THIRD DIVISION

The Facts

[G.R. No. 146886. April 30, 2003]

The factual antecedents are summarized by the CA as follows:

DEVORAH E. BARDILLON, petitioner, vs. BARANGAY MASILI of

Calamba, Laguna, respondent.

At the root of this present [P]etition is the controversy surrounding the

two (2) [C]omplaints for eminent domain which were filed by herein
respondent for the purpose of expropriating a ONE HUNDRED
FORTY FOUR (144) square meter-parcel of land, otherwise known as
Lot 4381-D situated in Barangay Masili, Calamba, Laguna and owned
by herein petitioner under Transfer Certificate of Title No. 383605 of
the Registry of Deeds of Calamba, Laguna. Petitioner acquired from
Makiling Consolidated Credit Corporation the said lot pursuant to a
Deed of Absolute Sale which was executed by and between the former
and the latter on October 7, 1996.

DECISION
PANGANIBAN, J.:
An expropriation suit is incapable of pecuniary estimation.
Accordingly, it falls within the jurisdiction of regional trial courts,
regardless of the value of the subject property.
The Case
Before us is a Petition for Review1[1] under Rule 45 of the Rules of
Court, seeking to set aside the January 10, 2001 Decision and the
February 5, 2001 Resolution of the Court of Appeals2[2] (CA) in CAGR SP No. 61088. The dispositive part of the Decision reads:
WHEREFORE, premises considered, the present [P]etition for
[C]ertiorari is hereby DENIED DUE COURSE and accordingly
DISMISSED, for lack of merit.3[3]
4

The assailed Resolution [4] denied petitioners Motion for

Reconsideration.
1

The first [C]omplaint for eminent domain, docketed as Civil Case No.
3648 and entitled Brgy. Masili, Calamba, Laguna v. Emelita A.
Reblara, Eugenia Almazan & Devorah E. Bardillon, was filed before
the Municipal Trial Court of Calamba, Laguna (MTC) on February
23, 1998, following the failure of Barangay Masili to reach an
agreement with herein petitioner on the purchase offer of TWO
HUNDRED THOUSAND PESOS (P200,000.00). The expropriation
of Lot 4381-D was being pursued in view of providing Barangay Masili
a multi-purpose hall for the use and benefit of its constituents.
On March 5, 1999, the MTC issued an order dismissing Civil Case
No. 3648 for lack of interest for failure of the [respondent] and its
counsel to appear at the pre-trial. The MTC, in its Order dated May 3,
1999, denied [respondents] [M]otion for [R]econsideration thereof.

The second [C]omplaint for eminent domain, docketed as Civil Case

No. 2845-99-C and entitled Brgy. Masili, Calamba, Laguna v.
Devorah E. Bardillon, was filed before Branch 37 of the Regional

1 | E X P R O P R I AT I O N

Trial Court of Calamba, Laguna (RTC) on October 18, 1999. This

[C]omplaint also sought the expropriation of the said Lot 4381-D for
the erection of a multi-purpose hall of Barangay Masili, but petitioner,
by way of a Motion to Dismiss, opposed this [C]omplaint by alleging in
the main that it violated Section 19(f) of Rule 16 in that [respondents]
cause of action is barred by prior judgment, pursuant to the doctrine of
res judicata.
On January 21, 2000, [the] Judge issued an order denying petitioners
Motion to Dismiss, holding that the MTC which ordered the dismissal
of Civil Case No. 3648 has no jurisdiction over the said expropriation
proceeding.
With the subsequent approval of Municipal Ordinance No. 2000-261
on July 10, 2000, and the submission thereof in compliance with [the]
Judges Order dated June 9, 2000 requiring herein respondent to
produce the authority for the expropriation through the Municipal
Council of Calamba, Laguna, the assailed Order dated August 4, 2000
was issued in favor of Barangay Masili x x x and, on August 16, 2000,
the corresponding order for the issuance of the [W]rit of [P]ossession
over Lot 4381-D.5[5]
Ruling of the Court of Appeals
In dismissing the Petition, the CA held that the Regional Trial Court
(RTC) of Calamba, Laguna (Branch 37)6[6] did not commit grave abuse
of discretion in issuing the assailed Orders. It ruled that the second
Complaint for eminent domain (Civil Case No. 2845-99-C) was not
barred by res judicata. The reason is that the Municipal Trial Court
(MTC), which dismissed the first Complaint for eminent domain (Civil
Case No. 3648), had no jurisdiction over the action.

Hence, this Petition.7[7]

The Issues
In her Memorandum, petitioner raises the following issues for our
consideration:
A. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion amounting to lack of jurisdiction when it denied and
dismissed petitioners appeal;
B. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion when it did not pass upon and consider the pending
Motion for Reconsideration which was not resolved by the Regional
Trial Court before issuing the questioned Orders of 4 and 16 August
2000;
C. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in taking the total amount of the assessed value of
the land and building to confer jurisdiction to the court a quo;
D. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in ignoring the fact that there is an existing multipurpose hall erected in the land owned by Eugenia Almazan which
should be subject of expropriation; and
E. Whether or not, the Honorable Respondent Court committed grave
abuse of discretion in failing to consider the issue of forum shopping
committed by Respondent Masili.8[8]
Simply put, the issues are as follows: (1) whether the MTC had
jurisdiction over the expropriation case; (2) whether the dismissal of

2 | E X P R O P R I AT I O N

that case before the MTC constituted res judicata; (3) whether the CA
erred when it ignored the issue of entry upon the premises; and (4)
whether respondent is guilty of forum shopping.
The Courts Ruling
The Petition has no merit.
First Issue:
Jurisdiction Over Expropriation
Petitioner claims that, since the value of the land is only P11,448, the
MTC had jurisdiction over the case.9[9]
On the other hand, the appellate court held that the assessed value of
the property was P28,960.10[10] Thus, the MTC did not have jurisdiction
over the expropriation proceedings, because the amount involved was
beyond the P20,000 jurisdictional amount cognizable by MTCs.
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 property for public use.11[11] As such, it is incapable of
pecuniary estimation and should be filed with the regional trial courts.12
[12]

9
10

This was explained by the Court in Barangay San Roque v. Heirs of

Francisco Pastor:13[13]
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 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 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 not intended to change these
jurisprudential precedents.14[14]
To reiterate, an expropriation suit is within the jurisdiction of the RTC
regardless of the value of the land, because the subject of the action is
the governments exercise of eminent domain -- a matter that is
incapable of pecuniary estimation.

11

13

12

14

3 | E X P R O P R I AT I O N

Second Issue:
Res Judicata
Petitioner claims that the MTCs dismissal of the first Complaint for
eminent domain was with prejudice, since there was no indication to
the contrary in the Order of dismissal. She contends that the filing of
the second Complaint before the RTC should therefore be dismissed on
account of res judicata.
Res judicata literally means a matter adjudged, judicially acted upon or
decided, or settled by judgment.15[15] It provides that a final judgment
on the merits rendered by a court of competent jurisdiction is
conclusive as to the rights of the parties and their privies; and
constitutes an absolute bar to subsequent actions involving the same
claim, demand or cause of action.16[16]
The following are the requisites of res judicata: (1) the former
judgment must be final; (2) the court that rendered it had jurisdiction
over the subject matter and the parties; (3) it is a judgment on the
merits; and (4) there is -- between the first and the second actions -- an
identity of parties, subject matter and cause of action.17[17]
Since the MTC had no jurisdiction over expropriation proceedings, the
doctrine of res judicata finds no application even if the Order of
dismissal may have been an adjudication on the merits.
Third Issue:
Legality of Entry Into Premises

Petitioner argues that the CA erred when it ignored the RTCs Writ of
Possession over her property, issued despite the pending Motion for
Reconsideration of the ruling dismissing the Complaint. We are not
persuaded.
The requirements for the issuance of a writ of possession in an
expropriation case are expressly and specifically governed by Section 2
of Rule 67 of the 1997 Rules of Civil Procedure.18[18] On the part of
local government units, expropriation is also governed by Section 19 of
the Local Government Code.19[19] Accordingly, in expropriation
proceedings, the requisites for authorizing immediate entry are as
follows: (1) the filing of a complaint for expropriation sufficient in
form and substance; and (2) the deposit of the amount equivalent to 15
percent of the fair market value of the property to be expropriated
based on its current tax declaration.20[20]
In the instant case, the issuance of the Writ of Possession in favor of
respondent after it had filed the Complaint for expropriation and
deposited the amount required was proper, because it had complied
with the foregoing requisites.
The issue of the necessity of the expropriation is a matter properly
addressed to the RTC in the course of the expropriation proceedings. If
petitioner objects to the necessity of the takeover of her property, she
should say so in her Answer to the Complaint.21[21] The RTC has the
18
19

15
16
17
4 | E X P R O P R I AT I O N

20
21

power to inquire into the legality of the exercise of the right of eminent
domain and to determine whether there is a genuine necessity for it.22[22]

in the MTC case will not constitute res judicata in the RTC, since the
former had no jurisdiction over the expropriation case.

Fourth Issue:
Forum Shopping

WHEREFORE, the Petition is DENIED and the assailed Decision

AFFIRMED. Costs against petitioner.

Petitioner claims that respondent is guilty of forum shopping, because it

scouted for another forum after obtaining an unfavorable Decision from
the MTC.

SO ORDERED.

The test for determining the presence of forum shopping is whether the
elements of litis pendentia are present in two or more pending cases,
such that a final judgment in one case will amount to res judicata in
another.23[23]
Be it noted that the earlier case lodged with the MTC had already been
dismissed when the Complaint was filed before the RTC. Even
granting arguendo that both cases were still pending, a final judgment

22
23
5 | E X P R O P R I AT I O N

Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales,

JJ., concur.

were consolidated. The Regional Trial Court resolved in favor of the

petitioner, to wit:

[G.R. No. 135866. June 28, 1999]

BARANGAY DUYAN-DUYAN vs. MANUEL PEREZ, et al.
FIRST DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court
dated JUN 28, 1999.
G.R. No. 135866 (Barangay Duyan-Duyan vs. Manuel Perez, et al.)
Petitioner filed the present petition for review on certiorari assailing
the Decision of the Court of Appeals in CA G.R. CV No. 50194 dated
June 5, 1998 and the corresponding Resolution dated October 5, 1998.
As antecedents, defendants/respondents Manuel Perez and Mercedes
Perez are owners of a parcel of land covered by TCT No. RT-41127
situated in Quirino District, quezon City. Said parcel of land is
registered in the name of respondent spouses. However, said lot has bee
in possession of herein petitioner Barangay Duyan-Duyan since June
11, 1978.\Upon discovery that barangay hall was built on their
property, private respondent filed an ejectment case against the
petitioner which was successful. However, while the ejectment case
was on appeal before the Regional Trial Court petitioner Barangay
Duyan-Duyan filed an action for Expropriation and/or Eminent Domain
before the Regional Trial Court of Quezon City. Whereupon both cases
6 | E X P R O P R I AT I O N

WHEREFORE, in view of the foregoing,

judgment is hereby rendered, ordering the
condemnation of the property covered by TCT No.
41127 for purposes of expropriation and that the
plaintiff Barangay Duyan-Duyan has the lawful
right to take possession of the above described
property for public use and purpose upon payment
of just compensation to the defendants to be
determined from the time this complaint was filed.
SO ORDERED.1 [Rollo, p. 22.]
On appeal, the Court of Appeals reversed the decision on the ground
that the expropriation procedure was not properly complied with by the
petitioner. Thus:
The Local Government Code refers to an
offer which is made prior to at action to improve
and use the property as a public facility. However,
the fact herein is clear that there has been no offer
previously made before the property was actually
expropriated for public use sometime in 1988. In
fact, the ejectment case was successfully pursued as
the barangay hall was built without even the
knowledge much less the consent of the owners
thereof. No building permit was ever presented.
What may pass for an offer was embodied in a
resolution made only in 1993, while the discovered
building was admittedly built and was in use since

1988. The act of expropriation by the barangay

officials was thus clearly an ultra vires act for being
contrary to the legal guidelines therefor.
Moreover, the validity of the Offer embodied
in the Resolution can also be faulted raised (sic) on
two points: First, the questioned fair market value
as submitted was more than One Million pesos while
the offer was an arbitrary sum of One Hundred
Twenty Five Thousand Pesos only. While
expropriation is not intended to equal the fair
market value of property, there has to be
"reasonable" compensation to be determined by the
court. it is notable though that the Offer covers only
about ten per cent of the appraised market value.
This is further aggravated by a latter deposit of
P37,560.00, being the assessed value of the property
for purposes of taxation. Secondly, the procedure
was not followed in the passage of the Barangay
Resolution which was not submitted to the City
Council for review as mandated in the Local
Government Code. In effect, the same was merely a
pro forma offer to gloss over the usurpation of
private property by the barangay.2 [Id., at 15.]
Hence, the present petition.
The petition is bereft of merit.
Section 19 of the Local Government Code provides:
Section 19. Eminent Domain. A local
government unit may, through its chief executive
7 | E X P R O P R I AT I O N

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: Provided, however, That the power of
eminent domain may not be exercised unless a valid
and definite offer has been precisely made to the
owner, and such offer was not accepted: Provided,
further, That the local government unit may
immediately take possession of the property upon
the filing of the expropriation proceedings and upon
making a deposit with the proper court of at least
fifteen (15%) of the fair market value of the
property based on the current tax declaration of the
property to be expropriated: Provided, finally, That
the amount to be paid for the expropriated property
shall be determined by the proper court, based on
the fair market value at the time of the taking of the
property.
In the exercise of this power, the State must at all times abide by the
requirements of due process. The above-quoted provisions clearly
outlines the steps to be taken before a local government unit may
exercise its power of eminent domain. A valid offer must first be made
to the owners of the property, and it is only when the offer is rejected
that expropriation proceedings may be instituted. In the instant case, no
valid offer was first made to the owner of the property before the
complaint for expropriation was filed. Moreover, as the Court of
Appeals found, petitioner took possession of the property ahead of the
filing of the expropriation proceedings. This act is clearly incompatible
with the procedure for expropriation required by law.

IN VIEW OF THE FOREGOING, the Court Resolved to DENY the

petition.

G.R. No. 162474

Very truly yours,

(Sgd.) VIRGINIA ANCHETA-SORIANO
Clerk of Court

HON. VICENTE P. EUSEBIO, LORNA A.

BERNARDO, VICTOR ENDRIGA, and the CITY
OF PASIG,
Petitioners,

Present:

CARPIO, J., Chairp

CHICO-NAZARIO
VELASCO, JR.,
NACHURA, and

versus -

PERALTA, JJ.

JOVITO M. LUIS, LIDINILA LUIS SANTOS,

ANGELITA CAGALINGAN, ROMEO M. LUIS, and
VIRGINIA LUIS-BELLESTEROS,*

Promulgated:

Republic of the Philippines

Supreme Court

Respondents.

Manila

October 13,

x----------------------------------------------------x
THIRD DIVISION
DECISION

*
8 | E X P R O P R I AT I O N

PERALTA, J.:

requested the Appraisal Committee to consider P2,000.00 per square meter as

the value of their land.

This resolves the Petition for Review on Certiorari under Rule 45 of the
Rules of Court, praying that the Decision24[1] of the Court of Appeals (CA)
dated November 28, 2003, affirming the trial court judgment, and the CA
Resolution25[2] dated February 27, 2004, denying petitioners motion for
reconsideration, be reversed and set aside.

One of the respondents also wrote a letter dated November 25, 1994
to Mayor Vicente P. Eusebio calling the latters attention to the fact that a
property in the same area, as the land subject of this case, had been paid for
by petitioners at the price of P2,000.00 per square meter when said property
was expropriated in the year 1994 also for conversion into a public road.
Subsequently, respondents counsel sent a demand letter dated August 26,
1996 to Mayor Eusebio, demanding the amount of P5,000.00 per square

The antecedent facts are as follows:

meter, or a total of P7,930,000.00, as just compensation for respondents

property. In response, Mayor Eusebio wrote a letter dated September 9, 1996
informing respondents that the City of Pasig cannot pay them more than the

Respondents are the registered owners of a parcel of land covered by

amount set by the Appraisal Committee.

Transfer Certificate of Title Nos. 53591 and 53589 with an area of 1,586
square meters. Said parcel of land was taken by the City of Pasig sometime
in 1980 and used as a municipal road now known as A. Sandoval Avenue,

Thus, on October 8, 1996, respondents filed a Complaint for

Barangay Palatiw, Pasig City. On February 1, 1993, the Sanggunian of Pasig

Reconveyance and/or Damages (Civil Case No. 65937) against herein

City passed Resolution No. 15 authorizing payments to respondents for said

petitioners before the Regional Trial Court (RTC) of Pasig City, Branch 155.

parcel of land. However, the Appraisal Committee of the City of Pasig, in

Respondents prayed that the property be returned to them with payment of

Resolution No. 93-13 dated October 19, 1993, assessed the value of the land

reasonable rental for sixteen years of use at P500.00 per square meter, or

only at P150.00 per square meter. In a letter dated June 26, 1995, respondents

P793,000.00, with legal interest of 12% per annum from date of filing of the

24

complaint until full payment, or in the event that said property can no longer
be returned, that petitioners be ordered to pay just compensation in the

25
9 | E X P R O P R I AT I O N

amount of P7,930,000.00 and rental for sixteen years of use at P500.00 per

square meter, or P793,000.00, both with legal interest of 12% per annum from

3.

In the event that said properties can no longer be

returned to the plaintiffs as the same is already
being used as a public road known as A. Sandoval
Avenue, Pasig City, the defendants are hereby
ordered to jointly pay the plaintiffs the fair and
reasonable value therefore at P5,000.00 per square
meter or a total of P7,930,000.00 with payment of
reasonable rental for its use in the amount of
P500.00 per square meter or a total of
P793,000.00, both with legal interest at the rate of
6% per annum from the filing of the instant
Complaint until full payment is made; and

4.

Ordering the defendants to jointly pay the

plaintiffs attorneys fees in the amount of
P200,000.00.

the date of filing of the complaint until full payment. In addition, respondents
prayed for payment of moral and exemplary damages, attorneys fees and
costs.

After trial, the RTC rendered a Decision 26[3] dated January 2, 2001,
the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing, judgment is

hereby rendered in favor of the plaintiffs and against the
defendants:
1.

2.

Declaring as ILLEGAL and UNJUST the action

of the defendants in taking the properties of
plaintiffs covered by Transfer Certificates of Title
Nos. 53591 and 53589 without their consent and
without the benefit of an expropriation
proceedings required by law in the taking of
private property for public use;
Ordering the defendants to jointly RETURN the
subject properties to plaintiffs with payment of
reasonable rental for its use in the amount of
P793,000.00 with legal interest at the rate of 6%
per annum from the filing of the instant Complaint
until full payment is made;

26
10 | E X P R O P R I A T I O N

No pronouncement as to costs.
SO ORDERED.

Petitioners then appealed the case to the CA, but the CA affirmed the
RTC judgment in its Decision dated November 28, 2003.

Petitioners motion for reconsideration of the CA Decision was denied

RESPONDENTS
REGISTERING
ANY
COMPLAINT OR PROTEST FOR THE TAKING
AND DESPITE THE FACT THAT SUCH
TAKING DID NOT PERSONALLY BENEFIT
THE PETITIONERS BUT THE PUBLIC AT
LARGE; AND

per Resolution dated February 27, 2004.

Hence, this petition where it is alleged that:

IV.
I.

PUBLIC RESPONDENT COURT

ERRED IN UPHOLDING THE RULING OF THE
LOWER COURT DESPITE THE APPARENT
LACK OF JURISDICTION BY REASON OF
PRESCRIPTION OF PRIVATE RESPONDENTS
CLAIM FOR JUST COMPENSATION;

II.

PUBLIC RESPONDENT COURT ERRED

IN FIXING THE FAIR AND REASONABLE
COMPENSATION
FOR
RESPONDENTS
PROPERTY AT P5,000.00 PER SQUARE
METER DESPITE THE GLARING FACT THAT
AT THE TIME OF TAKING IN THE YEAR 1980
THE FAIR MARKET VALUE WAS PEGGED BY
AN APPRAISAL COMMITTEE AT ONE
HUNDRED SIXTY PESOS (PHP160.00);

PUBLIC RESPONDENT COURT OF

APPEALS ERRED IN AFFIRMING THE
P200,000.00 AWARD FOR ATTORNEYS FEES
TO THE PRIVATE RESPONDENTS COUNSEL
DESPITE THE ABSENCE OF NEGLIGENCE
OR INACTION ON THE PART OF
PETITIONERS RELATIVE TO THE INSTANT
CLAIM FOR JUST COMPENSATION.27[4]

At the outset, petitioners must be disabused of their belief that

respondents action for recovery of their property, which had been taken for
public use, or to claim just compensation therefor is already barred by
prescription.

In Republic of the Philippines v. Court of Appeals,28[5] the

Court emphasized that where private property is taken by the Government

for public use without first acquiring title thereto either through expropriation

III.

PUBLIC RESPONDENT COURT ERRED

IN UPHOLDING THE JUDGMENT OF THE
LOWER COURT AWARDING THE AMOUNT
OF P793,000.00 AS REASONABLE RENTAL
FOR
THE
USE
OF
RESPONDENTS
PROPERTY IN SPITE OF THE FACT THAT
THE SAME WAS CONVERTED INTO A
PUBLIC ROAD BY A PREVIOUSLY ELECTED
MUNICIPAL
MAYOR
WITHOUT

11 | E X P R O P R I A T I O N

or negotiated sale, the owners action to recover the land or the value thereof
does not prescribe. The Court went on to remind government agencies not
to exercise the power of eminent domain with wanton disregard for property
27
28

rights as Section 9, Article III of the Constitution provides that private

property shall not be taken for public use without just compensation. 29[6]

In said case, the Court held that because the landowner did not act to
question the lack of expropriation proceedings for a very long period of time
and even negotiated with the PNR as to how much it should be paid as just
compensation, said landowner is deemed to have waived its right and is

The remaining issues here are whether respondents are entitled to

regain possession of their property taken by the city government in the 1980s

estopped from questioning the power of the PNR to expropriate or the public
use for which the power was exercised. It was further declared therein that:

and, in the event that said property can no longer be returned, how should just
compensation to respondents be determined.
x x x recovery of possession of the property by the
landowner can no longer be allowed on the grounds of
estoppel and, more importantly, of public policy which
imposes upon the public utility the obligation to continue its
services to the public. The non-filing of the case for
expropriation will not necessarily lead to the return of the
property to the landowner. What is left to the landowner is
the right of compensation.

These issues had been squarely addressed in Forfom Development

Corporation v. Philippine National Railways,30[7] which is closely analogous
to the present case. In said earlier case, the Philippine National Railways
(PNR) took possession of the private property in 1972 without going through

x x x It is settled that non-payment of just compensation

does not entitle the private landowners to recover possession of
their expropriated lot.31[8]

expropriation proceedings. The San Pedro-Carmona Commuter Line Project

was then implemented with the installation of railroad facilities on several
parcels of land, including that of petitioner Forfom. Said owner of the private
property then negotiated with PNR as to the amount of just compensation. No
agreement having been reached, Forfom filed a complaint for Recovery of
Possession of Real Property and/or Damages with the trial court sometime in
August 1990.

Just like in the Forfom case, herein respondents also failed to question
the taking of their property for a long period of time (from 1980 until the
early 1990s) and, when asked during trial what action they took after their
property was taken, witness Jovito Luis, one of the respondents, testified that
when we have an occasion to talk to Mayor Caruncho we always asked for

29
30
12 | E X P R O P R I A T I O N

31

compensation.32[9]

It is likewise undisputed that what was constructed by

National Power Corporation v. Dela Cruz34[11] that trial with the aid of

the city government on respondents property was a road for public use,

commissioners is a substantial right that may not be done away with

namely, A. Sandoval Avenue in Pasig City. Clearly, as in Forfom, herein

capriciously or for no reason at all. 35[12] It was also emphasized therein that

respondents are also estopped from recovering possession of their land, but

although ascertainment of just compensation is a judicial prerogative, the

are entitled to just compensation.

commissioners findings may only be disregarded or substituted with the trial

courts own estimation of the propertys value only if the commissioners have
applied illegal principles to the evidence submitted to them, where they have

Now, with regard to the trial courts determination of the amount of

just compensation to which respondents are entitled, the Court must strike
down the same for being contrary to established rules and jurisprudence.

The

prevailing

doctrine

on

judicial

determination

of

disregarded a clear preponderance of evidence, or where the amount allowed

is either grossly inadequate or excessive.

Thus, the Court concluded in

Forfom that:

The judge should not have made a determination of

just compensation without first having appointed the required
commissioners who would initially ascertain and report the just
compensation for the property involved. This being the case,
we find the valuation made by the trial court to be
ineffectual, not having been made in accordance with the
procedure provided for by the rules.36[13]

just

33

compensation is that set forth in Forfom. [10] Therein, the Court ruled that
even if there are no expropriation proceedings instituted to determine just
compensation, the trial court is still mandated to act in accordance with the
procedure provided for in Section 5, Rule 67 of the 1997 Rules of Civil
Procedure, requiring the appointment of not more than three competent and
disinterested commissioners to ascertain and report to the court the just
compensation for the subject property. The Court reiterated its ruling in

Verily, the determination of just compensation for property taken for

public use must be done not only for the protection of the landowners interest
34

32

35

33

36

13 | E X P R O P R I A T I O N

but also for the good of the public. In Republic v. Court of Appeals,37[14] the

Explaining the reason for this rule in Manila International Airport Authority

Court explained as follows:

v. Rodriguez,40[17] the Court, quoting Ansaldo v. Tantuico, Jr.,41[18] stated,

thus:

The concept of just compensation, however, does not

imply fairness to the property owner alone. Compensation
must be just not only to the property owner, but also to the
public which ultimately bears the cost of expropriation.38
[15]

The reason for the rule, as pointed out in Republic v. Lara, is

that
. . . [w]here property is taken ahead of the filing of the
condemnation proceedings, the value thereof may be
enchanced by the public purpose for which it is
taken; the entry by the plaintiff upon the property
may have depreciated its value thereby; or, there
may have been a natural increase in the value of the
property from the time the complaint is filed, due
to general economic conditions. The owner of
private property should be compensated only for
what he actually loses; it is not intended that his
compensation shall extend beyond his loss or
injury. And what he loses is only the actual value of
his property at the time it is taken. This is the only
way that compensation to be paid can be truly just; i.e.,
just not only to the individual whose property is
taken,' 'but to the public, which is to pay for it.42[19]

It is quite clear that the Court, in formulating and promulgating the procedure
provided for in Sections 5 and 6, Rule 67, found this to be the fairest way of
arriving at the just compensation to be paid for private property taken for
public use.

With regard to the time as to when just compensation should be fixed, it is

settled jurisprudence that where property was taken without the benefit of
expropriation proceedings, and its owner files an action for recovery of
possession thereof before the commencement of expropriation proceedings, it
is the value of the property at the time of taking that is controlling. 39[16]
37

40

38

41

39

42

14 | E X P R O P R I A T I O N

In this case, the trial court should have fixed just compensation for the
property at its value as of the time of taking in 1980, but there is nothing on
record showing the value of the property at that time.

The trial court,

therefore, clearly erred when it based its valuation for the subject land on the
price paid for properties in the same location, taken by the city government
only sometime in the year 1994.

However, in taking respondents property without the benefit of expropriation

proceedings and without payment of just compensation, the City of Pasig
clearly acted in utter disregard of respondents proprietary rights.

Such

conduct cannot be countenanced by the Court. For said illegal taking, the
City of Pasig should definitely be held liable for damages to respondents.
Again, in Manila International Airport Authority v. Rodriguez, 43[20] the Court

Such pecuniary loss entitles him to adequate

compensation in the form of actual or compensatory
damages, which in this case should be the legal interest
(6%) on the value of the land at the time of taking, from
said point up to full payment by the MIAA. This is based
on the principle that interest runs as a matter of law and
follows from the right of the landowner to be placed in as good
position as money can accomplish, as of the date of the
taking.
The award of interest renders unwarranted the
grant of back rentals as extended by the courts below. In
Republic v. Lara, et al., the Court ruled that the indemnity for
rentals is inconsistent with a property owners right to be paid
legal interest on the value of the property, for if the condemnor
is to pay the compensation due to the owners from the time of
the actual taking of their property, the payment of such
compensation is deemed to retroact to the actual taking of the
property; and, hence, there is no basis for claiming rentals from
the time of actual taking. More explicitly, the Court held in
Republic v. Garcellano that:

held that the government agencys illegal occupation of the owners property

The uniform rule of this Court, however, is

that this compensation must be, not in the
form of rentals, but by way of 'interest
from the date that the company [or entity]
exercising the right of eminent domain
take possession of the condemned lands,
and the amounts granted by the court
shall cease to earn interest only from the
moment they are paid to the owners or
deposited in court x x x.

for a very long period of time surely resulted in pecuniary loss to the owner.
The Court held as follows:

xxxx

43
15 | E X P R O P R I A T I O N

For more than twenty (20) years, the MIAA occupied

the subject lot without the benefit of expropriation proceedings
and without the MIAA exerting efforts to ascertain ownership
of the lot and negotiating with any of the owners of the
property. To our mind, these are wanton and irresponsible

acts which should be suppressed and corrected. Hence, the

award of exemplary damages and attorneys fees is in order.
However, while Rodriguez is entitled to such exemplary
damages and attorneys fees, the award granted by the courts
below should be equitably reduced. We hold that Rodriguez is
entitled only to P200,000.00 as exemplary damages, and
attorneys fees equivalent to one percent (1%) of the amount
due.44[21]

1.

The valuation of just compensation and award of back rentals

made by the Regional Trial Court of Pasig City, Branch 155 in
Civil Case No. 65937 are hereby SET ASIDE. The City of Pasig,
represented by its duly-authorized officials, is DIRECTED to
institute the appropriate expropriation action over the subject
parcel of land within fifteen (15) days from finality of this
Decision, for the proper determination of just compensation due
to respondents, with interest at the legal rate of six (6%) percent
per annum from the time of taking until full payment is made.

Lastly, with regard to the liability of petitioners Vicente P. Eusebio,

Lorna A. Bernardo, and Victor Endriga all officials of the city government
the Court cannot uphold the ruling that said petitioners are jointly liable in
their personal capacity with the City of Pasig for payments to be made to
respondents. There is a dearth of evidence which would show that said
petitioners were already city government officials in 1980 or that they had any

2.

The City of Pasig is ORDERED to pay respondents the

amounts of P200,000.00 as exemplary damages and P200,000.00
as attorneys fees.

involvement whatsoever in the illegal taking of respondents property. Thus,

any liability to respondents is the sole responsibility of the City of Pasig.
No costs.
IN VIEW OF THE FOREGOING, the petition is PARTIALLY
GRANTED.

SO ORDERED.

The Decision of the Court of Appeals dated November 28,

2003 is MODIFIED to read as follows:

DIOSDADO

M.

PERALTA
Associate
Justice
44
16 | E X P R O P R I A T I O N

Plaintiff-appellant, Cosme Lacuesta, was the agricultural lessee

of a landholding consisting of 1.6610 hectares, situated in
Barangay Casabaan, Cabangan, Zambales. He was devoting a
5,000 square meter portion thereof to the planting of palay.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-56540 October 31, 1984
COSME LACUESTA, plaintiff-appellant,
vs.
BARANGAY CASABAAN, MUNICIPALITY OF CABANGAN,
PROVINCE OF ZAMBALES, and TEOFILO RONQUILLO,
defendants-appellees.

MELENCIO-HERRERA, J.:+.wph!1
This is an appeal certified to us by the then Court of Appeals as
involving a pure question of law.
17 | E X P R O P R I A T I O N

By virtue of expropriation proceedings against the land-owners

instituted by defendant-appellee, Barangay Casabaan (the
Barangay, for short), before the Court of First Instance of
Zambales ( the Expropriation Case), the said Barangay was
placed in possession of the same 5,000 square meter portion.
Lacuesta was not a party in that case. The Barangay thereafter
started converting the area into a public plaza and constructed a
basketball court, a rural health center, a barangay hall and a
stage.
While the Expropriation Case was pending, a claiming that he
had been illegally deprived of the right to cultivate the portion
expropriated, Lacuesta, litigating as a pauper, filed before the
Court of Agrarian Relations of Zambales (CAR, for short), a
Complaint for Reinstatement and Damages against the
Barangay, represented by its Captain, Teofilo Ronquillo.
Lacuesta claimed that the entry of the Barangay into the litigated
portion without his consent was illegal as its deprived average
annual income of 17.5 cavans of palay or its money equivalent,
and that by reason he suffered moral damages of P2,000.00
In its Answer, the Barangay contended that the 5,000 square
meter portion was upland, not suited for the planting of palay or
corn, but for sugar cane, as shown by the Tax Declaration
covering it; that it was awarded possession by virtue of a lawful
Court Order in the Expropriation Case, and that Lacuesta's claim
of an annual palay harvest of 17.5 cavans of palay is unfounded.

On July 17, 1980, the CAR rendered judgment dismissing the

case essentially on the ground that for reasons of comity, it may
not interfere in the acts of another Court of equal rank, and who
has first acquired jurisdiction over the expropriation case." The
CAR further held that Lacuesta was not entitled to actual
damages since the palay had already been harvested at the time
of expropriation, nor to disturbance comp ensation since
dispossession was not due to the causes enumerated in Section
36(l) of the Code of Agrarian Reforms (R.A. No. 3844). 1
Lacuesta assailed that judgment before the then Court of Appeals claiming that it is the CAR "which has
jurisdiction to determine whether (he) ha(d) the right to be reinstated in the cultivation of the landholding.
2

He also cited Section 12(n) of P.D. No. 946, roviding that the Court of
Agrarian Relations has original and exclusive jurisdiction over: t.hqw
xxx xxx xxx
(n) Expropriation proceedings for public purpose of all kinds
of tenanted agricultural land, whether instituted by the State,
its political subdivisions and instrumentalities, or corporations
and entities authorized by law to expropriate.
The legal poser is, as between the Court of First Instance (CFI) and the Court
of Agrarian Relations (CAR), which Court has jurisdiction over the
expropriation of a tenanted landholding?
Although the abovequoted provision of P.D. No. 946 explicitly vests
jurisdiction in the CAR, it should be noted that P.D. No. 946 became effective
only on June 17, 1976 or posterior to the Expropriation Case instituted on
October 8, 1975. Jurisdiction, therefore, vested in the Court of First Instance
where we find that no irregularity had been satisfactorily established.
The reinstatement prayed for by Lacuesta is obviously impossible of
accomplishment because the public plaza had been constructed and there is
no longer any area he could still cultivate.

On the issue of damages, procedurally, that should have been more properly
raised in the Expropriation Case, since it was the case first instituted and it
was the CFI that had first acquired jurisdiction. The Barangay had raised that
point in its "Opposition to Motion for Issuance of Restraining Order and/or
Issuance of Preliminary Injunction" but it evoked no reaction from Lacuesta.
On the other hand, the Barangay, too, can be faulted for not having included
Lacuesta as a party in the Expropriation Case as required by Section 1, Rule
67 of the Rules of Court.
But procedural lapses should not prejudice Lacuesta, whose right to security
of tenure as a tenant is, in our opinion, also entitled to protection even where
the power of eminent domain is exercised. Although Lacuesta admits that he
is not entitled to disturbance compensation because that is only granted to a
tenant-agricultural lessee whose landholding has been converted by his
landowner/lessor for non-agricultural purposes and not where a tenanted
farmholding is expropriated, yet, it is our opinion that Lacuesta should be
entitled to some compensation for the deprivation of his farmholding. Since
the amount Lacuesta claimed as damages in the Complaint has not been
satisfactorily rebutted, he may be awarded 17.5 cavans of palay or its money
equivalent, for a period of five years, applying by analogy the same period
granted in cases where payment of disturbance compensation is warranted. 3
Lacuesta is not entitled to the moral damages that he prays for since it cannot
be said that the Barangay had acted with malice and in bad faith.
WHEREFORE, the appealed judgment is hereby modified in that defendantsappellees shall pay plaintiff-appellant damages of 17.5 cavans of palay or its
money equivalent in 1975, the year that expropriation took place, for a period
of five years. No costs.
SO ORDERED.1wph1.t
Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., and De la Fuente, JJ.,
concur.

Footnotes

18 | E X P R O P R I A T I O N

1 Sec. 36. Possession of Landholding; Exceptions. Notwithstanding any

agreement as to the period or future surrender, of the land, an agricultural lessee
shall continue in the enjoyment and possession of his landholding except when
his dispossession has been authorized by the Court in a judgment that is final and
executory if after due hearing it is shown that: t.hqw
(1) The landholding is declared by the department head
upon recommendation of the National Planning Commission
to be suited for residential, commercial, industrial or some
other urban purposes: Provided, That the agricultural lessee
shall be entitled to disturbance compensation equivalent to
five times the average of the gross harvest of his
landholding during the last five preceding calendar years.
2 Memorandum, P. 2
3 Section 36(1), R.A. 3844, supra.

19 | E X P R O P R I A T I O N