perfected the appeal
before the CA which, on 16 May 2007, rendered the
herein assailed decision,
reversing and setting aside the RTC’s appealed decis
ion. On motion forreconsideration, the same was
denied by the CA. Hence, this petition for review on
certiorari.
ISSUE:
WON petitioners are entitled to full just
compensation.
RULING:
The rule is settled that a contract constitutes the law
between the parties who are bound by its stipulations
which, when couched in clear
andplain language, should be applied according to th
eir literal tenor. Courtscannot supply material
stipulations, read into the contract words it does
notcontain or, for that matter, read into it any other i
ntention that would contradict its plain import.
Neither can they
rewrite contracts because theyoperate harshly or
inequitably as to one of the parties, or alter them for
the benefit of one party and to the detriment of the
other, or by construction, relieve one of the parties
from the terms which he voluntarily consented to, or
impose on him those which he did not.
The power of eminent domain may be exercised alth
ough title is nottransferred to the expropriator in an e
asement of right of way. Justcompensation which sh
ould be neither more nor less than the moneyequival
ent of the property is, moreover, due where the nature
and effect of the easement is to impose limitations
against the use of the land for an indefinite period and
deprive the landowner its ordinary use. It has been
ruled that the owner should be compensated for the
monetary equivalent of the land if, as here, the
easement is intended to perpetually or
indefinitelydeprive the owner of his proprietary right
s through the imposition of conditions that affect the
ordinary use, free enjoyment and disposal of the
property or through restrictions and limitations that
are inconsistent with the
exercise of the attributes of ownership, or when the i
ntroduction of structures or objects which, by their n
ature, create or increase theprobability of injury,
death upon or destruction of life and property found
20
on the land is necessary. Measured not by the taker’s
gain but the owner’s
loss, just compensation is defined as the full and fair
equivalent of the propertytaken from its owner by
the expropriator. The determination of just
compensation in eminent domain proceedings
is a judicial function and no statute, decree, or
executive order can mandate that its own
determination shall prevail over the court's findings.
Any valuation for just compensation laid down in the
statutes may serve only as a guiding principle or one
of the factors in determining just compensation, but it
may
not substitute the court's own judgment as to what a
mount should beawarded and how to arrive at such
amount. Hence, Section 3A of R.A. No.6395, as
amended, is not binding upon this Court.
18. NATIONAL POWER CORPORATION v.
LUCMAN G. IBRAHIM, OMAR G.
MARUHOM, ELIAS G. MARUHOM, BUCAY G.
MARUHOM, FAROUK G. MARUHOM,
HIDJARA G. MARUHOM, ROCANIA G.
MARUHOM, POTRISAM G. MARUHOM,
LUMBA G. MARUHOM, SINAB G.
MARUHOM, ACMAD G. MARUHOM,
SOLAYMAN G. MARUHOM, MOHAMAD M.
IBRAHIM, and CAIRONESA M. IBRAHIM
G.R. No. 168732, June 29, 2007, Azcuna, J.
Where the nature of the easement practically deprives
the owners of the property’s normal beneficial use,
notwithstanding the fact that the expropriator only
occupies the sub-terrain portion, it is liable to pay not
merely an easement fee but rather the full
compensation for land.
FACTS:
Respondent Ibrahim and his co-heirs filed a
complaint against NAPOCOR for recovery of
possession of land and damages before the RTC of
Lanao del Sur alleging that they were the owners of
several parcels of land and that NAPOCOR, through
alleged stealth and without respondents’ knowledge
and prior consent, took possession of the sub-terrain
area of said lands and constructed therein
underground tunnels. The existence of the tunnels
was only discovered sometime in July 1992 by
respondents. The tunnels were apparently being used
by NAPOCOR in siphoning the water of Lake Lanao
and in the operation of NAPOCOR’s Agus Projects.
The RTC ordered defendant NAPOCOR to pay to
plaintiffs the fair market value of said 70,000 square
meters of land. Hence, the present petition.
NAPOCOR contended that respondents were not
denied the beneficial use of their subject properties to
entitle them to just compensation by way of damages.
ISSUE:
Whether the respondents are entitled to just
compensation.
RULING:
YES. Petitioner contends that the underground
tunnels in this case constitute an easement upon the
property of respondents which does not involve any
loss of title or possession. The manner in which the
easement was created by petitioner, however, violates
the due process rights of respondents as it was without
notice and indemnity to them and did not go through
proper expropriation proceedings. Petitioner could
have, at any time, validly exercised the power of
eminent domain to acquire the easement over
respondents’ property as this power encompasses not
only the taking or appropriation of title to and
possession of the expropriated property but likewise
covers even the imposition of a mere burden upon the
owner of the condemned property. Significantly,
though, landowners cannot be deprived of their right
over their land until expropriation proceedings are
instituted in court. The court must then see to it that
the taking is for public use, that there is payment of
just compensation and that there is due process of law.
Where the nature of the easement practically deprives
the owners of the property’s normal beneficial use,
notwithstanding the fact that the expropriator only
occupies the sub- terrain portion as in this case, it is
liable to pay not merely an easement fee but rather the
full compensation for land. In determining the just
compensation, the valuation of the property should be
based on the value on the date when the landowners
discovered the presence of the huge underground
tunnels beneath their lands, not the value on the date
on which the latter constructed the tunnels.
21
19. NATIONAL POWER CORPORATION VS.
TARCELO
FACTS
Felicisimo (Tarcelo) and the heirs of Comia (Santos)
are the owners of two lots measuring 4,404 and 2,611
situated in Bgy. TabangaoAmbulong, Batangas City.
In 2000, the National Power Corporation filed a
Complaint for Expropriation of the two lands to the
extent of 1,595.91 square meters which will be
affected by the construction and maintenance of the
NPC’s Ilian Natural Gas Project. After trial, the RTC
fixed the just compensation for the lands at P1,000.00
per square meter, despite the submission of the NPC’s
commissioners that the value of the land should be
P475.00 per square meter only.
NPC thus appealed to the CA, which fixed the just
compensation at P797.50 per square meters, which
judgment became final and executory, thus the
respondents filed a motion for issuance of writ of
execution. On May 14, 2009, a Notice of
Garnishment was served on the Manager of the Land
Bank of the Philippines, NPC Branch, Quezon City
for the satisfaction of the amount of P5,594,462.50
representing just compensation for the whole of
respondents’ 4,404- and 2,611square meter lots – or
7,015 square meters – and not merely the supposedly
affected portions thereof totaling 1,595.91 square
meters as NPC originally sought to acquire.
NPC then moved to quash the writ of execution and
notice of garnishment, alleging that the RTC erred in
issuing the writ of garnishment for the whole of the
two lots, instead of 1,595.91 square meters only,
which is inconsistent with the RTC and the CA
decisions. It pointed out that the appeal before the CA
was only on the issue of fixing the just compensation.
The RTC, however, denied the omnibus motion,
ruling that the construction of the underground
pipeline inevitably affected the whole properties, not
just the portion thereof claimed by NPC.
The ruling that just was not without precedent,
according to the RTC inasmuch as the case of NPC
vs. Court of Appeals ruled that when a property
suffered permanent injury as a result of the
expropriation, he is entitled to compensation of the
whole property, not just a portion of it. It ruled that
the measure of just compensation is not the taker’s
gain, but the owner’s loss.
The Court of Appeals, upon petition for certiorari
filed by the NPC to set aside the order denying the
motion to quash the writ of execution as well as the
notice of garnishment, denied the same, siding with
the RTC. Thus, NPC elevated its case to the Supreme
Court
ISSUE Whether or not NAPOCOR should be held
liable for the just compensation of the two properties,
not just the portion affected by the construction.
HELD The Court grants the Petition. The exercise of
the right of eminent domain, whether directly by the
State or by its authorized agents, is necessarily in
derogation of private rights. It is one of the harshest
proceedings known to the law. x x x The authority to
condemn is to be strictly construed in favor of the
owner and against the condemnor. When the power is
granted, the extent to which it may be exercised is
limited to the express terms or clear implication of the
statute in which the grant is contained[1]. Corollarily,
it has been held that trial courts should exercise care
and circumspection in the resolution of just
compensation cases, considering that they involve the
expenditure of public funds[2]. The above principles
were somehow lost on both the trial and appellate
courts.
The CA therefore patently erred in declaring in its
assailed Decision that there is nothing in the
November 7, 2005 Decision of the Batangas City
RTC to indicate that NPC was being ordered to pay
just compensation only for the 1,595.91-square meter
portion of respondents’ properties. On the contrary,
the evidence is quite clear that NPC has been made
liable precisely to such extent only, and not more. The
Court likewise observes that contrary to the CA’s
appreciation, the June 26, 2007 Decision in CA-G.R.
CV No. 86712 did not particularly declare that NPC
should pay for the entire area of respondents’
properties. It merely stated that respondents should be
compensated for the full and fair market value of their
property and not merely paid a 10% easement fee
therefor; it did not resolve the issue of whether NPC
should pay just compensation for the entire area of
7,015 square meters. It simply said that NPC should
pay for the full per-square meter value of the affected
portions, and not just a fraction thereof (or 10%).
NPC is thus correct in its observation that the issue of
whether it should be made to pay for the whole 7,015-
square meter area was not at all raised.
22
Besides, in arriving at its judgment, the CA took into execution must conform substantially to every
full consideration the Commissioners’ Reports, essential particular of the judgment promulgated.
which recommended the payment of just Execution not in harmony with the judgment is bereft
compensation only for the affected portions of of validity. It must conform, more particularly, to that
respondents’ properties; if it believed otherwise, the ordained or decreed in the dispositive portion of the
appellate court would have so indicated, and it would decision
have taken exception to the said reports and arrived at
its own independent consideration of the case. It has
always been the rule that “[t]he only portion of the
decision that may be the subject of execution is that
which is ordained or decreed in the dispositive
portion. Whatever may be found in the body of the
decision can only be considered as part of the reasons
or conclusions of the court and serve only as guides
to determine the ratio decidendi[7].” “[W]here there
is a conflict between the dispositive portion of the
decision and the body thereof, the dispositive portion
controls irrespective of what appears in the body of
the decision.
While the body of the decision, order or resolution
might create some ambiguity in the manner of the
court’s reasoning preponderates, it is the dispositive
portion thereof that finally invests rights upon the
parties, sets conditions for the exercise of those rights,
and imposes corresponding duties or obligation.”
Thus, with the decretal portion of the trial court’s
November 7, 2005 Decision particularly stating that
NPC shall have the lawful right to enter, take
possession and acquire easement of right-of-way over
the affected portions of respondents’ properties upon
the payment of just compensation, any order
executing the trial court’s Decision should be based
on such dispositive portion. “An order of execution is
based on the disposition, not on the body, of the
decision.” Execution must therefore conform to that
ordained or decreed in the dispositive part of the
decision
Since there is a disparity between the dispositive
portion of the trial court’s November 7, 2005
Decision as affirmed with modification by the final
and executory June 26, 2007 Decision of the CA in
CA-G.R. CV No. 86712 – which decreed that
respondents be paid just compensation only for the
affected portions of their properties, totaling 1,595.91
square meters – and the Notice of Garnishment – for
the satisfaction of the amount of P5,594,462.50
representing just compensation for the whole 7,015
square meters – the latter must be declared null and
void. It is a settled general principle that a writ of
23
I. INVERSE CONDEMNATION
20. NATIONAL POWER CORPORATION v.
HEIRS OF MACABANGKIT SANGKAY,
namely: CEBU, BATOWA-AN, SAYANA,
NASSER, MANTA, EDGAR, PUTRI,
MONGKOY and AMIR, all surnamed
MACABANGKIT
G.R. No. 165828, August 24, 2011, Bersamin, J.
It is settled that the taking of private property for
public use, to be compensable, need not be an actual
physical taking or appropriation.
FACTS:
Respondents were the owners of land with an area of
221,573 square meters situated in Ditucalan, Iligan
City who sued NPC in the RTC for the recovery of
damages and of the property, with the alternative
prayer for the payment of just compensation. They
alleged that they had belatedly discovered that one of
the underground tunnels of NPC that diverted the
water flow of the Agus River for the operation of the
Hydroelectric Project traversed their land and that it
had been constructed without their knowledge and
consent. As a consequence of which, the tunnel
deprived them of the agricultural, commercial,
industrial and residential value of their land. They
also contended that their land had become an unsafe
place for habitation because of the loud sound of the
water rushing through the tunnel and the constant
shaking of the ground, forcing them and their workers
to relocate to safer grounds. NPC countered that the
Heirs of Macabangkit had no right to compensation
under section 3(f) of Republic Act No. 6395, under
which a mere legal easement on their land was
established; that their cause of action, should they be
entitled to compensation, already prescribed due to
the tunnel having been constructed in 1979; and that
by reason of the tunnel being an apparent and
continuous easement, any action arising from such
easement prescribed in five years.
The RTC ruled in favor of the respondents and
ordered NPC to pay them just compensation. NPC
appealed before CA which affirmed the RTC’s
decision. Thus, the present petition where NPC
contended that it is not liable to pay the respondents
just compensation.
ISSUES:
1. Whether the respondents are entitled to just
compensation.
2. Whether the five-year prescription period applies
in this case.
RULING:
1. YES. Here, like in National Power Corporation v.
Ibrahim, NPC constructed a tunnel underneath the
land of the Heirs of Macabangkit without going
through formal expropriation proceedings and
without procuring their consent or at least informing
them beforehand of the construction. NPC’s
construction adversely affected the owners’ rights
and interests because the subterranean intervention by
NPC prevented them from introducing any
developments on the surface, and from disposing of
the land or any portion of it, either by sale or
mortgage.
There was a full taking on the part of NPC,
notwithstanding that the owners were not completely
and actually dispossessed. It is settled that the taking
of private property for public use, to be compensable,
need not be an actual physical taking or appropriation.
Indeed, the expropriator’s action may be short of
acquisition of title, physical possession, or occupancy
but may still amount to a taking. Compensable taking
includes destruction, restriction, diminution, or
interruption of the rights of ownership or of the
common and necessary use and enjoyment of the
property in a lawful manner, lessening or destroying
its value. It is neither necessary that the owner be
wholly deprived of the use of his property, nor
material whether the property is removed from the
possession of the owner, or in any respect changes
hands. As a result, NPC should pay just compensation
for the entire land.
2. NO. Prescriptive period provided under Section
3(i) of Republic Act No. 6395 is applicable only to an
action for damages, and does not extend to an action
to recover just compensation like this case.
Consequently, NPC cannot thereby bar the right of
the Heirs of Macabangkit to recover just
compensation for their land.
The action to recover just compensation from the
State or its expropriating agency differs from the
24
action for damages. The former, also known as
inverse condemnation, has the objective to recover
the value of property taken in fact by the
governmental defendant, even though no formal
exercise of the power of eminent domain has been
attempted by the taking agency. Just compensation is
the full and fair equivalent of the property taken from
its owner by the expropriator. The measure is not the
taker’s gain, but the owner’s loss.

25
J. CONSTRUCTIVE EXPROPRIATION AND
REGULATORY TAKING
21. US VS. CAUSBY
Brief Fact Summary. Respondents claim that their
property was taken, within the meaning of the Fifth
Amendment, by the regular army and navy aircraft
flights over their house and chicken farm.
Synopsis of Rule of Law. The airspace is a public
highway, but if the landowner is to have the full
enjoyment of his land, he must have exclusive control
over the immediate reaches of the enveloping
atmosphere
Facts. Respondents own 2.8 acres near an airport
outside of Greensboro, North Carolina. Respondents’
property contained a house and a chicken farm. The
end of one of the runways of the airport was 2,220
feet from Respondents’ property, and the glide path
passed over the property at 83 feet, which is 67 feet
above the house, 63 feet above the barn, and 18 feet
above the highest tree. The use by the United States
of this airport is pursuant to a lease beginning June 1,
1942, and ending June 30, 1942, with provisions for
renewal until June 30, 1967, or six months after the
end of the national emergency, whichever is earlier.
The United States’ four motored bombers make loud
noises when flying above the property, and have very
bright lights. Respondents’ chicken farm production
had to stop, because 150 chickens were killed by
flying into walls from fright. In the Court of Claims,
it was found that the United States had taken an
easement over the property on June 1, 1942, and that
the val
ue of the property depreciation as the result of the
easement was $2,000.00. The United States
petitioned for certiorari, which was granted.
Issue. Has the Respondents’ property been taken
within the meaning of the Fifth Amendment?
Held. Yes. But the case is remanded for a
determination of the value of the easement and
whether the easement was permanent or temporary.
The court noted the common law doctrine of
ownership of land extending to the sky above the
land. However, the court notes that an act of Congress
had given the United States exclusive national
sovereignty over the air space. The court noted that
common sense made the common law doctrine
inapplicable.
However, the court found that the common law
doctrine did not control the present case. The United
States had conceded in oral argument that if flights
over the Respondents’ property rendered it
uninhabitable then there would be a taking
compensable under the Fifth Amendment. The
measure of the value of the property taken is the
owner’s loss, not the taker’s gain.
The airspace is a public highway. But it is obvious
that if the landowner is to have the full enjoyment of
his land, he must have exclusive control of the
immediate reaches of the enveloping atmosphere. If
this were not true then landowners could not build
buildings, plant trees or run fences.
The airspace, apart from the immediate reaches above
the land, is part of the public domain. The court does
not set the precise limits of the line of demarcation.
Flights over private land are not a taking, unless, like
here, they are so low and frequent as to be a direct and
immediate interference with the enjoyment of the
land. The Court of Claims must, upon remand,
determine the value of the easement and whether it is
a temporary or permanent easement.
Dissent. The dissent would reverse the decision of the
Court of Claims and hold that there has been no taking
within the meaning of the Fifth Amendment. This is
because of the modern nature of the airplane, and the
desire to avoid confusion.
Discussion. The national emergency, World War II,
meant that the airport, which was not previously used
by large planes, would be the home to large bombers.
The use of the airspace above Respondents’ home and
farm was not a problem previously, because the
flights were sporadic and not nearly as loud as the
bombers.
22. CITY OF MANILA VS. LAGUIO JR.
TINGA, J.:
I know only that what is moral is what you feel good
after and what is immoral is what you feel bad after.
Ernest Hermingway
Death in the Afternoon, Ch. 1
It is a moral and political axiom that any dishonorable
act, if performed by oneself, is less immoral than if
26
performed by someone else, who would be well-
intentioned in his dishonesty.
J. Christopher Gerald
Bonaparte in Egypt, Ch. I
Private respondent Malate Tourist Development
Corporation (MTDC) is a corporation engaged in the
business of operating hotels, motels, hostels and
lodging houses. It built and opened Victoria Court in
Malate which was licensed as a motel although duly
accredited with the Department of Tourism as a hotel.
The City of Manila enacted an ordinance which
disallows the operation of sauna parlors, massage
parlors, karaoke bars, beerhouses, night clubs, day
clubs, super clubs, discotheques, cabarets, dance
halls, motels and inns in the Ermita-Malate area.
Further, it states in Section 4 that in cases of
subsequent violations of the provisions of the
Ordinance, the premises of the erring establishment
shall be closed and padlocked permanently.
Now, MTDC contended that the said
Ordinance erroneously and improperly included in its
enumeration of prohibited establishments, motels and
inns such as MTDCs Victoria Court considering that
these were not establishments for amusement or
entertainment and they were not services or facilities
for entertainment, nor did they use women as tools for
entertainment, and neither did they disturb the
community, annoy the inhabitants or adversely affect
the social and moral welfare of the community.
Further, they claimed that the said ordinance is
confiscatory and constitutes an invasion of plaintiffs
property rights.
On the other hand, petitioners City of Manila and Lim
maintained that the City Council had the power to
prohibit certain forms of entertainment in order to
protect the social and moral welfare of the community
as provided for in Section 458 (a) 4 (vii) of the Local
Government Code. According to them,
the Ordinance was enacted to address and arrest the
social ills purportedly spawned by the establishments
in the Ermita-Malate area which are allegedly
operated under the deceptive veneer of legitimate,
licensed and tax-paying nightclubs, bars, karaoke
bars, girlie houses, cocktail lounges, hotels and
motels
RULING:
 The Ordinance infringes the Due Process
Clause
The Ordinance seeks to legislate morality but fails to
address the core issues of morality. Try as
the Ordinance may to shape morality, it should not
foster the illusion that it can make a moral man out of
it because immorality is not a thing, a building or
establishment; it is in the hearts of men. The City
Council instead should regulate human conduct that
occurs inside the establishments, but not to the
detriment of liberty and privacy which are covenants,
premiums and blessings of democracy.
 Means employed areconstitutionally
infirm
the means employed by the Ordinance for the
achievement of its purposes, the governmental
interference itself, infringes on the constitutional
guarantees of a persons fundamental right to liberty
and property.
 Modality employed is unlawful taking
The Ordinance is unreasonable and oppressive as it
substantially divests the respondent of the beneficial
use of its property.[77]
The Constitution expressly provides in Article III,
Section 9, that private property shall not be taken for
public use without just compensation. The provision
is the most important protection of property rights in
the Constitution. This is a restriction on the general
power of the government to take property. The
constitutional provision is about ensuring that the
government does not confiscate the property of some
to give it to others. In part too, it is about loss
spreading. If the government takes away a persons
property to benefit society, then society should pay.
The principal purpose of the guarantee is to bar the
Government from forcing some people alone to bear
public burdens which, in all fairness and justice,
should be borne by the public as a whole.
There are two different types of taking that can be
identified
1. A possessory taking occurs when the
government confiscates or physically
occupies property.
27
 2. A regulatory taking occurs when the
governments regulation leaves no
reasonable economically viable use of
the property
What is crucial in judicial consideration of regulatory
takings is that government regulation is a taking if it
leaves no reasonable economically viable use of
property in a manner that interferes with reasonable
expectations for use. A regulation that permanently
denies all economically beneficial or productive use
of land is, from the owners point of view, equivalent
to a taking unless principles of nuisance or property
law that existed when the owner acquired the land
make the use prohibitable. When the owner of real
property has been called upon to sacrifice all
economically beneficial uses in the name of the
common good, that is, to leave his property
economically idle, he has suffered a taking.
A regulation which denies all economically
beneficial or productive use of land will require
compensation under the takings clause. Where a
regulation places limitations on land that fall short of
eliminating all economically beneficial use, a taking
nonetheless may have occurred, depending on a
complex of factors including the regulations
economic effect on the landowner, the extent to which
the regulation interferes with reasonable investment-
backed expectations and the character of government
action. These inquiries are informed by the purpose
of the takings clause which is to prevent the
government from forcing some people alone to bear
public burdens which, in all fairness and justice,
should be borne by the public as a whole.
A restriction on use of property may also
constitute a taking if not reasonably necessary to
the effectuation of a substantial public purpose or
if it has an unduly harsh impact on the distinct
investment-backed expectations of the owner.
The Ordinance gives the owners and operators of the
prohibited establishments three (3) months from its
approval within which to wind up business operations
or to transfer to any place outside of the Ermita-
Malate area or convert said businesses to other kinds
of business allowable within the area. The directive to
wind up business operations amounts to a closure of
the establishment, a permanent deprivation of
property, and is practically confiscatory. Unless the
owner converts his establishment to accommodate an
allowed business, the structure which housed the
previous business will be left empty and gathering
dust. Suppose he transfers it to another area, he will
likewise leave the entire establishment idle.
Consideration must be given to the substantial
amount of money invested to build the edifices which
the owner reasonably expects to be returned within a
period of time. It is apparent that
the Ordinance leaves no reasonable economically
viable use of property in a manner that interferes
with reasonable expectations for use.
The second and third options to transfer to any place
outside of the Ermita-Malate area or to convert into
allowed businessesare confiscatory as well. The
penalty of permanent closure in cases of subsequent
violations found in Section 4 of the Ordinance is also
equivalent to a taking of private property.
The second option instructs the owners to abandon
their property and build another one outside the
Ermita-Malate area. In every sense, it qualifies as a
taking without just compensation with an additional
burden imposed on the owner to build another
establishment solely from his coffers. The proffered
solution does not put an end to the problem, it merely
relocates it. Not only is this impractical, it is
unreasonable, onerous and oppressive. The
conversion into allowed enterprises is just as
ridiculous. How may the respondent convert a motel
into a restaurant or a coffee shop, art gallery or music
lounge without essentially destroying its property?
This is a taking of private property without due
process of law, nay, even without compensation.
The penalty of closure likewise constitutes unlawful
taking that should be compensated by the
government. The burden on the owner to convert or
transfer his business, otherwise it will be closed
permanently after a subsequent violation should be
borne by the public as this end benefits them as a
whole.
Petitioners cannot take refuge in classifying the
measure as a zoning ordinance. A zoning ordinance,
although a valid exercise of police power, which
limits a wholesome property to a use which can not
reasonably be made of it constitutes the taking of such
property without just compensation. Private property
which is not noxious nor intended for noxious
purposes may not, by zoning, be destroyed without
compensation. Such principle finds no support in the
28
principles of justice as we know them. The police did not prohibit motels. The Ordinance in this case
powers of local government units which have always however is not a regulatory measure but is an exercise
received broad and liberal interpretation cannot be of an assumed power to prohibit
stretched to cover this particular taking.
WHEREFORE, the Petition is hereby DENIED and
Distinction should be made between destruction the decision of the Regional Trial Court declaring
from necessity and eminent domain. It needs the Ordinance void is AFFIRMED. Costs against
restating that the property taken in the exercise of petitioners.
police power is destroyed because it is noxious or
intended for a noxious purpose while the property
taken under the power of eminent domain is intended
for a public use or purpose and is therefore
wholesome. If it be of public benefit that a
wholesome property remain unused or relegated to a
particular purpose, then certainly the public should
bear the cost of reasonable compensation for the
condemnation of private property for public use.
Further, the Ordinance fails to set up any standard
to guide or limit the petitioners actions. It in no way
controls or guides the discretion vested in them. It
provides no definition of the establishments covered
by it and it fails to set forth the conditions when the
establishments come within its ambit of prohibition.
The Ordinance confers upon the mayor arbitrary and
unrestricted power to close down establishments.
Ordinances such as this, which make possible abuses
in its execution, depending upon no conditions or
qualifications whatsoever other than the unregulated
arbitrary will of the city authorities as the touchstone
by which its validity is to be tested, are unreasonable
and invalid. The Ordinance should have established a
rule by which its impartial enforcement could be
secured.
Ordinances placing restrictions upon the lawful
use of property must, in order to be valid and
constitutional, specify the rules and conditions to
be observed and conduct to avoid; and must not
admit of the exercise, or of an opportunity for the
exercise, of unbridled discretion by the law
enforcers in carrying out its provisions.
NOTE: The case of Ermita Malate Hotel and Motel
Operators Association, Inc. v. City Mayor of
Manila,[ it needs pointing out, is also different from
this case in that what was involved therein was a
measure which regulated the mode in which motels
may conduct business in order to put an end to
practices which could encourage vice and immorality.
Necessarily, there was no valid objection on due
process or equal protection grounds as the ordinance
29