G.R. No.

170945 September 26, 2006

NATIONAL POWER CORPORATION, petitioner,

vs.
MARIA MENDOZA SAN PEDRO, represented by VICENTE, HERMINIA and
FRANCISCO, all surnamed SAN PEDRO, respondents.

DECISION

CALLEJO, SR., J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Decision1 of the
Court of Appeals (CA) in CA-G.R. CV No. 72860, and its Resolution2 denying the motion for
reconsideration thereof.

The Antecedents

The National Power Corporation (NPC) is a government-owned-and-controlled corporation

created to undertake the development of hydro-electric generation of power and the
production of electricity from any and all sources; and particularly the construction,
operation, and maintenance of power plants, auxiliary plants, dams, reservoirs, pipes,
mains, transmission lines, power stations and substations, and other works for the purpose
of developing hydraulic power from any river, lake, creek, spring and waterfalls in the
Philippines and supplying such power to the inhabitants thereof.3 Under Republic Act No.
6395, as amended, the NPC is authorized to enter private property provided that the owners
thereof shall be indemnified for any actual damage caused thereby.4

For the construction of its San Manuel-San Jose 500 KV Transmission Line and Tower No.
SMJ-389, NPC negotiated with Maria Mendoza San Pedro, then represented by her son,
Vicente, for an easement of right of way over her property, Lot No. 2076. The property,
which was partly agricultural and partly residential land, was located in Barangay Partida,
Norzagaray, Bulacan and covered by Tax Declaration No. 00386. On June 19, 1997, Maria
executed a Right of Way Grant5 in favor of NPC over the lot for P1,277,886.90. The NPC
paid her P524,635.50 for the damaged improvements thereon.6

The payment voucher for the residential portion of the lot valued at P6,000,000.00
(at P600.00 per square meter) was then processed.7 However, the NPC Board of Directors
approved Board Resolution No. 97-2468 stating that it would pay only P230.00 per sq m for
the residential portion and P89.00 per sq m for the agricultural portion, on the following
premises:

A) The proposed land valuations were evaluated and analyzed using the joint
appraisal report on fair market value of lands by Cuervo Appraisal, Inc.,
Development Bank of the Philippines, and the Land Bank of the Philippines and the
fair market values established by the respective Provincial Appraisal Committee
(PAC) of Zambales, Pangasinan, Nueva Ecija, Pampanga and Bulacan as well as
the City Appraisal Committee (CAC) of San Carlos and Cabanatuan.
 B) For lot acquisition, adopt PAC or CUERVO Appraisal, whichever is lower; if there
is a problem of acceptance, refer same to the Board;

C) For easement over agricultural lands, adopt median or average if there are
several amounts involved; and

D) Always oppose any proposals for conversion of agricultural lands.9

On January 15, 1998, the NPC filed a complaint10 for eminent domain in the Regional Trial
Court (RTC) of Bulacan against Maria and other landowners. The case was docketed as
Civil Case No. 28-M-98. According to NPC, in order to construct and maintain its
Northwestern Luzon Transmission Line Project (San Manuel-San Jose 500 KV
Transmission Line Project), it was necessary to acquire several lots in the Municipalities of
San Jose del Monte and Norzagaray, Bulacan for an easement of right of way in the total
area of more or less 35,288.5 sq m. The owners of the affected areas and their
corresponding assessed values are:

OWNER/ LOT/ TAX TITLE TOTAL AREA ASSESSED CLASSIFICATION

CLAIMANT BLK. DEC. NO. AREA AFFECTED VALUE OF OF LAND
NO. NO. IN SQ. M. AREA
AFFECTED
Ma. Mendoza 2076 00386 122,821.32 17,195 P 18,555.75 Agricultural
San Pedro rep. 10,000 6,565 P147,712.50 Residential
by Vicente San
Pedro
Lorenza Manuel / 1250 96- T- 5,700 51,666.5 P 13,481.03 Agricultural
Sps. Raul & Edna 21017- 28392-
Lagula P-(M)
00084
Sps. Segundo & 1251 96- P-3965 6,362 6,362 P 16,210.00 Agricultural
Maxima Manuel / 21017-
Sps. Raul & Edna (M)
Lagula 00083

Maria San Pedro filed her Answer11 on February 2, 1998, alleging that there had already
been an agreement as to the just compensation for her property. She prayed, among
others, that she should be paid the consideration stated in the Right of Way Grant, P600.00
per sq m for the residential portion of the land as agreed upon by her and NPC, and to base
the values from Resolution No. 97-00512 of the Provincial Appraisal Committee.

Meanwhile, Maria San Pedro filed an Amended Answer13 in which she alleged that NPC
had resorted to deceit, trickery and machination to induce her to grant a right of way by
assuring her that it would also pay for the residential portion of the property at P600.00 per
sq m.
On August 10, 1998, the RTC issued a writ of possession against Maria San Pedro. 14 When
she passed away on August 22, 1998,15 she was substituted by her heirs, Vicente, Herminia
and Francisco, all surnamed San Pedro, on September 11, 1998.16

During the pre-trial on January 25, 1999, the parties agreed that the only issue for resolution
was the just compensation for the property. The court appointed a committee of
commissioners to ascertain and recommend to the trial court the just compensation for the
properties, composed of Atty. Josephine L. Sineneng-Baltazar, the Clerk of Court, as
chairperson; and Engr. Oscar C. Cruz, Provincial Assessor of Bulacan, and Atty. Henry P.
Alog of the Litigation Department of NPC to serve as members-commissioners thereof.17

On July 12, 1999, Atty. Baltazar and Engr. Cruz submitted their report,18 recommending as
payment for just compensation P800.00 per sq m for the residential lot and P700.00 per sq
m for the agricultural lot.19 The majority report reads:

I. Description of the Property

A parcel of land with a total area of 132,821.32 square meters located at Partida,
Norzagaray, Bulacan and declared for taxation purposes in the name of Maria
Mendoza San Pedro is sought to be expropriated by plaintiff National Power
Corporation for the construction and maintenance of its Northwestern Luzon
Transmission Line Project (San Miguel-San Jose 500 KV Transmission Line
Project), to wit:

Lot No. Tax Dec. Total Area Area Classification

No. Affected in
sq. m.

2076 01337 122,821.32 17,195 Agricultural

10,000.00 6,565 Residential

The pertinent tax declaration is hereto attached as Annex "A."

The residential lot is not affected by NPC's project in its entirety. Around 2,000 sq. m.
remains on each side of the residential lot.

Likewise, only a portion or 17,195 sq. m. of (sic) more than 12 hectares agricultural
land, (sic) is affected by the project. A sketch plan of the affected area is attached
hereto as Annex "B."

II. Claims of the Parties

Defendants allege that they had signed a Right of Way Grant Contract dated June
19, 1997 which plaintiff itself prepared and was notarized by Atty. Marcelo Aure; that,
among others, defendants and plaintiff agreed that the price of the residential land
is P600.00 per square meter, based on the Provincial Appraisals Committee (PAC)
Resolution No. 97-005; that, on December 6, 1997, plaintiff informed them that the
NPC Board passed Resolution No. 97-246 dated October 27, 1997, pursuant to
which the board approved price for acquisition of subject property is P230.00 per sq.
m. for residential and P89.00 per sq. m. for agricultural lot. Defendants did not
accept the new offer.

On the other hand, plaintiff alleges that the price for residential land is P230.00 per
sq. m. as approved by NPC's Board and not P600.00 per sq. m. being asked by
defendants. It further recommended the appointment of commissioners to report to
the Court the just compensation to be paid to the defendants.

III. Observations

The Commissioners went to the site on May 11, 1999 and were able to observe that:

(1) The residential lot of Vicente San Pedro is not affected by NPC's project in
its entirety. Around 2,000 sq. m. remains on each side of the residential lot.
There are no existing structures or improvements on said residential lot,
which is situated along the all-weather (gravel) road. Defendants are afraid to
utilize the said remaining portions for residential purposes because of the
reported constant loud buzzing and exploding sounds emanating from the
towers and transmission lines, especially on rainy days. The two children of
Vicente San Pedro had wanted to construct their residential houses on said
land, but decided against it now because of fear that the large transmission
lines looming not far above their land and the huge tower in front of their lot
will affect their safety and health. Moreover, there is a slim chance now that
somebody will still buy the remaining portions on each side of the residential
lot affected by the project, to the damage of the defendant, both as to future
actual use of the land and financial gains to be derived therefrom.

(2) Likewise only a portion, or 17,195 sq. m. of the 122,821.32 square meter
agricultural land, is affected by the transmission line project. It was not
planted with palay at the time of the inspection. According to the defendants,
their farm helpers are already afraid to work on the land because of the
buzzing and cracking sounds coming from the tower and transmission lines.

(3) The site is located in a highly developed area about 1.5 kms. away from
Norzagaray Municipal Building. The vast land owned by Jesus Is Lord
congregation is on the same side of the road as subject property. Opposite
the road is an ongoing resort project, the Falcon Crest Resort about
kilometers away, and the proposed Catholic Retreat House about 200 meters
away. Attached as Annex "C" is the Location Plan of said lot.

IV. Available Data

(1) Based on the Zoning Certificate issued by the Municipal Mayor, subject
parcel of land has been classified as residential pursuant to the proposed
Comprehensive Land Use Plan of local government unit. Copy of said Zoning
Certificate is hereto attached as Annex "D."
 (2) Based on the BIR Zonal Valuation attached as Annex "E," subject land
has a zonal value of P60.00/sq. m. for residential and P30.00/sq. m. for
agricultural lot. However, it is common knowledge that zonal valuation
provided by BIR cannot be made as basis for the purpose of determining just
compensation in eminent domain cases because it is only for the purpose of
computing internal revenue taxes.

(3) Opinion values gathered by the Provincial Assessor on the price of the
property are as follows:

Residential - P1,075.00 / sq. m.

Agricultural - P 643.00 / sq. m.

The summary of Opinion Values is hereto attached as Annex "F."

(4) There are no available sales data on properties within the vicinity of
subject land for the years 1996 and 1997, approximate time of the taking.

IV. Recommendation

The Commissioners, after considering the location of the subject property in a highly
developed area and accessibility thru the all-weather road (gravel); its potential for
full development as shown by the existence of building projects in the vicinity; and
the long-term effect the expropriation will have on the lives, comfort and financial
condition of herein defendants, respectfully recommend the following amounts as
payment for the affected portions of subject property.

P800. / sq. m. - for the residential lot

P700. / sq. m. - for the agricultural lot20

However, Atty. Alog, who represented NPC, dissented from the report, claiming that it was
merely based on "opinion values," and the self-serving declarations and opinions of
defendants. He maintained that, in determining just compensation, the trial court should
instead consider the appraisal report of Cuervo Appraisers, Inc., upon which Resolution No.
97-246 of NPC was based. He likewise argued that the property involved was actually and
principally used as agricultural, though declared as agricultural/residential lots; hence, only
the easement fee of right of way should be paid, as the principal purpose for which the lot
was devoted would not be impaired by the construction of transmission lines. His report
reads:

I. FINDINGS

The ocular inspection and research conducted by the undersigned Commissioner on

May 12, 1999 disclosed the following pertinent information and data:
1) The subject lots can be reached through a 1.4 km two lane concrete road,
from the Sta. Maria-Norzagaray National Highway intersection at Poblacion,
Norzagaray, Bulacan (refer to Annex "B");

2) The low lying northern portion of the property is presently used

as riceland and the rest planted with assorted trees (refer to Annex "C,"
pictures);

3) The property is a portion of hill in the area with sides sloping downward on
the northern eastern boundaries (refer to Annex "C");

4) There is no visible structural development in the area except for:

a) a two lane concrete road adjacent to the property at the northwest

boundaries going to San Jose Del Monte, Bulacan;

b) newly constructed steel towers of NPC;

c) barbed wire fence with wooden post covering the northwestern

portion of the lot adjacent to the concrete road to San Jose Del Monte,
Bulacan and a bamboo fence that covers the southern portion (refer to
Annex "C"); and

d) residential house approximately 200 meters from affected area.

5) During the ocular inspection, it is noted that they still use the affected area
for agricultural purposes;

6) The Falcon Crest Resort is approximately 1 km. from the affected property;

7) Price data gathered are as follows (in square meter unless specified):

Agri-Orchard Riceland Subd. Res'l Agr'l

(Interior) unirrigated along
(Interior) Sta.
Maria
(Garay)
Provincial Appraisal P600.00 P400.00
Committee
Bulacan (Res. No.
97-005)
(Annex "D")
NP Board Resolution P89.00 P80.00 P230.00
No. 97-246
(Annex "E")
Cuervo Appraisers, P890,000/ha. P800,000/ha. P230.0021
 Inc.
(Annex "F")

Atty. Alog also recommended that only P2,640,274.70 be paid to defendants by way of just
compensation, broken down as follows:

Eight Hundred Two Thousand Three - Payment for damaged

Hundred Sixty Eight Pesos and 50/100 crops/plants/trees
(P802,368.50)
One Hundred Sixty Two Thousand Eight - Payment for structures
Hundred Sixty Five Pesos and 65/100
(P162,865.65)
One Million Five Hundred Nine - Payment for residential
Thousand Nine Hundred Fifty Pesos portion of lot
(P1,509,950.00)
One Hundred Fifty One Thousand Six - Easement fee for
Hundred Ninety One Pesos and 60/100 agricultural portion of
(P151,691.60) lot
Thirteen Thousand Three Hundred - Tower Occupancy Fee
Ninety-Eight and 95/100 (P13,398.95)22

On October 28, 1999, the RTC rendered judgment,23 declaring as well-grounded, fair and
reasonable the compensation for the property as recommended by Atty. Baltazar and Engr.
Cruz. The fallo of the RTC decision reads:

WHEREFORE, premises considered, this Court hereby orders the above-described

5,700-square meter lot from Lot No. 1250 of defendants Spouse (sic) Raul (sic) and
the afore-described 6,362-square meter lot from Lot No. 1251 of same defendants,
subject to the covering Compromise Agreements; and the above-described 17,195-
square meter lot from Lot No. 2076 of defendant Maria Mendoza San Pedro,
CONDEMNED and/or EXPROPRIATED for the construction and maintenance of
plaintiff's Northwestern Luzon Transmission Line Project (San Manuel - San Jose
500 KV Transmission Line Project), a project for public purpose.

Accordingly, this Court hereby fixes the just compensation for the expropriated lots,
as follows:

OWNERS LOT AREA PRICE/ JUST

NO. EXPROPRIATED S.Q. COMPENSATION
METER

Sps. Raul & Edna 1250 5,700 sq. m. P499.00 P2,844,300.00

Lagula

Sps. Raul & Edna 1251 6,362 sq. m. 499.00 2,174,638

Lagula
 Ma. Mendoza San 2076 17,195 sq. m. 800.00 13,756,000
Pedro her heirs

Hence, plaintiff is ordered to pay, as soon as possible, herein defendants the just
compensation enumerated above for their respective lots aforementioned. For this
purpose, plaintiff may withdraw the sum of money deposited with the Land Bank of
the Philippines or any other banks pursuant to Section 2 of Rule 67 of the Rules of
Court, as amended by P.D. No. 42.

FURTHER, defendants are ordered to clear and vacate the lots in question within 30
days from receipt hereof and to surrender possession thereof to the plaintiff.

The fees for the 3 Commissioners of the Appraisal Committee in the sum
of P6,000.00 for the Chairman and P5,000.00 each for the 2 members, shall be paid
by the plaintiff.

SO ORDERED.24

On November 19, 1999, the heirs of Maria San Pedro filed a Manifestation and Motion 25 for
the partial reconsideration of the decision on the ground that the court failed to include in its
decision the just compensation for the 6,565-square-meter residential portion of their land,
with prayer for attorney's fees equivalent to 10% of the total amount to be awarded to them.

On December 3, 1999, NPC filed its motion for reconsideration,26 insisting that the just
compensation awarded to defendants was without legal and factual basis, and that it should
only be made to pay an easement fee.

On June 6, 2001, the trial court issued an Order granting the motion of the heirs and denied
that of NPC.27 The RTC declared that the just compensation for the residential portion of the
property should be the same as that of the spouses Lagula's property, which was P499.00
per sq m. On the claim of NPC in its motion for reconsideration that it should be made to
pay only an easement fee, the trial court ruled that Lot No. 2076 should be treated the same
way as NPC treated the properties of the spouses Lagula. It was pointed out that in the
compromise agreements executed by plaintiff and spouses Lagula, plaintiff paid P499.00
per sq m on the basis of a straight sale of their agricultural land, and not merely an
easement fee for a right of way thereon. The fallo of the amended decision reads:

WHEREFORE, in the light of the foregoing, the Court hereby:

1. Grants the motion of defendant Maria Mendoza San Pedro and thus orders
that the 1st paragraph of page 8 of the Decision be amended to read as
follows:

"Plaintiff is expropriating portions of defendants' above-described properties

to give way to the construction and maintenance of its Northern Luzon
Transmission Line Project (San Manuel - San Jose 500 KV Transmission
Line Project), a project for public purpose. The area of the lots sought to be
 expropriated from the lot of defendant Maria Mendoza San Pedro,
represented by her heirs, are 17,195 square meters more or less of
agricultural land and 6,565 square meters of residential land, while the area
of the land sought to be expropriated from the two lots of defendants Sps.
Raul and Edna Lagula are only 5,166.50 square meters, more or less, from
Lot No. 1250 and 6,363 (sic) square meters, more or less, from Lot No. 1251.

Furthermore, the second paragraph of the dispositive portion of the Decision should
be amended as follows:

"Accordingly, this Court hereby fixes the just compensation for the
expropriated lots, as follows:

OWNERS LOT AREA PRICE/ JUST

NO. EXPROPRIATED S.Q. COMPENSATION
METER

Sps. Raul & Edna

Lagula 1250 5,700 sq. m. P499.00 P2,844,300.00

Sps. Raul & Edna

Lagula 1251 6,362 sq. m. 499.00 3,174,638.00

Ma. Mendoza
San Pedro her
heirs 2076 17,195 sq. m. 499.00 8,580,305.00

Ma. Mendoza
San Pedro her
heirs 6,565 sq. m. 800.00 5,252,000.00

2. Denies the plaintiff's Motion for Reconsideration for lack of merit.

SO ORDERED.28

NPC appealed the amended decision to the CA, asserting that:

THE LOWER COURT GRAVELY ERRED IN FIXING P800.00 AND P499.00 PER
SQUARE METER AS JUST COMPENSATION FOR APPELLEE'S 6,565 SQUARE
METERS OF RESIDENTIAL LAND AND 17,195 SQUARE METERS OF
AGRICULTURAL LAND, RESPECTIVELY.29

On September 28, 2005, the CA rendered judgment dismissing the appeal. The CA ruled
that the July 12, 1999 majority report was based on uncontroverted facts, supported by
documentary evidence and confirmed by
the commissioners' ocular inspection of the subject properties. To arrive at a reasonable
estimate of just compensation, the commissioners considered factors such as the location,
the most profitable likely use of the remaining area, size, shape, accessibility, as well as
listings of other properties within the vicinity. Citing National Power Corporation v. Manubay
Agro-Industrial Development Corporation,30 the CA found as unpersuasive NPC's argument
that it should only pay an easement fee. It ruled that considering the nature and effect of the
installation of power lines, the limitations on the use of land for an indefinite period deprives
the owner of its normal use. The falloof the CA decision reads:

WHEREFORE, the Appeal is hereby DENIED. The assailed Decision and Order
dated 28 October 1999 and 6 June 2001, respectively, are AFFIRMED.

SO ORDERED.31

NPC filed a Motion for Reconsideration,32 which the CA denied in its Resolution33 dated
December 22, 2005; hence, the instant petition based on the following ground:

THE COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT UPHELD

THE DECISION OF THE TRIAL COURT FIXING THE JUST COMPENSATION FOR
RESPONDENT'S 6,565 SQ. METERS OF RESIDENTIAL LAND AND 17,195
SQUARE METERS OF AGRICULTURAL LAND, AT PHP800.00 AND PHP499.00
PER SQUARE METER RESPECTIVELY, INSTEAD OF THE EASEMENT FEE AS
PRAYED FOR IN THE COMPLAINT AND PROVIDED UNDER REPUBLIC ACT NO.
6395, AS AMENDED, OTHERWISE KNOWN AS THE REVISED NPC CHARTER.34

The Ruling of the Court

The petition is denied for lack of merit.

The CA found no reversible error in the trial court's finding of just compensation. Inasmuch
as the determination of just compensation in eminent domain cases is a judicial function
and factual findings of the CA are conclusive on the parties and reviewable only when the
case falls within the recognized exceptions, which does not obtain in this case, we see no
reason to disturb the factual findings as to the valuation of the subject property. 35

Petitioner avers that the rulings of the trial court affirmed by the appellate court, based on
the majority report on the subject property's just compensation, is not supported by
documentary evidence. It avers that in the majority report, Commissioners Atty. Baltazar
and Engr. Cruz, even admit that there were no available sales data on properties within the
vicinity of the subject property for the years 1996 and 1997. Moreover, the Bureau of
Internal Revenue (BIR) valued the property at P60.00 per sq m for residential, and P30.00
per sq m for agricultural lot.36

Petitioner further argues that respondents have not shown that the condition of the adjoining
properties or improvements thereon had increased their land's economic value.37 The
valuation, thus, of the trial court, as affirmed by the CA, was exorbitant and devoid of factual
and legal basis.38

We are not persuaded.

The constitutional limitation of "just compensation" is considered to be the sum equivalent to
the market value of the property, broadly described to be the price fixed by the seller in
open market in the usual and ordinary course of legal action and competition or the fair
value of the property as between one who receives, and one who desires to sell it, fixed at
the time of the actual taking by the government.39 To determine the just compensation to be
paid to the landowner, the nature and character of the land at the time of its taking is the
principal criterion.40

In the July 12, 1999 Majority Report, the commissioners found that the property was located
in a highly-developed area and was accessible through an all-weather road. The fact that
the property had potential for full development as shown by the existence of building
projects in the vicinity, and the long-term effect of the expropriation on the lives, comfort and
financial condition of petitioners was likewise considered. The report also took into account
the ocular inspection conducted by the commissioners on May 11, 1999. The tax
declaration of the subject property,41the NPC sketch plan,42 the location plan,43 the zoning
certificates,44 the zonal valuation of the BIR,45 and the opinion values46 were also
considered.

The lone fact that there was no available sales data on properties within the vicinity of
respondent's land for 1996 and 1997 and that the BIR zonal value was P60.00 per sq m for
residential and P30.00 per sq m for agricultural did not proscribe the commissioners and the
trial court from making their own reasonable estimates of just compensation, after
considering all the facts as to the condition of the property and its surroundings, its
improvements and capabilities. As had been amply explained by this Court in Export
Processing Zone Authority v. Dulay:47

Various factors can come into play in the valuation of specific properties singled out
for expropriation. The values given by provincial assessors are usually uniform for
very wide areas covering several barrios or even an entire town with the exception of
the poblacion. Individual differences are never taken into account. The value of land
is based on such generalities as its possible cultivation for rice, corn, coconuts, or
other crops. Very often land described as "cogonal" has been cultivated for
generations. Buildings are described in terms of only two or three classes of building
materials and estimates of areas are more often inaccurate than correct. Tax values
can serve as guides but cannot be absolute substitutes for just compensation.

To say that the owners are estopped to question the valuations made by assessors
since they had the opportunity to protest is illusory. The overwhelming mass of land
owners accept unquestioningly what is found in the tax declarations prepared by
local assessors or municipal clerks for them. They do not even look at, much less
analyze, the statements. The idea of expropriation simply never occurs until a
demand is made or a case filed by an agency authorized to do so.

It is violative of due process to deny to the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to basic
concepts of justice and fairness to allow the haphazard work of a minor bureaucrat
or clerk to absolutely prevail over the judgment of a court promulgated only after
expert commissioners have actually viewed the property, after evidence and
 arguments pro and con have been presented, and after all factors and
considerations essential to a fair and just determination have been judiciously
evaluated.48

Conformably with the rulings of this Court, the majority report took into account the most
profitable likely use of the remaining area; and the size, shape, accessibility, as well as
listings of other properties within the vicinity.49

As gleaned from the location plan50 of the property in the case at bar, Lot No. 2076 is
connected via a cemented road to the National Road, 1.5 kilometers away. The same is
likewise strategically located at a junction of the barrio road leading to the Provincial Road,
the National Road and to Sapang Palay. The lot is also on the same side of the road as the
land owned by the Jesus Is Lord Congregation and the Partida Elementary School. The
ocular inspection of the commissioners also reveals that opposite the road, about half a km
away, is an ongoing resort project, the Falcon Crest Resort, and, about 200 meters away,
the proposed Catholic Retreat House. While there are no existing structures or
improvements on the residential portion of the lot, the same is situated along the all-weather
(gravel) road and is fronting the property. On the agricultural portion thereof, the same
appears to have been cultivated prior to the taking, as petitioner offered to compensate
respondent's heirs' damages to the crops, plants and trees.

The trial court fixed the just compensation for the property as follows: (1) P499.00 per sq m
on the 17,195 sq m agricultural portion of the subject land; and (2) P800.00 per sq m on the
6,565 sq m residential portion of the lot. Noticeably, the trial court did not blindly accept the
recommendation of majority of the commissioners of P800.00 per sq m for the residential lot
and P700.00 per sq m for the agricultural lot. Indeed, the trial court took into account the
evidence of the parties, in tandem with the findings and recommendation of the majority of
the commissioners. Considering that such valuation of the trial court as affirmed by the CA
is reasonable as it is and supported by the evidence on record, we find no compelling
reason to disturb the same.51

The Court is not persuaded by petitioner's argument that respondents had not shown that
the condition of the adjoining properties, i.e., improvements, had increased their land's
economic value. It bears stressing that there is absence of any available sales data on
properties within the vicinity of respondent's land for the years 1996 and 1997, the time of
the taking. The property of respondent was the first to be sold. It is thus an exercise in
futility for respondents to require evidence of sales of properties in the vicinity when no such
transactions took place.

Petitioner's contention that the trial court should have based the fixing of just compensation
on the appraisal report of Cuervo Appraisers, Inc. (where petitioner based its Resolution No.
97-246) is likewise untenable. Petitioner failed to present the so-called report of the Cuervo
Appraisers, Inc. as evidence. We note that annexed to NPC Resolution No. 97-246 is a data
of the NPC Board Appraisal on the Fair Market Value of residential lands along the concrete
road in Sapang Palay, San Jose Del Monte, valued at P499.00 per sq m, which, however, is
not signed nor authenticated. If, at all, the values indicated therein are self-serving to
petitioner.
Parenthetically, petitioner has not explained why it agreed on paying just compensation
of P499.00 per sq m on the agricultural lands of the spouses Lagula, when the purported
Cuervo Appraisal Report indicates that the fair market value of unirrigated riceland along
the road is only P110.00 per sq m, and for an unirrigated interior only P85.00 per sq
m.52 Had petitioner really believed Cuervo's appraisal, then, it should have likewise insisted
on the values therein when it dealt with the spouses Lagulas.

Notably, the lower court's valuations of respondent's property P499.00 per sq m on the
agricultural portion and P800.00 per sq m on the residential portion of the lot are near the
estimates made by the following: (1) the Provincial Appraisal Committee, in its Resolution
No. 97-005, which are P400.00 for agricultural and P600.00 for residential;53 (2) the
recommendation in the majority report of the commissioners (P700.00 for agricultural
and P800.00 for residential); and (3) the opinion values, which are P643.00 for agricultural
and P1,075.00 for residential. On the other hand, the valuations made by Atty. Alog, P89.00
for agricultural and P230.00 for residential, are unconscionably low, understandably so
because he works for petitioner.

On the question as to whether petitioner shall pay only an easement fee to respondent's
heirs, the following pronouncement in National Power Corporation v. Aguirre-Paderanga54 is
enlightening:

Indeed, expropriation is not limited to the acquisition of real property with a

corresponding transfer of title or possession. The right-of-way easement resulting in
a restriction or limitation on property rights over the land traversed by transmission
lines, as in the present case, also falls within the ambit of the term "expropriation."As
explained in National Power Corporation v. Gutierrez, viz:

The trial court's observation shared by the appellate court show that "x x x
While it is true that plaintiff [is] 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 v. Court of
Appeals, 129 SCRA 665, 1984; Garcia v. Court of Appeals, 102 SCRA 597,
1981). The Supreme Court, in Republic of the Philippines v. PLDT, 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. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right-of-way."

In 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.55

Similarly, in this case, the commissioners' observation on the reported constant loud
buzzing and exploding sounds emanating from the towers and transmission lines, especially
on rainy days; the constant fear on the part of the landowners that the large transmission
lines looming not far above their land and the huge tower in front of their lot will affect their
safety and health; and the slim chance that no one would be interested to buy the remaining
portions on each side of the residential lot affected by the project, to the damage of the
landowners, both as to future actual use of the land and financial gains to be derived
therefrom, makes the instant case fall within the ambit of expropriation.

WHEREFORE, premises considered, the appeal is hereby DENIED for lack of merit. The
ruling of the Court of Appeals in CA-G.R. CV No. 72860 is AFFIRMED.

SO ORDERED.

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. Dabu for private respondents.

BIDIN, J.:

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
Instance of Pampanga, Fifth Judicial District, Branch II, in Civil Case No. 2709,
entitled National 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 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. In 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). It 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 PETITIONER SHOULD BE MADE TO PAY SIMPLE EASEMENT FEE

OR FULL COMPENSATION FOR THE LAND TRAVERSED BY ITS
TRANSMISSION LINES.

It 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 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. 1w phi1

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). The Supreme Court, in Republic of the Philippines vs. PLDT, * 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. It is
unquestionable that real property may, through expropriation, be subjected to an
easement of right-of-way.

In 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 has always been
understood to be the just and complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation (Province of Tayabas vs. Perez, 66
Phil. 467 [1938]; Assoc. of Small Land Owners of the Phils., Inc. 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]).

It 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 Internal Revenue v.
Procter and Gamble Philippines Manufacturing Corporation, 160 SCRA 560 [1988];
Commissioner of Internal Revenue v. Wander Philippines, Inc., 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 AFFIRMED.

SO ORDERED.

MARINA Z. REYES; ALFREDO A. FRANCISCO; ANGELITA Z. GARCIA;

ALFREDO Z. FRANCISCO, JR; ARMANDO Z. FRANCISCO; ALMA
C. FRANCISCO; EUGENIA Z. LUNA; CLARITA Z. ZABALLERO,
LEONARDO Z. ZABALLERO, JR, and TEODORO Z. ZABALLERO,
in substitution of LEONARDO M. ZABALLERO; AUGUSTO M.
ZABALLERO; FRINE A. ZABALLERO; ELENA FRONDA
ZABALLERO; VICTOR GREGORIO F. ZABALLERO; MARIA
ELENA F. ZABALLERO; LOURDES ZABALLERO-LAVA;
SOCORRO EMILIA ZABALLERO-YAP; and TERESITA F.
ZABALLERO, petitioners, vs. NATIONAL HOUSING
AUTHORITY, respondent.

DECISION
PUNO, J.:

This is an appeal by certiorari from the decision of the Court of Appeals in

CA-GR CV No. 51641 dated September 29, 2000 affirming the judgment of
[1]

the Regional Trial Court of Quezon City, Branch 79 which dismissed the
complaint for forfeiture of rights filed by herein petitioners, as well as the
Resolution dated March 13, 2001 denying petitioners motion for
reconsideration.
Records show that in 1977, respondent National Housing Authority (NHA)
filed separate complaints for the expropriation of sugarcane lands, particularly
Lot Nos. 6450, 6448-E, 6198-A and 6199 of the cadastral survey of
Dasmarias, Cavite belonging to the petitioners, before the then Court of First
Instance of Cavite, and docketed as Civil Case Nos. T.G.-392, T.G.-396 and
T.G.-417. The stated public purpose of the expropriation was the expansion of
the Dasmarias Resettlement Project to accommodate the squatters who were
relocated from the Metropolitan Manila area. The trial court rendered
judgment ordering the expropriation of these lots and the payment of just
compensation. This was affirmed by the Supreme Court in a decision
rendered on October 29, 1987 in the case of NHA vs. Zaballero and which [2]

became final on November 26, 1987. [3]

On February 24, 1989, the expropriation court (now Branch 18, Regional
Trial Court of Tagaytay City) issued an Order the dispositive portion of which
[4]

reads:

WHEREFORE, and resolving thus, let an Alias Writ of Execution be immediately

issued and that:

(1) The Register of Deeds of the Province of Cavite is hereby ordered to transfer, in
the name of the plaintiff National Housing Authority, the following:

(a) Transfer Certificate No. RT-638 containing an area of 79,167 square

meters situated in Barrio Bangkal, Dasmarias, Cavite;

(b) Transfer Certificate of Title No. T-55702 containing an area of 20,872

square meters situated in Barrio Bangkal, Dasmarias, Cavite;

(c) Transfer Certificate of Title No. RT-639 and RT-4641 covering Lot
Nos. 6198-A and 6199 with an aggregate area of 159,985 square meters
also situated in Barrio Bangkal, Dasmarias, Cavite.

(2) Plaintiff National Housing Authority is likewise hereby ordered, under pain of
contempt, to immediately pay the defendants, the amounts stated in the Writ of
Execution as the adjudicated compensation of their expropriated properties, which
process was received by it according to the records, on September 26, 1988,
segregating therefrom, and in separate check, the lawyers fees in favor of Atty. Bobby
P. Yuseco, in the amount of P322,123.05, as sustained by their contract as gleaned
from the records, with no other deduction, paying on its own (NHA) account, the
necessary legal expenses incident to the registration or issuance of new certificates of
title, pursuant to the provisions of the Property Registration Law (PD 1529);

(3) Defendants, however, are directed to pay the corresponding capital gains tax on
the subject properties, directing them additionally, to coordinate with the plaintiff
NHA in this regard, in order to facilitate the termination of this case, put an end to this
controversy and consign the same to its final rest.

For the alleged failure of respondent NHA to comply with the above order,
petitioners filed on April 28, 1992 a complaint for forfeiture of rights before the
[5]

Regional Trial Court of Quezon City, Branch 79, in Civil Case No. Q-92-
12093. They alleged that respondent NHA had not relocated squatters from
the Metropolitan Manila area on the expropriated lands in violation of the
stated public purpose for expropriation and had not paid the just
compensation fixed by the court. They prayed that respondent NHA be
enjoined from disposing and alienating the expropriated properties and that
judgment be rendered forfeiting all its rights and interests under the
expropriation judgment. In its Answer, respondent NHA averred that it had
[6]

already paid a substantial amount to herein petitioners and that the

expropriation judgment could not be executed in view of several issues raised
by respondent NHA before the expropriation court (now Branch 18, RTC,
Tagaytay City) concerning capital gains tax, registration fees and other
expenses for the transfer of title to respondent NHA, as well as the claims for
attorneys fees of Atty. Joaquin Yuseco, Jr., collaborating counsel for
petitioners.
Ocular inspections conducted by the trial court on the subject properties
[7]

show that:

1. 80% of Lot No. 6198-A with an area of 120,146 square meters is already occupied
by relocatees whose houses are made of light materials with very few houses partly
made of hollow blocks.The relocatees were relocated only on (sic) March of 1994;

2. Most of the area covered by Lot No. 2075 is almost occupied by houses and
structures, most of which are made of concrete materials. These houses are not being
occupied by squatters relocated to the said lot by the defendant NHA;

3. Lot No. 6199 is also occupied by concrete houses and structures but likewise there
are no relocatees in said lot. A large area of the same is still unoccupied.

On September 29, 1995, the trial court rendered judgment dismissing the
complaint. Finding that the failure of respondent NHA to pay just
compensation and of petitioners to pay capital gains tax are both unjustified
and unreasonable, the trial court held that: (1) respondent NHA is not deemed
to have abandoned the public purpose for which the subject properties were
expropriated because the relocation of squatters involves a long and tedious
process. It ruled that respondent NHA actually pursued the public purpose of
the expropriation when it entered into a contract with Arceo C. Cruz involving
the construction of low cost housing on the expropriated lots to be sold to
qualified low income beneficiaries; (2) there is no condition imposed in the
expropriation judgment that the subject properties shall revert back to its
original owners in case the purpose of expropriation is terminated or
abandoned; (3) the payment of just compensation is independent of the
obligation of herein petitioners to pay capital gains tax; and (4) in the payment
of just compensation, the basis should be the value at the time the property
was taken. On appeal, the Court of Appeals affirmed the decision of the trial
court.
Petitioners are now before us raising the following assignment of errors:

1. The Honorable Court of Appeals had decided a question of substance not in

accord with justice and equity when it ruled that, as the judgment of the
expropriation court did not contain a condition that should the
expropriated property be not used for the intended purpose it would
revert to the condemnee, the action to declare the forfeiture of rights
under the expropriation judgment can not prosper;

2. The Honorable Court of Appeals decided a question of substance not in

accord with jurisprudence, justice and equity when it ruled that the non-
payment is not a ground for forfeiture;

3. The Honorable Court of Appeals erred in not declaring the judgment of

expropriation forfeited in light of the failure of respondent to use the
expropriated property for the intended purpose but for a totally different
purpose.

The petition is not impressed with merit.

Petitioners contend that respondent NHA violated the stated public
purpose for the expansion of the Dasmarias Resettlement Project when it
failed to relocate the squatters from the Metro Manila area, as borne out by
the ocular inspection conducted by the trial court which showed that most of
the expropriated properties remain unoccupied.Petitioners likewise question
the public nature of the use by respondent NHA when it entered into a
contract for the construction of low cost housing units, which is allegedly
different from the stated public purpose in the expropriation
proceedings. Hence, it is claimed that respondent NHA has forfeited its rights
and interests by virtue of the expropriation judgment and the expropriated
properties should now be returned to herein petitioners. We are not
persuaded.
 The 1987 Constitution explicitly provides for the exercise of the power of
eminent domain over private properties upon payment of just compensation.
More specifically, section 9, Article III states that private property shall not be
taken for public use without just compensation. The constitutional restraints
are public use and just compensation.
Petitioners cannot insist on a restrictive view of the eminent domain
provision of the Constitution by contending that the contract for low cost
housing is a deviation from the stated public use. It is now settled doctrine that
the concept of public use is no longer limited to traditional purposes. Here, as
elsewhere, the idea that public use is strictly limited to clear cases of use by
the public has been abandoned. The term public use has now been held to be
synonymous with public interest, public benefit, public welfare, and public
convenience. The rationale for this new approach is well explained in the
[8]

case of Heirs of Juancho Ardona, et al. vs. Reyes, et al., to wit: [9]

The restrictive view of public use may be appropriate for a nation which
circumscribes the scope of government activities and public concerns and which
possesses big and correctly located public lands that obviate the need to take private
property for public purposes. Neither circumstance applies to the Philippines. We
have never been a laissez faire State. And the necessities which impel the exertion of
sovereign power are all too often found in areas of scarce public land or limited
government resources.

xxxxxxxxx

The taking to be valid must be for public use. There was a time when it was felt that a
literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or
parks. Otherwise, expropriation is not allowable. It is not anymore. As long as the
purpose of the taking is public, then the power of eminent domain comes into play. As
just noted, the constitution in at least two cases, to remove any doubt, determines what
is public use. One is the expropriation of lands to be subdivided into small lots for
resale at cost to individuals. The other is in the transfer, through the exercise of this
power, of utilities and other private enterprise to the government. It is accurate to state
then that at present whatever may be beneficially employed for the general welfare
satisfies the requirement of public use. (emphasis supplied)

The act of respondent NHA in entering into a contract with a real estate
developer for the construction of low cost housing on the expropriated lots to
be sold to qualified low income beneficiaries cannot be taken to mean as a
deviation from the stated public purpose of their taking. Jurisprudence has it
that the expropriation of private land for slum clearance and urban
development is for a public purpose even if the developed area is later sold to
private homeowners, commercials firms, entertainment and service
companies, and other private concerns. [10]

Moreover, the Constitution itself allows the State to undertake, for the
common good and in cooperation with the private sector, a continuing
program of urban land reform and housing which will make at affordable
cost decent housing and basic services to underprivileged and homeless
citizens in urban centers and resettlement areas. The expropriation of
[11]

private property for the purpose of socialized housing for the marginalized
sector is in furtherance of the social justice provision under Section 1, Article
XIII of the Constitution which provides that:

SECTION 1. The Congress shall give highest priority to the enactment of measures
that protect and enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities by equitably
diffusing wealth and political power for the common good.

To this end, the State shall require the acquisition, ownership, use and disposition of
property and its increments.

It follows that the low cost housing project of respondent NHA on the
expropriated lots is compliant with the public use requirement.
We likewise do not subscribe to petitioners contention that the stated
public purpose was abandoned when respondent NHA failed to occupy the
expropriated lots by relocating squatters from the Metro Manila area. The
expropriation judgment declared that respondent NHA has a lawful right to
take petitioners properties for the public use or purpose of expanding the
Dasmarias Resettlement Project. The taking here is absolute, without any
condition, restriction or qualification. Contrary to petitioners submission, the
ruling enunciated in the early case of Fery vs. Municipality of
Cabanatuan, is still good and sound doctrine, viz.:
[12]

x x x If, for example, land is expropriated for a particular purpose, with the condition
that when that purpose is ended or abandoned the property shall return to its former
owner, then, of course, when the purpose is terminated or abandoned the former
owner reacquires the property so expropriated. x x x If, upon the contrary, however,
the decree of expropriation gives to the entity a fee simple title, then, of course, the
land becomes the absolute property of the expropriator x x x.
When land has been acquired for public use in fee simple unconditionally, either
by the exercise of eminent domain or by purchase, the former owner retains no
rights in the land, and the public use may be abandoned, or the land may be
devoted to a different use, without any impairment of the estate or title acquired,
or any reversion to the former owner.

Petitioners further aver that the continued failure of respondent NHA to

pay just compensation for a long period of time justifies the forfeiture of its
rights and interests over the expropriated lots. They demand the return of the
expropriated lots. Respondent NHA justifies the delay to pay just
compensation by reason of the failure of petitioners to pay the capital gains
tax and to surrender the owners duplicate certificates of title.
In the recent case of Republic of the Philippines vs. Court of Appeals,
et al., the Court ruled that non-payment of just compensation does not entitle
[13]

the private landowners to recover possession of their expropriated lots. Thus:

Thus, in Valdehueza vs. Republic where the private landowners had remained unpaid
ten years after the termination of the expropriation proceedings, this Court ruled

The points in dispute are whether such payment can still be made and, if so, in what
amount. Said lots have been the subject of expropriation proceedings. By final and
executory judgment in said proceedings, they were condemned for public use, as part
of an airport, and ordered sold to the government. x x x. It follows that both by virtue
of the judgment, long final, in the expropriation suit, as well as the annotations upon
their title certificates, plaintiffs are not entitled to recover possession of their
expropriated lots which are still devoted to the public use for which they were
expropriated but only to demand the market value of the same.

Said relief may be granted under plaintiffs prayer for such other remedies, which may
be deemed just and equitable under the premises.

The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay City where
the recovery of possession of property taken for public use prayed for by the unpaid
landowner was denied even while no requisite expropriation proceedings were first
instituted. The landowner was merely given the relief of recovering compensation for
his property computed at its market value at the time it was taken and appropriated by
the State.

The judgment rendered by the Bulacan RTC in 1979 on the expropriation

proceedings provides not only for the payment of just compensation to herein
respondents but likewise adjudges the property condemned in favor of petitioner
over which parties, as well as their privies, are bound. Petitioner has occupied,
utilized and, for all intents and purposes, exercised dominion over the property
pursuant to the judgment. The exercise of such rights vested to it as the
condemnee indeed has amounted to at least a partial compliance or satisfaction
of the 1979 judgment, thereby preempting any claim of bar by prescription on
grounds of non-execution. In arguing for the return of their property on the basis
of non-payment, respondents ignore the fact that the right of the expropriating
authority is far from that of an unpaid seller in ordinary sales, to which the
remedy of rescission might perhaps apply. An in remproceeding, condemnation
acts upon the property. After condemnation, the paramount title is in the public
under a new and independent title; thus, by giving notice to all claimants to a disputed
title, condemnation proceedings provide a judicial process for securing better title
against all the world than may be obtained by voluntary conveyance. (emphasis
supplied)

We, however, likewise find the refusal of respondent NHA to pay just
compensation, allegedly for failure of petitioners to pay capital gains tax and
surrender the owners duplicate certificates of title, to be unfounded and
unjustified.
First, under the expropriation judgment the payment of just compensation
is not subject to any condition. Second, it is a recognized rule that although
the right to enter upon and appropriate the land to public use is completed
prior to payment, title to the property expropriated shall pass from the owner
to the expropriator only upon full payment of the just compensation. In the
case of Association of Small Landowners in the Phils., Inc., et al. vs.
Secretary of Agrarian Reform, it was held that:
[14]

Title to property which is the subject of condemnation proceedings does not vest the
condemnor until the judgment fixing just compensation is entered and paid, but the
condemnors title relates back to the date on which the petition under the Eminent
Domain Act, or the commissioners report under the Local Improvement Act, is filed.

x x x Although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the owner
until payment is actually made.

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that
title to property does not pass to the condemnor until just compensation had actually
been made. In fact, the decisions appear to be uniformly to this effect. As early as
1838, in Rubottom v. McLure, it was held that actual payment to the owner of the
condemned property was a condition precedent to the investment of the title to the
property in the State albeit not to the appropriation of it to public use. In Rexford v.
Knight, the Court of Appeals of New York said that the construction upon the statutes
was that the fee did not vest in the State until the payment of the compensation
although the authority to enter upon and appropriate the land was complete prior to
the payment. Kennedy further said that both on principle and authority the rule is x x
x that the right to enter on and use the property is complete, as soon as the
property is actually appropriated under the authority of law for a public use, but
that the title does not pass from the owner without his consent, until just
compensation has been made to him.

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes,
that:

If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation adopted in
this jurisdiction is such as to afford absolute reassurance that no piece of land can be
finally and irrevocably taken from an unwilling owner until compensation is paid. x x
x. (emphasis supplied)

With respect to the amount of the just compensation still due and
demandable from respondent NHA, the lower courts erred in not awarding
interest computed from the time the property is actually taken to the time
when compensation is actually paid or deposited in court. In Republic, et al.
vs. Court of Appeals, et al., the Court imposed interest at 12% per annum
[15]

in order to help eliminate the issue of the constant fluctuation and inflation of
the value of the currency over time, thus:

The constitutional limitation of just compensation is considered to be the sum

equivalent to the market value of the property, broadly described to be the price fixed
by the seller in open market in the usual and ordinary course of legal action and
competition or the fair value of the property as between one who receives, and one
who desires to sell, it being fixed at the time of the actual taking by the
government. Thus, if property is taken for public use before compensation is
deposited with the court having jurisdiction over the case, the final compensation
must include interests on its just value to be computed from the time the property is
taken to the time when compensation is actually paid or deposited with the court. In
fine, between the taking of the property and the actual payment, legal interests accrue
in order to place the owner in a position as good as (but not better than) the position
he was in before the taking occurred.

x x x This allowance of interest on the amount found to be the value of the property as
of the time of the taking computed, being an effective forbearance, at 12% per annum
should help eliminate the issue of the constant fluctuation and inflation of the value of
the currency over time. Article 1250 of the Civil Code, providing that, in case of
extraordinary inflation or deflation, the value of the currency at the time of the
establishment of the obligation shall be the basis for the payment when no agreement
to the contrary is stipulated, has strict application only to contractual obligations. In
other words, a contractual agreement is needed for the effects of extraordinary
inflation to be taken into account to alter the value of the currency.

Records show that there is an outstanding balance of P1,218,574.35 that

ought to be paid to petitioners. It is not disputed that respondent NHA took
[16]

actual possession of the expropriated properties in 1977. Perforce, while

[17]

petitioners are not entitled to the return of the expropriated property, they are
entitled to be paid the balance of P1,218,574.35 with legal interest thereon at
12% per annum computed from the taking of the property in 1977 until the due
amount shall have been fully paid.
WHEREFORE, the appealed judgment is modified as follows:

1. Ordering respondent National Housing Authority to pay petitioners the

amount of P1,218,574.35 with legal interest thereon at 12% per annum
computed from the taking of the expropriated properties in 1997 until the
amount due shall have been fully paid;

2. Ordering petitioners to pay the capital gains tax; and

3. Ordering petitioners to surrender to respondent National Housing Authority

the owners duplicate certificates of title of the expropriated properties upon
full payment of just compensation.

SO ORDERED.

G.R. Nos. L-60549, 60553 to 60555 October 26, 1983

HEIRS OF JUANCHO ARDONA (represented by Gloria Ardona) ANASTACIO C.

CABILAO, HEIRS OF CIPRIANO CABILAO (represented by Jose Cabilao) MODESTA
CABILAO, HEIRS OF ROMAN CABUENAS (represented by Alberto Cabuenas),
AGRIPINO GABISAY and PRUDENCIA MABINI, ANTONIO LABRADOR and LUCIA
GABISAY, GERONIMO MABINI and MARCELINA SABAL, INOCENCIO MABINI and
ARSENIA REYES, PATRICIO MABINI and GREGORIA BORRES, ANICETO GADAPAN
and MAXIMA GABISAY, BARTOLOME MAGNO and CALINECA E. MAGNO, ALBERTO
CABUENAS, NARCISO CABUENAS and VICTORIA CABUENAS, EUTIQUIOSENO,
HEIRS OF ESPERIDION CABUENAS (represented by Alberto Cabuenas), MAXIMINA
NAVARO, SULPICIO NAVARO, EDUARDO NAVARO, MARTINIANO ROMA (in
representation of Arcadio Mabini, deceased), MARTIN SENO, FAUSTO ARDA,
MAXIMA CABILAO, ESTRELLA SENO, EDUVEGIS S. CABILAO, ROSARIO CABILAO,
MINORS DANILO, SOCORRO, JOSEFINA and MARITES, all surnamed Cabilao, JUAN
BORRES (represented by Francisca Borres), RAMON JABADAN, JESUS ALIPAR and
LEONILA KABAHAR, ANTONIO LABRADOR, HEIRS OF NICASIO GABISAY
(represented by Arsenio Gabisay), PACIFICO LABRADOR, DEMETRIO LABRADOR
and FRUCTOSA TABURA, VENANCIO DEL MAR, MARINO DEL MAR, HEIRS OF
TEODORA ARCILLO (represented by Brigida Arcillo) DIONISIA GABUNADA, HEIRS
OF BUENAVENTURA FRANCISCO (represented by Felicidad Sadaya Francisco),
HEIRS OF VICTORIA C. CABUENAS (represented by Alberto Cabuenas) HEIRS OF
CIPRIANO GABUNADA (represented by Claudio Gabunada), petitioners,
vs.
HON. JUAN Y. REYES, Executive Judge and Presiding Judge of Branch I, COURT OF
FIRST instance OF CEBU, and the PHILIPPINE TOURISM AUTHORITY, respondents.

George M. Baladjay, Mario G. dela Victoria, Olegario Sarmiento, Jr., and Democrito
Barcenas for petitioners.

The Solicitor General for respondent Judge.

F.A. Sugue & Elino B. Lingas for Philippine Tourism Authoirity

GUTIERREZ, JR., J.:

This is a petition for certiorari with preliminary injunction challenging the constitutionality of
Presidential Decree No. 564, the Revised Charter of the Philippine Tourism Authority, and
Proclamation No. 2052 declaring the barangays of Sibugay, Malubog, Babag and Sirao
including the proposed Lusaran Dam in the City of Cebu and in the municipalities of Argao
and Dalaguete in the province of Cebu as tourist zones. The petitioners ask that we restrain
respondent Court of First Instance of Cebu and the Philippine Tourism Authority (PTA) from
enforcing and implementing the writs of possession issued in four (4) expropriation cases
filed by PTA against the petitioners: Civil Cases Nos. R-19562, R-19684, R-20701, and R-
21608 of the Court of First Instance of Cebu (Branch 1).

The Philippine Tourism Authority filed four (4) Complaints with the Court of First Instance of
Cebu City for the expropriation of some 282 hectares of rolling land situated in barangays
Malubog and Babag, Cebu City, under PTA's express authority "to acquire by purchase, by
negotiation or by condemnation proceedings any private land within and without the tourist
zones" for the purposes indicated in Section 5, paragraph B(2), of its Revised Charter (PD
564), more specifically, for the development into integrated resort complexes of selected
and well-defined geographic areas with potential tourism value. As uniformly alleged in the
complaints, the purposes of the expropriation are:
 xxx xxx xxx

Plaintiff, in line with the policy of the government to promote tourism and
development of tourism projects will construct in Barangays Malubog, Busay
and Babag, all of Cebu City, a sports complex (basketball courts, tennis
courts, volleyball courts, track and field, baseball and softball diamonds, and
swimming pools), clubhouse, gold course, children's playground and a nature
area for picnics and horseback riding for the use of the public.

The development plan, covering approximately 1,000 hectares, includes the

establishment of an electric power grid in the area by the National Power
Corporation, thus assuring the supply of electricity therein for the benefit of
the whole community. Deep wells will also be constructed to generate water
supply within the area. Likewise, a complex sewerage and drainage system
will be devised and constructed to protect the tourists and nearby residents
from the dangers of pollution.

Complimentary and support facilities for the project will be constructed,

including public rest houses, lockers, dressing rooms, coffee shops, shopping
malls, etc. Said facilities will create and offer employment opportunities to
residents of the community and further generate income for the whole of
Cebu City.

Plaintiff needs the property above described which is directly covered by the
proposed golf court.

xxx xxx xxx

The defendants in Civil Cases Nos. R-20701 and R-21608 filed their respective Opposition
with Motion to Dismiss and/or Reconsideration. The defendants in Civil Case No. R-19562
filed a manifestation adopting the answer of defendants in Civil Case No. R-19864. The
defendants, now petitioners, had a common allegation in that the taking is allegedly not
impressed with public use under the Constitution.

In their motions to dismiss, the petitioners alleged, in addition to the issue of public use, that
there is no specific constitutional provision authorizing the taking of private property for
tourism purposes; that assuming that PTA has such power, the intended use cannot be
paramount to the determination of the land as a land reform area; that limiting the amount of
compensation by Legislative fiat is constitutionally repugnant; and that since the land is
under the land reform program, it is the Court of Agrarian Relations and not the Court of
First Instance that has jurisdiction over the expropriation cases.

The Philippine Tourism Authority having deposited with The Philippine National Bank, Cebu
City Branch, an amount equivalent to 10% of the value of the properties pursuant to
Presidential Decree No. 1533. the lower court issued separate orders authorizing PTA to
take immediate possession of the premises and directing the issuance of writs of
possession.

On May 25, 1982, petitioners filed this petition questioning the orders of the respondent
Judge, The respondents have correctly restated the grounds in the petition as follows:

xxx xxx xxx

A. The complaints for expropriation lack basis because the Constitution does
not provide for the expropriation of private property for tourism or other
related purposes;

B. The writs of possession or orders authorizing PTA to take immediate

possession is premature because the "public use" character of the taking has
not been previously demonstrated;

C. The taking is not for public use in contemplation of eminent domain law;

D. The properties in question have been previously declared a land reform

area; consequently, the implementation of the social justice pro- ,vision of the
Constitution on agrarian reform is paramount to the right of the State to
expropriate for the purposes intended;

E. Proclamation No. 2052 declaring certain barangays in Cebu City, which

include the lands subject of expropriation as within a tourist zone, is
unconstitutional for it impairs the obligation of contracts; "F. Since the
properties are within a land reform area, it is the Court of Agrarian Relations,
not the lower court, that has jurisdiction pursuant to Pres. Decree No. 946;

F. The forcible ejectment of defendants from the premises constitutes a

criminal act under Pres. Decree No. 583;

In their memorandum, the petitioners have summarized the issues as follows:

I. Enforcement of the Writ of Possession is Premature:

II. Presidential Decree 564 Amending Presidential Decree l89 is

Constitutionally Repugnant:

III. The Condemnation is not for Public Use, Therefore, Unconstitutional:

IV. The Expropriation for Tourism Purposes of Lands Covered by the Land
Reform Program Violates the Constitution:

V. Presidential Proclamation 2052 is Unconstitutional:

VI. Presidential Decree No 1533 is Unconstitutional:

 VII. The Court of First Instance has no Jurisdiction:

VIII. The Filing of the Present Petition is not Premature.

The issues raised by the petitioners revolve around the proposition that the actions to
expropriate their properties are constitutionally infirm because nowhere in the Constitution
can a provision be found which allows the taking of private property for the promotion of
tourism.

The petitioners' arguments in their pleadings in support of the above proposition are
subsumed under the following headings:

1. Non-compliance with the "public use" requirement under the eminent

domain provision of the Bill of Rights.

2. Disregard of the land reform nature of the property being expropriated.

3. Impairment of the obligation of contracts.

There are three provisions of the Constitution which directly provide for the exercise of the
power of eminent domain. Section 2, Article IV states that private property shall not be
taken for public use without just compensation. Section 6, Article XIV allows the State, in
the interest of national welfare or defense and upon payment of just compensation to
transfer to public ownership, utilities and other private enterprises to be operated by the
government. Section 13, Article XIV states that the Batasang Pambansa may authorize
upon payment of just compensation the expropriation of private lands to be subdivided into
small lots and conveyed at cost to deserving citizens.

While not directly mentioning the expropriation of private properties upon payment of just
compensation, the provisions on social justice and agrarian reforms which allow the
exercise of police power together with the power of eminent domain in the implementation
of constitutional objectives are even more far-reaching insofar as taking of private property
is concerned.

Section 6, Article II provides:

Sec. 6. The State shall promote social justice to ensure the dignity, welfare,
and security of all the people. Towards its end, the State shall regulate the
acquisition, ownership, use, enjoyment, and disposition of private property,
and equitably diffuse property ownership and profits.

xxx xxx xxx

Section 12, Article XIV provides:

See. 12. The State shall formulate and implement an agrarian reform
program aimed at emancipating the tenant from the bondage of the soil and
achieving the goals enunciated in this Constitution.
The equitable diffusion of property ownership in the promotion of social justice implies the
exercise, whenever necessary, of the power to expropriate private property. Likewise there
can be no meaningful agrarian reform program unless the power to expropriate is utilized.

We cite all the above provisions on the power to expropriate because of the petitioners'
insistence on a restrictive view of the eminent domain provision. The thrust of all
constitutional provisions on expropriation is in the opposite direction.

As early as 1919, this Court in Visayan Refining Co. v. Samus (40 Phil. 550) categorized
the restrictive view as wholly erroneous and based on a misconception of fundamentals.

The petitioners look for the word "tourism" in the Constitution. Understandably the search
would be in vain. The policy objectives of the framers can be expressed only in general
terms such as social justice, local autonomy, conservation and development of the national
patrimony, public interest, and general welfare, among others. The programs to achieve
these objectives vary from time to time and according to place, To freeze specific programs
like Tourism into express constitutional provisions would make the Constitution more prolix
than a bulky code and require of the framers a prescience beyond Delphic proportions. The
particular mention in the Constitution of agrarian reform and the transfer of utilities and other
private enterprises to public ownership merely underscores the magnitude of the problems
sought to be remedied by these programs. They do not preclude nor limit the exercise of the
power of eminent domain for such purposes like tourism and other development programs.

In the leading case of Visayan Refining Co. v. Camus (supra), this Court emphasized that
the power of eminent domain is inseparable from sovereignty being essential to the
existence of the State and inherent in government even in its most primitive forms. The only
purpose of the provision in the Bill of Rights is to provide some form of restraint on the
sovereign power. It is not a grant of authority -

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

The constitutional restraints are public use and just compensation.

Do the purposes of the taking in this case constitute "public use"?

The petitioners ask us to adopt a strict construction and declare that "public use" means
literally use by the public and that "public use" is not synonymous with "public interest",
"public benefit", or "public welfare" and much less "public convenience. "

The petitioners face two major obstacles. First, their contention which is rather sweeping in
its call for a retreat from the public welfare orientation is unduly restrictive and outmoded.
Second, no less than the lawmaker has made a policy determination that the power of
eminent domain may be exercised in the promotion and development of Philippine tourism.
The restrictive view of public use may be appropriate for a nation which circumscribes the
scope of government activities and public concerns and which possesses big and correctly
located public lands that obviate the need to take private property for public purposes.
Neither circumstance applies to the Philippines. We have never been a laissez faire State,
And the necessities which impel the exertion of sovereign power are all too often found in
areas of scarce public land or limited government resources.

Certain aspects of parliamentary government were introduced by the 1973 amendments to

the Constitution with further modifications in the 1976 and 1981 amendments. Insofar as the
executive and legislative departments are concerned, the traditional concept of checks and
balances in a presidential form was considerably modified to remove some roadblocks in
the expeditious implementation of national policies. There was no such change for the
judiciary. We remain as a checking and balancing department even as all strive to maintain
respect for constitutional boundaries. At the same time, the philosophy of coordination in the
pursuit of developmental goals implicit in the amendments also constrains in the judiciary to
defer to legislative discretion iii the judicial review of programs for economic development
and social progress unless a clear case of constitutional infirmity is established. We cannot
stop the legitimate exercise of power on an invocation of grounds better left interred in a
bygone age and time.* As we review the efforts of the political departments to bring about
self-sufficiency, if not eventual abundance, we continue to maintain the liberal approach
because the primary responsibility and the discretion belong to them.

There can be no doubt that expropriation for such traditions' purposes as the construction of
roads, bridges, ports, waterworks, schools, electric and telecommunications systems,
hydroelectric power plants, markets and slaughterhouses, parks, hospitals, government
office buildings, and flood control or irrigation systems is valid. However, the concept of
public use is not limited to traditional purposes. Here as elsewhere the Idea that "public use"
is strictly limited to clear cases of "use by the public" has been discarded.

In the United States, the rule was enunciated in Berman v. Parker (348 U.S. 25; 99 L. ed.
27) as follows:

We do not sit to determine whether a particular housing project is or is not

desirable. The concept of the public welfare is broad and inclusive. See
DayBrite Lighting, Inc. v. Missouri, 342 US 421, 424, 96 L ed 469, 472, 72 S
Ct 405. The values it represents are spiritual as well as physical, aesthetic as
well as monetary. It is within the power of the legislature to determine that the
community should be beautiful as well as healthy, spacious as well as clean,
well-balanced as well as carefully patrolled. In the present case, the
Congress and its authorized agencies have made determinations that take
into account a wide variety of values. It is not for us to reappraise them. If
those who govern the District of Columbia decide that the Nation's Capital
should be beautiful as well as sanitary, there is nothing in the Fifth
Amendment that stands in the way.

Once the object is within the authority of Congress, the right to realize it
through the exercise of eminent domain is clear. For the power of eminent
domain is merely the means to the end. See Luxton v. North River Bridge Co.
 153 US 525, 529, 530, 38 L ed 808, 810, 14 S Ct 891; United States v.
Gettysburg Electric R. Co. 160 US 668, 679, 40 L ed 576, 580, 16 S Ct 427.

In an earlier American case, where a village was isolated from the rest of North Carolina
because of the flooding of the reservoir of a dam thus making the provision of police,
school, and health services unjustifiably expensive, the government decided to expropriate
the private properties in the village and the entire area was made part of an adjoining
national park. The district court and the appellate court ruled against the expropriation or
excess condemnation. The Court of Appeals applied the "use by the public" test and stated
that the only land needed for public use was the area directly flooded by the reservoir. The
village may have been cut off by the dam but to also condemn it was excess condemnation
not valid under the "Public use" requirement. The U.S. Supreme Court in United States ex
rel TVA v. Welch (327 U.S, 546; 90 L. ed 843) unanimously reversed the lower courts. It
stated:

The Circuit Court of Appeals, without expressly relying on a compelling rule of

construction that would give the restrictive scope to the T.V.A. Act given it by
the district court, also interpreted the statute narrowly. It first analyzed the
facts by segregating the total problem into distinct parts, and thus came to the
conclusion that T.V.A.'s purpose in condemning the land in question was only
one to reduce its liability arising from the destruction of the highway. The
Court held that use of the lands for that purpose is a "private" and not a
"public use" or, at best, a "public use" not authorized by the statute. we are
unable to agree with the reasoning and conclusion of the Circuit Court of
Appeals.

We think that it is the function of Congress to decide what type of taking is for
a public use and that the agency authorized to do the taking may do so to the
still extent of its statutory authority, United States v. Gettysburg Electric R.
Co. 160 US 668, 679, 40 L ed 576, 580, 16 S Ct 427. ...

xxx xxx xxx

... But whatever may be the scope of the judicial power to determine what is a
"public use" in Fourteenth Amendment controversies, this Court has said that
when Congress has spoken on this subject "Its decision is entitled to
deference until it is shown to involve an impossibility." Old Dominion Land Co.
v. United States, 269, US 55, 66, 70 L ed 162, 46 S Ct 39. Any departure
from this judicial restraint would result in courts deciding on what is and is not
a governmental function and in their invalidating legislation on the basis of
their view on that question at the moment of decision, a practice which has
proved impracticable in other fields. See Case v. Bowles decided February 4,
1946, 437 US 92, 101, ante, 552, 559, 66 S Ct 438. New York v. United
States, 326 US 572 ante 326, 66 S Ct 310). We hold that the T.V.A. took the
tracts here involved for a public purpose, if, as we think is the case, Congress
authorized the Authority to acquire, hold, and use the lands to carry out the
purposes of the T.V.A. Act.
In the Philippines, Chief Justice Enrique M. Fernando has aptly summarized the statutory
and judicial trend as follows:

The taking to be valid must be for public use. There was a time when it was
felt that a literal meaning should be attached to such a requirement. Whatever
project is undertaken must be for the public to enjoy, as in the case of streets
or parks. Otherwise, expropriation is not allowable. It is not any more. As long
as the purpose of the taking is public, then the power of eminent domain
comes into play. As just noted, the constitution in at least two cases, to
remove any doubt, determines what is public use. One is the expropriation of
lands to be subdivided into small lots for resale at cost to individuals. The
other is in the transfer, through the exercise of this power, of utilities and
other private enterprise to the government. It is accurate to state then that at
present whatever may be beneficially employed for the general welfare
satisfies the requirement of public use. (Fernando, The Constitution of the
Philippines, 2nd ed., pp. 523-524)

The petitioners' contention that the promotion of tourism is not "public use" because private
concessioners would be allowed to maintain various facilities such as restaurants, hotels,
stores, etc. inside the tourist complex is impressed with even less merit. Private bus firms,
taxicab fleets, roadside restaurants, and other private businesses using public streets end
highways do not diminish in the least bit the public character of expropriations for roads and
streets. The lease of store spaces in underpasses of streets built on expropriated land does
not make the taking for a private purpose. Airports and piers catering exclusively to private
airlines and shipping companies are still for public use. The expropriation of private land for
slum clearance and urban development is for a public purpose even if the developed area is
later sold to private homeowners, commercial firms, entertainment and service companies,
and other private concerns.

The petitioners have also failed to overcome the deference that is appropriately accorded to
formulations of national policy expressed in legislation. The rule in Berman u. Parker (supra)
of deference to legislative policy even if such policy might mean taking from one private
person and conferring on another private person applies as well as in the Philippines.

... Once the object is within the authority of Congress, the means by which it
will be attained is also for Congress to determine. Here one of the means
chosen is the use of private enterprise for redevelopment of the area.
Appellants argue that this makes the project a taking from one businessman
for the benefit of another businessman. But the means of executing the
project are for Congress and Congress alone to determine, once the public
purpose has been established. Selb Luxton v. North River Bridge Co. (US)
supra; cf. Highland v. Russel Car & Snow Plow Co. 279 US 253, 73 L ed 688,
49 S Ct 314. The public end may be as well or better served through an
agency of private enterprise than through a department of government-or so
the Congress might conclude. We cannot say that public ownership is the
sole method of promoting the public purposes of community redevelopment
projects. What we have said also disposes of any contention concerning the
fact that certain property owners in the area may be permitted to repurchase
 their properties for redevelopment in harmony with the over-all plan. That,
too, is a legitimate means which Congress and its agencies may adopt, if they
choose. (Berman v. Parker, 99 L ed 38, 348 US 33, 34)

An examination of the language in the 1919 cases of City of Manila v. Chinese Community
of Manila (40 Phil, 349) and Visayan Refining Co. vs. Camus, earlier cited, shows that from
the very start of constitutional government in our country judicial deference to legislative
policy has been clear and manifest in eminent domain proceedings.

The expressions of national policy are found in the revised charter of the Philippine Tourism
Authority, Presidential Decree No. 564:

WHEREAS, it is the avowed aim of the government to promote Philippine

tourism and work for its accelerated and balanced growth as well as for
economy and expediency in the development of the tourism plant of the
country;

xxx xxx xxx

SECTION 1. Declaration of Policy. - It is hereby declared to be the policy of

the State to promote, encourage, and develop Philippine tourism as an
instrument in accelerating the development of the country, of strengthening
the country's foreign exchange reserve position, and of protecting Philippine
culture, history, traditions and natural beauty, internationally as well as
domestically.

The power of eminent domain is expressly provided for under Section 5 B(2) as follows:

xxx xxx xxx

2. Acquisition of Private Lands, Power of Eminent Domain. To acquire by

purchase, by negotiation or by condemnation proceedings any private land
within and without the tourist zones for any of the following reasons: (a)
consolidation of lands for tourist zone development purposes, (b) prevention
of land speculation in areas declared as tourist zones, (c) acquisition of right
of way to the zones, (d) protection of water shed areas and natural assets
with tourism value, and (e) for any other purpose expressly authorized under
this Decree and accordingly, to exercise the power of eminent domain under
its own name, which shall proceed in the manner prescribed by law and/or
the Rules of Court on condemnation proceedings. The Authority may use any
mode of payment which it may deem expedient and acceptable to the land
owners: Provided, That in case bonds are used as payment, the conditions
and restrictions set forth in Chapter III, Section 8 to 13 inclusively, of this
Decree shall apply.

xxx xxx xxx

The petitioners rely on the Land Reform Program of the government in raising their second
argument. According to them, assuming that PTA has the right to expropriate, the properties
subject of expropriation may not be taken for the purposes intended since they are within
the coverage of "operation land transfer" under the land reform program. Petitioners claim
that certificates of land transfer (CLT'S) and emancipation patents have already been
issued to them thereby making the lands expropriated within the coverage of the land
reform area under Presidential Decree No. 2; that the agrarian reform program occupies a
higher level in the order of priorities than other State policies like those relating to the health
and physical well- being of the people; and that property already taken for public use may
not be taken for another public use.

We have considered the above arguments with scrupulous and thorough circumspection.
For indeed any claim of rights under the social justice and land reform provisions of the
Constitution deserves the most serious consideration. The Petitioners, however, have failed
to show that the area being developed is indeed a land reform area and that the affected
persons have emancipation patents and certificates of land transfer.

The records show that the area being developed into a tourism complex consists of more
than 808 hectares, almost all of which is not affected by the land reform program. The
portion being expropriated is 282 hectares of hilly and unproductive land where even
subsistence farming of crops other than rice and corn can hardly survive. And of the 282
disputed hectares, only 8,970 square meters-less than one hectare-is affected by Operation
Land Transfer. Of the 40 defendants, only two have emancipation patents for the less than
one hectare of land affected. And this 8,970 square meters parcel of land is not even within
the sports complex proper but forms part of the 32 hectares resettlement area where the
petitioners and others similarly situated would be provided with proper housing, subsidiary
employment, community centers, schools, and essential services like water and electricity-
which are non-existent in the expropriated lands. We see no need under the facts of this
petition to rule on whether one public purpose is superior or inferior to another purpose or
engage in a balancing of competing public interests. The petitioners have also failed to
overcome the showing that the taking of the 8,970 square meters covered by Operation
Land Transfer forms a necessary part of an inseparable transaction involving the
development of the 808 hectares tourism complex. And certainly, the human settlement
needs of the many beneficiaries of the 32 hectares resettlement area should prevail over
the property rights of two of their compatriots.

The invocation of the contracts clause has no merit. The non-impairment clause has never
been a barrier to the exercise of police power and likewise eminent domain. As stated
in Manigault v. Springs (199 U.S. 473) "parties by entering into contracts may not stop the
legislature from enacting laws intended for the public good."

The applicable doctrine is expressed in Arce v. Genato (69 SCRA 544) which involved the
expropriation of land for a public plaza. The Court stated:

xxx xxx xxx

... What is claimed is that there must be a showing of necessity for such
condemnation and that it was not done in this case in support of such a view,
 reliance is placed on City of Manila v. Arenano Law Colleges. (85 Phil. 663
[1950]) That doctrine itself is based on the earlier case of City of Manila v.
Chinese Community of Manila, (50 Phil. 349) also, like Camus, a 1919
decision. As could be discerned, however, in the Arellano Law Colleges
decision. it was the antiquarian view of Blackstone with its sanctification of the
right to one's estate on which such an observation was based. As did appear
in his Commentaries: "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 thereof." Even the most , cursory
glance at such well-nigh absolutist concept of property would show its
obsolete character at least for Philippine constitutional law. It cannot survive
the test of the 1935 Constitution with its mandates on social justice and
protection to labor. (Article II, Section 5 of the 1935 Constitution reads: "The
promotion of social justice to unsure the well-being and economic security of
all the people should be the concern of the State." Article XI, Section 6 of the
same Constitution provides: "The State shall afford protection to labor,
especially to working women and minors, and shall regulate the relation
between landowner and tenant, and between labor and capital in industry and
in agriculture. The State may provide for compulsory arbitration.") What is
more, the present Constitution pays even less heed to the claims of property
and rightly so. After stating that the State shall promote social justice, it
continues: "Towards this end, the State shall regulate the acquisition,
ownership, use, enjoyment, and disposition of private property, and equitably
diffuse property ownership and profits." (That is the second sentence of
Article II, Section 6 of the Constitution) If there is any need for explicit
confirmation of what was set forth in Presidential Decree No. 42, the above
provision supplies it. Moreover, that is merely to accord to what of late has
been the consistent course of decisions of this Court whenever property
rights are pressed unduly. (Cf. Alalayan v. National Power Corporation, L-
24396, July 29, 1968, 24 SCRA 172; Agricultural Credit and Cooperative
Financing Administration v. Confederation of Unions, L-21484, Nov. 29, 1969,
30 SCRA 649; Edu v. Ericta, L-32096, Oct. 24, 1970, 35 SCRA 481; Phil.
Virginia Tobacco Administration v. Court of Industrial Relations, L-32052, July
25, 1975, 65 SCRA 416) The statement therefore, that there could be
discerned a constitutional objection to a lower court applying a Presidential
Decree, when it leaves no doubt that a grantee of the power of eminent
domain need not prove the necessity for the expropriation, carries its own
refutation.

xxx xxx xxx

The issue of prematurity is also raised by the petitioners. They claim that since the
necessity for the taking has not been previously established, the issuance of the orders
authorizing the PTA to take immediate possession of the premises, as well as the
corresponding writs of possession was premature.

Under Presidential Decree No. 42, as amended by Presidential Decree No. 1533, the
government, its agency or instrumentality, as plaintiff in an expropriation proceedings is
authorized to take immediate possession, control and disposition of the property and the
improvements, with power of demolition, notwithstanding the pendency of the issues before
the court, upon deposit with the Philippine National Bank of an amount equivalent to 10% of
the value of the property expropriated. The issue of immediate possession has been settled
in Arce v. Genato (supra). In answer to the issue:

... whether the order of respondent Judge in an expropriation case allowing

the other respondent, ... to take immediate possession of the parcel of land
sought to be condemned for the beautification of its public plaza, without a
prior hearing to determine the necessity for the exercise of the power of
eminent domain, is vitiated by jurisdictional defect, ...

this Court held that:

... It is not disputed that in issuing such order, respondent Judge relied on
Presidential Decree No. 42 issued on the 9th of November, 1972.
(Presidential Decree No. 42 is entitled "Authorizing the Plaintiff in Eminent
Domain Proceedings to Take Possession of the Property involved Upon
Depositing the Assessed Value for Purposes of Taxation.") The question as
thus posed does not occasion any difficulty as to the answer to be given. This
petition for certiorari must fail, there being no showing that compliance with
the Presidential Decree, which under the Transitory Provisions is deemed a
part of the law of the land, (According to Article XVII, Section 3 par. (2) of the
Constitution: "All proclamations, orders, decrees, instructions and acts
promulgated, issued, or done by the incumbent President shall be part of the
law of the land, and shall remain valid, legal, binding, and effective even after
lifting of martial law or the ratification of this Constitution, unless modified,
revoked, or superseded by subsequent proclamations. orders, decrees
instructions, or other acts of the incumbent President, or unless expressly and
explicitly modified or repealed by the regular National Assembly") would be
characterized as either an act in excess of jurisdiction or a grave abuse of
discretion. So we rule.

Likewise in Ramos v. Philippine Tourism Authority (G.R. Nos. 52449-50, June 9, 1980), this
Court held:

... condemnation or expropriation proceedings is in the nature of one that is

quasi-in-rem wherein the fact that the owner of the property is made a party is
not essentially indispensable insofar was least as it conncerns is the
immediate taking of possession of the property and the preliminary
determination of its value, including the amount to be deposited.

In their last argument, the petitioners claim that a consequence of the expropriation
proceedings would be their forcible ejectment. They contend that such forcible ejectment is
a criminal act under Presidential Decree No. 583. This contention is not valid. Presidential
Decree No. 583 prohibits the taking cognizance or implementation of orders designed to
obstruct the land reform program. It refers to the harassment of tenant- farmers who try to
enforce emancipation rights. It has nothing to do with the expropriation by the State of lands
needed for public purposes. As a matter of fact, the expropriated area does not appear in
the master lists of the Ministry of Agrarian Reforms as a teranted area. The petitioners' bare
allegations have not been supported with particulars pointing to specific parcels which are
subject of tenancy contracts. The petitioners may be owner-tillers or may have some form of
possessory or ownership rights but there has been no showing of their being tenants on the
disputed lands.

The petitioners have failed to overcome the burden of anyone trying to strike down a statute
or decree whose avowed purpose is the legislative perception is the public good. A statute
has in its favor the presumption of validity. All reasonable doubts should be resolved in
favor of the constitutionality of a law. The courts will not set aside a law as violative of the
Constitution except in a clear case (People v. Vera, 65 Phil. 56). And in the absence of
factual findings or evidence to rebut the presumption of validity, the presumption prevails
(Ermita-Malate Hotel, etc. v. Mayor of Manila, 20 SCRA 849; Morfe v. Mutuc, 22 SCRA
424).

The public respondents have stressed that the development of the 808 hectares includes
plans that would give the petitioners and other displaced persons productive employment,
higher incomes, decent housing, water and electric facilities, and better living standards.
Our dismissing this petition is, in part, predicated on those assurances. The right of the PTA
to proceed with the expropriation of the 282 hectares already Identified as fit for the
establishment of a resort complex to promote tourism is, therefore, sustained.

WHEREFORE, the instant petition for certiorari is hereby DISMISSE D for lack of merit.

SO ORDERED.

ALEJANDRO MANOSCA, ASUNCION MANOSCA and LEONICA

MANOSCA, petitioners, vs. HON. COURT OF APPEALS, HON.
BENJAMIN V. PELAYO, Presiding Judge, RTC-Pasig, Metro
Manila, Branch 168, HON. GRADUACION A. REYES CLARAVAL,
Presiding Judge, RTC-Pasig, Metro Manila, Branch 71,
and REPUBLIC OF THE PHILIPPINES, respondents.

DECISION
VITUG, J.:

In this appeal, via a petition for review on certiorari, from the decision of [1]

the Court of Appeals, dated 15 January 1992, in CA-G.R. SP No. 24969

(entitled Alejandro Manosca, et al. v. Hon. Benjamin V. Pelayo, et al.), this
Court is asked to resolve whether or not the public use requirement of
Eminent Domain is extant in the attempted expropriation by the Republic of a
492-square-meter parcel of land so declared by the National Historical
Institute (NHI) as a national historical landmark.
The facts of the case are not in dispute.
Petitioners inherited a piece of land located at P. Burgos Street, Calzada,
Taguig, Metro Manila, with an area of about four hundred ninety-two (492)
square meters. When the parcel was ascertained by the NHI to have been the
birthsite of Felix Y. Manalo, the founder of Iglesia Ni Cristo, it passed
Resolution No. 1, Series of 1986, pursuant to Section 4 of Presidential[2]

Decree No. 260, declaring the land to be a national historical landmark. The
resolution was, on 06 January 1986, approved by the Minister of Education,
Culture and Sports. Later, the opinion of the Secretary of Justice was asked
on the legality of the measure. In his Opinion No. 133, Series of 1987, the
Secretary of Justice replied in the affirmative; he explained:

According to your guidelines, national landmarks are places or objects that are
associated with an event, achievement, characteristic, or modification that makes a
turning point or stage in Philippine history. Thus, the birthsite of the founder of
the Iglesia ni Cristo, the late Felix Y. Manalo, who, admittedly, had made
contributions to Philippine history and culture has been declared as a national
landmark. It has been held that places invested with unusual historical interest is a
public use for which the power of eminent domain may be authorized x x x.

In view thereof, it is believed that the National Historical Institute as an agency of the
Government charged with the maintenance and care of national shrines, monuments
and landmarks and the development of historical sites that may be declared as national
shrines, monuments and/or landmarks, may initiate the institution of condemnation
proceedings for the purpose of acquiring the lot in question in accordance with the
procedure provided for in Rule 67 of the Revised Rules of Court. The proceedings
should be instituted by the Office of the Solicitor General in behalf of the Republic.

Accordingly, on 29 May 1989, the Republic, through the Office of the

Solicitor-General, instituted a complaint for expropriation before the Regional
[3]

Trial Court of Pasig for and in behalf of the NHI alleging, inter alia, that:

Pursuant to Section 4 of Presidential Decree No. 260, the National Historical Institute
issued Resolution No. 1, Series of 1986, which was approved on January, 1986 by the
then Minister of Education, Culture and Sports, declaring the above described parcel
of land which is the birthsite of Felix Y. Manalo, founder of the Iglesia ni Cristo, as a
National Historical Landmark. The plaintiff perforce needs the land as such national
historical landmark which is a public purpose.

At the same time, respondent Republic filed an urgent motion for the
issuance of an order to permit it to take immediate possession of the
property. The motion was opposed by petitioners. After a hearing, the trial
court issued, on 03 August 1989, an order fixing the provisional market
[4]

(P54,120.00) and assessed (P16,236.00) values of the property and

authorizing the Republic to take over the property once the required sum
would have been deposited with the Municipal Treasurer of Taguig, Metro
Manila.
Petitioners moved to dismiss the complaint on the main thesis that the
intended expropriation was not for a public purpose and, incidentally, that
the act would constitute an application of public funds, directly or indirectly, for
the use, benefit, or support of Iglesia ni Cristo, a religious entity, contrary to
the provision of Section 29(2), Article VI, of the 1987 Constitution. Petitioners
[5]

sought, in the meanwhile, a suspension in the implementation of the 03rd

August 1989 order of the trial court.
On 15 February 1990, following the filing by respondent Republic of its
reply to petitioners motion seeking the dismissal of the case, the trial court
issued its denial of said motion to dismiss. Five (5) days later, or on 20
[6]

February 1990, another order was issued by the trial court, declaring moot
[7]

and academic the motion for reconsideration and/or suspension of the order
of 03 August 1989 with the rejection of petitioners motion to dismiss.
Petitioners motion for the reconsideration of the 20th February 1990 order
was likewise denied by the trial court in its 16th April 1991 order. [8]

Petitioners then lodged a petition for certiorari and prohibition with the
Court of Appeals. In its now disputed 15th January 1992 decision, the
appellate court dismissed the petition on the ground that the remedy of appeal
in the ordinary course of law was an adequate remedy and that the petition
itself, in any case, had failed to show any grave abuse of discretion or lack of
jurisdictional competence on the part of the trial court. A motion for the
reconsideration of the decision was denied in the 23rd July 1992 resolution of
the appellate court.
We begin, in this present recourse of petitioners, with a few known
postulates.
Eminent domain, also often referred to as expropriation and, with less
frequency, as condemnation, is, like police power and taxation, an inherent
power of sovereignty. It need not be clothed with any constitutional gear to
exist; instead, provisions in our Constitution on the subject are meant more to
regulate, rather than to grant, the exercise of the power. Eminent domain is
generally so described as the highest and most exact idea of property
remaining in the government that may be acquired for some public purpose
through a method in the nature of a forced purchase by the State. It is a right
[9]

to take or reassert dominion over property within the state for public use or to
meet a public exigency. It is said to be an essential part of governance even in
its most primitive form and thus inseparable from sovereignty. The only [10]

direct constitutional qualification is that private property shall not be taken for
public use without just compensation. This proscription is intended to provide
[11]

a safeguard against possible abuse and so to protect as well the individual

against whose property the power is sought to be enforced.
Petitioners assert that the expropriation has failed to meet the guidelines
set by this Court in the case of Guido v. Rural Progress Administration, to [12]

wit: (a) the size of the land expropriated; (b) the large number of people
benefited; and, (c) the extent of social and economic reform. Petitioners [13]

suggest that we confine the concept of expropriation only to the following

public uses, i.e., the -
[14]

x x x taking of property for military posts, roads, streets, sidewalks, bridges, ferries,
levees, wharves, piers, public buildings including schoolhouses, parks, playgrounds,
plazas, market places, artesian wells, water supply and sewerage systems, cemeteries,
crematories, and railroads.

This view of petitioners is much too limitative and restrictive.

The court, in Guido, merely passed upon the issue of the extent of the
Presidents power under Commonwealth Act No. 539 to, specifically, acquire
private lands for subdivision into smaller home lots or farms for resale to bona
fide tenants or occupants. It was in this particular context of the statute that
the Court had made the pronouncement. The guidelines in Guido were not
meant to be preclusive in nature and, most certainly, the power of eminent
domain should not now be understood as being confined only to the
expropriation of vast tracts of land and landed estates. [15]

The term public use, not having been otherwise defined by the
constitution, must be considered in its general concept of meeting a public
need or a public exigency. Black summarizes the characterization given by
[16]

various courts to the term; thus:

Public Use. Eminent domain. The constitutional and statutory basis for taking
property by eminent domain. For condemnation purposes, public use is one which
confers same benefit or advantage to the public; it is not confined to actual use by
public. It is measured in terms of right of public to use proposed facilities for which
condemnation is sought and, as long as public has right of use, whether exercised by
one or many members of public, a public advantage or public benefit accrues
sufficient to constitute a public use. Montana Power Co. vs. Bokma, Mont. 457 P. 2d
769, 772, 773.

Public use, in constitutional provisions restricting the exercise of the right to take
private property in virtue of eminent domain, means a use concerning the whole
community as distinguished from particular individuals. But each and every member
of society need not be equally interested in such use, or be personally and directly
affected by it; if the object is to satisfy a great public want or exigency, that is
sufficient. Rindge Co. vs. Los Angeles County, 262 U.S. 700, 43 S.Ct. 689, 692, 67
L.Ed. 1186. The term may be said to mean public usefulness, utility, or advantage, or
what is productive of general benefit. It may be limited to the inhabitants of a small or
restricted locality, but must be in common, and not for a particular individual. The use
must be a needful one for the public, which cannot be surrendered without obvious
general loss and inconvenience. A public use for which land may be taken defies
absolute definition for it changes with varying conditions of society, new appliances
in the sciences, changing conceptions of scope and functions of government, and other
differing circumstances brought about by an increase in population and new modes of
communication and transportation. Katz v. Brandon, 156 Conn., 521, 245 A.2d
579,586. [17]

The validity of the exercise of the power of eminent domain for traditional
purposes is beyond question; it is not at all to be said, however, that public
use should thereby be restricted to such traditional uses. The idea that public
use is strictly limited to clear cases of use by the public has long been
discarded. This Court in Heirs of Juancho Ardona v. Reyes, quoting from [18]

Berman v. Parker (348 U.S. 25; 99 L. ed. 27), held:

We do not sit to determine whether a particular housing project is or is not

desirable. The concept of the public welfare is broad and inclusive. See DayBrite
Lighting, Inc. v. Missouri, 342 US421, 424, 96 L. Ed. 469, 472, 72 S Ct 405. The
values it represents are spiritual as well as physical, aesthetic as well as monetary. It is
within the power of the legislature to determine that the community should be
beautiful as well as healthy, spacious as well as clean, well-balanced as well as
carefully patrolled. In the present case, the Congress and its authorized agencies have
made determinations that take into account a wide variety of values. It is not for us to
reappraise them. If those who govern the District of Columbia decide that the Nations
Capital should be beautiful as well as sanitary, there is nothing in the Fifth
Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it through the
exercise of eminent domain is clear. For the power of eminent domain is merely the
means to the end. See Luxton v. North River Bridge Co. 153 US 525, 529, 530, 38 L.
ed. 808, 810, 14 S Ct 891; United States v. Gettysburg Electric R. Co. 160 US 668,
679, 40 L. ed. 576, 580, 16 S Ct 427.

It has been explained as early as Sea v. Manila Railroad Co., that: [19]

x x x A historical research discloses the meaning of the term public use to be one of
constant growth. As society advances, its demands upon the individual increase and
each demand is a new use to which the resources of the individual may be devoted. x
x x for whatever is beneficially employed for the community is a public use.

Chief Justice Enrique M. Fernando states:

The taking to be valid must be for public use. There was a time when it was felt that a
literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or parks.
Otherwise, expropriation is not allowable. It is not so any more. As long as the
purpose of the taking is public, then the power of eminent domain comes into play. As
just noted, the constitution in at least two cases, to remove any doubt, determines what
is public use. One is the expropriation of lands to be subdivided into small lots for
resale at cost to individuals. The other is the transfer, through the exercise of this
power, of utilities and other private enterprise to the government. It is accurate to state
then that at present whatever may be beneficially employed for the general welfare
satisfies the requirement of public use.[20]

Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land
Tenure Administration, has viewed the Constitution a dynamic instrument
[21]

and one that is not to be construed narrowly or pedantically so as to enable it

to meet adequately whatever problems the future has in store. Fr. Joaquin
Bernas, a noted constitutionalist himself, has aptly observed that what, in fact,
has ultimately emerged is a concept of public use which is just as broad as
public welfare. [22]

Petitioners ask: But (w)hat is the so-called unusual interest that the
expropriation of (Felix Manalos) birthplace become so vital as to be a public
use appropriate for the exercise of the power of eminent domain when only
members of the Iglesia ni Cristo would benefit? This attempt to give some
religious perspective to the case deserves little consideration, for what should
be significant is the principal objective of, not the casual consequences that
might follow from, the exercise of the power. The purpose in setting up the
marker is essentially to recognize the distinctive contribution of the late Felix
Manalo to the culture of the Philippines, rather than to commemorate his
founding and leadership of the Iglesia ni Cristo. The practical reality that
greater benefit may be derived by members of the Iglesia ni Cristo than by
most others could well be true but such a peculiar advantage still remains to
be merely incidental and secondary in nature. Indeed, that only a few would
actually benefit from the expropriation of property does not necessarily
diminish the essence and character of public use. [23]

Petitioners contend that they have been denied due process in the fixing
of the provisional value of their property. Petitioners need merely to be
reminded that what the law prohibits is the lack of opportunity to be
heard; contrary to petitioners argument, the records of this case are replete
[24]

with pleadings that could have dealt, directly or indirectly, with the provisional
[25]

value of the property.

Petitioners, finally, would fault respondent appellate court in sustaining the
trial courts order which considered inapplicable the case of Noble v. City
of Manila. Both courts held correctly. The Republic was not a party to the
[26]

alleged contract of exchange between the Iglesia ni Cristo and petitioners

which (the contracting parties) alone, not the Republic, could properly be
bound.
All considered, the Court finds the assailed decision to be in accord with
law and jurisprudence.
WHEREFORE, the petition is DENIED. No costs.
SO ORDERED.

ESTATE OF SALUD JIMENEZ, petitioner, vs. PHILIPPINE EXPORT

PROCESSING ZONE, respondent.

DECISION
DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision[1] and the Resolution[2]of the
Court of Appeals[3] dated March 25, 1998 and January 14, 1999, respectively, which ordered the
Presiding Judge of the Regional Trial Court of Cavite City, Branch 17, to proceed with the
hearing of the expropriation proceedings regarding the determination of just compensation for
Lot 1406-B while setting aside the Orders dated August 4, 1997[4] and November 3, 1997 of the
said Regional Trial Court which ordered the peaceful turnover to petitioner Estate of Salud
Jimenez of said Lot 1406-B.
The facts are as follows:
On May 15, 1981, private respondent Philippine Export Processing Zone (PEZA), then
called as the Export Processing Zone Authority (EPZA), initiated before the Regional Trial Court
of Cavite expropriation proceedings[5] on three (3) parcels of irrigated riceland in Rosario,
Cavite. One of the lots, Lot 1406 (A and B) of the San Francisco de Malabon Estate, with an
approximate area of 29,008 square meters, is registered in the name of Salud Jimenez under TCT
No. T-113498 of the Registry of Deeds of Cavite.
More than ten (10) years later[6], the said trial court in an Order[7] dated July 11, 1991 upheld the
right of private respondent PEZA to expropriate, among others, Lot 1406 (A and B). Reconsideration of
the said order was sought by petitioner contending that said lot would only be transferred to a private
corporation, Philippine Vinyl Corp., and hence would not be utilized for a public purpose.
In an Order[8] dated October 25, 1991, the trial court reconsidered the Order dated July 11,
1991 and released Lot 1406-A from expropriation while the expropriation of Lot 1406-B was
maintained. Finding the said order unacceptable, private respondent PEZA interposed an appeal
to the Court of Appeals.
Meanwhile, petitioner wrote a letter to private respondent offering two (2) proposals,
namely:
1. Withdrawal of private respondents appeal with respect to Lot 1406-A in consideration of the
waiver of claim for damages and loss of income for the possession of said lot by private
respondent.
2. The swap of Lot 1406-B with Lot 434 covered by TCT No. T-14772 since private respondent
has no money yet to pay for the lot.
Private respondents Board approved the proposal and the compromise agreement was signed
by private respondent through its then administrator Tagumpay Jardiniano assisted by
Government Corporate Counsel Oscar I. Garcia. Said compromise agreement[9] dated January 4,
1993 is quoted hereunder:
1. That plaintiff agrees to withdraw its appeal from the Order of the Honorable Court dated
October 25, 1991 which released lot 1406-A from the expropriation proceedings. On the
other hand, defendant Estate of Salud Jimenez agrees to waive, quitclaim and forfeit its
claim for damages and loss of income which it sustained by reason of the possession of said
lot by plaintiff from 1981 up to the present.
2. That the parties agree that defendant Estate of Salud Jimenez shall transfer lot 1406-B with
an area of 13,118 square meters which forms part of the lot registered under TCT No.
113498 of the Registry of Deeds of Cavite to the name of the plaintiff and the same shall be
swapped and exchanged with lot 434 with an area of 14,167 square meters and covered by
Transfer Certificate of Title No. 14772 of the Registry of Deeds of Cavite which lot will be
transferred to the name of Estate of Salud Jimenez.
3. That the swap arrangement recognizes the fact that the lot 1406-B covered by TCT No. T-
113498 of the estate of defendant Salud Jimenez is considered expropriated in favor of the
government based on Order of the Honorable Court dated July 11, 1991. However, instead
 of being paid the just compensation for said lot, the estate of said defendant shall be paid
with lot 434 covered by TCT No. T-14772.
4. That the parties agree that they will abide by the terms of the foregoing agreement in good
faith and the Decision to be rendered based on this Compromise Agreement is immediately
final and executory.
The Court of Appeals remanded the case to the trial court for the approval of the said
compromise agreement entered into between the parties, consequent with the withdrawal of the
appeal with the Court of Appeals. In the Order[10] dated August 23, 1993, the trial court approved
the compromise agreement.
However, private respondent failed to transfer the title of Lot 434 to petitioner inasmuch as
it was not the registered owner of the covering TCT No. T-14772 but Progressive Realty Estate,
Inc. Thus, on March 13, 1997, petitioner Estate filed a Motion to Partially Annul the Order dated
August 23, 1993.[11]
In the Order[12] dated August 4, 1997, the trial court annulled the said compromise agreement
entered into between the parties and directed private respondent to peacefully turn over Lot
1406-A to the petitioner. Disagreeing with the said Order of the trial court, respondent PEZA
moved[13] for its reconsideration. The same proved futile since the trial court denied
reconsideration in its Order[14] dated November 3, 1997.
On December 4, 1997, the trial court, at the instance[15] of petitioner, corrected the Orders
dated August 4, 1997 and November 3, 1997 by declaring that it is Lot 1406-B and not Lot 1406-
A that should be surrendered and returned to petitioner.
On November 27, 1997, respondent interposed before the Court of Appeals a petition for
certiorari and prohibition[16] seeking to nullify the Orders dated August 4, 1997 and November 3,
1997 of the trial court. Petitioner filed its Comment[17]on January 16, 1998.
Acting on the petition, the Court of Appeals in a Decision[18]dated March 25, 1998 upheld the
rescission of the compromise agreement, ratiocinating thus:

A judicial compromise may be enforced by a writ of execution, and if a party fails or

refuses to abide by the compromise, the other party may regard it as rescinded and
insist upon his original demand. This is in accordance with Article 2041 of the Civil
Code which provides:

If one of the parties fails or refuses to abide by the compromise, the other party may
either enforce the compromise or regard it as rescinded and insist upon his original
demand.

The Supreme Court had the occasion to explain this provision of law in the case of
Leonor v. Sycip (1 SCRA 1215). It ruled that the language of the abovementioned
provision denotes that no action for rescission is required and that the aggrieved party
by the breach of compromise agreement, may regard the compromise agreement
already rescinded, to wit:
It is worthy of notice, in this connection, that, unlike Article 2039 of the same Code,
which speaks of a cause of annulment or rescission of the compromise and provides
that the compromise may be annulled or rescinded for the cause therein specified, thus
suggesting an action for annulment or rescission, said Article 2041 confers upon the
party concerned not a cause for rescission, or the right to demand rescission, of a
compromise, but the authority, not only to regard it as rescinded, but, also, to insist
upon his original demand. The language of this Article 2041, particularly when
contrasted with that of Article 2039, denotes that no action for rescission is required in
said Article 2041, and that the party aggrieved by the breach of a compromise
agreement may, if he chooses, bring the suit contemplated or involved in his original
demand, as if there had never been any compromise agreement, without bringing an
action for rescission thereof. He need not seek a judicial declaration of rescission, for
he may regard the compromise agreement already, rescinded.

Nonetheless, it held that:

Having upheld the rescission of the compromise agreement, what is then the status of
the expropriation proceedings? As succinctly discussed in the case of Leonor v. Sycip,
the aggrieved party may insist on his original demand as if there had never been any
compromise agreement. This means that the situation of the parties will revert back to
status before the execution of the compromise agreement, that is, the second stage of
the expropriation proceedings which is the determination of the just compensation.[19]

xxx
Thus, the appellate court partially granted the petition by setting aside the order of the trial
court regarding the peaceful turn over to the Estate of Salud Jimenez of Lot No. 1406-B and
instead ordered the trial judge to proceed with the hearing of the expropriation proceedings
regarding the determination of just compensation over Lot 1406-B.[20]
Petitioner sought[21] reconsideration of the Decision dated March 25, 1998. However, public
respondent in a Resolution[22] dated January 14, 1999 denied petitioners motion for
reconsideration.
Hence, this petition anchored on the following assignment of errors, to wit:

THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE

ERROR IN GIVING DUE COURSE TO THE SPECIAL CIVIL ACTION
FILED BY RESPONDENT PEZA IN CA-G.R. SP. NO. 46112 WHEN IT WAS
MADE A SUBSTITUTE FOR LOST APPEAL IN CLEAR CONTRAVENTION
OF THE HONORABLE COURTS RULING IN SEMPIO VS. COURT OF
APPEALS (263 SCRA 617) AND ONGSITCO VS. COURT OF APPEALS (255
SCRA 703) AND DESPITE THE FACT THAT THE ORDER OF THE CAVITE
REGIONAL TRIAL COURT IS ALREADY FINAL AND EXECUTORY.
II

GRANTING IN GRATIA ARGUMENTI THAT THE SPECIAL CIVIL ACTION

OF CERTIORARI IS PROPER, THE COURT OF APPEALS
NEVERTHELESS WRONGLY INTERPRETED THE PHRASE ORIGINAL
DEMAND CONTAINED IN ARTICLE 2041 OF THE CIVIL CODE. THE
ORIGINAL DEMAND OF PETITIONER ESTATE IS THE RETURN OF THE
SUBJECT LOT (LOT 1406-B) WHICH IS SOUGHT TO BE EXPROPRIATED
AND NOT THE DETERMINATION OF JUST COMPENSATION FOR THE
LOT. FURTHERMORE, EVEN IF THE INTERPRETATION OF THE
COURT OF APPEALS OR THE IMPORT OF THE PHRASE IN QUESTION
IS CORRECT, IT IS ARTICLE 2039 OF THE CIVIL CODE AND NOT
ARTICLE 2041 WHICH IS APPLICABLE TO COMPROMISE
AGREEMENTS APPROVED BY THE COURTS.[23]

We rule in favor of the respondent.

Petitioner contends that the Court of Appeals erred in entertaining the petition
for certiorari filed by respondent under Rule 65 of the Rules of Court, the same being actually a
substitute for lost appeal. It appeared that on August 11, 1997, respondent received the Order of
the trial court dated August 4, 1997 annulling the compromise agreement. On August 26, 1997,
the last day for the filing of a notice of appeal, respondent filed instead a motion for
reconsideration. The Order of the trial court denying the motion for reconsideration was received
by respondent on November 23, 1997. The reglementary period to appeal therefore lapsed on
November 24, 1997. On November 27, 1997, however, respondent filed with the Court of
Appeals a petition for certioraridocketed as CA-G.R. SP. No. 46112. Petitioner claims that
appeal is the proper remedy inasmuch as the Order dated August 4, 1997 of the Regional Trial
Court is a final order that completely disposes of the case. Besides, according to petitioner,
respondent is estopped in asserting that certiorari is the proper remedy inasmuch as it invoked
the fifteen (15) day reglementary period for appeal when it filed a motion for reconsideration on
August 26, 1997 and not the sixty (60) day period for filing a petition for certiorari under Rule
65 of the Rules of Court.
The Court of Appeals did not err in entertaining the petition for certiorari under Rule 65 of
The Rules of Court. A petition for certiorari is the proper remedy when any tribunal, board, or
officer exercising judicial or quasi-judicial functions has acted without or in excess of its
jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction and
there is no appeal, nor any plain, speedy, and adequate remedy at law.[24] Grave abuse of
discretion is defined as the capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction. An error of judgment committed in the exercise of its legitimate jurisdiction
is not the same as grave abuse of discretion. An abuse of discretion is not sufficient by itself to
justify the issuance of a writ of certiorari. The abuse must be grave and patent, and it must be
shown that the discretion was exercised arbitrarily and despotically.[25]
As a general rule, a petition for certiorari will not lie if an appeal is the proper remedy
thereto such as when an error of judgment as well as of procedure are involved. As long as a
court acts within its jurisdiction and does not gravely abuse its discretion in the exercise thereof,
any supposed error committed by it will amount to nothing more than an error of judgment
reviewable by a timely appeal and not assailable by a special civil action of certiorari. However,
in certain exceptional cases, where the rigid application of such rule will result in a manifest
failure or miscarriage of justice, the provisions of the Rules of Court which are technical rules
may be relaxed. Certiorari has been deemed to be justified, for instance, in order to prevent
irreparable damage and injury to a party where the trial judge has capriciously and whimsically
exercised his judgment, or where there may be danger of clear failure of justice, or where an
ordinary appeal would simply be inadequate to relieve a party from the injurious effects of the
judgment complained of.[26]
Expropriation proceedings involve two (2) phases. The first phase ends either with an order
of expropriation (where the right of plaintiff to take the land and the public purpose to which
they are to be devoted are upheld) or an order of dismissal. Either order would be a final one
since it finally disposes of the case. The second phase concerns the determination of just
compensation to be ascertained by three (3) commissioners. It ends with an order fixing the
amount to be paid to the defendant. Inasmuch as it leaves nothing more to be done, this order
finally disposes of the second stage. To both orders the remedy therefrom is an appeal.[27]
In the case at bar, the first phase was terminated when the July 11, 1991 order of
expropriation became final and the parties subsequently entered into a compromise agreement
regarding the mode of payment of just compensation. When respondent failed to abide by the
terms of the compromise agreement, petitioner filed an action to partially rescind the same.
Obviously, the trial could only validly order the rescission of the compromise agreement anent
the payment of just compensation inasmuch as that was the subject of the compromise. However,
on August 4, 1991, the trial court gravely abused its discretion when it ordered the return of Lot
1406-B. It, in effect, annulled the Order of Expropriation dated July 11, 1991 which was already
final and executory.
We affirm the appellate courts reliance on the cases of Aguilar v. Tan[28] and Bautista v.
Sarmiento[29] wherein it was ruled that the remedies of certiorari and appeal are not mutually exclusive remedies in
certain exceptional cases, such as when there is grave abuse of discretion, or when public welfare so requires. The
trial court gravely abused its discretion by setting aside the order of expropriation which has long become final and
executory and by ordering the return of Lot 1406-B to the petitioner. Its action was clearly beyond its jurisdiction for
it cannot modify a final and executory order. A final and executory order can only be annulled by a petition to annul
the same on the ground of extrinsic fraud and lack of jurisdiction [30] or a petition for relief from a final order or
judgment under Rule 38 of the Rules of Court. However, no petition to that effect was filed. Hence, though an order
completely and finally disposes of the case, if appeal is not a plain, speedy and adequate remedy at law or the
interest of substantial justice requires, a petition for certiorari may be availed of upon showing of lack or excess of
jurisdiction or grave abuse of discretion on the part of the trial court.

According to petitioner the rule that a petition for certiorari can be availed of despite the
fact that the proper remedy is an appeal only applies in cases where the petition is filed within
the reglementary period for appeal. Inasmuch as the petition in the case at bar was filed after the
fifteen (15) day regulatory period to appeal, said exceptional rule as enshrined in the cases
of Aguilar v. Tan[31] and Bautista v. Sarmiento[32] is not applicable. We find this interpretation too restrictive. The
said cases do not set as a condition sine qua non the filing of a petition for certiorari within the fifteen (15) day
period to appeal in order for the said petition to be entertained by the court. To espouse petitioners contention would
render inutile the sixty (60) day period to file a petition for certiorari under Rule 65. In Republic v. Court of
Appeals[33], which also involved an expropriation case where the parties entered into a compromise agreement on
just compensation, this Court entertained the petition for certiorari despite the existence of an appeal and despite its
being filed after the lapse of the fifteen (15) day period to appeal the same. We ruled that the Court has not too
infrequently given due course to a petition for certiorari, even when the proper remedy would have been an appeal,
where valid and compelling considerations would warrant such a recourse. [34] If compelled to return the subject
parcel of land, the respondent would divert its budget already allocated for economic development in order to pay
petitioner the rental payments from the lessee banks. Re-adjusting its budget would hamper and disrupt the operation
of the economic zone. We believe that the grave abuse of discretion committed by the trial court and the consequent
disruption in the operation of the economic zone constitutes valid and compelling reasons to entertain the petition.

Petitioner next argues that the instances cited under Section 1 of Rule 41 of the Rules of
Court[35] whereby an appeal is not allowed are exclusive grounds for a petition for certiorari.
Inasmuch as the August 4 1997 Order rescinding the compromise agreement does not fall under
any of the instances enumerated therein, a petition for certiorari will not prosper. This reasoning
is severely flawed. The said section is not phrased to make the instances mentioned therein the
sole grounds for a petition for certiorari. It only states that Rule 65 may be availed of under the
grounds mentioned therein, but it never intended said enumeration to be exclusive. It must be
remembered that a wide breadth of discretion is granted a court of justice
in certiorari proceedings.[36]
In the second assignment of error, petitioner assails the interpretation by the Court of
Appeals of the phrase original demand in Article 2041 of the New Civil Code vis-a-vis the case
at bar. Article 2041 provides that, If one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the compromise or regard it as rescinded and
insist upon his original demand. According to petitioner, the appellate court erred in interpreting
original demand as the fixing of just compensation. Petitioner claims that the original demand is
the return of Lot 1406-B as stated in petitioners motion to dismiss[37] the complaint for
expropriation inasmuch as the incorporation of the expropriation order in the compromise
agreement subjected the said order to rescission. Since the order of expropriation was rescinded,
the authority of respondent to expropriate and the purpose of expropriation have again become
subject to dispute.
Petitioner cites cases[38] which provide that upon the failure to pay by the lessee, the lessor
can ask for the return of the lot and the ejectment of the former, this being the lessors original
demand in the complaint. We find said cases to be inapplicable to this instant case for the reason
that the case at bar is not a simple ejectment case. This is an expropriation case which involves
two (2) orders: an expropriation order and an order fixing just compensation. Once the first order
becomes final and no appeal thereto is taken, the authority to expropriate and its public use
cannot anymore be questioned.
Contrary to petitioners contention, the incorporation of the expropriation order in the
compromise agreement did not subject said order to rescission but instead constituted an
admission by petitioner of respondents authority to expropriate the subject parcel of land and the
public purpose for which it was expropriated. This is evident from paragraph three (3) of the
compromise agreement which states that the swap arrangement recognizes the fact that Lot
1406-B covered by TCT No. T-113498 of the estate of defendant Salud Jimenez is considered
expropriated in favor of the government based on the Order of the Honorable Court dated July
11, 1991. It is crystal clear from the contents of the agreement that the parties limited the
compromise agreement to the matter of just compensation to petitioner. Said expropriation order
is not closely intertwined with the issue of payment such that failure to pay by respondent will
also nullify the right of respondent to expropriate. No statement to this effect was mentioned in
the agreement. The Order was mentioned in the agreement only to clarify what was subject to
payment.
This Court therefore finds that the Court of Appeals did not err in interpreting original
demand to mean the fixing of just compensation. The authority of respondent and the nature of
the purpose thereof have been put to rest when the Expropriation Order dated July 11, 1991
became final and was duly admitted by petitioner in the compromise agreement. The only issue
for consideration is the manner and amount of payment due to petitioner. In fact, aside from the
withdrawal of private respondents appeal to the Court of Appeals concerning Lot 1406-A, the
matter of payment of just compensation was the only subject of the compromise agreement dated
January 4, 1993. Under the compromise agreement, petitioner was supposed to receive
respondents Lot No. 434 in exchange for Lot 1406-B. When respondent failed to fulfill its
obligation to deliver Lot 434, petitioner can again demand for the payment but not the return of
the expropriated Lot 1406-B. This interpretation by the Court of Appeals is in accordance with
Sections 4 to 8, Rule 67 of the Rules of Court.
We also find as inapplicable the ruling in Gatchalian v. Arlegui[39], a case cited by petitioner,
where we held that even a final judgment can still be compromised so long as it is not fully
satisfied. As already stated, the expropriation order was not the subject of the compromise
agreement. It was only the mode of payment which was the subject of the compromise
agreement.Hence, the Order of Expropriation dated July 11, 1991 can no longer be annulled.
After having invoked the provisions of Article 2041, petitioner inconsistently contends that
said article does not apply to the case at bar inasmuch as it is only applicable to cases where a
compromise has not been approved by a court. In the case at bar, the trial court approved the
compromise agreement. Petitioner insists that Articles 2038, 2039 and 1330 of the New Civil
Code should apply. Said articles provide that:

Article 2038. A compromise in which there is mistake, fraud, violence, intimidation,

undue influence, or falsity of documents, is subject to the provisions of Article 1330 of
this Code.

However, one of the parties cannot set up a mistake of fact as against the other if the
latter, by virtue of the compromise, has withdrawn from a litigation already
commenced.

Article 2039. When the parties compromise generally on all differences which they
might have with each other, the discovery of documents referring to one or more but
not to all of the questions settled shall not itself be a cause for annulment or rescission
of the compromise, unless said documents have been concealed by one of the parties.
But the compromise may be annulled or rescinded if it refers only to one thing to
which one of the parties has no right, as shown by the newly discovered documents.(n)

Article 1330. A contract where consent is given through mistake, violence,

intimidation, undue influence, or fraud is voidable.[40]

The applicability of the above-quoted legal provisions will not change the outcome of the
subject of the rescission. Since the compromise agreement was only about the mode of payment
by swapping of lots and not about the right and purpose to expropriate the subject Lot 1406-B,
only the originally agreed form of compensation that is by cash payment, was rescinded.
This Court holds that respondent has the legal authority to expropriate the subject Lot 1406-
B and that the same was for a valid public purpose. In Sumulong v. Guerrero[41], this Court has
ruled that,

the public use requirement for a valid exercise of the power of eminent domain is a
flexible and evolving concept influenced by changing conditions. In this jurisdiction,
the statutory and judicial trend has been summarized as follows:

this Court has ruled that the taking to be valid must be for public use. There was a
time when it was felt that a literal meaning should be attached to such a
requirement. Whatever project is undertaken must be for the public to enjoy, as in the
case of streets or parks. Otherwise expropriation is not allowable. It is not
anymore. As long as the purpose of the taking is public, then the power of eminent
domain comes into play It is accurate to state then that at present whatever may be
beneficially employed for the general welfare satisfies the requirement of public
use. [Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 (1983) at 234-235 quoting E.
Fernando, the Constitution of the Philippines 523-4 (2nd Ed. 1977)

The term public use has acquired a more comprehensive coverage. To the literal
import of the term signifying strict use or employment by the public has been added
the broader notion of indirect public benefit or advantage.

In Manosca v. Court of Appeals, this Court has also held that what ultimately emerged is a
concept of public use which is just as broad as public welfare.[42]
Respondent PEZA expropriated the subject parcel of land pursuant to Proclamation No.
1980 dated May 30, 1980 issued by former President Ferdinand Marcos. Meanwhile, the power
of eminent domain of respondent is contained in its original charter, Presidential Decree No. 66,
which provides that:

Section 23. Eminent Domain. For the acquisition of rights of way, or of any property
for the establishment of export processing zones, or of low-cost housing projects for
the employees workingin such zones, or for the protection of watershed areas, or for
the construction of dams, reservoirs, wharves, piers, docks, quays, warehouses
and other terminal facilities, structures and approaches thereto, the Authority shall
have the right and power to acquire the same by purchase, by negotiation, or by
condemnation proceedings. Should the authority elect to exercise the right of eminent
domain, condemnation proceedings shall be maintained by and in the name of the
Authority and it may proceed in the manner provided for by law. (italics supplied)

Accordingly, subject Lot 1406-B was expropriated for the construction of terminal facilities,
structures and approaches thereto. The authority is broad enough to give the respondent
substantial leeway in deciding for what public use the expropriated property would be
utilized. Pursuant to this broad authority, respondent leased a portion of the lot to commercial
banks while the rest was made a transportation terminal. Said public purposes were even
reaffirmed by Republic Act No. 7916, a law amending respondent PEZAs original charter, which
provides that:

Sec. 7. ECOZONE to be a Decentralized Agro-Industrial, Industrial,

Commercial/Trading, Tourist, Investment and Financial Community. Within the
framework of the Constitution, the interest of national sovereignty and territorial
integrity of the Republic, ECOZONE shall be developed, as much as possible, into a
decentralized, self-reliant and self-sustaining industrial, commercial/trading, agro-
industrial, tourist, banking, financial and investment center with minimum
government intervention. Each ECOZONE shall be provided with transportation,
telecommunications and other facilities needed to generate linkage with industries and
employment opportunities for its own habitants and those of nearby towns and cities.

The ECOZONE shall administer itself on economic, financial, industrial, tourism

development and such other matters within the exclusive competence of the national
government. (italics supplied)

Among the powers of PEZA enumerated by the same law are:

Sec. 12. Functions and Powers of PEZA Board. ---- The Philippine Economic Zone
Authority (PEZA) Board shall have the following function and powers:

(a) Set the general policies on the establishment and operations of the ECOZONE,
Industrial estate, exports processing zones, free trade zones, and the like;

xxx

(c) Regulate and undertake the establishment, operation and maintenance of utilities,
other services and infrastructure in the ECOZONE, such as heat, light and power,
water supply, telecommunications, transport, toll roads and bridges, port services, etc.
and to fix just, reasonable and competitive rates, fares, charges and fees thereof.[43]
 In Manila Railroad Co. v. Mitchel[44], this Court has ruled that in the exercise of eminent
domain, only as much land can be taken as is necessary for the legitimate purpose of the
condemnation. The term necessary, in this connection, does not mean absolutely indispensable
but requires only a reasonable necessity of the taking for the stated purpose, growth and future
needs of the enterprise. The respondent cannot attain a self-sustaining and viable ECOZONE if
inevitable needs in the expansion in the surrounding areas are hampered by the mere refusal of
the private landowners to part with their properties. The purpose of creating an ECOZONE and
other facilities is better served if respondent directly owns the areas subject of the expansion
program.
The contention of petitioner that the leasing of the subject lot to banks and building
terminals was not expressly mentioned in the original charter of respondent PEZA and that it was
only after PEZA devoted the lot to said purpose that Republic Act No. 7916 took effect, is not
impressed with merit. It should be pointed out that Presidential Decree No. 66 created the
respondent PEZA to be a viable commercial, industrial and investment area. According to the
comprehensive wording of Presidential Decree No. 66, the said decree did not intend to limit
respondent PEZA to the establishment of an export processing zone but it was also bestowed
with authority to expropriate parcels of land for the construction of terminal facilities, structures
and approaches thereto. Republic Act No. 7916 simply particularized the broad language
employed by Presidential Decree No. 66 by specifying the purposes for which PEZA shall
devote the condemned lots, that is, for the construction and operation of an industrial estate, an
export processing zone, free trade zones, and the like. The expropriation of Lot 1406-B for the
purpose of being leased to banks and for the construction of a terminal has the purpose of
making banking and transportation facilities easily accessible to the persons working at the
industries located in PEZA. The expropriation of adjacent areas therefore comes as a matter of
necessity to bring life to the purpose of the law. In such a manner, PEZAs goal of being a major
force in the economic development of the country would be realized. Furthermore, this Court has
already ruled that:

(T)he Legislature 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. In such a case, it is well-settled that the utility of the
proposed improvement, the existence of the public necessity for its construction, the
expediency of constructing it, the suitableness of the location selected, 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.

In 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.[45]

Inasmuch as both Presidential Decree No. 66 and Republic Act No. 7916, bestow respondent
with authority to develop terminal facilities and banking centers, this Court will not question the
respondents lease of certain portions of the expropriated lot to banks, as well as the construction
of terminal facilities.
 Petitioner contends that respondent is bound by the representations of its Chief Civil
Engineer when the latter testified before the trial court that the lot was to be devoted for the
construction of government offices. Anent this issue, suffice it to say that PEZA can vary the
purpose for which a condemned lot will be devoted to, provided that the same is for public
use. Petitioner cannot impose or dictate on the respondent what facilities to establish for as long
as the same are for public purpose.
Lastly, petitioner appeals to the sense of justice and equity to this Court in restoring the said
lot to its possession. From the time of the filing of the expropriation case in 1981 up to the
present, respondent has not yet remunerated the petitioner although respondent has already
received earnings from the rental payments by lessees of the subject property.
We have ruled that the concept of just compensation embraces not only the correct
determination of the amount to be paid to the owners of the land, but also the payment of the
land within a reasonable time from its taking. Without prompt payment, compensation cannot be
considered just inasmuch as the property owner is made to suffer the consequences of being
immediately deprived of his land while being made to wait for a decade or more before actually
receiving the amount necessary to cope with his loss.[46] Payment of just compensation should
follow as a matter of right immediately after the order of expropriation is issued. Any delay in
payment must be counted from said order. However, the delay to constitute a violation of due
process must be unreasonable and inexcusable; it must be deliberately done by a party in order to
defeat the ends of justice.
We find that respondent capriciously evaded its duty of giving what is due to petitioner. In
the case at bar, the expropriation order was issued by the trial court in 1991. The compromise
agreement between the parties was approved by the trial court in 1993. However, from 1993 up
to the present, respondent has failed in its obligation to pay petitioner to the prejudice of the
latter.Respondent caused damage to petitioner in making the latter to expect that it had a good
title to the property to be swapped with Lot 1406-B; and meanwhile, respondent has been
reaping benefits from the lease or rental income of the said expropriated lot. We cannot tolerate
this oppressive exercise of the power of eminent domain by respondent. As we have ruled
in Cosculluela vs. Court of Appeals:[47]

In the present case, the irrigation project was completed and has been in operation
since 1976. The project is benefiting the farmers specifically and the community in
general. Obviously, the petitioners land cannot be returned to him. However, it is high
time that the petitioner be paid what was due him eleven years ago. It is arbitrary and
capricious for a government agency to initiate expropriation proceedings, seize a
persons property, allow the judgment of the court to become final and executory and
then refuse to pay on the ground that there are no appropriations for the property
earlier taken and profitably used. We condemn in the strongest possible terms the
cavalier attitude of government officials who adopt such a despotic and irresponsible
stance.

Though the respondent has committed a misdeed to petitioner, we cannot, however, grant
the petitioners prayer for the return of the expropriated Lot No. 1406-B. The Order of
expropriation dated July 11, 1991, has long become final and executory. Petitioner
cited Provincial Government of Sorsogon v. Rosa E. Vda. De Villaroya[48] to support its
contention that it is entitled to a return of the lot where this Court ruled that under ordinary
circumstances, immediate return to the owners of the unpaid property is the obvious remedy.
However, the said statement was not the ruling in that case. As in other cases where there was no
prompt payment by the government, this Court declared in Sorsogon that the Provincial
Government of Sorsogon is expected to immediately pay as directed. Should any further delay be
encountered, the trial court is directed to seize any patrimonial property or cash savings of the
province in the amount necessary to implement this decision. However, this Court also stressed
and declared in that case that In cases where land is taken for public use, public interest,
however, must be considered.
In view of all the foregoing, justice and equity dictate that this case be remanded to the trial
court for hearing of the expropriation proceedings on the determination of just compensation for
Lot 1406-B and for its prompt payment to the petitioner.
WHEREFORE, the instant petition is hereby denied. The Regional Trial Court of Cavite
City is hereby ordered to proceed with the hearing of the expropriation proceedings, docketed as
Civil Case No. N-4029, regarding the determination of just compensation for Lot 1406-B,
covered and described in TCT No. T-113498-Cavite, and to resolve the same with dispatch.
SO ORDERED.