1.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-2929

February 28, 1950

THE CITY OF MANILA, plaintiff-appellant,

vs.
THE ARRELANO LAW COLLEGES, INC., defendant-appellee.
City Fiscal Eugenio Angeles and Assistant City Fiscal Arsenio Naawa for appellant.
Emmanuel Pelaez for appellee.
TUASON, J.:
Section 1 of Republic Act No. 267 provides:
Cities and municipalities are authorized to contract loans from the Reconstruction
Finance Corporation, the Philippine National Bank, and/or other entity or person at
the rate of interest not exceeding eight per cent annum for the purpose of
purchasing or expropriating homesites within their respective territorial jurisdiction
and reselling them at cost to residents of the said cities and municipalities.
The court below ruled that this provision empowers cities to purchase but not to
expropriate lands for the purpose of subdivision and resale, and so dismissed the present
action, which seeks to condemn, for the purpose just stated, several parcels of land
having a combined area of 7,270 square meters and situated on Legarda Street, City of
Manila.
In the cases of Guido vs. Rural Progress Administration (G. R. No. L2089)1 and Commonwealth of the Philippines vs. De Borja (G. R. No. L-1496),2 we
discussed at great length the extent of the Philippine Government's power to condemn
private property for resale. Among other things, we said:
It has been truly said that the assertion of the right on the part of the legislature to
take the property of one citizen and transfer it to another, even for a full
compensation, when the public interest is not promoted thereby, is claiming a
despotic power, and one inconsistent with every just principle and fundamental
maxim of a free government. (29 C. J. S., 820.)
In a broad sense, expropriation of large estates, trusts in perpetuity, and land that
embraces a whole town, or large section of a town or city, bears direct relation to
the public welfare. The size of the land expropriated, the large number of people
benefited, and the extent of social and economic reform secured by the
condemnation, clothes the expropriation with public interest and public use. The
expropriation in such cases tends to abolish economic slavery, feudalistic
practices, endless conflicts between landlords and tenants, and other evils inimical
to community prosperity and contentment and public peace and order. Although
courts are not in agreement as to the tests to applied in determining whether the
use is public or not, some go so far in the direction of a liberal construction as to
hold that public use is synonymous with public benefit, public utility, or public
advantage, and to authorize the exercise of the power of eminent domain to
promote such public benefit, etc., especially where the interest involved are of
considerable magnitude. (29 C. J. S.; 823, 824; see also People of Puerto Rico vs.
Eastern Sugar Associate et al., 156 Fed. [2d], 316.) In some instances, slumsites
have been acquired by condemnation. The highest court of New York State has
ruled that slum clearance and erection of houses for low-income families were

public purpose for which New York City Housing authorities could exercise the
power of condemnation. and this decision was followed by similar ones in other
states. The underlying reasons for these decisions are that the destruction of
congested areas and unsanitary dwellings diminished the potentialities of
epidemics, crime and waste, prevents the spread of crime and diseases to
unaffected areas, enhances the physical and moral value of the surrounding
communities, and promote the safety and welfare of the public in general. (Murray
et al. vs. La Guardia, 52 N. e. [2d], 884; General Development Coop. vs. City of
Detroit, 33 N. W. [2d], 919; Weizner vs. Stichman, 64 N. Y. S. [2d], 50.) But it will be
noted that in all these cases and of similar nature extensive areas were involved
and numerous people and the general public benefited by the action taken.
The condemnation of a small property in behalf of 10, 20 or 50 persons and their
families does not insure to the benefit of the public to a degree sufficient to give
the use public character. The expropriation proceedings at bar have been instituted
for the economic relief of a few families devoid of any consideration of public
peace and order, or other public advantage. What is proposed to be done is to take
plaintiff's property, which for all we know she acquired by sweat and sacrifices for
her and her family's security, and sell it at cost to a few lessees who refuse to pay
the stipulated rent or leave the premises.
No fixed line of demarcation between what taking is for public use and what is not
can made; each case has to be judged according to its peculiar circumstances. It
suffices to say for the purpose of this decision that the case under consideration is
far wanting in those elements which make for public convenience or public use. It
is patterned upon an ideology far removed from the majority of the citizens of this
country. If upheld, this case would open the gates to more oppressive
expropriations. If this expropriation be constitutional, we see no reason why a 10-,
15-, or 25-hectare farm land might not be expropriated and subdivided, and sold to
those who want to own a portion of it. to make the analogy closer, we find no
reason why the Rural Progress Administration could not take by condemnation an
urban lot containing and area of 1,000 or 2,000 square meters for subdivision into
tiny lots for resale to its occupations or those who want to build thereon.
We are inclined to believe that Act No. 267 empowers cities to expropriate as well as to
purchase lands for homesites. The word "expropriating," taken singly or with the text, is
susceptible of only meaning. But this power to expropriate is necessarily subject to the
limitations and conditions noted in the decisions above cited. The National Government
may not confer its instrumentalities authority which itself may not exercise. A stream can
not run higher than its source.
Viewed from another angle, the case at bar is weaker for the condemnor. In the first
place, the land that is the subject of the present expropriation is only one-third of the
land sought to be taken in the Guido case, and about two-thirds of that involved in the
Borja condemnation proceeding. In the second place, the Arellano Colleges' land is
situated in a highly commercial section of the city and is occupied by persons who are
not bona fide tenants. Lastly, this land was brought by the defendant for a university site
to take the place of rented buildings that are unsuitable for schools of higher learning.
To authorize the condemnation of any particular land by a grantee of the power of
eminent domain, a necessity must exist for the taking thereof for the proposed uses and
purposes. (29 C. J. S., 884-885.) In City of Manila vs. Manila Chinese Community (40 Phil.,
349), this Court, citing American decision, laid done this rule:
The very foundation of the right to exercise eminent domain is a genuine
necessity, and that necessity must be of a public character. The ascertainment of
the necessity must precede or accompany, and not follow, the taking of the land.
(Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind., 511; Stearns vs. Barre, 73 Vt., 281;
Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72 Ohio St., 368.)

And this passage in Blackstone's Commentaries on the English Law is cited in that
decision: "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 exist a very great
necessity thereof."
Perhaps modern decisions are not so exigent. Necessity within the rule that the particular
property to be expropriated must be necessary. does not mean an absolute but only a
reasonable or practical necessity, such as would combine the greatest benefit to the
public with the least inconvenience and expense to the condemning party and property
owner consistent with such benefits. (29 C. J. S., 386.) But measured even by this
standard, and forgetting for a moment the private character of the intended use,
necessity for the condemnation has not been shown. The land in question has cost the
owner P140,000. The people for whose benefit the condemnation is being undertaken
are so poor they could ill afford to meet this high price, unless they intend to borrow the
money with a view to disposing of the property later for a profits. Cheaper lands not
dedicated to a purpose so worthy as a school and more suited to the occupants' needs
and means, if really they only want to own their own homes, are plenty elsewhere. On
the other hand, the defendant not only has invested a considerable amount for its
property but had the plans for construction ready and would have completed the project
a long time ago had it not been stopped by the city authorities. And again, while a
handful of people stand to profits by the expropriation, the development of a university
that has a present enrollment of 9,000 students would be sacrificed. Any good that
would accrue to the public from providing homes to a few families fades into
insignificance in comparison with the preparation of a young men and young women for
useful citizenship and for service to the government and the community, a task which
the government alone is not in a position to undertake. As the Rural Progress
Administration, the national agency lands for resale as homesites and to which the
petition to purchase the land in question on behalf of the occupants was referred by the
President, turning down the occupants request after proper investigation, commented
that "the necessity of the Arellano Law College to acquire a permanent site of its own is
imperative not only because denial of the same would hamper the objectives of that
educational institution, but it would likewise be taking a property intended already for
public benefit." The Mayor of the City of Manila himself confessed that he believes the
plaintiff is entitled to keep this land.
The order of the Court of First Instance of Manila is affirmed without costs.
Moran, C.J., Ozaeta, Pablo, Padilla, Montemayor, Reyes and Torres, JJ., concur.

2. United States vs. Causby

U.S. Supreme Court
UNITED STATES v. CAUSBY, 328 U.S. 256 (1946)
328 U.S. 256
UNITED STATES
v.
CAUSBY et ux.
No. 630.
Argued May 1, 1946.
Decided May 27, 1946.
Military airplanes are subject to rules of Civil Aeronautics Board where there are no
army or navy regulations to the contrary. [328 U.S. 256, 257] Mr. Walter J.
Cummings, Jr., of Washington, D.C., for petitioner.
Mr. William E. Comer, of Greensboro, N.C., for respondent.
[328 U.S. 256, 258]
Mr. Justice DOUGLAS delivered the opinion of the Court.
This is a case of first impression. The problem presented is whether respondents'
property was taken within the meaning of the Fifth Amendment by frequent and
regular flights of army and navy aircraft over respondents' land at low altitudes. The
Court of Claims held that there was a taking and entered judgment for respondent,
one judge dissenting. 60 F.Supp. 751. The case is here on a petition for a writ of
certiorari which we granted becuase of the importance of the question presented.
Respondents own 2.8 acres near an airport outside of Greensboro, North Carolina. It
has on it a dwelling house, and also various outbuildings which were mainly used for
raising chickens. The end of the airport's northwest-southeast runway is 2,220 feet
from respondents' barn and 2,275 feet from their house. The path of glide to this
runway passes directly over the property-which is 100 feet wide and 1,200 feet long.
The 30 to 1 safe glide angle1 approved by the Civil Aeronautics Authority2 passes
over this property at 83 feet, which is 67 feet above the house, 63 feet above the
barn and 18 feet above the highest tree. 3 The use by the United States of this airport
is pursuant to a lease executed in May, 1942, for a term commencing June 1, 1942
and ending June 30, 1942, with a provision for renewals until June 30, 1967, or
six [328 U.S. 256, 259] months after the end of the national emergency, whichever
is the earlier.
Various aircraft of the United States use this airport-bombers, transports and fighters.
The direction of the prevailing wind determines when a particular runway is used. The
north-west-southeast runway in question is used about four per cent of the time in
taking off and about seven per cent of the time in landing. Since the United States
began operations in May, 1942, its four-motored heavy bombers, other planes of the
heavier type, and its fighter planes have frequently passed over respondents' land
buildings in considerable numbers and rather close together. They come close enough
at times to appear barely to miss the tops of the trees and at times so close to the
tops of the trees as to blow the old leaves off. The noise is startling. And at night the
glare from the planes brightly lights up the place. As a result of the noise,
respondents had to give up their chicken business. As many as six to ten of their
chickens were killed in one day by flying into the walls from fright. The total chickens
lost in that manner was about 150. Production also fell off. The result was the
destruction of the use of the property as a commercial chicken farm. Respondents are

frequently deprived of their sleep and the family has become nervous and frightened.
Although there have been no airplane accidents on respondents' property, there have
been several accidents near the airport and close to respondents' place. These are
the essential facts found by the Court of Claims. On the basis of these facts, it found
that respondents' property had depreciated in value. It held that the United States
had taken an easement over the property on June 1, 1942, and that the value of the
property destroyed and the easement taken was $2,000. [328 U.S. 256, 260] I. The
United States relies on the Air Commerce Act of 1926, 44 Stat. 568, 49 U.S.C. 171 et
seq., 49 U.S.C.A. 171 et seq., as amended by the Civil Aeronautics Act of 1938, 52
Stat. 973, 49 U.S.C. 401 et seq., 49 U. S.C.A. 401 et seq. Under those statutes the
United States has 'complete and exclusive national sovereignty in the air space' over
this country. 49 U.S.C. 176(a), 49 U.S.C.A. 176(a). They grant any citizen of the United
States 'a public right of freedom of transit in air commerce4 through the navigable air
space of the United States.' 49 U.S.C. 403, 49 U.S.C.A. 403. And 'navigable air space'
is defined as 'airspace above the minimum safe altitudes of flight prescribed by the
Civil Aeronautics Authority.' 49 U.S.C. 180, 49 U.S.C.A. 180. And it is provided that
'such navigable airspace shall be subject to a public right of freedom of interstate and
foreign air navigation.' Id. It is, therefore, argued that since these flights were within
the minimum safe altitudes of flight which had been prescribed, they were an exercise
of the declared right of travel through the airspace. The United States concludes that
when flights are made within the navigable airspace without any physical invasion of
the property of the landowners, there has been no taking of property. It says that at
most there was merely incidental damage occurring as a consequence of authorized
air navigation. It also argues that the landowner does not own superadjacent airspace
which he has not subjected to possession by the erection of structures or other
occupancy. Moreover, it is argued that even if the United States took airspace owned
by respondents, no compensable damage was shown. Any damages are said to be
merely consequential for which no compensation may be obtained under the Fifth
Amendment.
It is ancient doctrine that at common law ownership of the land extended to the
periphery of the universe-Cujus[328 U.S. 256, 261] est solum ejus est usque ad
coelum. 5 But that doctrine has no place in the modern world. The ai is a public
highway, as Congress has declared. Were that not true, every transcontinental flight
would subject the operator to countless trespass suits. Common sense revolts at the
idea. To recognize such private claims to the airspace would clog these highways,
seriously interfere with their control and development in the public interest, and
transfer into private ownership that to which only the public has a just claim.
But that general principle does not control the present case. For the United States
conceded on oral argument that if the flights over respondents' property rendered it
uninhabitable, there would be a taking compensable under the Fifth Amendment. It is
the owner's loss, not the taker's gain, which is the measure of the value of the
property taken. United States v. Miller, 317 U.S. 369 , 63 S.Ct. 276, 147 A.L. R. 55.
Market value fairly determined is the normal measure of the recovery. Id. And that
value may reflect the use to which the land could readily be converted, as well as the
existing use. United States v. Powelson, 319 U.S. 266, 275 , 63 S.Ct. 1047, 1053, and
cases cited. If, by reason of the frequency and altitude of the flights, respondents
could not use this land for any purpose, their loss would be complete. 6 It would be as
complete as if the United States had entered upon the surface of the land and taken
exclusive possession of it.
We agree that in those circumstances there would be a taking. Though it would be
only an easement of flight[328 U.S. 256, 262] which was taken, that easement, if
permanent and not merely temporary, normally would be the equivalent of a fee
interest. It would be a definite exercise of complete dominion and control over the
surface of the land. The fact that the planes never touched the surface would be as
irrelevant as the absence in this day of the feudal livery of seisin on the transfer of

real estate. The owner's right to possess and exploit the land-that is to say, his
beneficial ownership of it-would be destroyed. It would not be a case of incidental
damages arising from a legalized nuisance such as was involved in Richards v.
Washington Terminal Co., 233 U.S. 546 , 34 S.Ct. 654, L.R.A.1915A, 887. In that case
property owners whose lands adjoined a railroad line were denied recovery for
damages resulting from the noise, vibrations, smoke and the like, incidental to the
operations of the trains. In the supposed case the line of flight is over the land. And
the land is appropriated as directly and completely as if it were used for the runways
themselves.
There is no material difference between the supposed case and the present one,
except that here enjoyment and use of the land are not completely destroyed. But
that does not seem to us to be controlling. The path of glide for airplanes might
reduce a valuable factory site to grazing land, an orchard to a vegetable patch, a
residential section to a wheat field. Some value would remain. But the use of the
airspace immediately above the land would limit the utility of the land and cause a
diminution in its value. 7 That was the philosophy of Portsmouth Harbor Land & Hotel
Co. v. [328 U.S. 256, 263] United States, 260 U.S. 327 , 43 S.Ct. 135. In that case the
petition alleged that the United States erected a fort on nearby land, established a
battery and a fire control station there, and fired guns over petitioner's land. The
Court, speaking through Mr. Justice Holmes, reversed the Court of Claims which
dismissed the petition on a demurrer, olding that 'the specific facts set forth would
warrant a finding that a servitude has been imposed.' 8 260 U.S. at page 330, 43 S.Ct.
at page 137. And see Delta Air Corp. v. Kersey, 193 Ga. 862, 20 S.E.2d 245, 140 A.L.R.
1352. Cf. United States v. 357.25 Acres of Land, D.C., 55 F.Supp. 461.
The fact that the path of glide taken by the planes was that approved by the Civil
Aeronautics Authority does not change the result. The navigable airspace which
Congress has placed in the public domain is 'airspace above the minimum safe
altitudes of flight prescribed by the Civil Aeronautics Authority.' 49 U.S.C. 180, 49
U.S.C.A. 180. If that agency prescribed 83 feet as the minimum safe altitude, then we
would have presented the question of the validity of the regulation. But nothing of the
sort has been done. The path of glide governs the method of operating- of landing or
taking off. The altitude required for that operation is not the minimum safe altitude of
flight which is the downward reach of the navigable airspace. The minimum
prescribed by the authority is 500 feet during the day and 1000 feet at night for air
carriers (Civil Air Regulations, Pt. 61, 61.7400, 61.7401, Code Fed.Reg.Cum.Supp., Tit.
14, ch. 1) and from 300 to 1000 feet for [328 U.S. 256, 264] other aircraft depending
on the type of plane and the character of the terrain. Id., Pt. 60, 60.350-60.3505,
Fed.Reg.Cum.Supp., supra. Hence, the flights in question were not within the
navigable airspace which Congress placed within the public domain. If any airspace
needed for landing or taking off were included, flights which were so close to the land
as to render it uninhabitable would be immune. But the United States concedes, as
we have said, that in that event there would be a taking. Thus, it is apparent that the
path of glide is not the minimum safe altitude of flight within the meaning of the
statute. The Civil Aeronautics Authority has, of course, the power to prescribe air
traffic rules. But Congress has defined navigable airspace only in terms of one of
them-the minimum safe altitudes of flight.
We have said that the airspace is a public highway. Yet it is obvious that if the
landowner is to have full enjoyment of the land, he must have exclusive control of the
immediate reaches of the enveloping atmosphere. Otherwise buildings could not be
erected, trees could not be planted, and even fences could not be run. The principle is
recognized when the law gives a remedy in case overhanging structures are erected
on adjoining land. 9 The landowner owns at least as much of the space above the
ground as the can occupy or use in connection with the land. See Hinman v. Pacific Air
Transport, 9 Cir., 84 F.2d 755. The fact that he does not occupy it in a physical senseby the erection of buildings and the like-is not material. As we have said, the flight of

airplanes, which skim the surface but do not touch it, is as much an appropriation of
the use of the land as a more conventional entry upon it. We would not doub that if
the United States erected [328 U.S. 256, 265] an elevated railway over respondents'
land at the precise altitude where its planes now fly, there would be a partial taking,
even though none of the supports of the structure rested on the land. 10 The reason
is that there would be an intrusion so immediate and direct as to subtract from the
owner's full enjoyment of the property and to limit his exploitation of it. While the
owner does not in any physical manner occupy that stratum of airspace or make use
of it in the conventional sense, he does use it in somewhat the same sense that space
left between buildings for the purpose of light and air is used. The superadjacent
airspace at this low altitude is so close to the land that continuous invasions of it
affect the use of the surface of the land itself. We think that the landowner, as an
incident to his ownership, has a claim to it and that invasions of it are in the same
category as invasions of the surface. 11
In this case, as in Portsmouth Harbor Land & Hotel Co. v. United States, supra, the
damages were not merely consequential. They were the product of a direct invasion
of respondents' do- [328 U.S. 256, 266] main. As stated in United States v.
Cress, 243 U.S. 316, 328 , 37 S.Ct. 380, 385, '... it is the character of the invasion, not
the amount of damage resulting from it, so long as the damage is substantial, that
determines the question whether it is a taking.'
We said in United States v. Powelson, supra, 319 U.S. at page 279, 63 S.Ct. at page
1054, that while the meaning of 'property' as used in the Fifth Amendment was a
federal question, 'it will normally obtain its content by reference to local law.' If we
look to North Carolina law, we reach the same result. Sovereignty in the airspace rests
in the State 'except where granted to and assumed by the United States.' Gen.Stats.
1943, 63-11. The flight of aircraft is lawful 'unless at such a low altitude as to interfere
with the then existing use to which the land or water, or the space over the land or
water, is put by the owner, or unless so conducted as to be imminently dangerous to
persons or property lawfully on the land or water beneath.' Id., 63-13. Subject to that
right of flight, 'ownership of the space above the lands and waters of this State is
declared to be vested in the several owners of the surface beneath.' Id. 63-12. Our
holding that there was an invasion of respondents' property is thus not inconsistent
with the local law governing a landowner's claim to the immediate reaches of the
superadjacent airspace.
The airplane is part of the modern environment of life, and the inconveniences which
it causes are normally not compensable under the Fifth Amendment. The airspace,
apart from the immediate reaches above the land, is part of the public domain. We
need not determine at this time what those precise limits are. Flights over private
land are not a taking, unless they are so low and so frequent as to be a direct and
immediate interference with the enjoyment and use of the land. We need not
speculate on that phase of the present case. For the findings of the Court [328 U.S.
256, 267] of Claims plainly establish that there was a diminution in value of the
property and that the frequent, low-level flights were the direct and immediate cause.
We agree with the Court of Claims that a servitude has been imposed upon the land.
II. By 145(1) of the Judicial Code, 28 U.S.C. 250(1), 28 U.S.C.A . 250(1), the Court of
Claims has jurisdiction to hear and determine 'All claims (except for pensions)
founded upon the Constitution of the United States or ... upon any contract, express
or implied, with the Government of the United States.'
We need not decide whether repeated trespasses might give rise to an implied
contract. Cf. Portsmouth Harbor Land & Hotel Co. v. United States, supra. If there is a
taking, the claim is 'founded upon the Constitution' and within the jurisdiction of the
Court of Claims to hear and determine. See Hollister v. Benedict & Burnham Mfg.
Co., 113 U.S. 59, 67 , 5 S.Ct. 717, 721; Hurley v. Kincaid, 285 U.S. 95, 104 , 52 S.Ct.

267, 269; Yearsley v. W. A. Ross Construction Co., 309 U.S. 18, 21 , 60 S.Ct. 413, 415.
Thus, the jurisdiction of the Court of Claims in this case is clear.
III. The Court of Claims held, as we have noted, that an easement was taken. But the
findings of fact contain no precise description as to its nature. It is not described in
terms of frequency of flight, permissible altitude, or type of airplane. Nor is there a
finding as to whether the easement taken was temporary or permanent. Yet an
accurate description of the property taken is essential, since that interest vests in the
United States. United States v. Cress, supra, 243 U.S. 328, 329 , 37 S.Ct. 385, 386,
and cases cited. It is true that the Court of Claims stated in its opinion that the
easement taken was permanent. But the deficiency in findings cannot be rectified by
statements in the opinion. United States v. Esnault-Pelterie, 299 U.S. 201, 205 , 206
S., 57 S.Ct. 159, 161, 162; United States v. Seminole Nation, 299 U.S. 417, 422 , 57
S.Ct. 283, 287. Findings of fact on every 'material issue' are a statutory [328 U.S. 256,
268] requirement. 53 Stat. 752, 28 U.S.C. 288, 28 U.S.C.A. 288. The importance of
findings of fact based on evidence is emphasized here by the Court of Claims'
treatment of the nature of the easement. It stated in its opinion that the easement
was permanent because the United States 'no doubt intended to make some sort of
arrangement whereby it could use the airport for its military planes whenever it had
occasion to do so.' (60 F. Supp. 758.) That sounds more like conjecture rather than a
conclusion from evidence; and if so, it would not be a proper foundation for liability of
the United States. We do not stop to examine the evidence to determine whether it
would support such a finding, if made. For that is not our function. United States v.
Esnault-Pelterie, supra, 299 U.S. at page 206, 57 S.Ct. at page 162.
Since on this record it is not clear whether the easement taken is a permanent or a
temporary one, it would be premature for us to consider whether the amount of the
award made by the Court of Claims was proper.
The judgment is reversed and the cause is remanded to the Court of Claims so that it
may make the necessary findings in conformity with this opin on.
REVERSED.
Mr. Justice JACKSON took no part in the consideration or decision of this case.
Mr. Justice BLACK, dissenting.
The Fifth Amendment provides that 'private property' shall not 'be taken for public
use, without just compensation.' The Court holds today that the Government has
'taken' respondents' property by repeatedly flying Army bombers directly above
respondents' land at a height of eighty-three feet where the light and noise from
these planes caused respondents to lose sleep and their chickens to be killed. Since
the effect of the Court's decision is [328 U.S. 256, 269] to limit, by the imposition of
relatively absolute Constitutional barriers, possible future adjustments through
legislation and regulation which might become necessary with the growth of air
transportation, and since in my view the Constitution does not contain such barriers, I
dissent.
The following is a brief statement of the background and of the events that the
Court's opinion terms a 'taking' within the meaning of the Fifth Amendment: Since
1928 there has been an airfield some eight miles from Greensboro, North Carolina. In
April, 1942, this airport was taken over by the Greensboro-High Point Municipal Airport
Authority and it has since then operated as a municipal airport. In 1942 the
Government, by contract, obtained the right to use the field 'concurrently, jointly, and
in common' with other users. Years before, in 1934, respondents had bought their
property, located more than one-third of a mile from the airport. Private planes from
the airport flew over their land and farm buildings from 1934 to 1942 and are still
doing so. But though these planes disturbed respondents to some extent, Army

bombers, which started to fly over the land in 1942 at a height of eighty-three feet,
disturbed them more because they were larger, came over more frequently, made a
louder noise, and at night a greater glare was caused by their lights. This noise and
glare disturbed respondents' sleep, frightened them, and made them nervous. The
noise and light also frightened respondents' chickens so much that many of them flew
against buildings and were killed.
The Court's opinion seems to indicate that the mere flying of planes through the
column of air directly above respondents' land does not constitute a 'taking'.
Consequently, it appears to be noise and glare, to the extent and under the
circumstances shown here, which make the government a seizer of private property.
But the allegation [328 U.S. 256, 270] of noise and glare resulting in damages,
constitutes at best an action in tort where there might be recovery if the noise and
light constituted a nuisance, a violation of a statute,1 or were the result of
negligence. 2 But the Government has not consented to be sued in the Court of
Claims except in actions based on express or implied contract. And there is no implied
contract here, unless by reason of the noise and glare caused by the bombers the
Government can be said to have 'taken' respondents' property in a Constitutional
sense. The concept of taking property as used in the Constitution has heretofore
never been given so sweeping a meaning. The Court's opinion presents no case where
a man who makes noise or shines light onto his neighbor's property has been ejected
from that property for wrongfully taking possession of it. Nor would anyone take
seriously a claim that noisy automobiles passing on a highway are taking wrongful
possession of the homes located thereon, or that a city elevated train which greatly
interferes with the sleep of those who live next to it wrongfully takes their property.
Even the one case in this Court which in considering the sufficiency of a complaint
gave the most elastic meaning to the phrase 'private property be taken' as used in
the Fifth Amendment, did not go so far. Portsmouth Harbor Land & Hotel Co. v. United
States, 260 U.S. [328 U.S. 256, 271] 327, 43 S.Ct. 135. I am not willing, nor do I think
the Constitution and the decisions authorize me to extend that phrase so as to
guarantee an absolute Constitutional right to relief not subject to legislative change,
which is based on averments that at best show mere torts committed by Government
agents while flying over land. The future adjustment of the rights and remedies of
property owners, which might be found necessary because of the flight of planes at
safe altitudes, should, especially in view of the imminent expansion of air navigation,
be left where I think the Constitution left it, with Congress.
Nor do I reach a different conclusion because of the fact that the particular
circumstance which under the Court's opinion makes the tort here absolutely
actionable, is the passing of planes through a column of air at an elevation of eightythree feet directly over respondents' property. It is inconceivable to me that the
Constitution guarantees that the airspace of this Nation needed for air navigation, is
owned by the particular persons who happen to own the land beneath to the same
degree as they own the surface below. 3 No rigid Constitutional rule, in my judgment,
commands that the air must be considered as marked off into separate compartments
by imaginary metes and bounds in order to synchronize air ownership with land
ownership. I think that the Constitution entrusts Congress with full power to control all
navigable airspace. Congress has already acted under that power. It has by statute,
44 Stat. 568, 52 Stat. 973, provided that 'the United States of America is ... to possess
and exercise complete and exclusive national sovereignty in the [328 U.S. 256,
272] air space (over) the United States.' This was done under the assumption that
the Commerce Clause of the Constitution gave Congress the same plenary power to
control navigable airspace as its plenary power over navigable waters. H. Rep. No.
572, 69th Cong., 1st Sess., p. 10; H. Rep. No. 1162, 69th Cong., 1st Sess., p. 14;
United States v. Commodore Park, Inc., 324 U.S. 386 , 65 S.Ct. 803. To make sure that
the airspace used for air navigation would remain free, Congress further declared that
'navigable airspace shall be subject to a public right of freedom of interstate and
foreign air navigation,' and finally stated emphatically that there exists 'a public right

of freedom of transit ... through the navigable airspace of the United States.' Congress
thus declared that the air is free, not subject to private ownership, and not subject to
delimitation by the courts. Congress and those acting under its authority were the
only ones who had power to control and regulate the flight of planes. 'Navigable airspace' was defined as 'airspace above the minimum safe altitudes of flight prescribed
by the Civil Aeronautics Authority.' 49 U.S.C. 180, 49 U.S.C.A. 180. Thus, Congress has
given the Civil Aeronautics Authority exclusive power to determine what is navigable
airspace subject to its exclusive control. This power derives specifically from the
Section which authorizes the Authority to prescribe 'air traffic rules governing the
flight of, and for the navigation, protection, and identification of, aircraft, including
rules as to safe altitudes of flight and rules for the prevention of collisions between
aircraft, and between aircraft and land or water vehicles.' 49 U.S.C.A. 551. Here there
was no showing that the bombers flying over respondents' land violated any rule or
regulation of the Civil Aeronautics Authority. Yet, unless we hold the Act
unconstitutional, at least such a showing would be necessary before the courts could
act without interfering with the exclusive authority which Congress gave to the
administrative agency. Not even a [328 U.S. 256, 273] showing that the Authority
has not acted at all would be sufficient. For in that event, were the courts to have any
authority to act in this case at all, they should stay their hand till the Authority has
acted.
The broad provisions of the Congressional statute cannot properly be circumscribed
by making a distinction as the Court's opinion does between rules of safe altitude of
flight while on the level of cross-country flight and rules of safe altitude during landing
and taking off. First, such a distinction can not be maintained from the practical
standpoint. It is unlikely that Congress intended that the Authority prescribe safe
altitudes for planes making cross-country flights, while at the same time it left the
more hazardous landing and take-off operations unregulated. The legislative history,
moreover, clearly shows that the Authority's power to prescribe air traffic rules
includes the power to make rules governing landing and take-off. Nor is the Court
justified in ignoring that history by labeling rules of safe altitude while on the level of
cross-country flight as rules prescribing the safe altitude proper and rules governing
take-off and landing as rules of operation. For the Conference Report explicitly states
that such distinctions were purposely eliminated from the original House Bill in order
that the Section on air traffic rules 'might be given the broadest construction by the ...
( Civil Aeronautics Authority) ... and the courts.' 4 In construing the statute narrowly
the Court [328 U.S. 256, 274] thwarts the intent of Congress. A proper broad
construction, such as Congress commanded, would not permit the Court to decide
what it has today without declaring the Act of Congress unconstitutional. I think the
Act given the broad construction intended is constitutional.
No greater confusion could be brought about in the coming age of air transportation
than that which would result were courts by Constitutional interpretation to hamper
Congress in its efforts to keep the air free. Old concepts of private ownership of land
should not be introduced into the field of air regulation. I have no doubt that Congress
will, if not handicapped by judicial interpretations of the Constitution, preserve the
freedom of the air, and at the same time, satisfy the just claims of aggrieved persons.
The noise of newer, larger, and more powerful planes may grow louder and louder and
disturb people more and more. But the solution of the problems precipitated by these
technological advances and new ways of living cannot come about through the
application of rigid Constitutional restraints formulated and enforced by the courts.
What adjustments may have to be made, only the future can reveal. It seems certain,
however, [328 U.S. 256, 275] the courts do not possess the techniques or the
personnel to consider and act upon the complex combinations of factors entering into
the problems. The contribution of courts must be made through the awarding of
damages for injuries suffered from the flying of planes, or by the granting of
injunctions to prohibit their flying. When these two simple remedial devices are
elevated to a Constitutional level under the Fifth Amendment, as the Court today

seems to have done, they can stand as obstacles to better adapted techniques that
might be offered by experienced experts and accepted by Congress. Today's opinion
is, I fear, an opening wedge for an unwarranted judicial interference with the power of
Congress to develop solutions for new and vital and national problems. In my opinion
this case should be reversed on the ground that there has been no 'taking' in the
Constitutional sense.
Mr. Justice BURTON joins in this dissent.

3. G.R. No. L-12172

August 29, 1958

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
JUAN F. FAJARDO, ET AL., defendants-appellants.
Assistant Solicitor General Esmeraldo Umali and Higinio V. Catalan for appellee.
Prila, Pardalis and Pejo for appellants.
REYES, J. B. L., J.:
Appeal from the decision of the Court of First Instance of Camarines Sur convicting
defendants-appellants Juan F. Fajardo and Pedro Babilonia of a violation of Ordinance No.
7, Series of 1950, of the Municipality of Baao, Camarines Sur, for having constructed
without a permit from the municipal mayor a building that destroys the view of the public
plaza.
It appears that on August 15, 1950, during the incumbency of defendant-appellant Juan
F. Fajardo as mayor of the municipality of Baao, Camarines Sur, the municipal council
passed the ordinance in question providing as follows:
SECTION 1. Any person or persons who will construct or repair a building should,
before constructing or repairing, obtain a written permit from the Municipal Mayor.
SEC. 2. A fee of not less than P2.00 should be charged for each building permit and
P1.00 for each repair permit issued.
SEC. 3. PENALTY Any violation of the provisions of the above, this ordinance,
shall make the violation liable to pay a fine of not less than P25 nor more than P50
or imprisonment of not less than 12 days nor more than 24 days or both, at the
discretion of the court. If said building destroys the view of the Public Plaza or
occupies any public property, it shall be removed at the expense of the owner of
the building or house.
SEC. 4. EFFECTIVITY This ordinance shall take effect on its approval. (Orig. Recs.,
P. 3)
Four years later, after the term of appellant Fajardo as mayor had expired, he and his son
in-law, appellant Babilonia, filed a written request with the incumbent municipal mayor
for a permit to construct a building adjacent to their gasoline station on a parcel of land
registered in Fajardo's name, located along the national highway and separated from the
public plaza by a creek (Exh. D). On January 16, 1954, the request was denied, for the
reason among others that the proposed building would destroy the view or beauty of the

public plaza (Exh. E). On January 18, 1954, defendants reiterated their request for a
building permit (Exh. 3), but again the request was turned down by the mayor.
Whereupon, appellants proceeded with the construction of the building without a permit,
because they needed a place of residence very badly, their former house having been
destroyed by a typhoon and hitherto they had been living on leased property.
On February 26, 1954, appellants were charged before and convicted by the justice of
the peace court of Baao, Camarines Sur, for violation of the ordinance in question.
Defendants appealed to the Court of First Instance, which affirmed the conviction, and
sentenced appellants to pay a fine of P35 each and the costs, as well as to demolish the
building in question because it destroys the view of the public plaza of Baao, in that "it
hinders the view of travelers from the National Highway to the said public plaza." From
this decision, the accused appealed to the Court of Appeals, but the latter forwarded the
records to us because the appeal attacks the constitutionality of the ordinance in
question.
We find that the appealed conviction can not stand.
A first objection to the validity of the ordinance in question is that under it the mayor has
absolute discretion to issue or deny a permit. The ordinance fails to state any policy, or
to set up any standard to guide or limit the mayor's action. No purpose to be attained by
requiring the permit is expressed; no conditions for its grant or refusal are enumerated. It
is not merely a case of deficient standards; standards are entirely lacking. The ordinance
thus confers upon the mayor arbitrary and unrestricted power to grant or deny the
issuance of building permits, and it is a settled rule that such an undefined and unlimited
delegation of power to allow or prevent an activity, per se lawful, is invalid (People vs.
Vera, 65 Phil., 56; Primicias vs. Fugoso, 80 Phil., 71; Schloss Poster Adv. Co. vs. Rock Hill,
2 SE (2d) 392)
The ordinance in question in no way controls or guides the discretion vested
thereby in the respondents. It prescribes no uniform rule upon which the special
permission of the city is to be granted. Thus the city is clothed with the
uncontrolled power to capriciously grant the privilege to some and deny it others;
to refuse the application of one landowner or lessee and to grant that of another,
when for all material purposes, the two applying for precisely the same privileges
under the same circumstances. The danger of such an ordinance is that it makes
possible arbitrary discriminations and abuses in its execution, depending upon no
conditions or qualifications whatever, other than the unregulated arbitrary will of
the city authorities as the touchstone by which its validity is to be tested.
Fundamental rights under our government do not depend for their existence upon
such a slender and uncertain thread. Ordinances which thus invest a city council
with a discretion which is purely arbitrary, and which may be exercised in the
interest of a favored few, are unreasonable and invalid. The ordinance should have
established a rule by which its impartial enforcement could be secured. All of the
authorities cited above sustain this conclusion.
As was said in City of Richmond vs. Dudley, 129 Ind. 112,28 N. E. 312, 314 13 L. R.
A. 587, 28 Am. St. Rep. 180: "It seems from the foregoing authorities to be well
established that municipal ordinances placing restrictions upon lawful conduct or
the lawful use of property must, in order to be valid, specify the rules and
conditions to be observed in such conduct or business; and must admit of the
exercise of the privilege of all citizens alike who will comply with such rules and
conditions; and must not admit of the exercise, or of an opportunity for the
exercise, of any arbitrary discrimination by the municipal authorities between
citizens who will so comply. (Schloss Poster Adv. Co., Inc. vs. City of Rock Hill, et al.,
2 SE (2d), pp. 394-395).
It is contended, on the other hand, that the mayor can refuse a permit solely in case that
the proposed building "destroys the view of the public plaza or occupies any public
property" (as stated in its section 3); and in fact, the refusal of the Mayor of Baao to
issue a building permit to the appellant was predicated on the ground that the proposed

building would "destroy the view of the public plaza" by preventing its being seen from
the public highway. Even thus interpreted, the ordinance is unreasonable and oppressive,
in that it operates to permanently deprive appellants of the right to use their own
property; hence, it oversteps the bounds of police power, and amounts to a taking of
appellants property without just compensation. We do not overlook that the modern
tendency is to regard the beautification of neighborhoods as conducive to the comfort
and happiness of residents. But while property may be regulated in the interest of the
general welfare, and in its pursuit, the State may prohibit structures offensive to the
sight (Churchill and Tait vs. Rafferty, 32 Phil. 580), the State may not, under the guise of
police power, permanently divest owners of the beneficial use of their property and
practically confiscate them solely to preserve or assure the aesthetic appearance of the
community. As the case now stands, every structure that may be erected on appellants'
land, regardless of its own beauty, stands condemned under the ordinance in question,
because it would interfere with the view of the public plaza from the highway. The
appellants would, in effect, be constrained to let their land remain idle and unused for
the obvious purpose for which it is best suited, being urban in character. To legally
achieve that result, the municipality must give appellants just compensation and an
opportunity to be heard.
An ordinance which permanently so restricts the use of property that it can not be
used for any reasonable purpose goes, it is plain, beyond regulation and must be
recognized as a taking of the property. The only substantial difference, in such
case, between restriction and actual taking, is that the restriction leaves the owner
subject to the burden of payment of taxation, while outright confiscation would
relieve him of that burden. (Arverne Bay Constr. Co. vs. Thatcher (N.Y.) 117 ALR.
1110, 1116).
A regulation which substantially deprives an owner of all beneficial use of his
property is confiscation and is a deprivation within the meaning of the 14th
Amendment. (Sundlum vs. Zoning Bd., 145 Atl. 451; also Eaton vs. Sweeny, 177 NE
412; Taylor vs. Jacksonville, 133 So. 114).
Zoning which admittedly limits property to a use which can not reasonably be
made of it cannot be said to set aside such property to a use but constitutes the
taking of such property without just compensation. Use of property is an element
of ownership therein. Regardless of the opinion of zealots that property may
properly, by zoning, be utterly destroyed without compensation, such principle
finds no support in the genius of our government nor in the principles of justice as
we known them. Such a doctrine shocks the sense of justice. If it be of public
benefit that property remain open and unused, then certainly the public, and not
the private individuals, should bear the cost of reasonable compensation for such
property under the rules of law governing the condemnation of private property for
public use. (Tews vs. Woolhiser (1933) 352 I11. 212, 185 N.E. 827) (Emphasis
supplied.)
The validity of the ordinance in question was justified by the court below under section
2243, par. (c), of the Revised Administrative Code, as amended. This section provides:
SEC. 2243. Certain legislative powers of discretionary character. The municipal
council shall have authority to exercise the following discretionary powers:
xxx

xxx

xxx

(c) To establish fire limits in populous centers, prescribe the kinds of buildings that
may be constructed or repaired within them, and issue permits for the creation or
repair thereof, charging a fee which shall be determined by the municipal council
and which shall not be less than two pesos for each building permit and one peso
for each repair permit issued. The fees collected under the provisions of this
subsection shall accrue to the municipal school fund.

Under the provisions of the section above quoted, however, the power of the municipal
council to require the issuance of building permits rests upon its first establishing fire
limits in populous parts of the town and prescribing the kinds of buildings that may be
constructed or repaired within them. As there is absolutely no showing in this case that
the municipal council had either established fire limits within the municipality or set
standards for the kind or kinds of buildings to be constructed or repaired within them
before it passed the ordinance in question, it is clear that said ordinance was not
conceived and promulgated under the express authority of sec. 2243 (c) aforequoted.
We rule that the regulation in question, Municipal Ordinance No. 7, Series of 1950, of the
Municipality of Baao, Camarines Sur, was beyond the authority of said municipality to
enact, and is therefore null and void. Hence, the conviction of herein appellants is
reversed, and said accused are acquitted, with costs de oficio. So ordered.

4. Richards v. Washington Terminal Co., 233 U.S. 546 (1914)

Richards v. Washington Terminal Company
No. 52
Argued November 7, 1913
Decided May 4, 1914
233 U.S. 546
ERROR TO THE COURT OF APPEALS
OF THE DISTRICT OF COLUMBIA
Syllabus
Although in England, Parliament, being omnipotent, may authorize the taking of private
property for public use without compensation, the English courts decline to place an
unjust construction on its acts, and, unless so clear as not to admit any other meaning,
do not interpret them as interfering with rights of private property.
Legislation of Congress is different from that of Parliament, as it must be construed in the
light of that provision of the Fifth Amendment which forbids the taking of private
property for public use without compensation.
While Congress may legalize, within the sphere of its jurisdiction, what otherwise would
be a public nuisance, it may not confer immunity from action for a private nuisance of
such a character as to amount in effect to a taking of private property for public use.
While the owners of a railroad constructed and operated for the public use, although with
private property for private gain, are not, in the absence of negligence, subject to action
in behalf of owners of neighboring private property for the ordinary damages attributable
to the operation of the railroad, a property owner may be entitled to compensation for
such special damages as devolve exclusively upon his property and not equally upon all
the neighboring property.
In this case, held that an owner of property near the portal of a tunnel in the District of
Columbia constructed under authority of Congress, while not entitled to compensation
for damages caused by the usual gases and smoke emitted from the tunnel by reason of

the proper operation of the railroad, is entitled to compensation for such direct, peculiar
and substantial damages as specially affect his property and diminish its value.
37 App.D.C. 289 reversed.
The facts, which involve the right, under the Fifth Amendment, of an owner to be
compensated for special and peculiar damages to his property by reason of the
operation of a railroad near the premises, are stated in the opinion.
Page 233 U. S. 548
MR. JUSTICE PITNEY delivered the opinion of the Court.
Plaintiff in error, who was plaintiff below, commenced this action in the Supreme Court of
the District of Columbia to recover for the damage to his property resulting from the
maintenance of an alleged nuisance by defendant by means of the operation of a
railroad and tunnel upon its own lands near to, but not adjoining, those of plaintiff.
Defendant having pleaded not guilty, the issue came on for trial by jury, and, at the
conclusion of plaintiff's evidence, a verdict was directed in favor of defendant. The court
of appeals affirmed the judgment (37 App.D.C. 289), and a writ of error brings the
controversy under the review of this Court.
An agreed abridgment of the evidence upon which the ruling of the trial justice was
based is embodied in the bill of exceptions. From this it appears that plaintiff is and has
been since the year 1901 the owner of Lot 34 in Square 693 in the City of Washington,
having a frontage of 20 ft. upon the westerly side of New Jersey Avenue, Southeast, and
an average depth of 81 ft., with improvements thereon consisting of a three-story and
basement brick dwelling house containing ten rooms, known as No. 415 New Jersey
Avenue. The rear windows upon all the floors of the house open in the direction of the
railroad tracks that lead from defendant's tunnel. The south portal of this tunnel opens
within Square 693, and near its Northeasterly corner, and the tunnel extends thence in a
northeasterly direction, passing under the Capitol and Library grounds and First Street
N.E. to the Union Station at Massachusetts Avenue. There are two sets of railroad tracks
in the tunnel and leading from it, and as these emerge from the south portal, they
extend in a general southwesterly direction up an incline or grade across the central
portion of Square 693 on to an elevated structure which carries the tracks over and
beyond South Capitol Street. The tunnel and these tracks are used for the passage of
trains running both northwardly and southwardly, about thirty each day, all of them
being passenger trains with the exception of an occasional shifting engine. The trains
frequently pass in and out of the tunnel without stopping, but trains also very often stop
at or near a switch tower that is situate near the center of Square 693. From the nearest
portion of plaintiff's house to the center of the south portal, the distance in a straight line
is about 114 ft., there being three intervening dwelling houses, two of which have been
purchased and are now owned by defendant? From the rear end of plaintiff's lot to the
middle of the tracks southwestwardly from the portal the distance in a straight line is
about 90 ft. Plaintiff's property has been damaged by the volumes of dense black or gray
smoke, and also by dust and dirt, cinders and gases, emitted from the trains while
passing over the tracks and in or out of the tunnel, or standing upon the tracks near the
signal tower. There is a fanning system installed in the tunnel which causes the gases
and smoke emitted from engines while in the tunnel to be forced out of the south portal,

and these gases and smoke contaminate the air, and also add to the inconvenience
suffered by plaintiff in the occupation of his property. His house was pleasant and
comfortable for purposes of occupation before the construction of the tunnel and tracks,
but since then it has not only depreciated in value, but the tenant removed therefrom,
and plaintiff was obliged to occupy the house himself by reason of his inability to rent it.
The property has depreciated from a value of about $5,500 to about $4,000, and the
rental value from $30 per month to $20 per month. The furniture and other belongings in
the house have been depreciated from a value of $1,200 to $600, all of which
depreciation is due to the presence of smoke, cinders, and gases emitted from passing
trains and from the mouth of the tunnel, which smoke, cinders, and gases enter the
dwelling house and settle upon the furniture and other personal property contained in it,
contaminating the air and rendering the house objectionable as a habitation. The house
has also been damaged by vibrations caused by the movement of trains on the track or
in the tunnel, resulting in cracking the walls and wallpaper, breaking glass in the
windows, and disturbing the peace and slumber of the occupants.
The defendant, the Washington Terminal Company, is the owner of the tunnel and of the
tracks therein, but its ownership of tracks ceases at the south portal. The tracks
extending therefrom in a southwesterly direction are owned and used by other railroad
companies, but the movement of the trains is controlled by defendant.
The tunnel and the tracks leading from it across Square 693 were located and
constructed and are now maintained under the authority of Acts of Congress of February
12, 1901, and February 28, 1903, 31 Stat. 774, c. 354; 32 Stat. 909, c. 856, in
accordance with plans and specifications approved by those acts. No claim is made by
plaintiff that the tunnel, the tracks in Square 693, and the trains operated therein and
thereon were constructed, operated, or maintained in a negligent manner, and it is
conceded that the tunnel and tracks were built upon property acquired by purchase or
condemnation proceedings, and were constructed under authority of the acts of
Congress and of permits issued by the Commissioners of the District of Columbia.
Such being the essential facts to be deduced from the evidence, we have reached the
conclusion, for reasons presently to be stated, that with respect to most of the elements
of damage to which the plaintiff's property has been subjected, the courts below
correctly held them to be damnum absque injuria; but that with respect to such damage
as is attributable to the gases and smoke emitted from locomotive engines while in the
tunnel, and forced out of it by means of the fanning system through a portal located so
near to plaintiff's property that these gases and smoke materially contribute to injure the
furniture and to render the house less habitable than otherwise it would be, there is a
right of recovery.
The acts of Congress referred to, followed by the construction of the tunnel and railroad
tracks substantially in the mode prescribed, had the effect of legalizing the construction
and operation of the railroad, so that its operation, while properly conducted and
regulated, cannot be deemed to be a public nuisance. Yet it is sufficiently obvious that
the acts done by defendant, if done without legislative sanction, would form the subject
of an action by plaintiff to recover damages as for a private nuisance.

At the same time, there is no exclusive and permanent appropriation of any portion of
plaintiff's land, which, indeed, does not even abut upon defendant's property. The acts of
Congress do not in terms provide for the payment of compensation to property owners
damnified through the construction and operation of the tunnel and railroad lines in
question, except to those whose lands, or a portion thereof, were necessarily
appropriated. For damages, whether direct or consequential, to noncontiguous parcels
such as that of plaintiff, there is no express provision. But 9 of the Act of 1903, 32 Stat.
916, c. 856, authorizes the Terminal Company to acquire, by purchase or condemnation,
"the lands and property necessary for all and every the purposes contemplated" by the
several acts of Congress under which the tunnel and railroad were constructed and are
operated. This grant of the power of condemnation is very broad, but it has not been
acted upon by the company in the case of the present plaintiff. And since he is not
wholly excluded from the use and enjoyment of his property, there has been no "taking"
of the land in the ordinary sense.
The courts of England, in a series of decisions, have dealt with the general subject now
under consideration. Rex v. Pease, 4 Barn. & Ad. 30, 40, 1 Nev. & M. 690, 2 L.J. Mag. Cas.
N.S. 26, 22 Eng. Rul. Cas. 71; Vaughan v. Taff Vale R. Co., 5 Hurl. & Nor. 679, 29 L.J. Exch.
247, 1 Eng.Rul.Cas. 296; Jones v. Festiniog Ry. Co., L.R. 3 Q.B. 733; Hammersmith &c. Ry.
Co. v. Brand, L.R. 4 H.L. 171, 38 L.J.Q.B. 265, 1 Eng.Rul.Cas. 623; Metropolitan Asylum
District v. Hill, L.R. 6 App.Cas. 193, 201, 203; London & Brighton Ry. Co. v. Truman, L.R.
11 App.Cas. 45. The rule to be deduced from these cases is that, while no action will lie
for an invasion of private rights necessarily resulting from the establishment and
operation of railways and other public works under the express sanction of an act of
Parliament, yet that such acts are to be strictly construed so as not to impair private
rights unless the legislative purpose to do so appears by express words or necessary
implication. In short, Parliament, being omnipotent, may authorize the taking of private
property for public use without compensation to the owner, but the courts decline to
place an unjust construction upon its acts, and will not interpret them as interfering with
rights of private property unless the language be so clear as to admit of no other
meaning.
But the legislation we are dealing with must be construed in the light of the provision of
the Fifth Amendment -- "Nor shall private property be taken for public use without just
compensation" -- and is not to be given an effect inconsistent with its letter or spirit. The
doctrine of the English cases has been generally accepted by the courts of this country,
sometimes with scant regard for distinctions growing out of the constitutional restrictions
upon legislative action under our system. Thus, it has been said that "a railroad
authorized by law and lawfully operated cannot be deemed a private nuisance;" that
"what the legislature has authorized to be done cannot be deemed unlawful," etc. These
and similar expressions have at times been indiscriminately employed with respect to
public and to private nuisances. We deem the true rule, under the Fifth Amendment, as
under state constitutions containing a similar prohibition, to be that, while the legislature
may legalize what otherwise would be a public nuisance, it may not confer immunity
from action for a private nuisance of such a character as to amount in effect to a taking
of private property for public use. Pennsylvania R. Co. v. Angel, 41 N.J.Eq. 316,
329; Costigan v. Pennsylvania R. Co., 54 N.J.L. 233; Cogswell v. N.Y., N.H. & H. R. Co., 103

N.Y. 10; Garvey v. Long Island R. Co., 159 N.Y. 323; Bohan v. Port Jervis Gas Light Co., 122
N.Y. 18, 29;Sadlier v. City of New York, 81 N.Y.S. 308.
But the question remains, in cases of the class now before us, what is to be deemed a
private nuisance such as amounts to a taking of property? And, by a great and
preponderant weight of judicial authority in those states whose constitutions contain a
prohibition of the taking of private property for public use without compensation,
substantially in the form employed in the Fifth Amendment, it has become established
that railroads constructed and operated for the public use, although with private capital
and for private gain, are not subject to actions in behalf of neighboring property owners
for the ordinary damages attributable to the operation of the railroad, in the absence of
negligence. Such roads are treated as public highways, and the proprietors as public
servants, with the exemption normally enjoyed by such servants from liability to private
suit, so far as concerns the incidental damages accruing to owners of nonadjacent land
through the proper and skillful management and operation of the railways. Any
diminution of the value of property not directly invaded nor peculiarly affected, but
sharing in the common burden of incidental damages arising from the legalized
nuisance, is held not to be a "taking" within the constitutional provision. The immunity is
limited to such damages as naturally and unavoidably result from the proper conduct of
the road and are shared generally by property owners whose lands lie within range of the
inconveniences necessarily incident to proximity to a railroad. It includes the noises and
vibrations incident to the running of trains, the necessary emission of smoke and sparks
from the locomotives, and similar annoyances inseparable from the normal and
nonnegligent operation of a railroad. Transportation Co. v. Chicago,99 U. S. 635, 99 U. S.
641; Beseman v. Pennsylvania R. Co., 50 N.J.L. 235, 240, 13 A. 164, aff'd, 52 N.J.L. 221.
That the constitutional inhibition against the taking of private property for public use
without compensation does not confer a right to compensation upon a landowner, no
part of whose property has been actually appropriated and who has sustained only those
consequential damages that are necessarily incident to proximity to the railroad, has
been so generally recognized that in some of the states (Arkansas, California, Colorado,
Georgia, Illinois, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, South
Dakota, Texas, West Virginia, and Wyoming are, we believe, among the number),
constitutions have been established providing in substance that private property shall
not be taken or damaged for public use without compensation.
The immunity from liability for incidental injuries is attended with a considerable degree
of hardship to the private landowner, and has not been adopted without some judicial
protest. But, as pointed out by Chief Justice Beasley in the Beseman case, 50 N.J.L. at p.
238, if railroad companies were liable to suit for such damages upon the theory that,
with respect to them, the company is a tortfeasor, the practical result would be to bring
the operation of railroads to a standstill. And, on the whole, the doctrine has become so
well established that it amounts to a rule of property, and should be modified, if at all,
only by the lawmaking power.
But the doctrine, being founded upon necessity, is limited accordingly. This Court, in a
leading case that we deem controlling upon the questions now at issue, had occasion to
recognize this, and at the same time to apply the distinction between public and private
nuisances with respect to the private right of action. In Baltimore & Potomac R. Co. v.

Fifth Baptist Church,108 U. S. 317, the Court, while recognizing (p. 108 U. S. 331) that
the legislative authority for operating a railway carried with it an immunity from private
actions based upon those incidental inconveniences that are unavoidably attendant upon
the operation of a railroad, nevertheless sustained the right of action in a case where a
building for housing and repairing locomotive engines was unnecessarily established in
close proximity to a place of public worship, and so used that the noises of the shop and
the rumbling of the locomotive engines passing in and out, the blowing off of steam, the
ringing of bells, the sound of whistles, and the smoke from the chimneys, created a
constant disturbance of the religious exercises. The Court (speaking by Mr. Justice Field)
held that the authority of the company to construct such works as it might deem
necessary and expedient for the completion and maintenance of its road did not
authorize it to place them wherever it might think proper in the city, without reference to
the property and rights of others, and that, whatever the extent of the authority
conferred, it was accompanied with the implied qualification that the works should not be
so placed as by their use to unreasonably interfere with and disturb the peaceful and
comfortable enjoyment of others in their property. In the language of the opinion:
"Grants of privileges or powers to corporate bodies like those in question confer no
license to use them in disregard of the private rights of others, and with immunity for
their invasion."
The reasoning proceeded upon the ground (p. 108 U. S. 332) that no authority conferred
by Congress would justify an invasion of private property to an extent amounting to an
entire deprivation of its use and enjoyment without compensation to the owner,
"nor could such authority be invoked to justify acts creating physical discomfort and
annoyance to others in the use and enjoyment of their property, to a less extent than
entire deprivation, if different places from those occupied could be used by the
corporation for its purposes, without causing such discomfort and annoyance,"
and hence that the legislative authorization conferred exemption only from suit or
prosecution for the public nuisance, and did not affect "any claim of a private citizen for
damages for any special inconvenience and discomfort not experienced by the public at
large."
The present case, in the single particular already alluded to -- that is to say, with respect
to so much of the damage as is attributable to the gases and smoke emitted from
locomotive engines while in the tunnel, and forced out of it by the fanning system
therein installed, and issuing from the portal located near to plaintiff's property in such
manner as to materially contribute to render his property less habitable than otherwise it
would be, and to depreciate it in value, and this without, so far as appears, any real
necessity existing for such damage -- is, in our opinion, within the reason and authority
of the decision just cited. This case differs from that of the Baptist Church in that there,
the railroad company was free to select some other location for the repair shop and
engine house, while here, the evidence shows that the location of the tunnel and its
south portal was established pursuant to law, and not voluntarily chosen by defendant.
This circumstance, however, does not, as we think, afford sufficient ground for a
distinction affecting the result. The case shows that Congress has authorized, and in
effect commanded, defendant to construct its tunnel with a portal located in the midst of

an inhabited portion of the city. The authority, no doubt, includes the use of steam
locomotive engines in the tunnel, with the inevitable concomitants of foul gases and
smoke emitted from the engines. No question is made but that it includes the installation
and operation of a fanning system for ridding the tunnel of this source of discomfort to
those operating the trains and traveling upon them. All this being granted, the special
and peculiar damage to the plaintiff as a property owner in close proximity to the portal
is the necessary consequence, unless, at least, it be feasible to install ventilating shafts
or other devices for preventing the outpouring of gases and smoke from the entire length
of the tunnel at a single point upon the surface, as at present. Construing the acts of
Congress in the light of the Fifth Amendment, they do not authorize the imposition of so
direct and peculiar and substantial a burden upon plaintiff's property without
compensation to him. If the damage is not preventable by the employment at reasonable
expense of devices such as have been suggested, then plaintiff's property is "necessary
for the purposes contemplated," and may be acquired by purchase or condemnation (32
Stat. 916, c. 856, 9), and, pending its acquisition, defendant is responsible. If the
damage is readily preventable, the statute furnishes no excuse, and defendant's
responsibility follows on general principles.
No doubt there will be some practical difficulty in distinguishing between that part of the
damage which is attributable to the gases and smoke emitted from the locomotive
engines while operated upon the railroad tracks adjacent to plaintiff's land, and with
respect to which we hold there is no right of action, and damage that arises from the
gases and smoke that issue from the tunnel, and with respect to which there appears to
be a right of action. How this difficulty is to be solved in order to determine the damages
that should be assessed in this action, or the compensation that should be awarded in
case condemnation proceedings are resorted to, is a question not presented by this
record, and upon which therefore no opinion is expressed.
Judgment reversed and cause remanded to the court of appeals, with directions to
reverse the judgment of the Supreme Court of the District and remand the cause to that
court with directions for a new trial, and for further proceedings in accordance with the
views above expressed.
MR. JUSTICE LURTON dissents.

5. G.R. No. L-20620 August 15, 1974

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
CARMEN M. VDA. DE CASTELLVI, ET AL., defendants-appellees.
Office of the Solicitor General for plaintiff-appellant.
C.A. Mendoza & A. V. Raquiza and Alberto Cacnio & Associates for defendant-appellees.
ZALDIVAR, J.:p
Appeal from the decision of the Court of First Instance of Pampanga in its Civil Case No.
1623, an expropriation proceeding.
Plaintiff-appellant, the Republic of the Philippines, (hereinafter referred to as the
Republic) filed, on June 26, 1959, a complaint for eminent domain against defendantappellee, Carmen M. Vda. de Castellvi, judicial administratrix of the estate of the late
Alfonso de Castellvi (hereinafter referred to as Castellvi), over a parcel of land situated in
the barrio of San Jose, Floridablanca, Pampanga, described as follows:
A parcel of land, Lot No. 199-B Bureau of Lands Plan Swo 23666. Bounded on
the NE by Maria Nieves Toledo-Gozun; on the SE by national road; on the SW
by AFP reservation, and on the NW by AFP reservation. Containing an area of
759,299 square meters, more or less, and registered in the name of Alfonso
Castellvi under TCT No. 13631 of the Register of Pampanga ...;
and against defendant-appellee Maria Nieves Toledo Gozun (hereinafter referred to as
Toledo-Gozun over two parcels of land described as follows:
A parcel of land (Portion Lot Blk-1, Bureau of Lands Plan Psd, 26254. Bounded
on the NE by Lot 3, on the SE by Lot 3; on the SW by Lot 1-B, Blk. 2
(equivalent to Lot 199-B Swo 23666; on the NW by AFP military reservation.
Containing an area of 450,273 square meters, more or less and registered in

the name of Maria Nieves Toledo-Gozun under TCT No. 8708 of the Register
of Deeds of Pampanga. ..., and
A parcel of land (Portion of lot 3, Blk-1, Bureau of Lands Plan Psd 26254.
Bounded on the NE by Lot No. 3, on the SE by school lot and national road,
on the SW by Lot 1-B Blk 2 (equivalent to Lot 199-B Swo 23666), on the NW
by Lot 1-B, Blk-1. Containing an area of 88,772 square meters, more or less,
and registered in the name of Maria Nieves Toledo Gozun under TCT No. 8708
of the Register of Deeds of Pampanga, ....
In its complaint, the Republic alleged, among other things, that the fair market value of
the above-mentioned lands, according to the Committee on Appraisal for the Province of
Pampanga, was not more than P2,000 per hectare, or a total market value of
P259,669.10; and prayed, that the provisional value of the lands be fixed at P259.669.10,
that the court authorizes plaintiff to take immediate possession of the lands upon deposit
of that amount with the Provincial Treasurer of Pampanga; that the court appoints three
commissioners to ascertain and report to the court the just compensation for the
property sought to be expropriated, and that the court issues thereafter a final order of
condemnation.
On June 29, 1959 the trial court issued an order fixing the provisional value of the lands
at P259,669.10.
In her "motion to dismiss" filed on July 14, 1959, Castellvi alleged, among other things,
that the land under her administration, being a residential land, had a fair market value
of P15.00 per square meter, so it had a total market value of P11,389,485.00; that the
Republic, through the Armed Forces of the Philippines, particularly the Philippine Air
Force, had been, despite repeated demands, illegally occupying her property since July 1,
1956, thereby preventing her from using and disposing of it, thus causing her damages
by way of unrealized profits. This defendant prayed that the complaint be dismissed, or
that the Republic be ordered to pay her P15.00 per square meter, or a total of
P11,389,485.00, plus interest thereon at 6% per annum from July 1, 1956; that the
Republic be ordered to pay her P5,000,000.00 as unrealized profits, and the costs of the
suit.
By order of the trial court, dated August, 1959, Amparo C. Diaz, Dolores G. viuda de Gil,
Paloma Castellvi, Carmen Castellvi, Rafael Castellvi, Luis Castellvi, Natividad Castellvi de
Raquiza, Jose Castellvi and Consuelo Castellvi were allowed to intervene as parties
defendants. Subsequently, Joaquin V. Gozun, Jr., husband of defendant Nieves Toledo
Gozun, was also allowed by the court to intervene as a party defendant.
After the Republic had deposited with the Provincial Treasurer of Pampanga the amount
of P259,669.10, the trial court ordered that the Republic be placed in possession of the
lands. The Republic was actually placed in possession of the lands on August 10,
1959. 1
In her "motion to dismiss", dated October 22, 1959, Toledo-Gozun alleged, among other
things, that her two parcels of land were residential lands, in fact a portion with an area
of 343,303 square meters had already been subdivided into different lots for sale to the
general public, and the remaining portion had already been set aside for expansion sites
of the already completed subdivisions; that the fair market value of said lands was
P15.00 per square meter, so they had a total market value of P8,085,675.00; and she
prayed that the complaint be dismissed, or that she be paid the amount of
P8,085,675.00, plus interest thereon at the rate of 6% per annum from October 13,
1959, and attorney's fees in the amount of P50,000.00.
Intervenors Jose Castellvi and Consuelo Castellvi in their answer, filed on February 11,
1960, and also intervenor Joaquin Gozun, Jr., husband of defendant Maria Nieves ToledoGozun, in his motion to dismiss, dated May 27, 1960, all alleged that the value of the
lands sought to be expropriated was at the rate of P15.00 per square meter.

On November 4, 1959, the trial court authorized the Provincial Treasurer of Pampanga to
pay defendant Toledo-Gozun the sum of P107,609.00 as provisional value of her
lands. 2 On May 16, 1960 the trial Court authorized the Provincial Treasurer of Pampanga
to pay defendant Castellvi the amount of P151,859.80 as provisional value of the land
under her administration, and ordered said defendant to deposit the amount with the
Philippine National Bank under the supervision of the Deputy Clerk of Court. In another
order of May 16, 1960 the trial Court entered an order of condemnation. 3
The trial Court appointed three commissioners: Atty. Amadeo Yuzon, Clerk of Court, as
commissioner for the court; Atty. Felicisimo G. Pamandanan, counsel of the Philippine
National Bank Branch at Floridablanca, for the plaintiff; and Atty. Leonardo F. Lansangan,
Filipino legal counsel at Clark Air Base, for the defendants. The Commissioners, after
having qualified themselves, proceeded to the performance of their duties.
On March 15,1961 the Commissioners submitted their report and recommendation,
wherein, after having determined that the lands sought to be expropriated were
residential lands, they recommended unanimously that the lowest price that should be
paid was P10.00 per square meter, for both the lands of Castellvi and Toledo-Gozun; that
an additional P5,000.00 be paid to Toledo-Gozun for improvements found on her land;
that legal interest on the compensation, computed from August 10, 1959, be paid after
deducting the amounts already paid to the owners, and that no consequential damages
be awarded. 4 The Commissioners' report was objected to by all the parties in the case
by defendants Castellvi and Toledo-Gozun, who insisted that the fair market value of
their lands should be fixed at P15.00 per square meter; and by the Republic, which
insisted that the price to be paid for the lands should be fixed at P0.20 per square
meter. 5
After the parties-defendants and intervenors had filed their respective memoranda, and
the Republic, after several extensions of time, had adopted as its memorandum its
objections to the report of the Commissioners, the trial court, on May 26, 1961, rendered
its decision 6 the dispositive portion of which reads as follows:
WHEREFORE, taking into account all the foregoing circumstances, and that
the lands are titled, ... the rising trend of land values ..., and the lowered
purchasing power of the Philippine peso, the court finds that the unanimous
recommendation of the commissioners of ten (P10.00) pesos per square
meter for the three lots of the defendants subject of this action is fair and
just.
xxx xxx xxx
The plaintiff will pay 6% interest per annum on the total value of the lands of
defendant Toledo-Gozun since (sic) the amount deposited as provisional
value from August 10, 1959 until full payment is made to said defendant or
deposit therefor is made in court.
In respect to the defendant Castellvi, interest at 6% per annum will also be
paid by the plaintiff to defendant Castellvi from July 1, 1956 when plaintiff
commenced its illegal possession of the Castellvi land when the instant
action had not yet been commenced to July 10, 1959 when the provisional
value thereof was actually deposited in court, on the total value of the said
(Castellvi) land as herein adjudged. The same rate of interest shall be paid
from July 11, 1959 on the total value of the land herein adjudged minus the
amount deposited as provisional value, or P151,859.80, such interest to run
until full payment is made to said defendant or deposit therefor is made in
court. All the intervenors having failed to produce evidence in support of
their respective interventions, said interventions are ordered dismissed.
The costs shall be charged to the plaintiff.

On June 21, 1961 the Republic filed a motion for a new trial and/or reconsideration, upon
the grounds of newly-discovered evidence, that the decision was not supported by the
evidence, and that the decision was against the law, against which motion defendants
Castellvi and Toledo-Gozun filed their respective oppositions. On July 8, 1961 when the
motion of the Republic for new trial and/or reconsideration was called for hearing, the
Republic filed a supplemental motion for new trial upon the ground of additional newlydiscovered evidence. This motion for new trial and/or reconsideration was denied by the
court on July 12, 1961.
On July 17, 1961 the Republic gave notice of its intention to appeal from the decision of
May 26, 1961 and the order of July 12, 1961. Defendant Castellvi also filed, on July 17,
1961, her notice of appeal from the decision of the trial court.
The Republic filed various ex-parte motions for extension of time within which to file its
record on appeal. The Republic's record on appeal was finally submitted on December 6,
1961.
Defendants Castellvi and Toledo-Gozun filed not only a joint opposition to the approval of
the Republic's record on appeal, but also a joint memorandum in support of their
opposition. The Republic also filed a memorandum in support of its prayer for the
approval of its record on appeal. On December 27, 1961 the trial court issued an order
declaring both the record on appeal filed by the Republic, and the record on appeal filed
by defendant Castellvi as having been filed out of time, thereby dismissing both appeals.
On January 11, 1962 the Republic filed a "motion to strike out the order of December 27,
1961 and for reconsideration", and subsequently an amended record on appeal, against
which motion the defendants Castellvi and Toledo-Gozun filed their opposition. On July
26, 1962 the trial court issued an order, stating that "in the interest of expediency, the
questions raised may be properly and finally determined by the Supreme Court," and at
the same time it ordered the Solicitor General to submit a record on appeal containing
copies of orders and pleadings specified therein. In an order dated November 19, 1962,
the trial court approved the Republic's record on appeal as amended.
Defendant Castellvi did not insist on her appeal. Defendant Toledo-Gozun did not appeal.
The motion to dismiss the Republic's appeal was reiterated by appellees Castellvi and
Toledo-Gozun before this Court, but this Court denied the motion.
In her motion of August 11, 1964, appellee Castellvi sought to increase the provisional
value of her land. The Republic, in its comment on Castellvi's motion, opposed the same.
This Court denied Castellvi's motion in a resolution dated October 2,1964.
The motion of appellees, Castellvi and Toledo-Gozun, dated October 6, 1969, praying
that they be authorized to mortgage the lands subject of expropriation, was denied by
this Court or October 14, 1969.
On February 14, 1972, Attys. Alberto Cacnio, and Associates, counsel for the estate of
the late Don Alfonso de Castellvi in the expropriation proceedings, filed a notice of
attorney's lien, stating that as per agreement with the administrator of the estate of Don
Alfonso de Castellvi they shall receive by way of attorney's fees, "the sum equivalent to
ten per centum of whatever the court may finally decide as the expropriated price of the
property subject matter of the case."
--------Before this Court, the Republic contends that the lower court erred:
1. In finding the price of P10 per square meter of the lands subject of the
instant proceedings as just compensation;

2. In holding that the "taking" of the properties under expropriation

commenced with the filing of this action;
3. In ordering plaintiff-appellant to pay 6% interest on the adjudged value of
the Castellvi property to start from July of 1956;
4. In denying plaintiff-appellant's motion for new trial based on newly
discovered evidence.
In its brief, the Republic discusses the second error assigned as the first issue to be
considered. We shall follow the sequence of the Republic's discussion.
1. In support of the assigned error that the lower court erred in holding that the "taking"
of the properties under expropriation commenced with the filing of the complaint in this
case, the Republic argues that the "taking" should be reckoned from the year 1947 when
by virtue of a special lease agreement between the Republic and appellee Castellvi, the
former was granted the "right and privilege" to buy the property should the lessor wish
to terminate the lease, and that in the event of such sale, it was stipulated that the fair
market value should be as of the time of occupancy; and that the permanent
improvements amounting to more that half a million pesos constructed during a period
of twelve years on the land, subject of expropriation, were indicative of an agreed
pattern of permanency and stability of occupancy by the Philippine Air Force in the
interest of national Security. 7
Appellee Castellvi, on the other hand, maintains that the "taking" of property under the
power of eminent domain requires two essential elements, to wit: (1) entrance and
occupation by condemn or upon the private property for more than a momentary or
limited period, and (2) devoting it to a public use in such a way as to oust the owner and
deprive him of all beneficial enjoyment of the property. This appellee argues that in the
instant case the first element is wanting, for the contract of lease relied upon provides
for a lease from year to year; that the second element is also wanting, because the
Republic was paying the lessor Castellvi a monthly rental of P445.58; and that the
contract of lease does not grant the Republic the "right and privilege" to buy the
premises "at the value at the time of occupancy." 8
Appellee Toledo-Gozun did not comment on the Republic's argument in support of the
second error assigned, because as far as she was concerned the Republic had not taken
possession of her lands prior to August 10, 1959. 9
In order to better comprehend the issues raised in the appeal, in so far as the Castellvi
property is concerned, it should be noted that the Castellvi property had been occupied
by the Philippine Air Force since 1947 under a contract of lease, typified by the contract
marked Exh. 4-Castellvi, the pertinent portions of which read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND ENTERED into by and between
INTESTATE ESTATE OF ALFONSO DE CASTELLVI, represented by CARMEN M.
DE CASTELLVI, Judicial Administratrix ... hereinafter called the LESSOR and
THE REPUBLIC OF THE PHILIPPINES represented by MAJ. GEN. CALIXTO
DUQUE, Chief of Staff of the ARMED FORCES OF THE PHILIPPINES, hereinafter
called the LESSEE,
WITNESSETH:
1. For and in consideration of the rentals hereinafter reserved and the mutual
terms, covenants and conditions of the parties, the LESSOR has, and by
these presents does, lease and let unto the LESSEE the following described
land together with the improvements thereon and appurtenances
thereof, viz:

Un Terreno, Lote No. 27 del Plano de subdivision Psu 34752, parte de la

hacienda de Campauit, situado en el Barrio de San Jose, Municipio de
Floridablanca Pampanga. ... midiendo una extension superficial de cuatro
milliones once mil cuatro cientos trienta y cinco (4,001,435) [sic] metros
cuadrados, mas o menos.
Out of the above described property, 75.93 hectares thereof are actually
occupied and covered by this contract. .
Above lot is more particularly described in TCT No. 1016, province of
Pampanga ...
of which premises, the LESSOR warrants that he/she/they/is/are the registered owner(s)
and with full authority to execute a contract of this nature.
2. The term of this lease shall be for the period beginning July 1, 1952 the
date the premises were occupied by the PHILIPPINE AIR FORCE, AFP until
June 30, 1953, subject to renewal for another year at the option of the
LESSEE or unless sooner terminated by the LESSEE as hereinafter provided.
3. The LESSOR hereby warrants that the LESSEE shall have quiet, peaceful
and undisturbed possession of the demised premises throughout the full
term or period of this lease and the LESSOR undertakes without cost to the
LESSEE to eject all trespassers, but should the LESSOR fail to do so, the
LESSEE at its option may proceed to do so at the expense of the LESSOR.
The LESSOR further agrees that should he/she/they sell or encumber all or
any part of the herein described premises during the period of this lease, any
conveyance will be conditioned on the right of the LESSEE hereunder.
4. The LESSEE shall pay to the LESSOR as monthly rentals under this lease
the sum of FOUR HUNDRED FIFTY-FIVE PESOS & 58/100 (P455.58) ...
5. The LESSEE may, at any time prior to the termination of this lease, use the
property for any purpose or purposes and, at its own costs and expense
make alteration, install facilities and fixtures and errect additions ... which
facilities or fixtures ... so placed in, upon or attached to the said premises
shall be and remain property of the LESSEE and may be removed therefrom
by the LESSEE prior to the termination of this lease. The LESSEE shall
surrender possession of the premises upon the expiration or termination of
this lease and if so required by the LESSOR, shall return the premises in
substantially the same condition as that existing at the time same were first
occupied by the AFP, reasonable and ordinary wear and tear and damages
by the elements or by circumstances over which the LESSEE has no control
excepted: PROVIDED, that if the LESSOR so requires the return of the
premises in such condition, the LESSOR shall give written notice thereof to
the LESSEE at least twenty (20) days before the termination of the lease and
provided, further, that should the LESSOR give notice within the time
specified above, the LESSEE shall have the right and privilege to compensate
the LESSOR at the fair value or the equivalent, in lieu of performance of its
obligation, if any, to restore the premises. Fair value is to be determined as
the value at the time of occupancy less fair wear and tear and depreciation
during the period of this lease.
6. The LESSEE may terminate this lease at any time during the term hereof
by giving written notice to the LESSOR at least thirty (30) days in advance ...
7. The LESSEE should not be responsible, except under special legislation for
any damages to the premises by reason of combat operations, acts of GOD,
the elements or other acts and deeds not due to the negligence on the part
of the LESSEE.

8. This LEASE AGREEMENT supersedes and voids any and all agreements and
undertakings, oral or written, previously entered into between the parties
covering the property herein leased, the same having been merged herein.
This AGREEMENT may not be modified or altered except by instrument in
writing only duly signed by the parties. 10
It was stipulated by the parties, that "the foregoing contract of lease (Exh. 4, Castellvi) is
'similar in terms and conditions, including the date', with the annual contracts entered
into from year to year between defendant Castellvi and the Republic of the Philippines
(p. 17, t.s.n., Vol. III)". 11 It is undisputed, therefore, that the Republic occupied Castellvi's
land from July 1, 1947, by virtue of the above-mentioned contract, on a year to year
basis (from July 1 of each year to June 30 of the succeeding year) under the terms and
conditions therein stated.
Before the expiration of the contract of lease on June 30, 1956 the Republic sought to
renew the same but Castellvi refused. When the AFP refused to vacate the leased
premises after the termination of the contract, on July 11, 1956, Castellvi wrote to the
Chief of Staff, AFP, informing the latter that the heirs of the property had decided not to
continue leasing the property in question because they had decided to subdivide the
land for sale to the general public, demanding that the property be vacated within 30
days from receipt of the letter, and that the premises be returned in substantially the
same condition as before occupancy (Exh. 5 Castellvi). A follow-up letter was sent on
January 12, 1957, demanding the delivery and return of the property within one month
from said date (Exh. 6 Castellvi). On January 30, 1957, Lieutenant General Alfonso
Arellano, Chief of Staff, answered the letter of Castellvi, saying that it was difficult for the
army to vacate the premises in view of the permanent installations and other facilities
worth almost P500,000.00 that were erected and already established on the property,
and that, there being no other recourse, the acquisition of the property by means of
expropriation proceedings would be recommended to the President (Exhibit "7"
Castellvi).
Defendant Castellvi then brought suit in the Court of First Instance of Pampanga, in Civil
Case No. 1458, to eject the Philippine Air Force from the land. While this ejectment case
was pending, the Republic instituted these expropriation proceedings, and, as stated
earlier in this opinion, the Republic was placed in possession of the lands on August 10,
1959, On November 21, 1959, the Court of First Instance of Pampanga, dismissed Civil
Case No. 1458, upon petition of the parties, in an order which, in part, reads as follows:
1. Plaintiff has agreed, as a matter of fact has already signed an agreement
with defendants, whereby she has agreed to receive the rent of the lands,
subject matter of the instant case from June 30, 1966 up to 1959 when the
Philippine Air Force was placed in possession by virtue of an order of the
Court upon depositing the provisional amount as fixed by the Provincial
Appraisal Committee with the Provincial Treasurer of Pampanga;
2. That because of the above-cited agreement wherein the administratrix
decided to get the rent corresponding to the rent from 1956 up to 1959 and
considering that this action is one of illegal detainer and/or to recover the
possession of said land by virtue of non-payment of rents, the instant case
now has become moot and academic and/or by virtue of the agreement
signed by plaintiff, she has waived her cause of action in the above-entitled
case. 12
The Republic urges that the "taking " of Castellvi's property should be deemed as of the
year 1947 by virtue of afore-quoted lease agreement. In American Jurisprudence, Vol. 26,
2nd edition, Section 157, on the subject of "Eminent Domain, we read the definition of
"taking" (in eminent domain) as follows:
Taking' under the power of eminent domain may be defined generally as
entering upon private property for more than a momentary period, and,
under the warrant or color of legal authority, devoting it to a public use, or

otherwise informally appropriating or injuriously affecting it in such a way as

substantially to oust the owner and deprive him of all beneficial enjoyment
thereof. 13
Pursuant to the aforecited authority, a number of circumstances must be present in the
"taking" of property for purposes of eminent domain.
First, the expropriator must enter a private property. This circumstance is present in the
instant case, when by virtue of the lease agreement the Republic, through the AFP, took
possession of the property of Castellvi.
Second, the entrance into private property must be for more than a momentary period.
"Momentary" means, "lasting but a moment; of but a moment's duration" (The Oxford
English Dictionary, Volume VI, page 596); "lasting a very short time; transitory; having a
very brief life; operative or recurring at every moment" (Webster's Third International
Dictionary, 1963 edition.) The word "momentary" when applied to possession or
occupancy of (real) property should be construed to mean "a limited period" not
indefinite or permanent. The aforecited lease contract was for a period of one year,
renewable from year to year. The entry on the property, under the lease, is temporary,
and considered transitory. The fact that the Republic, through the AFP, constructed some
installations of a permanent nature does not alter the fact that the entry into the land
was transitory, or intended to last a year, although renewable from year to year by
consent of 'The owner of the land. By express provision of the lease agreement the
Republic, as lessee, undertook to return the premises in substantially the same condition
as at the time the property was first occupied by the AFP. It is claimed that the intention
of the lessee was to occupy the land permanently, as may be inferred from the
construction of permanent improvements. But this "intention" cannot prevail over the
clear and express terms of the lease contract. Intent is to be deduced from the language
employed by the parties, and the terms 'of the contract, when unambiguous, as in the
instant case, are conclusive in the absence of averment and proof of mistake or fraud
the question being not what the intention was, but what is expressed in the language
used. (City of Manila v. Rizal Park Co., Inc., 53 Phil. 515, 525); Magdalena Estate, Inc. v.
Myrick, 71 Phil. 344, 348). Moreover, in order to judge the intention of the contracting
parties, their contemporaneous and subsequent acts shall be principally considered (Art.
1371, Civil Code). If the intention of the lessee (Republic) in 1947 was really to occupy
permanently Castellvi's property, why was the contract of lease entered into on year to
year basis? Why was the lease agreement renewed from year to year? Why did not the
Republic expropriate this land of Castellvi in 1949 when, according to the Republic itself,
it expropriated the other parcels of land that it occupied at the same time as the
Castellvi land, for the purpose of converting them into a jet air base? 14 It might really
have been the intention of the Republic to expropriate the lands in question at some
future time, but certainly mere notice - much less an implied notice of such intention
on the part of the Republic to expropriate the lands in the future did not, and could not,
bind the landowner, nor bind the land itself. The expropriation must be actually
commenced in court (Republic vs. Baylosis, et al., 96 Phil. 461, 484).
Third, the entry into the property should be under warrant or color of legal authority. This
circumstance in the "taking" may be considered as present in the instant case, because
the Republic entered the Castellvi property as lessee.
Fourth, the property must be devoted to a public use or otherwise informally
appropriated or injuriously affected. It may be conceded that the circumstance of the
property being devoted to public use is present because the property was used by the air
force of the AFP.
Fifth, the utilization of the property for public use must be in such a way as to oust the
owner and deprive him of all beneficial enjoyment of the property. In the instant case,
the entry of the Republic into the property and its utilization of the same for public use
did not oust Castellvi and deprive her of all beneficial enjoyment of the property.
Castellvi remained as owner, and was continuously recognized as owner by the Republic,
as shown by the renewal of the lease contract from year to year, and by the provision in

the lease contract whereby the Republic undertook to return the property to Castellvi
when the lease was terminated. Neither was Castellvi deprived of all the beneficial
enjoyment of the property, because the Republic was bound to pay, and had been
paying, Castellvi the agreed monthly rentals until the time when it filed the complaint for
eminent domain on June 26, 1959.
It is clear, therefore, that the "taking" of Catellvi's property for purposes of eminent
domain cannot be considered to have taken place in 1947 when the Republic
commenced to occupy the property as lessee thereof. We find merit in the contention of
Castellvi that two essential elements in the "taking" of property under the power of
eminent domain, namely: (1) that the entrance and occupation by the condemnor must
be for a permanent, or indefinite period, and (2) that in devoting the property to public
use the owner was ousted from the property and deprived of its beneficial use, were not
present when the Republic entered and occupied the Castellvi property in 1947.
Untenable also is the Republic's contention that although the contract between the
parties was one of lease on a year to year basis, it was "in reality a more or less
permanent right to occupy the premises under the guise of lease with the 'right and
privilege' to buy the property should the lessor wish to terminate the lease," and "the
right to buy the property is merged as an integral part of the lease relationship ... so
much so that the fair market value has been agreed upon, not, as of the time of
purchase, but as of the time of occupancy" 15 We cannot accept the Republic's
contention that a lease on a year to year basis can give rise to a permanent right to
occupy, since by express legal provision a lease made for a determinate time, as was the
lease of Castellvi's land in the instant case, ceases upon the day fixed, without need of a
demand (Article 1669, Civil Code). Neither can it be said that the right of eminent
domain may be exercised by simply leasing the premises to be expropriated (Rule 67,
Section 1, Rules of Court). Nor can it be accepted that the Republic would enter into a
contract of lease where its real intention was to buy, or why the Republic should enter
into a simulated contract of lease ("under the guise of lease", as expressed by counsel
for the Republic) when all the time the Republic had the right of eminent domain, and
could expropriate Castellvi's land if it wanted to without resorting to any guise
whatsoever. Neither can we see how a right to buy could be merged in a contract of
lease in the absence of any agreement between the parties to that effect. To sustain the
contention of the Republic is to sanction a practice whereby in order to secure a low
price for a land which the government intends to expropriate (or would eventually
expropriate) it would first negotiate with the owner of the land to lease the land (for say
ten or twenty years) then expropriate the same when the lease is about to terminate,
then claim that the "taking" of the property for the purposes of the expropriation be
reckoned as of the date when the Government started to occupy the property under the
lease, and then assert that the value of the property being expropriated be reckoned as
of the start of the lease, in spite of the fact that the value of the property, for many good
reasons, had in the meantime increased during the period of the lease. This would be
sanctioning what obviously is a deceptive scheme, which would have the effect of
depriving the owner of the property of its true and fair market value at the time when
the expropriation proceedings were actually instituted in court. The Republic's claim that
it had the "right and privilege" to buy the property at the value that it had at the time
when it first occupied the property as lessee nowhere appears in the lease contract.
What was agreed expressly in paragraph No. 5 of the lease agreement was that, should
the lessor require the lessee to return the premises in the same condition as at the time
the same was first occupied by the AFP, the lessee would have the "right and privilege"
(or option) of paying the lessor what it would fairly cost to put the premises in the same
condition as it was at the commencement of the lease, in lieu of the lessee's
performance of the undertaking to put the land in said condition. The "fair value" at the
time of occupancy, mentioned in the lease agreement, does not refer to the value of the
property if bought by the lessee, but refers to the cost of restoring the property in the
same condition as of the time when the lessee took possession of the property. Such fair
value cannot refer to the purchase price, for purchase was never intended by the parties
to the lease contract. It is a rule in the interpretation of contracts that "However general
the terms of a contract may be, they shall not be understood to comprehend things that

are distinct and cases that are different from those upon which the parties intended to
agree" (Art. 1372, Civil Code).
We hold, therefore, that the "taking" of the Castellvi property should not be reckoned as
of the year 1947 when the Republic first occupied the same pursuant to the contract of
lease, and that the just compensation to be paid for the Castellvi property should not be
determined on the basis of the value of the property as of that year. The lower court did
not commit an error when it held that the "taking" of the property under expropriation
commenced with the filing of the complaint in this case.
Under Section 4 of Rule 67 of the Rules of Court, 16 the "just compensation" is to be
determined as of the date of the filing of the complaint. This Court has ruled that when
the taking of the property sought to be expropriated coincides with the commencement
of the expropriation proceedings, or takes place subsequent to the filing of the complaint
for eminent domain, the just compensation should be determined as of the date of the
filing of the complaint. (Republic vs. Philippine National Bank, L-14158, April 12, 1961, 1
SCRA 957, 961-962). In the instant case, it is undisputed that the Republic was placed in
possession of the Castellvi property, by authority of the court, on August 10, 1959. The
"taking" of the Castellvi property for the purposes of determining the just compensation
to be paid must, therefore, be reckoned as of June 26, 1959 when the complaint for
eminent domain was filed.
Regarding the two parcels of land of Toledo-Gozun, also sought to be expropriated, which
had never been under lease to the Republic, the Republic was placed in possession of
said lands, also by authority of the court, on August 10, 1959, The taking of those lands,
therefore, must also be reckoned as of June 26, 1959, the date of the filing of the
complaint for eminent domain.
2. Regarding the first assigned error discussed as the second issue the Republic
maintains that, even assuming that the value of the expropriated lands is to be
determined as of June 26, 1959, the price of P10.00 per square meter fixed by the lower
court "is not only exhorbitant but also unconscionable, and almost fantastic". On the
other hand, both Castellvi and Toledo-Gozun maintain that their lands are residential
lands with a fair market value of not less than P15.00 per square meter.
The lower court found, and declared, that the lands of Castellvi and Toledo-Gozun are
residential lands. The finding of the lower court is in consonance with the unanimous
opinion of the three commissioners who, in their report to the court, declared that the
lands are residential lands.
The Republic assails the finding that the lands are residential, contending that the plans
of the appellees to convert the lands into subdivision for residential purposes were only
on paper, there being no overt acts on the part of the appellees which indicated that the
subdivision project had been commenced, so that any compensation to be awarded on
the basis of the plans would be speculative. The Republic's contention is not well taken.
We find evidence showing that the lands in question had ceased to be devoted to the
production of agricultural crops, that they had become adaptable for residential
purposes, and that the appellees had actually taken steps to convert their lands into
residential subdivisions even before the Republic filed the complaint for eminent domain.
In the case of City of Manila vs. Corrales (32 Phil. 82, 98) this Court laid down basic
guidelines in determining the value of the property expropriated for public purposes. This
Court said:
In determining the value of land appropriated for public purposes, the same
consideration are to be regarded as in a sale of property between private
parties. The inquiry, in such cases, must be what is the property worth in the
market, viewed not merely with reference to the uses to which it is at the
time applied, but with reference to the uses to which it is plainly adapted,
that is to say, What is it worth from its availability for valuable uses?

So many and varied are the circumstances to be taken into account in

determining the value of property condemned for public purposes, that it is
practically impossible to formulate a rule to govern its appraisement in all
cases. Exceptional circumstances will modify the most carefully guarded rule,
but, as a general thing, we should say that the compensation of the owner is
to be estimated by reference to the use for which the property is suitable,
having regard to the existing business or wants of the community, or such as
may be reasonably expected in the immediate future. (Miss. and Rum River
Boom Co. vs. Patterson, 98 U.S., 403).
In expropriation proceedings, therefore, the owner of the land has the right to its value
for the use for which it would bring the most in the market. 17 The owner may thus show
every advantage that his property possesses, present and prospective, in order that the
price it could be sold for in the market may be satisfactorily determined. 18 The owner
may also show that the property is suitable for division into village or town lots. 19
The trial court, therefore, correctly considered, among other circumstances, the proposed
subdivision plans of the lands sought to be expropriated in finding that those lands are
residential lots. This finding of the lower court is supported not only by the unanimous
opinion of the commissioners, as embodied in their report, but also by the Provincial
Appraisal Committee of the province of Pampanga composed of the Provincial Treasurer,
the Provincial Auditor and the District Engineer. In the minutes of the meeting of the
Provincial Appraisal Committee, held on May 14, 1959 (Exh. 13-Castellvi) We read in its
Resolution No. 10 the following:
3. Since 1957 the land has been classified as residential in view of its
proximity to the air base and due to the fact that it was not being devoted to
agriculture. In fact, there is a plan to convert it into a subdivision for
residential purposes. The taxes due on the property have been paid based on
its classification as residential land;
The evidence shows that Castellvi broached the idea of subdividing her land into
residential lots as early as July 11, 1956 in her letter to the Chief of Staff of the Armed
Forces of the Philippines. (Exh. 5-Castellvi) As a matter of fact, the layout of the
subdivision plan was tentatively approved by the National Planning Commission on
September 7, 1956. (Exh. 8-Castellvi). The land of Castellvi had not been devoted to
agriculture since 1947 when it was leased to the Philippine Army. In 1957 said land was
classified as residential, and taxes based on its classification as residential had been paid
since then (Exh. 13-Castellvi). The location of the Castellvi land justifies its suitability for
a residential subdivision. As found by the trial court, "It is at the left side of the entrance
of the Basa Air Base and bounded on two sides by roads (Exh. 13-Castellvi), paragraphs
1 and 2, Exh. 12-Castellvi), the poblacion, (of Floridablanca) the municipal building, and
the Pampanga Sugar Mills are closed by. The barrio schoolhouse and chapel are also near
(T.S.N. November 23,1960, p. 68)." 20
The lands of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the same condition as the
land of Castellvi. The lands of Toledo-Gozun adjoin the land of Castellvi. They are also
contiguous to the Basa Air Base, and are along the road. These lands are near the barrio
schoolhouse, the barrio chapel, the Pampanga Sugar Mills, and the poblacion of
Floridablanca (Exhs. 1, 3 and 4-Toledo-Gozun). As a matter of fact, regarding lot 1-B it
had already been surveyed and subdivided, and its conversion into a residential
subdivision was tentatively approved by the National Planning Commission on July 8,
1959 (Exhs. 5 and 6 Toledo-Gozun). As early as June, 1958, no less than 32 man
connected with the Philippine Air Force among them commissioned officers, noncommission officers, and enlisted men had requested Mr. and Mrs. Joaquin D. Gozun to
open a subdivision on their lands in question (Exhs. 8, 8-A to 8-ZZ-Toledo-Gozun). 21
We agree with the findings, and the conclusions, of the lower court that the lands that
are the subject of expropriation in the present case, as of August 10, 1959 when the
same were taken possession of by the Republic, were residential lands and were
adaptable for use as residential subdivisions. Indeed, the owners of these lands have the

right to their value for the use for which they would bring the most in the market at the
time the same were taken from them. The most important issue to be resolved in the
present case relates to the question of what is the just compensation that should be paid
to the appellees.
The Republic asserts that the fair market value of the lands of the appellees is P.20 per
square meter. The Republic cites the case of Republic vs. Narciso, et al., L-6594, which
this Court decided on May 18, 1956. The Narciso case involved lands that belonged to
Castellvi and Toledo-Gozun, and to one Donata Montemayor, which were expropriated by
the Republic in 1949 and which are now the site of the Basa Air Base. In the Narciso case
this Court fixed the fair market value at P.20 per square meter. The lands that are sought
to be expropriated in the present case being contiguous to the lands involved in the
Narciso case, it is the stand of the Republic that the price that should be fixed for the
lands now in question should also be at P.20 per square meter.
We can not sustain the stand of the Republic. We find that the price of P.20 per square
meter, as fixed by this Court in the Narciso case, was based on the allegation of the
defendants (owners) in their answer to the complaint for eminent domain in that case
that the price of their lands was P2,000.00 per hectare and that was the price that they
asked the court to pay them. This Court said, then, that the owners of the land could not
be given more than what they had asked, notwithstanding the recommendation of the
majority of the Commission on Appraisal which was adopted by the trial court that
the fair market value of the lands was P3,000.00 per hectare. We also find that the price
of P.20 per square meter in the Narciso case was considered the fair market value of the
lands as of the year 1949 when the expropriation proceedings were instituted, and at
that time the lands were classified as sugar lands, and assessed for taxation purposes at
around P400.00 per hectare, or P.04 per square meter. 22 While the lands involved in the
present case, like the lands involved in the Narciso case, might have a fair market value
of P.20 per square meter in 1949, it can not be denied that ten years later, in 1959, when
the present proceedings were instituted, the value of those lands had increased
considerably. The evidence shows that since 1949 those lands were no longer cultivated
as sugar lands, and in 1959 those lands were already classified, and assessed for
taxation purposes, as residential lands. In 1959 the land of Castellvi was assessed at
P1.00 per square meter. 23
The Republic also points out that the Provincial Appraisal Committee of Pampanga, in its
resolution No. 5 of February 15, 1957 (Exhibit D), recommended the sum of P.20 per
square meter as the fair valuation of the Castellvi property. We find that this resolution
was made by the Republic the basis in asking the court to fix the provisional value of the
lands sought to be expropriated at P259,669.10, which was approved by the court. 24 It
must be considered, however, that the amount fixed as the provisional value of the lands
that are being expropriated does not necessarily represent the true and correct value of
the land. The value is only "provisional" or "tentative", to serve as the basis for the
immediate occupancy of the property being expropriated by the condemnor. The records
show that this resolution No. 5 was repealed by the same Provincial Committee on
Appraisal in its resolution No. 10 of May 14, 1959 (Exhibit 13-Castellvi). In that resolution
No. 10, the appraisal committee stated that "The Committee has observed that the value
of the land in this locality has increased since 1957 ...", and recommended the price of
P1.50 per square meter. It follows, therefore, that, contrary to the stand of the Republic,
that resolution No. 5 of the Provincial Appraisal Committee can not be made the basis for
fixing the fair market value of the lands of Castellvi and Toledo-Gozun.
The Republic further relied on the certification of the Acting Assistant Provincial Assessor
of Pampanga, dated February 8, 1961 (Exhibit K), to the effect that in 1950 the lands of
Toledo-Gozun were classified partly as sugar land and partly as urban land, and that the
sugar land was assessed at P.40 per square meter, while part of the urban land was
assessed at P.40 per square meter and part at P.20 per square meter; and that in 1956
the Castellvi land was classified as sugar land and was assessed at P450.00 per hectare,
or P.045 per square meter. We can not also consider this certification of the Acting
Assistant Provincial Assessor as a basis for fixing the fair market value of the lands of
Castellvi and Toledo-Gozun because, as the evidence shows, the lands in question, in

1957, were already classified and assessed for taxation purposes as residential lands.
The certification of the assessor refers to the year 1950 as far as the lands of ToledoGozun are concerned, and to the year 1956 as far as the land of Castellvi is concerned.
Moreover, this Court has held that the valuation fixed for the purposes of the assessment
of the land for taxation purposes can not bind the landowner where the latter did not
intervene in fixing it. 25
On the other hand, the Commissioners, appointed by the court to appraise the lands that
were being expropriated, recommended to the court that the price of P10.00 per square
meter would be the fair market value of the lands. The commissioners made their
recommendation on the basis of their observation after several ocular inspections of the
lands, of their own personal knowledge of land values in the province of Pampanga, of
the testimonies of the owners of the land, and other witnesses, and of documentary
evidence presented by the appellees. Both Castellvi and Toledo-Gozun testified that the
fair market value of their respective land was at P15.00 per square meter. The
documentary evidence considered by the commissioners consisted of deeds of sale of
residential lands in the town of San Fernando and in Angeles City, in the province of
Pampanga, which were sold at prices ranging from P8.00 to P20.00 per square meter
(Exhibits 15, 16, 17, 18, 19, 20, 21, 22, 23-Castellvi). The commissioners also considered
the decision in Civil Case No. 1531 of the Court of First Instance of Pampanga, entitled
Republic vs. Sabina Tablante, which was expropriation case filed on January 13, 1959,
involving a parcel of land adjacent to the Clark Air Base in Angeles City, where the court
fixed the price at P18.00 per square meter (Exhibit 14-Castellvi). In their report, the
commissioners, among other things, said:
... This expropriation case is specially pointed out, because the
circumstances and factors involved therein are similar in many respects to
the defendants' lands in this case. The land in Civil Case No. 1531 of this
Court and the lands in the present case (Civil Case No. 1623) are both near
the air bases, the Clark Air Base and the Basa Air Base respectively. There is
a national road fronting them and are situated in a first-class municipality. As
added advantage it may be said that the Basa Air Base land is very near the
sugar mill at Del Carmen, Floridablanca, Pampanga, owned by the Pampanga
Sugar Mills. Also just stone's throw away from the same lands is a beautiful
vacation spot at Palacol, a sitio of the town of Floridablanca, which counts
with a natural swimming pool for vacationists on weekends. These
advantages are not found in the case of the Clark Air Base. The defendants'
lands are nearer to the poblacion of Floridablanca then Clark Air Base is
nearer (sic) to the poblacion of Angeles, Pampanga.
The deeds of absolute sale, according to the undersigned commissioners, as
well as the land in Civil Case No. 1531 are competent evidence, because
they were executed during the year 1959 and before August 10 of the same
year. More specifically so the land at Clark Air Base which coincidentally is
the subject matter in the complaint in said Civil Case No. 1531, it having
been filed on January 13, 1959 and the taking of the land involved therein
was ordered by the Court of First Instance of Pampanga on January 15, 1959,
several months before the lands in this case were taken by the plaintiffs ....
From the above and considering further that the lowest as well as the highest
price per square meter obtainable in the market of Pampanga relative to
subdivision lots within its jurisdiction in the year 1959 is very well known by
the Commissioners, the Commission finds that the lowest price that can be
awarded to the lands in question is P10.00 per square meter. 26
The lower court did not altogether accept the findings of the Commissioners based on
the documentary evidence, but it considered the documentary evidence as basis for
comparison in determining land values. The lower court arrived at the conclusion that
"the unanimous recommendation of the commissioners of ten (P10.00) pesos per square
meter for the three lots of the defendants subject of this action is fair and just". 27 In
arriving at its conclusion, the lower court took into consideration, among other

circumstances, that the lands are titled, that there is a rising trend of land values, and
the lowered purchasing power of the Philippine peso.
In the case of Manila Railroad Co. vs. Caligsihan, 40 Phil. 326, 328, this Court said:
A court of first instance or, on appeal, the Supreme Court, may change or
modify the report of the commissioners by increasing or reducing the amount
of the award if the facts of the case so justify. While great weight is attached
to the report of the commissioners, yet a court may substitute therefor its
estimate of the value of the property as gathered from the record in certain
cases, as, where the commissioners have applied illegal principles to the
evidence submitted to them, or where they have disregarded a clear
preponderance of evidence, or where the amount allowed is either palpably
inadequate or excessive. 28
The report of the commissioners of appraisal in condemnation proceedings are not
binding, but merely advisory in character, as far as the court is concerned. 29 In our
analysis of the report of the commissioners, We find points that merit serious
consideration in the determination of the just compensation that should be paid to
Castellvi and Toledo-Gozun for their lands. It should be noted that the commissioners had
made ocular inspections of the lands and had considered the nature and similarities of
said lands in relation to the lands in other places in the province of Pampanga, like San
Fernando and Angeles City. We cannot disregard the observations of the commissioners
regarding the circumstances that make the lands in question suited for residential
purposes their location near the Basa Air Base, just like the lands in Angeles City that
are near the Clark Air Base, and the facilities that obtain because of their nearness to the
big sugar central of the Pampanga Sugar mills, and to the flourishing first class town of
Floridablanca. It is true that the lands in question are not in the territory of San Fernando
and Angeles City, but, considering the facilities of modern communications, the town of
Floridablanca may be considered practically adjacent to San Fernando and Angeles City.
It is not out of place, therefore, to compare the land values in Floridablanca to the land
values in San Fernando and Angeles City, and form an idea of the value of the lands in
Floridablanca with reference to the land values in those two other communities.
The important factor in expropriation proceeding is that the owner is awarded the just
compensation for his property. We have carefully studied the record, and the evidence, in
this case, and after considering the circumstances attending the lands in question We
have arrived at the conclusion that the price of P10.00 per square meter, as
recommended by the commissioners and adopted by the lower court, is quite high. It is
Our considered view that the price of P5.00 per square meter would be a fair valuation of
the lands in question and would constitute a just compensation to the owners thereof. In
arriving at this conclusion We have particularly taken into consideration the resolution of
the Provincial Committee on Appraisal of the province of Pampanga informing, among
others, that in the year 1959 the land of Castellvi could be sold for from P3.00 to P4.00
per square meter, while the land of Toledo-Gozun could be sold for from P2.50 to P3.00
per square meter. The Court has weighed all the circumstances relating to this
expropriations proceedings, and in fixing the price of the lands that are being
expropriated the Court arrived at a happy medium between the price as recommended
by the commissioners and approved by the court, and the price advocated by the
Republic. This Court has also taken judicial notice of the fact that the value of the
Philippine peso has considerably gone down since the year 1959. 30Considering that the
lands of Castellvi and Toledo-Gozun are adjoining each other, and are of the same
nature, the Court has deemed it proper to fix the same price for all these lands.
3. The third issue raised by the Republic relates to the payment of interest.
The Republic maintains that the lower court erred when it ordered the
Republic to pay Castellvi interest at the rate of 6% per annum on the total
amount adjudged as the value of the land of Castellvi, from July 1, 1956 to
July 10, 1959. We find merit in this assignment of error.

In ordering the Republic to pay 6% interest on the total value of the land of Castellvi from
July 1, 1956 to July 10, 1959, the lower court held that the Republic had illegally
possessed the land of Castellvi from July 1, 1956, after its lease of the land had expired
on June 30, 1956, until August 10, 1959 when the Republic was placed in possession of
the land pursuant to the writ of possession issued by the court. What really happened
was that the Republic continued to occupy the land of Castellvi after the expiration of its
lease on June 30, 1956, so much so that Castellvi filed an ejectment case against the
Republic in the Court of First Instance of Pampanga. 31 However, while that ejectment
case was pending, the Republic filed the complaint for eminent domain in the present
case and was placed in possession of the land on August 10, 1959, and because of the
institution of the expropriation proceedings the ejectment case was later dismissed. In
the order dismissing the ejectment case, the Court of First Instance of Pampanga said:
Plaintiff has agreed, as a matter of fact has already signed an agreement
with defendants, whereby she had agreed to receive the rent of the lands,
subject matter of the instant case from June 30, 1956 up to 1959 when the
Philippine Air Force was placed in possession by virtue of an order of the
Court upon depositing the provisional amount as fixed by the Provincial
Appraisal Committee with the Provincial Treasurer of
Pampanga; ...
If Castellvi had agreed to receive the rentals from June 30, 1956 to August 10, 1959, she
should be considered as having allowed her land to be leased to the Republic until
August 10, 1959, and she could not at the same time be entitled to the payment of
interest during the same period on the amount awarded her as the just compensation of
her land. The Republic, therefore, should pay Castellvi interest at the rate of 6% per
annum on the value of her land, minus the provisional value that was deposited, only
from July 10, 1959 when it deposited in court the provisional value of the land.
4. The fourth error assigned by the Republic relates to the denial by the lower court of its
motion for a new trial based on nearly discovered evidence. We do not find merit in this
assignment of error.
After the lower court had decided this case on May 26, 1961, the Republic filed a motion
for a new trial, supplemented by another motion, both based upon the ground of newly
discovered evidence. The alleged newly discovered evidence in the motion filed on June
21, 1961 was a deed of absolute sale-executed on January 25, 1961, showing that a
certain Serafin Francisco had sold to Pablo L. Narciso a parcel of sugar land having an
area of 100,000 square meters with a sugar quota of 100 piculs, covered by P.A. No.
1701, situated in Barrio Fortuna, Floridablanca, for P14,000, or P.14 per square meter.
In the supplemental motion, the alleged newly discovered evidence were: (1) a deed of
sale of some 35,000 square meters of land situated at Floridablanca for P7,500.00 (or
about P.21 per square meter) executed in July, 1959, by the spouses Evelyn D. Laird and
Cornelio G. Laird in favor of spouses Bienvenido S. Aguas and Josefina Q. Aguas; and (2)
a deed of absolute sale of a parcel of land having an area of 4,120,101 square meters,
including the sugar quota covered by Plantation Audit No. 161 1345, situated at
Floridablanca, Pampanga, for P860.00 per hectare (a little less than P.09 per square
meter) executed on October 22, 1957 by Jesus Toledo y Mendoza in favor of the Land
Tenure Administration.
We find that the lower court acted correctly when it denied the motions for a new trial.
To warrant the granting of a new trial based on the ground of newly discovered evidence,
it must appear that the evidence was discovered after the trial; that even with the
exercise of due diligence, the evidence could not have been discovered and produced at
the trial; and that the evidence is of such a nature as to alter the result of the case if
admitted. 32 The lower court correctly ruled that these requisites were not complied with.
The lower court, in a well-reasoned order, found that the sales made by Serafin Francisco
to Pablo Narciso and that made by Jesus Toledo to the Land Tenure Administration were

immaterial and irrelevant, because those sales covered sugarlands with sugar quotas,
while the lands sought to be expropriated in the instant case are residential lands. The
lower court also concluded that the land sold by the spouses Laird to the spouses Aguas
was a sugar land.
We agree with the trial court. In eminent domain proceedings, in order that evidence as
to the sale price of other lands may be admitted in evidence to prove the fair market
value of the land sought to be expropriated, the lands must, among other things, be
shown to be similar.
But even assuming, gratia argumenti, that the lands mentioned in those deeds of sale
were residential, the evidence would still not warrant the grant of a new trial, for said
evidence could have been discovered and produced at the trial, and they cannot be
considered newly discovered evidence as contemplated in Section 1(b) of Rule 37 of the
Rules of Court. Regarding this point, the trial court said:
The Court will now show that there was no reasonable diligence employed.
The land described in the deed of sale executed by Serafin Francisco, copy of
which is attached to the original motion, is covered by a Certificate of Title
issued by the Office of the Register of Deeds of Pampanga. There is no
question in the mind of the court but this document passed through the
Office of the Register of Deeds for the purpose of transferring the title or
annotating the sale on the certificate of title. It is true that Fiscal Lagman
went to the Office of the Register of Deeds to check conveyances which may
be presented in the evidence in this case as it is now sought to be done by
virtue of the motions at bar, Fiscal Lagman, one of the lawyers of the
plaintiff, did not exercise reasonable diligence as required by the rules. The
assertion that he only went to the office of the Register of Deeds 'now and
then' to check the records in that office only shows the half-hazard [sic]
manner by which the plaintiff looked for evidence to be presented during the
hearing before the Commissioners, if it is at all true that Fiscal Lagman did
what he is supposed to have done according to Solicitor Padua. It would have
been the easiest matter for plaintiff to move for the issuance of a
subpoena duces tecum directing the Register of Deeds of Pampanga to come
to testify and to bring with him all documents found in his office pertaining to
sales of land in Floridablanca adjacent to or near the lands in question
executed or recorded from 1958 to the present. Even this elementary
precaution was not done by plaintiff's numerous attorneys.
The same can be said of the deeds of sale attached to the supplementary
motion. They refer to lands covered by certificate of title issued by the
Register of Deeds of Pampanga. For the same reason they could have been
easily discovered if reasonable diligence has been exerted by the numerous
lawyers of the plaintiff in this case. It is noteworthy that all these deeds of
sale could be found in several government offices, namely, in the Office of
the Register of Deeds of Pampanga, the Office of the Provincial Assessor of
Pampanga, the Office of the Clerk of Court as a part of notarial reports of
notaries public that acknowledged these documents, or in the archives of the
National Library. In respect to Annex 'B' of the supplementary motion copy of
the document could also be found in the Office of the Land Tenure
Administration, another government entity. Any lawyer with a modicum of
ability handling this expropriation case would have right away though [sic] of
digging up documents diligently showing conveyances of lands near or
around the parcels of land sought to be expropriated in this case in the
offices that would have naturally come to his mind such as the offices
mentioned above, and had counsel for the movant really exercised the
reasonable diligence required by the Rule' undoubtedly they would have
been able to find these documents and/or caused the issuance of subpoena
duces tecum. ...

It is also recalled that during the hearing before the Court of the Report and
Recommendation of the Commissioners and objection thereto, Solicitor
Padua made the observation:
I understand, Your Honor, that there was a sale that took place in this place
of land recently where the land was sold for P0.20 which is contiguous to this
land.
The Court gave him permission to submit said document subject to the
approval of the Court. ... This was before the decision was rendered, and
later promulgated on May 26, 1961 or more than one month after Solicitor
Padua made the above observation. He could have, therefore, checked up
the alleged sale and moved for a reopening to adduce further evidence. He
did not do so. He forgot to present the evidence at a more propitious time.
Now, he seeks to introduce said evidence under the guise of newlydiscovered evidence. Unfortunately the Court cannot classify it as newlydiscovered evidence, because tinder the circumstances, the correct
qualification that can be given is 'forgotten evidence'. Forgotten however, is
not newly-discovered
evidence. 33
The granting or denial of a motion for new trial is, as a general rule, discretionary with
the trial court, whose judgment should not be disturbed unless there is a clear showing
of abuse of discretion. 34 We do not see any abuse of discretion on the part of the lower
court when it denied the motions for a new trial.
WHEREFORE, the decision appealed from is modified, as follows:
(a) the lands of appellees Carmen Vda. de Castellvi and Maria Nieves ToledoGozun, as described in the complaint, are declared expropriated for public
use;
(b) the fair market value of the lands of the appellees is fixed at P5.00 per
square meter;
(c) the Republic must pay appellee Castellvi the sum of P3,796,495.00 as just
compensation for her one parcel of land that has an area of 759,299 square
meters, minus the sum of P151,859.80 that she withdrew out of the amount
that was deposited in court as the provisional value of the land, with interest
at the rate of 6% per annum from July 10, 1959 until the day full payment is
made or deposited in court;
(d) the Republic must pay appellee Toledo-Gozun the sum of P2,695,225.00
as the just compensation for her two parcels of land that have a total area of
539,045 square meters, minus the sum of P107,809.00 that she withdrew
out of the amount that was deposited in court as the provisional value of her
lands, with interest at the rate of 6%, per annum from July 10, 1959 until the
day full payment is made or deposited in court; (e) the attorney's lien of Atty.
Alberto Cacnio is enforced; and
(f) the costs should be paid by appellant Republic of the Philippines, as
provided in Section 12, Rule 67, and in Section 13, Rule 141, of the Rules of
Court.
IT IS SO ORDERED.
Makalintal, C.J., Barredo, Antonio, Esguerra, Fernandez, Muoz Palma and Aquino, JJ.,
concur.
Castro, Fernando, Teehankee and Makasiar, JJ., took no part.

6. G.R. No. L-15870 December 3, 1919

VISAYAN REFINING COMPANY, DEAN C. WORCESTER, and FRED A.
LEAS, petitioners,
vs.
HON. MANUEL CAMUS, Judge of the Court of First Instance of the Province of
Rizal and HON. QUINTIN PAREDES, Attorney-General of the Philippine
Islands, respondents.
Kincaid and Perkins for petitioners.
Assistant Attorney-General Reyes for respondents.
STREET, J.:
This is an original petition, directed to the Supreme Court, containing an alternative
prayer for a writ of certiorarior prohibition, as the facts may warrant, to stop certain
condemnation proceedings instituted by the Government of the Philippine Islands, and
now pending in the Court of First Instance of the Province of Rizal. The respondents have
interposed what is called an answer, but which is in legal effect merely a demurrer,
challenging the sufficiency of the allegations of the petition. The matter having been
submitted upon oral argument, the cause is now before us for the decision of the
question thus presented.
It appears that upon September 13, 1919, the Governor-General directed the AttorneyGeneral to cause condemnation proceedings to be begun for the purpose of
expropriating a tract of land of an area of about 1,100,463 square meters, commonly
known as the site of Camp Tomas Claudio. Said land is located in the municipality of
Paraaque, Province of Rizal, and lies along the water front of Manila Bay, a few miles
south of the city of Manila. It is stated in communication of the Governor-General that
the property in question is desired by the Government of the Philippine Islands for
military and aviation purposes.
In conformity with the instructions of the Governor-General, condemnation proceedings
were begun by the Attorney-General on September 15, 1919, by filing a complaint in the
name of the Government of the Philippine Islands in the Court of First Instance of the
Province of Rizal. Numerous persons are named in the complaint as defendants because
of their supposed ownership of portions of the property intended to be expropriated. In

the list of persons thus impleaded appear the names of the three petitioners herein,
namely, the Visayan Refining Co., Dean C. Worcester, and Fred A. Leas, who are severally
owners of different portions of the property in question.
In the communication of the Governor-General, the Attorney-General was directed
immediately upon filing the complaint to ask the court to give the Government the
possession of the land to be expropriated, after the necessary deposit should be made as
provided by law. Accordingly in the complaint itself the Attorney-General prayed the
court promptly and provisionally to fix the sum of P600,000 as the total value of the
property and to put the Government in immediate possession when said sum should be
placed at the disposition of the court. An order was accordingly made on September 15,
1919, by the Honorable Judge Manuel Camus, of the Court of First Instance of the
Province of Rizal, fixing the value of the property provisionally at the amount stated and
ordering that the plaintiff be placed in possession, it being made to appear that a
certificate of deposit for the amount stated had been delivered to the provincial
treasurer.
At this stage of the proceedings in the Court of First Instance the three respondents
already mentioned, to wit, the Visayan Refining Co., Dean C. Worcester, and Fred A. Leas,
interposed a demurrer, questioning the validity of the proceedings on the ground that
there is no Act of the Philippine Legislature authorizing the exercise of the power of
eminent domain to acquire land for military or aviation purposes.
Contemporaneously with the filing of their demurrer, the same parties moved the Court
of First Instance to revoke its order of September 15, giving the plaintiff provisional
possession. This motion is based substantially on the same ground as the demurrer, that
is, the lack of legislative authority for the proposed expropriation, but it contains one
additional allegation to the effect that the deposit in court of the sum of P600,000, had
been made without authority of law. In support of this contention it was shown, by means
of an informal communication from the Insular Auditor, that the money in question had
been taken from the unexpended balance of the funds appropriated by Acts Nos. 2748
and 2785 of the Philippine Legislature for the use of the Militia Commission. This
appropriation showed, upon the date said deposit of P600,000 was made, an
unexpended balance of P1,144,672.83.
On October 3, 1919, the Judge of the Court of First Instance overruled the demurrer
interposed by the three parties mentioned and denied their motion to vacate the order
granting possession to the Government. The present proceeding was thereupon
instituted in this Court in the manner and for the purpose already stated.
General authority to exercise the power of eminent domain is expressly conferred on the
Government of the Philippine Islands, as now constituted by section 63 of the Philippine
Bill, which reads as follows:
That the Government of the Philippine Islands is hereby authorized, subject to the
limitation and conditions prescribed in this Act to acquire, receive, hold, maintain,
and convey title to real and personal property, and may acquire real estate for
public uses by the exercise of the right of eminent domain. (Act of Congress of July
1, 1902.)
Section 3 of the Jones Act contains the further provision that "private property shall not
be taken for public use without just compensation." In addition to this there is found in
the same section the familiar provision, already expressed in section 5 of the Philippine
Bill, that no law shall be enacted which shall deprive any person of property without due
process of law, or deny any person the equal protection of the laws. (Acts of Congress of
August 29, 1916, sec. 3.)
Section 64 of the Administrative Code of the Philippine Islands (Act No. 2711) expressly
confers on the Government General the power, among others:

To determine when it is necessary or advantageous to exercise the right of eminent

domain in behalf of the Government of the Philippine Islands; and to direct the
Attorney-General, where such at is deemed advisable, to cause the condemnation
proceedings to be begun in the court having proper jurisdiction.
The procedural provisions relative to the conduct of expropriation proceedings are
contained in section 241 to 253, inclusive, of the Code of Civil Procedure, supplemented
as they are by various later Acts of the Legislature. Among the salient features of the
scheme of expropriation thus created are these: (1) If the court is of the opinion that the
right of expropriation exists, three commissioners are appointed to hear the parties, view
the premises, and assess the damages to be paid for the condemnation (sec. 243 Code
Civ. Proc.); (2) after hearing the evidence submitted by the parties and assessing the
damages in the manner prescribed by law (sec. 244), the commissioners make their
report to the court, setting forth all their proceedings; and it is expressly declared that
"none of their proceedings shall be effectual to bind the property or the parties until the
court shall have accepted their report and rendered judgment in accordance with its
recommendations" (sec. 245); (3) the court then acts upon the report, accepting the
same in whole or in part, or rejecting, recommitting, or setting aside the same, as it sees
fit (sec. 246).
It is further declared in section 246 that
The court . . . may make such final order and judgment as shall secure to the
plaintiff the property essential to the exercise of his rights under the law, and to
the defendant just compensation for the land so taken; and the judgment shall
require payment of the sum awarded as provided in the next section (i.e., sec. 247)
before the plaintiff can enter upon the ground and appropriate it to the public use.
Sections 247 and 251 of the same Code are of sufficient importance in this connection to
warrant quotation in their entirety. They are as follows:
SEC. 247. Rights of Plaintiff After the Judgment. Upon payment by the plaintiff to
the defendant of compensation as fixed by the judgment, or after tender to him of
the amount so fixed and payment of the costs, the plaintiffs shall have the right to
enter in and upon the land so condemned, to appropriate the same to the public
use defined in the judgment. In case the defendant and his attorney absent
themselves from the court or decline to receive the same, payment may be made
to the clerk of the court for him, and such officer shall be responsible on his bond
therefor and shall be compelled to receive it."
SEC. 251. Final Judgment, Its Record and Effect. The record of the final judgment
in such action shall state definitely, by meters and bounds and adequate
description, the particular land or interest in land condemned to the public use,
and the nature of the public use. A certified copy of the record of the judgment
shall be recorded in the office of the registrar of deeds for the province in which
the estate is situated, and its effect shall be to vest in the plaintiff for the public
use stated the land and estate so described.
The provisions which deal with the giving of immediate possession when the
Government of the Philippine Islands is the plaintiff are found in Act No. 2826, which is in
part as follows:
SEC. 2. When condemnation proceedings are instituted by or in favor of the Insular
Government . . . in any competent court of the Philippines, the plaintiff shall be
entitled to enter immediately upon the land covered by such proceedings, after
depositing with the provincial treasurer the value of said land in cash, as previously
and promptly determined and fixed by the competent court, which money the
provincial treasurer shall retain subject to the order and final decision of the
court: Provided, however, That the court may permit that in lieu of cash, there may
be deposited with the provincial treasurer a certificate of deposit of any depository
of the Government of the Philippine Islands, payable to the provincial treasurer on

sight, for the sum ordered deposited by the court. The certificate and the sums
represented by it shall be subject to the order and final decision of the court, and
the court shall have authority to place said plaintiff in possession of the land, upon
such deposit being made, by the proper orders and a mandate, if necessary.
SEC. 3. . . . Upon the payment by the plaintiff to the defendants of the
compensation awarded by the sentence, or after the tender of said sum to the
defendants, and the payment of the costs, or in case the court orders the price to
be paid into court, the plaintiff shall be entitled to appropriate the land so
condemned to the public use specified in the sentence. In case payment is made
to the court, the clerk of the same shall be liable on his bond for the sum so paid
and shall be obliged to receive the same.
In connection with the foregoing provisions found in laws enact under the American
regime is to be considered the following provision of the Civil Code:
ART. 349. No one may be deprived of his property unless it be by competent
authority for some purpose of proven public utility and after payment of the proper
compensation.
Unless this requisite has been complied with, it shall be the duty of the court to
protect the owner of such property in its possession or to restore its possession to
him, as the case may be.
Taken together the laws mentioned supply a very complete scheme of judicial
expropriation, deducing the authority from its ultimate source in sovereignty, providing
in detail for the manner of its exercise, and making the right of the expropriator finally
dependent upon payment of the amount awarded by the court.
As has already been indicated the petition before us proceeds on the idea that the
expropriation proceedings in question cannot be maintained by the Philippine
Government in the absence of a statute authorizing the exercise of the power of eminent
domain for military and aviation purposes; and while it is not urged that a special
legislative Act must be passed every time any particular parcel of property is to be
expropriated, it is
claimed and this really amounts to the same thing that the Government cannot
institute and prosecute expropriation proceedings unless there is already in existence a
legislative appropriation especially destined to pay for the land to be taken.
We are of the opinion that the contentions of the petitioners, in whatever way they may
be understood or expressed, are not well founded. There is one point at least on which
all must agree, namely, that if land can be taken by the Government for a public use at
all, the use intended to be made of the land now in question, that is, for military and
aviation purposes, is a public use. It is undeniable that a military establishment is
essential to the maintenance of organized society, and the courts will take judicial notice
of the recent progress of the military and naval arts resulting from the development of
aeronautics.
The question as to the abstract authority of the Government to maintain expropriation
proceedings upon the initiative of the Governor-General should not be confused with that
which has reference to the necessity for a legislative appropriation. They really involve
different problems and will be separately considered.
Upon the first, we are of the opinion that in this jurisdiction at least expropriation
proceedings may be maintained upon the exclusive initiative of the Governor-General,
without the aid of any special legislative authority other than that already on the statute
books. Furthermore, if the Government complies with the requirements of law relative to
the making of a deposit in court, provisional possession of the property may be at once
given to it, just as is permitted in the case of any other person or entity authorized by
law to exercise the power eminent domain. Special legislative authority for the buying of
a piece of land by the Government is no more necessary than for buying a paper of pain;

and in the case of a forced taking of property against the will of the owner, all that can
be required of the government is that should be able to comply with the conditions laid
down by law as and when those conditions arise.
The contention that the authority to maintain such a proceeding cannot be delegated by
the Legislature to the Chief Executive, is in our opinion wholly erroneous and apparently
has its basis in a misconception of fundamentals. It is recognized by all writers 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.
Philosophers and legists may differ as to the grounds upon which the exercise of this
high power is to be justified, but no one can question its existence. No law, therefore, is
ever necessary to confer this right upon sovereignty or upon any government exercising
sovereign or quasi-sovereign powers.
As is well said by the author of the article on Eminent Domain in the encyclopdic
treaties Ruling Case Law.
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 provisions 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. (10, R. C. L., pp. 11, 12.)
In other words, the provisions now generally found in the modern laws of constitutions of
civilized countries to the effect that private property shall not be taken for public use
without compensation have their origin in the recognition of a necessity for restraining
the sovereign and protecting the individual. Moreover, as will be at once apparent, the
performance of the administrative acts necessary to the exercise of the power of
eminent domain in behalf of the state is lodged by tradition in the Sovereign or other
Chief Executive. Therefore, when the Philippine Legislature declared in section 64 of the
Administrative Code, that the Governor-General, who exercises supreme executive power
in these Islands (sec. 21, Jones Act), should be the person to direct the initiation of
expropriation proceedings, it placed the authority exactly where one would expect to find
it, and we can conceive of no ground upon which the efficacy of the statute can
reasonably be questioned.
We would not of course pretend that, under our modern system of Government, in which
the Legislature plays so important a role, the executive department could, without the
authority of some statute, proceed to condemn property for its own uses; because the
traditional prerogatives of the sovereign are not often recognized nowadays as a valid
source of power, at least in countries organized under republican forms of government.
Nevertheless it may be observed that the real check which the modern Legislature exerts
over the Executive Department, in such a matter as this, lies not so much in the
extinction of the prerogative as in the fact the hands of the Executive can always be
paralyzed by lack of money something which is ordinarily supplied only by the
Legislature.
At any rate the conclusion is irresistible that where the Legislature has expressly
conferred the authority to maintain expropriation proceedings upon the Chief Executive,
the right of the latter to proceed therein is clear. As is said by the author of the article
from which we have already quoted, "Once authority is given to exercise the power of
eminent domain, the matter ceases to be wholly legislative. The executive authorities
may then decide whether the power will be invoked and to what extent." (10 R. C. L., p.
14.)
The power of eminent domain, with respect to the conditions under which the property is
taken, must of course be exercised in subjection to all the restraints imposed by
constitutional or organic law. The two provisions by which the exercise of this power is
chiefly limited in this jurisdiction are found in the third section of the Jones Act, already
mentioned, which among other things declares (1) that no law shall be enacted which

shall deprive any person of property without due process of law and (2) that private
property shall not be taken for public use without just compensation. The latter of these
provisions is directly aimed at the taking of property under the exercise of the power of
eminent domain; and as this requirement, in connection with the statutes enacted to
make sure the payment of compensation, usually affords all the protection that the
owner of property can claim, it results that the due process clause is rarely invoked by
the owner in expropriation proceedings.
Nevertheless it should be noted that the whole problem of expropriation is resolvable in
its ultimate analysis into a constitutional question of due process of law. The specific
provisions that just compensation shall be made is merely in the nature of a superadded
requirement to be taken into account by the Legislature in prescribing the method of
expropriation. Even were there no organic or constitutional provision in force requiring
compensation to be paid, the seizure of one's property without payment, even though
intended for a public use, would undoubtedly be held to be a taking without due process
of law and a denial of the equal protection of the laws.
This point is not merely an academic one, as might superficially seem. On the contrary it
has a practical bearing on the problem before us, which may be expressed by saying
that, if the Legislature has prescribed a method of expropriation which provides for the
payment of just compensation and such method is so conceived and adapted as to fulfill
the constitutional requisite of due process of law, any proceeding conducted in
conformity with that method must be valid.lawphi1.net
These considerations are especially important to be borne in mind in connection with the
second contention made by counsel for the petitioners, namely, that land cannot be
expropriated by the Government in the absence of a legislative appropriation especially
destined to pay for the land to be taken. To this question we now address ourselves; and
while we bear in mind the cardinal fact that just compensation must be made, the
further fact must not be overlooked that there is no organic or constitutional provision in
force in these lands Islands requiring that compensation shall actually be paid prior to
the judgment of condemnation.
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 assurance that no piece of land can be finally and
irrevocably taken from an unwilling owner until compensation is paid. It is true that in
rare instances the proceedings may be voluntarily abandoned before the expropriation is
complete or the proceedings may fail because the expropriator becomes insolvent, in
either of which cases the owner retains the property; and if possession has been
prematurely obtained by the plaintiff in the proceedings, it must be restored. It will be
noted that the title does not actually pass to the expropriator until a certified copy of the
record of the judgment is recorded in the office of the register of deeds (sec. 251, Code
Civ. Proc.). Before this stage of the proceedings is reached the compensation is supposed
to have been paid; and the court is plainly directed to make such final order and
judgment as shall secure to the defendant just compensation for the land taken. (Sec.
246, Code Civ. Proc.). Furthermore, the right of the expropriator is finally made
dependent absolutely upon the payment of compensation by him. (Sec. 3, Act No. 2826;
sec. 247, Code Civ. Proc.).
It will be observed that the scheme of expropriation exemplified in our statutes does not
primarily contemplate the giving of a personal judgment for the amount of the award
against the expropriator; the idea is rather to protect the owner by requiring payment as
a condition precedent to the acquisition of the property by the other party. The power of
the court to enter a judgment for the money and to issue execution thereon against the
plaintiff is, however, unquestioned; and the court can without doubt proceed in either
way. But whatever course be pursued the owner is completely protected from the
possibility of losing his property without compensation.
When the Government is plaintiff the judgment will naturally take the form of an order
merely requiring the payment of the award as a condition precedent to the transfer of

the title, as a personal judgment against the Government could not be realized upon
execution. It is presumed that by appearing as plaintiff in condemnation proceedings, the
Government submits itself to the jurisdiction of the court and thereby waives its
immunity from suit. As a consequence it would be theoretically subject to the same
liability as any other expropriator. Nevertheless, the entering of a personal judgment
against it would be an unnecessary, as well as profitless formality.
In the face of the elaborate safeguards provided in our procedure, it is frivolous to
speculate upon the possibility that the Legislature may finally refuse to appropriate any
additional amount, over and above the provisional deposit, that may be necessary to pay
the award. That it may do. But the Government can not keep the land and dishonor the
judgment. Moreover, in the eventuality that the expropriation shall not be consummated,
the owners will be protected by the deposit from any danger of loss resulting from the
temporary occupation of the land by the Government; for it is obvious that this
preliminary deposit serves the double purpose of a prepayment upon the value of the
property, if finally expropriated and as an indemnity against damage in the eventuality
that the proceedings should fail of consummation.
It appears that the money represented by the certificate of deposit which was placed at
the disposal of the lower court, pursuant to the requirements of section 2 of Act No.
2826, was taken from certain appropriations under the control of the Militia Commission,
a body created by section 29 of Act No. 2715, for the purpose, among others, of advising
the Governor-General upon measures relative to the organization equipment, and
government of the National Guard and reserve militia. Counsel for the petitioners say
that money appropriated for the purpose of the Militia Commission cannot be lawfully
used to acquire the land which is now the subject of expropriation, because no authority
for the exercise of the power of eminent domain is to be found in any of the Acts
appropriating money for said Commission; from whence it is argued that the certificate
of deposit affords no protection to the owners of property.
The point appears to be one of little general importance, and we will not multiply words
over it. Suffice it to say that in our opinion the Insular Auditor was acting within his
authority when he let this money out of the Insular Treasury; and being now within the
control of the lower court, it will doubtless in due time be applied to the purpose for
which the deposit was made.
From the foregoing discussion it is apparent that the action taken by the lower court in
the condemnation proceedings aforesaid was in all respects regular and within the
jurisdiction of the court. The writ prayed for in the petition before us, therefore, can not
be issued. The application is accordingly denied, with costs against the petitioners.
Arellano, C.J., Torres, Araullo and Avancea, JJ., concur.
Johnson, J., reserves the right to prepare a separate opinion.
Separate Opinions
MALCOLM, J., concurring:
I agree with the conclusion arrived at in the majority decision. I am clearly of the opinion
that the alternative application for a writ of certiorari or prohibition should not be
granted. An analysis into their simplest elements of the various questions presented may
easily be made as follows: 1. The power of the Philippine Government in eminent
domain; (2) The constitutional prohibition that (A) private property (B) shall not be taken
for public use (C) without just compensation; and 3. The constitutional prohibition that no
money shall be paid out of the treasury except in pursuance of an appropriation by law.
1. The power of eminent domain is expressly vested in the Government of the Philippine
Islands be section 63 of the Act of Congress of July 1, 1902, commonly known as the
Philippine Bill. The Philippine Legislature has, in turn by section 64 (h) of the
Administrative Code of 1917, expressly delegated to the Governor-General the specific
power and duty to determine when it is necessary or advantageous to exercise the right

of eminent domain in behalf of the Government of the Philippine Islands. This delegation
of legislative power to the Governor-General was authorized in view of the nature of
eminent domain, which necessitates administrative agents for its execution, in view of
the previous attitude assumed by the Judiciary with relation to similar delegations of
power, and in view of the undeniable fact that the Governor-General is a part of the
same Government of the Philippine Islands to which was transferred the right of eminent
domain by the Congress of the United States. (See Government of the Philippine
Islands vs. Municipality of Binangonan [1916], 34 Phil. 518.) When, therefore, the
Governor-General directed the Attorney-General to cause condemnation proceedings to
be begun in the Court of First Instance of Rizal with the object of having the Government
obtain title to the site commonly known as "Camp Tomas Claudio," the Governor-General
was merely acting as a mouthpiece of American sovereignty, pursuant to a delegated
power transmitted by the Congress of the United States to the Government of the
Philippine Islands and lodged by this latter Government in the Chief Executive. Any other
holding would mean that section 64 (h) of the Administrative Code is invalid, a result to
be avoided.lawphi1.net
2. In the existing Philippine Bill of Rights (last sentence, paragraph 1, section 3, Act of
Congress of August 29, 1916) is a provision that "private property shall not be taken for
public use without just compensation." It seems undeniable (A) that Camp Claudio was
"private property," and (B) that it was being "taken for public use," namely, for military
and aviation purposes. The only remaining point concerns "just compensation," which
can better be discussed under our division 3.
3. Another provision of the Philippine Bill of Rights (paragraph 15, section 3, Act of
Congress of August 29, 1916) is, "that no money shall be paid out of the treasury except
in pursuance of an appropriation by law." The same Auditor who shall "audit, in
accordance with law and administrative regulations, all expenditure of funds or property
pertaining to, or held in trust, by the Government." His administrative jurisdiction is
made "exclusive." The Philippine Legislature could, of course, have specifically
appropriated an amount for the purchase of the Camp Claudio site just as it could have
specifically enacted a law for the condemnation of such site, but instead it preferred to
include in the general Appropriation Acts, under the heads of The Philippine National
Guard or Philippine Militia, a large amount to be expended in the discretion of the Militia
Commission, which may "use the funds appropriated for other purposes, as the efficiency
of the service may require." This transfer of power of the Militia Commission, like the
delegation of some of the general legislative power to the Governor-General, raises no
constitutional bar. The Insular Auditor has stated that there is in the treasury over a
million pesos available for the condemnation of Camp Claudio, and this decision for
present purposes must be taken as final and conclusive. The six hundred thousand pesos
deposit is merely the provisional determination of the value of the land by the competent
court, and in no way jeopardizes the financial interests of the owners of the property. No
additional security is required since the sovereign power has waived its right to be sued,
has pledged the public faith, and cannot obtain title until the owners receive just
compensation for their property. (See Sweet vs. Rechel [1895], 159 U. S., 380.)
In resume, therefore, the Governor-General of the Philippine Islands had the right to
authorize the condemnation of this land for military and aviation purposes, and no
constitutional provision has been violated. The Court of First Instance of Rizal has merely
acted in strict accord with law, and its action should, consequently, be sustained.

7. G.R. No. L-2089

October 31, 1949

JUSTA G. GUIDO, petitioner,

vs.
RURAL PROGRESS ADMINISTRATION, c/o FAUSTINO AGUILAR, Manager, Rural
Progress Administration,respondent.
Guillermo B. Guevara for petitioner.
Luis M. Kasilag and Lorenzo B. Vizconde for respondent.
TUASON, J.:
This a petition for prohibition to prevent the Rural Progress Administration and Judge
Oscar Castelo of the Court of First Instance of Rizal from proceeding with the
expropriation of the petitioner Justa G. Guido's land, two adjoining lots, part commercial,
with a combined area of 22,655 square meters, situated in Maypajo, Caloocan, Rizal, just
outside the north Manila boundary, on the main street running from this city to the north.
Four grounds are adduced in support of the petition, to wit:
(1) That the respondent RPA (Rural Progress Administration) acted without
jurisdiction or corporate power in filling the expropriation complaint and has no
authority to negotiate with the RFC a loan of P100,000 to be used as part payment
of the value of the land.
(2) That the land sought to be expropriated is commercial and therefore excluded
within the purview of the provisions of Act 539.
(3) That majority of the tenants have entered with the petitioner valid contracts for
lease, or option to buy at an agreed price, and expropriation would impair those
existing obligation of contract.
(4) That respondent Judge erred in fixing the provisional value of the land at
P118,780 only and in ordering its delivery to the respondent RPA.
We will take up only ground No. 2. Our conclusion on this branch of the case will make
superfluous a decision on the other questions raised.

Sections 1 and 2 of Commonwealth Act No. 539, copied verbatim, are as follows:
SECTION 1. The President of the Philippines is authorized to acquire private lands
or any interest therein, through purchaser or farms for resale at reasonable prices
and under such conditions as he may fix to theirbona fide tenants or occupants or
to private individuals who will work the lands themselves and who are qualified to
acquire and own lands in the Philippines.
SEC. 2. The President may designated any department, bureau, office, or
instrumentality of the National Government, or he may organize a new agency to
carry out the objectives of this Act. For this purpose, the agency so created or
designated shall be considered a public corporation.
The National Assembly approved this enactment on the authority of section 4 of Article
XIII of the Constitution which, copied verbatim, is as follows:
The Congress may authorize, upon payment of just compensation, the
expropriation of lands to be subdivided into small lots and conveyed at cost to
individuals.
What lands does this provision have in view? Does it comprehend all lands regardless of
their location, nature and area? The answer is to be found in the explanatory statement
of Delegate Miguel Cuaderno, member of the Constitutional Convention who was the
author or sponsor of the above-quoted provision. In this speech, which was entitled
"Large Estates and Trust in Perpetuity" and is transcribed in full in Aruego's "The Framing
of the Philippine Constitution," Mr. Cuaderno said:
There has been an impairment of public tranquility, and to be sure a continuous of
it, because of the existence of these conflicts. In our folklore the oppression and
exploitation of the tenants are vividly referred to; their sufferings at the hand of
the landlords are emotionally pictured in our drama; and even in the native movies
and talkies of today, this theme of economic slavery has been touched upon. In
official documents these same conflicts are narrated and exhaustively explained as
a threat to social order and stability.
But we should go to Rizal inspiration and illumination in this problem of this
conflicts between landlords and tenants. The national hero and his family were
persecuted because of these same conflicts in Calamba, and Rizal himself met a
martyr's death because of his exposal of the cause of the tenant class, because he
would not close his eyes to oppression and persecution with his own people as
victims.lawphi1.nt
I ask you, gentlemen of the Convention, knowing this as you do and feeling deeply
as you must feel a regret over the immolation of the hero's life, would you not
write in the Constitution the provision on large estates and trust in perpetuity, so
that you would be the very instrument of Providence to complete the labors of
Rizal to insure domestic tranquility for the masses of our people?
If we are to be true to our trust, if it is our purpose in drafting our constitution to
insure domestic tranquility and to provide for the well-being of our people, we
cannot, we must fail to prohibit the ownership of large estates, to make it the duty
of the government to break up existing large estates, and to provide for their
acquisition by purchase or through expropriation and sale to their occupants, as
has been provided in the Constitutions of Mexico and Jugoslavia.
No amendment was offered and there was no debate. According to Dean Aruego, Mr.
Cuaderno's resolution was readily and totally approved by the Convention. Mr.
Cuaderno's speech therefore may be taken as embodying the intention of the framers of
the organic law, and Act No. 539 should be construed in a manner consonant with that
intention. It is to be presumed that the National Assembly did not intend to go beyond
the constitutional scope of its powers.

There are indeed powerful considerations, aside from the intrinsic meaning of section 4
of Article XIII of the Constitution, for interpreting Act No. 539 in a restrictive sense.
Carried to extremes, this Act would be subversive of the Philippine political and social
structure. It would be in derogation of individual rights and the time-honored
constitutional guarantee that no private property of law. The protection against
deprivation of property without due process for public use without just compensation
occupies the forefront positions (paragraph 1 and 2) in the Bill for private use relieves
the owner of his property without due process of law; and the prohibition that "private
property should not be taken for public use without just compensation" (Section 1 [par.
2], Article III, of the Constitution) forbids necessary implication the appropriation of
private property for private uses (29 C.J.S., 819). It has been truly said that the assertion
of the right on the part of the legislature to take the property of and citizen and transfer
it to another, even for a full compensation, when the public interest is not promoted
thereby, is claiming a despotic power, and one inconsistent with very just principle and
fundamental maxim of a free government. (29 C.J.S., 820.)
Hand in hand with the announced principle, herein invoked, that "the promotion of social
justice to insure the well-being and economic security of all the people should be the
concern of the state," is a declaration, with which the former should be reconciled, that
"the Philippines is a Republican state" created to secure to the Filipino people "the
blessings of independence under a regime of justice, liberty and democracy."
Democracy, as a way of life enshrined in the Constitution, embraces as its necessary
components freedom of conscience, freedom of expression, and freedom in the pursuit of
happiness. Along with these freedoms are included economic freedom and freedom of
enterprise within reasonable bounds and under proper control. In paving the way for the
breaking up of existing large estates, trust in perpetuity, feudalism, and their
concomitant evils, the Constitution did not propose to destroy or undermine the property
right or to advocate equal distribution of wealth or to authorize of what is in excess of
one's personal needs and the giving of it to another. Evincing much concern for the
protection of property, the Constitution distinctly recognize the preferred position which
real estate has occupied in law for ages. Property is bound up with every aspects of
social life in a democracy as democracy is conceived in the Constitution. The
Constitution owned in reasonable quantities and used legitimately, plays in the
stimulation to economic effort and the formation and growth of a social middle class that
is said to be the bulwark of democracy and the backbone of every progressive and happy
country.
The promotion of social justice ordained by the Constitution does not supply paramount
basis for untrammeled expropriation of private land by the Rural Progress Administration
or any other government instrumentality. Social justice does not champion division of
property or equality of economic status; what it and the Constitution do guaranty are
equality of opportunity, equality of political rights, equality before the law, equality
between values given and received on the basis of efforts exerted in their production. As
applied to metropolitan centers, especially Manila, in relation to housing problems, it is a
command to devise, among other social measures, ways and means for the elimination
of slums, shambles, shacks, and house that are dilapidated, overcrowded, without
ventilation. light and sanitation facilities, and for the construction in their place of decent
dwellings for the poor and the destitute. As will presently be shown, condemnation of
blighted urban areas bears direct relation to public safety health, and/or morals, and is
legal.
In reality, section 4 of Article XIII of the Constitution is in harmony with the Bill of Rights.
Without that provision the right of eminent domain, inherent in the government, may be
exercised to acquire large tracts of land as a means reasonably calculated to solve
serious economic and social problem. As Mr. Aruego says "the primary reason" for Mr.
Cuaderno's recommendation was "to remove all doubts as to the power of the
government to expropriation the then existing landed estates to be distributed at costs
to the tenant-dwellers thereof in the event that in the future it would seem such
expropriation necessary to the solution of agrarian problems therein."

In a broad sense, expropriation of large estates, trusts in perpetuity, and land that
embraces a whole town, or a large section of a town or city, bears direct relation to the
public welfare. The size of the land expropriated, the large number of people benefited,
and the extent of social and economic reform secured by the condemnation, clothes the
expropriation with public interest and public use. The expropriation in such cases tends
to abolish economic slavery, feudalistic practices, and other evils inimical to community
prosperity and contentment and public peace and order. Although courts are not in
agreement as to the tests to be applied in determining whether the use is public or not,
some go far in the direction of a liberal construction as to hold that public advantage,
and to authorize the exercise of the power of eminent domain to promote such public
benefit, etc., especially where the interest involved are considerable magnitude. (29
C.J.S., 823, 824. See also People of Puerto Rico vs.Eastern Sugar Associates, 156 Fed.
[2nd], 316.) In some instances, slumsites have been acquired by condemnation. The
highest court of New York States has ruled that slum clearance and reaction of houses for
low-income families were public purposes for which New York City Housing authorities
could exercise the power of condemnation. And this decision was followed by similar
ones in other states. The underlying reasons for these decisions are that the destruction
of congested areas and insanitary dwellings diminishes the potentialities of epidemic,
crime and waste, prevents the spread of crime and diseases to unaffected areas,
enhances the physical and moral value of the surrounding communities, and promotes
the safety and welfare of the public in general. (Murray vs. La Guardia, 52 N.E. [2nd],
884; General Development Coop. vs. City of Detroit, 33 N.W. [2ND], 919;
Weizner vs. Stichman, 64 N.Y.S. [2nd], 50.) But it will be noted that in all these case and
others of similar nature extensive areas were involved and numerous people and the
general public benefited by the action taken.
The condemnation of a small property in behalf of 10, 20 or 50 persons and their families
does not inure to the benefit of the public to a degree sufficient to give the use public
character. The expropriation proceedings at bar have been instituted for the economic
relief of a few families devoid of any consideration of public health, public peace and
order, or other public advantage. What is proposed to be done is to take plaintiff's
property, which for all we know she acquired by sweat and sacrifice for her and her
family's security, and sell it at cost to a few lessees who refuse to pay the stipulated rent
or leave the premises.
No fixed line of demarcation between what taking is for public use and what is not can be
made; each case has to be judge according to its peculiar circumstances. It suffices to
say for the purpose of this decision that the case under consideration is far wanting in
those elements which make for public convenience or public use. It is patterned upon an
ideology far removed from that consecrated in our system of government and embraced
by the majority of the citizens of this country. If upheld, this case would open the gates
to more oppressive expropriations. If this expropriation be constitutional, we see no
reason why a 10-, 15-, or 25-hectare farm land might not be expropriated and
subdivided, and sold to those who want to own a portion of it. To make the analogy
closer, we find no reason why the Rural Progress Administration could not take by
condemnation an urban lot containing an area of 1,000 or 2,000 square meters for
subdivision into tiny lots for resale to its occupants or those who want to build thereon.
The petition is granted without special findings as to costs.
Moran, C.J., Feria, Bengzon, Padilla and Montemayor, JJ., concur.
Paras and Reyes, JJ., concur in the result.
Separate Opinions
TORRES, J., concurring:
I fully concur in the above opinion of Mr. Justice Tuason. I strongly agree with him that
when the framers of our Constitution wrote in our fundamental law the provision
contained in section 4 of Article XIII, they never intended to make it applicable to all
cases, wherein a group of more or less numerous persons represented by the Rural

Progress Administration, or some other governmental instrumentality, should take steps

for the expropriation of private land to be resold to them on the installment plan. If such
were the intention of the Constitution, if section 4 of its Article XIII will be so interpreted
as to authorize that government corporation to institute the corresponding court
proceedings to expropriate for the benefit of a new interested persons a piece of private
land, the consequence that such interpretation will entail will be incalculable.
In addition to the very cogent reasons mentioned by Mr. Justice Tuason in support of his
interpretation of that constitution created by the acquisition of the so-called friar lands at
the beginning of the establishment of civil government by the United States in these
islands. After the lapse of a few years, the tenants for whose benefit
those haciendas were purchased by the government, and who signed contracts of
purchase by the government. Thousands of cases were time, the Government which had
been administering those haciendas for a long period of years went into much expense
in order to achieve the purpose of the law. I take for granted that in this case the
prospective purchasers, in inducing the government to buy the land to be expropriated
and sold to them by lots on the installments plan do from the beginning have the best of
intentions to abide by the terms of the contract which they will be required to sign.
If I am not misinformed, the whole transaction in the matter of the purchase of the friar
lands has been a losing proposition, with the government still holding many lots
originally intended for sale to their occupants, who for some reasons or other failed to
comply with the terms of the contract signed by them.
Without the sound interpretation thus given this Court restricting within reasonable
bounds the application of the provision of section 4 of Article XIII of our Constitution and
clarifying the powers of the Rural Progress Administration under Commonwealth Act No.
539, said corporation or, for that matter, some other governmental entity might
embark in a policy of indiscriminate acquisition of privately owned land, urban or
otherwise just for the purpose of taking care of the wishes of certain individuals and, as
outlined by Mr. Justice Tuason, regardless of the merits of the case. And once said policy
is carried out, it will place the Government of the Republic in the awkward predicament
of veering towards socialism, a step not foreseen nor intended by our Constitution.
Private initiative will thus be substituted by government action and intervention in cases
where the action of the individual will be more than enough to accomplish the purpose
sought. In the case at bar, it is understood that contracts, for the sale by lots of the land
sought to be expropriated to the present tenants of this herein petitioner, have been
executed. There is, therefore, not the slightest reason for the intervention of the
government in the premises.

8. G.R. No. L-10278

November 23, 1915

THE MANILA RAILROAD COMPANY, Plaintiff-Appellant, vs. ROMANA VELASQUEZ,

MELECIO ALLAREY and DEOGRACIAS MALIGALIG, Defendants-Appellants.
William A. Kincaid and Thomas L. Hartigan for plaintiff.
Ledesma, Lim and Irureta Goyena for defendants.
TRENT, J.:
This action was instituted by the Manila Railroad Company for the purpose of
expropriating twelve small parcels of land for a railroad station site at Lucena, Province
of Tayabas.
The original defendants were Romana Velasquez, Melecio Allarey, and Deogracias
Maligalig. After the filing of the complaint Simeon Perez, Filemon Perez, and Francisco
Icasiano, having bought Romana Velasquez' interest, were included as defendants. The
commissioners fixed the value of the twelve parcels at P81,412.75, and awarded P600 to
Simeon Perez as damages for the removal of an uncompleted camarin. Upon hearing, the
commissioners' report was approved and the plaintiff directed to pay to the "Tayabas
Land company" the total amount awarded, with interest and costs. The plaintiff company
alleges that that amount is grossly excessive, pointing out that the land has never been
used except for rice culture.
Upon this appeal we are asked to review the evidence and reduce the appraised value of
the condemned land in accordance with our findings rendering judgment accordingly.
Has this court, under the law, authority to take such action? And along with this question
it must be decided whether the Courts of First Instance have such power over the reports
of commissioners. Section 246 of the Code of Civil Procedure reads:
Action of Court Upon Commissioners' Report. - Upon the filing of such report in court, the
court shall, upon hearing, accept the same and render judgment in accordance
therewith; or for cause shown, it may recommit the report 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 may make such final order and
judgment as shall secure to the plaintiff the property essential to the exercise of this
rights under the law, and to the defendant just compensation for the land so taken; and
the judgment shall require payment of the sum awarded as provided in the next section,
before the plaintiff can enter upon the ground and appropriate it to the public use.

From this section it clearly appears that the report of the commissioners on the value of
the condemned land is not final. The judgment of the court is necessary to give effect to
their estimated valuation. (Crawford vs. Valley R.R. Co., 25 Grat., 467.) Nor is the report
of the commissioners conclusive, under any circumstances, so that the judgment of the
court is a mere detail or formality requisite to the proceedings. The judgment of the court
on the question of the value of the land sought to be condemned is rendered after a
consideration of the evidence submitted to the commissioners, their report, and the
exceptions thereto submitted upon the hearing of the report. By this judgment the court
may accept the commissioners' report unreservedly; it may return the report for
additional facts; or it may set the report aside and appoint new commissioners; or it may
accept the report in part or reject it in part, and "make such final order and judgment as
shall secure to the plaintiff the property essential to the exercise of this rights under the
law, and to the defendant just compensation for the land so taken." Any one of these
methods of disposing of the report is available to and may be adopted by the court
according as they are deemed suited to secure to the plaintiff the necessary property
and to the defendant just compensation therefor. But can the latter method produce a
different result in reference to any part of the report from that recommended by the
commissioner?
Section 246 expressly authorizes the court to "accept the report in part and reject it in
part." If this phrase stood alone, it might be said that the court is only empowered to
accept as a whole certain parts of the report and reject as a whole other parts. That is, if
the commissioners fixed the value of the land taken at P5,000, the improvements at
P1,000, and the consequential damages at P500, the court could accept the report in full
as to any one item and reject it as to any other item, but could not accept or reject a part
of the report in such a way as to change any one of the amounts. But the court is also
empowered "to make such final order and judgment as shall secure to the plaintiff the
property essential to the exercise of this rights under the law, and to the defendant just
compensation for the land so taken." The court is thereby expressly authorized to issue
such orders and render such judgment as will produce these results. If individual items
which make up the total amount of the award in the commissioners' report could only be
accepted or rejected in their entirety, it would be necessary to return the case, so far as
the rejected portions of the report were concerned, for further consideration before the
same or new commissioners, and the court could not make a "final order and judgment"
in the cause until the rejected portions of the report had been reported to it. Thus, in
order to give the quotation from 246 its proper meaning, it is obvious that the court may,
in its discretion correct the commissioners' report in any manner deemed suitable to the
occasion so that final judgment may be rendered and thus end the litigation. The "final
order and judgment" are reviewable by this court by means of a bill of exceptions in the
same way as any other "action." Section 496 provides that the Supreme Court may, in
the exercise of its appellate jurisdiction, affirm, reverse, or modify any final judgment,
order, or decree of the Court of First Instance, and section 497, as amended by Act No.
1596, provides that if the excepting party filed a motion in the Court of First Instance for
a new trial upon the ground that the evidence was insufficient to justify the decision and
the judge overruled such motion and due exception was taken to his ruling, the Supreme
Court may review the evidence and make such findings upon the facts by a
preponderance of the evidence and render such final judgment as justice and equity may
require. So it is clear from these provisions that this court, in those cases where the right
to eminent domain has been complied with, may examine the testimony and decide the
case by a preponderance of the evidence; or, in other words, retry the case upon the
merits and render such order or judgment as justice and equity may require. The result is
that, in our opinion, there is ample authority in the statute to authorize the courts to
change or modify the report of the commissioners by increasing or decreasing the
amount of the award, if the facts of the case will justify such change or modification. As it
has been suggested that this conclusion is in conflict with some of the former holdings of
this court upon the same question, it might be well to briefly review the decisions to
ascertain whether or not, as a matter of fact, such conflict exists. In City of Manila vs.
Tuason (R.G. No. 3367, decided March 23, 1907, unreported), the Court of First Instance
modified the report of the commissioners as to some of the items and confirmed it as to
others. On appeal, the Supreme Court remanded the cause, apparently for the reason
that the evidence taken by the commissioners and the lower court was not before it, and

perhaps also because the commissioners adopted a wrong principle of assessing

damages.
In Manila Railway Co. vs. Fabie (17 Phil. Rep., 206) the majority report of the
commissioners appraised the land at P56,337.18, while a dissenting commissioners
estimated it at P27,415.92. The Court of First Instance, after taking additional evidence
upon the consequential benefits to the remainder of defendants' land by the construction
of the railroad, and also as to the rental value of various pieces of land in the locality,
fixed the value of the land at the sum estimated by the dissenting commissioner. The
defendants appealed to this court. This court remarked that the only evidence tending to
support the majority report of the commissioners consisted of deeds of transfer of real
estate between parties in that community showing the prices paid by the vendees in
such conveyances. It was held that without its being shown that such transfers had been
made in the ordinary course of business and competition, and that the parties therein
stated were not fictitious, such deeds were incompetent as evidence of the value of the
condemned land. As to the action of the court in fixing the price of the land at
P27,415.92, the court said:
Conceding, without deciding, that he also had the right to formulate an opinion of his
own as to the value of the land in question, nevertheless, if he formulate such an
opinion, he must base it upon competent evidence. The difficulty with the case is that it
affirmatively appears from the record on appeal that there is an entire absence of
competent evidence to support the finding either of the commissioners or of the court,
even if the court had a right to make a finding of his own at all under the circumstances.
In the Manila Railroad Co. vs. Attorney-General (22 Phil. Rep., 192) the only question
raised was the value of certain improvements on the condemned portion of a hacienda,
such improvements consisting mainly of plants and trees and belonging to a lessee of
the premises. The total damages claimed were P24,126.50. The majority report of the
Commission allowed P19,478, which amount was reduced by the Court of First Instance
to P16,778. The plaintiff company, upon appeal to this court, alleged that the damages
allowed were grossly excessive and that the amount allowed by the commissioners
should have been reduced by at least P17,000; while the defendant urged that the
damages as shown by the record were much greater than those allowed, either by the
commissioners or by the court. In disposing of the case this court said:
The only ground upon which the plaintiff company bases its contention that the
valuations are excessive is the minority report of one of the commissioners. The values
assigned to some of the improvements may be excessive but we are not prepared to say
that such is the case. Certainly there is no evidence in the record which would justify us
in holding this values to be grossly excessive. The commissioners in their report go into
rather minute detail as to the reasons for the conclusions reached and the valuations
fixed for the various items included therein. There was sufficient evidence before the
commissioners to support the valuations fixed by them except only those later modified
by the court below. The trial court was of opinion that the price of P2 each which was
fixed for the orange trees ( naranjitos) was excessive, and this was reduced to P1.50 for
each tree; this on the ground that the evidence discloses that these trees were
comparatively young at the time of the expropriation, and that the value fixed by the
majority report of the commissioners was that of full-grown or nearly full-grown trees. We
are of opinion that this reduction was just and reasonable. Aside from the evidence taken
into consideration by the trial judge we find no evidence in the record in support of the
contention of the railroad plaintiff that the valuations fixed in the majority report of the
commissioners and by the trial court are grossly excessive, and plaintiff company having
wholly failed to offer evidence in support of its allegations in this regard when the
opportunity so to do was provided in accordance with law, it has no standing in this court
to demand a new trial based on its unsupported allegations of grossly excessive
valuation of the property by the commissioners and the court below.
This court affirmed the finding of damages made by the trial court with the exception of
an item for damages caused by fire to improvements on lands adjoining those
condemned, which was held not to be a proper matter to be considered in condemnation

proceedings. The court here approved of the action of the Court of First Instance in
reducing the amount of damages fixed by the commissioners as to the value of the
young orange trees on the strength of the evidence of record.
In Manila Railroad Company vs. Caligsahan (R.G. No. 7932, decided March 25, 1913,
unreported), it appears that the lower court approved in toto the report of the
commissioners. On appeal, This Supreme Court reversed the lower court and remanded
the case with orders to appoint new commissioners, saying:
Under the evidence in this case the award is excessive. Section 246 of the Code of Civil
Procedure giving to the court the power to "make such final order and judgment as shall
secure to the party the property essential to the exercise of his rights under the law, and
to the defendant just compensation for the land so taken," we exercise that right in this
case for the purpose of preventing the defendants from obtaining that which would be
more than `just compensation' under all the evidence of the case.
The judgment is reversed and the cause remanded, with instructions to the lower court
to appoint a new commission and to proceed from that point de novo.
We will now examine the case (Philippine Railway Co. vs. Solon, 13 Phil. Rep., 34) relied
upon the support the proposition that the courts should not interfere with the report of
the commissioners to correct the amount of damages except in cases of gross
error, showing prejudice or corruption.
In that case the property belonging to the appellant which the company sought to
appropriate was his interest as tenant in a tract of land belonging to the Government,
together with a house standing thereon and other property belonging to him. He asked
that he be awarded for all the property taken P19,398.42. The commissioners allowed
him P10,745.25. At the hearing had upon the report, the court reduced this amount and
allowed the appellant P9,637.75. The commissioners took a large amount of evidence
relative to the amount of damages. The testimony was conflicting as to the value of the
house, two witnesses fixing it at over P12,000; and another at P14,000; one at P8,750;
another at P6,250; and another at P7,050.95. The commissioners fixed the value of the
house alone at P9,500, and the court at P8,792.50. This court said:
Nor do we decide whether, in a case where the damages awarded by the commissioners
are grossly excessive or grossly insufficient, the court can, upon the same evidence
presented before the commissioners, itself change the award. We restrict ourselves to
deciding the precise question presented by this case, in which it is apparent that, in the
opinion of the court below, the damages were not grossly excessive, for its own
allowance was only P1,000 less than the amount allowed by the commissioners, and the
question is whether in such a case the court can substitute its own opinion upon the
evidence presented before the commissioners for the opinion which the commissioners
themselves formed, not only from that evidence but also from a view of the premises
which by law they were required to make.
Referring to the manner in which the trial court arrived at its valuation of the various
items, including the house, this court said:
Without considering the correctness of the rule adopted by the court for determining the
value of the property it is sufficient to say that the evidence before the commissioners as
to the value of the property taken was contradictory and that their award was not
palpably excessive or inadequate. Under such circumstances, we are of the opinion that
the court had no right to interfere with it.
From the foregoing it is clear that (1) the testimony was conflicting; (2) that the award as
allowed by the commissioners was well within the amounts fixed by the witnesses; and
(3) that the award was not grossly excessive. That it was not grossly excessive is shown
by the difference between the amount fixed by the commissioners and that fixed by the
court, this difference being P1,117.50, a reduction of a little over 10 per cent.

In City of Manila vs. Estrada (25 Phil. Rep., 208), the city sought to expropriate an entire
parcel of land with its improvements for use in connection with a public market. The
commissioners, after viewing the premises and receiving evidence, being unable to
agree, submitted two reports to the court. In the majority report the value of the land
was fixed at P20 per square meter and in the minority report at P10. The Court of First
Instance fixed the value at P15 per square meter. Upon appeal this court, after reviewing
the evidence, held that P10 per square meter was a just compensation for the land taken
and rendered judgment accordingly, saying:
After a careful examination of the entire record in this case and the law applicable to the
questions raised therein, we are of the opinion that P10 per square meter is a just
compensation for the land taken.
From the above review of the cases it will be seen that this court has not only not
decided that the courts cannot interfere with the report of the commissioners unless
prejudice or fraud has been shown, but the decisions, aside from the case of the City of
Manila vs.Estrada, tend to show the contrary; that is, an award which is grossly excessive
or grossly insufficient in the opinion of the court can be increased or decreased, although
there be nothing which tends to indicate prejudice or fraud on the part of the
commissioners. The case of the City of Manila vs. Estrada is direct authority supporting
the conclusions which we have reached in the case at bar. And we are not without
authority outside of this jurisdiction which supports the view we have taken in the case
under consideration. In Morgan's Louisiana & Texas R.R. Co. vs. Barton (51 La. Ann.,
1338), the court, in considering a procedural law similar to our own, stated:
On the question of the value of the land, 8.34 acres, the commissioners have allowed
$2,500, or $300 per acre. The defendant has put in the record the testimony of witnesses
claimed to support the allowance. Without disregarding this testimony, it is sufficient to
say that the opinions of the witnesses do not seem to be based on any fact calculated to
show the value of the land. ... On the other hand the plaintiff has placed before us the
titles of defendant of recent date showing the price paid by him (the defendant) for the
entire body of land of which the 8 acres are part; the acts of sale of land in the same
neighborhood, and of the same quality; the assessment of defendant's property, and
other testimony on this issue of value. ... Giving all possible weight, or rather restricting
the testimony of the plaintiffs' witnesses to its due influence, and giving, we think,
necessary effect to the acts by which defendant purchased, the acts of sale of other
land, the assessment of value, with due allowance for under assessment, and the other
testimony of record, we reach the conclusion that the award gives two-thirds more than
the value of the land. We fix the value of the land at $833.33.
See also T. & P.R.R. Co. vs. Southern Develop. Co. (52 La. Ann., 535), where the court
held the appraisement too low and after discussing the evidence, increased the amount
of the award accordingly. A similar case is Abney vs. Railroad Co. (105 La., 446). See also
T. & P.R.R. Co. vs. Wilson (108 La., 1; 32 So., 173); and Louisiana Western R.
Co. vs.Crossman's Heirs (111 La., 611; 35 So., 784), where the point is touched upon.
In Missouri the statute (1 Mo. Ann. Stat., sec. 1268) directs that "the court shall make
such order therein as right and justice may require, and may order a new appraisement,
upon good cause shown." Owing to a constitutional restriction, this provision has been
construed to apply only to damages and benefits resulting to land owners in
consequence of proposed improvements, the cash value of property expropriated being
an issue triable, at the instance of either party by a jury subsequent to the findings of
the commissioners. Subject to this restriction, however, it has been held that the above
provision of law gives the court the right increase or decrease the amount awarded by
the commissioners. In the late case of Tarkio Drainage District vs. Richardson (237 Mo.,
49), the court presents a lengthy review of its decisions on this subject.
The question now arises, when may the courts, with propriety, overrule the award of the
commissioners in whole or in part, and substitute their own valuation of the condemned
property? We shall consider this question in two ways: first, as one of procedure under

section 246, above quoted; and second, as to the evidence which must appear in the
record in order to justify such action.
From a mere reading of section 246 and the remarks just made, it should be clear that
the court is permitted to act upon the commissioners' report in one of several ways, at
its own discretion. The whole duty of the court in considering the commissioners' report
is to satisfy itself that just compensation will be made to the defendant by its final
judgment in the matter, and in order to fulfill its duty in this respect the court will be
obliged to exercise its discretion in dealing with the report as the particular
circumstances of the case may require. But generally speaking, when the
commissioners' report cannot with justice be approved by the court, one of three or four
circumstances will usually present itself, each of which has for its antidote one of the
methods of dealing with the report placed at the disposal of the court by section 246.
Thus, if it be successfully established that the commissioners refused to hear competent
evidence material to the case, then all the evidence in the case would not be before the
court. The court could not, with reason, attempt to either approve or change the report,
as it stood, for the reason that all the evidence of the case would not have been
considered by the commissioners not have been presented to the court; and the remedy
would be to "recommit the report of the commissioners for further report of facts." Again,
if improper conduct, fraud, or prejudice be charged against the commissioners and this
charge be sustained it would be safer to set aside the award thus vitiated and "appoint
new commissioners" who could render a report not tainted by these things. But when the
only error of the commissioners is that they have applied illegal principles to the
evidence submitted to them; or that they have disregarded a clear preponderance of the
evidence; or that they have used an improper rule of assessment in arriving at the
amount of the award, then, in such a case, if the evidence be clear and convincing, the
court should ordinarily be able, by the use of those correct legal principles which govern
the case, to determine upon the amount which should be awarded without returning the
report to the commissioners. When the matter stands in this light, it becomes the duty of
the court to make "final order and judgment" in which the proper award will be made and
thus end the litigation between the parties.
Now, what evidence as to value must the record contain in order to justify the court in
disregarding the valuation fixed upon the condemned property by the commissioners
and substituting therefor its own finding of value? It is almost a universal practice in the
United States to submit the question of value in expropriation cases to a jury or
commission, usually of local property owners, and one of the things they are specially
instructed to do is to view or inspect the condemned property. The purpose of this view
and the additional weight which would should be given to the award of the appraisers
because of the view are questions often discussed. After a careful examination of a
number of adjudicated cases, we have concluded that the following cases, all agreeing in
principle, correctly state the purpose of the view. In Denver Co. vs. Howe (49 Colo., 256
112 P., 779), it was said: "The jury viewed the premises and were better able to judge of
the number of acres in each, as well as other conditions affecting the land. The facts
ascertained by the view of the premises are not in the record, whether they were
regarded as so much additional evidence, or were used to better understand and apply
the evidence adduced at the trial. Keeping in view the evidence relating to the special
value of the building site, the value of improvements and of the ground, it will be found
that the verdict is within and supported by the values as testified to, and these values,
as fixed by the several witnesses, represented to each the market value, as conceded by
appellants. The verdict is supported by the evidence of market value and on that ground
would have to be sustained if the matter complained of in the instruction had been
entirely omitted."
In Gorgas vs. Railroad Co. (114 Pa., 1; 22 Atl., 715), it was said: "A view may sometimes
be of the highest importance, where there is a conflict of testimony. It may enable the
jurors to see on which side the truth lies. And if the witnesses on the one side or the
other have testified to a state of facts which exists only in their imagination, as to the
location of the property, the manner in which it is cut by the road, the character of the
improvements, or any other physical fact bearing upon the case, they surely cannot be
expected to ignore the evidence of their sense and give weight to testimony which their

view shows to be false. ... The true in such cases is believed to be that the jury in
estimating the damages shall consider the testimony as given by the witnesses, in
connection with the facts as they appear upon the view; and upon the whole case, as
thus presented, ascertain the difference between the market value of the property
immediately before and immediately after the land was taken. This difference is the
proper measure of damages."
In Close vs. Samm (27 Iowa, 503), subsequently approved in Guinn vs. Railway Co. (131
Iowa, 680, 683; 109 N.W., 209), it was said: "The question then arises as to the purposes
and intent of this statute. It seems to us that it was to enable the jury, by the view of the
premises or place to better understand and comprehend the testimony of the witnesses
respecting the same, and thereby the more intelligently to apply the testimony to the
issues on trial before them, and not to make them silent witnesses in the case, burdened
with testimony unknown top both parties, and in respect to which no opportunity for
cross-examination or correction of error, if any, could be afforded either party. If they are
thus permitted to include their personal examination, how could a court ever properly set
aside their verdict as being against the evidence, or even refuse to set it aside without
knowing the facts ascertained by such personal examination for the jury? It is a general
rule certainly, if not universal, that the jury must base their verdict upon the evidence
delivered to them in open court, and they may not take into consideration facts known to
them personally, but outside of the evidence produced before them in court. If a party
would avail himself of the facts known to a juror, he must have him sworn and examined
as other witnesses."
In C.K. & W.R. Co. vs. Mouriquand (45 Kan., 170), the court approved of the practice of
instructing the jury that their view of the premises was to be used in determining the
value of conflicting testimony, saying: "Had the jury disregarded all the sworn evidence,
and returned a verdict upon their own view of the premises, then it might be said that
the evidence which the jurors acquired from making the view had been elevated to the
character of exclusive and predominating evidence. This is not allowable. The evidence
of the witnesses introduced in the court on the part of the landowner supports by
substantial testimony given by witnesses sworn upon the trial, we would set it aside, but
as the jury only took into consideration the result of their view of the premises, in
connection with the sworn evidence produced before them, to determine between
conflicting evidence, the instruction was not so erroneous as to require a new trial."
In Postal Telegraph-Cable Co. vs. Peyton (124 Ga., 746; 52 S.E., 803; 3 L.R.A., N.S., 333),
it was said: "A jury cannot be left to roam without any evidence in the ascertainment and
assessment of damages. The damages which the law allows to be assessed in favor of a
landowner whose property has been taken or damaged under the right of eminent
domain are purely compensatory. The land actually appropriated by the telegraph
company amounted to only a fraction of an acre; and while it appeared that the
construction and maintenance of the telegraph line would cause consequential damages
to the plaintiff, no proof was offered from which any fair and reasonable estimate of the
amount of damages thereby sustained could be made. The jury should have been
supplied with the data necessary in arriving at such an estimate. In the absence of this
essential proof, a verdict many times in excess of the highest proved value of the land
actually taken must necessarily be deemed excessive. Judgment reversed."
In New York, where the question has doubtless been raised more often than anywhere
else, the late cases illustrate the rule, perhaps the most clearly. The appellate division,
supreme court, in In re Titus Street in city of New York (123 N.Y.S., 1018), where it
appeared that the city's witnesses testified that the property was worth $9,531 and the
commissioners awarded $2,000 less, said:
We do not think that this is meeting the requirements of the law; we do not believe that
it is within the province of commissioners to arbitrarily set up their own opinion against
that of the witnesses called by the city, and to award damages largely below the figure
to which the moving party is committed, without something appearing in the record to
justify such action. When a party comes into court and makes an admission against his
interest, no court or judicial tribunal is justified in assuming that the admission is not true

without at least pointing out the reason for discrediting it; it carries with it the overcome
by the mere fact that the commissioners might themselves have reached a different
conclusion upon the viewing of the premises. ... This view of the commissioners, it seems
to us, is for the purpose of enabling the commissioners to give proper weight and effect
to the evidence before them, and it might justify them in giving larger damages than
some of the witnesses thought proper, or even less than some of them declared to be
sustained, but where the evidence produced by the moving party in a proceeding for
taking property for public purposes fixes a sum, without any disagreement in the
testimony on that side, we are of the opinion that the case do not justify a holding that
the commissioners are authorized to ignore such testimony and to substitute their own
opinion, in such a manner as to preclude the supreme court from reviewing the
determination. That is not in harmony with that due process of law which is always
demanded where rights of property are involved, and would make it possible for a
corrupt commission to entirely disregard the rights of the individual to the undisturbed
enjoyment of his property, or its equivalent.
From these authorities and keeping in mind the local law on the subject, we think the
correct rule to be that, if the testimony of value and damages is conflicting, the
commissioners may resort to their knowledge of the elements which affect the
assessment and which were obtained from a view of the premises, in order to determine
the relative weight of conflicting testimony, but their award must be supported by the
evidence adduced at their hearings and made of record, or it cannot stand; or, in other
words, the view is intended solely for the purpose of better understanding the evidence
submitted. To allow the commissioners to make up their judgment on their own individual
knowledge of disputed facts material to the case, or upon their private opinions, would
be most dangerous and unjust. It would deprive the losing party of the right of crossexamination and the benefit of all the tests of credibility which the law affords. It would
make each commissioner the absolute judge of the accuracy and value of his own
knowledge or opinions and compel the court to affirm the report on the facts when all of
such facts were not before it. The evidence of such knowledge or of the grounds of such
opinions could not be preserved in a bill of exceptions or questioned upon appeal. It is no
hardship upon any of the parties to require that the award must be based upon the
evidence. It is the duty of each party to submit what evidence of value he has and if he
fails to do so he can not complain if the appraisement in kept within the bounds of the
evidence presented to the commissioners.
In those cases where the testimony as to value and damages in conflicting the
commissioners should always set forth in full their reasons for accepting the testimony of
certain witnesses and rejecting that the others, especially in those cases where a view of
the premises has been made.
The commissioners are required by law to be disinterested landowners of the province,
selected by the court with a view to their ability to arrive at a judicious decision in the
assessment of damages. The judgment of men with these qualifications upon the price of
real property is entitled to some considerable weight. Being local men, it may be
assumed that they are familiar with the local land values, the needs of the community in
that line, and the adaptability of particular sites to commercial purposes. Then, too, their
view of the premises enables commissioners to better understand the evidence
submitted to them, as we have said above. The declarations of witnesses as to the value
of the land, as to its condition, or the conditions of improvements which may be located
upon it, and comparisons made between the condemned land and other land in the
vicinity may all be better understood by the commissioners if they have viewed the
premises. It is, therefore, no slight divergence from the seeming preponderance of the
evidence of record, as viewed by the court, which will justify the court in brushing aside
the commissioners' report and appraising the property itself, based only upon a perusal
of the evidence which was submitted to them. It is in those cases where the evidence
submitted to the commissioners as to the value varies greatly that the real difficulty lies.
In these cases it is clear that some of the evidence must be untrustworthy. Hence, it is
necessary to reject that evidence which shows the price to be greatly higher or lower
than the just compensation to which the defendant owner is entitled. If, after making due
allowance for the superior facilities which the commissioners had for arriving at the

correct value of the property, the court is clearly of the opinion that the evidence relied
upon by them is untrustworthy, and that other evidence rejected by the commission and
which fixes the value of the property at a figure greatly at variance with their valuation of
the property bears the earmarks of truth, then it becomes the duty of the court to
substitute for the commissions' award the amount indicated by such evidence. That the
estimated value made by the appraisers is to be given "great weight;" that such
valuation is not to be "lightly set aside;" that it will not be set aside "if there is
substantial testimony to support it," unless error is "plainly manifest;" "unless it is
apparent that injustice has been done;" "unless the commissioners have clearly gone
astray or adopted erroneous principles;" "unless the commissioners acted upon wrong
principles, or their award is grossly inadequate;" unless the award is "palpably excessive
or inadequate;" unless it is "grossly inadequate or unequal," is the burden of all the
cases.
Let us now examine the evidence, keeping these legal principles in mind. The only
discussion of the evidence of value made by the lower court was as follows:
To determine this question (the value of the land) the court abides by and refers to the
report of the commissioners dated July 10, 1913, because it understands that it must
accept this report in all its parts for the reason that the prices fixed in the said report of
P3.75 per square meter for parcel 21-B, that of P3.50 per square meter for parcel 21-A,
and that of P2 per square meter for the rest of the parcels (naming them) are reasonable
and just; the compensation which is made in the said report for the damages occasioned
to the defendant Simeon Perez being also reasonable and just.
It will be seen that the lower court relied entirely upon the findings of the commissioners.
The commissioners justified their appraisement of the land at a price so greatly in excess
of its value as agricultural land upon the following considerations. First, the construction
of the provincial building and the high school had increased the price of land in their
vicinity. Second, the neighborhood of these building had become a choice residential
district. Third, the population in the vicinity had increased since it became known that
the condemned property had been selected as a station site by the railroad company. We
propose to discuss the evidence of value precisely along these lines, starting first,
however, with its value as agricultural land, the only use to which it has ever been put.
The condemned land is not located in the commercial district of the town of Lucena, but
is located near the provincial building and the high school. The land has been used from
time out of mind solely for the cultivation of rice. Deogracias Maligalig, one of the
defendants, testified that rice land in the municipality of Lucena was worth P500 per
cavan (hectare). Melecio Allarey, another defendant, testified that such land was worth
from P300 to P400 per hectare. Agustin testified that such land was worth between P400
and P500 per hectare if not under irrigation, and if under irrigation, more than P1,000.
Ambrosio Zaballero, owner of more than 30 parcels of land in the municipality of Lucena,
said that the site of the railroad station was nothing but a rice field prior to the coming of
the railroad, worth from P300 to P400 per hectare. Cayo Alzona, the only witness for the
plaintiff, testified that, in Candelaria, rice land was worth between P200 and P250 per
hectare, he having purchased an uncleared parcel of the rice land for P150 per hectare.
It seems fair to accept the statement of the two defendants, Maligalig and Allarey, and
fix the price of the condemned land for agricultural purposes at P500 per hectare.
Witnesses for the defendants, including three of the latter, fixed the value of the
condemned land at prices ranging from P5 to P8 per square meter. The remaining
defendant, Icasiano, did not testify before the commissioners. But in his answer filed
about seven months after purchasing the land for P0.81 per square meter, he alleged
that his parcel was worth P5 per square meter. So that we have all of the defendants and
several other witnesses estimating the value of the condemned land at about the same
figure, or from P50,000 to P80,000 per hectare.
The defendant, Melecio Allarey, testified that he owned 30,000 square meters of land in
the vicinity of the railroad station site, 2,895 square meters of which was wanted by the
plaintiff company. Upon being asked what the value of his land was, he promptly replied

that it was worth P5.50 per square meters. Asked if he were making his will whether he
would list this property at a total value of P150,000, he evaded a direct reply by saying
that he would divide it among his children. Asked if he considered himself the owner of
land valued at P150,000, he replied that for his purpose he figured on that price. Asked if
he would declare the land to be worth that sum in his sworn tax declaration, he replied
that he would accept the figures fixed upon by the tax appraisers. His testimony shows
clearly that he did not desire to commit himself positively to the assertion that his three
hectares of land was worth P150,000. His ambiguous and evasive replies on crossexamination do not at all harmonize with his unequivocal statement in his direct
examination that his land was worth P5.50 per square meter. Apparently, when
confronted with the price per hectare, which this estimate would put upon his land, he
was somewhat astounded. Indeed, we are inclined to believe that one of the reasons for
the high value placed upon the condemned land by all the witnesses is that they were
estimating the price per square meter instead of per hectare, which is the customary
method of fixing the price of agricultural land. A perusal of the remainder of the
testimony of defendant Allarey shows that he is paying annual taxes on his 30,000
square meters of land amounting to between P12 and P13. He also naively informs us
that he has not been able to till the land lately because he has no carabaos or other work
animals.
Several of the witnesses for the defendants testified to having purchased land in the
vicinity of the station site for residential purposes. Thus, Edard testified that he paid
P1,400 for 220 square meters in 1910. Andres Dinlasan sold 119 square meters for P10
per square meter on June 6, 1912. He could give no reason why the purchaser had paid
so much for the land, but in response to a question said the purchaser had some more
land joining it. Agustin bought 1,900 square meters in 1910 for P2 per square meter.
Esteban Lagos paid P1,000 for a plot 16 by 18 meters in 1911. A most remarkable thing
about these purchases is that, as choice residential sites, they are so extremely small.
With the possible exception of the parcel purchased by Agustin, the parcels in question
are hardly generous enough to permit of the construction of even a modest mansion.
Cayo Alzona testified that he purchased 2,200 square meters in 1906 for P350, and that
he purchased a little less than one hectare in 1912, all in the vicinity of the station site,
for which he paid P1,500. It will be noted that there is considerable difference between
these figures and the prices at which the other witnesses testified they purchased land in
that neighborhood. That the evidence of sales of nearby land was competent, there can
be no doubt.chanroblesvirtualawlibrary chanrobles virtual law library
In Aledo Terminal Ry. Co. vs. Butler (246 Ill., 406; 92 N.E., 909), the court said: "Evidence
of voluntary sales of other lands in the vicinity and similarly situated is admissible in
evidence to aid in estimating the value of the tract sought to be condemned, but the
value of such testimony depends upon the similarity of the land to that in question and
the time when such sales were made and the distance such lands are from those the
value of which is the subject of inquiry." chanrobles virtual law library
In an earlier case, the supreme court of Illinois stated the rule as follows: "The theory
upon which evidence of sales of other similar property in the neighborhood, at about the
same time, is held to be admissible is that it tends to show the fair market value of the
property sought to be condemned. And it can not be doubted that such sales, when
made in a free and open market, where a fair opportunity for competition has existed,
become material and often very important factors in determining the value of the
particular property in question." (Peoria Gas Light Co. vs. Peoria Term. Ry. Co., 146 Ill.,
372; 21 L.R.A., 373; 34 N.E. 550.) chanrobles virtual law library
The supreme court of Massachusetts, in Fourth National Bank vs. Com. (212 Mass., 66;
98 N.E., 86), affirms the rule as follows: "It long has been settled that in the assessment
of damages where lands are acquired by eminent domain evidence is admissible of the
price received from sales of land similar in character, and situated in the vicinity, if the
transactions are not so remote in point of time that a fair comparison practically is
impossible." chanrobles virtual law library

In Hewitt vs. Price (204 Mo., 31), it was said: "It is sufficient to say upon this proposition
that the law is well settled in this State upon the subject, and while the value or selling
price of similar property may be taken into consideration in determining the value of the
piece of property in litigation, it is equally true that the location and character of such
property should be similar and the sale of such other property should at least be
reasonably near in point of time to the time at which the inquiry of the value of the
property in dispute is directed." chanrobles virtual law library
In Laing vs. United New Jersey R.R. & C. Co. (54 N.J.L., 576; 33 Am. St. Rep., 682; 25 A.,
409), it was said: "Generally in this and other states evidence of sales of land in the
neighborhood is competent on an inquiry as to the value of land, and if the purchases or
sales were made by the party against whom the evidence was offered it might stand as
an admission. But such testimony is received only upon the idea that there is substantial
similarity between the properties. The practice does not extend, and the rule should not
be applied, to cases where the conditions are so dissimilar as not easily to admit of
reasonable comparison, and much must be left to the discretion of the trial judge in the
determination of the preliminary question whether the conditions are fairly comparable."
Evidence of other sales made in good faith is competent if the character of such parcels
as sites for business purposes, dwellings, or for whatever other use which enhances the
pecuniary value of the condemned land is sufficiently similar to the latter that it may be
reasonably assumed that the price of the condemned land would be approximately near
the price brought by the parcels sold. The value of such evidence, of course, diminishes
as the differences between the property sold and the condemned land increase. The
property must be in the immediate neighborhood, that is, in the zone of commercial
activity with which the condemned property is identified, and the sales must be
sufficiently near in point of time with the date of the condemnation proceedings as to
exclude general increases or decreases in property values due to changed commercial
conditions in the vicinity. No two estates are ever exactly alike, and as the differences
between parcels sold and the land condemned must necessarily be taken into
consideration in comparing values, we think it much better that those differences should
be shown as part of the evidence of such sales, as is the practice in Iowa. (Town of
Cherokee vs. S.C. & I.F. Town Lot and Land Co., 52 Iowa, 279; 3 N.W., 42.) And where
these differences are so great that the sales in question can form no reliable standard for
comparison, such evidence should not be admitted. (Presbrey vs. Old Colony & Newport
R. Co., 103 Mass., 1.)
Aside from the bare fact that the real estate transactions referred to by the witnesses
were somewhere in the vicinity of the condemned land, there is nothing to guide us as to
the relative value of the condemned land. The differences which must have existed
between the various parcels of land in the vicinity we are left to imagine. And while the
commissioners' view of the condemned land undoubtedly assisted them in forming their
estimate of value, still counsel should not have relied upon their astuteness to discover
differences in values, but should have brought them specifically to the attention of the
commissioners. It seems rather unusual, also, that the bare statements of witnesses
should be accepted as to the prices which nearby parcels brought, in view of the
insistence of counsel that the condemned land is nothing more than agricultural land.
These sales should have been thoroughly investigated to determine whether they were
made bona fideand, if so, whether they were not attended by unusual circumstances
which materially increased the purchase price.
But while these transfers of nearby land are interesting as bearing upon the value of the
condemned land, the record also shows several transfers of the latter itself after it
became generally known that it had been selected by the railroad company as the site
for its Lucena station. We take it that these transactions, in which the defendants were
themselves parties, offer a far more certain basis for estimating the value of the land
than do their testimony before the commissioners or the testimony of other witnesses as
to fancy prices paid for neighboring parcels. Romana Velasquez, who owned the major
portion of the condemned land, disposed of hers to her nephews surnamed Perez. Her
first sale was on July 21, 1912. This parcel contained 16,094 square meters and brought
at this time P6,500, or a little more than P0.40 per square meter. A month later Perez

sold this parcel to one Icasiano for P13,000, or a little less than P0.81 per square meter.
Sra. Velasquez' next sale was of three parcels, the first two of which contained
approximately 23,000 square meters, while the area of the third was described as three
gantas of rice. The total price of the three parcels was P2,500 of a little over P0.10 per
meter. In one of these parcels was located approximately 8,700 square meters of the
condemned land which the commissioners reported at a price higher than any of the
rest.
On May 26, 1913, Icasiano, the then owner of the parcel containing 16,094 square
meters, sold it to the Tayabas Land Company for P18,000; and on July 1, 1913, some
twenty days after the commissioners had rendered their report, all of the remaining
owners of the condemned land sold their holdings, parcel by parcel, as it had been
assessed by the commissioners, to the same company for P1.05 per square meter, with
the exception of Simeon Perez who sold the two parcels owned by him at P2.27 and
P2.11, respectively. Here is the most convincing argument that all the witnesses who
placed values on the condemned property, ranging from P5 per square meter to P8 per
meter, were seriously in error. After all the speculation concerning the land, after the
commissioners had reported its value at prices ranging from P2 to P3.75 per square
meter, the owners sold the land, parcel by parcel, as it had been assessed by the
commissioners for a little more than P1 per meter, with exception of Simeon Perez who
accepted P2.11 and P2.27 for the two parcels which the commissioners had appraised at
P3.50 and P3.75 per meter, respectively. It is unfortunate that the commissioners did not
have an opportunity to consider the deeds executed by the defendants in favor of the
Tayabas Land Company. With the commissioners' valuation of the land before them, the
Tayabas Land Company was actually able to purchase from the defendant all of the
condemned land at a greatly inferior price. The defendants were not able to resist an
offer of P1 and P2 per meter for their holdings, notwithstanding their fervid declarations
before the commissioners that their property was worth P5 per meter, and
notwithstanding the official report by a board composed of local men that it was worth
from P2 to P3.75 per meter. This, of course, does not include the defendant Icasiano who
sold out to the land company after the commission had been appointed but before it had
begun its labors. It is to be remembered, however, that he both bought and sold the land
after the railroad company had made known its intention of expropriating it, and that in
his answer to the complaint he alleged his land to be worth P5 per meter.
Now, what was the object of the Tayabas Land Company in purchasing the land?
Evidently it was not with the intention of making any use of it, for the railroad company
had long since taken possession. They, as well as the owners, were simply speculating
on the probability that the award of the commissioners would be approved by the court.
It was little more than a sporty guess on each side as to what would be allowed for the
land by the final judgment of the court. The company believed the award would exceed
P1.05 per meter, and the defendants thought the risk that the award would be in a lesser
amount was so great that they let the land go for the price the company offered them.
Nor is it at all certain that the prices inserted in these deeds of sale were not fictitiously
inflated. The circumstances under which the sales were made would readily suggest the
expediency of inserting fictitious prices in the deeds.
The moment a parcel of land is wanted by a public service corporation the price, for
some occult reason, immediately soars far beyond what the owner would think of asking
or receiving in the open market. Owners ask fabulous prices for it and neighbors look on
with an indulgent smile or even persuade themselves that the land is worth the price for
which the owner holds out - in view of the fact that it is wanted by a corporation, whose
financial resources are popularly supposed to be inexhaustible. The resultant good to a
community due to the investment of new capital, the increased employment of labor,
and the services the corporation will render are for the moment forgotten; and persons
called upon for opinions as to the price of the desired property, unconsciously perhaps,
relax from that sound business acumen which guides them in their daily affairs, while
they are considering, not the price which they would care to pay if they wanted the land,
but the price which the corporation ought to pay in view of the fact that it is a
corporation.

The owner of condemned land is entitled to just compensation. That is all the law allows
him. "Compensation" means an equivalent for the value of the land (property) taken.
Anything beyond that is more and anything short of that is less than compensation. To
compensate is to render something which is equal in value to that taken or received. The
word "just" is used to intensify the meaning of the word "compensation;" to convey the
idea that the equivalent to be rendered for the property taken shall be real, substantial,
full, ample. "Just compensation." therefore, as used in section 246 of the Code of Civil
Procedure, means a fair and full equivalent for the loss sustained.
The exercise of the power being necessary for the public good, and all property being
held subject to its exercise when, and as the public good requires it, it would be unjust to
the public that it should be required to pay the owner more than a fair indemnity for such
loss. To arrive at this fair indemnity, the interests of the public and of the owner and all
the circumstances of the particular appropriation should be taken into consideration.
(Lewis on Eminent Domain, sec. 462.)
The compensation must be just to the public as well as to the owners. (Searl vs. School
District 133 U.S., 533; 33 L. ed. 740.) Section 244 of our code says that:
The commissioners shall assess the value of the property taken and used and shall also
assess the consequential damages to the property not taken an deduct from such
consequential damages the consequential benefits to be derived by the owners from the
public use of the land taken.
"To assess" is to perform a judicial act. The commissioners' power is limited to assessing
the value and to determining the amount of the damages. There it stops; they can go no
further. The value and damages awarded must be a just compensation and no more and
no less. But in fixing these amounts, the commissioners are not to act ad libitum. They
are to discharge the trust reposed in them according to well established rules and form
their judgment upon correct legal principles. To deny this is to place them where no one
else in this country is placed, above the law and beyond accountability.
There is no question but that the compensation to which a defendant owner is entitled is
the market value of the condemned property, to which, of course, must be added his
consequential damages if any, or from which must be deducted his consequential
benefits, if any. Such was our holding in Manila Railway Co. vs. Fabie (17 Phil. Rep., 206).
But as stated in Packard vs. Bergen Neck Ry. Co. (54 N.J.L., 553; 23 A., 506):
The difficulty is not with the rule, but with its application. For the determination of the
market value of land, which is 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 a
price to the given and received therefor, is beyond doubt difficult. The test is logically
and legally correct, but is cannot be applied to land with the accuracy with which it can
be applied to stocks, bonds and personal property generally. Still it is this test which
admittedly must be applied, even when the value of the land and the damages are found
in separate sums.
It is a very difficult matter to limit the scope of the inquiry as to what the market value of
condemned property is. The market value of a piece of land is attained by a
consideration of all those facts which make it commercially valuable. Whether evidence
considered by those whose duty it is to appraise the land is of that nature is often a very
difficult matter to decide. The Supreme Court of the United States, in a carefully worded
statement, marks out the scope of the inquiry as follows:
In determining the value of the appropriated for public purposes, the same
considerations are to be regarded as in a sale of property between private parties. The
inquiry in such cases must be: What is that property worth in the market, viewed not
merely with reference to the uses to which it is at the time applied, but with reference to
the uses to which it is plainly adapted; that is to say, what is it worth from its availability
for valueless uses? ... As a general thing, we should say that the compensation to the
owner is to be estimated by reference to the uses for which the property is suitable,

having regard to the existing business or wants of the community, or such as may be
reasonably expected in the immediate future. (Boom Co. vs. Patterson, 98 U.S., 403.)
This passage is quoted with approval in the late case of St. Loui I.M. & S.R.
Co. vs.Theodore Maxfield Co. (94 Ark., 135; 26 L.R.A., N.S., 1111; 126 S.W., 83), a very
well-considered case.
The supreme court of Missouri has also formulated an exceedingly clear statement of the
matter in the Stock Yards Case (120 Mo., 541):
The market value of the property means its actual value, independent of the location of
plaintiff's road thereon, that is, the fair value of the property as between one who wants
to purchase and one who wants to sell it; not what could be obtained for it in peculiar
circumstances when greater than its fair price could be obtained; nor its speculative
value; nor the value obtained through the necessities of another. Nor, on the other hand,
is it to be limited to that price which the property would bring when forced off at auction
under the hammer. The question is, if the defendant wanted to sell its property, what
could be obtained for it upon the market from parties who wanted to buy and would give
its full value.
These views are practically in accord with Lewis on Eminent Domain (2d ed.), section
478, where the rule is stated as follows:
The market value of property is the price which it will bring when it is offered for sale by
one who desire, but is not obliged to sell it, and is bought by one who is under no
necessity of having it. In estimating its value all the capabilities of the property, and all
the uses to which it may be applied or for which it is adapted are to be considered, and
not merely the condition it is in at the time and the use to which it is then applied by the
owner. It is not a question of the value of the property to the owner. Nor can the
damages be enhanced by his unwillingness to sell. On the other hand, the damages
cannot be measured by the value of the property to the party condemning it, nor by its
need of the particular and its surroundings, its improvements and capabilities, may be
shown and considered in estimating its value. (Approved in Seaboard Air
Line vs.Chamblin, 18 Va., 42.)
Now, what was the utility of the land condemned? So far as the record shows, its possible
uses were, first, for the cultivation of rice; second, as a residential site owing to its
proximity to the provincial building and the high school; and third, as a railroad station
site.
Its location from a farmer's point of view would doubtless enhance its value, since it was
so close to the town of Lucena that the marketing of crops was a decidedly simple
matter. For this reason it was more valuable as agriculture land than other farms farther
away from town.
As a residential site it seems to have been so far a complete failure. How long the high
school had stood there the record does not state. But although the provincial building
had stood near it for several years, not a single homebuilder had selected any portion of
the condemned land as a site for his residence. We note that all those who testified at
the hearing before the commissioners to having purchased land in the vicinity for home
sites, purchased other land than that condemned. Nor does the record contain any
intimation that any of the owners of the land had ever attempted to dispose of any part
of it as building lots. As a residential site, therefore, its value was decidedly
problematical. Possibly, in the next dozen years a few houses might have been built
upon the land, but, judging by the past record, its development along this line would
have been extremely slow.
As a railroad station site, the record gives no indication that it is the sole possible
location for that purpose in Lucena. It is not shown that its location for that purpose is at
all superior to other side of town. Hence, possessing no exclusive natural advantages for

this purpose, it is a foregone conclusion that the railroad company would not willingly
pay P81,00 for such a site when it could have purchased another site for, say, P1,500.
Here it seems proper to say that the appearance of the railroad in the town of Lucena
was the occasion for an incipient real estate boom in the vicinity of the provincial
building and the high school. Several of the witnesses for the defendants testified what
they would offer; if they were in the market for land in the vicinity of the station site, and
the witness Alzona, the single witness who testified for the plaintiff, testified that some
owner of land near the provincial building were asking between P50 and P700 for lost of
400 square meters. It is clear that these hypothetical purchases and sales do not offer
any reliable basis upon which to calculate the actual market value of the land. The fond
dreams of the owners of a sudden shift of the business center on the town of Lucena to
their vicinity, or of its becoming a choice residential district, are not capital in hand.
Proof must be limited to showing the present condition of the property and the uses to
which it is naturally adapted. It is not competent for the owner to show to what use he
intended to put the property, nor what plans he had for its improvement, nor the
probable future use of the property. Nothing can be allowed for damages to an intended
use. (Lewis on Eminent Domain, 2d ed., sec. 709.)
From the evidence we have discussed above, it is apparent that a good price for rice land
in the vicinity of Lucena is P500 per hectare. With his as a basis, at what would the
prospective buyer estimate the possibility of the land being used as a residential site
sometime in the future and its possible advantages as a railroad site? Certainly at
nothing like the estimates contained in the report of the commissioners. To secure an
adequate return on such a large investment as P80,000, every meter of the land would
have to be put to immediate use as residential sites, supposing that people could be
induced to buy it for that purpose at such figures or to pay the necessarily large rent
therefor based on such a valuation. And to hold out for such a figure in case a railroad
company wanted the land as a depot site would mean that the company would locate its
depot at some other place. It seems to us that, either as a residential site or as a railroad
station site, its value should be principally regulated by the value of other agricultural
land on the outskirts of the town. In other words, the chance that it would be wanted for
either of these purposes owing to its superior location was but slightly greater than that
of other agricultural land adjacent to the town. We are, therefore, led to the conclusion
that the price at which practically half of the condemned land was, sold by Romana
Velasquez to the defendant, Filemon Perez, is a most liberal estimate of its value. We
refer to her sale of the parcel of 16,094 square meters for P6,500. This parcel comprises
practically one-half of the entire station site and no outside land was included in the
transaction. The sale was made after it became known that the land sold was to be part
of the station site, and a statement to this effect was included in the deed. Both parties
being aware that the land was to be condemned by the plaintiff company, it cannot be
said that they were not aware of all the latent utility of the land. For these reasons, the
price which this parcel brought should serve as an excellent criterion of the value of the
entire station site. And while no explanation is given of why the sale occurred, since, of
course, no one would but it with the expectation of using it himself when he knew that it
would shortly be occupied by the railroad company, still there is not sufficient indication
that it was sold for speculative purposes or that the element of speculation entered into
the transaction to enable us to say that the price was inflated and exceeded the actual
market value of the condemned land as agricultural land to be worth P500 per hectare,
and leaves a little more than P3,500 for its potential value as a residential district and as
a railroad station site. This is, furthermore, approximately 400 per cent higher than Sra.
Velasquez' second sale (some for months later) to Simeon Perez, when she sold about
23,000 square meters in the same neighborhood for a little over P1,000 per hectare.
It is to be further noted that the average assessed valuation of the condemned property
is somewhat less than P0.08 per square meter, while the highest assessed valuation of
any of it is only P0.23 per square meter, which is carried by some 5,973 square meters,
or less than one-sixth of the whole. It is also to be noted that these 5,973 square meters
were appraised by the commissioners as being worth exactly what the 16,094 square

meters were worth, the latter being assessed for taxation purposes at only P0.03 per
square meter.
At the price we have fixed, we are of the opinion that any consequential damages which
may have been occasioned to any of the defendants by the condemnation proceedings is
amply cared for.
The defendants, Simeon Perez, was awarded P600 damages by the commissioners for
being compelled to remove a building in course of construction at the time the
expropriation proceedings were started. This building was designed to serve partly as a
warehouse and partly for stores. He commenced its construction about the middle of
December, 1912, after it became known that he plaintiff company wanted the land for a
railroad station. Construction work was ordered stopped by the court. From the vague
description of this order in the record, we presume it was the order of the court of date of
January 22, 1913, placing the plaintiff in possession of the land under the provisions of
Act No. 1258 as amended by Act No. 1592. Until such action was taken by the railroad
company, or until the commissioners were appointed and had appraised the land, we
know of no legal provision which would prohibit the owner from doing with the land what
he pleased. The Act in question gives t the company "the right t enter immediately upon
the possession of the land involved." (Sec. 3.) This amendment to Act No. 1258 was
enacted especially for the benefit of railroad companies, and affords full protection to
them if they act with due diligence. Until some such positive assertion of its desire to
expropriate the land, no reason is seen why the company might not ask for a dismissal of
the proceedings in accordance with section 127 of the Code of Civil Procedure. The right
of the owner to the enjoyment of his property ought not to be made to depend so
entirely upon the whims of a third party. No attempt was made to meet the statement of
Perez that he had expended a large sum of money on the construction of the building.
The commissioners probably saw the structure or some of the materials which entered
into it and are in a much better position to judge of the amount expended upon the work
than are we. They have fixed that amount at P600. In the absence of positive evidence in
the record showing this findings to be grossly excessive, we must accept it as correct.
For the foregoing, reasons, the judgment of the court below is modified by reducing the
award for the parcel containing 16,094 square meters to the sum of P6,500. The
damages for the remaining parcels will be fixed at the same proportionate amount. As
thus modified the judgment appealed from is affirmed. No costs will be allowed on this
appeal. The amount as herein fixed, together with interest, will be deposited with the
clerk of the Court of First Instance of Tayabas, subject to the rights of the defendants and
the Tayabas Land Company. So ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.

9. G.R. No. L-35861 October 18, 1979

MUNICIPALITY OF DAET, petitioner,
vs.
COURT OF APPEALS and LI SENG GIAP & CO., INC., respondent.
GUERRERO, J.:
The judgment of the respondent Court of Appeals, subject of the instant petition to
review on certiorari, "fixing the fair market value of the property sought to be
expropriated at P200.00 per square meter or for of FIVE HUNDRED FORTY THREE
THOUSAND FOUR HUNDRED (P543,400.00) PESOS, and the value of the improvement
thereon at THIRTY SIC THOUSAND FIVE HUNDRED (P36,500.00) PESOS, Philippine
Currency, both amounts to bear legal interest from and after the date of the actual
taking of possession by the Municipality of Daet, Camarines Norte until the full amount is
paid, with costs against plaintiff-appellant," must be affirmed in the light of the unusual,
unique and abnormal circumstances obtaining in this case where the complaint for
condemnation was filed on August 9, 1962 or seventeen (17) years ago but up to the
present, the petitioner Municipality of Daet has failed to make the deposit required to
take possession of the property sought to be expropriated.
The Municipality of Daet instituted condemnation proceedings against private
respondent Li Seng Giap & Co. Inc. on August 9, 1962 before the Court of Firs Instance of
Camarines Norte for the purpose of acquiring and subsequently converting the following
described property owned by private respondent as a public park:
A parcel of land (Lot No. 3 Plans PSU-57331 situated in the Poblacion, Municipality of
Daet, bounded on the North-East by a provincial road known as Vinzons Avenue; on the
South-East, by Felipe II Street; on the South, by Ildefonso Moreno Street, and on the
West, by J. Lukban Street, covering an area of TWO THOUSAND SEVEN HUNDRED AND
SEVENTEEN (2,717 sq. meters) SQUARE METERS, more or less and assessed by
TRANSFER CERTIFICATE OF TITLE NO. 207 in the name of Li Seng Giap & Co. 1
On August 20, 1962, private respondent, having been served with summons through
counsel, filed a "Motion to Dismiss" on the following grounds:
1. The proposed expropriation has not been duly authorized as provided by law,
principally because it has not been approved by the Office of the President as required
by Section 2245 of the Revised Administrative Code;
2. There is no genuine necessity for the proposed expropriation of the defendant's
property;
3. The proposed park should be put up in a different site which would entail less
expense to the plaintiff;
4. The present expropriation proceeding instituted by the herein plaintiff against the
defendant is discriminatory;

5. The plaintiff does not have sufficient funds to push through its project of
constructing a park and to allow the plaintiff to expropriate defendant's property this
time would be only to needlessly deprive the latter of the use of its property. 2
On February 8, 1963, the trial court rendered a decision dismissing the expropriation
proceedings mainly on the grounds that there is no "genuine need" for the petitioner to
convert the aforestated lot into a park nor necessity to widen the streets and that even if
there is genuine necessity for the proposed expropriation, still the petitioner cannot, in
this case, exercise the power of eminent domain as it has no funds to pay the reasonable
value of the land and the building thereon. 3
On February 12, 1963, petitioner filed a motion for reconsideration which was denied on
February 27, 1963. Petitioner then appealed to the Court of Appeals, which appeal was
docketed as CA-G.R. No. 32-259-R. On April 14, 1968, the Court of Appeals rendered a
decision reversing the trial court's decision, the dispositive portion of which is as follows:
WHEREFORE, the appealed "decision" (order) in Civil Case No. 1436 for expropriation is
hereby reversed and set aside, and, in lieu thereof, another one is hereby rendered
denying defendant Li Seng Gia & Company's motion for dismiss; declaring that plaintiff
Municipality of Daet has a lawful right to take the property sought to be condemned, for
the public use described in the complaint, upon payment of just compensation to be
determined as of the date of the filing of the complaint; directing the court a quo to
promptly fix the provisional value of the property sought to be condemned for the
purposed of the motion of plaintiff Municipality of Daet to take immediate possession of
said property under Sec. 2 of Rules 67 (formerly Sec. 3 of Rules 69) of the Rules of Court;
and remanding the case to the court a quo for further proceedings consistent with this
decision, the costs in this appeal to be taxed against plaintiff Municipality of Daet in
accordance with Sec. 12 of Rule 67 (formerly Sec. 13 of Rule 69) of the Rules of
Court; ... 4
On March 20, 1969, after the records of the case were remanded to the trial court,
private respondent filed a "Motion for Appointment of Commissioners to Fix Just
Compensation for the Property Sought to be Taken."
On April 15, 1969, the trial court issued twin orders: (1) fixing the provisional value of the
land at P129,99 per square meter and the value of the improvement at P30,000.00
totalling P356,040.00 and require the Municipality to deposit with the Provincial Treasurer
in cash or in security which should be payable on demand and upon deposit being
effected, the Clerk of Court was ordered to issue the necessary writ of place the
Municipality in possession of the property; and (2) appointing Atty. Ernesto de Jesus,
Provincial Assessor, as chairman; Atty. Jose V. Jamito, PNB Branch Attorney and Dr. Mateo
Aquino, a resident of the municipality, as members of the committee on appraisal. The
committee members proceeded to qualify by taking their oaths of office and then held
three sessions on May 10, May 17, and May 24, 1969. On May 28, 1969, the committee
filed t he following report:
COMMISSIONERS' REPORT
In compliance with the order of this Honorable Court dated April 15, 1969, and pursuant
to the provisions of Sec. 6. Rule 67 of the Rules of Court, the undersigned
commissioners, with due notice to the counsels of both parties, convened in the morning
of May 10, 1969, for the purpose of finding ways and means by which the commissioners
could ascertain the fair market value of the property subject of this proceeding. There
are two basic approaches used in the appraisal of land sought to be condemned the
sale approach, and the income approach. The commissioners as well as the counsels of
both parties agreed to use the sale approach. In order to enable the counsels of both
parties, as well as the commissioners, to gather or secure documents regarding
transaction of real property which the commissioners might use as guide in determining
the fair market value, the parties agreed to postpone the hearing to May 17, 1969, at
6:30 in the morning.

Hearing was resumed in the morning of May 17, forthwith, the counsel for the plaintiff
presented documents which were submitted as Exhibits, to wit:
1. Exh. "A" Deed of absolute sale executed by Lydia Moreno in favor of Jaime R.
Alegre, entered as Doc. No. 160: Page No. 33: Book No. IV; Series of 1962. (The
consideration was about P13.00 per square meter).
2. Exh. "B" Deed of absolute sale executed by Jesus Villafranca y Aules in favor of
Sourthern Products Import and Export Corporation, entered as Doc. No. 314; Page No.
64; Book No. II; Series of 1962. (The consideration was around P14.00 per square
meter).
3 Exh. "C" Deed of absolute sale executed by Julio Curva, et al. in favor of Felicidad
Vinzons Pajarillo, entered as Doc. No. 186; Page No. 39; Book No. 1; Series of 1958.
(The consideration was P 15.00 per square meter).
4. Exh. "D" Deed of Absolute Sale executed by Clao Dy Kim To in favor of
Concepcion Fonacier-Abao, entered as Doc. No. 133; Page No. 88; Book No. V; Series
of 1948. (The consideration was about P8.57 per square meter).
5. Exh. "E" Deed of sale with mortgage executed by Dr. Agustin F. Cuevas and
Leticia Lopez, in favor of the Camarines Norte Teachers Cooperative Credit Union, Inc.,
entered as Doc. No. 117; Page No. 56; Book NO. VIII; Series of 1961. (The
consideration was P57,000.00 the lot with an area of 972 square meters, and a
three-storey concrete building assessed at P16,000.00 under Tax Dec. No. 7083. If we
will exclude the value of the building, the consideration for the land will be about
P43.00 per square meter).
After the submission of the aforementioned exhibits, upon motion of the counsel for the
defendant, the hearing was postponed to May 24, 1969, at 8:30 in the morning. Upon
resumption of the hearing on said hour and date, the counsel for the defendant
presented Exh. 1, which the deed of sale executed by the Municipality of Daet in favor of
the Development Bank of the Philippines; the document was executed on January 30,
1969; Exh. "1-A", the consideration in the amount of P205,600.00; Exh. "1-B", the area of
2,056 square meters; and Exh. "2", the letter of Tomas Cootauco to Li Seng Giap & Co.,
dated July 21, 1962. In addition to the aforementioned evidence, the counsel for the
defendant presented as witness Lo Chin who testified that sometime in July, 1962. In
addition to the aforementioned evidence, the counsel for the defendant presented as
witness Lo Chin who testified that sometime in July, 19 1962 (after the fire), he was
instructed by his son-in-law, Mr. Jesus Ty Poco, to see Mr. Jose Ong, the representative of
Mr. William Lee, for the purpose of making an offer to buy the land subject of this
proceeding for a price of P120.00 per square meter, and P30,000.00 for the structure
thereon; that he had talked with Mr. William Lee, for the purpose of making an offer to
buy the land subject of this proceeding for a price of P120.00 per square meter, and
P30,000.00 for the structure thereon; that he had talked with Mr. Jose Ong, for the same
purpose, on several occasions 5 or 6 times, the last was sometime in the first week of
May, this year wherein he offered to pay as high as P150.00 per square meter, and
P50,000,00 for the structure thereon; and that Mr. Ty Poco, having been born in
Mercedes, and resided here since birth, was desirous of buying said property because he
intends to build a memorial thereon. Counsel likewise presented Mr. Jose Ong as witness
to corroborate the testimony of Lo Chin.
After the hearing held by the commissioners, Atty. Ernesto de Jesus, who is the
incumbent provincial assessor, dig up the records in his office for the purpose of finding,
in addition to the exhibits already presented, other documents covering transactions of
properties located within the areas near the land sought to be condemned, but failed to
locate even a single document Hence, the commissioners have no other recourse but to
base their appraisal of the value of the land under consideration from the Exhibits
submitted by the parties.

Under Sec. 4, Rule 67, of the Rules of Court, just compensation is to be determined as of
the date of the filing of the complaint. The above-entitled complaint was filed in August,
1962; hence, Exh. "1", Exh. "1-B" and Exh. "1-C" could not be taken into consideration,
the same having been executed in the year 1969 seven years after the filing of the
complaint. The offer of Mr. Jesus Ty Poco could not also be considered because the same
was made by one who was under an imperative necessity of buying the property.
After all the exhibits submitted by the plaintiff had been examined by the
commissioners, and upon a conscientious and analytical study of the sales of land near
the land subject of this proceeding, and after serious deliberations on the matter, the
commissioners agreed that, in the year 1962, the reasonable or fair market value of the
land subject of this proceeding should be P60.00 per square meter; and the structure
remaining thereon at P15,000.00
Attached hereto is the map of the commercial center of Daet wherein the land subject of
this case is shown. The lands described in the Exhibits submitted by the plaintiff are also
indicated thereon.
Daet, Camarines Norte, May 28, 1969.
Respectfully submitted,
(Sgd.) Ernesto de Jesus (Sgd.) Jose V. Jamito
Commissioner Commissioner
(Sgd.) Mateo D. Aquino
Commissioner 5
Private respondent, having received copy of the commissioner's report, filed a "Motion to
Admit Additional Evidence" which was opposed by petitioner but the same was granted
by the Court provided that the additional evidence consisted of the expert testimony of a
duly licensed broker. On August 20, 1969, the municipality manifested its conformity to
the commissioner's report.
Meanwhile, on July 23, 1969, Judge Gabriel V. Valero, the Presiding Judge at Branch I,
issued an order transferring this case to Judge Isidro Vera of Branch II, who proceeded to
take the additional evidence of private respondent. Said evidence consisted of the
testimony of Engineer Aurelio B. Aquino, who appraised the land involved herein at
P200.00 per square meter and the improvement thereon at P36,500.00 in 1969.
On December 2, 1969, after submission of evidence for both parties, the trial court
rendered a decision disregarding the valuation made by the commissioners and using
the appraisal of Engineer Aurelio B. Aquino in 1969 as the basis in determining the value
of the land in 1962. The dispositive portion of said decision is quoted herein as follows:
WHEREFORE, the Court renders judgment fixing the reasonable value of the property
sought to be expropriated at P117.00 per square meter or for a total amount of Three
Hundred Seventeen Thousand Eight Hundred Eighty Nine Pesos (P317,889.00), and the
value of the improvement at Thirty Six Thousand Five Hundred Pesos (P36,500.00), this
amount to bear interest at the legal rate from the filing of the complaint until paid with
costs against the plaintiff.
SO ORDERED. 6
Both petitioner and private respondent filed their respective motions for reconsideration,
the former praying that the trial court give due course to the commissioner's report while
the latter insisting that the market value of the land be fixed at P200.00 per square
meter. Upon denial of the said motions, both parties then appealed to the Court of
Appeals.

On October 18, 1972, respondent Court of Appeals rendered a decision sustaining the
valuation of the property in 1969, declaring the municipality to have a lawful right to
expropriate and modified the judgment of the trial court with respect to the interest that
can be recovered which should be from and after the date of actual taking.
Petitioner's motion for reconsideration having been denied, the instant petition for review
on certiorari was filed and the following assignment of errors raised:
I. Contrary to law and jurisprudence, the Court of Appeals erred in the interpretation and
application of Section 4, Rule 67 of the Rules of Court by determining the value of the
property in condemnation proceedings at the time of the rendition of the judgment of the
trial court and not at the date of the filing of the complaint.
II. Contrary to the principle of res judicata, the Court of Appeals gravely abused its power
in modifying, disregarding and amending its own decision which has long become final
and executory (in CA-G.R. No. 32259-R).
III. Without regard to the guidelines set forth by procedural laws and jurisprudence, the
Court of Appeals erred in giving credence to an appraiser under the employ of the
private respondent and totally disregarded the findings of the commissioners appointed
by the Court and the by not declaring that the trial judge of Branch II of the Court of First
Instance of Camarines Norte has gravely abused his discretion in taking cognizance of
the condemnation case.
IV. In any event, by virtue of the Presidential Decree No. 42 issued on November 9, 1972
private respondent in estopped from claiming in valuation higher than the assessed
value of the property sought to be condemned. 7
The first assignment of error assails the respondent Court's application of Section 4, Rule
67 of the Revised Rules of Court which states the time when the value of the land should
be determined in condemnation proceedings. The Rule provides thus:
Sec. 4. Order of condemnation. When such a motion is overruled or when any party
fails to defend as required by this rule, the court may enter an order 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 payment of
just compensation to be determined as of the date of the filing of the complaint ...
A look into the original of this provision reveals that it is a reproduction of Section 5, Rule
69 of the Rules of Court of July 1, 1940. In turn, the said provision in the Rules of 1940
appears to have been taken from the ruling Manila Railroad Company vs. Caligsihan, 8 a
1919 case, where the rule that "the value of the property taken should be fixed as of the
date of the proceedings" was enunciated.
Prior to the promulgation of the Rules of 1940, however, there is another case that
touched on the question of time when valuation of the property taken should be fixed.
This is the case of Provincial Government of Rizal vs. Caro de Araullo 9 a 1938 case,
where the value of the property therein involved was fixed as of the date when it was
taken in 1927 and not at the time of the filing of the complaint in 1928. This ruling was
reiterated in Republic vs. Lara, 10 a 1954 case, where it was held that the value of the
lands expropriated must be reckoned as of the time of the actual possession by the
Government in 1946 and not as of the time of the filing of the complaint in 1949. Such
was the ruling notwithstanding the fact that the Rules of 1940 was already in force and
effect. In explaining the ruling, the Court therein held:
... Ordinarily, inquiry is limited to actual market values at the time of the institution of
the condemnation proceedings because under normal circumstances, the filing of the
complaint coincides or even precedes the taking of the property by the plaintiff; and Rule
69 simply fixes this convenient date for the valuation of property sought to be
expropriated. Where, however, the actual taking or occupation by the plaintiff, with the
consent of the landowner long precedes the filing of the complaint for expropriation the

rule to be followed must still be that enunciated by us in Provincial Government of Rizal

vs. Caro, supra, that "that value of the property should be fixed as of the date when it
was taken and not of the date of the filing of the proceedings." For where property is
taken ahead of the filing of the condemnation proceedings, the value thereof may be
enhanced by the public purpose for which it is taken, the entry of the plaintiff upon the
property may have depreciated its value thereby, or there may have been a natural
increase in the value of the property from the time it is taken to the time the complaint is
filed, due to general economic conditions. The owner of the private property should be
compensated only for what he actually loses, it is not intended that his compensation
shall extend beyond his loss or injury. And what he loses is only the actual value of his
property at the time it is taken. This is the only way the compensation to be paid can be
truly just, i.e., "just" not only to the individual whose property is taken, "but to the public,
which is to pay for it." (18 Am. Jur. 873, 874)
Subsequent cases where the taking preceded the filing of the expropriation proceedings
followed the doctrine in the Caro case. These cases were: Republic vs. Garcellano, et
al.; 11 Municipal Government of Sagay vs. Jison, et al.;12 and Alfonso vs. Pasay
City. 13 However, in the case of Republic vs. Narciso, et al., 14 where the expropriation
proceeding preceded the taking, it was held that the value of "the property to be
considered are those at the beginning of the expropriation" and not accordingly at the
time of the taking of said property. For this reason, this Court fittingly saw the need for
clarify the departure of some cases from the mandate of Section 5, Rule 69 of the Rules
of Court of 1940 (now Section 4, Rule 67 of the Revised Rules of Court) in the case
of Republic of the Philippines vs. Philippine National Bank, 15 where it was held:
It is apparent from the foregoing that, when plaintiff takes possession before the
institution of the condemnation proceedings, the value should be fixed as of the time of
the taking of the said possession, not the filing of the complaint, and the latter should be
the basis for the determination of the value, when the taking of the property involved
coincides with or is subsequent to, the commencement of the proceedings. Indeed,
otherwise, the provision of Rule 69, Section 5, directing that compensation" be
determined as of the date of the filing of the complaint," would never be operative.
In Capitol Subdivision, Inc. vs. Province of Negros Occidental, 7 SCRA 60, the Court said
that "Since the right of the Province of Negros Occidental to expropriate the lot in
question in the present case is not contested, the owner of said lot is entitled to recover
from said province the fair and full value of the lot, as of the time when possession
thereof was actually taken by the province, plus consequential damages including
attorney's fees from which the consequential benefits, if any, should be deducted with
interest at the legal rate, on the aggregate sum due to the owner from and after the date
of actual taking." And in the case of J.M. Tuason & Co., INc. vs. Land Tenure
Administration, 31 SCRA 413, the Court, speaking thru now Chief Justice Fernando,
reiterated the "well-settled (rule) of the property at the time of its taking. Anything
beyond that is more and anything short of that is less, than just compensation. It means
a fair and full equivalent for the loss sustained, which is the measure of the indemnity,
not whatever gain would accrue to the expropriation entity."
In the case at bar, it is a fact that there has been no taking of the property prior to the
institution of the condemnation proceedings. And it cannot even be said that the filing of
the complaint coincided with he taking of the property by the plaintiff because the latter
did not enter into possession of the property since it failed or did not comply with the
order of the Court requiring the municipality to make the necessary deposit of the
provisional value as fixed by the Court in its Order of April 15, 1969. Petitioner did not
even move for a reconsideration of said Order. The trial proceeded and after hearing and
submission of evidence for both parties, the trial court rendered on December 2, 1969 its
decision "fixing the reasonable value of the property sought to be expropriated at
P117.00 per square meter or for a total amount of Three Hundred Seventeen Thousand
Eight Hundred Eighty Nine Pesos (P317,889.00), and the value of the improvement at
Thirty Six Thousand Five Hundred Pesos (P36,500.00), said amount ... to bear interest at
the legal rate from the date of the filing of the complaint until paid."

Still questioning the value determined by the trial court, petitioner appealed to the Court
of Appeals and on October 8, 1972, the appellate court in its judgment fixed the value of
the property at P200.00 per square meter and P36,500.00 for the improvement. Not yet
satisfied, the municipality appealed to the Supreme Court and meantime took no step to
take possession of the land. While petitioner submitted a Manifestation on September
15, 1977 to this Court invoking Presidential Decree No. 42 dated November 9, 1972 and
manifesting that it had made a deposit to the Philippine National Bank in the amount of
P54,370.00 as per PNB Certificate No. 9381 dated February 9, 1973, We hold that
petitioner has not made the correct and proper deposit of the provisional value as fixed
by the trial court. It is elementary that Presidential Decree No. 42 of November 9, 1972
which grants the right to take or enter upon the possession of the property sought to be
expropriated if he deposits with the Philippine National Bank an amount equivalent tot he
assessed value of the property for purposes of taxation has no application to the case at
bar where the Court of Appeals had already fixed the value of the property at P200.00
per square meter and P36,500.00 for the improvement in its decision promulgated on
October 18, 1972 about three weeks earlier than the issuance of the Presidential Decree
No. 42
By not complying with the orders of the trial court and the appellate court, petitioner
would benefit by its non-compliance and dilly-dallying in taking possession of the
property which We will not sanction or allow to the prejudice of the private respondent
landowner who should not be penalized by the protracted delay of petitioner in taking
over the property over a period of seventeen (17) years during which time private
respondent was deprived of the beneficial use of the land and the improvement thereon.
Petitioner upon tiling the complaint has the duty to make the deposit in the amount
provisionally ascertained and fixed by the court (Sec. 2, Rule 67, Rules of Court), which
deposit serves the double purpose of pre- payment of the property if the same is finally
expropriated and of an indemnity for damages if the proceedings are dismissed. (Visayan
Refining Co. vs. Camus, 40 Phil. 550; Republic of the Philippines vs. Baylosis, L-13582,
Sept. 30, 1960)
The records disclose that petitioner filed a Motion for Authority to Demolish Building of
Private Respondent dated June 27, 1974 for reasons therein alleged which private
respondent opposed as not being the proper procedure under the law to abate a
nuisance unless petitioner deposits the amount of P36,500.00 which is the value of the
improvement. The Court resolved to deny the motion without prejudice to petitioner's
taking the proper proceedings for the abatement of the alleged nuisance pursuant to the
provisions of the new Civil Code in its Resolution of July 24, 1974.
The records further disclose that in the Petition to Cite the Mayor of the Municipality of
Daet (Herein Petitioner) in Contempt of Court filed by private respondent on February 14,
1978, this Court was informed that the petitioner acting thru its Mayor, Engineer Jose P.
Timoner, started to demolish on February 6, 1978 the building of the private respondent,
attaching thereto photographs marked Annexes 1 and 2 showing the building before and
during the demolition. Private respondent prayed that the Mayor be cited for contempt or
alternatively, that the petitioner be ordered to deposit with the Philippine National Bank
the amount of P36,500.00 instead of P28,830.00 to await the final outcome of this case.
Commenting on the petition to cite the Mayor in contempt of court, petitioner again
relies on Presidential Decree No. 42 alleging that the assessed value of the property for
taxation purposes is only P18,250.00 which is less than the amount of P28,830.00 it had
already deposited with the Philippine National Bank.
The above antecedent facts and circumstances of this case are unique and abnormal
such that by reason thereof, We agree with the judgment of the Court of Appeals fixing
the fair market value of the property sought to be expropriated at P200.00 per sq. meter
or for a total of FIVE HUNDRED FORTY THREE THOUSAND FOUR HUNDRED (P543,400.00)
PESOS, and the value of the improvement thereon at THIRTY SIX THOUSAND FIVE
HUNDRED (P36,500.00) PESOS, Philippine Currency, both amounts to bear legal interest
from and after the date of the actual taking of possession by the Municipality of Daet,
Camarines Norte until the full amount is paid, with costs against plaintiff-appellant.

We hold that the decision of the Court of Appeals fixing the market value of the property
to be that obtaining, at least, as of the date of the rendition of the judgment on
December 2, 1969 as prayed by private respondent, which the Court fixed at P200.00
per square meter is in conformity with doctrinal rulings herein above cited that the value
should be fixed as of the time of the taking of the possession of the property because
firstly, at the time judgment was rendered on December 2, 1969, petitioner had not
actually taken possession of the property sought to be expropriated and secondly, We
find the valuation determined by the Court of Appeals to be just, fair and reasonable.
On the second assignment of error, petitioner faults the respondent court in modifying,
disregarding and amending its own decision in CA-G.R. No. 32259-R which directed
payment of just compensation to be determined as of the date of the filing of the
complaint. Petitioner claims that this decision has tong become final and executory and it
would be contrary to the doctrine of res judicata to modify, disregard and amend said
decision.
In order that there may be res judicata, the following requisites must be present: (a) the
former judgment must be final; (b) it must have been rendered by a court having
jurisdiction of the subject- matter and of the parties; (c) it must be a judgment on the
merits; and (d) there must be, between the first and second actions, Identity of parties,
of subject matter, and of cause of action. 16
When, between the first case where the judgment was rendered, and the second case
where such judgment is invoked, the three Identities mentioned in paragraph (d) above,
are present, the judgment on the merits rendered in the first case constitutes an
absolute bar to the subsequent action. It is final as to the claim or demand in the
controversy, including the parties and those in privity with them, not only as to every
matter which was offered and received to sustain or defeat the claim or demand, but as
to any other admissible matter which might have been offered for that purpose and of all
matters that could have been adjudged in that case. 17
This is, however, not the situation in the case at bar. The only question drawn in issue
before the Court of Appeals in CA-G.R. No. 32259-R was whether petitioner had the
authority to exercise the right of eminent domain. The question regarding the amount of
just compensation was expressly reserved by the Court of Appeals for the trial court to
determine. Perforce, Between the first case wherein the judgment is rendered, and the
second case wherein such judgment is invoked, there is Identity of parties but there is no
Identity of causes of action. In such a situation, the judgment is conclusive in the second
case only to those matters actually and directly controverted and determined, and not as
to matters merely involved therein. To constitute res judicata,the right to relief in one suit
must rest upon the same question which in essence and substance was litigated and
determined in the first suit. 18
That phrase in the dispositive portion of the decision of the Court of Appeals in CA-G.R.
No. 32259-R referring to the time that should be considered in reckoning the just
compensation, to wit "declaring that plaintiff Municipality of Daet has the lawful right
to take the Property sought to be condemned, for the public use described in the
complaint, upon payment of just compensation to be determined as of the date of the
filing of the complaint" cannot likewise constitute the law of the case, which is a
doctrine closely akin to res judicata. The law of the case, as applied to a former decision
of an appellate court, merely expresses the practice of the courts in refusing to reopen
what has been decided. 19 It differs from res judicata in that the conclusiveness of the
first judgment ' is not dependent upon its finality. The first judgment is generally' if not
universally, not final. 20 It relates entirely to questions of law, and is confined in its
operation to subsequent proceedings in the same case. 21 While it is conclusive as to all
matters within its scope, it cannot be invoked, except as to questions as have been
actually considered and determined in the first appeal. In the application of this rule,
courts will take cognizance of such points only as affirmatively appears in the last to
have been decided in the former appeal. 22

Moreover, this case is before the Supreme Court and being the Court of last resort, it is
the final arbiter of all legal questions properly brought before it and its decision in any
given case constitutes the law of this particular case. Once Our judgment becomes final,
it is binding on all inferior courts, and hence beyond their power and authority to alter or
modify. (Kabigting vs. Acting Director oil Prisons, 6 SCRA 281, 286). Petitioner's second
assignment of error is, therefore, without merit.
The first part of the third assignment of error hinges on what is the proper procedure in
determining the just compensation in proceedings.
Section 5, Rule 67 of the Revised Rules of Court calls for the appointment of not more
than three (3) competent and disinterested persons as commissioners to ascertain and
report to the court the just compensation for the property sought to be taken. As to the
extent of this function and power of the commissioner, this Court held inManila Railroad
Company vs. Velasquez 23 that the commissioners' power is limited to assessing the
value and determining the amount of damages. There it stops; they can go no farther.
The value and damages awarded must be a just compensation and no more and no less.
But in fixing these amounts, the commissioners are not to act ad libitum. They are to
discharge the trust reposed in them according to well-established rules and form their
judgment upon correct legal principles. To deny this is to place them where no one else
in this country is placed, above the law and beyond accountability.
Corollary to tills limitation, it has been held that reports submitted by commissioners of
appraisals in condemnation proceedings are not binding, but merely advisory in
character, as far as the court is concerned. 24An early case enunciated the rule that a
Court of First Instance has the undoubted right to reject the report of the commissioners
as to the value of the land, if the report is not founded upon legal evidence. The judge
has the undoubted right also to discharge the commission and appoint a new one. He
also has the right to formulate an opinion of his own as to the value of the land in
question, nevertheless, if he formulates such an opinion, he must base it upon
competent evidence.25 When the commissioners report is not in accordance with the law
on the matter, another case ruled that it cannot serve as the basis of the judicial decision
but must be annulled and set aside, and the case remanded to the court below for
reopening of trial. 26 Then, in still other cases, it was held that a Court of First Instance or
on appeal, the Supreme Court may substitute its own estimate of value as gathered from
the record submitted to it, in cases where the only error of the commissioners is that
they have applied illegal principles to the evidence submitted to them; or that they have
disregarded a clear preponderance of evidence; or that they have used an improper rule
of assessment in arriving at the amount of the award; provided always that the evidence
be clear and convincing and the amount allowed by the commissioners is grossly
inadequate or excessive. 27
That the commissioners' report is not final and conclusive, but merely recommendatory
is bolstered by the requirement in Section 8, Rule 67 of the Revised Rules of Court of
conducting a hearing thereon. Otherwise stated, said provision requires that upon the
expiration of the period of ten (10) days within which all interested parties may file their
objects to the report, or even before the expiration of such period if all interested parties
have filed their objections to the report or their statement of agreement therewith, the
court must conduct a hearing on the report.
In view of these basic provisions of the Rules of Court on eminent domain and various
jurisprudence on the function of the commissioners as limited by the Court, We hold that
the respondent Court of Appeals did not err in giving credence to the appraiser employed
by private respondent and in disregarding the commissioners report.
Respondent court found that aside from being a civil engineer, Aurelio B. Aquino is a
licensed real estate broker and appraiser of long standing, being one of the incorporators
of C.M. Hoskins and Co., Inc., a corporation engaged in real estate brokerage since
October, 1938 and of which firm he is presently the Chairman of the board of directors.
With these qualifications, respondent court committed no error in concluding that he was
competent to make the appraisal of the fair market value of the parcel of land under

consideration. Although he does not maintain an office in Daet nor does he appear to
have had any transactions in said locality, he is compatent since a commercial parcel of
land retains the same characteristics whether it is located in Manila or Daet, and the
criterion for making an appraisal of a parcel of land is universally applied, irrespective of
the locality where it is situated. And since the value of a parcel of land taken by eminent
domain is always a matter of opinion, the same may be proved by opinion evidence of
the real estate appraiser. 28 Hence, We find substantial basis for the court to fix the value
of the land at P200-00 per square meter and the building at P36,500.00 as testified to by
the broker.
Petitioner assails the transfer of the case from Branch I of the Court of First Instance of
Camarines Norte to Branch 11 thereof, claiming that the jurisdiction of the respective
branches are delineated by a controlling department circular and thereby concluding
that Branch 11 has no legal and valid authority to take over said expropriation case.
We do not agree. Where a court of first instance is divided into several branches, each of
the branches is not a court distinct and separate from the others. Jurisdiction is vested in
the court, not in the judges, so that when a complaint or information is filed before one
branch or judge, jurisdiction does not attach to said branch or judge alone, to the
exclusion of the others. Trial may be had or proceedings may continue by and before
another branch or judge. It is for this reason that Section 57 of the Judiciary Act,
expressly grants the Minister of Justice, upon recommendation of the district Judge, the
administrative right or power to apportion the cases among the different branches, both
for the convenience of the parties and the coordination of the work by the different
branches, and the judges presiding each branch. The apportionment does not involve a
grant or limitation or jurisdiction; this continues to be vested in the court of first instance
of the province as a whole, and trial may be had by any judge or branch of the court. 29
We do agree, however, that the apportionment of cases must be respected by the judges
in the interest of order and coordination in the dispatch of cases. But the question of
whether Branch II took cognizance of a case properly belonging to another branch is
negated by the fact, pointed out by respondents, that Administrative Order No. 472 of
the Secretary of Justice dividing the Province of Camarines Norte between Branch I and
Branch II took effect on January 1, 1971 long after Branch II had disposed of the case at
bar because said case was decided on December 2, 1969.
The fourth assignment of error is clearly untenable. Presidential Decree No. 42 issued on
November 9, 1972 does not limit the just compensation in expropriation proceedings to
the assessed value of the value sought to be condemned. By its title alone, i.e.,
"Authorizing the Plaintiff in Eminent Domain Proceedings to Take Possession of the
Property Involved Upon Depositing the Assessed Value for Purposes of Taxation," it can
already be gleaned that said decree fixes only the provisional value of the property. As a
provisional value, "it does not necessarily represent the true and correct value of the
land. The value is only "provisional" or "tentative" to serve as the basis for the
immediate occupancy of the property being expropriated by the condemnor. 30
This decree repealed Section 2, Rule 67 of the Revised Rules of Court which imposed
upon the court having jurisdiction of the proceeding with the duty of ascertaining and
fixing the provisional value of The property. As stated in the said decree itself, the repeal
was necessary inasmuch as the "existing procedure for the exercise of the right of
eminent domain is not expeditious enough to enable the plaintiff to take possession of
the real property involved as soon as possible, when needed for public purposes."
Even in Presidential Decree No. 76, "Requiring All Persons, Natural or Juridical Owning or
Administering Real Property, Including the Improvements Thereon, to File Sworn
Statement of the True Value of Such Property," issued on December 6, 1972, it is clearly
stated that the just compensation is based on the current and fair market value and not
on the assessed value. The pertinent provisions state as follows:
For purposes of just compensation in cases of private property acquired by the
government for public use, the basis shall be the current and fair market value as

declared by the owner or administrator or such market value as determined by the

assessor, whichever is lower.
Under this Decree, the assessed valuation which shall be the basis for payment of real
property tax beginning the calendar year 1974 shall be fifty per centum of the current
fair market value, as determined by the assessor, in case of commercial, industrial or
mineral lands; forty per centum in the case of agricultural lands and thirty per centum in
the case of lands for purely residential purposes.
Clearly, therefore, the assessed value of a property constitutes only a percentage of its
current fair market value. It cannot, thus, be the direct basis of just compensation in
expropriation proceedings.
But more importantly, this assignment of error is bereft of merit because Presidential
Decree No. 42 is inapplicable in the case at bar. As pointed out by private respondent, it
is a cardinal rule of statutory construction that laws shall have only prospective effect.
The provisional value of the property in this case having already been fixed, the deposit
on February 9, 1973 of the amount of P54,370.00 representing the assessed value of the
land and the deposit on October 21, 1977 of the amount of P25,830.00 representing the
assessed value of the improvement, both pursuant to the said decree, are not sufficient.
Nevertheless, said amounts should be deducted from the total amount due to private
respondent.
To elucidate and clarify the judgment of this Court in affirming the decision appealed
from, We consider and hold that the demolition of the building of private respondent
standing on the land by the Municipal Mayor, Engr. Jose P. Timoner on February 14, 1978
constituted the actual taking of possession of the property sought to be expropriated by
the Municipality of Daet. And from said date, February 14, 1978, interest at the legal rate
shall be paid by the municipality until the full amount is paid.
IN VIEW OF ALL THE FOREGOING, the judgment under review is hereby AFFIRMED in toto.
SO ORDERED.
Claudio Teehankee, took no part.
Makasiar, Fernandez, De Castro and Melencio Herrera, JJ., concur.

10.
11.

NHA vs Reyes, 123 scra 245 (Di ko Makita!)

G.R. No. L-32049 June 25, 1984

MATAAS NA LUPA TENANTS ASSOCIATION, INC., NICOLAS AGLABAY, and Those

Mentioned in Annex "A" of Complaint, petitioners,
vs.
CARLOS DIMAYUGA and JULIANA DIEZ Vda. de GABRIEL, respondents.
Ramon Gonzales for petitioners.
The Solicitor General and Magno T. Bueses for respondents.
MAKASIAR, J.:
This petition for review on certiorari presents for review the order dated October 30,
1969 of the defunct Court of First Instance of Manila, Branch IV, which granted the
motion to dismiss the complaint of petitioners in Civil Case No. 75391 on the ground that
the same failed to state a cause of action (p. 16, rec.; pp. 1, 100, CFI rec.).
The undisputed facts are as follows:
On January 17, 1969, petitioners filed a complaint for the exercise of preferential rights
with the then Court of First Instance of Manila, Branch IV, docketed as Civil Case No.
75391 (p. 32, rec.; p. 1, CFI rec.).
The said complaint alleged that petitioner association has for its members Nicolas
Aglabay, et al., named and listed in Annex "A" of said complaint, which members are
heads of 110 tenant families, and who have been, for more than ten years prior to 1959,
occupants of a parcel of land (with their 110 houses built thereon), formerly owned by
the respondent, Juliana Diez Vda. de Gabriel, to whom petitioners have been paying
rents for the lease thereof, but who, on May 14, 1968, without notice to petitioners, sold
the same to respondent Carlos Dimayuga, who, in turn, mortgaged the same to her for
the balance of the purchase price; that according to Republic Act 1162, as amended by
Republic Act 2342, a parcel of land in Manila and suburbs, with at least fifty (50) houses
of tenants erected thereon and actually leased to said tenants for at least ten (10) years
prior to June 20, 1959, may not be sold by the landowner to any person other than such
tenants, unless the latter renounced their rights in a public instrument; that without said
tenants-appellants having renounced their preferential rights in public instrument,
respondent Vda. de Gabriel sold the land to respondent Dimayuga; that petitionerstenants are willing to purchase said land at the same price and on the same terms and
conditions observed in the contract of sale with respondent Dimayuga; and that since
aforesaid contract of sale is expressly prohibited by law, the same is null and void, while
it is mandatory for respondent Vda. de Gabriel to execute such sale to petitioners,
Petitioners therefore prayed that said contract of sale be declared void, and that
respondent Vda. de Gabriel be ordered to execute a deed of sale in favor of petitioners at
the same price and conditions followed in the contract with respondent Dimayuga, plus
attorney's fees and damages (p. 32, rec.; p. 1, CFI rec.).
On January 31, 1969, respondent Vda. de Gabriel filed a motion to dismiss on the ground
that the complaint stated no cause of action because the land subject of the complaint is
not a landed estate, and not being such, the same cannot be expropriated, and not being
expropriable, no preferential rights could be availed of by the tenants (p. 41, rec.; p. 22,
CFI rec.).

Respondent Dimayuga filed his answer to aforesaid complaint on February 6, 1969

admitting therein certain factual allegations, denied some averments, interposed the
affirmative defenses that plaintiffs had no personality to initiate the action since the
Land Tenure Administration possessed the power to institute the proper expropriation
proceedings before the competent court and that the subject complaint stated no cause
of action against respondent, alleged a counterclaim to eject plaintiffs from the property,
and prayed for the dismissal of the complaint and other remedies (p. 44, rec.; p. 155, CFI
rec.).lwphl@it
On February 6, 1969, plaintiffs-petitioners filed their opposition to the motion to dismiss,
maintaining, among others, that Republic Act 1162, as amended by Republic Act 2342
(law which respondent Vda. de Gabriel invoked), does not necessarily refer to landed
estates, but to any piece of land occupied by more than 50 families leasing the same for
more than ten (10) years prior to June 20, 1959; that their preferential rights are
independent of the expropriability of the land; that therefore, said rights may be
exercised even if the land is not expropriable; and that these rights were granted
pursuant to the police power of the State for the general welfare, with prayer that
aforesaid motion to dismiss be denied (p. 47, rec.; p. 26, CFI rec.).
On February 13, 1969, respondent Vda. de Gabriel replied to the aforesaid opposition to
motion to dismiss, reiterating therein her prayer to dismiss the complaint (p. 57, rec.; p.
38, CFI rec.).
Plaintiffs-petitioners filed their rejoinder to above reply to their opposition on February
19, 1969, laying emphasis on the alleged distinction between the two ways of acquiring
occupied land under Republic Act 1162, which are expropriation and voluntary disposal
of the land by the owner thereof, and which are exercisable independently of each other
(p. 56, rec.; p. 42, CFI rec.).
On October 30, 1969, Branch IV of the Court of First Instance of Manila issued the subject
order which found respondent's motion to dismiss well-taken and thereby dismissed the
complaint (p. 69, rec.; p. 100, CFI rec.).
Petitioners moved for reconsideration of the aforecited order on January 7, 1970, which
motion was denied in the lower court's order of January 27, 1970 (p. 111, 190, CFI rec.).
On February 9, 1970, petitioners filed a notice of appeal with the lower court to which
respondent Vda. de Gabriel moved for dismissal of the same on February 11, 1970 on
the alleged ground that pursuant to Republic Act 5440, petitioners should have appealed
from the questioned order by way of a petition for certiorari to this Court since the
matter involved only errors or questions of law (p. 143, CFI rec.).
After a series of motions, reply, rejoinder, sur-rejoinder, and answer between both
parties, the lower court issued its order of May 11, 1970 dismissing petitioners' appeal
(p. 225, CFI rec.).
Petitioners thus resorted to this petition.
Petitioners contend that the lower court committed an error in dismissing their complaint
on the ground that since the land is not expropriable, it follows that the tenants therein
have no preferential rights to buy said land, if the same is sold voluntarily. Petitioners'
contention is anchored on the amendment introduced by Republic Act 3516 into Section
1 of Republic Act 1162, which latter law had been invoked in the decision of the lower
court.
According to petitioners, the phrase "any landed estates or haciendas herein authorized
to be expropriated" had been amended to read "any landed estates or haciendas or
lands herein authorized to be expropriated"; hence, Republic Act 1162 does not refer
exclusively to landed estates or haciendas, but even to smaller lands. The particular
section as amended reads thus:

The expropriation of landed estates or haciendas, or lands which formerly formed part
thereof, or any piece of land in the City of Manila, Quezon City and suburbs, which have
been and are actually being leased to tenants for at least ten years, is hereby
authorized: Provided, That such lands shall have at least forty families of tenants
thereon. (Sec. 1 of R. A. 3516).
Petitioners likewise invoke the amended title of Republic Act 1162 which had been
introduced by Republic Act 2342 which title now reads as follows:
An Act Providing for the Expropriation of Landed Estates or Haciendas or Lands Which
Formerly Formed Part Thereof or Any Piece of Land in the City of Manila, Quezon City and
Suburbs, Their Subdivision into Small Lots, and the Sale of Such Lots at Cost or Their
Lease on Reasonable Terms, and for Other Purposes (emphasis supplied).
Petitioners further allege that Republic Act 1162 is both an exercise of the power of
eminent domain and the police power of the State. The exercise of the police power of
the State refers to the grant of preferential rights to the tenants of such land, if the same
is disposed of voluntarily. Simply stated, petitioners theorize that Republic Act 1162
covers both compulsory and voluntary sale; hence, while expropriability is pertinent to
compulsory sale, the same does not relate to voluntary sale. Even if the land is not
expropriable, if the same is however actually leased to the occupants for more than ten
years prior to May 22, 1963 (when R.A. 3516 took effect) with at least 40 families, said
land, if sold voluntarily, is subject to the preferential rights of the tenants.
Respondent Vda. de Gabriel maintains, on the other hand, that there is no more issue
regarding the non-expropriability of subject land, which condition or status was expressly
admitted by petitioners in the lower court; that the title of Republic Act 1162, as
amended by Republic Act Nos. 2342 and 3516 clearly embraces expropriation; that the
prohibitive acts enumerated in Section 5 of R.A. 1162, as amended, are entirely
dependent on the expropriability of the land in controversy; that there is nothing in the
aforecited law which validly supports the alleged preferential right of petitioners to
purchase the property at the same price and under the same conditions; that the only
reasonable interpretation of the opening lines of Section 5 of Republic Act 1162, as
amended, is that pending expropriation, the landowner shall not sell the land to any
other person than the tenant or occupant unless the latter renounces his rights in a
public instrument; but if the land is not expropriable, as petitioners have admitted, the
prohibition does not apply; and that clearly, from the provision of Section 6 of the
amended law, Section 5 thereof may be violated only if the land is "herein authorized to
be expropriated" and since petitioners have admitted the non-expropriability of subject
land, it necessarily follows that said Section 5 cannot apply.
Respondent Dimayuga avers that Section 9, in relation to the title of R.A. 1162, clearly
provides that the preferential right could be exercised only when the land under question
is subject to expropriation, or better still, if the tenanted property which formerly formed
part of an hacienda or is a landed estate, had been expropriated; and, that R.A. 1162, as
amended, embraces only landed estates or haciendas with an extensive area.
The sole issue raised by petitioners is whether or not they have the pre-emptive or
preferential rights to buy the land in question.
WE find for petitioners.
I
The third proviso in Section 5 of Republic Act 3516, which law further amended R.A.
1162, reads:
Provided, furthermore, That no lot or portion thereof actually occupied by a tenant or
occupant shall be sold by the landowner to any other person than such tenant or
occupant, unless the latter renounce in a public instrument his rights under this Act:
Provided, finally, That if there shall be tenants who have constructed bona

fide improvements on the lots leased by them, the rights of these tenants should be
recognized in the sale or in the lease of the lots, the limitation as to area in Section three
notwithstanding.
The provision clearly defines the preferential right of herein petitioners to buy the parcel
of land. It should be noted that respondent Vda. de Gabriel voluntarily sold the land to
respondent Dimayuga without informing the petitioners of the transaction. Respondent
Vda. de Gabriel did not give the first offer to petitioners who were then tenants-lessees
and who would have either accepted or refused to buy the land in a public 7 document.
The fact is that on discovery of the sale to respondent dent Dimayuga, petitioners filed
their original claim for preferential rights eight months after the clandestine sale. Thus,
the condition set forth in the aforesaid proviso that of offering first the sale of the land
to petitioners and the latter's renunciation in a public instrument were not met when
the land was sold to respondent Dimayuga. Evidently, said sale was made illegally and,
therefore, void. Petitioners have still the first option to buy the land as provided for in the
above provision.
II
A brief run down of this Court's decisions easily reveal the adherence to the principle
that the test for a valid expropriation of private land for resale to its occupants, is the
number of families to be benefited thereby, and not the area.
In his book on Constitutional Law, Dean Isagani A. Cruz recapitulates thus:
In the earlier case of Rural Progress Administration v. Reyes, the Supreme Court held
that the criterion for determining the validity of expropriation under this provision
was not the area of the landsought to be taken but the number of people intended to be
benefited thereby. The land, in other words, could be small provided it was tenanted by a
sizable number of people.
This ruling was abandoned in the case of Guido v. Rural Progress Administration where
the Supreme Court declared, also by a split decision as in the Reyes case, that the test to
be applied was the area of the land and not the number of people who stood to be
benefitted by the expropriation. The land should be a landed estate or one comprising a
very fast area. It was stressed that one of the purposes of the framers was precisely to
break up these estates in the hands of only a few individuals or families and thus more
equitably distribute them along the landless.
xxx xxx xxx
It has also been held that where a landed estate is broken up into reasonable portions
which are thereafter sold to separate purchasers, the resultant portions cannot be
deemed as still subject to expropriation under this provision simply because they used to
form part of a landed estate.
In the case of Tuason v. PHHC, which was a petition for prohibition to nullify a law
directing the expropriation of Tatalon Estate in Quezon City, Justice Fernando suggested
a ruling to the Reyes ruling arguing that the propriety of expropriation "could not be
determined on a purely quantitative or area basis," quoting from Justice J.B.L. Reyes in
his dissenting opinion in the Baylosis Case. ... (p 71,1983 Ed.; emphasis supplied).
From the Reyes case where the number of beneficiaries test was applied in determining
public use down to the Guido and Baylosis cases where the land or area size test was
invoked, then to the Tuason case where a return to the Reyes decision was made and
then up to the recent case of Pulido vs. Court of Appeals (L-57625, May 3, 1983; 122
SCRA 63) where this Court found it "unfortunate that petitioner would be deprived of his
land holdings, but his interest and that of his family should not stand in the way of
progress and the benefit of the greater majority of the inhabitants of the country," there
has evolved a clear pattern of adherence to the "number of people to be benefited test.

This is made more manifest by the new constitutional provisions on the equitable
diffusion of property ownership and profits (Sec. 6, Art. 11) and the implementation of an
agrarian reform program aimed at emancipating the tenant from the bondage of the soil
(Sec. 12, Art. XIV).
It has been noted with concern that while respondents raised the issue of expropriability
of the parcel of land, petitioners limited themselves to the issue of preferential or preemptive rights.
What petitioners might have failed to realize is that had they invoked the expropriability
of subject land, they would have had a foolproof case. Right from the start, they would
have had the upper hand. Ironically, however, instead of anchoring their case on the
expropriability of such land, they concentrated on asserting their preferential right to buy
the land. For, Section 1 of R.A. 1162, as amended by R.A. 3516, specifically authorizes
the expropriation ofany piece of land in the City of Manila, Quezon City and suburbs
which have been and are actually being leasedto tenants for at least ten (10) years,
provided said lands have at least forty families of tenants thereon. The case at bar
comes within the coverage of the aforesaid legal provision since the parcel of land is
located in Manila which was then actually leased to 110 tenant families 20 years prior to
the commencement of this action in the lower court. Clearly, therefore, the land in
question is capable of expropriation.
The above situation now brings Us back to the case of J.M. Tuason & Co. vs. Land Tenure
Administration (L-21064, Feb. 18, 1970, 31 SCRA 413-417) where this Court laid down
certain basic doctrines on the power of eminent domain. Thus, this Court, speaking thru
then Justice Fernando, declared:
It does not admit of doubt that the congressional power conferred by the Constitution is
far from limited. It is left to the legislative will to determine what lands may be
expropriated so that they could be subdivided for resale to those in need of them. Nor
can it be doubted either that as to when such authority may be exercised is purely for
Congress to decide. Its discretion on the matter is not to be interfered with. This is shown
by reference to the historical basis of the provision as reflected in the proceedings of the
Constitutional Convention.
Historical discussion while valuable is not necessarily decisive. It is easy to understand
why. The social and economic conditions are not static. They change with the times. To
Identify the text of a written constitution with the circumstances that inspired its
inclusion may render it incapable of being responsive to future needs. Precisely, it is
assumed to be one of the virtues of a written constitution that it suffices to govern the
life of the people not only at the time of its framing but far into the indefinite future. It is
not to be considered as so lacking in flexibility and suppleness that it may be a bar to
measures, novel and unorthodox, as they may appear to some, but nonetheless
imperatively called for.
xxx xxx xxx
The framers of the Constitution were seriously concerned with the grave problems of
inequality of wealth, with its highly divisive tendency, resulting in the generous scope
accorded the police power and eminent domain prerogatives of the state, even if the
exercise thereof would cover terrain of property right previously thought of as beyond
state control, to promote social justice and the general welfare.
As in the case of the more general provision on eminent domain, the power to
expropriate lands under Sec. 4 of Art. XIII of the Constitution requires the payment of just
compensation, the taking to be for the public use, and to meet the exacting standard of
due process and equal protection guaranty of the Constitution.
xxx xxx xxx

The power granted to Congress by the Constitution to "authorize, upon payment of just
compensation, the expropriation of lands to be subdivided into small lots and conveyed
at cost to individuals" is unlimited by any other provision of the Constitution. Just
compensation is in reality a part of the power granted rather than a limitation thereto,
just as just compensation is of the essence in any exercise of the power of eminent
domain as, otherwise it would be plain commandeering.
While the taking must be for public use as a matter of principle, in the judicial
proceeding, the Government need not present evidence of such public use as a fact. The
constitutional provision itself declares the public objective, purpose or use of the
expropriation contemplated, hence, it should follow that as long as a congressional
legislation declares that the condemnation of a particular land is for the specific purpose
stated in the Constitution, it is not for the judiciary to inquire as to whether or not the
taking of such land is for public use. The Constitution itself which is supposed to be the
supreme law on private property rights declares it to be so, and leaves it to Congress,
not to the judiciary, to make the choice of the lands to be taken to attain the objective
the constituent assembly aimed to achieve. The scope and the limit of the power of the
judiciary in this regard is only to determine the existence of enabling legislation, to see
to it that the facts are as contemplated in such enabling act and to provide the vehicle
for compliance with procedural due process in the implementation of the congressional
act.
On the matter of taking for public use, Chief Justice Fernando summarily observed:
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 (The Constitution of the Philippines, 2nd Ed., 1977, pp. 523-24).
III
This preferential right of petitioners and the power of eminent domain have been further
mandated, strengthened and expanded by recent developments in law and
jurisprudence.
It must be recalled that the 1973 Constitution embodies certain original and innovative
provisions on eminent domain. The new Constitution provides thus:
Private property shall not be taken for public use without just compensation" (Sec. 2, Art.
IV).
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 (See. 13, Art. XIV).
The State shall promote social justice to ensure the dignity, welfare and security of
affirmatively the people. Toward this end, the State shall regulate the acquisition
Ownership, use, enjoyment and disposition of private property, and equitably diffuse
property ownership and profits (Sec. 6, Art. 11; emphasis supplied).
The State shall establish, maintain, and ensure adequate social services in the field of
education, health, housing, employment, welfare, and social security to guarantee the
enjoyment by the people of a decent standard of living (Sec. 7, Art. 11).

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 (Sec. 12, Art. XIV).
The aforequoted Section 6 of Article 11, which is a modified version of the original
provision of the 1935 Constitution, "emphasizes the stewardship concept, under which
private property is supposed to be held by the individual only as a trustee for the people
in general, who are its real owners. As a mere steward, the individual must exercise his
rights to the proper- 4 ty not for his own exclusive and selfish benefit but for the good of
the entire community or nation" (p. 70, Phil. Political Law, Cruz, 1983 ed.).lwphl@it
In the case of Almeda vs. Court of Appeals, et al. (L-43800, 78 SCRA 194 [July 29, 1977]),
this Court thus declared:
It is to be noted that under the new Constitution, property ownership is impressed with
social function. Property use must not only be for the benefit of the owner but of society
as well. The State, in the promotion of social justice, may "regulate the acquisition,
ownership, use, enjoyment and disposition of private property, and equitably diffuse
property ownership and profits." One governmental policy of recent date projects the
emancipation of tenants from the bondage of the soil and the transfer to them of the
ownership of the land they till.
"The Legislature may regulate 'the acquisition, ownership, use, enjoyment and
disposition of private property,' to the end that maximum advantage can be derived from
it by the people as a whole. Thus, it may limit the size of private landholdings, impose
higher taxes on agricultural lands that are not being tilled, or provide for a wider
distribution of land among the landless. ... (p. 70, Phil. Political Law, Cruz, 1983 ed.).
It is obviously in the spirit of Sections 6 and 7 of Article 11 that P.D. No. 1517 on urban
land reform was enacted and the subsequent implementing Proclamation No. 1967 was
issued. Significantly also, the latest amendment to the Constitution on urban land reform
and social housing program which has been proclaimed by the President as having been
approved in the recent plebiscite on January 17, 1984 all the more emphasizes and
strengthens the constitutional base for urban land reform consistent with the provisions
on social justice.
Even as we have consistently and explicitly pronounced that the power of eminent
domain is a basic and inherent power of government which does not have to be spelled
out by the Constitution, still our legislators felt such urgent demands for redistribution of
land in this country that they had to incorporate into the 1935 and 1973 Constitutions a
specific provision on expropriation of land for resale. Section 13, Article IV of the 1973
Constitution specially authorizes the expropriation of private lands for resale.
Thus, as earlier mentioned, P.D. No. 1517 entitled "Proclaiming Urban Land Reform in the
Philippines and Providing for the Implementing Machinery Thereof" was enacted and
beer effective on June 1 1, 1978 and Proclamation No. 1967 was issued on May 14, 1980
as an implementing law. This decree, which is firmly based on Section 6, Article 11 of the
new Constitution, undoubtedly adopts and crystallizes the greater number of people
criterion when it speaks of tenants and residents in declared urban land reform zones or
areas without any mention of the land area covered by such zones. The focus, therefore,
is on people who would stand to benefit and not on the size of the land involved.
It should now be clarified that Section 22 of the aforecited decree declares thus:
Sec. 22. Repealing Clause. All laws, decrees, executive orders, rules and regulations
inconsistent herewith are hereby repealed, amended or modified accordingly.
The decree has, therefore, superseded R.A. Nos. 1162, 2342 and 3516.
The issue of pre-emptive or preferential rights still remains for Our resolution within the
purview of the said decree.

The pertinent provisions of P.D. No. 1517 are as follows:

Sec. 4. Proclamation of Urban Land Reform Zones. The President shall proclaim
specific parcels of urban and urbanizable lands as Urban Land Reform Zones, otherwise
known as Urban Zones for purposes of this Decree, which may include Bagong Lipunan
Sites, as defined in P.D. 1396 (par. 1 of the section).
xxx xxx xxx
Sec. 6. Land Tenancy in Urban Land Reform A Teas. Within the Urban Zones legitimate
tenants who have resided on the land for ten years or more who have built their homes
on the land and residents who have legally occupied the lands by contract, continuously
for the last ten years shall not be dispossessed of the land and shall be allowed the right
of first refusal to purchase the same within a reasonable time and at reasonable prices,
under terms and conditions to be determined by the Urban Zone Expropriation and Land
Management Committee created by Section 8 of the Decree.
xxx xxx xxx
Sec. 9. Compulsory Declaration of Sale and Preemptive Rights. Upon the proclamation by
the President of an area as an Urban Land Reform Zone, all landowners, tenants and
residents thereupon are required to declare to the Ministry any proposal to sell, lease or
encumber lands and improvements thereon, including the proposed price, rent or value
of encumbrances and secure approval of said proposed transactions.
The Ministry shag have the pre-emptive right to acquire the above-mentioned lands and
improvements thereon which shall include, but shag not be limited to lands occupied by
tenants as provided for in Section 6 of this Decree (emphasis supplied).
Pursuant to the above decree and for purposes of making specific the applicability of the
same and other subsequent laws on the matter, the President issued Proclamation No.
1967 dated May 14, 1980 declaring Metropolitan Manila Area as Urban Land Reform
Zone. Thus, on page 2, No. 14 of said proclamation, Mataas na Lupa, the land in
controversy, (an area bounded on the northwest by Quirino Avenue, South Superhighway
on the east, San Andres Street on the south, and on the west, by Anak Bayan Street) was
declared as an area for priority development and urban land reform zone.
The aforequoted provisions of P.D. 1517 and the declaration in the aforesaid
proclamation are clear and leave no room for any interpretation. Evidently, petitioners'
case falls squarely within the law. Under Section 6 of the decree, the 110 tenant-families
have been vested with the right of first refusal to purchase the land in question within a
reasonable time and reasonable prices, subject to Ministry of Human Settlements rules
and regulations.
WHEREFORE, THE ORDER DATED OCTOBER 30, 1969 OF THE THEN MANILA COURT OF
FIRST INSTANCE, BRANCH IV, IS HEREBY SET ASIDE AND THE MINISTRY OF HUMAN
SETTLEMENTS IS HEREBY DIRECTED TO FACILITATE AND ADMINISTER THE
IMPLEMENTATION OF THE RIGHTS OF HEREIN PETITIONERS. COSTS AGAINST
RESPONDENTS.
SO ORDERED.
Concepcion, Jr., Guerrero and Escolin, JJ., concur.
Aquino J., concurs in the result.
Abad Santos, J., I reserve my vote.

12.

G.R. No. L-59603

April 29, 1987

EXPORT PROCESSING ZONE AUTHORITY, petitioner,

vs.
HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge, Court of First
Instance of Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO
DEVELOPMENT CORPORATION, respondents.
Elena M. Cuevas for respondents.
GUTIERREZ, JR., J.:
The question raised in this petition is whether or not Presidential Decrees Numbered 76,
464, 794 and 1533 have repealed and superseded Sections 5 to 8 of Rule 67 of the
Revised Rules of Court, such that in determining the just compensation of property in an
expropriation case, the only basis should be its market value as declared by the owner or
as determined by the assessor, whichever is lower.
On January 15, 1979, the President of the Philippines, issued Proclamation No. 1811,
reserving a certain parcel of land of the public domain situated in the City of Lapu-Lapu,
Island of Mactan, Cebu and covering a total area of 1,193,669 square meters, more or
less, for the establishment of an export processing zone by petitioner Export Processing
Zone Authority (EPZA).
Not all the reserved area, however, was public land. The proclamation included, among
others, four (4) parcels of land with an aggregate area of 22,328 square meters owned
and registered in the name of the private respondent. The petitioner, therefore, offered
to purchase the parcels of land from the respondent in acccordance with the valuation
set forth in Section 92, Presidential Decree (P.D.) No. 464, as amended. The parties failed
to reach an agreement regarding the sale of the property.
The petitioner filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-Lapu
City, a complaint for expropriation with a prayer for the issuance of a writ of possession
against the private respondent, to expropriate the aforesaid parcels of land pursuant to
P.D. No. 66, as amended, which empowers the petitioner to acquire by condemnation
proceedings any property for the establishment of export processing zones, in relation to
Proclamation No. 1811, for the purpose of establishing the Mactan Export Processing
Zone.
On October 21, 1980, the respondent judge issued a writ of possession authorizing the
petitioner to take immediate possession of the premises. On December 23, 1980, the
private respondent flied its answer.
At the pre-trial conference on February 13, 1981, the respondent judge issued an order
stating that the parties have agreed that the only issue to be resolved is the just
compensation for the properties and that the pre-trial is thereby terminated and the
hearing on the merits is set on April 2, 1981.
On February 17, 1981, the respondent judge issued the order of condemnation declaring
the petitioner as having the lawful right to take the properties sought to be condemned,
upon the payment of just compensation to be determined as of the filing of the
complaint. The respondent judge also issued a second order, subject of this petition,
appointing certain persons as commissioners to ascertain and report to the court the just
compensation for the properties sought to be expropriated.

On June 19, 1981, the three commissioners submitted their consolidated report
recommending the amount of P15.00 per square meter as the fair and reasonable value
of just compensation for the properties.
On July 29, 1981, the petitioner Med a Motion for Reconsideration of the order of
February 19, 1981 and Objection to Commissioner's Report on the grounds that P.D. No.
1533 has superseded Sections 5 to 8 of Rule 67 of the Rules of Court on the
ascertainment of just compensation through commissioners; and that the compensation
must not exceed the maximum amount set by P.D. No. 1533.
On November 14, 1981, the trial court denied the petitioner's motion for reconsideration
and gave the latter ten (10) days within which to file its objection to the Commissioner's
Report.
On February 9, 1982, the petitioner flied this present petition for certiorari and
mandamus with preliminary restraining order, enjoining the trial court from enforcing the
order dated February 17, 1981 and from further proceeding with the hearing of the
expropriation case.
The only issue raised in this petition is whether or not Sections 5 to 8, Rule 67 of the
Revised Rules of Court had been repealed or deemed amended by P.D. No. 1533 insofar
as the appointment of commissioners to determine the just compensation is concerned.
Stated in another way, is the exclusive and mandatory mode of determining just
compensation in P.D. No. 1533 valid and constitutional?
The petitioner maintains that the respondent judge acted in excess of his jurisdiction and
with grave abuse of discretion in denying the petitioner's motion for reconsideration and
in setting the commissioner's report for hearing because under P.D. No. 1533, which is
the applicable law herein, the basis of just compensation shall be the fair and current
market value declared by the owner of the property sought to be expropriated or such
market value as determined by the assessor, whichever is lower. Therefore, there is no
more need to appoint commissioners as prescribed by Rule 67 of the Revised Rules of
Court and for said commissioners to consider other highly variable factors in order to
determine just compensation. The petitioner further maintains that P.D. No. 1533 has
vested on the assessors and the property owners themselves the power or duty to fix the
market value of the properties and that said property owners are given the full
opportunity to be heard before the Local Board of Assessment Appeals and the Central
Board of Assessment Appeals. Thus, the vesting on the assessor or the property owner of
the right to determine the just compensation in expropriation proceedings, with
appropriate procedure for appeal to higher administrative boards, is valid and
constitutional.
Prior to the promulgation of P.D. Nos. 76, 464, 794 and 1533, this Court has interpreted
the eminent domain provisions of the Constitution and established the meaning, under
the fundametal law, of just compensation and who has the power to determine it. Thus,
in the following cases, wherein the filing of the expropriation proceedings were all
commenced prior to the promulgation of the aforementioned decrees, we laid down the
doctrine onjust compensation:
Municipality of Daet v. Court of Appeals (93 SCRA 503, 516),
xxx

xxx

xxx

"And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413,
the Court, speaking thru now Chief Justice Fernando, reiterated the 'well-settled (rule)
that just compensation means the equivalent for the value of the property at the time of
its taking. Anything beyond that is more and anything short of that is less, than just
compensation. It means a fair and full equivalent for the loss sustained, which is the
measure of the indemnity, not whatever gain would accrue to the expropriating entity."
Garcia v. Court ofappeals (102 SCRA 597, 608),

xxx

xxx

xxx

"Hence, in estimating the market value, all the capabilities of the property and all
the uses to which it may be applied or for which it is adapted are to be considered
and not merely the condition it is in the time and the use to which it is then applied
by the owner. All the facts as to the condition of the property and its surroundings,
its improvements and capabilities may be shown and considered in estimating its
value."
Republic v. Santos (141 SCRA 30, 35-36),
"According to section 8 of Rule 67, the court is not bound by the commissioners'
report. 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 condemnation, and to
the defendant just compensation for the property expropriated. This Court may
substitute its own estimate of the value as gathered from the record (Manila
Railroad Company v. Velasquez, 32 Phil. 286)."
However, the promulgation of the aforementioned decrees practically set aside the
above and many other precedents hammered out in the course of evidence-laden, well
argued, fully heard, studiously deliberated, and judiciously considered court proceedings.
The decrees categorically and peremptorily limited the definition of just compensation
thus:
P.D. No. 76:
xxx

xxx

xxx

"For purposes of just compensation in cases of private property acquired by the

government for public use, the basis shall be the current and fair market value
declared by the owner or administrator, or such market value as determined by the
Assessor, whichever is lower."
P.D. No. 464:
"Section 92. Basis for payment of just compensation in expropriation proceedings.
In determining just compensation which private property is acquired by the
government for public use, the basis shall be the market value declared by the
owner or administrator or anyone having legal interest in the property, or such
market value as determined by the assessor, whichever is lower."
P.D. No. 794:
"Section 92. Basis for payment of just compensation in expropriation proceedings.
In determining just compensation when private property is acquired by the
government for public use, the same shall not exceed the market value declared
by the owner or administrator or anyone having legal interest in the property, or
such market value as determined by the assessor, whichever is lower."
P.D. No. 1533:
"Section 1. In determining just compensation for private property acquired through
eminent domain proceedings, the compensation to be paid shall not exceed the
value declared by the owner or administrator or anyone having legal interest in the
property or determined by the assessor, pursuant to the Real Property Tax Code,
whichever value is lower, prior to the recommendation or decision of the
appropriate Government office to acquire the property."
We are constrained to declare the provisions of the Decrees on just compensation
unconstitutional and void and accordingly dismiss the instant petition for lack of merit.

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.
Thus, although in an expropriation proceeding the court technically would still have the
power to determine the just compensation for the property, following the applicable
decrees, its task would be relegated to simply stating the lower value of the property as
declared either by the owner or the assessor. As a necessary consequence, it would be
useless for the court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not had before
the actual taking. However, the strict application of the decrees during the proceedings
would be nothing short of a mere formality or charade as the court has only to choose
between the valuation of the owner and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot exercise its discretion or independence
in determining what is just or fair. Even a grade school pupil could substitute for the
judge insofar as the determination of constitutional just compensation is concerned.
In the case of National Housing Authority v. Reyes (123 SCRA 245), this Court upheld P.D.
No. 464, as further amended by P.D. Nos. 794, 1224 and 1259. In this case, the petitioner
National Housing Authority contended that the owner's declaration at P1,400.00 which
happened to be lower than the assessor's assessment, is the just compensation for the
respondent's property under section 92 of P.D. No. 464. On the other hand, the private
respondent stressed that while there may be basis for the allegation that the respondent
judge did not follow the decree, the matter is still subject to his final disposition, he
having been vested with the original and competent authority to exercise his judicial
discretion in the light of the constitutional clauses on due process and equal protection.
To these opposing arguments, this Court ruled ihat under the conceded facts, there
should be a recognition that the law as it stands must be applied; that the decree having
spoken so clearly and unequivocably calls for obedience; and that on a matter where the
applicable law speaks in no uncertain language, the Court has no choice except to yield
to its command. We further stated that "the courts should recognize that the rule
introduced by P.D. No. 76 and reiterated in subsequent decrees does not upset the
established concepts of justice or the constitutional provision on just compensation for,
precisely, the owner is allowed to make his own valuation of his property."
While the Court yielded to executive prerogative exercised in the form of absolute lawmaking power, its members, nonetheless, remained uncomfortable with the implications
of the decision and the abuse and unfairness which might follow in its wake. For one
thing, the President himself did not seem assured or confident with his own enactment. It
was not enough to lay down the law on determination of just compensation in P.D. 76. It
had to be repeated and reiterated in P.D. 464, P.D. 794, and P.D. 1533. The provision is
also found in P.D. 1224, P.D. 1259 and P.D. 1313. Inspite of its effectivity as general law
and the wide publicity given to it, the questioned provision or an even stricter version
had to be embodied in cases of specific expropriations by decree as in P.D. 1669
expropriating the Tambunting Estate and P.D. 1670 expropriating the Sunog Apog area in
Tondo, Manila.
In the present petition, we are once again confronted with the same question of whether
the courts under P.D. 1533, which contains the same provision on just compensation as
its predecessor decrees, still have the power and authority to determine just
compensation, independent of what is stated by the decree and to this effect, to appoint
commissioners for such purpose.
This time, we answer in the affirmative.
In overruling the petitioner's motion for reconsideration and objection to the
commissioner's report, the trial court said:

"Another consideration why the Court is empowered to appoint commissioners to

assess the just compensation of these properties under eminent domain
proceedings, is the well-entrenched ruling that 'the owner of property expropriated
is entitled to recover from expropriating authority the fair and full value of the lot,
as of the time when possession thereof was actually taken by the province, plus
consequential damages including attorney's fees from which the
consequential benefits, if any should be deducted, with interest at the legal rate,
on the aggregate sum due to the owner from and after the date of actual taking.'
(Capitol Subdivision, Inc. v. Province of Negros Occidental, 7 SCRA 60). In fine, the
decree only establishes a uniform basis for determining just compensation which
the Court may consider as one of the factors in arriving at 'just compensation,' as
envisage in the Constitution. In the words of Justice Barredo, "Respondent court's
invocation of General Order No. 3 of September 21, 1972 is nothing short of an
unwarranted abdication of judicial authority, which no judge duly imbued with the
implications of the paramount principle of independence of the judiciary should
ever think of doing." (Lina v. Purisima, 82 SCRA 344, 351; Cf. Prov. of Pangasinan v.
CFI Judge of Pangasinan, Br. VIII, 80 SCRA 117) Indeed, where this Court simply
follows PD 1533, thereby limiting the determination of just compensation on the
value declared by the owner or administrator or as determined by the Assessor,
whichever is lower, it may result in the deprivation of the landowner's right of due
process to enable it to prove its claim to just compensation, as mandated by the
Constitution. (Uy v. Genato, 57 SCRA 123). The tax declaration under the Real
Property Tax Code is, undoubtedly, for purposes of taxation."
We are convinced and so rule that the trial court correctly stated that the valuation in the
decree may only serve as a guiding principle or one of the factors in determining just
compensation but it may not substitute the court's own judgment as to what amount
should be awarded and how to arrive at such amount. A return to the earlier wellestablished doctrine, to our mind, is more in keeping with the principle that the judiciary
should live up to its mission "by vitalizing and not denigrating constitutional rights." (See
Salonga v. Cruz Pao, 134 SCRA 438, 462; citing Mercado v. Court of First Instance of
Rizal, 116 SCRA 93.) The doctrine we enunciated in National Housing Authority v. Reyes,
supra, therefore, must necessarily be abandoned if we are to uphold this Court's role as
the guardian of the fundamental rights guaranteed by the due process and equal
protection clauses and as the final arbiter over transgressions committed against
constitutional rights.
The basic unfairness of the decrees is readily apparent.
Just compensation means the value of the property at the time of the taking. It means
a fair and full equivalent for the loss sustained. All the facts as to the condition of the
property and its surroundings, its improvements and capabilities, should be considered.
In this particular case, the tax declarations presented by the petitioner as basis for just
compensation were made by the Lapu-Lapu municipal, later city assessor long before
martial law, when land was not only much cheaper but when assessed values of
properties were stated in figures constituting only a fraction of their true market value.
The private respondent was not even the owner of the properties at the time. It
purchased the lots for development purposes. To peg the value of the lots on the basis of
documents which are out of date and at prices below the acquisition cost of present
owners would be arbitrary and confiscatory.
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.
As was held in the case of Gideon v. Wainwright (93 ALR 2d,733,742):
"In the light of these and many other prior decisions of this Court, it is not surprising that
the Betts Court, when faced with the contention that 'one charged with crime, who is
unable to obtain counsel must be furnished counsel by the State,' conceded that
'[E]xpressions in the opinions of this court lend color to the argument. . .' 316 U.S., at
462, 463, 86 L ed. 1602, 62 S Ct. 1252. The fact is that in deciding as it did-that
"appointment of counsel is not a fundamental right, essential to a fair trial" the Court
in Betts v. Brady made an ubrupt brake with its own well-considered precedents. In
returning to these old precedents, sounder we believe than the new, we but restore
constitutional principles established to achieve a fair system of justice. . ."
We return to older and more sound precedents. This Court has the duty to formulate
guiding and controlling constitutional principles, precepts, doctrines, or rules. (See
Salonga v. Cruz Pano, supra).
The determination of "just compensation" in eminent domain cases is a judicial function.
The executive department or the legislature may make the initial determinations but
when a party claims a violation of the guarantee in the Bill of Rights that private property
may not be taken for public use without just compensation, no statute, decree, or
executive order can mandate that its own determination shall prevail over the court's
findings. Much less can the courts be precluded from looking into the "just-ness" of the
decreed compensation.
We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion to appoint
commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To
hold otherwise would be to undermine the very purpose why this Court exists in the first
place.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The
temporary restraining order issued on February 16, 1982 is LIFTED and SET ASIDE.
SO ORDERED.
Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento and Cortes, JJ.,concur.
Teehankee, C.J., in the result.
Yap, J., on leave.
Petition dismissed. Order lifted and set aside.

13.

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D.

GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE,
CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J.
SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE,
TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA,
FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO,
CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA,
HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE,
INC., Victorias Mill District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM,
HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE
PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO
AVANCENA and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF
THE PHILIPPINES,respondents.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules
for his life on his way to Mycenae after performing his eleventh labor. The two wrestled
mightily and Hercules flung his adversary to the ground thinking him dead, but Antaeus
rose even stronger to resume their struggle. This happened several times to Hercules'
increasing amazement. Finally, as they continued grappling, it dawned on Hercules that
Antaeus was the son of Gaea and could never die as long as any part of his body was
touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air,
beyond the reach of the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch
even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the
elemental forces of life and death, of men and women who, like Antaeus need the
sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the
distribution of this precious resource among our people. But it is more than a slogan.

Through the brooding centuries, it has become a battle-cry dramatizing the increasingly
urgent demand of the dispossessed among us for a plot of earth as their place in the
sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to
"insure the well-being and economic security of all the people," 1 especially the less
privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the
State shall regulate the acquisition, ownership, use, enjoyment and disposition of private
property and equitably diffuse property ownership and profits." 2 Significantly, there was
also the specific injunction to "formulate and implement an agrarian reform program
aimed at emancipating the tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it
also adopted one whole and separate Article XIII on Social Justice and Human Rights,
containing grandiose but undoubtedly sincere provisions for the uplift of the common
people. These include a call in the following words for the adoption by the State of an
agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded on
the right of farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers, to receive a just
share of the fruits thereof. To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of
small landowners. The State shall further provide incentives for voluntary landsharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code,
had already been enacted by the Congress of the Philippines on August 8, 1963, in line
with the above-stated principles. This was substantially superseded almost a decade
later by P.D. No. 27, which was promulgated on October 21, 1972, along with martial law,
to provide for the compulsory acquisition of private lands for distribution among tenantfarmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the
thrust for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued
E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and
providing for the valuation of still unvalued lands covered by the decree as well as the
manner of their payment. This was followed on July 22, 1987 by Presidential
Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took
over legislative power from the President and started its own deliberations, including
extensive public hearings, on the improvement of the interests of farmers. The result,
after almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino
signed on June 10, 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect insofar as they are not
inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common legal
questions, including serious challenges to the constitutionality of the several measures
mentioned above. They will be the subject of one common discussion and resolution, The
different antecedents of each case will require separate treatment, however, and will
first be explained hereunder.
G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and
229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned
by petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four
tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full
owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter
alia of separation of powers, due process, equal protection and the constitutional
limitation that no private property shall be taken for public use without just
compensation.
They contend that President Aquino usurped legislative power when she promulgated
E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4, of the
Constitution, for failure to provide for retention limits for small landowners. Moreover, it
does not conform to Article VI, Section 25(4) and the other requisites of a valid
appropriation.
In connection with the determination of just compensation, the petitioners argue that the
same may be made only by a court of justice and not by the President of the Philippines.
They invoke the recent cases of EPZA v. Dulay 5and Manotok v. National Food
Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights is
payable in money or in cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also
deprives the petitioners of their property rights as protected by due process. The equal
protection clause is also violated because the order places the burden of solving the
agrarian problems on the owners only of agricultural lands. No similar obligation is
imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be
the owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and
so violated due process. Worse, the measure would not solve the agrarian problem
because even the small farmers are deprived of their lands and the retention rights
guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld
in the earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice
and Corn Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The
determination of just compensation by the executive authorities conformably to the
formula prescribed under the questioned order is at best initial or preliminary only. It
does not foreclose judicial intervention whenever sought or warranted. At any rate, the
challenge to the order is premature because no valuation of their property has as yet
been made by the Department of Agrarian Reform. The petitioners are also not proper
parties because the lands owned by them do not exceed the maximum retention limit of
7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not
provide for retention limits on tenanted lands and that in any event their petition is a
class suit brought in behalf of landowners with landholdings below 24 hectares. They
maintain that the determination of just compensation by the administrative authorities is
a final ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided
in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O.
Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No.
6657. Nevertheless, this statute should itself also be declared unconstitutional because it
suffers from substantially the same infirmities as the earlier measures.

A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz,
owner of a 1. 83- hectare land, who complained that the DAR was insisting on the
implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had
reached with his tenant on the payment of rentals. In a subsequent motion dated April
10, 1989, he adopted the allegations in the basic amended petition that the abovementioned enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District,
Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization
composed of 1,400 planter-members. This petition seeks to prohibit the implementation
of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform
Program as decreed by the Constitution belongs to Congress and not the President.
Although they agree that the President could exercise legislative power until the
Congress was convened, she could do so only to enact emergency measures during the
transition period. At that, even assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be
annulled for violating the constitutional provisions on just compensation, due process,
and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the
Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to
cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to
1992 which shall be sourced from the receipts of the sale of the assets of the Asset
Privatization Trust and Receipts of sale of ill-gotten wealth received through the
Presidential Commission on Good Government and such other sources as government
may deem appropriate. The amounts collected and accruing to this special fund shall be
considered automatically appropriated for the purpose authorized in this Proclamation
the amount appropriated is in futuro, not in esse. The money needed to cover the cost of
the contemplated expropriation has yet to be raised and cannot be appropriated at this
time.
Furthermore, they contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such
payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6,
thereof provides that the Land Bank of the Philippines "shall compensate the landowner
in an amount to be established by the government, which shall be based on the owner's
declaration of current fair market value as provided in Section 4 hereof, but subject to
certain controls to be defined and promulgated by the Presidential Agrarian Reform
Council." This compensation may not be paid fully in money but in any of several modes
that may consist of part cash and part bond, with interest, maturing periodically, or
direct payment in cash or bond as may be mutually agreed upon by the beneficiary and
the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made
to make a careful study of the sugar planters' situation. There is no tenancy problem in
the sugar areas that can justify the application of the CARP to them. To the extent that
the sugar planters have been lumped in the same legislation with other farmers,
although they are a separate group with problems exclusively their own, their right to
equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of
Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual
sugar planters all over the country. On September 10, 1987, another motion for
intervention was filed, this time by Manuel Barcelona, et al., representing coconut and
riceland owners. Both motions were granted by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform
Program and that, in any event, the appropriation is invalid because of uncertainty in the
amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229
provide for an initial appropriation of fifty billion pesos and thus specifies the minimum
rather than the maximum authorized amount. This is not allowed. Furthermore, the
stated initial amount has not been certified to by the National Treasurer as actually
available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear
and convincing evidence the necessity for the exercise of the powers of eminent domain,
and the violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the
expropriation of the said land for an amount equal to the government assessor's
valuation of the land for tax purposes. On the other hand, if the landowner declares his
own valuation he is unjustly required to immediately pay the corresponding taxes on the
land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity
for the expropriation as explained in the "whereas" clauses of the Proclamation and
submits that, contrary to the petitioner's contention, a pilot project to determine the
feasibility of CARP and a general survey on the people's opinion thereon are not
indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to
show that they belong to a different class and should be differently treated. The
Comment also suggests the possibility of Congress first distributing public agricultural
lands and scheduling the expropriation of private agricultural lands later. From this
viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the
payment of public money without the corresponding appropriation. There is no rule that
only money already in existence can be the subject of an appropriation law. Finally, the
earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an
initial amount, is actually the maximum sum appropriated. The word "initial" simply
means that additional amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own
behalf, assailing the constitutionality of E.O. No. 229. In addition to the arguments
already raised, Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in the
title;
(3) The power of the President to legislate was terminated on July 2, 1987; and
(4) The appropriation of a P50 billion special fund from the National Treasury did
not originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in
violation of due process and the requirement for just compensation, placed his
landholding under the coverage of Operation Land Transfer. Certificates of Land Transfer
were subsequently issued to the private respondents, who then refused payment of
lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small
landholding under Operation Land transfer and asked for the recall and cancellation of
the Certificates of Land Transfer in the name of the private respondents. He claims that
on December 24, 1986, his petition was denied without hearing. On February 17, 1987,
he filed a motion for reconsideration, which had not been acted upon when E.O. Nos. 228
and 229 were issued. These orders rendered his motion moot and academic because
they directly effected the transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.
(2) The said executive orders are violative of the constitutional provision that no
private property shall be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the
1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before
Congress convened is anomalous and arbitrary, besides violating the doctrine of
separation of powers. The legislative power granted to the President under the Transitory
Provisions refers only to emergency measures that may be promulgated in the proper
exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due
process of law and to the retention of his small parcels of rice holding as guaranteed
under Article XIII, Section 4 of the Constitution. He likewise argues that, besides denying
him just compensation for his land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21,
1972 shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the
inclusion of even small landowners in the program along with other landowners with
lands consisting of seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the
motion for reconsideration filed with the Minister of Agrarian Reform is still unresolved.
As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were
enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of the 1987
Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first
Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated
on October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of
the land he was tilling. The leasehold rentals paid after that date should therefore be
considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed
was resolved on December 14, 1987. An appeal to the Office of the President would be
useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the
validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners
of rice and corn lands not exceeding seven hectares as long as they are cultivating or
intend to cultivate the same. Their respective lands do not exceed the statutory limit but
are occupied by tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be
ejected or removed from his farm holding until such time as the respective rights
of the tenant- farmers and the landowner shall have been determined in
accordance with the rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their
right of retention because the Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted decree. They therefore ask the
Court for a writ of mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI
474 removing any right of retention from persons who own other agricultural lands of
more than 7 hectares in aggregate area or lands used for residential, commercial,
industrial or other purposes from which they derive adequate income for their family.
And even assuming that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July
10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying
Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978,
(Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated
December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by
Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a
Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of
their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to
file the corresponding applications for retention under these measures, the petitioners
are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this
case notwithstanding the pendency of their appeal to the President of the Philippines.
Moreover, the issuance of the implementing rules, assuming this has not yet been done,
involves the exercise of discretion which cannot be controlled through the writ
of mandamus. This is especially true if this function is entrusted, as in this case, to a
separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to
them because they do not own more than seven hectares of agricultural land. Moreover,
assuming arguendo that the rules were intended to cover them also, the said measures
are nevertheless not in force because they have not been published as required by law
and the ruling of this Court in Tanada v. Tuvera. 10 As for LOI 474, the same is ineffective
for the additional reason that a mere letter of instruction could not have repealed the
presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to
annul the acts of either the legislative or the executive or of both when not conformable
to the fundamental law. This is the reason for what some quarters call the doctrine of
judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The
doctrine of separation of powers imposes upon the courts a proper restraint, born of the
nature of their functions and of their respect for the other departments, in striking down
the acts of the legislative and the executive as unconstitutional. The policy, indeed, is a
blend of courtesy and caution. To doubt is to sustain. The theory is that before the act
was done or the law was enacted, earnest studies were made by Congress or the
President, or both, to insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of
the Supreme Court who took part in the deliberations and voted on the issue during their
session en banc. 11 And as established by judge made doctrine, the Court will assume

jurisdiction over a constitutional question only if it is shown that the essential requisites
of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual
case or controversy involving a conflict of legal rights susceptible of judicial
determination, the constitutional question must have been opportunely raised by the
proper party, and the resolution of the question is unavoidably necessary to the decision
of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before
us, we hold that the same is satisfied by the petitioners and intervenors because each of
them has sustained or is in danger of sustaining an immediate injury as a result of the
acts or measures complained of. 13 And even if, strictly speaking, they are not covered by
the definition, it is still within the wide discretion of the Court to waive the requirement
and so remove the impediment to its addressing and resolving the serious constitutional
questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
although they were invoking only an indirect and general interest shared in common with
the public. The Court dismissed the objection that they were not proper parties and ruled
that "the transcendental importance to the public of these cases demands that they be
settled promptly and definitely, brushing aside, if we must, technicalities of procedure."
We have since then applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted
with constitutional issues like the ones now before it, it will not hesitate to declare a law
or act invalid when it is convinced that this must be done. In arriving at this conclusion,
its only criterion will be the Constitution as God and its conscience give it the light to
probe its meaning and discover its purpose. Personal motives and political considerations
are irrelevancies that cannot influence its decision. Blandishment is as ineffectual as
intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate
to "make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the
acts of these departments, or of any public official, betray the people's will as expressed
in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries, it does not
assert any superiority over the other departments; it does not in reality nullify or
invalidate an act of the Legislature, but only asserts the solemn and sacred
obligation assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and guarantees to them. This
is in truth all that is involved in what is termed "judicial supremacy" which properly
is the power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more
serious challenges to the constitutionality of the several measures involved in these
petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under
martial law has already been sustained in Gonzales v. Estrella and we find no reason to
modify or reverse it on that issue. As for the power of President Aquino to promulgate

Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6 of
the Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the
Congress of the Philippines was formally convened and took over legislative power from
her. They are not "midnight" enactments intended to pre-empt the legislature because
E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and
E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to say that these
measures ceased to be valid when she lost her legislative power for, like any statute,
they continue to be in force unless modified or repealed by subsequent law or declared
invalid by the courts. A statute does not ipso facto become inoperative simply because of
the dissolution of the legislature that enacted it. By the same token, President Aquino's
loss of legislative power did not have the effect of invalidating all the measures enacted
by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they
shall be suppletory to R.A. No. 6657 whenever not inconsistent with its
provisions. 17 Indeed, some portions of the said measures, like the creation of the P50
billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have
been incorporated by reference in the CARP Law.18
That fund, as earlier noted, is itself being questioned on the ground that it does not
conform to the requirements of a valid appropriation as specified in the Constitution.
Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide
for the creation of said fund, for that is not its principal purpose. An appropriation law is
one the primary and specific purpose of which is to authorize the release of public funds
from the treasury.19 The creation of the fund is only incidental to the main objective of
the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and
Section 25(4) of Article VI, are not applicable. With particular reference to Section 24,
this obviously could not have been complied with for the simple reason that the House of
Representatives, which now has the exclusive power to initiate appropriation measures,
had not yet been convened when the proclamation was issued. The legislative power
was then solely vested in the President of the Philippines, who embodied, as it were,
both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be
invalidated because they do not provide for retention limits as required by Article XIII,
Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such
limits now in Section 6 of the law, which in fact is one of its most controversial
provisions. This section declares:
Retention Limits. Except as otherwise provided in this Act, no person may own
or retain, directly or indirectly, any public or private agricultural land, the size of
which shall vary according to factors governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following qualifications: (1)
that he is at least fifteen (15) years of age; and (2) that he is actually tilling the
land or directly managing the farm; Provided, That landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That original homestead grantees
or direct compulsory heirs who still own the original homestead at the time of the
approval of this Act shall retain the same areas as long as they continue to
cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall
have only one subject, to be expressed in its title, deserves only short attention. It is

settled that the title of the bill does not have to be a catalogue of its contents and will
suffice if the matters embodied in the text are relevant to each other and may be
inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance,
by whatever name it was called, had the force and effect of law because it came from
President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the
petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27
because the former was only a letter of instruction. The important thing is that it was
issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to
comply with the requirement for publication as this Court held in Tanada v.
Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2 of
the Civil Code, they could not have any force and effect if they were among those
enactments successfully challenged in that case. LOI 474 was published, though, in the
Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of
mandamus cannot issue to compel the performance of a discretionary act, especially by
a specific department of the government. That is true as a general proposition but is
subject to one important qualification. Correctly and categorically stated, the rule is that
mandamus will lie to compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus can issue to require
action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty imposed
by law, the courts will intervene by the extraordinary legal remedy of mandamus
to compel action. If the duty is purely ministerial, the courts will require specific
action. If the duty is purely discretionary, the courts by mandamus will require
action only. For example, if an inferior court, public official, or board should, for an
unreasonable length of time, fail to decide a particular question to the great
detriment of all parties concerned, or a court should refuse to take jurisdiction of a
cause when the law clearly gave it jurisdiction mandamus will issue, in the first
case to require a decision, and in the second to require that jurisdiction be taken of
the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a
plain, speedy and adequate remedy available from the administrative authorities, resort
to the courts may still be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent
domain that logically preclude the application of both powers at the same time on the
same subject. In the case of City of Baguio v. NAWASA, 24 for example, where a law
required the transfer of all municipal waterworks systems to the NAWASA in exchange for
its assets of equivalent value, the Court held that the power being exercised was
eminent domain because the property involved was wholesome and intended for a public
use. Property condemned under the police power is noxious or intended for a noxious
purpose, such as a building on the verge of collapse, which should be demolished for the
public safety, or obscene materials, which should be destroyed in the interest of public
morals. The confiscation of such property is not compensable, unlike the taking of
property under the power of expropriation, which requires the payment of just
compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of
the police power in a famous aphorism: "The general rule at least is that while property
may be regulated to a certain extent, if regulation goes too far it will be recognized as a
taking." The regulation that went "too far" was a law prohibiting mining which might

cause the subsidence of structures for human habitation constructed on the land
surface. This was resisted by a coal company which had earlier granted a deed to the
land over its mine but reserved all mining rights thereunder, with the grantee assuming
all risks and waiving any damage claim. The Court held the law could not be sustained
without compensating the grantor. Justice Brandeis filed a lone dissent in which he
argued that there was a valid exercise of the police power. He said:
Every restriction upon the use of property imposed in the exercise of the police
power deprives the owner of some right theretofore enjoyed, and is, in that sense,
an abridgment by the State of rights in property without making compensation. But
restriction imposed to protect the public health, safety or morals from dangers
threatened is not a taking. The restriction here in question is merely the prohibition
of a noxious use. The property so restricted remains in the possession of its owner.
The state does not appropriate it or make any use of it. The state merely prevents
the owner from making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious as it may because of further
changes in local or social conditions the restriction will have to be removed and
the owner will again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police
power and the power of eminent domain, with the latter being used as an implement of
the former like the power of taxation. The employment of the taxing power to achieve a
police purpose has long been accepted. 26 As for the power of expropriation, Prof. John J.
Costonis of the University of Illinois College of Law (referring to the earlier case of Euclid
v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power)
makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the Police and
eminent domain powers on different planets. Generally speaking, they viewed
eminent domain as encompassing public acquisition of private property for
improvements that would be available for public use," literally construed. To the
police power, on the other hand, they assigned the less intrusive task of preventing
harmful externalities a point reflected in the Euclid opinion's reliance on an analogy
to nuisance law to bolster its support of zoning. So long as suppression of a
privately authored harm bore a plausible relation to some legitimate "public
purpose," the pertinent measure need have afforded no compensation whatever.
With the progressive growth of government's involvement in land use, the distance
between the two powers has contracted considerably. Today government often
employs eminent domain interchangeably with or as a useful complement to the
police power-- a trend expressly approved in the Supreme Court's 1954 decision in
Berman v. Parker, which broadened the reach of eminent domain's "public use"
test to match that of the police power's standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted
areas in the District of Columbia as a proper exercise of the police power. On the role of
eminent domain in the attainment of this purpose, Justice Douglas declared:
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.

28

In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the
U.S Supreme Court sustained the respondent's Landmarks Preservation Law under which
the owners of the Grand Central Terminal had not been allowed to construct a multi-story
office building over the Terminal, which had been designated a historic landmark.
Preservation of the landmark was held to be a valid objective of the police power. The

problem, however, was that the owners of the Terminal would be deprived of the right to
use the airspace above it although other landowners in the area could do so over their
respective properties. While insisting that there was here no taking, the Court
nonetheless recognized certain compensatory rights accruing to Grand Central Terminal
which it said would "undoubtedly mitigate" the loss caused by the regulation. This "fair
compensation," as he called it, was explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights
accruing to the site prior to the Terminal's designation as a landmark the rights which
would have been exhausted by the 59-story building that the city refused to
countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were
proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the
Terminal site by constructing or selling to others the right to construct larger, hence more
profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of
compensable taking is concerned. To the extent that the measures under challenge
merely prescribe retention limits for landowners, there is an exercise of the police power
for the regulation of private property in accordance with the Constitution. But where, to
carry out such regulation, it becomes necessary to deprive such owners of whatever
lands they may own in excess of the maximum area allowed, there is definitely a taking
under the power of eminent domain for which payment of just compensation is
imperative. The taking contemplated is not a mere limitation of the use of the land. What
is required is the surrender of the title to and the physical possession of the said excess
and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the
several measures before us are challenged as violative of the due process and equal
protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no
retention limits are prescribed has already been discussed and dismissed. It is noted that
although they excited many bitter exchanges during the deliberation of the CARP Law in
Congress, the retention limits finally agreed upon are, curiously enough, not being
questioned in these petitions. We therefore do not discuss them here. The Court will
come to the other claimed violations of due process in connection with our examination
of the adequacy of just compensation as required under the power of expropriation.
The argument of the small farmers that they have been denied equal protection because
of the absence of retention limits has also become academic under Section 6 of R.A. No.
6657. Significantly, they too have not questioned the area of such limits. There is also
the complaint that they should not be made to share the burden of agrarian reform, an
objection also made by the sugar planters on the ground that they belong to a particular
class with particular interests of their own. However, no evidence has been submitted to
the Court that the requisites of a valid classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other
in certain particulars and different from each other in these same particulars. 31 To be
valid, it must conform to the following requirements: (1) it must be based on substantial
distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited
to existing conditions only; and (4) it must apply equally to all the members of the
class. 32 The Court finds that all these requisites have been met by the measures here
challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be
treated alike both as to the rights conferred and the liabilities imposed. 33 The petitioners
have not shown that they belong to a different class and entitled to a different
treatment. The argument that not only landowners but also owners of other properties
must be made to share the burden of implementing land reform must be rejected. There

is a substantial distinction between these two classes of owners that is clearly visible
except to those who will not see. There is no need to elaborate on this matter. In any
event, the Congress is allowed a wide leeway in providing for a valid classification. Its
decision is accorded recognition and respect by the courts of justice except only where
its discretion is abused to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police
power only if there is a concurrence of the lawful subject and the lawful method. Put
otherwise, the interests of the public generally as distinguished from those of a particular
class require the interference of the State and, no less important, the means employed
are reasonably necessary for the attainment of the purpose sought to be achieved and
not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform
have been laid down by the Constitution itself, we may say that the first requirement has
been satisfied. What remains to be examined is the validity of the method employed to
achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the
individual are concerned, the end does not justify the means. It is not enough that there
be a valid objective; it is also necessary that the means employed to pursue it be in
keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts.
There is no question that not even the strongest moral conviction or the most urgent
public need, subject only to a few notable exceptions, will excuse the bypassing of an
individual's rights. It is no exaggeration to say that a, person invoking a right guaranteed
under Article III of the Constitution is a majority of one even as against the rest of the
nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of Article
III of the Constitution. With regard to his property, the owner enjoys the added protection
of Section 9, which reaffirms the familiar rule that private property shall not be taken for
public use without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire
private lands intended for public use upon payment of just compensation to the
owner. Obviously, there is no need to expropriate where the owner is willing to sell
under terms also acceptable to the purchaser, in which case an ordinary deed of
sale may be agreed upon by the parties. 35 It is only where the owner is unwilling
to sell, or cannot accept the price or other conditions offered by the vendee, that
the power of eminent domain will come into play to assert the paramount authority
of the State over the interests of the property owner. Private rights must then yield
to the irresistible demands of the public interest on the time-honored justification,
as in the case of the police power, that the welfare of the people is the supreme
law.
But for all its primacy and urgency, the power of expropriation is by no means absolute
(as indeed no power is absolute). The limitation is found in the constitutional injunction
that "private property shall not be taken for public use without just compensation" and in
the abundant jurisprudence that has evolved from the interpretation of this principle.
Basically, the requirements for a proper exercise of the power are: (1) public use and (2)
just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the
State should first distribute public agricultural lands in the pursuit of agrarian reform
instead of immediately disturbing property rights by forcibly acquiring private
agricultural lands. Parenthetically, it is not correct to say that only public agricultural
lands may be covered by the CARP as the Constitution calls for "the just distribution of all
agricultural lands." In any event, the decision to redistribute private agricultural lands in
the manner prescribed by the CARP was made by the legislative and executive

departments in the exercise of their discretion. We are not justified in reviewing that
discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments
when they decide what is known as the political question. As explained by Chief Justice
Concepcion in the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely,
a question of policy. It refers to "those questions which, under the Constitution, are
to be decided by the people in their sovereign capacity; or in regard to which full
discretionary authority has been delegated to the legislative or executive branch of
the government." It is concerned with issues dependent upon the wisdom, not
legality, of a particular measure.
It is true that the concept of the political question has been constricted with the
enlargement of judicial power, which now includes the authority of the courts "to
determine whether or not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or instrumentality of the
Government." 37 Even so, this should not be construed as a license for us to reverse the
other departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the
CARP the redistribution of private landholdings (even as the distribution of public
agricultural lands is first provided for, while also continuing apace under the Public Land
Act and other cognate laws). The Court sees no justification to interpose its authority,
which we may assert only if we believe that the political decision is not unwise, but
illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the entire
St. Mary's river between the American bank and the international line, as well as all
of the upland north of the present ship canal, throughout its entire length, was
"necessary for the purpose of navigation of said waters, and the waters connected
therewith," that determination is conclusive in condemnation proceedings
instituted by the United States under that Act, and there is no room for judicial
review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the
Constitution itself No less than the 1987 Charter calls for agrarian reform, which is the
reason why private agricultural lands are to be taken from their owners, subject to the
prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc. No.
131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that the
State adopt the necessary measures "to encourage and undertake the just distribution of
all agricultural lands to enable farmers who are landless to own directly or collectively
the lands they till." That public use, as pronounced by the fundamental law itself, must
be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and
more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from its
owner by the expropriator. 39 It has been repeatedly stressed by this Court that the
measure is not the taker's gain but the owner's loss.40 The word "just" is used to intensify
the meaning of the word "compensation" to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions contemplate more
than a mere regulation of the use of private lands under the police power. We deal here
with an actual taking of private agricultural lands that has dispossessed the owners of

their property and deprived them of all its beneficial use and enjoyment, to entitle them
to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when
the following conditions concur: (1) the expropriator must enter a private property; (2)
the entry must be for more than a momentary period; (3) the entry must be under
warrant or color of legal authority; (4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected; and (5) the utilization of the
property for public use must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property. All these requisites are envisioned in the measures
before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit
upon its taking possession of the condemned property, as "the compensation is a public
charge, the good faith of the public is pledged for its payment, and all the resources of
taxation may be employed in raising the amount." 43 Nevertheless, Section 16(e) of the
CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of
rejection or no response from the landowner, upon the deposit with an accessible
bank designated by the DAR of the compensation in cash or in LBP bonds in
accordance with this Act, the DAR shall take immediate possession of the land and
shall request the proper Register of Deeds to issue a Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. The DAR shall thereafter
proceed with the redistribution of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is
claimed is entrusted to the administrative authorities in violation of judicial prerogatives.
Specific reference is made to Section 16(d), which provides that in case of the rejection
or disregard by the owner of the offer of the government to buy his land... the DAR shall conduct summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the LBP and other
interested parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of the notice. After the expiration of the
above period, the matter is deemed submitted for decision. The DAR shall decide
the case within thirty (30) days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed to the courts
of justice and may not be usurped by any other branch or official of the
government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by
President Marcos providing that the just compensation for property under expropriation
should be either the assessment of the property by the government or the sworn
valuation thereof by the owner, whichever was lower. In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
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 this Constitution is reserved to it for final
determination.
Thus, although in an expropriation proceeding the court technically would still have
the power to determine the just compensation for the property, following the
applicable decrees, its task would be relegated to simply stating the lower value of
the property as declared either by the owner or the assessor. As a necessary
consequence, it would be useless for the court to appoint commissioners under
Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause
in the taking of private property is seemingly fulfilled since it cannot be said that a
judicial proceeding was not had before the actual taking. However, the strict
application of the decrees during the proceedings would be nothing short of a mere
formality or charade as the court has only to choose between the valuation of the

owner and that of the assessor, and its choice is always limited to the lower of the
two. The court cannot exercise its discretion or independence in determining what
is just or fair. Even a grade school pupil could substitute for the judge insofar as
the determination of constitutional just compensation is concerned.
xxx
In the present petition, we are once again confronted with the same question of
whether the courts under P.D. No. 1533, which contains the same provision on just
compensation as its predecessor decrees, still have the power and authority to
determine just compensation, independent of what is stated by the decree and to
this effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to the 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.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally objectionable.
Although the proceedings are described as summary, the landowner and other interested
parties are nevertheless allowed an opportunity to submit evidence on the real value of
the property. But more importantly, 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.
The second and more serious objection to the provisions on just compensation is not as
easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall compensate
the landowner in such amount as may be agreed upon by the landowner and
the DAR and the LBP, in accordance with the criteria provided for in Sections
16 and 17, and other pertinent provisions hereof, or as may be finally
determined by the court, as the just compensation for the land.
The compensation shall be paid in one of the following modes, at the option
of the landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is
concerned Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares
Thirty percent (30%) cash, the balance to be paid in government financial
instruments negotiable at any time.
(c) For lands twenty-four (24) hectares and below Thirty-five percent
(35%) cash, the balance to be paid in government financial instruments
negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP preferred
shares, physical assets or other qualified investments in accordance with
guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent
(10%) of the face value of the bonds shall mature every year from the date
of issuance until the tenth (10th) year: Provided, That should the landowner
choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the
landowner, his successors-in- interest or his assigns, up to the amount of
their face value, for any of the following:
(i) Acquisition of land or other real properties of the government, including assets
under the Asset Privatization Program and other assets foreclosed by government
financial institutions in the same province or region where the lands for which the
bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or controlled corporations
or shares of stock owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or for performance bonds;
(iv) Security for loans with any government financial institution, provided the
proceeds of the loans shall be invested in an economic enterprise, preferably in a
small and medium- scale industry, in the same province or region as the land for
which the bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the use of
these bonds for these purposes will be limited to a certain percentage of the
outstanding balance of the financial instruments; Provided, further, That the PARC
shall determine the percentages mentioned above;
(vi) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated properties to accept
just compensation therefor in less than money, which is the only medium of payment
allowed. In support of this contention, they cite jurisprudence holding that:

The fundamental rule in expropriation matters is that 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 . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration,

46

this Court held:

It is well-settled that just compensation means the equivalent for the value of the
property at the time of its taking. Anything beyond that is more, and anything
short of that is less, than just compensation. It means a fair and full equivalent for
the loss sustained, which is the measure of the indemnity, not whatever gain
would accrue to the expropriating entity. The market value of the land taken is the
just compensation to which the owner of condemned property is entitled, the
market value being 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 a price
to be given and received for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been derived,
the weight of authority is also to the effect that just compensation for property
expropriated is payable only in money and not otherwise. Thus
The medium of payment of compensation is ready money or cash. The condemnor
cannot compel the owner to accept anything but money, nor can the owner compel
or require the condemnor to pay him on any other basis than the value of the
property in money at the time and in the manner prescribed by the Constitution
and the statutes. When the power of eminent domain is resorted to, there must be
a standard medium of payment, binding upon both parties, and the law has fixed
that standard as money in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be
regarded as a reliable and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent
in money, which must be paid at least within a reasonable time after the taking,
and it is not within the power of the Legislature to substitute for such payment
future obligations, bonds, or other valuable advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been
paid in the past solely in that medium. However, we do not deal here with the traditional
excercise of the power of eminent domain. This is not an ordinary expropriation where
only a specific property of relatively limited area is sought to be taken by the State from
its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of
whatever kind as long as they are in excess of the maximum retention limits allowed
their owners. This kind of expropriation is intended for the benefit not only of a particular
community or of a small segment of the population but of the entire Filipino nation, from
all levels of our society, from the impoverished farmer to the land-glutted owner. Its
purpose does not cover only the whole territory of this country but goes beyond in time
to the foreseeable future, which it hopes to secure and edify with the vision and the
sacrifice of the present generation of Filipinos. Generations yet to come are as involved
in this program as we are today, although hopefully only as beneficiaries of a richer and
more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today.
And, finally, let it not be forgotten that it is no less than the Constitution itself that has
ordained this revolution in the farms, calling for "a just distribution" among the farmers

of lands that have heretofore been the prison of their dreams but can now become the
key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we
estimate that hundreds of billions of pesos will be needed, far more indeed than the
amount of P50 billion initially appropriated, which is already staggering as it is by our
present standards. Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they
called for agrarian reform as a top priority project of the government. It is a part of this
assumption that when they envisioned the expropriation that would be needed, they also
intended that the just compensation would have to be paid not in the orthodox way but a
less conventional if more practical method. There can be no doubt that they were aware
of the financial limitations of the government and had no illusions that there would be
enough money to pay in cash and in full for the lands they wanted to be distributed
among the farmers. We may therefore assume that their intention was to allow such
manner of payment as is now provided for by the CARP Law, particularly the payment of
the balance (if the owner cannot be paid fully with money), or indeed of the entire
amount of the just compensation, with other things of value. We may also suppose that
what they had in mind was a similar scheme of payment as that prescribed in P.D. No.
27, which was the law in force at the time they deliberated on the new Charter and with
which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical
agreement among the members regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform program being
contemplated. There was the suggestion to "fine tune" the requirement to suit the
demands of the project even as it was also felt that they should "leave it to Congress" to
determine how payment should be made to the landowner and reimbursement required
from the farmer-beneficiaries. Such innovations as "progressive compensation" and
"State-subsidized compensation" were also proposed. In the end, however, no special
definition of the just compensation for the lands to be expropriated was reached by the
Commission. 50
On the other hand, there is nothing in the records either that militates against the
assumptions we are making of the general sentiments and intention of the members on
the content and manner of the payment to be made to the landowner in the light of the
magnitude of the expenditure and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of the
just compensation provided for in the afore- quoted Section 18 of the CARP Law is not
violative of the Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this Court is not a
cloistered institution removed from the realities and demands of society or oblivious to
the need for its enhancement. The Court is as acutely anxious as the rest of our people
to see the goal of agrarian reform achieved at last after the frustrations and deprivations
of our peasant masses during all these disappointing decades. We are aware that
invalidation of the said section will result in the nullification of the entire program, killing
the farmer's hopes even as they approach realization and resurrecting the spectre of
discontent and dissent in the restless countryside. That is not in our view the intention of
the Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be
made fully in money, we find further that the proportion of cash payment to the other
things of value constituting the total payment, as determined on the basis of the areas of
the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the
smaller the land, the bigger the payment in money, primarily because the small
landowner will be needing it more than the big landowners, who can afford a bigger
balance in bonds and other things of value. No less importantly, the government
financial instruments making up the balance of the payment are "negotiable at any

time." The other modes, which are likewise available to the landowner at his option, are
also not unreasonable because payment is made in shares of stock, LBP bonds, other
properties or assets, tax credits, and other things of value equivalent to the amount of
just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big
and small, not a little inconvenience. As already remarked, this cannot be avoided.
Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know
they are of the need for their forebearance and even sacrifice, will not begrudge us their
indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our
pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does
not seem to be viable any more as it appears that Section 4 of the said Order has been
superseded by Section 14 of the CARP Law. This repeats the requisites of registration as
embodied in the earlier measure but does not provide, as the latter did, that in case of
failure or refusal to register the land, the valuation thereof shall be that given by the
provincial or city assessor for tax purposes. On the contrary, the CARP Law says that the
just compensation shall be ascertained on the basis of the factors mentioned in its
Section 17 and in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property even
before actual payment to him in full of just compensation, in contravention of a wellaccepted principle of eminent domain.
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. 51
... 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. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 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, 54 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, 55 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 ... 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,

56

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 ... . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as

October 21, 1972 and declared that he shall "be deemed the owner" of a portion of land
consisting of a family-sized farm except that "no title to the land owned by him was to be
actually issued to him unless and until he had become a full-fledged member of a duly
recognized farmers' cooperative." It was understood, however, that full payment of the
just compensation also had to be made first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21,
1972 of the land they acquired by virtue of Presidential Decree No. 27. (Emphasis
supplied.)
it was obviously referring to lands already validly acquired under the said decree, after
proof of full-fledged membership in the farmers' cooperatives and full payment of just
compensation. Hence, it was also perfectly proper for the Order to also provide in its
Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary after
October 21, 1972 (pending transfer of ownership after full payment of just
compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the corresponding payment or
the deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. 57 No outright change of
ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D.
No. 27, as recognized under E.O. No. 228, are retained by him even now under R.A. No.
6657. This should counter-balance the express provision in Section 6 of the said law that
"the landowners whose lands have been covered by Presidential Decree No. 27 shall be
allowed to keep the area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original homestead at
the time of the approval of this Act shall retain the same areas as long as they continue
to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the
appeal filed by the petitioners with the Office of the President has already been resolved.
Although we have said that the doctrine of exhaustion of administrative remedies need
not preclude immediate resort to judicial action, there are factual issues that have yet to
be examined on the administrative level, especially the claim that the petitioners are not
covered by LOI 474 because they do not own other agricultural lands than the subjects of
their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the
petitioners have not yet exercised their retention rights, if any, under P.D. No. 27, the
Court holds that they are entitled to the new retention rights provided for by R.A. No.
6657, which in fact are on the whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have been the
subject of bitter attack from those who point to the shortcomings of these measures and
ask that they be scrapped entirely. To be sure, these enactments are less than perfect;
indeed, they should be continuously re-examined and rehoned, that they may be sharper
instruments for the better protection of the farmer's rights. But we have to start
somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but
grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The

CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes's
words, "it is an experiment, as all life is an experiment," and so we learn as we venture
forward, and, if necessary, by our own mistakes. We cannot expect perfection although
we should strive for it by all means. Meantime, we struggle as best we can in freeing the
farmer from the iron shackles that have unconscionably, and for so long, fettered his soul
to the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian
reform program are removed, to clear the way for the true freedom of the farmer. We
may now glimpse the day he will be released not only from want but also from the
exploitation and disdain of the past and from his own feelings of inadequacy and
helplessness. At last his servitude will be ended forever. At last the farm on which he toils
will be his farm. It will be his portion of the Mother Earth that will give him not only the
staff of life but also the joy of living. And where once it bred for him only deep despair,
now can he see in it the fruition of his hopes for a more fulfilling future. Now at last can
he banish from his small plot of earth his insecurities and dark resentments and "rebuild
in it the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are
SUSTAINED against all the constitutional objections raised in the herein petitions.
2. Title to all expropriated properties shall be transferred to the State only upon full
payment of compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are
retained and recognized.
4. Landowners who were unable to exercise their rights of retention under P.D. No.
27 shall enjoy the retention rights granted by R.A. No. 6657 under the conditions
therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without
pronouncement as to costs.
SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco,
Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.

14.

G.R. No. L-119694 May 22, 1995

PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139 members,

represented by its President, Amado P. Macasaet and its Executive Director
Ermin F. Garcia, Jr., petitioner,

vs.
COMMISSION ON ELECTIONS, respondent.
RESOLUTION
FELICIANO, J.:
The Philippine Press Institute, Inc. ("PPI") is before this Court assailing the constitutional
validity of Resolution No. 2772 issued by respondent Commission on Elections
("Comelec") and its corresponding Comelec directive dated 22 March 1995, through a
Petition for Certiorari and Prohibition. Petitioner PPI is a non-stock, non-profit organization
of newspaper and magazine publishers.
On 2 March 1995, Comelec promulgated Resolution No. 2772, which reads in part:
xxx xxx xxx
Sec. 2. Comelec Space. The Commission shall procure free print space of not
less than one half (1/2) page in at least one newspaper of general circulation in
every province or city for use as "Comelec Space" from March 6, 1995 in the case
of candidates for senator and from March 21, 1995 until May 12, 1995. In the
absence of said newspaper, "Comelec Space" shall be obtained from any magazine
or periodical of said province or city.
Sec. 3. Uses of Comelec Space. "Comelec Space" shall be allocated by the
Commission, free of charge, among all candidates within the area in which the
newspaper, magazine or periodical is circulated to enable the candidates to make
known their qualifications, their stand on public issues and their platforms and
programs of government.
"Comelec Space" shall also be used by the Commission for dissemination of vital
election information.
Sec. 4. Allocation of Comelec Space. (a) "Comelec Space" shall also be available
to all candidatesduring the periods stated in Section 2 hereof. Its allocation shall be
equal and impartial among all candidates for the same office. All candidates
concerned shall be furnished a copy of the allocation of "Comelec Space" for their
information, guidance and compliance.
(b) Any candidate desiring to avail himself of "Comelec Space" from
newspapers or publications based in the Metropolitan Manila Area shall
submit an application therefor, in writing, to the Committee on Mass Media of
the Commission. Any candidate desiring to avail himself of "Comelec Space"
in newspapers or publications based in the provinces shall submit his
application therefor, in writing, to the Provincial Election Supervisor
concerned. Applications for availment of "Comelec Space" maybe filed at any
time from the date of effectivity of this Resolution.
(c) The Committee on Mass Media and the Provincial Election Supervisors
shall allocate available"Comelec Space" among the candidates concerned by
lottery of which said candidates shall be notified in advance, in writing, to be
present personally or by representative to witness the lottery at the date,
time and place specified in the notice. Any party objecting to the result of the
lottery may appeal to the Commission.
(d) The candidates concerned shall be notified by the Committee on Mass
Media or the Provincial Election Supervisor, as the case maybe, sufficiently in
advance and in writing of the date of issue and the newspaper or publication
allocated to him, and the time within which he must submit the written
material for publication in the "Comelec Space".

xxx xxx xxx

Sec. 8. Undue Reference to Candidates/Political Parties in Newspapers. No
newspaper or publication shall allow to be printed or published in the news,
opinion, features, or other sections of the newspaper or publication accounts or
comments which manifestly favor or oppose any candidate or political party by
unduly or repeatedly referring to or including therein said candidate or political
party. However, unless the facts and circumstances clearly indicate otherwise, the
Commission will respect the determination by the publisher and/or editors of the
newspapers or publications that the accounts or views published are significant,
newsworthy and of public interest. (Emphasis supplied)
Apparently in implementation of this Resolution, Comelec through Commissioner
Regalado E. Maambong sent identical letters, dated 22 March 1995, to various publishers
of newspapers like the Business World, the Philippine Star, the Malaya and the Philippine
Times Journal, all members of PPI. These letters read as follows:
This is to advise you that pursuant to Resolution No. 2772 of the Commission on
Elections, you aredirected to provide free print space of not less than one half (1/2)
page for use as "Comelec Space"or similar to the print support which you have
extended during the May 11, 1992 synchronized elections which was 2 full pages
for each political party fielding senatorial candidates, from March 6, 1995 to May 6,
1995, to make known their qualifications, their stand on public issues and their
platforms and programs of government.
We shall be informing the political parties and candidates to submit directly to
you their pictures, biographical data, stand on key public issues and platforms of
government either as raw data or in the form of positives or camera-ready
materials.
Please be reminded that the political parties/candidates may be accommodated in
your publication any day upon receipt of their materials until May 6, 1995 which is
the last day for campaigning.
We trust you to extend your full support and cooperation in this regard. (Emphasis
supplied)
In this Petition for Certiorari and Prohibition with prayer for the issuance of a Temporary
Restraining Order, PPI asks us to declare Comelec Resolution No. 2772 unconstitutional
and void on the ground that it violates the prohibition imposed by the Constitution upon
the government, and any of its agencies, against the taking of private property for public
use without just compensation. Petitioner also contends that the 22 March 1995 letter
directives of Comelec requiring publishers to give free "Comelec Space" and at the same
time process raw data to make it camera-ready, constitute impositions of involuntary
servitude, contrary to the provisions of Section 18 (2), Article III of the 1987 Constitution.
Finally, PPI argues that Section 8 of Comelec Resolution No. 2772 is violative of the
constitutionally guaranteed freedom of speech, of the press and of expression. 1
On 20 April 1995, this Court issued a Temporary Restraining Order enjoining Comelec
from enforcing and implementing Section 2 of Resolution No. 2772, as well as the
Comelec directives addressed to various print media enterprises all dated 22 March
1995. The Court also required the respondent to file a Comment on the Petition.
The Office of the Solicitor General filed its Comment on behalf of respondent Comelec
alleging that Comelec Resolution No. 2772 does not impose upon the publishers any
obligation to provide free print space in the newspapers as it does not provide any
criminal or administrative sanction for non-compliance with that Resolution. According to
the Solicitor General, the questioned Resolution merely established guidelines to be
followed in connection with the procurement of "Comelec space," the procedure for and
mode of allocation of such space to candidates and the conditions or requirements for
the candidate's utilization of the "Comelec space" procured. At the same time, however,

the Solicitor General argues that even if the questioned Resolution and its implementing
letter directives are viewed as mandatory, the same would nevertheless be valid as an
exercise of the police power of the State. The Solicitor General also maintains that
Section 8 of Resolution No. 2772 is a permissible exercise of the power of supervision or
regulation of the Comelec over the communication and information operations of print
media enterprises during the election period to safeguard and ensure a fair, impartial
and credible election. 2
At the oral hearing of this case held on 28 April 1995, respondent Comelec through its
Chairman, Hon. Bernardo Pardo, in response to inquiries from the Chief Justice and other
Members of the Court, stated that Resolution No. 2772, particularly Section 2 thereof and
the 22 March 1995 letters dispatched to various members of petitioner PPI,
were not intended to compel those members to supply Comelec with free print space.
Chairman Pardo represented to the Court that Resolution and the related letter-directives
were merely designed to solicit from the publishers the same free print space which
many publishers had voluntarily given to Comelec during the election period relating to
the 11 May 1992 elections. Indeed, the Chairman stated that the Comelec would, that
very afternoon, meet and adopt an appropriate amending or clarifying resolution, a
certified true copy of which would forthwith be filed with the Court.
On 5 May 1995, the Court received from the Office of the Solicitor General a
manifestation which attached a copy of Comelec Resolution No. 2772-A dated 4 May
1995. The operative portion of this Resolution follows:
NOW THEREFORE, pursuant to the powers vested in it by the Constitution, the
Omnibus Election Code, Republic Acts No. 6646 and 7166 and other election laws,
the Commission on Elections RESOLVED to clarify Sections 2 and 8 of Res. No. 2772
as follows:
1. Section 2 of Res. No. 2772 shall not be construed to mean as requiring
publishers of the different mass media print publications to provide print
space under pain of prosecution, whether administrative, civil or criminal,
there being no sanction or penalty for violation of said Section provided for
either in said Resolution or in Section 90 of Batas Pambansa Blg. 881,
otherwise known as the Omnibus Election Code, on the grant of "Comelec
space."
2. Section 8 of Res. No. 2772 shall not be construed to mean as constituting
prior restraint on the part of publishers with respect to the printing or
publication of materials in the news, opinion, features or other sections of
their respective publications or other accounts or comments, it being clear
from the last sentence of said Section 8 that the Commission shall, "unless
the facts and circumstances clearly indicate otherwise . . .respect the
determination by the publisher and/or editors of the newspapers or
publications that the accounts or views published are significant,
newsworthy and of public interest."
This Resolution shall take effect upon approval. (Emphasis in the original)
While, at this point, the Court could perhaps simply dismiss the Petition for Certiorari and
Prohibition as having become moot and academic, we consider it not inappropriate to
pass upon the first constitutional issue raised in this case. Our hope is to put this issue to
rest and prevent its resurrection.
Section 2 of Resolution No. 2772 is not a model of clarity in expression. Section 1 of
Resolution No. 2772-A did not try to redraft Section 2; accordingly, Section 2 of
Resolution No. 2772 persists in its original form. Thus, we must point out that, as
presently worded, and in particular as interpreted and applied by the Comelec itself in its
22 March 1995 letter-directives to newspaper publishers, Section 2 of Resolution No.
2772 is clearly susceptible of the reading that petitioner PPI has given it. That Resolution
No. 2772 does not, in express terms, threaten publishers who would disregard it or its

implementing letters with some criminal or other sanction, does not by itself
demonstrate that the Comelec's original intention was simply to solicit or request
voluntary donations of print space from publishers. A written communication
officially directing a print media company to supply free print space, dispatched by a
government (here a constitutional) agency and signed by a member of the Commission
presumably legally authorized to do so, is bound to produce a coercive effect upon the
company so addressed. That the agency may not be legally authorized to impose, or
cause the imposition of, criminal or other sanctions for disregard of such directions, only
aggravates the constitutional difficulties inhearing in the present situation. The
enactment or addition of such sanctions by the legislative authority itself would be open
to serious constitutional objection.
To compel print media companies to donate "Comelec-space" of the dimensions specified
in Section 2 of Resolution No. 2772 (not less than one-half page), amounts to "taking" of
private personal property for public use or purposes. Section 2 failed to specify the
intended frequency of such compulsory "donation:" only once during the period from 6
March 1995 (or 21 March 1995) until 12 May 1995? or everyday or once a week? or as
often as Comelec may direct during the same period? The extent of the taking or
deprivation is not insubstantial; this is not a case of a de minimis temporary limitation or
restraint upon the use of private property. The monetary value of the compulsory
"donation," measured by the advertising rates ordinarily charged by newspaper
publishers whether in cities or in non-urban areas, may be very substantial indeed.
The taking of print space here sought to be effected may first be appraised under the
rubric of expropriation of private personal property for public use. The threshold
requisites for a lawful taking of private property for public use need to be examined here:
one is the necessity for the taking; another is the legal authority to effect the taking. The
element of necessity for the taking has not been shown by respondent Comelec. It has
not been suggested that the members of PPI are unwilling to sell print space at their
normal rates to Comelec for election purposes. Indeed, the unwillingness or reluctance of
Comelec to buy print space lies at the heart of the problem. 3Similarly, it has not been
suggested, let alone demonstrated, that Comelec has been granted the power of
eminent domain either by the Constitution or by the legislative authority. A reasonable
relationship between that power and the enforcement and administration of election
laws by Comelec must be shown; it is not casually to be assumed.
That the taking is designed to subserve "public use" is not contested by petitioner PPI.
We note only that, under Section 3 of Resolution No. 2772, the free "Comelec space"
sought by the respondent Commission would be used not only for informing the public
about the identities, qualifications and programs of government of candidates for
elective office but also for "dissemination of vital election information" (including,
presumably, circulars, regulations, notices, directives, etc. issued by Comelec). It seems
to the Court a matter of judicial notice that government offices and agencies (including
the Supreme Court) simply purchase print space, in the ordinary course of events, when
their rules and regulations, circulars, notices and so forth need officially to be brought to
the attention of the general public.
The taking of private property for public use is, of course, authorized by the Constitution,
but not without payment of "just compensation" (Article III, Section 9). And apparently
the necessity of paying compensation for "Comelec space" is precisely what is sought to
be avoided by respondent Commission, whether Section 2 of Resolution No. 2772 is read
as petitioner PPI reads it, as an assertion of authority to require newspaper publishers to
"donate" free print space for Comelec purposes, or as an exhortation, or perhaps an
appeal, to publishers to donate free print space, as Section 1 of Resolution No. 2772-A
attempts to suggest. There is nothing at all to prevent newspaper and magazine
publishers from voluntarily giving free print space to Comelec for the purposes
contemplated in Resolution No. 2772. Section 2 of Resolution No. 2772 does not,
however, provide a constitutional basis for compelling publishers, against their will, in
the kind of factual context here present, to provide free print space for Comelec
purposes. Section 2 does not constitute a valid exercise of the power of eminent domain.

We would note that the ruling here laid down by the Court is entirely in line with the
theory of democratic representative government. The economic costs of informing the
general public about the qualifications and programs of those seeking elective office are
most appropriately distributed as widely as possible throughout our society by the
utilization of public funds, especially funds raised by taxation, rather than cast solely on
one small sector of society, i.e., print media enterprises. The benefits which flow from a
heightened level of information on and the awareness of the electoral process are
commonly thought to be community-wide; the burdens should be allocated on the same
basis.
As earlier noted, the Solicitor General also contended that Section 2 of Resolution No.
2772, even if read as compelling publishers to "donate" "Comelec space, " may be
sustained as a valid exercise of the police power of the state. This argument was,
however, made too casually to require prolonged consideration on our part. Firstly, there
was no effort (and apparently no inclination on the part of Comelec) to show that the
police power essentially a power of legislation has been constitutionally delegated
to respondent Commission. 4 Secondly, while private property may indeed be validly
taken in the legitimate exercise of the police power of the state, there was no attempt to
show compliance in the instant case with the requisites of a lawful taking under the
police power. 5
Section 2 of Resolution No. 2772 is a blunt and heavy instrument that purports, without a
showing of existence of a national emergency or other imperious public necessity,
indiscriminately and without regard to the individual business condition of particular
newspapers or magazines located in differing parts of the country, to take private
property of newspaper or magazine publishers. No attempt was made to demonstrate
that a real and palpable or urgent necessity for the taking of print space confronted the
Comelec and that Section 2 of Resolution No. 2772 was itself the only reasonable and
calibrated response to such necessity available to the Comelec. Section 2 does not
constitute a valid exercise of the police power of the State.
We turn to Section 8 of Resolution No. 2772, which needs to be quoted in full again:
Sec. 8. Undue Reference to Candidates/Political Parties in Newspapers. No
newspaper or publication shall allow to be printed or published in the news,
opinion, features, or other sections of the newspaper or publication accounts or
comments which manifestly favor or oppose any candidate or political party by
unduly or repeatedly referring to or including therein said candidate or political
party. However, unless the facts and circumstances clearly indicate otherwise, the
Commission will respect the determination by the publisher and/or editors of the
newspapers or publications that the accounts or views published are significant,
newsworthy and of public interest.
It is not easy to understand why Section 8 was included at all in Resolution No. 2772. In
any case, Section 8 should be viewed in the context of our decision in National Press
Club v. Commission on Elections. 6 There the Court sustained the constitutionality of
Section 11 (b) of R.A. No. 6646, known as the Electoral Reforms Law of 1987, which
prohibits the sale or donation of print space and airtime for campaign or other political
purposes, except to the Comelec. In doing so, the Court carefully distinguished (a) paid
political advertisements which are reached by the prohibition of Section 11 (b), from (b)
the reporting of news, commentaries and expressions of belief or opinion by reporters,
broadcasters, editors, commentators or columnists which fall outside the scope of
Section 11 (b) and which are protected by the constitutional guarantees of freedom of
speech and of the press:
Secondly, and more importantly, Section 11 (b) is limited in its scope of
application. Analysis ofSection 11 (b) shows that it purports to apply only to the
purchase and sale, including purchase and sale disguised as a donation, of print
space and air time for campaign or other political purposes.Section 11 (b) does not
purport in any way to restrict the reporting by
newspapers or radio ortelevision stations of news or news-worthy events relating

to candidates, their qualifications, political parties and programs of government.

Moreover, Section 11 (b) does not reach commentaries and expressions of belief or
opinion by reporters or broadcaster or editors or commentators or columnists in
respect of candidates, their qualifications, and programs and so forth, so long at
least as such comments, opinions and beliefs are not in fact advertisements for
particular candidates covertly paid for. In sum, Section 11 (b) is not to be read as
reaching any report or commentary or other coverage that, in responsible media,
is not paid for by candidates for political office. We read Section 11 (b) as designed
to cover only paid political advertisements of particular candidates.
The above limitation in scope of application of Section 11 (b) that it does not
restrict either the reporting of or the expression of belief or opinion or comment
upon the qualifications and programs and activities of any and all candidates for
office constitutes the critical distinction which must be made between the
instant case and that of Sanidad v. Commission on Elections. . . . 7 (Citations
omitted; emphasis supplied)
Section 8 of Resolution No. 2772 appears to represent the effort of the Comelec to
establish a guideline for implementation of the above-quoted distinction and doctrine
in National Press Club an effort not blessed with evident success. Section 2 of Resolution
No. 2772-A while possibly helpful, does not add substantially to the utility of Section 8 of
Resolution No. 2772. The distinction between paid political advertisements on the one
hand and news reports, commentaries and expressions of belief or opinion by reporters,
broadcasters, editors, etc. on the other hand, can realistically be given operative
meaning only in actual cases or controversies, on a case-to-case basis, in terms of very
specific sets of facts.
At all events, the Court is bound to note that PPI has failed to allege any specific
affirmative action on the part of Comelec designed to enforce or implement Section 8.
PPI has not claimed that it or any of its members has sustained actual or imminent injury
by reason of Comelec action under Section 8. Put a little differently, the Court considers
that the precise constitutional issue here sought to be raised whether or not Section 8
of Resolution No. 2772 constitutes a permissible exercise of the Comelec's power under
Article IX, Section 4 of the Constitution to supervise or regulate the enjoyment or
utilization of all franchise or permits for the operation of media of communication or
information [for the purpose of ensuring] equal opportunity, time and space, and the
right of reply, including reasonable, equal rates therefore, for public information
campaigns and forums among candidates in connection with the objective of holding
free, orderly honest, peaceful and credible elections is not ripe for judicial review for
lack of an actual case or controversy involving, as the very lis mota thereof, the
constitutionality of Section 8.
Summarizing our conclusions:
1. Section 2 of Resolution No. 2772, in its present form and as interpreted by Comelec in
its 22 March 1995 letter directives, purports to require print media enterprises to
"donate" free print space to Comelec. As such, Section 2 suffers from a fatal
constitutional vice and must be set aside and nullified.
2. To the extent it pertains to Section 8 of Resolution No. 2772, the Petition
for Certiorari and Prohibition must be dismissed for lack of an actual, justiciable case or
controversy.
WHEREFORE, for all the foregoing, the Petition for Certiorari and Prohibition is GRANTED
in part and Section 2 of Resolution No. 2772 in its present form and the related letterdirectives dated 22 March 1995 are hereby SET ASIDE as null and void, and the
Temporary Restraining Order is hereby MADE PERMANENT. The Petition is DISMISSED in
part, to the extent it relates to Section 8 of Resolution No. 2772. No pronouncement as to
costs.

Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug,
Kapunan, Mendoza and Francisco, JJ., concur.
Quiason, J., is on leave.