EPZA VS.DULAY [148 SCRA 305; G.R. No.

L-59603; 29 Apr 1987]

Facts: The four parcels of land that are the subject of this case are where the Mactan
ExportProcessing Zone Authority in Cebu (EPZA) is to be constructed. Private respondent San
Antonio Development Corporation (San Antonio, for brevity), under which these lands are
registered, claimed that the lands were expropriated to the government without them reaching an
agreement as to the compensation. Respondent Judge Dulay then issued an order for the
appointment of the commissioners to determine the just compensation. It was later found out that
the payment of the government to San Antonio would be P15 per square meter, which was
objected to by the latter contending that under PD 1533, the basis of just compensation shall be
fair and according to the market value declared by the owner of the property sought to be
expropriated, or by the assessor, whichever is lower. Such objection and the subsequent Motion
for Reconsideration were denied and a hearing was set for the reception of the commissioner’s
report. EPZA then filed this petition for certiorari and mandamus enjoining the respondent from
further hearing the case.
Issue: Whether or Not the exclusive and mandatory mode of determining just compensation in
PD1533 is unconstitutional.
Held: The Supreme Court ruled that the mode of determination of just compensation in PD 1533
is unconstitutional.The method of ascertaining just compensation constitutes impermissible
encroachment to judicial prerogatives. It tends to render the courts inutile in a matter which
under the Constitution is reserved to it for financial determination. 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. The determination of just compensation is a judicial function. The
executive department or the legislature may make the initial determination but when a party
claims a violation of the guarantee in the Bill of rights that the private party 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 justness of the decreed
compensation.