[G.R. No. 138896.

June 20, 2000]

BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner, vs. Heirs of FRANCISCO

PASTOR, namely: EUGENIO SYLIANCO, TEODORO SYLIANCO, ISABEL
SYLIANCO, EUGENIA S. ONG, LAWRENCE SYLIANCO, LAWSON SYLIANCO,
LAWINA S. NOTARIO, LEONARDO SYLIANCO JR. and LAWFORD
SYLIANCO, respondents.

DECISION

PANGANIBAN, J.:

An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within the

jurisdiction of the regional trial courts, regardless of the value of the subject property.

The Case

Before us is a Petition for Review on Certiorari assailing the March 29, 1999 Order of [1]

the Regional Trial Court (RTC) of Cebu City (Branch 58) in Civil Case No. CEB-21978,
in which it dismissed a Complaint for eminent domain. It ruled as follows:

"Premises considered, the motion to dismiss is hereby granted on the

ground that this Court has no jurisdiction over the case. Accordingly, the
Orders dated February 19, 1999 and February 26, 1999, as well as the
Writ of Possession issued by virtue of the latter Order are hereby recalled
for being without force and effect."[2]

Petitioner also challenges the May 14, 1999 Order of the RTC denying reconsideration.

The Facts

Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu (Branch 1) a [3]

Complaint to expropriate a property of the respondents. In an Order dated April 8, 1997,

the MTC dismissed the Complaint on the ground of lack of jurisdiction. It reasoned that
"[e]minent domain is an exercise of the power to take private property for public use
after payment of just compensation. In an action for eminent domain, therefore, the
principal cause of action is the exercise of such power or right. The fact that the action
also involves real property is merely incidental. An action for eminent domain is
therefore within the exclusive original jurisdiction of the Regional Trial Court and not
with this Court."
[4]
 Assailed RTC Ruling

The RTC also dismissed the Complaint when filed before it, holding that an action for
eminent domain affected title to real property; hence, the value of the property to be
expropriated would determine whether the case should be filed before the MTC or the
RTC. Concluding that the action should have been filed before the MTC since the value
of the subject property was less than P20,000, the RTC ratiocinated in this wise:

"The instant action is for eminent domain. It appears from the current Tax
Declaration of the land involved that its assessed value is only One
Thousand Seven Hundred Forty Pesos (P1,740.00). Pursuant to Section
3, paragraph (3), of Republic Act No. 7691, all civil actions involving title
to, or possession of, real property with an assessed value of less
than P20,000.00 are within the exclusive original jurisdiction of the
Municipal Trial Courts. In the case at bar, it is within the exclusive original
jurisdiction of the Municipal Trial Court of Talisay, Cebu, where the
property involved is located.

"The instant action for eminent domain or condemnation of real property is

a real action affecting title to or possession of real property, hence, it is the
assessed value of the property involved which determines the jurisdiction
of the court. That the right of eminent domain or condemnation of real
property is included in a real action affecting title to or possession of real
property, is pronounced by retired Justice Jose Y. Feria, thus, Real
actions are those affecting title to or possession of real property. These
include partition or condemnation of, or foreclosures of mortgage on, real
property. x x x"[5]

Aggrieved, petitioner appealed directly to this Court, raising a pure question of law. In a [6]

Resolution dated July 28, 1999, the Court denied the Petition for Review "for being
posted out of time on July 2, 1999, the due date being June 2, 1999, as the motion for
extension of time to file petition was denied in the resolution of July 14, 1999." In a
[7]

subsequent Resolution dated October 6, 1999, the Court reinstated the Petition. [8]

Respondents, on the other hand, contend that the Complaint for Eminent Domain
affects the title to or possession of real property. Thus, they argue that the case should
have been brought before the MTC, pursuant to BP 129 as amended by Section 3 (3) of
RA 7691. This law provides that MTCs shall have exclusive original jurisdiction over all
civil actions that involve title to or possession of real property, the assessed value of
which does not exceed twenty thousand pesos or, in civil actions in Metro Manila, fifty
thousand pesos exclusive of interest, damages of whatever kind, attorneys fees,
litigation expenses and costs.

We agree with the petitioner that an expropriation suit is incapable of pecuniary

estimation. The test to determine whether it is so was laid down by the Court in this
wise:
 "A review of the jurisprudence of this Court indicates that in determining
whether an action is one the subject matter of which is not capable of
pecuniary estimation, this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is
primarily for the recovery of a sum of money, the claim is considered
capable of pecuniary estimation, and whether jurisdiction is in the
municipal courts or in the courts of first instance would depend on the
amount of the claim. However, where the basic issue is something other
than the right to recover a sum of money, or where the money claim is
purely incidental to, or a consequence of, the principal relief sought, like in
suits to have the defendant perform his part of the contract (specific
performance) and in actions for support, or for annulment of a judgment or
to foreclose a mortgage, this Court has considered such actions as cases
where the subject of the litigation may not be estimated in terms of money,
and are cognizable exclusively by courts of first instance. The rationale of
the rule is plainly that the second class cases, besides the determination
of damages, demand an inquiry into other factors which the law has
deemed to be more within the competence of courts of first instance,
which were the lowest courts of record at the time that the first organic
laws of the Judiciary were enacted allocating jurisdiction (Act 136 of the
Philippine Commission of June 11, 1901)." 10

In the present case, an expropriation suit does not involve the recovery of a sum of
money. Rather, it deals with the exercise by the government of its authority and right to
take private property for public use. In National Power Corporation v. Jocson, the
11 12

Court ruled that expropriation proceedings have two phases:

"The first is concerned with the determination of the authority of the

plaintiff to exercise the power of eminent domain and the propriety of its
exercise in the context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, of condemnation declaring that the
plaintiff has a lawful right to take the property sought to be condemned, for
the public use or purpose described in the complaint, upon the payment of
just compensation to be determined as of the date of the filing of the
complaint. An order of dismissal, if this be ordained, would be a final one,
of course, since it finally disposes of the action and leaves nothing more to
be done by the Court on the merits. So, too, would an order of
condemnation be a final one, for thereafter as the Rules expressly state, in
the proceedings before the Trial Court, no objection to the exercise of the
right of condemnation (or the propriety thereof) shall be filed or heard.

"The second phase of the eminent domain action is concerned with the
determination by the court of the just compensation for the property
sought to be taken. This is done by the Court with the assistance of not
more than three (3) commissioners. The order fixing the just
compensation on the basis of the evidence before, and findings of, the
 commissioners would be final, too. It would finally dispose of the second
stage of the suit, and leave nothing more to be done by the Court
regarding the issue. x x x"

It should be stressed that the primary consideration in an expropriation suit is whether

the government or any of its instrumentalities has complied with the requisites for the
taking of private property. Hence, the courts determine the authority of the government
entity, the necessity of the expropriation, and the observance of due process. In the
13

main, the subject of an expropriation suit is the governments exercise of eminent

domain, a matter that is incapable of pecuniary estimation.

True, the value of the property to be expropriated is estimated in monetary terms, for
the court is duty-bound to determine the just compensation for it. This, however, is
merely incidental to the expropriation suit. Indeed, that amount is determined only after
the court is satisfied with the propriety of the expropriation.

Verily, the Court held in Republic of the Philippines v. Zurbano that "condemnation
proceedings are within the jurisdiction of Courts of First Instance," the forerunners of
14

the regional trial courts. The said case was decided during the effectivity of the Judiciary
Act of 1948 which, like BP 129 in respect to RTCs, provided that courts of first instance
had original jurisdiction over "all civil actions in which the subject of the litigation is not
capable of pecuniary estimation." The 1997 amendments to the Rules of Court were
15

not intended to change these jurisprudential precedents.

We are not persuaded by respondents argument that the present action involves the
title to or possession of a parcel of land. They cite the observation of retired Justice
Jose Y. Feria, an eminent authority in remedial law, that condemnation or expropriation
proceedings are examples of real actions that affect the title to or possession of a parcel
of land.16

Their reliance is misplaced. Justice Feria sought merely to distinguish between real and
personal actions. His discussion on this point pertained to the nature of actions, not to
the jurisdiction of courts. In fact, in his pre-bar lectures, he emphasizes that jurisdiction
over eminent domain cases is still within the RTCs under the 1997 Rules.

To emphasize, the question in the present suit is whether the government may
expropriate private property under the given set of circumstances. The government
does not dispute respondents title to or possession of the same. Indeed, it is not a
question of who has a better title or right, for the government does not even claim that it
has a title to the property. It merely asserts its inherent sovereign power to "appropriate
and control individual property for the public benefit, as the public necessity,
convenience or welfare may demand." 17

WHEREFORE, the Petition is hereby GRANTED and the assailed Orders SET ASIDE.
The Regional Trial Court is directed to HEAR the case. No costs.
SO ORDERED.

G.R. Nos. 94193-99 February 25, 1992

NATIONAL POWER CORPORATION, petitioner,

vs.
HON. ENRIQUE T. JOCSON, in his capacity as Presiding Judge, Regional Trial Court, 6th Judicial
Region, Branch 47, Bacolod City; JESUS, FERNANDO, MARIA CRISTINA and MICHAEL, all
surnamed GONZAGA; LUIS, DIONISIO, ROBERTO, GABRIEL, BENJAMIN, ANA, ALEXANDER,
CARLA, SOFIA and DANIEL, all surnamed GONZAGA; ROSARIO P. MENDOZA; CELSOY AGRO-
IND. CORP.; EMMANUEL, LYDIA, HARRY, NOLI, CLIFFORD and CHRISTIAN DALE, all surnamed
AÑO; MAYO L. LACSON; and LUCIA GOSIENFIAO, respondents.

Amado B. Parreno Law Office for Gonzaga, et al.

Francisco B. Cruz for R. Mendoza.

Eduardo M. Casiple for Mayo Lacson.

DAVIDE, JR., J.:

This is a special civil action for certiorari to annul, for having been issued without or in excess of
jurisdiction, in violation of law and in deprivation of petitioner's right to due process, four (4) orders
successively issued by the respondent Judge in seven (7) eminent domain cases (1) fixing the provisional
values of the parcels of land sought to be expropriated by the petitioner, National Power Corporation
(NAPOCOR), in amounts far exceeding their market values, (2) increasing the provisional values of the
parcels of land involved in two (2) of such cases without hearing and holding in abeyance the issuance of
the writ of possession in favor of petitioner until deposit of the additional amount, (3) requiring the private
respondents, as defendants in said cases, to state in writing within twenty-four (24) hours whether or not
they are amenable to accepting and withdrawing the amount deposited by petitioner as provisional values
in full and final satisfaction of their respective properties, and directing that the writ of possession be
issued only until after the defendants shall have so manifested in writing their acceptance and receipt of
said amounts, and (4) directing petitioner to release and pay within twenty-four (24) hours, through the
Court and in favor of the defendants, the amount of P43,016,960.00.

The antecedents of this case are not controverted.

Petitioner is a government-owned and controlled corporation created and existing by virtue of Republic
Act No. 6395, as amended, for the purpose of undertaking the development of hydraulic power, the
production of power from any source, particularly by constructing, operating and maintaining power
plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission lines, power stations and other
works for the purpose of developing hydraulic power from any river, creek, lake, spring and waterfall in
the Philippines and supplying such power to the inhabitants thereof. In order to carry out these purposes,
it is authorized to exercise the power of eminent domain.

On 30 March 1990, petitioner filed seven (7) eminent domain cases before the Regional Trial Court of the
Sixth Judicial Region in Bacolod City, to wit:

(1) Civil Case No. 5938 against Jesus, Fernando, Ma. Cristina and Michael, all surnamed
GONZAGA; 1
 (2) Civil Case No. 5939 against Louis, Dionisio, Roberto, Gabriel, Benjamin, Ana, Alexander, Carla,
Sofia, Daniel, all surnamed GONZAGA; 2

3
(3) Civil Case No. 5940 against Rosario P. Mendoza;

(4) Civil Case No. 5941 against Celsoy Agro-Ind.

Corporation; 4

(5) Civil Case No. 5942 against Emmanuel, Lydia, Harry, Noli, Clifford and Christian, Dale, all
surnamed AÑO; 5

6
(6) Civil Case No. 5943 against Mayo L. Lacson;

7
(7) Civil Case No. 5944 against Lucia Gosiengfiao

for the acquisition of a right-of-way easement over portions of the parcels of land described in the
complaints for its Negros-Panay Interconnection Project, particularly the Bacolod-Tomonton Transmission
Line.

The complaints uniformly (a) allege that petitioner urgently needs portions of the affected land to enable it
to construct its tower and transmission line in a manner that is compatible with the greatest good while at
the same time causing the least private injury; the purpose for which the lands are principally devoted will
not be impaired by the transmission lines as it will only acquire a right-of-way-easement thereon; and it
had negotiated with and offered to pay defendants for the portions affected by the Bacolod-Tomonton
Transmission Line, but the parties failed to reach an agreement despite long and repeated negotiations,
and (b) pray that:

1. This Honorable Court fix the provisional value of the portions of the parcel of land
herein sought to be expropriated pursuant to Section 2, Rule 67 of the Rules of Court;

2. This Honorable Court, by proper order and writ, authorize the plaintiff to enter or take
possession of the premises described in paragraph 3 hereof, and to commence and
undertake the construction of the Bacolod-Tomonton T/L after depositing with the
Provincial Treasurer of Negros Occidental the provisional value fixed by this Honorable
Court, which amount shall be held by said official subject to the order and final disposition
of the Court;

3. This Honorable Court appoint three (3) Commissioners to hear the parties, view the
premises, assess the damages to be paid for the condemnation, and to report in full their
proceedings to the Court;

4. The plaintiff be declared to have the lawful right to acquire portions of the properties of
the defendants affected by the condemnation;

5. After the determination of the amount of indemnity, the Court authorize the payment by
the plaintiff to the defendants; and

6. Judgment be rendered against the defendants, condemning the portion of the parcels
of land referred to in paragraphs 3 and 4 hereof, including the improvements thereof, if
any, for public use and for the purpose hereinabove set forth, free from all other liens and
encumbrances whatsoever; and thereafter, upon plaintiff's compliance with the
requirements of said judgment, a final order of condemnation be issued and entered in
favor of the plaintiff.
 Plaintiff further prays for such other reliefs as may be deemed just and equitable in the
premises.

The cases were raffled to different branches of the trial court as follows: Civil Cases Nos. 5938, 5943 and
5944 to Branch 43; Civil Case No. 5939 to Branch 54; Civil Case No. 5940 to Branch 45; Civil Case No.
5941 to Branch 50; and Civil Case No. 5942 to Branch 46.

Only the defendants in Civil Cases Nos. 5938, 5939, and 5942 filed Motions to Dismiss. 8

On 4 April 1990, petitioner filed a Motion to consolidate these cases for joint trial 9 and an Urgent Motion To
Fix Provisional Value. 10

On 10 April 1990, Executive Judge Jesus V. Ramos issued an Order granting the motion for consolidation
and ordering the consolidation of all the cases in Branch 43 of the court, then presided over by Judge
Romeo Habaradas. 11

Considering that Judge Habaradas was on sick leave, petitioner filed on 8 May 1990 an Urgent Motion to
Reraffle due to the urgent necessity for the hearing of the cases and the Urgent Motion to Fix Provisional
Value. 12 Acting on said motion, Vice Executive Judge Bethel K. Moscardon issued on 9 May 1990 an Order granting
the motion and directing the re-raffle of the cases. 13

Upon re-raffle, the cases were assigned to Branch 47, presided over by respondent Judge. Since the
latter went on sick leave effective 16 May 1990, petitioner filed on said date an Urgent Motion for Special
Re-raffle and for Immediate Fixing of Provisional Value. 14 As a consequence thereof, the cases were re-raffled
to Branch 48 of the court.

On 17 May 1990, Judge Romeo Hibionada of Branch 48 issued an Order directing the defendants to
appear before the court on 21 May 1990 at 8:30 A.M. to register their comments or objections to the fixing
of the provisional values of the parcels of land subject of expropriation. 15

On 21 May 1990, the petitioner and the defendants, through their respective lawyers, appeared and orally
argued their respective positions on the Motion to Fix Provisional Value. 16

Instead of ruling on the issues raised therein, Judge Hibionada, citing Circular No. 7 of this Court dated
23 September 1974 which establishes a pairing system, 17 promulgated an Order directing the return of the
seven (7) cases to Branch 47 for further disposition.

On 5 June 1990, Branch 47, through respondent Judge, issued an Order directing the petitioner:

. . . to show by documents and otherwise within five (5) days from receipt hereof the
following:

1. That it has earlier negotiated repeatedly with defendants but failed to reach agreement;

2. That expropriation of heavily populated subdivision areas in order to install primary

electric transmission lines would not endanger lives and property in the area;

3. That such installation is of paramount public interest and there is no other

demonstrable alternative.

and warning that "no provisional order for tentative cost payment of the land affected would be issued"
pending compliance by petitioner with the
foregoing. 18
On 25 June 1990, respondent Judge, finding the existence of paramount public interest which. may be
served by the expropriation, the long range benefit of the project involved, substantial compliance with the
rules concerning efforts for negotiation and, taking into consideration the market value of the subject
areas and the daily opportunity profit that the petitioner allegedly admitted in open court, issued an Order
fixing the provisional values of the subject areas, to wit:

CIVIL CASE AFFECTED MARKET PROVISIONAL

NO. AREA(SQ. M.) VALUE

1. 5938 7,050 P 45,000.00 P 180,000.00

3,000 668,700.00 2,674,800.00
6,600 219,830.00 879,320.00
2. 5939 23,400 757,437.00 3,029,748.00
3. 5940 9,030 2,870.00 11,480.00
4. 5941 17,430 433,130.00 1,732,520.00
5. 5942 2,700 342,900.00 1,371,600.00
6. 5943 15,900 2,125,340.00 8,501,360.00
7. 5944 21,000 1,200,000.00 1,800,000.00

and directing the petitioner:

. . . to deposit the amount with the Philippine National Bank in escrow for the benefit of
the defendants pending decision on the merits. 19

The market values mentioned in the Order are the same values appearing in the tax declarations of the
properties and the notices of assessment issued by the Assessor.

In compliance with the said Order, petitioner deposited the total sum of P23,180,828.00 with the
Philippine National Bank, NAPOCOR Branch, Quezon City, under Savings Account 249-505865-7 and
manifested on 3 July 1990 with the court below that it did so. 20

On 11 July 1990, the defendants in Civil Case No. 5938 filed a motion for the reconsideration of the 25
June 1990 Order alleging that the provisional value of the property involved therein "had been set much
too low" considering the allegations therein adduced, stating that the real compensation that should
accrue to them is estimated at P29,970,000.00 and praying that the questioned Order be reconsidered so
as to reflect "the true amount covering the properties subject to (sic) Eminent Domain estimated at
TWENTY NINE MILLION NINE HUNDRED SEVENTY THOUSAND (P29,970,000.00)." 21

It likewise appears that the defendants in "Civil Case No. 5939 filed a motion for reconsideration asking
for a re-evaluation of the provisional value of the subject property. 22

On 12 July 1990, respondent Judge issued an Order 23

increasing the provisional values of the properties
enumerated in the motions for reconsideration, directing the petitioner to deposit "whatever differential between the
amounts above fixed and those already deposited within twenty four (24) hours from receipt of the Order" and holding
in abeyance the issuance of the writ of possession pending compliance therewith. The Order reads in full as follows:

ORDER

Before this Court are two (2) Motions for Reconsideration of the Order dated June 25,
1990 fixing provisional values of the lands sought to be expropriated belonging to the
defendants in these cases. The first motion was filed by the Torres Valencia Ciocon
Dabao Valencia & De La Paz Law Offices for the defendants Jesus, Fernando, Ma.
Cristina and Michel (sic), all surnamed Gonzaga, seeking a reconsideration of the values
set by this Court earlier at P3,734,120.00 for the areas affected consisting of the
following:

7,050 square meters;

6,600 square meters; and
3,000 square meters

belonging to the aforesaid persons. The Court is aware that the Order of July 25, 1990
was not based on ultimate factual conditions of the property of the movants. At that time,
the Court is (sic) unaware that the expropriation of these areas would render the
remaining portion practically a total loss considering that it is in a subdivision and not
agricultural and that the fetching price (sic) now in the immediate vicinity is between
P1,500.00 and P2,000.00 per square meter. Considering that the presence of the primary
transmission lines of the property and the earlier intrusion of the Central Negros
Cooperative at the side of the areas affected for free (sic) during the Martial Law Regime,
and considering further the proximity of the Rolling Hills Memorial Park, the San Miguel
Corporation manufacturing complex, Jesusa Heights, Green Hills Memorial Park and
other posh subdivisions, as well as a golf course, the Court is convinced that that (sic),
defendants Jesusa Gonzaga, Fernando Gonzaga, Ma. Cristina and Michel (sic) Gonzaga
are entitled to a higher valuation for the property, not only because of the above-stated
facts but because of the clear danger to the inhabitants in the area and the destruction of
the marketability of the remaining portion after expropriation.

II

In respect to the plea of defendants Louis Gonzaga, et al. for re-evaluation of the areas
owned by them, the Court feels that adjustment should also be made considering that it is
contiguous to the areas belonging to Jesus Gonzaga, et al. above-stated and it is also
affected by the same conditions. Considering that the area affected is 23,000 square
meters and the fetching price (sic) in the vicinity is between P1,500.00 and P2,000.00 per
square meter, the Court feels that the provisional value of the property should be
P12,600,000.00.

As to the rest of the defendants, there being no extra-ordinary or peculiar conditions

which may warrant re-evaluation the amounts fixed earlier by this Court shall stand.

WHEREFORE, (a) the Court rules that the provisional value of 7,050 square meters
aforestated should be P6,000,000.00; the provisional value of 6,600 square meters
aforestated should be P5,000,000.00; and the provisional value of 3,000 square meters
aforestated should be P3,000,000.00 instead of those in the June 25, 1990 Order of this
Court for these properties. (b) The provisional value of 23,000 square meters belonging
to Louis Gonzaga, et al. should be rightfully valued at P12,600,000.00.

The plaintiff is directed to deposit whatever differential between the amounts above fixed
and those already deposited in PNB Savings Account No. 249-5-5865-7 within 48 hours
from receipt of this Order. Pending such compliance hereof, action on the Motion for
Issuance of Writ of Possession will be held in abeyance. The representative of the
plaintiff may get from the Branch Clerk of Court the corresponding bank book earlier
attached to the expediente for the purpose of complying with this Order.

SO ORDERED.
In compliance with the said Order, petitioner immediately deposited the additional sum of P22,866,860.00
with the Philippine National Bank under Savings Account No. 249-505865-7 as evidenced by the Bank's
certification dated 13 July 1990. 24

On 16 July 1990, respondent Judge issued an Order 25

mandatorily requiring the defendants:

. . . to state in writing within twenty-four (24) hours whether or not they are amenable to
accept and withdraw (sic) the amounts already deposited by the plaintiff for each of them
at final and full satisfaction of the value of their respective property (sic) affected by
expropriation, and this is mandatory.

[t]he Writ of Possession sought for by the plaintiff will be issued immediately after
manifestation of acceptance and receipt of said amounts.

On 18 July 1990, respondent Judge, claiming to act on the

Manifestation — filed in compliance with the Order of 16 July 1990 — of defendants Jesus Gonzaga, et
al. in Civil Case No. 5938, Luis Gonzaga, et al. in Civil Case No. 5939, Rosario Mendoza in Civil Case
No. 5940, Emmanuel Año, et al. in Civil Case No. 5942 and Mayo Lacson in Civil Case No. 5943, issued
an Order 26 directing the petitioner to pay the defendants within twenty-four (24) hours, through the court and from
petitioner's Philippine National Bank Savings Account No. 249-505865-7 or from any other fund; whichever may be
most expeditious, the following amounts by way of full payment for their expropriated property:

CIVIL CASE NO. AFFECTED AREA VALUE

(SQ. M.)

1. 5938 7,050 P 6,000,000.00

3,000 3,000,000.00
6,600 5,000,000.00
2. 5939 23,000 12,600,000.00
3. 5940 9,030 11,480.00
4. 5941 17,430 1,732,520.00
5. 5942 2,700 1,371,600.00
6. 5943 15,900 8,501,360.00
7. 5944 21,000 4,800,000.00

and ordering that the writ of possession be issued in these cases after the defendants "have duly
received the amounts."

Unable to accept the above Orders of 25 June, 12 July, 16 July and 18 July 1990, petitioner filed this
petition on 24 July 1990 alleging therein, as grounds for its allowance, that respondent Judge acted in
excess of jurisdiction, in violation of laws and in dereliction of the duty to afford respondents due process
when he issued said Orders. In support thereof petitioner asserts that the Orders of 25 June and 12 July
1990 fixing the provisional values at excessive and unconscionable amounts, are utterly scandalous and
unreasonable. As classified under their respective tax declarations, the several lots to be expropriated are
sugarlands with the following assessed values:

OWNER TAX DEC. NO. ASSESSED

VALUE

1. JESUS L. GONZAGA 007-000621 P18,000.00

2. Estate of SOPHIA
Vda. de GONZAGA 007-000495 267,480.00
3. JESUS GONZAGA 005-000007 87,930.00
4. LOUIS, DIONISIO
 ROBERTO, GABRIEL
BENJAMIN, ANA
ALEXANDER, CARLO
SOPHIA, DANIEL
also named
GONZAGA 007-5224 398,260.00
5. ROSARIO MENDOZA Notice of Assessment
of Real Property dated
March 23, 1990,
Lot No. 1278-B-1 860.00
6. ROSARIO MENDOZA Notice of Assessment
of Real Property dated
March 23, 1990, 861,380.00
Lot No. 1278-C-1 429,080.00
7. CEL-SOY-AGRO-
IND. CORPORATION 2284 179,650.00
8. LYDIA S. ANO
married to
EMMANUEL ANO 4047 (0854-05) 137,160.00
9. PACITA LACSON
(MAYO L. LACSON) Notice of Assessment
of Real Property dated
March 21, 1990
Lot No. 7-G 861,380.00
10. DOLORES D.
COSCOLLUELA 020-00017 487,730.00
(LUCIA GOSIENFIAO)

Yet, petitioner submits that in a clear display of abuse of discretion, respondent Judge fixed, in the Order
of 25 June 1990, the provisional valued as follows:

CIVIL CASE AFFECTED AREA MARKET PROVISIONAL

VALUE (SQ. M.) VALUE
NO.

1. 5938 7,050 P 45,000.00 P 180,000.00

3,000 668,700.00 2,674,800.00
6,600 219,830.00 879,320.00
2. 5939 23,400 757,437.00 3,029,748.00
3 5940 9,030 2,870.00 11,480.00
4. 5941 17,430 433,130.00 1,732,520.00
5. 5942 2,700 342,900.00 1,371,600.00
6. 5943 15,900 2,125,340.00 8,501,360.00
7. 5944 21,000 1,200,000.00 4,800,000.00

and that:

. . . in another clear abuse (sic) of discretion, herein respondent Judge, on the basis of
the respective Motion (sic) for Reconsideration of defendants in Civil Cases Nos. 5938
and 5939, without affording the herein petitioner an opportunity to be heard, and with
evident and manifest partiality to therein defendants increased the previously fixed
provisional value of their respective lands, as follows:

a. Civil Case No. 5938:

 1. 7,050 sq. m. — From P180,000.00 to P6,000,000.00

2. 3,000 sq. m. — From P2,674,800.00 to P3,000,000.00

3. 6,600 sq. m. — From P879,320.00 to P5,000,000.00

b. Civil Case No. 5939

1. 23,400 sq. m. — From P3,029,748.00 to P12,600,000.00

Nevertheless, due to its urgent need for the areas to be able to complete the interconnection project as
soon as possible, petitioner deposited the amounts representing the provisional values fixed by the
respondent Judge. Still, petitioner laments, the latter persisted in his stubbornness by not issuing a writ of
possession, in violation of Section 2, Rule 67 of the Rules of Court which provides that upon the filing of
the complaint or at any time thereafter, the plaintiff shall have the right to take or enter upon the
possession of the real or personal property involved if he deposits with the National or Provincial
Treasurer its value, as provisionally and promptly ascertained and fixed by the court having jurisdiction of
the proceedings, to be held by such treasurer subject to the orders and final disposition of the court; and
that after such deposit to made, the court shall order the sheriff or other proper officer to forthwith place
the plaintiff in possession of the property involved P.D. No. 42, which provides that:

. . . upon filing in the proper court of the complaint in eminent domain proceedings or at
anytime thereafter, and after due notice to the defendant, plaintiff shall have the right to
take or enter upon the possession of the real property involved if he deposits with the
Philippine National Bank, in its main office or any of its branches or agencies, an amount
equivalent to the assessed value of the property for purposes of taxation, to be held by
said bank subject to the orders and final disposition of the court.

is also alleged to have been violated by respondent Judge.

The issuance then of the writ of possession was an unqualified ministerial duty which respondent Judge
failed to perform.

Moreover, the Order of 16 July 1990 surrenders the judicial prerogative to fix the provisional value in favor
of the defendants considering that respondent Judge's valuation may still be overruled by the latter since
they were given twenty-four (24) hours to state in writing whether or not they are accepting and
withdrawing the amount already deposited by petitioner.

Finally, petitioner contends that the Order of 16 July 1990 partakes of the nature of a final disposition of
the case should the defendants accept the provisional value as "final and full satisfaction of the value of
their respective property (sic)affected by expropriation," thereby preempting and depriving the former of
the right to dispute and contest the value of the property. Clearly, respondent Judge took a short-cut,
violating in the process the procedure laid down in Sections 3 to 8, inclusive, of Rule 67 of the Rules of
Court.

In the Resolution of 31 July 1990, this court required the respondents to comment on the petition and
resolved to issue a temporary restraining order, effective immediately and to continue until further orders
from the Court, compelling the respondent Judge to cease and desist from enforcing and/or executing his
questioned Orders and directing him, pending determination of this case, to place petitioner in possession
of the properties subject of this
petition. 27

The following respondents filed, through their counsels, their Answers on various dates, as follows:
 Mayo Lacson — 14 September 1990 28
Rosario P. Mendoza — 18 September 1990 29
Jesus Gonzaga, et al.;
Emmanuel Año, et al. — 27 September 1990 30
Luis Gonzaga, et al. — 20 September 1990 31

All of them, except for Rosario P. Mendoza who informed the Court that she filed a motion to reconsider
the 18 July 1990 Order of respondent Judge and who agrees with petitioner that commissioners should
be appointed to determine the just compensation, 32 support and sustain the actions of respondent Judge and
pray for the dismissal of the petition.

Mayo Lacson, in submitting that the procedure prescribed in Rule 67 may be abbreviated provided that
the rights of the parties are duly protected, cites the case of City Government of Toledo vs. Fernandos, et
al. 33 wherein this Court sustained the judgment of the trial court on the basis of what transpired in the pre-trial
conference.

Complying with the Resolution of the 25 September 1990, petitioner filed on 6 November 1990 a Reply to
the Comment of respondent Mayo Lacson, 34 stressing therein that the case of City Government of Toledo City
vs. Fernandos, et al. 35 does not apply to the present case because a pre-trial was conducted in the former during
which the parties were able to present their respective positions on just compensation.

On 22 January 1991, this Court resolved to consider the respondents' Comments as Answers to the
petition, give due course to the petition and require the parties to file simultaneously their respective
Memoranda within twenty (20) days from notice, which petitioner complied with on 11 March
1991; 36 respondent Mendoza on 4 March 1991; 37 respondents Jesus Gonzaga, et al. and Emmanuel Año, et al. on
19 March 1991; 38 and Mayo Lacson on 5 April 1991. 39

We find merit in the petition.

Respondent Judge committed grave abuse of discretion amounting to lack of jurisdiction, and is otherwise
either unmindful or ignorant of the law: when he fixed the provisional values of the properties for the
purpose of issuing a writ of possession on the basis of the market value and the daily opportunity profit
petitioner may derive in violation or in disregard of P.D. No. 42; in amending such determination in Civil
Cases Nos. 5938 and 5939 by increasing the same without hearing; in directing the defendants to
manifest within twenty-four (24) hours whether or not they are accepting and withdrawing the amounts,
representing the provisional values, deposited by the plaintiff for each of them as "final and full
satisfaction of the value of their respective property (sic); " in declaring the provisional values as the final
values and directing the release of the amounts deposited, in full satisfaction thereof, to the defendants
even if not all of them made the manifestation; and in suspending the issuance of the writ of possession
until after the suspending the amounts shall have been released to and received by defendants.

In Municipality of Biñan vs. Hon. Jose Mar Garcia, et al., 40 this Court ruled that there are two (2) stages in
every action of expropriation:

The first is concerned with the determination of the authority of the plaintiff to exercise the
power of eminent domain and the propriety of its exercise in the context of the facts
involved in the suit. 41 It ends with an order, if not of dismissal of the action, "of condemnation
declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the
public use or purpose described in the complaint, upon the payment of just compensation to be
determined as of the date of the filing of the complaint." 42 An order of dismissal, if this be ordained,
would be a final one, of course, since it finally disposes of the action and leaves nothing more to be
done by the Court on the merits. 43 So, too, would an order of condemnation be a final one, for
thereafter as the Rules expressly state, in the proceedings before the Trial Court, "no objection to
the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard."
 The second phase of the eminent domain action is concerned with the determination by
the Court of the "just compensation for the property sought to be taken." This is done by
the Court with the assistance of not more than three (3) commissioners. 44 The order fixing
the just compensation on the basis of the evidence before, and findings of, the commissioners
would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more
to be done by the Court regarding the issue. . . .

However, upon the filing of the complaint or at any time thereafter, the petitioner has the right to take or
enter upon the possession of the property involved upon compliance with P.D. No. 42 which requires the
petitioner, after due notice to the defendant, to deposit with the Philippine National Bank in its main office
or any of its branches or agencies, "an amount equivalent to the assessed value of the property for
purposes of taxation." This assessed value is that indicated in the tax declaration.

P.D. No. 42 repealed the "provisions of Rule 67 of the Rules of Court and of any other existing law
contrary to or inconsistent" with it. Accordingly, it repealed Section 2 of Rule 67 insofar as the
determination of the provisional value, the form of payment and the agency with which the deposit shall
be made, are concerned. Said section reads in full as follows:

Sec. 2. Entry of plaintiff upon depositing value with National or Provisional Treasurer. —
Upon the filing of the complaint or at any time thereafter the plaintiff shall have the right to
take or enter upon the possession of the real or personal property involved if he deposits
with the National or Provincial Treasurer its value, as provisionally and promptly
ascertained and fixed by the court having jurisdiction of the proceedings, to be held by
such treasurer subject to the orders and final disposition of the court. Such deposit shall
be in money, unless in lieu thereof the court authorizes the deposit of a certificate of
deposit of a depository of the Republic of the Philippines payable on demand to the
National or Provincial Treasurer, as the case may be, in the amount directed by the court
to be deposited. After such deposit is made the court shall order the sheriff or other
proper officer to forthwith place the plaintiff in possession of the property involved.

It will be noted that under the aforequoted section, the court has the discretion to determine the
provisional value which must be deposited by the plaintiff to enable it "to take or enter upon the
possession of the property." Notice to the parties is not indispensable. In interpreting a similar provision of
Act No. 1592, this Court, in the 1915 case of Manila Railroad Company, et al. vs. Paredes, et al., 45 held:

. . . The statute directs that, at the very outset, "when condemnation proceedings are
brought by any railway corporation" the amount of the deposit is to be "provisionally and
promptly ascertained and fixed by the court." It is very clear that it was not the intention of
the legislator that before the order fixing the amount of the deposit could lawfully be
entered the court should finally and definitely determine who are the true owners of the
land; and after doing so, give them a hearing as to its value, and assess the true value of
the land accordingly. In effect, that would amount to a denial of the right of possession of
the lands involved until the conclusion of the proceedings, when there would no need for
the filing of the deposit. Of course, there is nothing in the statute which denies the right of
the judge to hear all persons claiming an interest in the land, and courts should ordinarily
give all such persons an opportunity to be heard if that be practicable, and will cause no
delay in the prompt and provisional ascertainment of the value of the land. But the scope
and extent of the inquiry is left wholly in the discretion of the court, and a failure to hear
the owners and claimants of the land, who may or may not be known at the time of the
entry of the order, in no wise effects the validity of the order. . . .

P.D. No. 42, however, effectively removes the discretion of the court in determining the provisional value.
What is to be deposited is an amount equivalent to the assessed value for taxation purpose. 46 No hearing
47
is required for that purpose. All that is needed is notice to the owner of the property sought to be condemned.
Clearly, therefore, respondent Judge either deliberately disregarded P.D. No. 42 or was totally unaware of
its existence and the cases applying the same.

In any event, petitioner deposited the provisional value fixed by the court. As a matter of right, it was
entitled to be placed in possession of the property involved in the complaints at once, pursuant to both
Section 2 of Rule 67 and P.D. No. 42. Respondent Court had the corresponding duty to order the sheriff
or any other proper officer to forthwith place the petitioner in such possession. Instead of complying with
the clear mandate of the law, respondent Judge chose to ignore and overlook it. Moreover, upon separate
motions for reconsideration filed by the defendants in Civil Cases Nos. 5938 and 5939, he issued a new
Order increasing the provisional values of the properties involved therein. No hearing was held on the
motions. As a matter of fact, as the records show, the motion for reconsideration filed by defendants
Jesus Gonzaga, et al. in Civil Case No. 5938 is dated 11 July 1990 48 while the Order granting both motions
was issued the next day, 12 July 1990. 49 The motion for reconsideration in Civil Case No. 5938 does not even
contain a notice of hearing. It is then a mere scrap of paper; it presents no question which merits the attention and
consideration of the court. It is not even a mere motion for it does not comply with the rules, more particularly
Sections 4 and 5, Rule 15 of the Rules of Court; the Clerk of Court then had no right to receive it. 50

There was, moreover, a much stronger reason why the respondent Court should not have issued the 12
July 1990 Order increasing the provisional values of the Gonzaga lots in Civil Cases Nos. 5938 and 5939.
After having fixed these provisional values, albeit erroneously, and upon deposit by petitioner of the said
amounts, respondent Judge lost, as was held in Manila Railroad Company vs. Paredes, 51 "plenary control
over the order fixing the amount of the deposit, and has no power to annul, amend or modify it in matters of
substance pending the course of the condemnation proceedings." The reason for this is that a contrary ruling would
defeat the very purpose of the law which is to provide a speedy and summary procedure whereby the peaceable
possession of the property subject of the expropriation proceedings "may be secured without the delays incident to
prolonged and vexatious litigation touching the ownership and value of such lands, which should not be permitted to
delay the progress of the work."

Compounding the above error and the capriciousness with which it was committed is respondent Judge's
refusal to place the petitioner in possession of the property or issue the writ of possession despite the fact
that the latter had likewise deposited the additional amount called for by the 12 July 1990 Order. Instead,
respondent Judge issued the 16 July 1990 Order directing the defendants to state in writing within twenty-
four (24) hours whether or not they would accept and withdraw the amounts deposited by the petitioner
for each of them " as final and full satisfaction of the value of their respective property (sic) affected by the
expropriation" and stating at the same time that the writ will be issued after such manifestation and
acceptance and receipt of the amounts.

The above Order has absolutely no legal basis even as it also unjustly, oppressively and capriciously
compels the petitioner to accept the respondent Judge's determination of the provisional value as the just
compensation after the defendants shall have manifested their conformity thereto. He thus subordinated
his own judgment to that of the defendants' because he made the latter the final authority to determine
such just compensation. This Court ruled in Export Processing Zone Authority vs. Dulay, et al. 52 that the
determination of just compensation in eminent domain cases is a judicial function; accordingly, We declared as
unconstitutional and void, for being, inter alia, impermissible encroachment on judicial prerogatives which tends to
render the Court inutile in a matter which, under the Constitution, is reserved to it for final determination, the method
of ascertaining just compensation prescribed in P.D. Nos. 76 464, 794 and 1533, to wit: the market value as declared
by the owner or administrator or such market value as determined by the assessor, whichever is lower in the first
three (3) decrees, and the value declared by the owner or administrator or anyone having legal interest in the
property or the value as determined by the assessor, pursuant to the Real Property Tax Code, whichever is lower,
prior to the recommendation or decision of the appropriate Government office to acquire the property, in the last
mentioned decree. If the legislature or the executive department cannot even impose upon the court how just
compensation should be determined, it would be far more objectionable and impermissible for respondent Judge to
grant the defendants in an eminent domain case such power and authority.

Without perhaps intending it to be so, there is not only a clear case of abdication of judicial prerogative,
but also a complete disregard by respondent Judge of the provisions of Rule 67 as to the procedure to be
followed after the petitioner has deposited the provisional value of the property. It must be recalled that
three (3) sets of defendants filed motions to dismiss 53
pursuant to Section 3, Rule 67 of the Rules of Court;
Section 4 of the same rule provides that the court must rule on them and in the event that it overrules the motions or,
when any party fails to present a defense as required in Section 3, it should enter an order of condemnation declaring
that the petitioner has a lawful right to take the property sought to be condemned.

As may be gleaned from the 25 June 1990 Order, the respondent Judge found that the petitioner has that
right and that "there will be a (sic) paramount public interest to be served by the expropriation of the
defendants' properties." Accordingly, considering that the parties submitted neither a compromise
agreement as to the just compensation nor a stipulation to dispense with the appointment of
commissioners and to leave the determination of just compensation to the court on the basis of certain
criteria, respondent Judge was duty bound to set in motion Section 5 of Rule 67; said section directs the
court to appoint not more than three (3) competent and disinterested persons as commissioners to
ascertain and report to it regarding the just compensation for the property sought to be taken. Such
commissioners shall perform their duties in the manner provided for in Section 6; upon the filing of their
report, the court may, after a period of ten (10) days which it must grant to the parties in order that the
latter may file their objections to such report, and after hearing pursuant to Section 8, accept and render
judgment in accordance therewith or, for cause shown, recommit the same to the commissioners for
further report of facts. The court may also set aside the report and appoint new commissioners, or it may
accept the report in part and reject it in part; and it may make such order or render such judgment as shall
secure to the petitioner the property essential to the exercise of its right of condemnation, and to the
defendant just compensation for the property so taken.

Not satisfied with the foregoing violations of law and insisting upon his own procedure, respondent Judge
declared in his Order of 18 July 1990 that the provisional amounts he fixed, later increased with respect to
the properties of the Gonzagas, shall be considered as the full payment of the value of the properties
after the defendants in Civil Cases Nos. 5938, 5939, 5940, 5942 and 5943 shall have filed their
manifestations; he also ruled that the writ of possession will be issued only after the latter shall have
received the said amounts. This Order and the records before this Court do not disclose that the
defendants in Civil Cases Nos. 5941 and 5944 filed any manifestation; yet, in the Order, respondent
Judge whimsically and arbitrarily considered the so-called provisional values fixed therein as the final
values. By such Order, the case was in fact terminated and the writ of execution then became a mere
incident of an execution of a judgment. The right of the petitioner to take or enter into possession of the
property upon the filing of the complaint granted by Section 2 of Rule 67 and P.D. No. 42 was totally
negated despite compliance with the deposit requirement under the latter law.

Nothing can justify the acts of respondent Judge. Either by design or sheer ignorance, he made a
mockery of the procedural law on eminent domain by concocting a procedure which he believes to be
correct. Judges must apply the law; they are not at liberty to legislate. As Canon 18 of the Canon of
Judicial Ethics provides:

A judge should be mindful that his duty his the application of general law to particular
instances, that ours is a government of law and not of men, and that he violates his duty
as a minister of justice under such a system if he seeks to do what he may personally
consider substantial justice in a particular case and disregards the general law as he
knows it to be binding on him. Such action may become a precedent unsettling accepted
principles and may have detrimental consequences beyond the immediate controversy.
He should administer his office with a due regard to the integrity of the system of the law
itself, remembering that he is not a depositary of arbitrary power, but a judge under the
sanction of law.

They must be reminded once more that "the demands of fair, impartial, and wise administration of justice
call for a faithful adherence to legal precepts on procedure which ensure to litigants the opportunity to
present their evidence and secure a ruling on all the issues presented in their respective pleadings.
"Short-cuts" in judicial processes are to be avoided where they impede rather than promote a judicious
disposition of justice." 54
We agree with the petitioner that the ruling in the case of City Government of Toledo City vs. Fernandos,
et al., 55does not apply to the instant petition because at the pre-trial conference held therein, the petitioner submitted
to the discretion of the court as to the correct valuation, private respondents stated that they have no objections and
are in conformity with the price of P30.00 per square meter as reasonable compensation for their land and the City
Assessor informed the court of the current market and appraisal values of the properties in the area and the factors to
be considered in the determination of such. The parties presented their documentary exhibits. In effect, therefore, the
parties themselves agreed to submit to a judicial determination on the matter of just compensation and that judgment
be rendered based thereon. In the instant case, no pre-trial was conducted; the proceedings were still at that state
where the provisional value was yet to be determined; and the parties made no agreement on just compensation.

WHEREFORE, the instant petition is GRANTED and the Orders of respondent Judge of 25 June 1990,
12 July 1990, 16 July 1990 and 18 July 1990 are hereby SET ASIDE and the temporary restraining order
issued by this Court on 31 July 1990 directing respondent Judge to cease and desist from enforcing the
questioned Orders is hereby made permanent.

The respondent Judge is hereby directed to fix the provisional values of the parcels of land in Civil Cases
Nos. 5938, 5939, 5940, 5941, 5942, 5943, and 5944 in accordance with P.D. No. 42; thereafter, the
petitioner may retain in Savings Account No. 249-505865-7 with the Philippine National Bank, NAPOCOR
Branch, Diliman, Quezon City, a sum equivalent to the provisional value as thus fixed, which the Bank
shall hold subject to the orders and final disposition of the court a quo, and withdraw the balance.

The respondent Judge is further directed to proceed with the above eminent domain cases without
unnecessary delay pursuant to the procedure laid down in Rule 67 of the Rules of Court.

Finally, respondent Judge is reminded to comply faithfully with the procedure provided for in the Rules of
Court. Let a copy of this Decision be appended to his record.

Costs against private respondents.

IT IS SO ORDERED.
G.R. No. L-2929 February 28, 1950

THE CITY OF MANILA, plaintiff-appellant,

vs.
THE ARRELANO LAW COLLEGES, INC., defendant-appellee.

City Fiscal Eugenio Angeles and Assistant City Fiscal Arsenio Nañawa for appellant.
Emmanuel Pelaez for appellee.

TUASON, J.:

Section 1 of Republic Act No. 267 provides:

Cities and municipalities are authorized to contract loans from the Reconstruction Finance
Corporation, the Philippine National Bank, and/or other entity or person at the rate of interest not
exceeding eight per cent annum for the purpose of purchasing or expropriating homesites within
their respective territorial jurisdiction and reselling them at cost to residents of the said cities and
municipalities.

The court below ruled that this provision empowers cities to purchase but not to expropriate lands for the
purpose of subdivision and resale, and so dismissed the present action, which seeks to condemn, for the
purpose just stated, several parcels of land having a combined area of 7,270 square meters and situated
on Legarda Street, City of Manila.

In the cases of Guido vs. Rural Progress Administration (G. R. No. L-2089)1 and Commonwealth of the
Philippines vs. De Borja (G. R. No. L-1496),2 we discussed at great length the extent of the Philippine
Government's power to condemn private property for resale. Among other things, we said:

It has been truly said that the assertion of the right on the part of the legislature to take the
property of one citizen and transfer it to another, even for a full compensation, when the public
interest is not promoted thereby, is claiming a despotic power, and one inconsistent with every
just principle and fundamental maxim of a free government. (29 C. J. S., 820.)

In a broad sense, expropriation of large estates, trusts in perpetuity, and land that embraces a
whole town, or large section of a town or city, bears direct relation to the public welfare. The size
of the land expropriated, the large number of people benefited, and the extent of social and
economic reform secured by the condemnation, clothes the expropriation with public interest and
public use. The expropriation in such cases tends to abolish economic slavery, feudalistic
practices, endless conflicts between landlords and tenants, and other evils inimical to community
prosperity and contentment and public peace and order. Although courts are not in agreement as
to the tests to applied in determining whether the use is public or not, some go so far in the
direction of a liberal construction as to hold that public use is synonymous with public benefit,
public utility, or public advantage, and to authorize the exercise of the power of eminent domain
to promote such public benefit, etc., especially where the interest involved are of considerable
magnitude. (29 C. J. S.; 823, 824; see also People of Puerto Rico vs. Eastern Sugar Associate et
al., 156 Fed. [2d], 316.) In some instances, slumsites have been acquired by condemnation. The
highest court of New York State has ruled that slum clearance and erection of houses for low-
income families were public purpose for which New York City Housing authorities could exercise
the power of condemnation. and this decision was followed by similar ones in other states. The
underlying reasons for these decisions are that the destruction of congested areas and unsanitary
dwellings diminished the potentialities of epidemics, crime and waste, prevents the spread of
crime and diseases to unaffected areas, enhances the physical and moral value of the
surrounding communities, and promote the safety and welfare of the public in general. (Murray et
al. vs. La Guardia, 52 N. e. [2d], 884; General Development Coop. vs. City of Detroit, 33 N. W.
 [2d], 919; Weizner vs. Stichman, 64 N. Y. S. [2d], 50.) But it will be noted that in all these cases
and of similar nature extensive areas were involved and numerous people and the general public
benefited by the action taken.

The condemnation of a small property in behalf of 10, 20 or 50 persons and their families does
not insure to the benefit of the public to a degree sufficient to give the use public character. The
expropriation proceedings at bar have been instituted for the economic relief of a few families
devoid of any consideration of public peace and order, or other public advantage. What is
proposed to be done is to take plaintiff's property, which for all we know she acquired by sweat
and sacrifices for her and her family's security, and sell it at cost to a few lessees who refuse to
pay the stipulated rent or leave the premises.

No fixed line of demarcation between what taking is for public use and what is not can made;
each case has to be judged according to its peculiar circumstances. It suffices to say for the
purpose of this decision that the case under consideration is far wanting in those elements which
make for public convenience or public use. It is patterned upon an ideology far removed from the
majority of the citizens of this country. If upheld, this case would open the gates to more
oppressive expropriations. If this expropriation be constitutional, we see no reason why a 10-, 15-
, or 25-hectare farm land might not be expropriated and subdivided, and sold to those who want
to own a portion of it. to make the analogy closer, we find no reason why the Rural Progress
Administration could not take by condemnation an urban lot containing and area of 1,000 or 2,000
square meters for subdivision into tiny lots for resale to its occupations or those who want to build
thereon.

We are inclined to believe that Act No. 267 empowers cities to expropriate as well as to purchase lands
for homesites. The word "expropriating," taken singly or with the text, is susceptible of only meaning. But
this power to expropriate is necessarily subject to the limitations and conditions noted in the decisions
above cited. The National Government may not confer its instrumentalities authority which itself may not
exercise. A stream can not run higher than its source.

Viewed from another angle, the case at bar is weaker for the condemnor. In the first place, the land that is
the subject of the present expropriation is only one-third of the land sought to be taken in the Guido case,
and about two-thirds of that involved in the Borja condemnation proceeding. In the second place, the
Arellano Colleges' land is situated in a highly commercial section of the city and is occupied by persons
who are not bona fide tenants. Lastly, this land was brought by the defendant for a university site to take
the place of rented buildings that are unsuitable for schools of higher learning.

To authorize the condemnation of any particular land by a grantee of the power of eminent domain, a
necessity must exist for the taking thereof for the proposed uses and purposes. (29 C. J. S., 884-885.) In
City of Manila vs. Manila Chinese Community (40 Phil., 349), this Court, citing American decision, laid
done this rule:

The very foundation of the right to exercise eminent domain is a genuine necessity, and that
necessity must be of a public character. The ascertainment of the necessity must precede or
accompany, and not follow, the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166
Ind., 511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72
Ohio St., 368.)

And this passage in Blackstone's Commentaries on the English Law is cited in that decision: "So great is
the regard of the law for private property that it will not authorize the least violation of it, even for the
public good, unless there exist a very great necessity thereof."

Perhaps modern decisions are not so exigent. Necessity within the rule that the particular property to be
expropriated must be necessary. does not mean an absolute but only a reasonable or practical necessity,
such as would combine the greatest benefit to the public with the least inconvenience and expense to the
condemning party and property owner consistent with such benefits. (29 C. J. S., 386.) But measured
even by this standard, and forgetting for a moment the private character of the intended use, necessity for
the condemnation has not been shown. The land in question has cost the owner P140,000. The people
for whose benefit the condemnation is being undertaken are so poor they could ill afford to meet this high
price, unless they intend to borrow the money with a view to disposing of the property later for a profits.
Cheaper lands not dedicated to a purpose so worthy as a school and more suited to the occupants' needs
and means, if really they only want to own their own homes, are plenty elsewhere. On the other hand, the
defendant not only has invested a considerable amount for its property but had the plans for construction
ready and would have completed the project a long time ago had it not been stopped by the city
authorities. And again, while a handful of people stand to profits by the expropriation, the development of
a university that has a present enrollment of 9,000 students would be sacrificed. Any good that would
accrue to the public from providing homes to a few families fades into insignificance in comparison with
the preparation of a young men and young women for useful citizenship and for service to the
government and the community, a task which the government alone is not in a position to undertake. As
the Rural Progress Administration, the national agency lands for resale as homesites and to which the
petition to purchase the land in question on behalf of the occupants was referred by the President, turning
down the occupants request after proper investigation, commented that "the necessity of the Arellano
Law College to acquire a permanent site of its own is imperative not only because denial of the same
would hamper the objectives of that educational institution, but it would likewise be taking a property
intended already for public benefit." The Mayor of the City of Manila himself confessed that he believes
the plaintiff is entitled to keep this land.

The order of the Court of First Instance of Manila is affirmed without costs.
G.R. No. L-15870 December 3, 1919

VISAYAN REFINING COMPANY, DEAN C. WORCESTER, and FRED A. LEAS, petitioners,

vs.
HON. MANUEL CAMUS, Judge of the Court of First Instance of the Province of Rizal and HON.
QUINTIN PAREDES, Attorney-General of the Philippine Islands, respondents.

Kincaid and Perkins for petitioners.

Assistant Attorney-General Reyes for respondents.

STREET, J.:

This is an original petition, directed to the Supreme Court, containing an alternative prayer for a writ
of certiorari or prohibition, as the facts may warrant, to stop certain condemnation proceedings instituted
by the Government of the Philippine Islands, and now pending in the Court of First Instance of the
Province of Rizal. The respondents have interposed what is called an answer, but which is in legal effect
merely a demurrer, challenging the sufficiency of the allegations of the petition. The matter having been
submitted upon oral argument, the cause is now before us for the decision of the question thus
presented.

It appears that upon September 13, 1919, the Governor-General directed the Attorney-General to cause
condemnation proceedings to be begun for the purpose of expropriating a tract of land of an area of about
1,100,463 square meters, commonly known as the site of Camp Tomas Claudio. Said land is located in
the municipality of Parañaque, Province of Rizal, and lies along the water front of Manila Bay, a few miles
south of the city of Manila. It is stated in communication of the Governor-General that the property in
question is desired by the Government of the Philippine Islands for military and aviation purposes.

In conformity with the instructions of the Governor-General, condemnation proceedings were begun by
the Attorney-General on September 15, 1919, by filing a complaint in the name of the Government of the
Philippine Islands in the Court of First Instance of the Province of Rizal. Numerous persons are named in
the complaint as defendants because of their supposed ownership of portions of the property intended to
be expropriated. In the list of persons thus impleaded appear the names of the three petitioners herein,
namely, the Visayan Refining Co., Dean C. Worcester, and Fred A. Leas, who are severally owners of
different portions of the property in question.

In the communication of the Governor-General, the Attorney-General was directed immediately upon
filing the complaint to ask the court to give the Government the possession of the land to be expropriated,
after the necessary deposit should be made as provided by law. Accordingly in the complaint itself the
Attorney-General prayed the court promptly and provisionally to fix the sum of P600,000 as the total value
of the property and to put the Government in immediate possession when said sum should be placed at
the disposition of the court. An order was accordingly made on September 15, 1919, by the Honorable
Judge Manuel Camus, of the Court of First Instance of the Province of Rizal, fixing the value of the
property provisionally at the amount stated and ordering that the plaintiff be placed in possession, it being
made to appear that a certificate of deposit for the amount stated had been delivered to the provincial
treasurer.

At this stage of the proceedings in the Court of First Instance the three respondents already mentioned, to
wit, the Visayan Refining Co., Dean C. Worcester, and Fred A. Leas, interposed a demurrer, questioning
the validity of the proceedings on the ground that there is no Act of the Philippine Legislature authorizing
the exercise of the power of eminent domain to acquire land for military or aviation purposes.

Contemporaneously with the filing of their demurrer, the same parties moved the Court of First Instance to
revoke its order of September 15, giving the plaintiff provisional possession. This motion is based
substantially on the same ground as the demurrer, that is, the lack of legislative authority for the proposed
expropriation, but it contains one additional allegation to the effect that the deposit in court of the sum of
P600,000, had been made without authority of law. In support of this contention it was shown, by means
of an informal communication from the Insular Auditor, that the money in question had been taken from
the unexpended balance of the funds appropriated by Acts Nos. 2748 and 2785 of the Philippine
Legislature for the use of the Militia Commission. This appropriation showed, upon the date said deposit
of P600,000 was made, an unexpended balance of P1,144,672.83.

On October 3, 1919, the Judge of the Court of First Instance overruled the demurrer interposed by the
three parties mentioned and denied their motion to vacate the order granting possession to the
Government. The present proceeding was thereupon instituted in this Court in the manner and for the
purpose already stated.

General authority to exercise the power of eminent domain is expressly conferred on the Government of
the Philippine Islands, as now constituted by section 63 of the Philippine Bill, which reads as follows:

That the Government of the Philippine Islands is hereby authorized, subject to the limitation and
conditions prescribed in this Act to acquire, receive, hold, maintain, and convey title to real and
personal property, and may acquire real estate for public uses by the exercise of the right of
eminent domain. (Act of Congress of July 1, 1902.)

Section 3 of the Jones Act contains the further provision that "private property shall not be taken for public
use without just compensation." In addition to this there is found in the same section the familiar
provision, already expressed in section 5 of the Philippine Bill, that no law shall be enacted which shall
deprive any person of property without due process of law, or deny any person the equal protection of the
laws. (Acts of Congress of August 29, 1916, sec. 3.)

Section 64 of the Administrative Code of the Philippine Islands (Act No. 2711) expressly confers on the
Government General the power, among others:

To determine when it is necessary or advantageous to exercise the right of eminent domain in

behalf of the Government of the Philippine Islands; and to direct the Attorney-General, where
such at is deemed advisable, to cause the condemnation proceedings to be begun in the court
having proper jurisdiction.

The procedural provisions relative to the conduct of expropriation proceedings are contained in section
241 to 253, inclusive, of the Code of Civil Procedure, supplemented as they are by various later Acts of
the Legislature. Among the salient features of the scheme of expropriation thus created are these: (1) If
the court is of the opinion that the right of expropriation exists, three commissioners are appointed to hear
the parties, view the premises, and assess the damages to be paid for the condemnation (sec. 243 Code
Civ. Proc.); (2) after hearing the evidence submitted by the parties and assessing the damages in the
manner prescribed by law (sec. 244), the commissioners make their report to the court, setting forth all
their proceedings; and it is expressly declared that "none of their proceedings shall be effectual to bind
the property or the parties until the court shall have accepted their report and rendered judgment in
accordance with its recommendations" (sec. 245); (3) the court then acts upon the report, accepting the
same in whole or in part, or rejecting, recommitting, or setting aside the same, as it sees fit (sec. 246).

It is further declared in section 246 that —

The court . . . may make such final order and judgment as shall secure to the plaintiff the property
essential to the exercise of his rights under the law, and to the defendant just compensation for
the land so taken; and the judgment shall require payment of the sum awarded as provided in the
next section (i.e., sec. 247) before the plaintiff can enter upon the ground and appropriate it to the
public use.
Sections 247 and 251 of the same Code are of sufficient importance in this connection to warrant
quotation in their entirety. They are as follows:

SEC. 247. Rights of Plaintiff After the Judgment. — Upon payment by the plaintiff to the
defendant of compensation as fixed by the judgment, or after tender to him of the amount so fixed
and payment of the costs, the plaintiffs shall have the right to enter in and upon the land so
condemned, to appropriate the same to the public use defined in the judgment. In case the
defendant and his attorney absent themselves from the court or decline to receive the same,
payment may be made to the clerk of the court for him, and such officer shall be responsible on
his bond therefor and shall be compelled to receive it."

SEC. 251. Final Judgment, Its Record and Effect. — The record of the final judgment in such
action shall state definitely, by meters and bounds and adequate description, the particular land
or interest in land condemned to the public use, and the nature of the public use. A certified copy
of the record of the judgment shall be recorded in the office of the registrar of deeds for the
province in which the estate is situated, and its effect shall be to vest in the plaintiff for the public
use stated the land and estate so described.

The provisions which deal with the giving of immediate possession when the Government of the
Philippine Islands is the plaintiff are found in Act No. 2826, which is in part as follows:

SEC. 2. When condemnation proceedings are instituted by or in favor of the Insular Government .
. . in any competent court of the Philippines, the plaintiff shall be entitled to enter immediately
upon the land covered by such proceedings, after depositing with the provincial treasurer the
value of said land in cash, as previously and promptly determined and fixed by the competent
court, which money the provincial treasurer shall retain subject to the order and final decision of
the court: Provided, however, That the court may permit that in lieu of cash, there may be
deposited with the provincial treasurer a certificate of deposit of any depository of the
Government of the Philippine Islands, payable to the provincial treasurer on sight, for the sum
ordered deposited by the court. The certificate and the sums represented by it shall be subject to
the order and final decision of the court, and the court shall have authority to place said plaintiff in
possession of the land, upon such deposit being made, by the proper orders and a mandate, if
necessary.

SEC. 3. . . . Upon the payment by the plaintiff to the defendants of the compensation awarded by
the sentence, or after the tender of said sum to the defendants, and the payment of the costs, or
in case the court orders the price to be paid into court, the plaintiff shall be entitled to appropriate
the land so condemned to the public use specified in the sentence. In case payment is made to
the court, the clerk of the same shall be liable on his bond for the sum so paid and shall be
obliged to receive the same.

In connection with the foregoing provisions found in laws enact under the American regime is to be
considered the following provision of the Civil Code:

ART. 349. No one may be deprived of his property unless it be by competent authority for some
purpose of proven public utility and after payment of the proper compensation.

Unless this requisite has been complied with, it shall be the duty of the court to protect the owner
of such property in its possession or to restore its possession to him, as the case may be.

Taken together the laws mentioned supply a very complete scheme of judicial expropriation, deducing the
authority from its ultimate source in sovereignty, providing in detail for the manner of its exercise, and
making the right of the expropriator finally dependent upon payment of the amount awarded by the court.
As has already been indicated the petition before us proceeds on the idea that the expropriation
proceedings in question cannot be maintained by the Philippine Government in the absence of a statute
authorizing the exercise of the power of eminent domain for military and aviation purposes; and while it is
not urged that a special legislative Act must be passed every time any particular parcel of property is to
be expropriated, it is
claimed — and this really amounts to the same thing — that the Government cannot institute and
prosecute expropriation proceedings unless there is already in existence a legislative appropriation
especially destined to pay for the land to be taken.

We are of the opinion that the contentions of the petitioners, in whatever way they may be understood or
expressed, are not well founded. There is one point at least on which all must agree, namely, that if land
can be taken by the Government for a public use at all, the use intended to be made of the land now in
question, that is, for military and aviation purposes, is a public use. It is undeniable that a military
establishment is essential to the maintenance of organized society, and the courts will take judicial notice
of the recent progress of the military and naval arts resulting from the development of aeronautics.

The question as to the abstract authority of the Government to maintain expropriation proceedings upon
the initiative of the Governor-General should not be confused with that which has reference to the
necessity for a legislative appropriation. They really involve different problems and will be separately
considered.

Upon the first, we are of the opinion that in this jurisdiction at least expropriation proceedings may be
maintained upon the exclusive initiative of the Governor-General, without the aid of any special legislative
authority other than that already on the statute books. Furthermore, if the Government complies with the
requirements of law relative to the making of a deposit in court, provisional possession of the property
may be at once given to it, just as is permitted in the case of any other person or entity authorized by law
to exercise the power eminent domain. Special legislative authority for the buying of a piece of land by the
Government is no more necessary than for buying a paper of pain; and in the case of a forced taking of
property against the will of the owner, all that can be required of the government is that should be able to
comply with the conditions laid down by law as and when those conditions arise.

The contention that the authority to maintain such a proceeding cannot be delegated by the Legislature to
the Chief Executive, is in our opinion wholly erroneous and apparently has its basis in a misconception of
fundamentals. It is recognized by all writers that the power of eminent domain is inseparable from
sovereignty being essential to the existence of the State and inherent in government even in its most
primitive forms. Philosophers and legists may differ as to the grounds upon which the exercise of this high
power is to be justified, but no one can question its existence. No law, therefore, is ever necessary to
confer this right upon sovereignty or upon any government exercising sovereign or quasi-sovereign
powers.

As is well said by the author of the article on Eminent Domain in the encyclopædic treaties Ruling Case
Law.

The power of eminent domain does not depend for its existence on a specific grant in the
constitution. It is inherent in sovereignty and exists in a sovereign state without any recognition of
it in the constitution. The provisions found in most of the state constitutions relating to the taking
of property for the public use do not by implication grant the power to the government of the state,
but limit a power which would otherwise be without limit. (10, R. C. L., pp. 11, 12.)

In other words, the provisions now generally found in the modern laws of constitutions of civilized
countries to the effect that private property shall not be taken for public use without compensation have
their origin in the recognition of a necessity for restraining the sovereign and protecting the individual.
Moreover, as will be at once apparent, the performance of the administrative acts necessary to the
exercise of the power of eminent domain in behalf of the state is lodged by tradition in the Sovereign or
other Chief Executive. Therefore, when the Philippine Legislature declared in section 64 of the
Administrative Code, that the Governor-General, who exercises supreme executive power in these
Islands (sec. 21, Jones Act), should be the person to direct the initiation of expropriation proceedings, it
placed the authority exactly where one would expect to find it, and we can conceive of no ground upon
which the efficacy of the statute can reasonably be questioned.

We would not of course pretend that, under our modern system of Government, in which the Legislature
plays so important a role, the executive department could, without the authority of some statute, proceed
to condemn property for its own uses; because the traditional prerogatives of the sovereign are not often
recognized nowadays as a valid source of power, at least in countries organized under republican forms
of government. Nevertheless it may be observed that the real check which the modern Legislature exerts
over the Executive Department, in such a matter as this, lies not so much in the extinction of the
prerogative as in the fact the hands of the Executive can always be paralyzed by lack of money —
something which is ordinarily supplied only by the Legislature.

At any rate the conclusion is irresistible that where the Legislature has expressly conferred the authority
to maintain expropriation proceedings upon the Chief Executive, the right of the latter to proceed therein
is clear. As is said by the author of the article from which we have already quoted, "Once authority is
given to exercise the power of eminent domain, the matter ceases to be wholly legislative. The executive
authorities may then decide whether the power will be invoked and to what extent." (10 R. C. L., p. 14.)

The power of eminent domain, with respect to the conditions under which the property is taken, must of
course be exercised in subjection to all the restraints imposed by constitutional or organic law. The two
provisions by which the exercise of this power is chiefly limited in this jurisdiction are found in the third
section of the Jones Act, already mentioned, which among other things declares (1) that no law shall be
enacted which shall deprive any person of property without due process of law and (2) that private
property shall not be taken for public use without just compensation. The latter of these provisions is
directly aimed at the taking of property under the exercise of the power of eminent domain; and as this
requirement, in connection with the statutes enacted to make sure the payment of compensation, usually
affords all the protection that the owner of property can claim, it results that the due process clause is
rarely invoked by the owner in expropriation proceedings.

Nevertheless it should be noted that the whole problem of expropriation is resolvable in its ultimate
analysis into a constitutional question of due process of law. The specific provisions that just
compensation shall be made is merely in the nature of a superadded requirement to be taken into
account by the Legislature in prescribing the method of expropriation. Even were there no organic or
constitutional provision in force requiring compensation to be paid, the seizure of one's property without
payment, even though intended for a public use, would undoubtedly be held to be a taking without due
process of law and a denial of the equal protection of the laws.

This point is not merely an academic one, as might superficially seem. On the contrary it has a practical
bearing on the problem before us, which may be expressed by saying that, if the Legislature has
prescribed a method of expropriation which provides for the payment of just compensation and such
method is so conceived and adapted as to fulfill the constitutional requisite of due process of law, any
proceeding conducted in conformity with that method must be valid. l awphi1.net

These considerations are especially important to be borne in mind in connection with the second
contention made by counsel for the petitioners, namely, that land cannot be expropriated by the
Government in the absence of a legislative appropriation especially destined to pay for the land to be
taken. To this question we now address ourselves; and while we bear in mind the cardinal fact that just
compensation must be made, the further fact must not be overlooked that there is no organic or
constitutional provision in force in these lands Islands requiring that compensation shall actually be paid
prior to the judgment of condemnation.
If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute
assurance that no piece of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid. It is true that in rare instances the proceedings may be voluntarily abandoned
before the expropriation is complete or the proceedings may fail because the expropriator becomes
insolvent, in either of which cases the owner retains the property; and if possession has been prematurely
obtained by the plaintiff in the proceedings, it must be restored. It will be noted that the title does not
actually pass to the expropriator until a certified copy of the record of the judgment is recorded in the
office of the register of deeds (sec. 251, Code Civ. Proc.). Before this stage of the proceedings is reached
the compensation is supposed to have been paid; and the court is plainly directed to make such final
order and judgment as shall secure to the defendant just compensation for the land taken. (Sec. 246,
Code Civ. Proc.). Furthermore, the right of the expropriator is finally made dependent absolutely upon the
payment of compensation by him. (Sec. 3, Act No. 2826; sec. 247, Code Civ. Proc.).

It will be observed that the scheme of expropriation exemplified in our statutes does not primarily
contemplate the giving of a personal judgment for the amount of the award against the expropriator; the
idea is rather to protect the owner by requiring payment as a condition precedent to the acquisition of the
property by the other party. The power of the court to enter a judgment for the money and to issue
execution thereon against the plaintiff is, however, unquestioned; and the court can without doubt
proceed in either way. But whatever course be pursued the owner is completely protected from the
possibility of losing his property without compensation.

When the Government is plaintiff the judgment will naturally take the form of an order merely requiring the
payment of the award as a condition precedent to the transfer of the title, as a personal judgment against
the Government could not be realized upon execution. It is presumed that by appearing as plaintiff in
condemnation proceedings, the Government submits itself to the jurisdiction of the court and
thereby waives its immunity from suit. As a consequence it would be theoretically subject to the same
liability as any other expropriator. Nevertheless, the entering of a personal judgment against it would be
an unnecessary, as well as profitless formality.

In the face of the elaborate safeguards provided in our procedure, it is frivolous to speculate upon the
possibility that the Legislature may finally refuse to appropriate any additional amount, over and above
the provisional deposit, that may be necessary to pay the award. That it may do. But the Government can
not keep the land and dishonor the judgment. Moreover, in the eventuality that the expropriation shall not
be consummated, the owners will be protected by the deposit from any danger of loss resulting from the
temporary occupation of the land by the Government; for it is obvious that this preliminary deposit serves
the double purpose of a prepayment upon the value of the property, if finally expropriated and as an
indemnity against damage in the eventuality that the proceedings should fail of consummation.

It appears that the money represented by the certificate of deposit which was placed at the disposal of the
lower court, pursuant to the requirements of section 2 of Act No. 2826, was taken from certain
appropriations under the control of the Militia Commission, a body created by section 29 of Act No. 2715,
for the purpose, among others, of advising the Governor-General upon measures relative to the
organization equipment, and government of the National Guard and reserve militia. Counsel for the
petitioners say that money appropriated for the purpose of the Militia Commission cannot be lawfully used
to acquire the land which is now the subject of expropriation, because no authority for the exercise of the
power of eminent domain is to be found in any of the Acts appropriating money for said Commission; from
whence it is argued that the certificate of deposit affords no protection to the owners of property.

The point appears to be one of little general importance, and we will not multiply words over it. Suffice it to
say that in our opinion the Insular Auditor was acting within his authority when he let this money out of the
Insular Treasury; and being now within the control of the lower court, it will doubtless in due time be
applied to the purpose for which the deposit was made.
From the foregoing discussion it is apparent that the action taken by the lower court in the condemnation
proceedings aforesaid was in all respects regular and within the jurisdiction of the court. The writ prayed
for in the petition before us, therefore, can not be issued. The application is accordingly denied, with costs
against the petitioners.
G.R. No. 69260 December 22, 1989

MUNICIPALITY OF BIÑAN, petitioner,

vs.
HON. JOSE MAR GARCIA, Judge of the Regional Trial Court at Biñan, Laguna (BRANCH XXXIV,
Region IV), and ERLINDA FRANCISCO, respondents.

The Provincial Fiscal for petitioner.

Roman M. Alonte for private respondent.

NARVASA, J.:

Three (3) questions are resolved in the action of certiorari at bar. The first is whether the special civil
action of eminent domain under Rule 67 of the Rules of Court is a case "wherein multiple appeals are
allowed, 1 as regards which 'the period of appeal shall be thirty [30] days, 2 instead of fifteen (15) days. 3 The second
is whether or not the Trial Court may treat the motion to dismiss" filed by one of the defendants in the action of
eminent domain as a "motion to dismiss" under Rule 16 of the Rules of Court, reverse the sequence of trial in order
and hear and determine said motion to dismiss, and thereafter dismiss the expropriation suit as against the movant.
And the third is whether or not a "locational clearance issued by the Human Settlements Regulatory Commission
relative to use of land is a bar to an expropriation suit involving that land.

The expropriation suit involved in this certiorari proceeding was commenced by complaint of the
Municipality of Biñan, Laguna 4 filed in the Regional Trial Court of Laguna and City of San Pablo, presided over by
respondent Judge Jose Mar Garcia. The complaint named as defendants the owners of eleven (11) adjacent parcels
of land in Biñan with an aggregate area of about eleven and a half (11-1/2) hectares. The land sought to be
expropriated was intended for use as the new site of a modern public market and the acquisition was authorized by a
resolution of the Sangguniang Bayan of Biñan approved on April 11, 1983.

One of the defendants was Erlinda Francisco. She filed a "Motion to Dismiss" dated August 26, 1983, on
the following grounds; (a) the allegations of the complaint are vague and conjectural; (b) the complaint
violates the constitutional limitations of law and jurisprudence on eminent domain; (c) it is oppressive; (d)
it is barred by prior decision and disposition on the subject matter; and (e) it states no cause of
action. 5 Now, her motion to dismiss" was filed pursuant to Section 3, Rule 67 of the Rules of Court:

Sec. 3. Defenses and objections within the time specified in the summons, each
defendant, in lieu of an answer, shall present in a single motion to dismiss or for other
apppropriate relief, all of his objections and defenses to the right of the plaintiff to take his
property for the use or purpose specified in the complaint. All such objections and
defenses not so presented are waived. A copy of the motion shall be served on the
plaintiffs attorney of record and filed with the court with the proof of service.

Her "motion to dismiss" was thus actually a pleading, taking the place of an answer in an ordinary civil
action; 6 it was not an ordinary motion governed by Rule 15, or a "motion to dismiss" within the contemplation of Rule
16 of the Rules of Court.

On October 23, 1983, respondent Judge issued a writ of possession in favor of the plaintiff Municipality.

On February 3, 1984, Erlinda Francisco filed a "Motion for Separate Trial," invoking Section 2, Rule
31. 7 She alleged that there had already been no little delay in bringing all the defendants within the court's
jurisdiction, and some of the defendants seemed "nonchalant or without special interest in the case" if not mere "free
riders;" and "while the cause of action and defenses are basically the same;" she had, among other defenses, "a
constitutional defense of vested right via a pre-existing approved Locational Clearance from the H.S.R.C." 8 Until this
clearance was revoked, Francisco contended, or the Municipality had submitted and obtained approval of a "rezoning
of the lots in question," it was premature for it to "file a case for expropriation. 9 The Court granted the motion. By
Order dated March 2, 1984, it directed that a separate trial be held for defendant Erlinda Francisco regarding her
special defenses mentioned in her .. Motion for Separate Trial and in her Motion to Dismiss, distinct from and
separate from the defenses commonly raised by all the defendants in their respective motions to dismiss."

At the separate trial, the Fiscal, in representation of the Municipality called the Trial Court's attention to
the irregularity of allowing Francisco to present her evidence ahead of the plaintiff, "putting the cart before
the horse, as it were." He argued that the motion to dismiss was in truth an answer, citing Rural Progress
Administration v. Judge de Guzman, and its filing did "not mean that the order of presentation of evidence
will be reversed," but the usual procedure should be followed; and the evidence adduced should be
deemed "evidence only for the motion for reconsideration of the writ of possession." 10

Nevertheless, at the hearing of March 5, and March 26, 1984, the Court directed Francisco to commence
the presentation of evidence. Francisco presented the testimony of Atty. Josue L. Jorvina, Jr. and certain
exhibits the Land Use Map of the Municipality of Biñan, the Locational Clearance and Development
Permit issued by the H.S.R.C. in favor of "Erlinda Francisco c/o Ferlins Realty & Development
Corporation, and Executive Order No. 648 and Letter of Instruction No. 729, etc. Thereafter, the
respondent Judge issued an Order dated July 24, 1984 dismissing the complaint "as against defendant
ERLINDA FRANCISCO," and amending the Writ of Possession dated October 18, 1983 so as to "exclude
therefrom and from its force and effects said defendant .. and her property ..." His Honor found that-

1) a Locational Clearance had been issued on May 4,1983 by the

Human Settlements Regulatory Commission to the "Ferlin's Realty ..
owned by defendant Erlinda Francisco to convert .. (her) lot to a
commercial complex;"

2) according to the testimony of Atty. Jorvina of the H.S.R.C., a grantee

of a locational clearance acquires a vested right over the subject
property in the sense that .. said property may not be subject of an
application for locational clearance by another applicant while said
locational clearance is subsisting;"

3) such a clearance should be "considered as a decision and disposition

of private property co-equal with or in parity with a disposition of private
property through eminent domain;

4) the clearance was therefore "a legal bar against the right of plaintiff
Municipality .. to expropriate the said property."

The Municipality filed on August 17, 1984 a Motion for Reconsideration. Therein it (a) reiterated its
contention respecting the irregularity of the reversal of the order of trial, supra. 11 (b) decried the act of the
Court in considering the case submitted for decision after the presentation of evidence by Francisco without setting
the case for further hearing for the reception of the plaintiffs own proofs, (c) pointed out that as admitted by Atty.
Jorvina, the locational clearance did not "mean that other persons are already prevented from filing locational
clearance for the same project, and so could not be considered a bar to expropriation, (d) argued that the locational
clearance issued on May 4, 1983, became a "worthless sheet of paper" one year later, on May 4, 1984 in accordance
with the explicit condition in the clearance that it "shall be considered automatically revoked if not used within a period
of one (1) year from date of issue," the required municipal permits to put up the commercial complex never having
been obtained by Francisco; and (e) alleged that all legal requirements for the expropriation of the property had been
duly complied with by the Municipality. 12

The Municipality set its motion for reconsideration for hearing on August 28, 1984 after furnishing
Francisco's counsel with copy thereof The Court however re-scheduled the hearing more than two (2)
months later, on November 20, 1984. 13 Why the hearing was reset to such a remote date is not explained.
On September 13, 1984, Francisco filed an "Ex-Parte Motion for Execution and/or Finality of Order,"
contending that the Order of July 27, 1984 had become "final and executory on August 12, 1984" for
failure of the Municipality to file a motion for reconsideration and/or appeal within the reglementary
period," 14 i.e "fifteen (15) days counted from the notice of the final order .. appealed from. 15

On October 10, 1984, the Court issued an Order declaring the Municipality's motion for reconsideration
dated August 15, 1984 to have been "filed out of time," on account of which the Court 49 could not give
due course to and/or act x x (thereon) except to dismiss (as it did thereby dismiss) the same." 16 It drew
attention to the fact that notice of its Order of July 24, 1984 (dismissing the complaint as against Francisco) was
served on plaintiff Municipality on July 27, 1984, but its motion for reconsideration was not presented until August 17,
1984, beyond the fifteen-day period for appeal prescribed by law. And on October 15, 1985, His Honor promulgated
another Order directing the issuance of (1) a writ of execution of the Order of July 24, 1984, and (2) a "certificate of
finality" of said order. 17

The Municipality attempted to have the respondent Court reconsider both and Orders of October 10, and
October 15, 1984. To this end it submitted a motion contending that: 18

1) "multiple appeals are allowed by law" in actions of eminent domain,

and hence the period of appeal is thirty (30), not fifteen (15) days;

2) moreover, the grant of a separate trial at Francisco's instance had

given rise "ipso facto to a situation where multiple appeals became
available (Sections 4 and 5, Rule 36, .. Santos v. Pecson, 79 Phil. 261);"

3) it was wrong for the Trial Court to have acted exparte on the motion
for execution, the motion being "litigable in character;" and

4) it (the Municipality) was denied due process when the Court, after
receiving Francisco's evidence and admitting her exhibits, immediately
resolved the case on the merits as regards Francisco, without setting the
case "for further hearing for reception of evidence for the plaintiff."

The motion was denied, by Order dated October 18, 1984; hence, the special civil action of certiorari at
bar.

1. There are two (2) stages in every action of expropriation. The first is concerned with
the determination of the authority of the plaintiff to exercise the power of eminent domain
and the propriety of its exercise in the context of the facts involved in the suit. 19 It ends
with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a
lawful right to take the property sought to be condemned, for the public use or purpose described in
the complaint, upon the payment of just compensation to be determined as of the date of the filing
of the complaint." 20 An order of dismissal, if this be ordained, would be a final one, of course, since
it finally disposes of the action and leaves nothing more to be done by the Court on the
Merits. 21 So, too, would an order of condemnation be a final one, for thereafter, as the Rules
expressly state, in the proceedings before the Trial Court, "no objection to the exercise of the right
of condemnation (or the propriety thereof) shall be flied or heard. 22

The second phase of the eminent domain action is concerned with the determination by the Court of "the
just compensation for the property sought to be taken." This is done by the Court with the assistance of
not more than three (3) commissioners. 23 The order fixing the just compensation on the basis of the evidence
before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit,
and leave nothing more to be done by the Court regarding the issue. Obviously, one or another of the parties may
believe the order to be erroneous in its appreciation of the evidence or findings of fact or otherwise. Obviously, too,
such a dissatisfied party may seek reversal of the order by taking an appeal therefrom.
A similar two-phase feature is found in the special civil action of partition and accounting under Rule 69 of
the Rules of Court. 24

The first phase of a partition and/or accounting suit is taken up with the determination of whether or not a
co-ownership in fact exists, and a partition is proper (i.e., not otherwise legally prescribed) and may be
made by voluntary agreement of all the parties interested in the property. 25 This phase may end with a
declaration that plaintiff is not entitled to have a partition either because a co-ownership does not exist, or partition is
legally prohibited. 26 It may end, on the other hand, with an adjudgment that a co-ownership does in truth exist,
partition is proper in the premises and an accounting of rents and profits received by the defendant from the real
estate in question is in order. 27 In the latter case, "the parties may, ff they are able to agree, make partition among
themselves by proper instruments of conveyance, and the court shall confirm the partition so agreed upon. 28, In
either case i.e. either the action is dismissed or partition and/or accounting is decreed the order is a final one, and
may be appealed by any party aggrieved thereby. 29

The second phase commences when it appears that "the parties are unable to agree upon the partition"
directed by the court. In that event partition shall be done for the parties by the Court with the assistance
of not more than three (3) commissioners. 30 This second stage may well also deal with the rendition of the
accounting itself and its approval by the Court after the parties have been accorded opportunity to be heard thereon,
and an award for the recovery by the party or parties thereto entitled of their just share in the rents and profits of the
real estate in question." 31 Such an order is, to be sure, final and appealable.

Now, this Court has settled the question of the finality and appealability of a decision or order decreeing
partition or recovery of property and/or accounting. In Miranda v. Court of Appeals, decided on June 18,
1986,32 the Court resolved the question affirmatively, and expressly revoked the ruling in Zaldarriaga v.
Enriquez 33 -that a decision or order of partition is not final because it leaves something more to be done in the trial
court for the complete disposition of the case, i.e, the appointment of commissioners, the proceedings for the
determination by said commissioners of just compensation, the submission of their reports, and hearing thereon, and
the approval of the partition-and in Fuentebella vs. Carrascoso 34 -that a judgement for recovery of property with
account is not final, but merely interlocutory and hence not appealable until the accounting is made and passed upon.
As pointed out in Miranda, imperative considerations of public policy, of sound practice and adherence to the
constitutional mandate of simplified, just, speedy and inexpensive determination of every action require that
judgments for recovery (or partition) of property with accounting be considered as final judgments, duly appealable.
This, notwithstanding that further proceedings will still have to be rendered by the party required to do so, it will be
ventilated and discussed by the parties, and will eventually be passed upon by the Court. It is of course entirely
possible that the Court disposition may not sit well with either the party in whose favor the accounting is made, or the
party rendering it. In either case, the Court's adjudication on the accounting is without doubt a final one, for it would
finally terminate the proceedings thereon and leave nothing more to be done by the Court on the merits of the issue.
And it goes without saying that any party feeling aggrieved by that ultimate action of the Court on the accounting may
seek reversal or modification thereof by the Court of Appeals or the Supreme Court. 35

The Miranda doctrine was reiterated in de Guzman v. C.A.- 36 Valdez v. Bagaso; 37 Lagunzad v.
Gonzales; 38 Cease v. C.A., 39 Macadangdang v. C.A. 40 and Hernandez v. C.A., 41 Gabor v. C.A. 42 Fabrica v. C.A . 43

No reason presents itself for different disposition as regards cases of eminent domain. On the contrary,
the close analogy between the special actions of eminent domain and partition already pointed out,
argues for the application of the same rule to both proceedings.

The Court therefore holds that in actions of eminent domain, as in actions for partition, since no less than
two (2) appeals are allowed by law, the period for appeal from an order of condemnation 44 is thirty (30)
days counted from notice of order and not the ordinary period of fifteen (15) days prescribed for actions in general,
conformably with the provision of Section 39 of Batas Pambansa Bilang 129, in relation to paragraph 19 (b) of the
Implementing Rules to the effect that in "appeals in special proceedings in accordance with Rule 109 of the Rules of
Court and other cases wherein multiple appeals are allowed, the period of appeal shall be thirty (30) days, a record of
appeal being required. 45
The municipality's motion for reconsideration filed on August 17, 1984 was therefore timely presented,
well within the thirty-day period laid down by law therefor; and it was error for the Trial Court to have ruled
otherwise and to have declared that the order sought to be considered had become final and executory.

2. As already observed, the Municipality's complaint for expropriation impleaded eleven

(11) defendants. A separate trial was held on motion of one of them, Erlinda
Francisco, 46 it appearing that she had asserted a defense personal and peculiar to her, and
inapplicable to the other defendants, supra. Subsequently, and on the basis of the evidence
presented by her, the Trial Court promulgated a separate Order dismissing the action as to her, in
accordance with Section 4, Rule 36 of the Rules of Court reading as follows:

Sec. 4. Several judgments in an action against several defendants, the court may, when
a several judgment is proper, render judgment against one or more of them, leaving the
action to proceed against the others.

It is now claimed by the Municipality that the issuance of such a separate, final order or judgment had
given rise "ipso facto to a situation where multiple appeals became available." The Municipality is right.

In the case at bar, where a single complaint was filed against several defendants having individual,
separate interests, and a separate trial was held relative to one of said defendants after which a final
order or judgment was rendered on the merits of the plaintiff s claim against that particular defendant, it is
obvious that in the event of an appeal from that separate judgment, the original record cannot and should
not be sent up to the appellate tribunal. The record will have to stay with the trial court because it will still
try the case as regards the other defendants. As the rule above quoted settles, "In an action against
several defendants, the court may, when a several judgment is proper, render judgment against one or
more of them, leaving the action to proceed against the others. " 47 In lieu of the original record, a record on
appeal will perforce have to be prepared and transmitted to the appellate court. More than one appeal being
permitted in this case, therefore, "the period of appeal shall be thirty (30) days, a record of appeal being required as
provided by the Implementing Rules in relation to Section 39 of B.P. Blg. 129, supra. 48

3. Erlinda Francisco filed a "motion to dismiss" intraverse of the averments of the

Municipality's complaint for expropriation. That "motion to dismiss" was in fact the
indicated responsive pleading to the complaint, "in lieu of an answer." 49

Now, the Trial Court conducted a separate trial to determine whether or not, as alleged by Francisco in
her "motion to dismiss," she had a "vested right via a pre-existing approved Locational Clearance from
the HRSC.," making the expropriation suit premature. 50 While such a separate trial was not improper in the
premises, 51 and was not put at issue by the Municipality, the latter did protest against the Trial Court's (a) reversing
the order of trial and receiving first, the evidence of defendant Francisco, and (b) subsequently rendering its order
sustaining Francisco's defense and dismissing the action as to her, solely on the basis of said Francisco's evidence
and without giving the plaintiff an opportunity to present its own evidence on the issue. The Trial Court was clearly
wrong on both counts. The Court will have to sustain the Municipality on these points.

Nothing in the record reveals any valid cause to reverse the order of trial. What the Trial Court might have
had in mind was the provision of Section 5, Rule 16 of the Rules of Court allowing "any of the grounds for
dismissal" in Rule 16 to "be pleaded as an affirmative defense and authorizing the holding of a
"preliminary hearing .. thereon as if a motion to dismiss had been filed." Assuming this to be the fact, the
reception of Francisco's evidence first was wrong, because obviously, her asserted objection or defense
that the locational clearance issued in her favor by the HSRC was a legal bar to the expropriation suit was
not a ground for dismissal under Rule 16. She evidently meant to prove the Municipality's lack of cause of
action; but lack of cause of action is not a ground for dismissal of an action under Rule 16; the ground is
the failure of the complaint to state a cause of action, which is obviously not the same as plaintiff's not
having a cause of action.
Nothing in the record, moreover, discloses any circumstances from which a waiver by the Municipality of
the right to present contrary proofs may be inferred. So, in deciding the issue without according the
Municipality that right to present contrary evidence, the Trial Court had effectively denied the Municipality
due process and thus incurred in another reversible error.

4. Turning now to the locational clearance issued by the HSRC in Francisco's favor on
May 4, 1983, it seems evident that said clearance did become a "worthless sheet of
paper," as averred by the Municipality, upon the lapse of one (1) year from said date in
light of the explicit condition in the clearance that it 44 shall be considered automatically
revoked if not used within a period of one (1) year from date of issue," and the unrebutted
fact that Francisco had not really made use of it within that period. The failure of the
Court to consider these facts, despite its attention having been drawn to them, is yet
another error which must be corrected.

WHEREFORE, the challenged Order issued by His Honor on July 24,1984 in Civil Case No. 8-1960 is
ANNULLED AND SET ASIDE, and the case is remanded to the Trial Court for the reception of the
evidence of the plaintiff Municipality of Biñan as against defendant Erlinda Francisco, and for subsequent
proceedings and judgment in accordance with the Rules of Court and the law. Costs against private
respondent.

SO ORDERED.
G.R. No. L-36096 August 16, 1933

THE PROVINCIAL GOVERNMENT OF RIZAL, PHILIPPINE ISLANDS, plaintiff-appellant,

vs.
FILOMENA CARO DE ARAULLO, ET AL., defendants-appellees.
AMALIA ARCEGA DE BASA and RAMON AGTARAP, defendants-appellants.

Acting Provincial Fiscal Carlos for plaintiff-appellant.

Antonio Gonzalez for defendant-appellant Arcega de Basa.
Feria and La O for defendant-appellant Agtarap.
Ross, Lawrence and Selph and Miguel F. Trias for defendant-appellee Caro de Araullo.
Ramon Diokno for defendants-appellees Aquilina de la Cruz and Alejandro Anareta.
Cardenas and Casal for defendant-appellee Jose Rueda Arias.
J.W. Ferrier for defendants-appellees Q.S. Lockart and L.H. Golucke.
Ricardo L. Ortega for defendants-appellees Andres G. Wieneke and Alfredo G. Wieneke.
Jose Ma. Cavanna for defendants-appellees T.F. McIntyre, J.J. Dunbar and Angela Cordero.
Gutierrez Repide and Monzon for defendant-appellee Luisa Atanacio.
Araneta, De Joya, Zaragoza and Araneta for defendant-appellee Roy S. Springer.
Adolfo A. Scheerer for defendant-appellee A. Otto Scheerer.
Castor P. Cruz for defendant-appellee Donato Espinosa.

VICKERS, J.:

This is an appeal by the provincial government of Rizal from the decision of the Court of First Instance of
that province dated March 21, 1931, and the additional decision of March 23, 1931, and the order or
decision of April 17, 1931, fixing the damages to be paid by the plaintiff for the property expropriated for
the extension of Taft Avenue from the limits of the City of Manila, through the municipality of Pasay, to its
intersection with the Manila South Road. Fifty-two lots and the improvements on ten lots are involved in
the appeal, as follows:

Lot No. 1 and improvements of Filomena C. de Araullo,

Lot No. 3 and improvements of J.M. McIntyre,
Lot No. 7 and improvements of Luisa Atanacio,
Lot No. 8 of Luisa Atanacio,
Lot No. 11 of Adolfo Otto Scheerer,
Lot No. 13 and improvements of Donato Espinosa,
Lot No. 26 and improvements of B.M. Lauritzen,
Lot No. 30 and improvements of Jose Rueda Arias,
Lot No. 31 of Joaquin Lim Ang,
Lot No. 33 of Gonzalo Go Kiolay,
Lot No. 34 of Roy S. Springer,
Lot No. 35 of Roy s. Springer,
Lot No. 37 of Emiliana Cordova,
Lot No. 39 of Agapito Sanchez,
Lot No. 41 and improvements of J.J. Dunbar,
Lot No. 42 of Aurelia Arcega de Basa,
Lot No. 45 of Aurelia Arcega de Basa,
Lot No. 49 of Andres and Alfredo Wieneke,
Lot No. 52 of Aquilina San Miguel,
Lot No. 53 of Jose Villanueva,
Lot No. 54 of Proceso Orca,
Lot No. 54-A of Ambrosio Hernandez,
Lot No. 55 of Pascual Villanueva,
Lot No. 56 of Flaviano de la Cruz,
Lot No. 57 of Pascual Villanueva,
 Lot No. 58 of Flaviano de los Santos,
Lot No. 60 of Ines Vda. de Taylo,
Lot No. 61 of Ines Vda. de Taylo,
Lot No. 61-A of Josefa de los Santos,
Lot No. 61-B of Canuto Cuneta,
Lot No. 62 of Esteban Marcelino,
Lot No. 63 of Esteban Marcelino,
Lot No. 64 of Damaso Ignacio,
Lot No. 64-A of Alfredo Roench,
Lot No. 65 of Alfredo Roench,
Lot No. 66 and improvements of Aquilina de la Cruz,
Lot No. 67 of Enrique Vito Cruz,
Lot No. 69 of Carlos Cruz,
Lot No. 72 of Flaviano de los Santos,
Lot No. 73 — Improvements only — of (a) Q.S. Lockart and (b) L.H. Golucke,
Lot No. 76 of Angela Cordero,
Lot No. 77 of Ramon Agtarap,
Lot No. 78 of Ramon Agtarap,
Lot No. 86 of Jacinta Z. de Cailles,
Lot No. 87 of Simeon Taylo,
Lot No. 88 of Flaviano de los Santos,
Lot No. 92 of Guillermo Musñgi,
Lot No. 94 of Proceso Orca,
Lot No. 96 and improvements of Felisa Cruz,
Lot No. 98 of Flaviano de los Santos,
Lot No. 100 of Vicente Reyes del Rosario,
Lot No. 101 of Anastacio Dizon,
Lot No. 102 of Alejandro Anareta.

The defendant Amalia Arcega de Basa also appealed from the decision of March 21, 1931 with respect to
lots 42 and 45, and the defendant Ramon Agtarap as to lots 77 and 78.

The complaint was filed on May 31, 1928. Defendants appeared and admitted plaintiff's right to
expropriate the property in question, and the court appointed for commissions composed of —

(a) Pedro Magsalin, Tomas Arguelles, and Salvador Barrios;

(b) Mariano Melendres, Tomas Arguelles, and Ramon Borromeo;

(c) Tomas Arguelles, Tomas de Guzman, and Celestino P. Raos; and

(d) Jose P. Pigao, Tomas Arguelles, and Manuel V. Dadivas, respectively, to hear the parties and
view the premises, and assess the damages to be paid for the condemnation, and to report their
proceedings to the court. The only question involved in the case was the determination of the
damages to which the defendants were entitled.

In the case of most of the lots the evidence consists of the owner's estimate of the value of his land at the
time of the hearing in 1929 or 1930, and for the plaintiff the testimony of Colin M. Hoskins. Hoskins is a
real estate broker and appraiser of real property, and at the time of the hearing had been engaged in that
business for seven years, and had participated in real estate transactions in the municipality of Pasay and
in the land taken for the extension of Taft Avenue. He had examined the property to be condemned, and
was in a position to express a reliable opinion as to its market value. We have not overlooked the fact that
he was being paid for his services by the plaintiff. He testified as to the value of the property in question in
1927 before the extension of Taft Avenue was laid out, and as to its increase value at the time of the
hearing.

ERROR NO. I

The lower court erred in declaring that the properties expropriated should be appraised according
to their value on June 1, 1928, and not that in 1927.

The fiscal's first assignment of error raises one of the principal questions to be decided. Are the damages
to be based upon the value of the property when the district engineer of Rizal Province entered upon the
land and laid out the extension of Taft Avenue in 1927, or the value on May 31, 1928 when the
condemnation proceedings were filed, or on the value of the property at the time of the hearings before
the commissioners in 1929 and 1930?

In their report of October 25, 1930 (p. 142, bill of exceptions), commissioners Magsalin, Arguelles, and
Barrios state that in appraising the land expropriated they gave great weight to Hoskin's valuation of the
land for 1927, which they increased slightly (A la verdad, los comisionados al fijar los precios de los
terrenos, han tenido mucho en cuenta los valores fijados por el experto del Gobierno, Mr. Hoskins, para
los lotes de los demandados desde el año 1927 con un ligero aumento). An examination of the record as
to the individual lots shows, however, that in most cases the commissioners disregarded the evidence
and substituted their opinion as to the value of the property, based on the inspection made by them. This
they were not authorized to do (Manila Railroad Co. vs. Aguilar, 35 Phil., 118).

After referring to the case of the Manila Railroad Co. vs. Caligsihan (40 Phil., 326), the trial judge said that
the present expropriation was begun June 1, 1928 (esta expropiacion ha comenzado el 1.º de junio de
1928). It may be inferred from this statement that he was under the erroneous impression that the
province did not lay out the street or take possession of the property before the filing of these proceedings
(p. 179, bill of exceptions).

The trial judge also held that there was a natural increase in the value of the property from 1927 to 1928
(Es de estimar que de 1927 a 1928 ha transcurrido bastante tiempo, durante el cual, como caso normal y
de ordinario curso, las propiedades tomen incremento en su valor; p. 179, bill of exceptions); that in the
ordinary course of events land increases in value from time to time, and the appraisal in this case is
based almost entirely on the prices fixed by Hoskins for the year 1927, plus an extra prince in accordance
with the petition of counsel for some of the defendants, this extra price appearing to be the natural
increase in value of the properties in question from 1927 to the date of the expropriation (p. 239, bill of
exceptions).

The record does not sustain these findings of the trial court.

In the case of the Manila Railroad Company vs. Caligsihan (40 Phil., 326, 329), cited by the trial judge,
this court said:

It is a rule of general application that the value of the property taken by eminent domain should be
fixed as of the date of the proceedings, and with reference to the loss the owner sustains,
considering the property in its condition and situation at the time it is taken, and not es enhanced
by the purpose for which it is taken. Our law says that the compensation shall be "just" and, "to be
exactly just, the compensation should be estimated as of the time of the taking."

The rule just quoted contemplates a case where the taking of the property by eminent domain coincides
with the filing of the proceedings, but in the case at bar the plaintiff through its agents entered upon the
property, with the consent of the owners, and laid out the street in 1927, and entrusted to the Director of
Public Works and other officials the negotiations as to the price to be paid therefor. A few public spirited
citizens offered to donate their land; others agreed to accept what the authorities deemed a reasonable
price, but in most cases no amicable agreement could be reached as to the value of the property taken,
and in order to settle the matter plaintiff filed these condemnation proceedings on May 31, 1928. The
improvements existing on the land when it was taken had been removed or destroyed in most cases
before the filing of these proceedings ("No ha encontrado las mejoras reclamadas porque segun se ha
probado ya habian sido destruidas antes aun de incoarse este expediente; pero ha encontrado otras de
igual naturaleza y condicion en los alrededores;" "En algunos casos la Comision no ha encontrado las
mejoras reclamadas porque segun pruebas ya habian sido destruidas mucho antes de incoar este
expediente, pero en otros casos la Comision ha encontrado en dichos terrenos ciertas mejoras
reclamadas y otras alrededor de los mismos". Reports of the commissions, pp. 67 and 125, bill of
exceptions).

The question at issue is stated by Gutierrez Repide & Monzon, attorneys for the appellee Luisa Atanacio,
as follows: "The Provincial Government of Rizal, which hereafter will be designated as appellant acting
thru its District Engineer, prepared the location plan and commenced the opening of the Taft Avenue
Extension in Pasay about the year 1927. Among the properties thus taken possession of by the appellant
was a portion of the lot of the herein appellee Luisa Atanacio. Although the appellant actually took
material possession of all the properties necessary for the opening and extension of the Taft Avenue
Extension in the year 1927, the expropriation proceedings were actually begun by the filing of the
complaint on June 1, 1928. The only question before this court for decision is what is the just and
reasonable compensation to which the appellee is entitled for lots 7 and 8 taken by the appellant through
the exercise of the right of eminent domain. It is contended for the appellant that the value of the said two
lots ought to be P3.50 per square meter which was the price in 1927 and not P5 per square meter which
was the value fixed by the commissioners and approved by the trial judge corresponding to the year 1928
when the expropriation proceedings were actually commenced in the Court of First Instance of Rizal."

As clearly appears from the evidence of record, the value of the property in question was greatly
enhanced between the time when the extension of the street was laid out and the date when the
condemnation proceedings were filed, because of the fact that one of the widest and most important
streets in the City of Manila was to be extended through the municipality of Pasay, thereby making the
land affected practically a part of the City of Manila and giving it a frontage on one of the city's principal
boulevards. The property had further increased in value when the commissioners held hearings a year
and a half after these proceedings were filed. In other words, the value of the property was enhanced by
the purpose for which it was taken. In our opinion the owners of the land have no right to recover
damages for this unearned increment resulting from the construction of the public improvement for which
the land was taken. To permit them to do so would be to allow them to recover more than the value of the
land at the time when it was taken, which is the true measure of the damages, or just compensation, and
would discourage the construction of important public improvements.

As the Supreme Court of the Unites States said in its decision of the case of the United States vs.
Chandler-Dunbar Water Power Company (229 U.S., 53), which decision was followed by this court in the
case of the Manila Railroad Co. vs. Caligsihan, the property is to be considered in its condition and
situation at the time it is taken, and not as enhanced by the purpose for which it is taken.

The fundamental doctrine that private property cannot be taken for public use without just
compensation requires that the owner shall receive the market value of his property at the time of
the taking, unaffected by any subsequent change in the condition of the property. (20 C.J., 826,
828.)

The principle of these decision, which requires compensation for property taken for public use to
be estimated with special reference to its value at the time of the appropriation or taking, is
manifestly just to all concerned. By no other rule, in cases of condemnations for uses of great
public interest and local benefit, could the valuation of property in the assessment of damages be
so successfully guarded against the influence of enhanced values resulting specially from the
enterprise (Missouri Pac. Ry. Co. vs. Hays, 15 Neb., 224, 231; 18 N.W., 51.)
It is generally held, as it was in the Nebraska case just cited, that the valuation of the property taken
should be made as of the time of the filing of the condemnation proceedings. That is a fixed and
convenient date, and it usually precedes or coincides with the taking of the property; but in the case at bar
the plaintiff appropriated the property with the consent of the landowners, and without the filing of any
expropriation proceedings, in the expectation that the parties would be able to reach an agreement out of
court as to the value of the property taken, and the condemnation proceedings were not filed until it was
found much later than no such agreement could be reached as to part of the property. Under those
circumstances the value of the property should be fixed as of the date when it was taken and not the date
of the filing of the proceedings.

In the case of Wier vs. St. Louis, Ft. S. & W.R. Co. (40 Kan., 130; 19 Pac. Rep., 316, 322), the Supreme
Court of Kansas said: "The general current of authorities is that in all such cases compensation should be
ascertained and assessed as of the time when the property was taken. There is some diversity of opinion
as to what constitutes a taking where the right of way is acquired by proceedings in advance of actual
occupancy; but where, as in this case, the possession is taken by consent of the owner, followed by the
location and construction of the road, the time of going into such actual possession is clearly the time of
taking, rather than the period of condemnation proceedings, which, for some reason, may have been
postponed. This subject has already been fully considered by this court in two cases, where it is decided
that, under circumstances such as are presented here, the damages will be measured as of the time
when the company first takes possession of the land, and occupies it as a right of way. (Railway Co. vs.
Andrews, 26 Kan., 702; Cohen vs. Railroad Co., 34 Kan., 158; 8 Pac. Rep., 138; see also, the numerous
cases there cited.)"

The conclusion of the trial court to the effect that there is a steady increase in the value of land is not well
founded. Land like other property increases or decreases in value according to the general economic
conditions prevailing, and for special reasons, but that is a matter of proof.

ERROR NO. II

The lower court erred in appraising lot No. 69 of the defendant Carlos Cruz at P7 a square meter.

This lot was originally appraised by the commission at P7 a square meter, but it subsequently increased
the valuation to P7.50, because only a small portion of the lot was left. The defendant claimed that his
land was worth P20 a square meter. It was assessed for taxation at P1 a square meter, and according to
Hoskins was worth P3 in 1927, and the triangular portion remaining, which is suitable for a gasoline
station, is worth P7 a square meter.

Mariano Molo testified as to the sale of a parcel of land on February 14, 1927 at P& a square meter
(Exhibit A-3), but the land to which he referred is situated on F.B. Harrison Street or the Manila South
Road, the principal commercial street of Pasay, and 400 meters from the land in question. Defendant's
Exhibit A-2 evidences the sale of lot No. 8 of the subdivision plan No. 8138 on August 15, 1927 for P6 a
square meter, but it appears that the area of the portion sold was only 165 square meters, and apparently
this lot is just beyond the limits of the City of Manila and far from the lot now in question.

On the ground that the original appraisal of the commission was sustained by a preponderance of the
evidence, the trial judge fixed the value of this lot at P7 a square meter. We see no reason for rejecting
Hoskins' valuation of this land, taking into consideration the fact it was far from the City of Manila and not
situated on an important street. The decision of the lower court is therefore modified, and the value of Lot
No. 69 is fixed at P3 a square meter.

ERROR NO. III

The lower court erred in appraising lots Nos. 1 and 72 at P6.50 a square meter.
 Lot No. 1 of Filomena Caro de Araullo

The commission appraised this lot at P6.50 per square meter, because it is high land and adjoins the City
of Manila, with an outlet to Calle Sandejas. Hoskins testified that the value of this land in 1927 was P5 per
square meter; that he intervened in the purchase of it by the defendant, who paid P5 per square meter
therefor. The trial judge accepted the valuation of the commission on the ground that the value of the land
had increased from 1927 to 1928. He said:

"Es de estimar que de 1927 a 1928 ha transcurrido bastante tiempo, durante el cual, como caso normal y
de ordinario curso, las propiedades tomen incremento en su valor." For the reasons which we have
stated, the defendant is entitled to recover the value of her land when it was taken in 1927. The decision
of the lower court is therefore modified, and the value of this lot is fixed at P5 a square meter.

Lot No. 72 of Flaviano de los Santos

This lot was first appraised by the commission at P6 a square meter. The appraisal was subsequently
increased to P6.50 a square meter. Hoskins testified that this land was worth P3 a square meter. It
appears that lot No. 71, which was similarly situated as lot No. 72, was purchased by the plaintiff for
P4.50 a square meter in accordance with the order of the court of February 3, 1931. The valuation of lot
No. 72 is accordingly reduced to P4.50 a square meter.

ERROR NO. IV

The lower court erred in appraising lots Nos. 3, 34, 35, 61-A, 61-B, 62, 64-A, 65, and 77 at P6 a square
meter.

Lot No. 3 of J.M. McIntyre

This was an interior lot, assessed for taxation at P0.80 a square meter. Hoskins appraised it at P5 a
square meter, but the commission increased the appraisal to P6 a square meter in order to indemnify the
owner for the expense of moving his house, and the trial judge approved the action of the commission.
The cost of the removal of defendant's house was not proved, nor was it proved that the defendant had a
house on the land appropriated by the plaintiff. The only evidence presented by the defendant was an
affidavit as to an offer he had received for his land. This affidavit was clearly inadmissible. The valuation
of this lot is therefore fixed at P5 a square meter.

Lot No. 34 of Roy S. Springer

The commissioners appraised this lot at P5 a square meter, that being in their opinion the value of
adjoining lots in the same condition. The trial judge increased the valuation to P6 a square meter. Hoskins
testified that this lot was worth P4.50 a square meter in 1927 and P8 a square meter in 1929. Jose
Araneta, a real estate broker, testified that this lot was purchased by the defendant in October or
November, 1928 for P6.75 a square meter, but he admitted that some years prior thereto the land was
worth P3 or P4 a square meter. Defendant's attorneys maintain that the land should be appraised
according to its value in June, 1928, but we have already rejected that contention. We see no reason for
not accepting the testimony of Hoskins, and the value of this lot is accordingly fixed at P4.50 a square
meter.

Lot No. 35 of Roy S. Springer

This was an interior lot, which was appraised by Hoskins and the commission at P4 a square meter, but
this valuation as raised by the trial judge to P6 a square meter. Jose Araneta testified that this lot was
purchased by the defendant in October or November, 1928 for P6.50 a square meter and that that was its
value at the time of the hearing in 1930. Neither the price paid by the defendant nor the value of the land
in 1930 is controlling, but the market value of the land when plaintiff took possession of it. The action of
the trial judge in increasing the valuation of this lot from P4 to P6 a square meter is not justified by the
evidence, and the value of said land is fixed at P4 a square meter.

Lot No. 61-A of Josefa de los Santos

The owner claimed 15 a square meter for this lot, because it was small and it would be difficult to find
another similar lot in the same place. Hoskins testified that this lot was worth P5 a square meter in 1927.
The commission appraised it at P6 a square meter, and this appraisal was approved by the trial judge on
the ground that practically the whole lot had been expropriated, and that the damages caused thereby
should be proportionately compensated. We find no evidence in the record to justify the appraisal of this
lot at P6 a square meter, because the evidence neither shows the area of the remaining portion, which is
described as insignificant, nor the amount of the damages. The value of this lot is fixed at P5 a square
meter.

Lot No. 61-B of Canuto Cuneta

What we have say with respect to lot 61-A applies to this lot, and its value is accordingly fixed at P5 a
square meter.

Lot No. 62 of Esteban Marcelino

This lot was appraised by the commission at P6 a square meter, and this valuation was approved by the
trial judge. The owner claimed P15 a square meter, because he had filled the lot, but he could not state
how much he had spent for filing it. This lot is assessed for taxation at P0.50 a square meter. Hoskins
testified that it was worth P4 a square meter in 1927 and P7 in 1929. It appears that only a small portion
of the lot is not included in the expropriation, but the evidence does not show the area of this remaining
portion or the amount of the damages. The appraisal of the commissioners which was approved by the
trial court is not sustained by the evidence, and the value of this lot is fixed at P4 a square meter.

Lots Nos. 64-A and 65 of Alfredo Roench

The commission valued these lots at P6 a square meter, because the land was high and the remaining
portions irregular in shape and not suitable for building site, and this appraisal was approved by the trial
judge. It appears that these two lots were purchased by the defendant on February 27, 1928 for P1 a
square meter. Hoskins declared that the value of this land in 1927 was P1.20 a square meter and P4.50
at the time of the hearing. It appears that prior to the construction of the Taft Avenue extension these lots
had no outlet to any public street except through a narrow road. The valuation of the commission, which
was accepted by the trial judge, is not sustained by the evidence, and reports not based on the evidence
should be disregarded.

The appellee contends that he was able to buy this land for a peso a square meter, because the owner
was forced to sell it; but it will be observed that when Roench bought this land in February, 1928 the
extension of Taft Avenue was already laid out. The value of these two lots is fixed at P1.20 a square
meter.

Lot No. 77 of Ramon Agtarap

This lot, which is assessed for taxation at P0.50 a square meter, was appraised by the commission at P6
a square meter, and this valuation was accepted by the lower court. Hoskins testified that this lot, like lot
No. 76, was worth P4 a square meter in 1927, and that an additional sum of P1 a square meter would be
sufficient to indemnify the owner for the damages sustained by reason of the fact that the remaining
portion of this land is practically unserviceable.

The defendant Ramon Agtarap also appealed from the decision of the court as to this lot. He claimed at
the trial that his property was worth P15 a square meter, because in 1926 and 1927 he wished to buy the
adjoining property for P8 a square meter, but the price demanded was P12. Such evidence, if admissible,
is of no consequence in determining the market value of the land in question. Defendant's attorneys
contend that the price fixed for this lot should be at least P7 a square meter, because Hoskins testified
that at the time of hearing on December 27, 1929 it was worth P7 a square meter. For the reasons which
we have already set forth, the defendant is entitled to recover the market value of his property when it
was taken in 1927, and not its value at the time of the hearing. The value of this lot is therefore fixed at P5
a square meter.

ERROR NO. V

The lower court erred in appraising lots Nos. 11, 13, 31, 60, 61, and 64 at P5.50 a square meter.

Lot No. 11 of Adolfo Otto Scheerer

The commission appraised this lot at P5.50 a square meter, because it was high land and the remaining
portion was disfigured by the expropriation. Hoskins testified that this land was worth P5 a square meter
in 1927. The trial court approved the valuation of the commission. The contention of the appellant as to
this lot is not sustained by the record. It appears that the difference in question of P0.50 a square meter
was awarded to the defendant as consequential damages. The decision of the trial court as to this lot is
affirmed.

Lot No. 13 of Donato Espinosa

This lot was appraised by the commission at P5.50 a square meter on the ground that it was in the same
condition as lot No. 12, which was appraised by the commission at that price. Hoskins testified that lot No.
12 was worth P4.50 a square meter in 1927. It does not appear that the defendant presented any
evidence as to the value of this lot. Ildefonso Hernandez was called as a witness, but he did not testify as
to the value of the land. Ciriaco Gaspar, the owner of lot No. 12, accepted the appraisal of P4.50 a square
meter. The value of Lot No. 13 is fixed at P4.50 a square meter.

Lot No. 31 of Joaquin Lim Ang

This lot was originally appraised by the commission at P5 a square meter, but this appraisal was
subsequently increased to P5.50 a square meter because of defendant's claim for 1,000 loads of dirt
removed by the plaintiff from this lot. It appears from the evidence that prior to the opening of the Taft
Avenue extension the lot in question was an interior lot and its only outlet was an alley leading to Calle
Buendia. Hoskins testified that the value of this lot in 1927 was P4 a square meter and at the present time
from P9 to P10. Taking into consideration defendant's claim for damages, which was allowed by the
commission and the trial judge, we fix the value of this lot at P4.50 a square meter.

Lots Nos. 60 and 61 of Ines Vda. de Taylo

The defendant claimed that these two lots were worth P15 a square meter. Hoskins testified that the
value of the land in question in 1927 was P5 a square meter. The commission appraised the land at
P5.50 a square meter, and this appraisal was approved by the court. Although the reason of the
commission for fixing the value of this lot at P5.50 does not clearly appear, nevertheless it may be
inferred from what is said in the report that this valuation was based upon the testimony of Hoskins to the
effect that this land was worth P5 a square meter in 1927. The value of the land in 1927 must govern, and
the valuation of these two lots in fixed at P5 a square meter.

Lot No. 64 of Damasa Ignacio

Alejandro Pascual, son-in-law of Damasa Ignacio, testified that this land was worth P15 a square meter at
the time of the expropriation.

Hoskins testified that this land was worth P4 a square meter in 1927, and P7 at the time of the hearing,
taking into consideration the fact that it was 30 centimeters below the level of Pilapil Street. The
commission, without giving any reason thereof, declared this land to be worth P5.50 a square meter, and
this appraisal was approved by the trial judge. The evidence does not sustain this appraisal, and the
value of this lot is fixed at P4 a square meter.

ERROR NO. VI

The lower court erred in appraising lots Nos. 7, 8, 33, 37, 39, 41, 76, 78, 96, and 98 at P5 a square meter.

Lots Nos. 7 and 8 of Luisa Atanacio

These lots were situated very near the limits of the City of Manila, and were found by the commission to
be in the same condition as lot No. 3 belonging to J.M. McIntyre and were assessed at P6 a square
meter. Hoskins testified that these lots were worth P3.50 a square meter in 1927, but as we have already
seen he found lot No. 3 to be worth P5 a square meter in 1927. He did not give any reason for the
difference in price. The defendant admits that the plaintiff took possession of the property in question in
1927. It appears that the defendant in a letter dated January 22, 1931 expressed her willingness to
accept P5 a square meter, and the trial judge fixed the value of these lots at that price. We see no reason
for making any distinction between the value of these two lots and lot No. 3. The decision of the lower
court as to these two lots is therefore affirmed.

Lot No. 33 of Gonzalo C. Go Quiolay

Hoskins testified that the value of this lot in 1927 was P3.50 a square meter. The defendant asked the
absurd price of P20 a square meter. The commission appraised it at P5 a square meter on the ground
that it was in the same condition as lots Nos. 29 and 31, and the appraisal of the commission was
approved by the lower court. The appellant maintains that according to the testimony of Hoskins this lot is
inferior to lots 29 and 31, but apparently this contention is not sustained by the record. The value of this
lot is fixed at P4 a square meter.

Lot No. 37 of Emiliana Cordova

Hoskins testified that the value of this lot in 1927 was P4 a square meter, and not P4.50 a square meter,
as stated in appellant's brief. The commission appraised this lot at P5 a square meter for the reason that
it was in the same conditions as "the preceding lots", and the appraisal of the commission was approved
by the trial judge. The finding of the commission is to vague to sustain the judgment, and the value of this
lot is fixed at P4 a square meter.

Lot No. 39 of Agapito Sanchez

Hoskins testified that this lot was worth P4 a square meter in 1927. The defendant presented no
competent evidence as to the value of the land. The commission appraised this lot at P5 a square meter
"por las mismas razones que alega en cuanto a los lotes anteriores", and the trial judge approved the
appraisal of the commission. The evidence does not sustain the finding of the lower court, and the value
of this lot is fixed at P4 a square meter.

Lot No. 41 of J.J. Dunbar

Hoskins testified that this lot was worth P4 a square meter in 1927. The defendant presented an affidavit
in which he claimed P8 a square meter, but subsequently offered to accept the commission's appraisal of
P5 a square meter. There is no competent evidence to sustain the valuation of the commission, which
was approved by the trial judge, and the value of this lot is fixed at P4 a square meter.

Lot No. 76 of Angela Cordero.

Hoskins testified that this lot was worth P4 a square meter in 1927. No competent evidence was
presented by the defendant. The commission allowed the defendant P5 a square meter, which was
approved by the court, partly for the reason that the defendant had been slightly damages because of the
conformation of the land not expropriated. The record does not justify this finding of the commission as to
consequential damages, especially in view of the fact that Hoskins testified that the remaining portion of
defendant's land is now worth P7 a square meter. The value of this lot is therefore fixed at P4 a square
meter.

Lot No. 78 of Ramon Agtarap

Hoskins testified that this lot was worth P4 a square meter in 1927. The defendant claimed the
unreasonable price of P15 a square meter, and was permitted to testify that in 1926 or 1927 he offered
Angela Cordero, the owner of adjoining lot No. 76, P8 a square meter. The commission appraised this lot
at P5 a square meter on the ground that it was in the same condition as lot No. 76, which was appraised
at P5 a square meter. It appears, however, that in fixing the value of lot No. 76 at P5 a square meter the
commission took into consideration certain consequential damages, but that reason does not apply in the
case of lot No. 78. The trial court approved the appraisal of the commission, and both parties have
appealed. The finding of the lower court is not sustained by the record. There is no competent evidence
to offset the testimony of Hoskins, and the value of this lot is fixed at P4 a square meter.

Defendant's attorneys on page 5 of their brief say: "As to lot No. 78, the plaintiff-appellant claims that the
defendant Ramon Agtarap has not presented any evidence at all (p. 21). This is a deliberate falsehood,
because, as has been stated, Mr. Agtarap himself this testified as to the value (I, t. s. n. pp. 55-59, G.R.
35565)." Although the statement made in the fiscal's brief is not strictly accurate, because Agtarap was
presented as a witness, there is not the slightest justification for characterizing the fiscal's statement as a
deliberate falsehood, and he strongly disapprove of the use of such language.

Lot No. 96 of Felisa Cruz

According to the evidence this lot belongs to Felisa Cruz and her sister, Dolores Cruz. Hoskins testified
that part of this lot is low and part high land, and that in 1927 it was worth P1.50 and P3 a square meter,
respectively. Melecio Sabino claimed P17 a square meter, because he had filled the land, and that the lot
was in the same condition as that of Carlos Cruz. The commission appraised the lot in question at P5 a
square meter, and the trial judge accepted this appraisal. The trial judge found that the pretensions of the
defendant were not sustained by the evidence. In out opinion the evidence did not justify the lower court
in fixing the value of this lot at P5 instead of P3 a square meter, in view of the testimony of Hoskins.
Plaintiff has expressed its willingness to pay P3 a square meter for the whole portion that was
expropriated. The value of this lot is fixed at P3 a square meter.

Lot No. 98 of Flaviano de los Santos

Hoskins testified that this lot was worth P4 a square meter in 1927. It appears from the testimony of
Meliton de los Santos that this land had an area of 730 square meters, and that all of it was expropriated
except 30 square meters. This small remaining portion is probably unserviceable. The defendant
presented no evidence as to the market value of his land further than to show that it was in the same
condition as lot No. 72. The value of this last mentioned lot has been fixed by us at P4.50 a square meter,
and taking into consideration defendants' consequential damages, we fix the value of lot No. 98 at P4.70
a square meter.

ERROR NO. VII

The lower court erred in appraising lots Nos. 26, 42, 58, 87, and 92 at P4.50 a square meter.

Lot No. 26 of Belle M. Lauritzen

As to this lot the commission said:

El lote 26 de la expropriada Mrs. B.M. Lauritzen, cuyo resto ha sido grandemente beneficiado por
la extension de la Avenida Taft, amillarado en P1 m. c. y tasado por Hoskins en P4.25 m. c.,
estara bien compensado con Cuatro pesos con cincuenta centavos solamente.

Hoskins testified that this lot was worth P4.25 a square meter in 1927 and P9 a square meter at the time
of the hearing. Defendant claimed P12 a square meter, and was permitted to testify to having refused an
offer of that price. This land was assessed for taxation at the rate of P1 a square meter. No competent
evidence was offered to offset the testimony of Hoskins, and the value of this lot is fixed at P4.25 a
square meter.

Lot No. 42 of Amalia Arcega de Basa

The commission appraised this lot at P4.50 a square meter, stating that the land was high in some parts
and that the expropriation had left a portion which was almost unserviceable. The court approved the
appraisal of the commission. Both parties have appealed. Hoskins testified that part of this lot was low
and that the market value of the lot in 1927 was P2.75 a square meter, not P2.25 as stated in the decision
and in plaintiff's brief. The defendant claims P5 a square meter. The only witness for the defendant was
her attorney. According to the contention of the defendant the are of the lot in question is 2,341 square
meters and the remaining portion not expropriated contains 440 square meters. We are of the opinion
that by adding to the market value of the land in 1927, 25 centavos a square meter, the defendant will be
compensated for any consequential damages which she may have suffered. The value of lot No. 42 is
therefore fixed at P3 a square meter.

Lot No. 58 of Flaviano de los Santos

The commission appraised this lot at P4 a square meter, but increased its appraisal to P4.50 a square
meter, because the expropriation had left a strip of land on either side of the street that was
unserviceable. The revised appraisal of the commission was approved by the trial court. Hoskins testified
that the land in question was worth P2.50 a square meter in 1927. It appears that the area of the land
expropriated is 2,564 square meters and that the remaining portion is very small. The exact area of it is
not given. Ten centavos a square meter on the portion condemned will probably be amply sufficient to
compensate the defendant for any consequential damages. The value of Lot No. 58 is therefore fixed at
P2.60 a square meter.

Lot No. 87 of the heirs of Simeon Taylo

The commission originally appraised this lot at P4 a square meter, but subsequently increased the
valuation to P4.50, without giving any reason therefor. Ines Claudio, administratrix of the estate of the
deceased Simeon Taylo, claimed P15 a square meter, stating that the lot in question was in the same
condition as lots Nos. 60 and 61, which were appraised by Hoskins at P5 a square meter. It appears that
the portion expropriated was very small, and that the remainder of defendant's land was greatly increased
in value. Hoskins testified that the market value of this land in 1927 was P3.50 a square meter. The
record shows that lots 60 and 61 had been filled to the street level, and that the valuation of P5 a square
meter includes certain consequential damages. The value of the lot in question is fixed at P3.50 a square
meter.

Lot No. 92 of Guillermo Musñgi

The commission appraised this lot at P4.50 a square meter, because it was high land and because
Hoskins testified that it was worth P4 a square meter in 1927. The trial judge approved the appraisal of
the commission. As we already explained, the defendant is entitled to recover the market value of his land
in 1927. The value of the lot in question is therefore fixed at P4 a square meter.

ERROR NO. VIII

The lower court erred in appraising lots Nos. 52, 53, 54, 54-A, 55, 56, 57, 63, 67, 86, 88, and 94 at P4 a
square meter.

Lot No. 52 of Aquilina San Miguel, lot No. 53 of Jose Villanueva, lot No. 54 of Proceso Orca, lot
No. 54-A of Ambrosio Hernandez and Pascual Villanueva, lot No. 55 of Pascual Villanueva, lot
No. 56 of the heirs of Flaviano de la Cruz, and lot No. 57 of Pascual Villanueva.

Hoskins appraised lot No. 52 at P1.50 a square meter in 1927 and P2 a square meter in 1929; lots Nos.
53 and 54 at P2.50 a square meter in 1927; lots Nos. 54-A, 55, and 56 at P2 a square meter in 1927, and
lot No. 57 at P2.50 a square meter in 1927. The defendants claimed P15, P12, P18, P15, P6, including
the improvements, P6, including the improvements, and P6 a square meter, including the improvements,
respectively.

The commission appraised all these lots at P4 a square meter, taking into consideration the different facts
as to the several lots, and this appraisal was approved by the trial court. Contrary to the contention of the
fiscal, these lots all appear to have fronted on Pilapil Street, and the commission found these lots to be in
the same condition as lot No. 51. The attorney for the defendants maintains that the plaintiff accepted the
appraisal of lot No. 51 of P4 a square meter and paid the owner of it at that rate, but the decision of the
trial judge as to lot No. 51 does not appear in the record that has been elevated to this court. There is a
sharp conflict in the evidence as to the character of some of the lots in question. While Hoskins testified
that they were low lands and were used as zacate fields, the defendants maintain that they had been filed
and were used for building sites and gardens. The truth probably is that small portions of the land had
been filled. Taking into consideration all the facts in the case and that the commission as a rule valued
the land expropriated according to what they deemed to be its value in 1928 or 1929 instead of its market
value in 1927, we fix the value of the foregoing lots at P3 a square meter.

Lot No. 63 of Esteban Marcelino

The commission appraised this lot at P5 a square meter, because it was high land and the part not
expropriated was disfigured. This appraisal was reduced by the lower court to P4 a square meter.
Hoskins testified that this land was 20 centimeters below the street level, and that its market value in
1927 was P1.20 a square meter. It appears from the evidence that this lot was assessed at 20 centavos a
square meter; that it was an interior lot, and that the remaining portion, which was slightly disfigured, was
greatly benefited by the extension of Taft Avenue. Neither the valuation of the commission nor that of the
trial judge is sustained by the evidence. The value of this lot is fixed at P1.20 a square meter.
 Lot No. 67 of Enrique Vito Cruz

The commission appraised this lot at P4.50 a square meter, because it was high land. The trial judge
reduced the valuation to P4 a square meter.

The defendant claimed P2 a square meter. He testified that he purchase it in 1921 at 32 centavos a
square meter, and admitted that the remainder of the property would be benefited by the expropriation.
He was permitted to testify to having received an offer of P3 a square meter in 1927.

It appears that this lot was assessed for taxation at 20 centavos a square meter. Hoskins testified that it
was marshy land and lower than Pilapil Street, on which it fronted; that its market value in 1927 was
P1.50 a square meter, but that at the time of the hearing it might be worth P4 a square meter. The
evidence of record does not sustain the finding of the commission or that of the trial judge. The area
expropriated was insignificant, being only 36 square meters. We fix the value of this lot at P1.50 a square
meter.

Lot No. 86 of Jacinta Z. de Cailles, lot No. 88 of Flaviano de los Santos, and Lot No. 94 of
Proceso Orca

These lots were all appraised by the commission at P4 a square meter, and this appraisal was approved
by the trial court.

Hoskins testified that the market value of lot No. 86 of Jacinta Z. de Cailles was P3.50 in 1927. The
defendant did not present any evidence as to the value of the land, but the trial judge states in his
decision that Hoskins in testifying as to lot No. 86 stated that it was worth P3.50 a square meter in 1927
and P7.50 a square meter in 1929. The court then found that the increase in price of 50 centavos a
square meter allowed by the commission was within the natural increase of the value of the land included
in the expropriation proceedings. This conclusion of the trial judge is clearly erroneous, and the value of
the lot in question is fixed at P3.50 a square meter.

The commission appraised lot No. 88 at P4 a square meter for the same reasons that it appraised lot No.
87 at that price. Hoskins testified that lot No. 88 was worth P3.50 a square meter in 1927 and P7.50 a
square meter in 1929. The defendant did not present any direct evidence as to the value of the lot in
question. His only witness, his son, Meliton de los Santos, admitted that the land of his father was
benefited by the opening of the street, and requested that he be allowed compensation at the same rate
given to adjoining owners. We have already fixed the value of lot No. 87 at P3.50 a square meter, and in
accordance with the evidence, we fix the value of lot No. 88 at the same price.

The portion of lot No. 94 of Proceso Orca that was expropriated was so small as to be almost negligible.
No evidence was presented by the plaintiff or the defendant as to the value of this lot. It appears from an
examination of the plan that it was situated on the opposite side of Calle Pilapil from lots Nos. 54 and 54-
A, which we have valued at P3 a square meter. The value of lot No. 94 is accordingly fixed at P3 a square
meter.

ERROR NO. IX

The lower court erred in appraising lot No. 30 at P3.20 a square meter.

Lot No. 30 of Jose Rueda Arias

The commission first appraised this lot at P3 a square meter, taking into consideration the fact that the
portion not included in the expropriation was unserviceable. In an additional report the commission
increased the valuation of the land expropriated to P3.20 a square meter, and allowed the defendant
P235 as damages for the destruction of the wall on two sides of the lot. Hoskins testified that the
remaining portion was of no value, and that if the part expropriated was high land it was worth P4 a
square meter in 1927, and if low land, P1 a square meter. The fiscal maintains that the commission was
not authorized to change its valuation of the land and to file an amended report without permission from
the court, and that the original valuation of P3 a square meter should be maintained. The trial judge states
in his decision that the commission was authorized to present an additional report regarding the lot in
question. After examining the record, we find no sufficient reason for sustaining the contention of
appellant, and the decision of the lower court fixing the value of the land expropriated at P3.20 a square
meter is affirmed.

ERROR NO. X

The lower court erred in appraising lots Nos. 45 and 49 at P3 a square meter.

Lot No. 45 of Amalia Arcega de Basa

This lot was appraised by the commission at P3 a square meter, and that appraisal was approved by the
trial judge. Both parties appealed. Plaintiff contends that the valuation should be reduced to P1 a square
meter in accordance with the testimony of Hoskins, while the defendant claims P5 a square meter.
Hoskins testified that this lot is low and swampy, and that its market value in 1927 was P1 a square
meter. It appears that the lot in question has an area of 6,820 square meters, and that the portion
expropriated contains 2,500 square meters; that a portion of the remaining land containing 1,361 square
meters was disfigured, and 680 square meters of it rendered unserviceable. The rest of defendant's land
was benefited by the expropriation. Defendant waived her claim for damages for the destruction of certain
fruit trees, but the value of these trees was not determined. There is no evidence in the record to support
defendant's claim. Taking into consideration all the facts in the case, we fix the value of the portion
expropriated at P2 a square meter.

Lot No. 49 of Andres and Alfredo Wieneke

This lot was appraised by the commission at P2 a square meter, but the trial judge increased the
appraisal to P3 a square meter. Hoskins testified that the market value of this lot in 1927 was P2 a square
meter. The only witness for the defendants was Andres Wieneke, who testified that the market value of
the lot in question was from P3 to P6 a square meter, but that the defendants were willing to accept P3 a
square meter. The trial judge took into consideration the fact that Hoskins appraised lot No. 48 at P3 a
square meter, but it was not proved that lots Nos. 48 and 49 were in the same condition, and the trial
judge erred in assuming this to be true. The value of this lot is fixed at P2 a square meter.

ERROR NO. XI

The lower court erred in appraising lots Nos. 66, 100, 101, and 102 at P2 a square meter.

Lot No. 66 of Aquilina de la Cruz

This lot was appraised by the commission at P2 a square meter, taking into consideration the
consequential damages and benefits of the expropriation. The trial judge fixed the value of the land
expropriated at P2 a square meter, but allowed the defendant a further sum of P300 as damages for the
destruction of the defendant's fish-pond and fruit trees.

Hoskins testified that the lot in question was low and muddy, and that its market value in 1927 was P1.75
a square meter. The defendant claimed P4 a square meter, and presented various documents evidencing
sales of land in that vicinity during the years 1927 and 1928 for prices varying from P3.47 to P5 a square
meter, but it was not proved that the lot in question was of the same character as the parcels of land
described in the deeds. The very fact that the lot in question was used for a fish pond and zacate field
shows that it was low land. It clearly appears that the commission in appraising the portion of land
expropriated took into consideration the damages to defendant's fish pond and fruit trees, and we see no
reason to disturb the finding of the commission. The value of defendant's lot is therefore fixed at P2 a
square meter, and she is not entitled to recover in addition thereto anything for damages to her fish pond
or fruit trees.

Lot No. 100 of Vicente Reyes del Rosario and lot No. 101 of Anastacio Dizon

These two lots were appraised by the commission at P2 a square meter, and this appraisal was approved
by the trial judge. Hoskins testified that these two lots were low and that their value in 1927 was P1.50 a
square meter. The defendants did not present any evidence as to the value of these lots. The commission
states in its report that lot No. 100 was assessed for taxation at the rate of P2 a square meter; that it is
comparatively low for the most part, and that P2 a square meter would be just compensation. As to lot
No. 101 it is stated in the report of the commission that this lot was assessed for taxation at the rate of 80
centavos per square meter, and was in the same condition as lot No. 100. The trial judge based his
approval of the appraisal of the commission on the fact that the commissioners had an opportunity to view
the lots in question, whereas Hoskins had not had an opportunity to do so. This conclusion of the trial
judge is not sustained by the evidence, and it does not appear that the commission was justified in
substituting its own opinion as to the value of the land for that of Hoskins. The value of these lots is fixed
at P1.50 a square meter.

Lot No. 102 of Alejandro Anareta

This lot was appraised by the commission at P4 a square meter, but this valuation was reduced by the
trial judge to P2 a square meter. Hoskins testified that the market value of this lot in 1927 was P1.50 a
square meter. The defendant claimed P4 a square meter, and still claims that price, although he did not
appeal from the decision of the trial court. Defendant offered evidence as to sales of property in the
vicinity where the lot in question is located, but did not prove that those lots were of the same character
as the lot in question. The portion of defendant's land that was expropriated contained only 75 square
meters. The commission in appraising this lot took into consideration the fact that it was assessed for
taxation at P2 a square meter in 1929, and it appears that before the expropriation it was assessed at
only 80 centavos a square meter. Defendant's land was not damaged by the expropriation of the small
piece of land in question, on the contrary his land was enhanced in value. The value of the land in
question is fixed at P1.50 a square meter.

ERROR NO. XII

The lower court erred in approving the commissioners' report as to the value of the improvements
on lots Nos. 1, 3, 7, 13, 26, 30, 41, 66, 73, and 96.

Under this assignment of error the fiscal maintains that the appraisal of the improvements should be
reduced as follows:

Lot No. Court Appellant

1 appraised at P53.00 should be reduced to P40.00

3 appraised at 51.50 should be reduced to 28.50

7 appraised at 105.50 should be reduced to 81.50

13 appraised at 151.00 should be reduced to 100.00

 26 appraised at 230.00 should be reduced to 130.00

30 appraised at 235.00 should be reduced to 200.00

41 appraised at 200.00 should be reduced to 100.00

73 appraised at (a) 450.00 should be reduced to 400.00

(b) 608.00 should be reduced to 500.00

96 appraised at 300.00 should be reduced to 240.00

It appears that the only evidence presented by the plaintiff as to the value of the improvements in
question was the expert testimony of Juan Bunuan, an employee of the Bureau of Plant Industry, who has
specialized in the study of plants in the Philippine Islands and is in charge of the office in that bureau for
the sale of seeds and young trees. He submitted a table by which he attempted to show the value of
different kinds of tress according to their sized and age. It does not appear that he had examined the fruit
trees in question, and we are of the opinion that the commission did not err in refusing to be controlled by
his table in fixing the valuation of the tress in question. The value of a fruit tree cannot be determined from
its size and age alone. It depends chiefly on what it bears.

Jose Rueda Arias was allowed P235 for the damages to a wall on two sides of lot No. 30, and Felisa Cruz
P300 for a house of mixed materials. No reason is adduced by the fiscal in his brief for modifying the
decision of the lower court as to these damages.

The decision of the trial judge as to the value of the improvements on the lots mentioned in the twelfth
assignment of error is affirmed.

With respect to the improvements on lot No. 66 of Aquilina de la Cruz, we have already held that the
value of said improvements was taken into consideration in fixing the value of her land that was
expropriated, and that she is not entitled to recover any additional sum for improvements.

ERROR NO. XIII

The lower court erred in sentencing the plaintiff to defray the costs of preparing a sketch to show
the area expropriated, and to pay the necessary amount for the resulting subdivision and
issuance of new certificates of title to the defendants, covering the portions of land not
expropriated.

If the land expropriated was already registered under Act No. 496, the owner is entitled to recover in
addition to the value of the land taken his expenses for the subdivision and the issuance of a new
certificate of title; if the land was not registered, the owner is entitled to recover his costs in obtaining a
plan showing the area expropriated; and if the land was not already registered and was brought under the
operation of the Cadastral Act, each party should pay his proportionate part of the expenses according to
the area expropriated and the portion remaining.

The defendants are entitled to recover legal interest on the value of their property from the time when it
was taken by the plaintiff.

Any question as to the cost of subdivision plans or registration or as to the specific date when the land of
any given defendant was taken by the plaintiff will be determined by the lower court, as there is no
evidence before us that would enable us to do so.
The decision appealed from is modified as hereinabove stated; in all other respects it is affirmed. The
plaintiff will pay the costs of the proceedings in the trial court. No costs will be allowed in this court.

G.R. No. L-10076 October 28, 1915

THE CITY OF MANILA, plaintiff-appellant,

vs.
FERNANDA FELISA CORRALES, ET AL., defendants-appellants.

Assistant City Attorney Moreno Lacalle for plaintiff.

Thos. D. Aitken for defendants.

JOHNSON, J.:

The present action was commenced on the 22nd of May, 1913, in the Court of First Instance of the City of
Manila. It was brought for the purpose of condemning certain property under the power of eminent
domain. The complaint alleged that the property in question was necessary for the purpose of opening or
building a street running from Calle Marques de Comillas to Calle Nozaleda, crossing Calle San
Marcelino and Taft Avenue. The plaintiff was able to purchase much of the land necessary for said
construction. The property involved in the present action is represented by the following plan:

The question of the necessity for said condemnation was submitted to the court. After hearing the
respective parties it was agreed that the opening or construction of said proposed street was necessary.
Whereupon, by agreement of all the parties, Mauro Prieto, Alfonso Tiaoqui, and Denis J. Mahoney were
appointed as commissioners to view and appraise the property involved in the present action and to
report their findings and conclusions to the court. said commissioners were duly sworn and entered upon
the performance of their duty. They held many sessions and heard all of the witnesses which the
respective parties desired to present.

After hearing all of the proofs presented relating to the value of the property involved, said commissioners
unanimously agree upon and made the following report:

By virtue of an order issued by the Honorable A.S. Crossfield, judge Court of First Instance, under
date of September 1, 1913, the undersigned, Mauro Prieto, Alfonso Tiaoqui and Denis J.
Mahoney were appointed commissioners to hear the parties, view the premises and assess the
damages to be paid for the condemnation of the properties required to be expropriated in the
above-entitled case.

The commissioners, after having duly qualified and after having duly notified all the parties
concerned, inspected the premises to be expropriated on September 13, 1913, and on the same
date and on various subsequent dates held various sessions at which evidence, oral and
documentary, relative to the property of Fernanda F. Corrales and children was offered and
received. A complete report of the proceedings is submitted herewith.

After all the evidence obtainable had been submitted by the litigants, the commissioners, after a
careful analytical study of the evidence, decided to make the following appraisement and
assessment of damages for the premises to be expropriated belonging to Fernanda F. Corrales
and children. The land sought to be expropriated, parcel No. 2, Exhibit A hereto attached, was
found to be considerably lower than the present level of Calle Marques de Comillas and lower
than level of the proposed boulevard:

For parcel No. 2, city engineer's plan F-10-161

F, hereto attached and marked Exhibit A,
having an area of 1,837.20 sq. m., after
deducting cost of fill required to bring to normal
street level P9,284.15
This sum is arrived at by the following calculations:
30 meters deep, Calle M.
de Comillas, 483.76 sq.
m., @ P8.00 P3,870.08
Interior area, 1,353.44 sq.
m., @ P5.00 6,767.20

Total, 1,837.20 sq. m. 10,637.28

Deduct cost of fill,
1,082.5 cubic meters, @
P1.25 1,353.13
Net value of land, present
condition 9,284.15
For the tienda indicated as building No. 2 on
city engineer's plan above quoted 2,000.00
For damages to residence, building No. 1 8,105.00
 Exhibit A, and for cost of necessary
rearrangement consequent on appropriation
For the litografia, building No. 3 Exhibit A 7,920.00
For cost of removing machinery from present
site and reinstalling on another location 2,100.00
For stable or camarin known as building No. 4 376.00
For damages incident to the stoppage of
business for a period of three months, more or
less 2,000.00

Total 31,785.15

In reviewing the testimony of the various witnesses, that of Sellner was taken as being the most
reasonable and logical with regard to the value of the land, and the uncontradicted testimony of
Latimer was used as a basis on which the estimated cost of fill to be deducted was considered
and determined. With regard to the main building marked No. 1, Exhibit A, and the stable marked
building No. 4, the evidence of Perez Muñoz and George B. Asp were considered jointly. Asp's
testimony was taken as the basis for the value placed on the litografia, building No. 3, Exhibit A,
and the certificate of the city assessor and collector taken for the value placed on the tienda
marked building No. 2 thereon. The item of P2,100 for removing and reinstalling the machinery
was agreed on between the parties in litigation and the sum of P2,000 recommended to and
awarded for the stoppage of business was based on the testimony of E.C. McCullough.

It will be noted that the actual figures given in Latimer's testimony as the cost of filing were P1.65,
but the undersigned believe that this price is excessive and have therefore recommended a
deduction of only P1.25 per cubic meter to be allowed.

Respectfully submitted.

(Signed) M. PRIETO
A. TIAOQUI.
DENIS J. MAHONEY.

Upon a consideration of the report of said commissioners, the Honorable A.S. Crossfield, judge, accepted
their findings of fact and conclusions and rendered a judgment in favor of the defendants and against the
plaintiff in accordance with their recommendations.

From that judgment, both the plaintiff and the defendants appealed to this court and each made several
assignments of error. For the purpose of convenience in discussing the questions presented by the
respective appellants, their assignments of error are hereby presented in parallel columns:

ASSIGNMENTS OF ERROR BY DEFENDANT- ASSIGNEMENTS OF ERROR BY PLAINTIFF-

APPELLANTS. APPELLANT.

First. The trial court erred in not awarding the First. The trial court erred in accepting the
defendants at least P13,617.63, as the value of
the land expropriated.
Second. The trial court erred in accepting the
commissioners' valuation of the tienda (building
No. 2 on plan) and in not fixing its valuation at at
least P5,265.
Third. The trial court erred in not awarding the
defendants at least P5,048.40, as damages on
building No. 1 on plan.
Fourth. The trial court erred in not awarding the
defendants at least P16,362, as the value of the
lithograph building No. 3 on plan.
Fifth. The trial court erred in not awarding the
defendants at least P849.36 for the camarin or
stable, No. 4 on plan.
Sixth. The trial court erred in not awarding
defendants at least P1,000 for trees, plants and
tennis-court.
Seventh. The trial court erred in not allowing the
consequential damages to the land not taken.
In taking private property for public use under the power of eminent domain, the persons whose property
is thus taken, should be paid the reasonable market price of their property. The owners of property should
valuation of P9,284.15, assessed by the
commissioners, as the present net market value
of the land sought to be condemned, and in
overruling plaintiff's motion to reduce said
valuation by P433, the amount arbitrarily
deducted by the commissioners from the cost of
filing, as established by the defendants.
Fourth. In accepting the sum of P2,000 assessed
by the commissioners as the value of the
structure known as building No. 2, and it not
reducing said valuation to the sum of P1,680.
Second. In accepting the sum of P8,105 as
assessed by the commissioners as the value of
the protion to be taken from the structure
described as "No. 1 main building," in Exhibit A,
and for cost of work of reconstruction and
damages to remainder of building, and in not
finding that the owners are only entitled to receive
for this item the sum of P5,444.50, and no more.
Fifth. In allowing the sum of 2,000 assessed by
the commisioners as damages to the defendants,
and in overruling plaintiff's motion to reject said
assessment.
Third. In accepting the sum of P376 assessed by
the commissioners as the value of the structure
described as "building No. 4" and in not finding
that the total compensation which the owners are
entitled to receive for said structure is the sum of
P200 and no more.
Sixth. In not finding that the sum of P5,566.44,
which is the consequential gain in value which the
remainder of the property of defendants will obtain
through the construction of the public
improvement referred to in these proceedings,
should be deducted from the compensation to be
paid to the owners.
not take advantage of the necessity of the public for the purpose of requiring the Government to pay more
than their property is worth, neither should the Government be permitted to take the property of private
persons at a less price than it is reasonably worth at the time of the expropriation. When we speak of the
market value of property taken under the power of eminent domain, we mean the value which purchasers
generally would pay for it. We do not mean what a purchaser would pay who had no particular object in
view in purchasing, and no definite plan as to the use to which to put it. The owner has a right to its value
for the use for which it would bring the most in the market. (King vs. Minneapolis Union railway Co., 32
Minn., 224.)

With this principle in mind we shall proceed to examine into the report of the commission for the purpose
of ascertaining whether or not their conclusions conform therewith. The first assignment of error by each
of the appellants relates to the amount allowed for all of the land belonging to the defendants,
appropriated for the opening or construction of the street. It is admitted by both parties that the amount of
land appropriated is 1,837.20 square meters. (See parcel No. 2 of plan.) The commissioners allowed as
the reasonable value of said land the sum of P9,284.15, said sum being, in their judgment, the
reasonable and just market value of said land. The commissioners, for the purpose of ascertaining the
value of said parcel No. 2, divided it into two parts, the first consisting of 483.76 square meters at P8 per
meter, and the second consisting of 1,353.44 square meters at P5 per meter. On that basis, the value of
the land (1,837.20 square meters) amounted to P10,637.28. The commissioners, however, reduced said
total amount by the sum of P1,353.13, which was the necessary cost, in their estimation, to properly
grade the street. Deducting from the total value of the land (P10,637.28) the cost of grading the street
(1,353.13), we have what the commissioners regarded as the value of the land, or the sum of P9,284.15.
The defendant-appellants insist that they should have been allowed the sum of P13,617.63. In support of
their claim they cite the declaration of several of the witnesses who testified during the trial of the cause
with reference to the value of the land in question. Sellner testified that a portion of the land was worth P8
per meter and the other portion P5 per meter. B.A. Green testified that the first portion or parcel was
worth P8 per meter and the other portion from P4.50 to P5 per meter. Serrano testified that one portion of
the land was worth P10 per meter and the balance P7 per meter. Enrique Brias testified that one portion
was worth P8 per meter and the other P5 per meter. Da. Felisa Corrales testified that all of the land in
question was worth on an average of P10 per meter.

It will be seen from the declarations of these witnesses that Sellner, Green, and Brias practically agreed
as to the value of the land. The defendant-appellants, however, attempt to show that some of the
witnesses were perhaps interested and that therefore their testimony should be to some extent
discredited. Eliminating the declarations of the witnesses for the plaintiff whose testimony it is claimed is
more or less prejudiced, and eliminating the declaration of one of the defendants for the same reason, we
would then have left the declaration of Green and Brias, who practically agree as to the value of the land,
against the testimony of Serrano. While we do not pretend that the preponderance of evidence can
always be measured by the number of witnesses, yet, nevertheless, in the present case, it would seem
that by every rule of evidence, the preponderance is in favor of the conclusions of the commissioners,
that one portion of the land in question is worth P8 and the other portion P5 per meter.

By reference to the report of the commissioners, it will be seen that they reduced the total value of the
land, P10,637.28, by the sum of P1,353.13, the amount which was necessary to grade the street when
opened. The commissioners found that it would cost P1.25 per cubic meter to properly grade the street.
The plaintiff-appellant complains that they should have reduced the total amount by the sum of P1,353.13
plus P433 or the sum of P1,786.13. The only expert evidence adduced during the trial of the cause, which
stands uncontradicted and undisputed, was the testimony of Latimer who stated that it would cost P1.65
per cubic meter to properly fill the street. Sellner testified that while the total value of the land was
P10,637.28, that amount should be reduced by whatever it would cost to fill and grade the street. He does
not state, however, the amount which it would cost to properly grade the street. The plaintiff-appellant
argues that the commissioners arbitrarily, without any proof whatever, reduced the cost of filling the street
and grading the land from P1.65 to P1.25 per square meter.
It will be remembered that none of the witnesses, except Sellner, in estimating the value of the land in
question, made any reduction whatever for the cost of grading the street when opened. It is difficult to
understand upon what theory the plaintiff could insist upon having the actual value of the land at the time
of expropriation reduced by what it would cost to grade the street after the land had been turned over to it.
The plaintiff was attempting to expropriate the land in the condition under which it was found. The
commissioners were appointed for the purpose of ascertaining its value in that condition. The question
was as to the value then, not its value after it was appropriated for public street purposes. It is difficult to
understand upon what theory the plaintiff could require the defendants to bear the cost of the construction
of the proposed street. In fact, a condition might be imagined where the street might be so graded as to
result in actual damaged to the rest of the property of the defendants. For example, if the city should
establish a grade much higher than the property belonging to the defendants, actual damages might
result to the defendants by virtue of the grading of the street. We do not believe that the cost of grading
the proposed street should be charged to the defendants. We are of the opinion, therefore, and so hold,
that the value of the property, P10,637.28, should not have been reduced by the sum of P1,353.13, or by
any other sum, for the purpose of paying for the grading of the proposed street. In our opinion, a
preponderance of the evidence clearly shows that the land (parcel No. 2) is reasonably worth P10,637.28.

The second assignment of error of the defendant-appellants and the fourth of the plaintiff-appellant
relates to the amount which the commissioners allowed for the tienda located on the land in question
which is marked building No. 2 on the plan. The defendant-appellants assert that the commissioners did
not allow sufficient for said tienda. The plaintiff-appellant contends that the commissioners allowed too
much as the value of the tienda. The defendant-appellants alleged that the commissioners should have
allowed the sum of P5,265. The plaintiff-appellant attempts to show that the tienda was not worth more
than P1,680. The commissioners allowed P2,000. By reference to the plan above, it will be seen that the
tienda at the point marked No. 2 is located wholly upon the land in question. The opening of the street
made it necessary to completely remove said tienda. The defendant-appellants show that they were
receiving a monthly rent for said building in the sum of P50. That proof is not denied. The plaintiff-
appellant insists, and presented proof in support of the contention, that the tienda could be reconstructed
for the sum of P1,680. The plaintiff insists that the defendants should not receive more for the tienda than
the cost of its construction, while the defendants insist that they should be allowed a sum which would
produce P50 per month, at the current rate of interest. In other words, the defendant-appellants insist that
if 6 per cent is the current rate of interest, for example, they should be allowed a sum for said tienda
sufficient to produce P50 per month. Using this example as the basis of the defendants' contention, they
should be allowed the sum of P10,000. Changing the basis of our calculations, and assuming that the
current rate of interest is 10 per cent, then, upon that basis, under the theory of the defendants, they
should receive the sum of 6,000 for said tienda.

One of the witnesses testified that property should be rented so as to render an income of 12 per cent on
its value. Another witness testified that property should be rented so as to produce an income of 10 per
cent. The defendant-appellants claim that under that testimony they should receive an amount for said
tienda which, at 11 per cent, would produce an income of P50 per month, or the sum of P5,454. In
support of their contention, the defendant-appellants cite several cases, the most important of which are
the G.R. & I. R.R. Co. vs. Weiden (70 Mich., 390), and the Union Railway Company vs. Hunton (114
Tenn., 609).

The question of the value of property in expropriation proceedings is always a difficult one to settle. The
opinions of men vary so much concerning the real value of property that the best the courts can do is to
hear all of the witnesses which the respective parties desire to present, and then, by carefully weighing
that testimony, arrive at a conclusion which is just and equitable. We do not believe that the contention of
the defendant-appellants is tenable. There may be cases where the value of property can be fixed upon
its actual rental value. For example, where the property has been rented for a number of years at a fixed
rate, then such rate ought to be used as the basis of the actual value of the property. It must not be
overlooked that there is a difference between the actual rental value of the property and the price for
which it is rented at any particular time. What property will rent for is a variable quantity. The amount paid
for the use of property is not always a constant quantity. The amount which the tenant will pay may
depend upon his particular necessities at the time. The theory of the defendants would fix the rent for all
time as a constant quantity. The constant changing of centers of population and of business, as well as
the fluctuation of business, depending upon good or so-called hard times, affect that value of property for
rental purposes. For example, had property been expropriated upon the Escolta in the city of Manila early
in the year 1898, and had its value been capitalized upon the basis of its rental value then, the owner
would have received a much less amount for his property than if the same property had been
expropriated in the year 1906, the difference depending upon what the particular property rented for in the
two periods. Thus, within a period of seven or eight years, an absolute readjustment of the value of the
properties had taken place. Thus it will be seen that the contention of the defendants that the rental value
of the property should be fixed for all time by what happens to be its rental value at the time of the
expropriation would seem to be untenable.

Neither can the rental value be determined upon a consideration of the cost of the construction of the
property. For example, a building in the principal part of the city might be worth much more than one on
the outskirts, which cost twice as much. A building on the Escolta, in the city of Manila, which cost
P50,000 might rent for twice as much as a building on the outskirts of the city which cost P100,000. Thus
it is clear that the cost of construction cannot be used as a basis for determining the value of property.

In determining the value of land appropriated for public purposes, the same considerations are to be
regarded as in a sale of property between private parties. The inquiry, in such cases, must be what is the
property worth in the market, viewed not merely with reference to the uses to which it is at the time
applied, but with reference to the uses to which it is plainly adapted, that is to say, What is it worth from its
availability for valuable uses?

So many and varied are the circumstances to be taken into account in determining the value of property
condemned for public purposes, that it is practically impossible to formulate a rule to govern its
appraisement in all cases. Exceptional circumstances will modify the most carefully guarded rule, but, as
a general thing, we should say that the compensation of the owner is to be estimated by reference to the
use for which the property is suitable, having regard to the existing business or wants of the community,
or such as may be reasonably expected in the immediate future. (Miss. and Rum River Boom
Co. vs. Patterson, 98 U.S., 403).

The tienda in question (building No. 2), according to the proof, is a very cheap structure, and might be
reconstructed for the sum of P1,680. Its value, as insisted upon by the defendant-appellants, does not
include the land. It does not seem reasonable to believe that such a structure, even granting that it rents
for P50 a month, has a market value such as is contended for by the defendants, under normal
conditions, where the owner desires to sell, without necessity, and to a person who desires to buy for
some specified purpose. l awphil.net

Again referring to the contention of the defendant-appellants that they should receive for said tienda a
sum which, at 11 per cent, would produce an income of P50 per month, we desire to make the following
observations.

Upon the land expropriated there were three buildings, which the defendants rented: (a) A tienda which
rented for P50; (b) a lithographing establishment which rented for P150 per month; and (c) a stable which
rented for P10 per month.

The amount received by the defendants for these three buildings was P210 per month. Of course, in
considering said buildings, some consideration must be given to the land which they occupy. Assuming
that the defendants desired to sell said parcel No. 2, the land in question, in endeavoring to ascertain
what the land and buildings in question are worth, upon their theory, then they would capitalize said
buildings and land at an amount which, at 11 per cent, would produce P210 per month. Upon that basis,
the land and buildings would be worth a little more than P22,909. Taking the amount which the
commissioners allowed the defendants, P31,785.15, and reducing that sum by the sum which the
commissioners allowed for damages done to the residence, P8,105, we have the sum of P23,680, which
the commissioners allowed for the land and buildings, which is P771,15 more than the defendants were
entitled to upon their own theory. Of course, this conclusion is reached upon the theory of the defendants,
to wit, that the value of their land is an amount which, at 11 per cent, would produce the present income
of P210.

It must be remembered, by reference to the above, that we have added to the value of the land, the sum
of P1,353.13, which the commissioners reduced, an account of the cost of grading the street. If that sum,
P1,353.13, is added to the P771.15 above, we have the sum of P2,124.28, more than the defendants
claim they are entitled to upon their own theory. This argument is not presented here for the purpose of
indicating our acceptance of the theory of the defendants, but simply for the purpose of demonstrating
that, even upon their own theory, they are receiving more for their property than they would under their
own contention.

With reference to the other assignments of error, relating to the various items which the commissioners
allowed, and considering the evidence adduced during the hearing, and in view of what has been said
above, and without a further discussion of the evidence relating to said assignments of error, we are of
the opinion, and so hold, that with the modification above indicated, relating to the cost of grading the
street, the judgment of the lower court should be affirmed, with costs.

It is therefore hereby ordered and decreed that a judgment be entered in favor of the defendants and
against the plaintiff in the sum of P33,138.28, with costs. So ordered.
G.R. No. 71412 August 15, 1986

BENGUET CONSOLIDATED, INC., (now Benguet Corporation), petitioners,

vs.
REPUBLIC OF THE PHILIPPINES, respondent.

Jose P. O. Aliling for petitioner.

Antonio C. Amor for respondent.

GUTIERREZ, JR., J.:

This is a petition to review the decision of the Intermediate Appellate Court in an expropriation case,
insofar as the decision affects the petitioner.

On June 18, 1958, the Republic of the Philippines filed with the then Court of First Instance of Benguet
and Baguio a complaint for expropriation against ten (10) defendants, among them Benguet
Consolidated, Inc. The Republic stated that it needed the property for the purpose of establishing and
maintaining a permanent site for the Philippine Military Academy, a training institution for officers in the
Armed Forces of the Philippines, under the direct authority and supervision of the Department of National
Defense. It also averred that it had occupied since May 6, 1950, the area covered by the mining claims of
the defendants and had already installed therein permanent buildings and other valuable improvements
with no less than P3,000,000.00 in the belief that the area was unoccupied portions of the public domain,
and that according to the Appraisal Committee constituted under Administrative Order No. 144, dated
October 10, 1955, by the President of the Philippines, the reasonable and fair market value of the rights
and interests of all the defendants which win be affected by these eminent domain proceedings cannot
exceed the total sum of P532,371.40.

The locations of the petitioner's four mining claims with a total area of 25.1082 hectares were made on
the following dates:

JEAN May 18, 1933 DOLORES FR May 15, 1933 NUGGET FR August 24, 1930
SMOKE May 11 & 12, 1933

The petitioner filed a motion to dismiss on the ground that, insofar as it is concerned, the Republic did not
need and has not occupied the areas covered by the above-mentioned mining claims and neither have
improvements been made on the said areas and that the area covers ground which is rugged in terrain
for which the Philippine Military Academy could have no use. By way of separate and special grounds for
dismissal, Benguet Consolidated, Inc. alleged that the authority given by the President of the Philippines
for the expropriation proceedings refers to privately owned mineral lands, mining interests, and other
private interests of private individuals and entities of private individuals in certain portions of the site
surveyed for and presently occupied by the Philippine Military Academy at Loakan, Baguio and that the
expropriation of Benguet Consolidated, Inc.'s mineral claims is in violation of law.

On December 28, 1955, the trial court heard Benguet Consolidated Inc.'s motion to dismiss. Valentin
Camado was presented as witness and he testified that he performed the annual assessment work for
movant's mineral claims. Since the possibility of an amicable settlement was raised, the representatives
of both parties agreed that pending any definite settlement, the hearing of the motion to dismiss would be
held in abeyance. On this same day, the trial court issued an order, the dispositive portion of which reads:
 In view of the fact that the defendants are no longer challenging plaintiff's right to
condemn the property, subject of the instant case, the plaintiff Republic of the Philippines
is hereby declared to have lawful right to take the property sought to be condemned, for
the public use described in the complaint, upon payment of just compensation to be
determined as of the date of the filing of the complaint.

Benguet Consolidated, Inc. took exception to the order of condemnation by filing a motion stating that at
no time, had it manifested, either expressly or impliedly, that it was no longer challenging the plaintiff's
right to expropriate its former mineral claims. In the same motion, Benguet Consolidated, Inc. moved for
the setting of a date for the continuation of the hearing of its motion to dismiss.

Acting on this motion, the trial court in its Order dated February 23, 1960, stated that " ... to satisfy
Benguet Consolidated, Inc., this Court makes it of record that, pending negotiations between the
Government and Benguet Consolidated, Inc. said corporation has not waived its right to challenge
plaintiff's right to condemn the mineral claims in question."

In the course of the proceedings, a Board of Commissioners to assess and establish the reasonable
amount of compensation was formed. Appointed by the court as members of the board of Commissioners
were Engineer Ernesto C. Bengson and Attorney-Engineer Rolando J. Gamboa representing the court
and the army respectively and Mining Engineer Francisco G. Joaquin, nominated by the defendants to
represent all of them.

Commissioner Joaquin resigned after attending eight (8) hearings leaving the two other commissioners to
conduct 56 more hearings.

On February 28, 1963, the Board of Commissioners submitted their report recommending the payment of
P43,703.37 to the ten (10) defendants as just compensation for their expropriated properties.

The parties filed their objections to the Commissioners' report.

The trial court rejected the Commissioners' Report and made its own findings and conclusions. On July 5,
1973, the trial court promulgated a decision awarding various sums to the defendants.

Benguet Consolidated filed a motion to clarify the decision since the dispositive portion of the decision
computed the respective amounts to be paid by the Republic to the defendants without, however,
including the amount to be paid to Benguet Consolidated for the expropriation of its four (4) mining
claims. In other words, the petitioner was excluded from the awards made by the trial court.

After Benguet Consolidated filed two other motions (motion for new trial and/or reconsideration; second
motion for clarification) reiterating its objection to the decision in not providing for just compensation for
their expropriated properties, the trial court issued an order fixing the "just compensation of the surface
area of the four (4) claims of Benguet Consolidated, Inc. in the amount of P128,051.82 with interest at 6%
per annum from May 6, 1950 until fully paid, plus attorney's fees in an amount equal to 5 % of the sum
fixed by this Court." A motion to reopen the case praying for a new trial to allow it to present evidence as
to the value of the properties filed by Benguet Consolidated was denied by the trial court.

Among all parties, only the plaintiff and defendant Benguet Consolidated, Inc. pursued their appeal before
the then Court of Appeals.

On June 28, 1985, the Intermediate Appellate Courts promulgated a decision setting aside the trial court's
decision. The dispositive portion of the decision reads:
 WHEREFORE, the appealed judgment is hereby reversed and set aside, and another
one is rendered (1) condemning the mineral claims described in the complaint belonging
to the defendants for the public use therein stated; and (2) ordering the plaintiff to pay the
defendants as follows:

Demonstration Gold Mines, Ltd. 22.0037 Has. x P600.00 P13,202.22

Benguet Goldfields Mining Co. 50.6633 Has. x P300.00 15,198.99

Crown Mines, Inc. none Benguet Consolidated Mining Co. 25.1082 Has. x P300.00
7,532.46

Josephine McKenzie none Josephine Murphy 5.8432 Has. x P300.00 1,752.96

J.E.H. Stevenot 1.1151 Has. 334.53 x P300.00

Andres Trepp none Gregoria Beley 18.9407 Has. x P300.00 5,682.21

No costs.

The petitioner asserts that there is a need to review and reverse the appellate court's decision because of
the following reasons:

A.

THE CONDEMNATION OF PETITIONER'S MINERAL CLAIM IS CONTRARY TO LAW

AND APPLICABLE JURISPRUDENCE.

B.

THE APPROVAL OF THE COMMISSIONER'S REPORT IS CONTRARY TO LAW AND

APPLICABLE JURISPRUDENCE.

The petitioner states that its mineral claims were located since 1933 at the latest. It argues that by such
location and perfection, the land is segregated from the public domain even as against the government.
Citing Gold Greek Mining Corporation v. Rodriguez, et al (66 Phil. 259), it states that when the location of
a mining claim is perfected, this has the effect of a grant of exclusive possession with right to the
enjoyment of the surface ground as well as of all the minerals within the lines of the claim and that this
right may not be infringed.

The petitioner's arguments have no merit. The filing of expropriation proceedings recognizes the fact that
the petitioner's property is no longer part of the public domain. The power of eminent domain refers to the
power of government to take private property for public use. If the mineral claims are public, there would
be no need to expropriate them. The mineral claims of the petitioner are not being transferred to another
mining company or to a public entity interested in the claims as such. The land where the mineral claims
were located is needed for the Philippine Military Academy, a public use completely unrelated to mining.
The fact that the location of a mining claim has been perfected does not bar the Government's exercise of
its power of eminent domain. The right of eminent domain covers all forms of private property, tangible or
intangible, and includes rights which are attached to land.

The petitioner next raises a procedural point-whether or not in expropriation proceedings an order of
condemnation may be entered by the court before a motion to dismiss is denied.
Citing the case of Nieto v. Ysip, etc., et al (97 Phil. 31), the petitioner claims that this cannot be done.

We ruled in the Nieto case that:

A cursory reading of Sections 4, 5 and 6 of Rules 69 of the Rules of Court discloses the
steps to be followed, one after another, in condemnation proceedings from the institution
thereof. Thep is the presentation by defendants of their objections and defenses to the
right of plaintiff to take the property for the use specified, which objections and defenses
shall be set forth in a single motion to dismiss (Section 4). The second is the hearing on
the motion and the unfavorable resolution thereon by the court. That an adverse
resolution on the motion to dismiss, if objections and defenses are presented, is required
because the rule (Sec. 5) authorizes the court to enter an order of condemnation only if
the motion to dismiss is overruled, or if no motion to dismiss had been presented. The
second step includes the order of condemnation, which may be embodied in the
resolution overruling the motion to dismiss. The third is the appointment of
commissioners to assess the just compensation for the property (Sec. 6). That the above
steps must follow one another is evident from the provisions of the rules as well as from
the inter-relation between the steps and the dependence of one upon the previous step.
Thus no order of condemnation may be entered if the motion to dismiss has not been
passed upon and overruled, and no assessment should be undertaken unless and until
an order of condemnation has already been entered.

In the instant case the ruling on the motion to dismiss was deferred by the trial court in view of a possible
amicable settlement. Moreover, after the trial court entered an order of condemnation over the objection
of the petitioner, the court issued an order to the effect that the trial court"... makes it of record that,
pending negotiations between the Government and Benguet Consolidated, Inc. said corporation has not
waived its right to challenge plaintiff's right to condemn the mineral claims in question."

At the hearing conducted by the Board of Commissioners, the counsel for the petitioner manifested that
its motion to dismiss was still pending in court, and requested that the hearing for the presentation of
evidence for the petitioner be cancelled. At this point, negotiations between the government and the
petitioner were still going on.

In its original decision, the lower court overlooked an award of just compensation for the petitioner. This
triggered off the filing of the following motions by the petitioner: (1) motion for clarification praying that an
order be issued clarifying the decision insofar as the compensation to be paid to the petitioner is
concerned; (2) motion for new trial and/or reconsideration on the ground that the court did not award just
compensation for the properties of the petitioner; (3) motion to re-open case on the ground that the issues
insofar as the petitioner is concerned have not been joined since its motion to dismiss has not been
resolved; and (4) a second motion for clarification praying therein:

WHEREFORE, it is respectfully prayed that a clarification of the decision rendered on

July 9th 1973 be made particularly with respect to defendant Benguet Consolidated, Inc.,
so as to make a specific award, as in the case of all the other defendants, for the just and
fair market value of the surface rights to its four condemned mineral claims at the very
least on the basis of the same rate of P0.51 per square meter, or for the total amount of
P128,051.82; with interest thereon at 6% per annum from May 6, 1950 until fully paid;
plus attorney's fees in an amount equal to 5% of the sum fixed to be just and fair market
value of the mineral claims.

The lower court denied the motion to re-open the case by stating in its Order:

xxx xxx xxx

 When this Court issued the order declaring that plaintiff has a lawful right to take the
property sought to be condemned,it impliedly overruled defendant's Motion to dismiss
which in expropriation cases takes the place of an answer (Sec. 3, Rule 67, Rules of
Court), and what defendant could have done at the time would have been to present
evidence on the fair market value of its properties. Having slept on its rights, Benguet
Consolidated, Inc. can no longer have this case reopened for the presentation of its
evidence.

This order was not challenged by the petitioner. Instead, it filed its above-mentioned second motion for
clarification. It is to be noted that in its motion for new trial and/or reconsideration, the petitioner stated:

Defendant Benguet Consolidated, Inc., does not dispute the right of the government to
exercise the power of eminent domain with respect to its property. However, in so doing
this court failed to comply with the basic constitutional provision that said power can only
be exercised upon payment of just compensation ...

Under these circumstances, the petitioner is estopped from questioning the proceedings of condemnation
followed by the court. We cannot condone the inconsistent positions of the petitioner. (See Republic v.
Court of Appeals, 133 SCRA 505). it is very clear from the statements of the petitioner that it had already
abandoned its earlier stand on the propriety of expropriation and that its intent shifted to the just
compensation to be paid by the plaintiff for its condemned properties.

The second issue centers on the amount of just compensation which should be paid by the respondent to
the petitioner for the condemned properties.

The petitioner assails the appellate court's approval of the Commissioners' Report which fixed the amount
of P7,532.46 as just compensation for the mineral claims. The petitioner contends that this amount is by
any standard ridiculously low and cannot be considered just and that in fact the commissioners' report
was rejected by the trial court.

The Commissioners' Report was submitted by Ernesto C. Bengson, chairman of the board and Rolando
J. Gamboa, Francisco Joaquin, representing the defendants resigned after attending eight (8) hearings
due to ill health. The defendants did not ask for a replacement.

The conclusion of the Commissioners are the result of documentary evidence presented by the parties,
testimonies of several mining experts and executives of mining companies including Mr. Ralph W.
Crosby, the then vice-president of the petitioner, and ocular inspections of the mining claims involved in
this case. Among those present during the ocular inspection were Mr. Joventino S. Perfecto and Mr.
Kevin A. Callow, the Chief Engineer of the Acupan Mines and the Exploration Geologist of the Benguet
Consolidated, Inc., respectively. Among those considered by the commissioners in order to determine the
just compensation to be paid to the defendants were the ore reserves, base metal concentrates, and
gypsums deposits of the mining claims.

The P7,532.46 just compensation for the petitioner was based on the following findings of the Board of
Commissioners:

The Commissioners conducted an ocular inspection of the mining claims involved in this
case, on October 14, 1961, with prior notice to all the parties. At this ocular inspection,
Mr. Joventino S. Perfecto and Mr. Kevin A. Callow, Chief Engineer of the Acupan Mines
and Exploration Geologist, respectively, of the Benguet Consolidated, Inc., also took part.
In the mining claims of Benguet Consolidated, Inc., involved in this case, namely,
Dolores, Nugget, Jean and Smoke mining claims, there are some exploration tunnels and
trenches to explore the mineral character of these claims. However, the exploration
and/or development work on these claims is not sufficient for making any estimate of the
 value of these claims for mining purposes. The property has possibilities; but, with the
limited work done on these claims, no ore body has as yet been found. Consequently, the
value of these claims cannot be determined at the present time.

xxx xxx xxx

With respect to the mining claims of Benguet Consolidated, Inc., which are considered
apart from the other mining claims involved in this case, the mineral value of these claims
cannot possibly be determined for the present, as these claims are not yet sufficiently
developed.

Upon the foregoing considerations, it would appear that authorities that the defendants
would be entitled to would be the value of the surface rights of their mining claims.

xxx xxx xxx

According to the 'Schedule of Assessed Value of Mineral Lands (Exhs. B and B-1), the
assessed value of a patented lode claim (producing or non-producing) or a non-patented
producing claim is P600.00 per hectare, and for a non- producing unpatented claim, it is
P300.00 per hectare.

The petitioner's mining claims were classified as non-producing unpatented claims. It was established
that the area of the mineral claims belonging to the petitioner and included in the Philippine Military
Reservation was 25.1082 hectares. Hence, the commissioners arrived at the total amount of P7,532.46
(25.1082 x P300.00) as just compensation to be paid to the petitioner for its mining claims.

The Schedule of Assessment Value of Mineral Lands (Exhibits B, B-1) presented by the government, is a
"SCHEDULE of Assessed Values of mineral lands, furnished by the Provincial Assessor of Mountain
Province on June 30, 1955" issued by Onofre D. Alabanza, ex-oficio Mining Recorder of the Office of the
Mining Recorder, City of Baguio, Bureau of Mines, Department of Agriculture and Natural Resources.

These findings negate the trial court's observation that the commissioners only took into consideration the
surface value of the mineral claims. In fact, the lower court affirmed the commissioners' report to the
effect that the petitioner herein is only entitled to the surface value of the mineral claims when it said:

The Court regrets that it has no basis on which to evaluate the value of the other claims
the mineral reserves of which were not included or taken into consideration in the above-
mentioned evaluations. The Court, however, realizes that these mineral claims have
values. In the absence of any evidence as to their positive, possible and probable ore
contents, said claims shall be evaluated only on the basis of their surface areas.

"Other claims" include the petitioner's mining claims. Thus, the trial court computed the amount to be paid
to the petitioner as just compensation on the basis of the surface value of its mining claims.

We find no reason to disturb the lower court's findings on this matter. The petitioner has not advanced
any reason for us to reject such findings.

As stated earlier, the appellate court based its findings on the Commissioners' Report. The petitioner now
assails the approval of the commissioners' report regarding the P7,532.46 just compensation to be paid
by the government for its four (4) mining claims.

While it is true that a court may reject a Commissioners' Report on the ground that the amount allowed is
palpably inadequate (Republic v. Vda. de Castellvi, 58 SCRA 336, citing Manila Railroad Co. v.
Caligsihan, 40 Phil. 326) it is to be noted that the petitioner herein has not supported its stand that the
P7,532.46 just compensation for its mining claims is by any standard ridiculously low and cannot be
considered just.

On the other hand, the appellate court said:

The integrity and impartiality of the remaining Commissioners, Engrs. Bengson and
Gamboa, were not questioned by the defendants. They are experienced mining
engineers and members of the bar. And the Commissioners did give value to the mineral
contents of the claims. Pages 168 to 206 of the Report will show that the Board
considered the ore reserves and the base metal concentrates and gypsum deposits. The
Board concluded that it was not profitable to operate the claims, taking into account the
cost of production, rehabilitation and depletion, depreciation and smelting and marketing
expenses. Although Engineer Joaquin resigned after eight hearings of the Board, the
defendants did not ask for a replacement. Anyway, the Court was ably represented by
Engineer Bengson. The Board held a total of 64 hearings. Besides documentary
evidence, and an ocular inspection of the mining claims involved made with prior notice,
twelve witnesses were presented by the parties.

We are not inclined to reject these findings of facts of the appellate court in the absence of any contrary
evidence pointed to by the petitioner.

Moreover, it is to be noted that unlike the plaintiff and other defendants, the petitioner did not file any
opposition to the Commissioners' Report in the lower court.

The appellate court, however, should have provided for the payment of legal interest from the time the
government took over the petitioner's mining claims until payment is made by the government. (See
National Power Corporation v. Court of Appeals, 129 SCRA 665).

We ruled in Republic v. Juan (92 SCRA 26):

xxx xxx xxx

...[S]aid interest ... 'runs as a matter of law and follows as a matter of course from the
right of the landowner to be placed in as good a position as money can accomplish, as of
the date of the taking' (30 CJS 230). Stated otherwise: 'Where the payment of
compensation does not accompany the taking of property for public use but is postponed
to a later date, the owner of the property is ordinarily entitled to the award of an additional
sum which will compensate for delay (cases cited) or which was in other words, produce
the full equivalent of the value of the property paid contemporaneously with the taking'
(29-A CJS 762). Under this view, the interest awarded is deemed part of the just
compensation required to be paid to the owner (27 Am. Jur. 112). ...

The appellate court's decision is, therefore, modified in this respect.

WHEREFORE, the decision of the Intermediate Appellate Court is MODIFIED in that the government is
directed to pay the petitioner the amount of SEVEN THOUSAND FIVE HUNDRED THIRTY-TWO
PESOS) and 46/100 (P7,532.46) plus 6% interest from May 6, 1950 to July 29, 1974 and 12% thereafter
until fully paid, and AFFIRMED in all other respects.

SO ORDERED.
G.R. No. 155746 October 13, 2004

DIOSDADO LAGCAO, DOROTEO LAGCAO and URSULA LAGCAO, petitioners,

vs.
JUDGE GENEROSA G. LABRA, Branch 23, Regional Trial Court, Cebu, and the CITY OF
CEBU, respondent.

DECISION

CORONA, J.:

Before us is a petition for review of the decision dated July 1, 2002 of the Regional Trial Court, Branch 23,
Cebu City1 upholding the validity of the City of Cebu’s Ordinance No. 1843, as well as the lower court’s
order dated August 26, 2002 denying petitioner’s motion for reconsideration.

In 1964, the Province of Cebu donated 210 lots to the City of Cebu. One of these lots was Lot 1029,
situated in Capitol Hills, Cebu City, with an area of 4,048 square meters. In 1965, petitioners purchased
Lot 1029 on installment basis. But then, in late 1965, the 210 lots, including Lot 1029, reverted to the
Province of Cebu.2Consequently, the province tried to annul the sale of Lot 1029 by the City of Cebu to
the petitioners. This prompted the latter to sue the province for specific performance and damages in the
then Court of First Instance.

On July 9, 1986, the court a quo ruled in favor of petitioners and ordered the Province of Cebu to execute
the final deed of sale in favor of petitioners. On June 11, 1992, the Court of Appeals affirmed the decision
of the trial court. Pursuant to the ruling of the appellate court, the Province of Cebu executed on June 17,
1994 a deed of absolute sale over Lot 1029 in favor of petitioners. Thereafter, Transfer Certificate of Title
(TCT) No. 129306 was issued in the name of petitioners and Crispina Lagcao. 3

After acquiring title, petitioners tried to take possession of the lot only to discover that it was already
occupied by squatters. Thus, on June 15, 1997, petitioners instituted ejectment proceedings against the
squatters. The Municipal Trial Court in Cities (MTCC), Branch 1, Cebu City, rendered a decision on April
1, 1998, ordering the squatters to vacate the lot. On appeal, the RTC affirmed the MTCC’s decision and
issued a writ of execution and order of demolition.1avvphi 1

However, when the demolition order was about to be implemented, Cebu City Mayor Alvin Garcia wrote
two letters4 to the MTCC, requesting the deferment of the demolition on the ground that the City was still
looking for a relocation site for the squatters. Acting on the mayor’s request, the MTCC issued two orders
suspending the demolition for a period of 120 days from February 22, 1999. Unfortunately for petitioners,
during the suspension period, the Sangguniang Panlungsod (SP) of Cebu City passed a resolution which
identified Lot 1029 as a socialized housing site pursuant to RA 7279.5 Then, on June 30, 1999, the SP of
Cebu City passed Ordinance No. 17726 which included Lot 1029 among the identified sites for socialized
housing. On July, 19, 2000, Ordinance No. 18437 was enacted by the SP of Cebu City authorizing the
mayor of Cebu City to initiate expropriation proceedings for the acquisition of Lot 1029 which was
registered in the name of petitioners. The intended acquisition was to be used for the benefit of the
homeless after its subdivision and sale to the actual occupants thereof. For this purpose, the ordinance
appropriated the amount of P6,881,600 for the payment of the subject lot. This ordinance was approved
by Mayor Garcia on August 2, 2000.

On August 29, 2000, petitioners filed with the RTC an action for declaration of nullity of Ordinance No.
1843 for being unconstitutional. The trial court rendered its decision on July 1, 2002 dismissing the
complaint filed by petitioners whose subsequent motion for reconsideration was likewise denied on
August 26, 2002.
In this appeal, petitioners argue that Ordinance No. 1843 is unconstitutional as it sanctions the
expropriation of their property for the purpose of selling it to the squatters, an endeavor contrary to the
concept of "public use" contemplated in the Constitution.8 They allege that it will benefit only a handful of
people. The ordinance, according to petitioners, was obviously passed for politicking, the squatters
undeniably being a big source of votes. 1avvphi 1

In sum, this Court is being asked to resolve whether or not the intended expropriation by the City of Cebu
of a 4,048-square-meter parcel of land owned by petitioners contravenes the Constitution and applicable
laws.

Under Section 48 of RA 7160,9 otherwise known as the Local Government Code of 1991,10 local
legislative power shall be exercised by the Sangguniang Panlungsod of the city. The legislative acts of
the Sangguniang Panlungsod in the exercise of its lawmaking authority are denominated ordinances.

Local government units have no inherent power of eminent domain and can exercise it only when
expressly authorized by the legislature.11 By virtue of RA 7160, Congress conferred upon local
government units the power to expropriate. Ordinance No. 1843 was enacted pursuant to Section 19 of
RA 7160:

SEC. 19. Eminent Domain. − A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or
welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant
to the provisions of the Constitution and pertinent laws xxx. (italics supplied).

Ordinance No. 1843 which authorized the expropriation of petitioners’ lot was enacted by the SP of Cebu
City to provide socialized housing for the homeless and low-income residents of the City.

However, while we recognize that housing is one of the most serious social problems of the country, local
government units do not possess unbridled authority to exercise their power of eminent domain in
seeking solutions to this problem.

There are two legal provisions which limit the exercise of this power: (1) no person shall be deprived of
life, liberty, or property without due process of law, nor shall any person be denied the equal protection of
the laws;12 and (2) private property shall not be taken for public use without just compensation. 13 Thus, the
exercise by local government units of the power of eminent domain is not absolute. In fact, Section 19 of
RA 7160 itself explicitly states that such exercise must comply with the provisions of the Constitution and
pertinent laws.

The exercise of the power of eminent domain drastically affects a landowner’s right to private property,
which is as much a constitutionally-protected right necessary for the preservation and enhancement of
personal dignity and intimately connected with the rights to life and liberty. 14 Whether directly exercised by
the State or by its authorized agents, the exercise of eminent domain is necessarily in derogation of
private rights.15 For this reason, the need for a painstaking scrutiny cannot be overemphasized.

The due process clause cannot be trampled upon each time an ordinance orders the expropriation of a
private individual’s property. The courts cannot even adopt a hands-off policy simply because public use
or public purpose is invoked by an ordinance, or just compensation has been fixed and determined. In De
Knecht vs. Bautista,16 we said:

It is obvious then that a land-owner is covered by the mantle of protection due process affords. It
is a mandate of reason. It frowns on arbitrariness, it is the antithesis of any governmental act that
smacks of whim or caprice. It negates state power to act in an oppressive manner. It is, as had
been stressed so often, the embodiment of the sporting idea of fair play. In that sense, it stands
as a guaranty of justice. That is the standard that must be met by any governmental agency in the
 exercise of whatever competence is entrusted to it. As was so emphatically stressed by the
present Chief Justice, "Acts of Congress, as well as those of the Executive, can deny due
process only under pain of nullity. xxx.

The foundation of the right to exercise eminent domain is genuine necessity and that necessity must be of
public character.17 Government may not capriciously or arbitrarily choose which private property should be
expropriated. In this case, there was no showing at all why petitioners’ property was singled out for
expropriation by the city ordinance or what necessity impelled the particular choice or selection.
Ordinance No. 1843 stated no reason for the choice of petitioners’ property as the site of a socialized
housing project.

Condemnation of private lands in an irrational or piecemeal fashion or the random expropriation of small
lots to accommodate no more than a few tenants or squatters is certainly not the condemnation for public
use contemplated by the Constitution. This is depriving a citizen of his property for the convenience of a
few without perceptible benefit to the public.18

RA 7279 is the law that governs the local expropriation of property for purposes of urban land reform and
housing. Sections 9 and 10 thereof provide:

SEC 9. Priorities in the Acquisition of Land. − Lands for socialized housing shall be acquired in
the following order:

(a) Those owned by the Government or any of its subdivisions, instrumentalities, or

agencies, including government-owned or controlled corporations and their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas or Priority Development, Zonal Improvement
Program sites, and Slum Improvement and Resettlement Program sites which have not
yet been acquired;

(e) Bagong Lipunan Improvement of Sites and Services or BLISS which have not yet
been acquired; and

(f) Privately-owned lands.

Where on-site development is found more practicable and advantageous to the beneficiaries, the
priorities mentioned in this section shall not apply. The local government units shall give
budgetary priority to on-site development of government lands. (Emphasis supplied).

SEC. 10. Modes of Land Acquisition. − The modes of acquiring lands for purposes of this Act
shall include, among others, community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the Government, joint venture agreement, negotiated
purchase, and expropriation: Provided, however, That expropriation shall be resorted to only
when other modes of acquisition have been exhausted: Provided further, That where
expropriation is resorted to, parcels of land owned by small property owners shall be exempted
for purposes of this Act: xxx. (Emphasis supplied).

In the recent case of Estate or Heirs of the Late Ex-Justice Jose B.L. Reyes et al. vs. City of Manila,19 we
ruled that the above-quoted provisions are strict limitations on the exercise of the power of eminent
domain by local government units, especially with respect to (1) the order of priority in acquiring land for
socialized housing and (2) the resort to expropriation proceedings as a means to acquiring it. Private
lands rank last in the order of priority for purposes of socialized housing. In the same vein, expropriation
proceedings may be resorted to only after the other modes of acquisition are exhausted. Compliance with
these conditions is mandatory because these are the only safeguards of oftentimes helpless owners of
private property against what may be a tyrannical violation of due process when their property is forcibly
taken from them allegedly for public use.

We have found nothing in the records indicating that the City of Cebu complied strictly with Sections 9
and 10 of RA 7279. Ordinance No. 1843 sought to expropriate petitioners’ property without any attempt to
first acquire the lands listed in (a) to (e) of Section 9 of RA 7279. Likewise, Cebu City failed to establish
that the other modes of acquisition in Section 10 of RA 7279 were first exhausted. Moreover, prior to the
passage of Ordinance No. 1843, there was no evidence of a valid and definite offer to buy petitioners’
property as required by Section 19 of RA 7160.20 We therefore find Ordinance No. 1843 to be
constitutionally infirm for being violative of the petitioners’ right to due process.

It should also be noted that, as early as 1998, petitioners had already obtained a favorable judgment of
eviction against the illegal occupants of their property. The judgment in this ejectment case had, in fact,
already attained finality, with a writ of execution and an order of demolition. But Mayor Garcia requested
the trial court to suspend the demolition on the pretext that the City was still searching for a relocation site
for the squatters. However, instead of looking for a relocation site during the suspension period, the city
council suddenly enacted Ordinance No. 1843 for the expropriation of petitioners’ lot. It was trickery and
bad faith, pure and simple. The unconscionable manner in which the questioned ordinance was passed
clearly indicated that respondent City transgressed the Constitution, RA 7160 and RA 7279.

For an ordinance to be valid, it must not only be within the corporate powers of the city or municipality to
enact but must also be passed according to the procedure prescribed by law. It must be in accordance
with certain well-established basic principles of a substantive nature. These principles require that an
ordinance (1) must not contravene the Constitution or any statute (2) must not be unfair or oppressive (3)
must not be partial or discriminatory (4) must not prohibit but may regulate trade (5) must be general and
consistent with public policy, and (6) must not be unreasonable. 21

Ordinance No. 1843 failed to comply with the foregoing substantive requirements. A clear case of
constitutional infirmity having been thus established, this Court is constrained to nullify the subject
ordinance. We recapitulate:

first, as earlier discussed, the questioned ordinance is repugnant to the pertinent provisions of the
Constitution, RA 7279 and RA 7160;

second, the precipitate manner in which it was enacted was plain oppression masquerading as a
pro-poor ordinance;

third, the fact that petitioners’ small property was singled out for expropriation for the purpose of
awarding it to no more than a few squatters indicated manifest partiality against petitioners, and

fourth, the ordinance failed to show that there was a reasonable relation between the end sought
and the means adopted. While the objective of the City of Cebu was to provide adequate housing
to slum dwellers, the means it employed in pursuit of such objective fell short of what was legal,
sensible and called for by the circumstances.

Indeed, experience has shown that the disregard of basic liberties and the use of short-sighted methods
in expropriation proceedings have not achieved the desired results. Over the years, the government has
tried to remedy the worsening squatter problem. Far from solving it, however, government’s kid-glove
approach has only resulted in the multiplication and proliferation of squatter colonies and blighted areas.
A pro-poor program that is well-studied, adequately funded, genuinely sincere and truly respectful of
everyone’s basic rights is what this problem calls for, not the improvident enactment of politics-based
ordinances targeting small private lots in no rational fashion.

WHEREFORE, the petition is hereby GRANTED. The July 1, 2002 decision of Branch 23 of the Regional
Trial Court of Cebu City is REVERSED and SET ASIDE.

SO ORDERED.
G.R. No. 167735 April 18, 2012

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
HEIRS OF SALVADOR ENCINAS and JACOBA DELGADO, Respondents.

DECISION

BRION, J.:

We resolve the petition for review on certiorari, 1 filed by the Land Bank of the Philippines (petitioner), that
challenges the July 22, 2004 decision2 and the April 6, 2005 resolution3 of the Court of Appeals (CA) in
CA-G.R. SP No. 78596. The CA decision dismissed the petitioner’s petition for review for lack of merit.
The CA resolution denied the petitioner’s subsequent motion for reconsideration.

The Factual Antecedents

The late Spouses Salvador and Jacoba Delgado Encinas were the registered owners of a 56.2733-
hectare agricultural land in Tinago, Juban, Sorsogon, under Original Certificate of Title (OCT) No. P-058.
When Republic Act No. (RA) 66574 took effect,5 the heirs of the spouses Encinas, Melchor and Simon
(respondents), voluntarily offered to sell the land to the government through the Department of Agrarian
Reform (DAR).

On August 21, 1992, the DAR conducted a field investigation of the land. 6 On October 27, 1997, the DAR
submitted the respondents’ claimfolder to the petitioner for computation of the land’s valuation. 7 The
petitioner valued the land at P819,778.30 (or P22,718.14 per hectare) for the acquired area of 35.9887
hectares (subject land).8

Upon the DAR's application, accompanied by the petitioner’s certification of deposit of payment, 9 the
Register of Deeds of Sorsogon partially cancelled OCT No. P-058 corresponding to the 35.9887-hectare
covered area, and issued Transfer Certificate of Title Nos. 49948 and 49949 in the name of the Republic
of the Philippines on December 5, 1997.10

Meanwhile, since the respondents rejected the petitioner’s valuation of P819,778.30, the DAR
Adjudication Board (DARAB) undertook a summary administrative proceeding for the determination of
just compensation.11 On February 6, 2001, Adjudicator Manuel M. Capellan fixed the value of just
compensation at P3,590,714.00, adopting the DARAB’s valuation on the property of Virginia Balane in
Rangas, Juban, Sorsogon that fixed the just compensation at P99,773.39 per hectare. 12

Following the denial of its motion for reconsideration,13 the petitioner filed on September 26, 2003 a
petition for determination of just compensation with the Regional Trial Court (RTC) of Sorsogon City,
Branch 52, sitting as a Special Agrarian Court (SAC).14

At the trial, the petitioner’s witnesses15 testified on the condition of the subject land when the DAR
conducted the field investigation in 1992,16 and that the petitioner based its P819,778.30 valuation on
DAR AO No. 11, series of 1994. The petitioner offered as documentary evidence the DAR field
investigation report,17 the claims and processing form, a copy of DAR AO No. 11, series of 1994, and the
field investigation report on Balane’s property.18

On the other hand, the respondents’ witnesses19 testified on the current number of trees in the subject
land and the estimated board feet each tree could produce as lumber,20 the cost of each fruit-bearing
tree,21 and the previous offer to sell the land.22 The respondents offered as documentary evidence the
recent private field investigation report of their witness, Wilfredo Embile, and the Commissioner’s Report
of Provincial Assessor Florencio Dino in Civil Case No. 6331 (Vivencio Mateo, et al. v. DAR, et al.) on the
just compensation involving another property.

The RTC Ruling

In its April 23, 2003 decision,23 the RTC fixed the just compensation at P4,470,554.00, based on: (1)
comparable transactions in the nearby locality; (2) the DARAB’s valuation on Balane’s property; (3) the
updated schedule of fair market value of real properties in the Province of Sorsogon (Sanggunian
Panlalawigan Resolution No. 73-99); (4) the value and the produce of coconuts, fruits, narra, and other
trees, and the number of board feet extractable from said trees; and (5) the land’s current condition and
potential productivity, thus:

Taking into consideration x x x the comparable sale transactions of similar nearby places as admissible in
evidence (MRR vs. Velasco case), the decision of the DARAB on VOS of Virginia Balane located at
Rangas, Juban, Sorsogon whereby the Board fixed the valuation at P99,773.39 per hectare, the number
of nuts produced from the 1500 coconut trees found by the representative of the Petitioner Land Bank as
per Field Investigation Report (Exh. "B") so that after ten years since its inspection on August 21, 1992 all
coconut trees are fruit bearing now and granting that each tree can produce nuts per 45 days, then 45
nuts can be produced per tree per year, 1500 trees can produce 67,500 nuts in eight harvest per year
and when converted to copra can produce 16,750 kilos, 540,000 nuts per year for the 1500 coconut trees
on the 35,9887 hectares equals 108,000 kilos at P8.00 per kilo, the land can get P864,000.00 yearly and
one/half of that shall go to landowner which is P432,000.00, the Court also considers the value of the fruit
bearing trees consisting of 6 guava trees for a total value of P34,000.00, 3 avocado trees for a total value
of P6,000.00, 10 langka trees for a total value of P4,000.0 and 300 banana hills for the total value of
P78,000.00, and or a grand total of P194,880.00 and the timber producing trees consisting of 100 narra
trees with an extractable lumber of no less 5,000 bd. ft at P55.00 per bd. ft or a total value of P275,000.00
and other trees with a total bd. ft. of 2,700 bd. ft at P27.00 per bd. ft or a total value of P172,900.00. The
Field Investigation Report (Exh. "B") state also that in the portion for acquisition, there is a hectare of Nipa
and according to the Sanggunian Panlalawigan Provincial Ordinance No. 73-99, Sec. 10-Valuation of
Perennial Trees, Plants and Other Improvements on Agricultural Land, the value of Nipa Improvement in
a 5th class Municipality is P13,400.00 per hectare and summing all of the valuation on the above
improvements, the Court hereby fixes the just compensation for the area of 35.9887 hectares subject for
acquisition in the total value of P4,470,554.00.24

The RTC did not consider the petitioner’s P819,778.30 valuation because it was "unrealistically
low," 25 based on a field investigation report made 11 years ago, compared to the report of the
respondents’ representative on the current condition of the property. 26

With the denial27 of its motion for reconsideration,28 the petitioner elevated its case to the CA via a petition
for review under Rule 42 of the Rules of Court.29

The CA Ruling

In its July 22, 2004 decision, the CA dismissed the petition for review for lack of merit, recognizing the
jurisdiction and supposed expertise of the DARAB and the RTC, as a SAC.30 It found that the petitioner’s
P819,778.30 valuation for 35.9887 hectares was unconscionably low 31 and that the RTC’s P4,470,554.00
valuation substantially complied with the factors prescribed by Section 17 of RA 6657. 32

After the denial33 of its motion for reconsideration,34 the petitioner came to this Court.

The Petition

The petitioner argues that the RTC failed to use the formula provided by Section 17 of RA 6657 in fixing
the land’s valuation at P4,470,554.00; the RTC erroneously considered the land’s potential, not actual,
use, as well as the land’s condition in 2003, many years after the DAR conducted the field investigation in
1992.

The Case for the Respondents

The respondents, invoking the RTC’s judicial discretion in the determination of just compensation, submit
that the RTC’s valuation is reasonable, based on the guidelines set by Section 17 of RA 6657.

The Issue

The core issue boils down to whether the CA erred in affirming the RTC decision fixing the just
compensation at P4,470,554.00 for the respondents’ 35.9887-hectare agricultural land.

Our Ruling

We find merit in the petition.

The "taking of private lands under the agrarian reform program partakes of the nature of an expropriation
proceeding."35 In computing the just compensation for expropriation proceedings, the RTC should take
into consideration the "value of the land at the time of the taking, not at the time of the rendition of
judgment."36"The ‘time of taking’ is the time when the landowner was deprived of the use and benefit of
his property, such as when title is transferred to the Republic." 37

In determining the just compensation, the RTC is also required to consider the following factors
enumerated in Section 1738 of RA 6657: (1) the acquisition cost of the land; (2) the current value of the
properties; (3) its nature, actual use, and income; (4) the sworn valuation by the owner; (5) the tax
declarations; (6) the assessment made by government assessors; (7) the social and economic benefits
contributed by the farmers and the farmworkers, and by the government to the property; and (8) the non-
payment of taxes or loans secured from any government financing institution on the said land, if any. 1âw phi 1

Pursuant to its rule-making power under Section 49 of RA 6657, the DAR translated these factors into the
following basic formula in computing just compensation:39

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where: LV = Land Value

CNI = Capitalized Net Income

CS = Comparable Sales

MV = Market Value per Tax Declaration

We have repeatedly stressed40 that these factors and formula are mandatory and not mere guides that
the SAC may disregard. "While the determination of just compensation is essentially a judicial function
vested in the RTC acting as a [SAC], the judge cannot abuse his discretion by not taking into full
consideration the factors specifically identified by law and implementing rules. [SACs] are not at liberty
to disregard the formula laid down [by the DAR], because unless an administrative order is declared
invalid, courts have no option but to apply it. The [SAC] cannot ignore, without violating the agrarian law,
the formula provided by the DAR for the determination of just compensation."41
In this case, we cannot accept the RTC’s P4,470,554.00 valuation for the respondents’ 35.9887-hectare
agricultural land as it failed to comply with the mandated requirements of the law and applicable DAR
regulation on the fixing of just compensation.1âw phi1

Instead of taking into account the condition of the subject land at the time of taking n December 5, 1997
when the title was transferred to the Republic of the Philippines,42 the RTC considered the respondents’
evidence on the condition of the subject land at the time of rendition of the judgment, as well the updated
schedule of fair market value of real properties in the Province of Sorsogon (Sanggunian Panlalawigan
Resolution No. 73-99). The RTC made use of no computation or formula to arrive at the P4,470,554.00
figure. In fact, it simply enumerated the respondents’ evidence and plucked out of thin air the amount of
P4,470,554.00.

In the same vein, we cannot accept the petitioner’s P819,778.30 valuation since it was based on the
condition of the subject land at the time of the field investigation in 1992, not at the time of the taking of
the subject land in 1997. Besides, the petitioner offered no testimony to show how the P819,778.30 figure
was arrived at; its witness merely stated that the P819,778.30 valuation was based on DAR AO No. 11,
series of 1994.43

In the absence of sufficient evidence for the determination of just compensation, we are constrained to
remand the present case to the SAC for the determination of just compensation, in accordance with
Section 17 of RA 6657 and DAR AO No. 02-09 dated October 15, 2009, the latest DAR issuance on fixing
just compensation.

WHEREFORE, the petition is GRANTED. The July 22, 2004 decision and the April 6, 2005 resolution of
the Court of Appeals in CA-G.R. SP No. 78596 are hereby REVERSED and SET ASIDE. The case
is REMANDED to the Regional Trial Court of Sorsogon City, Branch 52 to determine the just
compensation in Civil Case No. 2001-6911, strictly in accordance with Section 17 of Republic Act No.
6657 and Department of Agrarian Reform Administrative Order No. 02-09 dated October 15, 2009.

No pronouncement as to costs.

SO ORDERED.
 SECOND DIVISION

TERESITA M. YUJUICO v. ATIENZA G.R. No. 164282

x-------------------------------------------------------------------x

DECISION
TINGA, J.:
This is a Petition for Review on Certiorari instituted by Teresita M. Yujuico, petitioner in
the case for mandamus docketed as Civil Case No. 02-103748 before the Regional Trial Court
(RTC) of Manila, Branch 15. Petitioner is questioning the propriety of the Order[1] dated 25 June
2004, granting respondents Petition for Relief from Judgment under Section 2, Rule 38 of the
1997 Rules of Civil Procedure.

The operative facts are not disputed.

On 8 December 1995, the City Council of Manila enacted an Ordinance[2] authorizing the
City Mayor to acquire by negotiation or expropriation certain parcels of land for utilization as a
site for the Francisco Benitez Elementary School.[3] The property chosen is located along Solis
St. near Juan Luna St. in the Second District of Manila and contains an approximate area of
3,979.10 square meters. It is covered by Transfer Certificates of Title Nos. 71541, 71548,
24423, 71544 and 71546, all in the name of petitioner. The Ordinance provides that an amount
not to exceed the fair market value of the land then prevailing in the area will be allocated out of
the Special Education Fund (SEF) of the City of Manila (City) to defray the cost of the propertys
acquisition.[4]
Failing to acquire the land by negotiation, the City filed a case for eminent domain
against petitioner as owner of the property. Filed on 22 August 1996, the case was raffled to
Branch 15, RTC of Manila and docketed as Civil Case No. 96-79699.[5]

On 30 June 2000, the RTC rendered a Decision[6] in the expropriation case in favor of
the City. The dispositive portion reads:

WHEREFORE, judgment is hereby rendered as follows:

1.) The lots including the improvements therein of defendant Teresita M. Yujuico, as
described in the complaint, are declared expropriated for public use;

2.) The fair market value of the lots of defendant is fixed at P18,164.80 per square
meter. The fair market value of the improvements of lots subject of this action is
fixed at P 978,000.00;

3.) The plaintiff must pay defendant the sum of P72,279,555.68 (3,979.10 sq. m.
x P18,164.80) representing the value of the subject lots plus P978,000.00
representing the value of the improvements or the total amount of P73,257,555.00
as just compensation for the whole property (including the improvements) minus the
sum of P5,363,289.00 that plaintiff deposited in Court per Order dated April 30,
1997, hence the balance of P67,894,266.00 with interest at the rate of 6% per
annum from July 15, 1997 (date of possession of subject property for the purpose of
this proceedings) until the day full payment is made to defendant or deposited in
Court.[7]
 The judgment became final and executory, no appeal having been interposed by either
party.[8]

On 6 April 2001, petitioner filed a Motion for Execution of Judgment[9] which the trial
court granted. Pursuant to a Writ of Execution[10]dated 28 June 2001, the branch sheriff served
a Notice of Garnishment on the funds of the City deposited with the Land Bank of the
Philippines, YMCA Branch, Manila (Land Bank) to satisfy the judgment amount
of P67,894,226.00, with interest at 6% per annum.[11]

Invoking jurisprudence holding that public funds cannot be made subject to garnishment,
the City filed a motion to quash the Notice of Garnishment.[12] Acting on the motion, the trial
court issued an Order dated 2 August 2001.

In the Order, the lower court recalled that during the hearing on the motion, the counsel
for the City manifested that the amount of P36,403,170.00 had been appropriated by the City
School Board (CSB) under CSB Resolutions Nos. 613 and 623, of which P31,039,881.00 was
available for release. The amount of P5,363,269.00, representing fifteen percent (15%) of the
assessed value of the property, had been deposited in court at the start of the expropriation
proceedings and subsequently received by petitioner. In line with the manifestation made by the
counsel for the City, the trial court ordered the release to petitioner of the amount
of P31,039,881.00 deposited with the Land Bank, in partial payment of the just compensation
adjudged in favor of petitioner.[13]

The trial court further stated in the Order:

Considering that this case is on all fours with the case of the Municipality of Makati vs.
Court of Appeals (190 SCRA 206), wherein it was ruled that x x x Public funds are not
subject to levy and execution, the Court therefore grants plaintiffs Motion to Quash the
Notice of Garnishment and the Notice of Garnishment to the Landbank of the Philippines
issued by the Branch Sheriff of this Court is hereby ordered lifted.

There being no opposition for the release of the Thirty One Million Thirty Nine
Thousand Eight Hundred Eighty One Pesos (P31,039,881.00) deposited with the Land
Bank, YMCA Branch as Special Education Fund, the Manager of the Landbank of the
Philippines, YMCA, Manila is hereby directed to release the said amount to defendant
Teresita M. Yujuico in partial payment of the just compensation adjudged by this Court in
its Decision dated June 30, 2000.
Upon manifestation of the counsel for the plaintiff that it is the City School Board
which has the authority to pass a resolution allocating funds for the full satisfaction of the
just compensation fixed, the said body is hereby given thirty (30) days from receipt of this
Order to pass the necessary resolution for the payments of the remaining balance due to
defendant Teresita M. Yujuico.[14]

A copy of the Order dated 2 August 2001 was served on the CSB on 3 August 2001.[15]

On 30 August 2001, petitioner submitted a manifestation before the trial court requesting that
she be informed by both the City and the CSB if a resolution had already been passed by the
latter in compliance with the Order.[16] Earlier, petitioner sent a letter to the Superintendent of
City Schools of Manila to verify the CSBs compliance with the Order.[17]
Not having been favored with a reply to her queries even after the lapse of the thirty (30)-day
compliance period, petitioner sent a letter to the CSB dated 10 September 2001, demanding
compliance with the Order.[18]

As there was no action from the CSB, on 1 February 2002, petitioner filed a petition for contempt
of court against respondents Hon. Jose L. Atienza, Jr., Dr. Ma. Luisa S. Quioňes, Roger
Gernale, Arlene Ortiz, Miles Roces, Percival Floriendo, Liberty Toledo, Isabelita Santos and
Isabelita Ching in their capacities as officers and members of the CSB. [19] The case was
docketed as Civil Case No. 02-102837 of the Manila RTC.[20]

Countering the petition for contempt, respondents filed a Motion to Dismiss,[21] wherein they
alleged inter alia that they never disregarded the Order as the matter had in fact been
calendared and deliberated upon during the meetings of the CSB.[22] In their
subsequent Omnibus Reply,[23] respondents argued that petitioners failure to avail of the proper
recourse to enforce the final and executory judgment[24] should not be a ground to hold them in
contempt of court. Citing the case of Municipality of Makati v. Court of Appeals,[25] respondents
asserted that petitioner should have filed a petition for mandamus to force the CSB to pass the
necessary resolution for immediate payment of the balance of the just compensation awarded in
her favor.[26]

According to respondents, petitioner took the Order as a writ of mandamus when in fact
it was a mere order in furtherance of the Writ of Execution.[27] This interpretation, respondents
insisted, should never be allowed since petitioner merely wanted to escape the payment of
docket fees in the filing of the petition for mandamus.[28]

In an Order[29] dated 17 May 2002, the trial court denied the petition for contempt of court.
On 6 June 2002, petitioner filed a Petition for Mandamus[30] against the members of the
CSB, the same respondents in the petition for contempt of court, seeking to compel them to
pass a resolution appropriating the amount necessary to pay the balance of the just
compensation awarded to petitioner in the expropriation case, Civil Case No. 96-79699. The
petition was docketed as Spl. Civil Action No. 02-103748 and raffled to Branch 51 of the RTC of
Manila. [31]

Upon petitioners motion,[32] Branch 51 of the Manila RTC before which the mandamus
case was pending, in an Order[33] dated 23 August 2002, directed its consolidation with the
expropriation case before Branch 15.[34]
In a Decision[35] dated 9 October 2002, the lower court (Branch 15) granted the petition
for mandamus. Specifically, it ordered respondents to immediately pass a resolution
appropriating the necessary amount and the corresponding disbursement thereof for the full and
complete payment of the balance of the court-adjudged compensation still due petitioner,
ratiocinating as follows:[36]

This case is on all fours with the case of Municipality of Makati v. Court of Appeals (190 SCRA
206).

....
The States power of eminent domain should be exercised within the bounds of fair play and
justice. In the case at bar, considering that valuable property has been taken, the
compensation to be paid fixed and the municipality is in full possession and utilizing the
property for the public purpose, for three (3) years, the Court finds that the municipality
has had more than reasonable time to pay full compensation.
 The arguments of the herein respondents that passing the ordinance or the act of
appropriating special educational fund is a discretionary act that could not be compelled
by mandamus should be thrown overboard. It must be stressed that what we have here is
a final and executory judgment, establishing a legal right for the petitioner to demand
fulfillment which on the other hand became an imperative duty on the part of the
respondent to perform the act required.

WHEREFORE, premises considered, the petition is GRANTED, and the respondents are hereby
ordered to immediately pass a resolution appropriating the necessary amount; and the
corresponding disbursement thereof, for the full and complete payment of the remaining
balance of the court-adjudged compensation due and owing to petitioner Teresita M.
Yujuico.
SO ORDERED.[37]

Respondents filed a motion for reconsideration, which the trial court denied in
an Order[38] dated 13 December 2002.
With respondents not interposing an appeal, the Decision became final and executory on
2 January 2003[39] and eventually, the corresponding Entry of Judgment was issued on 15
January 2003.[40] The court granted petitioners Motion for Execution[41] in an Order[42]dated 12
March 2003.

However, on 14 March 2003, respondents filed a Petition for Relief from

Judgment,[43] wherein they also prayed for a temporary restraining order (TRO) and a writ of
preliminary injunction. Respondents invoked excusable negligence as a ground for their failure
to seasonably file an appeal.[44] While it denied the application for TRO in view of its prior order
granting petitioners Motion for Execution, the court granted the Petition for Relief from
Judgment in an Order[45] dated 25 June 2004. This had the effect of giving due course to
respondents appeal despite the fact that the decision of the trial court had already attained
finality.

Finding the Order unacceptable, petitioner elevated it to this Court by way of a petition
for certiorari under Rule 45. In her petition, petitioner asks that the order of the lower court
giving due course to respondents appeal be reversed and set aside on a pure question of
law.[46]

Before resolving the substantive issues raised by the parties, the Court will first address
the procedural infirmities ascribed by respondents to the petition at bar.

Respondents assail the correctness and propriety of the mode of appeal resorted to by
petitioner.[47] According to them, the order granting the petition for relief from judgment is an
interlocutory order which cannot be made the subject of an appeal.[48] Respondents likewise
argue that petitioner failed to respect the rule on hierarchy of courts. This Court, they aver, had
consistently held that its original jurisdiction to issue a writ of certiorari is not exclusive but is
concurrent with that of the RTC and the Court of Appeals in certain cases.[49]

Respondents have correctly pointed out that an interlocutory order cannot be made
subject to an appeal. However, when viewed in context, the recitals of the petition clearly
disclose and the Court is convinced that the lower court committed grave abuse of discretion
amounting to lack or excess of jurisdiction when it granted respondents petition for relief from
judgment. While this case should have been elevated to this Court not by way of a petition for
review under Rule 45 but through a special civil action for certiorari under Rule 65, in the
exercise of our sound discretion and in order to write finis to this case which has needlessly
dragged on for so long, we shall treat the petition as a special civil action for certiorari. After all,
it was filed within the reglementary period for the filing of a Rule 65 petition. As we held
in Salinas v. NLRC,[50] in the interest of justice, this Court has often judiciously treated petitions
erroneously captioned as petitions for review on certiorari as special civil actions for certiorari.
This is in line with the principle that the strict application of procedural technicalities should not
hinder the speedy disposition of the case on the merits.[51]

Accordingly, facial allegations of reversible error in the petition will be treated, as they
should be, as contextual averments of grave abuse of discretion on the part of the court a quo.
Appropriately, petitioner impleaded the RTC Presiding Judge as party-respondent in the instant
petition.

Anent the alleged breach of the rule on hierarchy of courts, the doctrine is not an iron-
clad dictum.[52] The rule may be relaxed when exceptional and compelling circumstances
warrant the exercise of this Courts primary jurisdiction.[53] In this case, the judgment sought to
be satisfied has long attained finality and the expropriated property has been utilized as a
school site for five (5) years now; yet, the awarded just compensation has not been fully paid.
These circumstances, in the Courts estimation, merit the relaxation of the technical rules of
procedure to ensure that substantial justice will be served.

Concerning petitioners alleged failure to implead the CSB or its new members before the
trial court,[54] respondents argue that since there are five (5) new members in the CSB any
decision in the case requiring the CSB to act as a body would prove to be legally impossible.
The former members of the CSB could no longer be compelled to act according to the orders of
the Court since they no longer have the capacity to do so. On the other hand, respondents
continue, the new members cannot be directed to comply with the Courts judgment either; they
have never been impleaded in the case; thus, the Court never acquired jurisdiction over their
persons.[55]

The arguments were effectively neutered in our Resolution dated 8 August 2005. There,
we declared:

Considering the arguments posited by both parties, this Court is of the view that
a substitution of the original respondents by the members of the CSB who replaced them
is warranted. The phrase or such time as may be granted by the Court in Sec. 17, Rule 3
of the 1997 Rules of Civil Procedure denotes that the Court before whom the motion for
substitution is filed may grant a period longer than thirty (30) days for the purpose. In any
event, technical rules on substitution of a party should not be so narrowly construed as
to prevent this Court from taking cognizance of a case and deciding it on the merits.
Moreover, petitioner did make an attempt to implead the new members of the CSB by
making the CSB itself a respondent before this Court. There is also no showing that the
new members of the CSB have deviated from the stand of their predecessors-in-interest;
hence, there is a substantial need for continuing or maintaining petitioners action against
them.[56]

In the same Resolution, the Court ordered the impleading of the new CSB members
Roger Gernale, Manuel M. Zarcal, Benjamin Valbuena and Francesca Gernale as party
respondentsthe last three in substitution of Arlene Ortiz, Percival Floriendo, Miles Rocesand the
new CSB Assistant Secretary Vicente Macarubbo in substitution of Isabelita Ching.[57] Only
Manuel Zarcal filed a Comment[58] dated 30 August 2005 through a new counsel, adopting in
toto the comment of his co-respondents. Hence, the other four newly impleaded party
respondents are deemed to have retained the Office of the City Legal Officer (OCLO) as their
counsel and to have adopted the Comment already filed by the OCLO in behalf of their co-
respondents.

Thus, the proper substitutions of some party respondents have already taken place in
this case.

The last procedural hurdle thrown petitioners way by respondents refers to the supposed
failure of the petition to comply with the requirements of Section 4, Rule 7 and Section 4, Rule
45 of the 1997 Rules of Civil Procedure[59] as amended by Supreme Court Circular A.M. No. 00-
2-10-SC.[60] Respondents claim that there was failure to include a verified statement indicating
the material dates relative to the receipt of the judgments and the filing of the pleadings. The
verification, moreover, allegedly failed to state that petitioner has read the petition [61] and that
the copies attached thereto are based on authentic records.[62] The defects of the verification
allegedly render the petition without legal effect and constitute grounds for its dismissal.

The purpose of requiring a verification is to secure an assurance that the allegations of

the petition have been made in good faith; or are true and correct, not merely
speculative.[63] This requirement is simply a condition affecting the form of pleadings and non-
compliance therewith does not necessarily render it fatally defective.[64] Perusal of the
verification in question shows that there was sufficient compliance with the requirements of the
Rules and the alleged defects are not so material as to justify the dismissal of the petition.
Now, the substantial issues.

Up for determination is the tenability of the RTCs favorable action on respondents

petition for relief from judgment. This engenders a look at the grounds and defenses relied upon
by respondents in support of their petition. Sections 2 and 3, Rule 38 of the 1997 Rules of Civil
Procedure provide that a petition for relief may be granted upon a showing that (1) through
fraud, accident, mistake or excusable negligence, a party has been prevented from taking an
appeal, and (2) the party has a good and substantial cause of action or defense.

The above requisites notwithstanding, it bears stressing that relief from judgment is
premised on equity. It is an act of grace which is allowed only in exceptional cases.[65]

In this case, according to respondents they were unable to seasonably file a notice of
appeal due to excusable negligence.[66] One Ronald Silva (Silva), an employee of the OCLO,
allegedly failed to forward the Order denying respondents motion for reconsideration in Civil
Case No. 02-103748 to the handling lawyers. When the order was delivered to the OCLO on 17
December 2002,[67] Silva was the one who received it because the employee designated to do
so was out on official business.[68] Since the employees were busy preparing for the office
Christmas party that day,[69] Silva forgot all about the order. He only remembered it when the
order for entry of judgment in the case was received on 29 January 2003. By that time,
however, the order dated 17 December 2002 had already been misplaced.[70]

Clearly, the situation does not present a case of excusable negligence which would
warrant relief under Rule 38. Time and again, this Court has ruled that the inability to perfect an
appeal in due time by reason of failure of a counsels clerk to notify the handling lawyer is not a
pardonable oversight.[71] As held in one case:

. . . The excuse offered by respondent . . . as reason for his failure to perfect in

due time his appeal from the judgment of the Municipal Court, that counsels clerk forgot to
hand him the court notice, is the most hackneyed and habitual subterfuge employed by
 litigants who fail to observe the procedural requirements prescribed by the Rules of Court.
The uncritical acceptance of this kind of common-place excuses, in the face of the
Supreme Courts repeated rulings that they are neither credible nor constitutive of
excusable negligence (Gaerlan v. Bernal, L-4039, 29 January 1952; Mercado v. Judge
Domingo, L-19457, 17 December 1966) is certainly such whimsical exercise of judgment
as to be a grave abuse of discretion.

....

In the face of all these facts and circumstances, . . . the respondent judge
revealed a simple-minded willingness to swallow a story patently concocted to delay as
much as possible the satisfaction of a judgment against respondent . . . .This
indiscriminating credulity does not conform to what is to be expected of a judicial mind. [72]

Reiterated in numerous cases is the rule that the clerks faults are attributable to the
handling lawyers.[73] Thus, excuses offered based on the formers negligence are not deemed
excusable. That the admonitions issued out by this Court were mostly directed against lawyers
in law firms does not exempt respondents herein from the same treatment. For all intents and
purposes, the set-up at the OCLO is akin to that of a law firm, the only difference being that the
former serves a public entity while the latter caters to private clients. The following
pronouncement in Negros Stevedoring Co., Inc. v. Court of Appeals[74] is apropos:

The negligence committed in the case at bar cannot be considered excusable,

nor is it unavoidable. Time and again, the Court has admonished law firms to adopt a
system of distributing pleadings and notices, whereby lawyers working therein receive
promptly notices and pleadings intended for them, so that they will always be informed of
the status of their cases. The Court has also often repeated that the negligence of clerks
which adversely affect the cases handled by lawyers is binding upon the latter.[75]

Without doubt, it was grave abuse of discretion for the lower court to have given due
course to respondents appeal through the grant of their petition for relief from judgment based
on the flimsy ground they proferred.

Even assuming that the negligence invoked by respondents could be considered

excusable, still the petition should not have been granted. It must be borne in mind that two
requisites must be satisfied before a petition under Rule 38 may be granted, the other being the
existence of a good and substantial cause of action or defense.

Respondents defense consisted of their claim that the CSB has a personality separate
and distinct from the City such that it should not be made to pay for the Citys
obligations.[76] However, the argument is undercut by the particular circumstances of this case.

It is worthy of note that the records of this case clearly show that the same counsel, the
OCLO, represented the City in the expropriation case and now, all except one of the individual
respondents in the case at bar. Worthy of note are the following manifestations relied upon by
the lower court in issuing the order on the motion to quash the Notice of Garnishment over the
funds of the City, to wit:

The Motion to Quash Notice of Garnishment was heard by this court this morning and
Atty. Joseph Aquino appeared for the plaintiff (City of Manila) and Atty. Federico Alday, for
the defendant. Atty. Aquino manifested that the amount of Thirty Six Million Four
Hundred Three Thousand One Hundred Seventy Pesos (P36,403,170.00) had been
 appropriated by the City School Board (CSB) under CSB Resolution Nos. 613 and
623 for this purpose.

....

Upon manifestation of the counsel for the plaintiff that it is the City School
Board which has the authority to pass a resolution allocating funds for the full
satisfaction of the just compensation fixed, the said body is hereby given thirty (30)
days from receipt of this Order to pass the necessary resolution for the payments of the
remaining balance due to defendant Teresita M. Yujuico. (Emphasis supplied.)[77]

The manifestation was made by the same counsel now claiming that it is actually the
City which should be made liable for the payment of its own obligations. This, after it trotted out
the CSB as the entity with authority to pass a resolution that would satisfy the obligation it had
vigorously pursued.

The above circumstances, coupled with the rule that an act performed by counsel within
the scope of a general or implied authority is regarded as an act of the client, [78] render the City
and, through it, respondents in estoppel. By estoppel is meant that an admission or
representation is rendered conclusive upon the person making it and cannot be denied or
disproved as against the person relying thereon.[79]Petitioner and the courts acted in accordance
with the Citys own manifestations by running after the CSB. At this point, respondents and the
OCLO can no longer turn around and toss the obligation back to the City. After all, it was the
legal counsel of both the City and respondents who made a big production out of showing that
the liability incurred by the City will be borne by the CSB.
Contrary to respondents claim, the law does not make the CSB an entity independent
from the City of Manila. This is evident from the provisions of the Local Government Code of
1991, the law providing for the creation of school boards. It states:

TITLE IV.- LOCAL SCHOOL BOARDS

Section 98. Creation, Composition and Compensation.-

(a) There shall be established in every province, city or municipality a

provincial, city, or municipal school board, respectively.

(b) The composition of local school boards shall be as follows:

...
(2) The city school board shall be composed of the city mayor and the city
superintendent of schools as co-chairmen; the chairman of the education
committee of the sangguniang panlungsod, the city treasurer, the representative
of the pederasyon ng mga sangguniang kabataan in the sangguniang
panlungsod, the duly elected president of the city federation of parents-teachers
associations, the duly elected representative of the non-academic personnel of
public schools in the city, as members;
...

Section 101. Compensation and Remuneration.-

The co-chairmen and members of the provincial, city or municipal school board shall
perform their duties as such without compensation or remuneration. Members thereof
who are not government officials or employees shall be entitled to traveling expenses
and allowances chargeable against the funds of the local school board concerned,
subject to existing accounting and auditing rules and regulations. [80]
 The fact that the highest ranking official of a local government unit (LGU) is designated
as co-chairman of the school board negates the claim in this case that the CSB has a
personality separate and distinct from the City. The other fact that government officials in the
school board do not receive any compensation or remuneration while NGO representatives
merely receive allowances underscores the absurdity of respondents argument all the more.
Indeed, such would not be the situation if the school board has a personality separate and
distinct from the LGU.

Respondents also argue that the members of the CSB cannot be directed to decide a
discretionary function in the specific manner the court desires.[81] The question of whether the
enactment of an ordinance to satisfy the appropriation of a final money judgment rendered
against an LGU may be compelled by mandamus has already been settled in Municipality of
Makati v. Court of Appeals.[82]

Nevertheless, this is not to say that private respondent and PSB are left with no
legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect
payment of a final money judgment rendered against it, the claimant may avail of the
remedy of mandamus in order to compel the enactment and approval of the necessary
appropriation ordinance, and the corresponding disbursement of municipal funds
therefore [See Viuda De Tan Toco v. The Municipal Council of Iloilo, supra, Baldivia v.
Lota, 107 Phil 1099 (1960); Yuviengco v. Gonzales, 108 Phil 247 (1960)]. [83]

Clearly, mandamus is a remedy available to a property owner when a money judgment

is rendered in its favor and against a municipality or city, as in this case.

Moreover, the very ordinance authorizing the expropriation of petitioners property

categorically states that the payment of the expropriated property will be defrayed from the SEF.
To quote:

An amount not to exceed the current fair market value, prevailing in the area
appraised in accordance with the requirements of existing laws, rules and regulations, of
the property to be acquired or so much thereof as may be necessary for the purpose shall
be allocated out of the Special Education Fund of the City to defray the cost of acquisition
of the above-mentioned parcels of land.[84]

The legality of the above-quoted provision is presumed. The source of the amount
necessary to acquire petitioners property having in fact been specified by the City Council of
Manila, the passage of the resolution for the allocation and disbursement thereof is indeed a
ministerial duty of the CSB.

Furthermore, respondents had argued in the petition for contempt filed against them by
petitioner that the latters failure to invoke the proper remedy of mandamus should not be a
ground to penalize them with contempt. In their haste to have the contempt petition dismissed,
respondents consistently contended that what petitioner should have filed was a case for
mandamus to compel passage of the corresponding resolution of the CSB if she wanted
immediate payment.[85] Having relied on these representations of respondents and having filed
the action they adverted to, petitioner cannot now be sent by respondents on another wild
goose chase to obtain ultimate recovery of what she is legally entitled to.

While this Court recognizes the power of LGU to expropriate private property for public
use, it will not stand idly by while the expropriating authority maneuvers to evade the payment of
just compensation of property already in its possession.
 The notion of expropriation is hard enough to take for a private owner. He is compelled
to give up his property for the common weal. But to give it up and wait in vain for the just
compensation decreed by the courts is too much to bear. In cases like these, courts will not
hesitate to step in to ensure that justice and fair play are served. As we have already ruled:

. . . This Court will not condone petitioners blatant refusal to settle its legal
obligation arising from expropriation proceedings it had in fact initiated. It cannot be over-
emphasized that within the context of the States inherent power of eminent domain,

. . . (j)ust compensation means not only the correct determination of the amount
to be paid to the owner of the land but also the payment of the land within a reasonable
time from its taking. Without prompt payment, compensation cannot be considered just for
the property owner is made to suffer the consequence of being immediately deprived of
his land while being made to wait for a decade or more before actually receiving the
amount necessary to cope with his loss (Consculluela v. The Honorable Court of Appeals,
G.R. No. 77765, August 15, 1988, 164 SCRA 393, 400. See also Provincial Government
of Sorsogon v. Vda. De Villaroya, G.R. No. 64037, August 27, 1987, 153 SCRA 291). [86]

The decision rendering just compensation in petitioners favor was promulgated way
back in the year 2000.[87] Five years have passed, yet the award still has not been fully satisfied.
Recently, in Republic v. Lim,[88] this Court made the following pronouncement:

. . . while the prevailing doctrine is that the non-payment of just compensation does not
entitle the private landowner to recover possession of the expropriated lots, however, in
cases where the government failed to pay just compensation within five (5) years from
the finality of judgment in the expropriation proceedings, the owners concerned
shall have the right to recover possession of their property. This is in consonance with
the principle that the government cannot keep the property and dishonor the judgment.
To be sure, the five-year period limitation will encourage the government to pay just
compensation punctually. This is in keeping with justice and equity. After all, it is the duty
of the government, whenever it takes property from private persons against their will, to
facilitate the payment of just compensation.[89] (Citations omitted)

Given the above ruling, the reversion of the expropriated property to the petitioner would
prove not to be a remote prospect should respondents and the City they represent insist on
trudging on their intransigent course.

One final note. Respondents appeal from the Decision dated 9 October 2002 of the lower court,
made possible by its grant of their petition for relief, is before the Court of Appeals where it is
docketed as CA-G.R. No. 86692.[90] The courts Decision in this case would have obvious
consequences on said appeal; hence, referral of this Decision to the Court of Appeals is in
order.
WHEREFORE, the petition is GRANTED. The Order of the trial court dated 25 June
2004, granting respondents Petition for Relief from Judgment is REVERSED and SET
ASIDE and its Decision dated 9 October 2002, ordering respondents to immediately pass a
resolution for the payment of the balance of the court-adjudged compensation due petitioner,
is REINSTATED.

Let a copy of this Decision be furnished the Court of Appeals for its information and
guidance in relation to CA-G.R. No. 86692 entitled Teresita M. Yujuico v. Hon. Jose L. Atienza,
Jr., et al.
SO ORDERED.