Rule 67 Other constitutional provisions: a.

)
Sec. 18, Art. XII (National Economy and
EXPROPRIATION
Patrimony) - recognizes the authority of
the state to transfer to public ownership

Preliminaries and operation, privately owned

enterprises and utilities upon the
The power of eminent domain is one
payment of just compensation, when
of the inherent powers of the state
required by national welfare and
together with police and taxation power.
defense. b.) Sec. 22, Art. XVIII
Being inherent, no law or even the
(Transitory Provisions) - State may also
Constitution may confer it. Therefore,
expropriate idle or abandoned
any provision in law or Constitution
agricultural lands for distribution to the
making reference to it is only a limitation
beneficiaries of the agrarian reform
to its exercise.
program.
The right of eminent domain is “the
The scope of the power of eminent
ultimate right of the sovereign power to
domain, as exercised by Congress is
appropriate, not only the public but the
plenary and is as broad as the police
private property of all citizens within the
power. Such power however, may also
territorial sovereignty, to public
be delegated to local political
purpose.” (Republic v. Heirs of Borbon,
subdivisions and public utilities.
G.R. No. 165354, January 12, 2015).

Sec. 9, Art. III of the Constitution lay

down specific limitations to its exercise Essence of expropriation; concept of

by requiring that the taking of private “public use”

property be done only for public use and
upon payment of just compensation.
The due process and equal protection
clauses in Sec. 1 of Art. III of the
Constitution likewise serve as limitations
to the exercise of such power.
Expropriation is forced private
property taking, the landowner being
really without a ghost of a chance to
defeat the case of the expropriating
agency. In other words, the private
owner is deprived of property against his
will.
 Public use, as an eminent domain
concept, has now acquired an
Government has no unrestricted title
expansive meaning to include any use
to the land expropriated
that is of usefulness, utility, or
advantage, or what is productive of A condemnor should commit to

general benefit.” use the property pursuant to the

purpose stated in the petition for
It is essential that the element of
expropriation, failing which it should file
public use of the property be maintained
another petition for the new purpose. If
throughout the proceedings for
not, the condemnor is required to return
expropriation. If not, it is incumbent upon
the property to its owner, if the latter so
the expropriator to return the said
desires.
property to its private owner, if the latter
desires to reacquire the same.
Otherwise, the property owner would be Exercise of eminent domain by local
denied due process of law, and the government units
judgment would violate the property
Section 19, RA 7160, also known
owner’s right to justice, fairness and
as the Local Government Code,
equity.
delegates to local government units the
power of eminent domain. The

Meaning of just compensation requisites under the said provision are:

Just compensation is defined as a. An ordinance is enacted by a

the full and fair equivalent of the local legislative council to

property taken from its owner by the exercise the power of eminent

expropriator. The word “just” is used to domain, or pursue expropriation

intensify the meaning of the word proceedings over a particular

“compensation” and to convey the idea private property through its chief

that the equivalent to be rendered for executive;

the property to be taken shall be real, b. The power of eminent domain is

substantial, full and ample. exercised for public use, purpose

 or welfare, or for the benefit of the into the propriety of the expropriation –
poor and the landless; its necessity and the public purpose.
c. The power may be exercised
The first stage will end in the
through its chief executive acting
issuance of an order of expropriation if
pursuant to the enacted
the court finds for the plaintiff, or in the
ordinance;
dismissal of the complaint if it finds
d. There is payment of just
otherwise.
compensation, as required under
Section 9, Article III of the Second: Determination of just

Constitution, and other pertinent compensation through the court-

laws; and appointed commissioners.

e. A valid and definite offer has

been previously made to the
Matters to be alleged in a complaint
owner of the property sought to
for expropriation
be expropriated, but said offer
was not accepted. An expropriation proceeding is
commenced by the fling of a verified
The local government unit cannot
complaint which shall:
authorize an expropriation of private
property through a mere resolution of a. state with certainty the right of the
its lawmaking body. RA 7160 plaintiff to expropriation and the
expressly requires an ordinance for purpose thereof;
the purpose and a resolution that b. describe the real or personal
merely expresses the sentiment of property sought to be
the municipal council will not suffice. expropriated; and
c. join as defendants all persons
owning or claiming to own, or
Stages in the expropriation process occupying, any part of the

First: Determination of the property or interest therein

authority of the plaintiff to expropriate. showing as far as practicable the

This determination includes an inquiry interest of each defendant. If the

plaintiff cannot with accuracy
 identify the real owners, averment defense to the taking of his property.
to that effect must be made in the This answer shall be served within the
complaint (Sec. 1, Rule 67, Rules time stated in the summons.
of Court).
He shall also allege all his
objections and defenses to the taking of
his property because those not adduced
Service of summons; who may be
are deemed waived.
defendants
If he fails to allege some
The defendant shall be served
defenses in the answer, the remedy of
with summons. The defendants in an
the defendant is to seek leave to amend
expropriation proceeding are not limited
the answer within 10 days from the filing
to the owners of the property
thereof.
condemned. They include all other
persons owning, occupying or claiming Under Rule 67, the defendant
to own the property. cannot file an answer with a
counterclaim, answer with a cross-claim,
or third-party complaint. Also, a
Court with jurisdiction defendant who does not file an answer,

An action for expropriation is filed will not totally lose his standing in court

with the Regional Trial Court because it unlike the defendant in an ordinary civil

is an action incapable of pecuniary action who cannot take part in the trial if

estimation regardless of the value of the he is declared in default for failure to file

property. his answer.

An answer is not required if the

defendant has no objection or defense
Defenses and objections in the
to the action or to the taking of his
answer
property. Instead, he may file and serve
The defendant shall serve an a: (a) notice of appearance, and (b)
answer if he has objection to the: (a) manifestation to the fact that he has no
filing of the complaint, (b) allegations in objection or defense to the taking of his
the complaint, or (c) objection or
property, within the time stated in the property should the court decide in favor
summons. of the plaintiff, and should it be
otherwise, the deposit shall serve as
Entry upon the property or
indemnity against any damage which
possession thereof; deposit and
the owner may have sustained. (Visayan
notice
Refining Company v. Camus and
Under Sec. 2 of Rule 67, in order Paredes)
to be entitled to the possession of the
property, the plaintiff, upon the filing of
the complaint or at anytime thereafter,
must deposit with the proper
RA 8974 as modification of Sec. 2,
government authority an amount
Rule 67
equivalent to the assessed value of the
property for purposes of taxation with an RA 8974, otherwise known as

authorized government depositary, "An Act to Facilitate the Acquisition of

which deposit shall be held by the bank Right-of-Way, Site or Location for

subject to the orders of the court. National Government Infrastructure

Projects and For Other Purposes," and
Notice is required to be sent to
its Implementing Rules and Regulations
the defendant before the plaintiff shall
has modified Sec. 2 of Rule 67.
have the right to take or enter upon the
possession of the real property involved. RA 8974 requires that the
Government make a direct payment to
The making of the required
the property owner before the writ may
deposit entitles the plaintiff to the
issue as compared to Rule 67. It only
immediate possession of the property
applies in instances when the national
although there was no prior hearing. All
government expropriates property for
that is required for the immediate
national government infrastructure
possession is notice to the owner and
projects.
the deposit.

The deposit shall serve as an

advanced payment to the owner of the
Deposit under the Local Government
Code
Be it noted that under Sec. 19 of
the Local Government Code, the local
government unit may immediately take
possession of the property upon the
filing of the expropriation proceedings
and making a deposit with the proper
court of at least 15 percent of the fair
market value of the property based on
the current tax declaration of
property to be expropriated.
Order of expropriation
An order of expropriation shall
issue in any of the following cases:
(a) In the event objections of the
defendant are overruled; or
(b) When no party appears to object
to or defend against
expropriation.
After the rendition of the order of
expropriation, the plaintiff shall not be
permitted to dismiss or discontinue the
proceeding except upon such terms as
the court deems just and equitable. The
order is also appealable by any party
aggrieved by such order.
An appeal of the order will not,
however, prevent the court from
determining the just compensation to be
paid and shall not delay the right of the
plaintiff to enter the property.
Just compensation
Upon the issuance of the
order of expropriation, the court shall
appoint not more than 3 commissioners
to ascertain the just compensation for
the
the property. A hearing before the
commissioners is indispensable to allow
the parties to present evidence on the
issue of just compensation.
RTC is to observe the following
guidelines for the proper determination
of just compensation as provided by
jurisprudence: (a) just compensation
must be valued at the time of taking of
the property expropriated, or the time
the when the owner was deprived of the use
and benefit of his property; (b) interest
may be awarded as may be warranted
by the circumstances of the case; and
(c) just compensation must be arrived at
pursuant to the guidelines set forth in
Section 17 of RA 6657 and outlined in a
formula provided in DAR A.O. No. 5.
The judgment rendered as to
compensation is also appealable.
 Just compensation is
ascertained at the time of taking of the
property or the filing of the complaint,
whichever comes first.
Payment shall consist of the
amount fixed in the judgment including
legal interest from the taking
possession of the property.
If the defendant and his counsel
absent themselves from the court, or
decline to receive the amount tendered,
the same shall be ordered deposited in
court, which will have the same effect as
actual payment to the defendant or the
person ultimately adjudged
thereto.
to be A real mortgage is an accessory
contract executed by a debtor in favor of
a creditor as security for the principal
obligation. It must be constituted on a
real property or alienable real rights.
The mortgagor need not be the
of debtor and the latter need not be the
mortgagor. There can also be several
mortgages over the same property since
there is no law prohibiting it.
Failure to register the instrument
in the Register of Deeds does not affect
its validity between the parties.
Registration is only necessary to bind
entitled third persons.

Failure to pay by the government

Dragnet Clause or Blanket Mortgage
does not automatically entitle the
Clause
landowner to recover possession of the
expropriated lots; instead, the Dragnet or Blanket Mortgage

government has 5 years with which to Clause are provision in a mortgage

pay. contract where the mortgage is a

security for past, present and future
indebtedness.
Rule 68

FORECLOSURE OF REAL ESTATE

When foreclosure is proper; demand
MORTGAGE
to pay

Foreclosure of real estate

mortgage presupposes that the debtor
failed to pay his debt despite demand.
The issue of whether demand was made
before the foreclosure was effected is
essential. If demand was made and duly
received by the respondents and the
latter still did not pay, then they were
already in default and foreclosure was
proper. However, if demand was not
made, then the loans had not yet
become due and demandable.
In case of default of the debtor,
the creditor has the following alternative
remedies: (a) to file an action for
collection of a sum of money; or (b) to
foreclose the mortgage, if one has been
constituted. The election of one
constitutes as a waiver of the other.
Pactum commissorium; not a valid
agreement
Pactum commissorium is “a
stipulation empowering the creditor to
appropriate the thing given as guaranty
for the fulfillment of the obligation in the
event the obligor fails to live up to his
undertakings, without further formality,
such as foreclosure proceedings, and a
public sale.”
Court with jurisdiction
The MTC or RTC has jurisdiction
in actions to foreclose a mortgage
depending on the assessed value of the
property involved.
Judicial foreclosure and extrajudicial
foreclosure
Extrajudicial foreclosure is the
mode to be used if there is a special
power inserted in or attached to the real
estate mortgage contract allowing an
extrajudicial foreclosure sale. Where
there is no such special power, the
foreclosure shall be done judicially
through Rule 68.
Judgment on foreclosure; payment or
sale
If after the trial, the court finds
that the matters set forth in the
complaint are true, it shall render a
judgment containing the following
matters: (a) an ascertainment of the
amount due to the plaintiff upon the
mortgage debt or obligation, including
interest and other charges as approved
by the court, as well as costs; (b) a
judgment of the sum found due; (c) an
order that the amount found due be paid
to the court or to the judgment obligee
within a period of not less than ninety
(90) days nor more than one hundred
(120) days from the entry of judgment;
(d) and an admonition that in default of
such payment the property shall be sold
at public auction to satisfy the judgment
(Sec. 2, Rule 68, Rules of Court).
Equity of redemption and right of
redemption
The 90-day period talks about
equity of redemption, which is the right
to extinguish the mortgage and retain
ownership of the property by paying the
debt even after the foreclosure sale
provided it is made before the sale is
confirmed by the court.
Right of redemption is a right
granted to the mortgagor to reacquire
the property even after the confirmation
of the sale and the registration of the
certificate of sale. Right of redemption
only exists in extrajudicial foreclosure
and not in judicial foreclosure, the
exception being when the foreclosure is
in favor of banks.
Sale of the mortgaged property
If the mortgagor fails to pay the
sum due within the period of 90-120
days from the entry of judgment, the
mortgagee must file a motion for the
sale of the mortgaged property. Such
motion is non-litigable and may be made
ex parte.
Confirmation of the sale
After the foreclosure sale has
been effected, the mortgagee shall file a
motion for the confirmation of the sale
which requires a notice and a hearing.
The confirmation of the sale shall
operate to divest the rights in the
property of all the parties to the action
and vest their rights in the purchaser,
subject to such rights of redemption as
may be allowed by law.
The order of confirmation is
appealable, and if not appealed within
the period for appeal, such order
becomes final.
Upon the finality of the order of
confirmation or upon the expiration of
the period for redemption when allowed
by law, the purchaser at the auction sale
or last redemptioner, if any, shall be
entitled to the possession of the property
and he may secure a writ of possession,
upon motion, from the court which
ordered the foreclosure unless a third
party is actually holding the same
adversely to the judgment obligor.
Disposition of the proceeds of the
foreclosure sale
The proceeds of the sale of the
mortgaged property shall, after
deducting the costs of the sale, be paid
to the person foreclosing the mortgage,
and when there shall be any balance or
residue after paying off the mortgage
debt due, the same shall be paid to
junior encumbrancers in the order of
their priority. If there be any further
balance after paying them or if there be
no junior encumbrancers, the same shall
be paid to the mortgagor or any person
entitled thereto.
Registration of the sale
A certified copy of the final order
of the court confirming the sale is
necessary for the sale to be registered
in the registry of deeds. If there is no
right of redemption, the certificate of title
in the name of the mortgagor shall be
cancelled, and a new one shall be
issued in the name of the purchaser.
Deficiency judgment; when there is
no deficiency judgment
If there be a balance due to the
plaintiff after applying the proceeds of
the sale, the court, upon motion, shall
render judgment against the defendant
for any such balance. Execution may
issue immediately if the balance is all
due at the time of the rendition of the
judgment. If not due, the plaintiff shall be
entitled to execution at such time as the
remaining balance shall become due
and such due date shall be stated in the
judgment (Sec. 6, Rule 68, Rules of
Court). The deficiency judgment is, in
itself, a judgment, hence, also
appealable.
It is the duty of the mortgagee to
return to the mortgagor any surplus in
the selling price during the foreclosure
sale.
Distinction between judicial (e) In a judicial foreclosure, recovery of
foreclosure and extrajudicial the deficiency can be done by mere
foreclosure motion for a deficiency judgment; in an
extrajudicial foreclosure, the recovery of
Judicial and extrajudicial
the deficiency is through an independent
foreclosures may be distinguished from
action and, although nothing about the
each other, as follows:
recovery of the deficiency is provided in
(a) A judicial foreclosure is governed by Act 3135, there is no prohibition either.
the Rules of Court; an extrajudicial
foreclosure is governed by Act 3135, as
amended. Rule 69

(b) A judicial foreclosure involves the PARTITION

filing of an independent action; an
extrajudicial judicial foreclosure does not
require the filing of an action. Partition is defined as the
separation, division and assignment of a
(c) There is an equity of redemption in a
thing held in common among those to
judicial foreclosure and no right of
whom it may belong. It presupposes the
redemption except when the mortgagee
existence of a co-ownership over a
is a banking institution; there is a right of
property between two or more persons.
redemption in extrajudicial foreclosure of
The rule allowing partition originates
mortgage.
from a well-known principle embodied in
(d) In a judicial foreclosure of mortgage, the Civil Code that no co-owner shall be
there could be a deficiency judgment obliged to remain in the co-ownership.
rendered by the court in the same
proceeding; there can be no judgment
for a deficiency in an extrajudicial Instances when a co-owner may not

foreclosure because there is no judicial demand partition at any time:

proceeding, although recovery of the (a) There is an agreement among the

deficiency is allowed. co-owners to keep the property
undivided for a certain period of time but
not exceeding ten years (Art. 494, Civil An action for partition of real
Code of the Philippines); property involves the title to, or
possession of, real property, or any
(b) When partition is prohibited by the
interest therein; hence, jurisdiction
donor or testator for a period not
should be determined by inquiring into
exceeding twenty years (Arts. 494 and
the assessed value of the real property.
1083, Civil Code of the Philippines);
It may be with the MTC or the RTC
(c) When partition is prohibited by law depending on the value of the property
(Art. 494, Civil Code of the Philippines); involved.

(d) When the property is not subject to a

physical division and to do so would
Modes of partition
render it unserviceable for the use for
which it is intended (Art. 495, Civil Code Partition may be made in either of
of the Philippines); or two ways: (a) by agreement of the
parties; or (b) by judicial proceedings
(e) When the condition imposed upon
under the Rules of Court when the
voluntary heirs before they can demand
parties cannot reach an agreement.
partition has not yet been fulfilled (Art.
1084, Civil Code of the Philippines).

Stages/phases in partition

Prescription of action for partition The first phase of a partition

and/or accounting suit is taken up with
Prescription does not run in favor
the determination of whether or not a co-
of a co-owner or co-heir against his co-
ownership in fact exists, and a partition
owner or co-heirs as long as there is a
is proper and may be made by voluntary
recognition of the co-ownership,
agreement of all the parties interested in
expressly o impliedly.
the property.

The second phase commences

Court with jurisdiction when it appears that “the parties are
unable to agree upon the partition”
directed by the court. In that event,
partition shall be done for the parties by
the court with the assistance of not more
than 3 commissioners.
Who may file action for partition;
defendants
The action shall be brought by
the person who has a right to compel
the partition of real estate or of an estate
composed of personal property, or of
both real and personal property.
The plaintiff is a person who is
supposed to be a co-owner of the
property or estate sought to be
partitioned. The defendants are all the
co-owners, who are indispensable
parties.
Order for partition; final order is
appealable
During the trial, the court shall
determine whether or not the plaintiff is
truly a co-owner of the property, that
there is indeed a co-ownership among
the parties, and that a partition is not
legally proscribed, thus, may be allowed.
If the court finds that a partition would be
in order, the court will issue an order for
partition.
Partition by agreement and by court-
appointed commissioners
The order for partition is one that
directs the parties or co-owners to
partition the property where they may
make the partition among themselves by
proper instruments of conveyance, if
they agree among themselves. If they
do agree, the court shall then confirm
the partition so agreed upon by all the
parties, and such partition, together with
the order of the court confirming the
same, shall be recorded in the registry
of deeds of the place where the property
is situated.
If the co-owners are unable to
agree upon the partition, the court shall
appoint not more than 3 commissioners
to make the partition for the parties.
The commissioners shall make a
report to the court of all their
proceedings to the partition where
copies are to be served upon all
interested parties with notice that they
are allowed 10 days within which to file
objections to the findings of the report.
 The proceedings had before the
commissioners shall not bind the parties
or pass title to the property until the
court shall have accepted the report of
the commissioners and rendered
judgment thereon.