Eminent domain (or expropriation) should deserve its own comprehensive discussion as an inherent power of the State where we discuss the concept, just compensation, etc. However, the syllabus dictates that we have that comprehensive discussion right here under Sec. 9 of the Bill of Rights.
So, let’s get to it.
CONCEPT
The SC in a 2020 case of MORE v. PECO has mentioned that the case of Heirs of Suguitan v. City of Mandaluyong (2000) “provides the most precise formulation of the general principle of law on the valid exercise of the power or right of eminent domain”:
“Eminent domain is the right or power of a sovereign state to appropriate private property to particular uses to promote public welfare. It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government to serve the common need and advance the general welfare. Thus, the right of eminent domain appertains to every independent government without the necessity for constitutional recognition. The provisions found in modern constitutions of civilized countries relating to the taking of property for the public use do not by implication grant the power to the government, but limit a power which would otherwise be without limit. Thus, our own Constitution provides that “private property shall not be taken for public use without just compensation.” Furthermore, the due process and equal protection clauses act as additional safeguards against the arbitrary exercise of this governmental power.”
– Heirs of Suguitan v. City of Mandaluyong, 2000
To sum it up, we have these principles:
1. Eminent domain involves the taking of private property for public use.
2. It is grounded in the primary duty of the government to promote public welfare (or advance general welfare or whatever other similar wordings)
3. It is inherent in a sovereign State.
4. Because it is inherent, it does not need any constitutional or legislative provision to be effective.
5. Sec. 9 of the Bill of Rights was inserted not to grant the power of Eminent Domain to the State, but to set two limitations: public use and just compensation (this is in line with the Bill of Rights’ purpose: to safeguard our rights and liberties against arbitrary exercise of power by the State).
6. Two more constitutional limitations to Eminent Domain is found in Sec. 1: the Due Process and Equal Protection clauses.
And because it is very powerful, it cannot be subjected to prohibition. “Only when the landowners are not given their just compensation for the taking of their property or when there has been no agreement on the amount of just compensation may the remedy of prohibition become available”:
“Verily, there can be no prohibition against a procedure whereby the immediate possession of the land under expropriation proceedings may be taken, provided always that due provision is made to secure the prompt adjudication and payment of just compensation to the owner. This bar against prohibition comes from the nature of the power of eminent domain as necessitating the taking of private land intended for public use, and the interest of the affected landowner is thus made subordinate to the power of the State. Once the State decides to exercise its power of eminent domain, the power of judicial review becomes limited in scope, and the courts will be left to determine the appropriate amount of just compensation to be paid to the affected landowners. Only when the landowners are not given their just compensation for the taking of their property or when there has been no agreement on the amount of just compensation may the remedy of prohibition become available.”
–Sps. Yusay v. CA, 2011
Because of the same reason as above, eminent domain cannot be barred by res judicata. Sure, the courts will invalidate an expropriation proceeding if it does not meet all the requirements, but nothing prevents the government from complying with such requirement and again exercise its power of eminent domain:
[…the Court holds that the principle of res judicata, which finds application in generally all cases and proceedings, cannot bar the right of the State or its agent to expropriate private property. The very nature of eminent domain, as an inherent power of the State, dictates that the right to exercise the power be absolute and unfettered even by a prior judgment or res judicata. The scope of eminent domain is plenary and, like police power, can “reach every form of property which the State might need for public use.” “All separate interests of individuals in property are held of the government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of property, remains in the government, or in the aggregate body of the people in their sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires it.” Thus, the State or its authorized agent cannot be forever barred from exercising said right by reason alone of previous non-compliance with any legal requirement.]
–Municipality of Parañaque v. V.M. Realty Corporation, 1998
Another demonstration of the power of expropriation proceedings is that it cannot be defeated by an ejectment suit. What happened in a case is that the government (or more appropriately agents) entered into a lease with a property owner with the intention of buying it later. But the owner backed out of the deal and because of the misunderstandings ,there was a non-payment of rentals and an ejectment suit was filed against representatives of the government. In turn, they also initiated expropriation proceedings against the property owner, seeking the issuance of a preliminary writ of possession. Should the writ be issued in light of the ejectment suit? The answer is yes:
“It would be circuitous, if not legally absurd, for this Court to require petitioner to first vacate the property in view of the adverse judgment in the unlawful detainer case, and soon afterwards, order the trial court to issue in petitioner’s favor a writ of possession pursuant to the expropriation proceedings. Such a scenario is a bureaucratic waste of precious time and resources.
x x x x
It is well-settled that eminent domain is an inherent power of the State that need not be granted even by the fundamental law. Section 9, Article III of the Constitution, in mandating that “private property shall not be taken for public use without just compensation,” merely imposes a limit on the government’s exercise of this power and provides a measure of protection to the individual’s right to property. x x x x Clearly, an ejectment suit ordinarily should not prevail over the State’s power of eminent domain.”
–Republic v. Tagle, 1998
Now enough about how powerful eminent domain is.
The next question is, who can exercise the power of eminent domain? Only the Legislative Department can, except if it validly delegates the power to the government agencies, local governments, public utilities, or even private corporations performing public services:
[It has been held that, as an inherent sovereign prerogative, the power to expropriate pertains primarily to the legislature. The power of eminent domain is lodged in the legislative branch of government.
However, the power to expropriate is not exclusive to Congress. The latter may delegate the exercise of the power to government agencies, public officials and quasi-public entities. According to eminent constitutionalist and one of the framers of the 1987 Constitution, Fr. Joaquin G. Bernas, S.J., “the authority of the legislature to delegate the right of eminent domain to private entities operating public utilities has never been questioned.”
In the hands of government agencies, local governments, public utilities, and other persons and entities, the right to expropriate is not inherent and is only a delegated power. In fact, even as to municipal corporations, it has been held that they can exercise the right of eminent domain only if some law exists conferring the power upon them.]
–PNOC v. NGCP, 2019
Segue: One thing to also note is that the President has the delegated power of eminent domain under E.O. 292 or the Administrative Code of 1987.
And because the power of eminent domain affects property rights, a constitutionally-protected right, all doubts in the law that grants authority to another entity must be strictly construed in favor of the property owner:
“The exercise of the right of eminent domain, whether directly by the State or by its authorized agents, is necessarily in derogation of private rights. It is one of the harshest proceedings known to the law. Consequently, when the sovereign delegates the power to a political unit or agency, a strict construction will be given against the agency asserting the power. The authority to condemn is to be strictly construed in favor of the owner and against the condemnor. When the power is granted, the extent to which it may be exercised is limited to the express terms or clear implication of the statute in which the grant is contained.
Corollarily . . . the condemnor, has the burden of proving all the essentials necessary to show the right of condemnation. It has the burden of proof to establish that it has complied with all the requirements provided by law for the valid exercise of the power of eminent domain.”
–Jesus is Lord v. Municipality of Pasig, 2005
Strict construction basically means that any doubt as to the wordings of the law that grants the power of eminent domain to agents must be settled against the “condemnor” and in favor of the owner of the property to be expropriated.
But, if in the hands of Congress, the power of eminent domain is larger in scope:
[In the hands of Congress the scope of the power is, like the scope of legislative power itself, plenary. It is as broad as the scope of police power itself. It can thus reach every form of property which the State might need for public use.” It can reach even private property already dedicated to public use or even property devoted to religious worship.”
As one early American case put it, “All separate interests of individuals in property are held of the government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of property, remains in the government, or in the aggregate body of the people in their sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires it.]
-Fr. Bernas, The 1987 Constitution of the R.P. A Commentary, 2009, p. 399
So, if exercised by Congress, does that mean that the Judiciary is powerless against the power of eminent domain? Basically, yes. The Judiciary can only interfere if there is an anomaly in the realms of just compensation (which we will explore later). But in the case of necessity, they cannot question the legislature:
“The legislature, in providing for the exercise of the power of eminent domain, may directly determine the necessity for appropriating private property for a particular improvement for public use, and it may select the exact location of the improvement. In such a case, it is well settled that the utility of the proposed improvement, the extent of the public necessity for its construction, the expediency of constructing it, the suitableness of the location selected and the consequent necessity of taking the land selected for its site, are all questions exclusively for the legislature to determine, and the courts have no power to interfere, or to substitute their own views for those of the representatives of the people.”
–City of Manila v. Chinese Community, 1919
Segue: But take note that, according to Fr. Bernas, this may not be a doctrine per se because it was just mentioned in passing (obiter dictum) and not directly related to the case. In fact, I don’t think there is a Philippine case directly tackling that issue of when the legislature itself enacts a law ordering the expropriation of a specific land. Nevertheless, this view makes sense, and it was cited by other cases after it. Nevertheless, I think this can be argued either way. On one hand we have the separation of powers, and on the other hand, we have the power of the Court to review acts of the Legislative or Executive when there is grave abuse of discretion (judicial review). Pick your poison.
Moving on.
We rarely see cases where Congress itself exercised the power of Eminent Domain. Thus, if the law DOES NOT PROVIDE A SPECIFIC PROPERTY TO BE TAKEN, the courts can question its necessity:
[“But when the statute does not designate the property to be taken nor how much may be taken, then the necessity of taking particular property is a question for the courts. Where the application to condemn or appropriate is made directly to the court, the question (of necessity) should be raised and decided in limine.”
The legislative department of the government very rarely undertakes to designate the precise property which should be taken for public use. It has generally, like in the present case, merely conferred general authority to take land for public use when a necessity exists therefor. We believe that it can be confidently asserted that, under such statute, the allegation of the necessity for the appropriation is an issuable allegation which it is competent for the courts to decide.]
–City of Manila v. Chinese Community, 1919
Here is an excerpt differentiating the GENERAL POWER to exercise the right of eminent domain vs. the right to exercise it in a PARTICULAR CASE:
“The general power to exercise the right of eminent domain must not be confused with the right to exercise it in a particular case. The power of the legislature to confer, upon municipal corporations and other entities within the State, general authority to exercise the right of eminent domain cannot be questioned by the courts, but that general authority of municipalities or entities must not be confused with the right to exercise it in particular instances. The moment the municipal corporation or entity attempts to exercise the authority conferred, it must comply with the conditions accompanying the authority. The necessity for conferring the authority upon a municipal corporation to exercise the right of eminent domain is admittedly within the power of the legislature. But whether or not the municipal corporation or entity is exercising the right in a particular case under the conditions imposed by the general authority, is a question which the courts have the right to inquire into.”
–City of Manila v. Chinese Community, 1919
Thus, we can see a trend where the Court is constrained to question the discretion of the legislature but not the discretion of delegated entities. This is a testament to the separation of powers.
Another question that deserves a closer look into is “what constitutes taking under the power of Eminent Domain?” It turns out that compensable taking includes even that in a constructive sense or one that is not actual physical taking:
“It is settled that the taking of private property for public use, to be compensable, need not be an actual physical taking or appropriation. Indeed, the expropriator’s action may be short of acquisition of title, physical possession, or occupancy but may still amount to a taking. Compensable taking includes destruction, restriction, diminution, or interruption of the rights of ownership or of the common and necessary use and enjoyment of the property in a lawful manner, lessening or destroying its value. It is neither necessary that the owner be wholly deprived of the use of his property, nor material whether the property is removed from the possession of the owner, or in any respect changes hands.”
–NAPOCOR v Heirs of Macabangkit Sangkay, 2011
Thus, this interpretation of taking includes easements (there are a lot of weird easements like the borrowing of PLDT’s telephone lines by the Government Telephone System, construction of an underground tunnel below private property, aerial easements for the construction of power lines, etc.) and even ordinances that prohibit construction of any building that would destroy the view of something like a plaza. We don’t need to discuss these cases. Only note that if a question comes up that asks us to answer whether or not there is expropriation subject to just compensation, and the situation is similar to these examples, we answer with a yes and support it with the principle above.
One more question to explore is, what is the procedure that governs the exercise of the eminent domain?:
[It undergoes two phases. The first phase determines the propriety of the action. The second phase determines the compensation to be paid to the landowner. Thus:
There are two (2) stages in every action for expropriation. The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, “of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint.” An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter, as the Rules expressly state, in the proceedings before the Trial Court, “no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard.”
The second phase of the eminent domain action is concerned with the determination by the Court of “the just compensation for the property sought to be taken.” This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. Obviously, one or another of the parties may believe the order to be erroneous in its appreciation of the evidence or findings of fact or otherwise. Obviously, too, such a dissatisfied party may seek a reversal of the order by taking an appeal therefrom.]
–NAPOCOR v. Posada, 2015
This may not be directly useful for exams, but this gives us an idea of what goes on in expropriation proceedings. After all, most of the problems arising comes before or after such proceedings.
I think we’ve covered the preliminary things we need to know before delving in deeper into the nuances of Eminent Domain. Let’s just summarize them:
1. Eminent domain involves the taking of private property for public use.
2. It is grounded in the primary duty of the government to promote public welfare (or advance general welfare or whatever other similar wordings)
3. It is inherent in a sovereign State.
4. Because it is inherent, it does not need any constitutional or legislative provision to be effective.
5. Sec. 9 of the Bill of Rights was inserted not to grant the power of Eminent Domain to the State, but to set two limitations: public use and just compensation (this is in line with the Bill of Rights’ purpose: to safeguard our rights and liberties against arbitrary exercise of power by the State).
6. Two more constitutional limitations to Eminent Domain is found in Sec. 1: the Due Process and Equal Protection clauses.
7. Prohibition does not lie against expropriation:
Once the State decides to exercise its power of eminent domain, the power of judicial review becomes limited in scope, and the courts will be left to determine the appropriate amount of just compensation to be paid to the affected landowners. Only when the landowners are not given their just compensation for the taking of their property or when there has been no agreement on the amount of just compensation may the remedy of prohibition become available.
8. Eminent domain cannot be barred by res judicata:
The very nature of eminent domain, as an inherent power of the State, dictates that the right to exercise the power be absolute and unfettered even by a prior judgment or res judicata.
9. An ejectment suit ordinarily should not prevail over the State’s power of eminent domain:
It would be circuitous, if not legally absurd, for the to court require the condemnor to first vacate the property in view of the adverse judgment in the unlawful detainer case, and soon afterwards, order the trial court to issue in petitioner’s favor a writ of possession pursuant to the expropriation proceedings. Such a scenario is a bureaucratic waste of precious time and resources.
10. Only the Legislature can exercise the power of eminent domain. However, it may delegate the exercise of the power government agencies, public officials, and quasi-public entities.
11. The authority to condemn is to be strictly construed in favor of the owner and against the condemnor:
When the power is granted, the extent to which it may be exercised is limited to the express terms or clear implication of the statute in which the grant is contained. The exercise of the right of eminent domain, whether directly by the State or by its authorized agents, is necessarily in derogation of private rights. It is one of the harshest proceedings known to the law. Consequently, when the sovereign delegates the power to a political unit or agency, a strict construction will be given against the agency asserting the power.
12. In terms of necessity, if the Legislature exercises the power, it cannot be questioned by the courts (political question). But, if exercised by a delegate, the court can question the necessity behind the exercise:
The legislative department of the government very rarely undertakes to designate the precise property which should be taken for public use. It has generally, like in the present case, merely conferred general authority to take land for public use when a necessity exists therefor. We believe that it can be confidently asserted that, under such statute, the allegation of the necessity for the appropriation is an issuable allegation which it is competent for the courts to decide.
13. Compensable Taking under the power of Eminent Domain includes destruction, restriction, diminution, or interruption of the rights of ownership or of the common and necessary use and enjoyment of the property in a lawful manner, lessening or destroying its value.
14. Expropriation proceedings undergo two phases: (1) The first phase determines the propriety of the action. (2) The second phase determines the compensation to be paid to the landowner.
On to the requisites.
Requisites
Before we go to the discussion on just compensation highlighted by the syllabus, let’s tackle all the requisites of for the valid exercise of Eminent Domain.
Thankfully, the case of Manapat v. CA (2007) already compiled for us the various requisites that have developed over decades of jurisprudence:
“Over the years and in a plethora of cases, this Court has recognized the following requisites for the valid exercise of the power of eminent domain:
(1) the property taken must be private property;
(2) there must be genuine necessity to take the private property;
(3) the taking must be for public use;
(4) there must be payment of just compensation; and
(5) the taking must comply with due process of law.
Accordingly, the question that this Court must resolve is whether these requisites have been adequately addressed.“
–Manapat v. CA, 2007
Let’s discuss these one by one.
1. the property taken must be private property
The first requirement seems easy enough. Maybe that’s why I can’t find a case with a meaningful discussion about it. Anyway, here is Justice Cruz’ explanation:
“Anything that can come under the dominion of man is subject to expropriation. This will include real and personal, tangible and intangible properties. A franchise is a
property right and may therefore be expropriated. Churches and other religious properties are likewise expropriable notwithstanding the principle of separation of Church and State. And while it has been said that the wheels of commerce must stop at the grave, even cemeteries may when necessary be taken under the power of
eminent domain.
The only exceptions to this rule are money and choses in action. Expropriation of money would be a futile act because of the requirement for the payment of just compensation, usually also in money. A chose in action is “a personal right not reduced into possession but recoverable by a suit at law, a right to receive, demand or recover a debt, demand or damages on a cause of action ex contractu or for a tort or omission of duty.” It is essentially conjectural both as to its validity and its value.”
-Justice Isagani Cruz, Constitutional Law, 2013, pp. 67-68
In other words, any property can be expropriated, even the intangible ones like services of telephone and light companies, and even religious properties. The exceptions are only money and choses in action. Money can’t be expropriated for obvious reasons, while a chose in action can’t be because the just compensation to be given to its owner cannot be calculated.
One important doctrine regarding private property is this:
Private property already devoted to public use cannot be expropriated by a delegate of legislature acting under a general grant of authority:
“Aside from insisting that there exists no necessity for the alleged improvement, the defendants further contend that the street in question should not be opened through the cemetery. One of the defendants alleges that said cemetery is public property. If that allegations is true, then, of course, the city of Manila cannot appropriate it for public use. The city of Manila can only expropriate private property.”
–City of Manila v. Chinese Community, 1919
But wait, so does that mean if (1) the legislature does it or (2) if the grant of authority is a specific one wherein it specifies a particular property to be expropriated, the property already devoted to public use CAN be expropriated? Yes. No case has confirmed it, but Justice Cruz says it in his book. So does Fr. Bernas:
“In the hands of Congress the scope of the power is, like the scope of legislative power itself, plenary. It is as broad as the scope of police power itself. It can thus reach every form of property which the State might need for public use. It can reach even private property already dedicated to public use or even property devoted to religious worship.“
-Fr. Bernas, The 1987 Constitution of the R.P. A Commentary, 2009, p. 399
2. there must be genuine necessity to take the private property
We’ve already discussed the issue of necessity above in the “CONCEPT” section, but it should be noted that it may be better to use the terms “genuine necessity” and “public character”:
“The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity must be of a public character. The ascertainment of the necessity must precede or accompany, and not follow, the taking of the land.”
–City of Manila v. Chinese Community, 1919
And just repeating what we’ve discussed above in the CONCEPT section, here is a case explaining how genuine necessity is presumed when the legislature exercises the power of eminent domain. It is essentially a political question (not subject to judicial review):
“As a rule, the determination of whether there is genuine necessity for the exercise is a justiciable question. However, when the power is exercised by the Legislature, the question of necessity is essentially a political question. Thus, in City of Manila v. Chinese Community, we held:
The legislature, in providing for the exercise of the power of eminent domain, may directly determine the necessity for appropriating private property for a particular improvement for public use, and it may select the exact location of the improvement. In such a case, it is well-settled that the utility of the proposed improvement, the extent of the public necessity for its construction, the expediency of constructing it, the suitableness of the location selected and the consequent necessity of taking the land selected for its site, are all questions exclusively for the legislature to determine, and the courts have no power to interfere, or to substitute their own views for those of the representatives of the people.“
–Manapat v. CA, 2007
And in contrast, when the power of eminent domain is delegated, the Court can question the genuine necessity of the exercise of such power. This is what happens in most cases.
We rarely see cases where Congress itself exercised the power of Eminent Domain. Thus, if the law DOES NOT PROVIDE A SPECIFIC PROPERTY TO BE TAKEN, the courts can question its necessity:
[“But when the statute does not designate the property to be taken nor how much may be taken, then the necessity of taking particular property is a question for the courts. Where the application to condemn or appropriate is made directly to the court, the question (of necessity) should be raised and decided in limine.”
The legislative department of the government very rarely undertakes to designate the precise property which should be taken for public use. It has generally, like in the present case, merely conferred general authority to take land for public use when a necessity exists therefor. We believe that it can be confidently asserted that, under such statute, the allegation of the necessity for the appropriation is an issuable allegation which it is competent for the courts to decide.]
–City of Manila v. Chinese Community, 1919
I think this is all we’ll need regarding this requisite. The question of genuine necessity itself, if such arises in the exam, can be reasoned out by logic and practicality.
3. the taking must be for public use
This is an issue that’s come up in a lot of cases, and the Philippines adheres to the expansive meaning of public use:
[Public use, as an eminent domain concept, has now acquired an expansive meaning to include any use that is of “usefulness, utility, or advantage, or what is productive of general benefit [of the public].“]
–Vda. de Ouano v. Republic, 2011
For easier memorizing, we’ll simply use the term “indirect public benefit or advantage”:
“Through the years, the public use requirement in eminent domain has evolved into a flexible concept, influenced by changing conditions (Sumulong v. Guerrero, supra; Manotok v. National Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]). Public use now includes the broader notion of indirect public benefit or advantage, including in particular, urban land reform and housing.”
–Philippine Columbian Association v. Panis, 1993
Thus, in questions of whether the expropriation is for public use or not, the above phrase can be used as support for a yes answer. For a no answer, we still use the principle above, but add that the purpose of the expropriation has no general or indirect benefit at all because (insert reason here).
(There is a case later on that has a no answer. In that case, the no answer was justified by both the lack of public use and genuine necessity.)
What does this mean? It means that even if the purpose of the expropriation is to only directly benefit a few, it is still valid because the people as a whole will benefit, although indirectly for most. Usually, the reasons behind such expropriations are social justice, agrarian reform, enhancement of the welfare of the underprivileged, etc.
Here are some examples:
1. Sumolong v. Guerrero (1987)- Where the petitioners contended that “public housing” for the purpose of expropriation is not “public use” since it will benefit only “a handful of people, bereft of public character.” The SC proclaimed them wrong:
[Specifically, urban renewal or redevelopment and the construction of low-cost housing is recognized as a public purpose, not only because of the expanded concept of public use but also because of specific provisions in the Constitution. The 1973 Constitution made it incumbent upon the State to establish, maintain and ensure adequate social services including housing [Art. 11, sec. 7]. The 1987 Constitution goes even further by providing that:
The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living and an improved quality of life for all. [Art. II, sec. 9]
The state shall by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban land reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the implementation of such program the State shall respect the rights of small property owners. (Art. XIII, sec. 9, Emphaisis supplied)
Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum, the general welfare. The public character of housing measures does not change because units in housing projects cannot be occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made, for it is not possible to provide housing for are who need it, all at once.]
2. Coscolluela v. CA (1988)- Where it was a question of just compensation but the SC said in passing that the term “public use” encompasses housing projects and improved irrigation systems, even if these were to be sold to private persons and farmers:
[This case illustrates the expanded meaning of “public use” in the eminent domain clause. (Constitution, Article III, Section 9.) The petitioner’s land was not taken for the construction of a road, bridge, school, public buildings, or other traditional objects of expropriation. When the National Housing Authority expropriates raw land to convert into housing projects for rent or sale to private persons or the NIA expropriates land to construct irrigation systems and sells water rights to farmers, it would be the height of abuse and ignominy for the agencies to start earning from those properties while ignoring final judgments ordering the payment of just compensation to the former owners.]
3. MORE v. PECO (2020)- Where there is an expropriation of PECO’s (old power distributor in Iloilo City) distribution system to be given to MORE (new power distributor in Iloilo City whose franchise was granted under R.A. 11212). The Court held that even if a private corporation would certainly benefit from the expropriation, such is still for public use (power distribution, ensure uninterrupted electric supply), or in their words, for a “genuine public purpose”:
[In its assailed Decision, the RTC held that while R.A. No. 11212 authorizes MORE to expropriate the private property of PECO and to apply the same to the public purpose of power distribution, such identified public purpose is not genuine for ultimately it is the private interest of MORE that will be served by the expropriation. In other words, the expropriation is an ill-disguised corporate takeover.
x x x x
The public necessity of ensuring uninterrupted electricity is implicit in Section 10 of R.A. No. 11212, which authorizes MORE to expropriate the existing distribution system to enable itself to efficiently establish its service. This distinct public necessity is reiterated in Section 17 of R.A. No. 11212 under which MORE may initiate expropriation proceedings even as PECO is provisionally operating the distribution system. In fact, this distinct public necessity of ensuring uninterrupted electricity is the very rationale of the ERC in granting PECO a provisional CPCN. The provisional CPCN is the legal basis of PECO’s continued operation of the distribution system. PECO cannot deny that such distinct necessity to ensure uninterrupted electricity supply is public and genuine.
Moreover, under R.A. No. 9136, one recognized public purpose is the protection of “public interest as it is affected by the rates and services of electric utilities and other providers of electric power.” The Court has sustained the taking of private property to ensure uninterrupted supply of electricity in National Electrification Administration v. Maguindanao Electric Cooperative, Inc. It recognized this authority in NEA which, under Presidential Decree No. 269, may order the transfer of the distribution assets of Maguindanao Electric Cooperative, Inc. as the old franchise holder to Cotabato Electric Cooperative, Inc. as the new franchise holder.
Furthermore, R.A. No. 11361 recently took effect declaring that the uninterrupted conveyance of electricity from generating plants to end-users is not just a matter of public interest, but already an elevated “matter of national security and is essential to sustaining the country’s economic an development. Without a doubt, the provision of uninterrupted supply of electricity is a public purpose which is distinct from the general purpose of electricity distribution. Such distinct purpose is both public and genuine.]
So, does that mean that the expansive meaning of public use has resulted in ALL questions of public use being resolved in favor of the expropriator? No. We have following cases:
1. Masikip v. City of Pasig (2006)
[Where the taking by the State of private property is done for the benefit of a small community which seeks to have its own sports and recreational facility, notwithstanding that there is such a recreational facility only a short distance away, such taking cannot be considered to be for public use. Its expropriation is not valid. In this case, the Court defines what constitutes a genuine necessity for public use.
x x x x
Applying this standard, we hold that respondent City of Pasig has failed to establish that there is a genuine necessity to expropriate petitioner’s property. Our scrutiny of the records shows that the Certification14 issued by the Caniogan Barangay Council dated November 20, 1994, the basis for the passage of Ordinance No. 42 s. 1993 authorizing the expropriation, indicates that the intended beneficiary is the Melendres Compound Homeowners Association, a private, non-profit organization, not the residents of Caniogan. It can be gleaned that the members of the said Association are desirous of having their own private playground and recreational facility. Petitioner’s lot is the nearest vacant space available. The purpose is, therefore, not clearly and categorically public. The necessity has not been shown, especially considering that there exists an alternative facility for sports development and community recreation in the area, which is the Rainforest Park, available to all residents of Pasig City, including those of Caniogan.]
Thus, we can safely say that the requisites of genuine necessity and public use are usually intertwined. After all, as we said before, the term “genuine necessity” should be paired with “must be of a public character.”
2. City of Manila v. Prieto (2019)-Another example of expropriation where public use was not found is when the beneficiaries of a housing program were people that are not technically “underprivileged and homeless” (there are professionals among them such as teachers, nurses, a doctor, and a dentist):
[The CA also correctly observed that there was likewise no evidence presented to show that the prospective beneficiaries of the expropriation are the “underprivileged and homeless” contemplated under Section 8 of R.A. No. 7279. Again, it could have been simple for petitioner to present surveys or studies conducted by competent authorities to prove that the prospective beneficiaries are the proper subjects of its socialized housing program. However, on the contrary, records show that the prospective beneficiaries are not such “underprivileged and homeless.” As testified to by a witness, these prospective beneficiaries have the ability to buy the properties that petitioner is seeking to expropriate to give to them. In fact, said purported “underprivileged and homeless” beneficiaries were able to put up a substantial amount to complete the additional deposit ordered by the court for the petitioner to satisfy.
To be sure, this Court is not unaware of the contemporary concept of “public use” as explained in prevailing jurisprudence. It remains true, however, that condemnation of private lands in an irrational or piecemeal fashion or the random expropriation of small lots to accommodate no more than a few tenants or squatters is certainly not the condemnation for public use contemplated by the Constitution. Such act would clearly deprive a citizen of his or her property for the convenience of a few without perceptible benefit to the public.]
3. Brgy. Sindalan v. CA (2007)- And our last example for lack of public use is when one property was sought to be expropriated in order to provide for a right of way of a feeder road for some subdivision residents, citing other “public benefits” for people around the area aside from the subdivision residents. This was not allowed as the law states that subdivision owners have the obligation to acquire a right of way for the subdivision residents:
[Considering that the residents who need a feeder road are all subdivision lot owners, it is the obligation of the Davsan II Subdivision owner to acquire a right-of-way for them. However, the failure of the subdivision owner to provide an access road does not shift the burden to petitioner. To deprive respondents of their property instead of compelling the subdivision owner to comply with his obligation under the law is an abuse of the power of eminent domain and is patently illegal. Without doubt, expropriation cannot be justified on the basis of an unlawful purpose.
x x x x
One last word: the power of eminent domain can only be exercised for public use and with just compensation. Taking an individual’s private property is a deprivation which can only be justified by a higher good which is public use and can only be counterbalanced by just compensation. Without these safeguards, the taking of property would not only be unlawful, immoral, and null and void, but would also constitute a gross and condemnable transgression of an individual’s basic right to property as well.]
That’s it for public use.
But before we get to the 4th requisite, “just compensation,” let’s first address the 5th one, “the taking must comply with due process of law.” This should not be discussed here anymore as it should be easily understood. What the requisite refers to here is procedural due process. Thus, due process simply means that the parties have been given their day in court or given the opportunity to be heard. It also means that the government follows the procedures laid out like the paying of just compensation:
Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a person of life, liberty, or property. Classic procedural due process issues are concerned with what kind of notice and what form of hearing the government must provide when it takes a particular action.
–City of Manila v. Hon. Laguio, Jr, 2005
Thus, when the government refuses to pay just compensation, that is a violation of the property owner’s right to due process. In effect, the owner can recover possession of the expropriated land. Another example is when the judge determines just compensation without the assistance of commissioners as dictated by the Rules of Court. In that case, the determination of just compensation will be nullified and re-computed with the assistance of commissioners. We’ll learn more about these examples in the following section.
Alright, let’s get to just compensation.
JUST COMPENSATION
This is one of the earliest definition of just compensation, and to put it into perspective, just compensation is measured is not the taker’s gain, but the owner’s loss:
“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 v. Perez, 1938
This definition has evolved to the “full and fair equivalent of the property taken” or the “fair market value” and includes the appreciation of many factors:
“Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. In this case, this simply means the property’s fair market value at the time of the filing of the complaint, or that sum of money which a person desirous but not compelled to buy, and an owner willing but not compelled to sell, would agree on as price to be given and received therefor. The measure is not the taker’s gain, but the owner’s loss.
While market value may be one of the bases of determining just compensation, the same cannot be arbitrarily arrived at without considering the factors to be appreciated in arriving at the fair market value of the property, e.g., the cost of acquisition, the current value of like properties, its size, shape, location, as well as the tax declarations thereon.”
–NAPOCOR v. Bagui, 2008
However, the fair market value is sometimes not enough to determine just compensation. There are times where there will be “consequential damages” and “consequential benefits” which must be taken into account in the computation:
“Section 6. Proceedings by commissioners. — Before entering upon the performance of their duties, the commissioners shall take and subscribe an oath that they will faithfully perform their duties as commissioners, which oath shall be filed in court with the other proceedings in the case. Evidence may be introduced by either party before the commissioners who are authorized to administer oaths on hearings before them, and the commissioners shall, unless the parties consent to the contrary, after due notice to the parties, to attend, view and examine the property sought to be expropriated and its surroundings, and may measure the same, after which either party may, by himself or counsel, argue the case. The commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owner from the public use or purpose of the property taken, the operation of its franchise by the corporation or the carrying on of the business of the corporation or person taking the property. But in no case shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual value of his property so taken.”
–Rule 67, Sec. 6, Rules of Court
To have a perspective of consequential damages or benefits:
“Consequential damages are only awarded if as a result of the expropriation, the remaining property of the owner suffers from an impairment or decrease in value.”
–Republic v. Sps. Salvador, 2017
The same principle applies to consequential benefits. Thus, it is safe to say that consequential damages and benefits are only relevant if the expropriation when there is partial expropriation i.e. when only a part of the property is taken by the government.
Thus, just compensation can be safely formulated as:
Where the entire property is expropriated:
just compensation = fair market value
Where only a portion of the property is expropriated:
just compensation = fair market value + consequential damages – consequential benefits
But if consequential benefits>consequential damages
just compensation = fair market value
Rule 67 also mentions that the court shall appoint not more than 3 commissioners who be tasked with computing the just compensation. Does that mean that these commissioners have the power to determine just compensation? NO. The power to determine just compensation is a “judicial prerogative” and the judge still has the final say:
“Section 8. Action upon commissioners‘ report. — Upon the expiration of the period of ten (10) days referred to in the preceding section, or even before the expiration of such period but after all the interested parties have filed their objections to the report or their statement of agreement therewith, the court may, after hearing, accept the report and render judgment in accordance therewith, or, for cause shown, it may recommit the same to the commissioners for further report of facts, or it may set aside the report and appoint new commissioners; or it may accept the report in part and reject it in part and it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of his right of expropriation, and to the defendant just compensation for the property so taken.”
–Rule 67, Sec. 8, Rules of Court
Segue: the appointment of the commissioners is mandatory:
“It has been held that trial with the aid of the commissioners is a substantial right. Therefore, the appointment of commissioners to ascertain just compensation for the property sought to be taken is a mandatory requirement in expropriation cases.”
–Republic v. Estate of Posadas III, 2020
If not followed, it will not invalidate the expropriation, but will only nullify the determination of the just compensation. The result is that the case will be remanded to the trial court for determination of just compensation with the assistance of commissioners:
“Thus, trial with the aid of the commissioners is a substantial right that may not be done away with capriciously or for no reason at all. Moreover, in such instances, where the report of the commissioners may be disregarded, the trial court may make its own estimate of value from competent evidence that may be gathered from the record. The aforesaid joint venture agreement relied upon by the respondent judge, in the absence of any other proof of valuation of said properties, is incompetent to determine just compensation.
x x x x
ACCORDINGLY, the petition is GRANTED and the order dated February 9, 1982 issued by the respondent judge insofar as it finally determined the amount of just compensation is nullified. This case is hereby ordered remanded to the lower court for trial with the assistance of a Board of Commissioners.”
–Manila Electric Company v. Pineda, 1992
Anyway..
We mentioned earlier that the determination of just compensation is a judicial prerogative. Thus, any law that provides that other entities aside from the court determines the just compensation is unconstitutional. Such is what happened to some Presidential Decrees that Marcos enacted:
“The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under the Constitution is reserved to it for final determination.”
–EPZA v. Dulay, 1987
The same happened to laws and executive issuances post-Marcos-era that fixed or provided for the manner of computation of just compensation. They were ruled as not binding on the courts:
“The payment of just compensation for private property taken for public use is guaranteed no less by our Constitution and is included in the Bill of Rights. As such, no legislative enactments or executive issuances can prevent the courts from determining whether the right of the property owners to just compensation has been violated. It is a judicial function that cannot “be usurped by any other branch or official of the government.” Thus, we have consistently ruled that statutes and executive issuances fixing or providing for the method of computing just compensation are not binding on courts and, at best, are treated as mere guidelines in ascertaining the amount thereof.“
–NAPOCOR v. Zabala, 2013
But then, when RA 6657 (Comprehensive Agrarian Reform Law) provided that the DAR can determine just compensation, the provision was not made invalid because such determination is not final and may be subjected to the court’s modification:
“…the determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function.”
–Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 1989
Now that we know what just compensation is and who determines it, the next question would be, what is the point of reference for measuring the value of the property? Should it be the value when the property was actually taken? When the complaint was filed? When the expropriation proceedings became final? The Rules of Court gives us the answer:
“…just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first.”
–Rule 67, Sec. 4, Rules of Court
This rule is pretty clear-cut. Prior to this 1998 Revised Rules of Court, there was no “whichever came first” rule and just compensation was simply the value at the date of the filing of the complaint. The exception would be if the taking happened prior to the filing of the complaint and that the value of the property increased because of the government’s use of the property. The reasoning is that if the rules were followed and just compensation would be set at the date of the filing of the complaint, the owner would gain undeserved profit or will be unjustly enriched. Thus, even without Rule 67, Sec. 4, it still stands that just compensation is equivalent to the value of the land at the time of taking or at the date of filing of the complaint, whichever came first:
“Simply stated, the exception finds application where the owner would be given undue incremental advantages arising from the use to which the government devotes the property expropriated.”
–NAPOCOR v. CA, 1996
What is not clear is the determination of taking. We already know earlier that taking can be in the form of actual physical taking and constructive taking like in easements. However, how do we know WHEN IT REALLY HAPPENED? This is important because there have been situations in the past where the government will occupy a piece of land earlier, not through a sale, but maybe through a lease, and then let’s say some decades later, they initiate expropriation proceedings. That is obviously an immoral scheme which results in a very low value of just compensation compared to what is really due to the previous owner.
Thus, to avoid this injustice, we have these requisites of a valid taking or entry under eminent domain:
1. The expropriator must enter a private property
2. Entry must be for more than a momentary period
3. Entry must be under warrant or color of legal authority
4. Property must be devoted to public use otherwise informally appropriated or
injuriously affected
5. Utilization of property must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property
–Republic v. De Castellvi, 1974
The first requisite we’ve already covered when we discussed what is private property (anything but money and choses in action). The second requisites has an element of permanence and consistency. The third means that the taking should be legal like there should be a contract or mutual agreement. The fourth seems to be satisfied as long as it is used by a government entity performing its public duties. The fifth means that there should be a degree of permanence wherein the past owner cannot makes use of the property anymore. Thus, leases that are renewed year to year are out of the question as they do not satisfy the second and fifth requisite.
The consequence would be that the value of the just compensation will be the value AT THE TIME OF FILING OF THE PETITION FOR EXPROPRIATION and not at the start of the lease.
Segue: The practical effect of these requisites is that the government will avoid using schemes that has the effect of lowering the just compensation owed to the previous owners. They may also be useful to determine whether expropriation proceedings are warranted or not because if we have noticed, the 5 requisites of just compensation under Manapat v. CA (2007) already presumes that there was already taking. But if we can prove that there was no taking in the first place, we can already prove that eminent domain is not proper. Thus, it can be useful to prove whether the taking is one under eminent domain or police power. This is what happened in Manila Memorial Park v. Secretary of DSWD (2013) where it is contested whether the 20% Senior Citizen Discount is compensable taking under Eminent Domain or non-compensable under Police Power (which we’ll discuss much later on). It was the latter.
Moving on..
The Rules of Court actually allows taking of the property prior to the finalization of the expropriation case. However, it is only allowed if coupled with a deposit equivalent to the assessed value of the property according to the tax declaration:
“Section 2. Entry of plaintiff upon depositing value with authorized government depositary. — Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of the Philippines payable on demand to the authorized government depositary.”
–Rule 67, Sec. 2, Rules of Court
This requirement is different in expropriations by a Local Government Unit and those necessary for a National Infrastructure Project under R.A. 10752 (The Right-of-Way Act).
For LGUs:
SECTION 19. Eminent Domain. – A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.
–Sec. 19, R.A. 7160 (Local Government Code), 1991
For National Government Infrastructures:
“SECTION 6. Guidelines for Expropriation Proceedings. – Whenever it is necessary to acquire real property for the right-of-way site or location for any national government infrastructure through expropriation, the appropriate implementing agency, through the Office of the Solicitor General, the Office of the Government Corporate Counsel, or their deputize government or private legal counsel, shall immediately initiate the expropriation proceedings before the proper court under the following guidelines:
(a) Upon the filing of the complaint or at any time thereafter, and after due notice to the defendant, the implementing agency shall immediately deposit to the court in favor of the owner the amount equivalent to the sum of:
(1) One hundred percent (100%) of the value of the land based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR) issued not more than three (3) years prior to the filing of the expropriation complaint subject to subparagraph (c) of this section;“
–Section 6, R.A. 10752, 2016
Segue: In this law’s previous iteration (R.A. 8974), the 100% zonal valuation value is not deposited to the court, but paid directly to the owner:
“the implementing agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue”
To summarize, aside from the filing of the complaint for expropriation proceedings, the following amounts should be deposited:
1. LGUs (RA 7160, deposit to the proper court)- 15% of the fair market value based on the current tax declaration
2. National Government infrastructure (RA 10752, deposit to the court)-100% of value based on the current zonal valuation of the BIR.
3. Every other expropriation (Rule 67, Rules of Court, deposit to the authorized government depositary)-The full value based on the current tax declaration
Once these payments are DEPOSITED (not paid directly to the owner), what is issued here is a WRIT OF POSSESSION.
An important thing to note here is that public purpose need not be determined before a writ of possession can be issued. That matter is only relevant in the actual expropriation proceedings. As long as the complaint is filed and the necessary amount is deposited, the government can take possession of the private property:
“The law does not make the determination of a public purpose a condition precedent to the issuance of a writ of possession.”
–Francia, Jr. v. Municipality of Meicauayan, 2008
Now then, what happens if even after the expropriation proceedings and it was ruled in favor of the government, the government fails to pay for just compensation?
Before we get to that answer, it should be noted that title to the property is not transferred to the government until the full payment of just compensation. But the effect of full payment is that the title relates back to when the complaint for Eminent Domain was filed:
[The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. Thus:
“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 condemnor’s title relates back to the date on which the petition under the Eminent Domain Act, or the commissioner’s report under the Local Improvement Act, is filed.”]
–Association of Small Landowners v. Secretary of Agrarian Reform, 1989
Thus, if the expropriator fails to pay just compensation, technically, they still do not own the property. So, it would make sense that, as the true owner, one should take control of the property back, right? HOWEVER, the rule is that the remedy for non-payment of just compensation is not the recovery of possession, but to demand of the payment of the fair market value of the property (subject to legal interest of course):
[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 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.]
–Reyes v. NHA, 2003
The above is a well-settled rule. HOWEVER, the SC was seemingly fed up with the great delays in the payments of just compensation that they made an exception to this rule. The case involved a piece of land that was expropriated and used by the military. The just compensation has not yet been paid for 57 years despite 2 court orders:
[Of course, we are aware of the doctrine that “non-payment of just compensation (in an expropriation proceedings) does not entitle the private landowners to recover possession of the expropriated lots.” This is our ruling in the recent cases of Republic of the Philippines vs. Court of Appeals, et al., and Reyes vs. National Housing Authority. However, the facts of the present case do not justify its application. It bears stressing that the Republic was ordered to pay just compensation twice, the first was in the expropriation proceedings and the second, in Valdehueza. Fifty-seven (57) years have passed since then. We cannot but construe the Republic’s failure to pay just compensation as a deliberate refusal on its part. Under such circumstance, recovery of possession is in order. In several jurisdictions, the courts held that recovery of possession may be had when property has been wrongfully taken or is wrongfully retained by one claiming to act under the power of eminent domain or where a rightful entry is made and the party condemning refuses to pay the compensation which has been assessed or agreed upon; or fails or refuses to have the compensation assessed and paid.
x x x x x
In summation, while the prevailing doctrine is that “the non-payment of just compensation does not entitle the private landowner to recover possession of the expropriated lots, however, in cases where the government failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation proceedings, the owners concerned shall have the right to recover possession of their property. This is in consonance with the principle that “the government cannot keep the property and dishonor the judgment.” To be sure, the five-year period limitation will encourage the government to pay just compensation punctually. This is in keeping with justice and equity. After all, it is the duty of the government, whenever it takes property from private persons against their will, to facilitate the payment of just compensation.“
–Republic v. Lim, 2005
I guess it helps that the property in question was barely used by the military. But, what then happens if the property is something important like a school or a hospital? We don’t know. Nevertheless, the court made the rule without distinction. The Court may have been too fed up that their means to deter the immoral practices leaves no room for exploitable exceptions.
But just to be safe in the exams, we’ll follow the rulings:
General Rule: Non-payment of just compensation does not entitle the private landowners to recover possession of the expropriated lots. Their remedy is to demand the payment of just compensation.
Interest rate: If there’s delay in the payment of just compensation, the interest rate is 12% per annum until June 30, 2013. From July 1, 2013 onwards, it is 6% per annum.
-Pursuant to Bangko Sentral ng Pilipinas Circular No. 799, series of 2013
Exception: In cases where the government deliberately refused to pay just compensation within five (5) years from the finality of the judgment in the expropriation proceedings, the owners concerned shall have the right to recover possession of their property.
I changed the “failed” to “deliberately refused” to pay because (1) there may be justifiable reasons why they cannot pay, and (2) the case involves not merely failure but deliberate refusal to pay.
The often cited principle in Lim is “without prompt payment, compensation cannot be considered ‘just'”:
[…”just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment for the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered ‘just.’” In jurisdictions similar to ours, where an entry to the expropriated property precedes the payment of compensation, it has been held that if the compensation is not paid in a reasonable time, the party may be treated as a trespasser ab initio.]
-Republic v. Lim, 2005
One more thing before we get to Abandonment of Intended Use and Right of Repurchase.
It is not only the owner that may be entitled to just compensation:
“The defendants in an expropriation case are not limited to the owners of the property condemned. They include all other persons owning, occupying or claiming to own the property. When [property] is taken by eminent domain, the owner x x x is not necessarily the only person who is entitled to compensation. In the American jurisdiction, the term ‘owner’ when employed in statutes relating to eminent domain to designate the persons who are to be made parties to the proceeding, refer, as is the rule in respect of those entitled to compensation, to all those who have lawful interest in the property to be condemned, including a mortgagee, a lessee and a vendee in possession under an executory contract. Every person having an estate or interest at law or in equity in the land taken is entitled to share in the award. If a person claiming an interest in the land sought to be condemned is not made a party, he is given the right to intervene and lay claim to the compensation.”
–De Knecht v. CA, 1998
The above group does not include persons who have no lawful interest over the property and are merely in possession of them because of tolerance of the registered owners.
Abandonment of Intended Use and Right of Repurchase
Earlier, we learned what constitutes public use in the realm of expropriation, the question now is, what happens if the property is suddenly not used for a public purpose?
This question has been considered as early as 1921:
“The answer to that question depends upon the character of the title acquired by the expropriator, whether it be the State, a province, a municipality, or a corporation which has the right to acquire property under the power of eminent domain. 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. If, for example, land is expropriated for a public street and the expropriation is granted upon condition that the city can only use it for a public street, then, of course, when the city abandons its use as a public street, it returns to the former owner, unless there is some statutory provision to the contrary. . . 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, whether it be the State, a province, or municipality, and in that case the non-user does not have the effect of defeating the title acquired by the expropriation proceedings.
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.“
–Fery v. Municipality of Cabanatuan, 1921
BUT! There’s a big but. The above ruling was expressly abandoned in 2010. The reason is that it was decided prior to the 1987 Constitution which expressly provides public use as a requisite of expropriation:
[Obviously, Fery was not decided pursuant to our now sacredly held constitutional right that private property shall not be taken for public use without just compensation. It is well settled that the taking of private property by the Government’s power of eminent domain is subject to two mandatory requirements: (1) that it is for a particular public purpose; and (2) that just compensation be paid to the property owner. These requirements partake of the nature of implied conditions that should be complied with to enable the condemnor to keep the property expropriated.
More particularly, with respect to the element of public use, the expropriator should commit to use the property pursuant to the purpose stated in the petition for expropriation filed, failing which, it should file another petition for the new purpose. If not, it is then incumbent upon the expropriator to return the said property to its private owner, if the latter desires to reacquire the same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it would lack one indispensable element for the proper exercise of the power of eminent domain, namely, the particular public purpose for which the property will be devoted. Accordingly, the private property owner would be denied due process of law, and the judgment would violate the property owner’s right to justice, fairness, and equity.
In light of these premises, we now expressly hold that the taking of private property, consequent to the Government’s exercise of its power of eminent domain, is always subject to the condition that the property be devoted to the specific public purpose for which it was taken. Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and is peremptorily abandoned, then the former owners, if they so desire, may seek the reversion of the property, subject to the return of the amount of just compensation received. In such a case, the exercise of the power of eminent domain has become improper for lack of the required factual justification.]
–MCIAA v. Lozada, Sr., 2010
What happened here is that people living around an area were asked to sell their property in favor of the government so the latter can expand an airport. In order to entice said people, the government would allow them to repurchase their property if the airport ceases to operate or is transferred somewhere else. Some of these people executed deeds of sale with right to repurchase in favor of the government (lucky them). The subject of our case, however, is one of those that did not sell their property and instead waited for the inevitable expropriation proceedings. When it did come, our subject here was convinced by the government not to oppose the expropriation proceedings since in the future they could repurchase the properties if the airport expansion would not push through. Now, acting on such promise, can our subject be entitled to repurchase despite any express condition granting him so? The answer is obviously yes because the Fery ruling was abandoned.
However, for educational purposes there is a 2003 case, Heirs of Moreno v. MCIAA, which did not abandon Fery, but sort of just side-stepped it. The previous owner in this case is in the same predicament as in our case above. It still ruled in favor of the previous owner but the reason is that there is an implied trust under Art. 1454 of the Civil Code which, even if not expressed in the judgment of expropriation, puts a condition that the previous owner can repurchase the land (note: repurchase, not reconvey). However, the caveat is that they SHOULD PROVE that there was a conversation that the government promised the property owners to give them the right to repurchase if the airport stops operating. In this case, the proof was 2 witnesses. Unfortunately, there are previous similar cases of similar facts where the Court ruled in favor of MCIAA because the evidence the previous owners offered were inconclusive or inadmissible. ANYWAY, thankfully, the 2010 Lozada case now abandons this complicated matter.
By the way, Lozada was reaffirmed in Vda. De Quana v. Republic (2011). :
“The Court, in the recent MCIAA v. Lozada, Sr., revisited and abandoned the Fery ruling that the former owner is not entitled to reversion of the property even if the public purpose were not pursued and were abandoned.
x x x
The notion, therefore, that the government, via expropriation proceedings, acquires unrestricted ownership over or a fee simple title to the covered land, is no longer tenable. We suggested as much in Heirs of Moreno and in Tudtud and more recently in Lozada, Sr. Expropriated lands should be differentiated from a piece of land, ownership of which was absolutely transferred by way of an unconditional purchase and sale contract freely entered by two parties, one without obligation to buy and the other without the duty to sell. In that case, the fee simple concept really comes into play. There is really no occasion to apply the “fee simple concept” if the transfer is conditional. The taking of a private land in expropriation proceedings is always conditioned on its continued devotion to its public purpose. As a necessary corollary, once the purpose is terminated or peremptorily abandoned, then the former owner, if he so desires, may seek its reversion, subject of course to the return, at the very least, of the just compensation received.“
– Vda. De Quana v. Republic, 2011
Thus, the only way that the government can keep the property they took even after abandonment of public use is THROUGH UNCONDITIONAL SALE. Expropriation is now off the table.
And, promise or not, the property may be returned to the previous owner provided that they also return the just compensation they received without additional interest:
“In accordance with Art. 1187 of the Civil Code on mutual compensation, MCIAA may keep whatever income or fruits it may have obtained from the parcels of land expropriated. In turn, the Ouanos and Inocians need not require the accounting of interests earned by the amounts they received as just compensation.
Following Art. 1189 of the Civil Code providing that “[i]f the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor x x x,” the Ouanos and Inocians do not have to settle the appreciation of the values of their respective lots as part of the reconveyance process, since the value increase is merely the natural effect of nature and time.”
– Vda. De Quana v. Republic, 2011
Okay, now that that’s understandable enough, here’s another question. What happens if the public purpose ceased to exist not after the expropriation, BUT DURING THE PENDENCY of the expropriation proceedings?
The answer is that the expropriation proceedings should be discontinued:
“It is not denied that the purpose of the plaintiff was to acquire the land in question for a public use. The fundamental basis then of all actions brought for the expropriation of lands, under the power of eminent domain, is public use. That being true, the very moment that it appears at any stage of the proceedings that the expropriation is not for a public use, the action must necessarily fail and should be dismissed, for the reason that the action cannot be maintained at all except when the expropriation is for some public use. That must be true even during the pendency of the appeal or at any other stage of the proceedings. If, for example, during the trial in the lower court, it should be made to appear to the satisfaction of the court that the expropriation is not for some public use, it would be the duty and the obligation of the trial court to dismiss the action. And even during the pendency of the appeal, if it should be made to appear to the satisfaction of the appellate court that the expropriation is not for public use, then it would become the duty and the obligation of the appellate court to dismiss it.”
–Metropolitan Water District v. De los Angeles, 1931
But of course, the dismissal of the expropriation proceedings does not mean that everything should be back to normal. It is possible that the property was already taken by the government prior to the proceedings and this may have caused damage to the owners. Thus, the dismissal may still be subject to conditions:
“It is notable that the dismissal of the expropriation proceedings in Metropolitan Water District v. De los Angeles was made subject to several conditions in order to address the dispossession of the defendants of their land, and the inconvenience, annoyance and damages suffered by the defendants on account of the proceedings. Accordingly, the Court remanded the case to the trial court for the issuance of a writ of possession ordering Metropolitan Water District to immediately return possession of the land to the defendants, and for the determination of damages in favor of the defendants, the claims for which must be presented within 30 days from the return of the record to the court of origin and notice thereof.”
–Republic v. Heirs of Saturnino Borbon, 2015
Thus, Justice Leonen sets these requirements before expropriation proceedings can be dismissed:
“The rule, therefore, is that expropriation proceedings must be dismissed when it is determined that it is not for a public purpose, except when:
First, the trial court’s order already became final and executory;
Second, the government already took possession of the property; and
Lastly, the expropriation case already caused prejudice to the landowner.
The expropriation case is not automatically dismissed when the property ceases to be for public use. The state must first file the appropriate Motion to Withdraw before the trial court having jurisdiction over the proceedings. The grant or denial of any Motion to Withdraw in an expropriation proceeding is always subject to judicial discretion.”
–NAPOCOR v. Posada, 2015
Thus, the trial court should order the return of the property, determine the damage caused, order the government to pay the same, whenever necessary, before the case can be dismissed.
(Remember the necessary deposits before the government can be granted a writ of possession so that they can take the property before the expropriation proceedings end? This is where those deposits can be useful. They can be used to pay the damages caused to the property owners.)
But, if the trial court’s order is already final and executory, the government should file a Motion to Withdraw with the trial court and it will be their burden to plead and prove its reasons for discontinuing with the expropriation. The previous owners can also present evidence for damages. But, if the trial court does not grant the Motion to Withdraw, the government SHOULD PAY THE JUST COMPENSATION.
Alright let’s move on to Expropriation by LGUs.
Expropriation by local government units
Expropriation by LGUs deserve their own section because most cases come from this type of expropriation.
As we discussed earlier, the power of eminent domain is lodged in the Legislative Department, but they can delegate such power to other entities such as Local Government Units through law. This delegated power of eminent domain is sometimes referred to as “inferior” domain because the delegate has to strictly follow the will of the legislature:
It has therefore no power to amend or act beyond the authority given and the limitations imposed on it by law. Strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but “inferior” domain, since it must conform to the limits imposed by the delegation, and thus partakes only of a share in eminent domain. Indeed, “the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.”
–Municipality of Parañaque v. V.M. Realty Corporation, 1998
In the LGUs case, Congress has delegated the power of eminent domain through R.A. 7160 or the Local Government Code:
“Section 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.”
–Sec. 19, R.A. 7160 (Local Government Code)
Thus, the following essential requisites must concur before an LGU can exercise the power of eminent domain:
1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless.
3. There is payment of just compensation, as required under Section 9 Article III of the Constitution and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted.
For the first requisite, it should be understood that a resolution cannot be substituted for an ordinance:
[We are not convinced by petitioner’s insistence that the terms “resolution” and “ordinance” are synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. An ordinance possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the two are enacted differently — a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of all the Sanggunian members.]
–Municipality of Parañaque v. V.M. Realty Corporation, 1998
In our case above, to be fair, the LGU relied on the IRR of R.A. 7160 which allows for a resolution as a requirement of the exercise of eminent domain. Nevertheless, the Court ruled that of course the law prevails over the IRR which merely seeks to implement it.
This follows that there can be no judicial challenge to a resolution or at anytime before the LGU initiates expropriation proceedings through the filing of a verified complaint to the proper court:
“Here, however, the remedy of prohibition was not called for, considering that only a resolution expressing the desire of the Sangguniang Panglungsod to expropriate the petitioners’ property was issued. As of then, it was premature for the petitioners to mount any judicial challenge, for the power of eminent domain could be exercised by the City only through the filing of a verified complaint in the proper court.[22] Before the City as the expropriating authority filed such verified complaint, no expropriation proceeding could be said to exist. Until then, the petitioners as the owners could not also be deprived of their property under the power of eminent domain.”
–Sps. Yusay v. CA, 2011
As for the 2nd and 3rd requisite of public use/purpose/welfare and just compensation, respectively, we’ve already discussed them enough before. Just revisit them.
But, it may be useful as an added bullet in the exams to add that, in the case of the exercise of the delegated power of eminent domain, “bare allegations and unsupported generalizations” do not suffice to satisfy the requirement of public use/purpose/welfare:
“It bears stressing that courts have a duty to judiciously scrutinize and determine whether the local government’s exercise of the delegated power of eminent domain is in accordance with the delegating law. As correctly ruled by the CA, bare allegations and unsupported generalizations do not suffice, considering the drastic effect of the exercise of such power to constitutionally-protected rights.”
–City of Manila v. Prieto, 2019
As for the last requisite of a valid and definite offer followed by a rejection of such offer, here are the specifics:
ARTICLE 35. Offer to Buy and Contract of Sale. – (a) The offer to buy private property for public use or purpose shall be in writing. It shall specify the property sought to be acquired, the reasons for its acquisition, and the price offered.
(b) If the owner or owners accept the offer in its entirety, a contract of sale shall be executed and payment forthwith made.
(c) If the owner or owners are willing to sell their property but at a price higher than that offered to them, the local chief executive shall call them to a conference for the purpose of reaching an agreement on the selling price. The chairman of the appropriation or finance committee of the sanggunian, or in his absence, any member of the sanggunian duly chosen as its representative, shall participate in the conference. When an agreement is reached by the parties, a contract of sale shall be drawn and executed.
x x x x x
–Article 35, Rules and Regulations Implementing the Local Government Code
Thus, it is important that this procedure is followed and that the LGU proves that they complied with the requirement of a valid and definite offer:
[The LGU has the burden] “…to prove the mandatory requirement of a valid and definite offer to the owner of the property before filing its complaint and the rejection thereof by the latter. It is incumbent upon the condemnor to exhaust all reasonable efforts to obtain the land it desires by agreement. Failure to prove compliance with the mandatory requirement will result in the dismissal of the complaint.”
–Jesus is Lord Christian School Foundation v. Municipality (Now City) of Pasig, 2005
That’s it for eminent domain! I can’t believe this took 8 days. Let’s go to impairment of contracts next time.
The Bartender 