THIRD DIVISION

[G.R. No. 139083. August 30, 2001]

FLORENCIA PARIS, petitioner, vs. DIONISIO A. ALFECHE, JUAN L. ALFECHE, MAXIMO N. PADILLA, DIONISIO Q. MATILOS, Heirs of GREG A. ALFECHE, DIONISIO W. MATILO, SIMPLICIO L. ADAYA, TEOFILO M. DE GUZMAN, FRANCISCO B. DINGLE and MARIFE NAVARO,respondents. DECISION
PANGANIBAN, J.:

Homesteads are not exempt from the operation of the Land Reform Law. The right to retain seven hectares of land is subject to the condition that the landowner is actually cultivating that area or will cultivate it upon the effectivity of the said law.

The Case The Petition for Review before us assails the June 4, 1999 Decision of the Court of Appeals[1] (CA), in CA-GR SP No. 45738, which affirmed the ruling of the Department of Agrarian Reform Adjudication Board (DARAB). The decretal portion of the CA Decision reads:

WHEREFORE, [there being] no grave abuse of discretion x x x committed by DARAB, the instant petition is hereby DENIED DUE COURSE and DISMISSED. Costs against the petitioner.
[2]

The Decision of the DARAB, which was affirmed by the CA, had disposed as follows:

WHEREFORE, premises considered, the assailed Decision dated March 19, 1992 is hereby REVERSED and SET ASIDE, and a new one is entered: 1. Declaring the private respondents to be full owners of the land they till pursuant to Presidential Decree No. 27 and Executive Order No. 228; 2. Declaring the validity of the Emancipation Patents issued to private respondents; and

3.

Dismissing the case.

[3]

The Facts The Court of Appeals narrates the facts thus:

Petitioner is the registered owner of a parcel of land situated at Paitan, Quezon, Bukidnon with an area of 10.6146 hectares, more or less, covered by Transfer Certificate of Title No. T-8275 and another property with an area of 13.2614 hectares covered by Original Certificate of Title No. P-4985, also located at Paitan, Quezon, Bukidnon; the said parcels are fully tenanted by private respondents herein who are recipients of Emancipation Patents in their names pursuant to Operation Land Transfer under P.D. 27 (Annexes A, A-1 to A-18) notwithstanding the fact that neither the tenants nor the Land Bank of the Philippines (LBP) [has] paid a single centavo for the said land. Petitioner and the tenants have not signed any Land Transfer Production Agreement. Petitioner and her children have been deprived of their property without due process of law and without just compensation, especially so that the tenants have already stopped paying rentals as of December 1988 to the damage and prejudice of petitioner. Petitioner contends that since she is entitled to a retention of seven (7) hectares under P.D. 27 and/or 5 hectares and 3 hectares each for her children under the Comprehensive Agrarian Reform Law (CARL), the tenants are not supposed to acquire the subject land and the Emancipation Patents precipitately issued to them are null and void for being contrary to law. Petitioner further alleged that she owns the subject property covered by OCT No. P-4985 as original homestead grantee who still owned the same when Republic Act No. 6657 was approved, thus she is entitled to retain the area to the exclusion of her tenants. As regards TCT No. 8275, petitioner has applied for retention of seven hectares per Letter of Retention attached as Annex B, that the lands subject of the instant petition are covered by Homestead Patents, and as decided by the Supreme Court in the cases of Patricio vs. Bayug (112 SCRA 41) and Alita vs. Court of Appeals (170 SCRA 706), the homesteaders and their heirs have the right to cultivate their homesteads personally, which is a superior right over that of tenant-farmers. Petitioner moved for the cancellation and recall of the Emancipation Patents issued to private respondents-farmers and to restore to petitioner and her children the ownership and cultivation of the subject lots plus payment of back rentals from the time they stopped paying the same until ejected therefrom.

Respondents filed their answer dated May 29, 1991 and admitted the generation and issuance of Emancipation Patents to private respondents as tenant-farmers thereof and the Supreme Court rulings on the Bayug and Alita cases relative to homestead patents, but denied the rest of the material allegations for want of knowledge or information as to the truth relative thereto. Respondents alleged that when the subject lands were covered under P.D. 27, the petitioner was repeatedly informed and invited by the DAR Office at Valencia, Bukidnon to thresh out the matter; that petitioners right to retain seven (7) hectares is not absolute since she owns other agricultural landholdings, thus disqualifying her to retain the area, aside from the fact that she has other properties sufficient to support her family as shown in the Certification of the Provincial Assessors Office listing down the petitioners landholdings (Annex 2). By way of special affirmative defenses, respondents averred that the criteria set forth under P.D. 27 were observed before the generation of the Emancipation Patents; that under Executive Order No. 228, the tenant-farmers under P.D. 27 are deemed full owners of the lands they till and the lease rentals paid by them should be considered as amortization payments; that under LOI 474, petitioner who owns more than seven (7) hectares of lands are not entitled to retention. Respondents prayed for the dismissal of the case. They likewise prayed that the Emancipation Patents issued to private respondents and their peaceful possession of their farm lots be respected. The Adjudicator a quo conducted a hearing and afforded the parties their day in court and the opportunity to present their evidence. On August 13, 1991, the Adjudicator a quo issued an Order for the parties to submit their respective position papers with evidence to buttress their allegations. On March 10, 1992, the Adjudicator a quo rendered the decision, thus: WHEREFORE, in the light of the foregoing, this Adjudicator declares the following:
1. That all the Emancipation Patents issued to tenants-respondents shall be cancelled and recalled; 2. That the Register of Deeds of Malaybalay, Bukidnon shall cancel all Emancipation Patents registered under the names of the herein tenants-respondents; and 3. That back rentals due to the petitioners, which were given to the LBP as amortizations, shall be given to the said petitioner.[4]

On appeal, the DARAB reversed the adjudicator.

Ruling of the Court of Appeals

The CA rejected the claim of petitioner. It ruled that she could not retain her homesteads, since she was not the actual cultivator thereof. It also held that she and her heirs had not been deprived of their right to retain the area mandated by law, because the records showed that they had other agricultural landholdings. Finally, it ruled that she had not been deprived of her properties without just compensation, since Section 2 of Executive Order 228 declared that tenant-farmers of agricultural lands under P.D. 27 are deemed owners of the land they till and the lease rentals paid by them shall be considered as amortization payments.[5] Hence, this Petition.[6]

The Issues In her Memorandum, petitioner submits the following issues for our consideration:

I. Whether or not the original homesteads issued under the public land act [are] exempted from the operation of land reform. II. Granting arguendo that homesteads are not exempt, whether or not the Emancipation Patents issued to the respondents are valid notwithstanding lack of payment of just compensation. III. On the assumption that homesteads are exempt from land reform and/or the emancipation patents are illegally issued hence, void, can the respondents be ejected from the premises in question?
[7]

The Courts Ruling The Petition is partly meritorious. Respondents are entitled to the lands they till, subject to the determination and payment of just compensation to petitioner. First Issue: Petitioners Homesteads Not Exempt from Land Reform Petitioner contends that because the subject properties are covered by homestead patents, they are exempt from the operation of land reform. In support of her position, she cites the cases Alita v. CA[8] and Patricio v. Bayug,[9] in which the Court ruled that homesteaders had a superior right to cultivate their homesteads as against their tenants. Petitioners contention is without legal basis. Presidential Decree (PD) No. 27, under which the Emancipation Patents sought to be cancelled here were issued to respondents, applies to all tenanted private agricultural lands primarily devoted to rice and corn under a system of sharecrop or lease-tenancy, whether classified as landed estate or not.[10] The law makes no exceptions

whatsoever in its coverage. Nowhere therein does it appear that lots obtained by homestead patents are exempt from its operation. The matter is made even clearer by Department Memorandum Circular No. 2, Series of 1978, which states: Tenanted private agricultural lands primarily devoted to rice and/or corn which have been acquired under the provisions of Commonwealth Act 141, as amended, shall also be covered by Operation Land Transfer. Unquestionably, petitioners parcels of land, though obtained by homestead patents under Commonwealth Act 141, are covered by land reform under PD 27. Petitioners claimed entitlement to retain seven (7) hectares is also untenable. PD 27, which provides the retention limit, states:

In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it.
Clearly, the right to retain an area of seven hectares is not absolute. It is premised on the condition that the landowner is cultivating the area sought to be retained or will actually cultivate it upon effectivity of the law. In the case at bar, neither of the conditions for retention is present. As admitted by petitioner herself, the subject parcels are fully tenanted; thus, she is clearly not cultivating them, nor will she personally cultivate any part thereof. Undoubtedly, therefore, she has no right to retain any portion of her landholdings. Even under the current primary law on agrarian reform, Republic Act (RA) No. 6657, to which the application of PD 27 is suppletory, petitioners lands are subject to land reform. The said Act lays down the rights of homestead grantees as follows:

SEC. 6. Retention Limits. Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That landowners whose lands have been covered by PD 27 shall be allowed to keep the area originally retained by them thereunder; Provided, further, That original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead. (italics supplied)
Indisputably, homestead grantees or their direct compulsory heirs can own and retain the original homesteads, only for as long as they continue to cultivate them. That parcels of land

are covered by homestead patents will not automatically exempt them from the operation of land reform. It is the fact of continued cultivation by the original grantees or their direct compulsory heirs that shall exempt their lands from land reform coverage. In the present case, as previously pointed out, neither petitioner nor her heirs are personally cultivating the subject homesteads. The DAR and the CA found that respondents were the ones who had been cultivating their respective portions of the disputed properties. However, petitioner can retain five (5) hectares in accordance with Section 6 of RA 6657, which requires no qualifying condition for the landowner to be entitled to retain such area. This ruling is in line withAssociation of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, from which we quote:

x x x. In any event, assuming that the petitioners have not yet exercised their retention rights, if any, under PD No. 27, the Court holds that they are entitled to the new retention rights provided for by RA No. 6657, which in fact are on the whole more liberal than those granted by the decree.
Petitioners heirs, however, are not entitled to awards of three (3) hectares each, since they are not actually tilling the parcels or directly managing the farm. Patricio v. Bayug and Alita v. CA Not Applicable Petitioner insists that the appellate court ignored the ruling of the Court in Patricio v. Bayug[11] and Alita v. CA.[12] She relies on the following pronouncement in Patricio: We hold that the more paramount and superior policy consideration is to uphold the right of the homesteader and his heirs to own and cultivate personally the land acquired from the State without being encumbered by tenancy relations.[13] She also cites the statement in Alita that the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question finds support in the aforecited Section 6 of RA 6657.[14] A closer look at these cases shows that they are not applicable to the issues in the present case. In Patricio, the owner and his heirs had previously cultivated the homestead, which was later sold but subsequently reconveyed to the former. After the reconveyance, the owners heirs wanted to resume their cultivation of the homestead, but the previous buyers tenants did not want to leave it. In Alita, the owner was also desirous of personally cultivating the homestead; but the tenants, not wanting to relinquish it, were asserting their own right to continue cultivating it. Thus, under these circumstances, the Court upheld the right of the homestead owners over that of the tenants. In the case at bar, petitioner herself has not personally cultivated the parcels of land. Neither has she or her heirs expressed, at any time, any desire to cultivate them personally. She is invoking, yet is clearly not intending to ever actually exercise, her alleged right as homesteader to own and personally cultivate them. Thus, the rulings in both Patricio and Alita, which are in line with the state objective of fostering owner cultivatorship[15] and of abolishing tenancy,[16] would be inapplicable to the present case. Since petitioner and her heirs have evinced no intention of actually cultivating the lands or

even directly managing the farm, they will undoubtedly continue to be absentee landlords. Therefore, to blindly and indiscriminately apply the ruling in the cited cases would be tantamount to encouraging feudalistic practices and going against the very essence of agrarian reform. This we cannot sanction.

Second Issue: Just Compensation It is undisputed that the subject parcels were covered by Operation Land Transfer under PD 27, and that private respondents were identified as beneficiaries. In fact, Emancipation Patents have already been issued to them. Petitioner, however, claims that she was not paid just compensation and, thus, prays for the cancellation of the Emancipation Patents issued to respondents under PD 27. She contends that it is illegal for the DAR to take property without full payment of just compensation[;] until full payment is done the title and ownership remain with the landholder.[17] Petitioners contention has merit. Section 2 of PD 266 states:

After the tenant-farmer shall have fully complied with the requirements for a grant of title under Presidential Decree No. 27, an Emancipation Patent and/or Grant shall be issued by the Department of Agrarian Reform on the basis of a duly approved survey plan.
On the other hand, paragraphs 8 and 9 of PD 27 reads as follows:

For the purpose of determining the cost of the land to be transferred to the tenantfarmer pursuant to this Decree, the value of the land shall be equivalent to two and one-half (2 ) times the average harvest of three normal crop years immediately preceding the promulgation of this Decree; The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations[.]
Although, under the law, tenant farmers are already deemed owners of the land they till, they are still required to pay the cost of the land, including interest, within fifteen years before the title is transferred to them. Thus, the Court held in Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform:[18]

It is true that PD 27 expressly ordered the emancipation of tenant-farmers as of October 21, 1972 and declared that he shall be deemed the owner of a portion of land consisting of a family-sized farm except that no title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly recognized farmers cooperative. It was understood, however, that

full payment of the just compensation also had to be made first, conformably to the constitutional requirement.
In the case at bar, there is no showing that respondents complied with the requirement of full payment of the cost of the parcels of land. As they themselves admitted,[19] their value had not even been determined yet. In the absence of such determination, the Court cannot rule that just compensation has already been fully paid. Presidential Decree 27 and subsequently Executive Order (EO) 228, which recognized the rights acquired by tenant-farmers under PD 27, provide in detail the computation to be used in arriving at the exact total cost of the parcels of land. Evidently, therefore, the law recognizes that their exact value, or the just compensation to be given to the landowner, cannot just be assumed; it must be determined with certainty before the land titles are transferred. Although EO 228 provides that the total lease rentals paid for the lands from October 21, 1972 shall be considered as advance payment, it does not sanction the assumption that such rentals are automatically considered as equivalent to just compensation for the land. The provision significantly designates the lease rentals as advance, not full, payment. The determination of the exact value of the lands cannot simply be brushed aside, as it is fundamental to the determination of whether full payment has been made. Necessarily, the lease rentals admittedly paid by respondents until December 1988 cannot, at this point, be considered as full settlement of the value of the lands or as just compensation for them. The value of the subject lands was never determined; thus, there is no amount that can be used as basis for applying the lease rentals. Under the circumstances, actual title to the subject lands remains with petitioner. Clearly then, under PD 27 and EO 228, the application of the process of agrarian reform to the subject lands is still incomplete. Considering the passage of RA 6657 before the completion of the application of the agrarian reform process to the subject lands, the same should now be completed under the said law, with PD 27 and EO 228 having only suppletory effect. This ruling finds support in Land Bank of the Philippines v. CA,[20] wherein the Court stated:

We cannot see why Sec. 18 of RA 6657 should not apply to rice and corn lands under PD 27. Section 75 of RA 6657 clearly states that the provisions of PD 27 and EO 228 shall only have a suppletory effect. Section 7 of the Act also provides --Sec. 7. Priorities. The DAR, in coordination with the PARC shall plan and program the acquisition and distribution of all agricultural lands through a period of (10) years from the effectivity of this Act. Lands shall be acquired and distributed as follows: Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners for agrarian reform; x x x and all other lands owned by the government devoted to or suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of this Act, with the

implementation to be completed within a period of not more than four (4) years emphasis supplied). This eloquently demonstrates that RA 6657 includes PD 27 lands among the properties which the DAR shall acquire and distribute to the landless. And to facilitate the acquisition and distribution thereof, Secs. 16, 17 and 18 of the Act should be adhered to. In Association of Small Landowners of the Philippines v. Secretary of Agrarian Reform this Court applied the provisions (of) RA 6657 to rice and corn lands when it upheld the constitutionality of the payment of just compensation for PD 27 lands through the different modes stated in Sec. 18.
In determining the amount to be paid petitioner, all lease rentals paid by respondents to her after October 21, 1972 should be deducted therefrom. This formula is intended to put into effect the provision of Section 2 of EO 228.

Third Issue: Tenants Cannot Be Ejected Petitioner submits that aside from cancelling the Emancipation Patents issued to respondents, the ejectment of the latter from the premises should be ordered by the Court, in accordance with the doctrine in Patricio. Petitioners position is unfounded. As earlier explained, Patricio finds no application to the case at bar. Thus, there is no justification for ejecting respondents. Besides, Section 22 of RA 6657 expressly states that actual tenant-tillers in the landholding shall not be ejected or removed therefrom. Furthermore, there is no reason for ejecting the tillers with respect to the area of five hectares, which petitioner may choose to retain. Section 6 of RA 6657 further states:

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner; Provided, however, That in case the area selected for retention by the land owner is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remain in the retained area, he shall be considered a lease holder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a lease-holder to the land retained by the landowner. The tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention. In all cases, the security of tenure of the farmers or farm workers on the land prior to the approval of this Act shall be respected.
The current provision on retention removes the necessity, present under PD 27, of ejecting actual tillers. Under the current law, landowners who do not personally cultivate their lands are

no longer required to do so in order to qualify for the retention of an area not exceeding five hectares. Instead, they are now required to maintain the actual tiller of the area retained, should the latter choose to remain therein. WHEREFORE, the Petition is partially GRANTED. The assailed Decision of the Court of Appeals is hereby SET ASIDE. The Decision of the provincial agrarian reform adjudicator is REINSTATED with the modification that the lease rentals, which respondents have already paid to petitioner after October 21, 1972, are to be considered part of the purchase price for the subject parcels of land. SO ORDERED. Melo, (Chairman), Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concur.

[1]

Fourteenth Division. The Decision was written by J. Demetrio G. Demetria with the concurrence of JJ Ramon A. Barcelona (Division chairman) and Mariano M. Umali (member).
[2]

CA Decision, p. 6; rollo, p. 22. Rollo, p. 38. CA Decision, pp. 2-4; rollo, pp. 18-20. CA Decision, p. 6; rollo, p. 22.

[3]

[4]

[5]

[6]

The case was deemed submitted for resolution on November 17, 2000, upon receipt by this Court of the Office of Solicitor Generals Memorandum/Comment signed by Sol. Gen. Ricardo P. Galvez, Asst. Sol. Gen. Roman G. Del Rosario and Sol. Ma. Theresa Dolores C. Gomez-Estoesta. Respondents Memorandum, signed by Atty. Francisco H. Albarracin Jr. of the Department of Agrarian Reform Legal Services Division, was received on February 7, 2000.
[7]

Petitioners Memorandum, p. 6; rollo, p. 41. 170 SCRA 706, February 27, 1989. 112 SCRA 41, February 16, 1982. Ministry Memorandum Circular No. 18-81. 112 SCRA 41, February 16, 1982. 170 SCRA 706, February 27, 1989. Supra, p. 45, per Aquino, J. Supra, p. 710; per Paras, J. RA 6657. PD 152. Petitioners Memorandum, p. 9; rollo, p. 44. 175 SCRA 343,390, July 14, 1989; per Cruz, J. Comment, p. 5; rollo, p. 31. 321 SCRA 629, 641, December 29, 1999; per Bellosillo, J.

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

FIRST DIVISION

[G.R. No. 146587. July 2, 2002]

REPUBLIC OF THE PHILIPPINES, represented by the General Manager of the PHILIPPINE INFORMATION AGENCY (PIA), petitioner, vs. THE HONORABLE COURT OF APPEALS and the HEIRS OF LUIS SANTOS as herein represented by DR. SABINO SANTOS and PURIFICACION SANTOS IMPERIAL, respondents. DECISION
VITUG, J.:

Petitioner instituted expropriation proceedings on 19 September 1969 before the Regional Trial Court ("RTC") of Bulacan, docketed Civil Cases No. 3839-M, No. 3840M, No. 3841-M and No. 3842-M, covering a total of 544,980 square meters of contiguous land situated along MacArthur Highway, Malolos, Bulacan, 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, h ad ceased its operations thereat. Petitioner made a deposit of P517,558.80, the sum provisionally fixed as being the reasonable value of the property. On 26 February 1979, or more than nine years after the institution of the expropriation proceedings, the trial court issued this order -

"WHEREFORE, premises considered, judgment is hereby rendered: "Condemning the properties of the defendants in Civil Cases Nos. 3839-M to 3842-M located at KM 43, MacArthur Highway, Malolos, Bulacan and covered by several transfer certificates of title appearing in the Commissioners Appraisal Report consisting of the total area of 544,980 square meters, as indicated in plan, Exhibit A, for plaintiff, also marked as Exhibit I for the defendants, and as Appendix A attached to the Commissioners Appraisal Report, for the purpose stated by the plaintiff in its complaint; "Ordering the plaintiff to pay the defendants the just compensation for said property which is the fair market value of the land condemned, computed at the rate of six pesos (P6.00) per square meter, with legal rate of interest from September 19, 1969, until fully paid; and

"Ordering the plaintiff to pay the costs of suit, which includes the aforesaid fees of commissioners, Atty. Victorino P. Evangelista and Mr. Pablo Domingo."
[1]

The bone of contention in the instant controversy is the 76,589-square meter property previously owned by Luis Santos, predecessor-in-interest of herein respondents, which forms part of the expropriated area. It would appear that the national government failed to pay to herein respondents the compensation pursuant to the foregoing decision, such that a little over five years later, or on 09 May 1984, respondents filed a manifestation with a motion seeking payment for the expropriated property. On 07 June 1984, the Bulacan RTC, after ascertaining that the heirs remained unpaid in the sum of P1,058,655.05, issued a writ of execution served on the plaintiff, through the Office of the Solicitor General, for the implementation thereof. When the order was not complied with, respondents again filed a motion urging the trial court to direct the provincial treasurer of Bulacan to release to them the amount of P72,683.55, a portion of the sum deposited by petitioner at the inception of the expropriation proceedings in 1969, corresponding to their share of the deposit. The trial court, in its order of 10 July 1984, granted the motion. In the meantime, President Joseph Ejercito Estrada issued Proclamation No. 22, 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 16 September 1999 when petitioner filed its manifestation and motion to permit the deposit in court of the amount of P4,664,000.00 by way of just compensation for the expropriated property of the late Luis Santos subject to such final computation as might be approved by the court. This time, the Santos heirs, opposing the manifestation and motion, submitted a counter-motion to adjust the compensation from P6.00 per square meter previously fixed in the 1979 decision to its current zonal valuation pegged at P5,000.00 per square meter or, in the alternative, to cause the return to them of the expropriated property. On 01 March 2000, the Bulacan RTC ruled in favor of respondents and issued the assailed order, vacating its decision of 26 February 1979 and declaring it to be unenforceable on the ground of prescription [2]

"WHEREFORE, premises considered, the court hereby: "1) declares the decision rendered by this Court on February 26, 1979 no longer enforceable, execution of the same by either a motion or an independent action having already prescribed in accordance with Section 6, Rule 39 of both the 1964 Revised Rules of Court and the 1997 Rules of Civil Procedure;

"2) denies the plaintiffs Manifestation and Motion to Permit Plaintiff to Deposit in Court Payment for Expropriated Properties dated September 16, 1999 for the reason stated in the next preceding paragraph hereof; and "3) orders the return of the expropriated property of the late defendant Luis Santos to his heirs conformably with the ruling of the Supreme Court in Government of Sorsogon vs. Vda. De Villaroya, 153 SCRA 291, without prejudice to any case which the parties may deem appropriate to institute in relation with the amount already paid to herein oppositors and the purported transfer of a portion of the said realty to the Bulacan State University pursuant to Proclamation No. 22 issued by President Joseph Ejercito."
[3]

Petitioner brought the matter up to the Court of Appeals but the petition was outrightly denied. It would appear that the denial was based on Section 4, Rule 65, of the 1997 Rules of Civil Procedure which provided that the filing of a motion for reconsideration in due time after filing of the judgment, order or resolution interrupted the running of the sixty-day period within which to file a petition for certiorari; and that if a motion for reconsideration was denied, the aggrieved party could file the petition only within the remaining period, but which should not be less than five days in any event, reckoned from the notice of such denial. The reglementary period, however, was later modified by A.M. No. 00-2-03 S.C., now reading thusly:

Sec. 4. When and where petition filed. --- The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said motion.
The amendatory provision, being curative in nature, should be made applicable to all cases still pending with the courts at the time of its effectivity. In Narzoles vs. NLRC,[4] the Court has said:

The Court has observed that Circular No. 39-98 has generated tremendous confusion resulting in the dismissal of numerous cases for late filing. This may have been because, historically, i.e., even before the 1997 revision to the Rules of Civil Procedure, a party had a fresh period from receipt of the order denying the motion for reconsideration to file a petition for certiorari. Were it not for the amendments brought about by Circular No. 39-98, the cases so dismissed would have been resolved on the merits. Hence, the Court deemed it wise to revert to the old rule allowing a party a fresh 60-day period from notice of the denial of the motion for reconsideration to file a petition for certiorari. x x x

The latest amendments took effect on September 1, 2000, following its publication in the Manila Bulletin on August 4, 2000 and in the Philippine Daily Inquirer on August 7, 2000, two newspapers of general circulation. In view of its purpose, the Resolution further amending Section 4, Rule 65, can only be described as curative in nature, and the principles governing curative statutes are applicable. Curative statutes are enacted to cure defects in a prior law or to validate legal proceedings which would otherwise be void for want of conformity with certain legal requirements. (Erectors, Inc. vs. National Labor Relations Commission, 256 SCRA 629 [1996].) They are intended to supply defects, abridge superfluities and curb certain evils. They are intended to enable persons to carry into effect that which they have designed or intended, but has failed of expected legal consequence by reason of some statutory disability or irregularity in their own action. They make valid that which, before the enactment of the statute was invalid. Their purpose is to give validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with. (Batong Buhay Gold Mines, Inc. vs. Dela Serna, 312 SCRA 22 [1999].) Curative statutes, therefore, by their very essence, are retroactive. (Municipality of San Narciso, Quezon vs. Mendez, Sr., 239 SCRA 11 [1994].)
[5]

At all events, petitioner has a valid point in emphasizing the "public nature" of the expropriated property. The petition being imbued with public interest, the Court has resolved to give it due course and to decide the case on its merits. Assailing the finding of prescription by the trial court, petitioner here posited that a motion which respondents had filed on 17 February 1984, followed up by other motions subsequent thereto, was made within the reglementary period that thereby interrupted the 5-year prescriptive period within which to enforce the 1979 judgment. Furthermore, petitioner claimed, the receipt by respondents of partial compensation in the sum of P72,683.55 on 23 July 1984 constituted partial compliance on the part of petitioners and effectively estopped respondents from invoking prescription expressed in Section 6, Rule 39, of the Rules of Court.[6] In opposing the petition, respondents advanced the view that pursuant to Section 6, Rule 39, of the Rules of Court, the failure of petitioner to execute the judgment, dated 26 February 1979, within five years after it had become final and executory, rendered it unenforceable by mere motion. The motion for payment, dated 09 May 1984, as well as the subsequent disbursement to them of the sum of P72,683.55 by the provincial treasurer of Bulacan, could not be considered as having interrupted the five-year period, since a motion, to be considered otherwise, should instead be made by the prevailing party, in this case by petitioner. Respondents maintained that the P72,683.55 paid to them by the provincial treasurer of Bulacan pursuant to the 1984 order of the trial court

was part of the initial deposit made by petitioner when it first entered possession of the property in 1969 and should not be so regarded as a partial payment. Respondents further questioned the right of PIA to transfer ownership of a portion of the property to the Bulacan State University even while the just compensation due the heirs had yet to be finally settled. 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.[7]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.[8] 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.[9] 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.[10] 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.[11] 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.[12] 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.[13] 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.

In insisting on the return of the expropriated property, respondents would exhort on the pronouncement in Provincial Government of Sorsogon vs. Vda. de Villaroya[14] where the unpaid landowners were allowed the alternative remedy of recovery of the property there in question. It might be borne in mind that the case involved the municipal government of Sorsogon, to which the power of eminent domain is not inherent, but merely delegated and of limited application. The grant of the power of eminent domain to local governments under Republic Act No. 7160[15] cannot be understood as being the pervasive and all-encompassing power vested in the legislative branch of government. For local governments to be able to wield the power, it must, by enabling law, be delegated to it by the national legislature, but even then, this delegated power of eminent domain is not, strictly speaking, a power of eminent, but only of inferior, domain or only as broad or confined as the real authority would want it to be.[16] Thus, in Valdehueza vs. Republic[17] where the private landowners had remained unpaid ten years after the termination of the expropriation proceedings, this Court ruled -

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. x x x 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. "Said relief may be granted under plaintiffs' prayer for: `such other remedies, which may be deemed just and equitable under the premises'."
[18]

The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay City[19] where the recovery of possession of property taken for public use prayed for by the unpaid landowner was denied even while no requisite expropriation proceedings were first instituted. The landowner was merely given the relief of recovering compensation for his property computed at its market value at the time it was taken and appropriated by the State. The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides not only for the payment of just compensation to herein respondents but likewise adjudges the property condemned in favor of petitioner over which parties, as well as their privies, are bound.[20] Petitioner has occupied, utilized and, for all intents and purposes, exercised dominion over the property pursuant to the judgment. The exercise of such rights vested to it as the condemnee indeed has amounted to at least a partial compliance or satisfaction of the 1979 judgment, thereby preempting any claim of bar by prescription on grounds of non-execution. In arguing for the return of their property on the basis of non-payment, respondents ignore the fact

that the right of the expropriatory authority is far from that of an unpaid seller in ordinary sales, to which the remedy of rescission might perhaps apply. An in rem proceeding, condemnation acts upon the property.[21]After condemnation, the paramount title is in the public under a new and independent title;[22] thus, by giving notice to all claimants to a disputed title, condemnation proceedings provide a judicial process for securing better title against all the world than may be obtained by voluntary conveyance. [23] Respondents, in arguing laches against petitioner did not take into account that the same argument could likewise apply against them. Respondents first instituted proceedings for payment against petitioner on 09 May 1984, or five years after the 1979 judgment had become final. The unusually long delay in bringing the action to compel payment against herein petitioner would militate 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. [24] 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. [25] Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court.[26] In fine, 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. [27] 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 annum [28] should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time.[29] Article 1250 of the Civil Code, providing that, in case of extraordinary inflation or deflation, the value of the currency at the time of the establishment of the obligation shall be the basis for the payment when no agreement to the contrary is stipulated, has strict application only to contractual obligations.[30] In other words, a contractual agreement is needed for the effects of extraordinary inflation to be taken into account to alter the value of the currency.[31] All given, the trial court of Bulacan in issuing its order, dated 01 March 2000, vacating its decision of 26 February 1979 has acted beyond its lawful cognizance, the only authority left to it being to order its execution. Verily, 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 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. WHEREFORE, the petition is GRANTED. The resolution, dated 31 July 2000, of the Court of Appeals dismissing the petition for certiorari, as well as its resolution of 04 January 2001 denying the motion for reconsideration, and the decision of the Regional Trial Court of Bulacan, dated 01 March 2000, are SET ASIDE. Let the case be forthwith remanded to the Regional Trial Court of Bulacan for the proper execution of its decision promulgated on 26 February 1979 which is hereby REINSTATED. No costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Kapunan, Ynares-Santiago, and Austria-Martinez, JJ., concur.

[1]

Rollo, p. 66.

The Dispositive Portion of Proclamation No. 22, entitled TRANSFERRING OWNERSHIP OF A PORTION OF THE PROPERTY OF THE PHILIPPINE INFORMATION AGENCY TO THE BULACAN STATE UNIVERSITY, reads:
[2]

NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby transfer to the Bulacan State University, twenty (20) hectares of the property mentioned above, and another five (5) hectares for the exclusive use of the propagation of the Philippine carabao, adjacent to the university campus, located in Malolos, Bulacan. The remaining portions of the property fronting the national highway shall be retained by the Philippine Information Agency for its proposed development plan, including offices of the PIA Regional Office, the Bulacan Provincial Information Center, the training center and the depository of equipment and other properties of PIA.
[3]

Rollo, pp. 76-77.

[4]

341 SCRA 533. See also PCGG vs. Desierto, 28 December 2001, G.R. No. 140358; PCGG vs. Desierto, 19 January 2001, G.R. No. 140323; Medina Investigation vs. Court of Appeals, 20 March 2001, G.R. No. 144074; Pfizervs. Galan, 25 May 2001, G.R. No. 143389; Santos vs. Court of Appeals, 05 July 2001, G.R. No. 141947.
[5]

At pp. 537-538. Section 6, Rule 39 of the Rules of Court provides:

[6]

Execution by motion or by independent action. 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.
[7]

Bernas, 1987 Edition, p. 276, quoting Justice Story in Charles River Bridge vs. Warren Bridge. US vs. Certain Lands in Highlands (DY NY) 48 F Supp 306.

[8]

[9]

US vs. Certain Lands in Highlands (DY NY) 48 F Supp 306; San Bernardino Valley Municipal Water District vs. Gage Canal Co. (4th Dist) 226 Cal App 2d 206, 37 Cal Rptr 856.
[10]

Sea vs. Manila Railroad Co., 42 Phil. 102. Visayan Refining Co., vs. Camus, 40 Phil 550.

[11]

[12]

Thornton Development Authority vs. Upah (DC Colo) 640 F Supp 1071. Visayan Refining, supra. 153 SCRA 291. See Local Government Code of 1991 City of Manila vs. Chinese Community of Manila, 40 Phil 349. 17 SCRA 107. At p. 112. 106 Phil. 1017. Mines vs. Canal Authority of the State (Fla) 467 So2d 989, 10 FLW 230. Cadorette vs. US CCA (Mass) 988 F2d 215. Ibid. Ibid. 17 SCRA 107, supra. Manila Railway Co. vs. Fabie, 17 Phil 206. Philippine Railway Co. vs. Solon, 13 Phil 34. Commissioner of Public Highways vs. Burgos, 96 SCRA 831. Eastern Shipping Lines, Inc. vs. Court of Appeals, 234 SCRA 78. US vs. Klamath and Moadoc Tribes, 304 US 119, 82 L Ed 1219, 58 S Ct 799. Commissioner of Public Highways vs. Burgos, supra. Ibid.

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

[26]

[27]

[28]

[29]

[30]

[31]