REPUBLIC OF THE PHILIPPINES VS GINGOYON [December 19, 2005]

FACTS:
The present controversy has its roots with the promulgation of the Courts
decision in Agan v. PIATCO, promulgated in 2003 (2003 Decision). This
decision nullified the Concession Agreement for the Build-Operate-andTransfer Arrangement of the Ninoy Aquino International Airport Passenger
Terminal
III
entered
into
between
the
Philippine
Government(Government) and the Philippine International Air Terminals
Co., Inc. (PIATCO), as well as the amendments and supplements thereto.
The agreement had authorized PIATCO to build a new international airport
terminal (NAIA 3), as well as a franchise to operate and maintain the said
terminal during the concession period of 25 years. The contracts were
nullified as the agreement was contrary to public policy.
At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities
had already been built by PIATCO and were nearing completion. However,
the ponencia of the 2003 Resolution was silent as to the legal status of the
NAIA 3 facilities following the nullification of the contracts, as well as
whatever rights of PIATCO for reimbursement for its expenses in the
construction of the facilities.
After the promulgation of the rulings in Agan, the NAIA 3 facilities have
remained in the possession of PIATCO, despite the avowed intent of the
Government to put the airport terminal into immediate operation. The
Government and PIATCO conducted several rounds of negotiation
regarding the NAIA 3 facilities.
In 2004, the Government filed a Complaint for expropriation with
the Pasay RTC. The Government sought upon the filing of the complaint
the issuance of a writ of possession authorizing it to take immediate
possession and control over the NAIA 3 facilities. The Government also
declared that it had deposited the amount of P3,002,125,000.00 (3 Billion)
in Cash with the Land Bank of the Philippines, representing the NAIA 3
terminals assessed value for taxation purposes [as stated in Rule 67]. The
Government insists that Rule 67 of the Rules of Court governs the
expropriation proceedings in this case to the exclusion of all other laws. On
the other hand, PIATCO claims that it is Rep. Act No. 8974 which does
apply.
Three orders of the RTC [excluding the first order issuing a writ of
possession] were elevated to the Supreme Court via a petition for certiorari
under Rule 65 to wit:
1.

Order to supplement the previous order issuing a writ of possession

in favor of the government. It contains a statement from the RTC
that RA 8974 should be applied.

EXPROPRIATION CASE DIGEST

Page 1

2.
3.

This order contained a decision appointing 3 commissioners for the

determination of just compensation for the NAIA 3 Complex.
Order denying the motion for reconsideration filed by the
government and the motion got inhibition of the RTC judge.

ISSUE: Whether or not the RTC was correct in issuing all the three orders?
Only the first two are relevant to the topic. YES to both orders [num. 1 and
2].
HELD:
The 2004 Resolution In Agan sets the base requirement that has to be
observed before the Government may take over the NAIA 3, that there
must be payment to PIATCO of just compensation in accordance with law
and equity. Any ruling in the present expropriation case must be
conformable to the dictates of the Court as pronounced in the Agan cases.
RULE 67 OR RA 8974?
There are at least two crucial differences between the respective
procedures under Rep. Act No. 8974 and Rule 67. Under the statute, the
Government is required to make immediate payment to the property owner
upon the filing of the complaint to be entitled to a writ of possession,
whereas in Rule 67, the Government is required only to make an initial
deposit with an authorized government depositary. Moreover, Rule 67
prescribes that the initial deposit be equivalent to the assessed value of
the property for purposes of taxation, unlike Rep. Act No. 8974 which
provides, as the relevant standard for initial compensation, the market
value of the property as stated in the tax declaration or the current
relevant zonal valuation of the Bureau of Internal Revenue (BIR), whichever
is higher, and the value of the improvements and/or structures using the
replacement cost method.
Further elaboration of the two follows. Rule 67 outlines the procedure
under which eminent domain may be exercised by the Government. Yet by
no means does it serve at present as the solitary guideline through which
the State may expropriate private property. For example, Section 19 of the
Local Government Code governs as to the exercise by local government
units of the power of eminent domain through an enabling ordinance. And
then there is Rep. Act No. 8974, which covers expropriation proceedings
intended for national government infrastructure projects. Rep. Act No.
8974, which provides for a procedure eminently more favorable to the
property owner than Rule 67, inescapably applies in instances when the
national government expropriates property "for national government
infrastructure projects."28 Thus, if expropriation is engaged in by the
national government for purposes other than national infrastructure
projects, the assessed value standard and the deposit mode prescribed in
Rule 67 continues to apply. Under both Rule 67 and Rep. Act No. 8974, the

Government commences expropriation proceedings through the filing of a

complaint. Unlike in the case of local governments which necessitate an
authorizing ordinance before expropriation may be accomplished, there is
no need under Rule 67 or Rep. Act No. 8974 for legislative authorization
before the Government may proceed with a particular exercise of eminent
domain. The most crucial difference between Rule 67 and Rep. Act No.
8974 concerns the particular essential step the Government has to
undertake to be entitled to a writ of possession.
Rule 67 merely requires the Government to deposit with an authorized
government depositary the assessed value of the property for
expropriation for it to be entitled to a writ of possession. On the other
hand, Rep. Act No. 8974 requires that the Government make a direct
payment to the property owner before the writ may issue. Moreover, such
payment is based on the zonal valuation of the BIR in the case of land, the
value of the improvements or structures under the replacement cost
method, or if no such valuation is available and in cases of utmost urgency,
the proffered value of the property to be seized.
RA 8974 is opted by the government since it would allow it to take over the
NAIA 3 facilities in a fashion that directly rebukes the 2003 Resolution of
the Agan case. It is the plain intent of RA 8974 to supersede the system of
deposit under Rule 67 with the scheme of immediate payment in cases
involving national government infrastructure projects.
There can be no doubt that PIATCO has ownership rights over the facilities
which it had financed and constructed. The 2004 Resolution squarely
recognized that right when it mandated the payment of just compensation
to PIATCO prior to the takeover.
The NAIA 3 facilities are real property owned by PIATCO. This
critical, considering the Governments insistence that the NAIA 3
cannot be deemed as the "right-of-way", "site" or "location" of a
government infrastructure project, within the coverage of Rep.
8974.

point is
facilities
national
Act No.

The court did not accept the governments proposition that the only
properties that may be expropriated under RA 8974 are parcels of land.
Rep. Act No. 8974 contemplates within its coverage such real
property constituting land, buildings, roads and constructions of
all kinds adhered to the soil. Section 1 of Rep. Act No. 8974, which sets
the declaration of the laws policy, refers to "real property acquired for
national government infrastructure projects are promptly paid just
compensation." Section 4 is quite explicit in stating that the scope of the
law relates to the acquisition of "real property," which under civil law
includes buildings, roads and constructions adhered to the soil.
EXPROPRIATION CASE DIGEST

Page 2

Even as the provisions of Rep. Act No. 8974 call for that laws application in
this case, the threshold test must still be met whether its implementation
would conform to the dictates of the Court in the 2004 Resolution. Unlike in
the case of Rule 67, the application of Rep. Act No. 8974 will not
contravene the 2004 Resolution, which requires the payment of just
compensation before any takeover of the NAIA 3 facilities by the
Government.

Proper Amount to be Paid

Under Rep. Act No. 8974, the Government is required to "immediately
pay" the owner of the property the amount equivalent to the sum
of (1) one hundred percent (100%) of the value of the property
based on the current relevant zonal valuation of the [BIR]; and (2)
the value of the improvements and/or structures as determined
under Section 7.
As stated above, the BIR zonal valuation cannot apply in this case,
thus the amount subject to immediate payment should be limited to "the
value of the improvements and/or structures as determined under Section
7," with Section 7 referring to the "implementing rules and regulations for
the equitable valuation of the improvements and/or structures on the
land." Under the present implementing rules in place, the valuation of the
improvements/structures are to be based using "the replacement cost
method." However, the replacement cost is only one of the factors to be
considered in determining the just compensation.
In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also
mandated that the payment of just compensation should be in
accordance with equity as well. Thus, in ascertaining the ultimate
amount of just compensation, the duty of the trial court is to ensure that
such amount conforms not only to the law, such as Rep. Act No. 8974, but
to principles of equity as well.
Section 4(c) of Rep. Act No. 8974 states that "in case the completion of a
government infrastructure project is of utmost urgency and importance,
and there is no existing valuation of the area concerned, the implementing
agency shall immediately pay the owner of the property its
proferred value, taking into consideration the standards
prescribed in Section 5 [of the law]." The "proffered value" may strike
as a highly subjective standard based solely on the intuition of the
government, but Rep. Act No. 8974 does provide relevant standards by
which "proffered value" should be based, as well as the certainty of judicial
determination of the propriety of the proffered value

The Court sees no impediment to recognize the sum of P3 Billion as the

proffered value under Section 4(b) of Rep. Act No. 8974. After all, in the
initial determination of the proffered value, the Government is not strictly
required to adhere to any predetermined standards, although its proffered
value may later be subjected to judicial review using the standards
enumerated under Section 5 of Rep. Act No. 8974.
While the Court agrees that P3 Billion should be considered as the correct
proffered value, still it cannot deem the Government as having
faithfully complied with Rep. Act No. 8974. For the law plainly
requires direct payment to the property owner, and not a mere deposit
with the authorized government depositary. Without such direct payment,
no writ of possession may be obtained.

Writ of Possession
The RTC authorized the issuance of the writ of possession to the
Government notwithstanding the fact that no payment of any amount had
yet been made to PIATCO, despite the clear command of Rep. Act No. 8974
that there must first be payment before the writ of possession can issue.
While the RTC did direct the LBP-Baclaran to immediately release the
amount of US$62 Million to PIATCO, it should have likewise suspended the
writ of possession, nay, withdrawn it altogether, until the Government shall
have actually paid PIATCO. This is the inevitable consequence of the
clear command of Rep. Act No. 8974 that requires immediate
payment of the initially determined amount of just compensation
should be effected. Otherwise, the overpowering intention of Rep.
Act No. 8974 of ensuring payment first before transfer of
repossession would be eviscerated.
Rights of the Government Upon the Issuance of a Writ of
Possession
Rep. Act No. 8974 provides the appropriate answer for the standard that
governs the extent of the acts the Government may be authorized to
perform upon the issuance of the writ of possession. Section 4 states that
"the court shall immediately issue to the implementing agency an order to
take possession of the property and start the implementation of the
project." accordingly, once the Writ of Possession is effective, the
Government itself is authorized to perform the acts that are
essential to the operation of the NAIA 3 as an international airport
terminal upon the effectivity of the Writ of Possession. These would
include the repair, reconditioning and improvement of the complex,
maintenance of the existing facilities and equipment, installation of new
facilities and equipment, provision of services and facilities pertaining to
the facilitation of air traffic and transport, and other services that are
integral to a modern-day international airport.
EXPROPRIATION CASE DIGEST

Page 3

In addition, based on jurisprudence, there is no transfer of ownership as of

yet by virtue of the writ of possession. 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.
Final Determination of Just Compensation within 60 days
The issuance of the writ of possession does not write finis to the
expropriation proceedings. As earlier pointed out, expropriation is not
completed until payment to the property owner of just compensation. The
proffered value stands as merely a provisional determination of
the amount of just compensation, the payment of which is
sufficient to transfer possession of the property to the
Government. However, to effectuate the transfer of ownership, it
is necessary for the Government to pay the property owner the
final just compensation.
Rep. Act No. 8974 mandates a speedy method by which the final
determination of just compensation may be had.
Section 4 provides: In the event that the owner of the property contests
the implementing agencys proffered value, the court shall determine the
just compensation to be paid the owner within sixty (60) days from the
date of filing of the expropriation case. When the decision of the court
becomes final and executory, the implementing agency shall pay the
owner the difference between the amount already paid and the just
compensation as determined by the court.
This provision should apply in this case. The sixty (60)-day period
prescribed in Rep. Act No. 8974 gives teeth to the laws avowed policy "to
ensure that owners of real property acquired for national government
infrastructure projects are promptly paid just compensation. In this case,
there already has been irreversible delay in the prompt payment of PIATCO
of just compensation, and it is no longer possible for the RTC to determine
the just compensation due PIATCO within sixty (60) days from the filing of
the complaint last year 2004, as contemplated by the law. Still, it is
feasible to effectuate the spirit of the law by requiring the trial court to
make such determination within sixty (60) days from finality of this
decision, in accordance with the guidelines laid down in Rep. Act No. 8974
and its Implementing Rules
Appointment of Commissioners
It must be noted that Rep. Act No. 8974 is silent on the appointment of
commissioners tasked with the ascertainment of just compensation. This
protocol though is sanctioned under Rule 67. We rule that the appointment

of commissioners under Rule 67 may be resorted to, even in expropriation

proceedings under Rep. Act No. 8974, since the application of the
provisions of Rule 67 in that regard do not conflict with the statute.
Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult with
the parties in the expropriation case on who should be appointed as
commissioners. Neither does the Court feel that such a requirement should
be imposed in this case. There is nothing to prevent the trial court from
seeking the recommendations of the parties on the matter of appointment
of commissioners, to better ensure their fair representation.
What Rule 67 does allow though is for the parties to protest the
appointment of any of these commissioners, as provided under Section 5
of the Rule. These objections though must be made filed within ten (10)
days from service of the order of appointment of the commissioners. In this
case, the proper recourse of the Government to challenge the choice of the
commissioners is to file an objection with the trial court, conformably with
Section 5, Rule 67, and not as it has done, assail the same through a
special civil action for certiorari.
CONCLUSION
(1) The 2004 Resolution in Agan sets the base requirement that has to be
observed before the Government may take over the NAIA 3, that there
must be payment to PIATCO of just compensation in accordance with law
and equity. Any ruling in the present expropriation case must be
conformable to the dictates of the Court as pronounced in the Agan cases.
(2) Rep. Act No. 8974 applies in this case, particularly insofar as it requires
the immediate payment by the Government of at least the proffered value
of the NAIA 3 facilities to PIATCO and provides certain valuation standards
or methods for the determination of just compensation.
(3) Applying Rep. Act No. 8974, the implementation of Writ of Possession in
favor of the Government over NAIA 3 is held in abeyance until PIATCO is
directly paid the amount of P3 Billion, representing the proffered value of
NAIA 3 under Section 4(c) of the law.
(4) Applying Rep. Act No. 8974, the Government is authorized to start the
implementation of the NAIA 3 Airport terminal project by performing the
acts that are essential to the operation of the NAIA 3 as an international
airport terminal upon the effectivity of the Writ of Possession, subject to
the conditions above-stated. As prescribed by the Court, such authority
encompasses "the repair, reconditioning and improvement of the complex,
maintenance of the existing facilities and equipment, installation of new
facilities and equipment, provision of services and facilities pertaining to
EXPROPRIATION CASE DIGEST

Page 4

the facilitation of air traffic and transport, and other services that are
integral to a modern-day international airport."
(5) The RTC is mandated to complete its determination of the just
compensation within sixty (60) days from finality of this Decision. In doing
so, the RTC is obliged to comply with "law and equity" as ordained in Again
and the standard set under Implementing Rules of Rep. Act No. 8974 which
is the "replacement cost method" as the standard of valuation of structures
and improvements.
(6) There was no grave abuse of discretion attending the RTC Order
appointing the commissioners for the purpose of determining just
compensation. The provisions on commissioners under Rule 67 shall apply
insofar as they are not inconsistent with Rep. Act No. 8974, its
Implementing Rules, or the rulings of the Court in Agan.
(7) The Government shall pay the just compensation fixed in the decision
of the trial court to PIATCO immediately upon the finality of the said
decision.
(8) There is no basis for the Court to direct the inhibition of Hon. Gingoyon.

NATIONAL POWER COPROATION VS MANUBAY AGRO-INDUSTRIAL

DEVELOPMENT CORPORATION [August 18, 2004]
FACTS:
NPC commences its 350 KV Leyte Luzon HVDC Power transmission Project.
The project aims to transmit the excess electrical generating capacity
coming from Leyte Geothermal Plant to Luzon and various load centers in
its vision to interconnect the entire country into a single power grid.
Apparently, the project is for a public purpose. To carry out such purpose,
NPC must cross over certain lands owned by private individuals and
entities, including that owned by respondent Agro Industrial for an
easement of right of way, hence the filing of an expropriation proceeding
with the RTC of Naga City.
RTC of Naga City issued an order authorizing immediate issuance of a writ
of possession and directing the sheriff to immediately place petition in
possession of the subject land.
Subsequently, it issued a writ of condemnation in favor of the petitioner at
the same time appointing 3 commissioners, one from petitioner, one from
respondent and the other one appointed by the court.
Commissioner of petitioner: Php 115 per square meter
Commissioner of Respondent: Php 550 per square meter commissioner of
the court agreed with this estimation.
RTC approved Php 550 per square meters as the basis for just
compensation. It stated that it was not bound by the special law cited by
the petitioner for determination of just compensation is a judicial function.
CA affirmed the ruling of the RTC.
ISSUE: Whether or not the actions of the RTC and CA were proper? YES.

value of the property. The acquisition of such an easement falls within the
purview of the power of eminent domain.
Normally, of course, the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated property; but
no cogent reason appears why the said power may not be availed of to
impose only a burden upon the owner of condemned property, without loss
of title and possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right of way.
True, an easement of a right of way transmits no rights except the
easement itself, and respondent retains full ownership of the
property. The acquisition of such easement is, nevertheless, not
gratis. As correctly observed by the CA, considering the nature and the
effect of the installation power lines, the limitations on the use of the land
for an indefinite period would deprive respondent of normal use of the
property. For this reason, the latter is entitled to payment of a just
compensation, which must be neither more nor less than the
monetary equivalent of the land.
Just compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator. The measure is not the takers
gain, but the owners loss. The word "just" is used to intensify the meaning
of the word "compensation" and to convey thereby the idea that the
equivalent to be rendered for the property to be taken shall be real,
substantial, full and ample.
In eminent domain or expropriation proceedings, the just compensation to
which the owner of a condemned property is entitled is generally the
market value. Market value is "that sum of money which a person
desirous but not compelled to buy, and an owner willing but not
compelled to sell, would agree on as a price to be given and
received therefor." Such amount is not limited to the assessed value of
the property or to the schedule of market values determined by the
provincial or city appraisal committee. However, these values may serve
as factors to be considered in the judicial valuation of the property.

HELD: petition is unmeritorious.

Petitioner claims that the valuation was too high considering that the
expropriation was only for an easement of right of way. The SC cited that
petitioner was not merely asking for a right of way but in fact, it
made use of the land itself and sought for the demolition of all
improvements existing thereon, on order to commence and
undertake construction of its project.
Granting arguendo that what petitioner acquired over respondents
property was purely an easement of a right of way, still, the court cannot
sustain its view that it should pay only an easement fee, and not the full
EXPROPRIATION CASE DIGEST
Page 5

The nature and character of the land at the time of its taking is the
principal criterion for determining how much just compensation should be
given to the landowner. All the facts as to the condition of the property and
its surroundings, as well as its improvements and capabilities, should be
considered.
The price of P550 per square meter appears to be the closest
approximation of the market value of the lots in the adjoining, fully
developed San Francisco Village Subdivision. Considering that the parcels
of land in question are still undeveloped raw land, it appears to the Court

that the just compensation of P550 per square meter is justified. Inasmuch
as the determination of just compensation in eminent domain cases is a
judicial function, and the trial court apparently did not act capriciously or
arbitrarily in setting the price at P550 per square meter -- an award
affirmed by the CA the SC sees no reason to disturb the factual findings
as to the valuation of the property. Both the Report of Commissioner Bulao
and the commissioners majority Report were based on uncontroverted
facts supported by documentary evidence and confirmed by their ocular
inspection of the property. As can be gleaned from the records, they did
not abuse their authority in evaluating the evidence submitted to them;
neither did they misappreciate the clear preponderance of evidence. The
amount fixed and agreed to by the trial court and respondent appellate
court has not been grossly exorbitant or otherwise unjustified.
petitioners contention that the Report adopted by the RTC and affirmed by
the CA was not the same one submitted by the board of commissioners,
but was only that of its chairperson. the commissioners Report was
actually a decision of the majority of the board. Note that after reviewing
the Reports of the other commissioners, Chairperson Teoxon opted to
adopt the recommendation of Commissioner Bulao. There has been no
claim that fraud or prejudice tainted the majority Report.
Under Section 8 of Rule 67 of the Rules of Court, the court may "accept the
report and render judgment in accordance therewith; or for cause shown, it
may recommit the same to the commissioners for further report of facts, or
it may set aside the report and appoint new commissioners, or it may
accept the report in part and reject it in part; x x x." In other words, the
reports of commissioners are merely advisory and recommendatory in
character, as far as the courts are concerned.
Thus, it hardly matters whether the commissioners have unanimously
agreed on their recommended valuation of the property. It has been held
that the report of only two commissioners may suffice, even if the third
commissioner dissents. As a court is not bound by commissioners reports
it may make such order or render such judgment as shall secure for the
plaintiff the property essential to the exercise of the latters right of
condemnation; and for the defendant, just compensation for the property
expropriated. For that matter, the court may even substitute its own
estimate of the value as gathered from the evidence on record
Petition is denied.

EXPROPRIATION CASE DIGEST

Page 6

REPUBLIC OF THE PHILIPPINES VS CA AND HEIRS OF LUIS SANTOS

[July 2, 2002]

ISSUE: Whether or not just compensation should be adjusted to its current

zonal value? NO.

FACTS:
Petitioners instituted an expropriation proceeding before the RTC of
Bulacan. The property sought to be taken was to be utilized for the
continued broadcast operation and use of radio transmitter facilities for the
"Voice of the Philippines" project.
Petitioner, through the Philippine Information Agency ("PIA"), took over the
premises after the previous lessee, the "Voice of America," had ceased its
operations thereat. Petitioner made a deposit of P517,558.80, the sum
provisionally fixed as being the reasonable value of the property.
More than 9 years after the institution of the case, the RTC issued an order
condemning the properties of the defendants and ordered petitioners to
pay just compensation.
Bone of contention in the instant controversy is the property owned by Luis
Santos, predecessor in interest of the respondents which forms part of the
expropriated area.
The national government failed to pay pursuant to the decision of the RTC,
such that a little over five years later, the respondents filed a
manifestation with a motion seeking payment for the expropriated
property. Writ issued. No payment.
Respondents filed another motion to direct the provincial
treasurer to release the amount deposited by petitioner at the
inception of the expropriation proceedings, corresponding to their share in
the deposit.
President Estrada issued a Proclamation transferring 20 hectares of the
expropriated property to the Bulacan State University for the expansion of
its facilities and another 5 hectares to be used exclusively for the
propagation of the Philippine carabao. The remaining portion was retained
by the PIA. This fact notwithstanding, and despite the 1984 court order,
the Santos heirs remained unpaid, and no action was taken on
their case until petitioner filed a manifestation to permit the
deposit in court of the amount of 4million plus by way of just
compensation for the expropriated property of the late Luis
Santos.
Respondents filed a counter motion to adjust the valuation for just
compensation to its current zonal value. RTC rules in favor of the
respondents. CA denied appeal.

EXPROPRIATION CASE DIGEST

Page 7

HELD:
RTC claimed unenforceability of the decision based on the lapse of the five
year period. Petitioner claimed that the period was interrupted by the filing
of the motions of the respondents and their receipt of the money deposited
by the treasurer. However, according to rule 39, the motion to revive the
judgment must be made by the winning party, the petitioner and not the
respondent.
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. Fundamental to the independent
existence of a State, it requires no recognition by the Constitution, whose
provisions are taken as being merely confirmatory of its presence and as
being regulatory, at most, in the due exercise of the power.
In the hands of the legislature, the power is inherent, its scope matching
that of taxation, even that of police power itself, in many respects. It
reaches to every form of property the State needs for public use and, as an
old case so puts it, all separate interests of individuals in property are held
under a tacit agreement or implied reservation vesting upon the sovereign
the right to resume the possession of the property whenever the public
interest so requires it. The ubiquitous character of eminent domain is
manifest in the nature of the expropriation proceedings. Expropriation
proceedings are not adversarial in the conventional sense, for the
condemning authority is not required to assert any conflicting interest in
the property. Thus, by filing the action, the condemnor in effect merely
serves notice that it is taking title and possession of the property, and the
defendant asserts title or interest in the property, not to prove a right to
possession, but to prove a right to compensation for the taking.
Obviously, however, the power is not without its limits: first, the taking
must be for public use, and second, that just compensation must be given
to the private owner of the property. These twin proscriptions have their
origin in the recognition of the necessity for achieving balance between the
State interests, on the one hand, and private rights, upon the other hand,
by effectively restraining the former and affording protection to the latter.
In determining "public use," two approaches are utilized - the first is public
employment or the actual use by the public, and the second is public
advantage or benefit. It is also useful to view the matter as being subject
to constant growth, which is to say that as society advances, its demands
upon the individual so increases, and each demand is a new use to which
the resources of the individual may be devoted.

The expropriated property has been shown to be for the continued

utilization by the PIA, a significant portion thereof being ceded for the
expansion of the facilities of the Bulacan State University and for the
propagation of the Philippine carabao, themselves in line with the
requirements of public purpose. Respondents question the public nature of
the utilization by petitioner of the condemned property, pointing out that
its present use differs from the purpose originally contemplated in
the 1969 expropriation proceedings. The argument is of no
moment. The property has assumed a public character upon its
expropriation. Surely, petitioner, as the condemnor and as the owner of
the property, is well within its rights to alter and decide the use of that
property, the only limitation being that it be for public use, which,
decidedly, it is.
Respondents, in arguing laches against petitioner did not take into account
that the same argument could likewise apply against them. Consistently
with the rule that one should take good care of his own concern,
respondents should have commenced the proper action upon the finality of
the judgment which, indeed, resulted in a permanent deprivation of their
ownership and possession of the property.
The constitutional limitation of "just compensation" is considered to be the
sum equivalent to the market value of the property, broadly described to
be the price fixed by the seller in open market in the usual and ordinary
course of legal action and competition or the fair value of the property as
between one who receives, and one who desires to sell, it fixed at the time
of the actual taking by the government.
Between the taking of the property and the actual payment, legal interests
accrue in order to place the owner in a position as good as (but not better
than) the position he was in before the taking occurred
The Bulacan trial court, in its 1979 decision, was correct in imposing
interests on the zonal value of the property to be computed from the time
petitioner instituted condemnation proceedings and "took" the property in
September 1969. This allowance of interest on the amount found to be the
value of the property as of the time of the taking computed, being an
effective forbearance, at 12% per annum28 should help eliminate the issue
of the constant fluctuation and inflation of the value of the currency over
time
Private respondents, although not entitled to the return of the expropriated
property, deserve to be paid promptly on the yet unpaid award of just
compensation already fixed by final judgment of the Bulacan RTC on 26
February 1979 at P6.00 per square meter, with legal interest thereon at
EXPROPRIATION CASE DIGEST

Page 8

12% per annum computed from the date of "taking" of the property, i.e.,
19 September 1969, until the due amount shall have been fully paid
Petition is GRANTED.

JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION VS MUNICIPALITY

(NOW CITY) OF PASIG [August 9, 2005]
FACTS:
Respondent 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. Likewise, the
residents in the area needed the road for water and electrical outlets. The
municipality then decided to acquire 51 square meters out of the 1,791square meter property of Lorenzo Ching Cuanco, Victor Ching Cuanco and
Ernesto Ching Cuanco Kho.
the Sangguniang Bayan of Pasig approved an Ordinance
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.
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
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. It caused the annotation of notice
of lis pendens on the TCT of the properties under the name of petitioner
who had purchased the property. Thereafter respondent plaintiff
constructed the cemented road it had planned.
Petitioner filed a motion to intervene as defendant. Granted. It
claimed that the expropriation was only for a particular class and not for
the benefit of the poor and the landless. Further, it was not the best portion
for the road and the least burdensome to it.
RTC issued an order in favor of the plaintiff-respondent. Elevated the case
to the CA.
EXPROPRIATION CASE DIGEST

Page 9

Court of Appeals affirmed the lower courts decision of declaring

respondent municipality (now city) as having the right to expropriate
petitioners property for the construction of an access road.
Petitioner argues that there was no valid and definite offer made
before a complaint for eminent domain was filed as the law
requires (Art. 35, Rules and Regulations Implementing the Local
Government Code). Respondent contends that a letter to purchase was
offered to the previous owners and the same was not accepted.
ISSUE: Whether or not the requirements under the LGC have been
followed by the respondent? NO. no valid offer.
HELD:
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.
The exercise of the right of eminent domain, whether directly by the State
or by its authorized agents, is necessarily in derogation of private rights. It
is one of the harshest proceedings known to the law. 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. The
authority to condemn is to be strictly construed in favor of the owner and
against the condemnor. When the power is granted, the extent to which it
may be exercised is limited to the express terms or clear implication of the
statute in which the grant is contained. Corollarily, the respondent,
which is the condemnor, has the burden of proving all the
essentials necessary to show the right of condemnation. 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.

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. A single bona fide offer that
is rejected by the owner will suffice.
See Section 19 RA 7610.
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
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. It is incumbent upon the
condemnor to exhaust all reasonable efforts to obtain the land it desires by
agreement. Failure to prove compliance with the mandatory requirement
will result in the dismissal of the complaint.
An offer is a unilateral proposition which one party makes to the other for
the celebration of a contract. It creates a power of acceptance permitting
the offeree, by accepting the offer, to transform the offerors promise into a
contractual obligation. Corollary, the offer must be complete, indicating
with sufficient clearness the kind of contract intended and definitely stating
the essential conditions of the proposed contract. An offer would require,
among other things, a clear certainty on both the object and the cause or
consideration of the envisioned contract.
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. 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. It encourages acquisition without litigation
and spares not only the landowner but also the condemnor, the expenses
EXPROPRIATION CASE DIGEST

Page 10

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.
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.
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. 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. 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.
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 is a
substantial compliance with the requisite offer. A notice of lis pendens is 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. The lis pendens was annotated at the dorsal

portion of the title 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 court also rejects 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.
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.

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
taken unless such determination is capricious and wantonly injurious.
Expropriation is justified so long as it is for the public good and there is
genuine necessity of public character. Government may not capriciously
choose what private property should be taken.
The respondent has demonstrated the necessity for constructing a road
from E. R. Santos Street to Sto. Tomas Bukid. Nonetheless, the respondent
failed to show the necessity for constructing the road particularly in the
petitioners property and not elsewhere. The respondents complaint
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.
Further, 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. 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.
Petition is GRANTED.

EXPROPRIATION CASE DIGEST

Page 11