1

Republic of the Philippines

SUPREME COURT
Baguio City
EN BANC

G.R. No. 132922 ApriI 21, 1998
TELECOMMUNICATIONS AND BROADCAST ATTORNEYS OF THE
PHILIPPINES, INC. and GMA NETWORK, INC., petitioners,
vs.
THE COMMISSION ON ELECTIONS, respondent.
MENDOZA,
n Osmea v. COMELEC, G.R. No. 132231, decided March 31, 1998,
1
we upheld
the validity of 11(b) of R.A. No. 6646 which prohibits the sale or donation of print
space or air time for political ads, except to the Commission on Elections under
90, of B.P. No. 881, the Omnibus Election Code, with respect to print media, and
92, with respect to broadcast media. n the present case, we consider the validity
of 92 of B.P. Blg. No. 881 against claims that the requirement that radio and
television time be given free takes property without due process of law; that it
violates the eminent domain clause of the Constitution which provides for the
payment of just compensation; that it denies broadcast media the equal protection
of the laws; and that, in any event, it violates the terms of the franchise of
petitioner GMA Network, nc.
Petitioner Telecommunications and Broadcast Attorneys of the Philippines, nc. is
an organization of lawyers of radio and television broadcasting companies. They
are suing as citizens, taxpayers, and registered voters. The other petitioner, GMA
Network, nc., operates radio and television broadcasting stations throughout the
Philippines under a franchise granted by Congress.
Petitioners challenge the validity of 92 on the ground (1) that it takes property
without due process of law and without just compensation; (2) that it denies radio
and television broadcast companies the equal protection of the laws; and (3) that it
is in excess of the power given to the COMELEC to supervise or regulate the
operation of media of communication or information during the period of election.
%e Question of Standing
At the threshold of this suit is the question of standing of petitioner
Telecommunications and Broadcast Attorneys of the Philippines, nc. (TELEBAP).
As already noted, its members assert an interest as lawyers of radio and television
broadcasting companies and as citizens, taxpayers, and registered voters.
n those cases
2
in which citizens were authorized to sue, this Court upheld their
standing in view of the "transcendental importance" of the constitutional question
raised which justified the granting of relief. n contrast, in the case at bar, as will
presently be shown, petitioner's substantive claim is without merit. To the extent,
therefore, that a party's standing is determined by the substantive merit of his case
or preliminary estimate thereof, petitioner TELEBAP must be held to be without
standing. ndeed, a citizen will be allowed to raise a constitutional question only
when he can show that he has personally suffered some actual or threatened
injury as a result of the allegedly illegal conduct of the government; the injury fairly
is fairly traceable to the challenged action; and the injury is likely to be redressed
by a favorable action.
3
Members of petitioner have not shown that they have
suffered harm as a result of the operation of 92 of B.P. Blg. 881.
Nor do members of petitioner TELEBAP have an interest as registered voters
since this case does not concern their right of suffrage. Their interest in 92 of B.P.
Blg. 881 should be precisely in upholding its validity.
Much less do they have an interest as taxpayers since this case does not involve
the exercise by Congress of its taxing or spending power.
4
A party suing as a
taxpayer must specifically show that he has a sufficient interest in preventing the
illegal expenditure of money raised by taxation and that he will sustain a direct
injury as a result of the enforcement of the questioned statute.
Nor indeed as a corporate entity does TELEBAP have standing to assert the rights
of radio and television broadcasting companies. Standing jus tertii will be
recognized only if it can be shown that the party suing has some substantial
relation to the third party, or that the third party cannot assert his constitutional
right, or that the eight of the third party will be diluted unless the party in court is
allowed to espouse the third party's constitutional claim. None of these
circumstances is here present. The mere fact that TELEBAP is composed of
lawyers in the broadcast industry does not entitle them to bring this suit in their
name as representatives of the affected companies.
Nevertheless, we have decided to take this case since the other petitioner, GMA
Network, nc., appears to have the requisite standing to bring this constitutional
challenge. Petitioner operates radio and television broadcast stations in the
Philippines affected by the enforcement of 92 of B.P. Blg. 881 requiring radio and
television broadcast companies to provide free air time to the COMELEC for the
use of candidates for campaign and other political purposes.
Petitioner claims that it suffered losses running to several million pesos in
providing COMELEC Time in connection with the 1992 presidential election and
the 1995 senatorial election and that it stands to suffer even more should it be
required to do so again this year. Petitioner's allegation that it will suffer losses
again because it is required to provide free air time is sufficient to give it standing
to question the validity of 92.
5

iring of COMELEC %ime, a
Reasonable Condition for
Grant of Petitioner's
Francise
As pointed out in our decision in Osmea v. COMELEC, 11(b) of R.A. No. 6646
and 90 and 92 of the B.P. Blg. 881 are part and parcel of a regulatory scheme
designed to equalize the opportunity of candidates in an election in regard to the
use of mass media for political campaigns. These statutory provisions state in
relevant parts:
R.. No. 6646
Sec. 11. Proibited Forms of Election Propaganda. n addition to the
forms of election propaganda prohibited under Section 85 of Batas
Pambansa Blg. 881, it shall be unlawful:
xxx xxx xxx
2
(b) for any newspapers, radio broadcasting or television station, or other
mass media, or any person making use of the mass media to sell or to
give free of charge print space or air time for campaign or other political
purposes except to the Commission as provided under Section 90 and 92
of Batas Pambansa Blg. 881. Any mass media columnist, commentator,
announcer or personality who is a candidate for any elective public office
shall take a leave of absence from his work as such during the campaign
period.
.P. lg. 881, (Omnibus Election Code)
Sec. 90. Comelec space. The Commission shall procure space in at
least one newspaper of general circulation in every province or
city; Provided, owever, That in the absence of said newspaper,
publication shall be done in any other magazine or periodical in said
province or city, which shall be known as "Comelec Space" wherein
candidates can announce their candidacy. Said space shall be allocated,
free of charge, equally and impartially by the Commission among all
candidates within the area in which the newspaper is circulated. (Sec. 45,
1978 EC).
Sec. 92. Comelec time. The commission shall procure radio and
television time to be known as "Comelec Time" which shall be allocated
equally and impartially among the candidates within the area of coverage
of all radio and television stations. For this purpose, the franchise of all
radio broadcasting and television stations are hereby amended so as to
provide radio or television time, free of charge, during the period of the
campaign. (Sec. 46, 1978 EC)
Thus, the law prohibits mass media from selling or donating print space and air
time to the candidates and requires the COMELEC instead to procure print space
and air time for allocation to the candidates. t will be noted that while 90 of B.P.
Blg. 881 requires the COMELEC to procure print space which, as we have held,
should be paid for, 92 states that air time shall be procured by the COMELEC
free of charge.
Petitioners contend that 92 of BP Blg. 881 violates the due process clause
6
and
the eminent domain provision
7
of the Constitution by taking air time from radio and
television broadcasting stations without payment of just compensation. Petitioners
claim that the primary source of revenue of the radio and television stations is the
sale of air time to advertisers and that to require these stations to provide free air
time is to authorize a taking which is not "ade minimis temporary limitation or
restraint upon the use of private property." According to petitioners, in 1992, the
GMA Network, nc. lost P22,498,560.00 in providing free air time of one (1) hour
every morning from Mondays to Fridays and one (1) hour on Tuesdays and
Thursday from 7:00 to 8:00 p.m. (prime time) and, in this year's elections, it stands
to lose P58,980,850.00 in view of COMELEC'S requirement that radio and
television stations provide at least 30 minutes of prime time daily for the
COMELEC Time.
8

Petitioners' argument is without merit, All broadcasting, whether by radio or by
television stations, is licensed by the government. Airwave frequencies have to be
allocated as there are more individuals who want to broadcast than there are
frequencies to assign.
9
A franchise is thus a privilege subject, among other things,
to amended by Congress in accordance with the constitutional provision that "any
such franchise or right granted . . . shall be subject to amendment, alteration or
repeal by the Congress when the common good so requires."
10

The idea that broadcast stations may be required to provide COMELEC Time free
of charge is not new. t goes back to the Election Code of 1971 (R.A. No. 6388),
which provided:
Sec. 49. Regulation of election propaganda troug mass media. (a)
The franchise of all radio broadcasting and television stations are hereby
amended so as to require each such station to furnish free of charge, upon
request of the Commission [on Elections], during the period of sixty days
before the election not more than fifteen minutes of prime time once a
week which shall be known as "Comelec Time" and which shall be used
exclusively by the Commission to disseminate vital election information.
Said "Comelec Time" shall be considered as part of the public service time
said stations are required to furnish the Government for the dissemination
of public information and education under their respective franchises or
permits.
The provision was carried over with slight modification by the 1978 Election Code
(P.D. No. 1296), which provided:
Sec. 46. COMELEC %ime. The Commission [on Elections] shall procure
radio and television time to be known as "COMELEC Time" which shall be
allocated equally and impartially among the candidates within the area of
coverage of said radio and television stations. For this purpose, the
franchises of all radio broadcasting and television stations are hereby
amended so as to require such stations to furnish the Commission radio or
television time, free of charge, during the period of the campaign, at least
once but not oftener than every other day.
Substantially the same provision is now embodied in 92 of B.P. Blg. 881.
ndeed, provisions for COMELEC Tima have been made by amendment of the
franchises of radio and television broadcast stations and, until the present case
was brought, such provisions had not been thought of as taking property without
just compensation. Art. X, 11 of the Constitution authorizes the amendment of
franchises for "the common good." What better measure can be conceived for the
common good than one for free air time for the benefit not only of candidates but
even more of the public, particularly the voters, so that they will be fully informed of
the issues in an election? "[]t is the right of the viewers and listeners, not the right
of the broadcasters, which is paramount."
11

Nor indeed can there be any constitutional objection to the requirement that
broadcast stations give free air time. Even in the United States, there are
responsible scholars who believe that government controls on broadcast media
can constitutionally be instituted to ensure diversity of views and attention to public
affairs to further the system of free expression. For this purpose, broadcast
stations may be required to give free air time to candidates in an election.
12
Thus,
3
Professor Cass R. Sunstein of the University of Chicago Law School, in urging
reforms in regulations affecting the broadcast industry, writes:
Elections. We could do a lot to improve coverage of electoral campaigns.
Most important, government should ensure free media time for candidates.
Almost all European nations make such provisions; the United States does
not. Perhaps government should pay for such time on its own. Peraps
broadcasters sould ave to offer it as a condition for receiving a
license. Peraps a commitment to provide free time would count in favor of
te grant of a license in te first instance. Steps of this sort would
simultaneously promote attention to public affairs and greater diversity of
view. They would also help overcome the distorting effects of "soundbites"
and the corrosive financial pressures faced by candidates in seeking time
on the media. 13
n truth, radio and television broadcasting companies, which are given franchises,
do not own the airwaves and frequencies through which they transmit broadcast
signals and images. They are merely given the temporary privilege of using them.
Since a franchise is a mere privilege, the exercise of the privilege may reasonably
be burdened with the performance by the grantee of some form of public service.
Thus, in e Villata v. Stanley,
14
a regulation requiring interisland vessels licensed
to engage in the interisland trade to carry mail and, for this purpose, to give
advance notice to postal authorities of date and hour of sailings of vessels and of
changes of sailing hours to enable them to tender mail for transportation at the last
practicable hour prior to the vessel's departure, was held to be a reasonable
condition for the state grant of license. Although the question of compensation for
the carriage of mail was not in issue, the Court strongly implied that such service
could be without compensation, as in fact under Spanish sovereignty the mail was
carried free.
15

n Pilippine Long istance %elepone Company v. N%C,
16
the Court ordered the
PLDT to allow the interconnection of its domestic telephone system with the
international gateway facility of Eastern Telecom. The Court cited (1) the
provisions of the legislative franchise allowing such interconnection; (2) the
absence of any physical, technical, or economic basis for restricting the linking up
of two separate telephone systems; and (3) the possibility of increase in the
volume of international traffic and more efficient service, at more moderate cost, as
a result of interconnection.
Similarly, in the earlier case of PL% v. N%C,
17
it was held:
Such regulation of the use and ownership of telecommunications systems
is in the exercise of the plenary police power of the State for the promotion
of the general welfare. The 1987 Constitution recognizes the existence of
that power when it provides:
Sec. 6. The use of property bears a social function, and all
economic agents shall contribute to the common good.
ndividuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall
have the right to own, establish, and operate economic
enterprises, subject to the duty of the State to promote
distributive justice and to intervene when the common
good so demands (Article X).
The interconnection which has been required of PLDT is a form of
"intervention" with property rights dictated by "the objective of government
to promote the rapid expansion of telecommunications services in all areas
of the Philippines, . . . to maximize the use of telecommunications facilities
available, . . . in recognition of the vital role of communications in nation
building . . . and to ensure that all users of the public telecommunications
service have access to all other users of the service wherever they may be
within the Philippines at an acceptable standard of service and at
reasonable cost" (DOTC Circular No. 90-248). Undoubtedly, the
encompassing objective is the common good. The NTC, as the regulatory
agency of the State, merely exercised its delegated authority to regulate
the use of telecommunications networks when it decreed interconnection.
n the granting of the privilege to operate broadcast stations and thereafter
supervising radio and television stations, the state spends considerable public
funds in licensing and supervising such stations.
18
t would be strange if it cannot
even require the licensees to render public service by giving free air time.
Considerable effort is made in the dissent of Mr. Justice Panganiban to show that
the production of television programs involves large expenditure and requires the
use of equipment for which huge investments have to be made. The dissent cites
the claim of GMA Network that the grant of free air time to the COMELEC for the
duration of the 1998 campaign period would cost the company P52,380,000,
representing revenue it would otherwise earn if the air time were sold to
advertisers, and the amount of P6,600,850, representing the cost of producing a
program for the COMELEC Time, or the total amount of P58,980,850.
The claim that petitioner would be losing P52,380,000 in unrealized revenue from
advertising is based on the assumption that air time is "finished product" which, it
is said, become the property of the company, like oil produced from refining or
similar natural resources after undergoing a process for their production. But air
time is not owned by broadcast companies. As held in Red Lion roadcasting
Co. v. F.C.C.,
19
which upheld the right of a party personally attacked to reply,
"licenses to broadcast do not confer ownership of designated frequencies, but only
the temporary privilege of using them." Consequently, "a license permits
broadcasting, but the license has no constitutional right to be the one who holds
the license or to monopolize a radio frequency to the exclusion of his fellow
citizens. There is nothing in the First Amendment which prevents the Government
from requiring a licensee to share his frequency with others and to conduct himself
as a proxy or fiduciary with obligations to present those views and voices which
are representative of his community and which would otherwise, by necessity, be
barred from the airwaves."
20
As radio and television broadcast stations do not own
the airwaves, no private property is taken by the requirement that they provide air
time to the COMELEC.
Justice Panganiban's dissent quotes from Tolentino on the Civil Code which says
that "the air lanes themselves 'are not property because they cannot be
appropriated for the benefit of any individual.'" (p. 5) That means neither the State
4
nor the stations own the air lanes. Yet the dissent also says that "The franchise
holders can recover their huge investments only by selling air time to advertisers."
(p. 13) f air lanes cannot be appropriated, how can they be used to produce air
time which the franchise holders can sell to recover their investment? There is a
contradiction here.
As to the additional amount of P6,600,850, it is claimed that this is the cost of
producing a program and it is for such items as "sets and props," "video tapes,"
"miscellaneous (other rental, supplies, transportation, etc.)," and "technical
facilities (technical crew such as director and cameraman as well as 'on air
plugs')." There is no basis for this claim. Expenses for these items will be for the
account of the candidates. COMELEC Resolution No. 2983, 6(d) specifically
provides in this connection:
(d) dditional services suc as tape-recording or video-taping of programs,
te preparation of visual aids, terms and condition tereof, and
consideration to be paid terefor may be arranged by te candidates wit
te radio/television station concerned. However, no radio/television station
shall make any discrimination among candidates relative to charges,
terms, practices or facilities for in connection with the services rendered.
t is unfortunate that in the effort to show that there is taking of private property
worth millions of pesos, the unsubstantiated charge is made that by its decision
the Court permits the "grand larceny of precious time," and allows itself to become
"the people's unwitting oppressor." The charge is really unfortunate. n Jackson
v. Rosenbaun,
21
Justice Holmes was so incensed by the resistance of property
owners to the erection of party walls that he was led to say in his original draft, "a
statute, which embodies the community's understanding of the reciprocal rights
and duties of neighboring landowners, does not need to invoke the penalty
larceny of the police power in its justification." Holmes's brethren corrected his
taste, and Holmes had to amend the passage so that in the end it spoke only of
invoking "the police power."
22
Justice Holmes spoke of the "petty larceny" of the
police power. Now we are being told of the "grand larceny [by means of the police
power] of precious air time."
Giving Free ir %ime a uty
ssumed by Petitioner
Petitioners claim that 92 is an invalid amendment of R.A. No. 7252 which granted
GMA Network, nc. a franchise for the operation of radio and television
broadcasting stations. They argue that although 5 of R.A. No. 7252 gives the
government the power to temporarily use and operate the stations of petitioner
GMA Network or to authorize such use and operation, the exercise of this right
must be compensated.
The cited provision of. R.A. No. 7252 states:
Sec. 5. Rigt of Government. A special right is hereby reserved to the
President of the Philippines, in times of rebellion, public peril, calamity,
emergency, disaster or disturbance of peace and order, to temporarily take
over and operate the stations of the grantee, to temporarily suspend the
operation of any station in the interest of public safety, security and public
welfare, or to authorize the temporary use and operation thereof by any
agency of the Government, upon due compensation to the grantee, for the
use of said stations during the period when they shall be so operated.
The basic flaw in petitioner's argument is that it assumes that the provision for
COMELEC Time constitutes the use and operation of the stations of the GMA
Network, nc., This is not so. Under 92 of B.P. Blg. 881, the COMELEC does not
take over the operation of radio and television stations but only the allocation of air
time to the candidates for the purpose of ensuring, among other things, equal
opportunity, time, and the right to reply as mandated by the Constitution.
23

ndeed, it is wrong to claim an amendment of petitioner's franchise for the reason
that B.P. Blg. 881, which is said to have amended R.A. No. 7252, actually
antedated it.
24
The provision of 92 of B.P. Blg. 881 must be deemed instead to
be incorporated in R.A. No. 7252. And, indeed, 4 of the latter statute does.
For the fact is that the duty imposed on the GMA Network, nc. by its franchise to
render "adequate public service time" implements 92 of B.P. Blg. 881.
Undoubtedly, its purpose is to enable the government to communicate with the
people on matters of public interest. Thus, R.A. No. 7252 provides:
Sec. 4. Responsibility to te Public. %e grantee sall provide adequate
public service time to enable te Government, troug te said
broadcasting stations, to reac te population on important public issues;
provide at all times sound and balanced programming; promote public
participation such as in community programming; assist in te functions of
public information and education; conform to the ethics of honest
enterprise; and not use its station for the broadcasting of obscene and
indecent language, speech, act or scene, or for the dissemination of
deliberately false information or willful misrepresentation, or to the
detriment of the public interest, or to incite, encourage, or assist in
subversive or treasonable acts. (Emphasis added).
t is noteworthy that 40 of R.A. No. 6388, from which 92 of B.P. Blg. 881 was
taken, expressly provided that the COMELEC Time should "be considered as part
of the public service time said stations are required to furnish the Government for
the dissemination of public information and education under their respective
franchises or permits." There is no reason to suppose that 92 of B.P. Blg. 881
considers the COMELEC Time therein provided to be otherwise than as a public
service which petitioner is required to render under 4 of its charter (R.A. No.
7252). n sum, B.P. Blg. 881, 92 is not an invalid amendment of petitioner's
franchise but the enforcement of a duty voluntarily assumed by petitioner in
accepting a public grant of privilege.
Thus far, we have confined the discussion to the provision of 92 of B.P. Blg. 881
for free air time without taking into account COMELEC Resolution No. 2983-A, 2
of which states:
Sec. 2. Grant of "Comelec %ime." Every radio broadcasting and
television station operating under franchise shall grant the
Commission, upon payment of just compensation, at least thirty (30)
minutes of prime time daily, to be known as "Comelec Time", effective
February 10, 1998 for candidates for President, Vice-President and
3
Senators, and effective March 27, 1998, for candidates for local elective
offices, until May 9, 1998. (Emphasis added).
This is because the amendment providing for the payment of "just compensation"
is invalid, being in contravention of 92 of B.P. Blg. 881 that radio and television
time given during the period of the campaign shall be "free of charge." ndeed,
Resolution No. 2983 originally provided that the time allocated shall be "free of
charge," just as 92 requires such time to be given "free of charge." The
amendment appears to be a reaction to petitioner's claim in this case that the
original provision was unconstitutional because it allegedly authorized the taking of
property without just compensation.
The Solicitor General, relying on the amendment, claims that there should be no
more dispute because the payment of compensation is now provided for. t is
basic, however, that an administrative agency cannot, in the exercise of
lawmaking, amend a statute of Congress. Since 2 of Resolution No. 2983-A is
invalid, it cannot be invoked by the parties.
Law llows Flextime for Programming
by Stations, Not Confiscation of
ir %ime by COMELEC
t is claimed that there is no standard in the law to guide the COMELEC in
procuring free air time and that "theoretically the COMELEC can demand all of the
air time of such stations."
25
Petitioners do not claim that COMELEC Resolution
No. 2983-A arbitrarily sequesters radio and television time. What they claim is that
because of the breadth of the statutory language, the provision in question is
susceptible of "unbridled, arbitrary and oppressive exercise."
26

The contention has no basis. For one, the COMELEC is required to procure free
air time for candidates "within the area of coverage" of a particular radio or
television broadcaster so that it cannot, for example, procure such time for
candidates outside that area. At what time of the day and how much time the
COMELEC may procure will have to be determined by it in relation to the overall
objective of informing the public about the candidates, their qualifications and their
programs of government. As stated in Osmea v. COMELEC, the COMELEC Time
provided for in 92, as well as the COMELEC Space provided for in 90, is in lieu
of paid ads which candidates are prohibited to have under 11(b) of R.A. No.
6646. Accordingly, this objective must be kept in mind in determining the details of
the COMELEC Time as well as those of the COMELEC Space.
There would indeed be objection to the grant of power to the COMELEC if 92
were so detailed as to leave no room for accommodation of the demands of radio
and television programming. For were that the case, there could be an intrusion
into the editorial prerogatives of radio and television stations.
ifferential %reatment of
roadcast Media Justified
Petitioners complain that B.P. Blg. 881, 92 singles out radio and television
stations to provide free air time. They contend that newspapers and magazines
are not similarly required as, in fact, in Pilippine Press Institute
v. COMELEC,
27
we upheld their right to the payment of just compensation for the
print space they may provide under 90.
The argument will not bear analysis. t rests on the fallacy that broadcast media
are entitled to the same treatment under the free speech guarantee of the
Constitution as the print media. There are important differences in the
characteristics of the two media, however, which justify their differential treatment
for free speech purposes. Because of the physical limitations of the broadcast
spectrum, the government must, of necessity, allocate broadcast frequencies to
those wishing to use them. There is no similar justification for government
allocation and regulation of the print media.
28

n the allocation of limited resources, relevant conditions may validly be imposed
on the grantees or licensees. The reason for this is that, as already noted, the
government spends public funds for the allocation and regulation of the broadcast
industry, which it does not do in the case of the print media. To require the radio
and television broadcast industry to provide free air time for the COMELEC Time is
a fair exchange for what the industry gets.
From another point of view, this Court has also held that because of the unique
and pervasive influence of the broadcast media, "[n]ecessarily . . . the freedom of
television and radio broadcasting is somewhat lesser in scope than the freedom
accorded to newspaper and print media."
29

The broadcast media have also established a uniquely pervasive presence in the
lives of all Filipinos. Newspapers and current books are found only in metropolitan
areas and in the poblaciones of municipalities accessible to fast and regular
transportation. Even here, there are low income masses who find the cost of
books, newspapers, and magazines beyond their humble means. Basic needs like
food and shelter perforce enjoy high priorities.
On the other hand, the transistor radio is found everywhere. The television
set is also becoming universal. Their message may be simultaneously
received by a national or regional audience of listeners including the
indifferent or unwilling who happen to be within reach of a blaring radio or
television set. The materials broadcast over the airwaves reach every
person of every age, persons of varying susceptibilities to persuasion,
persons of different .Q.s and mental capabilities, persons whose reactions
to inflammatory or offensive speech would he difficult to monitor or predict.
The impact of the vibrant speech is forceful and immediate. Unlike readers
of the printed work, the radio audience has lesser opportunity to cogitate,
analyze, and reject the utterance. 30
Petitioners' assertion therefore that 92 of B.P. Blg. 881 denies them the equal
protection of the law has no basis. n addition, their plea that 92 (free air time)
and 11(b) of R.A. No. 6646 (ban on paid political ads) should be invalidated
would pave the way for a return to the old regime where moneyed candidates
could monopolize media advertising to the disadvantage of candidates with less
resources. That is what Congress tried to reform in 1987 with the enactment of
R.A. No. 6646. We are not free to set aside the judgment of Congress, especially
in light of the recent failure of interested parties to have the law repealed or at least
modified.
Requirement of COMELEC %ime, a
Reasonable Exercise of te
6
State's Power to Regulate
Use of Francises
Finally, it is argued that the power to supervise or regulate given to the COMELEC
under Art. X-C, 4 of the Constitution does not include the power to prohibit. n the
first place, what the COMELEC is authorized to supervise or regulate by Art. X-C,
4 of the Constitution,
31
among other things, is the use by media of information of
their franchises or permits, while what Congress (not the COMELEC) prohibits is
the sale or donation of print space or air time for political ads. n other words, the
object of supervision or regulation is different from the object of the prohibition. t is
another fallacy for petitioners to contend that the power to regulate does not
include the power to prohibit. This may have force if the object of the power were
the same.
n the second place, the prohibition in 11(b) of R.A. No. 6646 is only half of the
regulatory provision in the statute. The other half is the mandate to the COMELEC
to procure print space and air time for allocation to candidates. As we said
in Osmea v. COMELEC:
The term political "ad ban" when used to describe 11(b) of R.A. No. 6646,
is misleading, for even as 11(b) prohibits the sale or donation of print
space and air time to political candidates, it mandates the COMELEC to
procure and itself allocate to the candidates space and time in the media.
There is no suppression of political ads but only a regulation of the time
and manner of advertising.
xxx xxx xxx
. . . What is involved here is simply regulation of this nature. nstead of
leaving candidates to advertise freely in the mass media, the law provides
for allocation, by the COMELEC of print space and air time to give all
candidates equal time and space for the purpose of ensuring "free,
orderly, honest, peaceful, and credible elections."
With the prohibition on media advertising by candidates themselves, the
COMELEC Time and COMELEC Space are about the only means through which
candidates can advertise their qualifications and programs of government. More
than merely depriving their qualifications and programs of government. More than
merely depriving candidates of time for their ads, the failure of broadcast stations
to provide air time unless paid by the government would clearly deprive the people
of their right to know. Art , 7 of the Constitution provides that "the right of the
people to information on matters of public concern shall be recognized," while Art.
X, 6 states that "the use of property bears a social function [and] the right to
own, establish, and operate economic enterprises [is] subject to the duty of the
State to promote distributive justice and to intervene when the common good so
demands."
To affirm the validity of 92 of B.P. Blg. 881 is to hold public broadcasters to their
obligation to see to it that the variety and vigor of public debate on issues in an
election is maintained. For while broadcast media are not mere common carriers
but entities with free speech rights, they are also public trustees charged with the
duty of ensuring that the people have access to the diversity of views on political
issues. This right of the people is paramount to the autonomy of broadcast media.
To affirm the validity of 92, therefore, is likewise to uphold the people's right to
information on matters of public concern. The use of property bears a social
function and is subject to the state's duty to intervene for the common good.
Broadcast media can find their just and highest reward in the fact that whatever
altruistic service they may render in connection with the holding of elections is for
that common good.
For the foregoing reasons, the petition is dismissed.
SO ORDERED.
Narvasa, C.J., Regalado, avide, Jr., ellosillo, Melo, Puno, Kapunan, Martinez
and Quisumbing, JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DVSON
G.R. No. 118712 October 6, 1995
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., respondents.
G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of
Agrarian Reform, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET
AL., respondents.

FRANCISCO, R.,
t has been declared that the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as deny justice to the
landowner whenever truth and justice happen to be on his side.
1
As eloquently
stated by Justice sagani Cruz:
. . . social justice or any justice for that matter is for the
deserving, whether he be a millionaire in his mansion or a pauper
in his hovel. t is true that, in case of reasonable doubt, we are
called upon to tilt the balance in favor of the poor, to whom the
Constitution fittingly extends its sympathy and compassion. But
never is it justified to prefer the poor simply because they are
poor, or to reject the rich simply because they are rich, for justice
must always be served, for poor and rich alike, according to the
mandate of the law.
2

n this agrarian dispute, it is once more imperative that the aforestated principles
be applied in its resolution.
Separate petitions for review were filed by petitioners Department of Agrarian
Reform (DAR) (G.R. No. 118745) and Land Bank of the Philippines (G.R. No.
7
118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP No.
33465. However, upon motion filed by private respondents, the petitions were
ordered consolidated.
3

Petitioners assail the decision of the Court of Appeals promulgated on October 20,
1994, which granted private respondents' Petition
for Certiorari and Mandamus and ruled as follows:
WHEREFORE, premises considered, the Petition
for Certiorari and Mandamus is hereby GRANTED:
a) DAR Administrative Order No. 9, Series of
1990 is declared null and void insofar as it
provides for the opening of trust accounts in lieu
of deposits in cash or bonds;
b) Respondent Landbank is ordered
to immediately deposit not merely "earmark",
"reserve" or "deposit in trust" with an
accessible bank designated by respondent DAR
in the names of the following petitioners the
following amounts in cash and in government
financial instruments within the parameters of
Sec. 18 (1) of RA 6657:
P 1,455,207.31 Pedro L. Yap
P 135,482.12 Heirs of Emiliano Santiago
P 15,914,127.77 AMADCOR;
c) The DAR-designated bank is ordered to allow
te petitioners to witdraw the above-deposited
amounts without prejudice to the final
determination of just compensation by the proper
authorities; and
d) Respondent DAR is ordered to
1) immediately conduct summary administrative
proceedings to determine the just compensation
for the lands of the petitioners giving the
petitioners 15 days from notice within which to
submit evidence and to 2) decide the cases witin
30 days after they are submitted for decision.
4

Likewise, petitioners seek the reversal of the Resolution dated January 18,
1995,
5
denying their motion for reconsideration.
Private respondents are landowners whose landholdings were acquired by the
DAR and subjected to transfer schemes to qualified beneficiaries under the
Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657).
Aggrieved by the alleged lapses of the DAR and the Landbank with
respect to the valuation and payment of compensation for their land
pursuant to the provisions of RA 6657, private respondents filed with this
Court a Petition for Certiorari and Mandamus with prayer for preliminary
mandatory injunction. Private respondents questioned the validity of DAR
Administrative Order No. 6, Series of 1992
6
and DAR Administrative Order
No. 9, Series of 1990,
7
and sought to compel the DAR to expedite the
pending summary administrative proceedings to finally determine the just
compensation of their properties, and the Landbank to deposit in cash and
bonds the amounts respectively "earmarked", "reserved" and "deposited in
trust accounts" for private respondents, and to allow them to withdraw the
same.
Through a Resolution of the Second Division dated February 9, 1994, this Court
referred the petition to respondent Court of Appeals for proper determination and
disposition.
As found by respondent court , the following are undisputed:
Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the
transfer certificates of title (TCTs) of petitioner Yap were totally
cancelled by the Registrar of Deeds of Leyte and were transferred
in the names of farmer beneficiaries collectively, based on the
request of the DAR together with a certification of the Landbank
that the sum of P735,337.77 and P719,869.54 have been
earmarked for Landowner Pedro L. Yap for the parcels of lands
covered by TCT Nos. 6282 and 6283, respectively, and issued in
lieu thereof TC-563 and TC-562, respectively, in the names of
listed beneficiaries (ANNEXES "C" & "D") without notice to
petitioner Yap and without complying with the requirement of
Section 16 (e) of RA 6657 to deposit the compensation in cash
and Landbank bonds in an accessible bank. (Rollo, p. 6).
The above allegations are not disputed by any of the respondents.
Petitioner Heirs of Emiliano Santiago allege that the heirs of
Emiliano F. Santiago are the owners of a parcel of land located at
Laur, NUEVA ECJA with an area of 18.5615 hectares covered by
TCT No. NT-60359 of the registry of Deeds of Nueva Ecija,
registered in the name of the late Emiliano F. Santiago; that in
November and December 1990, without notice to the petitioners,
the Landbank required and the beneficiaries executed Actual
tillers Deed of Undertaking (ANNEX "B") to pay rentals to the
LandBank for the use of their farmlots equivalent to at least 25%
of the net harvest; that on 24 October 1991 the DAR Regional
Director issued an order directing the Landbank to pay the
landowner directly or through the establishment of a trust fund in
the amount of P135,482.12, that on 24 February 1992, the
Landbank reserved in trust P135,482.12 in the name of Emiliano
F. Santiago. (ANNEX "E"; Rollo,
p. 7); that the beneficiaries stopped paying rentals to the
landowners after they signed the Actual Tiller's Deed of
Undertaking committing themselves to pay rentals to the
LandBank (Rollo, p. 133).
The above allegations are not disputed by the respondents except
that respondent Landbank claims 1) that it was respondent DAR,
not Landbank which required the execution of Actual Tillers Deed
8
of Undertaking (ATDU, for brevity); and 2) that respondent
Landbank, although armed with the ATDU, did not collect any
amount as rental from the substituting beneficiaries (Rollo, p. 99).
Petitioner Agricultural Management and Development Corporation
(MCOR, for brevity) alleges with respect to its properties
located in San Francisco, Quezon that the properties of
AMADCOR in San Francisco, Quezon consist of a parcel of land
covered by TCT No. 34314 with an area of 209.9215 hectares and
another parcel covered by TCT No. 10832 with an area of
163.6189 hectares; that a summary administrative proceeding to
determine compensation of the property covered by TCT No.
34314 was conducted by the DARAB in Quezon City without
notice to the landowner; that a decision was rendered on 24
November 1992 (ANNEX "F") fixing the compensation for the
parcel of land covered by TCT No. 34314 with an area of
209.9215 hectares at P2,768,326.34 and ordering the Landbank
to pay or establish a trust account for said amount in the name of
AMADCOR; and that the trust account in the amount of
P2,768,326.34 fixed in the decision was established by adding
P1,986,489.73 to the first trust account established on 19
December 1991 (ANNEX "G"). With respect to petitioner
AMADCOR's property in Tabaco, Albay, it is alleged that the
property of AMADCOR in Tabaco, Albay is covered by TCT No. T-
2466 of the Register of Deeds of Albay with an area of 1,629.4578
hectares'; that emancipation patents were issued covering an area
of 701.8999 hectares which were registered on 15 February 1988
but no action was taken thereafter by the DAR to fix the
compensation for said land; that on 21 April 1993, a trust account
in the name of AMADCOR was established in the amount of
P12,247,217.83', three notices of acquisition having been
previously rejected by AMADCOR. (Rollo, pp. 8-9)
The above allegations are not disputed by the respondents except
that respondent Landbank claims that petitioner failed to
participate in the DARAB proceedings (land valuation case)
despite due notice to it (Rollo, p. 100).
8

Private respondents argued that Administrative Order No. 9, Series of 1990 was
issued without jurisdiction and with grave abuse of discretion because it permits
the opening of trust accounts by the Landbank, in lieu of depositing in cash or
bonds in an accessible bank designated by the DAR, the compensation for the
land before it is taken and the titles are cancelled as provided under Section 16(e)
of RA 6657.
9
Private respondents also assail the fact that the DAR and the
Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation
in their names as landowners despite the clear mandate that before taking
possession of the property, the compensation must be deposited in cash or in
bonds.
10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid
exercise of its rule-making power pursuant to Section 49 of RA 6657.
11
Moreover,
the DAR maintained that the issuance of the "Certificate of Deposit" by the
Landbank was a substantial compliance with Section 16(e) of RA 6657 and the
ruling in the case of ssociation of Small Landowners in te Pilippines, Inc., et
al. vs. Hon. Secretary of grarian Reform, G.R. No. 78742, July 14, 1989 (175
SCRA 343).
12

For its part, petitioner Landbank declared that the issuance of the Certificates of
Deposits was in consonance with Circular Nos. 29, 29-A and 54 of the Land
Registration Authority where the words "reserved/deposited" were also used.
13

On October 20, 1994, the respondent court rendered the assailed decision in favor
of private respondents.
14
Petitioners filed a motion for reconsideration but
respondent court denied the same.
15

Hence, the instant petitions.
On March 20, 1995, private respondents filed a motion to dismiss the petition in
G.R. No. 118745 alleging that the appeal has no merit and is merely intended to
delay the finality of the appealed decision.
16
The Court, however, denied the
motion and instead required the respondents to file their comments.
17

Petitioners submit that respondent court erred in (1) declaring as null and void
DAR Administrative Order No. 9, Series of 1990, insofar as it provides for the
opening of trust accounts in lieu of deposit in cash or in bonds, and (2) in holding
that private respondents are entitled as a matter of right to the immediate and
provisional release of the amounts deposited in trust pending the final resolution of
the cases it has filed for just compensation.
Anent the first assignment of error, petitioners maintain that the word "deposit" as
used in Section 16(e) of RA 6657 referred merely to the act of depositing and in no
way excluded the opening of a trust account as a form of deposit. Thus, in opting
for the opening of a trust account as the acceptable form of deposit through
Administrative Circular No. 9, petitioner DAR did not commit any grave abuse of
discretion since it merely exercised its power to promulgate rules and regulations
in implementing the declared policies of RA 6657.
The contention is untenable. Section 16(e) of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding payment
or, in case of rejection or no response from the landowner,
upon te deposit wit an accessible bank designated by te R
of te compensation in cas or in LP bonds in accordance with
this Act, the DAR shall take immediate possession of the land and
shall request the proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the Republic of the
Philippines. . . . (emphasis supplied)
t is very explicit therefrom that the deposit must be made only in "cash" or in "LBP
bonds". Nowhere does it appear nor can it be inferred that the deposit can be
made in any other form. f it were the intention to include a "trust account" among
the valid modes of deposit, that should have been made express, or at least,
9
qualifying words ought to have appeared from which it can be fairly deduced that a
"trust account" is allowed. n sum, there is no ambiguity in Section 16(e) of RA
6657 to warrant an expanded construction of the term "deposit".
The conclusive effect of administrative construction is not absolute. Action of an
administrative agency may be disturbed or set aside by the judicial department if
there is an error of law, a grave abuse of power or lack of jurisdiction or grave
abuse of discretion clearly conflicting with either the letter or the spirit of a
legislative enactment.
18
n this regard, it must be stressed that the function of
promulgating rules and regulations may be legitimately exercised only for the
purpose of carrying the provisions of the law into effect. The power of
administrative agencies is thus confined to implementing the law or putting it into
effect. Corollary to this is that administrative regulations cannot extend
the law and amend a legislative enactment,
19
for settled is the rule that
administrative regulations must be in harmony with the provisions of the law. And
in case there is a discrepancy between the basic law and an implementing rule or
regulation, it is the former that prevails.
20

n the present suit, the DAR clearly overstepped the limits of its power to enact
rules and regulations when it issued Administrative Circular No. 9. There is no
basis in allowing the opening of a trust account in behalf of the landowner as
compensation for his property because, as heretofore discussed, Section 16(e) of
RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP
bonds". n the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A
and 54 because these implementing regulations cannot outweigh the clear
provision of the law. Respondent court therefore did not commit any error in
striking down Administrative Circular No. 9 for being null and void.
Proceeding to the crucial issue of whether or not private respondents are entitled
to withdraw the amounts deposited in trust in their behalf pending the final
resolution of the cases involving the final valuation of their properties, petitioners
assert the negative.
The contention is premised on the alleged distinction between the deposit of
compensation under Section 16(e) of RA 6657 and payment of final compensation
as provided under Section 18
21
of the same law. According to petitioners, the right
of the landowner to withdraw the amount deposited in his behalf pertains only to
the final valuation as agreed upon by the landowner, the DAR and the LBP or that
adjudged by the court. t has no reference to amount deposited in the trust account
pursuant to Section 16(e) in case of rejection by the landowner because the latter
amount is only provisional and intended merely to secure possession of the
property pending final valuation. To further bolster the contention petitioners cite
the following pronouncements in the case of "Association of Small Landowners in
the Phil. nc. vs. Secretary of Agrarian Reform".
22

The last major challenge to CARP is that the landowner is
divested of his property even before actual payment to him in full
of just compensation, in contravention of a well-accepted principle
of eminent domain.
xxx xxx xxx
The CARP Law, for its part conditions the transfer of possession
and ownership of the land to the government on receipt by the
landowner of the corresponding payment or the deposit by the
DAR of the compensation in cash or LBP bonds with an
accessible bank. Until then, title also remains with the landowner.
No outright change of ownership is contemplated either.
xxx xxx xxx
Hence the argument that the assailed measures violate due
process by arbitrarily transferring title before the land is fully paid
for must also be rejected.
Notably, however, the aforecited case was used by respondent court in discarding
petitioners' assertion as it found that:
. . . despite the "revolutionary" character of the expropriation
envisioned under RA 6657 which led the Supreme Court, in the
case of Association of Small Landowners in the Phil. nc. vs.
Secretary of Agrarian Reform (175 SCRA 343), to conclude that
"payments of the just compensation is not always required to be
made fully in money" even as the Supreme Court admits in the
same case "that the traditional medium for the payment of just
compensation is money and no other" the Supreme Court in
said case did not abandon the "recognized rule . . . tat title to te
property expropriated sall pass from te owner to te
expropriator only upon full payment of te just
compensation."
23
(Emphasis supplied)
We agree with the observations of respondent court. The ruling in the
"Association" case merely recognized the extraordinary nature of the expropriation
to be undertaken under RA 6657 thereby allowing a deviation from the traditional
mode of payment of compensation and recognized payment other than in cash. t
did not, however, dispense with the settled rule that there must be full payment of
just compensation before the title to the expropriated property is transferred.
The attempt to make a distinction between the deposit of compensation under
Section 16(e) of RA 6657 and determination of just compensation under Section
18 is unacceptable. To withhold the right of the landowners to appropriate the
amounts already deposited in their behalf as compensation for their properties
simply because they rejected the DAR's valuation, and notwithstanding that they
have already been deprived of the possession and use of such properties, is an
oppressive exercise of eminent domain. The irresistible expropriation of private
respondents' properties was painful enough for them. But petitioner DAR rubbed it
in all the more by withholding that which rightfully belongs to private respondents
in exchange for the taking, under an authority (the "Association" case) that is,
however, misplaced. This is misery twice bestowed on private respondents, which
the Court must rectify.
Hence, we find it unnecessary to distinguish between provisional compensation
under Section 16(e) and final compensation under Section 18 for purposes of
exercising the landowners' right to appropriate the same. The immediate effect in
both situations is the same, the landowner is deprived of the use and possession
10
of his property for which he should be fairly and immediately compensated.
Fittingly, we reiterate the cardinal rule that:
. . . within the context of the State's inherent power of eminent
domain, just compensation means not only te correct
determination of te amount to be paid to te owner of te land
but also te payment of te land witin a reasonable time from its
taking. Witout prompt payment, compensation cannot be
considered "just" for te property owner is made to suffer te
consequence of being immediately deprived of is land wile
being made to wait for a decade or more before actually receiving
te amount necessary to cope wit is loss.
24
(Emphasis supplied)
The promulgation of the "Association" decision endeavored to remove all legal
obstacles in the implementation of the Comprehensive Agrarian Reform Program
and clear the way for the true freedom of the farmer.
25
But despite this, cases
involving its implementation continue to multiply and clog the courts' dockets.
Nevertheless, we are still optimistic that the goal of totally emancipating the
farmers from their bondage will be attained in due time. t must be stressed,
however, that in the pursuit of this objective, vigilance over the rights of the
landowners is equally important because social justice cannot be invoked to
trample on the rights of property owners, who under our Constitution and laws are
also entitled to protection.
26

WHEREFORE, the foregoing premises considered, the petition is hereby DENED
for lack of merit and the appealed decision is AFFRMED in toto.
SO ORDERED.
Regalado, Puno and Mendoza, JJ., concur.
Narvasa, C.J., is on leave.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12172 August 29, 1958
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
JUAN F. FAJARDO, ET AL., defendants-appellants.
ssistant Solicitor General Esmeraldo Umali and Higinio V. Catalan for appellee.
Prila, Pardalis and Pejo for appellants.
REYES, J. B. L., :
Appeal from the decision of the Court of First nstance of Camarines Sur convicting
defendants-appellants Juan F. Fajardo and Pedro Babilonia of a violation of
Ordinance No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur, for
having constructed without a permit from the municipal mayor a building that
destroys the view of the public plaza.
t appears that on August 15, 1950, during the incumbency of defendant-appellant
Juan F. Fajardo as mayor of the municipality of Baao, Camarines Sur, the
municipal council passed the ordinance in question providing as follows:
SECTON 1. Any person or persons who will construct or repair a building
should, before constructing or repairing, obtain a written permit from the
Municipal Mayor.
SEC. 2. A fee of not less than P2.00 should be charged for each building
permit and P1.00 for each repair permit issued.
SEC. 3. PENALTY Any violation of the provisions of the above, this
ordinance, shall make the violation liable to pay a fine of not less than P25
nor more than P50 or imprisonment of not less than 12 days nor more than
24 days or both, at the discretion of the court. f said building destroys the
view of the Public Plaza or occupies any public property, it shall be
removed at the expense of the owner of the building or house.
SEC. 4. EFFECTVTY This ordinance shall take effect on its approval.
(Orig. Recs., P. 3)
Four years later, after the term of appellant Fajardo as mayor had expired, he and
his son in-law, appellant Babilonia, filed a written request with the incumbent
municipal mayor for a permit to construct a building adjacent to their gasoline
station on a parcel of land registered in Fajardo's name, located along the national
highway and separated from the public plaza by a creek (Exh. D). On January 16,
1954, the request was denied, for the reason among others that the proposed
building would destroy the view or beauty of the public plaza (Exh. E). On January
18, 1954, defendants reiterated their request for a building permit (Exh. 3), but
again the request was turned down by the mayor. Whereupon, appellants
proceeded with the construction of the building without a permit, because they
needed a place of residence very badly, their former house having been destroyed
by a typhoon and hitherto they had been living on leased property.
On February 26, 1954, appellants were charged before and convicted by the
justice of the peace court of Baao, Camarines Sur, for violation of the ordinance in
question. Defendants appealed to the Court of First nstance, which affirmed the
conviction, and sentenced appellants to pay a fine of P35 each and the costs, as
well as to demolish the building in question because it destroys the view of the
public plaza of Baao, in that "it hinders the view of travelers from the National
Highway to the said public plaza." From this decision, the accused appealed to the
Court of Appeals, but the latter forwarded the records to us because the appeal
attacks the constitutionality of the ordinance in question.
We find that the appealed conviction can not stand.
A first objection to the validity of the ordinance in question is that under it the
mayor has absolute discretion to issue or deny a permit. The ordinance fails to
state any policy, or to set up any standard to guide or limit the mayor's action. No
purpose to be attained by requiring the permit is expressed; no conditions for its
grant or refusal are enumerated. t is not merely a case of deficient standards;
standards are entirely lacking. The ordinance thus confers upon the mayor
arbitrary and unrestricted power to grant or deny the issuance of building permits,
and it is a settled rule that such an undefined and unlimited delegation of power to
allow or prevent an activity, per se lawful, is invalid (People vs. Vera, 65 Phil., 56;
Primicias vs. Fugoso, 80 Phil., 71; Schloss Poster Adv. Co. vs. Rock Hill, 2 SE (2d)
392)
11
The ordinance in question in no way controls or guides the discretion
vested thereby in the respondents. t prescribes no uniform rule upon
which the special permission of the city is to be granted. Thus the city is
clothed with the uncontrolled power to capriciously grant the privilege to
some and deny it others; to refuse the application of one landowner or
lessee and to grant that of another, when for all material purposes, the two
applying for precisely the same privileges under the same circumstances.
The danger of such an ordinance is that it makes possible arbitrary
discriminations and abuses in its execution, depending upon no conditions
or qualifications whatever, other than the unregulated arbitrary will of the
city authorities as the touchstone by which its validity is to be tested.
Fundamental rights under our government do not depend for their
existence upon such a slender and uncertain thread. Ordinances which
thus invest a city council with a discretion which is purely arbitrary, and
which may be exercised in the interest of a favored few, are unreasonable
and invalid. The ordinance should have established a rule by which its
impartial enforcement could be secured. All of the authorities cited above
sustain this conclusion.
As was said in City of Ricmond vs. udley, 129 nd. 112,28 N. E. 312,
314 13 L. R. A. 587, 28 Am. St. Rep. 180: "t seems from the foregoing
authorities to be well established that municipal ordinances placing
restrictions upon lawful conduct or the lawful use of property must, in order
to be valid, specify the rules and conditions to be observed in such
conduct or business; and must admit of the exercise of the privilege of all
citizens alike who will comply with such rules and conditions; and must not
admit of the exercise, or of an opportunity for the exercise, of any arbitrary
discrimination by the municipal authorities between citizens who will so
comply. (Schloss Poster Adv. Co., nc. vs. City of Rock Hill, et al., 2 SE
(2d), pp. 394-395).
t is contended, on the other hand, that the mayor can refuse a permit solely in
case that the proposed building "destroys the view of the public plaza or occupies
any public property" (as stated in its section 3); and in fact, the refusal of the Mayor
of Baao to issue a building permit to the appellant was predicated on the ground
that the proposed building would "destroy the view of the public plaza" by
preventing its being seen from the public highway. Even thus interpreted, the
ordinance is unreasonable and oppressive, in that it operates to permanently
deprive appellants of the right to use their own property; hence, it oversteps the
bounds of police power, and amounts to a taking of appellants property without
just compensation. We do not overlook that the modern tendency is to regard the
beautification of neighborhoods as conducive to the comfort and happiness of
residents. But while property may be regulated in the interest of the general
welfare, and in its pursuit, the State may prohibit structures offensive to the sight
(Churchill and Tait vs. Rafferty, 32 Phil. 580), the State may not, under the guise of
police power, permanently divest owners of the beneficial use of their property and
practically confiscate them solely to preserve or assure the aesthetic appearance
of the community. As the case now stands, every structure that may be erected on
appellants' land, regardless of its own beauty, stands condemned under the
ordinance in question, because it would interfere with the view of the public plaza
from the highway. The appellants would, in effect, be constrained to let their land
remain idle and unused for the obvious purpose for which it is best suited, being
urban in character. To legally achieve that result, the municipality must give
appellants just compensation and an opportunity to be heard.
An ordinance which permanently so restricts the use of property that it can
not be used for any reasonable purpose goes, it is plain, beyond regulation
and must be recognized as a taking of the property. The only substantial
difference, in such case, between restriction and actual taking, is that the
restriction leaves the owner subject to the burden of payment of taxation,
while outright confiscation would relieve him of that burden. (Arverne Bay
Constr. Co. vs. Thatcher (N.Y.) 117 ALR. 1110, 1116).
A regulation which substantially deprives an owner of all beneficial use of
his property is confiscation and is a deprivation within the meaning of the
14th Amendment. (Sundlum vs. Zoning Bd., 145 Atl. 451; also Eatonvs.
Sweeny, 177 NE 412; Taylor vs. Jacksonville, 133 So. 114).
Zoning which admittedly limits property to a use which can not reasonably
be made of it cannot be said to set aside such property to a use but
constitutes the taking of such property without just compensation. Use of
property is an element of ownership therein. Regardless of the opinion of
zealots that property may properly, by zoning, be utterly destroyed without
compensation, such principle finds no support in the genius of our
government nor in the principles of justice as we known them. Such a
doctrine shocks the sense of justice. If it be of public benefit tat property
remain open and unused, ten certainly te public, and not te private
individuals, sould bear te cost of reasonable compensation for suc
property under te rules of law governing te condemnation of private
property for public use. (Tews vs. Woolhiser (1933) 352 11. 212, 185 N.E.
827) (Emphasis supplied.)
The validity of the ordinance in question was justified by the court below under
section 2243, par. (c), of the Revised Administrative Code, as amended. This
section provides:
SEC. 2243. Certain legislative powers of discretionary caracter. The
municipal council shall have authority to exercise the following
discretionary powers:
x x x x x x x x x
(c) To establish fire limits in populous centers, prescribe the kinds of
buildings that may be constructed or repaired within them, and issue
permits for the creation or repair thereof, charging a fee which shall be
determined by the municipal council and which shall not be less than two
pesos for each building permit and one peso for each repair permit issued.
The fees collected under the provisions of this subsection shall accrue to
the municipal school fund.
Under the provisions of the section above quoted, however, the power of the
municipal council to require the issuance of building permits rests upon its first
12
establishing fire limits in populous parts of the town and prescribing the kinds of
buildings that may be constructed or repaired within them. As there is absolutely
no showing in this case that the municipal council had either established fire limits
within the municipality or set standards for the kind or kinds of buildings to be
constructed or repaired within them before it passed the ordinance in question, it is
clear that said ordinance was not conceived and promulgated under the express
authority of sec. 2243 (c) aforequoted.
We rule that the regulation in question, Municipal Ordinance No. 7, Series of 1950,
of the Municipality of Baao, Camarines Sur, was beyond the authority of said
municipality to enact, and is therefore null and void. Hence, the conviction of
herein appellants is reversed, and said accused are acquitted, with costs de oficio.
So ordered.
Paras, C. J., engzon, Padilla, Montemayor, Reyes, ., autista ngelo,
Concepcion, Endencia and Felix, JJ.,concur.
THRD DVSON
G.R. No. 146886. ApriI 30, 2003]
DEVORAH E. BARDILLON, petitioner, vs. BARANGAY MASILI of CaIamba,
Laguna, respondent.
D E C I S I O N
PANGANIBAN, .:
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 Review
[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 Appeals
[2]
(CA) in CA-GR SP No. 61088. The
dispositive part of the Decision reads:
"WHEREFORE, premises considered, the present [P]etition for [C]ertiorari is
hereby DENED DUE COURSE and accordingly DSMSSED, for lack of merit.
[3]

The assailed Resolution
[4]
denied petitioner's Motion for Reconsideration.
The Facts
The factual antecedents are summarized by the CA as follows:
"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 eed of bsolute Sale which was executed by and between the former and the
latter on October 7, 1996.
"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 [respondent's] [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 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 ismiss, opposed this [C]omplaint by alleging in
the main that it violated Section 19(f) of Rule 16 in that [respondent's] 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 petitioner's Motion to
ismiss, 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] Judge's 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]

RuIing of the Court of AppeaIs
n dismissing the Petition, the CA held that the Regional Trial Court (RTC) of
Calamba, Laguna (Branch 37)
[6]
did not commit grave abuse of discretion in
issuing the assailed Orders. t ruled that the second Complaint for eminent
domain (Civil Case No. 2845-99-C) was not barred byres 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]

The Issues
n 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
petitioner's 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;
13
"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 multi-purpose 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]

Simply put, the issues are as follows: (1) whether the MTC had jurisdiction
over the expropriation case; (2) whether the dismissal of 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 Court's RuIing
The Petition has no merit.
First Issue:
urisdiction Over Expropriation
Petitioner claims that, since the value of the land is only P11,448, the MTC
had jurisdiction over the case.
[9]

On the other hand, the appellate court held that the assessed value of the
property was P28,960.
[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]
As such, it is incapable of pecuniary
estimation and should be filed with the regional trial courts.
[12]

This was explained by the Court in arangay San Roque v. Heirs of Francisco
Pastor:
[13]

"t 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. n the main, the subject of an expropriation suit is the
government's 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 onIy after the court is satisfied with the propriety of the
expropriation."
"Verily, the Court held in Republic of te Pilippines v. Zurbano that 'condemnation
proceedings are within the jurisdiction of Courts of First nstance,' 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]

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
government's exercise of eminent domain -- a matter that is incapable of pecuniary
estimation.
Second Issue:
Res Judicata
Petitioner claims that the MTC's 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]
t 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]

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]

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 RTC's 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]
On the part of local government units, expropriation is
also governed by Section 19 of the Local Government Code.
[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]

n 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. f petitioner objects to
the necessity of the takeover of her property, she should say so in her Answer to
14
the Complaint.
[21]
The RTC has the 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]

Fourth Issue:
orum Shopping
Petitioner claims that respondent is guilty of forum shopping, because it
scouted for another forum after obtaining an unfavorable Decision from the MTC.
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]

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 in the MTC
case will not constitute res judicata in the RTC, since the former had no jurisdiction
over the expropriation case.
WHEREFORE, the Petition is ENIE and the assailed
Decision FFIRME. Costs against petitioner.
SO ORDERED.
Puno, (Cairman), Sandoval-Gutierrez, Corona, and Carpio-Morales,
JJ., concur.



SECOND DIVISION

METROPOLTAN CEBU G.R. No. 175983
WATER DSTRCT (MCWD),
Petitioner, Present:

QUSUMBNG, J.,
Cairperson,
- versus - CARPO MORALES,
TNGA,
VELASCO, JR., and
BRON, JJ.
J. KNG AND SONS
COMPANY, NC.,
Respondent. Promulgated:
April 16, 2009
x ----------------------------------------------------------------------------------
D E C I S I O N

TINGA, .:

Before us is a Rule 45 petition
[1]
which seeks the reversal of the
decision
[2]
and resolution
[3]
of the Court of Appeals in CA-G.R. CEB-SP No. 00810.
The Court of Appeals' decision nullified the orders
[4]
and the writ of
possession
[5]
issued by the Regional Trial Court (RTC) of Cebu City, Branch 23,
allowing petitioner to take possession of respondent's property.

Petitioner Metropolitan Cebu Water District is a government-owned and
controlled corporation created pursuant to Presidential Decree No. 198, as
amended. Among its purposes are to acquire, install, improve, maintain and
operate water supply and distribution systems within the boundaries of the
District.
[6]


Petitioner wanted to acquire a five (5)-square meter lot occupied by its
production well. The lot is part of respondent's property covered by TCT No.
168605 and located in Banilad, Cebu City. Petitioner initiated negotiations
[7]
with
respondent J. King and Sons Company, nc. for the voluntary sale of the latter's
property. Respondent did not acquiesce to petitioner's proposal. After the
negotiations had failed, petitioner pursuant to its charter
[8]
initiated
expropriation proceedings through Board Resolution No. 015-2004
[9]
which was
duly approved by the Local Water Utilities Administration (LWUA).
[10]
On 10
November 2004, petitioner filed a complaint
[11]
to expropriate the five (5)-square
meter portion of respondent's property.

On 7 February 2005, petitioner filed a motion
[12]
for the issuance of a writ
of possession. Petitioner wanted to tender the amount to respondent during a
rescheduled hearing which petitioner's counsel had failed to attend.
[13]
Petitioner
deposited
[14]
with the Clerk of Court the amount of P17,500.00 equivalent to one
hundred percent (100%) of the current zonal value of the property which the
Bureau of nternal Revenue had pegged at P3,500.00 per square
meter.
[15]
Subsequently, the trial court granted the motion
[16]
and issued the writ of
possession.
[17]
Respondent moved for reconsideration but the motion was
denied.
[18]

Respondent filed a petition
[19]
for certiorari under Rule 65 with the Court of
Appeals. t sought the issuance of a temporary restraining order (TRO) which the
Court of Appeals granted.
[20]
Thus, petitioner was not able to gain entry to the
lot.
[21]


On 26 July 2006, the Court of Appeals rendered the assailed
decision
[22]
granting respondent's petition. t ruled that the board resolution which
authorized the filing of the expropriation complaint lacked exactitude and
particularity which made it invalid; that there was no genuine necessity for the
expropriation of the five (5)-square meter lot and; that the reliance on Republic Act
(R.A.) No. 8974 in fixing the value of the property contravenes the judicial
determination of just compensation. Petitioner moved
[23]
for reconsideration but the
motion was rejected.
[24]


Hence, this petition.

13
The issues raised by petitioner can be summarized as follows:

1. Whether there was sufficient authority from the petitioner's board of
directors to institute the expropriation complaint; and
2. Whether the procedure in obtaining a writ of possession was properly
observed.

Eminent domain is the right of the state to acquire private property for
public use upon payment of just compensation.
[25]
The power of eminent domain is
inseparable in sovereignty being essential to the existence of the State and
inherent in government. ts exercise is proscribed by only two Constitutional
requirements: first, that there must be just compensation, and second, that no
person shall be deprived of life, liberty or property without due process of law
[26]
.

As an inherent sovereign prerogative, the power to expropriate pertains to
the legislature. However, Congress may, as in fact it often does, delegate the
exercise of the power to government agencies, public officials and quasi-public
entities. Petitioner is one of the numerous government offices so empowered.
Under its charter, P.D. No. 198, as amended,
[27]
petitioner is explicitly granted the
power of eminent domain.

On 7 November 2000, Congress enacted R.A. No. 8974, entitled "An Act
To Facilitate The Acquisition Of Right-Of-Way, Site Or Location For National
Government nfrastructure Projects And For Other Purposes. Section 2 thereof
defines national government projects as follows:

Sec. 2. National Government Projects.The term "national
government projects shall refer to all national government
infrastructure, engineering works and service
contracts, incIuding projects undertaken by government-
owned and -controIIed corporations, all projects covered by
Republic Act No. 6957, as amended by Republic Act No. 7718,
otherwise known as the Build-Operate-and-Transfer Law, and
other related and necessary activities, such as site acquisition,
supply and/or installation of equipment and materials,
implementation, construction, completion, operation,
maintenance, improvement, repair and rehabilitation, regardless
of source of funding. (emphasis ours)


R.A. No. 8974 includes projects undertaken by government owned and
controlled corporations,
[28]
such as petitioner. Moreover, the mplementing Rules
and Regulations of R.A. No. 8974 explicitly includes water supply, sewerage, and
waste management facilities among the national government projects covered by
the law.
[29]
t is beyond question, therefore, that R.A. No. 8974 applies to the
expropriation subject of this case.

The Court of Appeals held that the board resolution authorizing the
expropriation lacked exactitude and particularity. t described the board resolution
as akin to a general warrant in criminal law and as such declared it invalid.
Respondent reiterates the same argument in its comment and adds that
petitioner's exercise of the power of eminent domain was not reviewed by the
LWUA.

A corporation does not have powers beyond those expressly conferred
upon it by its enabling law. Petitioner's charter provides that it has the powers,
rights and privileges given to private corporations under existing laws, in addition
to the powers granted in it.
[30]
All the powers, privileges, and duties of the district
shall be exercised and performed by and through the board and that any
executive, administrative or ministerial power may be delegated and
redelegated by the board to any of its officers or agents for such
purpose.
[31]
Being a corporation, petitioner can exercise its powers only through its
board of directors.


For petitioner to exercise its power of eminent domain, two requirements
should be met, namely: first, its board of directors passed a resolution authorizing
the expropriation, and; second, the exercise of the power of eminent domain was
subjected to review by the LWUA. n this case, petitioner's board of directors
approved on 27 February 2004, Board Resolution No. 015-2004
[32]
authorizing its
general manager to file expropriation and other cases. Moreover, the LWUA did
review and gave its stamp of approval to the filing of a complaint for the
expropriation of respondent's lot. Specifically, the LWUA through its Administrator,
Lorenzo H. Jamora, wrote petitioner's manager, Armando H. Paredes, a letter
dated 28 February 2005
[33]
authorizing petitioner to file the expropriation case
"against the owner of the five-square meter portion of Lot No. 921-A covered by
TCT No. 168805, pursuant to Section 25 of P.D. No. 198, as amended.

The letter not only explicitly debunks respondent's claim that there was no
authorization from LWUA but it also identifies the lot sought to be expropriated with
sufficient particularity.

t is settled that the validity of a complaint may be questioned immediately
upon its filing through a motion to dismiss or raised thereafter as an affirmative
defense. However, there is no need to further belabor the issue since it is
established that petitioner has the legal capacity to institute the expropriation
complaint.

Anent the second issue involving the issuance of a writ of possession, a
discussion on the various stages in an expropriation proceeding is necessary.

16
The general rule is that upon filing of the expropriation complaint, the
plaintiff has the right to take or enter into possession of the real property involved if
he deposits with the authorized government depositary an amount equivalent to
the assessed value of the property for purposes of taxation. An exception to this
procedure is provided by R.A. No. 8974
[34]
. t requires the payment of one hundred
percent (100%) of the zonal value of the property to be expropriated to entitle the
plaintiff to a writ of possession.

n an expropriation proceeding there are two stages, first, is the
determination of the validity of the expropriation, and second is the determination
of just compensation.
[35]
n %an v. Republic,
[36]
we explained the two (2) stages in
an expropriation proceeding to wit:

(1) 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. t ends with
an order, if not of dismissal of the action, with 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 payment of just compensation. An order of
expropriation is final. An order of dismissal, if this be ordained,
would be a final one, as it finally disposes of the action and leaves
nothing more to be done by the courts on the merits. The order of
expropriation would also be a final one for after its issuance, no
objection to the right of condemnation shall be heard. The order of
expropriation may be appealed by any party aggrieved thereby by
filing a record on appeal.

(2) Determination by the court of the just compensation
for the property sought to be taken with the assistance of not more
than three (3) commissioners. The order fixing the just
compensation on the basis of the evidence before the court and
findings of the commissioners would likewise be a final one, as it
would leave nothing more to be done by the court regarding the
issue. A second and separate appeal may be taken from this order
fixing the just compensation.
[37]


Thus, the determination of the necessity of the expropriation is a justiciable
question which can only be resolved during the first stage of an expropriation
proceeding. Respondent's claim that the expropriated property is too small to be
considered for public use can only be resolved during that stage.

Further, the Court of Appeals ruled that Section 4 of R.A. No. 8974 runs
counter to the express mandate of Section 2 of Rule 67.
[38]
t held that the law
undermined the principle that the determination of just compensation is a judicial
function. However, this Court has already settled the issue. n Republic v.
Gingoyon,
[39]
this Court held that:

t is the plain intent of Rep. Act No. 8974 to supersede the
system of deposit under Rule 67 with the scheme of "immediate
payment in cases involving national government infrastructure
projects.

x x x

t likewise bears noting that the appropriate standard of
just compensation is a substantive matter. t is well within the
province of the legislature to fix the standard, which it did through
the enactment of Rep. Act No. 8974. Specifically, this prescribes
the new standards in determining the amount of just
compensation in expropriation cases relating to national
government infrastructure projects, as well as the manner of
payment thereof.


At the same time, Section 14 of the mplementing Rules
recognizes the continued applicability of Rule 67 on procedural
aspects when it provides "all matters regarding defenses and
objections to the complaint, issues on uncertain ownership and
conflicting claims, effects of appeal on the rights of the parties,
and such other incidents affecting the complaint shall be resolved
under the provisions on expropriation of Rule 67 of the Rules of
Court.
[40]


R.A. No. 8974 does not take away from the courts the power to judicially
determine the amount of just compensation. The law merely sets the minimum
price of the property as the provisional value. Thus,
the amount of just compensation must still be determined by the courts according
to the standards set forth in Section 5
[41]
of R.A. No. 8974.

R.A. No. 8974 provides a different scheme for the obtention of a writ of
possession. The law does not require a deposit with a government bank; instead it
requires the government to immediately pay the property owner.
[42]
The provisional
character of this payment means that it is not yet final, yet, sufficient under the law
to entitle the Government to the writ of possession over the expropriated
property.
[43]
The provisional payment is a prerequisite
[44]
and a trigger
[45]
for the
issuance of the writ of possession. n Gingoyon,
[46]
we held that:

t is the plain intent of Rep. Act No. 8974 to supersede the
system of deposit under Rule 67 with the scheme of "immediate
17
payment in cases involving national government infrastructure
projects.
[47]


x x x

Rep. Act. No. 8974 is plainly clear in imposing the
requirement of immediate prepayment, and no amount of
statutory deconstruction can evade such requisite. t enshrines a
new approach towards eminent domain that reconciles the
inherent unease attending expropriation proceedings with a
position of fundamental equity. While expropriation proceedings
have always demanded just compensation in exchange for
private property, the previous deposit requirement impeded
immediate compensation to the private owner, especially in
cases wherein the determination of the final amount of
compensation would prove highly disputed. Under the new
modality prescribed by Rep. Act. No. 8974, the private owner
sees immediate monetary recompense, with the same degree of
speed as the taking of his/her property.
[48]


Petitioner was supposed to tender the provisional payment directly to respondent
during a hearing which it had failed to attend. Petitioner, then, deposited the
provisional payment with the court. The trial court did not commit an error in
accepting the deposit and in issuing the writ of possession. The deposit of the
provisional amount with the court is equivalent to payment.

ndeed, Section 4 of R.A. No. 8974 is emphatic to the effect that "upon
compliance with the guidelines.the court shaIIimmediately issue to the
implementing agency an order to take possession of the property and start the
implementation of the project.
[49]
Under this statutory provision, when the
government, its agencies or government-owned and controlled corporations, make
the required provisional payment, the trial court has a ministerial duty to issue a
writ of possession. n Capitol Steel Corporation v. PHIVIEC Industrial
utority,
[50]
we held that:
Upon compliance with the requirements, a petitioner in an
expropriation case.is entitled to a writ of possession as a
matter of right and it becomes the ministeriaI duty of the trial
court to forthwith issue the writ of possession. No hearing is
required and the court neither exercises its discretion or
judgment in determining the amount of the provisional value
of the properties to be expropriated as the legislature has
fixed the amount under Section 4 of R.A. No.
8974.
[51]
(emphasis ours)


t is mandatory on the trial court's part to issue the writ of possession and
on the sheriff's part to deliver possession of respondent's property to petitioner
pursuant to the writ.

WHEREFORE, the Court of Appeals' Decision dated 26 July 2006 and
Resolution dated 28 September 2006 areREVERSED. The ORDERS of the
Regional Trial Court dated 01 April 2005 and 9 May 2005 are
hereby REINSTATED. The Regional Trial Court is
further DIRECTED to immediately REMIT the amount of P17,500.00 to
respondent and to REQUIRE the sheriff to implement the writ of possession. The
case is REMANDED to the trial court for further proceedings.

Republic of the Philippines
SUPREME COURT
Manila
THRD DVSON
G.R. No. 72126 January 29, 1988
MUNICIPALITY OF MEYCAUAYAN, BULACAN, HON. ADRIANO D. DAEZ,
MUNICIPAL MAYOR, MEYCAUAYAN, BULACAN, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and PHILIPPINE PIPES &
MERCHANDIZING CORPORATION,respondents.

GUTIERREZ, JR.,
This is a petition for review on certiorari of the resolution dated April 24,1985 by
the former ntermediate Appellate Court, now Court of Appeals, setting aside its
earlier decision dated January 10, 1985 and dismissing the special civil action for
expropriation filed by the petitioner.
n 1975, respondent Philippine Pipes and Merchandising Corporation filed with the
Office of the Municipal Mayor of Meycauayan, Bulacan, an application for a permit
to fence a parcel of land with a width of 26.8 meters and a length of 184.37 meters
covered by Transfer Certificates of Title Nos. 215165 and 37879. The fencing of
said property was allegedly to enable the storage of the respondent's heavy
equipment and various finished products such as large diameter steel pipes,
pontoon pipes for ports, wharves, and harbors, bridge components, pre-stressed
girders and piles, large diameter concrete pipes, and parts for low cost housing.
n the same year, the Municipal Council of Meycauayan, headed by then Mayor
Celso R. Legaspi, passed Resolution No. 258, Series of 1975, manifesting the
intention to expropriate the respondent's parcel of land covered by Transfer
Certificate of Title No. 37879.
An opposition to the resolution was filed by the respondent with the Office of the
Provincial Governor, which, in turn, created a special committee of four members
to investigate the matter.
On March 10, 1976, the Special Committee recommended that the Provincial
Board of Bulacan disapprove or annul the resolution in question because there
18
was no genuine necessity for the Municipality of Meycauayan to expropriate the
respondent's property for use as a public road.
On the basis of this report, the Provincial Board of Bulacan passed Resolution No.
238, Series of 1976, disapproving and annulling Resolution No. 258, Series of
1975, of the Municipal Council of Meycauayan. The respondent, then, reiterated to
the Office of the Mayor its petition for the approval of the permit to fence the
aforesaid parcels of land.
On October 21, 1983, however, the Municipal Council of Meycauayan, now
headed by Mayor Adriano D. Daez, passed Resolution No. 21, Series of 1983, for
the purpose of expropriating anew the respondent's land. The Provincial Board of
Bulacan approved the aforesaid resolution on January 25, 1984.
Thereafter, the petitioner, on February 14, 1984, filed with the Regional Trial Court
of Malolos, Bulacan, Branch V, a special civil action for expropriation.
Upon deposit of the amount of P24,025.00, which is the market value of the land,
with the Philippine National Bank, the trial court on March 1, 1984 issued a writ of
possession in favor of the petitioner.
On August 27, 1984, the trial court issued an order declaring the taking of the
property as lawful and appointing the Provincial Assessor of Bulacan as court
commissioner who shall hold the hearing to ascertain the just compensation for the
property.
The respondent went to the ntermediate Appellate Court on petition for review. On
January 10, 1985, the appellate court affirmed the trial court's decision. However,
upon motion for reconsideration by the respondent, the decision was re-examined
and reversed. The appellate court held that there is no genuine necessity to
expropriate the land for use as a public road as there were several other roads for
the same purpose and another more appropriate lot for the proposed public road.
The court, taking into consideration the location and size of the land, also opined
that the land is more deal for use as storage area for respondent's heavy
equipment and finished products.
After its motion for reconsideration was denied, the petitioner went to this Court on
petition for review on certiorari on October 25, 1985, with the following arguments:
Petitioners most respectfully submit that respondent Court has decided a question
of substance not in accord with law or with applicable decisions of this Honorable
Supreme Court; that the judgment is based on a misapprehension of facts and the
conclusion is a finding grounded entirely on speculation, surmises, and
conjectures, because:
a. t concluded, that by dismissing the complaint for expropriation the existence of
legal and factual circumstance of grave abuse of discretion amounting to lack of
jurisdiction committed by the respondent Judge without any shred of evidence at
all contrary to the law on evidence;
b. t concluded, in its decision that respondent Philippine Pipes and Merchandising
Corporation has no need of the property sought to be condemned on the use to
which it is devoted as a private road but allegedly for storage contrary to the
allegations of respondent Philippine Pipes and Merchandising Corporation itself;
c. t anchored its decision on factual situations obtaining a long, long time ago
without regard to the relatively present situation now obtaining. (Rollo, pp. 8-9)
n refuting the petitioner's arguments, the private respondent contends that this
Court may only resolve questions of law and not questions of fact such as those
which the petitioner puts in issue in this case. The respondent further argues that
this Court may not also interfere with an action of the Court of Appeals which
involves the exercise of discretion.
We agree with the respondent.
The jurisdiction of this Court in cases brought to us from the Court of Appeals is
limited to the review of errors of law (Rizal Cement Co., nc. v. Villareal, 135 SCRA
15, 24), factual issues not being proper in certiorari proceedings (See Ygay et al.
v. Hon. Escareal et al., 135 SCRA 78, 82).
This Court reviews and rectifies the findings of fact of the Court of Appeals only
under certain established exceptions such as: (1) when the conclusion is a finding
grounded entirely on speculations, surmises and conjectures; (2) when the
inference made is manifestly mistaken, absurd and impossible; (3) when there is
grave abuse of discretion; (4) when the judgment is based on a misapprehension
of facts; and (5) when the court, in making its finding, went beyond the issues of
the case and the same is contrary to the admissions of both the appellant and the
appellee (Moran, Jr. v. Court of Appeals, 133 SCRA 88).
None of the exceptions warranting non-application of the rule is present in this
case. On the contrary, we find that the appellate court's decision is supported by
substantial evidence.
The petitioner's purpose in expropriating the respondent's property is to convert
the same into a public road which would provide a connecting link between
Malhacan Road and Bulac Road in Valenzuela, Bulacan and thereby ease the
traffic in the area of vehicles coming from MacArthur Highway.
The records, however, reveals that there are other connecting links between the
aforementioned roads. The petitioner itself admits that there are four such cross
roads in existence. The respondent court stated that with the proposed road, there
would be seven.
Appreciating the evidence presented before it, with particular emphasis on the
Special Committee's report dated March 10, 1976, the Court of Appeals declared:
xxx xxx xxx
FACTS ESTABLSHED ON OCULAR NSPECTON
n the ocular inspection, the following facts came into the limelight:
(1) The property in question of the Philippine Pipes and Merchandazing
Corporation intended to be expropriated by the Municipality of Meycauayan is
embraced under Transfer Certificate of Title No. 37879 and is a private road of the
company used in the conduct and operation of its business, with the inabitation in
nearby premises tolerated to pass the same. t extends from Bulac Road to the
south, to Malhacan Road on the north, with a width of about 6 to 7 meters, more or
less.
(2) Adjoining this private road on the eastern side, is a vacant property also
belonging to the Philippine Pipes and Merchandising Corporation and extending
also from Bulac Road to Malacan Road, with a high wall along the property line
on the east side thereof serving as a fence.
19
(3) Opposite the private road, after crossing Bulac Road, is the gate of the factory
of the Philippine Pipes and Merchandising Corporation.
(4) From the private road of the firm on the eastern direction about 30 to 40 meters
distance are subdivision roads of an existing subdivision with a width of 6 to 7
meters, more or less, running parallel to the said private road of the firm and
likewise extending from Bulac Road to Malhacan Road. Whether said subdivision
roads had already been donated to the municipality is not known.
(5) On the western side of the private road is a vacant lot with an area of l6,071
square meters offered for sale by its owner extending also from Bulac Road to
Malhacan Road.
(6) Bulac road, a municipal road with a width of about 6 to 7 meters and all the
nearby subdivision roads are obviously very poorly developed and maintained, and
are in dire need of repair. Like the Malhacan Road, Bulac road extends from the
McArthur Highway with exit to North Diversion Road.
xxx xxx xxx
The Sketch Plan (Rollo, p. 26 or p. 97) clearly and conclusively shows that
petitioner does not need this strip of land as a private road. The Sketch Plan
clearly shows that petitioner's factory site is adjacent to Bulac Road which has a
width of about seven meters, more or less. Petitioner can use Bulac Road in
reaching McArthur Highway on the west or in reaching the Manila North
Expressway on the east for the purpose of transporting its products. Petitioner
does not need to go to Malhacan Road via this so-called private road before going
to McArthur Highway or to the Manila North Expressway. Why should petitioner go
first to Malhacan Road via this so called "private road" before going to McArthur
Highway or to the Manila North Expressway when taking the Bulac Road in going
to McArthur Highway or to the Manila North Expressway is more direct, nearer and
more advantageous. Hence, it is beyond doubt that petitioner acquired this strip of
land for the storage of its heavy equipments and various finished products and for
growth and expansion and never to use it as a private road. This is the very reason
why petitioner filed an application with the Office of the Municipal Mayor of
Meycauayan, Bulacan to fence with hollow blocks this strip of land.
Third, We will determine whether there is a genuine necessity to expropriate this
strip of land for use as a public road.
We hereby quote a relevant part of the Special Committee's Report dated March
10, 1976, which is as follows:
OBSERVATON OF COMMTTEE
From the foregoing facts, it appears obvious to this Special Committee that there is
no genuine necessity for the Municipality of' Meycauayan to expropriate the
aforesaid property of the Philippine Pipes and Merchandising Corporation for use
as a public road. Considering that in the vicinity there are other available road and
vacant lot offered for sale situated similarly as the lot in question and lying dle,
unlike the lot sought to be expropriated which was found by the Committee to be
badly needed by the company as a site for its heavy equipment after it is fenced
together with the adjoining vacant lot, the justification to condemn the same does
not appear to be very imperative and necessary and would only cause unjustified
damage to the firm. The desire of the Municipality of Meycauayan to build a public
road to decongest the volume of traffic can be fully and better attained by acquiring
the other available roads in the vicinity maybe at lesser costs without causing harm
to an establishment doing legitimate business therein. Or, the municipality may
seek to expropriate a portion of the vacant lot also in the vicinity offered for sale for
a wider public road to attain decongest (sic) of traffic because as observed by the
Committee, the lot of the Corporation sought to be taken will only accommodate a
one-way traffic lane and therefore, will not suffice to improve and decongest the
flow of traffic and pedestrians in the Malhacan area. ...
xxx xxx xxx
t must be noted that this strip of land covered by Transfer Certificates of Titles
Nos. 215165 and 37879 were acquired by petitioner from Dr. Villacorta. The lot for
sale and lying dle with an area of 16,071 square meter which is adjacent and on
the western side of the aforesaid strip of land and extends likewise from Bulac
Road to Malhacan Road belongs also to Dr. Villacorta. This lot for sale and lying
dle is most deal for use as a public road because it is more than three (3) times
wider that the said strip of land.
xxx xxx xxx
xxx xxx xxx
Since there is another lot ready for sale and lying dle, adjacent and on the
western side of the strip of land, and extending also from Malhacan Road to Bulac
Road and most deal for a public road because it is very much wider than the lot
sought to be expropriated, it seems that it is more just, fair, and reasonable if this
lot is the one to be expropriated. (Rollo, pp. 22-26)
The petitioner objects to the appellate court's findings contending that they were
based on facts obtaining long before the present action to expropriate took place.
We note, however, that there is no evidence on record which shows a change in
the factual circumstances of the case. There is no showing that some of the six
other available cross roads have been closed or that the private roads in the
subdivision may not be used for municipal purposes. What is more likely is that
these roads have already been turned over to the government. The petitioner
alleges that surely the environmental progress during the span of seven years
between the first and second attempts to expropriate has brought about a change
in the facts of the case. This allegation does not merit consideration absent a
showing of concrete evidence attesting to it.
There is no question here as to the right of the State to take private property for
public use upon payment of just compensation. What is questioned is the
existence of a genuine necessity therefor.
As early as City of Manila v. Cinese Community of Manila (40 Phil. 349) this
Court held that the foundation of the right to exercise the power of eminent domain
is genuine necessity and that necessity must be of a public character.
Condemnation of private property is justified only if it is for the public good and
there is a genuine necessity of a public character. Consequently, the courts have
the power to inquire into the legality of the exercise of the right of eminent domain
and to determine whether there is a genuine necessity therefor (Republic v. La
Orden de PP. Benedictos de Filipinas, 1 SCRA 646; J.M. Tuason & Co., nc. v.
Land Tenure Administration, 31 SCRA 413).
20
n the recent case of e Knect v. autista, (100 SCRA 660) this court further
ruled that the government may not capriciously choose what private property
should be taken. Citing the case of J.M. %uason & Co., Inc. v. Land %enure
dministration (supra), the Court held:
... With due recognition then of the power of Congress to designate the particular
property to be taken and how much thereof may be condemned in the exercise of
the power of expropriation, it is still a judicial question whether in the exercise of
such competence, the party adversely affected is the victim of partiality and
prejudice. That the equal protection clause will not allow. (At p. 436)
There is absolutely no showing in the petition why the more appropriate lot for the
proposed road which was offered for sale has not been the subject of the
petitioner's attempt to expropriate assuming there is a real need for another
connecting road.
WHEREFORE, the petition is hereby DSMSSED for lack of merit. The questioned
resolution of the respondent court is AFFRMED.
SO ORDERED.
Fernan (Cairman), Feliciano, idin and Cortes, JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12792 February 28, 1961
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
LA ORDEN DE PP. BENEDICTINOS DE FILIPINAS, defendant-appellee.
Office of te Solicitor General for plaintiff-appellant.
Ledesma, Puno, Guytingco, ntonio and ssociates for defendant-appellee.
DIZON, .:
To ease and solve the daily traffic congestion on Legarda Street, the Government
drew plans to extend Azcarraga street from its junction with Mendiola street, up to
the Sta. Mesa Rotonda, Sampaloc, Manila. To carry out this plan it offered to buy a
portion of approximately 6,000 square meters of a bigger parcel belonging to La
Orden de PP. Benedictinos de Filipinas, a domestic religious corporation that owns
the San Beda College, a private educational institution situated on Mendiola street.
Not having been able to reach an agreement on the matter with the owner, the
Government instituted the present expropriation proceedings.
On May 27, 1957 the trial court, upon application of the Government hereinafter
referred to as appellant issued an order fixing the provisional value of the
property in question at P270,000.00 and authorizing appellant to take immediate
possession thereof upon depositing said amount. The deposit having been made
with the City Treasurer of Manila, the trial court issued the corresponding order
directing the Sheriff of Manila to place appellant in possession of the property
aforesaid.
On June 8, 1957, as directed by the Rules of Court, the herein appellee, in lieu of
an answer, filed a motion to dismiss the complaint based on the following grounds:
. That the property sought to be expropriated is already dedicated to public use
and therefore is not subject to expropriation.
. That there is no necessity for the proposed expropriation.
. That the proposed Azcarraga Extension could pass through a different site
which would entail less expense to the Government and which would not
necessitate the expropriation of a property dedicated to education.
V. That the present action filed by the plaintiff against the defendant is
discriminatory.
V. That the herein plaintiff does not count with sufficient funds to push through its
project of constructing the proposed Azcarraga Extension and to allow the plaintiff
to expropriate defendant's property at this time would be only to needlessly deprive
the latter of the use of its property.".
The government filed a written opposition to the motion to dismiss (Record on
Appeal, pp. 30-37) while appellee filed a reply thereto (d., pp. 38-48). On July 29,
1957, without receiving evidence upon the questions of fact arising from the
complaint, the motion to dismiss and the opposition thereto filed, the trial court
issued the appealed order dismissing the case.
The appealed order shows that the trial court limited itself to deciding the point of
whether or not the expropriation of the property in question is necessary (Rec. on
Ap., p. 50) and, having arrived at the conclusion that such expropriation was not of
extreme necessity, dismissed the proceedings.
t is to be observed that paragraph V of the complaint expressly alleges that
appellant needs, among other properties, the portion of appellee's property in
question for the purpose of constructing the Azcarraga street extension, and that
paragraph V of the same complaint expressly alleges that, in accordance with
Section 64(b) of the Revised Administrative Code, the President of the Philippines
had authorized the acquisition, thru condemnation proceedings, of the aforesaid
parcel of land belonging to appellee, as evidenced by the third indorsement dated
May 15, 1957 of the Executive Secretary, Office of the President of the Philippines,
a copy of which was attached to the complaint as Annex "C" and made an integral
part thereof. n denial of these allegations appellee's motion to dismiss alleged that
"there is no necessity for the proposed expropriation". Thus, the question of fact
decisive of the whole case arose.
t is the rule in this jurisdiction that private property may be expropriated for public
use and upon payment of just compensation; that condemnation of private
property is justified only if it is for the public good and there is a genuine necessity
therefor of a public character. Consequently, the courts have the power to inquire
into the legality of the exercise of the right of eminent domain and to determine
whether or not there is a genuine necessity therefor (City of Manila vs. Chinese
Community, 40 Phil. 349; Manila Railroad Company vs. Hacienda Benito, nc., 37
O.G. 1957).
Upon the other hand, it does not need extended argument to show that whether or
not the proposed opening of the Azcarraga extension is a necessity in order to
relieve the daily congestion of traffic on Legarda St., is a question of fact
dependent not only upon the facts of which the trial court very liberally took judicial
notice but also up on other factors that do not appear of record and must,
21
therefore, be established by means of evidence. We are, therefore, of the opinion
that the parties should have been given an opportunity to present their respective
evidence upon these factors and others that might be of direct or indirect help in
determining the vital question of fact involved, namely, the need to open the
extension of Azcarraga street to ease and solve the traffic congestion on Legarda
street.
WHEREFORE, the appealed order of dismissal is set aside and the present case
is remanded to the trial court for further proceedings in accordance with this
decision. Without costs.
engzon, ctg. C.J., Padilla, autista ngelo, Labrador, Reyes, J..L., arrera
and Paredes JJ., concur.
Concepcion, J., took no part.

Republic of the Philippines
SUPREME COURT
Manila


EN BANC


DECSON


October 31, 1919

G.R. No. L-14355
THE CITY OF MANILA, plaintiff-appellant,
vs.
CHINESE COMMUNITY OF MANILA, ET AL., defendants-appellees.

City Fiscal iaz for appellant.
Crossfield and O'rien, Williams, Ferrier and Sycip, elgado and elgado,
Filemon Sotto, and Ramon Salinas for appellees.

Johnson, :

The important question presented by this appeal is: n expropriation proceedings
by the city of Manila, may the courts inquire into, and hear proof upon, the
necessity of the expropriation?

That question arose in the following manner:

On the 11th day of December, 1916, the city of Manila presented a petition in the
Court of First nstance of said city, praying that certain lands, therein particularly
described, be expropriated for the purpose of constructing a public improvement.
The petitioner, in the second paragraph of the petition, alleged:

That for the purpose of constructing a public improvement, namely, the extension
of Rizal Avenue, Manila, it is necessary for the plaintiff to acquire ownership in fee
simple of certain parcels of land situated in the district of Binondo of said city within
Block 83 of said district, and within the jurisdiction of this court.

The defendant, the Comunidad de Chinos de Manila [Chinese Community of
Manila], answering the petition of the plaintiff, alleged that it was a corporation
organized and existing under and by virtue of the laws of the Philippine slands,
having for its purpose the benefit and general welfare of the Chinese Community
of the City of Manila; that it was the owner of parcels one and two of the land
described in paragraph 2 of the complaint; that it denied that it was either
necessary or expedient that the said parcels be expropriated for street purposes;
that existing street and roads furnished ample means of communication for the
public in the district covered by such proposed expropriation; that if the
construction of the street or road should be considered a public necessity, other
routes were available, which would fully satisfy the plaintiff's purposes, at much
less expense and without disturbing the resting places of the dead; that it had a
Torrens title for the lands in question; that the lands in question had been used by
the defendant for cemetery purposes; that a great number of Chinese were buried
in said cemetery; that if said expropriation be carried into effect, it would disturb
the resting places of the dead, would require the expenditure of a large sum of
money in the transfer or removal of the bodies to some other place or site and in
the purchase of such new sites, would involve the destruction of existing
monuments and the erection of new monuments in their stead, and would create
irreparable loss and injury to the defendant and to all those persons owning and
interested in the graves and monuments which would have to be destroyed; that
the plaintiff was without right or authority to expropriate said cemetery or any part
or portion thereof for street purposes; and that the expropriation, in fact, was not
necessary as a public improvement.

The defendant ldefonso Tambunting, answering the petition, denied each and
every allegation of the complaint, and alleged that said expropriation was not a
public improvement; that it was not necessary for the plaintiff to acquire the parcels
of land in question; that a portion of the lands in question was used as a cemetery
in which were the graves of his ancestors; that monuments and tombstones of
great value were found thereon; that the land had become quasi-public property of
a benevolent association, dedicated and used for the burial of the dead and that
many dead were buried there; that if the plaintiff deemed it necessary to extend
Rizal Avenue, he had offered and still offers to grant a right of way for the said
extension over other land, without cost to the plaintiff, in order that the sepulchers,
chapels and graves of his ancestors may not be disturbed; that the land so offered,
free of charge, would answer every public necessity on the part of the plaintiff.

The defendant Feliza Concepcion de Delgado, with her husband, Jose Maria
22
Delgado, and each of the other defendants, answering separately, presented
substantially the same defense as that presented by the Comunidad de Chinos de
Manila and ldefonso Tambunting above referred to.

The foregoing parts of the defense presented by the defendants have been
inserted in order to show the general character of the defenses presented by each
of the defendants. The plaintiff alleged that the expropriation was necessary. The
defendants each alleged (a) that no necessity existed for said expropriation and
(b) that the land in question was a cemetery, which had been used as such for
many years, and was covered with sepulchres and monuments, and that the same
should not be converted into a street for public purposes.

Upon the issue thus presented by the petition and the various answers, the
Honorable Simplicio del Rosario, judge, in a very elucidated opinion, with very
clear and explicit reasons, supported by ambulance of authorities, decided that
there was no necessity for the expropriation of the particular strip of land in
question, and absolved each and all of the defendants from all liability under the
complaint, without any finding as to costs U5Yrb5.

From that judgment the plaintiff appealed and presented the above question as its
principal ground of appeal.

The theory of the plaintiff is, that once it has established the fact, under the law,
that it has authority to expropriate land, it may expropriate any land it may desire;
that the only function of the court in such proceedings is to ascertain the value of
the land in question; that neither the court nor the owners of the land can inquire
into the advisible purpose of purpose of the expropriation or ask any questions
concerning the necessities therefor; that the courts are mere appraisers of the land
involved in expropriation proceedings, and, when the value of the land is fixed by
the method adopted by the law, to render a judgment in favor of the defendant for
its value.

That the city of Manila has authority to expropriate private lands for public
purposes, is not denied. Section 2429 of Act No. 2711 (Charter of the city of
Manila) provides that "the city (Manila) . . . may condemn private property for
public use."

The Charter of the city of Manila contains no procedure by which the said authority
may be carried into effect. We are driven, therefore, to the procedure marked out
by Act No. 190 to ascertain how the said authority may be exercised. From an
examination of Act No. 190, in its section 241, we find how the right of eminent
domain may be exercised. Said section 241 provides that, "The Government of the
Philippine slands, or of any province or department thereof, or of any municipality,
and any person, or public or private corporation having, by law, the right to
condemn private property for public use, shall exercise that right in the manner
hereinafter prescribed."

Section 242 provides that a complaint in expropriation proceeding shall be
presented; that the complaint shall state with certainty the right of condemnation,
with a description of the property sought to be condemned together with the
interest of each defendant separately.

Section 243 provides that if the court shall find upon trial that the right to
expropriate the land in question exists, it shall then appoint commissioners oRtoo.

Sections 244, 245 and 246 provide the method of procedure and duty of the
commissioners. Section 248 provides for an appeal from the judgment of the Court
of First nstance to the Supreme Court. Said section 248 gives the Supreme Court
authority to inquire into the right of expropriation on the part of the plaintiff. f the
Supreme Court on appeal shall determine that no right of expropriation existed, it
shall remand the cause to the Court of First nstance with a mandate that the
defendant be replaced in the possession of the property and that he recover
whatever damages he may have sustained by reason of the possession of the
plaintiff.

t is contended on the part of the plaintiff that the phrase in said section, "and if the
court shall find the right to expropriate exists," means simply that, if the court finds
that there is some law authorizing the plaintiff to expropriate, then the courts have
no other function than to authorize the expropriation and to proceed to ascertain
the value of the land involved; that the necessity for the expropriation is a
legislative and not a judicial question.

Upon the question whether expropriation is a legislative function exclusively, and
that the courts cannot intervene except for the purpose of determining the value of
the land in question, there is much legal legislature. Much has been written upon
both sides of that question. A careful examination of the discussions pro and con
will disclose the fact that the decisions depend largely upon particular
constitutional or statutory provisions. t cannot be denied, if the legislature under
proper authority should grant the expropriation of a certain or particular parcel of
land for some specified public purpose, that the courts would be without
jurisdiction to inquire into the purpose of that legislation qMTR34yyK2.

f, upon the other hand, however, the Legislature should grant general authority to
a municipal corporation to expropriate private land for public purposes, we think
the courts have ample authority in this jurisdiction, under the provisions above
quoted, to make inquiry and to hear proof, upon an issue properly presented,
concerning whether or not the lands were private and whether the purpose was, in
fact, public. n other words, have no the courts in this jurisdiction the right,
inasmuch as the questions relating to expropriation must be referred to them (sec.
241, Act No. 190) for final decision, to ask whether or not the law has been
complied with? Suppose in a particular case, it should be denied that the property
is not private property but public, may not the courts hear proof upon that
23
question? Or, suppose the defense is, that the purpose of the expropriation is not
public but private, or that there exists no public purpose at all, may not the courts
make inquiry and hear proof upon that question?

The city of Manila is given authority to expropriate private lands for public
purposes. Can it be possible that said authority confers the right to determine for
itself that the land is private and that the purpose is public, and that the people of
the city of Manila who pay the taxes for its support, especially those who are
directly affected, may not question one or the other, or both, of these questions?
Can it be successfully contended that the phrase used in Act No. 190, "and if the
court upon trial shall find that such right exists," means simply that the court shall
examine the statutes simply for the purpose of ascertaining whether a law exists
authorizing the petitioner to exercise the right of eminent domain? Or, when the
case arrives in the Supreme Court, can it be possible that the phrase, "if the
Supreme Court shall determine that no right of expropriation exists," that that
simply means that the Supreme Court shall also examine the enactments of the
legislature for the purpose of determining whether or not a law exists permitting the
plaintiff to expropriate?

We are of the opinion that the power of the court is not limited to that question. The
right of expropriation is not an inherent power in a municipal corporation, and
before it can exercise the right some law must exist conferring the power upon it.
When the courts come to determine the question, they must only find (a) that a law
or authority exists for the exercise of the right of eminent domain, but (b) also that
the right or authority is being exercised in accordance with the law. n the present
case there are two conditions imposed upon the authority conceded to the City of
Manila: First, the land must be private; and, second, the purpose must be public. f
the court, upon trial, finds that neither of these conditions exists or that either one
of them fails, certainly it cannot be contended that the right is being exercised in
accordance with law.

Whether the purpose for the exercise of the right of eminent domain is public, is a
question of fact. Whether the land is public, is a question of fact; and, in our
opinion, when the legislature conferred upon the courts of the Philippine slands
the right to ascertain upon trial whether the right exists for the exercise of eminent
domain, it intended that the courts should inquire into, and hear proof upon, those
questions. s it possible that the owner of valuable land in this jurisdiction is
compelled to stand mute while his land is being expropriated for a use not public,
with the right simply to beg the city of Manila to pay him the value of his land?
Does the law in this jurisdiction permit municipalities to expropriate lands, without
question, simply for the purpose of satisfying the aesthetic sense of those who
happen for the time being to be in authority? Expropriation of lands usually calls for
public expense. The taxpayers are called upon to pay the costs. Cannot the
owners of land question the public use or the public necessity?

As was said above, there is a wide divergence of opinion upon the authority of the
court to question the necessity or advisability of the exercise of the right of eminent
domain. The divergence is usually found to depend upon particular statutory or
constitutional provisions 3QFqB.

t has been contended and many cases are cited in support of that contention,
and section 158 of volume 10 of Ruling Case Law is cited as conclusive that the
necessity for taking property under the right of eminent domain is not a judicial
question. But those who cited said section evidently overlooked the section
immediately following (sec. 159), which adds: "But it is obvious that if the property
is taken in the ostensible behalf of a public improvement which it can never by any
possibility serve, it is being taken for a use not public, and the owner's
constitutional rights call for protection by the courts. While many courts have used
sweeping expression in the decisions in which they have disclaimed the power of
supervising the power of supervising the selection of the sites of public
improvements, it may be safely said that the courts of the various states would feel
bound to interfere to prevent an abuse of the discretion delegated by the
legislature, by an attempted appropriation of land in utter disregard of the possible
necessity of its use, or when the alleged purpose was a cloak to some sinister
scheme." (Norwich City vs. Johnson, 86 Conn., 151; Bell vs. Mattoon Waterworks,
etc. Co., 245 ll., 544; Wheeling, etc. R. R. Co. vs. Toledo Ry. etc. Co., 72 Ohio St.,
368; State vs. Stewart, 74 Wis., 620.)

Said section 158 (10 R. C. L., 183) which is cited as conclusive authority in support
of the contention of the appellant, says:

The legislature, in providing for the exercise of the power of eminent domain, may
directly determine the necessity for appropriating private property for a particular
improvement for public use, and it may select the exact location of the
improvement. n such a case, it is well settled that the utility of the proposed
improvement, the extent of the public necessity for its construction, the expediency
of constructing it, the suitableness of the location selected and the consequent
necessity of taking the land selected for its site, are all questions exclusively for
the legislature to determine, and the courts have no power to interfere, or to
substitute their own views for those of the representatives of the people.

Practically every case cited in support of the above doctrine has been examined,
and we are justified in making the statement that in each case the legislature
directly determined the necessity for the exercise of the right of eminent domain in
the particular case. t is not denied that if the necessity for the exercise of the right
of eminent domain is presented to the legislative department of the government
and that department decides that there exists a necessity for the exercise of the
right in a particular case, that then and in that case, the courts will not go behind
the action of the legislature and make inquiry concerning the necessity. But, in the
case of Wheeling, etc. R. R. Co. vs. Toledo, Ry, etc., Co. (72 Ohio St., 368 [106
Am. St. rep., 622, 628]), which was cited in support of the doctrine laid down in
section 158 above quoted, the court said:
24

But when the statute does not designate the property to be taken nor how may be
taken, then the necessity of taking particular property is a question for the courts.
Where the application to condemn or appropriate is made directly to the court, the
question (of necessity) should be raised and decided in limene.

The legislative department of the government was rarely undertakes to designate
the precise property which should be taken for public use. t has generally, like in
the present case, merely conferred general authority to take land for public use
when a necessity exists therefor. We believe that it can be confidently asserted
that, under such statute, the allegation of the necessity for the appropriation is an
issuable allegation which it is competent for the courts to decide. (Lynch vs.
Forbes, 161 Mass., 302 [42 Am. St. Rep., 402, 407].)

There is a wide distinction between a legislative declaration that a municipality is
given authority to exercise the right of eminent domain, and a decision by the
municipality that there exist a necessity for the exercise of that right in a particular
case. The first is a declaration simply that there exist reasons why the right should
be conferred upon municipal corporation, while the second is the application of the
right to a particular case. Certainly, the legislative declaration relating to the
advisability of granting the power cannot be converted into a declaration that a
necessity exists for its exercise in a particular case, and especially so when,
perhaps, the land in question was not within the territorial authority was granted.

Whether it was wise, advisable, or necessary to confer upon a municipality the
power to exercise the right of eminent domain, is a question with which the courts
are not concerned. But when that right or authority is exercised for the purpose of
depriving citizens of their property, the courts are authorized, in this jurisdiction, to
make inquiry and to hear proof upon the necessity in the particular case, and not
the general authority.

Volume 15 of the Cyclopedia of Law and Procedure (Cyc.), page 629, is cited as a
further conclusive authority upon the question that the necessity for the exercise of
the right of eminent domain is a legislative and not a judicial question. Cyclopedia,
at the page stated, says:

n the absence of some constitutional or statutory provision to the contrary, the
necessity and expediency of exercising the right of eminent domain are questions
essentially political and not judicial in their character. The determination of those
questions (the necessity and the expediency) belongs to the sovereign power; the
legislative department is final and conclusive, and the courts have no power to
review it (the necessity and the expediency) . . . . t (the legislature) may designate
the particular property to be condemned, and its determination in this respect
cannot be reviewed by the courts.

The volume of Cyclopedia, above referred to, cites many cases in support of the
doctrine quoted. While time has not permitted an examination of all of said
citations, many of them have been examined, and it can be confidently asserted
that said cases which are cited in support of the assertion that, "the necessity and
expediency of exercising the right of eminent domain are questions essentially
political and not judicial," show clearly and invariably that in each case the
legislature itself usually, by a special law, designated the particular case in which
the right of eminent domain might be exercised by the particular municipal
corporation or entity within the state. (Eastern R. Co. vs. Boston, etc., R. Co., 11
Mass., 125 [15 Am. Rep., 13]; Brooklyn Park Com'rs vs. Armstrong, 45 N.Y., 234
[6 Am. Rep., 70]; Hairston vs. Danville, etc. Ry. Co., 208 U. S. 598; Cincinnati vs.
Louisville, etc. Ry. Co., 223 U. S., 390; U.S. vs. Chandler-Dunbar Water Power
Co., 229 U. S., 53; U.S. vs. Gettysburg, etc. Co., 160 U. S., 668; Traction Co. vs.
Mining Co., 196 U.S., 239; Sears vs. City of Akron, 246 U.S., 351 [erroneously
cited as 242 U.S.].)

n the case of Traction Co. vs. Mining Co. (196 U.S., 239), the Supreme Court of
the United States said: "t is erroneous to suppose that the legislature is beyond
the control of the courts in exercising the power of eminent domain, either as to the
nature of the use or the necessity to the use of any particular property. For if the
use be not public or no necessity for the taking exists, the legislature cannot
authorize the taking of private property against the will of the owner,
notwithstanding compensation may be required."

n the case of School Board of Carolina vs. Saldaa (14 Porto Rico, 339, 356), we
find the Supreme Court of Porto Rico, speaking through Justice MacLeary, quoting
approvingly the following, upon the question which we are discussing: "t is well
settled that although the legislature must necessarily determine in the first instance
whether the use for which they (municipalities, etc.) attempt to exercise the power
is a public one or not, their (municipalities, etc.) determination is not final, but is
subject to correction by the courts, who may undoubtedly declare the statute
unconstitutional, if it shall clearly appear that the use for which it is proposed to
authorize the taking of private property is in reality not public but private." Many
cases are cited in support of that doctrine.

Later, in the same decision, we find the Supreme Court of Porto Rico says: "At any
rate, the rule is quite well settled that in the cases under consideration the
determination of the necessity of taking a particular piece or a certain amount of
land rests ultimately with the courts." (Spring Valley etc. Co. vs. San Mateo, etc.
Co., 64 Cal., 123.) rdHiQZoY.

n the case of Board of Water Com'rs., etc. vs. Johnson (86 Conn., 571 [41 L. R.
A., N. S., 1024]), the Supreme Court of Connecticut approvingly quoted the
following doctrine from Lewis on Eminent Domain (3d ed.), section 599: "n all
such cases the necessity of public utility of the proposed work or improvement is a
judicial question. n all such cases, where the authority is to take property
necessary for the purpose, the necessity of taking particular property for a
23
particular purpose is a judicial one, upon which the owner is entitled to be heard."
(Riley vs. Charleston, etc. Co., 71 S. C., 457, 489 [110 Am. St. Rep., 579];
Henderson vs. Lexington 132 Ky., 390, 403.)

The taking of private property for any use which is not required by the necessities
or convenience of the inhabitants of the state, is an unreasonable exercise of the
right of eminent domain, and beyond the power of the legislature to delegate.
(Bennett vs. Marion, 106 owa, 628, 633; Wilson vs. Pittsburg, etc. Co., 222 Pa.
St., 541, 545; Greasy, etc. Co. vs. Ely, etc. Co., 132 Ky., 692, 697.)

n the case of New Central Coal Co. vs. George's etc. Co. (37 Md., 537, 564), the
Supreme Court of the State of Maryland, discussing the question before us, said:
"To justify the exercise of this extreme power (eminent domain) where the
legislature has left it to depend upon the necessity that may be found to exist, in
order to accomplish the purpose of the incorporation, as in this case, the party
claiming the right to the exercise of the power should be required to show at least
a reasonable degree of necessity for its exercise. Any rule less strict than this, with
the large and almost indiscriminate delegation of the right to corporations, would
likely lead to oppression and the sacrifice of private right to corporate power."

n the case of Dewey vs. Chicago, etc. Co. (184 ll., 426, 433), the court said: "ts
right to condemn property is not a general power of condemnation, but is limited to
cases where a necessity for resort to private property is shown to exist. Such
necessity must appear upon the face of the petition to condemn. f the necessary
is denied the burden is upon the company (municipality) to establish it." (Highland,
etc. Co. vs. Strickley, 116 Fed., 852, 856; Kiney vs. Citizens' Water & Light Co.,
173 nd., 252, 257 ; Bell vs. Mattoon Waterworks, etc. Co., 245 ll., 544 [137 Am.
St. Rep. 338].)

t is true that naby decisions may be found asserting that what is a public use is a
legislative question, and many other decisions declaring with equal emphasis that
it is a judicial question. But, as long as there is a constitutional or statutory
provision denying the right to take land for any use other than a public use, it
occurs to us that the question whether any particular use is a public one or not is
ultimately, at least, a judicial question. The legislative may, it is true, in effect
declare certain uses to be public, and, under the operation of the well-known rule
that a statute will not be declared to be unconstitutional except in a case free, or
comparatively free, from doubt, the courts will certainly sustain the action of the
legislature unless it appears that the particular use is clearly not of a public nature.
The decisions must be understood with this limitation; for, certainly, no court of last
resort will be willing to declare that any and every purpose which the legislative
might happen to designate as a public use shall be conclusively held to be so,
irrespective of the purpose in question and of its manifestly private character
Blackstone in his Commentaries on the English Law remarks that, 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 exists a very great necessity therefor.

n the case of Wilkinson vs. Leland (2 Pet. [U.S.], 657), the Supreme Court of the
United States said: "That government can scarcely be deemed free where the
rights of property are left solely defendant on the legislative body, without restraint.
The fundamental maxims of free government seem to require that the rights of
personal liberty and private property should be held sacred. At least no court of
justice in this country would be warranted in assuming that the power to violate
and disregard them a power so repugnant to the common principles of justice
and civil liberty lurked in any general grant of legislature authority, or ought to
be implied from any general expression of the people. The people ought no to be
presumed to part with rights so vital to their security and well-being without very
strong and direct expression of such intention." (Lewis on Eminent Domain, sec.
603; Lecoul vs. Police Jury 20 La. Ann., 308; Jefferson vs. Jazem, 7 La. Ann.,
182.)

Blackstone, in his Commentaries on the English Law said that the right to own and
possess land a place to live separate and apart from others to retain it as a
home for the family in a way not to be molested by others is one of the most
sacred rights that men are heirs to. That right has been written into the organic law
of every civilized nation. The Acts of Congress of July 1, 1902, and of August 29,
1916, which provide that "no law shall be enacted in the Philippine slands which
shall deprive any person of his property without due process of law," are but a
restatement of the time-honored protection of the absolute right of the individual to
his property. Neither did said Acts of Congress add anything to the law already
existing in the Philippine slands. The Spaniard fully recognized the principle and
adequately protected the inhabitants of the Philippine slands against the
encroachment upon the private property of the individual. Article 349 of the Civil
Code provides that: "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 (proven public utility and
payment) has been complied with, it shall be the duty of the courts to protect the
owner of such property in its possession or to restore its possession to him , as the
case may be."

The exercise of the right of eminent domain, whether directly by the State, or by its
authorized agents, is necessarily in derogation of private rights, and the rule in that
case is that the authority must be strictly construed. No species of property is held
by individuals with greater tenacity, and none is guarded by the constitution and
laws more sedulously, than the right to the freehold of inhabitants. When the
legislature interferes with that right, and, for greater public purposes, appropriates
the land of an individual without his consent, the plain meaning of the law should
not be enlarged by doubtly interpretation. (Bensely vs. Mountainlake Water Co., 13
Cal., 306 and cases cited [73 Am. Dec., 576].)

The statutory power of taking property from the owner without his consent is one of
the most delicate exercise of government authority. t is to be watched with jealous
26
scrutiny. mportant as the power may be to the government, the inviolable sanctity
which all free constitutions attach to the right of property of the citizens, constrains
the strict observance of the substantial provisions of the law which are prescribed
as modes of the exercise of the power, and to protect it from abuse. Not only must
the authority of municipal corporations to take property be expressly conferred and
the use for which it is taken specified, but the power, with all constitutional
limitation and directions for its exercise, must be strictly pursued. (Dillon on
Municipal Corporations [5th Ed.], sec. 1040, and cases cited; Tenorio vs. Manila
Railroad Co., 22 Phil., 411.)

t can scarcely be contended that a municipality would be permitted to take
property for some public use unless some public necessity existed therefor. The
right to take private property for public use originates in the necessity, and the
taking must be limited by such necessity. The appellant contends that inasmuch as
the legislature has given it general authority to take private property for public use,
that the legislature has, therefore, settled the question of the necessity in every
case and that the courts are closed to the owners of the property upon that
question. Can it be imagined, when the legislature adopted section 2429 of Act No.
2711, that it thereby declared that it was necessary to appropriate the property of
Juan de la Cruz, whose property, perhaps, was not within the city limits at the time
the law was adopted? The legislature, then, not having declared the necessity, can
it be contemplated that it intended that a municipality should be the sole judge of
the necessity in every case, and that the courts, in the face of the provision that "if
upon trial they shall find that a right exists," cannot in that trial inquire into and hear
proof upon the necessity for the appropriation in a particular case?

The Charter of the city of Manila authorizes the taking of private property for public
use. Suppose the owner of the property denies and successfully proves that the
taking of his property serves no public use: Would the courts not be justified in
inquiring into that question and in finally denying the petition if no public purpose
was proved? Can it be denied that the courts have a right to inquire into that
question? f the courts can ask questions and decide, upon an issue properly
presented, whether the use is public or not, is not that tantamount to permitting the
courts to inquire into the necessity of the appropriation? f there is no public use,
then there is no necessity, and if there is no necessity, it is difficult to understand
how a public use can necessarily exist. f the courts can inquire into the question
whether a public use exists or not, then it seems that it must follow that they can
examine into the question of the necessity E5wOlN.

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. ndianapolis, etc. Ry. Co., 166 nd., 511; Stearns vs. Barre, 73 Vt.,
281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72 Ohio St., 368.)

The general power to exercise the right of eminent domain must not be confused
with the right to exercise it in a particular case. The power of the legislature to
confer, upon municipal corporations and other entities within the State, general
authority to exercise the right of eminent domain cannot be questioned by the
courts, but that general authority of municipalities or entities must not be confused
with the right to exercise it in particular instances. The moment the municipal
corporation or entity attempts to exercise the authority conferred, it must comply
with the conditions accompanying the authority. The necessity for conferring the
authority upon a municipal corporation to exercise the right of eminent domain is
admittedly within the power of the legislature. But whether or not the municipal
corporation or entity is exercising the right in a particular case under the conditions
imposed by the general authority, is a question which the courts have the right to
inquire into FNze.

The conflict in the authorities upon the question whether the necessity for the
exercise of the right of eminent domain is purely legislative and not judicial, arises
generally in the wisdom and propriety of the legislature in authorizing the exercise
of the right of eminent domain instead of in the question of the right to exercise it in
a particular case. (Creston Waterworks Co. vs. McGrath, 89 owa, 502.)

By the weight of authorities, the courts have the power of restricting the exercise of
eminent domain to the actual reasonable necessities of the case and for the
purposes designated by the law. (Fairchild vs. City of St. Paul. 48 Minn., 540.)

And, moreover, the record does not show conclusively that the plaintiff has
definitely decided that their exists a necessity for the appropriation of the particular
land described in the complaint. Exhibits 4, 5, 7, and E clearly indicate that the
municipal board believed at one time that other land might be used for the
proposed improvement, thereby avoiding the necessity of distributing the quiet
resting place of the dead.

Aside from insisting that there exists no necessity for the alleged improvements,
the defendants further contend that the street in question should not be opened
through the cemetery. One of the defendants alleges that said cemetery is public
property. f that allegations is true, then, of course, the city of Manila cannot
appropriate it for public use. The city of Manila can only expropriate private
property.

t is a well known fact that cemeteries may be public or private. The former is a
cemetery used by the general community, or neighborhood, or church, while the
latter is used only by a family, or a small portion of the community or
neighborhood. (11 C. J., 50.)

Where a cemetery is open to public, it is a public use and no part of the ground
can be taken for other public uses under a general authority. And this immunity
extends to the unimproved and unoccupied parts which are held in good faith for
future use. (Lewis on Eminent Domain, sec. 434, and cases cited.)
27

The cemetery in question seems to have been established under governmental
authority. The Spanish Governor-General, in an order creating the same, used the
following language:

The cemetery and general hospital for indigent Chinese having been founded and
maintained by the spontaneous and fraternal contribution of their protector,
merchants and industrials, benefactors of mankind, in consideration of their
services to the Government of the slands its internal administration, government
and regime must necessarily be adjusted to the taste and traditional practices of
those born and educated in China in order that the sentiments which animated the
founders may be perpetually effectuated.

t is alleged, and not denied, that the cemetery in question may be used by the
general community of Chinese, which fact, in the general acceptation of the
definition of a public cemetery, would make the cemetery in question public
property. f that is true, then, of course, the petition of the plaintiff must be denied,
for the reason that the city of Manila has no authority or right under the law to
expropriate public property.

But, whether or not the cemetery is public or private property, its appropriation for
the uses of a public street, especially during the lifetime of those specially
interested in its maintenance as a cemetery, should be a question of great
concern, and its appropriation should not be made for such purposes until it is fully
established that the greatest necessity exists therefor.

While we do not contend that the dead must not give place to the living, and while
it is a matter of public knowledge that in the process of time sepulchres may
become the seat of cities and cemeteries traversed by streets and daily trod by the
feet of millions of men, yet, nevertheless such sacrifices and such uses of the
places of the dead should not be made unless and until it is fully established that
there exists an eminent necessity therefor. While cemeteries and sepulchres and
the places of the burial of the dead are still within

the memory and command of the active care of the living; while they are still
devoted to pious uses and sacred regard, it is difficult to believe that even the
legislature would adopt a law expressly providing that such places, under such
circumstances, should be violated fscFJ.

n such an appropriation, what, we may ask, would be the measure of damages at
law, for the wounded sensibilities of the living, in having the graves of kindred and
loved ones blotted out and desecrated by a common highway or street for public
travel? The impossibility of measuring the damage and inadequacy of a remedy at
law is too apparent to admit of argument. To disturb the mortal remains of those
endeared to us in life sometimes becomes the sad duty of the living; but, except in
cases of necessity, or for laudable purposes, the sanctity of the grave, the last
resting place of our friends, should be maintained, and the preventative aid of the
courts should be invoked for that object. (Railroad Company vs. Cemetery Co.,
116 Tenn., 400; Evergreen Cemetery Association vs. The City of New Haven, 43
Conn., 234; Anderson vs. Acheson, 132 owa, 744; Beatty vs. Kurtz, 2 Peters,
566.)

n the present case, even granting that a necessity exists for the opening of the
street in question, the record contains no proof of the necessity of opening the
same through the cemetery. The record shows that adjoining and adjacent lands
have been offered to the city free of charge, which will answer every purpose of
the plaintiff.

For all of the foregoing, we are fully persuaded that the judgment of the lower court
should be and is hereby affirmed, with costs against the appellant. So ordered.

Arellano, C.J., Torres, Araullo and Avancea, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 88404 October 18, 1990
PHILIPPINE LONG DISTANCE TELEPHONE CO. PLDT], petitioner,
vs.
THE NATIONAL TELECOMMUNICATIONS COMMISSION AND CELLCOM,
INC., (EXPRESS TELECOMMUNICATIONS CO., INC. ETCI]), respondents.
lampan & Manit Law Offices for petitioner.
Gozon, Fernandez, efensor & Parel for private respondent.

MELENCIO-HERRERA,
Petitioner Philippine Long Distance Telephone Company (PLDT) assails, by way
of certiorari and Prohibition under Rule 65, two (2) Orders of public respondent
National Telecommunications Commission (NTC), namely, the Order of 12
December 1988 granting private respondent Express Telecommunications Co.,
nc. (ETC) provisional authority to install, operate and maintain a Cellular Mobile
Telephone System in Metro-Manila (Phase A) in accordance with specified
conditions, and the Order, dated 8 May 1988, denying reconsideration.
On 22 June 1958, Rep. Act No. 2090, was enacted, otherwise known as "An Act
Granting Felix Alberto and Company, ncorporated, a Franchise to Establish Radio
Stations for Domestic and Transoceanic Telecommunications." Felix Alberto &
Co., nc. (FAC) was the original corporate name, which was changed to ETC with
the amendment of the Articles of ncorporation in 1964. Much later, "CELLCOM,
nc." was the name sought to be adopted before the Securities and Exchange
Commission, but this was withdrawn and abandoned.
On 13 May 1987, alleging urgent public need, ETC filed an application with public
respondent NTC (docketed as NTC Case No. 87-89) for the issuance of a
Certificate of Public Convenience and Necessity (CPCN) to construct, install,
28
establish, operate and maintain a Cellular Mobile Telephone System and an Alpha
Numeric Paging System in Metro Manila and in the Southern Luzon regions, with a
prayer for provisional authority to operate Phase A of its proposal within Metro
Manila.
PLDT filed an Opposition with a Motion to Dismiss, based primarily on the
following grounds: (1) ETC is not capacitated or qualified under its legislative
franchise to operate a systemwide telephone or network of telephone service such
as the one proposed in its application; (2) ETC lacks the facilities needed and
indispensable to the successful operation of the proposed cellular mobile
telephone system; (3) PLDT has itself a pending application with NTC, Case No.
86-86, to install and operate a Cellular Mobile Telephone System for domestic and
international service not only in Manila but also in the provinces and that under the
"prior operator" or "protection of investment" doctrine, PLDT has the priority or
preference in the operation of such service; and (4) the provisional authority, if
granted, will result in needless, uneconomical and harmful duplication, among
others.
n an Order, dated 12 November 1987, NTC overruled PLDT's Opposition and
declared that Rep. Act No. 2090 (1958) should be liberally construed as to include
among the services under said franchise the operation of a cellular mobile
telephone service.
n the same Order, ETC was required to submit the certificate of registration of its
Articles of ncorporation with the Securities and Exchange Commission, the
present capital and ownership structure of the company and such other evidence,
oral or documentary, as may be necessary to prove its legal, financial and
technical capabilities as well as the economic justifications to warrant the setting
up of cellular mobile telephone and paging systems. The continuance of the
hearings was also directed.
After evaluating the reconsideration sought by PLDT, the NTC, in October 1988,
maintained its ruling that liberally construed, applicant's franchise carries with it the
privilege to operate and maintain a cellular mobile telephone service.
On 12 December 1988, NTC issued the first challenged Order. Opining that "public
interest, convenience and necessity further demand a second cellular mobile
telephone service provider and finds PRMA FACE evidence showing applicant's
legal, financial and technical capabilities to provide a cellular mobile service using
the AMPS system," NTC granted ETC provisional authority to install, operate and
maintain a cellular mobile telephone system initially in Metro Manila, Phase A only,
subject to the terms and conditions set forth in the same Order. One of the
conditions prescribed (Condition No. 5) was that, within ninety (90) days from date
of the acceptance by ETC of the terms and conditions of the provisional authority,
ETC and PLDT "shall enter into an interconnection agreement for the provision of
adequate interconnection facilities between applicant's cellular mobile telephone
switch and the public switched telephone network and shall jointly submit such
interconnection agreement to the Commission for approval."
n a "Motion to Set Aside the Order" granting provisional authority, PLDT alleged
essentially that the interconnection ordered was in violation of due process and
that the grant of provisional authority was jurisdictionally and procedurally infirm.
On 8 May 1989, NTC denied reconsideration and set the date for continuation of
the hearings on the main proceedings. This is the second questioned Order.
PLDT urges us now to annul the NTC Orders of 12 December 1988 and 8 May
1989 and to order ETC to desist from, suspend, and/or discontinue any and all
acts intended for its implementation.
On 15 June 1989, we resolved to dismiss the petition for its failure to comply fully
with the requirements of Circular No. 1-88. Upon satisfactory showing, however,
that there was, in fact, such compliance, we reconsidered the order, reinstated the
Petition, and required the respondents NTC and ETC to submit their respective
Comments.
On 27 February 1990, we issued a Temporary Restraining Order enjoining NTC to
"Cease and Desist from all or any of its on-going proceedings and ETC from
continuing any and all acts intended or related to or which will amount to the
implementation/execution of its provisional authority." This was upon PLDT's
urgent manifestation that it had been served an NTC Order, dated 14 February
1990, directing immediate compliance with its Order of 12 December 1988,
"otherwise the Commission shall be constrained to take the necessary measures
and bring to bear upon PLDT the full sanctions provided by law."
We required PLDT to post a bond of P 5M. t has complied, with the statement that
it was "post(ing) the same on its agreement and/or consent to have the same
forfeited in favor of Private Respondent ETC/CELLCOM should the instant
Petition be dismissed for lack of merit." ETC took exception to the sufficiency of
the bond considering its initial investment of approximately P 225M, but accepted
the forfeiture proferred.
ETC moved to have the TRO lifted, which we denied on 6 March 1990. We stated,
however, that the inaugural ceremony ETC had scheduled for that day could
proceed, as the same was not covered by the TRO.
PLDT relies on the following grounds for the issuance of the Writs prayed for:
1. Respondent NTC's subject order effectively licensed and/or authorized a
corporate entity without any franchise to operate a public utility, legislative or
otherwise, to establish and operate a telecommunications system.
2. The same order validated stock transactions of a public service enterprise
contrary to and/or in direct violation of Section 20(h) of the Public Service Act.
3. Respondent NTC adjudicated in the same order a controverted matter that was
not heard at all in the proceedings under which it was promulgated.
As correctly pointed out by respondents, this being a special civil action for
certiorari and Prohibition, we only need determine if NTC acted without jurisdiction
or with grave abuse of discretion amounting to lack or excess of jurisdiction in
granting provisional authority to ETC under the NTC questioned Orders of 12
December 1988 and 8 May 1989.
The case was set for oral argument on 21 August 1990 with the parties directed to
address, but not limited to, the following issues: (1) the status and coverage of
Rep. Act No. 2090 as a franchise; (2) the transfer of shares of stock of a
corporation holding a CPCN; and (3) the principle and procedure of
interconnection. The parties were thereafter required to submit their respective
Memoranda, with which they have complied.
29
We find no grave abuse of discretion on the part of NTC, upon the following
considerations:
1. N%C Jurisdiction
There can be no question that the NTC is the regulatory agency of the national
government with jurisdiction over all telecommunications entities. t is legally
clothed with authority and given ample discretion to grant a provisional permit or
authority. n fact, NTC may, on its own initiative, grant such relief even in the
absence of a motion from an applicant.
Sec. 3. Provisional Relief. Upon the filing of an application, complaint or petition
or at any stage thereafter, the Board may grant on motion of the pleaders or on its
own initiative, the relief prayed for, based on the pleading, together with the
affidavits and supporting documents attached thereto, without prejudice to a final
decision after completion of the hearing which shall be called within thirty (30) days
from grant of authority asked for. (Rule 15, Rules of Practice and Procedure
Before the Board of Communications (now NTC).
What the NTC granted was such a provisional authority, with a definite expiry
period of eighteen (18) months unless sooner renewed, and which may be
revoked, amended or revised by the NTC. t is also limited to Metro Manila only.
What is more, the main proceedings are clearly to continue as stated in the NTC
Order of 8 May 1989.
The provisional authority was issued after due hearing, reception of evidence and
evaluation thereof, with the hearings attended by various oppositors, including
PLDT. t was granted only after a prima facie showing that ETC has the necessary
legal, financial and technical capabilities and that public interest, convenience and
necessity so demanded.
PLDT argues, however, that a provisional authority is nothing short of a Certificate
of Public Convenience and Necessity (CPCN) and that it is merely a "distinction
without a difference." That is not so. Basic differences do exist, which need not be
elaborated on. What should be borne in mind is that provisional authority would be
meaningless if the grantee were not allowed to operate. Moreover, it is clear from
the very Order of 12 December 1988 itself that its scope is limited only to the first
phase, out of four, of the proposed nationwide telephone system. The installation
and operation of an alpha numeric paging system was not authorized. The
provisional authority is not exclusive. ts lifetime is limited and may be revoked by
the NTC at any time in accordance with law. The initial expenditure of P130M more
or less, is rendered necessary even under a provisional authority to enable ETC
to prove its capability. And as pointed out by the Solicitor General, on behalf of the
NTC, if what had been granted were a CPCN, it would constitute a final order or
award reviewable only by ordinary appeal to the Court of Appeals pursuant to
Section 9(3) of BP Blg. 129, and not by certiorari before this Court.
The final outcome of the application rests within the exclusive prerogative of the
NTC. Whether or not a CPCN would eventually issue would depend on the
evidence to be presented during the hearings still to be conducted, and only after a
full evaluation of the proof thus presented.
2. %e Coverage of E%CI's Francise
Rep. Act No. 2090 grants ETC (formerly FAC) "the right and privilege of
constructing, installing, establishing and operating in the entire Philippines radio
stations for reception and transmission of messages on radio stations in the
foreign and domestic public fixed point-to-point and public base, aeronautical
and land mobile stations, ... with the corresponding relay stations for te reception
and transmission of wireless messages on radiotelegrapy and/or
radiotelepony ...." PLDT maintains that the scope of the franchise is limited to
"radio stations" and excludes telephone services such as the establishment of the
proposed Cellular Mobile Telephone System (CMTS). However, in its Order of 12
November 1987, the NTC construed the technical term "radiotelephony" liberally
as to include the operation of a cellular mobile telephone system. t said:
n resolving the said issue, the Commission takes into consideration the different
definitions of the term "radiotelephony." As defined by the New nternational
Webster Dictionary the term "radiotelephony" is defined as a telephone carried on
by aid of radiowaves without connecting wires. The nternational
Telecommunications Union (TU) defines a "radiotelephone call" as a "telephone
call, originating in or intended on all or part of its route over the radio
communications channels of the mobile service or of the mobile satellite service."
From the above definitions, while under Republic Act 2090 a system-wide
telephone or network of telephone service by means of connecting wires may not
have been contemplated, it can be construed liberally that the operation of a
cellular mobile telephone service which carries messages, either voice or record,
with the aid of radiowaves or a part of its route carried over radio communication
channels, is one included among the services under said franchise for which a
certificate of public convenience and necessity may be applied for.
The foregoing is the construction given by an administrative agency possessed of
the necessary special knowledge, expertise and experience and deserves great
weight and respect (Asturias Sugar Central, nc. v. Commissioner of Customs, et
al., L-19337, September 30, 1969, 29 SCRA 617). t can only be set aside on proof
of gross abuse of discretion, fraud, or error of law (Tupas Local Chapter No. 979 v.
NLRC, et al., L-60532-33, November 5, 1985, 139 SCRA 478). We discern none of
those considerations sufficient to warrant judicial intervention.
3. %e Status of E%CI Francise
PLDT alleges that the ETC franchise had lapsed into nonexistence for failure of
the franchise holder to begin and complete construction of the radio system
authorized under the franchise as explicitly required in Section 4 of its franchise,
Rep. Act No. 2090.
1
PLDT also invokes Pres. Decree No. 36, enacted on 2
November 1972, which legislates the mandatory cancellation or invalidation of all
franchises for the operation of communications services, which have not been
availed of or used by the party or parties in whose name they were issued.
However, whether or not ETC, and before it FAC, in contravention of its
franchise, started the first of its radio telecommunication stations within (2) years
from the grant of its franchise and completed the construction within ten (10) years
from said date; and whether or not its franchise had remained unused from the
time of its issuance, are questions of fact beyond the province of this Court,
besides the well-settled procedural consideration that factual issues are not
30
subjects of a special civil action for certiorari (Central Bank of the Philippines vs.
Court of Appeals, G.R. No. 41859, 8 March 1989, 171 SCRA 49; Ygay vs.
Escareal, G.R. No. 44189, 8 February 1985, 135 SCRA 78; Filipino Merchant's
nsurance Co., nc. vs. ntermediate Appellate Court, G.R. No. 71640, 27 June
1988, 162 SCRA 669). Moreover, neither Section 4, Rep. Act No. 2090 nor Pres.
Decree No. 36 should be construed as self-executing in working a forfeiture.
Franchise holders should be given an opportunity to be heard, particularly so,
where, as in this case, ETC does not admit any breach, in consonance with the
rudiments of fair play. Thus, the factual situation of this case differs from that
in ngeles Ry Co. vs. City of Los ngeles (92 Pacific Reporter 490) cited by PLDT,
where the grantee therein admitted its failure to complete the conditions of its
franchise and yet insisted on a decree of forfeiture.
More importantly, PLDT's allegation partakes of a Collateral attack on a franchise
Rep. Act No. 2090), which is not allowed. A franchise is a property right and
cannot be revoked or forfeited without due process of law. The determination of
the right to the exercise of a franchise, or whether the right to enjoy such privilege
has been forfeited by non-user, is more properly the subject of the prerogative writ
of quo warranto, the right to assert which, as a rule, belongs to the State "upon
complaint or otherwise" (Sections 1, 2 and 3, Rule 66, Rules of Court),
2
the reason
being that the abuse of a franchise is a public wrong and not a private injury. A
forfeiture of a franchise will have to be declared in a direct proceeding for the
purpose brought by the State because a franchise is granted by law and its
unlawful exercise is primarily a concern of Government.
A ... franchise is ... granted by law, and its ... unlawful exercise is the concern
primarily of the Government. Hence, the latter as a rule is the party called upon to
bring the action for such ... unlawful exercise of franchise. (V-B V. FRANCSCO,
298 [1963 ed.], citing Cruz vs. Ramos, 84 Phil. 226).
4. E%CI's Stock %ransactions
ETC admits that in 1964, the Albertos, as original owners of more than 40% of the
outstanding capital stock sold their holdings to the Orbes. n 1968, the Albertos re-
acquired the shares they had sold to the Orbes. n 1987, the Albertos sold more
than 40% of their shares to Horacio Yalung. Thereafter, the present stockholders
acquired their ETC shares. Moreover, in 1964, ETC had increased its capital
stock from P40,000.00 to P360,000.00; and in 1987, from P360,000.00 to P40M.
PLDT contends that the transfers in 1987 of the shares of stock to the new
stockholders amount to a transfer of ETC's franchise, which needs Congressional
approval pursuant to Rep. Act No. 2090, and since such approval had not been
obtained, ETC's franchise had been invalidated. The provision relied on reads, in
part, as follows:
SECTON 10. The grantee shall not lease, transfer, grant the usufruct of, sell or
assign this franchise nor the rights and privileges acquired thereunder to any
person, firm, company, corporation or other commercial or legal entity nor merge
with any other person, company or corporation organized for the same purpose,
without the approval of the Congress of the Philippines first had. ...
t should be noted, however, that the foregoing provision is, directed to the
"grantee" of the franchise, which is the corporation itself and refers to a sale, lease,
or assignment of that franchise. t does not include the transfer or sale of shares of
stock of a corporation by the latter's stockholders.
The sale of shares of stock of a public utility is governed by another law, i.e.,
Section 20(h) of the Public Service Act (Commonwealth Act No. 146). Pursuant
thereto, the Public Service Commission (now the NTC) is the government agency
vested with the authority to approve the transfer of more than 40% of the
subscribed capital stock of a telecommunications company to a single transferee,
thus:
SEC. 20. Acts requiring the approval of the Commission. Subject to established
stations and exceptions and saving provisions to the contrary, it shall be unlawful
for any public service or for the owner, lessee or operator thereof, without the
approval and authorization of the Commission previously had
xxx xxx xxx
(h) To sell or register in its books the transfer or sale of shares of its capital stock,
if the result of that sale in itself or in connection with another previous sale, shall
be to vest in the transferee more than forty per centum of the subscribed capital of
said public service. Any transfer made in violation of this provision shall be void
and of no effect and shall not be registered in the books of the public service
corporation. Nothing herein contained shall be construed to prevent the holding of
shares lawfully acquired. (As amended by Com. Act No. 454).
n other words, transfers of shares of a public utility corporation need only NTC
approval, not Congressional authorization. What transpired in ETC were a series
of transfers of shares starting in 1964 until 1987. The approval of the NTC may be
deemed to have been met when it authorized the issuance of the provisional
authority to ETC. There was full disclosure before the NTC of the transfers. n fact,
the NTC Order of 12 November 1987 required ETC to submit its "present capital
and ownership structure." Further, ETC even filed a Motion before the NTC, dated
8 December 1987, or more than a year prior to the grant of provisional authority,
seeking approval of the increase in its capital stock from P360,000.00 to P40M,
and the stock transfers made by its stockholders.
A distinction should be made between shares of stock, which are owned by
stockholders, the sale of which requires only NTC approval, and the franchise itself
which is owned by the corporation as the grantee thereof, the sale or transfer of
which requires Congressional sanction. Since stockholders own the shares of
stock, they may dispose of the same as they see fit. They may not, however,
transfer or assign the property of a corporation, like its franchise. n other words,
even if the original stockholders had transferred their shares to another group of
shareholders, the franchise granted to the corporation subsists as long as the
corporation, as an entity, continues to exist The franchise is not thereby invalidated
by the transfer of the shares. A corporation has a personality separate and distinct
from that of each stockholder. t has the right of continuity or perpetual succession
(Corporation Code, Sec. 2).
To all appearances, the stock transfers were not just for the purpose of acquiring
the ETC franchise, considering that, as heretofore stated, a series of transfers
was involved from 1964 to 1987. And, contrary to PLDT's assertion, the franchise
was not the only property of ETC of meaningful value. The "zero" book value of
31
ETC assets, as reflected in its balance sheet, was plausibly explained as due to
the accumulated depreciation over the years entered for accounting purposes and
was not reflective of the actual value that those assets would command in the
market.
But again, whether ETC has offended against a provision of its franchise, or has
subjected it to misuse or abuse, may more properly be inquired into in quo
warranto proceedings instituted by the State. t is the condition of every franchise
that it is subject to amendment, alteration, or repeal when the common good so
requires (1987 Constitution, Article X, Section 11).
5. %e N%C Interconnection Order
n the provisional authority granted by NTC to ETC, one of the conditions imposed
was that the latter and PLDT were to enter into an interconnection agreement to
be jointly submitted to NTC for approval.
PLDT vehemently opposes interconnection with its own public switched telephone
network. t contends: that while PLDT welcomes interconnections in the
furtherance of public interest, only parties who can establish that they have valid
and subsisting legislative franchises are entitled to apply for a CPCN or provisional
authority, absent which, NTC has no jurisdiction to grant them the CPCN or
interconnection with PLDT; that the 73 telephone systems operating all over the
Philippines have a viability and feasibility independent of any interconnection with
PLDT; that "the NTC is not empowered to compel such a private raid on PLDT's
legitimate income arising out of its gigantic investment;" that "it is not public
interest, but purely a private and selfish interest which will be served by an
interconnection under ETC's terms;" and that "to compel PLDT to interconnect
merely to give viability to a prospective competitor, which cannot stand on its own
feet, cannot be justified in the name of a non-existent public need" (PLDT
Memorandum, pp. 48 and 50).
PLDT cannot justifiably refuse to interconnect.
Rep. Act No. 6849, or the Municipal Telephone Act of 1989, approved on 8
February 1990, mandates interconnection providing as it does that "all domestic
telecommunications carriers or utilities ... shall be interconnected to the public
switch telephone network." Such regulation of the use and ownership of
telecommunications systems is in the exercise of the plenary police power of the
State for the promotion of the general welfare. The 1987 Constitution recognizes
the existence of that power when it provides.
SEC. 6. The use of property bears a social function, and all economic agents shall
contribute to the common good. ndividuals and private groups, including
corporations, cooperatives, and similar collective organizations, shall have the
right to own, establish, and operate economic enterprises, subject to the duty of
the State to promote distributive justice and to intervene when the common good
so demands (Article X).
The interconnection which has been required of PLDT is a form of "intervention"
with property rights dictated by "the objective of government to promote the rapid
expansion of telecommunications services in all areas of the Philippines, ... to
maximize the use of telecommunications facilities available, ... in recognition of the
vital role of communications in nation building ... and to ensure tat all users of te
public telecommunications service ave access to all oter users of te service
werever tey may be witin te Pilippines at an acceptable standard of service
and at reasonable cost" (DOTC Circular No. 90-248). Undoubtedly, the
encompassing objective is the common good. The NTC, as the regulatory agency
of the State, merely exercised its delegated authority to regulate the use of
telecommunications networks when it decreed interconnection.
The importance and emphasis given to interconnection dates back to Ministry
Circular No. 82-81, dated 6 December 1982, providing:
Sec. 1. That the government encourages the provision and operation of public
mobile telephone service within local sub-base stations, particularly, in the highly
commercialized areas;
Sec. 5. That, in the event the authority to operate said service be granted to other
applicants, other than the franchise holder, the franchise operator shall be under
obligation to enter into an agreement with the domestic telephone network, under
an interconnection agreement;
Department of Transportation and Communication (DOTC) Circular No. 87-188,
issued in 1987, also decrees:
12. All public communications carriers shall interconnect their facilities pursuant to
comparatively efficient interconnection (CE) as defined by the NTC in the interest
of economic efficiency.
The sharing of revenue was an additional feature considered in DOTC Circular No.
90-248, dated 14 June 1990, laying down the "Policy on nterconnection and
Revenue Sharing by Public Communications Carriers," thus:
WHEREAS, it is the objective of government to promote the rapid expansion of
telecommunications services in all areas of the Philippines;
WHEREAS, there is a need to maximize the use of telecommunications facilities
available and encourage investment in telecommunications infrastructure by
suitably qualified service providers;
WHEREAS, in recognition of the vital role of communications in nation building,
there is a need to ensure that all users of the public telecommunications service
have access to all other users of the service wherever they may be within the
Philippines at an acceptable standard of service and at reasonable cost.
WHEREFORE, ... the following Department policies on interconnection and
revenue sharing are hereby promulgated:
1. All facilities offering public telecommunication services shall be interconnected
into the nationwide telecommunications network/s.
xxx xxx xxx
4. The interconnection of networks shall be effected in a fair and non-
discriminatory manner and within the shortest time-frame practicable.
5. The precise points of interface between service operators shall be as defined by
the NTC; and the apportionment of costs and division of revenues resulting from
interconnection of telecommunications networks shall be as approved and/or
prescribed by the NTC.
xxx xxx xxx
Since then, the NTC, on 12 July 1990, issued Memorandum Circular No. 7-13-90
prescribing the "Rules and Regulations Governing the nterconnection of Local
32
Telephone Exchanges and Public Calling Offices with the Nationwide
Telecommunications Network/s, the Sharing of Revenue Derived Therefrom, and
for Other Purposes."
The NTC order to interconnect allows the parties themselves to discuss and agree
upon the specific terms and conditions of the interconnection agreement instead of
the NTC itself laying down the standards of interconnection which it can very well
impose. Thus it is that PLDT cannot justifiably claim denial of clue process. t has
been heard. t will continue to be heard in the main proceedings. t will surely
heard in the negotiations concerning the interconnection agreement.
As disclosed during the hearing, the interconnection sought by ETC is by no
means a "parasitic dependence" on PLDT. The ETC system can operate on its
own even without interconnection, but it will be limited to its own subscribers. What
interconnection seeks to accomplish is to enable the system to reach out to the
greatest number of people possible in line with governmental policies laid down.
Cellular phones can access PLDT units and vice versa in as wide an area as
attainable. With the broader reach, public interest and convenience will be better
served. To be sure, ETC could provide no mean competition (although PLDT
maintains that it has nothing to fear from the "innocuous interconnection"), and eat
into PLDT's own toll revenue cream PLDT revenue," in its own words), but all for
the eventual benefit of all that the system can reach.
6. Ultimate Considerations
The decisive consideration are public need, public interest, and the common good.
Those were the overriding factors which motivated NTC in granting provisional
authority to ETC. Article , Section 24 of the 1987 Constitution, recognizes the
vital role of communication and information in nation building. t is likewise a State
policy to provide the environment for the emergence of communications structures
suitable to the balanced flow of information into, out of, and across the country
(Article XV, Section 10, Ibid.). A modern and dependable communications
network rendering efficient and reasonably priced services is also indispensable
for accelerated economic recovery and development. To these public and national
interests, public utility companies must bow and yield.
Despite the fact that there is a virtual monopoly of the telephone system in the
country at present. service is sadly inadequate. Customer demands are hardly
met, whether fixed or mobile. There is a unanimous cry to hasten the development
of a modern, efficient, satisfactory and continuous telecommunications service not
only in Metro Manila but throughout the archipelago. The need therefor was
dramatically emphasized by the destructive earthquake of 16 July 1990. t may be
that users of the cellular mobile telephone would initially be limited to a few and to
highly commercialized areas. However, it is a step in the right direction towards the
enhancement of the telecommunications infrastructure, the expansion of
telecommunications services in, hopefully, all areas of the country, with chances of
complete disruption of communications minimized. t will thus impact on, the total
development of the country's telecommunications systems and redound to the
benefit of even those who may not be able to subscribe to ETC.
Free competition in the industry may also provide the answer to a much-desired
improvement in the quality and delivery of this type of public utility, to improved
technology, fast and handy mobile service, and reduced user dissatisfaction. After
all, neither PLDT nor any other public utility has a constitutional right to a
monopoly position in view of the Constitutional proscription that no franchise
certificate or authorization shall be exclusive in character or shall last longer than
fifty (50) years (ibid., Section 11; Article XV Section 5, 1973 Constitution; Article
XV, Section 8, 1935 Constitution). Additionally, the State is empowered to decide
whether public interest demands that monopolies be regulated or prohibited (1987
Constitution. Article X, Section 19).
WHEREFORE, finding no grave abuse of discretion, tantamount to lack of or
excess of jurisdiction, on the part of the National Telecommunications Commission
in issuing its challenged Orders of 12 December 1988 and 8 May 1989 in NTC
Case No. 87-39, this Petition is DSMSSED for lack of merit. The Temporary
Restraining Order heretofore issued is LFTED. The bond issued as a condition for
the issuance of said restraining Order is declared forfeited in favor of private
respondent Express Telecommunications Co., nc. Costs against petitioner.
SO ORDERED.
Paras, Feliciano, Padilla, Sarmiento, Cortes, Grio-quino and Regalado, JJ.,
concur.
Republic of the Philippines
SUPREME COURT
Manila
THRD DVSON

G.R. No. L-60077 January 18, 1991
NATIONAL POWER CORPORATION, petitioner,
vs.
SPS. MISERICORDIA GUTIERREZ and RICARDO MALIT and THE
HONORABLE COURT OF APPEALS,respondents.
Pedro S. abu for private respondents.

BIDIN, p
This is a petition for review on certiorari filed by the National Power Corporation
(NPC) seeking the reversal or modification of the March 9, 1986 Decision of the
Court of Appeals in CA G.R. No. 54291-R entitled "National Power Corporation v.
Sps. Misericordia Gutierrez and Ricardo Malit", affirming the December 4, 1972
Decision of the then Court of First nstance of Pampanga, Fifth Judicial District,
Branch , in Civil Case No. 2709, entitledNational Power Corporation v. Matias
Cruz, et al.
The undisputed facts of the case, as found by the Court of Appeals, are as follows:
Plaintiff National Power Corporation, a government owned and controlled entity, in
accordance with Commonwealth Act No. 120, is invested with the power of
eminent domain for the purpose of pursuing its objectives, which among others is
the construction, operation, and maintenance of electric transmission lines for
distribution throughout the Philippines. For the construction of its 230 KV Mexico-
Limay transmission lines, plaintiff's lines have to pass the lands belonging to
defendants Matias Cruz, Heirs of Natalia Paule and spouses Misericordia
33
Gutierrez and Ricardo Malit covered by tax declarations Nos. 907, 4281 and 7582,
respectively.
Plaintiff initiated negotiations for the acquisition of right of way easements over the
aforementioned lots for the construction of its transmission lines but unsuccessful
in this regard, said corporation was constrained to file eminent domain
proceedings against the herein defendants on January 20, 1965.
Upon filing of the corresponding complaint, plaintiff corporation deposited the
amount of P973.00 with the Provincial Treasurer of Pampanga, tendered to cover
the provisional value of the land of the defendant spouses Ricardo Malit and
Misericordia Gutierrez. And by virtue of which, the plaintiff corporation was placed
in possession of the property of the defendant spouses so it could immediately
proceed with the construction of its Mexico-Limay 230 KV transmission line. n this
connection, by the trial court's order of September 30, 1965, the defendant
spouses were authorized to withdraw the fixed provisional value of their land in the
sum of P973.00.
The only controversy existing between the parties litigants is the reasonableness
and adequacy of the disturbance or compensation fee of the expropriated
properties.
Meanwhile, for the purpose of determining the fair and just compensation due the
defendants, the court appointed three commissioners, comprised of one
representative of the plaintiff, one for the defendants and the other from the court,
who then were empowered to receive evidence, conduct ocular inspection of the
premises, and thereafter, prepare their appraisals as to the fair and just
compensation to be paid to the owners of the lots. Hearings were consequently
held before said commissioners and during their hearings, the case of defendant
Heirs of Natalia Paule was amicably settled by virtue of a Right of Way Grant (Exh.
C) executed by Guadalupe Sangalang for herself and in behalf of her co-heirs in
favor of the plaintiff corporation. The case against Matias Cruz was earlier decided
by the court, thereby leaving only the case against the defendant spouses Ricardo
Malit and Misericordia Gutierrez still to be resolved. Accordingly, the
commissioners submitted their individual reports. The commissioner for the plaintiff
corporation recommended the following:
. . . that plaintiff be granted right of way easement over the 760 square meters of
the defendants Malit and Gutierrez land for plaintiff transmission line upon
payment of an easement fee of P1.00 therefor. . . . (Annex M)
The commissioner for the defendant spouses recommended the following:
. . . that Mr. and Mrs. Ricardo Malit be paid as disturbance compensation the
amount of P10.00 sq. meter or the total amount of P7,600.00' (Annex K)
The Court's commissioner recommended the following:
. . . the payment of Five (P 5.OO) Pesos per square meter of the area covered by
the Right-of-way to be granted, . . .(Annex L)
The plaintiff corporation urged the Court that the assessment as recommended by
their commissioner be the one adopted. Defendant spouses, however, dissented
and objected to the price recommended by both the representative of the court
and of the plaintiff corporation.
With these reports submitted by the three commissioners and on the evidence
adduced by the defendants as well as the plaintiff for the purpose of proving the
fair market value of the property sought to be expropriated, the lower court
rendered a decision the dispositive portion of which reads as follows:
WHEREFORE, responsive to the foregoing considerations, judgment is hereby
rendered ordering plaintiff National Power Corporation to pay defendant spouses
Ricardo Malit and Misericordia Gutierrez the sum of P10.00 per square meter as
the fair and reasonable compensation for the right-of-way easement of the affected
area, which is 760 squares, or a total sum of P7,600.00 and P800.00 as attorney's
fees' (Record on Appeal, p. 83)
Dissatisfied with the decision, the plaintiff corporation filed a motion for
reconsideration which was favorably acted upon by the lower court, and in an
order dated June 10, 1973, it amended its previous decision in the following tenor:
On the basis of an ocular inspection made personally by the undersigned, this
court finally classified the land of the spouses Ricardo Malit and Misericordia to be
partly commercial and partly agricultural, for which reason the amount of P10.00
per sq. meter awarded in the decision of December 4,1972 is hereby reduced to
P5.00 per square meter as the fair and reasonable market value of the 760 square
meters belonging to the said spouses.
There being no claim and evidence for attorney's fees, the amount of P800.00
awarded as attorney's fees, in the decision of December 4, 1972 is hereby
reconsidered and set aside. (Annex S)
Still not satisfied, an appeal was filed by petitioner (NPC) with the Court of Appeals
but respondent Court of Appeals in its March 9, 1982, sustained the trial court, as
follows:
WHEREFORE, finding no reversible error committed by the court a quo, the
appealed judgment is hereby affirmed with costs against the plaintiff-appellant.
Hence, the instant petition.
The First Division of this Court gave due course to the petition and required both
parties to submit their respective memoranda (Resolution of January 12, 1983). t
also noted in an internal resolution of August 17, 1983 that petitioner flied its
memorandum while the respondents failed to file their memorandum within the
period which expired on February 24,1983; hence, the case was considered
submitted for decision.
The sole issue raised by petitioner is
WHETHER PETTONER SHOULD BE MADE TO PAY SMPLE EASEMENT FEE
OR FULL COMPENSATON FOR THE LAND TRAVERSED BY TS
TRANSMSSON LNES.
t is the contention of petitioner that the Court of Appeals committed gross error by
adjudging the petitioner liable for the payment of the full market value of the land
traversed by its transmission lines, and that it overlooks the undeniable fact that a
simple right-of-way easement (for the passage of transmission lines) transmits no
rights, except that of the easement. Full ownership is retained by the private
respondents and they are not totally deprived of the use of the land. They can
continue planting the same agricultural crops, except those that would result in
34
contact with the wires. On this premise, petitioner submits that if full market value
is required, then full transfer of ownership is only the logical equivalent.
The petition is devoid of merit. The resolution of this case hinges on the
determination of whether the acquisition of a mere right-of-way is an exercise of
the power of eminent domain contemplated by law.
The trial court's observation shared by the appellate court show that ". . . While it is
true that plaintiff are (sic) only after a right-of-way easement, it nevertheless
perpetually deprives defendants of their proprietary rights as manifested by the
imposition by the plaintiff upon defendants that below said transmission lines no
plant higher than three (3) meters is allowed. Furthermore, because of the high-
tension current conveyed through said transmission lines, danger to life and limbs
that may be caused beneath said wires cannot altogether be discounted, and to
cap it all plaintiff only pays the fee to defendants once, while the latter shall
continually pay the taxes due on said affected portion of their property."
The foregoing facts considered, the acquisition of the right-of-way easement falls
within the purview of the power of eminent domain. Such conclusion finds support
in similar cases of easement of right-of-way where the Supreme Court sustained
the award of just compensation for private property condemned for public use
(See National Power Corporation vs. Court of Appeals, 129 SCRA 665, 1984;
Garcia vs. Court of Appeals, 102 SCRA 597,1981). %e Supreme Court, in
Republic of te Pilippines vs. PL%, thus held that:
Normally, of course, the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated property; but no
cogent reason appears why said power may not be availed of to impose only a
burden upon the owner of condemned property, without loss of title and
possession. t is unquestionable that real property may, through expropriation, be
subjected to an easement of right-of-way.
n the case at bar, the easement of right-of-way is definitely a taking under the
power of eminent domain. Considering the nature and effect of the installation of
the 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC
against the use of the land for an indefinite period deprives private respondents of
its ordinary use.
For these reasons, the owner of the property expropriated is entitled to a just
compensation, which should be neither more nor less, whenever it is possible to
make the assessment, than the money equivalent of said property. Just
compensation as always been understood to be te just and complete equivalent
of te loss wic te owner of te ting expropriated as to suffer by reason of te
expropriation (Province of Tayabas vs. Perez, 66 Phil. 467 [1938]; Assoc. of Small
Land Owners of the Phils., nc. vs. Secretary of Agrarian Reform, G.R. No. 78742;
Acuna vs. Arroyo, G.R. No. 79310; Pabrico vs. Juico, G.R. No. 79744; Manaay v.
Juico, G.R. No. 79777,14 July 1989, 175 SCRA 343 [1989]). The price or value of
the land and its character at the time it was taken by the Government are the
criteria for determining just compensation (National Power Corp. v. Court of
Appeals, 129 SCRA 665, [1984]). The above price refers to the market value of the
land which may be the full market value thereof. According to private respondents,
the market value of their lot is P50.00 per square meter because the said lot is
adjacent to the National and super highways of Gapan, Nueva Ecija and Olongapo
City.
Private respondents recognize the inherent power of eminent domain being
exercised by NPC when it finally consented to the expropriation of the said portion
of their land, subject however to payment of just compensation. No matter how
laudable NPC's purpose is, for which expropriation was sought, it is just and
equitable that they be compensated the fair and full equivalent for the loss
sustained, which is the measure of the indemnity, not whatever gain would accrue
to the expropriating entity (EPZA v. Dulay, 149 SCRA 305 [1987]; Mun. of Daet v.
Court of Appeals, 93 SCRA 503 (1979]).
t appearing that the trial court did not act capriciously and arbitrarily in setting the
price of P5.00 per square meter of the affected property, the said award is proper
and not unreasonable.
On the issue of ownership being claimed by petitioner in the event that the price of
P5.00 per square meter be sustained, it is well settled that an issue which has not
been raised in the Court a quo cannot be raised for the first time on appeal as it
would be offensive to the basic rules of fair play, justice and due process . . .
(Filipino Merchants v. Court of Appeals, G.R. No. 85141, November 8, 1989, 179
SCRA 638; Commissioner of nternal Revenue v. Procter and Gamble Philippines
Manufacturing Corporation, 160 SCRA 560 [1988]; Commissioner of nternal
Revenue v. Wander Philippines, nc., 160 SCRA 573 1988]). Petitioner only sought
an easement of right-of-way, and as earlier discussed, the power of eminent
domain may be exercised although title was not transferred to the expropriator.
WHEREFORE, the assailed decision of the Court of Appeals is AFFRMED.
SO ORDERED.
Fernan, C.J. and Feliciano, J., concur.
Gutierrez, Jr., J., I concur but believe payment sould be P10.00 a sq. meter at te
very least.
Republic of the Philippines
SUPREME COURT
Manila
FRST DVSON
G.R. No. L-34915 June 24, 1983
CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON
CITY, petitioners,
vs.
HON. JUDGE VICENTE G. ERICTA as Judge of the Court of First Instance of
RizaI, Quezon City, Branch XVIII; HIMLAYANG PILIPINO, INC., respondents.
City Fiscal for petitioners.
Manuel Villaruel, Jr. and Feliciano %umale for respondents.

GUTIERREZ, JR.,
This is a petition for review which seeks the reversal of the decision of the Court of
First nstance of Rizal, Branch XV declaring Section 9 of Ordinance No. 6118, S-
64, of the Quezon City Council null and void.
33
Section 9 of Ordinance No. 6118, S-64, entitled "ORDNANCE REGULATNG THE
ESTABLSHMENT, MANTENANCE AND OPERATON OF PRVATE MEMORAL
TYPE CEMETERY OR BURAL GROUND WTHN THE JURSDCTON OF
QUEZON CTY AND PROVDNG PENALTES FOR THE VOLATON THEREOF"
provides:
Sec. 9. At least six (6) percent of the total area of the memorial park cemetery shall
be set aside for charity burial of deceased persons who are paupers and have
been residents of Quezon City for at least 5 years prior to their death, to be
determined by competent City Authorities. The area so designated shall
immediately be developed and should be open for operation not later than six
months from the date of approval of the application.
For several years, the aforequoted section of the Ordinance was not enforced by
city authorities but seven years after the enactment of the ordinance, the Quezon
City Council passed the following resolution:
RESOLVE by te council of Quezon assembled, to request, as it does hereby
request the City Engineer, Quezon City, to stop any further selling and/or
transaction of memorial park lots in Quezon City where the owners thereof have
failed to donate the required 6% space intended for paupers burial.
Pursuant to this petition, the Quezon City Engineer notified respondent Himlayang
Pilipino, nc. in writing that Section 9 of Ordinance No. 6118, S-64 would be
enforced
Respondent Himlayang Pilipino reacted by filing with the Court of First nstance of
Rizal Branch XV at Quezon City, a petition for declaratory relief, prohibition and
mandamus with preliminary injunction (Sp. Proc. No. Q-16002) seeking to annul
Section 9 of the Ordinance in question The respondent alleged that the same is
contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and
the Revised Administrative Code.
There being no issue of fact and the questions raised being purely legal both
petitioners and respondent agreed to the rendition of a judgment on the pleadings.
The respondent court, therefore, rendered the decision declaring Section 9 of
Ordinance No. 6118, S-64 null and void.
A motion for reconsideration having been denied, the City Government and City
Council filed the instant petition.
Petitioners argue that the taking of the respondent's property is a valid and
reasonable exercise of police power and that the land is taken for a public use as it
is intended for the burial ground of paupers. They further argue that the Quezon
City Council is authorized under its charter, in the exercise of local police power, "
to make such further ordinances and resolutions not repugnant to law as may be
necessary to carry into effect and discharge the powers and duties conferred by
this Act and such as it shall deem necessary and proper to provide for the health
and safety, promote the prosperity, improve the morals, peace, good order,
comfort and convenience of the city and the inhabitants thereof, and for the
protection of property therein."
On the other hand, respondent Himlayang Pilipino, nc. contends that the taking or
confiscation of property is obvious because the questioned ordinance permanently
restricts the use of the property such that it cannot be used for any reasonable
purpose and deprives the owner of all beneficial use of his property.
The respondent also stresses that the general welfare clause is not available as a
source of power for the taking of the property in this case because it refers to "the
power of promoting the public welfare by restraining and regulating the use of
liberty and property." The respondent points out that if an owner is deprived of his
property outright under the State's police power, the property is generally not taken
for public use but is urgently and summarily destroyed in order to promote the
general welfare. The respondent cites the case of a nuisance per se or the
destruction of a house to prevent the spread of a conflagration.
We find the stand of the private respondent as well as the decision of the
respondent Judge to be well-founded. We quote with approval the lower court's
ruling which declared null and void Section 9 of the questioned city ordinance:
The issue is: s Section 9 of the ordinance in question a valid exercise of the police
power?
An examination of the Charter of Quezon City (Rep. Act No. 537), does not reveal
any provision that would justify the ordinance in question except the provision
granting police power to the City. Section 9 cannot be justified under the power
granted to Quezon City to tax, fix the license fee, and regulatesuch other business,
trades, and occupation as may be established or practised in the City.'
(Subsections 'C', Sec. 12, R.A. 537).
The power to regulate does not include the power to prohibit (People vs. Esguerra,
81 PhiL 33, Vega vs. Municipal Board of loilo, L-6765, May 12, 1954; 39 N.J. Law,
70, Mich. 396). A fortiori, the power to regulate does not include the power to
confiscate. The ordinance in question not only confiscates but also prohibits the
operation of a memorial park cemetery, because under Section 13 of said
ordinance, 'Violation of the provision thereof is punishable with a fine and/or
imprisonment and that upon conviction thereof the permit to operate and maintain
a private cemetery shall be revoked or cancelled.' The confiscatory clause and the
penal provision in effect deter one from operating a memorial park cemetery.
Neither can the ordinance in question be justified under sub- section "t", Section 12
of Republic Act 537 which authorizes the City Council to-
'prohibit the burial of the dead within the center of population of the city and
provide for their burial in such proper place and in such manner as the council may
determine, subject to the provisions of the general law regulating burial grounds
and cemeteries and governing funerals and disposal of the dead.' (Sub-sec. (t),
Sec. 12, Rep. Act No. 537).
There is nothing in the above provision which authorizes confiscation or as
euphemistically termed by the respondents, 'donation'
We now come to the question whether or not Section 9 of the ordinance in
question is a valid exercise of police power. The police power of Quezon City is
defined in sub-section 00, Sec. 12, Rep. Act 537 which reads as follows:
(00) To make such further ordinance and regulations not repugnant to law as may
be necessary to carry into effect and discharge the powers and duties conferred by
this act and such as it shall deem necessary and proper to provide for the health
and safety, promote, the prosperity, improve the morals, peace, good order,
36
comfort and convenience of the city and the inhabitants thereof, and for the
protection of property therein; and enforce obedience thereto with such lawful fines
or penalties as the City Council may prescribe under the provisions of subsection
(jj) of this section.
We start the discussion with a restatement of certain basic principles. Occupying
the forefront in the bill of rights is the provision which states that 'no person shall
be deprived of life, liberty or property without due process of law' (Art. ll, Section 1
subparagraph 1, Constitution).
On the other hand, there are three inherent powers of government by which the
state interferes with the property rights, namely-. (1) police power, (2) eminent
domain, (3) taxation. These are said to exist independently of the Constitution as
necessary attributes of sovereignty.
Police power is defined by Freund as 'the power of promoting the public welfare by
restraining and regulating the use of liberty and property' (Quoted in Political Law
by Tanada and Carreon, V-11, p. 50). t is usually exerted in order to merely
regulate the use and enjoyment of property of the owner. f he is deprived of his
property outright, it is not taken for public use but rather to destroy in order to
promote the general welfare. n police power, the owner does not recover from the
government for injury sustained in consequence thereof (12 C.J. 623). t has been
said that police power is the most essential of government powers, at times the
most insistent, and always one of the least limitable of the powers of government
(Ruby vs. Provincial Board, 39 PhiL 660; chong vs. Hernandez, 1,7995, May 31,
1957). This power embraces the whole system of public regulation (U.S. vs.
Linsuya Fan, 10 PhiL 104). The Supreme Court has said that police power is so
far-reaching in scope that it has almost become impossible to limit its sweep. As it
derives its existence from the very existence of the state itself, it does not need to
be expressed or defined in its scope. Being coextensive with self-preservation and
survival itself, it is the most positive and active of all governmental processes, the
most essential insistent and illimitable Especially it is so under the modern
democratic framework where the demands of society and nations have multiplied
to almost unimaginable proportions. The field and scope of police power have
become almost boundless, just as the fields of public interest and public welfare
have become almost all embracing and have transcended human foresight. Since
the Courts cannot foresee the needs and demands of public interest and welfare,
they cannot delimit beforehand the extent or scope of the police power by which
and through which the state seeks to attain or achieve public interest and welfare.
(chong vs. Hernandez, L-7995, May 31, 1957).
The police power being the most active power of the government and the due
process clause being the broadest station on governmental power, the conflict
between this power of government and the due process clause of the Constitution
is oftentimes inevitable.
t will be seen from the foregoing authorities that police power is usually exercised
in the form of mere regulation or restriction in the use of liberty or property for the
promotion of the general welfare. t does not involve the taking or confiscation of
property with the exception of a few cases where there is a necessity to confiscate
private property in order to destroy it for the purpose of protecting the peace and
order and of promoting the general welfare as for instance, the confiscation of an
illegally possessed article, such as opium and firearms.
t seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of
Quezon City is not a mere police regulation but an outright confiscation. t deprives
a person of his private property without due process of law, nay, even without
compensation.
n sustaining the decision of the respondent court, we are not unmindful of the
heavy burden shouldered by whoever challenges the validity of duly enacted
legislation whether national or local As early as 1913, this Court ruled in Case v.
oard of Healt (24 PhiL 250) that the courts resolve every presumption in favor of
validity and, more so, where the ma corporation asserts that the ordinance was
enacted to promote the common good and general welfare.
n the leading case of Ermita-Malate Hotel and Motel Operators ssociation Inc. v.
City Mayor of Manila (20 SCRA 849) the Court speaking through the then
Associate Justice and now Chief Justice Enrique M. Fernando stated
Primarily what calls for a reversal of such a decision is the a of any evidence to
offset the presumption of validity that attaches to a statute or ordinance. As was
expressed categorically by Justice Malcolm 'The presumption is all in favor of
validity. ... The action of the elected representatives of the people cannot be lightly
set aside. The councilors must, in the very nature of things, be familiar with the
necessities of their particular ... municipality and with all the facts and lances which
surround the subject and necessitate action. The local legislative body, by
enacting the ordinance, has in effect given notice that the regulations are essential
to the well-being of the people. ... The Judiciary should not lightly set aside
legislative action when there is not a clear invasion of personal or property rights
under the guise of police regulation. (U.S. v. Salaveria (1918], 39 Phil. 102, at p.
111. There was an affirmation of the presumption of validity of municipal ordinance
as announced in the leading Salaveria decision in Ebona v. Daet, [1950]85 Phil.
369.)
We have likewise considered the principles earlier stated in Case v. Board of
Health supra :
... Under the provisions of municipal charters which are known as the general
welfare clauses, a city, by virtue of its police power, may adopt ordinances to the
peace, safety, health, morals and the best and highest interests of the municipality.
t is a well-settled principle, growing out of the nature of well-ordered and society,
that every holder of property, however absolute and may be his title, holds it under
the implied liability that his use of it shall not be injurious to the equal enjoyment of
others having an equal right to the enjoyment of their property, nor injurious to the
rights of the community. An property in the state is held subject to its general
regulations, which are necessary to the common good and general welfare. Rights
of property, like all other social and conventional rights, are subject to such
reasonable limitations in their enjoyment as shall prevent them from being
injurious, and to such reasonable restraints and regulations, established by law, as
the legislature, under the governing and controlling power vested in them by the
constitution, may think necessary and expedient. The state, under the police
power, is possessed with plenary power to deal with all matters relating to the
37
general health, morals, and safety of the people, so long as it does not contravene
any positive inhibition of the organic law and providing that such power is not
exercised in such a manner as to justify the interference of the courts to prevent
positive wrong and oppression.
but find them not applicable to the facts of this case.
There is no reasonable relation between the setting aside of at least six (6) percent
of the total area of an private cemeteries for charity burial grounds of deceased
paupers and the promotion of health, morals, good order, safety, or the general
welfare of the people. The ordinance is actually a taking without compensation of a
certain area from a private cemetery to benefit paupers who are charges of the
municipal corporation. nstead of building or maintaining a public cemetery for this
purpose, the city passes the burden to private cemeteries.
The expropriation without compensation of a portion of private cemeteries is not
covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City
which empowers the city council to prohibit the burial of the dead within the center
of population of the city and to provide for their burial in a proper place subject to
the provisions of general law regulating burial grounds and cemeteries. When the
Local Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q)
that a Sangguniang panlungsod may "provide for the burial of the dead in such
place and in such manner as prescribed by law or ordinance" it simply authorizes
the city to provide its own city owned land or to buy or expropriate private
properties to construct public cemeteries. This has been the law and practise in
the past. t continues to the present. Expropriation, however, requires payment of
just compensation. The questioned ordinance is different from laws and
regulations requiring owners of subdivisions to set aside certain areas for streets,
parks, playgrounds, and other public facilities from the land they sell to buyers of
subdivision lots. The necessities of public safety, health, and convenience are very
clear from said requirements which are intended to insure the development of
communities with salubrious and wholesome environments. The beneficiaries of
the regulation, in turn, are made to pay by the subdivision developer when
individual lots are sold to home-owners.
As a matter of fact, the petitioners rely solely on the general welfare clause or on
implied powers of the municipal corporation, not on any express provision of law
as statutory basis of their exercise of power. The clause has always received
broad and liberal interpretation but we cannot stretch it to cover this particular
taking. Moreover, the questioned ordinance was passed after Himlayang Pilipino,
nc. had incorporated. received necessary licenses and permits and commenced
operating. The sequestration of six percent of the cemetery cannot even be
considered as having been impliedly acknowledged by the private respondent
when it accepted the permits to commence operations.
WHEREFORE, the petition for review is hereby DSMSSED. The decision of the
respondent court is affirmed.
SO ORDERED.
%eeankee (Cairman), Melencio-Herrera, Plana, Vasquez and Relova, JJ.,
concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-20620 August 15, 1974
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
CARMEN M. VDA. DE CASTELLVI, ET AL., defendants-appellees.
Office of te Solicitor General for plaintiff-appellant.
C.. Mendoza & . V. Raquiza and lberto Cacnio & ssociates for defendant-
appellees.

ZALDIVAR, p
Appeal from the decision of the Court of First nstance of Pampanga in its Civil
Case No. 1623, an expropriation proceeding.
Plaintiff-appellant, the Republic of the Philippines, (hereinafter referred to as the
Republic) filed, on June 26, 1959, a complaint for eminent domain against
defendant-appellee, Carmen M. Vda. de Castellvi, judicial administratrix of the
estate of the late Alfonso de Castellvi (hereinafter referred to as Castellvi), over a
parcel of land situated in the barrio of San Jose, Floridablanca, Pampanga,
described as follows:
A parcel of land, Lot No. 199-B Bureau of Lands Plan Swo 23666. Bounded on the
NE by Maria Nieves Toledo-Gozun; on the SE by national road; on the SW by AFP
reservation, and on the NW by AFP reservation. Containing an area of 759,299
square meters, more or less, and registered in the name of Alfonso Castellvi under
TCT No. 13631 of the Register of Pampanga ...;
and against defendant-appellee Maria Nieves Toledo Gozun (hereinafter referred
to as Toledo-Gozun over two parcels of land described as follows:
A parcel of land (Portion Lot Blk-1, Bureau of Lands Plan Psd, 26254. Bounded on
the NE by Lot 3, on the SE by Lot 3; on the SW by Lot 1-B, Blk. 2 (equivalent to
Lot 199-B Swo 23666; on the NW by AFP military reservation. Containing an area
of 450,273 square meters, more or less and registered in the name of Maria
Nieves Toledo-Gozun under TCT No. 8708 of the Register of Deeds of Pampanga.
..., and
A parcel of land (Portion of lot 3, Blk-1, Bureau of Lands Plan Psd 26254. Bounded
on the NE by Lot No. 3, on the SE by school lot and national road, on the SW by
Lot 1-B Blk 2 (equivalent to Lot 199-B Swo 23666), on the NW by Lot 1-B, Blk-1.
Containing an area of 88,772 square meters, more or less, and registered in the
name of Maria Nieves Toledo Gozun under TCT No. 8708 of the Register of
Deeds of Pampanga, ....
n its complaint, the Republic alleged, among other things, that the fair market
value of the above-mentioned lands, according to the Committee on Appraisal for
the Province of Pampanga, was not more than P2,000 per hectare, or a total
market value of P259,669.10; and prayed, that the provisional value of the lands
be fixed at P259.669.10, that the court authorizes plaintiff to take immediate
38
possession of the lands upon deposit of that amount with the Provincial Treasurer
of Pampanga; that the court appoints three commissioners to ascertain and report
to the court the just compensation for the property sought to be expropriated, and
that the court issues thereafter a final order of condemnation.
On June 29, 1959 the trial court issued an order fixing the provisional value of the
lands at P259,669.10.
n her "motion to dismiss" filed on July 14, 1959, Castellvi alleged, among other
things, that the land under her administration, being a residential land, had a fair
market value of P15.00 per square meter, so it had a total market value of
P11,389,485.00; that the Republic, through the Armed Forces of the Philippines,
particularly the Philippine Air Force, had been, despite repeated demands, illegally
occupying her property since July 1, 1956, thereby preventing her from using and
disposing of it, thus causing her damages by way of unrealized profits. This
defendant prayed that the complaint be dismissed, or that the Republic be ordered
to pay her P15.00 per square meter, or a total of P11,389,485.00, plus interest
thereon at 6% per annum from July 1, 1956; that the Republic be ordered to pay
her P5,000,000.00 as unrealized profits, and the costs of the suit.
By order of the trial court, dated August, 1959, Amparo C. Diaz, Dolores G. viuda
de Gil, Paloma Castellvi, Carmen Castellvi, Rafael Castellvi, Luis Castellvi,
Natividad Castellvi de Raquiza, Jose Castellvi and Consuelo Castellvi were
allowed to intervene as parties defendants. Subsequently, Joaquin V. Gozun, Jr.,
husband of defendant Nieves Toledo Gozun, was also allowed by the court to
intervene as a party defendant.
After the Republic had deposited with the Provincial Treasurer of Pampanga the
amount of P259,669.10, the trial court ordered that the Republic be placed in
possession of the lands. The Republic was actually placed in possession of the
lands on August 10,
1959.
1

n her "motion to dismiss", dated October 22, 1959, Toledo-Gozun alleged, among
other things, that her two parcels of land were residential lands, in fact a portion
with an area of 343,303 square meters had already been subdivided into different
lots for sale to the general public, and the remaining portion had already been set
aside for expansion sites of the already completed subdivisions; that the fair
market value of said lands was P15.00 per square meter, so they had a total
market value of P8,085,675.00; and she prayed that the complaint be dismissed,
or that she be paid the amount of P8,085,675.00, plus interest thereon at the rate
of 6% per annum from October 13, 1959, and attorney's fees in the amount of
P50,000.00.
ntervenors Jose Castellvi and Consuelo Castellvi in their answer, filed on
February 11, 1960, and also intervenor Joaquin Gozun, Jr., husband of defendant
Maria Nieves Toledo-Gozun, in his motion to dismiss, dated May 27, 1960, all
alleged that the value of the lands sought to be expropriated was at the rate of
P15.00 per square meter.
On November 4, 1959, the trial court authorized the Provincial Treasurer of
Pampanga to pay defendant Toledo-Gozun the sum of P107,609.00 as provisional
value of her lands.
2
On May 16, 1960 the trial Court authorized the Provincial
Treasurer of Pampanga to pay defendant Castellvi the amount of P151,859.80 as
provisional value of the land under her administration, and ordered said defendant
to deposit the amount with the Philippine National Bank under the supervision of
the Deputy Clerk of Court. n another order of May 16, 1960 the trial Court entered
an order of condemnation.
3

The trial Court appointed three commissioners: Atty. Amadeo Yuzon, Clerk of
Court, as commissioner for the court; Atty. Felicisimo G. Pamandanan, counsel of
the Philippine National Bank Branch at Floridablanca, for the plaintiff; and Atty.
Leonardo F. Lansangan, Filipino legal counsel at Clark Air Base, for the
defendants. The Commissioners, after having qualified themselves, proceeded to
the performance of their duties.
On March 15,1961 the Commissioners submitted their report and
recommendation, wherein, after having determined that the lands sought to be
expropriated were residential lands, they recommended unanimously that the
lowest price that should be paid was P10.00 per square meter, for both the lands
of Castellvi and Toledo-Gozun; that an additional P5,000.00 be paid to Toledo-
Gozun for improvements found on her land; that legal interest on the
compensation, computed from August 10, 1959, be paid after deducting the
amounts already paid to the owners, and that no consequential damages be
awarded.
4
The Commissioners' report was objected to by all the parties in the
case by defendants Castellvi and Toledo-Gozun, who insisted that the fair
market value of their lands should be fixed at P15.00 per square meter; and by the
Republic, which insisted that the price to be paid for the lands should be fixed at
P0.20 per square meter.
5

After the parties-defendants and intervenors had filed their respective memoranda,
and the Republic, after several extensions of time, had adopted as its
memorandum its objections to the report of the Commissioners, the trial court, on
May 26, 1961, rendered its decision
6
the dispositive portion of which reads as
follows:
WHEREFORE, taking into account all the foregoing circumstances, and that the
lands are titled, ... the rising trend of land values ..., and the lowered purchasing
power of the Philippine peso, the court finds that the unanimous recommendation
of the commissioners of ten (P10.00) pesos per square meter for the three lots of
the defendants subject of this action is fair and just.
xxx xxx xxx
The plaintiff will pay 6% interest per annum on the total value of the lands of
defendant Toledo-Gozun since (sic) the amount deposited as provisional value
from August 10, 1959 until full payment is made to said defendant or deposit
therefor is made in court.
n respect to the defendant Castellvi, interest at 6% per annum will also be paid by
the plaintiff to defendant Castellvi from July 1, 1956 when plaintiff commenced its
illegal possession of the Castellvi land when the instant action had not yet been
commenced to July 10, 1959 when the provisional value thereof was actually
deposited in court, on the total value of the said (Castellvi) land as herein
adjudged. The same rate of interest shall be paid from July 11, 1959 on the total
value of the land herein adjudged minus the amount deposited as provisional
39
value, or P151,859.80, such interest to run until full payment is made to said
defendant or deposit therefor is made in court. All the intervenors having failed to
produce evidence in support of their respective interventions, said interventions
are ordered dismissed.
The costs shall be charged to the plaintiff.
On June 21, 1961 the Republic filed a motion for a new trial and/or
reconsideration, upon the grounds of newly-discovered evidence, that the decision
was not supported by the evidence, and that the decision was against the law,
against which motion defendants Castellvi and Toledo-Gozun filed their respective
oppositions. On July 8, 1961 when the motion of the Republic for new trial and/or
reconsideration was called for hearing, the Republic filed a supplemental motion
for new trial upon the ground of additional newly-discovered evidence. This motion
for new trial and/or reconsideration was denied by the court on July 12, 1961.
On July 17, 1961 the Republic gave notice of its intention to appeal from the
decision of May 26, 1961 and the order of July 12, 1961. Defendant Castellvi also
filed, on July 17, 1961, her notice of appeal from the decision of the trial court.
The Republic filed various ex-parte motions for extension of time within which to
file its record on appeal. The Republic's record on appeal was finally submitted on
December 6, 1961.
Defendants Castellvi and Toledo-Gozun filed not only a joint opposition to the
approval of the Republic's record on appeal, but also a joint memorandum in
support of their opposition. The Republic also filed a memorandum in support of its
prayer for the approval of its record on appeal. On December 27, 1961 the trial
court issued an order declaring both the record on appeal filed by the Republic,
and the record on appeal filed by defendant Castellvi as having been filed out of
time, thereby dismissing both appeals.
On January 11, 1962 the Republic filed a "motion to strike out the order of
December 27, 1961 and for reconsideration", and subsequently an amended
record on appeal, against which motion the defendants Castellvi and Toledo-
Gozun filed their opposition. On July 26, 1962 the trial court issued an order,
stating that "in the interest of expediency, the questions raised may be properly
and finally determined by the Supreme Court," and at the same time it ordered the
Solicitor General to submit a record on appeal containing copies of orders and
pleadings specified therein. n an order dated November 19, 1962, the trial court
approved the Republic's record on appeal as amended.
Defendant Castellvi did not insist on her appeal. Defendant Toledo-Gozun did not
appeal.
The motion to dismiss the Republic's appeal was reiterated by appellees Castellvi
and Toledo-Gozun before this Court, but this Court denied the motion.
n her motion of August 11, 1964, appellee Castellvi sought to increase the
provisional value of her land. The Republic, in its comment on Castellvi's motion,
opposed the same. This Court denied Castellvi's motion in a resolution dated
October 2,1964.
The motion of appellees, Castellvi and Toledo-Gozun, dated October 6, 1969,
praying that they be authorized to mortgage the lands subject of expropriation, was
denied by this Court or October 14, 1969.
On February 14, 1972, Attys. Alberto Cacnio, and Associates, counsel for the
estate of the late Don Alfonso de Castellvi in the expropriation proceedings, filed a
notice of attorney's lien, stating that as per agreement with the administrator of the
estate of Don Alfonso de Castellvi they shall receive by way of attorney's fees, "the
sum equivalent to ten per centum of whatever the court may finally decide as the
expropriated price of the property subject matter of the case."
---------
Before this Court, the Republic contends that the lower court erred:
1. n finding the price of P10 per square meter of the lands subject of the instant
proceedings as just compensation;
2. n holding that the "taking" of the properties under expropriation commenced
with the filing of this action;
3. n ordering plaintiff-appellant to pay 6% interest on the adjudged value of the
Castellvi property to start from July of 1956;
4. n denying plaintiff-appellant's motion for new trial based on newly discovered
evidence.
n its brief, the Republic discusses the second error assigned as the first issue to
be considered. We shall follow the sequence of the Republic's discussion.
1. n support of the assigned error that the lower court erred in holding that the
"taking" of the properties under expropriation commenced with the filing of the
complaint in this case, the Republic argues that the "taking" should be reckoned
from the year 1947 when by virtue of a special lease agreement between the
Republic and appellee Castellvi, the former was granted the "right and privilege" to
buy the property should the lessor wish to terminate the lease, and that in the
event of such sale, it was stipulated that the fair market value should be as of the
time of occupancy; and that the permanent improvements amounting to more that
half a million pesos constructed during a period of twelve years on the land,
subject of expropriation, were indicative of an agreed pattern of permanency and
stability of occupancy by the Philippine Air Force in the interest of national
Security.
7

Appellee Castellvi, on the other hand, maintains that the "taking" of property under
the power of eminent domain requires two essential elements, to wit: (1) entrance
and occupation by condemn or upon the private property for more than a
momentary or limited period, and (2) devoting it to a public use in such a way as to
oust the owner and deprive him of all beneficial enjoyment of the property. This
appellee argues that in the instant case the first element is wanting, for the
contract of lease relied upon provides for a lease from year to year; that the
second element is also wanting, because the Republic was paying the lessor
Castellvi a monthly rental of P445.58; and that the contract of lease does not grant
the Republic the "right and privilege" to buy the premises "at the value at the time
of occupancy."
8

Appellee Toledo-Gozun did not comment on the Republic's argument in support of
the second error assigned, because as far as she was concerned the Republic
had not taken possession of her lands prior to August 10, 1959.
9

n order to better comprehend the issues raised in the appeal, in so far as the
Castellvi property is concerned, it should be noted that the Castellvi property had
40
been occupied by the Philippine Air Force since 1947 under a contract of lease,
typified by the contract marked Exh. 4-Castellvi, the pertinent portions of which
read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND ENTERED into by and between
NTESTATE ESTATE OF ALFONSO DE CASTELLV, represented by CARMEN
M. DE CASTELLV, Judicial Administratrix ... hereinafter called the LESSOR and
THE REPUBLC OF THE PHLPPNES represented by MAJ. GEN. CALXTO
DUQUE, Chief of Staff of the ARMED FORCES OF THE PHLPPNES,
hereinafter called the LESSEE,
WTNESSETH:
1. For and in consideration of the rentals hereinafter reserved and the mutual
terms, covenants and conditions of the parties, the LESSOR has, and by these
presents does, lease and let unto the LESSEE the following described land
together with the improvements thereon and appurtenances thereof, viz:
Un Terreno, Lote No. 27 del Plano de subdivision Psu 34752, parte de la hacienda
de Campauit, situado en el Barrio de San Jose, Municipio de Floridablanca
Pampanga. ... midiendo una extension superficial de cuatro milliones once mil
cuatro cientos trienta y cinco (4,001,435) [sic] metros cuadrados, mas o menos.
Out of the above described property, 75.93 hectares thereof are actually occupied
and covered by this contract. .
Above lot is more particularly described in TCT No. 1016, province of
Pampanga ...
of which premises, the LESSOR warrants that he/she/they/is/are the registered
owner(s) and with full authority to execute a contract of this nature.
2. The term of this lease shall be for the period beginning July 1, 1952 the date the
premises were occupied by the PHLPPNE AR FORCE, AFP until June 30,
1953, subject to renewal for another year at the option of the LESSEE or unless
sooner terminated by the LESSEE as hereinafter provided.
3. The LESSOR hereby warrants that the LESSEE shall have quiet, peaceful and
undisturbed possession of the demised premises throughout the full term or period
of this lease and the LESSOR undertakes without cost to the LESSEE to eject all
trespassers, but should the LESSOR fail to do so, the LESSEE at its option may
proceed to do so at the expense of the LESSOR. The LESSOR further agrees that
should he/she/they sell or encumber all or any part of the herein described
premises during the period of this lease, any conveyance will be conditioned on
the right of the LESSEE hereunder.
4. The LESSEE shall pay to the LESSOR as monthly rentals under this lease the
sum of FOUR HUNDRED FFTY-FVE PESOS & 58/100 (P455.58) ...
5. The LESSEE may, at any time prior to the termination of this lease, use the
property for any purpose or purposes and, at its own costs and expense make
alteration, install facilities and fixtures and errect additions ... which facilities or
fixtures ... so placed in, upon or attached to the said premises shall be and remain
property of the LESSEE and may be removed therefrom by the LESSEE prior to
the termination of this lease. The LESSEE shall surrender possession of the
premises upon the expiration or termination of this lease and if so required by the
LESSOR, shall return the premises in substantially the same condition as that
existing at the time same were first occupied by the AFP, reasonable and ordinary
wear and tear and damages by the elements or by circumstances over which the
LESSEE has no control excepted: PROVDED, that if the LESSOR so requires the
return of the premises in such condition, the LESSOR shall give written notice
thereof to the LESSEE at least twenty (20) days before the termination of the lease
and provided, further, that should the LESSOR give notice within the time specified
above, the LESSEE shall have the right and privilege to compensate the LESSOR
at the fair value or the equivalent, in lieu of performance of its obligation, if any, to
restore the premises. Fair value is to be determined as the value at the time of
occupancy less fair wear and tear and depreciation during the period of this lease.
6. The LESSEE may terminate this lease at any time during the term hereof by
giving written notice to the LESSOR at least thirty (30) days in advance ...
7. The LESSEE should not be responsible, except under special legislation for any
damages to the premises by reason of combat operations, acts of GOD, the
elements or other acts and deeds not due to the negligence on the part of the
LESSEE.
8. This LEASE AGREEMENT supersedes and voids any and all agreements and
undertakings, oral or written, previously entered into between the parties covering
the property herein leased, the same having been merged herein. This
AGREEMENT may not be modified or altered except by instrument in writing only
duly signed by the parties.
10

t was stipulated by the parties, that "the foregoing contract of lease (Exh. 4,
Castellvi) is 'similar in terms and conditions, including the date', with the annual
contracts entered into from year to year between defendant Castellvi and the
Republic of the Philippines (p. 17, t.s.n., Vol. )".
11
t is undisputed, therefore, that
the Republic occupied Castellvi's land from July 1, 1947, by virtue of the above-
mentioned contract, on a year to year basis (from July 1 of each year to June 30 of
the succeeding year) under the terms and conditions therein stated.
Before the expiration of the contract of lease on June 30, 1956 the Republic
sought to renew the same but Castellvi refused. When the AFP refused to vacate
the leased premises after the termination of the contract, on July 11, 1956,
Castellvi wrote to the Chief of Staff, AFP, informing the latter that the heirs of the
property had decided not to continue leasing the property in question because they
had decided to subdivide the land for sale to the general public, demanding that
the property be vacated within 30 days from receipt of the letter, and that the
premises be returned in substantially the same condition as before occupancy
(Exh. 5 Castellvi). A follow-up letter was sent on January 12, 1957, demanding
the delivery and return of the property within one month from said date (Exh. 6
Castellvi). On January 30, 1957, Lieutenant General Alfonso Arellano, Chief of
Staff, answered the letter of Castellvi, saying that it was difficult for the army to
vacate the premises in view of the permanent installations and other facilities
worth almost P500,000.00 that were erected and already established on the
property, and that, there being no other recourse, the acquisition of the property by
means of expropriation proceedings would be recommended to the President
(Exhibit "7" Castellvi).
41
Defendant Castellvi then brought suit in the Court of First nstance of Pampanga,
in Civil Case No. 1458, to eject the Philippine Air Force from the land. While this
ejectment case was pending, the Republic instituted these expropriation
proceedings, and, as stated earlier in this opinion, the Republic was placed in
possession of the lands on August 10, 1959, On November 21, 1959, the Court of
First nstance of Pampanga, dismissed Civil Case No. 1458, upon petition of the
parties, in an order which, in part, reads as follows:
1. Plaintiff has agreed, as a matter of fact has already signed an agreement with
defendants, whereby she has agreed to receive the rent of the lands, subject
matter of the instant case from June 30, 1966 up to 1959 when the Philippine Air
Force was placed in possession by virtue of an order of the Court upon depositing
the provisional amount as fixed by the Provincial Appraisal Committee with the
Provincial Treasurer of Pampanga;
2. That because of the above-cited agreement wherein the administratrix decided
to get the rent corresponding to the rent from 1956 up to 1959 and considering that
this action is one of illegal detainer and/or to recover the possession of said land
by virtue of non-payment of rents, the instant case now has become moot and
academic and/or by virtue of the agreement signed by plaintiff, she has waived her
cause of action in the above-entitled case.
12

The Republic urges that the "taking " of Castellvi's property should be deemed as
of the year 1947 by virtue of afore-quoted lease agreement. n American
Jurisprudence, Vol. 26, 2nd edition, Section 157, on the subject of "Eminent
Domain, we read the definition of "taking" (in eminent domain) as follows:
Taking' under the power of eminent domain may be defined generally as entering
upon private property for more than a momentary period, and, under the warrant or
color of legal authority, devoting it to a public use, or otherwise informally
appropriating or injuriously affecting it in such a way as substantially to oust the
owner and deprive him of all beneficial enjoyment thereof.
13

Pursuant to the aforecited authority, a number of circumstances must be present in
the "taking" of property for purposes of eminent domain.
First, the expropriator must enter a private property. This circumstance is present
in the instant case, when by virtue of the lease agreement the Republic, through
the AFP, took possession of the property of Castellvi.
Second, the entrance into private property must be for more than a momentary
period. "Momentary" means, "lasting but a moment; of but a moment's duration"
(The Oxford English Dictionary, Volume V, page 596); "lasting a very short time;
transitory; having a very brief life; operative or recurring at every moment"
(Webster's Third nternational Dictionary, 1963 edition.) The word "momentary"
when applied to possession or occupancy of (real) property should be construed to
mean "a limited period" not indefinite or permanent. The aforecited lease
contract was for a period of one year, renewable from year to year. The entry on
the property, under the lease, is temporary, and considered transitory. The fact
that the Republic, through the AFP, constructed some installations of a permanent
nature does not alter the fact that the entry into the land was transitory, or intended
to last a year, although renewable from year to year by consent of 'The owner of
the land. By express provision of the lease agreement the Republic, as lessee,
undertook to return te premises in substantially the same condition as at the time
the property was first occupied by the AFP. t is claimed that the intention of the
lessee was to occupy the land permanently, as may be inferred from the
construction of permanent improvements. But this "intention" cannot prevail over
the clear and express terms of the lease contract. ntent is to be deduced from the
language employed by the parties, and the terms 'of the contract, when
unambiguous, as in the instant case, are conclusive in the absence of averment
and proof of mistake or fraud the question being not what the intention was, but
what is expressed in the language used. (City of Manila v. Rizal Park Co., nc., 53
Phil. 515, 525); Magdalena Estate, nc. v. Myrick, 71 Phil. 344, 348). Moreover, in
order to judge the intention of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered (Art. 1371, Civil Code). f the
intention of the lessee (Republic) in 1947 was really to occupy permanently
Castellvi's property, why was the contract of lease entered into on year to year
basis? Why was the lease agreement renewed from year to year? Why did not the
Republic expropriate this land of Castellvi in 1949 when, according to the Republic
itself, it expropriated the other parcels of land that it occupied at the same time as
the Castellvi land, for the purpose of converting them into a jet air base?
14
t might
really have been the intention of the Republic to expropriate the lands in question
at some future time, but certainly mere notice - much less an implied notice of
such intention on the part of the Republic to expropriate the lands in the future did
not, and could not, bind the landowner, nor bind the land itself. The expropriation
must be actually commenced in court (Republic vs. Baylosis, et al., 96 Phil. 461,
484).
Third, the entry into the property should be under warrant or color of legal
authority. This circumstance in the "taking" may be considered as present in the
instant case, because the Republic entered the Castellvi property as lessee.
Fourth, the property must be devoted to a public use or otherwise informally
appropriated or injuriously affected. t may be conceded that the circumstance of
the property being devoted to public use is present because the property was used
by the air force of the AFP.
Fifth, the utilization of the property for public use must be in such a way as to oust
the owner and deprive him of all beneficial enjoyment of the property. n the instant
case, the entry of the Republic into the property and its utilization of the same for
public use did not oust Castellvi and deprive her of all beneficial enjoyment of the
property. Castellvi remained as owner, and was continuously recognized as owner
by the Republic, as shown by the renewal of the lease contract from year to year,
and by the provision in the lease contract whereby the Republic undertook to
return the property to Castellvi when the lease was terminated. Neither was
Castellvi deprived of all the beneficial enjoyment of the property, because the
Republic was bound to pay, and had been paying, Castellvi the agreed monthly
rentals until the time when it filed the complaint for eminent domain on June 26,
1959.
t is clear, therefore, that the "taking" of Catellvi's property for purposes of eminent
domain cannot be considered to have taken place in 1947 when the Republic
commenced to occupy the property as lessee thereof. We find merit in the
42
contention of Castellvi that two essential elements in the "taking" of property under
the power of eminent domain, namely: (1) that the entrance and occupation by the
condemnor must be for a permanent, or indefinite period, and (2) that in devoting
the property to public use the owner was ousted from the property and deprived of
its beneficial use, were not present when the Republic entered and occupied the
Castellvi property in 1947.
Untenable also is the Republic's contention that although the contract between the
parties was one of lease on a year to year basis, it was "in reality a more or less
permanent right to occupy the premises under the guise of lease with the 'right and
privilege' to buy the property should the lessor wish to terminate the lease," and
"the right to buy the property is merged as an integral part of the lease relationship
... so much so that the fair market value has been agreed upon, not, as of the time
of purchase, but as of the time of occupancy"
15
We cannot accept the Republic's
contention that a lease on a year to year basis can give rise to a permanent right
to occupy, since by express legal provision a lease made for a determinate time,
as was the lease of Castellvi's land in the instant case, ceases upon the day fixed,
without need of a demand (Article 1669, Civil Code). Neither can it be said that the
right of eminent domain may be exercised by simply leasing the premises to be
expropriated (Rule 67, Section 1, Rules of Court). Nor can it be accepted that the
Republic would enter into a contract of lease where its real intention was to buy, or
why the Republic should enter into a simulated contract of lease ("under the guise
of lease", as expressed by counsel for the Republic) when all the time the Republic
had the right of eminent domain, and could expropriate Castellvi's land if it wanted
to without resorting to any guise whatsoever. Neither can we see how a right to
buy could be merged in a contract of lease in the absence of any agreement
between the parties to that effect. To sustain the contention of the Republic is to
sanction a practice whereby in order to secure a low price for a land which the
government intends to expropriate (or would eventually expropriate) it would first
negotiate with the owner of the land to lease the land (for say ten or twenty years)
then expropriate the same when the lease is about to terminate, then claim that
the "taking" of the property for the purposes of the expropriation be reckoned as of
the date when the Government started to occupy the property under the lease, and
then assert that the value of the property being expropriated be reckoned as of the
start of the lease, in spite of the fact that the value of the property, for many good
reasons, had in the meantime increased during the period of the lease. This would
be sanctioning what obviously is a deceptive scheme, which would have the effect
of depriving the owner of the property of its true and fair market value at the time
when the expropriation proceedings were actually instituted in court. %e
Republic's claim tat it ad te "rigt and privilege" to buy te property at te value
tat it ad at te time wen it first occupied te property as lessee nowere
appears in te lease contract. What was agreed expressly in paragraph No. 5 of
the lease agreement was that, should the lessor require the lessee to return the
premises in the same condition as at the time the same was first occupied by the
AFP, the lessee would have the "right and privilege" (or option) of paying the
lessor what it would fairly cost to put the premises in the same condition as it was
at the commencement of the lease, in lieu of the lessee's performance of the
undertaking to put the land in said condition. The "fair value" at the time of
occupancy, mentioned in the lease agreement, does not refer to the value of the
property if bought by the lessee, but refers to the cost of restoring the property in
the same condition as of the time when the lessee took possession of the property.
Such fair value cannot refer to the purchase price, for purchase was never
intended by the parties to the lease contract. t is a rule in the interpretation of
contracts that "However general the terms of a contract may be, they shall not be
understood to comprehend things that are distinct and cases that are different from
those upon which the parties intended to agree" (Art. 1372, Civil Code).
We hold, therefore, that the "taking" of the Castellvi property should not be
reckoned as of the year 1947 when the Republic first occupied the same pursuant
to the contract of lease, and that the just compensation to be paid for the Castellvi
property should not be determined on the basis of the value of the property as of
that year. The lower court did not commit an error when it held that the "taking" of
the property under expropriation commenced with the filing of the complaint in this
case.
Under Section 4 of Rule 67 of the Rules of Court,
16
the "just compensation" is to
be determined as of the date of the filing of the complaint. This Court has ruled
that when the taking of the property sought to be expropriated coincides with the
commencement of the expropriation proceedings, or takes place subsequent to
the filing of the complaint for eminent domain, the just compensation should be
determined as of the date of the filing of the complaint. (Republic vs. Philippine
National Bank, L-14158, April 12, 1961, 1 SCRA 957, 961-962). n the instant
case, it is undisputed that the Republic was placed in possession of the Castellvi
property, by authority of the court, on August 10, 1959. The "taking" of the Castellvi
property for the purposes of determining the just compensation to be paid must,
therefore, be reckoned as of June 26, 1959 when the complaint for eminent
domain was filed.
Regarding the two parcels of land of Toledo-Gozun, also sought to be
expropriated, which had never been under lease to the Republic, the Republic was
placed in possession of said lands, also by authority of the court, on August 10,
1959, The taking of those lands, therefore, must also be reckoned as of June 26,
1959, the date of the filing of the complaint for eminent domain.
2. Regarding the first assigned error discussed as the second issue the
Republic maintains that, even assuming that the value of the expropriated lands is
to be determined as of June 26, 1959, the price of P10.00 per square meter fixed
by the lower court "is not only exhorbitant but also unconscionable, and almost
fantastic". On the other hand, both Castellvi and Toledo-Gozun maintain that their
lands are residential lands with a fair market value of not less than P15.00 per
square meter.
The lower court found, and declared, that the lands of Castellvi and Toledo-Gozun
are residential lands. The finding of the lower court is in consonance with the
unanimous opinion of the three commissioners who, in their report to the court,
declared that the lands are residential lands.
The Republic assails the finding that the lands are residential, contending that the
plans of the appellees to convert the lands into subdivision for residential purposes
43
were only on paper, there being no overt acts on the part of the appellees which
indicated that the subdivision project had been commenced, so that any
compensation to be awarded on the basis of the plans would be speculative. The
Republic's contention is not well taken. We find evidence showing that the lands in
question had ceased to be devoted to the production of agricultural crops, that
they had become adaptable for residential purposes, and that the appellees had
actually taken steps to convert their lands into residential subdivisions even before
the Republic filed the complaint for eminent domain. n the case of City of Manila
vs. Corrales (32 Phil. 82, 98) this Court laid down basic guidelines in determining
the value of the property expropriated for public purposes. This Court said:
n determining the value of land appropriated for public purposes, te same
consideration are to be regarded as in a sale of property between private parties.
%e inquiry, in suc 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).
n expropriation proceedings, therefore, the owner of the land has the right to its
value for the use for which it would bring the most in the market.
17
The owner may
thus show every advantage that his property possesses, present and prospective,
in order that the price it could be sold for in the market may be satisfactorily
determined.
18
The owner may also show that the property is suitable for division
into village or town lots.
19

The trial court, therefore, correctly considered, among other circumstances, the
proposed subdivision plans of the lands sought to be expropriated in finding that
those lands are residential lots. This finding of the lower court is supported not only
by the unanimous opinion of the commissioners, as embodied in their report, but
also by the Provincial Appraisal Committee of the province of Pampanga
composed of the Provincial Treasurer, the Provincial Auditor and the District
Engineer. n the minutes of the meeting of the Provincial Appraisal Committee,
held on May 14, 1959 (Exh. 13-Castellvi) We read in its Resolution No. 10 the
following:
3. Since 1957 the land has been classified as residential in view of its proximity to
the air base and due to the fact that it was not being devoted to agriculture. n fact,
there is a plan to convert it into a subdivision for residential purposes. The taxes
due on the property have been paid based on its classification as residential land;
The evidence shows that Castellvi broached the idea of subdividing her land into
residential lots as early as July 11, 1956 in her letter to the Chief of Staff of the
Armed Forces of the Philippines. (Exh. 5-Castellvi) As a matter of fact, the layout
of the subdivision plan was tentatively approved by the National Planning
Commission on September 7, 1956. (Exh. 8-Castellvi). The land of Castellvi had
not been devoted to agriculture since 1947 when it was leased to the Philippine
Army. n 1957 said land was classified as residential, and taxes based on its
classification as residential had been paid since then (Exh. 13-Castellvi). The
location of the Castellvi land justifies its suitability for a residential subdivision. As
found by the trial court, "t is at the left side of the entrance of the Basa Air Base
and bounded on two sides by roads (Exh. 13-Castellvi), paragraphs 1 and 2, Exh.
12-Castellvi), the poblacion, (of Floridablanca) the municipal building, and the
Pampanga Sugar Mills are closed by. The barrio schoolhouse and chapel are also
near (T.S.N. November 23,1960, p. 68)."
20

The lands of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the same
condition as the land of Castellvi. The lands of Toledo-Gozun adjoin the land of
Castellvi. They are also contiguous to the Basa Air Base, and are along the road.
These lands are near the barrio schoolhouse, the barrio chapel, the Pampanga
Sugar Mills, and the poblacion of Floridablanca (Exhs. 1, 3 and 4-Toledo-Gozun).
As a matter of fact, regarding lot 1-B it had already been surveyed and subdivided,
and its conversion into a residential subdivision was tentatively approved by the
National Planning Commission on July 8, 1959 (Exhs. 5 and 6 Toledo-Gozun). As
early as June, 1958, no less than 32 man connected with the Philippine Air Force
among them commissioned officers, non-commission officers, and enlisted men
had requested Mr. and Mrs. Joaquin D. Gozun to open a subdivision on their lands
in question (Exhs. 8, 8-A to 8-ZZ-Toledo-Gozun).
21

We agree with the findings, and the conclusions, of the lower court that the lands
that are the subject of expropriation in the present case, as of August 10, 1959
when the same were taken possession of by the Republic, were residential lands
and were adaptable for use as residential subdivisions. ndeed, the owners of
these lands have the right to their value for the use for which they would bring the
most in the market at the time the same were taken from them. The most important
issue to be resolved in the present case relates to the question of what is the just
compensation that should be paid to the appellees.
The Republic asserts that the fair market value of the lands of the appellees is
P.20 per square meter. The Republic cites the case of Republic vs. Narciso, et al.,
L-6594, which this Court decided on May 18, 1956. The Narciso case involved
lands that belonged to Castellvi and Toledo-Gozun, and to one Donata
Montemayor, which were expropriated by the Republic in 1949 and which are now
the site of the Basa Air Base. n the Narciso case this Court fixed the fair market
value at P.20 per square meter. The lands that are sought to be expropriated in
the present case being contiguous to the lands involved in the Narciso case, it is
the stand of the Republic that the price that should be fixed for the lands now in
question should also be at P.20 per square meter.
We can not sustain the stand of the Republic. We find that the price of P.20 per
square meter, as fixed by this Court in the Narciso case, was based on the
allegation of the defendants (owners) in their answer to the complaint for eminent
domain in that case that the price of their lands was P2,000.00 per hectare and
that was the price that they asked the court to pay them. This Court said, then, that
44
the owners of the land could not be given more than what they had asked,
notwithstanding the recommendation of the majority of the Commission on
Appraisal which was adopted by the trial court that the fair market value of
the lands was P3,000.00 per hectare. We also find that the price of P.20 per
square meter in the Narciso case was considered the fair market value of the
lands as of the year 1949 when the expropriation proceedings were instituted, and
at that time the lands were classified as sugar lands, and assessed for taxation
purposes at around P400.00 per hectare, or P.04 per square meter. 22 While the
lands involved in the present case, like the lands involved in the Narciso case,
might have a fair market value of P.20 per square meter in 1949, it can not be
denied that ten years later, in 1959, when the present proceedings were instituted,
the value of those lands had increased considerably. The evidence shows that
since 1949 those lands were no longer cultivated as sugar lands, and in 1959
those lands were already classified, and assessed for taxation purposes, as
residential lands. n 1959 the land of Castellvi was assessed at P1.00 per square
meter.
23

The Republic also points out that the Provincial Appraisal Committee of
Pampanga, in its resolution No. 5 of February 15, 1957 (Exhibit D), recommended
the sum of P.20 per square meter as the fair valuation of the Castellvi property. We
find that this resolution was made by the Republic the basis in asking the court to
fix the provisional value of the lands sought to be expropriated at P259,669.10,
which was approved by the court.
24
t must be considered, however, that the
amount fixed as the provisional value of the lands that are being expropriated does
not necessarily represent the true and correct value of the land. The value is only
"provisional" or "tentative", to serve as the basis for the immediate occupancy of
the property being expropriated by the condemnor. The records show that this
resolution No. 5 was repealed by the same Provincial Committee on Appraisal in
its resolution No. 10 of May 14, 1959 (Exhibit 13-Castellvi). n that resolution No.
10, the appraisal committee stated that "The Committee has observed that the
value of the land in this locality has increased since 1957 ...", and recommended
the price of P1.50 per square meter. t follows, therefore, that, contrary to the stand
of the Republic, that resolution No. 5 of the Provincial Appraisal Committee can
not be made the basis for fixing the fair market value of the lands of Castellvi and
Toledo-Gozun.
The Republic further relied on the certification of the Acting Assistant Provincial
Assessor of Pampanga, dated February 8, 1961 (Exhibit K), to the effect that in
1950 the lands of Toledo-Gozun were classified partly as sugar land and partly as
urban land, and that the sugar land was assessed at P.40 per square meter, while
part of the urban land was assessed at P.40 per square meter and part at P.20 per
square meter; and that in 1956 the Castellvi land was classified as sugar land and
was assessed at P450.00 per hectare, or P.045 per square meter. We can not
also consider this certification of the Acting Assistant Provincial Assessor as a
basis for fixing the fair market value of the lands of Castellvi and Toledo-Gozun
because, as the evidence shows, the lands in question, in 1957, were already
classified and assessed for taxation purposes as residential lands. The certification
of the assessor refers to the year 1950 as far as the lands of Toledo-Gozun are
concerned, and to the year 1956 as far as the land of Castellvi is concerned.
Moreover, this Court has held that the valuation fixed for the purposes of the
assessment of the land for taxation purposes can not bind the landowner where
the latter did not intervene in fixing it.
25

On the other hand, the Commissioners, appointed by the court to appraise the
lands that were being expropriated, recommended to the court that the price of
P10.00 per square meter would be the fair market value of the lands. The
commissioners made their recommendation on the basis of their observation after
several ocular inspections of the lands, of their own personal knowledge of land
values in the province of Pampanga, of the testimonies of the owners of the land,
and other witnesses, and of documentary evidence presented by the appellees.
Both Castellvi and Toledo-Gozun testified that the fair market value of their
respective land was at P15.00 per square meter. The documentary evidence
considered by the commissioners consisted of deeds of sale of residential lands in
the town of San Fernando and in Angeles City, in the province of Pampanga,
which were sold at prices ranging from P8.00 to P20.00 per square meter (Exhibits
15, 16, 17, 18, 19, 20, 21, 22, 23-Castellvi). The commissioners also considered
the decision in Civil Case No. 1531 of the Court of First nstance of Pampanga,
entitled Republic vs. Sabina Tablante, which was expropriation case filed on
January 13, 1959, involving a parcel of land adjacent to the Clark Air Base in
Angeles City, where the court fixed the price at P18.00 per square meter (Exhibit
14-Castellvi). n their report, the commissioners, among other things, said:
... This expropriation case is specially pointed out, because the circumstances and
factors involved therein are similar in many respects to the defendants' lands in
this case. The land in Civil Case No. 1531 of this Court and the lands in the
present case (Civil Case No. 1623) are both near the air bases, the Clark Air Base
and the Basa Air Base respectively. There is a national road fronting them and are
situated in a first-class municipality. As added advantage it may be said that the
Basa Air Base land is very near the sugar mill at Del Carmen, Floridablanca,
Pampanga, owned by the Pampanga Sugar Mills. Also just stone's throw away
from the same lands is a beautiful vacation spot at Palacol, a sitio of the town of
Floridablanca, which counts with a natural swimming pool for vacationists on
weekends. These advantages are not found in the case of the Clark Air Base. The
defendants' lands are nearer to the poblacion of Floridablanca then Clark Air Base
is nearer (sic) to the poblacion of Angeles, Pampanga.
The deeds of absolute sale, according to the undersigned commissioners, as well
as the land in Civil Case No. 1531 are competent evidence, because they were
executed during the year 1959 and before August 10 of the same year. More
specifically so the land at Clark Air Base which coincidentally is the subject matter
in the complaint in said Civil Case No. 1531, it having been filed on January 13,
1959 and the taking of the land involved therein was ordered by the Court of First
nstance of Pampanga on January 15, 1959, several months before the lands in
this case were taken by the plaintiffs ....
From the above and considering further that the lowest as well as the highest price
per square meter obtainable in the market of Pampanga relative to subdivision lots
within its jurisdiction in the year 1959 is very well known by the Commissioners,
43
the Commission finds that the lowest price that can be awarded to the lands in
question is P10.00 per square meter.
26

The lower court did not altogether accept the findings of the Commissioners based
on the documentary evidence, but it considered the documentary evidence as
basis for comparison in determining land values. The lower court arrived at the
conclusion that "the unanimous recommendation of the commissioners of ten
(P10.00) pesos per square meter for the three lots of the defendants subject of this
action is fair and just".
27
n arriving at its conclusion, the lower court took into
consideration, among other circumstances, that the lands are titled, that there is a
rising trend of land values, and the lowered purchasing power of the Philippine
peso.
n the case of Manila Railroad Co. vs. Caligsian, 40 Phil. 326, 328, this Court
said:
A court of first instance or, on appeal, the Supreme Court, may change or modify
the report of the commissioners by increasing or reducing the amount of the award
if the facts of the case so justify. While great weight is attached to the report of the
commissioners, yet a court may substitute therefor its estimate of the value of the
property as gathered from the record in certain cases, as, where the
commissioners have applied illegal principles to the evidence submitted to them,
or where they have disregarded a clear preponderance of evidence, or where the
amount allowed is either palpably inadequate or excessive.
28

The report of the commissioners of appraisal in condemnation proceedings are not
binding, but merely advisory in character, as far as the court is concerned.
29
n our
analysis of the report of the commissioners, We find points that merit serious
consideration in the determination of the just compensation that should be paid to
Castellvi and Toledo-Gozun for their lands. t should be noted that the
commissioners had made ocular inspections of the lands and had considered the
nature and similarities of said lands in relation to the lands in other places in the
province of Pampanga, like San Fernando and Angeles City. We cannot disregard
the observations of the commissioners regarding the circumstances that make the
lands in question suited for residential purposes their location near the Basa Air
Base, just like the lands in Angeles City that are near the Clark Air Base, and the
facilities that obtain because of their nearness to the big sugar central of the
Pampanga Sugar mills, and to the flourishing first class town of Floridablanca. t is
true that the lands in question are not in the territory of San Fernando and Angeles
City, but, considering the facilities of modern communications, the town of
Floridablanca may be considered practically adjacent to San Fernando and
Angeles City. t is not out of place, therefore, to compare the land values in
Floridablanca to the land values in San Fernando and Angeles City, and form an
idea of the value of the lands in Floridablanca with reference to the land values in
those two other communities.
The important factor in expropriation proceeding is that the owner is awarded the
just compensation for his property. We have carefully studied the record, and the
evidence, in this case, and after considering the circumstances attending the lands
in question We have arrived at the conclusion that the price of P10.00 per square
meter, as recommended by the commissioners and adopted by the lower court, is
quite high. t is Our considered view that the price of P5.00 per square meter
would be a fair valuation of the lands in question and would constitute a just
compensation to the owners thereof. n arriving at this conclusion We have
particularly taken into consideration the resolution of the Provincial Committee on
Appraisal of the province of Pampanga informing, among others, that in the year
1959 the land of Castellvi could be sold for from P3.00 to P4.00 per square meter,
while the land of Toledo-Gozun could be sold for from P2.50 to P3.00 per square
meter. The Court has weighed all the circumstances relating to this expropriations
proceedings, and in fixing the price of the lands that are being expropriated the
Court arrived at a happy medium between the price as recommended by the
commissioners and approved by the court, and the price advocated by the
Republic. This Court has also taken judicial notice of the fact that the value of the
Philippine peso has considerably gone down since the year 1959.
30
Considering
that the lands of Castellvi and Toledo-Gozun are adjoining each other, and are of
the same nature, the Court has deemed it proper to fix the same price for all these
lands.
3. The third issue raised by the Republic relates to the payment of interest. The
Republic maintains that the lower court erred when it ordered the Republic to pay
Castellvi interest at the rate of 6% per annum on the total amount adjudged as the
value of the land of Castellvi, from July 1, 1956 to July 10, 1959. We find merit in
this assignment of error.
n ordering the Republic to pay 6% interest on the total value of the land of
Castellvi from July 1, 1956 to July 10, 1959, the lower court held that the Republic
had illegally possessed the land of Castellvi from July 1, 1956, after its lease of the
land had expired on June 30, 1956, until August 10, 1959 when the Republic was
placed in possession of the land pursuant to the writ of possession issued by the
court. What really happened was that the Republic continued to occupy the land of
Castellvi after the expiration of its lease on June 30, 1956, so much so that
Castellvi filed an ejectment case against the Republic in the Court of First nstance
of Pampanga.
31
However, while that ejectment case was pending, the Republic
filed the complaint for eminent domain in the present case and was placed in
possession of the land on August 10, 1959, and because of the institution of the
expropriation proceedings the ejectment case was later dismissed. n the order
dismissing the ejectment case, the Court of First nstance of Pampanga said:
Plaintiff has agreed, as a matter of fact has already signed an agreement with
defendants, whereby she had agreed to receive the rent of the lands, subject
matter of the instant case from June 30, 1956 up to 1959 when the Philippine Air
Force was placed in possession by virtue of an order of the Court upon depositing
the provisional amount as fixed by the Provincial Appraisal Committee with the
Provincial Treasurer of
Pampanga; ...
f Castellvi had agreed to receive the rentals from June 30, 1956 to August 10,
1959, she should be considered as having allowed her land to be leased to the
Republic until August 10, 1959, and she could not at the same time be entitled to
the payment of interest during the same period on the amount awarded her as the
just compensation of her land. The Republic, therefore, should pay Castellvi
46
interest at the rate of 6% per annum on the value of her land, minus the provisional
value that was deposited, only from July 10, 1959 when it deposited in court the
provisional value of the land.
4. The fourth error assigned by the Republic relates to the denial by the lower
court of its motion for a new trial based on nearly discovered evidence. We do not
find merit in this assignment of error.
After the lower court had decided this case on May 26, 1961, the Republic filed a
motion for a new trial, supplemented by another motion, both based upon the
ground of newly discovered evidence. The alleged newly discovered evidence in
the motion filed on June 21, 1961 was a deed of absolute sale-executed on
January 25, 1961, showing that a certain Serafin Francisco had sold to Pablo L.
Narciso a parcel of sugar land having an area of 100,000 square meters with a
sugar quota of 100 piculs, covered by P.A. No. 1701, situated in Barrio Fortuna,
Floridablanca, for P14,000, or P.14 per square meter.
n the supplemental motion, the alleged newly discovered evidence were: (1) a
deed of sale of some 35,000 square meters of land situated at Floridablanca for
P7,500.00 (or about P.21 per square meter) executed in July, 1959, by the
spouses Evelyn D. Laird and Cornelio G. Laird in favor of spouses Bienvenido S.
Aguas and Josefina Q. Aguas; and (2) a deed of absolute sale of a parcel of land
having an area of 4,120,101 square meters, including the sugar quota covered by
Plantation Audit No. 161 1345, situated at Floridablanca, Pampanga, for P860.00
per hectare (a little less than P.09 per square meter) executed on October 22,
1957 by Jesus Toledo y Mendoza in favor of the Land Tenure Administration.
We find that the lower court acted correctly when it denied the motions for a new
trial.
To warrant the granting of a new trial based on the ground of newly discovered
evidence, it must appear that the evidence was discovered after the trial; that even
with the exercise of due diligence, the evidence could not have been discovered
and produced at the trial; and that the evidence is of such a nature as to alter the
result of the case if admitted.
32
The lower court correctly ruled that these
requisites were not complied with.
The lower court, in a well-reasoned order, found that the sales made by Serafin
Francisco to Pablo Narciso and that made by Jesus Toledo to the Land Tenure
Administration were immaterial and irrelevant, because those sales covered
sugarlands with sugar quotas, while the lands sought to be expropriated in the
instant case are residential lands. The lower court also concluded that the land
sold by the spouses Laird to the spouses Aguas was a sugar land.
We agree with the trial court. n eminent domain proceedings, in order that
evidence as to the sale price of other lands may be admitted in evidence to prove
the fair market value of the land sought to be expropriated, the lands must, among
other things, be shown to be similar.
But even assuming, gratia argumenti, that the lands mentioned in those deeds of
sale were residential, the evidence would still not warrant the grant of a new trial,
for said evidence could have been discovered and produced at the trial, and they
cannot be considered newly discovered evidence as contemplated in Section 1(b)
of Rule 37 of the Rules of Court. Regarding this point, the trial court said:
The Court will now show that there was no reasonable diligence employed.
The land described in the deed of sale executed by Serafin Francisco, copy of
which is attached to the original motion, is covered by a Certificate of Title issued
by the Office of the Register of Deeds of Pampanga. There is no question in the
mind of the court but this document passed through the Office of the Register of
Deeds for the purpose of transferring the title or annotating the sale on the
certificate of title. t is true that Fiscal Lagman went to the Office of the Register of
Deeds to check conveyances which may be presented in the evidence in this case
as it is now sought to be done by virtue of the motions at bar, Fiscal Lagman, one
of the lawyers of the plaintiff, did not exercise reasonable diligence as required by
the rules. The assertion that he only went to the office of the Register of Deeds
'now and then' to check the records in that office only shows the half-hazard [sic]
manner by which the plaintiff looked for evidence to be presented during the
hearing before the Commissioners, if it is at all true that Fiscal Lagman did what he
is supposed to have done according to Solicitor Padua. t would have been the
easiest matter for plaintiff to move for the issuance of a subpoena duces
tecum directing the Register of Deeds of Pampanga to come to testify and to bring
with him all documents found in his office pertaining to sales of land in
Floridablanca adjacent to or near the lands in question executed or recorded from
1958 to the present. Even this elementary precaution was not done by plaintiff's
numerous attorneys.
The same can be said of the deeds of sale attached to the supplementary motion.
They refer to lands covered by certificate of title issued by the Register of Deeds of
Pampanga. For the same reason they could have been easily discovered if
reasonable diligence has been exerted by the numerous lawyers of the plaintiff in
this case. t is noteworthy that all these deeds of sale could be found in several
government offices, namely, in the Office of the Register of Deeds of Pampanga,
the Office of the Provincial Assessor of Pampanga, the Office of the Clerk of Court
as a part of notarial reports of notaries public that acknowledged these documents,
or in the archives of the National Library. n respect to Annex 'B' of the
supplementary motion copy of the document could also be found in the Office of
the Land Tenure Administration, another government entity. Any lawyer with a
modicum of ability handling this expropriation case would have right away though
[sic] of digging up documents diligently showing conveyances of lands near or
around the parcels of land sought to be expropriated in this case in the offices that
would have naturally come to his mind such as the offices mentioned above, and
had counsel for the movant really exercised the reasonable diligence required by
the Rule' undoubtedly they would have been able to find these documents and/or
caused the issuance of subpoena duces tecum. ...
t is also recalled that during the hearing before the Court of the Report and
Recommendation of the Commissioners and objection thereto, Solicitor Padua
made the observation:
understand, Your Honor, that there was a sale that took place in this place of land
recently where the land was sold for P0.20 which is contiguous to this land.
The Court gave him permission to submit said document subject to the approval of
the Court. ... This was before the decision was rendered, and later promulgated on
47
May 26, 1961 or more tan one mont after Solicitor Padua made the above
observation. He could have, therefore, checked up the alleged sale and moved for
a reopening to adduce further evidence. He did not do so. He forgot to present the
evidence at a more propitious time. Now, he seeks to introduce said evidence
under the guise of newly-discovered evidence. Unfortunately the Court cannot
classify it as newly-discovered evidence, because tinder the circumstances, the
correct qualification that can be given is 'forgotten evidence'. Forgotten however, is
not newly-discovered
evidence.
33

The granting or denial of a motion for new trial is, as a general rule, discretionary
with the trial court, whose judgment should not be disturbed unless there is a clear
showing of abuse of discretion.
34
We do not see any abuse of discretion on the
part of the lower court when it denied the motions for a new trial.
WHEREFORE, the decision appealed from is modified, as follows:
(a) the lands of appellees Carmen Vda. de Castellvi and Maria Nieves Toledo-
Gozun, as described in the complaint, are declared expropriated for public use;
(b) the fair market value of the lands of the appellees is fixed at P5.00 per square
meter;
(c) the Republic must pay appellee Castellvi the sum of P3,796,495.00 as just
compensation for her one parcel of land that has an area of 759,299 square
meters, minus the sum of P151,859.80 that she withdrew out of the amount that
was deposited in court as the provisional value of the land, with interest at the rate
of 6% per annum from July 10, 1959 until the day full payment is made or
deposited in court;
(d) the Republic must pay appellee Toledo-Gozun the sum of P2,695,225.00 as
the just compensation for her two parcels of land that have a total area of 539,045
square meters, minus the sum of P107,809.00 that she withdrew out of the amount
that was deposited in court as the provisional value of her lands, with interest at
the rate of 6%, per annum from July 10, 1959 until the day full payment is made or
deposited in court; (e) the attorney's lien of Atty. Alberto Cacnio is enforced; and
(f) the costs should be paid by appellant Republic of the Philippines, as provided in
Section 12, Rule 67, and in Section 13, Rule 141, of the Rules of Court.
T S SO ORDERED.
Makalintal, C.J., arredo, ntonio, Esguerra, Fernandez, Muoz Palma and
quino, JJ., concur.
Castro, Fernando, %eeankee and Makasiar, JJ., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-3144 November 19, 1907
CARMEN AYALA DE ROXAS and PEDRO P. ROXAS, plaintiffs,
vs.
THE CITY OF MANILA and ROBERT G. DIECK, as city engineer, defendants.
el-Pan, Ortigas and Fiser, for plaintiffs.
Modesto Reyes, for defendants.

ARELLANO, C
The defendants' demurred to the amended complaint having been overruled, an
answer was presented, and the trial of the case proceeded with.
Briefly, the subject of this action may be stated as follows:
1. That on the 15th of January, 1906, the plaintiff, as owner of the property situated
on the Escolta, district of Binondo, city of Manila, the eastern boundary of which
adjoins the canal of San Jacinto or Sibacon to the extent of 23.50 meters, the total
area of the ground being 658.19 square meters, applied to the city engineer,
Robert G. Dieck, the defendant herein, for a license to construct a terrace
over "te strip of land 3 meters in widt between the main wall of her house and
the edge of the said canal of Sibacon or San Jacinto, which strip of land belongs
exclusively to her"; but the defendant refused to grant the license or authorize the
plaintiff to build the terrace.
2. That a similar petition was addressed to the Municipal Board of the city of
Manila on the 30th of said month and year, and it also was denied.
3. That, as the plaintiff has been informed, the sole reason wherefore the license
was denied is because "the said defendants pretend to compel the plaintiff to leave
vacant and without any construction whatever thereon the said strip of 3 meters in
width which is a portion of the ground belonging to her, in order to use the same as
the wharf or public way so that the plaintiff will only be able to use the said strip in
the same manner and for the same purposes as the public in general, thus losing
the enjoyment, use, and exclusive possession of the said strip of the property
which the plaintiff and the former owners thereof have enjoyed quietly and
peacefully during more than seventy years."
4. That the strip in question was occupied by a two-storey building constructed
more than seventy years ago.
t appears from the evidence:
First. That the plaintiff's ownership of the whole ground and of the strip in question
is beyond all doubt, both by reason of her title thereto and the entry thereof in the
registry of property, and by the acknowledgment thereof made by the city itself
when obtaining by means of condemnation proceedings a portion of the same
property adjoining the public road.
Second. That as a matter of fact, the license which the plaintiff, using her right of
ownership, requested for the construction of a terrace on the strip of 3 meters
adjoining the canal of San Jacinto or Sibacon, was denied; both parties agreeing
that the denial was due to the intent to reserve the said strip for the establishment
of a public easement, although the opposing witnesses did not agree as to the
special easement intended to be established.
Third. That it was agreed between both parties that the strip above referred to had
not been expropriated in whole or in part by the municipality of Manila, and that
neither had the latter offered any compensation for the same to the owner thereof.
Fourth. That according to Engineer Dieck, a defendant, the purpose of the city was
to use the said strip of 3 meters as a place for discharging and landing goods, and
as a place of shelter for shipwrecked persons and for fishermen, and to devote it
also, together with other strips along the canal, by the gradual acquisition of land,
48
to a towpath for craft passing through the canal; that a building line has been
established by the Municipal Board along the Sibacon Creek leaving a strip of 3
meters within which, according to ordinances, no constructions would be
permitted; that such is the purpose and the intent on which the existing ordinances
are based. But John Tuther, the secretary of the Municipal Board, declares that,
when Ordinance No. 78 was under discussion, he does not recall having heard
any of the members of the board make reference to a towpath nor did he ever hear
anything said with reference to the purpose to which the strip of 3 meters
mentioned in Ordinance No. 78 was to be devoted, though he believes that, by
thus leaving a strip of 3 meters, it would be easier to prevent collisions; that it
would facilitate navigation, and that it had never been the intention of the Board to
indemnify the owners of such strips of 3 meters by reason of the use which parties
landing thereon may make of the same.
Fifth. That, as stated in the brief of the defendants, "the intention of the Municipal
Board, when denying the permit asked for by the plaintiff, has never been to
establish any way whatever along the Sibacon Creek so that said plaintiff could, if
she chose to, close her property with walls or the like perpendicularly to said creek,
that is, over the two lines perpendicular to said creek, provided se does not close
or build over the 3-meter space running along the creek," which space is subject,
as stated in the evidence submitted by the defendants, to the "easement of public
use for the general interest of navigation, flotation, fishing, and salvage," citing the
Law of Waters and the Civil Code.
Sixth. And that the result is, according to No. 19 of the statement of facts of the
complaint, "that the plaintiff shall only be able to use said strip in the same manner
and for the same purposes as the general public, thus losing the enjoyment, use,
and exclusive possession of said strip of the ground which the plaintiff and the
former owners of the same have enjoyed as such owners quietly and peacefully
during more than seventy years."
What the defendants have therefore done is to prevent the plaintiffs from
continuing to enjoy, use, and freely dispose of such strip of their ground, as they
had been doing up to the time when they applied for a license to construct a
terrace over said strip, and the defendants prevented it with the intention of
establishing a public easement provided for in an ordinance of their own which
they consider is pursuant to the provisions of the Law of Waters and of the Civil
Code in force.
n the decision entered by this court on the 5th of May, 1906, regarding the
demurrer, the following was set forth:
The easement of a zone for public use, authorized by article 73 of the Law of
Waters of 1866, is developed in articles 160 and 161, inclusive, of said law; the
general interest on behalf of which the easement is supported is determined, for
navigation, by articles 160 and 161; for flotation, by article 162; for salvage, by
article 163; and for fishing, by article 164; in all of them the owner of the riverside
property supports the easement "upon being previously indemnified for loss and
damage." (Folio 41.)
Said zone for public use, the same as a towpath, is solely available for the
purposes of navigation, flotation, fishing, and salvage, being closed to any other
use which be attempted; therefore, it is erroneous to pretend that the right of the
owner of the property bordering upon the stream can be reduced to the level of the
public right; on the contrary he should only be called upon to bear those burdens
which are in the general interest, but not without prior, or subsequently indemnity.
(Folio 43.)
f as affirmed in statement No. 4, and accepted by the defendants, the Sibacon
Creek is a canal let us grant that it is navigable, because it has been held by
competent authority and that under the name of a public wharf, which is the
largest in area, it is desired to establish a towpath, which is the smallest, it must be
remembered that the law does not grant it along navigable canals (art. 157), and,
at all events, the establishment thereof must be preceded by the corresponding
indemnity. (Arts. 154 and 157.)
The matter at issue herein being the enforcement of the Law of Waters and of the
Civil Code, it is not out of place nor untimely, even now, to point out the
administrative law which ought to have been applied had this act of the city of
Manila been carried out by the late ayuntamiento during the former sovereignty; an
administrative law which, owing to its having been so often repeated, is now raised
to the rank of an incontrovertible principle of law on the matter.
The powers of the administration do not extend to the establishment of new
easements upon private property but simply to preserve old ones, whenever a
recent and easily proven usurpation exists. (Decision of January 23,
1866.) lawpil.net
yuntamientos are not authorized to impose an easement upon private property;
therefore, any order thus given can not be held to have been issued in the
exercise of their lawful powers. (Decision of July 28, 1866.)
Administrative action for the recovery of a public easement which has been
usurped by a constructive work of private ownership can only be taken when such
usurpation is of recent date and easily proven.
When real rights are concerned an ayuntamiento may prosecute such actions as it
may consider itself entitled to, for the possession or ownership in accordance with
law. (Decision of October 26, 1866.)
This doctrine will be found far more vigorous at present upon reference to the
principles of the law now in force.
According to article 349 of the Civil Code, no one shall be deprived of his property,
except by competent authority and with sufficient cause of public utility, always
after proper indemnity; if this requisite has not been fulfilled the courts must
protect, and eventually restore possession to the injured party.
Under section 5 of the act of Congress of July 1, 1902, no legislation shall be
enacted in the Philippine slands which shall deprive any person of life, liberty, or
property without due process of law; and the due process of law in order to deprive
a person of his property is, according to the Code of Civil Procedure, reserved to
the judicial authority. The refusal to grant a license or the enactment of an
ordinance whereby a person may be deprived of property or rights, or an attempt
thereat is made, without previously indemnifying him therefor, is not, nor can it be,
due process of law.1awpil.net
49
And, considering that the easement intended to be established, whatever may be
the object thereof, is not merely a real right that will encumber the property, but is
one tending to prevent the exclusive use of one portion of the same, by
expropriating it for a public use which, be it what it may, can not be accomplished
unless the owner of the property condemned or seized be previously and duly
indemnified, it is proper to protect the appellant by means of the remedy employed
in such cases, as it is the only adequate remedy when no other legal action can be
resorted to, against an intent which is nothing short of an arbitrary restriction
imposed by the city by virtue of the coercive power with which the same is
invested. The question involved here is not the actual establishment of an
easement which might be objected to by an action in court, but a mere act of
obstruction, a refusal which is beyond the powers of the city of Manila, because it
is not simply a measure in connection with building regulations, but is an attempt
to suppress, without due process of law, real rights which are attached to the right
of ownership.
When . . . any corporation, board, or person unlawfully neglects the performance
of an act which the law specially enjoins as a duty resulting from an office, trust, or
station, or unlawfully excludes the plaintiff from the use and enjoyment of a right or
office to which he is entitled and from which he is unlawfully precluded by such
inferior tribunal, corporation, board, or person, and the court, on trial, finds the
allegations of the complaint to be true, it may, if there is no other plain, speedy,
and adequate remedy in the ordinary courts of law, render a judgment granting a
peremptory order against the defendant, commanding him, immediately after the
receipt of such order, or at some other specified time, to do the act required to be
done to protect the rights of the plaintiff. (Code of Civil Procedure, sec 222.)
Therefore, we hereby command the defendants, the city of Manila, and Robert G.
Dieck, as city engineer, or whomsoever may now be acting as such, to
immediately issue a license in favor of the plaintiff herein, Doa Carmen Ayala de
Roxas, to construct the terrace as aforesaid in accordance with the plan and
specification as per Exhibit A, the said defendants to pay the costs of these
proceedings. So ordered.
%orres, Jonson, Carson, Willard and %racey, JJ., concur.
FRST DVSON
G.R. No. 109338. November 20, 2000]
CAMARINES NORTE ELECTRIC COOPERATIVE, INC.
(CANORECO), petitioner, vs COURT OF APPEALS, HON. LUIS L. DICTADO,
Presiding Judge, RTC, Branch 39, Daet, Camarines Norte, EDUARDO R.
MORENO, LT. COL. RUFINO CHAVEZ, CAPT. ALFREDO BORJA, CONRAD C.
LEVISTE and VINES REALTY CORPORATION, respondents
D E C I S I O N
PARDO, .:
The acquisition of an easement of a right-of-way falls within the purview of the
power of eminent domain.
We have before the Court for consideration a petition for review on certiorari of the
decision of the Court of Appeals,
[1]
and its resolution,
[2]
which denied petitioner's
motion for reconsideration.
[3]

The facts of the case, as found by the Court of Appeals, are as follows:
On May 18, 1989, Conrad L. Leviste filed with the Regional Trial Court, Daet,
Camarines Norte, a complaint
[4]
for collection of a sum of money and foreclosure of
mortgage against Philippine Smelter Corporation (PSC).
For failure to file an answer to the complaint, the trial court declared PSC in default
and allowed plaintiff Leviste to present evidence ex-parte.
On November 23, 1989, the trial court rendered a decision, the dispositive portion
of which reads:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the
defendant ordering the latter.
"1. to pay the plaintiff the sum of P1,798,750.00 with interest thereon at the rate of
12% per annum from November, 1989 until the whole amount shall have been fully
paid;
"2. to pay the plaintiff the sum of P11,500.00 as attorney's fees;
to pay the plaintiff the sum of P5,000.00 as expenses incidental to this litigation;
and
"3. to pay the costs of this suit.
"T S SO ORDERED.
[5]

When the decision became final and executory, the trial court issued a writ of
execution and respondent sheriff Eduardo R. Moreno levied upon two (2) parcels
of land covered TCT Nos. T-13505 and T-13514 issued by the Registrar of Deeds
in the name of PSC. On April 24, 1990, the parcels of land were sold at public
auction in favor of Vines Realty Corporation (Vines Realty). On April 25, 1990, the
Clerk of Court, as ex-officio Provincial Sheriff, issued a Certificate of Sale,
[6]
which
Judge Luis D. Dictado, in his capacity as executive judge, approved.
On June 23, 1992, Vines Realty moved for the issuance of a writ of possession
over said property. On June 25, 1992, the trial court granted the motion.
[7]

On August 7, 1992, copy of the writ of possession was served on petitioner as
owner of the power lines standing on certain portions of the subject
property. Later, on August 12, 1992, Vines Realty filed an amended motion for an
order of demolition and removal
[8]
of improvements on the subject land.
Among the improvements for removal were the power lines and electric posts
belonging to petitioner.
Petitioner opposed the motion
[9]
on the ground, among other reasons, that
petitioner was not a party to the case and therefore not bound by the judgment of
the trial court and that it had subsisting right-of-way agreements over said
property.
The trial court
[10]
set the hearing on the amended motion on September 29, 1992
but the hearing was re-scheduled on October 28, 1992, and then again on
November 10, 1992.
[11]
On all these dates, no hearing was conducted.
Then the case was re-raffled to Branch 39 of the regional trial court presided over
by respondent judge.
On November 27, 1992, the trial court
[12]
set the hearing on the amended motion
for demolition. However, instead of adducing evidence for petitioner, its
counsel
[13]
manifested that he was withdrawing his appearance since the authority
given him by petitioner was only for the filing of the opposition to the amended
30
motion. The trial court proceeded with the hearing despite the fact that petitioner
had no counsel present. Thus, only Vines Realty presented its evidence.
On the same date, November 27, 1992, the trial court ordered the issuance of a
writ of demolition directing and deputizing Lt. Col. Rufino Chavez, Jr. and Capt.
Alfredo Borja to constitute an augmentation force for the immediate
implementation of the writ.
[14]

On December 7, 1992, petitioner filed with the Court of Appeals a petition for
prohibition with restraining order and preliminary injunction.
[15]
Petitioner argued
that the trial court acted without or in excess of its jurisdiction or with grave abuse
of discretion in issuing the order dated November 27. 1992.
On December 10, 1992, the Court of Appeals sent telegrams to respondents
informing them of the issuance of a restraining order. On the same day, however,
the trial court issued a writ of demolition.
[16]
The court addressed the writ to sheriff
Eduardo de los Reyes,
[17]
who was not a respondent in the petition before the
Court of Appeals, so that the latter can implement the writ on the pretext that he
was not covered by the restraining order.
On December 11, 1992, the trial court issued another order directing the National
Power Corporation sub-unit in Camarines Norte to shut off the power lines
energizing the New Lucena Oil Products Corporation, one of the consumers
serviced by petitioner, as shown by the radiogram
[18]
of Simeon P. Zao , OC
Labo, NPC. Mr. Zao filed a manifestation
[19]
with the trial court that if NPC would
shut off said power supply before the sub-station of petitioner, it would deprive
Benguet Mining Corporation of electricity and endanger the lives of its miners.
On the same day, December 11, 1992, respondent Vines Realty cut down
petitioner's electric posts professedly using a chainsaw
[20]
and resulting in a loud
blast affecting the area. Philippine National Police desk officer Bianito
Cobacha
[21]
of Barangay Jose Panganiban Police Station entered in the police
blotter that on December 11, 1992, at about 2 p.m., men led by the provincial
sheriff felled petitioner's electric posts along the cemetery of Bagumbayan.
Even the members of the Sangguniang Bayan at San Jose appealed to
respondent Sheriff to desist from proceeding with the demolition due to a
restraining order but to no avail.
On January 4, 1993, Vines Realty filed with the trial court a motion for the issuance
of an alias writ of demolition.
[22]
The hearing was scheduled on January 12, 1993,
at 8:30 a. m. but petitioner's lawyer, Atty. Jose Maacop, received a copy only on
January 11, 1994.
Atty. Bienvenido A. Paita made a special appearance for petitioner through a
manifestation with motion for reconsideration
[23]
dated January 21, 1993. Atty.
Paita declared it was impossible for him to appear and file an opposition to the
motion on very short notice. He said that petitioner was not a party to the case,
that the restraining order of the Court of Appeals was good until further orders, and
the writ of execution was executed on December 11, 1992. Petitioner manifested
that it was denied its day in court.
On January 25, 1993,
[24]
the trial court denied the motion for reconsideration on the
ground that the appearance of Atty. Paita was irregular and that Atty. Maacop as
the counsel in the appellate court must first make an entry of appearance with the
trial court.
On January 26, 1993, the trial court issued an alias writ of demolition.
[25]

The sheriff, at the request of Vines Realty demolished the remaining electric posts
resulting in the cutting off of power supply to various business establishments and
barangays.
Meantime, on January 19, 1993, the Court of Appeals, promulgated a
decision
[26]
dismissing the petition for lack of merit.
"WHEREFORE, the present petition is DSMSSED for lack of merit.
"Let it be stated that the temporary restraining order which was issued by this
Court on December 9, 1992 has a limited life of twenty (20) days from date of
issue (Carbungco vs. CA, 181 SCRA 313) and has therefore become void at the
expiration of the said twenty (20) days (law at Buklod ng Manggagawa vs. NLRC,
198 SCRA 586).
"SO ORDERED.
On February 19, 1993, petitioner's new counsel, Gancayco Law Offices, filed with
the Court of Appeals an Urgent Appearance And Motion To Admit Supplemental
Petition.
[27]
This was a new petition for certiorari and prohibition with prayer for
issuance of a writ of mandatory injunction.
[28]

On March 15, 1993, the Court of Appeals denied the motion for
reconsideration as well as the admission of the supplemental petition on the
ground that the petition had been decided.
[29]

Meanwhile, in response to the public's urgent basic need, petitioner re-constructed
its power lines along the provincial road leading to the Port of Osmea upon
authority of the District Engineer of the Department of Public Works and Highways
[DPWH].
On April 23, 1993, however, petitioner received a letter dated April 10, 1993,
stating that Vines Realty was the owner of the roadside and that petitioner could
not construct power lines therein without its permission. Petitioner promptly replied
that the power lines were constructed within the right of way of the provincial road
leading to the port of Osmea as granted by the District Engineer of DPWH.
Hence, this petition.
[30]

At issue is whether petitioner is entitled to retain possession of the power lines
located in the land sold at public auction as a result of extra-judicial foreclosure of
mortgage.
The most basic tenet of due process is the right to be heard.
[31]
A court denies a
party due process if it renders its orders without giving such party an opportunity to
present its evidence.
[32]

We find that petitioner was denied due process. Petitioner could have negated
private respondent's claims by showing the absence of legal or factual basis
therefor if only the trial court in the exercise of justice and equity reset the hearing
instead of proceeding with the trial and issuing an order of demolition on the same
day.
t is incumbent upon the trial court to receive evidence on petitioner's right over the
property to be demolished.
31
The essence of due process is an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side or an opportunity
to seek a reconsideration of the action or ruling complained of.
[33]
Due process is
equally applicable in a case involving public utilities, where a strict application of
the rules would bring about catastrophic inconveniences to the public. Hence, the
act would do more harm than good to the public, which the government seeks to
protect. Damages and losses of a considerable amount of time (about 8 years)
could have been prevented if the trial court did not gravely abuse its discretion on
the matter.
Well aware that the counsel was not authorized, the trial court could have
stretched its liberality a little to ensure that it would serve the ends of justice well
for the people of Camarines Norte. Petitioner must be given the chance to prove
its position.
We cannot conceive how, knowing fully well that destroying the power lines and
electric posts would cause overwhelming losses to a lot of business
establishments and a great inconvenience to a lot of people, the trial court still
ordered the demolition of the property. Their personal motives aside, the Court
finds that the trial court gravely abused its discretion in hastily ordering the removal
of the electric posts.
We are not a trier of facts. We cannot determine whether petitioner's Agreements
of Right of Way
[34]
or that of the authorization
[35]
of the OC District Engineer to
construct electric posts within the limits of the road right of way were genuine
instruments. We can, however, determine the legality of the acts of the trial court
in issuing the writs of demolition over the property.
The trial court failed to appreciate the nature of electric cooperatives as public
utilities.
Among the powers granted to electric cooperatives by virtue of Presidential
Decree No. 269
[36]
are:
"Section 16 Powers-
(j) To construct, maintain and operate electric transmission and distribution lines
along, upon, under and across publicly owned lands and public thoroughfares,
including, without limitation, all roads, highways, streets, alleys, bridges and
causeways; Provided, that such shall not prevent or unduly impair the primary
public uses to which such lands and thoroughfares are otherwise devoted;
"(k) To exercise the power of eminent domain in the manner provided by law for
the exercise of such power by other corporations constructing or operating electric
generating plants and electric transmission and distribution lines or systems.
Electric cooperatives, like CANORECO, are vested with the power of eminent
domain.
The acquisition of an easement of a right-of-way falls within the purview of the
power of eminent domain. Such conclusion finds support in easements of right-of-
way where the Supreme Court sustained the award of just compensation for
private property condemned for public use.
[37]
The Supreme Court, in Republic
vs. PLDT
[38]
thus held that:
"Normally, of course, the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated property; but no
cogent reason appears why said power may not be availed of to impose only a
burden upon the owner of condemned property, without loss of title and
possession. t is unquestionable that real property may, through expropriation, be
subjected to an easement of right-of-way."
However, a simple right-of-way easement transmits no rights, except the
easement.
[39]
Vines Realty retains full ownership and it is not totally deprived of the
use of the land. t can continue doing what it wants to do with the land, except
those that would result in contact with the wires.
The acquisition of this easement, nevertheless, is not gratis. Considering the
nature and effect of the installation power lines, the limitations on the use of the
land for an indefinite period deprives private respondents of its ordinary use. For
these reasons, Vines Realty is entitled to payment of just compensation,
[40]
which
must be neither more nor less than the money equivalent of the property.
Just compensation has been understood to be the just and complete equivalent of
the loss, which the owner of the res expropriated has to suffer by reason of the
expropriation.
[41]
The value of the land and its character at the time it was taken by
the Government are the criteria for determining just compensation.
[42]
No matter
how commendable petitioner's purpose is, it is just and
equitable that Vines Realty be compensated the fair and full equivalent for the
taking of its property, which is the measure of the indemnity, not whatever gain
would accrue to the expropriating entity.
[43]

Moreover, CANORECO only sought the continuation of the exercise of its right-of-
way easement and not ownership over the land. Public utilities' power of eminent
domain may be exercised although title is not transferred to the expropriator.
[44]

Consequently, we rule that a court's writ of demolition can not prevail over the
easement of a right-of-way which falls within the power of eminent domain.
WHEREFORE, the petition is hereby GRANTED. The decision of the Court of
Appeals promulgated on January 19, 1993, and the resolution adopted on March
15, 1993, in CA-G. R. SP No. 29624, are SET ASDE. The orders of the trial court
dated November 27, 1992, December 10, 1992, January 18, 1993, and January
25, 1993 and the writs of demolition issued on December 11, 1992, and January
26, 1993, are ANNULLED.
Private respondents are ordered to restore or restitute petitioner's electric posts
and power lines or otherwise indemnify petitioner for the cost of the restoration
thereof. Finally, private respondents are permanently enjoined or prohibited from
disturbing or interfering with the operation and maintenance of the business of
petitioner.
Costs against private respondents.
SO ORDERED.
avide, Jr., C.J., (Cairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.
Republic of the Philippines
SUPREME COURT
Baguio City

EN BANC

32


G.R. No. 132922 April 21, 1998

TELECOMMUNCATONS AND BROADCAST ATTORNEYS OF THE
PHLPPNES, NC. and GMA NETWORK, NC., petitioners,
vs.
THE COMMSSON ON ELECTONS, respondent.



MENDOZA, J.:

n Osmea v. COMELEC, G.R. No. 132231, decided March 31, 1998, 1 we upheld
the validity of 11(b) of R.A. No. 6646 which prohibits the sale or donation of print
space or air time for political ads, except to the Commission on Elections under
90, of B.P. No. 881, the Omnibus Election Code, with respect to print media, and
92, with respect to broadcast media. n the present case, we consider the validity
of 92 of B.P. Blg. No. 881 against claims that the requirement that radio and
television time be given free takes property without due process of law; that it
violates the eminent domain clause of the Constitution which provides for the
payment of just compensation; that it denies broadcast media the equal protection
of the laws; and that, in any event, it violates the terms of the franchise of
petitioner GMA Network, nc.

Petitioner Telecommunications and Broadcast Attorneys of the Philippines, nc. is
an organization of lawyers of radio and television broadcasting companies. They
are suing as citizens, taxpayers, and registered voters. The other petitioner, GMA
Network, nc., operates radio and television broadcasting stations throughout the
Philippines under a franchise granted by Congress.

Petitioners challenge the validity of 92 on the ground (1) that it takes property
without due process of law and without just compensation; (2) that it denies radio
and television broadcast companies the equal protection of the laws; and (3) that it
is in excess of the power given to the COMELEC to supervise or regulate the
operation of media of communication or information during the period of election.

The Question of Standing

At the threshold of this suit is the question of standing of petitioner
Telecommunications and Broadcast Attorneys of the Philippines, nc. (TELEBAP).
As already noted, its members assert an interest as lawyers of radio and television
broadcasting companies and as citizens, taxpayers, and registered voters.

n those cases 2 in which citizens were authorized to sue, this Court upheld their
standing in view of the "transcendental importance" of the constitutional question
raised which justified the granting of relief. n contrast, in the case at bar, as will
presently be shown, petitioner's substantive claim is without merit. To the extent,
therefore, that a party's standing is determined by the substantive merit of his case
or preliminary estimate thereof, petitioner TELEBAP must be held to be without
standing. ndeed, a citizen will be allowed to raise a constitutional question only
when he can show that he has personally suffered some actual or threatened
injury as a result of the allegedly illegal conduct of the government; the injury fairly
is fairly traceable to the challenged action; and the injury is likely to be redressed
by a favorable action. 3 Members of petitioner have not shown that they have
suffered harm as a result of the operation of 92 of B.P. Blg. 881.

Nor do members of petitioner TELEBAP have an interest as registered voters
since this case does not concern their right of suffrage. Their interest in 92 of B.P.
Blg. 881 should be precisely in upholding its validity.

Much less do they have an interest as taxpayers since this case does not involve
the exercise by Congress of its taxing or spending power. 4 A party suing as a
taxpayer must specifically show that he has a sufficient interest in preventing the
illegal expenditure of money raised by taxation and that he will sustain a direct
injury as a result of the enforcement of the questioned statute.

Nor indeed as a corporate entity does TELEBAP have standing to assert the rights
of radio and television broadcasting companies. Standing jus tertii will be
recognized only if it can be shown that the party suing has some substantial
relation to the third party, or that the third party cannot assert his constitutional
right, or that the eight of the third party will be diluted unless the party in court is
allowed to espouse the third party's constitutional claim. None of these
circumstances is here present. The mere fact that TELEBAP is composed of
lawyers in the broadcast industry does not entitle them to bring this suit in their
name as representatives of the affected companies.

Nevertheless, we have decided to take this case since the other petitioner, GMA
Network, nc., appears to have the requisite standing to bring this constitutional
challenge. Petitioner operates radio and television broadcast stations in the
Philippines affected by the enforcement of 92 of B.P. Blg. 881 requiring radio and
television broadcast companies to provide free air time to the COMELEC for the
use of candidates for campaign and other political purposes.

Petitioner claims that it suffered losses running to several million pesos in
providing COMELEC Time in connection with the 1992 presidential election and
the 1995 senatorial election and that it stands to suffer even more should it be
required to do so again this year. Petitioner's allegation that it will suffer losses
again because it is required to provide free air time is sufficient to give it standing
to question the validity of 92. 5

Airing of COMELEC Time, a
33

Reasonable Condition for

Grant of Petitioner's

Franchise

As pointed out in our decision in Osmea v. COMELEC, 11(b) of R.A. No. 6646
and 90 and 92 of the B.P. Blg. 881 are part and parcel of a regulatory scheme
designed to equalize the opportunity of candidates in an election in regard to the
use of mass media for political campaigns. These statutory provisions state in
relevant parts:

R.A. No. 6646

Sec. 11. Prohibited Forms of Election Propaganda. n addition to the
forms of election propaganda prohibited under Section 85 of Batas Pambansa Blg.
881, it shall be unlawful:

xxx xxx xxx

(b) for any newspapers, radio broadcasting or television station, or other mass
media, or any person making use of the mass media to sell or to give free of
charge print space or air time for campaign or other political purposes except to
the Commission as provided under Section 90 and 92 of Batas Pambansa Blg.
881. Any mass media columnist, commentator, announcer or personality who is a
candidate for any elective public office shall take a leave of absence from his work
as such during the campaign period.

B.P. Blg. 881, (Omnibus Election Code)

Sec. 90. Comelec space. The Commission shall procure space in at
least one newspaper of general circulation in every province or city; Provided,
however, That in the absence of said newspaper, publication shall be done in any
other magazine or periodical in said province or city, which shall be known as
"Comelec Space" wherein candidates can announce their candidacy. Said space
shall be allocated, free of charge, equally and impartially by the Commission
among all candidates within the area in which the newspaper is circulated. (Sec.
45, 1978 EC).

Sec. 92. Comelec time. The commission shall procure radio and
television time to be known as "Comelec Time" which shall be allocated equally
and impartially among the candidates within the area of coverage of all radio and
television stations. For this purpose, the franchise of all radio broadcasting and
television stations are hereby amended so as to provide radio or television time,
free of charge, during the period of the campaign. (Sec. 46, 1978 EC)

Thus, the law prohibits mass media from selling or donating print space and air
time to the candidates and requires the COMELEC instead to procure print space
and air time for allocation to the candidates. t will be noted that while 90 of B.P.
Blg. 881 requires the COMELEC to procure print space which, as we have held,
should be paid for, 92 states that air time shall be procured by the COMELEC
free of charge.

Petitioners contend that 92 of BP Blg. 881 violates the due process clause 6 and
the eminent domain provision 7 of the Constitution by taking air time from radio
and television broadcasting stations without payment of just compensation.
Petitioners claim that the primary source of revenue of the radio and television
stations is the sale of air time to advertisers and that to require these stations to
provide free air time is to authorize a taking which is not "a de minimis temporary
limitation or restraint upon the use of private property." According to petitioners, in
1992, the GMA Network, nc. lost P22,498,560.00 in providing free air time of one
(1) hour every morning from Mondays to Fridays and one (1) hour on Tuesdays
and Thursday from 7:00 to 8:00 p.m. (prime time) and, in this year's elections, it
stands to lose P58,980,850.00 in view of COMELEC'S requirement that radio and
television stations provide at least 30 minutes of prime time daily for the
COMELEC Time. 8

Petitioners' argument is without merit, All broadcasting, whether by radio or by
television stations, is licensed by the government. Airwave frequencies have to be
allocated as there are more individuals who want to broadcast than there are
frequencies to assign. 9 A franchise is thus a privilege subject, among other
things, to amended by Congress in accordance with the constitutional provision
that "any such franchise or right granted . . . shall be subject to amendment,
alteration or repeal by the Congress when the common good so requires." 10

The idea that broadcast stations may be required to provide COMELEC Time free
of charge is not new. t goes back to the Election Code of 1971 (R.A. No. 6388),
which provided:

Sec. 49. Regulation of election propaganda through mass media. (a)
The franchise of all radio broadcasting and television stations are hereby amended
so as to require each such station to furnish free of charge, upon request of the
Commission [on Elections], during the period of sixty days before the election not
more than fifteen minutes of prime time once a week which shall be known as
"Comelec Time" and which shall be used exclusively by the Commission to
disseminate vital election information. Said "Comelec Time" shall be considered as
part of the public service time said stations are required to furnish the Government
for the dissemination of public information and education under their respective
franchises or permits.

34
The provision was carried over with slight modification by the 1978 Election Code
(P.D. No. 1296), which provided:

Sec. 46. COMELEC Time. The Commission [on Elections] shall procure
radio and television time to be known as "COMELEC Time" which shall be
allocated equally and impartially among the candidates within the area of coverage
of said radio and television stations. For this purpose, the franchises of all radio
broadcasting and television stations are hereby amended so as to require such
stations to furnish the Commission radio or television time, free of charge, during
the period of the campaign, at least once but not oftener than every other day.

Substantially the same provision is now embodied in 92 of B.P. Blg. 881.

ndeed, provisions for COMELEC Tima have been made by amendment of the
franchises of radio and television broadcast stations and, until the present case
was brought, such provisions had not been thought of as taking property without
just compensation. Art. X, 11 of the Constitution authorizes the amendment of
franchises for "the common good." What better measure can be conceived for the
common good than one for free air time for the benefit not only of candidates but
even more of the public, particularly the voters, so that they will be fully informed of
the issues in an election? "[]t is the right of the viewers and listeners, not the right
of the broadcasters, which is paramount." 11

Nor indeed can there be any constitutional objection to the requirement that
broadcast stations give free air time. Even in the United States, there are
responsible scholars who believe that government controls on broadcast media
can constitutionally be instituted to ensure diversity of views and attention to public
affairs to further the system of free expression. For this purpose, broadcast
stations may be required to give free air time to candidates in an election. 12 Thus,
Professor Cass R. Sunstein of the University of Chicago Law School, in urging
reforms in regulations affecting the broadcast industry, writes:

Elections. We could do a lot to improve coverage of electoral campaigns.
Most important, government should ensure free media time for candidates. Almost
all European nations make such provisions; the United States does not. Perhaps
government should pay for such time on its own. Perhaps broadcasters should
have to offer it as a condition for receiving a license. Perhaps a commitment to
provide free time would count in favor of the grant of a license in the first instance.
Steps of this sort would simultaneously promote attention to public affairs and
greater diversity of view. They would also help overcome the distorting effects of
"soundbites" and the corrosive financial pressures faced by candidates in seeking
time on the media. 13

n truth, radio and television broadcasting companies, which are given franchises,
do not own the airwaves and frequencies through which they transmit broadcast
signals and images. They are merely given the temporary privilege of using them.
Since a franchise is a mere privilege, the exercise of the privilege may reasonably
be burdened with the performance by the grantee of some form of public service.
Thus, in De Villata v. Stanley, 14 a regulation requiring interisland vessels licensed
to engage in the interisland trade to carry mail and, for this purpose, to give
advance notice to postal authorities of date and hour of sailings of vessels and of
changes of sailing hours to enable them to tender mail for transportation at the last
practicable hour prior to the vessel's departure, was held to be a reasonable
condition for the state grant of license. Although the question of compensation for
the carriage of mail was not in issue, the Court strongly implied that such service
could be without compensation, as in fact under Spanish sovereignty the mail was
carried free. 15

n Philippine Long Distance Telephone Company v. NTC, 16 the Court ordered the
PLDT to allow the interconnection of its domestic telephone system with the
international gateway facility of Eastern Telecom. The Court cited (1) the
provisions of the legislative franchise allowing such interconnection; (2) the
absence of any physical, technical, or economic basis for restricting the linking up
of two separate telephone systems; and (3) the possibility of increase in the
volume of international traffic and more efficient service, at more moderate cost, as
a result of interconnection.

Similarly, in the earlier case of PLDT v. NTC, 17 it was held:

Such regulation of the use and ownership of telecommunications systems is in the
exercise of the plenary police power of the State for the promotion of the general
welfare. The 1987 Constitution recognizes the existence of that power when it
provides:

Sec. 6. The use of property bears a social function, and all economic agents shall
contribute to the common good. ndividuals and private groups, including
corporations, cooperatives, and similar collective organizations, shall have the
right to own, establish, and operate economic enterprises, subject to the duty of
the State to promote distributive justice and to intervene when the common good
so demands (Article X).

The interconnection which has been required of PLDT is a form of "intervention"
with property rights dictated by "the objective of government to promote the rapid
expansion of telecommunications services in all areas of the Philippines, . . . to
maximize the use of telecommunications facilities available, . . . in recognition of
the vital role of communications in nation building . . . and to ensure that all users
of the public telecommunications service have access to all other users of the
service wherever they may be within the Philippines at an acceptable standard of
service and at reasonable cost" (DOTC Circular No. 90-248). Undoubtedly, the
encompassing objective is the common good. The NTC, as the regulatory agency
of the State, merely exercised its delegated authority to regulate the use of
telecommunications networks when it decreed interconnection.
33

n the granting of the privilege to operate broadcast stations and thereafter
supervising radio and television stations, the state spends considerable public
funds in licensing and supervising such stations. 18 t would be strange if it cannot
even require the licensees to render public service by giving free air time.

Considerable effort is made in the dissent of Mr. Justice Panganiban to show that
the production of television programs involves large expenditure and requires the
use of equipment for which huge investments have to be made. The dissent cites
the claim of GMA Network that the grant of free air time to the COMELEC for the
duration of the 1998 campaign period would cost the company P52,380,000,
representing revenue it would otherwise earn if the air time were sold to
advertisers, and the amount of P6,600,850, representing the cost of producing a
program for the COMELEC Time, or the total amount of P58,980,850.

The claim that petitioner would be losing P52,380,000 in unrealized revenue from
advertising is based on the assumption that air time is "finished product" which, it
is said, become the property of the company, like oil produced from refining or
similar natural resources after undergoing a process for their production. But air
time is not owned by broadcast companies. As held in Red Lion Broadcasting Co.
v. F.C.C., 19 which upheld the right of a party personally attacked to reply,
"licenses to broadcast do not confer ownership of designated frequencies, but only
the temporary privilege of using them." Consequently, "a license permits
broadcasting, but the license has no constitutional right to be the one who holds
the license or to monopolize a radio frequency to the exclusion of his fellow
citizens. There is nothing in the First Amendment which prevents the Government
from requiring a licensee to share his frequency with others and to conduct himself
as a proxy or fiduciary with obligations to present those views and voices which
are representative of his community and which would otherwise, by necessity, be
barred from the airwaves." 20 As radio and television broadcast stations do not
own the airwaves, no private property is taken by the requirement that they provide
air time to the COMELEC.

Justice Panganiban's dissent quotes from Tolentino on the Civil Code which says
that "the air lanes themselves 'are not property because they cannot be
appropriated for the benefit of any individual.'" (p. 5) That means neither the State
nor the stations own the air lanes. Yet the dissent also says that "The franchise
holders can recover their huge investments only by selling air time to advertisers."
(p. 13) f air lanes cannot be appropriated, how can they be used to produce air
time which the franchise holders can sell to recover their investment? There is a
contradiction here.

As to the additional amount of P6,600,850, it is claimed that this is the cost of
producing a program and it is for such items as "sets and props," "video tapes,"
"miscellaneous (other rental, supplies, transportation, etc.)," and "technical
facilities (technical crew such as director and cameraman as well as 'on air
plugs')." There is no basis for this claim. Expenses for these items will be for the
account of the candidates. COMELEC Resolution No. 2983, 6(d) specifically
provides in this connection:

(d) Additional services such as tape-recording or video-taping of programs,
the preparation of visual aids, terms and condition thereof, and consideration to be
paid therefor may be arranged by the candidates with the radio/television station
concerned. However, no radio/television station shall make any discrimination
among candidates relative to charges, terms, practices or facilities for in
connection with the services rendered.

t is unfortunate that in the effort to show that there is taking of private property
worth millions of pesos, the unsubstantiated charge is made that by its decision
the Court permits the "grand larceny of precious time," and allows itself to become
"the people's unwitting oppressor." The charge is really unfortunate. n Jackson v.
Rosenbaun, 21 Justice Holmes was so incensed by the resistance of property
owners to the erection of party walls that he was led to say in his original draft, "a
statute, which embodies the community's understanding of the reciprocal rights
and duties of neighboring landowners, does not need to invoke the penalty larceny
of the police power in its justification." Holmes's brethren corrected his taste, and
Holmes had to amend the passage so that in the end it spoke only of invoking "the
police power." 22 Justice Holmes spoke of the "petty larceny" of the police power.
Now we are being told of the "grand larceny [by means of the police power] of
precious air time."

Giving Free Air Time a Duty

Assumed by Petitioner

Petitioners claim that 92 is an invalid amendment of R.A. No. 7252 which granted
GMA Network, nc. a franchise for the operation of radio and television
broadcasting stations. They argue that although 5 of R.A. No. 7252 gives the
government the power to temporarily use and operate the stations of petitioner
GMA Network or to authorize such use and operation, the exercise of this right
must be compensated.

The cited provision of. R.A. No. 7252 states:

Sec. 5. Right of Government. A special right is hereby reserved to the
President of the Philippines, in times of rebellion, public peril, calamity, emergency,
disaster or disturbance of peace and order, to temporarily take over and operate
the stations of the grantee, to temporarily suspend the operation of any station in
the interest of public safety, security and public welfare, or to authorize the
temporary use and operation thereof by any agency of the Government, upon due
compensation to the grantee, for the use of said stations during the period when
they shall be so operated.
36

The basic flaw in petitioner's argument is that it assumes that the provision for
COMELEC Time constitutes the use and operation of the stations of the GMA
Network, nc., This is not so. Under 92 of B.P. Blg. 881, the COMELEC does not
take over the operation of radio and television stations but only the allocation of air
time to the candidates for the purpose of ensuring, among other things, equal
opportunity, time, and the right to reply as mandated by the Constitution. 23

ndeed, it is wrong to claim an amendment of petitioner's franchise for the reason
that B.P. Blg. 881, which is said to have amended R.A. No. 7252, actually
antedated it. 24 The provision of 92 of B.P. Blg. 881 must be deemed instead to
be incorporated in R.A. No. 7252. And, indeed, 4 of the latter statute does.

For the fact is that the duty imposed on the GMA Network, nc. by its franchise to
render "adequate public service time" implements 92 of B.P. Blg. 881.
Undoubtedly, its purpose is to enable the government to communicate with the
people on matters of public interest. Thus, R.A. No. 7252 provides:

Sec. 4. Responsibility to the Public. The grantee shall provide adequate public
service time to enable the Government, through the said broadcasting stations, to
reach the population on important public issues; provide at all times sound and
balanced programming; promote public participation such as in community
programming; assist in the functions of public information and education; conform
to the ethics of honest enterprise; and not use its station for the broadcasting of
obscene and indecent language, speech, act or scene, or for the dissemination of
deliberately false information or willful misrepresentation, or to the detriment of the
public interest, or to incite, encourage, or assist in subversive or treasonable acts.
(Emphasis added).

t is noteworthy that 40 of R.A. No. 6388, from which 92 of B.P. Blg. 881 was
taken, expressly provided that the COMELEC Time should "be considered as part
of the public service time said stations are required to furnish the Government for
the dissemination of public information and education under their respective
franchises or permits." There is no reason to suppose that 92 of B.P. Blg. 881
considers the COMELEC Time therein provided to be otherwise than as a public
service which petitioner is required to render under 4 of its charter (R.A. No.
7252). n sum, B.P. Blg. 881, 92 is not an invalid amendment of petitioner's
franchise but the enforcement of a duty voluntarily assumed by petitioner in
accepting a public grant of privilege.

Thus far, we have confined the discussion to the provision of 92 of B.P. Blg. 881
for free air time without taking into account COMELEC Resolution No. 2983-A, 2
of which states:

Sec. 2. Grant of "Comelec Time." Every radio broadcasting and television
station operating under franchise shall grant the Commission, upon payment of
just compensation, at least thirty (30) minutes of prime time daily, to be known as
"Comelec Time", effective February 10, 1998 for candidates for President, Vice-
President and Senators, and effective March 27, 1998, for candidates for local
elective offices, until May 9, 1998. (Emphasis added).

This is because the amendment providing for the payment of "just compensation"
is invalid, being in contravention of 92 of B.P. Blg. 881 that radio and television
time given during the period of the campaign shall be "free of charge." ndeed,
Resolution No. 2983 originally provided that the time allocated shall be "free of
charge," just as 92 requires such time to be given "free of charge." The
amendment appears to be a reaction to petitioner's claim in this case that the
original provision was unconstitutional because it allegedly authorized the taking of
property without just compensation.

The Solicitor General, relying on the amendment, claims that there should be no
more dispute because the payment of compensation is now provided for. t is
basic, however, that an administrative agency cannot, in the exercise of
lawmaking, amend a statute of Congress. Since 2 of Resolution No. 2983-A is
invalid, it cannot be invoked by the parties.

Law Allows Flextime for Programming

by Stations, Not Confiscation of

Air Time by COMELEC

t is claimed that there is no standard in the law to guide the COMELEC in
procuring free air time and that "theoretically the COMELEC can demand all of the
air time of such stations." 25 Petitioners do not claim that COMELEC Resolution
No. 2983-A arbitrarily sequesters radio and television time. What they claim is that
because of the breadth of the statutory language, the provision in question is
susceptible of "unbridled, arbitrary and oppressive exercise." 26

The contention has no basis. For one, the COMELEC is required to procure free
air time for candidates "within the area of coverage" of a particular radio or
television broadcaster so that it cannot, for example, procure such time for
candidates outside that area. At what time of the day and how much time the
COMELEC may procure will have to be determined by it in relation to the overall
objective of informing the public about the candidates, their qualifications and their
programs of government. As stated in Osmea v. COMELEC, the COMELEC Time
provided for in 92, as well as the COMELEC Space provided for in 90, is in lieu
of paid ads which candidates are prohibited to have under 11(b) of R.A. No.
6646. Accordingly, this objective must be kept in mind in determining the details of
the COMELEC Time as well as those of the COMELEC Space.

37
There would indeed be objection to the grant of power to the COMELEC if 92
were so detailed as to leave no room for accommodation of the demands of radio
and television programming. For were that the case, there could be an intrusion
into the editorial prerogatives of radio and television stations.

Differential Treatment of

Broadcast Media Justified

Petitioners complain that B.P. Blg. 881, 92 singles out radio and television
stations to provide free air time. They contend that newspapers and magazines
are not similarly required as, in fact, in Philippine Press nstitute v. COMELEC, 27
we upheld their right to the payment of just compensation for the print space they
may provide under 90.

The argument will not bear analysis. t rests on the fallacy that broadcast media
are entitled to the same treatment under the free speech guarantee of the
Constitution as the print media. There are important differences in the
characteristics of the two media, however, which justify their differential treatment
for free speech purposes. Because of the physical limitations of the broadcast
spectrum, the government must, of necessity, allocate broadcast frequencies to
those wishing to use them. There is no similar justification for government
allocation and regulation of the print media. 28

n the allocation of limited resources, relevant conditions may validly be imposed
on the grantees or licensees. The reason for this is that, as already noted, the
government spends public funds for the allocation and regulation of the broadcast
industry, which it does not do in the case of the print media. To require the radio
and television broadcast industry to provide free air time for the COMELEC Time is
a fair exchange for what the industry gets.

From another point of view, this Court has also held that because of the unique
and pervasive influence of the broadcast media, "[n]ecessarily . . . the freedom of
television and radio broadcasting is somewhat lesser in scope than the freedom
accorded to newspaper and print media." 29

The broadcast media have also established a uniquely pervasive presence in the
lives of all Filipinos. Newspapers and current books are found only in metropolitan
areas and in the poblaciones of municipalities accessible to fast and regular
transportation. Even here, there are low income masses who find the cost of
books, newspapers, and magazines beyond their humble means. Basic needs like
food and shelter perforce enjoy high priorities.

On the other hand, the transistor radio is found everywhere. The television set is
also becoming universal. Their message may be simultaneously received by a
national or regional audience of listeners including the indifferent or unwilling who
happen to be within reach of a blaring radio or television set. The materials
broadcast over the airwaves reach every person of every age, persons of varying
susceptibilities to persuasion, persons of different .Q.s and mental capabilities,
persons whose reactions to inflammatory or offensive speech would he difficult to
monitor or predict. The impact of the vibrant speech is forceful and immediate.
Unlike readers of the printed work, the radio audience has lesser opportunity to
cogitate, analyze, and reject the utterance. 30

Petitioners' assertion therefore that 92 of B.P. Blg. 881 denies them the equal
protection of the law has no basis. n addition, their plea that 92 (free air time)
and 11(b) of R.A. No. 6646 (ban on paid political ads) should be invalidated
would pave the way for a return to the old regime where moneyed candidates
could monopolize media advertising to the disadvantage of candidates with less
resources. That is what Congress tried to reform in 1987 with the enactment of
R.A. No. 6646. We are not free to set aside the judgment of Congress, especially
in light of the recent failure of interested parties to have the law repealed or at least
modified.

Requirement of COMELEC Time, a Reasonable Exercise of the State's Power to
Regulate
Use of Franchises
Finally, it is argued that the power to supervise or regulate given to the COMELEC
under Art. X-C, 4 of the Constitution does not include the power to prohibit. n the
first place, what the COMELEC is authorized to supervise or regulate by Art. X-C,
4 of the Constitution, 31 among other things, is the use by media of information of
their franchises or permits, while what Congress (not the COMELEC) prohibits is
the sale or donation of print space or air time for political ads. n other words, the
object of supervision or regulation is different from the object of the prohibition. t is
another fallacy for petitioners to contend that the power to regulate does not
include the power to prohibit. This may have force if the object of the power were
the same.
n the second place, the prohibition in 11(b) of R.A. No. 6646 is only half of the
regulatory provision in the statute. The other half is the mandate to the COMELEC
to procure print space and air time for allocation to candidates. As we said in
Osmea v. COMELEC:

The term political "ad ban" when used to describe 11(b) of R.A. No. 6646, is
misleading, for even as 11(b) prohibits the sale or donation of print space and air
time to political candidates, it mandates the COMELEC to procure and itself
allocate to the candidates space and time in the media. There is no suppression of
political ads but only a regulation of the time and manner of advertising.

xxx xxx xxx
. . . What is involved here is simply regulation of this nature. nstead of leaving
candidates to advertise freely in the mass media, the law provides for allocation,
by the COMELEC of print space and air time to give all candidates equal time and
38
space for the purpose of ensuring "free, orderly, honest, peaceful, and credible
elections."
With the prohibition on media advertising by candidates themselves, the
COMELEC Time and COMELEC Space are about the only means through which
candidates can advertise their qualifications and programs of government. More
than merely depriving their qualifications and programs of government. More than
merely depriving candidates of time for their ads, the failure of broadcast stations
to provide air time unless paid by the government would clearly deprive the people
of their right to know. Art , 7 of the Constitution provides that "the right of the
people to information on matters of public concern shall be recognized," while Art.
X, 6 states that "the use of property bears a social function [and] the right to
own, establish, and operate economic enterprises [is] subject to the duty of the
State to promote distributive justice and to intervene when the common good so
demands."
To affirm the validity of 92 of B.P. Blg. 881 is to hold public broadcasters to their
obligation to see to it that the variety and vigor of public debate on issues in an
election is maintained. For while broadcast media are not mere common carriers
but entities with free speech rights, they are also public trustees charged with the
duty of ensuring that the people have access to the diversity of views on political
issues. This right of the people is paramount to the autonomy of broadcast media.
To affirm the validity of 92, therefore, is likewise to uphold the people's right to
information on matters of public concern. The use of property bears a social
function and is subject to the state's duty to intervene for the common good.
Broadcast media can find their just and highest reward in the fact that whatever
altruistic service they may render in connection with the holding of elections is for
that common good.

For the foregoing reasons, the petition is dismissed.

SO ORDERED.

Narvasa, C.J., Regalado, Davide, Jr., Bellosillo, Melo, Puno, Kapunan, Martinez
and Quisumbing, JJ., concur.
Sumulong v. Guerrero 154 SCRA 461 (1987) F: On December 5, 1977, the
National Housing Authority filed a complaint for the expropriation of 25 hectares of
land in Antipolo, Rizal pursuant to PD 1224 authorizing the expropriation of private
lands for socialized housing. Among those lands sought to be expropriated are the
petitioners'' lands. They brought this suit in the SC challenging the constitutionality
of PD 1224. HELD: Petitioners contend that socialized housing for the purpose of
condemnation proceedings is not public use since it will benefit only a handful of
people. The "public use" requirement is an evolving concept influences by
changing conditions. Urban renewal or redevelopment and the construction of low-
cost housing is recognized as a public purpose, not only because of the expanded
concept of public use but also because of specific provisions in the Constitution.
Shortage in housing is a matter of state concern since it directly and significantly
affects public health, safety, the environment and, in sum, the general welfare.
Petitioners claim that there are vast areas of lands in Rizal hundreds of hectares of
which are owned by a few landowners only. Why should the NHA pick their small
lots? Expropriation is not confined to landed estates. The test to be applied for a
valid expropriation of private lands was the area of the land and not the number of
people who stood to be benefitted. The State acting through the NHA is vested
with broad discretion to designate the property. The property owner may not
interpose objections merely because in their judgment some other property would
have been more suitable. The provisions on just compensation found in PD 1224,
1259, and 1313 are the same provisions which were declared unconstitutional in
EPZA v. Dulay (1987) for being encroachments on judicial prerogatives.

Republic of the Philippines
SUPREME COURT
Manila
FRST DVSON

G.R. No. 103125 May 17, 1993
PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R.
VILLAFUERTE and HON. BENJAMIN V. PANGA as Presiding Judge of RTC
Branch 33 at PiIi, Camarines Sur, petitioners,
vs.
THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and
EFREN SAN JOAQUIN,respondents.
%e Provincial ttorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.

QUIASON,
n this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP
No. 20551 entitled "Ernesto N. San Joaquin, et al., v. Hon. Benjamin V. Panga, et
al.," this Court is asked to decide whether the expropriation of agricultural lands by
local government units is subject, to the prior approval of the Secretary of the
Agrarian Reform, as the implementator of the agrarian reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the Province of
Camarines Sur passed Resolution No. 129, Series of 1988, authorizing the
Provincial Governor to purchase or expropriate property contiguous to the
provincial capitol site, in order to establish a pilot farm for non-food and non-
traditional agricultural crops and a housing project for provincial government
employees.
The "WHEREAS" clause o:f the Resolution states:
WHEREAS, the province of Camarines Sur has adopted a five-year
Comprehensive Development plan, some of the vital components of which
includes the establishment of model and pilot farm for non-food and non-traditional
agricultural crops, soil testing and tissue culture laboratory centers, 15 small scale
technology soap making, small scale products of plaster of paris, marine biological
and sea farming research center,and other progressive feasibility concepts
objective of which is to provide the necessary scientific and technology know-how
39
to farmers and fishermen in Camarines Sur and to establish a housing project for
provincial government employees;
WHEREAS, the province would need additional land to be acquired either by
purchase or expropriation to implement the above program component;
WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial
Capitol Site ideally suitable to establish the same pilot development center;
WHEREFORE . . . .
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor,
Hon. Luis R.Villafuerte, filed two separate cases for expropriation against Ernesto
N. San Joaquin and Efren N. San Joaquin, docketed as Special Civil Action Nos.
P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided by
the Hon. Benjamin V. Panga.
Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of
possession. The San Joaquins failed to appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy
of the price offered for their property. n an order dated December 6, 1989, the trial
court denied the motion to dismiss and authorized the Province of Camarines Sur
to take possession of the property upon the deposit with the Clerk of Court of the
amount of P5,714.00, the amount provisionally fixed by the trial court to answer for
damages that private respondents may suffer in the event that the expropriation
cases do not prosper. The trial court issued a writ of possession in an order dated
January18, 1990.
The San Joaquins filed a motion for relief from the order, authorizing the Province
of Camarines Sur to take possession of their property and a motion to admit an
amended motion to dismiss. Both motions were denied in the order dated
February 1990.
n their petition before the Court of Appeals, the San Joaquins asked: (a) that
Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan be declared
null and void; (b) that the complaints for expropriation be dismissed; and (c) that
the order dated December 6, 1989 (i) denying the motion to dismiss and (ii)
allowing the Province of Camarines Sur to take possession of the property subject
of the expropriation and the order dated February 26, 1990, denying the motion to
admit the amended motion to dismiss, be set aside. They also asked that an order
be issued to restrain the trial court from enforcing the writ of possession, and
thereafter to issue a writ of injunction.
n its answer to the petition, the Province of Camarines Sur claimed that it has the
authority to initiate the expropriation proceedings under Sections 4 and 7 of Local
Government Code (B.P. Blg. 337) and that the expropriations are for a public
purpose.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor
General stated that under Section 9 of the Local Government Code (B.P. Blg.
337), there was no need for the approval by the Office of the President of the
exercise by the Sangguniang Panlalawigan of the right of eminent domain.
However, the Solicitor General expressed the view that the Province of Camarines
Sur must first secure the approval of the Department of Agrarian Reform of the
plan to expropriate the lands of petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of
Camarines Sur to take possession of private respondents' lands and the order
denying the admission of the amended motion to dismiss. t also ordered the trial
court to suspend the expropriation proceedings until after the Province of
Camarines Sur shall have submitted the requisite approval of the Department of
Agrarian Reform to convert the classification of the property of the private
respondents from agricultural to non-agricultural land.
Hence this petition.
t must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the
dismissal of the complaints for expropriation on the ground of the inadequacy of
the compensation offered for the property and (ii) the nullification of Resolution No.
129, Series of 1988 of the Sangguniang Panlalawigan of the Province of
Camarines Sur.
The Court of Appeals did not rule on the validity of the questioned resolution;
neither did it dismiss the complaints. However, when the Court of Appeals ordered
the suspension of the proceedings until the Province of Camarines Sur shall have
obtained the authority of the Department of Agrarian Reform to change the
classification of the lands sought to be expropriated from agricultural to non-
agricultural use, it assumed that the resolution is valid and that the expropriation is
for a public purpose or public use.
Modernly, there has been a shift from the literal to a broader interpretation of
"public purpose" or "public use" for which the power of eminent domain may be
exercised. The old concept was that the condemned property must actually be
used by the general public (e.g. roads, bridges, public plazas, etc.) before the
taking thereof could satisfy the constitutional requirement of "public use". Under
the new concept, "public use" means public advantage, convenience or benefit,
which tends to contribute to the general welfare and the prosperity of the whole
community, like a resort complex for tourists or housing project (Heirs of Juancho
Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SC.RA 461
[1987]).
The expropriation of the property authorized by the questioned resolution is for a
public purpose. The establishment of a pilot development center would inure to the
direct benefit and advantage of the people of the Province of Camarines Sur. Once
operational, the center would make available to the community invaluable
information and technology on agriculture, fishery and the cottage industry.
Ultimately, the livelihood of the farmers, fishermen and craftsmen would be
enhanced. The housing project also satisfies the public purpose requirement of the
Constitution. As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic
human need. Shortage in housing is a matter of state concern since it directly and
significantly affects public health, safety, the environment and in sum the general
welfare."
t is the submission of the Province of Camarines Sur that its exercise of the power
of eminent domain cannot be restricted by the provisions of the Comprehensive
Agrarian Reform Law (R.A. No. 6657), particularly Section 65 thereof, which
requires the approval of the Department of Agrarian Reform before a parcel of land
can be reclassified from an agricultural to a non-agricultural land.
60
The Court of Appeals, following the recommendation of the Solicitor General, held
that the Province of Camarines Sur must comply with the provision of Section 65 of
the Comprehensive Agrarian Reform Law and must first secure the approval of the
Department of Agrarian Reform of the plan to expropriate the lands of the San
Joaquins.
n Heirs of Juanco rdana v. Reyes, 125 SCRA 220, petitioners raised the issue
of whether the Philippine Tourism Authority can expropriate lands covered by the
"Operation Land Transfer" for use of a tourist resort complex. There was a finding
that of the 282 hectares sought to be expropriated, only an area of 8,970 square
meters or less than one hectare was affected by the land reform program and
covered by emancipation patents issued by the Ministry of Agrarian Reform. While
the Court said that there was "no need under the facts of this petition to rule on
whether the public purpose is superior or inferior to another purpose or engage in
a balancing of competing public interest," it upheld the expropriation after noting
that petitioners had failed to overcome the showing that the taking of 8,970 square
meters formed part of the resort complex. A fair and reasonable reading of the
decision is that this Court viewed the power of expropriation as superior to the
power to distribute lands under the land reform program.
The Solicitor General denigrated the power to expropriate by the Province of
Camarines Sur by stressing the fact that local government units exercise such
power only by delegation. (Comment, pp. 14-15; Rollo, pp. 128-129)
t is true that local government units have no inherent power of eminent domain
and can exercise it only when expressly authorized by the legislature (City of
Cincinnati v. Vester, 28l US 439, 74 L.ed. 950, 50 SCt. 360). t is also true that in
delegating the power to expropriate, the legislature may retain certain control or
impose certain restraints on the exercise thereof by the local governments (Joslin
Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such
delegated power may be a limited authority, it is complete within its limits.
Moreover, the limitations on the exercise of the delegated power must be clearly
expressed, either in the law conferring the power or in other legislations.
Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of
B.P. Blg. 337, the Local Government Code, which provides:
A local government unit may, through its head and acting pursuant to a resolution
of its sanggunian exercise the right of eminent domain and institute condemnation
proceedings for public use or purpose.
Section 9 of B.P. Blg. 337 does not intimate in the least that local government,
units must first secure the approval of the Department of Land Reform for the
conversion of lands from agricultural to non-agricultural use, before they can
institute the necessary expropriation proceedings. Likewise, there is no provision
in the Comprehensive Agrarian Reform Law which expressly subjects the
expropriation of agricultural lands by local government units to the control of the
Department of Agrarian Reform. The closest provision of law that the Court of
Appeals could cite to justify the intervention of the Department of Agrarian Reform
in expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law,
which reads:
Sec. 65. Conversion of Lands. After the lapse of five (5) years from its award,
when the land ceases to be economically feasible and sound for, agricultural
purposes, or the locality has become urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes, the DAR, upon
application of the beneficiary or the landowner, with due notice to the affected
parties, and subject to existing laws, may authorize the reclassification or
conversion of the land and its disposition: Provided, That the beneficiary shall have
fully paid his obligation.
The opening, adverbial phrase of the provision sends signals that it applies to
lands previously placed under the agrarian reform program as it speaks of "the
lapse of five (5) years from its award."
The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of
Executive Order No. 129-A, Series of 1987, cannot be the source of the authority
of the Department of Agrarian Reform to determine the suitability of a parcel of
agricultural land for the purpose to which it would be devoted by the expropriating
authority. While those rules vest on the Department of Agrarian Reform the
exclusive authority to approve or disapprove conversions of agricultural lands for
residential, commercial or industrial uses, such authority is limited to the
applications for reclassification submitted by the land owners or tenant
beneficiaries.
Statutes conferring the power of eminent domain to political subdivisions cannot
be broadened or constricted by implication (Schulman v. People, 10 N.Y. 2d. 249,
176 N.E. 2d. 817, 219 NYS 2d. 241).
To sustain the Court of Appeals would mean that the local government units can
no longer expropriate agricultural lands needed for the construction of roads,
bridges, schools, hospitals, etc, without first applying for conversion of the use of
the lands with the Department of Agrarian Reform, because all of these projects
would naturally involve a change in the land use. n effect, it would then be the
Department of Agrarian Reform to scrutinize whether the expropriation is for a
public purpose or public use.
Ordinarily, it is the legislative branch of the local government unit that shall
determine whether the use of the property sought to be expropriated shall be
public, the same being an expression of legislative policy. The courts defer to such
legislative determination and will intervene only when a particular undertaking has
no real or substantial relation to the public use (United States Ex Rel Tennessee
Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel
Twin City Bldg. and nvest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR
585).
There is also an ancient rule that restrictive statutes, no matter how broad their
terms are, do not embrace the sovereign unless the sovereign is specially
mentioned as subject thereto (Alliance of Government Workers v. Minister of Labor
and Employment, 124 SCRA 1 [1983]). The Republic of the Philippines, as
sovereign, or its political subdivisions, as holders of delegated sovereign powers,
cannot be bound by provisions of law couched in general term.
The fears of private respondents that they will be paid on the basis of the valuation
declared in the tax declarations of their property, are unfounded. This Court has
61
declared as unconstitutional the Presidential Decrees fixing the just compensation
in expropriation cases to be the value given to the condemned property either by
the owners or the assessor, whichever was lower ([Export Processing Zone
Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of %alisay v.
Ramirez, 183 SCRA 528 [1990], the rules for determining just compensation are
those laid down in Rule 67 of the Rules of Court, which allow private respondents
to submit evidence on what they consider shall be the just compensation for their
property.
WHEREFORE, the petition is GRANTED and the questioned decision of the Court
of Appeals is set aside insofar as it (a) nullifies the trial court's order allowing the
Province of Camarines Sur to take possession of private respondents' property; (b)
orders the trial court to suspend the expropriation proceedings; and (c) requires
the Province of Camarines Sur to obtain the approval of the Department of
Agrarian Reform to convert or reclassify private respondents' property from
agricultural to non-agricultural use.
The decision of the Court of Appeals is AFFRMED insofar as it sets aside the
order of the trial court, denying the amended motion to dismiss of the private
respondents.
SO ORDERED.
Cruz, Grio-quino and ellosillo, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila

THRD DVSON



G.R. No. 107916 March 31, 1995

PERCVAL MODAY, ZOTCO MODAY (deceased) and LEONORA MODAY,
petitioners,
vs.
COURT OF APPEALS, JUDGE EVANGELNE S. YUPCO OF BRANCH 6
REGONAL TRAL COURT, AGUSAN DEL SUR AND MUNCPALTY OF
BUNAWAN, respondents.



ROMERO, J.:

Petitioner seeks the resolution of his Omnibus Motion for the Enforcement of
Restraining Order and Contempt.

n connection with the petition for review involving the expropriation of petitioners'
land by respondent Municipality of Bunawan Agusan Del Sur, the Court on
December 8, 1993 resolved to issue a temporary restraining order enjoining and
restraining

a) Judge Evangeline S. Yuipco of the Regional Trial Court of Prosperidad,
Agusan Del Sur; Branch 6, from further enforcing her decision, dated July 2, 1991
in Special Civil Case No. 719, for "Eminent Domain", and

b) the respondent Municipality of Bunawan, through its incumbent Mayor
from using and occupying all buildings constructed within and from further
constructing any building on the land subject of the petition, effective immediately
and until herein further orders from this Court.

n his aforesaid Omnibus Motion, petitioner alleges that the municipal mayor
continues to use the buildings on the subject land and even constructed new
"blocktiendas" thereon in October 1994. Photographs, affidavits and an invitation
to an affair held there attached to the motion show such continuing use of the
subject land. He prays that the municipal mayor and municipal officials be cited for
contempt.

Petitioner also alleges that the sheriff has refused to enforce the TRO enjoining his
regional trial court from proceeding with the case. Accordingly, he prays that a law
enforcement agency be designated to enforce the restraining order by padlocking
the buildings and demolishing the blocktiendas on the land.

n their opposition to the motion, respondent municipal mayor admits the
construction of temporary booths for a certain municipal project which was due to
be demolished after October 29, 1994. However, no photos or other proofs were
submitted to show that the booths had indeed been demolished. Respondent also
alleges that the buildings and the land were indeed used, not for Mayor Bustillo's
personal purposes, but for public service and public interest.

Respondent Municipality of Bunawan, acting through its mayor, clearly disobeyed
the restraining order issued by the Court on December 8, 1993. Respondent
admits having constructed temporary booths on the subject lands as well as
having used the buildings thereon for public service-oriented activities.

The explanation given by respondent municipality is unacceptable. The purpose
for which the buildings were used is immaterial. Respondent was duty bound to
obey the injunction issued by this Court. The TRO was explicit in its language.
Violating its purpose and language is patently contemptuous and merits the
corresponding punishment.

We reiterate the restraining order issued by the Court on December 8, 1993.

WHEREFORE, the respondent Municipality of Bunawan, Agusan Del Sur, through
its incumbent Municipal Mayor, is cited for contempt and is hereby FNED in the
62
amount of one thousand pesos (P1,000.00) with the WARNNG that a repetition or
continuation of the acts herein found to constitute contempt of court will be dealt
with more severely. The mayor is hereby ordered to DEMOLSH the structures
subject of the restraining order.

SO ORDERED.

Feliciano, Melo, Vitug and Francisco, JJ., concur.
FIRST DIVISION

AMOS P. FRANCIA, JR., G.R. No. 170432
CECILIA P. FRANCIA,
AND HEIRS OF BENJAMIN
P. FRANCIA, Present:
Petitioners,
PUNO, C.J., Cairperson,
CARPO,
CORONA,
AZCUNA and
- v e r s u s - LEONARDO-DE CASTRO, JJ.



MUNICIPALITY OF
MEYCAUAYAN,
Respondent. Promulgated:

March 24, 2008

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

R E S O L U T I O N


CORONA, .:
On February 6, 2003, respondent Municipality of Meycauayan, Bulacan
filed a complaint for expropriation
[1]
against petitioners Amos P. Francia, Jr.,
Cecilia P. Francia and Benjamin P. Francia
[2]
in the Regional Trial Court (RTC) of
Malolos, Bulacan, Branch 16. Respondent needed petitioners' 16,256 sq. m. idle
property at the junction of the North Expressway, Malhacan-ba-Camalig main road
artery and the MacArthur Highway.
[3]
t planned to use it to establish a common
public terminal for all types of public utility vehicles with a weighing scale for heavy
trucks.
n their answer,
[4]
petitioners denied that the property sought to be
expropriated was raw land. t was in fact developed
[5]
and there were plans for
further development. For this reason, respondent's offer price of P2,333,500
(or P111.99 per square meter) was too low.
After trial, the RTC ruled that the expropriation was for a public purpose.
The construction of a common terminal for all public utility conveyances (serving
as a two-way loading and unloading point for commuters and goods) would
improve the flow of vehicular traffic during rush hours. Moreover, the property was
the best site for the proposed terminal because of its accessibility. Thus, on
November 8, 2004, the RTC issued the following order:
[6]

WHEREFORE, premises considered, after [respondent] has deposited
with this Court the fifteen percent (15%) of the fair market value of the property
based on the current tax declaration of the property to be expropriated, it may take
immediate possession of the property upon issuance of writ of possession that this
court will issue for that purpose.

Further, the purposes of assessment and determination of the area needed
that will suit the purpose of expropriation and just compensation of the lot sought
to be expropriated, the court hereby appoints commissioners to be composed of
the officer-in-charge of this court, Lerida Socorro E. Joson and one each from
[respondent] and [petitioners].

Notify all parties concerned.

SO ORDERED.
[7]

Petitioners moved for the reconsideration of the November 8, 2004 order
but the motion was denied in an order dated January 31, 2005.
Aggrieved, petitioners filed a petition for certiorari in the Court of Appeals
(CA) contending that the RTC committed grave abuse of discretion in issuing its
November 8, 2004 and January 31, 2005 orders. They claimed that the trial court
issued the orders without conducting a hearing to determine the existence of a
public purpose.
On July 28, 2005, the CA rendered a decision
[8]
partially granting the
petition. Finding that petitioners were deprived of an opportunity to controvert
respondent's allegations, the appellate court nullified the order of expropriation
except with regard to the writ of possession. According to the CA, a hearing was
not necessary because once the expropriator deposited the required amount (with
the Court), the issuance of a writ of possession became ministerial.
Petitioners moved for partial reconsideration but their motion was denied.
Hence, this recourse.
Petitioners essentially aver that the CA erred in upholding the RTC's orders
that, in expropriation cases, prior determination of the existence of a public
purpose was not necessary for the issuance of a writ of possession.
We deny the petition.
Section 19 of Republic Act 7160
[9]
provides:
Section 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
63
landless, upon payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws; Provided, owever, That the power of eminent
domain may not be exercised unless a valid and definite offer has been previously
made to the owner, and that such offer was not accepted; Provided, furter, That
the IocaI government unit may immediateIy take possession of the property
upon the fiIing of the expropriation proceedings and upon making a deposit
with the proper court of at Ieast fifteen percent (15%) of the fair market vaIue
of the property based on the current tax decIaration 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. (emphasis supplied)
[10]

Before a local government unit may enter into the possession of the
property sought to be expropriated, it must (1) file a complaint for expropriation
sufficient in form and substance in the proper court and (2) deposit with the said
court at least 15% of the property's fair market value based on its current tax
declaration.
[11]
The law does not make the determination of a public purpose a
condition precedent to the issuance of a writ of possession.
[12]

WHEREFORE, the petition is hereby DENIED.
Costs against petitioners.
SO ORDERED.
RepubIic of the PhiIippines
SUPREME COURT
ManiIa

EN BANC

G.R. No. L-59603 ApriI 29, 1987

EXPORT PROCESSING ZONE AUTHORITY, petitioner,
vs.
HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge, Court of
First Instance of Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO
DEVELOPMENT CORPORATION, respondents.

EIena M. Cuevas for respondents.



GUTIERREZ, JR., J.:

The question raised in this petition is whether or not PresidentiaI Decrees
Numbered 76, 464, 794 and 1533 have repeaIed and superseded Sections 5
to 8 of RuIe 67 of the Revised RuIes of Court, such that in determining the
just compensation of property in an expropriation case, the onIy basis
shouId be its market vaIue as decIared by the owner or as determined by the
assessor, whichever is Iower.

On January 15, 1979, the President of the PhiIippines, issued ProcIamation
No. 1811, reserving a certain parceI of Iand of the pubIic domain situated in
the City of Lapu-Lapu, IsIand of Mactan, Cebu and covering a totaI area of
1,193,669 square meters, more or Iess, for the estabIishment of an export
processing zone by petitioner Export Processing Zone Authority (EPZA).

Not aII the reserved area, however, was pubIic Iand. The procIamation
incIuded, among others, four (4) parceIs of Iand with an aggregate area of
22,328 square meters owned and registered in the name of the private
respondent. The petitioner, therefore, offered to purchase the parceIs of Iand
from the respondent in acccordance with the vaIuation set forth in Section
92, PresidentiaI Decree (P.D.) No. 464, as amended. The parties faiIed to
reach an agreement regarding the sate of the property.

The petitioner fiIed with the then Court of First Instance of Cebu, Branch XVI,
Lapu-Lapu City, a compIaint for expropriation with a prayer for the issuance
of a writ of possession against the private respondent, to expropriate the
aforesaid parceIs of Iand pursuant to P.D. No. 66, as amended, which
empowers the petitioner to acquire by condemnation proceedings any
property for the estabIishment of export processing zones, in reIation to
ProcIamation No. 1811, for the purpose of estabIishing the Mactan Export
Processing Zone.

On October 21, 1980, the respondent judge issued a writ of possession
authorizing the petitioner to take immediate possession of the premises. On
December 23, 1980, the private respondent fIied its answer.

At the pre-triaI conference on February 13, 1981, the respondent judge
issued an order stating that the parties have agreed that the onIy issue to be
resoIved is the just compensation for the properties and that the pre-triaI is
thereby terminated and the hearing on the merits is set on ApriI 2, 1981.

On February 17, 1981, the respondent judge issued the order of
condemnation decIaring the petitioner as ha,.,ing the IawfuI right to take the
properties sought to be condemned, upon the payment of just compensation
to be determined as of the fuing of the compIaint. The respondent judge aIso
issued a second order, subject of this petition, appointing certain persons as
commissioners to ascertain and report to the court the just compensation
for the properties sought to be expropriated.

On June 19, 1981, the three commissioners submitted their consoIidated
report recommending the amount of P15.00 per square meter as the fair and
reasonabIe vaIue of just compensation for the properties.

64
On JuIy 29, 1981, the petitioner Med a Motion for Reconsideration of the
order of February 19, 1981 and Objection to Commissioner's Report on the
grounds that P.D. No. 1533 has superseded Sections 5 to 8 of RuIe 67 of the
RuIes of Court on the ascertainment of just compensation through
commissioners; and that the compensation must not exceed the maximum
amount set by P.D. No. 1533.

On November 14, 1981, the triaI court denied the petitioner's motion for
reconsideration and gave the Iatter ten (10) days within which to ffIe its
objection to the Commissioner's Report.

On February 9, 1982, the petitioner fIied this present petition for certiorari
and mandamus with preIiminary restraining order, enjoining the triaI court
from enforcing the order dated February 17, 1981 and from further
proceeding with the hearing of the expropriation case.

The onIy issue raised in this petition is whether or not Sections 5 to 8, RuIe
67 of the Revised RuIes of Court had been repeaIed or deemed amended by
P.D. No. 1533 insofar as the appointment of conunissioners to determine the
just compensation is concerned. Stated in another way, is the excIusive and
mandatory mode of determining just compensation in P.D. No. 1533 vaIid
and constitutionaI?

The petitioner maintains that the respondent judge acted in excess of his
jurisdiction and with grave abuse of discretion in denying the petitioner's
motion for reconsideration and in setting the commissioner's report for
hearing because under P.D. No. 1533, which is the appIicabIe Iaw herein, the
basis of just compensation shan be the fair and current market vaIue
decIared by the owner of the property sought to be expropriated or such
market vaIue as determined by the assessor, whichever is Iower. Therefore,
there is no more need to appoint commissioners as prescribed by RuIe 67 of
the Revised RuIes of Court and for said conunissioners to consider other
highIy variabIe factors in order to determine just compensation. The
petitioner further maintains that P.D. No. 1533 has vested on the assessors
and the property owners themseIves the power or duty to fix the market
vaIue of the properties and that said property owners are given the fun
opportunity to be heard before the LocaI Board of Assessment AppeaIs and
the CentraI Board of Assessment AppeaIs. Thus, the vesting on the assessor
or the property owner of the right to determine the just compensation in
expropriation proceedings, with appropriate procedure for appeaI to higher
administrative boards, is vaIid and constitutionaI.

Prior to the promuIgation of P.D. Nos. 76, 464, 794 and 1533, this Court has
interpreted the eminent domain provisions of the Constitution and
estabIished the meaning, under the fundametaI Iaw, of just compensation
and who has the power to determine it. Thus, in the foIIowing cases, wherein
the fiIing of the expropriation proceedings were aII commenced prior to the
promuIgation of the aforementioned decrees, we Iaid down the doctrine
onjust compensation:

MunicipaIity of Daet v. Court of AppeaIs (93 SCRA 503, 516),

xxx xxx xxx

... And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration,
31 SCRA 413, the Court, speaking thru now Chief justice Fernando,
reiterated the 'weII-settIed (ruIe) that just compensation means the
equivaIent for the vaIue of the property at the time of its taking. Anything
beyond that is more and anything short of that is Iess, than just
compensation. It means a fair and fun equivaIent for the Ioss sustained,
which is the measure of the indemnity, not whatever gain wouId accrue to
the expropriating entity.'

Garcia v. Court ofappeaIs (102 SCRA 597, 608),

xxx xxx xxx

... Hence, in estimating the market vaIue, afI the capabiIities of the property
and aII the uses to which it may be appIied or for which it is adapted are to
be considered and not mereIy the condition it is in the time and the use to
which it is then appIied by the owner. An the facts as to the condition of the
property and its surroundings, its improvements and capabiIities may be
shown and considered in estimating its vaIue.

RepubIic v. Santos (141 SCRA 30, 35-36),

According to section 8 of RuIe 67, the court is not bound by the
conunissioners' report. It may niake such order or render such judgment as
shaII secure to the pIaintiff the property essentiaI to the exercise of his right
of condemnation, and to the defendant just compensation for the property
expropriated. This Court may substitute its own estimate of the vaIue as
gathered from the record (ManiIa RaiIroad Company v. VeIasquez, 32 PhiI.
286).

However, the promuIgation of the aforementioned decrees practicaIIy set
aside the above and many other precedents hammered out in the course of
evidence-Iaden, weII argued, fuIIy heard, studiousIy deIiberated. and
judiciousIy considered court proceedings. The decrees categoricaIIy and
peremptoriIyIimited the definition of just compensation thus:

P.D. No. 76:

63
xxx xxx xxx

For purposes of just compensation in cases of private property acquired by
the government for pubIic use, the basis shaII be the current and fair market
vaIue decIared by the owner or adminiqtrator, or such market vaIue as
determined by the Assessor, whichever is Iower.

P.D. No. 464:

Section 92. Basis for payment of just compensation in expropriation
proceedings. - In determining just compensation which private property is
acquired by the government for pubIic use, the basis shaII be the market
vaIue decIared by the owner or administrator or anyone having IegaI interest
in the property, or such market vaIue as determined by the assessor,
whichever is Iower.

P.D. No. 794:

Section 92. Basis for payment of just compensation in expropriation
proceedings. - In determining just compensation when private property is
acquired by the government for pubIic use, the same shaII not exceed the
market vaIue decIared by the owner or administrator or anyone having IegaI
interest in the property, or such market vaIue as determined by the assessor,
whichever is Iower.

P.D. No. 1533:

Section 1. Indeterminingjustcompensationforprivateproperty acquired
through eminent domain proceedings, the compensation to be paid shaII not
exceed the vaIue decIared by the owner or administrator or anyone having
IegaI interest in the property or determined by the assessor, pursuant to the
ReaI Property Tax Code, whichever vaIue is Iower, prior to the
recommendation or decision of the appropriate Government office to acquire
the property.

We are constrained to decIare the provisions of the Decrees on just
compensation unconstitutionaI and void and accordingIy dismiss the instant
petition for Iack of merit.
The method of ascertaining just compensation under the aforecited decrees
constitutes impermissibIe encroachment on judiciaI prerogatives. It tends to
render this Court inutiIe in a matter which under the Constitution is reserved
to it for finaI determination.
Thus, aIthough in an expropriation proceeding the court technicaIIy wouId
stiII have the power to determine the just compensation for the property,
foIIowing the appIicabIe decrees, its task wouId be reIegated to simpIy
stating the Iower vaIu46 of the property as decIared either by the owner or
the assessor. As a necessary consequence, it wouId be useIess for the court
to appoint commissioners under RuIe 67 of the RuIes of Court. Moreover, the
need to satisfy the due process-cIause in the taking of private property is
seemingIy fuIfiIIed since it cannot be said that a judiciaI proceeding was not
had before the actuaI taking. However, the strict appIication of the decrees
during the proceedings wouId be nothing short of a mere formaIity or
charade as the court has onIy to choose between the vaIuation of the owner
and that of the assessor, and its choice is aIways Iimited to the Iower of the
two. The court cannot exercise its discretion or independence in determining
what is just or fair. Even a grade schooI pupiI couId substitute for the judge
insofar as the determination of constitutionaI just compensation is
concerned.
In the case of NationaI Housing Authority v. Reyes (123 SCRA 245), this
Court upheId P.D. No. 464, as further amended by P.D. Nos. 794, 1224 and
1259. In this case, the petitioner NationaI Housing Authority contended that
the owner's decIaration at P1,400.00 which happened to be Iower than the
assessor's assessment, is the just compensation for the respondent's
property under section 92 of P.D. No. 464. On the other hand, the private
respondent stressed that whiIe there may be basis for the aIIegation that the
respondent judge did not foIIow the decree, the matter is stiII subject to his
finaI disposition, he having been vested with the originaI and competent
authority to exercise his judiciaI discretion in the Iight of the constitutionaI
cIauses on due process and equaI protection.
To these opposing arguments, this Court ruIed ihat under the conceded
facts, there shouId be a recognition that the Iaw as it stands must be appIied;
that the decree having spoken so cIearIy and unequivocabIy caIIs for
obedience; and that on a matter where the appIicabIe Iaw speaks in no
uncertain Ianguage, the Court has no choice except to yieId to its command.
We further stated that "the courts shouId recognizethat the mIe introduced
by P.D. No. 76 and reiterated in subw quent decrees does not upset the
estabIished concepts of justice or the constitutionaI provision on just
compensation for, preciseIy, the owner is aIIowed to make his own vaIuation
of his property."
WhiIe the Court yieIded to executive prerogative exercised in the form of
absoIute Iaw-making power, its members, none. theIess, remained
uncomfortabIe with the impIications of the decision and the abuse and
unfairness which might foIIow in its wake. For one thing, the President
himseIf did not seem assured or confident with his own enactment. It was
not enough to Iay down the Iaw on determination of just compensation in
P.D. 76. It had to be repeated and reiterated in P.D. 464, P.D. 794, and P.D.
1533. The provision is aIso found in P.D. 1224, P.D. 1259 and P.D. 1313.
inspite of its effectivity as generaI Iaw and the wide pubIicity given to it, the
questioned provision or an even stricter version had to be embodied in
cases of specific expropriations by decree as in P.D. 1669 expropriating the
Tambunting Estate and P.D. 1670 expropriating the Sunog Apog area in
Tondo, ManiIa.
66
In the present petition, we are once again confronted with the same question
of whether the courts under P.D. 1533, which contains the same provision on
just compensation as its predecessor decrees, stiII have the power and
authority to determine just compensation, independent of what is stated by
the decree and to this effect, to appoint conunissioners for such purpose.
This time, we answer in the affirmative.
In overruIing the petitioner's motion for reconsideration and objection to the
conunissioner's report, the triaI court said:
Another consideration why the Court is empowered to appoint
commissioners to assess the just compensation of these properties under
eminent domain proceedings, is the wen-entrenched ruIing that 'the owner of
property expropriated is entitIed to recover from expropriating authority the
fair and fuII vaIue of the Iot, as of the time when possession thereof was
actuaIIy taken by the province, pIus consequentiaI damages - incIuding
attorney's fees - from which the consequentiaI benefits, if any shouId be
deducted, with interest at theIegaI rate, on the aggregate sum due to the
owner from and after the date of actuaI taking." (CapitoI Subdivision, Inc. v.
Province of Negros OccidentaI, 7 SCRA 60). In fine, the decree onIy
estabIishes a uniform basis for determining just compensation which the
Court may consider as one of the factors in arriving at 'just compensation,"
as envisage in the Constitution. In the words of Justice Barredo,
"Respondent court's invocation of GeneraI Order No. 3 of September 21,
1972 is nothing short of an unwarranted abdication of judiciaI authority,
which no judge duIy imbued with the impheations of the paramount principIe
of independence of the judiciary shouId ever think of doing." (Lina v.
Purisinia, 82 SCRA 344, 351; Cf. Prov. of Pangasinan v. CFI Judge of
Pangasinan, Br. VIII, 80 SCRA 117) Indeed, where this Court simpIy foIIows
PD 1533, thereby Iimiting the determination of just compensation on the
vaIue decIared by the owner or administrator or as determined by the
Assessor, whichever is Iower, it may resuIt in the deprivation of the
Iandowner's right of due process to enabIe it to prove its cIaim to just
compensation, as mandated by the Constitution. (Uy v. Genato, 57 SCRA
123). The tax decIaration under the ReaI Property Tax Code is, undoubtedIy,
for purposes of taxation.
We are convinced and so ruIe that the triaI court correctIy stated that the
vaIuation in the decree may onIy serve as a guiding principIe or one of the
factors in determining just compensation but it may not substitute the
court's own judgment as to what amount shouId be awarded and how to
arrive at such amount. A return to the earher weu-estabhshed doctrine, to
our mind, is more in keeping with the principIe that the judiciary shouId Iive
up to its mission "by vitaIizing and not denigrating constitutionaI rights."
(See SaIonga v. Cruz Patio, 134 SCRA 438, 462; citing Mercado v. Court of
Pirst Instance of RizaI, 116 SCRA 93.) The doctrine we enunciated in NationaI
Housing Authority v. Reyes, supra, therefore, must necessariIy be
abandoned if we are to uphoId this Court's roIe as the guardian of the
fundamentaI rights guaranteed by the due process and equaI protection
cIauses and as the finaI arbiter over transgressions committed against
constitutionaI rights.
The basic unfairness of the decrees is readiIy apparent.
Just compensation means the vaIue of the property at the time of the taking.
It means a fair and fuII equivaIent for the Ioss sustained. AII the facts as to
the condition of the property and its surroundings, its improvements and
capabiIities, shouId be considered.

In this particuIar case, the tax decIarations presented by the petitioner as
basis for just compensation were made by the Lapu-Lapu municipaI, Iater
city assessor Iong before martiaI Iaw, when Iand was not onIy much cheaper
but when assessed vaIues of properties were stated in figures constituting
onIy a fraction of their true market vaIue. The private respondent was not
even the owner of the properties at the time. It purchased the Iots for
deveIopment purposes. To peg the vaIue of the Iots on the basis of
documents which are out of date and at prices beIow the acquisition cost of
present owners wouId be arbitrary and confiscatory.
Various factors can come into pIay in the vaIuation of specific properties
singIed out for expropriation. The vaIues given by provinciaI assessors are
usuaIIy uniform for very wide areas covering severaI barrios or even an
entire town with the exception of the pobIacion. IndividuaI differences are
never taken into account. The vaIue of Iand is based on such generaIities as
its possibIe cuItivation for rice, corn, coconuts, or other crops. Very often
Iand described as "cogonaI" has been cuItivated for generations. BuiIdings
are described in terms of onIy two or three cIasses of buiIding materiaIs and
estimates of areas are more often inaccurate than correct. Tax vaIues can
serve as guides but cannot be absoIute substitutes for just compensation.
To say that the owners are estopped to question the vaIuations made by
assessors since they had the opportunity to protest is iIIusory. The
overwheIming mass of Iand owners accept unquestioningIy what is found in
the tax decIarations prepared by IocaI assessors or municipaI cIerks for
them. They do not even Iook at, much Iess anaIyze, the statements. The Idea
of expropriation simpIy never occurs untiI a demand is made or a case fiIed
by an agency authorized to do so.
It is vioIative of due process to deny to the owner the opportunity to prove
that the vaIuation in the tax documents is unfair or wrong. And it is repuIsive
to basic concepts of justice and fairness to aIIow the haphazard work of a
minor bureaucrat or cIerk to absoIuteIy prevaiI over the judgment of a court
promuIgated onIy after expert commissioners have actuaIIy viewed the
property, after evidence and arguments pro and con have been presented,
and after aII factors and considerations essentiaI to a fair and just
determination have been judiciousIy evaIuated.
As was heId in the case of Gideon v. Wainwright (93 ALR 2d,733,742):
In the Iight of these and many other prior decisions of this Court, it is not
surprising that the Betts Court, when faced with the contention that "one
charged with crime, who is unabIe to obtain counseI must be furnished
67
counseI by the State," conceded that "E]xpressions in the opinions of this
court Iend coIor to the argument . . ." 316 U.S., at 462, 463, 86 L ed. 1602, 62
S Ct. 1252. The fact is that in deciding as it did-that "appointment of counseI
is not a fundamentaI right, essentiaI to a fair triaI" - the Court in Betts v.
Brady made an ubrupt brake with its own weII-considered precedents. In
returning to these oId precedents, sounder we beIieve than the new, we but
restore constitutionaI principIes estabIished to achieve a fair system of
justice. ...
We return to oIder and more sound precedents. This Court has the duty to
formuIate guiding and controIIing constitutionaI principIes, precepts,
doctrines, or ruIes. (See SaIonga v. Cruz Pano, supra).
The determination of "just compensation" in eminent domain cases is a
judiciaI function. The executive department or the IegisIature may make the
initiaI determinations but when a party cIaims a vioIation of the guarantee in
the BiII of Rights that private property may not be taken for pubhc use
without just compensation, no statute, decree, or executive order can
mandate that its own determination shag prevaiI over the court's findings.
Much Iess can the courts be precIuded from Iooking into the "just-ness" of
the decreed compensation.
We, therefore, hoId that P.D. No. 1533, which eIiminates the court's
discretion to appoint commissioners pursuant to RuIe 67 of the RuIes of
Court, is unconstitution and void. To hoId otherwise wouId be to undermine
the very purpose why this Court exists in the first pIace.

WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby
DISMISSED. The temporary restraining order issued on February 16, 1982 is
LIFTED and SET ASIDE.
SO ORDERED.