Export Processing Zone Authority vs Hon.

Ceferino Dulay
Ponente: Gutierrez, Jr.

Facts: January 1957, president of the Philippines issued proclamation no

1811 reserving a parcel of land in Lapu-lapu for the establishment of an
export processing zone. Not all the reserved land was public. EPZA then
offered to purchase the lands from its registered owners, in the valuation
set by PD 464, as amended. The owners did not agree.

EPZA filed with CFI-Cebu a complaint for expropriation with a prayer for
the issuance of a writ of possession against the landowners. Judge Dulay,
later issued a writ of possession authorizing EPZA to take immediate
possession of the premises.
After the recommendation of the appointed commissioners as to the just
compensation, EPZA filed for a motion for reconsideration saying that the
PD 464, as amended, superseded the rules of court. The trial court denied
the motion. EPZA then filed for certiorari and mandamus with preliminary
restraining order.

Issue: Whether PD 76, 464, 794 and 1533 have repealed the Revised Rules of
Court, such that in determining just compensation in expropriation shall
be based only in its market value as declared by the owner or by assessor,
whichever is lower.

Ruling: PD 464 on just compensation is unconstitutional and void. The

method of just compensation provided by PD 464 is an encroachment on
judicial prerogatives, contradicting the Constitution which reserved the
power to determine just compensation to the Court's final determination.
We are convinced and so rule that the trial court correctly stated that
the valuation in the decree may only serve as a guiding principle or one
of the factors in determining just compensation but it may not substitute
the court's own judgment as to what amount should be awarded and how to
arrive at such amount.
Just compensation means the value of the property at the time of the
taking. It means a fair and full equivalent for the loss sustained. All
the facts as to the condition of the property and its surroundings, its
improvements and capabilities, should be considered. The determination of
"just compensation" in eminent domain cases is a judicial function. The
executive department or the legislature may make the initial
determinations but when a party claims a violation of the guarantee in the
Bill of Rights that private property may not be taken for public use
without just compensation, no statute, decree, or executive order can
mandate that its own determination shall prevail over the court's
findings. Much less can the courts be precluded from looking into the
"just-ness" of the decreed compensation.