July 8, 2019

G.R. No. 221366

CITY OF MANILA, Petitioner

vs.
ALEJANDRO ROCES PRIETO, BENITO ROCES PRIETO,
MERCEDES PRIETO DELGADO, MONICA , LOPEZ
PRIETO, MARTIN LOPEZ PRIETO, BEATRIZ PRIETO DE
LEON, RAFAEL ROCES PRIETO, BENITO LEGARD A,
INC., ALEGAR CORPORATION, BENITO LEGARD A, JR.,
PECHATEN CORPORATION, ESTATE OF ROSARIO M.
LLORA, and all persons claiming interests against them,
Respondents

DECISION

REYES, J. JR., J.:

This is a Petition for Review on Certiorari1 under Rule 45 of

the Rules of Court, assailing the Decision2 dated June 30, 2015
and the Resolution3 dated November 9, 2015, of the Court of
Appeals (CA) in CAG. R. CV No. 101440, which reversed and
set aside the Order4 dated June 23, 2011, of the Regional Trial
Court (RTC) of Manila, Branch 52, in Civil Case No. 04-
110823.

The Facts

On January 19, 2004, the City Council of Manila enacted

Ordinance No. 8070 that authorized the City Mayor to acquire
certain parcels of land belonging to respondents Alejandro
Roces Prieto, Benito Roces Prieto, Mercedes Delgado Prieto,
Monica Lopez Prieto, Martin Lopez Prieto, Beatriz Prieto De
Leon, Rafael Roces Prieto, Benito Legarda, Inc., Alegar
Corporation, Benito Legarda, Jr., Pechaten Corporation, and
Rosario M. Llora (collectively, respondents) to be used for the
City of Manila's (petitioner) Land-For-The-Landless Program.5

Initially, petitioner attempted to acquire the subject lots by

negotiated sale, offering the amount of ₱2,000.00 per square
meter, which respondents refused to accept on the ground that
their respective properties are worth more than that. 6
Thus, petitioner filed a Complaint dated September 3, 2004,
before the RTC, asserting its authority to expropriate the
subject lots for its project.7

Invoking Section 2, Rule 67 of the Rules of Court, petitioner

sought the issuance of a writ of possession for it to be able to
immediately take possession of the subject properties.
Petitioner manifested that it had already deposited the sum of
₱4,812,920.00 in the bank, representing more than one
hundred percent (100%) of the assessed value of the
properties as shown in the declarations of real property. 8

On February 2, 2005, the RTC issued an Order denying the

issuance of a writ of possession pending the deposit of the
additional amount of ₱852,519.00. Instead of the general
provisions on expropriation under Rule 67 of the Rules of
Court, the RTC applied the provisions of the Local Government
Code (LGC), mandating the deposit of 15% of the fair market
value of the properties subject of expropriation, for petitioner's
immediate possession thereof.9

Upon compliance, petitioner manifested that the additional

amount of ₱852,519 .00 has already been satisfied. Petitioner
deposited the amount of ₱425,519.00, while the prospective
beneficiaries of the project deposited ₱443,621.00 to complete
the additional amount. 10
11
On October 6, 2006, the RTC issued a Writ of Possession.

The Ruling of the RTC

In granting petitioner's complaint for expropriation, the RTC

concluded that all the requisites for the local government's
exercise of the power of eminent domain have been met by the
petitioner. 12

The RTC found that there was an ordinance passed by the City
Council of Manila to expropriate the subject lots for public
purpose. The requirement that it should be for public use was,
according to the RTC, satisfied by the fact that the properties
were sought to be expropriated pursuant to the petitioner's
"Land for the Landless and Onsite Development Programs." 13
The RTC also noted that before the filing of the complaint in
court, petitioner made "definite and formal offers" to
respondents to purchase the subject lots, which the latter
rejected. 14

Further, despite "privately-owned lands" being last in the list

of priorities in land acquisition under Section 9 of Republic Act
(R.A.) No. 7279 or the Urban Development Housing Act of
1992, the RTC dispensed with said list, subscribing to
petitioner's allegation that an on-site development is more
practicable and advantageous to the beneficiaries. 15

The RTC made the following disposition, thus:

WHEREFORE, in view of the foregoing, the court finds that

the complaint in the instant case is a proper case of eminent
domain.

Accordingly, an order of expropriation is hereby issued

declaring that the [petitioner] has a lawful right to take the
subject parcels of land, for the public use or purpose as
described in the complaint upon payment of just compensation
to be determined as of the date of the taking of the property or
the filing of the complaint whichever came first.

Furnish the parties through their respective counsels with a

copy each of the order.

SO ORDERED.16

Respondents' respective motions for reconsideration were

denied by the RTC on January 22, 2013. 17

Appeals were then filed with the CA.

The Ruling of the CA

In its assailed Decision, the CA emphasized the drastic effect

of the exercise of the power of eminent domain to a
landowner's right to private property. Hence, compliance with
the rules and limitations provided under the Constitution and
pertinent laws should be strictly observed. If not, according to
the CA, it behooves petitioner to justify its non-compliance
 18
with the rules and limitations. This, according to the CA,
petitioner failed to do.

The CA found the records lacking of any evidence to support

petitioner's claim that an on-site development program is the
most practicable and advantageous for the beneficiaries, to
justify the non-applicability of the list of priorities in land
acquisition under Section 9 of R.A. No. 7279. According to the
CA, petitioner failed to take into consideration the legal
definition of an on-site development under R.A. No.
7279, i.e., "the process of upgrading and rehabilitation of
blighted and slum urban areas, with a view of minimizing
displacement of dwellers in said areas and with provisions for
basic services as provided for in Section 21"19 of the same
Act.20 "Blighted lands" was further defined under Section 3(c)
thereof as referring to the "areas where the structures are
dilapidated, obsolete and unsanitary, tending to depreciate the
value of the land and prevent normal development and use of
the area." The CA ruled that bare and unsupported assertions
that the lots sought to be expropriated are blighted lands to be
the proper subject of an on-site development program, and
that on-site development is the most practical, advantageous,
and beneficial to the beneficiaries, should not suffice to justify
the mandatory provisions of R.A. No. 7279.21

The CA further found petitioner to have failed to exhaust other

modes of acquisition before it resorted to expropriation in
violation of Section 10 of R.A. No. 7279. The appellate court
pointed out petitioner's failure to renegotiate the offer to
purchase the property before filing the expropriation case.
Such failure, the CA ruled, warrants the dismissal of the
complaint for expropriation. 22

Lastly, the CA found that the intended beneficiaries of

petitioner's socialized housing program are not
"underprivileged and homeless," in violation of Section 823 of
R.A. No. 7279. The CA took into consideration the testimony of
witness Emma Morales (Morales), President of the
neighborhood association of the beneficiaries, stating that its
members have money to buy the properties they are currently
occupying. As can be gleaned from the transcript of
stenographic notes during the hearing, Morales even admitted
that there are professionals among them such as teachers,
nurses, a doctor, and a dentist, who may hardly be considered
as "underprivileged and homeless."24

In all, the CA ruled that petitioner has failed to discharge its

burden to prove that the requirements for the proper exercise
of the local government's power of eminent domain were
complied with or otherwise, are not applicable to its case. It
disposed, thus:

WHEREFORE, the appeal is GRANTED. The

assailed Order dated June 23, 2011 rendered by the Regional
Trial Court of Manila in Civil Case No. 04-110823
is REVERSED and SET ASIDE.

SO ORDERED.25

Petitioner's motion for reconsideration was denied by the CA

in its assailed Resolution, which reads:

This Court, finding that the matters raised by [petitioner] in its

July 22, 2015 Motion for Reconsideration have been
sufficiently passed upon in the June 30, 2015 Decision, and
further finding that there is no cogent reason to modify, much
less, reverse-the same, hereby DENIES the instant motion.

SO ORDERED.26

Hence, this petition.

The Issue

Petitioner's arguments are centered upon the assertion of its

power to expropriate and its claim that it had complied with
the provisions of the Constitution and pertinent laws in the
exercise thereof. Hence, stripped to the essentials, the issue
before us is: whether or not the CA erred in finding that
petitioner failed to prove that it complied with pertinent laws
in the exercise of its power of eminent domain.

The Court's Ruling

The petition is bereft of merit.

In resolving expropriation cases, this Court has always been
reminded that the exercise of the power of eminent domain
necessarily involves a derogation of fundamental right.27 "The
exercise of the power of eminent domain drastically affects a
landowner's right to private property, which is as much a
constitutionally-protected right necessary for the preservation
and enhancement of personal dignity and intimately connected
with the rights to life and liberty."28 Therefore, the exercise of
such power must undergo painstaking scrutiny. 29

Such scrutiny is especially necessary when eminent domain is

exercised by a local government considering that it merely has
a delegated power of eminent domain. A local government unit
has no inherent power of eminent domain. Such power is
essentially lodged in the legislature although it may be validly
delegated to local government units, other public entities and
public utilities. Thus, inasmuch as the principal's exercise of
the power of eminent domain is subject to certain conditions,
with more reason that the exercise of a delegated power is not
absolute. In fact, strictly speaking, the power of eminent
domain delegated to the local government unit is, in reality,
not eminent but inferior since it must conform to the limits
imposed by the principal.30

Through the LGC, the national legislature delegated the power

of eminent domain to the local government units. Section 19
thereof provides:

SEC. 19. Eminent Domain. -A local government unit may,

through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public
use, or purpose[,] or welfare for the benefit of the poor and the
landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws: Provided,
however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously
made to the owner, and such offer was not accepted: Provided,
further, That the local government unit may immediately take
possession of the property upon the filing of the expropriation
proceedings and upon making a deposit with the proper court
of at least fifteen percent (15%) of the fair market value of the
property based on the current tax declaration of the property
to be expropriated: Provided, finally, That, the amount to be
paid for the expropriated property shall be determined by the
proper court, based on the fair market value at the time of the
taking of the property.

From the foregoing, several requisites must concur before a

local government unit can exercise the power of eminent
domain, to wit: (1) an ordinance is enacted by the local
legislative council authorizing the local chief executive, in
behalf of the local government unit, to exercise the power of
eminent domain or pursue expropriation proceedings over a
particular private property; (2) the power of eminent domain is
exercised for public use, purpose or welfare, or for the benefit
of the poor and the landless; (3) there is payment of just
compensation, as required under Section 9, Article III of the
Constitution, and other pertinent laws; and (4) a valid and
definite offer has been previously made to the owner of the
property sought to be expropriated, but said offer was not
accepted.31

Further, the above-cited provision also states that the exercise

of such delegated power should be pursuant to the
Constitution and pertinent laws. R.A. No. 7279 is such
pertinent law in this case as it governs the local expropriation
of properties for purposes of urban land reform and housing.
Thus, the rules and limitations set forth therein cannot be
disregarded. Sections 9 and 10 of the said Act provide:

SEC 9. Priorities in the Acquisition of Land. - Lands for

socialized housing shall be acquired in the following
order:

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

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

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas or Priority Development,

Zonal Improvement Program sites, and Slum Improvement and
Resettlement Program sites which have not yet been acquired;
(e) Bagong Lipunan Improvement of Sites and Services or
BLISS sites which have not yet been acquired; and

(f) Privately-owned lands.

Where [on-site] development is found more practicable and

advantageous to the beneficiaries, the priorities mentioned in
this section shall not apply. The local government units shall
give budgetary priority to on-site development of government
lands.

SEC. 10. Modes of Land Acquisition. - The modes of acquiring

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

It could be readily seen from the RTC's Order that in granting

petitioner's complaint for expropriation, it took a facile
approach in its resolution of the expropriation suit. It
sweepingly concluded that petitioner had met all the
aforecited requisites. It concluded that the expropriation was
for a public purpose merely because it is pursuant to the city's
land-for-the-landless and on-site development programs. The
RTC also took hook, line, and sinker, petitioner's assertion that
an on-site development is the most practicable and
advantageous to the beneficiaries, allowing the resort to the
acquisition of private lands despite the same being last in the
list of priorities under Section 9 of R.A. No. 7279. As can be
gleaned from its Order, the RTC subscribed to the assertion
that an on-site development is more practicable and
advantageous to the beneficiaries merely on the basis of its
unsupported generalization that "it would be absurd for other
priorities to be applied considering that the tenants have been
there for more than fifty (50) years being assisted by the
government in terms of social services and having their houses
demolished and then relocate them somewhere is anathema to
the essence and aim of [on-site] development."32

It bears stressing that courts have a duty to judiciously

scrutinize and determine whether the local government's
exercise of the delegated power of eminent domain is in
accordance with the delegating law.33 As correctly ruled by the
CA, bare allegations and unsupported generalizations do not
suffice, considering the drastic effect of the exercise of such
power to constitutionally-protected rights. In the case
of Estate or Heirs of the Late Ex-Justice Jose B.L. Reyes v. City
of Manila,34 we emphatically ruled that the above-quoted
provisions are strict limitations on the exercise of the power
of eminent domain by local government units, especially with
respect to: (1) the order of priority in acquiring land for
socialized housing; and (2) the resort to expropriation
proceedings as a means of acquiring it.35 Compliance with
these conditions is mandatory because these are the only
safeguards of oftentimes helpless owners of private property
against what may be a tyrannical violation of due process
when their property is forcibly taken from them allegedly for
public use.

As correctly found by the CA, we find nothing in the records

indicating that petitioner complied with Section 19 of the LGC
and Sections 9 and 10 of R.A. No. 7279.

Petitioner persistently alleges that it conducted a study and

observed the order of priority in land acquisition for
expropriation under Section 9 of R.A. No. 7279 and found that
on-site development is the most practicable and advantageous
to the prospective beneficiaries. Aside from such bare
allegations and unsupported generalizations of the Officer-in-
Charge of its Urban Settlements Office, however, no evidence
was presented to prove such claim. There was no showing that
any attempt was made to first acquire the lands listed in
Section 9(a) to (e) before proceeding to expropriate
respondents' private lands. There was also no document or any
evidence presented to prove a study allegedly conducted
showing comparisons and considerations to support
petitioner's conclusion that onsite development was its best
choice.
What is more, there was no evidence presented showing that
the subject properties were those contemplated under R.A.
7279 to be proper subjects of on-site
development.1âшphi1 The CA correctly pointed out that R.A.
No. 7279 provides for a detailed description of specific areas
which are the proper subjects of on-site
development, i.e., those "areas where the structures are
dilapidated, obsolete, and unsanitary, tending to depreciate
the value of the land and prevent normal development and use
of the area" as defined under Section 3(1), in relation to
Section 3(c) of R.A. No. 7279. It is, thus, incumbent upon
petitioner to show that the areas they sought to expropriate
for socialized housing and urban development are those
contemplated under the law. Again, unsupported allegations
and generalizations will not suffice.

The CA also correctly observed that there was likewise no

evidence presented to show that the prospective beneficiaries
of the expropriation are the "underprivileged and homeless"
contemplated under Section 8 of R.A. No. 7279. Again, it could
have been simple for petitioner to present surveys or studies
conducted by competent authorities to prove that the
prospective beneficiaries are the proper subjects of its
socialized housing program. However, on the contrary, records
show that the prospective beneficiaries are not such
"underprivileged and homeless." As testified to by a witness,
these prospective beneficiaries have the ability to buy the
properties that petitioner is seeking' to expropriate to give to
them. In fact, said purported "underprivileged and homeless"
beneficiaries were able to put up a substantial amount to
complete the additional deposit ordered by the court for the
petitioner to satisfy.

To be sure, this Court is not unaware of the contemporary

concept of "public use" as explained in prevailing
jurisprudence. It remains true, however, that condemnation of
private lands in an irrational or piecemeal fashion or the
random expropriation of small lots to accommodate no more
than a few tenants or squatters is certainly not the
condemnation for public use contemplated by the Constitution.
Such act would clearly deprive a citizen of his or her property
for the convenience of a few without perceptible benefit to the
public. 36
Finally, petitioner failed to establish that the other modes of
acquisition under Section 10 of R.A. No. 7279 were first
exhausted. Said provision prefers the acquisition of private
property by negotiated sale over the filing of an expropriation
suit. This rule is not without basis. The government should
lead in avoiding litigations and overburdening the courts as
litigations are costly and protracted.37 Thus, this Court has
held, time and again, that in cases of land acquisitions by the
government, when the property owner rejects the offer but
hints for a better price, the government should renegotiate by
calling the property owner to a conference.38 "The government
must exhaust all reasonable efforts to obtain by agreement the
land it desires. Its failure to comply will warrant the dismissal
of the complaint."39 This finds further legal basis in Article 35
of the Rules and Regulations Implementing the Local
Government Code, which reads:

ART. 35. Offer to Buy and Contract of Sale. (a) The offer to buy
private property for public use or purpose shall be in writing.
It shall specify the property sought to be acquired, the reasons
for its acquisition, and the price offered.

xxxx

(c) If the owner or owners are willing to sell their property but
at a price higher than that offered to them, the local chief
executive shall call them to a conference for the purpose of
reaching an agreement on the selling price. The chairman of
the appropriation or finance committee of the sanggunian, or
in his absence, any member of the sanggunian duly chosen as
its representative, shall participate in the conference. When an
agreement is reached by the parties, a contract of sale shall be
drawn and executed.

Here, it is undisputed that after respondents rejected

petitioner's offer of ₱2,000.00 per square meter to purchase
their lots for being too low compared to the fair market value
of their properties, petitioner readily instituted the present
expropriation suit without bothering to renegotiate its offer.
Relevantly, thus, there is no valid and definite offer made by
petitioner before it filed the expropriation complaint. The
intent of the law is for the State or the local government to
make a reasonable offer in good faith, not merely a pro
forma offer to acquire the property.40

In all, while we recognize petitioner's power to expropriate

and the fact that housing is one of the most serious social
problems that it needs to address, it is equally important to
acknowledge that local government units do not have an
unbridled authority to exercise such formidable power in
seeking solutions to such problem. Again, such formidable
power greatly affects a citizen's fundamental right to property,
hence, there is a need to strictly comply with the conditions
and restrictions set forth in the Constitution and pertinent
laws to assure that every right is protected and every mandate
is properly discharged.

It is well to mention that this decision is not meant to

disparage the local government units' delegated power to
expropriate. It merely calls for compliance with all the legal
requirements, as well as the presentation of proof of such
compliance.

WHEREFORE, premises considered, the petition is DENIED.

Accordingly, the Decision dated June 30, 2015, and Resolution
dated November 9, 2015, of the Court of Appeals in CA-G.R.
CV No. 101440 are AFFIRMED.

SO ORDERED.

Carpio (Chairperson), Perlas-Bernabe, Caguioa, and Lazaro-

Javier, JJ., concur.