CITY OF MANDALUYONG, petitioner,

vs.
ANTONIO N., FRANCISCO N., THELMA N., EUSEBIO N., RODOLFO N., all surnamed AGUILAR, respondents.

PUNO, J.:

This is a petition for review under Rule 45 of the Rules of Court of the Orders dated September 17, 1998 and
December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City 1 dismissing the petitioner's Amended
Complaint in SCA No. 1427 for expropriation of two (2) parcels of land in Mandaluyong City. 1wphi1.nt

The antecedent facts are as follows:

On August 4, 1997, petitioner filed with the Regional Trial Court, Branch 168, Pasig City a complaint for expropriation
entitled "City of Mandaluyong, plaintiff v. Antonio N., Francisco N, Thelma N, Eusebio N, Rodolfo N., all surnamed
Aguilar, defendants." Petitioner sought to expropriate three (3) adjoining parcels of land with an aggregate area of
1,847 square meters registered under Transfer Certificates of Title Nos. 59780, 63766 and 63767 in the names of the
defendants, herein respondents, located at 9 de Febrero Street, Barangay Mauwag, City of Mandaluyong; on a
portion of the 3 lots, respondents constructed residential houses several decades ago which they had since leased
out to tenants until the present; on the vacant portion of the lots, other families constructed residential structures
which they likewise occupied; in 1983, the lots were classified by Resolution No. 125 of the Board of the Housing
and Urban Development Coordinating Council as an Area for Priority Development for urban land reform under
Proclamation Nos. 1967 and 2284 of then President Marcos; as a result of this classification, the tenants and
occupants of the lots offered to purchase the land from respondents, but the latter refused to sell; on November 7,
1996, the Sangguniang Panlungsod of petitioner, upon petition of the Kapitbisig, an association of tenants and
occupants of the subject land, adopted Resolution No. 516, Series of 1996 authorizing Mayor Benjamin Abalos of
the City of Mandaluyong to initiate action for the expropriation of the subject lots and construction of a medium-
rise condominium for qualified occupants of the land; on January 10, 1996, Mayor Abalos sent a letter to respondents
offering to purchase the said property at P3,000.00 per square meter; respondents did not answer the letter.
Petitioner thus prayed for the expropriation of the said lots and the fixing of just compensation at the fair market
value of P3,000.00 per square meter.2

In their answer, respondents, except Eusebio N. Aguilar who died in 1995, denied having received a copy of Mayor
Abalos' offer to purchase their lots. They alleged that the expropriation of their land is arbitrary and capricious, and
is not for a public purpose; the subject lots are their only real property and are too small for expropriation, while
petitioner has several properties inventoried for socialized housing; the fair market value of P3,000.00 per square
meter is arbitrary because the zonal valuation set by the Bureau of Internal Revenue is P7,000.00 per square meter.
As counterclaim, respondents prayed for damages of P21 million.3

Respondents filed a "Motion for Preliminary Hearing" claiming that the defenses alleged in their Answer are valid
grounds for dismissal of the complaint for lack of jurisdiction over the person of the defendants and lack of cause of
action. Respondents prayed that the affirmative defenses be set for preliminary hearing and that the complaint be
dismissed.4 Petitioner replied.

On November 5, 1997, petitioner filed an Amended Complaint and named as an additional defendant Virginia N.
Aguilar and, at the same time, substituted Eusebio Aguilar with his heirs. Petitioner also excluded from expropriation
TCT No. 59870 and thereby reduced the area sought to be expropriated from three (3) parcels of land to two (2)
parcels totalling 1,636 square meters under TCT Nos. 63766 and 63767. 5

The Amended Complaint was admitted by the trial court on December 18, 1997. Respondents, who, with the
exception of Virginia Aguilar and the Heirs of Eusebio Aguilar had yet to be served with summons and copies of the
Amended Complaint, filed a "Manifestation and Motion" adopting their "Answer with Counterclaim" and "Motion
for Preliminary Hearing" as their answer to the Amended Complaint. 6

The motion was granted. At the hearing of February 25, 1998, respondents presented Antonio Aguilar who testified
and identified several documentary evidence. Petitioner did not present any evidence. Thereafter, both parties filed
their respective memoranda.7

On September 17, 1998, the trial court issued an order dismissing the Amended Complaint after declaring
respondents as "small property owners" whose land is exempt from expropriation under Republic Act No. 7279. The
court also found that the expropriation was not for a public purpose for petitioner's failure to present any evidence
that the intended beneficiaries of the expropriation are landless and homeless residents of Mandaluyong. The court
thus disposed of as follows:

"WHEREFORE, the Amended Complaint is hereby ordered dismissed without pronouncement as to cost.

SO ORDERED."8

Petitioner moved for reconsideration. On December 29, 1998, the court denied the motion. Hence this petition.

Petitioner claims that the trial court erred

"IN UPHOLDING RESPONDENT'S CONTENTION THAT THEY QUALIFY AS SMALL PROPERTY OWNERS AND ARE
THUS EXEMPT FROM EXPROPRIATION."9

Petitioner mainly claims that the size of the lots in litigation does not exempt the same from expropriation in view
of the fact that the said lots have been declared to be within the Area for Priority Development (APD) No. 5 of
Mandaluyong by virtue of Proclamation No. 1967, as amended by Proclamation No. 2284 in relation to Presidential
Decree No. 1517.10 This declaration allegedly authorizes petitioner to expropriate the property, ipso
facto, regardless of the area of the land.

Presidential Decree (P.D.) No. 1517, the Urban Land Reform Act, was issued by then President Marcos in 1978. The
decree adopted as a State policy the liberation of human communities from blight, congestion and hazard, and
promotion of their development and modernization, the optimum use of land as a national resource for public
welfare.11 Pursuant to this law, Proclamation No. 1893 was issued in 1979 declaring the entire Metro Manila as
Urban Land Reform Zone for purposes of urban land reform. This was amended in 1980 by Proclamation No. 1967
and in 1983 by Proclamation No. 2284 which identified and specified 245 sites in Metro Manila as Areas for Priority
Development and Urban Land Reform Zones.

In 1992, the Congress of the Philippines passed Republic Act No. 7279, the "Urban Development and Housing Act of
1992." The law lays down as a policy that the state, in cooperation with the private sector, undertake a
comprehensive and continuing Urban Development and Housing Program; uplift the conditions of the
underprivileged and homeless citizens in urban, areas and resettlement areas by making available to them decent
housing at affordable cost, basic services and employment opportunities and provide for the rational use and
development of urban land to bring about, among others, equitable utilization of residential lands; encourage more
effective people's participation in the urban development process and improve the capability of local government
units in undertaking urban development and housing programs and projects. 12 Towards this end, all city and
municipal governments are mandated to conduct an inventory of all lands and improvements within their respective
localities, and in coordination with the National Housing Authority, the Housing and Land Use Regulatory Board, the
National Mapping Resource Information Authority, and the Land Management Bureau, identify lands for socialized
housing and resettlement areas for the immediate and future needs of the underprivileged and homeless in the
urban areas, acquire the lands, and dispose of said lands to the beneficiaries of the program.13
The acquisition of lands for socialized housing is governed by several provisions in the law. Section 9 of R.A. 7279
provides:

"Sec. 9. Priorities in the Acquisition of Land. Lands for socialized housing shall be acquired in the following
order:

(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies,
including government-owned or controlled corporations and their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas for Priority Development, Zonal Improvement Program sites,
and Slum Improvement and Resettlement Program sites which have not yet been acquired;

(e) Bagong Lipunan Improvement of Sites and Services or BLISS Sites which have not yet been
acquired;

(f) Privately-owned lands.

Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities
mentioned in this section shall not apply. The local government units shall give budgetary priority to on-site
development of government lands."

Lands for socialized housing are to be acquired in the following order: (1) government lands; (2) alienable lands of
the public domain; (3) unregistered or abandoned or idle lands; (4) lands within the declared Areas for Priority
Development (APD), Zonal Improvement Program (ZIP) sites, Slum Improvement and Resettlement (SIR) sites which
have not yet been acquired; (5) BLISS sites which have not yet been acquired; and (6) privately-owned lands.

There is no dispute that the two lots in litigation are privately-owned and therefore last in the order of priority
acquisition. However, the law also provides that lands within the declared APD's which have not yet been acquired
by the government are fourth in the order of priority. According to petitioner, since the subject lots lie within the
declared APD, this fact mandates that the lots be given priority in acquisition.14

Section 9, however, is not a single provision that can be read separate from the other provisions of the law. It must
be read together with Section 10 of R.A. 7279 which also provides:

"Section 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall
include, among others, community mortgage, land swapping, land assembly or consolidation, land banking,
donation to the Government, joint-venture agreement, negotiated purchase, and expropriation: Provided,
however, That expropriation shall be resorted to only when other modes of acquisition have been
exhausted: Provided, further, That where expropriation is resorted to, parcels of land owned by small
property owners shall be exempted for purposes of this Act: Provided, finally, That abandoned property, as
herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure
laid down in Rule 91 of the Rules of Court.15

For the purposes of socialized housing, government-owned and foreclosed properties shall be acquired by
the local government units, or by the National Housing Authority primarily through negotiated
purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the right
of first refusal."
Lands for socialized housing under R.A. 7279 are to be acquired in several modes. Among these modes are the
following: (1) community mortgage; (2) land swapping, (3) land assembly or consolidation; (4) land banking; (5)
donation to the government; (6) joint venture agreement; (7) negotiated purchase; and (8) expropriation. The mode
of expropriation is subject to two conditions: (a) it shall be resorted to only when the other modes of acquisition
have been exhausted; (b) parcels of land owned by small property owners are exempt from such acquisition.

Section 9 of R.A. 7279 speaks of priorities in the acquisition of lands. It enumerates the type of lands to be acquired
and the heirarchy in their acquisition. Section 10 deals with the modes of land acquisition or the process of acquiring
lands for socialized housing. These are two different things. They mean that the type of lands that may be acquired
in the order of priority in Section 9 are to be acquired only in the modes authorized under Section 10. The acquisition
of the lands in the priority list must be made subject to the modes and conditions set forth in the next provision. In
other words, land that lies within the APD, such as in the instant case, may be acquired only in the modes under,
and subject to the conditions of, Section 10.

Petitioner claims that it had faithfully observed the different modes of land acquisition for socialized housing under
R.A. 7279 and adhered to the priorities in the acquisition for socialized housing under said law.16 It, however, did not
state with particularity whether it exhausted the other modes of acquisition in Section 9 of the law before it decided
to expropriate the subject lots. The law states "expropriation shall be resorted to when other modes of acquisition
have been exhausted." Petitioner alleged only one mode of acquisition, i.e., by negotiated purchase. Petitioner,
through the City Mayor, tried to purchase the lots from respondents but the latter refused to sell. 17 As to the other
modes of acquisition, no mention has been made. Not even Resolution No. 516, Series of 1996 of the Sangguniang
Panlungsod authorizing the Mayor of Mandaluyong to effect the expropriation of the subject property states
whether the city government tried to acquire the same by community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the government, or joint venture agreement under Section 9 of the law.

Section 9 also exempts from expropriation parcels of land owned by small property owners. 18 Petitioner argues that
the exercise of the power of eminent domain is not anymore conditioned on the size of the land sought to be
expropriated.19 By the expanded notion of public use, present jurisprudence has established the concept that
expropriation is not anymore confined to the vast tracts of land and landed estates, but also covers small parcels of
land.20 That only a few could actually benefit from the expropriation of the property does not diminish its public use
character.21 It simply is not possible to provide, in one instance, land and shelter for all who need them. 22

While we adhere to the expanded notion of public use, the passage of R.A. No. 7279, the "Urban Development and
Housing Act of 1992" introduced a limitation on the size of the land sought to be expropriated for socialized housing.
The law expressly exempted "small property owners" from expropriation of their land for urban land reform. R.A.
No. 7279 originated as Senate Bill No. 234 authored by Senator Joey Lina 23 and House Bill No. 34310. Senate Bill No.
234 then provided that one of those lands not covered by the urban land reform and housing program was "land
actually used by small property owners within the just and equitable retention limit as provided under this
Act."24"Small property owners" were defined in Senate Bill No. 234 as:

"4. Small Property Owners are those whose rights are protected under Section 9, Article XIII of the
Constitution of the Philippines, who own small parcels of land within the fair and just retention limit
provided under this Act and which are adequate to meet the reasonable needs of the small property
owner's family and their means of livelihood.25

The exemption from expropriation of lands of small-property owners was never questioned on the Senate
floor.26This exemption, although with a modified definition, was actually retained in the consolidation of Senate Bill
No. 234 and House Bill No. 34310 which became R.A. No. 7279.27

The question now is whether respondents qualify as "small property owners" as defined in Section 3 (q) of R.A. 7279.
Section 3 (q) provides:
 "Section 3 x x x (q). "Small property owners" refers to those whose only real property consists of residential
lands not exceeding three hundred square meters (300 sq.m.) in highly urbanized cities and eight hundred
square meters (800 sq.m.) in other urban areas."

"Small-property owners" are defined by two elements: (1) those owners of real property whose property consists of
residential lands with an area of not more than 300 square meters in highly urbanized cities and 800 square meters
in other urban areas; and (2) that they do not own real property other than the same.

The case at bar involves two (2) residential lots in Mandaluyong City, a highly urbanized city. The lot under TCT No.
63766 is 687 square meters in area and the second under TCT No. 63767 is 949 square meters, both totalling 1,636
square meters in area. TCT No. 63766 was issued in the names of herein five (5) respondents, viz:

"FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR., widower;
RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; all of legal age,
Filipinos."28

TCT No. 63767 was issued in the names of the five (5) respondents plus Virginia Aguilar, thus:

"FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR., widower;
RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; and VIRGINIA N.
AGUILAR, single, all of legal age, Filipinos."29

Respondent Antonio Aguilar testified that he and the other registered owners are all siblings who inherited the
subject property by intestate succession from their parents. 30 Their father died in 1945 and their mother in
1976.31Both TCT's were issued in the siblings' names on September 2, 1987.31 In 1986, however, the siblings agreed
to extrajudicially partition the lots among themselves, but no action was taken by them to this end. It was only eleven
(11) years later, on November 28, 1997 that a survey of the two lots was made 33 and on February 10, 1998, a
consolidation subdivision plan was approved by the Lands Management Service of the Department of Environment
and Natural Resources.34 The co-owners signed a Partition Agreement on February 24, 199835 and on May 21, 1998,
TCT Nos. 63766 and 63767 were cancelled and new titles issued in the names of the individual owners pursuant to
the Partition Agreement.

Petitioner argues that the consolidation of the subject lots and their partition was made more than six (6) months
after the complaint for expropriation was filed on August 4, 1997, hence, the partition was made in bad faith, for
the purpose of circumventing the provisions of R.A. 7279. 36

At the time of filing of the complaint for expropriation, the lots subject of this case were owned in common by
respondents; Under a co-ownership, the ownership of an undivided thing or right belongs to different
persons.37During the existence of the co-ownership, no individual can claim title to any definite portion of the
community property until the partition thereof; and prior to the partition, all that the co-owner has is an ideal or
abstract quota or proportionate share in the entire land or thing. 38 Article 493 of the Civil Code however provides
that:

"Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining
thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with
respect to the co-owners shall be limited to the portion which may be allotted to him in the division upon
termination of the co-ownership.39

Before partition in a co-ownership, every co-owner has the absolute ownership of his undivided interest in the
common property. The co-owner is free to alienate, assign or mortgage his interest, except as to purely personal
rights.40 He may also validly lease his undivided interest to a third party independently of the other co-owners.41The
effect of any such transfer is limited to the portion which may be awarded to him upon the partition of the
property.42

Article 493 therefore gives the owner of an undivided interest in the property the right to freely sell and dispose of
his undivided interest.43 The co-owner, however, has no right to sell or alienate a concrete specific or determinate
part of the thing owned in common, because his right over the thing is represented by a quota or ideal portion
without any physical adjudication.44 If the co-owner sells a concrete portion, this, nonetheless, does not render the
sale void. Such a sale affects only his own share, subject to the results of the partition but not those of the other co-
owners who did not consent to the sale.45

In the instant case, the titles to the subject lots were issued in respondents' names as co-owners in 1987ten (10)
years before the expropriation case was filed in 1997. As co-owners, all that the respondents had was an ideal or
abstract quota or proportionate share in the lots. This, however, did not mean that they could not separately exercise
any rights over the lots. Each respondent had the full ownership of his undivided interest in the property. He could
freely sell or dispose of his interest independently of the other co-owners. And this interest could have even been
attached by his creditors.46 The partition in 1998, six (6) months after the filing of the expropriation case, terminated
the co-ownership by converting into certain and definite parts the respective undivided shares of the co-
owners.47The subject property is not a thing essentially indivisible. The rights of the co-owners to have the property
partitioned and their share in the same delivered to them cannot be questioned for "[n]o co-owner shall be obliged
to remain in the co-ownership."48 The partition was merely a necessary incident of the co-ownership;49 and absent
any evidence to the contrary, this partition is presumed to have been done in good faith.

Upon partition, four (4) co-owners, namely, Francisco, Thelma, Rodolfo and Antonio Aguilar each had a share of 300
square meters under TCT Nos. 13849, 13852, 13850, 13851. 50 Eusebio Aguilar's share was 347 square meters under
TCT No. 1385351 while Virginia Aguilar's was 89 square meters under TCT No. 13854.52

It is noted that Virginia Aguilar, although granted 89 square meters only of the subject lots, is, at the same time, the
sole registered owner of TCT No. 59780, one of the three (3) titles initially sought to be expropriated in the original
complaint. TCT No. 59780, with a land area of 211 square meters, was dropped in the amended complaint. Eusebio
Aguilar was granted 347 square meters, which is 47 square meters more than the maximum of 300 square meters
set by R.A. 7279 for small property owners. In TCT No. 13853, Eusebio's title, however, appears the following
annotation:

"... subject to x x x, and to the prov. of Sec. 4 Rule 74 of the Rules of Court with respect to the inheritance
left by the deceased Eusebio N. Aguilar."53

Eusebio died on March 23, 1995,54 and, according to Antonio's testimony, the former was survived by five (5)
children.55 Where there are several co-owners, and some of them die, the heirs of those who die, with respect to
that part belonging to the deceased, become also co-owners of the property together with those who survive.56 After
Eusebio died, his five heirs became co-owners of his 347 square-meter portion. Dividing the 347 square meters
among the five entitled each heir to 69.4 square meters of the land subject of litigation.

Consequently, the share of each co-owner did not exceed the 300 square meter limit set in R.A. 7279. The second
question, however, is whether the subject property is the only real property of respondents for them to comply with
the second requisite for small property owners.

Antonio Aguilar testified that he and most of the original co-owners do not reside on the subject property but in
their ancestral home in Paco, Manila.57 Respondents therefore appear to own real property other than the lots in
litigation. Nonetheless, the records do not show that the ancestral home in Paco, Manila and the land on which it
stands are owned by respondents or anyone of them. Petitioner did not present any title or proof of this fact despite
Antonio Aguilar's testimony.

On the other hand, respondents claim that the subject lots are their only real property 58 and that they, particularly
two of the five heirs of Eusebio Aguilar, are merely renting their houses and therefore do not own any other real
property in Metro Manila.59 To prove this, they submitted certifications from the offices of the City and Municipal
Assessors in Metro Manila attesting to the fact that they have no registered real property declared for taxation
purposes in the respective cities. Respondents were certified by the City Assessor of Manila;60 Quezon City;61Makati
City;62 Pasay City;63 Paranaque;64 Caloocan City;65 Pasig City;66 Muntinlupa;67 Marikina;68 and the then municipality
of Las Pias69 and the municipality of San Juan del Monte70 as having no real property registered for taxation in their
individual names.1wphi1.nt

Finally, this court notes that the subject lots are now in the possession of respondents. Antonio Aguilar testified that
he and the other co-owners filed ejectment cases against the occupants of the land before the Metropolitan Trial
Court, Mandaluyong, Branches 59 and 60. Orders of eviction were issued and executed on September 17, 1997 which
resulted in the eviction of the tenants and other occupants from the land in question. 71

IN VIEW WHEREOF, the petition is DENIED and the orders dated September 17. 1998 and December 29, 1998 of the
Regional Trial Court, Branch 168, Pasig City in SCA No. 1427 are AFFIRMED.

SO ORDERED.

Davide, Jr., Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

Footnotes:

18 Likewise exempt are idle residential lands also owned by small property owners under Section 11 of the law which reads:

Sec. 11. Expropriation of idle lands. All idle lands in urban lands in urban and urbanizable areas, as defined and identified in accordance with this Act,
shall be expropriated and shall form part of the public domain. These lands shall be disposed of or utilized by the Government for such purposes that
conform with their land use plans. Expropriation proceedings shall be instituted if, after the lapse of one (1) year following receipt of notice of
acquisition, the owner fails to introduce improvements as defined in Section 3 (f) hereof, except in the case of force majeure and other fortuitous
events. Exempted from this provision, however, are residential lands owned by small property owners or those the ownership of which is subject of a
pending litigation."
JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC., Petitioners,
vs.
MUNICIPALITY (now CITY) OF PASIG, METRO MANILA, Respondent.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review of the Decision 1 of the Court of Appeals (CA) in CA-G.R. CV No. 59050, and its
Resolution dated February 18, 2002, denying the motion for reconsideration thereof. The assailed decision affirmed
the order of the Regional Trial Court (RTC) of Pasig, Branch 160, declaring the respondent Municipality (now City) of
Pasig as having the right to expropriate and take possession of the subject property.

The Antecedents

The Municipality of Pasig needed an access road from E. R. Santos Street, a municipal road near the Pasig Public
Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to 70 houses, mostly made of light materials, were located.
The road had to be at least three meters in width, as required by the Fire Code, so that fire trucks could pass through
in case of conflagration.2 Likewise, the residents in the area needed the road for water and electrical outlets. 3 The
municipality then decided to acquire 51 square meters out of the 1,791-square meter property of Lorenzo Ching
Cuanco, Victor Ching Cuanco and Ernesto Ching Cuanco Kho covered by Transfer Certificate of Title (TCT) No. PT-
66585,4 which is abutting E. R. Santos Street.

On April 19, 1993, the Sangguniang Bayan of Pasig approved an Ordinance5 authorizing the municipal mayor to
initiate expropriation proceedings to acquire the said property and appropriate the fund therefor. The ordinance
stated that the property owners were notified of the municipalitys intent to purchase the property for public use as
an access road but they rejected the offer.

On July 21, 1993, the municipality filed a complaint, amended on August 6, 1993, against the Ching Cuancos for the
expropriation of the property under Section 19 of Republic Act (R.A.) No. 7160, otherwise known as the Local
Government Code. The plaintiff alleged therein that it notified the defendants, by letter, of its intention to construct
an access road on a portion of the property but they refused to sell the same portion. The plaintiff appended to the
complaint a photocopy of the letter addressed to defendant Lorenzo Ching Cuanco. 6

The plaintiff deposited with the RTC 15% of the market value of the property based on the latest tax declaration
covering the property. On plaintiffs motion, the RTC issued a writ of possession over the property sought to be
expropriated. On November 26, 1993, the plaintiff caused the annotation of a notice of lis pendens at the dorsal
portion of TCT No. PT-92579 under the name of the Jesus Is Lord Christian School Foundation, Incorporated (JILCSFI)
which had purchased the property.7 Thereafter, the plaintiff constructed therein a cemented road with a width of
three meters; the road was called Damayan Street.

In their answer,8 the defendants claimed that, as early as February 1993, they had sold the said property to JILCSFI
as evidenced by a deed of sale9 bearing the signature of defendant Ernesto Ching Cuanco Kho and his wife.

When apprised about the complaint, JILCSFI filed a motion for leave to intervene as defendant-in-intervention, which
motion the RTC granted on August 26, 1994. 10

In its answer-in-intervention, JILCSFI averred, by way of special and affirmative defenses, that the plaintiffs exercise
of eminent domain was only for a particular class and not for the benefit of the poor and the landless. It alleged that
the property sought to be expropriated is not the best portion for the road and the least burdensome to it. The
intervenor filed a crossclaim against its co-defendants for reimbursement in case the subject property is
expropriated.11 In its amended answer, JILCSFI also averred that it has been denied the use and enjoyment of its
property because the road was constructed in the middle portion and that the plaintiff was not the real party-in-
interest. The intervenor, likewise, interposed counterclaims against the plaintiff for moral damages and attorneys
fees.12

During trial, Rolando Togonon, the plaintiffs messenger, testified on direct examination that on February 23, 1993,
he served a letter of Engr. Jose Reyes, the Technical Assistant to the Mayor on Infrastructure, to Lorenzo Ching
Cuanco at his store at No. 18 Alkalde Jose Street, Kapasigan, Pasig. A lady received the same and brought it inside
the store. When she returned the letter to him, it already bore the signature of Luz Bernarte. He identified a
photocopy of the letter as similar to the one he served at the store. On cross-examination, he admitted that he never
met Luz Bernarte. 13

Edgardo del Rosario, a resident of Sto. Tomas Bukid since 1982 declared that he would pass through a wooden bridge
to go to E. R. Santos Street. At times, the bridge would be slippery and many had met accidents while walking along
the bridge. Because of this, they requested Mayor Vicente Eusebio to construct a road therein. He attested that after
the construction of the cemented access road, the residents had water and electricity.14

Augusto Paz of the City Engineers Office testified that, sometime in 1992, the plaintiff constructed a road
perpendicular from E. R. Santos Street to Sto. Tomas Bukid; he was the Project Engineer for the said undertaking.
Before the construction of the road, the lot was raw and they had to put filling materials so that vehicles could use
it. According to him, the length of the road which they constructed was 70 meters long and 3 meters wide so that a
fire truck could pass through. He averred that there is no other road through which a fire truck could pass to go to
Sto. Tomas Bukid.15

Manuel Tembrevilla, the Fire Marshall, averred that he had seen the new road, that is, Damayan Street, and found
that a fire truck could pass through it. He estimated the houses in the area to be around 300 to 400. Tembrevilla also
stated that Damayan Street is the only road in the area. 16

Finally, Bonifacio Maceda, Jr., Tax Mapper IV, testified that, according to their records, JILCSFI became the owner of
the property only on January 13, 1994.17

The plaintiff offered in evidence a photocopy of the letter of Engr. Jose Reyes addressed to Lorenzo Ching Cuanco to
prove that the plaintiff made a definite and valid offer to acquire the property to the co-owners. However, the RTC
rejected the same letter for being a mere photocopy.18

For the defendant-intervenor, Normita del Rosario, owner of the property located across the subject property,
testified that there are other roads leading to E. R. Santos Street. She asserted that only about ten houses of the
urban poor are using the new road because the other residents are using an alternative right-of-way. She averred
that she did not actually occupy her property; but there were times that she visited it. 19

Danilo Caballero averred that he had been a resident of Sto. Tomas Bukid for seven years. From his house, he could
use three streets to go to E. R. Santos Street, namely, Catalina Street, Damayan Street and Bagong Taon Street. On
cross-examination, he admitted that no vehicle could enter Sto. Tomas Bukid except through the newly constructed
Damayan Street.20

Eduardo Villanueva, Chairman of the Board of Trustees and President of JILCSFI, testified that the parcel of land was
purchased for purposes of constructing a school building and a church as worship center. He averred that the
realization of these projects was delayed due to the passing of the ordinance for expropriation. 21

The intervenor adduced documentary evidence that on February 27, 1993, Lorenzo Ching Cuanco and the co-owners
agreed to sell their property covered by TCT No. PT-66585 for 1,719,000.00.22 It paid a down payment of
1,000,000.00 for the property. After payment of the total purchase price, the Ching Cuancos executed a Deed of
Absolute Sale23 over the property on December 13, 1993. On December 21, 1993, TCT No. PT-92579 was issued in
the name of JILCSFI.24 It declared the property for taxation purposes under its name. 25

On September 3, 1997, the RTC issued an Order in favor of the plaintiff, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing and in accordance with Section 4, Rule 67 of the Revised Rules of Court, the
Court Resolves to DECLARE the plaintiff as having a lawful right to take the property in question for purposes for
which the same is expropriated.

The plaintiff and intervenor are hereby directed to submit at least two (2) names of their recommended
commissioners for the determination of just compensation within ten (10) days from receipt hereof.

SO ORDERED.26

The RTC held that, as gleaned from the declaration in Ordinance No. 21, there was substantial compliance with the
definite and valid offer requirement of Section 19 of R.A. No. 7160, and that the expropriated portion is the most
convenient access to the interior of Sto. Tomas Bukid.

Dissatisfied, JILCSFI elevated the case to the CA on the following assignment of errors:

First Assignment of Error

THE LOWER COURT SERIOUS[LY] ERRED WHEN IT RULED THAT PLAINTIFF-APPELLEE SUBSTANTIALLY COMPLIED
WITH THE LAW WHEN IT EXPROPRIATED JILS PROPERTY TO BE USED AS A RIGHT OF WAY.

Second Assignment of Error

THE LOWER COURT ERRED IN DISREGARDING JILS EVIDENCE PROVING THAT THERE WAS NO PUBLIC NECESSITY TO
WARRANT THE EXPROPRIATION OF THE SUBJECT PROPERTY.27

The Court of Appeals Decision

In a Decision dated March 13, 2001, the CA affirmed the order of the RTC. 28 The CA agreed with the trial court that
the plaintiff substantially complied with Section 19 of R.A. No. 7160, particularly the requirement that a valid and
definite offer must be made to the owner. The CA declared that the letter of Engr. Reyes, inviting Lorenzo Ching
Cuanco to a conference to discuss with him the road project and the price of the lot, was a substantial compliance
with the "valid and definite offer" requirement under said Section 19. In addition, the CA noted that there was also
constructive notice to the defendants of the expropriation proceedings since a notice of lis pendens was annotated
at the dorsal portion of TCT No. PT-92579 on November 26, 1993.29

Finally, the CA upheld the public necessity for the subject property based on the findings of the trial court that the
portion of the property sought to be expropriated appears to be, not only the most convenient access to the interior
of Sto. Tomas Bukid, but also an easy path for vehicles entering the area, particularly fire trucks. Moreover, the CA
took into consideration the provision of Article 33 of the Rules and Regulations Implementing the Local Government
Code, which regards the "construction or extension of roads, streets, sidewalks" as public use, purpose or welfare.30

On April 6, 2001, JILCSFI filed a motion for reconsideration of the said decision alleging that the CA erred in relying
on the photocopy of Engr. Reyes letter to Lorenzo Ching Cuanco because the same was not admitted in evidence by
the trial court for being a mere photocopy. It also contended that the CA erred in concluding that constructive notice
of the expropriation proceeding, in the form of annotation of the notice of lis pendens, could be considered as a
substantial compliance with the requirement under Section 19 of the Local Government Code for a valid and definite
offer. JILCSFI also averred that no inspection was ever ordered by the trial court to be conducted on the property,
and, if there was one, it had the right to be present thereat since an inspection is considered to be part of the trial
of the case.31

The CA denied the motion for reconsideration for lack of merit. It held that it was not precluded from considering
the photocopy32 of the letter, notwithstanding that the same was excluded by the trial court, since the fact of its
existence was duly established by corroborative evidence. This corroborative evidence consisted of the testimony
of the plaintiffs messenger that he personally served the letter to Lorenzo Ching Cuanco, and Municipal Ordinance
No. 21 which expressly stated that the property owners were already notified of the expropriation proceeding. The
CA noted that JILCSFI failed to adduce controverting evidence, thus the presumption of regularity was not
overcome.33

The Present Petition

In this petition, petitioner JILCSFI raises the following issues: (1) whether the respondent complied with the
requirement, under Section 19 of the Local Government Code, of a valid and definite offer to acquire the property
prior to the filing of the complaint; (2) whether its property which is already intended to be used for public purposes
may still be expropriated by the respondent; and (3) whether the requisites for an easement for right-of-way under
Articles 649 to 657 of the New Civil Code may be dispensed with.

The petitioner stresses that the law explicitly requires that a valid and definite offer be made to the owner of the
property and that such offer was not accepted. It argues that, in this case, there was no evidence to show that such
offer has been made either to the previous owner or the petitioner, the present owner. The petitioner contends that
the photocopy of the letter of Engr. Reyes, notifying Lorenzo Ching Cuanco of the respondents intention to construct
a road on its property, cannot be considered because the trial court did not admit it in evidence. And assuming that
such letter is admissible in evidence, it would not prove that the offer has been made to the previous owner because
mere notice of intent to purchase is not equivalent to an offer to purchase. The petitioner further argues that the
offer should be made to the proper party, that is, to the owner of the property. It noted that the records in this case
show that as of February 1993, it was already the owner of the property. Assuming, therefore, that there was an
offer to purchase the property, the same should have been addressed to the petitioner, as present owner. 34

The petitioner maintains that the power of eminent domain must be strictly construed since its exercise is necessarily
in derogation of the right to property ownership. All the requirements of the enabling law must, therefore, be strictly
complied with. Compliance with such requirements cannot be presumed but must be proved by the local
government exercising the power. The petitioner adds that the local government should, likewise, comply with the
requirements for an easement of right-of-way; hence, the road must be established at a point least prejudicial to
the owner of the property. Finally, the petitioner argues that, if the property is already devoted to or intended to be
devoted to another public use, its expropriation should not be allowed. 35

For its part, the respondent avers that the CA already squarely resolved the issues raised in this petition, and the
petitioner failed to show valid and compelling reason to reverse the CAs findings. Moreover, it is not the function
of the Supreme Court to weigh the evidence on factual issues all over again. 36 The respondent contends that the
Ching Cuancos were deemed to have admitted that an offer to purchase has been made and that they refused to
accept such offer considering their failure to specifically deny such allegation in the complaint. In light of such
admission, the exclusion of the photocopy of the letter of Engr. Reyes, therefore, is no longer significant. 37

The Ruling of the Court

The petition is meritorious.

At the outset, it must be stressed that only questions of law may be raised by the parties and passed upon by the
Supreme Court in petitions for review on certiorari.38 Findings of fact of the CA, affirming those of the trial court, are
final and conclusive and may not be reviewed on appeal.39

Nonetheless, where it is shown that the conclusion is a finding grounded on speculations, surmises or conjectures
or where the judgment is based on misapprehension of facts, the Supreme Court may reexamine the evidence on
record.40

Eminent Domain: Nature and Scope

The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate any
property within its territorial sovereignty for a public purpose. The nature and scope of such power has been
comprehensively described as follows:

It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government to serve the
common need and advance the general welfare. Thus, the right of eminent domain appertains to every independent
government without the necessity for constitutional recognition. The provisions found in modern constitutions of
civilized countries relating to the taking of property for the public use do not by implication grant the power to the
government, but limit the power which would, otherwise, be without limit. Thus, our own Constitution provides that
"[p]rivate property shall not be taken for public use without just compensation." Furthermore, the due process and
equal protection clauses act as additional safeguards against the arbitrary exercise of this governmental power. 41

Strict Construction and Burden of Proof

The exercise of the right of eminent domain, whether directly by the State or by its authorized agents, is necessarily
in derogation of private rights.42 It is one of the harshest proceedings known to the law. Consequently, when the
sovereign delegates the power to a political unit or agency, a strict construction will be given against the agency
asserting the power.43 The authority to condemn is to be strictly construed in favor of the owner and against the
condemnor.44 When the power is granted, the extent to which it may be exercised is limited to the express terms or
clear implication of the statute in which the grant is contained.45

Corollarily, the respondent, which is the condemnor, has the burden of proving all the essentials necessary to show
the right of condemnation.46 It has the burden of proof to establish that it has complied with all the requirements
provided by law for the valid exercise of the power of eminent domain.

The grant of the power of eminent domain to local government units is grounded on Section 19 of R.A. No. 7160
which reads:

SEC. 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor
and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent
laws; Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer
has been previously made to the owner, and such offer was not accepted: Provided, further, That the local
government unit may immediately take possession of the property upon the filing of the expropriation proceedings
and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the
property based on the current tax declaration of the property to be expropriated: Provided, finally, That the amount
to be paid for the expropriated property shall be determined by the proper court based on the fair market value at
the time of the taking of the property.

The Court declared that the following requisites for the valid exercise of the power of eminent domain by a local
government unit must be complied with:
1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the local
government unit, to exercise the power of eminent domain or pursue expropriation proceedings over a particular
private property.

2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and
the landless.

3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other
pertinent laws.

4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but
said offer was not accepted.47

Valid and Definite Offer

Article 35 of the Rules and Regulations Implementing the Local Government Code provides:

ARTICLE 35. Offer to Buy and Contract of Sale. (a) The offer to buy private property for public use or purpose shall
be in writing. It shall specify the property sought to be acquired, the reasons for its acquisition, and the price offered.

(b) If the owner or owners accept the offer in its entirety, a contract of sale shall be executed and payment forthwith
made.

(c) If the owner or owners are willing to sell their property but at a price higher than that offered to them, the local
chief executive shall call them to a conference for the purpose of reaching an agreement on the selling price. The
chairman of the appropriation or finance committee of the sanggunian, or in his absence, any member of
the sanggunian duly chosen as its representative, shall participate in the conference. When an agreement is reached
by the parties, a contract of sale shall be drawn and executed.

(d) The contract of sale shall be supported by the following documents:

(1) Resolution of the sanggunian authorizing the local chief executive to enter into a contract of sale. The resolution
shall specify the terms and conditions to be embodied in the contract;

(2) Ordinance appropriating the amount specified in the contract; and

(3) Certification of the local treasurer as to availability of funds together with a statement that such fund shall not
be disbursed or spent for any purpose other than to pay for the purchase of the property involved.

The respondent was burdened to prove the mandatory requirement of a valid and definite offer to the owner of the
property before filing its complaint and the rejection thereof by the latter. 48 It is incumbent upon the condemnor to
exhaust all reasonable efforts to obtain the land it desires by agreement. 49 Failure to prove compliance with the
mandatory requirement will result in the dismissal of the complaint. 50

An offer is a unilateral proposition which one party makes to the other for the celebration of a contract. 51 It creates
a power of acceptance permitting the offeree, by accepting the offer, to transform the offerors promise into a
contractual obligation.52 Corollarily, the offer must be complete, indicating with sufficient clearness the kind of
contract intended and definitely stating the essential conditions of the proposed contract. 53 An offer would require,
among other things, a clear certainty on both the object and the cause or consideration of the envisioned contract.54
The purpose of the requirement of a valid and definite offer to be first made to the owner is to encourage
settlements and voluntary acquisition of property needed for public purposes in order to avoid the expense and
delay of a court action.55 The law is designed to give to the owner the opportunity to sell his land without the expense
and inconvenience of a protracted and expensive litigation. This is a substantial right which should be protected in
every instance.56 It encourages acquisition without litigation and spares not only the landowner but also the
condemnor, the expenses and delays of litigation. It permits the landowner to receive full compensation, and the
entity acquiring the property, immediate use and enjoyment of the property. A reasonable offer in good faith, not
merely perfunctory or pro forma offer, to acquire the property for a reasonable price must be made to the owner
or his privy.57 A single bona fide offer that is rejected by the owner will suffice.

The expropriating authority is burdened to make known its definite and valid offer to all the owners of the property.
However, it has a right to rely on what appears in the certificate of title covering the land to be expropriated. Hence,
it is required to make its offer only to the registered owners of the property. After all, it is well-settled that persons
dealing with property covered by a Torrens certificate of title are not required to go beyond what appears on its
face.58

In the present case, the respondent failed to prove that before it filed its complaint, it made a written definite and
valid offer to acquire the property for public use as an access road. The only evidence adduced by the respondent
to prove its compliance with Section 19 of the Local Government Code is the photocopy of the letter purportedly
bearing the signature of Engr. Jose Reyes, to only one of the co-owners, Lorenzo Ching Cuanco. The letter reads:

MR. LORENZO CHING CUANCO

18 Alcalde Jose Street

Capasigan, Pasig

Metro Manila

Dear Mr. Cuanco:

This refers to your parcel of land located along E. Santos Street, Barangay Palatiw, Pasig, Metro Manila embraced in
and covered by TCT No. 66585, a portion of which with an area of fifty-one (51) square meters is needed by the
Municipal Government of Pasig for conversion into a road-right of way for the benefit of several residents living in
the vicinity of your property. Attached herewith is the sketch plan for your information.

In this connection, may we respectfully request your presence in our office to discuss this project and the price that
may be mutually agreed upon by you and the Municipality of Pasig.

Thank you.

Very truly yours,

(Sgd.)

ENGR. JOSE L. REYES

Technical Asst. to the Mayor

on Infrastructure59
It bears stressing, however, that the respondent offered the letter only to prove its desire or intent to acquire the
property for a right-of-way.60 The document was not offered to prove that the respondent made a definite and valid
offer to acquire the property. Moreover, the RTC rejected the document because the respondent failed to adduce
in evidence the original copy thereof.61 The respondent, likewise, failed to adduce evidence that copies of the letter
were sent to and received by all the co-owners of the property, namely, Lorenzo Ching Cuanco, Victor Ching Cuanco
and Ernesto Kho.

The respondent sought to prove, through the testimony of its messenger, Rolando Togonon, that Lorenzo Ching
Cuanco received the original of the said letter. But Togonon testified that he merely gave the letter to a lady, whom
he failed to identify. He stated that the lady went inside the store of Lorenzo Ching Cuanco, and later gave the letter
back to him bearing the signature purportedly of one Luz Bernarte. However, Togonon admitted, on cross-
examination, that he did not see Bernarte affixing her signature on the letter. Togonon also declared that he did not
know and had never met Lorenzo Ching Cuanco and Bernarte:

Q And after you received this letter from that lady, what did you do afterwards?

A I brought it with me, that letter, and then I went to Caruncho.

Q So, [M]r. Witness, you are telling this Honorable Court that this letter intended to Mr. Lorenzo was served at Pasig
Trading which was situated at No. 18 Alkalde Jose Street on February 23, 1993?

A Yes, Maam.

ATTY. TAN:

That is all for the witness, Your Honor.

COURT:

Do you have any cross-examination?

ATTY. JOLO:

Just a few cross, Your Honor, please. With the kind permission of the Honorable Court.

COURT:

Proceed.

CROSS-EXAMINATION

BY ATTY. JOLO:

Q Mr. Witness, do you know Mr. Lorenzo Ching [Cuanco]

A I do not know him.

Q As a matter of fact, you have not seen him even once, isnt not (sic)?

A Yes, Sir.
Q This Luz Bernarte, do you know her?

A I do not know her.

Q As a matter of fact, you did not see Mrs. Bernarte even once?

A That is correct.

Q And as a matter of fact, [M]r. Witness, you did not see Mrs. Luz Bernarte affixing her signature on the bottom
portion of this demand letter, marked as Exh. "C-2"?

A Yes, Sir.62

Even if the letter was, indeed, received by the co-owners, the letter is not a valid and definite offer to purchase a
specific portion of the property for a price certain. It is merely an invitation for only one of the co-owners, Lorenzo
Ching Cuanco, to a conference to discuss the project and the price that may be mutually acceptable to both parties.

There is no legal and factual basis to the CAs ruling that the annotation of a notice of lis pendens at the dorsal portion
of petitioners TCT No. PT-92579 is a substantial compliance with the requisite offer. A notice of lis pendensis a notice
to the whole world of the pendency of an action involving the title to or possession of real property and a warning
that those who acquire an interest in the property do so at their own risk and that they gamble on the result of the
litigation over it.63 Moreover, the lis pendens was annotated at the dorsal portion of the title only on November 26,
1993, long after the complaint had been filed in the RTC against the Ching Cuancos.

Neither is the declaration in one of the whereas clauses of the ordinance that "the property owners were already
notified by the municipality of the intent to purchase the same for public use as a municipal road," a substantial
compliance with the requirement of a valid and definite offer under Section 19 of R.A. No. 7160. Presumably,
the Sangguniang Bayan relied on the erroneous premise that the letter of Engr. Reyes reached the co-owners of the
property. In the absence of competent evidence that, indeed, the respondent made a definite and valid offer to all
the co-owners of the property, aside from the letter of Engr. Reyes, the declaration in the ordinance is not a
compliance with Section 19 of R.A. No. 7160.

The respondent contends, however, that the Ching Cuancos, impliedly admitted the allegation in its complaint that
an offer to purchase the property was made to them and that they refused to accept the offer by their failure to
specifically deny such allegation in their answer. This contention is wrong. As gleaned from their answer to the
complaint, the Ching Cuancos specifically denied such allegation for want of sufficient knowledge to form a belief as
to its correctness. Under Section 10,64 Rule 8 of the Rules of Court, such form of denial, although not specific, is
sufficient.

Public Necessity

We reject the contention of the petitioner that its property can no longer be expropriated by the respondent because
it is intended for the construction of a place for religious worship and a school for its members. As aptly explained
by this Court in Manosca v. Court of Appeals,65 thus:

It has been explained as early as Sea v. Manila Railroad Co., that:

A historical research discloses the meaning of the term "public use" to be one of constant growth. As society
advances, its demands upon the individual increases and each demand is a new use to which the resources of the
individual may be devoted. for "whatever is beneficially employed for the community is a public use."
Chief Justice Enrique M. Fernando states:

The taking to be valid must be for public use. There was a time when it was felt that a literal meaning should be
attached to such a requirement. Whatever project is undertaken must be for the public to enjoy, as in the case of
streets or parks. Otherwise, expropriation is not allowable. It is not so any more. As long as the purpose of the taking
is public, then the power of eminent domain comes into play. As just noted, the constitution in at least two cases,
to remove any doubt, determines what is public use. One is the expropriation of lands to be subdivided into small
lots for resale at cost to individuals. The other is the transfer, through the exercise of this power, of utilities and
other private enterprise to the government. It is accurate to state then that at present whatever may be beneficially
employed for the general welfare satisfies the requirements of public use.

Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land Tenure Administration, has viewed the
Constitution a dynamic instrument and one that "is not to be construed narrowly or pedantically so as to enable it to
meet adequately whatever problems the future has in store." Fr. Joaquin Bernas, a noted constitutionalist himself,
has aptly observed that what, in fact, has ultimately emerged is a concept of public use which is just as broad as
"public welfare."

Petitioners ask: But "(w)hat is the so-called unusual interest that the expropriation of (Felix Manalos) birthplace
become so vital as to be a public use appropriate for the exercise of the power of eminent domain" when only
members of the Iglesia ni Cristo would benefit? This attempt to give some religious perspective to the case deserves
little consideration, for what should be significant is the principal objective of, not the casual consequences that
might follow from, the exercise of the power. The purpose in setting up the marker is essentially to recognize the
distinctive contribution of the late Felix Manalo to the culture of the Philippines, rather than to commemorate his
founding and leadership of the Iglesia ni Cristo. The practical reality that greater benefit may be derived by members
of the Iglesia ni Cristo than by most others could well be true but such a peculiar advantage still remains to be merely
incidental and secondary in nature. Indeed, that only a few would actually benefit from the expropriation of
property, does not necessarily diminish the essence and character of public use.

The petitioner asserts that the respondent must comply with the requirements for the establishment of an easement
of right-of-way, more specifically, the road must be constructed at the point least prejudicial to the servient state,
and that there must be no adequate outlet to a public highway. The petitioner asserts that the portion of the lot
sought to be expropriated is located at the middle portion of the petitioners entire parcel of land, thereby splitting
the lot into two halves, and making it impossible for the petitioner to put up its school building and worship center.

The subject property is expropriated for the purpose of constructing a road. The respondent is not mandated to
comply with the essential requisites for an easement of right-of-way under the New Civil Code. Case law has it that
in the absence of legislative restriction, the grantee of the power of eminent domain may determine the location
and route of the land to be taken66 unless such determination is capricious and wantonly injurious. 67 Expropriation
is justified so long as it is for the public good and there is genuine necessity of public character. 68 Government may
not capriciously choose what private property should be taken. 69

The respondent has demonstrated the necessity for constructing a road from E. R. Santos Street to Sto. Tomas Bukid.
The witnesses, who were residents of Sto. Tomas Bukid, testified that although there were other ways through which
one can enter the vicinity, no vehicle, however, especially fire trucks, could enter the area except through the newly
constructed Damayan Street. This is more than sufficient to establish that there is a genuine necessity for the
construction of a road in the area. After all, absolute necessity is not required, only reasonable and practical necessity
will suffice.70

Nonetheless, the respondent failed to show the necessity for constructing the road particularly in the petitioners
property and not elsewhere.71 We note that the whereas clause of the ordinance states that the 51-square meter
lot is the shortest and most suitable access road to connect Sto. Tomas Bukid to E. R. Santos Street. The respondents
complaint also alleged that the said portion of the petitioners lot has been surveyed as the best possible ingress and
egress. However, the respondent failed to adduce a preponderance of evidence to prove its claims.

On this point, the trial court made the following findings:

The contention of the defendants that there is an existing alley that can serve the purpose of the expropriator is
not accurate. An inspection of the vicinity reveals that the alley being referred to by the defendants actually passes
thru Bagong Taon St. but only about one-half (1/2) of its entire length is passable by vehicle and the other half is
merely a foot-path. It would be more inconvenient to widen the alley considering that its sides are occupied by
permanent structures and its length from the municipal road to the area sought to be served by the expropriation is
considerably longer than the proposed access road. The area to be served by the access road is composed of compact
wooden houses and literally a slum area. As a result of the expropriation of the 51-square meter portion of the
property of the intervenor, a 3-meter wide road open to the public is created. This portion of the property of the
intervenor is the most convenient access to the interior of Sto. Tomas Bukid since it is not only a short cut to the
interior of the Sto. Tomas Bukid but also an easy path for vehicles entering the area, not to mention the 3-meter
wide road requirement of the Fire Code. 72

However, as correctly pointed out by the petitioner, there is no showing in the record that an ocular inspection was
conducted during the trial. If, at all, the trial court conducted an ocular inspection of the subject property during the
trial, the petitioner was not notified thereof. The petitioner was, therefore, deprived of its right to due process. It
bears stressing that an ocular inspection is part of the trial as evidence is thereby received and the parties are entitled
to be present at any stage of the trial.73 Consequently, where, as in this case, the petitioner was not notified of any
ocular inspection of the property, any factual finding of the court based on the said inspection has no probative
weight. The findings of the trial court based on the conduct of the ocular inspection must, therefore, be rejected.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and Resolution of the Court of Appeals are
REVERSED AND SET ASIDE. The RTC is ordered to dismiss the complaint of the respondent without prejudice to the
refiling thereof.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Footnotes

1
Penned by Associate Justice Portia Alio-Hormachuelos, with Associate Justices Fermin A. Martin, Jr. and
Mercedes Gozo-Dadole, concurring; Rollo, pp. 6-14.

2
TSN, 9 January 1996, pp. 4-9.

3
TSN, 1 August 1994, p. 17.

4
Records, p. 17.

5
Exhibit "C," Id. at 59-60.

6
Records, pp. 19-20.
7
Id. at 56.

8
Id. at 21.

9
Exhibits "2" and "3."

10
Id. at 24.

11
Records, p. 26.

12
Id. at 31-32.

13
TSN, 1 August 1994, pp. 3-8.

14
TSN, 1 August 1994, pp. 15-18.

15
TSN, 9 January 1996, pp. 5-10.

16
TSN, 30 January 1996, pp. 9-10.

17
TSN, 13 March 1996, p. 5.

18
Records, p. 41.

19
TSN, 15 July 1996, pp. 17-19.

20
TSN, 19 August 1996, pp. 8-13.

21
TSN, 25 September 1996, pp. 7-9.

22
Exhibit "3."

23
Exhibit "5."

24
Exhibit "1."

25
Exhibit "2."

26
Rollo, pp. 58-59.

27
CA Rollo, p. 46.

28
Rollo, p. 13.

29
Id. at 10-11.

30
Rollo, pp. 12-13.

31
CA Rollo, pp. 143-148.
32
Exhibit "H."

33
Rollo, p. 18.

34
Rollo, pp. 159-162.

35
Rollo, pp. 168-175.

36
Id. at 196.

37
Id. at 97-98.

38
Vicente v. Planters Development Bank, G.R. No. 136112, 28 January 2003, 396 SCRA 282.

39
Larena v. Mapili, G.R. No. 146341, 7 August 2003, 408 SCRA 484.

40
Chan v. Maceda, Jr., G.R. No. 142591, 30 April 2003, 402 SCRA 352.

41
Heirs of Alberto Suguitan v. City of Mandaluyong, G.R. No. 135087, 14 March 2000, 328 SCRA 137.

42
City of Manila v. Chinese Community of Manila, 40 Phil. 349 (1919).

43
District Board of Trustees of the Daytona Beach Community College v. Allen, 428 So.2d 704 (1983).

44
Pequonnock Yacht Club, Inc. v. City of Bridgeport, 259 Conn. 592, 790 A.2d 1178 (2002).

45
City of Birmingham v. Brown, 241 Ala. 203, 2 So.2d 305 (1941).

46
Gordon v. Conroe Independent School District, 789 S.W.2d 395 (1990).

47
Heirs of Alberto Suguitan v. City of Mandaluyong, supra.

48
Wampler v. Trustees of Indiana University, 241 Ind. 449, 172 N.E.2d 67 (1961).

49
Pequonnock Yacht Club, Inc. v. City of Bridgeport, supra.

50
Casino Reinvestment Development Authority v. Katz, 334 N.J.Super 473, 759 A.2d 1247 (2000).

51
Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philippines, Volume IV,
1991 Edition, p. 448.

52
Blacks Law Dictionary, 5th Edition, p. 976.

53
Tolentino, supra, p. 449.

54
Swedish Match, AB v. Court of Appeals, G.R. No. 128120, 20 October 2004, 441 SCRA 1.

55
City of Atlantic v. Cynwyd Investments, 148 N.J. 55, 689 A.2d 712 (1997).
56
In Re University of Avenue in City of Rochester, 82 Misc. 598, 144 N.Y.S. 1086 (1913).

57
Chambers v. Public Service Company of Indiana, Inc., 265 Ind. 336, 355 N.E.2d 781 (1976).

58
Orquiola v. Court of Appeals, G.R. No. 141463, 6 August 2002, 386 SCRA 301.

59
Records, p. 57.

60
Id. at 38.

61
Records, p. 41.

62
TSN, 1 August 1994, pp. 6-8.

63
Los Baos Rural Bank, Inc. v. Africa, G.R. No. 143994, 11 July 2002, 384 SCRA 535.

64
Section 10, Rule 8 of the Rules of Court provides:

Section 10. Specific denial. A defendant must specify each material allegation of fact the truth of which
he does not admit and whenever practicable, shall set forth the substance of the matters upon which he
relies to support his denial. Where a defendant desires to deny only a part of an averment, he shall specify
so much of it as is true and material and shall deny only the remainder. Where a defendant is without
knowledge or information sufficient to form a belief as to the truth of a material averment made in the
complaint, he shall so state, and this shall have the effect of a denial. (Emphasis supplied)

65
G.R. No. 106440, 29 January 1996, 252 SCRA 412.

66
Alabama Elec. Co-op., Inc. v. Watson, 419 So. 2d 1351 (1982).

67
Alabama Power Co. v. Tauton, 465 So. 2d 1105 (1984).

68
Municipality of Meycauayan, Bulacan v. Intermediate Appellate Court, G.R. No. L-72126, 29 January 1988,
157 SCRA 640.

69
Moday v. Court of Appeals, G.R. No. 107916, 20 February 1997, 268 SCRA 586.

70
Manotok v. National Housing Authority, G.R. No. L-55166, 21 May 1987, 150 SCRA 89.

71
See City of Manila v. Chinese Community of Manila, supra, where the Court noted that the record contains
no proof of the necessity of opening the same through the cemetery; Manotok v. National Housing
Authority, supra, where the Court observed that there is no showing as to why the properties involved were
singled out for expropriation or what necessity impelled the particular choices or selection.

72
Rollo, pp. 57-58.

73
Ricardo J. Francisco, Evidence, 3rd ed., 1996, p. 52, citing Benton v. State, 30 Ark. 329; Denver Omnibus &
Cab Co. v. War Auction Co., 47 Colo. 446, 1076 Pac. 1073.
G.R. No. 103125 May 17, 1993

PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON. BENJAMIN V. PANGA as
Presiding Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners,
vs.
THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN JOAQUIN, respondents.

The Provincial Attorney for petitioners.

Reynaldo L. Herrera for Ernesto San Joaquin.

QUIASON, J.:

In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled "Ernesto N.
San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide whether the expropriation of
agricultural lands by local government units is subject, to the prior approval of the Secretary of the Agrarian Reform,
as the implementator of the agrarian reform program.

On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed Resolution No. 129,
Series of 1988, authorizing the Provincial Governor to purchase or expropriate property contiguous to the provincial
capitol site, in order to establish a pilot farm for non-food and non-traditional agricultural crops and a housing project
for provincial government employees.

The "WHEREAS" clause o:f the Resolution states:

WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Development
plan, some of the vital components of which includes the establishment of model and pilot farm
for non-food and non-traditional agricultural crops, soil testing and tissue culture laboratory
centers, 15 small scale technology soap making, small scale products of plaster of paris, marine
biological and sea farming research center,and other progressive feasibility concepts objective of
which is to provide the necessary scientific and technology know-how to farmers and fishermen in
Camarines Sur and to establish a housing project for provincial government employees;

WHEREAS, the province would need additional land to be acquired either by purchase or
expropriation to implement the above program component;

WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Site
ideally suitable to establish the same pilot development center;

WHEREFORE . . . .

Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R.Villafuerte, filed two
separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, docketed as Special Civil
Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided by the Hon. Benjamin V.
Panga.

Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession. The San Joaquins
failed to appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for their
property. In an order dated December 6, 1989, the trial court denied the motion to dismiss and authorized the
Province of Camarines Sur to take possession of the property upon the deposit with the Clerk of Court of the amount
of P5,714.00, the amount provisionally fixed by the trial court to answer for damages that private respondents may
suffer in the event that the expropriation cases do not prosper. The trial court issued a writ of possession in an order
dated January18, 1990.

The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to take
possession of their property and a motion to admit an amended motion to dismiss. Both motions were denied in the
order dated February 1990.

In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129, Series of 1988 of
the Sangguniang Panlalawigan be declared null and void; (b) that the complaints for expropriation be dismissed; and
(c) that the order dated December 6, 1989 (i) denying the motion to dismiss and (ii) allowing the Province of
Camarines Sur to take possession of the property subject of the expropriation and the order dated February 26,
1990, denying the motion to admit the amended motion to dismiss, be set aside. They also asked that an order be
issued to restrain the trial court from enforcing the writ of possession, and thereafter to issue a writ of injunction.

In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate the
expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that the
expropriations are for a public purpose.

Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that under Section 9
of the Local Government Code (B.P. Blg. 337), there was no need for the approval by the Office of the President of
the exercise by the Sangguniang Panlalawigan of the right of eminent domain. However, the Solicitor General
expressed the view that the Province of Camarines Sur must first secure the approval of the Department of Agrarian
Reform of the plan to expropriate the lands of petitioners for use as a housing project.

The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take possession
of private respondents' lands and the order denying the admission of the amended motion to dismiss. It also ordered
the trial court to suspend the expropriation proceedings until after the Province of Camarines Sur shall have
submitted the requisite approval of the Department of Agrarian Reform to convert the classification of the property
of the private respondents from agricultural to non-agricultural land.

Hence this petition.

It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the complaints for
expropriation on the ground of the inadequacy of the compensation offered for the property and (ii) the nullification
of Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan of the Province of Camarines Sur.

The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss the complaints.
However, when the Court of Appeals ordered the suspension of the proceedings until the Province of Camarines Sur
shall have obtained the authority of the Department of Agrarian Reform to change the classification of the lands
sought to be expropriated from agricultural to non-agricultural use, it assumed that the resolution is valid and that
the expropriation is for a public purpose or public use.

Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use" for
which the power of eminent domain may be exercised. The old concept was that the condemned property must
actually be used by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could satisfy
the constitutional requirement of "public use". Under the new concept, "public use" means public advantage,
convenience or benefit, which tends to contribute to the general welfare and the prosperity of the whole
community, like a resort complex for tourists or housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220
[1983]; Sumulong v. Guerrero, 154 SC.RA 461 [1987]).

The expropriation of the property authorized by the questioned resolution is for a public purpose. The establishment
of a pilot development center would inure to the direct benefit and advantage of the people of the Province of
Camarines Sur. Once operational, the center would make available to the community invaluable information and
technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of the farmers, fishermen and
craftsmen would be enhanced. The housing project also satisfies the public purpose requirement of the Constitution.
As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of
state concern since it directly and significantly affects public health, safety, the environment and in sum the general
welfare."

It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain cannot be
restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657), particularly Section 65
thereof, which requires the approval of the Department of Agrarian Reform before a parcel of land can be reclassified
from an agricultural to a non-agricultural land.

The Court of Appeals, following the recommendation of the Solicitor General, held that the Province of Camarines
Sur must comply with the provision of Section 65 of the Comprehensive Agrarian Reform Law and must first secure
the approval of the Department of Agrarian Reform of the plan to expropriate the lands of the San Joaquins.

In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the Philippine Tourism
Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist resort complex. There
was a finding that of the 282 hectares sought to be expropriated, only an area of 8,970 square meters or less than
one hectare was affected by the land reform program and covered by emancipation patents issued by the Ministry
of Agrarian Reform. While the Court said that there was "no need under the facts of this petition to rule on whether
the public purpose is superior or inferior to another purpose or engage in a balancing of competing public interest,"
it upheld the expropriation after noting that petitioners had failed to overcome the showing that the taking of 8,970
square meters formed part of the resort complex. A fair and reasonable reading of the decision is that this Court
viewed the power of expropriation as superior to the power to distribute lands under the land reform program.

The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by stressing the fact
that local government units exercise such power only by delegation. (Comment, pp. 14-15; Rollo, pp. 128-129)

It is true that local government units have no inherent power of eminent domain and can exercise it only when
expressly authorized by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed. 950, 50 SCt. 360). It is also
true that in delegating the power to expropriate, the legislature may retain certain control or impose certain
restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167,
43 S Ct. 684). While such delegated power may be a limited authority, it is complete within its limits. Moreover, the
limitations on the exercise of the delegated power must be clearly expressed, either in the law conferring the power
or in other legislations.

Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the Local Government
Code, which provides:

A local government unit may, through its head and acting pursuant to a resolution of its sanggunian
exercise the right of eminent domain and institute condemnation proceedings for public use or
purpose.

Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first secure the approval
of the Department of Land Reform for the conversion of lands from agricultural to non-agricultural use, before they
can institute the necessary expropriation proceedings. Likewise, there is no provision in the Comprehensive Agrarian
Reform Law which expressly subjects the expropriation of agricultural lands by local government units to the control
of the Department of Agrarian Reform. The closest provision of law that the Court of Appeals could cite to justify the
intervention of the Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive
Agrarian Reform Law, which reads:

Sec. 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land
ceases to be economically feasible and sound for, agricultural purposes, or the locality has become
urbanized and the land will have a greater economic value for residential, commercial or industrial
purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the
affected parties, and subject to existing laws, may authorize the reclassification or conversion of
the land and its disposition: Provided, That the beneficiary shall have fully paid his obligation.

The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed under the
agrarian reform program as it speaks of "the lapse of five (5) years from its award."

The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of
1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a
parcel of agricultural land for the purpose to which it would be devoted by the expropriating authority. While those
rules vest on the Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of
agricultural lands for residential, commercial or industrial uses, such authority is limited to the applications for
reclassification submitted by the land owners or tenant beneficiaries.

Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constricted by
implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241).

To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural
lands needed for the construction of roads, bridges, schools, hospitals, etc, without first applying for conversion of
the use of the lands with the Department of Agrarian Reform, because all of these projects would naturally involve
a change in the land use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the
expropriation is for a public purpose or public use.

Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the
property sought to be expropriated shall be public, the same being an expression of legislative policy. The courts
defer to such legislative determination and will intervene only when a particular undertaking has no real or
substantial relation to the public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L.
ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585).

There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not embrace the
sovereign unless the sovereign is specially mentioned as subject thereto (Alliance of Government Workers v. Minister
of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the Philippines, as sovereign, or its political
subdivisions, as holders of delegated sovereign powers, cannot be bound by provisions of law couched in general
term.

The fears of private respondents that they will be paid on the basis of the valuation declared in the tax declarations
of their property, are unfounded. This Court has declared as unconstitutional the Presidential Decrees fixing the just
compensation in expropriation cases to be the value given to the condemned property either by the owners or the
assessor, whichever was lower ([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held
in Municipality of Talisay v. Ramirez, 183 SCRA 528 [1990], the rules for determining just compensation are those
laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on what they consider
shall be the just compensation for their property.
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside insofar as it
(a) nullifies the trial court's order allowing the Province of Camarines Sur to take possession of private respondents'
property; (b) orders the trial court to suspend the expropriation proceedings; and (c) requires the Province of
Camarines Sur to obtain the approval of the Department of Agrarian Reform to convert or reclassify private
respondents' property from agricultural to non-agricultural use.

The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court, denying the
amended motion to dismiss of the private respondents.

SO ORDERED.
G.R. No. 161656 June 29, 2005

REPUBLIC OF THE PHILIPPINES, GENERAL ROMEO ZULUETA, COMMODORE EDGARDO GALEOS, ANTONIO
CABALUNA, DOROTEO MANTOS & FLORENCIO BELOTINDOS, petitioners,
vs.
VICENTE G. LIM, respondent.

RESOLUTION

SANDOVAL-GUTIERREZ, J.:

Justice is the first virtue of social institutions. 1 When the state wields its power of eminent domain, there arises a
correlative obligation on its part to pay the owner of the expropriated property a just compensation. If it fails, there
is a clear case of injustice that must be redressed. In the present case, fifty-seven (57) years have lapsed from the
time the Decision in the subject expropriation proceedings became final, but still the Republic of the Philippines,
herein petitioner, has not compensated the owner of the property. To tolerate such prolonged inaction on its part
is to encourage distrust and resentment among our people the very vices that corrode the ties of civility and tempt
men to act in ways they would otherwise shun.

A revisit of the pertinent facts in the instant case is imperative.

On September 5, 1938, the Republic of the Philippines (Republic) instituted a special civil action for expropriation
with the Court of First Instance (CFI) of Cebu, docketed as Civil Case No. 781, involving Lots 932 and 939 of the
Banilad Friar Land Estate, Lahug, Cebu City, for the purpose of establishing a military reservation for the Philippine
Army. Lot 932 was registered in the name of Gervasia Denzon under Transfer Certificate of Title (TCT) No. 14921
with an area of 25,137 square meters, while Lot 939 was in the name of Eulalia Denzon and covered by TCT No.
12560 consisting of 13,164 square meters.

After depositing 9,500.00 with the Philippine National Bank, pursuant to the Order of the CFI dated October 19,
1938, the Republic took possession of the lots. Thereafter, or on May 14, 1940, the CFI rendered its Decision ordering
the Republic to pay the Denzons the sum of 4,062.10 as just compensation.

The Denzons interposed an appeal to the Court of Appeals but it was dismissed on March 11, 1948. An entry of
judgment was made on April 5, 1948.

In 1950, Jose Galeos, one of the heirs of the Denzons, filed with the National Airports Corporation a claim for rentals
for the two lots, but it "denied knowledge of the matter." Another heir, Nestor Belocura, brought the claim to the
Office of then President Carlos Garcia who wrote the Civil Aeronautics Administration and the Secretary of National
Defense to expedite action on said claim. On September 6, 1961, Lt. Manuel Cabal rejected the claim but expressed
willingness to pay the appraised value of the lots within a reasonable time.

For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons successors-in-interest, Francisca
Galeos-Valdehueza and Josefina Galeos-Panerio,2 filed with the same CFI an action for recovery of possession with
damages against the Republic and officers of the Armed Forces of the Philippines in possession of the property. The
case was docketed as Civil Case No. R-7208.

In the interim or on November 9, 1961, TCT Nos. 23934 and 23935 covering Lots 932 and 939 were issued in the
names of Francisca Valdehueza and Josefina Panerio, respectively. Annotated thereon was the phrase "subject to
the priority of the National Airports Corporation to acquire said parcels of land, Lots 932 and 939 upon previous
payment of a reasonable market value."
On July 31, 1962, 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 932 and 939 because of the Republics failure to pay the
amount of 4,062.10, adjudged in the expropriation proceedings. However, in view of the annotation on their land
titles, they were ordered to execute a deed of sale in favor of the Republic. In view of "the differences in money
value from 1940 up to the present," the court adjusted the market value at 16,248.40, to be paid with 6% interest
per annum from April 5, 1948, date of entry in the expropriation proceedings, until full payment.

After their motion for reconsideration was denied, Valdehueza and Panerio appealed from the CFI Decision, in view
of the amount in controversy, directly to this Court. The case was docketed as No. L-21032.3 On May 19, 1966, this
Court rendered its Decision affirming the CFI Decision. It held that Valdehueza and Panerio are still the registered
owners of Lots 932 and 939, there having been no payment of just compensation by the Republic. Apparently, this
Court found nothing in the records to show that the Republic paid the owners or their successors-in-interest
according to the CFI decision. While it deposited the amount of 9,500,00, and said deposit was allegedly disbursed,
however, the payees could not be ascertained.

Notwithstanding the above finding, this Court still ruled that Valdehueza and Panerio are not entitled to recover
possession of the lots but may only demand the payment of their fair market value, ratiocinating as follows:

"Appellants would contend that: (1) possession of Lots 932 and 939 should be restored to them as owners of the
same; (2) the Republic should be ordered to pay rentals for the use of said lots, plus attorneys fees; and (3) the
court a quo in the present suit had no power to fix the value of the lots and order the execution of the deed of sale
after payment.

It is true that plaintiffs are still the registered owners of the land, there not having been a transfer of said lots in
favor of the Government. The records do not show that the Government paid the owners or their successors-in-
interest according to the 1940 CFI decision although, as stated, 9,500.00 was deposited by it, and said deposit had
been disbursed. With the records lost, however, it cannot be known who received the money (Exh. 14 says: It is
further certified that the corresponding Vouchers and pertinent Journal and Cash Book were destroyed during the
last World War, and therefore the names of the payees concerned cannot be ascertained.) And the Government
now admits that there is no available record showing that payment for the value of the lots in question has been
made (Stipulation of Facts, par. 9, Rec. on Appeal, p. 28).

The points in dispute are whether such payment can still be made and, if so, in what amount. Said lots have been
the subject of expropriation proceedings. By final and executory judgment in said proceedings, they were
condemned for public use, as part of an airport, and ordered sold to the Government. In fact, the abovementioned
title certificates secured by plaintiffs over said lots contained annotations of the right of the National Airports
Corporation (now CAA) to pay for and acquire them. It follows that both by virtue of the judgment, long final, in the
expropriation suit, as well as the annotations upon their title certificates, plaintiffs are not entitled to recover
possession of their expropriated lots which are still devoted to the public use for which they were expropriated
but only to demand the fair market value of the same."

Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein respondent,4 as security for
their loans. For their failure to pay Lim despite demand, he had the mortgage foreclosed in 1976. Thus, TCT No.
23934 was cancelled, and in lieu thereof, TCT No. 63894 was issued in his name.

On August 20, 1992, respondent Lim filed a complaint for quieting of title with the Regional Trial Court (RTC), Branch
10, Cebu City, against General Romeo Zulueta, as Commander of the Armed Forces of the Philippines, Commodore
Edgardo Galeos, as Commander of Naval District V of the Philippine Navy, Antonio Cabaluna, Doroteo Mantos and
Florencio Belotindos, herein petitioners. Subsequently, he amended the complaint to implead the Republic.

On May 4, 2001, the RTC rendered a decision in favor of respondent, thus:

"WHEREFORE, judgment is hereby rendered in favor of plaintiff Vicente Lim and against all defendants, public and
private, declaring plaintiff Vicente Lim the absolute and exclusive owner of Lot No. 932 with all the rights of an
absolute owner including the right to possession. The monetary claims in the complaint and in the counter claims
contained in the answer of defendants are ordered Dismissed.

Petitioners elevated the case to the Court of Appeals, docketed therein as CA-G.R. CV No. 72915. In its
Decision5dated September 18, 2003, the Appellate Court sustained the RTC Decision, thus:

"Obviously, defendant-appellant Republic evaded its duty of paying what was due to the landowners. The
expropriation proceedings had already become final in the late 1940s and yet, up to now, or more than fifty (50)
years after, the Republic had not yet paid the compensation fixed by the court while continuously reaping benefits
from the expropriated property to the prejudice of the landowner. x x x. This is contrary to the rules of fair play
because the concept of just compensation embraces not only the correct determination of the amount to be paid
to the owners of the land, but also the payment for the land within a reasonable time from its taking. Without
prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the
consequence of being immediately deprived of his land while being made to wait for a decade or more, in this case
more than 50 years, before actually receiving the amount necessary to cope with the loss. To allow the taking of the
landowners properties, and in the meantime leave them empty-handed by withholding payment of compensation
while the government speculates on whether or not it will pursue expropriation, or worse, for government to
subsequently decide to abandon the property and return it to the landowners, is undoubtedly an oppressive exercise
of eminent domain that must never be sanctioned. (Land Bank of the Philippines vs. Court of Appeals, 258 SCRA 404).

xxxxxx

An action to quiet title is a common law remedy for the removal of any cloud or doubt or uncertainty on the title to
real property. It is essential for the plaintiff or complainant to have a legal or equitable title or interest in the real
property, which is the subject matter of the action. Also the deed, claim, encumbrance or proceeding that is being
alleged as cloud on plaintiffs title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy (Robles vs. Court of Appeals, 328 SCRA 97). In view of the foregoing
discussion, clearly, the claim of defendant-appellant Republic constitutes a cloud, doubt or uncertainty on the title
of plaintiff-appellee Vicente Lim that can be removed by an action to quiet title.

WHEREFORE, in view of the foregoing, and finding no reversible error in the appealed May 4, 2001 Decision of Branch
9, Regional Trial Court of Cebu City, in Civil Case No. CEB-12701, the said decision is UPHELD AND
AFFIRMED. Accordingly, the appeal is DISMISSED for lack of merit."

Undaunted, petitioners, through the Office of the Solicitor General, filed with this Court a petition for review on
certiorari alleging that the Republic has remained the owner of Lot 932 as held by this Court in Valdehueza vs.
Republic.6

In our Resolution dated March 1, 2004, we denied the petition outright on the ground that the Court of Appeals did
not commit a reversible error. Petitioners filed an urgent motion for reconsideration but we denied the same with
finality in our Resolution of May 17, 2004.

On May 18, 2004, respondent filed an ex-parte motion for the issuance of an entry of judgment. We only noted the
motion in our Resolution of July 12, 2004.

On July 7, 2004, petitioners filed an urgent plea/motion for clarification, which is actually a second motion for
reconsideration. Thus, in our Resolution of September 6, 2004, we simply noted without action the motion
considering that the instant petition was already denied with finality in our Resolution of May 17, 2004.
On October 29, 2004, petitioners filed a very urgent motion for leave to file a motion for reconsideration of our
Resolution dated September 6, 2004 (with prayer to refer the case to the En Banc). They maintain that the Republics
right of ownership has been settled in Valdehueza.

The basic issue for our resolution is whether the Republic has retained ownership of Lot 932 despite its failure to
pay respondents predecessors-in-interest the just compensation therefor pursuant to the judgment of the CFI
rendered as early as May 14, 1940.

Initially, we must rule on the procedural obstacle.

While we commend the Republic for the zeal with which it pursues the present case, we reiterate that its urgent
motion for clarification filed on July 7, 2004 is actually a second motion for reconsideration. This motion is prohibited
under Section 2, Rule 52, of the 1997 Rules of Civil Procedure, as amended, which provides:

"Sec. 2. Second motion for reconsideration. No second motion for reconsideration of a judgment or final resolution
by the same party shall be entertained."

Consequently, as mentioned earlier, we simply noted without action the motion since petitioners petition was
already denied with finality.

Considering the Republics urgent and serious insistence that it is still the owner of Lot 932 and in the interest of
justice, we take another hard look at the controversial issue in order to determine the veracity of petitioners stance.

One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property
without due process of law; and in expropriation cases, an essential element of due process is that there must be
just compensation whenever private property is taken for public use. 7 Accordingly, Section 9, Article III, of our
Constitution mandates: "Private property shall not be taken for public use without just compensation."

The Republic disregarded the foregoing provision when it failed and refused to pay respondents 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. The final judgment in the
expropriation proceedings (Civil Case No. 781) was entered on April 5, 1948. 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. This is more so when such delay is accompanied by
bureaucratic hassles. Apparent from Valdehueza is the fact that respondents predecessors-in-interest were given a
"run around" by the Republics officials and agents. In 1950, despite the benefits it derived from the use of the two
lots, the National Airports Corporation denied knowledge of the claim of respondents predecessors-in-interest.
Even President Garcia, who sent a letter to the Civil Aeronautics Administration and the Secretary of National
Defense to expedite the payment, failed in granting relief to them. And, on September 6, 1961, while the Chief of
Staff of the Armed Forces expressed willingness to pay the appraised value of the lots, nothing happened.lawphil.net

The Court of Appeals is correct in saying that Republics delay is contrary to the rules of fair play, as "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. Without prompt payment, compensation
cannot be considered just." In jurisdictions similar to ours, where an entry to the expropriated property precedes
the payment of compensation, it has been held that if the compensation is not paid in a reasonable time, the party
may be treated as a trespasser ab initio.8

Corollarily, in Provincial Government of Sorsogon vs. Vda. De Villaroya,9 similar to the present case, this Court
expressed its disgust over the governments vexatious delay in the payment of just compensation, thus:
"The petitioners have been waiting for more than thirty years to be paid for their land which was taken for use as a
public high school. As a matter of fair procedure, it is the duty of the Government, whenever it takes property from
private persons against their will, to supply all required documentation and facilitate payment of just
compensation. The imposition of unreasonable requirements and vexatious delays before effecting payment is not
only galling and arbitrary but a rich source of discontent with government. There should be some kind of swift and
effective recourse against unfeeling and uncaring acts of middle or lower level bureaucrats."

We feel the same way in the instant case.

More than anything else, however, it is the obstinacy of the Republic that prompted us to dismiss its petition
outright. As early as May 19, 1966, in Valdehueza, this Court mandated the Republic to pay respondents
predecessors-in-interest the sum of 16,248.40 as "reasonable market value of the two lots in question."
Unfortunately, it did not comply and allowed several decades to pass without obeying this Courts mandate. Such
prolonged obstinacy bespeaks of lack of respect to private rights and to the rule of law, which we cannot
countenance. It is tantamount to confiscation of private property. While it is true that all private properties are
subject to the need of government, and the government may take them whenever the necessity or the exigency of
the occasion demands, however, the Constitution guarantees that when this governmental right of expropriation is
exercised, it shall be attended by compensation. 10 From the taking of private property by the government under the
power of eminent domain, there arises an implied promise to compensate the owner for his loss. 11

Significantly, the above-mentioned provision of Section 9, Article III of the Constitution is not a grant but
a limitationof power. This limiting function is in keeping with the philosophy of the Bill of Rights against the arbitrary
exercise of governmental powers to the detriment of the individuals rights. Given this function, the provision should
therefore be strictly interpreted against the expropriator, the government, and liberally in favor of the property
owner.12

Ironically, in opposing respondents claim, the Republic is invoking this Courts Decision in Valdehueza, a Decision it
utterly defied. How could the Republic acquire ownership over Lot 932 when it has not paid its owner the just
compensation, required by law, for more than 50 years? The recognized rule is that title to the property expropriated
shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on
this settled principle is consistent both here and in other democratic jurisdictions. In Association of Small
Landowners in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform, 13 thus:

"Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment
fixing just compensation is entered and paid, but the condemnors title relates back to the date on which the petition
under the Eminent Domain Act, or the commissioners report under the Local Improvement Act, is filed.

x x x Although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the
property taken remains in the owner until payment is actually made. (Emphasis supplied.)

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not pass to
the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniform to this
effect. As early as 1838, in Rubottom v. McLure, it was held that actual payment to the owner of the condemned
property was a condition precedent to the investment of the title to the property in the State albeit not to the
appropriation of it to public use. In Rexford v. Knight, the Court of Appeals of New York said that the construction
upon the statutes was that the fee did not vest in the State until the payment of the compensation although the
authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said
that both on principle and authority the rule is . . . that the right to enter on and use the property is complete, as
soon as the property is actually appropriated under the authority of law for a public use, but that the title does not
pass from the owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent
that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece
of land can be finally and irrevocably taken from an unwilling owner until compensation is paid..."(Emphasis
supplied.)

Clearly, without full payment of just compensation, there can be no transfer of title from the landowner to the
expropriator. Otherwise stated, the Republics acquisition of ownership is conditioned upon the full payment of just
compensation within a reasonable time.14

Significantly, in Municipality of Bian v. Garcia15 this Court ruled that the expropriation of lands consists of two
stages, to wit:

"x x x The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent
domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not
of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought
to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation
to be determined as of the date of the filing of the complaint" x x x.

The second phase of the eminent domain action is concerned with the determination by the court of "the just
compensation for the property sought to be taken." This is done by the court with the assistance of not more than
three (3) commissioners. x x x.

It is only upon the completion of these two stages that expropriation is said to have been completed. In Republic v.
Salem Investment Corporation,16 we ruled that, "the process is not completed until payment of just compensation."
Thus, here, the failure of the Republic to pay respondent and his predecessors-in-interest for a period of 57 years
rendered the expropriation process incomplete.

The Republic now argues that under Valdehueza, respondent is not entitled to recover possession of Lot 932 but
only to demand payment of its fair market value. Of course, we are aware of the doctrine that "non-payment of just
compensation (in an expropriation proceedings) does not entitle the private landowners to recover possession of
the expropriated lots." This is our ruling in the recent cases of Republic of the Philippines vs. Court of Appeals, et
al.,17and Reyes vs. National Housing Authority.18 However, the facts of the present case do not justify its application.
It bears stressing that the Republic was ordered to pay just compensation twice, the first was in the expropriation
proceedings and the second, in Valdehueza. Fifty-seven (57) years have passed since then. We cannot but construe
the Republics failure to pay just compensation as a deliberate refusal on its part. Under such circumstance, recovery
of possession is in order. In several jurisdictions, the courts held that recovery of possession may be had when
property has been wrongfully taken or is wrongfully retained by one claiming to act under the power of eminent
domain19 or where a rightful entry is made and the party condemning refuses to pay the compensation which has
been assessed or agreed upon;20 or fails or refuses to have the compensation assessed and paid. 21

The Republic also contends that where there have been constructions being used by the military, as in this case,
public interest demands that the present suit should not be sustained.

It must be emphasized that an individual cannot be deprived of his property for the public
convenience.22 In Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform,23 we
ruled:

"One of the basic principles of the democratic system is that where the rights of the individual are concerned, the
end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means
employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need, subject
only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that
a person invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest
of the nation who would deny him that right.

The right covers the persons life, his liberty and his property under Section 1 of Article III of the Constitution. With
regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that
private property shall not be taken for public use without just compensation."

The Republics assertion that the defense of the State will be in grave danger if we shall order the reversion of Lot
932 to respondent is an overstatement. First, Lot 932 had ceased to operate as an airport. What remains in the site
is just the National Historical Institutes marking stating that Lot 932 is the "former location of Lahug Airport."
And second, there are only thirteen (13) structures located on Lot 932, eight (8) of which are residence apartments of
military personnel. Only two (2) buildings are actually used as training centers. Thus, practically speaking, the
reversion of Lot 932 to respondent will only affect a handful of military personnel. It will not result to "irreparable
damage" or "damage beyond pecuniary estimation," as what the Republic vehemently claims.

We thus rule that the special circumstances prevailing in this case entitle respondent to recover possession of the
expropriated lot from the Republic. Unless this form of swift and effective relief is granted to him, the grave injustice
committed against his predecessors-in-interest, though no fault or negligence on their part, will be perpetuated. Let
this case, therefore, serve as a wake-up call to the Republic that in the exercise of its power of eminent domain,
necessarily in derogation of private rights, it must comply with the Constitutional limitations. This Court, as the
guardian of the peoples right, will not stand still in the face of the Republics oppressive and confiscatory taking of
private property, as in this case.

At this point, it may be argued that respondent Vicente Lim acted in bad faith in entering into a contract of mortgage
with Valdehueza and Panerio despite the clear annotation in TCT No. 23934 that Lot 932 is "subject to the priority
of the National Airports Corporation [to acquire said parcels of land] x x x upon previous payment of a reasonable
market value."

The issue of whether or not respondent acted in bad faith is immaterial considering that the Republic did not
complete the expropriation process. In short, it failed to perfect its title over Lot 932 by its failure to pay just
compensation. The issue of bad faith would have assumed relevance if the Republic actually acquired title over Lot
932. In such a case, even if respondents title was registered first, it would be the Republics title or right of ownership
that shall be upheld. But now, assuming that respondent was in bad faith, can such fact vest upon the Republic a
better title over Lot 932? We believe not. This is because in the first place, the Republic has no title to speak of.

At any rate, assuming that respondent had indeed knowledge of the annotation, still nothing would have prevented
him from entering into a mortgage contract involving Lot 932 while the expropriation proceeding was pending. Any
person who deals with a property subject of an expropriation does so at his own risk, taking into account the ultimate
possibility of losing the property in favor of the government. Here, the annotation merely served as a caveatthat the
Republic had a preferential right to acquire Lot 932 upon its payment of a "reasonable market value." It did not
proscribe Valdehueza and Panerio from exercising their rights of ownership including their right to mortgage or even
to dispose of their property. In Republic vs. Salem Investment Corporation,24 we recognized the owners absolute
right over his property pending completion of the expropriation proceeding, thus:

"It is only upon the completion of these two stages that expropriation is said to have been completed. Moreover, it
is only upon payment of just compensation that title over the property passes to the government. Therefore, until
the action for expropriation has been completed and terminated, ownership over the property being expropriated
remains with the registered owner. Consequently, the latter can exercise all rights pertaining to an owner, including
the right to dispose of his property subject to the power of the State ultimately to acquire it through expropriation.
It bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to respondent in 1964, they were still the
owners thereof and their title had not yet passed to the petitioner Republic. In fact, it never did. Such title or
ownership was rendered conclusive when we categorically ruled in Valdehueza that: "It is true that plaintiffs are still
the registered owners of the land, there not having been a transfer of said lots in favor of the Government."

For respondents part, it is reasonable to conclude that he entered into the contract of mortgage with Valdehueza
and Panerio fully aware of the extent of his right as a mortgagee. A mortgage is merely an accessory contract
intended to secure the performance of the principal obligation. One of its characteristics is that it is inseparablefrom
the property. It adheres to the property regardless of who its owner may subsequently be. 25 Respondent must have
known that even if Lot 932 is ultimately expropriated by the Republic, still, his right as a mortgagee is protected. In
this regard, Article 2127 of the Civil Code provides:

"Art. 2127. The mortgage extends to the natural accessions, to the improvements, growing fruits, and the rents or
income not yet received when the obligation becomes due, and to the amount of the indemnity granted or owing
to the proprietor from the insurers of the property mortgaged, or in virtue of expropriation for public use, with the
declarations, amplifications, and limitations established by law, whether the estate remains in the possession of the
mortgagor or it passes in the hands of a third person.

In summation, 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, 26 however, in cases where the government failed
to pay just compensation within five (5)27 years from the finality of the judgment in the expropriation proceedings,
the owners concerned shall have the right to recover possession of their property. This is in consonance with the
principle that "the government cannot keep the property and dishonor the judgment." 28 To be sure, the five-year
period limitation will encourage the government to pay just compensation punctually. This is in keeping with justice
and equity. After all, it is the duty of the government, whenever it takes property from private persons against their
will, to facilitate the payment of just compensation. In Cosculluela v. Court of Appeals,29 we defined just
compensation as not only the correct determination of the amount to be paid to the property owner but also the
payment of the property within a reasonable time. Without prompt payment, compensation cannot be considered
"just."

WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 72915 is AFFIRMED in toto.

The Republics motion for reconsideration of our Resolution dated March 1, 2004 is DENIED with FINALITY. No
further pleadings will be allowed.

Let an entry of judgment be made in this case.

SO ORDERED.

Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, Carpio-Morales,
Callejo, Sr., Azcuna, Tinga, Chico-Nazario, and Garcia, JJ., concur.

Footnotes

1
Rawls, A Theory of Justice (1971) at 4.

2
They were joined by their husbands, Angel Valdehueza and Pablo Panerio, and father, Jose Galeos.
3
May 19, 1966, 17 SCRA 107.

4
The mortgage was duly annotated at the back of the mortgagors title in 1964, while the Decision of this
Court in Valdehueza vs. Republic was annotated in 1974.

5
Penned by Justice Sergio L. Pestao (retired) and concurred in by Justices Perlita J. Tria Tirona and Jose C.
Mendoza.

6
Supra.

7
Coscuella vs. Court of Appeals, No. L-77765, August 15, 1988, 164 SCRA 393, citing Province of Pangasinan
vs. CFI Judge of Pangasinan, Branch VIII, 80 SCRA 117, 120-121 (1977).

8
Law of Eminent Domain, Third Edition, Volume II 931 citing Cushman vs. Smith, 34 Me. 247; and
see Davis vs. Russel, 47 Me. 443.

9
No. L-64037, August 27, 1987, 153 SCRA 291.

10
26 Am Jur 2d 168.

11
Ibid.

12
Cruz, Constitutional Law, 1995 Ed., at 58-59.

13
G.R. No. 78742, July 14, 1989, 175 SCRA 343.

14
"Just compensation is described as a full and fair equivalent of the property taken from the private owner
by the expropriator. This is intended to indemnify the owner fully for the loss he has sustained as a result
of the expropriation. The measure of this compensation is not the takers gain but the owners loss. The
word just is used to intensify the meaning of the word compensation, to convey the idea that the equivalent
to be rendered for the property taken shall be real, substantial, full, ample." (Manila Railroad Co. vs.
Velasquez, 32 Phil. 286).

15
G.R. No. 69260, December 22, 1989, 180 SCRA 576, 583-584.

16
G.R. No. 137569, June 23, 2000, 334 SCRA 320, 329.

17
G.R. No. 146587, July 2, 2002, 383 SCRA 611.

18
G.R. No. 147511, January 20, 2003, 395 SCRA 494.

19
Law of Eminent Domain, Third Edition, Volume II 927 citing Robinson vs. Southern California Ry.Co., 129
Cal. 8, 61 Pac. 947; Meeker vs. Chicago, 23 Ill. App. 23; Wilson vs. Muskegon etc. R.R. Co., 132 Mich. 469, 93
N.W. 1059; Illinois Cent.R.R. Co. vs. Hoskins, 80 Miss. 730, 32 So. 150, 92 Am St. Rep. 612; McClinton vs.
Pittsburg etc. Ry Co., 66 Pa St. 404

20
Id., citing White vs. Wabash, St. Louis & Pacific Ry. Co., 64 Ia. 281,20 N.W. 436; St. Joseph & Denver City
R.R. Co. vs. Callender, 13 Kan. 496; Blackshire vs. Atchison,Topeka and Sta. Fe R.R. Co., 13 Kan. 514; Kanne
v. Minneapolis & St. Louis Ry.Co., 30 Minn. 423; Bartleson vs. Minneapolis, 33 Minn. 468; Wheeling etc.
R.R.Co. vs. Warrell, 122 Pa St. 613, 16 Alt 20
21
Id., citing Connellsville Gas Coal Co. vs. Baltimore, etc. R.R. Co., 216 Pa St.309, 65 Atl. 669.

22
Law of Eminent Domain, Third Edition, Volume II 929 citing Hooper vs. Columbus & Western Ry.Co., 78
Ala. 213; Stratten vs. Great Western & Bradford Ry.Co., 40 L.J. Eq. 50. In the latter case the court says. "With
regard to what is said as to public interests, I am not inclined to listen to any suggestion of public interest
as against private rights acquired in a lawful way. I do not think that the interest of the public in using
something that is provided for their convenience is to be upheld at the price of saying that a persons
property is to be confiscated for that purpose. A man who comes to this court is entitled to have his rights
ascertained and declared, however, inconvenient it may be to third persons to whom it may be a
convenience to have the use of his property."

23
Supra at 375-376.

24
Supra.

25
Paras, Civil Code of the Philippines Annotated, 14th Ed., Book V, at 1021.

26
Republic of the Philippines vs. Court of Appeals, supra. and Reyes vs. National Housing Authority, supra.

27
Section 6, Rule 39 provides that: "A final and executory judgment or order may be executed on motion
within five (5) years from the date of its entry. After the lapse of such time, and before it is barred by the
statute of limitations, a judgment may be enforced by action. The revived judgment may also be enforced
by motion within (5) years from the date of its entry and thereafter by action before it is barred by the
statute of limitations."

28
Commissioner of Public Highways v. San Diego, No. L-30098, February 18, 1970.

29
No. L-77765, August 15, 1988, 164 SCRA 393.
 CITY OF MANILA, G.R. No. 169263
Petitioner, Present:

VELASCO, JR., J., Chairperson,

PERALTA,
ABAD,
- versus- MENDOZA, and
PERLAS-BERNABE, JJ.
Promulgated:

September 21, 2011

MELBA TAN TE,
Respondent.

x---------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

In this Petition for Review,[1] the City of Manila assails the April 29, 2005 Decision[2] of the Court of Appeals
in CA-G.R. CV No. 71894, as well as the August 12, 2005 Resolution,[3] in the said case denying reconsideration.
The assailed decision affirmed the June 13, 2001 Order[4] of the Regional Trial Court of Manila, Branch 24 issued in
Civil Case No. 00-99264 one for expropriation filed by petitioner, the City of Manila. The said Order, in turn, granted
the motion to dismiss the complaint that was filed by respondent Melba Tan Te, in lieu of an answer.

The facts follow.

On March 15, 1998, then Manila City Mayor Joselito L. Atienza approved Ordinance No. 7951 an expropriation
measure enacted on February 3, 1998 by the city council authorizing him to acquire by negotiation or expropriation
certain pieces of real property along Maria Clara and Governor Forbes Streets where low-cost housing units could
be built and then awarded to bona fide residents therein. For this purpose, the mayor was also empowered to access
the citys funds or utilize funding facilities of other government agencies. [5] In the aggregate, the covered property
measures 1,425 square meters, and includes the 475-square-meter lot owned by respondent Melba Tan Te.[6]

The records bear that respondent had acquired the property from the heirs of Emerlinda Dimayuga Reyes in 1996,
and back then it was being occupied by a number of families whose leasehold rights had long expired even prior to
said sale. In 1998, respondent had sought before the Metropolitan Trial Court of Manila, Branch 15 the ejectment
of these occupants from the premises. The favorable ruling in that case evaded execution; hence, the court, despite
opposition of the City of Manila, issued a Writ of Demolition at respondents instance.[7] It appears that in the interim
between the issuance of the writ of execution and the order of demolition, the City of Manila had instituted an
expropriation case[8] affecting the same property. Respondent had moved for the dismissal of that first expropriation
case for lack of cause of action, lack of showing of an ordinance authorizing the expropriation, and non-compliance
with the provisions of Republic Act (R.A.) No. 7279, otherwise known as the Urban Development and Housing Act of
1992.[9] The trial court found merit in the motion and dismissed the complaint without prejudice. [10]

On November 16, 2000, petitioner[11] filed this second Complaint[12] for expropriation before the Regional Trial Court
of Manila, Branch 24.[13] This time, it attached a copy of Ordinance No. 7951 and alleged that pursuant thereto, it
had previously offered to purchase the subject property from respondent for P824,330.00.[14] The offer was
contained in a letter sent to respondent by the City Legal Officer on May 21, 1999,[15] but respondent allegedly failed
to retrieve it despite repeated notices,[16] thereby compelling petitioner to institute the present expropriation
proceedings after depositing in trust with the Land Bank of the Philippines P1,000,000.00 cash, representing the just
compensation required by law to be paid to respondent. [17]

Respondent did not file an answer and in lieu of that, she submitted a Motion to Dismiss [18] and raised the
following grounds: that Ordinance No. 7951 was an invalid expropriation measure because it violated the rule against
taking private property without just compensation; that petitioner did not comply with the requirements of Sections
9[19] and 10[20] of R.A. No. 7279; and that she qualified as a small property owner and, hence, exempt from the
operation of R.A. No. 7279, the subject lot being the only piece of realty that she owned.

Petitioner moved that it be allowed to enter the property, but before it could be resolved, the trial court
issued its June 13, 2001 Order[21] dismissing the complaint. First, the trial court held that while petitioner had
deposited with the bank the alleged P1M cash in trust for respondent, petitioner nevertheless did not submit any
certification from the City Treasurers Office of the amount needed to justly compensate respondent for her
property. Second, it emphasized that the provisions of Sections 9 and 10 of R.A. No. 7279 are mandatory in character,
yet petitioner had failed to show that it exacted compliance with them prior to the commencement of this
suit. Lastly, it conceded that respondent had no other real property except the subject lot which, considering its total
area, should well be considered a small property exempted by law from expropriation. In view of the dismissal of
the complaint, petitioners motion to enter was rendered moot and academic. [22]

Petitioner interposed an appeal to the Court of Appeals which, finding no merit therein, dismissed the
same.[23] Petitioner sought reconsideration,[24] but it was denied.[25]

In this Petition,[26] petitioner posits that the trial courts dismissal of its complaint was premature, and it
faults the Court of Appeals for having failed to note that by such dismissal it has been denied an opportunity to show
previous compliance with the requirements of Sections 9 and 10 of R.A. No. 7279 as well as to establish that
respondent actually owns other realty apart from the subject property. Besides, continues petitioner, whether or
not it had truly complied with the requirements of the law is a matter which can be determined only after a trial of
the case on the merits and not, as what happened in this case, at the hearing of the motion to dismiss. [27]

Respondent, for her part, points out that Ordinance No. 7951 is an invalid expropriation measure as it does
not even contain an appropriation of funds in its implementation. In this respect, respondent believes that the P1M
cash deposit certified by the bank seems to be incredible, since petitioner has not shown any certification from the
City Treasurers Office on the amount necessary to implement the expropriation measure. More importantly, she
believes that the dismissal of the complaint must be sustained as it does not allege previous compliance with
Sections 9 and 10 of R.A. No. 7279 and, hence, it does not present a valid cause of action. [28] She theorizes that the
expropriation for socialized housing must abide by the priorities in land acquisition and the available modes of land
acquisition laid out in the law, and that expropriation of privately-owned lands avails only as the last resort.[29] She
also invokes the exemptions provided in the law. She professes herself to be a small property owner under Section
3 (q),[30] and claims that the subject property is the only piece of land she owns where she, as of yet, has not been
able to build her own home because it is still detained by illegal occupants whom she had already successfully battled
with in the ejectment court.[31]

In its Reply, petitioner adopts a different and bolder theory. It claims that by virtue of the vesture of eminent
domain powers in it by its charter, it is thereby not bound by the requirements of Sections 9 and 10 of R.A. No.
7279. It also asserts its right to immediately enter the subject property because not only is its complaint supposedly
sufficient in form and substance but also because it has already deposited P1M cash with the bank in trust for
respondent. It reiterates that the dismissal of its complaint constitutes a denial of due process because all the issues
propounded by respondent, initially in her motion to dismiss and all the way in the present appeal, must be resolved
in a full-blown trial.

Prefatorily, the concept of socialized housing, whereby housing units are distributed and/or sold to qualified
beneficiaries on much easier terms, has already been included in the expanded definition of public use or purpose
in the context of the States exercise of the power of eminent domain. Said the Court in Sumulong v.
Guerrero,[32] citing the earlier case of Heirs of Juancho Ardona v. Reyes:[33]
The public use requirement for a valid exercise of the power of eminent domain is a
flexible and evolving concept influenced by changing conditions.

The taking to be valid must be for public use. There was a time where it was felt that a literal
meaning should be attached to such a requirement. Whatever project is undertaken must be for
the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It
is not anymore. As long as the purpose of the taking is public, then the power of eminent domain
comes into play. x x x The constitution in at least two cases, to remove any doubt, determines what
is public use. One is the expropriation of lands to be divided into small lots for resale at cost to
individuals. The other is in the transfer, through the exercise of this power, of utilities and other
enterprise to the government. It is accurate to state then that at present whatever may be
beneficially employed for the general welfare satisfies the requirement of public use.

The term public use has acquired a more comprehensive coverage. To the literal import of the
term signifying strict use or employment by the public has been added the broader notion
of indirect public benefit or advantage. x x x

The restrictive view of public use may be appropriate for a nation which circumscribes the scope
of government activities and public concerns and which possesses big and correctly located public
lands that obviate the need to take private property for public purposes. Neither circumstance
applies to the Philippines. We have never been a laissez-faire state. And the necessities which
impel the exertion of sovereign power are all too often found in areas of scarce public land or
limited government resources.

Specifically, urban renewal or development and the construction of low-cost housing are
recognized as a public purpose, not only because of the expanded concept of public use but also
because of specific provisions in the Constitution. x x x The 1987 Constitution [provides]:

The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty
through policies that provide adequate social services, promote full
employment, a rising standard of living and an improved quality of life for all.
(Article II, Section 9)

The State shall, by law and for the common good, undertake, in cooperation with
the private sector, a continuing program for urban land reform and housing
which will make available at affordable cost decent housing and basic services to
underprivileged and homeless citizens in urban centers and resettlement areas.
x xx In the implementation of such program the State shall respect the rights of
small property owners. (Article XIII, Section 9)

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

Population growth, the migration to urban areas and the mushrooming of crowded
makeshift dwellings is a worldwide development particularly in developing countries. So basic and
urgent are housing problems that the United Nations General Assembly proclaimed 1987 as the
"International Year of Shelter for the Homeless" "to focus the attention of the international
community on those problems." The General Assembly is seriously concerned that, despite the
efforts of Governments at the national and local levels and of international organizations, the
driving conditions of the majority of the people in slums and squatter areas and rural settlements,
especially in developing countries, continue to deteriorate in both relative and absolute terms."
[G.A. Res. 37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4]

In light of the foregoing, the Court is satisfied that socialized housing falls within the
confines of public use.[34]
Congress passed R.A. No. 7279,[35] to provide a comprehensive and continuing urban development and housing
program as well as access to land and housing by the underprivileged and homeless citizens; uplift the conditions of
the underprivileged and homeless citizens in urban areas by making available decent housing at affordable cost;
optimize the use and productivity of land and urban resources; reduce urban dysfunctions which affect public health,
safety and ecology; and improve the capability of local governments in undertaking urban development and housing
programs and projects, among others.[36] Accordingly, all city and municipal governments are mandated to inventory
all lands and improvements within their respective locality and identify lands which may be utilized for socialized
housing and as resettlement sites for acquisition and disposition to qualified beneficiaries. [37] Section 10 thereof
authorizes local government units to exercise the power of eminent domain to carry out the objectives of the law,
but subject to the conditions stated therein and in Section 9. [38]

It is precisely this aspect of the law which constitutes the core of the present controversy, yet this case presents a
serious procedural facet overlooked by both the trial court and the Court of Appeals which needs foremost attention
ahead of the issues propounded by the parties.

Expropriation is a two-pronged proceeding: first, the determination of the authority of the plaintiff to
exercise the power and the propriety of its exercise in the context of the facts which terminates in an order of
dismissal or an order of condemnation affirming the plaintiff's lawful right to take the property for the public use or
purpose described in the complaint and second, the determination by the court of the just compensation for the
property sought to be expropriated.[39]

Expropriation proceedings are governed by Rule 67 of the Rules of Court. Under the Rules of Court of 1940
and 1964, where the defendant in an expropriation case conceded to the plaintiffs right to expropriate (or where
the trial court affirms the existence of such right), the court-appointed commissioners would then proceed to
determine the just compensation to be paid.[40] Otherwise, where the defendant had objections to and defenses
against the expropriation of his property, he was required to file a single motion to dismiss containing all such
objections and defenses.[41]
This motion to dismiss was not covered by Rule 15 which governed ordinary motions, and was then the
required responsive pleading, taking the place of an answer, where the plaintiffs right to expropriate the defendants
property could be put in issue.[42] Any relevant and material fact could be raised as a defense, such as that which
would tend to show that the exercise of the power to condemn was unauthorized, or that there was cause for not
taking defendants property for the purpose alleged in the petition, or that the purpose for the taking was not public
in character. With that, the hearing of the motion and the presentation of evidence would follow. The rule is based
on fundamental constitutional provisions affecting the exercise of the power of eminent domain, such as those that
seek to protect the individual property owner from the aggressions of the government. [43] However, the rule, which
was derived from the practice of most American states, proved indeed to be a source of confusion because it likewise
permitted the filing of another motion to dismiss, such as that referred to in Rule 16, where the defendant could
raise, in addition, the preliminary objections authorized under it.[44]

The Supreme Court, in its en banc Resolution in Bar Matter No. 803 dated April 8, 1997, has provided that
the revisions made in the Rules of Court were to take effect on July 1, 1997. Thus, with said amendments, the present
state of Rule 67 dispenses with the filing of an extraordinary motion to dismiss such as that required before in
response to a complaint for expropriation. The present rule requires the filing of an answer as responsive pleading
to the complaint. Section 3 thereof provides:

Sec. 3. Defenses and objections. If a defendant has no objection or defense to the action
or the taking of his property, he may and serve a notice or appearance and a manifestation to that
effect, specifically designating or identifying the property in which he claims to be interested,
within the time stated in the summons. Thereafter, he shall be entitled to notice of all proceedings
affecting the same.

If a defendant has any objection to the filing of or the allegations in the complaint, or any objection
or defense to the taking of his property, he shall serve his answer within the time stated in the
summons. The answer shall specifically designate or identify the property in which he claims to
have an interest, state the nature and extent of the interest claimed, and adduce all his objections
and defenses to the taking of his property. No counterclaim, cross-claim or third-party complaint
shall be alleged or allowed in the answer or any subsequent pleading.

A defendant waives all defenses and objections not so alleged but the court, in the interest of
justice, may permit amendments to the answer to be made not later than ten (10) days from the
filing thereof. However, at the trial of the issue of just compensation, whether or not a defendant
has previously appeared or answered, he may present evidence as to the amount of the
compensation to be paid for his property, and he may share in the distribution of the award.[45]

The defendant in an expropriation case who has objections to the taking of his property is now required to
file an answer and in it raise all his available defenses against the allegations in the complaint for eminent
domain. While the answer is bound by the omnibus motion rule under Section 8,[46] Rule 15, much leeway is
nevertheless afforded to the defendant because amendments may be made in the answer within 10 days from its
filing. Also, failure to file the answer does not produce all the disastrous consequences of default in ordinary civil
actions, because the defendant may still present evidence on just compensation. [47]

At the inception of the case at bar with the filing of the complaint on November 16, 2000, the amended
provisions of Rule 67 have already been long in force. Borre v. Court of Appeals[48] teaches that statutes which
regulate procedure in the courts apply to actions pending and undetermined at the time those statutes were
passed. And in Laguio v. Gamet,[49] it is said that new court rules apply to proceedings which take place after the
date of their effectivity.
 In the case of Robern Development Corporation v. Quitain,[50] a similar motion to dismiss was filed by the
private property owner, petitioner therein, in an expropriation case filed by the National Power Corporation (NPC),
alleging certain jurisdictional defects as well as issues on the impropriety of the expropriation measure being
imposed on the property. The trial court in that case denied the motion inasmuch as the issues raised therein should
be dealt with during the trial proper. On petition for certiorari, the Court of Appeals affirmed the trial courts denial
of the motion to dismiss. On appeal, the Supreme Court affirmed the Court of Appeals, but declared that under the
amended provisions of Section 3, Rule 67, which were already in force at about the time the motion to dismiss had
been submitted for resolution, all objections and defenses that could be availed of to defeat the expropriators
exercise of the power of eminent domain must be contained in an answer and not in a motion to dismiss because
these matters require the presentation of evidence. Accordingly, while the Court in that case sustained the setting
aside of the motion to dismiss, it nevertheless characterized the order of dismissal as a nullity. Hence, it referred the
case back to the trial court and required the NPC to submit its answer to the complaint within 10 days from the
finality of the decision.

Thus, the trial court in this case should have denied respondents motion to dismiss and required her to
submit in its stead an answer within the reglementary period. This, because whether petitioner has observed the
provisions of Sections 9 and 10 of R.A. No. 7279 before resorting to expropriation, and whether respondent owns
other properties than the one sought to be expropriated, and whether she is actually a small property owner beyond
the reach of petitioners eminent domain powers, are indeed issues in the nature of affirmative defenses which
require the presentation of evidence aliunde.[51] Besides, Section 1, Rule 16 of the Rules of Court does not consider
these matters grounds for a motion to dismiss, and an action can be dismissed only on the grounds authorized by
this provision.[52]

The Court declared in Robern Development Corporation, thus:

Accordingly, Rule 16, Section 1 of the Rules of Court, does not consider as grounds for a
motion to dismiss the allotment of the disputed land for another public purpose or the petition for
a mere easement of right-of-way in the complaint for expropriation. The grounds for dismissal are
exclusive to those specifically mentioned in Section 1, Rule 16 of the Rules of Court, and an action
can be dismissed only on a ground authorized by this provision.

To be exact, the issues raised by the petitioner are affirmative defenses that should be
alleged in an answer, since they require presentation of evidence aliunde. Section 3 of Rule 67
provides that if a defendant has any objection to the filing of or the allegations in the complaint,
or any objection or defense to the taking of his property, he should include them in his answer.
Naturally, these issues will have to be fully ventilated in a full-blown trial and hearing. It would be
precipitate to dismiss the Complaint on such grounds as claimed by the petitioner. Dismissal of an
action upon a motion to dismiss constitutes a denial of due process if, from a consideration of the
pleadings, it appears that there are issues that cannot be decided without a trial of the case on the
merits.
 Inasmuch as the 1997 Rules had just taken effect when this case arose, we believe that in the
interest of substantial justice, the petitioner should be given an opportunity to file its answer to
the Complaint for expropriation in accordance with Section 3, Rule 67 of the 1997 Rules of Civil
Procedure.x x x[53]

WHEREFORE, the Petition is hereby GRANTED. The Order of the Regional Trial Court of Manila, Branch 24
in Civil Case No. 00-99264 dated June 13, 2001, as well as the April 29, 2005 Decision of the Court of Appeals in CA-
G.R. CV No. 71894 affirming said order, and the August 12, 2005 Resolution therein which denied reconsideration,
are hereby SET ASIDE. The case is hereby REMANDED to the trial court for further proceedings. Respondent
is DIRECTED to file her Answer to the complaint within ten (10) days from the finality of this Decision.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson

ROBERTO A. ABAD JOSE CATRAL MENDOZA

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Courts Division.
PRESBITERO J. VELASCO, JR.
Associate Justice
Third Division, Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

[1]
Rollo, pp. 12-20. The petition states that the same was filed under Section 3, Rule 56 of the Rules of Court, and
was taken from the August 12, 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 71894 which denied
reconsideration of the April 29, 2005 Decision in the same case. Section 3, in relation to Section 4 of the said Rule,
provides that appeals to the Supreme Court may be taken only by petition for review in accordance, among others,
with the provisions of Rule 45. The petition was initially denied in the Courts November 21, 2005 Resolution for being
filed out of the period of extension given, for lack of proper verification and certification, as well for lack of reversible
error. (See rollo, p. 155). On Motion for Reconsideration, which discussed both the technicalities as well as the merits
of the case, the Court reconsidered and directed respondent to file her Comment, which addressed the primordial
issues raised in the petition. Thereafter, petitioner filed its Reply. The issues pervading since the inception of this
case now call for the exercise of discretionary power of judicial review.
[2]
The assailed decision was penned by Associate Justice Eliezer R. Delos Santos, with Associate Justices Rosmari D.
Carandang and Arturo D. Brion (now Supreme Court Associate Justice) concurring; CA rollo, pp. 97-105.
[3]
CA rollo, pp. 130-132.
[4]
The Order was signed by Judge Antonio M. Eugenio, Jr.; records, pp. 137-138.
[5]
It is entitled AN ORDINANCE AUTHORIZING HIS HONOR, THE MAYOR, TO ACQUIRE EITHER BY NEGOTIATION OR
EXPROPRIATION CERTAIN PARCELS OF LAND COVERED BY TRANSFER CERTIFICATE OF TITLE NOS. 233273, 175106
AND 140471, CONTAINING A TOTAL AREA OF ONE THOUSAND FOUR HUNDRED TWENTY-FIVE (1,425) SQUARE
METERS, LOCATED AT MARIA CLARA AND GOV. FORBES STREETS, STA. CRUZ, MANILA, FOR LOW-COST HOUSING
AND AWARD TO ACTUAL BONA FIDE RESIDENTS THEREAT, AND AUTHORIZING THE MAYOR TO AVAIL FOR THAT
PURPOSE ANY AVAILABLE FUNDS OF THE CITY AND OTHER EXISTING FUNDING FACILITIES FROM OTHER
GOVERNMENT AGENCIES; id. at 8-9.
[6]
Respondents property is covered by Transfer Certificate of Title (TCT) No. 233273. The two other properties are
covered by TCT Nos. 175106 and 140471; id. at 7-8.
[7]
See the Decision in Civil Case Nos. 156527-CV, 156528-CV, 156729-CV, 156731-CV, 156732-CV, 156733-CV,
156734-CV, 156735-CV and 156736-CV, as well as the Writ of Execution issued in these cases and the Order for the
issuance of a Writ of Demolition; id. at 65-82.
[8]
The case was docketed as Civil Case No. 97-85700 with the Regional Trial Court of Manila, Branch 47.
[9]
Urban land reform was institutionalized in 1978 by Presidential Decree (P.D) No. 1517, known as the Urban Land
Reform Act, issued by then President Ferdinand Marcos. This decree sought to liberate human communities from
blight, congestion and hazard, and promote their development and modernization, the optimum use of land as a
national resource for public welfare. Accordingly, Proclamation No. 1893 was issued a year later and declared the
entire Metro Manila area as an urban land reform zone. Amendments came in 1980 under Proclamation No. 1967
and then in 1983 under Proclamation No. 2284 which identified 245 sites in Metro Manila as areas for priority
development and urban land reform zones.
[10]
See Order dated August 6, 1998 issued in Civil Case No. 97-85700, records, pp. 87-91.
[11]
Petitioner, the City of Manila, is a municipal corporation organized and existing under Republic Act No. 409, as
amended.
[12]
Records, pp. 1-6.
[13]
Presided by Judge Antonio M. Eugenio, Jr.
[14]
Records, p. 3. See also Letter dated May 21, 1999 signed by City Legal Officer Melchor Monsod communicating
petitioners formal offer to purchase respondents property for the amount equivalent to its assessed value; records,
p. 10.
[15]
See May 21, 1999 Letter addressed to respondent; id. at 10.
[16]
See Certification from the Philippine Postal Corporation showing respondent failed to claim the letter despite
notices on July 2, 9 and 21, 1999; id. at 11.
[17]
See Certification issued by the Land Bank of the Philippines dated April 7, 2000, id. at 12.
[18]
Records, pp. 44-64.
[19]
SEC. 9. Priorities in the Acquisition of Land. Lands for socialized housing shall be acquired in the following order:
(a) Those owned by the Government or any of its subdivisions, instrumentalities,
or agencies, including government-owned or controlled corporations and their subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas or Priority Development, Zonal
Improvement Program sites, and Slum Improvement and Resettlement Program sites which have
not yet been acquired;
(e) Bagong Lipunan Improvement of Sites and Services or BLISS sites which have
not yet been acquired; and
(f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities
mentioned in this section shall not apply. The local government units shall give priority to on-site development of
government lands.
[20]
SEC. 10. Modes of Land Acquisition. The modes of acquiring lands for purposes of this Act shall include, among
others, community mortgage, land-swapping, land assembly or consolidation, land banking, donation to the
Government, joint-venture agreement, negotiated purchase, and expropriation: Provided, however, That
expropriation shall be resorted to only when other modes of acquisition have been exhausted: Provided,
further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted
for purposes of this Act: Provided, finally, That abandoned property, as herein defined, shall be reverted and
escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.
For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by
the local government units, or by the National Housing Authority, primarily through negotiated
purchase: Provided, That qualified beneficiaries who are actual occupants of the land shall be given the right of first
refusal.
[21]
Records, pp. 137-138.
[22]
Id. at 138. The Order disposed of the complaint as follows:
ACCORDINGLY, finding merit in the Motion, the same is hereby GRANTED. The complaint
filed by plaintiff is hereby ordered DISMISSED.
With the dismissal of the complaint, the motion to allow plaintiff to enter the property of
defendant filed by plaintiff had become MOOT and ACADEMIC. The hearing on the Motion
scheduled on July 6, 2001 at 8:30 a.m. is hereby CANCELLED.
SO ORDERED.
[23]
CA rollo, p. 90. It disposed of the appeal as follows:
WHEREFORE, premises considered, the appeal is hereby DISMISSED for lack of merit.
SO ORDERED.
[24]
Id. at 91-94.
[25]
Id. at 126-128.
[26]
Rollo, pp. 12-20.
[27]
Id. at 17-19, 207-209.
[28]
Id. at 182-188, 190-197
[29]
Id. at 188-189.
[30]
Id. at 189. Section 3 (q) of R.A. No. 7279 states:
SEC. 3. Definition of Terms. For purposes of this Act:
(q) Small property owners refers to those whose only real property consists of residential
lands and exceeding three hundred square meters (300 sq. m.) in highly urbanized cities and eight
hundred square meters (800 sq. m.) in other urban areas.
[31]
Id. at 199.
[32]
No. L-48685, September 30, 1987, 154 SCRA 461.
[33]
Nos. L-60549, 60553-60555, October 26, 1983, 125 SCRA 220.
[34]
Sumulong v. Guerrero, supra note 32, at 468-469. See also National Housing Authority v. Guivelondo G.R. No.
154411, June 19, 2003, 404 SCRA 389 and Reyes v. National Housing Authority, 443 Phil. 603 (2003). (Emphasis
supplied.)
[35]
Urban land reform was institutionalized in 1978 by Presidential Decree No. 1517, known as the Urban Land
Reform Act, issued by then President Ferdinand Marcos. This decree sought to liberate human communities from
blight, congestion and hazard, and to promote their development and modernization as well as the optimum use of
land as a national resource for public welfare. Accordingly, Proclamation No. 1893 was issued a year later and
declared the entire Metro Manila area as an urban land reform zone. Amendments came in 1980 under Proclamation
No. 1967 and then in 1983 under Proclamation No. 2284 which identified 245 sites in Metro Manila as areas for
priority development and urban land reform zones.
[36]
R.A. No. 7279, Sec. 2.
[37]
R.A. No. 7279, Secs. 7, 8, 9 and 12.
[38]
See notes 19 and 20.
[39]
Abad v. Fil-Homes Realty and Development Corporation, G.R. No. 189239, November 24, 2010, 636 SCRA 247,
255, citing Lintag v. National Power Corporation, G.R. No. 158609, July 27, 2007, 528 SCRA 287.
[40]
See Act 190, Sec. 243.
[41]
Section 3 of the old Rule 67 of the Rules of Court allowed a defendant in lieu of an answer, [to] present in a single
motion to dismiss or for other appropriate relief, all his objections and defenses to the plaintiffs right to take his
property x x x.See Feria-Noche, Civil procedure Annotated, Volume 2, 2001 ed., p. 536 and Regalado, Remedial Law
Compendium, Vol. I, 8th Revised ed., p. 752.
[42]
Robern Development Corporation v. Quitain, 373 Phil. 773, 790 (1999); Rural Progress Administration v. Guzman,
87 Phil. 176, 178 (1950);
[43]
Robern Development Corporation, supra, citing Francisco, The Revised Rules of Court in the Philippines, Vol. IV-B,
Part I, 1972 ed., pp. 405-412.
[44]
Id. at 790-791, citing Regalado, Remedial Law Compendium, Vol. I, 8th Revised ed., pp. 752-753.
[45]
Emphasis supplied.
[46]
Sec. 8. Omnibus motion. Subject to the provisions of Section 1 of Rule 9, a motion attacking a pleading, order,
judgment, or proceeding shall include all objections then available, and all objections not so included shall be
deemed waived.
[47]
Robern Development Corporation v. Quitain, supra note 42, at 791, citing Regalado, Remedial Law
Compendium, Vol. I, 8th Revised ed., pp. 752-753.
[48]
242 Phil. 345 (1988).
[49]
G.R. No. 74903, March 21, 1989, 171 SCRA 392.
[50]
Supra note 42.
[51]
See Panes v. Visayas State College of Agriculture, 332 Phil. 745 (1996).
[52]
See Borje v. CFI of Misamis Occidental, Br. II, No. L-48315, February 27, 1979, 88 SCRA 576, 581, cited in Robern
Development Corporation v. Court of Appeals, supra note 42, at 791.
[53]
Robern Development Corporation v. Court of Appeals, supra note 42, at 164-165.

CITY OF MANILA, petitioner,

vs.
OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA AND ADELAIDA, ALL SURNAMED SERRANO, respondents.

Mendoza, J.:

This is a petition for review on certiorari of the decision, dated November 16, 1999, and resolution, dated February
23, 2000, of the Court of Appeals reversing the order, dated December 15, 1998, of the Regional Trial Court, Branch
16, Manila and perpetually enjoining it from proceeding with the petitioner's complaint for eminent domain in Civil
Case No. 94-72282.

The facts are as follows:

On December 21, 1993, the City Council of Manila enacted the Ordinance No. 7833, authorizing the expropriation
of certain properties in Manila 's First District in Tondo, covered by TCT Nos. 70869, 105201, 105202, and 138273 of
the Register of Deeds of Manila, which are to be sold and distributed to qualified occupants pursuant to the Land
Use Development Program of the City of Manila.

One of the properties sought to be expropriated, denominated as Lot 1-C, consists of 343.10 square meters. It is
covered by TCT No. 138272 which was derived from TCT No. 70869 issued in the name of Feliza De Guia. 1 After her
death, the estate of Feliza De Guia was settled among her heirs by virtue of a compromise agreement, which was
duly approved by the Regional Trial Court, Branch 53, Manila in its decision, dated May 8, 1986. 2 In 1989, Alberto De
Guia, one of the heirs of Feliza De Guia, died, as a result of which his estate, consisting of his share in the properties
left by his mother, was partitioned among his heirs. Lot 1-C was assigned to Edgardo De Guia, one of the heirs of
Alberto De Guia.3 On April 15, 1994, Edgardo De Guia was issued TCT No. 215593, covering Lot 1-C.4On July 29, 1994,
the said property was transferred to Lee Kuan Hui, in whose name TCT No. 217018 was issued. 5

The property was subsequently sold on January 24,1996 to Demetria De Guia to whom TCT No. 226048 was issued. 6

On September 26, 1997, petitioner City of Manila filed an amended complaint for expropriation, docketed as Civil
Case No. 94-72282, with the Regional Trial Court, Branch 16, Manila, against the supposed owners of the lots covered
by TCT Nos. 70869 (including Lot 1-C), 105201, 105202 and 138273, which included herein respondents Oscar,
Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida, all surnamed are Serrano. 7 On November 12, 1997,
respondents filed a consolidated answer, in which they alleged that their mother, the late Demetria De Guia, had
acquired Lot l-C from Lee Kian Hui; that they had been the bona fide occupants of the said parcel of land for more
than 40 years; that the expropriation of Lot l-C would result in their disclosure, it being the only residential land left
to them by their deceased mother; and that the said lot was exempt from expropriation because dividing the said
parcel of land among them would entitle each of them to only about 50 square meters of land. Respondents,
therefore, prayed that judgment be rendered declaring Lot l-C exempt from expropriation and ordering the
cancellation of the notice annotated on the back of TCT No. 226048, 8 regarding the pendency of Civil Case No. 94-
72282. for eminent domain filed by petitioner.9

Upon motion by petitioner, the trial court issued an order, dated October 9, 1998, directing petitioner to deposit the
amount of Pl,825,241.00 equivalent to the assessed value of the properties.10 After petitioner had made the deposit,
the trial court issued another order, dated December 15, 1998, directing the issuance of a writ of possession in favor
of petitioner.ll

Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot l-C would
render respondents, who are actual occupants thereof, landless; that Lot l-C is exempt from expropriation because
R.A. No. 7279 provides that properties consisting of residential lands not exceeding 300 square meters in highly
urbanized cities are exempt from expropriations; that respondents would only receive around 49 square meters
each after the partition of Lot l-C which consists of only 343.10 square meters; and that R.A. No. 7279 was not meant
to deprive an owner of the entire residential land but only that in excess of 300 square meters. 12

On November 16, 1999, the Court of Appeals rendered a decision holding that Lot l-C is not exempt from
expropriation because it undeniably exceeds 300 square meters which is no longer considered a small property
within the framework of R.A. No. 7279. However, it held that in accordance with the ruling in Filstream International
Inc. v. Court of Appeals,13 the other modes of acquisition of lands enumerated in 9-10 of the law must first be tried
by the city government before it can resort to expropriation. As petitioner failed to show that it had done so, the
Court of Appeals gave judgment for respondents and enjoined petitioner from expropriating Lot 1-C. The dispositive
portion of its decision reads:

WHEREFORE, in view of all the foregoing, the instant petition is hereby GIVEN DUE COURSE and accordingly
GRANTED. The Order, dated December 15, 1998, denying petitioner's motion for reconsideration issued by
the respondent Regional Trial Court of Manila, Branch 16, in Civil Case No. 94-72282 is hereby REVERSED
and SET ASIDE. Let a writ of injunction issue perpetually enjoining the same respondent court from
proceeding with the complaint for eminent domain in Civil Case No. 94-72282,14

In its resolution, dated February 23, 2000, the Court of Appeals likewise denied two motions for reconsideration
filed by petitioner.l5 Hence this petition. Petitioner contends that the Court of Appeals erred in --

1) Giving due course to the petition of the Serranos under Rule 65 notwithstanding its own declaration of
the impropriety of the resort to the writ and filing thereof with the wrong appellate court;

2) Concluding that the Order of October 9, 1998 which authorizes the immediate entry of the City as the
expropriating agency into the property sough to be expropriated upon the deposit of the provisionally fixed
fair market value thereof as tantamount to condemnation of the property without prior showing of
compliance with the acquisition of other lands enumerated in Sec. 9 of R.A. 7279 ergo a violation of due
process of the Serranos by the doctrinaire application of FILSTREAM ruling and corrollarily,

3) In prohibiting permanently, by writ of injunction, the trial court from proceeding with a complaint for
expropriation of the City in Civil Case No. 94-72282.16

We will deal with these contentions in the order they are presented.

First. Petitioner contends that the respondents' remedy against the order of the trial court granting a writ of
possession was not to file a petition for certiorari under Rule 65 but a petition for review under Rule 45 which should
have been filed in the Supreme Court.17

This contention has no merit. A petition for review under Rule 45 is a mode of appeal. Accordingly, it could not have
been resorted to by the respondents inasmuch as the order of the trial court granting a writ of possession was merely
interlocutory from which no appeal could be taken. Rule 45, 1 of the 1997 Rules for Civil Procedure applies only to
final judgments or orders of the Court of Appeals, the Sandiganbayan, and the Regional Trial Court. On the other
hand, a petition for certiorari is the suitable remedy in view of Rule 65, 1 which provides:
 When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in
excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction,
and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainly and
praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or
officer, and granting such incidental reliefs as laws and justice may require.

Respondents' petition before the Court of Appeals alleged that the trial court had acted without or in excess of its
jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the order, dated December
15, 1998, resolving that Lot 1-C is not exempt from expropriation and ordering the issuance of the writ of possession
in favor of petitioner.18

Second. Petitioner faults the Court of Appeals for deciding issues not raised in the trial court, specifically the question
of whether or not there was compliance with 9 and 10 of RA. No. 7279. It argues that the sole defense set up by
respondents in their petition before the Court of Appeals was that their property was exempted from expropriation
because it comes within the purview of a "small property" as defined by R.A. No. 7279 . Accordingly, the Court of
Appeals should not have applied the doctrine laid down by this Court in the Filstream19 case as such issue was not
raised by respondents in their petition before the Court of Appeals.

This contention likewise has no merit. In their petition before the Court of Appeals, respondents raised the following
issues:

1. Whether or not the subject Lot 1-C with an area of 343.10 square meters covered by T.C.T. No. 226048
in the name of petitioners' mother, the late Demetria [De Guia] Serrano, may be lawfully expropriated "for
the public purpose of providing landless occupants thereof homelots of their own under the "land-for-the
landless program of respondent City of Manila."

2. Whether or not the expropriation of the said Lot l-C by respondent City of Manila violates the equal
protection clause of the Constitution, since petitioners, with the exemption of petitioner Oscar G. Serranno,
who are likewise landless are actual occupants hereof.

3. Whether or not Lot 1-C is or may be exempted from expropriation pursuant to R.A. 7279, otherwise
known as the Urban Development and Housing Act of 1992.20

It is clear that respondents raised in issue the propriety of the expropriation of their property in connection with RA.
No. 7279. Although what was discussed at length in their petition before the Court of Appeals was whether or not
the said property could be considered a small property within the purview of the exemption under the said law, the
other provisions of the said law concerning expropriation proceedings need also be looked into to address the first
issue raised by the respondents and to determine whether or not expropriation of Lot 1-C was proper under the
circumstances. The Court of Appeals properly considered relevant provisions of R A. No.7279 to determine the issues
raised by respondents. Whether or not it correctly applied the doctrine laid down in Filstream in resolving the issues
raised by respondents, however, is a different matter altogether, and this brings us to the next point.

Third. Petitioner contends that the Court of Appeals erroneously presumed that Lot 1-C has been ordered
condemned in its favor when the fact is that the order of the trial court, dated December 15, 1998, merely authorized
the issuance of a writ of possession and petitioner's entry into the property pursuant to Rule 67, 2. At that stage, it
was premature to determine whether the requirements of RA. No. 7279, 9 - 10 have been complied with since no
evidentiary hearing had yet been conducted by the trial court. 21

This contention is well taken. Rule 67, 2 provides:

 Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff
shall have the right to take or enter upon possession of the real property involved if he deposits with the
authorized government depository an amount equivalent to the assessed value of the property for
purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in
money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government
bank of the Republic of the Philippines payable on demand to the authorized government depositary.

If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited
shall be fixed by the court.

After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the
plaintiff in possession of the property involved and promptly submit a report thereof to the court with
service of copies to the parties.

Thus, a writ of execution may be issued by a court upon the filing by the government of a complaint for expropriation
sufficient in form and substance and upon deposit made by the government of the amount equivalent to the
assessed value of the property subject to expropriation. Upon compliance with these requirements, the issuance of
the writ of possession becomes ministerial.22 In this case, these requirements were satisfied and, therefore, it
became the ministerial duty of the court to issue the writ of possession.

The Court of Appeals, however, ruled that petitioner failed to comply with the requirements laid down in 9 - 10
of RA. No. 7279 and reiterated in Filstream ruling. This is error. The ruling in the Filstream was necessitated because
an order of condemnation had already been issued by the trial court in that case. Thus, the judgment in that case
had already become final. In this case, the trial court has not gone beyond the issuance of a writ of possession.
Hearing is still to be held to determine whether or not petitioner indeed complied with the requirements provided
in RA. No. 7279. It is, therefore, premature at this stage of the proceedings to find that petitioner resorted
expropriation without first trying the other modes of acquisition enumerated in 10 of the law.

RA. No 7279 in pertinent parts provide:

SEC. 9. Priorities in the Acquisition of Land Lands for socialized housing shall be acquired in the following
order:

(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including
government owned and controlled corporations and their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declares Areas or Priority Development, Zone Improvement Program sites, and Slum
Improvement and Resettlement Programs sites which have not yet been acquired;

(e) Bagong Lipunan Improvement and Sites and Services or BLISS sites which have not yet been acquired,
and;

(f) Privately-owned lands.

Where on-site development is found more practicable and advantageously to the beneficiaries, the
priorities mentioned in this section shall not apply. The local government units shall give budgetary priority
on-site development of government lands.
 SEC. 10. Modes of Lands Acquisition. -- The modes of acquiring lands for purposes of this Act shall include,
amount others, community mortgage, land swapping, land assembly or consolidation, land banking,
donation to the Government, joint-venture agreement, negotiated purchase, and expropriation: Provided,
however; That expropriation shall be resorted to only when other modes of acquisition have been
exhausted: Provided, further; That were expropriation is resorted to, parcels of land owned by small
property owners shall be exempted for purposes of this Act: Provided finally, That abandoned property, as
herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure
laid down in Rule 91 of the Rules of Court.

For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by
the local government units, or by the National Housing Authority primarily through negotiated
purchase: Provided, That qualified beneficiaries who are actual occupants of the lands shall be given the
right of first refusal.

Whether petitioner has complied with these provisions requires the presentation of evidence, although in its
amended complaint petitioner did allege that it had complied with the requirements.23 The determination of this
question must await that hearing on the complaint for expropriation, particularly the hearing for the condemnation
of the properties sought to be expropriated. Expropriation proceedings consist of two stages: first, condemnation of
the property after it is determined that its acquisition will be for a public purpose or public use and, second, the
determination of just compensation to be paid for the taking of the private property to be made by the court with
the assistance of not more than three commissioners.24

WHEREFORE, the decision, dated November 16,1999, and resolution, dated February 23, 2000, of the Court of
Appeals are REVERSED and the order of the trial court, dated December 15,1998, is REINSTATED. This case is
REMANDED to the trial court to further proceedings.1wphi1.nt

SO ORDERED.

Bellosillo, Quisumbing, Buena, and De Leon, Jr., JJ., concur.

Footnotes:

1
CA Decision, p. 3; CA Rollo, p. 329.

2
CA Rollo, pp. 44-47.

3
Id., p. 60.

4
Id., p. 54.

5
Id., p. 57.

6
Id., p. 58.

7
Id., pp. 28-34.

8
Id., pp. 36-39.
9
Id., p. 58.

10
Id., p. 70.

11
Id., pp. 24-26.

12
Id., pp. 16-18.

13
284 SCRA 716 (1998).

14
CA Decision, p. 8; CA Rollo, p. 334.

15
CA Rollo, p. 393.

16
Petition, p. 5; Rollo, p. 14.

17
Id., p. 6; Id., p. 15.

18
CA Rollo, p. 7.

19
Supra.

20
CA Rollo, p. 12.

21
Petition, pp. 8-10; Rollo, pp. 17.20.

22
Biglang-awa v. Bacalla, G.R. Nos. 139927 and 139936, Nov. 22, 2000.

23
In its amended complaint, petitioner alleged:

4. Prior to the institution of this action, plaintiff tried to purchase the subject property by
negotiated sale with a valid and definite offer of P4,324,000.00 as fair market value thereof
contained in a letter dated March 17, 1994 of the then City Legal Officer Mario C.R. Domingo
addressed to defendants' administrator, Ms. Linda De Guia...

4.1. Defendants LEE KIAN HUI, EDGARDO DE QUIA, FELISSA DE QUIA, RODOLFO DE QUIA,
BRUHILDA DE QUIA, OSCAR, FELICITAS, JOSE, BENJAMIN, ESTRELLITA, LEONORA, ADELAIDA, all
surnamed SERRANO, ERLINDA DE QUIA, ELENA DE QUIA, RAMIRO DE QUIA, who received the
offer-letter, rejected the offer.

24
Barangay San Roque, Talisay, Cebu v. Heirs of Francisco Pastor, G.R. No.138896, June 20, 2000.
ANIANO A. ALBON, Petitioner,
vs.
BAYANI F. FERNANDO, City Mayor of Marikina, ENGR. ALFONSO ESPIRITO, City Engineer of Marikina, ENGR. ANAKI
MADERAL, Assistant City Engineer of Marikina, and NATIVIDAD CABALQUINTO, City Treasurer of
Marikina, Respondents.

RESOLUTION

CORONA, J.:

May a local government unit (LGU) validly use public funds to undertake the widening, repair and improvement of
the sidewalks of a privately-owned subdivision?

This is the issue presented for the Courts resolution in

this petition for review on certiorari1 which assails the December 22, 2000 decision2 and May 30, 2001 resolution of
the Court of Appeals in CA-G.R. SP No. 56767.

In May 1999, the City of Marikina undertook a public works project to widen, clear and repair the existing sidewalks
of Marikina Greenheights Subdivision. It was undertaken by the city government pursuant to Ordinance No. 59, s.
19933 like other infrastructure projects relating to roads, streets and sidewalks previously undertaken by the city.

On June 14, 1999, petitioner Aniano A. Albon filed with the Regional Trial Court of Marikina, Branch 73, a taxpayers
suit for certiorari, prohibition and injunction with damages against respondents (who were at that time officials of
Marikina), namely, City Mayor Bayani F. Fernando, City Engineer Alfonso Espirito, Assistant City Engineer Anaki
Maderal and City Treasurer Natividad Cabalquinto. It was docketed as SCA Case No. 99-331-MK.

Petitioner claimed that it was unconstitutional and unlawful for respondents to use government equipment and
property, and to disburse public funds, of the City of Marikina for the grading, widening, clearing, repair and
maintenance of the existing sidewalks of Marikina Greenheights Subdivision. He alleged that the sidewalks were
private property because Marikina Greenheights Subdivision was owned by V.V. Soliven, Inc. Hence, the city
government could not use public resources on them. In undertaking the project, therefore, respondents allegedly
violated the constitutional proscription against the use of public funds for private purposes4 as well as Sections 335
and 336 of RA 71605 and the Anti-Graft and Corrupt Practices Act. Petitioner further alleged that there was no
appropriation for the project.

On June 22, 1999, the trial court denied petitioners application for a temporary restraining order (TRO) and writ of
preliminary injunction. The trial court reasoned that the questioned undertaking was covered by PD 1818 and
Supreme Court Circular No. 68-94 which prohibited courts from issuing a TRO or injunction in any case, dispute or
controversy involving an infrastructure project of the government.

On November 15, 1999, the trial court rendered its decision6 dismissing the petition. It ruled that the City of Marikina
was authorized to carry out the contested undertaking pursuant to its inherent police power. Invoking this Courts
1991 decision in White Plains Association v. Legaspi,7 the roads and sidewalks inside the Marikina Greenheights
Subdivision were deemed public property.

Petitioner sought a reconsideration of the trial courts decision but it was denied.

Thereafter, petitioner elevated the case to the Court of Appeals via a petition for certiorari, prohibition, injunction
and damages. On December 22, 2000, the appellate court sustained the ruling of the trial court and held that
Ordinance No. 59, s. 1993, was a valid enactment. The sidewalks of Marikina Greenheights Subdivision were public
in nature and ownership thereof belonged to the City of Marikina or the Republic of the Philippines following the
1991 White Plains Association decision. Thus, the improvement and widening of the sidewalks pursuant to
Ordinance No. 59, s. 1993 was well within the LGUs powers. On these grounds, the petition was dismissed.

Petitioner moved for reconsideration of the appellate courts decision but it was denied. Undaunted, he instituted
this petition.

Like all LGUs, the City of Marikina is empowered to enact ordinances for the purposes set forth in the Local
Government Code (RA 7160). It is expressly vested with police powers delegated to LGUs under the general welfare
clause of RA 7160.8 With this power, LGUs may prescribe reasonable regulations to protect the lives, health, and
property of their constituents and maintain peace and order within their respective territorial jurisdictions. 9

Cities and municipalities also have the power to exercise such powers and discharge such functions and
responsibilities as may be necessary, appropriate or incidental to efficient and effective provisions of the basic
services and facilities, including infrastructure facilities intended primarily to service the needs of their residents and
which are financed by their own funds.10 These infrastructure facilities include municipal or city roads and bridges
and similar facilities.11

There is no question about the public nature and use of the sidewalks in the Marikina Greenheights Subdivision. One
of the "whereas clauses" of PD 121612 (which amended PD 95713) declares that open spaces,14 roads, alleys and
sidewalks in a residential subdivision are for public use and beyond the commerce of man. In conjunction herewith,
PD 957, as amended by PD 1216, mandates subdivision owners to set aside open spaces which shall be devoted
exclusively for the use of the general public.

Thus, the trial and appellate courts were correct in upholding the validity of Ordinance No. 59, s. 1993. It was enacted
in the exercise of the City of Marikinas police powers to regulate the use of sidewalks. However, both the trial and
appellate courts erred when they invoked our 1991 decision in White Plains Association and automatically applied
it in this case.

This Court has already resolved three interrelated White Plains Association cases:15 (1) G.R. No. 5568516 resolved in
1985; (2) G.R. No. 9552217 decided in 1991 and (3) G.R. No. 12813118 decided in 1998.

The ruling in the 1991 White Plains Association decision relied on by both the trial and appellate courts was modified
by this Court in 1998 in White Plains Association v. Court of Appeals.19 Citing Young v. City of Manila,20this Court held
in its 1998 decision that subdivision streets belonged to the owner until donated to the government or until
expropriated upon payment of just compensation.

The word "street," in its correct and ordinary usage, includes not only the roadway used for carriages and vehicular
traffic generally but also the portion used for pedestrian travel. 21 The part of the street set aside for the use of
pedestrians is known as a sidewalk.22

Moreover, under subdivision laws,23 lots allotted by subdivision developers as road lots include roads, sidewalks,
alleys and planting strips.24 Thus, what is true for subdivision roads or streets applies to subdivision sidewalks as
well. Ownership of the sidewalks in a private subdivision belongs to the subdivision owner/developer until it is either
transferred to the government by way of donation or acquired by the government through expropriation.

Section 335 of RA 7160 is clear and specific that no public money or property shall be appropriated or applied for
private purposes. This is in consonance with the fundamental principle in local fiscal administration that local
government funds and monies shall be spent solely for public purposes. 25
In Pascual v. Secretary of Public Works,26 the Court laid down the test of validity of a public expenditure: it is the
essential character of the direct object of the expenditure which must determine its validity and not the magnitude
of the interests to be affected nor the degree to which the general advantage of the community, and thus the public
welfare, may be ultimately benefited by their promotion.27 Incidental advantage to the public or to the State
resulting from the promotion of private interests and the prosperity of private enterprises or business does not
justify their aid by the use of public money.28

In Pascual, the validity of RA 920 ("An Act Appropriating Funds for Public Works") which appropriated P85,000 for
the construction, repair, extension and improvement of feeder roads within a privately-owned subdivision was
questioned. The Court held that where the land on which the projected feeder roads were to be constructed
belonged to a private person, an appropriation made by Congress for that purpose was null and void. 29

In Young v. City of Manila,30 the City of Manila undertook the filling of low-lying streets of the Antipolo Subdivision,
a privately-owned subdivision. The Court ruled that as long as the private owner retained title and ownership of the
subdivision, he was under the obligation to reimburse to the city government the expenses incurred in land-filling
the streets.

Moreover, the implementing rules of PD 957, as amended by PD 1216, provide that it is the registered owner or
developer of a subdivision who has the responsibility for the maintenance, repair and improvement of road lots and
open spaces of the subdivision prior to their donation to the concerned LGU. The owner or developer shall be
deemed relieved of the responsibility of maintaining the road lots and open space only upon securing a certificate
of completion and executing a deed of donation of these road lots and open spaces to the LGU. 31

Therefore, the use of LGU funds for the widening and improvement of privately-owned sidewalks is unlawful as it
directly contravenes Section 335 of RA 7160. This conclusion finds further support from the language of Section 17
of RA 7160 which mandates LGUs to efficiently and effectively provide basic services and facilities. The law speaks
of infrastructure facilities intended primarily to service the needs of the residents of the LGU and "which are funded
out of municipal funds."32 It particularly refers to "municipal roads and bridges" and "similar facilities."33

Applying the rules of ejusdem generis, the phrase "similar facilities" refers to or includes infrastructure facilities like
sidewalks owned by the LGU. Thus, RA 7160 contemplates that only the construction, improvement, repair and
maintenance of infrastructure facilities owned by the LGU may be bankrolled with local government funds.

Clearly, the question of ownership of the open spaces (including the sidewalks) in Marikina Greenheights Subdivision
is material to the determination of the validity of the challenged appropriation and disbursement made by the City
of Marikina. Similarly significant is the character of the direct object of the expenditure, that is, the sidewalks.

Whether V.V. Soliven, Inc. has retained ownership of the open spaces and sidewalks or has already donated them
to the City of Marikina, and whether the public has full and unimpeded access to the roads and sidewalks of Marikina
Greenheights Subdivision, are factual matters. There is a need for the prior resolution of these issues before the
validity of the challenged appropriation and expenditure can be determined.

WHEREFORE, this case is hereby ordered REMANDED to the Regional Trial Court of Marikina City for the reception
of evidence to determine (1) whether V.V. Soliven, Inc. has retained ownership of the open spaces and sidewalks of
Marikina Greenheights Subdivision or has donated them to the City of Marikina and (2) whether the public has full
and unimpeded access to, and use of, the roads and sidewalks of the subdivision. The Marikina City Regional Trial
Court is directed to decide the case with dispatch.

SO ORDERED.
RENATO C. CORONA
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Acting Chief Justice
Chairperson

(On Official Business)

ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA
Associate Justice Asscociate Justice

CANCIO C. GARCIA
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above resolution had been
reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Acting Chief Justice

Footnotes

1
Under Rule 45 of the Rules of Court.

2
Penned by Associate Justice Ramon A. Barcelona and concurred in by Associate Justices Rodrigo V. Cosico
and Bienvenido L. Reyes of the Tenth Division of the Court of Appeals; rollo, pp. 44-51.

3
Otherwise known as "An Ordinance Regulating the Use of the Streets and Sidewalks in the Municipality of
Marikina."

4
Constitution, Article VI, Sec. 9.

5
Otherwise known as the "Local Government Code of 1991."

6
Penned by Judge Olga Palanca Enriquez.

7
G.R. No. 95522, 07 February 1991, 193 SCRA 765. In particular, the Court of Appeals invoked the following
statement in the 1991 White Plains Association decision:

When [a strip of land] was withdrawn from the commerce of man as the open space required by
law to be devoted for the use of the general public, its ownership was automatically vested in the
[LGU] and/or the Republic of the Philippines, without need of paying any compensation to [the
 developer], although it is still registered in the latters name. Its donation by the owner/developer
is a mere formality.

8
SEC. 61. General Welfare. Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for the efficient and
effective governance, and those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support, among other things,
the preservation and enrichment of culture, promote health and safety, enhance the right of the people to
a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social justice, promote
full employment among their residents, maintain peace and order, and preserve the comfort and
convenience of their inhabitants.

9
Batangas CATV, Inc. v. Court of Appeals, G.R. No. 138810, 29 September 2004, 439 SCRA 326.

10
RA 7160, Section 17.

11
Id., paragraphs (b)(2)(viii) and (b)(4).

12
Defining "Open Space" in Residential Subdivisions and Amending Section 31 of PD 957 Requiring
Subdivision Owners to Provide Roads, Alleys, Sidewalks and Reserve Open Space for Parks or Recreational
Use.

13
Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties for Violations Thereof.

14
Open space shall mean an area reserved exclusively for parks, playgrounds, recreational uses, and other
similar facilities and amenities. (Section 4[c], Rule III, HSRC Administrative Order No. 82-01, also known as
the "Rules and Regulations Implementing Sec. 31 of PD 957, as amended by PD 1216.")

15
All three cases relate to Road Lot 1 or the proposed portion of Katipunan Avenue supposed to pass
through the White Plains Subdivision.

16
White Plains Association v. Court of Appeals and Quezon City Development Corporation. In its resolution
dated November 14, 1985, the Court en banc dismissed the petition. The Court ruled that Road Lot 1 was
withdrawn from the commerce of man and should be developed for the use of the general public.

17
White Plains Association, Inc. v. Legaspi, Quezon City Development Corporation, et al., supra at note 7.
The Court reiterated the doctrine that Road Lot 1 had been withdrawn from the commerce of man, thus
constituting it as part of mandatory open space reserved for public use.

18
White Plains Association v. Court of Appeals, 08 October 1998, 297 SCRA 547.

19
Id.

20
73 Phil. 537 (1941).

21
Government of the Philippine Islands v. Derham Brothers, 36 Phil. 960 (1917).

22
Id.
 23
PDs 957 and 1216.

24
They also include the subdivisions gutters, drainage and sewerage. (Section 4[d], Rule III, HSRC
Administrative Order No. 82-01).

25
Section 305(b), RA 7160.

26
110 Phil. 331 (1960).

27
Id.

28
Id.

29
Id.

30
Supra at note 20.

31
Section 9, Rule IV, HSRC Administrative Order No. 82-01 (Rules and Regulations Implementing Sec. 31 of
PD 957, as amended by PD 1216).

32
See Section 17, RA 7160.

33
See Paragraphs (b)(2)(viii) and (b)(4), Section 17, RA 7160.

THE CITY OF CEBU, petitioner,

vs.
SPOUSES APOLONIO and BLASA DEDAMO, respondents.

DAVIDE, JR., C.J.:

In its petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner City of Cebu
assails the decision of 11 October 1999 of the Court of Appeals in CA-G.R. CV No. 592041 affirming the judgment of
7 May 1996 of the Regional Trial Court, Branch 13, Cebu City, in Civil Case No. CEB-14632, a case for eminent domain,
which fixed the valuation of the land subject thereof on the basis of the recommendation of the commissioners
appointed by it.

The material operation facts are not disputed.

On 17 September 1993, petitioner City of Cebu filed in Civil Case No. CEB-14632 a complaint for eminent domain
against respondents spouses Apolonio and Blasa Dedamo. The petitioner alleged therein that it needed the following
parcels of land of respondents, to wit:

Lot No. 1527

Area------------------------------------------------ 1,146 square meters

Tax Declaration---------------------------------- 03472

Title No. ------------------------------------------ 31833

 Market value------------------------------------- P240,660.00

Assessed Value---------------------------------- P72,200.00

Lot No. 1528

Area------------------------------------------------ 793 square meters

Area sought to be expropriated ---------------- 478 square meters

Tax Declaration ----------------------------------- 03450

Title No. -------------------------------------------- 31832

Market value for the whole lot ------------------ P1,666,530.00

Market value of the Area to be expropriated -- P100,380.00

Assessed Value ------------------------------------ P49,960.00

for a public purpose, i.e., for the construction of a public road which shall serve as an access/relief road of Gorordo
Avenue to extend to the General Maxilum Avenue and the back of Magellan International Hotel Roads in Cebu City.
The lots are the most suitable site for the purpose. The total area sought to be expropriated is 1,624 square meters
with an assessed value of P1,786.400. Petitioner deposited with the Philippine National Bank the amount of P51,156
representing 15% of the fair market value of the property to enable the petitioner to take immediate possession of
the property pursuant to Section 19 of R.A. No. 7160.2

Respondents, filed a motion to dismiss the complaint because the purpose for which their property was to be
expropriated was not for a public purpose but for benefit of a single private entity, the Cebu Holdings, Inc. Petitioner
could simply buy directly from them the property at its fair market value if it wanted to, just like what it did with the
neighboring lots. Besides, the price offered was very low in light of the consideration of P20,000 per square meter,
more or less, which petitioner paid to the neighboring lots. Finally, respondents alleged that they have no other land
in Cebu City.

A pre-trial was thereafter had.

On 23 August 1994, petitioner filed a motion for the issuance of a writ of possession pursuant to Section 19 of R.A.
No. 7160. The motion was granted by the trial court on 21 September 1994. 3

On 14 December 1994, the parties executed and submitted to the trial court an Agreement 4 wherein they declared
that they have partially settled the case and in consideration thereof they agreed:

1. That the SECOND PARTY hereby conforms to the intention to [sic] the FIRST PARTY in expropriating their
parcels of land in the above-cited case as for public purpose and for the benefit of the general public;

2. That the SECOND PARTY agrees to part with the ownership of the subject parcels of land in favor of the
FIRST PARTY provided the latter will pay just compensation for the same in the amount determined by the
court after due notice and hearing;
 3. That in the meantime the SECOND PARTY agrees to receive the amount of ONE MILLION SEVEN HUNDRED
EIGHTY SIX THOUSAND FOUR HUNDRED PESOS (1,786,400.00) as provisional payment for the subject
parcels of land, without prejudice to the final valuation as maybe determined by the court;

4. That the FIRST PARTY in the light of the issuance of the Writ of Possession Order dated September 21,
1994 issued by the Honorable Court, agreed to take possession over that portion of the lot sought to be
expropriated where the house of the SECOND PARTY was located only after fifteen (15) days upon the
receipt of the SECOND PARTY of the amount of P1,786,400.00;

5. That the SECOND PARTY upon receipt of the aforesaid provisional amount, shall turn over to the FIRST
PARTY the title of the lot and within the lapse of the fifteen (15) days grace period will voluntarily demolish
their house and the other structure that may be located thereon at their own expense;

6. That the FIRST PARTY and the SECOND PARTY jointly petition the Honorable Court to render judgment in
said Civil Case No. CEB-14632 in accordance with this AGREEMENT;

7. That the judgment sought to be rendered under this agreement shall be followed by a supplemental
judgment fixing the just compensation for the property of the SECOND PARTY after the Commissioners
appointed by this Honorable Court to determine the same shall have rendered their report and approved
by the court.

Pursuant to said agreement, the trial court appointed three commissioners to determine the just compensation of
the lots sought to be expropriated. The commissioners were Palermo M. Lugo, who was nominated by petitioner
and who was designated as Chairman; Alfredo Cisneros, who was nominated by respondents; and Herbert E. Buot,
who was designated by the trial court. The parties agreed to their appointment.

Thereafter, the commissioners submitted their report, which contained their respective assessments of and
recommendation as to the valuation of the property.1wphi1.nt

On the basis of the commissioners' report and after due deliberation thereon, the trial court rendered its decision
on 7 May 1996,5 the decretal portion o which reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in accordance with the report of the
commissioners.

Plaintiff is directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the sum of pesos: TWENTY FOUR
MILLION EIGHT HUNDRED SIXTY-FIVE THOUSAND AND NINE HUNDRED THIRTY (P24,865.930.00)
representing the compensation mentioned in the Complaint.

Plaintiff and defendants are directed to pay the following commissioner's fee;

1. To Palermo Lugo - P21,000.00

2. To Herbert Buot - P19,000.00

3. To Alfredo Cisneros - P19,000.00

Without pronouncement as to cost.

SO ORDERED.
Petitioner filed a motion for reconsideration on the ground that the commissioners' report was inaccurate since it
included an area which was not subject to expropriation. More specifically, it contended that Lot No. 1528 contains
793 square meters but the actual area to be expropriated is only 478 square meters. The remaining 315 square
meters is the subject of a separate expropriation proceeding in Civil Case No. CEB-8348, then pending before Branch
9 of the Regional Trial Court of Cebu City.

On 16 August 1996, the commissioners submitted an amended assessment for the 478 square meters of Lot No.
1528 and fixed it at P12,824.10 per square meter, or in the amount of P20,826,339.50. The assessment was approved
as the just compensation thereof by the trial court in its Order of 27 December 1996. 6 Accordingly, the dispositive
portion of the decision was amended to reflect the new valuation.

Petitioner elevated the case to the Court of Appeals, which docketed the case as CA-G.R. CV No. 59204. Petitioner
alleged that the lower court erred in fixing the amount of just compensation at P20,826,339.50. The just
compensation should be based on the prevailing market price of the property at the commencement of the
expropriation proceedings.

The petitioner did not convince the Court of Appeals. In its decision of 11 October 1999, 7 the Court of Appeals
affirmed in toto the decision of the trial court.

Still unsatisfied, petitioner filed with us the petition for review in the case at bar. It raises the sole issue of whether
just compensation should be determined as of the date of the filing of the complaint. It asserts that it should be,
which in this case should be 17 September 1993 and not at the time the property was actually taken in 1994,
pursuant to the decision in "National Power Corporation vs. Court of Appeals."8

In their Comment, respondents maintain that the Court of Appeals did not err in affirming the decision of the trial
court because (1) the trial court decided the case on the basis of the agreement of the parties that just compensation
shall be fixed by commissioners appointed by the court; (2) petitioner did not interpose any serious objection to the
commissioners' report of 12 August 1996 fixing the just compensation of the 1,624-square meter lot at
P20,826,339.50; hence, it was estopped from attacking the report on which the decision was based; and (3) the
determined just compensation fixed is even lower than the actual value of the property at the time of the actual
taking in 1994.

Eminent domain is a fundamental State power that is inseparable from sovereignty. It is the Government's right to
appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose. 9 However,
the Government must pay the owner thereof just compensation as consideration therefor.

In the case at bar, the applicable law as to the point of reckoning for the determination of just compensation is
Section 19 of R.A. No. 7160, which expressly provides that just compensation shall be determined as of the time of
actual taking. The Section reads as follows:

SECTION 19. Eminent Domain. A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose or welfare for
the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions
of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously made to the owner, and such offer was not
accepted: Provided, further, That the local government unit may immediately take possession of the
property upon the filing of the expropriation proceedings and upon making a deposit with the proper court
of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration
of the property to be expropriated: Provided finally, That, the amount to be paid for the expropriated
property shall be determined by the proper court, based on the fair market value at the time of the taking
of the property.
The petitioner has misread our ruling in The National Power Corp. vs. Court of Appeals.10 We did not categorically
rule in that case that just compensation should be determined as of the filing of the complaint. We explicitly stated
therein that although the general rule in determining just compensation in eminent domain is the value of the
property as of the date of the filing of the complaint, the rule "admits of an exception: where this Court fixed the
value of the property as of the date it was taken and not at the date of the commencement of the expropriation
proceedings."

Also, the trial court followed the then governing procedural law on the matter, which was Section 5 of Rule 67 of
the Rules of Court, which provided as follows:

SEC. 5. Ascertainment of compensation. Upon the entry of the order of condemnation, the court shall
appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and
report to the court the just compensation for the property sought to be taken. The order of appointment
shall designate the time and place of the first session of the hearing to be held by the commissioners and
specify the time within which their report is to be filed with the court.

More than anything else, the parties, by a solemn document freely and voluntarily agreed upon by them, agreed to
be bound by the report of the commission and approved by the trial court. The agreement is a contract between the
parties. It has the force of law between them and should be complied with in good faith. Article 1159 and 1315 of
the Civil Code explicitly provides:

Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and
should be complied with in good faith.

Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only
to the fulfillment of what has been expressly stipulated but also to all the consequences which, according
to their nature, may be in keeping with good faith, usage and law.

Furthermore, during the hearing on 22 November 1996, petitioner did not interpose a serious objection. 11 It is
therefore too late for petitioner to question the valuation now without violating the principle of equitable estoppel.
Estoppel in pais arises when one, by his acts, representations or admissions, or by his own silence when he ought to
speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such
other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the
existence of such facts.12 Records show that petitioner consented to conform with the valuation recommended by
the commissioners. It cannot detract from its agreement now and assail correctness of the commissioners'
assessment.1wphi1.nt

Finally, while Section 4, Rule 67 of the Rules of Court provides that just compensation shall be determined at the
time of the filing of the complaint for expropriation,13 such law cannot prevail over R.A. 7160, which is a substantive
law.14

WHEREFORE, finding no reversible error in the assailed judgment on the Court of Appeals in CA-G.R. CV No. 59204,
the petition in this case is hereby DENIED.

No pronouncement as to costs.

SO ORDERED.

Puno, Kapunan, Ynares-Santiago, De Leon, Jr., and Austria-Martinez, JJ., concur.

Footnote

1
Black, Law Dictionary 1081 (1957).

2
Entitled "The Local Government Code of 1991."

3
Rollo, 60.

4
Annex "1" of Comment, Rollo, 57-58.

5
Rollo, 60-63. Per judgment of Judge Meinrado P. Paredes.

6
Rollo, 64.

7
Supra note 1.

8
254 SCRA 577 [1996].

9
Moday v. Court of Appeals, 268 SCRA 586, 592 [1997].

10
Supra note 8.

11
Rollo, 64, Per Order of Judge Meinrado P. Paredes, 27 December 1996.

12
Ibaan Rural Bank, Inc. v. Court of Appeals, 321 SCRA 88, 93 [1999]; Philippine National Bank v. Court of
Appeals, 315 SCRA 309, 314 [1999].

13
SEC 4. Order of Condemnation. When such motion is overruled or when any party fails to defend as
required by this rule, the court may enter an order of condemnation declaring that the plaintiff has a lawful
right to take the property sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be determined as of the date of the filing of the
complaint. xxx (emphasis, ours).

14
See Philippine National Bank v. Independent Planters Association, Inc., 122 SCRA 113 [1983].