Loving v.

Virginia

Citation. 388 U.S. 1, 87 S. Ct. 1817, 18 L. Ed. 2d 1010, 1967 U.S. 1082.
Brief Fact Summary. The state of Virginia enacted laws making it a felony
for a white person to intermarry with a black person or the reverse. The
constitutionality
of
the
statutes
was
called
into
question.
Synopsis of Rule of Law. Restricting the freedom to marry solely on the
basis of race violates the central meaning of the Equal Protection Clause.
Facts. The state of Virginia enacted laws making it a felony for a white
person to intermarry with a black person or a black person to intermarry with
a white person. The Supreme Court of Appeals of Virginia held that the
statutes served the legitimate state purpose of preserving the racial
integrity of its citizens. The State argued that because its miscegenation
statutes punished both white and black participants in an interracial
marriage equally, they cannot be said to constitute invidious discrimination
based on race and, therefore, the statutes commanded mere rational basis
review.
Issue. Was rational basis the proper standard of review by which to evaluate
the
constitutionality
of
the
statutes?
Were the Virginia miscegenation statutes constitutional under the Equal
Protection Clause?
Held. No
and
No.
The mere fact that a statute is one of equal application does not mean that
the statute is exempt from strict scrutiny review. The statutes were clearly
drawn upon race-based distinctions. The legality of certain behavior turned
on the races of the people engaging in it. Equal Protection requires, at least,
that classifications based on race be subject to the most rigid scrutiny.
The Equal Protection Clause of the United States Constitution (Constitution)
prohibits classifications drawn by any statute that constitutes arbitrary and
invidious discrimination. The fact that Virginia bans only interracial marriages
involving whites is proof that the miscegenation statutes exist for no
purposes independent of those based on arbitrary and invidious racial
discrimination.

Concurrence. Justice Potter Stewart (J. Stewart) argued it is not possible for a
state law to be valid, which makes the criminality of an act depend upon the
race of the actor.
Discussion. The key to this case is articulated in J. Stewarts concurrence.
The miscegenation statute was improper because it made the legal
consequences of an action turn on the races of the persons participating in
it.
Location: Virginia General Assembly
Facts of the Case
In 1958, two residents of Virginia, Mildred Jeter, a black woman, and Richard
Loving, a white man, were married in the District of Columbia. The Lovings
returned to Virginia shortly thereafter. The couple was then charged with
violating the state's antimiscegenation statute, which banned inter-racial
marriages. The Lovings were found guilty and sentenced to a year in jail (the
trial judge agreed to suspend the sentence if the Lovings would leave
Virginia and not return for 25 years).
Question
Did Virginia's antimiscegenation law violate the Equal Protection Clause of
the Fourteenth Amendment?
Argument
Loving v. Virginia - Oral Argument
Conclusion
Decision: 9
votes
for
Legal provision: Equal Protection

Loving,

vote(s)

against

Yes. In a unanimous decision, the Court held that distinctions drawn

according to race were generally "odious to a free people" and were subject
to "the most rigid scrutiny" under the Equal Protection Clause. The Virginia
law, the Court found, had no legitimate purpose "independent of invidious
racial discrimination." The Court rejected the state's argument that the
statute was legitimate because it applied equally to both blacks and whites
and found that racial classifications were not subject to a "rational purpose"
test under the Fourteenth Amendment. The Court also held that the Virginia
law violated the Due Process Clause of the Fourteenth Amendment. "Under
our Constitution," wrote Chief Justice Earl Warren, "the freedom to marry, or
not marry, a person of another race resides with the individual, and cannot
be infringed by the State."
Loving v. Virginia (1967)

Summary
During Black History month we spotlight the landmark Supreme Court case
of Loving v. Virginia(1967), which declared anti-miscegenation laws (laws
banning interracial marriages) to be unconstitutional. The Court unanimously
held that prohibiting and punishing marriage based on racial qualifications
violated the Equal Protection and Due Process clauses of the Fourteenth
Amendment.
Mildred Jeter and her new husband, Richard Loving, returned to their home in
Caroline County, Virginia. The newlyweds had recently taken their vows in
nearby Washington, D.C. and were happy to begin their new life together as
married couple. But there was a big obstacle to their marital bliss. The year
was 1958, and Virginia was one of sixteen states that prohibited and
punished interracial marriages. Mildred was African American and her
husband Richard was Caucasian. Four months into their married life they
were indicted by a grand jury.
The following January, the Lovings pleaded guilty to the charge and were
sentenced to one year in jail. The trial judge agreed to suspend the sentence
if the Lovings would leave the state for twenty-five years. The judge told Mr.
and Mrs. Loving: Almighty God created the racesand he placed them on
separate continents. The fact he separated the races shows that He did not
intend for the races to mix.
The Lovings moved to Washington, D.C. and appealed their conviction on the
grounds that Virginia law, The Racial Integrity Law of 1924, violated their
rights to equal protection of the law and due process under the Fourteenth
Amendment.
The Supreme Court ruled unanimously to overturn their conviction and strike
down the Virginia law. The Court held, There can be no doubt that restricting
the freedom to marry solely because of racial classifications violates the
central meaning of the Equal Protection Clause. The Court also found that
the Virginia law deprived the Lovings of liberty without due process of law.
The freedom to marry has long been recognized as one of the vital personal
rights essential to the orderly pursuit of happiness by free men. To deny
this fundamental freedom on so unsupportable a basis as the racial
classifications is surely to deprive all the States citizens of liberty without
due process of law.

Relevant Facts: PLs are an interracial couple who were prosecuted on the
basis of a VA statute which prohibited such marriages, punishable by fine
and or jail time. State Supreme Court upheld the lower courts sentence of
one year suspended with suspension on the premise the couple never
returned to VA. This Court reverses.
Issue: Under constitutional law, a state statute that prosecutes parties who
are interracially married violate the Equal Protection Clause when the statute
is argued to be equally discriminatory?
Holding: No. The framers of the Constitution did not intend for a statute
which discriminates, even if equally, against race; such a statute is
considered a violation of the EPC.
Courts Rationale/Reasoning: The Court said the law involved in the caseat-bar is basically a furthering of white supremacy. The State says the
Framers intent in such a law was if there is a discriminatory effect, that it
applies equally to parties. They continue to add that if EPC does not outlaw
mixed marriage statutes b/c of their reliance on racial classification, the
question of constitutionality would thus become whether there was any
rational basis for a State to treat interracial marriages differently from other
marriages..
The Court rejects these arguments. When a statute is not race-based, the
Court will ask if there is a rational basis for the statute; it may defer to the
states, but if there is no rational basis it is rendered void. The State
contends the Framers of the Constitution or the Framers of the 14th
Amendment didnt intend to make mixed marriage statutes unconstitutional.
But the Court says the clear intent of the 14th was to eliminate all official
state sources of violative racial discrimination in the States (originalist
argument).
VAs statute is discriminatory on its face, as it discriminates against generally
accepted conduct if engaged in by members of different races. After
applying strict scrutiny to the statute, the Court tried to figure out if they
were necessary to the carrying out of a state objective, independent of the
racial discrimination which it was object of the 14th Amendment to
eliminate.
However, there is no independent issue aside from racial discrimination
which justifies this classification. The fact that the statute involves white
interracial marriages is proof of the supremacist intent of the States framers.
The Court consistently denied the constitutionality of such statutes. Bottom
line is that the statutes also deprive the Lovings of liberty without due
process of law in violation of the Due Process Clause of the 14th
Amendment. The freedom to marry has long been recognized as an
essential right that the Court will enforce.

Rule: The clear and central purpose of the 14th Amendment was to
eliminate all official state sources of invidious racial discrimination in the
States.
The EPC demands that racial classifications, especially suspect in criminal
statutes, be subjected to the most rigid scrutiny. and, if they are to be
upheld, they must be shown to be necessary to the accomplishment of some
permissible state objective, independent of the racial discrimination which it
was the object of the 14th Amendment to eliminate.
SSS Employee Asso. v CA 175 SCRA 686 (July 28, 1989)
Facts: The petitioners went on strike after the SSS failed to act upon the
unions demands concerning the implementation of their CBA. SSS filed
before the court action for damages with prayer for writ of preliminary
injunction against petitioners for staging an illegal strike. The court issued a
temporary restraining order pending the resolution of the application for
preliminary injunction while petitioners filed a motion to dismiss alleging the
courts lack of jurisdiction over the subject matter. Petitioners contend that
the court made reversible error in taking cognizance on the subject matter
since the jurisdiction lies on the DOLE or the National Labor Relations
Commission as the case involves a labor dispute. The SSS contends on one
hand that the petitioners are covered by the Civil Service laws, rules and
regulation thus have no right to strike. They are not covered by the NLRC or
DOLE therefore the court may enjoin the petitioners from striking.

Issue: Whether or not SSS employers have the right to strike

Whether or not the CA erred in taking jurisdiction over the subject
matter.

Held: The Constitutional provisions enshrined on Human Rights and Social

Justice provides guarantee among workers with the right to organize and
conduct peaceful concerted activities such as strikes. On one hand, Section
14 of E.O No. 180 provides that the Civil Service law and rules governing
concerted activities and strikes in the government service shall be observed,
subject to any legislation that may be enacted by Congress referring to
Memorandum Circular No. 6, s. 1987 of the Civil Service Commission which
states that prior to the enactment by Congress of applicable laws
concerning strike by government employees enjoins under pain of
administrative sanctions, all government officers and employees from
staging strikes, demonstrations, mass leaves, walk-outs and other forms of
mass action which will result in temporary stoppage or disruption of public

service. Therefore in the absence of any legislation allowing govt.

employees to strike they are prohibited from doing so.

In Sec. 1 of E.O. No. 180 the employees in the civil service are denominated
as government
employees and that the SSS is one such government-controlled corporation
with an original charter, having been created under R.A. No. 1161, its
employees are part of the civil service and are covered by the Civil Service
Commissions memorandum prohibiting strikes.

Neither the DOLE nor the NLRC has jurisdiction over the subject matter but
instead it is the Public Sector Labor-Management Council which is not
granted by law authority to issue writ of injunction in labor disputes within its
jurisdiction thus the resort of SSS before the general court for the issuance of
a writ of injunction to enjoin the strike is appropriate
SSS Employees Association v Court of Appeals
SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T.
BAYLON, RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO
DE ALDAY, SERGIO ARANETA, PLACIDO AGUSTIN, VIRGILIO MAGPAYO,
petitioner,
vs.
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C.
PERALEJO, RTC, BRANCH 98, QUEZON CITY, respondents.

G.R. No. 85279

July 28, 1989

Facts:
On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon
City a complaint for damages with a prayer for a writ of preliminary
injunction against petitioners, alleging that on June 9, 1987, the officers and
members of SSSEA staged an illegal strike and baricaded the entrances to
the SSS Building, preventing non-striking employees from reporting for work

and SSS members from transacting business with the SSS; that the strike
was reported to the Public Sector Labor - Management Council, which
ordered the strikers to return to work; that the strikers refused to return to
work; and that the SSS suffered damages as a result of the strike. The
complaint prayed that a writ of preliminary injunction be issued to enjoin the
strike and that the strikers be ordered to return to work; that the defendants
(petitioners herein) be ordered to pay damages; and that the strike be
declared illegal.
It appears that the SSSEA went on strike after the SSS failed to act on
the union's demands, which included: implementation of the provisions of
the old SSS-SSSEA collective bargaining agreement (CBA) on check-off of
union dues; payment of accrued overtime pay, night differential pay and
holiday pay; conversion of temporary or contractual employees with six (6)
months or more of service into regular and permanent employees and their
entitlement to the same salaries, allowances and benefits given to other
regular employees of the SSS; and payment of the children's allowance of
P30.00, and after the SSS deducted certain amounts from the salaries of the
employees and allegedly committed acts of discrimination and unfair labor
practices.
Issue:
Whether or not employees of the Social Security System (SSS) have the right
to strike.
Held:
The 1987 Constitution, in the Article on Social Justice and Human Rights,
provides that the State "shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law" [Art. XIII, Sec.
31].
Resort to the intent of the framers of the organic law becomes helpful in
understanding the meaning of these provisions. A reading of the proceedings
of the Constitutional Commission that drafted the 1987 Constitution would
show that in recognizing the right of government employees to organize, the
commissioners intended to limit the right to the formation of unions or
associations only, without including the right to strike.
Considering that under the 1987 Constitution "the civil service embraces all
branches, subdivisions, instrumentalities, and agencies of the Government,

including government-owned or controlled corporations with original

charters" [Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the
employees in the civil service are denominated as "government employees"]
and that the SSS is one such government-controlled corporation with an
original charter, having been created under R.A. No. 1161, its employees are
part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295,
November 24,1988] and are covered by the Civil Service Commission's
memorandum prohibiting strikes. This being the case, the strike staged by
the employees of the SSS was illegal.
Facts: The petitioners went on strike after the SSS failed to act upon the
unions demands concerning the implementation of their CBA. SSS filed
before the court action for damages with prayer for writ of preliminary
injunction against petitioners for staging an illegal strike. The court issued a
temporary restraining order pending the resolution of the application for
preliminary injunction while petitioners filed a motion to dismiss alleging the
courts lack of jurisdiction over the subject matter. Petitioners contend that
the court made reversible error in taking cognizance on the subject matter
since the jurisdiction lies on the DOLE or the National Labor Relations
Commission as the case involves a labor dispute. The SSS contends on one
hand that the petitioners are covered by the Civil Service laws, rules and
regulation thus have no right to strike. They are not covered by the NLRC or
DOLE therefore the court may enjoin the petitioners from striking.
Issue: Whether or not SSS employers have the right to strike
Whether or not the CA erred in taking jurisdiction over the subject
matter.
Held: The Constitutional provisions enshrined on Human Rights and Social
Justice provides guarantee among workers with the right to organize and
conduct peaceful concerted activities such as strikes. On one hand, Section
14 of E.O No. 180 provides that the Civil Service law and rules governing
concerted activities and strikes in the government service shall be observed,
subject to any legislation that may be enacted by Congress referring to
Memorandum Circular No. 6, s. 1987 of the Civil Service Commission which
states that prior to the enactment by Congress of applicable laws
concerning strike by government employees enjoins under pain of
administrative sanctions, all government officers and employees from
staging strikes, demonstrations, mass leaves, walk-outs and other forms of
mass action which will result in temporary stoppage or disruption of public
service. Therefore in the absence of any legislation allowing govt.
employees to strike they are prohibited from doing so.
In Sec. 1 of E.O. No. 180 the employees in the civil service are denominated
as government employees and that the SSS is one such government-

controlled corporation with an original charter, having been created under

R.A. No. 1161, its employees are part of the civil service and are covered
by the Civil Service Commissions memorandum prohibiting strikes.
Neither the DOLE nor the NLRC has jurisdiction over the subject matter but
instead it is the Public Sector Labor-Management Council which is not
granted by law authority to issue writ of injunction in labor disputes within its
jurisdiction thus the resort of SSS before the general court for the issuance of
a writ of injunction to enjoin the strike is appropriate.
SSS EMPLOYEES ASSOC. v. CA, 175 SCRA 686
FACTS: Petitioners went on strike after their employer SSS failed to act upon
the union's demands concerning the implementation of their CBA. SSS filed
an injunction contending that the petitioners are covered by Civil Service
laws which prohibits employees of the government from staging a strike.
SSSEA on the other hand, argued that the NLRC has the jurisdiction of the
case by virtue of the provisions of the Labor Code.
ISSUE: Does the court have jurisdiction? Do employees covered by the Civil
Service have the right to strike?
HELD: On question of jurisdiction, yes. The RTC, in the exercise of its general
jurisdiction under BP 129, has jurisdiction over petitioner's claim for damages
and for the issuance of a writ of injunction to stop the strike, since the Labor
Code do not apply to government employees.
On the right to strike of government workers, No. The Constitution provides
guarantee among workers with the right to organize and conduct peaceful
concerted activities. On the other hand, EO 180 provides that the Civil
Service law and rules governing concerted activities in government service
shall be observed subject to any legislation that may be enacted by
Congress. Referring to Memo Circular No.6, s. 1987 of the CSC which states
that prior to the enactment by Congress of applicable laws concerning strike
by government employees, enjoins under pain of administrative sanctions,
all government officials and employees from staging a strike,
demonstrations, mass leaves, walk-outs and other forms of mass action
which will result in temporary stoppage or disruption of public service, the
court ruled that in the absence of any legislation allowing government
employees to strike, they are therefore prohibited from doing so.

MPSTA

vs.

Laguio

Facts:
The series of events that touched off these cases started with the so-called
"mass action" undertaken by some 800 public school teachers, among them
members of the petitioning associations in both cases, on September 17,
1990 to "dramatize and highlight" 1 the teachers' plight resulting from the
alleged failure of the public authorities to act upon grievances that had time
and
again
been
brought
to
the
latter's
attention.
Issue: Are employees in the public service prohibited from forming unions
and
holding
strikes?

Held:
these mass actions were to all intents and purposes a strike; they
constituted a concerted and unauthorized stoppage of, or absence from,
work which it was the teachers duty to perform, undertaken for essentially
economic reasons, should not principally resolve the present case, as the
underlying facts are allegedly not identical.

UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, vs.

HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS,
PHILIPPINES, INC. respondents.
DECISION
MENDOZA, J.:
Petitioner is a union of supervisory employees. It appears that on March
20, 1995 the union filed a petition for certification election on behalf of the
route managers at Pepsi-Cola Products Philippines, Inc. However, its petition
was denied by the med-arbiter and, on appeal, by the Secretary of Labor and
Employment, on the ground that the route managers are managerial
employees and, therefore, ineligible for union membership under the first
sentence of Art. 245 of the Labor Code, which provides:

Ineligibility of managerial employees to join any labor organization; right of

supervisory employees. Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their
own.
Petitioner brought this suit challenging the validity of the order dated
August 31, 1995, as reiterated in the order dated September 22, 1995, of the
Secretary of Labor and Employment. Its petition was dismissed by the Third
Division for lack of showing that respondent committed grave abuse of
discretion. But petitioner filed a motion for reconsideration, pressing for
resolution its contention that the first sentence of Art. 245 of the Labor Code,
so far as it declares managerial employees to be ineligible to form, assist or
join unions, contravenes Art. III 8 of the Constitution which provides:
The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for the purposes not
contrary to law shall not be abridged.
For this reason, the petition was referred to the Court en banc.
The Issues in this Case

Two question are presented by the petition: (1) whether the route
managers at Pepsi-Cola Products Philippines, Inc. are managerial employees
and (2) whether Art. 245, insofar as it prohibits managerial employees from
forming, joining or assisting labor unions, violates Art. III, 8 of the
Constitution.
In resolving these issues it would be useful to begin by defining who are
managerial employees and considering the types of managerial
employees.
Types of Managerial Employees

The term manager generally refers to anyone who is responsible for

subordinates and other organization resources. [1] As a class, managers
constitute three levels of a pyramid:
Top Management

_________________
Middle Management
_________________
First Line
Management
(also called Supervisor)
____________________
____________________
Operatives
Or Operating Employees
FIRST-LINE MANAGERS The lowest level in an organization at which
individuals are responsible for the work of others is called first-line or firstlevel management. First-line managers direct operating employees only;
they do not supervise other managers. Example of first-line managers are
the foreman or production supervisor in a manufacturing plant, the
technical supervisor in a research department, and the clerical supervisor in
a large office. First-level managers are often called supervisors.
MIDDLE MANAGERS The term middle management can refer to more than
one level in an organization. Middle managers direct the activities of other
managers and sometimes also those of operating employees. Middle
managers principal responsibilities are to direct the activities that
implement their organizations policies and to balance the demands of their
superiors with the capacities of their subordinates. A plant manager in an
electronics firm is an example of a middle manager.
TOP MANAGERS Composed of a comparatively small group of
executives, top management is responsible for the overall management of
the organization. It establishes operating policies and guides the
organizations interactions with its environment. Typical titles of top
managers are chief executive officer, president, and senior vice-

president. Actual titles vary from one organization to another and are not
always a reliable guide to membership in the highest management
classification.[2]
As can be seen from this description, a distinction exist between those
who have the authority to devise, implement and control strategic and
operational policies (top and middle managers) and those whose task is
simply to ensure that such polices are carried out by the rank-and-file
employees of an organization (first-level managers/supervisors). What
distinguishes them from the rank-and file employees is that they act in the
interest of the employer in supervising such rank-and-file employees.
Managerial employees may therefore be said to fall into two distinct
categories: the managers per se, who compose the former group described
above, and the supervisors who form the latter group. Whether they
belong to the first or second category, managers, vis--vis employers, are,
likewise, employees.[3]
The first question is whether route managers are managers are
managerial employees or supervisors.
Previous Administrative Determinations of the Question Whether Route Managers are Managerial Employees

It appears that this question was the subject of two previous

determinations by the Secretary of Labor and Employment, in accordance
with which this case was decided by the med-arbiter.
In Case No. OS-MA-10318-91, entitled Workerss Alliance Trade Union
(WATU) v. Pepsi-Cola Products Philippines, Inc., decided on November 13,
1991, the Secretary of Labor found:
We examined carefully the pertinent job description of the subject employees
and other documentary evidence on record vis--vis paragraph (m), Article
212 of the Labor Code, as amended, and we find that only those employees
occupying the position of route manager and accounting manager are
managerial employees. The rest i.e. quality control manager, yard/transport
manager and warehouse operations manager are supervisory employees.
To qualify as managerial employee, there must be a clear showing of the
exercise of managerial attributes under paragraph (m), Article 212 of the
Labor Code as amended. Designations or titles of positions are not

controlling. In the instant case, nothing on record will support the claim that
the quality control manager, yard/transport manager and warehouse
operations manager are vested with said attributes. The warehouse
operations manager, for example, merely assists the plant finance manager
in planning, organizing, directing and controlling all activities relative to
development and implementation of an effective management control
information system at the sale offices. The exercise of authority of the
quality control manager, on the other hand, needs the concurrence of the
manufacturing manager
As to the route managers and accounting manager, we are convinced that
they are managerial employees. Their job descriptions clearly reveal so.
On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92,
entitled In Re: Petition for Direct Certification and/or Certification ElectionRoute Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc., as
follows:
The issue brought before us is not of first impression. At one time, we had
the occasion to rule upon the status of route manager in the same company
vis a vis the issue as to whether or not it is supervisory employee or a
managerial employee. In the case of Workers Alliance Trade Unions (NATU)
vs. Pepsi Cola Products, Phils., Inc. (OS-MA-A-10-318-91), 15 November 1991,
we ruled that a route manager is a managerial employee within the context
of the definition of the law, and hence, ineligible to join, form or assist a
union. We have once more passed upon the logic of our Decision aforecited
in the light of the issues raised in the instant appeal, as well as the available
documentary evidence on hand, and have come to the view that there is no
cogent reason to depart from our earlier holding. Route Managers are, by
the very nature of their functions and the authority they wield over their
subordinates, managerial employees. The prescription found in Art. 245 of
the Labor Code, as amended therefore, clearly applies to them.[4]4
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations
Commission,[5]5
however,
petitioner
argues
that
these
previous
administrative determinations do not have the effect of res judicata in this
case, because "labor relations proceedings" are "non-litigious and summary
in nature without regard to legal technicalities." [6] Nasipit Lumber Co.
involved a clearance to dismiss an employee issued by the Department of
Labor. The question was whether in a subsequent proceeding for illegal

dismissal, the clearance was res judicata. In holding it was not, this Court
made it clear that it was referring to labor relations proceedings of a nonadversary character, thus:
The requirement of a clearance to terminate employment was a creation of
the Department of labor to carry out the Labor Code provisions on security of
tenure and termination of employment. The proceeding subsequent to the
filing of an application for clearance to terminate employment was outlined
in Book V, Rule XIV of the Rules and Regulations Implementing the Labor
Code. The fact that said rule allowed a procedure for the approval of the
clearance with or without the opposition of the employee concerned (Secs. 7
& 8), demonstrates the non-litigious and summary nature of the
proceeding. The clearance requirement was therefore necessary only as an
expeditious shield against arbitrary dismissal without the knowledge and
supervision of the Department of Labor. Hence, a duly approved clearance
implied that the dismissal was legal or for cause (Sec. 2). [7]v. National Labor
Relations Commission, 177 SCRA 93, 100 (1989).7
But the doctrine of res judicata certainly applies to adversary
administrative proceedings. As early as 1956, in Brillantes v. Castro,[8]8 we
sustained the dismissal of an action by a trial court on the basis of a prior
administrative determination of the same case by the Wage Administration
Service, applying the principle of res judicata. Recently, in Abad v. NLRC[9]9
we applied the related doctrine of stare decisis in holding that the prior
determination that certain jobs at the Atlantic Gulf and Pacific Co. were
project employments was binding in another case involving another group of
employees of the same company. Indeed, in Nasipit Lumber Co., this Court
clarified toward the end of its opinion that "the doctrine of res
judicata applies . . . to judicial or quasi judicial proceedings and not to the
exercise
of
administrative
powers."[10]v. National
Labor
Relations
Commission, supra note 7.10 Now proceedings for certification election,
such as those involved in Case No. OS-M-A-10-318-91 and Case No. OS-A-371-92, are quasi judicial in nature and, therefore, decisions rendered in such
proceedings can attain finality.[11]v. B.F. Goodrich (Marikina Factory)
Confidential and Salaries Employees Union-NATU, 49 SCRA 532 (1973).11
Thus, we have in this case an expert's view that the employees
concerned are managerial employees within the purview of Art. 212 which
provides:

(m)
"managerial employee" is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the
use of independent judgment. All employees not falling within any of the
above definitions are considered rank-and-file employees for purposes of this
Book.
At the very least, the principle of finality of administrative determination
compels respect for the finding of the Secretary of Labor that route
managers are managerial employees as defined by law in the absence of
anything to show that such determination is without substantial evidence to
support it. Nonetheless, the Court, concerned that employees who are
otherwise supervisors may wittingly or unwittingly be classified as
managerial personnel and thus denied the right of self- organization, has
decided to review the record of this case.
DOLE's Finding that Route Managers are Managerial Employees Supported by Substantial Evidence in the Record

The Court now finds that the job evaluation made by the Secretary of
Labor is indeed supported by substantial evidence. The nature of the job of
route managers is given in a four-page pamphlet, prepared by the company,
called "Route Manager Position Description," the pertinent parts of which
read:
A. BASIC PURPOSE
A Manager achieves objectives through others.
As a Route Manager, your purpose is to meet the sales plan; and you
achieve this objective through the skillful MANAGEMENT OF YOUR JOB
AND THE MANAGEMENT OF YOUR PEOPLE.
These then are your functions as Pepsi-Cola Route Manager. Within
these functions - managing your job and managing your people - you
are accountable to your District Manager for the execution and
completion of various tasks and activities which will make it possible
for you to achieve your sales objectives.

B. PRINCIPAL ACCOUNTABILITIES
1.0 MANAGING YOUR JOB
The Route Manager is accountable for the following:
1.1 SALES DEVELOPMENT
1.1.1

Achieve the sales plan.

1.1.2

Achieve all distribution and new account objectives.

1.1.3

Develop new business

contacts with dealers.

opportunities

1.1.4

Inspect and ensure that all merchandizing [sic] objectives

are achieved in all outlets.

1.1.5

maintain and improve

equipment and kiosks.

productivity

thru

of

1.1.6

Execute and control all authorized promotions.

1.1.7

Develop and maintain dealer goodwill.

all

personal

cooling

1.1.8

Ensure all accounts comply with company suggested retail

pricing.

1.1.9

Study from time to time individual route coverage and

productivity for possible adjustments to maximize
utilization of resources.

1.2 Administration
1.2.1

Ensure the proper loading of route trucks before check-out

and the proper sorting of bottles before check-in.

1.2.2

Ensure the upkeep of all route sales reports and all other
related reports and forms required on an accurate and
timely basis.

1.2.3

Ensure proper implementation of the various company

policies and procedures incl. but not limited to shakedown;
route shortage; progressive discipline; sorting; spoilages;
credit/collection; accident; attendance.

1.2.4

Ensure collection of receivables and delinquent accounts.

2.0 MANAGING YOUR PEOPLE

The Route Manager is accountable for the following:
2.1 Route Sales Team Development
2.1.1

Conduct route rides to train, evaluate and develop all

assigned route salesmen and helpers at least 3 days a
week, to be supported by required route ride
documents/reports & back check/spot check at least 2 days
a week to be supported by required documents/reports.

2.1.2

Conduct sales meetings and morning huddles. Training

should focus on the enhancement of effective sales and
merchandizing [sic] techniques of the salesmen and
helpers. Conduct group training at least 1 hour each week
on a designated day and of specific topic.

2.2 Code of Conduct

2.2.1

Maintain the company's reputation through strict

adherence to PCPPI's code of conduct and the universal
standards of unquestioned business ethics.[12]12

Earlier in this opinion, reference was made to the distinction between

managers per se (top managers and middle managers) and supervisors
(first-line managers). That distinction is evident in the work of the route
managers which sets them apart from supervisors in general. Unlike
supervisors who basically merely direct operating employees in line with set
tasks assigned to them, route managers are responsible for the success of
the company's main line of business through management of their respective
sales teams. Such management necessarily involves the planning, direction,
operation and evaluation of their individual teams and areas which the work
of supervisors does not entail.

The route managers cannot thus possibly be classified as mere

supervisors because their work does not only involve, but goes far beyond,
the simple direction or supervision of operating employees to accomplish
objectives set by those above them. They are not mere functionaries with
simple oversight functions but business administrators in their own right. An
idea of the role of route managers as managers per se can be gotten from a
memo sent by the director of metro sales operations of respondent company
to one of the route managers. It reads:[13]
03 April 1995
To

: CESAR T. REOLADA

From

: REGGIE M. SANTOS

Subj

: SALARY INCREASE

Effective 01 April 1995, your basic monthly salary of P11,710

will be increased to P12,881 or an increase of 10%. This represents
the added managerial responsibilities you will assume due to the recent
restructuring and streamlining of Metro Sales Operations brought about
by the continuous losses for the last nine (9) months.
Let me remind you that for our operations to be profitable, we have to
sustain the intensity and momentum that your group and yourself have
shown last March. You just have todeliver the desired volume
targets, better negotiated concessions, rationalized sustaining
deals, eliminate or reduced overdues, improved collections,
more cash accounts, controlled operating expenses, etc. Also,
based on the agreed set targets, your monthly performance will be
closely monitored.
You have proven in the past that your capable of achieving your
targets thru better planning, managing your group as a fighting
team, and thru aggressive selling. I am looking forward to your
success and I expect that you just have to exert your doubly best
in turning around our operations from a losing to a profitable
one!
Happy Selling!!

(Sgd.) R.M. SANTOS

The plasticized card given to route managers, quoted in the separate
opinion of Justice Vitug, although entitled "RM's Job Description," is only a
summary of performance standards. It does not show whether route
managers are managers per se or supervisors. Obviously, these performance
standards have to be related to the specific tasks given to route managers in
the four-page "Route Manager Position Description," and, when this is done,
the managerial nature of their jobs is fully revealed. Indeed, if any, the card
indicates the great latitude and discretion given to route managers - from
servicing and enhancing company goodwill to supervising and auditing
accounts, from trade (new business) development to the discipline, training
and monitoring of performance of their respective sales teams, and so forth,
- if they are to fulfill the company's expectations in the "key result areas."
Article 212(m) says that "supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment." Thus, their only power is to
recommend. Certainly, the route managers in this case more than merely
recommend effective management action. They perform operational, human
resource, financial and marketing functions for the company, all of which
involve the laying down of operating policies for themselves and their teams.
For example, with respect to marketing, route managers, in accordance with
B.1.1.1 to B.1.1.9 of the Route Managers Job Description, are charged,
among other things, with expanding the dealership base of their respective
sales areas, maintaining the goodwill of current dealers, and distributing the
company's various promotional items as they see fit. It is difficult to see how
supervisors can be given such responsibility when this involves not just the
routine supervision of operating employees but the protection and expansion
of the company's business vis-a-vis its competitors.
While route managers do not appear to have the power to hire and fire
people (the evidence shows that they only "recommended" or "endorsed"
the taking of disciplinary action against certain employees), this is because
this is a function of the Human Resources or Personnel Department of the
company.[14]14 And neither should it be presumed that just because they
are
given
set
benchmarks
to
observe,
they
are ipso
facto supervisors. Adequate control methods (as embodied in such concepts
as "Management by Objectives [MBO]" and "performance appraisals") which

require a delineation of the functions and responsibilities of managers by

means of ready reference cards as here, have long been recognized in
management as effective tools for keeping businesses competitive.
This brings us to the second question, whether the first sentence of Art.
245 of the Labor Code, prohibiting managerial employees from forming,
assisting or joining any labor organization, is constitutional in light of Art. III,
8 of the Constitution which provides:
The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary
to law shall not be abridged.
As already stated, whether they belong to the first category
(managers per se) or the second category (supervisors), managers are
employees. Nonetheless, in the United States, as Justice Puno's separate
opinion notes, supervisors have no right to form unions. They are excluded
from the definition of the term "employee" in 2(3) of the Labor-Management
Relations Act of 1947.[15]v. Bell Aerospace Co., 416 U.S. 281, n 11, 40 L.Ed.2d
134, 147, n. 11 (1974), thus:
Supervisors are management people. They have distinguished
themselves in their work. They have demonstrated their ability to take care
of themselves without depending upon the pressure of collective action. No
one forced them to become supervisors. They abandoned the "collective
security" of the rank and file voluntarily, because they believed the
opportunities thus opened to them to be more valuable to them than such
"security". It seems wrong, and it is wrong, to subject people of this kind,
who have demonstrated their initiative, their ambition and their ability to get
ahead, to the leveling processes of seniority, uniformity and standardization
that the Supreme Court recognizes as being fundamental principles of
unionism. (J.I. Case Co. v. National Labor Relations Board, 321 U.S. 332, 88
L.Ed. 762, 64 S. Ct. 576 (1994). It is wrong for the foremen, for it
discourages the things in them that made them foremen in the first
place. For the same reason, that it discourages those best qualified to get
ahead, it is wrong for industry, and particularly for the future strength and
productivity of our country.15 In the Philippines, the question whether
managerial employees have a right of self-organization has arisen with
respect to first-level managers or supervisors, as shown by a review of the
course of labor legislation in this country.

Right of Self-Organization of Managerial Employees under Pre-Labor Code Laws

Before the promulgation of the Labor Code in 1974, the field of labor
relations was governed by the Industrial Peace Act (R.A. No. 875).
In accordance with the general definition above, this law defined
"supervisor" as follows:
SECTION 2. . . .
(k) "Supervisor" means any person having authority in the interest of an
employer, to hire, transfer, suspend, lay-off, recall, discharge, assign,
recommend, or discipline other employees, or responsibly to direct them,
and to adjust their grievances, or effectively to recommend such acts, if, in
connection with the foregoing, the exercise of such authority is not of a
merely routinary or clerical nature but requires the use of independent
judgment.[16]16
The right of supervisors to form their own organizations was affirmed:
SEC. 3. Employees' Right to Self-Organization. -- Employees shall have the
right to self-organization and to form, join or assist labor organizations of
their own choosing for the purpose of collective bargaining through
representatives of their own choosing and to engage in concerted activities
for the purpose of collective bargaining and other mutual aid and protection.
Individuals employed as supervisors shall not be eligible for membership in a
labor organization of employees under their supervision but may form
separate organizations of their own.[17]
For its part, the Supreme Court upheld in several of its decisions the right of
supervisors to organize for purposes of labor relations. [18]v. Filoil Supervisory
and Confidential Employees Association, 6 SCRA 522 (1972); Kapisanan ng
mga Manggagawa sa Manila Railroad Co. v. CIR, 106 Phil 607 (1959).18
Although it had a definition of the term "supervisor," the Industrial Peace
Act did not define the term "manager." But, using the commonly-understood
concept of "manager," as above stated, it is apparent that the law used the
term "supervisors" to refer to the sub-group of "managerial employees"
known as front-line managers. The other sub-group of "managerial
employees," known as managers per se, was not covered.

However, in Caltex Filipino Managers and Supervisors Association v. Court

of Industrial Relations,[19]J.)19 the right of all managerial employees to selforganization was upheld as a general proposition, thus:
It would be going too far to dismiss summarily the point raised by
respondent Company - that of the alleged identity of interest between the
managerial staff and the employing firm. That should ordinarily be the case,
especially so where the dispute is between management and the rank and
file. It does not necessarily follow though that what binds the managerial
staff to the corporation forecloses the possibility of conflict between
them. There could be a real difference between what the welfare of such
group requires and the concessions the firm is willing to grant. Their needs
might not be attended to then in the absence of any organization of their
own. Nor is this to indulge in empty theorizing. The record of respondent
Company, even the very case cited by it, is proof enough of their uneasy and
troubled relationship. Certainly the impression is difficult to erase that an
alien firm failed to manifest sympathy for the claims of its Filipino
executives. To predicate under such circumstances that agreement
inevitably marks their relationship, ignoring that discord would not be
unusual, is to fly in the face of reality.
. . . The basic question is whether the managerial personnel can
organize. What respondent Company failed to take into account is that the
right to self-organization is not merely a statutory creation. It is fortified by
our Constitution. All are free to exercise such right unless their purpose is
contrary to law. Certainly it would be to attach unorthodoxy to, not to say an
emasculation of, the concept of law if managers as such were precluded from
organizing. Having done so and having been duly registered, as did occur in
this case, their union is entitled to all the rights under Republic Act
No. 875. Considering what is denominated as unfair labor practice under
Section 4 of such Act and the facts set forth in our decision, there can be
only one answer to the objection raised that no unfair labor practice could be
committed by respondent Company insofar as managerial personnel is
concerned. It is, as is quite obvious, in the negative.[20]20
Actually, the case involved front-line managers or supervisors only, as
the plantilla of employees, quoted in the main opinion, [21]J.) (emphasis
added).21 clearly indicates:

CAFIMSA members holding the following Supervisory Payroll Position Title

are Recognized by the Company
Payroll Position Title
Assistant to Mgr. - National Acct. Sales
Jr. Sales Engineer
Retail Development Asst.
Staff Asst. - 0 Marketing
Sales Supervisor
Supervisory Assistant
Jr. Supervisory Assistant
Credit Assistant
Lab. Supvr. - Pandacan
Jr. Sales Engineer B
Operations Assistant B
Field Engineer
Sr. Opers. Supvr. - MIA A/S
Purchasing Assistant
Jr. Construction Engineer
St. Sales Supervisor
Deport Supervisor A
Terminal Accountant B
Merchandiser

Dist. Sales Prom. Supvr.

Instr. - Merchandising
Asst. Dist. Accountant B
Sr. Opers. Supervisor
Jr. Sales Engineer A
Asst. Bulk Ter. Supt.
Sr. Opers. Supvr.
Credit Supervisor A
Asst. Stores Supvr. A
Ref. Supervisory Draftsman
Refinery Shift Supvr. B
Asst. Supvr. A - Operations (Refinery)
Refinery Shift Supvr. B
Asst. Lab. Supvr. A (Refinery)
St. Process Engineer B (Refinery)
Asst. Supvr. A - Maintenance (Refinery)
Asst. Supvr. B - Maintenance (Refinery)
Supervisory Accountant (Refinery)
Communications Supervisor (Refinery)
Finally, also deemed included are all other employees excluded from the
rank and file unions but not classified as managerial or otherwise
excludable by law or applicable judicial precedents.

Right of Self-Organization of Managerial Employees under the Labor Code

Thus, the dictum in the Caltex case which allowed at least for the
theoretical unionization of top and middle managers by assimilating them
with the supervisory group under the broad phrase "managerial personnel,"
provided the lynchpin for later laws denying the right of self-organization not
only to top and middle management employees but to front line managers or
supervisors as well. Following the Caltex case, the Labor Code, promulgated
in 1974 under martial law, dropped the distinction between the first and
second sub-groups of managerial employees. Instead of treating the terms
"supervisor" and "manager" separately, the law lumped them together and
called them "managerial employees," as follows:
ART. 212. Definitions . . . .
(k) "Managerial Employee" is one who is vested with powers or prerogatives
to lay down and execute management policies and/or to hire, transfer,
suspend, lay off, recall, discharge, assign or discipline employees, or to
effectively recommend such managerial actions. All employees not falling
within this definition are considered rank and file employees for purposes of
this Book.[22]22
The definition shows that it is actually a combination of the commonly
understood definitions of both groups of managerial employees,
grammatically joined by the phrase "and/or."
This general definition was perhaps legally necessary at that time for two
reasons. First, the 1974 Code denied supervisors their right to self-organize
as theretofore guaranteed to them by the Industrial Peace Act. Second, it
stood the dictum in the Caltex case on its head by prohibiting all types of
managers from forming unions. The explicit general prohibition was
contained in the then Art. 246 of the Labor Code.
The practical effect of this synthesis of legal concepts was made
apparent in the Omnibus Rules Implementing the Labor Code which the
Department of Labor promulgated on January 19, 1975. Book V, Rule II, 11
of the Rules provided:
Supervisory unions and unions of security guards to cease operation. - All
existing supervisory unions and unions of security guards shall, upon the
effectivity of the Code, cease to operate as such and their registration

certificates shall be deemed automatically cancelled. However, existing

collective agreements with such unions, the life of which extends beyond the
date of effectivity of the Code, shall be respected until their expiry date
insofar as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition of
managerial employees shall become eligible to join or assist the rank and file
labor organization, and if none exists, to form or assist in the forming of such
rank and file organization. The determination of who are managerial
employees and who are not shall be the subject of negotiation between
representatives of the supervisory union and the employer. If no agreement
is reached between the parties, either or both of them may bring the issue to
the nearest Regional Office for determination.
The Department of Labor continued to use the term "supervisory unions"
despite the demise of the legal definition of "supervisor" apparently because
these were the unions of front line managers which were then allowed as a
result of the statutory grant of the right of self-organization under the
Industrial Peace Act. Had the Department of Labor seen fit to similarly ban
unions of top and middle managers which may have been formed following
the dictum in Caltex, it obviously would have done so. Yet it did not,
apparently because no such unions of top and middle managers really then
existed.
Real Intent of the 1986 Constitutional Commission

This was the law as it stood at the time the Constitutional

Commission considered the draft of Art. III, 8. Commissioner Lerum sought
to amend the draft of what was later to become Art. III, 8 of the present
Constitution:
MR. LERUM. My amendment is on Section 7, page 2, line 19, which is to
insert between the words "people" and "to" the following: WHETHER
EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS. In other words, the
section will now read as follows: "The right of the people WHETHER
EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS to form associations,
unions, or societies for purposes not contrary to law shall not be
abridged."[23]23
Explaining his proposed amendment, he stated:

MR. LERUM. Under the 1935 Bill of Rights, the right to form associations is
granted to all persons whether or not they are employed in the
government. Under that provision, we allow unions in the government, in
government-owned and controlled corporations and in other industries in the
private sector, such as the Philippine Government Employees' Association,
unions in the GSIS, the SSS, the DBP and other government-owned and
controlled corporations. Also, we have unions of supervisory employees and
of security guards. But what is tragic about this is that after the 1973
Constitution was approved and in spite of an express recognition of the right
to organize in P.D. No. 442, known as the Labor Code, the right of
government workers, supervisory employees and security guards to form
unions was abolished.
And we have been fighting against this abolition. In every tripartite
conference attended by the government, management and workers, we have
always been insisting on the return of these rights. However, both the
government and employers opposed our proposal, so nothing came out of
this until this week when we approved a provision which states:
Notwithstanding any provision of this article, the right to self-organization
shall not be denied to government employees.
We are afraid that without any corresponding provision covering the private
sector, the security guards, the supervisory employees or majority
employees [sic] will still be excluded, and that is the purpose of this
amendment.
I will be very glad to accept any kind of wording as long as it will amount to
absolute recognition of private sector employees, without exception, to
organize.
THE PRESIDENT. What does the Committee say?
FR. BERNAS. Certainly, the sense is very acceptable, but the point raised by
Commissioner Rodrigo is well-taken. Perhaps, we can lengthen this a little bit
more to read: "The right of the people WHETHER UNEMPLOYED OR
EMPLOYED BY STATE OR PRIVATE ESTABLISHMENTS."
I want to avoid also the possibility of having this interpreted as applicable
only to the employed.

MR. DE LOS REYES. Will the proponent accept an amendment to the

amendment, Madam President?
MR. LERUM. Yes, as long as it will carry the idea that the right of the
employees in the private sector is recognized.[24]
Lerum thus anchored his proposal on the fact that (1) government
employees, supervisory employees, and security guards, who had the right
to organize under the Industrial Peace Act, had been denied this right by the
Labor Code, and (2) there was a need to reinstate the right of these
employees. In consonance with his objective to reinstate the right of
government, security, and supervisory employees to organize, Lerum then
made his proposal:
MR. LERUM. Mr. Presiding Officer, after a consultation with several Members
of this Commission, my amendment will now read as follows: "The right of
the people INCLUDING THOSE EMPLOYED IN THE PUBLIC AND PRIVATE
SECTORS to form associations, unions, or societies for purposes not contrary
to law shall not be abridged. In proposing that amendment I ask to make of
record that I want the following provisions of the Labor Code to be
automatically abolished, which read:
ART. 245. Security guards and other personnel employed for the protection
and security of the person, properties and premises of the employers shall
not be eligible for membership in a labor organization.
ART. 246. Managerial employees are not eligible to join, assist, and form any
labor organization.
THE PRESIDING OFFICER (Mr. Bengzon). What does the Committee say?
FR. BERNAS. The Committee accepts.
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has accepted the
amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment, as
amended, is approved.[25]
The question is what Commissioner Lerum meant in seeking to
"automatically abolish" the then Art. 246 of the Labor Code. Did he simply

want "any kind of wording as long as it will amount to absolute recognition

of private sector employees, without exception, to organize"? [26] Or, did he
instead intend to have his words taken in the context of the cause which
moved him to propose the amendment in the first place, namely, the denial
of the right of supervisory employees to organize, because he said, "We are
afraid that without any corresponding provision covering the private sector,
security guards, supervisory employees or majority [of] employees will still
be excluded, and that is the purpose of this amendment"?[27]
It would seem that Commissioner Lerum simply meant to restore the
right of supervisory employees to organize. For even though he spoke of the
need to "abolish" Art. 246 of the Labor Code which, as already stated,
prohibited "managerial employees" in general from forming unions, the fact
was that in explaining his proposal, he repeatedly referred to "supervisory
employees" whose right under the Industrial Peace Act to organize had been
taken away by Art. 246. It is noteworthy that Commissioner Lerum never
referred to the then definition of "managerial employees" in Art. 212(m) of
the Labor Code which put together, under the broad phrase "managerial
employees," top and middle managers and supervisors. Instead, his
repeated use of the term "supervisory employees," when such term then was
no longer in the statute books, suggests a frame of mind that remained
grounded in the language of the Industrial Peace Act.
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of
all managerial employees to organize, despite the fact that the Industrial
Peace Act did not expressly provide for the right of top and middle managers
to organize. If Lerum was aware of the Caltex dictum, then his insistence on
the use of the term "supervisory employees" could only mean that he was
excluding other managerial employees from his proposal. If, on the other
hand, he was not aware of the Caltex statement sustaining the right to
organize to top and middle managers, then the more should his repeated use
of the term "supervisory employees" be taken at face value, as it had been
defined in the then Industrial Peace Act.
At all events, that the rest of the Commissioners understood his proposal
to refer solely to supervisors and not to other managerial employees is clear
from the following account of Commissioner Joaquin G. Bernas, who writes:
In presenting the modification on the 1935 and 1973 texts, Commissioner
Eulogio R. Lerum explained that the modification included three categories of

workers: (1) government employees, (2) supervisory employees, and (3)

security guards. Lerum made of record the explicit intent to repeal provisions
of P.D. 442, the Labor Code. The provisions referred to were:
ART. 245. Security guards and other personnel employed for the protection
and security of the person, properties and premises of the employers shall
not be eligible for membership in a labor organization.
ART. 246. Managerial employees are not eligible to join, assist, and form any
labor organization.[28]28
Implications of the Lerum Proposal

In sum, Lerum's proposal to amend Art. III, 8 of the draft Constitution by

including labor unions in the guarantee of organizational right should be
taken in the context of statements that his aim was the removal of the
statutory ban against security guards and supervisory employees joining
labor organizations. The approval by the Constitutional Commission of his
proposal can only mean, therefore, that the Commission intended the
absolute right to organize of government workers, supervisory employees,
and security guards to be constitutionally guaranteed. By implication, no
similar absolute constitutional right to organize for labor purposes should be
deemed to have been granted to top-level and middle managers. As to them
the right of self-organization may be regulated and even abridged
conformably to Art. III, 8.
Constitutionality of Art. 245

Finally, the question is whether the present ban against managerial

employees, as embodied in Art. 245 (which superseded Art. 246) of the
Labor Code, is valid. This provision reads:
ART. 245. Ineligibility of managerial employees to join any labor
organization; right of supervisory employees. - Managerial employees are not
eligible to join, assist or form any labor organization. Supervisory employees
shall not be eligible for membership in a labor organization of the rank-andfile employees but may join, assist or form separate labor organizations of
their own.[29]29
This provision is the result of the amendment of the Labor Code in 1989
by R.A. No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the

Industrial Peace Act or the provisions of the Labor Code which it superseded,
R.A. No. 6715 provides separate definitions of the terms "managerial" and
"supervisory employees," as follows:
ART. 212. Definitions. . . .
(m)
"managerial employee" is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire
transfer, suspend, lay off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the
use of independent judgment. All employees not falling within any of the
above definitions are considered rank-and-file employees for purposes of this
Book.
Although the definition of "supervisory employees" seems to have been
unduly restricted to the last phrase of the definition in the Industrial Peace
Act, the legal significance given to the phrase "effectively recommends"
remains the same. In fact, the distinction between top and middle
managers, who set management policy, and front-line supervisors, who are
merely responsible for ensuring that such policies are carried out by the rank
and file, is articulated in the present definition. [30]30 When read in relation
to this definition in Art. 212(m), it will be seen that Art. 245 faithfully carries
out the intent of the Constitutional Commission in framing Art. III, 8 of the
fundamental law.
Nor is the guarantee of organizational right in Art. III, 8 infringed by a
ban against managerial employees forming a union. The right guaranteed in
Art. III, 8 is subject to the condition that its exercise should be for purposes
"not contrary to law." In the case of Art. 245, there is a rational basis for
prohibiting managerial employees from forming or joining labor
organizations. As Justice Davide, Jr., himself a constitutional commissioner,
said in his ponencia in Philips Industrial Development, Inc. v. NLRC:[31]31
In the first place, all these employees, with the exception of the service
engineers and the sales force personnel, are confidential employees. Their
classification as such is not seriously disputed by PEO-FFW; the five (5)
previous CBAs between PIDI and PEO-FFW explicitly considered them as
confidential employees. By the very nature of their functions, they assist and
act in a confidential capacity to, or have access to confidential matters of,

persons who exercise managerial functions in the field of labor relations. As

such, the rationale behind the ineligibility of managerial employees to form,
assist or joint a labor union equally applies to them.
In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated
on this rationale, thus:
". . . The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the Union in view of evident
conflict of interests. The Union can also become company-dominated with
the presence of managerial employees in Union membership." [32]
To be sure, the Court in Philips Industrial was dealing with the right of
confidential employees to organize. But the same reason for denying them
the right to organize justifies even more the ban on managerial employees
from forming unions. After all, those who qualify as top or middle managers
are executives who receive from their employers information that not only is
confidential but also is not generally available to the public, or to their
competitors, or to other employees. It is hardly necessary to point out that to
say that the first sentence of Art. 245 is unconstitutional would be to
contradict the decision in that case.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.

National Power Corporation v Judge Jocson 206 SCRA 520 (1992)

expropriation case

amt. for just compensation in dispute

judge held in abeyance the write of possession

order due to petitioner while increasing outright provisional value of land
without hearing.
Facts:
The petitioner files a special civil action for certiorari to annul the order
issued by respondent judge in violation of deprivation of the right of the
petitioner for due process. The petitioner filed 7 eminent domain cases in the
acquisition of right of way easement over 7 parcels of land in relation to the
necessity of building towers and transmission line for the common good with

the offer of corresponding compensation to landowners affected with the

expropriation process. However, both parties did not come to an agreement
on just compensation thereby prompting petitioner to bring the eminent
domain case. Respondent judge found existing paramount public interest for
the expropriation and thereby issued an order determining the provisional
market value of the subject areas based on tax declaration of the properties.
The petitioner, incompliance to the order of respondent judge, deposited
corresponding amount of the assessed value of said lands in the amount of
P23,180,828.00 with the Philippine National Bank. Respondents land owners
filed motion for reconsideration asserting that the assessed value is way too
low and that just compensation due them is estimated as P29,970,000.00.
Immediately the following day, respondent judge increased the provisional
value to that stated in the motion for reconsideration and ordered petitioner
to deposit the differential amount within 24 hours from receipt of order while
holding in abeyance the writ of possession order pending compliance to said
order
which
the
petitioner
immediately
complied.
Thereafter,
respondent judge ordered petitioner to pay in full amount the defendants for
their expropriated property. Petitioner assailed such order to be in violation of
due process and abuse of discretion on the part of the respondent judge
hence this petition.
Issue:
W/N the respondent judge acted in grave abuse of discretion and whether or
not the petitioner was deprived of due process of law.
Held:
The court ruled that PD No. 42 provides that upon filing in court complaints
on eminent domain proceeding and after due notice to the defendants,
plaintiff will have the right to take possession of the real property upon
deposit of the amount of the assessed value with PNB to be held by the bank
subject to orders and final disposition of the court. The respondent judge
failed to observe this procedure by failure to issue the writ of possession to
the petitioner despite its effort to deposit the amount in compliance to the
mandate of law. Furthermore, the respondent judge erred in increasing the
provisional value of properties without holding any hearing for both parties.
The instant petition was granted by the court setting aside the temporary
restraining order and directing respondent judge to cease and desist from
enforcing his orders. There are 2 stages in the action of expropriation:1.
Determination of the authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the context of the facts
involved in the suit.2. Eminent domain action is concerned with the
determination by the Court of the "just compensation for the property sought
to be taken." This is done by the Court with the assistance of not more than
three (3)commissioners whose findings are deemed to be final
POWER OF EMINENT DOMAIN

City of Manila v Chinese Community 40 PHIL 349 (1919)

expropriation of Chinese cemetery

Facts: The City of Manila wants to expropriate a land owned by the Chinese community as
cemetery
for
the
purpose
of
extending
Rizal Avenue
for public use. The respondents contend that the land already acquires a quasi-public
character and many dead bodies are already buried there. They stress that there is no
necessity of taking the land for public purpose since such is under Torrens title and the
expropriation will disturb the resting place of the dead. The plaintiff contends that under the
Charter of City of Manila, they may condemn private lands for public purpose, such being an
exclusive function of the legislature and the only function of the court is to assess the value
of the land expropriated.
Issue: Whether or not the court can inquire into the necessity of expropriation.
Held: The court ruled that the power of judicial review on expropriation is not limited to the
inquiry of the existence of law that grants a municipal corporation to expropriate private
lands for public purpose. The court has the responsibility to (1) ensure that a law or authority
existsfor the exercise of the right of eminent domain, and (2) that the right or authority is
being exercised in accordance with the law. There are two conditions imposed upon the
authority conceded to the City of Manila: (1) the land must be private; and, (2) the purpose
must be public. The taking of land in the exercise of power of eminent domain of the state is
not a judicial question but the court is bound to interfere to prevent an abuse of the
discretion delegated by the legislature. 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. The court ruled that the cemetery is a public property and it found no great necessity to
allow the expropriation of the land by the City of Manila thus thereby affirmed the decision of
the lower court.
Sumulong v Guerrero 154 SCRA 461 (1987)

expropriation requisites for expropriation met but denied petitioners with due process of
hearing

Facts: Petitioner files motion for reconsideration on the lower court decision allowing
expropriation of their parcel of land in favor to the National Housing Authority without due
process of law. They assail the constitutionality of PD 1224 (Policy on Expropriation of Private
Property for Socialized Housing Upon Payment of Just Compensation) allowing the taking of
properties regardless of size and no matter how small the area to be expropriated, social
housing being the purpose of condemnation is not really for public purpose, and violation of
procedural due process as immediate taking of possession of property without due process of
hearing.
Issue: Whether or not due process of law was observed in the expropriation process.
Held: The court ruled that the purpose of expropriation for socialized housing project is a
valid justification for public purpose since housing is a basic need. The size of the area to be
expropriated is not subject to question as long as it satisfied the public purpose of
expropriation. However, the court held that the petitioners were denied of due process of law

for being deprived of the conduct of hearing and notice upon its order for the immediate
possession and taking of the land by NHA.
In order to justify expropriation the following requisites must be satisfied:
1. public use/purpose
2. just compensation
Although the court issued the immediate possession of the land with just compensation to the
petitioners and meeting the requisite for public use, the petitioners were denied with the due
process of expropriation proceeding which is a basic and fundamental right of the petitioner.
EPZA v Dulay 149 SCRA 305 (1987)

appointment of commissioners to determine just compensation in expropriation

Facts: A land reserve was provided for the Export Processing Zone which some portion of the
land is privately owned by the respondents. Petitioner offered to purchase the land but both
parties did not come to an agreement in terms of the assessed value of the property.
Petitioner files an expropriation case which the court decided in favor of them and issued a
writ of possession for the immediate possession of land subject to just compensation.
Respondents however are not amenable to the amount and thus the court appointed
commissioners to determine the appropriate property value. Petitioner now questions the
appointment of commissioners to determine the value of property while invoking PD No. 1533
that indicates the determination of just compensation is based on the declared value
indicated by the land owner and the assessor whichever is lower and there is no need to
appoint commissioners for the purpose of assessing the property value.
Issue: Whether or not the court erred in appointing commissioners to the case at bar
Held: The court ruled that PD No. 1533 only serves as a guiding principle providing some
considerations in the determination of just compensation in expropriation proceedings. It
does not substitute the discretion vested upon the court to exercise in determining the fair
and just compensation in expropriating property. The appointment of commissioners is one
way the court may determine the fair and just compensation in dispute for judicial
evaluation.
National Power Corporation v Judge Jocson 206 SCRA 520 (1992)

expropriation case amt. for just compensation in dispute judge held in abeyance the write of
possession order due to petitioner while increasing outright provisional value of land without
hearing.

Facts: The petitioner files a special civil action for certiorari to annul the order issued by
respondent judge in violation of deprivation of the right of the petitioner for due process. The
petitioner filed 7 eminent domain cases in the acquisition of right of way easement over 7
parcels of land in relation to the necessity of building towers and transmission line for the
common good with the offer of corresponding compensation to landowners affected with the
expropriation process. However, both parties did not come to an agreement on just
compensation thereby prompting petitioner to bring the eminent domain case. Respondent
judge found existing paramount public interest for the expropriation and thereby issued an
order determining the provisional market value of the subject areas based on tax declaration
of the properties. The petitioner, in compliance to the order of respondent judge, deposited
corresponding amount of the assessed value of said lands in the amount of P23,180,828.00
with the Philippine National Bank. Respondents land owners filed motion for reconsideration

asserting that the assessed value is way too low and that just compensation due them is
estimated as P29,970,000.00. Immediately the following day, respondent judge increased the
provisional value to that stated in the motion for reconsideration and ordered petitioner to
deposit the differential amount within 24 hours from receipt of order while holding in
abeyance the writ of possession order pending compliance to said order which the petitioner
immediately complied. Thereafter, respondent judge ordered petitioner to pay in full amount
the defendants for their expropriated property. Petitioner assailed such order to be in
violation of due process and abuse of discretion on the part of the respondent judge hence
this petition.
Issue: Whether or not the respondent judge acted in grave abuse of discretion and whether or
not the petitioner was deprived of due process of law.
Held: The court ruled that PD No. 42 provides that upon filing in court complaints on eminent
domain proceeding and after due notice to the defendants, plaintiff will have the right to
take possession of the real property upon deposit of the amount of the assessed value with
PNB to be held by the bank subject to orders and final disposition of the court. The
respondent judge failed to observe this procedure by failure to issue the writ of possession to
the petitioner despite its effort to deposit the amount in compliance to the mandate of law.
Furthermore, the respondent judge erred in increasing the provisional value of properties
without holding any hearing for both parties. The instant petition was granted by the court
setting aside the temporary restraining order and directing respondent judge to cease and
desist from enforcing his orders.
There are 2 stages in the action of expropriation:
1. Determination of the authority of the plaintiff to exercise the power of eminent
domain and the propriety of its exercise in the context of the facts involved in the suit.
2. Eminent domain action is concerned with the determination by the Court of the "just
compensation for the property sought to be taken." This is done by the Court with the
assistance of not more than three (3) commissioners whose findings are deemed to be
final.
Read Rule 67, Revised Rules of Court

RULE 67
EXPROPRIATION
Section 1. The complaint.
The right of eminent domain shall be exercised by the filing of a verified
complaint which shall state with certainty the right and purpose of
expropriation, describe the real or personal property sought to be
expropriated, and join as defendants all persons owning or claiming to own, or
occupying, any part thereof or interest therein, showing, so far as
practicable, the separate interest of each defendant. If the title to any
property sought to be expropriated appears to be in the Republic of the
Philippines, although occupied by private individuals, or if the title is
otherwise obscure or doubtful so that the plaintiff cannot with accuracy or
certainty specify who are the real owners, averment to that effect shall be
made in the complaint.

Sec. 2. Entry of plaintiff upon depositing value with authorized government

depositary.
Upon the filing of the complaint or at any time thereafter and after due
notice to the defendant, the plaintiff shall have the right to take or enter
upon the possession of the real property involved if he deposits with the
authorized government depositary an amount equivalent to the assessed value of
the property for purposes of taxation to be held by such bank subject to the
orders of the court. Such deposit shall be in money, unless in lieu thereof
the court authorizes the deposit of a certificate of deposit of a government
bank of the Republic of the Philippines payable on demand to the authorized
government depositary.
If personal property is involved, its value shall be provisionally ascertained
and the amount to be deposited shall be promptly fixed by the court.
After such deposit is made the court shall order the sheriff or other proper
officer to forthwith place the plaintiff in possession of the property
involved and promptly submit a report thereof to the court with service of
copies to the parties.
Sec.
3.
Defenses
and
objections.
If a defendant has no objection or defense to the action or the taking of his
property, he may file and serve a notice of appearance and a manifestation to
that effect, specifically designating or identifying the property in which he
claims to be interested, within the time stated in the summons. Thereafter, he
shall be entitled to notice of all proceedings affecting the same.
If a defendant has any objection to the filing of or the allegations in the
complaint, or any objection or defense to the taking of his property, he shall
serve his answer within the time stated in the summons. The answer shall
specifically designate or identify the property in which he claims to have an
interest, state the nature and extent of the interest claimed, and adduce all
his objections and defenses to the taking of his property. No counterclaim,
cross-claim or third-party complaint shall be alleged or allowed in the answer
or any subsequent pleading.
A defendant waives all defenses and objections not so alleged but the court,
in the interest of justice, may permit amendments to the answer to be made not
later than ten (10) days from the filing thereof. However, at the trial of the
issue of just compensation, whether or not a defendant has previously appeared
or answered, he may present evidence as to the amount of the compensation to
be paid for his property, and he may share in the distribution of the award.
Sec.
4.
Order
of
expropriation.
If the objections to and the defenses against the right of the plaintiff to
expropriate the property are overruled, or when no party appears to defend as
required by this Rule, the court may issue an order of expropriation declaring
that the plaintiff has a lawful right to take the property sought to be
expropriated, for the public use or purpose described in the complaint, upon
the payment of just compensation to be determined as of the date of the taking
of the property or the filing of the complaint, whichever came first.
A final order sustaining the right to expropriate the property may be appealed
by any party aggrieved thereby. Such appeal, however, shall not prevent the
court from determining the just compensation to be paid.
After the rendition of such an order, the plaintiff shall not be permitted to
dismiss or discontinue the proceeding except on such terms as the court deems
just and equitable.
Sec.
5.
Ascertainment
of
compensation.

Upon the rendition of the order of expropriation, the court shall appoint 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. The order of appointment shall designate the time and
place of the first session of the hearing to be held by the commissioners and
specify the time within which their report shall be submitted to the court.
Copies of the order shall be served on the parties. Objections to the
appointment of any of the commissioners shall be filed with the court within
ten (10) days from service, and shall be resolved within thirty (30) days
after all the commissioners shall have received copies of the objections.
Sec.
6.
Proceedings
by
commissioners.
Before entering upon the performance of their duties, the commissioners shall
take and subscribe an oath that they will faithfully perform their duties as
commissioners, which oath shall be filed in court with the other proceedings
in the case. Evidence may be introduced by either party before the
commissioners who are authorized to administer oaths on hearings before them,
and the commissioners shall, unless the parties consent to the contrary, after
due notice to the parties to attend, view and examine the property sought to
be expropriated and its surroundings, and may measure the same, after which
either party may, by himself or counsel, argue the case. The commissioners
shall assess the consequential damages to the property not taken and deduct
from such consequential damages the consequential benefits to be derived by
the owner from the public use or purpose of the property taken, the operation
of its franchise by the corporation or the carrying on of the business of the
corporation or person taking the property. But in no case shall the
consequential benefits assessed exceed the consequential damages assessed, or
the owner be deprived of the actual value of his property so taken.
Sec.

7.

Report

by

commissioners

and

judgment

thereupon.

The court may order the commissioners to report when any particular portion of
the real estate shall have been passed upon by them, and may render judgment
upon such partial report, and direct the commissioners to proceed with their
work as to subsequent portions of the property sought to be expropriated, and
may from time to time so deal with such property. The commissioners shall make
a full and accurate report to the court of all their proceedings, and such
proceedings shall not be effectual until the court shall have accepted their
report and rendered judgment in accordance with their recommendations. Except
as otherwise expressly ordered by the court, such report shall be filed within
sixty (60) days from the date the commissioners were notified of their
appointment, which time may be extended in the discretion of the court. Upon
the filing of such report, the clerk of the court shall serve copies thereof
on all interested parties, with notice that they are allowed ten (10) days
within which to file objections to the findings of the report, if they so
desire.
Sec.

8.

Action

upon

commissioners

report.

Upon the expiration of the period of ten (10) days referred to in the
preceding section, or even before the expiration of such period but after all
the interested parties have filed their objections to the report or their
statement of agreement therewith, the court may, after hearing, accept the
report and render judgment in accordance therewith; or, for cause shown, it
may recommit the same to the commissioners for further report of facts; or it
may set aside the report and appoint new commissioners; or it may accept the
report in part and reject it in part; and it may make such order or render

such judgment as shall secure to the plaintiff the property essential to the
exercise of his right of expropriation, and to the defendant just compensation
for the property so taken.
Sec.

9.

Uncertain

ownership;

conflicting

claims.

If the ownership of the property taken is uncertain, or there are conflicting

claims to any part thereof, the court may order any sum or sums awarded as
compensation for the property to be paid to the court for the benefit of the
person adjudged in the same proceeding to be entitled thereto. But the
judgment shall require the payment of the sum or sums awarded to either the
defendant or the court before the plaintiff can enter upon the property, or
retain it for the public use or purpose if entry has already been made.
Sec.

10.

Rights

of

plaintiff

after

judgment

and

payment.

Upon payment by the plaintiff to the defendant of the compensation fixed by

the judgment, with legal interest thereon from the taking of the possession of
the property, or after tender to him of the amount so fixed and payment of the
costs, the plaintiff shall have the right to enter upon the property
expropriated and to appropriate it for the public use or purpose defined in
the judgment, or to retain it should he have taken immediate possession
thereof under the provisions of section 2 hereof. If the defendant and his
counsel absent themselves from the court, or decline to receive the amount
tendered, the same shall be ordered to be deposited in court and such deposit
shall have the same effect as actual payment thereof to the defendant or the
person ultimately adjudged entitled thereto.
Sec.

11.

Entry

not

delayed

by

appeal;

effect

of

reversal.

The right of the plaintiff to enter upon the property of the defendant and
appropriate the same for public use or purpose shall not be delayed by an
appeal from the judgment. But if the appellate court determines that plaintiff
has no right of expropriation, judgment shall be rendered ordering the
Regional Trial Court to forthwith enforce the restoration to the defendant of
the possession of the property, and to determine the damages which the
defendant sustained and may recover by reason of the possession taken by the
plaintiff.
Sec.

12.

Costs,

by

whom

paid.

The fees of the commissioners shall be taxed as a part of the costs of the
proceedings. All costs, except those of rival claimants litigating their
claims, shall be paid by the plaintiff, unless an appeal is taken by the owner
of the property and the judgment is affirmed, in which event the costs of the
appeal shall be paid by the owner.
Sec.

13.

Recording

judgment,

and

its

effect.

The judgment entered in expropriation proceedings shall state definitely, by

an adequate description, the particular property or interest therein
expropriated, and the nature of the public use or purpose for which it is
expropriated. When real estate is expropriated, a certified copy of such
judgment shall be recorded in the registry of deeds of the place in which the
property is situated, and its effect shall be to vest in the plaintiff the
title to the real estate so described for such public use or purpose.

Sec.

14.

Power

of

guardian

in

such

proceedings.

The guardian or guardian ad litem of a minor or of a person judicially

declared to be incompetent may, with the approval of the court first had, do
and perform on behalf of his ward any act, matter, or thing respecting the
expropriation for public use or purpose of property belonging to such minor or
person judicially declared to be incompetent, which such minor or person
judicially declared to be incompetent could do in such proceedings if he were
of age or competent.

G.R. Nos. 94193-99 February 25, 1992

NATIONAL POWER CORPORATION, petitioner,
vs.
HON. ENRIQUE T. JOCSON, in his capacity as Presiding Judge, Regional Trial Court, 6th
Judicial Region, Branch 47, Bacolod City; JESUS, FERNANDO, MARIA CRISTINA and
MICHAEL, all surnamed GONZAGA; LUIS, DIONISIO, ROBERTO, GABRIEL, BENJAMIN, ANA,
ALEXANDER, CARLA, SOFIA and DANIEL, all surnamed GONZAGA; ROSARIO P. MENDOZA;
CELSOY AGRO-IND. CORP.; EMMANUEL, LYDIA, HARRY, NOLI, CLIFFORD and CHRISTIAN
DALE, all surnamed AO; MAYO L. LACSON; and LUCIA GOSIENFIAO,respondents.
Amado B. Parreno Law Office for Gonzaga, et al.
Francisco B. Cruz for R. Mendoza.
Eduardo M. Casiple for Mayo Lacson.

DAVIDE, JR., J.:

This is a special civil action for certiorari to annul, for having been issued without or in excess of
jurisdiction, in violation of law and in deprivation of petitioner's right to due process, four (4) orders
successively issued by the respondent Judge in seven (7) eminent domain cases (1) fixing the
provisional values of the parcels of land sought to be expropriated by the petitioner, National Power
Corporation (NAPOCOR), in amounts far exceeding their market values, (2) increasing the
provisional values of the parcels of land involved in two (2) of such cases without hearing and
holding in abeyance the issuance of the writ of possession in favor of petitioner until deposit of the
additional amount, (3) requiring the private respondents, as defendants in said cases, to state in
writing within twenty-four (24) hours whether or not they are amenable to accepting and withdrawing
the amount deposited by petitioner as provisional values in full and final satisfaction of their
respective properties, and directing that the writ of possession be issued only until after the
defendants shall have so manifested in writing their acceptance and receipt of said amounts, and (4)
directing petitioner to release and pay within twenty-four (24) hours, through the Court and in favor of
the defendants, the amount of P43,016,960.00.
The antecedents of this case are not controverted.
Petitioner is a government-owned and controlled corporation created and existing by virtue of
Republic Act No. 6395, as amended, for the purpose of undertaking the development of hydraulic
power, the production of power from any source, particularly by constructing, operating and

maintaining power plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission lines, power
stations and other works for the purpose of developing hydraulic power from any river, creek, lake,
spring and waterfall in the Philippines and supplying such power to the inhabitants thereof. In order
to carry out these purposes, it is authorized to exercise the power of eminent domain.
On 30 March 1990, petitioner filed seven (7) eminent domain cases before the Regional Trial Court
of the Sixth Judicial Region in Bacolod City, to wit:
(1) Civil Case No. 5938 against Jesus, Fernando, Ma. Cristina and Michael, all
surnamed GONZAGA; 1
(2) Civil Case No. 5939 against Louis, Dionisio, Roberto, Gabriel, Benjamin, Ana,
Alexander, Carla, Sofia, Daniel, all surnamed GONZAGA; 2
(3) Civil Case No. 5940 against Rosario P. Mendoza;

(4) Civil Case No. 5941 against Celsoy Agro-Ind.

Corporation; 4
(5) Civil Case No. 5942 against Emmanuel, Lydia, Harry, Noli, Clifford and Christian,
Dale, all surnamed AO;5
(6) Civil Case No. 5943 against Mayo L. Lacson;

(7) Civil Case No. 5944 against Lucia Gosiengfiao

for the acquisition of a right-of-way easement over portions of the parcels of land described in the
complaints for its Negros-Panay Interconnection Project, particularly the Bacolod-Tomonton
Transmission Line.
The complaints uniformly (a) allege that petitioner urgently needs portions of the affected land to
enable it to construct its tower and transmission line in a manner that is compatible with the greatest
good while at the same time causing the least private injury; the purpose for which the lands are
principally devoted will not be impaired by the transmission lines as it will only acquire a right-of-wayeasement thereon; and it had negotiated with and offered to pay defendants for the portions affected
by the Bacolod-Tomonton Transmission Line, but the parties failed to reach an agreement despite
long and repeated negotiations, and (b) pray that:
1. This Honorable Court fix the provisional value of the portions of the parcel of land
herein sought to be expropriated pursuant to Section 2, Rule 67 of the Rules of
Court;
2. This Honorable Court, by proper order and writ, authorize the plaintiff to enter or
take possession of the premises described in paragraph 3 hereof, and to commence
and undertake the construction of the Bacolod-Tomonton T/L after depositing with the
Provincial Treasurer of Negros Occidental the provisional value fixed by this
Honorable Court, which amount shall be held by said official subject to the order and
final disposition of the Court;

3. This Honorable Court appoint three (3) Commissioners to hear the parties, view
the premises, assess the damages to be paid for the condemnation, and to report in
full their proceedings to the Court;
4. The plaintiff be declared to have the lawful right to acquire portions of the
properties of the defendants affected by the condemnation;
5. After the determination of the amount of indemnity, the Court authorize the
payment by the plaintiff to the defendants; and
6. Judgment be rendered against the defendants, condemning the portion of the
parcels of land referred to in paragraphs 3 and 4 hereof, including the improvements
thereof, if any, for public use and for the purpose hereinabove set forth, free from all
other liens and encumbrances whatsoever; and thereafter, upon plaintiff's
compliance with the requirements of said judgment, a final order of condemnation be
issued and entered in favor of the plaintiff.
Plaintiff further prays for such other reliefs as may be deemed just and equitable in
the premises.
The cases were raffled to different branches of the trial court as follows: Civil Cases Nos. 5938, 5943
and 5944 to Branch 43; Civil Case No. 5939 to Branch 54; Civil Case No. 5940 to Branch 45; Civil
Case No. 5941 to Branch 50; and Civil Case No. 5942 to Branch 46.
Only the defendants in Civil Cases Nos. 5938, 5939, and 5942 filed Motions to Dismiss.

On 4 April 1990, petitioner filed a Motion to consolidate these cases for joint trial 9 and an Urgent
Motion To Fix Provisional Value. 10
On 10 April 1990, Executive Judge Jesus V. Ramos issued an Order granting the motion for
consolidation and ordering the consolidation of all the cases in Branch 43 of the court, then presided
over by Judge Romeo Habaradas. 11
Considering that Judge Habaradas was on sick leave, petitioner filed on 8 May 1990 an Urgent
Motion to Reraffle due to the urgent necessity for the hearing of the cases and the Urgent Motion to
Fix Provisional Value. 12 Acting on said motion, Vice Executive Judge Bethel K. Moscardon issued on 9
May 1990 an Order granting the motion and directing the re-raffle of the cases. 13
Upon re-raffle, the cases were assigned to Branch 47, presided over by respondent Judge. Since
the latter went on sick leave effective 16 May 1990, petitioner filed on said date an Urgent Motion for
Special Re-raffle and for Immediate Fixing of Provisional Value. 14 As a consequence thereof, the
cases were re-raffled to Branch 48 of the court.
On 17 May 1990, Judge Romeo Hibionada of Branch 48 issued an Order directing the defendants to
appear before the court on 21 May 1990 at 8:30 A.M. to register their comments or objections to the
fixing of the provisional values of the parcels of land subject of expropriation. 15
On 21 May 1990, the petitioner and the defendants, through their respective lawyers, appeared and
orally argued their respective positions on the Motion to Fix Provisional Value. 16

Instead of ruling on the issues raised therein, Judge Hibionada, citing Circular No. 7 of this Court
dated 23 September 1974 which establishes a pairing system, 17 promulgated an Order directing the
return of the seven (7) cases to Branch 47 for further disposition.
On 5 June 1990, Branch 47, through respondent Judge, issued an Order directing the petitioner:
. . . to show by documents and otherwise within five (5) days from receipt hereof the
following:
1. That it has earlier negotiated repeatedly with defendants but failed to reach
agreement;
2. That expropriation of heavily populated subdivision areas in order to install primary
electric transmission lines would not endanger lives and property in the area;
3. That such installation is of paramount public interest and there is no other
demonstrable alternative.
and warning that "no provisional order for tentative cost payment of the land affected would be
issued" pending compliance by petitioner with the
foregoing. 18
On 25 June 1990, respondent Judge, finding the existence of paramount public interest which. may
be served by the expropriation, the long range benefit of the project involved, substantial compliance
with the rules concerning efforts for negotiation and, taking into consideration the market value of the
subject areas and the daily opportunity profit that the petitioner allegedly admitted in open court,
issued an Order fixing the provisional values of the subject areas, to wit:
CIVIL CASE AFFECTED MARKET PROVISIONAL
NO. AREA(SQ. M.) VALUE
1. 5938 7,050 P 45,000.00 P 180,000.00
3,000 668,700.00 2,674,800.00
6,600 219,830.00 879,320.00
2. 5939 23,400 757,437.00 3,029,748.00
3. 5940 9,030 2,870.00 11,480.00
4. 5941 17,430 433,130.00 1,732,520.00
5. 5942 2,700 342,900.00 1,371,600.00
6. 5943 15,900 2,125,340.00 8,501,360.00
7. 5944 21,000 1,200,000.00 1,800,000.00
and directing the petitioner:
. . . to deposit the amount with the Philippine National Bank in escrow for the benefit
of the defendants pending decision on the merits. 19
The market values mentioned in the Order are the same values appearing in the tax declarations of
the properties and the notices of assessment issued by the Assessor.

In compliance with the said Order, petitioner deposited the total sum of P23,180,828.00 with the
Philippine National Bank, NAPOCOR Branch, Quezon City, under Savings Account 249-505865-7
and manifested on 3 July 1990 with the court below that it did so. 20
On 11 July 1990, the defendants in Civil Case No. 5938 filed a motion for the reconsideration of the
25 June 1990 Order alleging that the provisional value of the property involved therein "had been set
much too low" considering the allegations therein adduced, stating that the real compensation that
should accrue to them is estimated at P29,970,000.00 and praying that the questioned Order be
reconsidered so as to reflect "the true amount covering the properties subject to (sic) Eminent
Domain estimated at TWENTY NINE MILLION NINE HUNDRED SEVENTY THOUSAND
(P29,970,000.00)." 21
It likewise appears that the defendants in "Civil Case No. 5939 filed a motion for reconsideration
asking for a re-evaluation of the provisional value of the subject property. 22
On 12 July 1990, respondent Judge issued an Order 23 increasing the provisional values of the
properties enumerated in the motions for reconsideration, directing the petitioner to deposit "whatever
differential between the amounts above fixed and those already deposited within twenty four (24) hours
from receipt of the Order" and holding in abeyance the issuance of the writ of possession pending
compliance therewith. The Order reads in full as follows:
ORDER
I
Before this Court are two (2) Motions for Reconsideration of the Order dated June
25, 1990 fixing provisional values of the lands sought to be expropriated belonging to
the defendants in these cases. The first motion was filed by the Torres Valencia
Ciocon Dabao Valencia & De La Paz Law Offices for the defendants Jesus,
Fernando, Ma. Cristina and Michel (sic), all surnamed Gonzaga, seeking a
reconsideration of the values set by this Court earlier at P3,734,120.00 for the areas
affected consisting of the following:
7,050 square meters;
6,600 square meters; and
3,000 square meters
belonging to the aforesaid persons. The Court is aware that the Order of July 25,
1990 was not based on ultimate factual conditions of the property of the movants. At
that time, the Court is (sic) unaware that the expropriation of these areas would
render the remaining portion practically a total loss considering that it is in a
subdivision and not agricultural and that the fetching price (sic) now in the immediate
vicinity is between P1,500.00 and P2,000.00 per square meter. Considering that the
presence of the primary transmission lines of the property and the earlier intrusion of
the Central Negros Cooperative at the side of the areas affected for free (sic) during
the Martial Law Regime, and considering further the proximity of the Rolling Hills
Memorial Park, the San Miguel Corporation manufacturing complex, Jesusa Heights,
Green Hills Memorial Park and other posh subdivisions, as well as a golf course, the
Court is convinced that that (sic), defendants Jesusa Gonzaga, Fernando Gonzaga,
Ma. Cristina and Michel (sic) Gonzaga are entitled to a higher valuation for the
property, not only because of the above-stated facts but because of the clear danger

to the inhabitants in the area and the destruction of the marketability of the remaining
portion after expropriation.
II
In respect to the plea of defendants Louis Gonzaga, et al. for re-evaluation of the
areas owned by them, the Court feels that adjustment should also be made
considering that it is contiguous to the areas belonging to Jesus Gonzaga, et al.
above-stated and it is also affected by the same conditions. Considering that the
area affected is 23,000 square meters and the fetching price (sic) in the vicinity is
between P1,500.00 and P2,000.00 per square meter, the Court feels that the
provisional value of the property should be P12,600,000.00.
As to the rest of the defendants, there being no extra-ordinary or peculiar conditions
which may warrant re-evaluation the amounts fixed earlier by this Court shall stand.
WHEREFORE, (a) the Court rules that the provisional value of 7,050 square meters
aforestated should be P6,000,000.00; the provisional value of 6,600 square meters
aforestated should be P5,000,000.00; and the provisional value of 3,000 square
meters aforestated should be P3,000,000.00 instead of those in the June 25, 1990
Order of this Court for these properties. (b) The provisional value of 23,000 square
meters belonging to Louis Gonzaga, et al. should be rightfully valued at
P12,600,000.00.
The plaintiff is directed to deposit whatever differential between the amounts above
fixed and those already deposited in PNB Savings Account No. 249-5-5865-7 within
48 hours from receipt of this Order. Pending such compliance hereof, action on the
Motion for Issuance of Writ of Possession will be held in abeyance. The
representative of the plaintiff may get from the Branch Clerk of Court the
corresponding bank book earlier attached to the expediente for the purpose of
complying with this Order.
SO ORDERED.
In compliance with the said Order, petitioner immediately deposited the additional sum of
P22,866,860.00 with the Philippine National Bank under Savings Account No. 249-505865-7 as
evidenced by the Bank's certification dated 13 July 1990. 24
On 16 July 1990, respondent Judge issued an Order

25

mandatorily requiring the defendants:

. . . to state in writing within twenty-four (24) hours whether or not they are amenable
to accept and withdraw (sic) the amounts already deposited by the plaintiff for each
of them at final and full satisfaction of the value of their respective property (sic)
affected by expropriation, and this is mandatory.
[t]he Writ of Possession sought for by the plaintiff will be issued immediately after
manifestation of acceptance and receipt of said amounts.
On 18 July 1990, respondent Judge, claiming to act on the
Manifestation filed in compliance with the Order of 16 July 1990 of defendants Jesus Gonzaga,
et al. in Civil Case No. 5938, Luis Gonzaga, et al. in Civil Case No. 5939, Rosario Mendoza in Civil

Case No. 5940, Emmanuel Ao, et al. in Civil Case No. 5942 and Mayo Lacson in Civil Case No.
5943, issued an Order 26 directing the petitioner to pay the defendants within twenty-four (24) hours,
through the court and from petitioner's Philippine National Bank Savings Account No. 249-505865-7 or
from any other fund; whichever may be most expeditious, the following amounts by way of full payment
for their expropriated property:
CIVIL CASE NO. AFFECTED AREA VALUE
(SQ. M.)
1. 5938 7,050 P 6,000,000.00
3,000 3,000,000.00
6,600 5,000,000.00
2. 5939 23,000 12,600,000.00
3. 5940 9,030 11,480.00
4. 5941 17,430 1,732,520.00
5. 5942 2,700 1,371,600.00
6. 5943 15,900 8,501,360.00
7. 5944 21,000 4,800,000.00
and ordering that the writ of possession be issued in these cases after the defendants "have duly
received the amounts."
Unable to accept the above Orders of 25 June, 12 July, 16 July and 18 July 1990, petitioner filed this
petition on 24 July 1990 alleging therein, as grounds for its allowance, that respondent Judge acted
in excess of jurisdiction, in violation of laws and in dereliction of the duty to afford respondents due
process when he issued said Orders. In support thereof petitioner asserts that the Orders of 25 June
and 12 July 1990 fixing the provisional values at excessive and unconscionable amounts, are utterly
scandalous and unreasonable. As classified under their respective tax declarations, the several lots
to be expropriated are sugarlands with the following assessed values:
OWNER TAX DEC. NO. ASSESSED
VALUE
1. JESUS L. GONZAGA 007-000621 P18,000.00
2. Estate of SOPHIA
Vda. de GONZAGA 007-000495 267,480.00
3. JESUS GONZAGA 005-000007 87,930.00
4. LOUIS, DIONISIO
ROBERTO, GABRIEL
BENJAMIN, ANA
ALEXANDER, CARLO
SOPHIA, DANIEL
also named
GONZAGA 007-5224 398,260.00
5. ROSARIO MENDOZA Notice of Assessment
of Real Property dated
March 23, 1990,
Lot No. 1278-B-1 860.00
6. ROSARIO MENDOZA Notice of Assessment
of Real Property dated
March 23, 1990, 861,380.00
Lot No. 1278-C-1 429,080.00

7. CEL-SOY-AGROIND. CORPORATION 2284 179,650.00

8. LYDIA S. ANO
married to
EMMANUEL ANO 4047 (0854-05) 137,160.00
9. PACITA LACSON
(MAYO L. LACSON) Notice of Assessment
of Real Property dated
March 21, 1990
Lot No. 7-G 861,380.00
10. DOLORES D.
COSCOLLUELA 020-00017 487,730.00
(LUCIA GOSIENFIAO)
Yet, petitioner submits that in a clear display of abuse of discretion, respondent Judge fixed, in the
Order of 25 June 1990, the provisional valued as follows:
CIVIL CASE AFFECTED AREA MARKET PROVISIONAL
VALUE (SQ. M.) VALUE
NO.
1. 5938 7,050 P 45,000.00 P 180,000.00
3,000 668,700.00 2,674,800.00
6,600 219,830.00 879,320.00
2. 5939 23,400 757,437.00 3,029,748.00
3 5940 9,030 2,870.00 11,480.00
4. 5941 17,430 433,130.00 1,732,520.00
5. 5942 2,700 342,900.00 1,371,600.00
6. 5943 15,900 2,125,340.00 8,501,360.00
7. 5944 21,000 1,200,000.00 4,800,000.00
and that:
. . . in another clear abuse (sic) of discretion, herein respondent Judge, on the basis
of the respective Motion (sic) for Reconsideration of defendants in Civil Cases Nos.
5938 and 5939, without affording the herein petitioner an opportunity to be heard,
and with evident and manifest partiality to therein defendants increased the
previously fixed provisional value of their respective lands, as follows:
a. Civil Case No. 5938:
1. 7,050 sq. m. From P180,000.00 to P6,000,000.00
2. 3,000 sq. m. From P2,674,800.00 to P3,000,000.00
3. 6,600 sq. m. From P879,320.00 to P5,000,000.00
b. Civil Case No. 5939
1. 23,400 sq. m. From P3,029,748.00 to P12,600,000.00

Nevertheless, due to its urgent need for the areas to be able to complete the interconnection project
as soon as possible, petitioner deposited the amounts representing the provisional values fixed by
the respondent Judge. Still, petitioner laments, the latter persisted in his stubbornness by not issuing
a writ of possession, in violation of Section 2, Rule 67 of the Rules of Court which provides that upon
the filing of the complaint or at any time thereafter, the plaintiff shall have the right to take or enter
upon the possession of the real or personal property involved if he deposits with the National or
Provincial Treasurer its value, as provisionally and promptly ascertained and fixed by the court
having jurisdiction of the proceedings, to be held by such treasurer subject to the orders and final
disposition of the court; and that after such deposit to made, the court shall order the sheriff or other
proper officer to forthwith place the plaintiff in possession of the property involved P.D. No. 42, which
provides that:
. . . upon filing in the proper court of the complaint in eminent domain proceedings or
at anytime thereafter, and after due notice to the defendant, plaintiff shall have the
right to take or enter upon the possession of the real property involved if he deposits
with the Philippine National Bank, in its main office or any of its branches or
agencies, an amount equivalent to the assessed value of the property for purposes
of taxation, to be held by said bank subject to the orders and final disposition of the
court.
is also alleged to have been violated by respondent Judge.
The issuance then of the writ of possession was an unqualified ministerial duty which respondent
Judge failed to perform.
Moreover, the Order of 16 July 1990 surrenders the judicial prerogative to fix the provisional value in
favor of the defendants considering that respondent Judge's valuation may still be overruled by the
latter since they were given twenty-four (24) hours to state in writing whether or not they are
accepting and withdrawing the amount already deposited by petitioner.
Finally, petitioner contends that the Order of 16 July 1990 partakes of the nature of a final disposition
of the case should the defendants accept the provisional value as "final and full satisfaction of the
value of their respective property (sic)affected by expropriation," thereby preempting and depriving
the former of the right to dispute and contest the value of the property. Clearly, respondent Judge
took a short-cut, violating in the process the procedure laid down in Sections 3 to 8, inclusive, of
Rule 67 of the Rules of Court.
In the Resolution of 31 July 1990, this court required the respondents to comment on the petition
and resolved to issue a temporary restraining order, effective immediately and to continue until
further orders from the Court, compelling the respondent Judge to cease and desist from enforcing
and/or executing his questioned Orders and directing him, pending determination of this case, to
place petitioner in possession of the properties subject of this
petition. 27
The following respondents filed, through their counsels, their Answers on various dates, as follows:
Mayo Lacson 14 September 1990 28
Rosario P. Mendoza 18 September 1990 29
Jesus Gonzaga, et al.;
Emmanuel Ao, et al. 27 September 1990 30
Luis Gonzaga, et al. 20 September 1990 31

All of them, except for Rosario P. Mendoza who informed the Court that she filed a motion to
reconsider the 18 July 1990 Order of respondent Judge and who agrees with petitioner that
commissioners should be appointed to determine the just compensation, 32 support and sustain the
actions of respondent Judge and pray for the dismissal of the petition.
Mayo Lacson, in submitting that the procedure prescribed in Rule 67 may be abbreviated provided
that the rights of the parties are duly protected, cites the case of City Government of Toledo
vs. Fernandos, et al. 33 wherein this Court sustained the judgment of the trial court on the basis of what
transpired in the pre-trial conference.
Complying with the Resolution of the 25 September 1990, petitioner filed on 6 November 1990 a
Reply to the Comment of respondent Mayo Lacson, 34 stressing therein that the case of City
Government of Toledo City vs.Fernandos, et al. 35 does not apply to the present case because a pre-trial
was conducted in the former during which the parties were able to present their respective positions on
just compensation.
On 22 January 1991, this Court resolved to consider the respondents' Comments as Answers to the
petition, give due course to the petition and require the parties to file simultaneously their respective
Memoranda within twenty (20) days from notice, which petitioner complied with on 11 March
1991; 36 respondent Mendoza on 4 March 1991; 37 respondents Jesus Gonzaga, et al. and Emmanuel
Ao, et al. on 19 March 1991; 38 and Mayo Lacson on 5 April 1991. 39
We find merit in the petition.
Respondent Judge committed grave abuse of discretion amounting to lack of jurisdiction, and is
otherwise either unmindful or ignorant of the law: when he fixed the provisional values of the
properties for the purpose of issuing a writ of possession on the basis of the market value and the
daily opportunity profit petitioner may derive in violation or in disregard of P.D. No. 42; in amending
such determination in Civil Cases Nos. 5938 and 5939 by increasing the same without hearing; in
directing the defendants to manifest within twenty-four (24) hours whether or not they are accepting
and withdrawing the amounts, representing the provisional values, deposited by the plaintiff for each
of them as "final and full satisfaction of the value of their respective property (sic); " in declaring the
provisional values as the final values and directing the release of the amounts deposited, in full
satisfaction thereof, to the defendants even if not all of them made the manifestation; and in
suspending the issuance of the writ of possession until after the suspending the amounts shall have
been released to and received by defendants.
In Municipality of Bian vs. Hon. Jose Mar Garcia, et al., 40 this Court ruled that there are two (2) stages
in every action of expropriation:
The first is concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in the context
of the facts involved in the suit. 41 It ends with an order, if not of dismissal of the action,
"of condemnation declaring that the plaintiff has a lawful right to take the property sought
to be condemned, for the public use or purpose described in the complaint, upon the
payment of just compensation to be determined as of the date of the filing of the
complaint." 42 An order of dismissal, if this be ordained, would be a final one, of course,
since it finally disposes of the action and leaves nothing more to be done by the Court on
the merits. 43 So, too, would an order of condemnation be a final one, for thereafter as the
Rules expressly state, in the proceedings before the Trial Court, "no objection to the
exercise of the right of condemnation (or the propriety thereof) shall be filed or heard."

The second phase of the eminent domain action is concerned with the determination
by the Court of the "just compensation for the property sought to be taken." This is
done by the Court with the assistance of not more than three (3)
commissioners. 44 The order fixing the just compensation on the basis of the evidence
before, and findings of, the commissioners would be final, too. It would finally dispose of
the second stage of the suit, and leave nothing more to be done by the Court regarding
the issue. . . .
However, upon the filing of the complaint or at any time thereafter, the petitioner has the right to take
or enter upon the possession of the property involved upon compliance with P.D. No. 42 which
requires the petitioner, after due notice to the defendant, to deposit with the Philippine National Bank
in its main office or any of its branches or agencies, "an amount equivalent to the assessed value of
the property for purposes of taxation." This assessed value is that indicated in the tax declaration.
P.D. No. 42 repealed the "provisions of Rule 67 of the Rules of Court and of any other existing law
contrary to or inconsistent" with it. Accordingly, it repealed Section 2 of Rule 67 insofar as the
determination of the provisional value, the form of payment and the agency with which the deposit
shall be made, are concerned. Said section reads in full as follows:
Sec. 2. Entry of plaintiff upon depositing value with National or Provisional Treasurer.
Upon the filing of the complaint or at any time thereafter the plaintiff shall have the
right to take or enter upon the possession of the real or personal property involved if
he deposits with the National or Provincial Treasurer its value, as provisionally and
promptly ascertained and fixed by the court having jurisdiction of the proceedings, to
be held by such treasurer subject to the orders and final disposition of the court.
Such deposit shall be in money, unless in lieu thereof the court authorizes the
deposit of a certificate of deposit of a depository of the Republic of the Philippines
payable on demand to the National or Provincial Treasurer, as the case may be, in
the amount directed by the court to be deposited. After such deposit is made the
court shall order the sheriff or other proper officer to forthwith place the plaintiff in
possession of the property involved.
It will be noted that under the aforequoted section, the court has the discretion to determine the
provisional value which must be deposited by the plaintiff to enable it "to take or enter upon the
possession of the property." Notice to the parties is not indispensable. In interpreting a similar
provision of Act No. 1592, this Court, in the 1915 case of Manila Railroad Company, et
al. vs. Paredes, et al., 45 held:
. . . The statute directs that, at the very outset, "when condemnation proceedings are
brought by any railway corporation" the amount of the deposit is to be "provisionally
and promptly ascertained and fixed by the court." It is very clear that it was not the
intention of the legislator that before the order fixing the amount of the deposit could
lawfully be entered the court should finally and definitely determine who are the true
owners of the land; and after doing so, give them a hearing as to its value, and
assess the true value of the land accordingly. In effect, that would amount to a denial
of the right of possession of the lands involved until the conclusion of the
proceedings, when there would no need for the filing of the deposit. Of course, there
is nothing in the statute which denies the right of the judge to hear all persons
claiming an interest in the land, and courts should ordinarily give all such persons an
opportunity to be heard if that be practicable, and will cause no delay in the prompt
and provisional ascertainment of the value of the land. But the scope and extent of
the inquiry is left wholly in the discretion of the court, and a failure to hear the owners

and claimants of the land, who may or may not be known at the time of the entry of
the order, in no wise effects the validity of the order. . . .
P.D. No. 42, however, effectively removes the discretion of the court in determining the provisional
value. What is to be deposited is an amount equivalent to the assessed value for taxation
purpose. 46 No hearing is required for that purpose. All that is needed is notice to the owner of the
property sought to be condemned. 47
Clearly, therefore, respondent Judge either deliberately disregarded P.D. No. 42 or was totally
unaware of its existence and the cases applying the same.
In any event, petitioner deposited the provisional value fixed by the court. As a matter of right, it was
entitled to be placed in possession of the property involved in the complaints at once, pursuant to
both Section 2 of Rule 67 and P.D. No. 42. Respondent Court had the corresponding duty to order
the sheriff or any other proper officer to forthwith place the petitioner in such possession. Instead of
complying with the clear mandate of the law, respondent Judge chose to ignore and overlook it.
Moreover, upon separate motions for reconsideration filed by the defendants in Civil Cases Nos.
5938 and 5939, he issued a new Order increasing the provisional values of the properties involved
therein. No hearing was held on the motions. As a matter of fact, as the records show, the motion for
reconsideration filed by defendants Jesus Gonzaga, et al. in Civil Case No. 5938 is dated 11 July
199048 while the Order granting both motions was issued the next day, 12 July 1990. 49 The motion for
reconsideration in Civil Case No. 5938 does not even contain a notice of hearing. It is then a mere scrap
of paper; it presents no question which merits the attention and consideration of the court. It is not even a
mere motion for it does not comply with the rules, more particularly Sections 4 and 5, Rule 15 of the Rules
of Court; the Clerk of Court then had no right to receive it. 50
There was, moreover, a much stronger reason why the respondent Court should not have issued the
12 July 1990 Order increasing the provisional values of the Gonzaga lots in Civil Cases Nos. 5938
and 5939. After having fixed these provisional values, albeit erroneously, and upon deposit by
petitioner of the said amounts, respondent Judge lost, as was held in Manila Railroad Company
vs. Paredes, 51 "plenary control over the order fixing the amount of the deposit, and has no power to
annul, amend or modify it in matters of substance pending the course of the condemnation proceedings."
The reason for this is that a contrary ruling would defeat the very purpose of the law which is to provide a
speedy and summary procedure whereby the peaceable possession of the property subject of the
expropriation proceedings "may be secured without the delays incident to prolonged and vexatious
litigation touching the ownership and value of such lands, which should not be permitted to delay the
progress of the work."
Compounding the above error and the capriciousness with which it was committed is respondent
Judge's refusal to place the petitioner in possession of the property or issue the writ of possession
despite the fact that the latter had likewise deposited the additional amount called for by the 12 July
1990 Order. Instead, respondent Judge issued the 16 July 1990 Order directing the defendants to
state in writing within twenty-four (24) hours whether or not they would accept and withdraw the
amounts deposited by the petitioner for each of them " as final and full satisfaction of the value of
their respective property (sic) affected by the expropriation" and stating at the same time that the writ
will be issued after such manifestation and acceptance and receipt of the amounts.
The above Order has absolutely no legal basis even as it also unjustly, oppressively and capriciously
compels the petitioner to accept the respondent Judge's determination of the provisional value as
the just compensation after the defendants shall have manifested their conformity thereto. He thus
subordinated his own judgment to that of the defendants' because he made the latter the final
authority to determine such just compensation. This Court ruled in Export Processing Zone Authority
vs. Dulay, et al. 52 that the determination of just compensation in eminent domain cases is a judicial

function; accordingly, We declared as unconstitutional and void, for being, inter alia, impermissible
encroachment on judicial prerogatives which tends to render the Court inutile in a matter which, under the
Constitution, is reserved to it for final determination, the method of ascertaining just compensation
prescribed in P.D. Nos. 76 464, 794 and 1533, to wit: the market value as declared by the owner or
administrator or such market value as determined by the assessor, whichever is lower in the first three (3)
decrees, and the value declared by the owner or administrator or anyone having legal interest in the
property or the value as determined by the assessor, pursuant to the Real Property Tax Code, whichever
is lower, prior to the recommendation or decision of the appropriate Government office to acquire the
property, in the last mentioned decree. If the legislature or the executive department cannot even impose
upon the court how just compensation should be determined, it would be far more objectionable and
impermissible for respondent Judge to grant the defendants in an eminent domain case such power and
authority.

Without perhaps intending it to be so, there is not only a clear case of abdication of judicial
prerogative, but also a complete disregard by respondent Judge of the provisions of Rule 67 as to
the procedure to be followed after the petitioner has deposited the provisional value of the property.
It must be recalled that three (3) sets of defendants filed motions to dismiss 53 pursuant to Section 3,
Rule 67 of the Rules of Court; Section 4 of the same rule provides that the court must rule on them and in
the event that it overrules the motions or, when any party fails to present a defense as required in Section
3, it should enter an order of condemnation declaring that the petitioner has a lawful right to take the
property sought to be condemned.
As may be gleaned from the 25 June 1990 Order, the respondent Judge found that the petitioner has
that right and that "there will be a (sic) paramount public interest to be served by the expropriation of
the defendants' properties." Accordingly, considering that the parties submitted neither a compromise
agreement as to the just compensation nor a stipulation to dispense with the appointment of
commissioners and to leave the determination of just compensation to the court on the basis of
certain criteria, respondent Judge was duty bound to set in motion Section 5 of Rule 67; said section
directs the court to appoint not more than three (3) competent and disinterested persons as
commissioners to ascertain and report to it regarding the just compensation for the property sought
to be taken. Such commissioners shall perform their duties in the manner provided for in Section 6;
upon the filing of their report, the court may, after a period of ten (10) days which it must grant to the
parties in order that the latter may file their objections to such report, and after hearing pursuant to
Section 8, accept and render judgment in accordance therewith or, for cause shown, recommit the
same to the commissioners for further report of facts. The court may also set aside the report and
appoint new commissioners, or it may accept the report in part and reject it in part; and it may make
such order or render such judgment as shall secure to the petitioner the property essential to the
exercise of its right of condemnation, and to the defendant just compensation for the property so
taken.
Not satisfied with the foregoing violations of law and insisting upon his own procedure, respondent
Judge declared in his Order of 18 July 1990 that the provisional amounts he fixed, later increased
with respect to the properties of the Gonzagas, shall be considered as the full payment of the value
of the properties after the defendants in Civil Cases Nos. 5938, 5939, 5940, 5942 and 5943 shall
have filed their manifestations; he also ruled that the writ of possession will be issued only after the
latter shall have received the said amounts. This Order and the records before this Court do not
disclose that the defendants in Civil Cases Nos. 5941 and 5944 filed any manifestation; yet, in the
Order, respondent Judge whimsically and arbitrarily considered the so-called provisional values fixed
therein as the final values. By such Order, the case was in fact terminated and the writ of execution
then became a mere incident of an execution of a judgment. The right of the petitioner to take or
enter into possession of the property upon the filing of the complaint granted by Section 2 of Rule 67
and P.D. No. 42 was totally negated despite compliance with the deposit requirement under the latter
law.

Nothing can justify the acts of respondent Judge. Either by design or sheer ignorance, he made a
mockery of the procedural law on eminent domain by concocting a procedure which he believes to
be correct. Judges must apply the law; they are not at liberty to legislate. As Canon 18 of the Canon
of Judicial Ethics provides:
A judge should be mindful that his duty his the application of general law to particular
instances, that ours is a government of law and not of men, and that he violates his
duty as a minister of justice under such a system if he seeks to do what he may
personally consider substantial justice in a particular case and disregards the general
law as he knows it to be binding on him. Such action may become a precedent
unsettling accepted principles and may have detrimental consequences beyond the
immediate controversy. He should administer his office with a due regard to the
integrity of the system of the law itself, remembering that he is not a depositary of
arbitrary power, but a judge under the sanction of law.
They must be reminded once more that "the demands of fair, impartial, and wise administration of
justice call for a faithful adherence to legal precepts on procedure which ensure to litigants the
opportunity to present their evidence and secure a ruling on all the issues presented in their
respective pleadings. "Short-cuts" in judicial processes are to be avoided where they impede rather
than promote a judicious disposition of justice." 54
We agree with the petitioner that the ruling in the case of City Government of Toledo City
vs. Fernandos, et al., 55does not apply to the instant petition because at the pre-trial conference held
therein, the petitioner submitted to the discretion of the court as to the correct valuation, private
respondents stated that they have no objections and are in conformity with the price of P30.00 per square
meter as reasonable compensation for their land and the City Assessor informed the court of the current
market and appraisal values of the properties in the area and the factors to be considered in the
determination of such. The parties presented their documentary exhibits. In effect, therefore, the parties
themselves agreed to submit to a judicial determination on the matter of just compensation and that
judgment be rendered based thereon. In the instant case, no pre-trial was conducted; the proceedings
were still at that state where the provisional value was yet to be determined; and the parties made no
agreement on just compensation.
WHEREFORE, the instant petition is GRANTED and the Orders of respondent Judge of 25 June
1990, 12 July 1990, 16 July 1990 and 18 July 1990 are hereby SET ASIDE and the temporary
restraining order issued by this Court on 31 July 1990 directing respondent Judge to cease and
desist from enforcing the questioned Orders is hereby made permanent.
The respondent Judge is hereby directed to fix the provisional values of the parcels of land in Civil
Cases Nos. 5938, 5939, 5940, 5941, 5942, 5943, and 5944 in accordance with P.D. No. 42;
thereafter, the petitioner may retain in Savings Account No. 249-505865-7 with the Philippine
National Bank, NAPOCOR Branch, Diliman, Quezon City, a sum equivalent to the provisional value
as thus fixed, which the Bank shall hold subject to the orders and final disposition of the court a quo,
and withdraw the balance.
The respondent Judge is further directed to proceed with the above eminent domain cases without
unnecessary delay pursuant to the procedure laid down in Rule 67 of the Rules of Court.
Finally, respondent Judge is reminded to comply faithfully with the procedure provided for in the
Rules of Court. Let a copy of this Decision be appended to his record.
Costs against private respondents.

IT IS SO ORDERED.
G.R. No. 170945

September 26, 2006

NATIONAL POWER CORPORATION, petitioner,

vs.
MARIA MENDOZA SAN PEDRO, represented by VICENTE, HERMINIA and FRANCISCO, all
surnamed SAN PEDRO, respondents.
DECISION
CALLEJO, SR., J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Decision1 of the Court of
Appeals (CA) in CA-G.R. CV No. 72860, and its Resolution 2 denying the motion for reconsideration
thereof.
The Antecedents
The National Power Corporation (NPC) is a government-owned-and-controlled corporation created
to undertake the development of hydro-electric generation of power and the production of electricity
from any and all sources; and particularly the construction, operation, and maintenance of power
plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission lines, power stations and
substations, and other works for the purpose of developing hydraulic power from any river, lake,
creek, spring and waterfalls in the Philippines and supplying such power to the inhabitants
thereof.3 Under Republic Act No. 6395, as amended, the NPC is authorized to enter private property
provided that the owners thereof shall be indemnified for any actual damage caused thereby.4
For the construction of its San Manuel-San Jose 500 KV Transmission Line and Tower No. SMJ-389,
NPC negotiated with Maria Mendoza San Pedro, then represented by her son, Vicente, for an
easement of right of way over her property, Lot No. 2076. The property, which was partly agricultural
and partly residential land, was located in Barangay Partida, Norzagaray, Bulacan and covered by
Tax Declaration No. 00386. On June 19, 1997, Maria executed a Right of Way Grant 5 in favor of
NPC over the lot for P1,277,886.90. The NPC paid herP524,635.50 for the damaged improvements
thereon.6
The payment voucher for the residential portion of the lot valued at P6,000,000.00 (at P600.00 per
square meter) was then processed.7 However, the NPC Board of Directors approved Board
Resolution No. 97-2468 stating that it would pay only P230.00 per sq m for the residential portion
and P89.00 per sq m for the agricultural portion, on the following premises:
A) The proposed land valuations were evaluated and analyzed using the joint appraisal
report on fair market value of lands by Cuervo Appraisal, Inc., Development Bank of the
Philippines, and the Land Bank of the Philippines and the fair market values established by
the respective Provincial Appraisal Committee (PAC) of Zambales, Pangasinan, Nueva Ecija,
Pampanga and Bulacan as well as the City Appraisal Committee (CAC) of San Carlos and
Cabanatuan.
B) For lot acquisition, adopt PAC or CUERVO Appraisal, whichever is lower; if there is a
problem of acceptance, refer same to the Board;

C) For easement over agricultural lands, adopt median or average if there are several
amounts involved; and
D) Always oppose any proposals for conversion of agricultural lands.9
On January 15, 1998, the NPC filed a complaint10 for eminent domain in the Regional Trial Court
(RTC) of Bulacan against Maria and other landowners. The case was docketed as Civil Case No.
28-M-98. According to NPC, in order to construct and maintain its Northwestern Luzon Transmission
Line Project (San Manuel-San Jose 500 KV Transmission Line Project), it was necessary to acquire
several lots in the Municipalities of San Jose del Monte and Norzagaray, Bulacan for an easement of
right of way in the total area of more or less 35,288.5 sq m. The owners of the affected areas and
their corresponding assessed values are:

OWNER/
CLAIMANT

Ma. Mendoza San

Pedro rep. by
Vicente San Pedro

LOT/
BLK.
NO.

TAX
DEC.
NO.

2076

00386

TITLE
NO.

TOTAL
AREA

AREA
ASSESSED CLASSIFICATION
AFFECTED VALUE OF
OF LAND
IN SQ. M.
AREA
AFFECTED

122,821.32

17,195

P 18,555.75 Agricultural

10,000

6,565

P147,712.50 Residential

Lorenza Manuel /
Sps. Raul & Edna
Lagula

1250

96T21017- 28392P-(M)
00084

5,700

51,666.5

P 13,481.03 Agricultural

Sps. Segundo &

Maxima Manuel /
Sps. Raul & Edna
Lagula

1251

96P-3965
21017(M)
00083

6,362

6,362

P 16,210.00 Agricultural

Maria San Pedro filed her Answer11 on February 2, 1998, alleging that there had already been an
agreement as to the just compensation for her property. She prayed, among others, that she should
be paid the consideration stated in the Right of Way Grant, P600.00 per sq m for the residential
portion of the land as agreed upon by her and NPC, and to base the values from Resolution No. 9700512 of the Provincial Appraisal Committee.
Meanwhile, Maria San Pedro filed an Amended Answer 13 in which she alleged that NPC had resorted
to deceit, trickery and machination to induce her to grant a right of way by assuring her that it would
also pay for the residential portion of the property at P600.00 per sq m.

On August 10, 1998, the RTC issued a writ of possession against Maria San Pedro. 14 When she
passed away on August 22, 1998,15 she was substituted by her heirs, Vicente, Herminia and
Francisco, all surnamed San Pedro, on September 11, 1998.16
During the pre-trial on January 25, 1999, the parties agreed that the only issue for resolution was the
just compensation for the property. The court appointed a committee of commissioners to ascertain
and recommend to the trial court the just compensation for the properties, composed of Atty.
Josephine L. Sineneng-Baltazar, the Clerk of Court, as chairperson; and Engr. Oscar C. Cruz,
Provincial Assessor of Bulacan, and Atty. Henry P. Alog of the Litigation Department of NPC to serve
as members-commissioners thereof.17
On July 12, 1999, Atty. Baltazar and Engr. Cruz submitted their report,18 recommending as payment
for just compensation P800.00 per sq m for the residential lot and P700.00 per sq m for the
agricultural lot.19 The majority report reads:
I. Description of the Property
A parcel of land with a total area of 132,821.32 square meters located at Partida,
Norzagaray, Bulacan and declared for taxation purposes in the name of Maria Mendoza San
Pedro is sought to be expropriated by plaintiff National Power Corporation for the
construction and maintenance of its Northwestern Luzon Transmission Line Project (San
Miguel-San Jose 500 KV Transmission Line Project), to wit:

Lot No.

Tax Dec. No.

2076

01337

Total Area

Area
Affected in
sq. m.

Classification

122,821.32

17,195 Agricultural

10,000.00

6,565 Residential

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

The residential lot is not affected by NPC's project in its entirety. Around 2,000 sq. m.
remains on each side of the residential lot.
Likewise, only a portion or 17,195 sq. m. of (sic) more than 12 hectares agricultural land,
(sic) is affected by the project. A sketch plan of the affected area is attached hereto as Annex
"B."
II. Claims of the Parties
Defendants allege that they had signed a Right of Way Grant Contract dated June 19, 1997
which plaintiff itself prepared and was notarized by Atty. Marcelo Aure; that, among others,

defendants and plaintiff agreed that the price of the residential land is P600.00 per square
meter, based on the Provincial Appraisals Committee (PAC) Resolution No. 97-005; that, on
December 6, 1997, plaintiff informed them that the NPC Board passed Resolution No. 97246 dated October 27, 1997, pursuant to which the board approved price for acquisition of
subject property is P230.00 per sq. m. for residential and P89.00 per sq. m. for agricultural
lot. Defendants did not accept the new offer.
On the other hand, plaintiff alleges that the price for residential land is P230.00 per sq. m. as
approved by NPC's Board and not P600.00 per sq. m. being asked by defendants. It further
recommended the appointment of commissioners to report to the Court the just
compensation to be paid to the defendants.
III. Observations
The Commissioners went to the site on May 11, 1999 and were able to observe that:
(1) The residential lot of Vicente San Pedro is not affected by NPC's project in its
entirety. Around 2,000 sq. m. remains on each side of the residential lot. There are
no existing structures or improvements on said residential lot, which is situated along
the all-weather (gravel) road. Defendants are afraid to utilize the said remaining
portions for residential purposes because of the reported constant loud buzzing and
exploding sounds emanating from the towers and transmission lines, especially on
rainy days. The two children of Vicente San Pedro had wanted to construct their
residential houses on said land, but decided against it now because of fear that the
large transmission lines looming not far above their land and the huge tower in front
of their lot will affect their safety and health. Moreover, there is a slim chance now
that somebody will still buy the remaining portions on each side of the residential lot
affected by the project, to the damage of the defendant, both as to future actual use
of the land and financial gains to be derived therefrom.
(2) Likewise only a portion, or 17,195 sq. m. of the 122,821.32 square meter
agricultural land, is affected by the transmission line project. It was not planted with
palay at the time of the inspection. According to the defendants, their farm helpers
are already afraid to work on the land because of the buzzing and cracking sounds
coming from the tower and transmission lines.
(3) The site is located in a highly developed area about 1.5 kms. away from
Norzagaray Municipal Building. The vast land owned by Jesus Is Lord congregation
is on the same side of the road as subject property. Opposite the road is an ongoing
resort project, the Falcon Crest Resort about kilometers away, and the proposed
Catholic Retreat House about 200 meters away. Attached as Annex "C" is the
Location Plan of said lot.
IV. Available Data
(1) Based on the Zoning Certificate issued by the Municipal Mayor, subject parcel of
land has been classified as residential pursuant to the proposed Comprehensive
Land Use Plan of local government unit. Copy of said Zoning Certificate is hereto
attached as Annex "D."
(2) Based on the BIR Zonal Valuation attached as Annex "E," subject land has a
zonal value ofP60.00/sq. m. for residential and P30.00/sq. m. for agricultural lot.

However, it is common knowledge that zonal valuation provided by BIR cannot be

made as basis for the purpose of determining just compensation in eminent domain
cases because it is only for the purpose of computing internal revenue taxes.
(3) Opinion values gathered by the Provincial Assessor on the price of the property
are as follows:
Residential - P1,075.00 / sq. m.
Agricultural - P 643.00 / sq. m.
The summary of Opinion Values is hereto attached as Annex "F."
(4) There are no available sales data on properties within the vicinity of subject land
for the years 1996 and 1997, approximate time of the taking.
IV. Recommendation
The Commissioners, after considering the location of the subject property in a highly
developed area and accessibility thru the all-weather road (gravel); its potential for full
development as shown by the existence of building projects in the vicinity; and the long-term
effect the expropriation will have on the lives, comfort and financial condition of herein
defendants, respectfully recommend the following amounts as payment for the affected
portions of subject property.
P800. / sq. m. - for the residential lot
P700. / sq. m. - for the agricultural lot20
However, Atty. Alog, who represented NPC, dissented from the report, claiming that it was merely
based on "opinion values," and the self-serving declarations and opinions of defendants. He
maintained that, in determining just compensation, the trial court should instead consider the
appraisal report of Cuervo Appraisers, Inc., upon which Resolution No. 97-246 of NPC was based.
He likewise argued that the property involved was actually and principally used as agricultural,
though declared as agricultural/residential lots; hence, only the easement fee of right of way should
be paid, as the principal purpose for which the lot was devoted would not be impaired by the
construction of transmission lines. His report reads:
I. FINDINGS
The ocular inspection and research conducted by the undersigned Commissioner on May
12, 1999 disclosed the following pertinent information and data:
1) The subject lots can be reached through a 1.4 km two lane concrete road, from
the Sta. Maria-Norzagaray National Highway intersection at Poblacion, Norzagaray,
Bulacan (refer to Annex "B");
2) The low lying northern portion of the property is presently used as riceland and the
rest planted with assorted trees (refer to Annex "C," pictures);

3) The property is a portion of hill in the area with sides sloping downward on the
northern eastern boundaries (refer to Annex "C");
4) There is no visible structural development in the area except for:
a) a two lane concrete road adjacent to the property at the northwest
boundaries going to San Jose Del Monte, Bulacan;
b) newly constructed steel towers of NPC;
c) barbed wire fence with wooden post covering the northwestern portion of
the lot adjacent to the concrete road to San Jose Del Monte, Bulacan and a
bamboo fence that covers the southern portion (refer to Annex "C"); and
d) residential house approximately 200 meters from affected area.
5) During the ocular inspection, it is noted that they still use the affected area for
agricultural purposes;
6) The Falcon Crest Resort is approximately 1 km. from the affected property;
7) Price data gathered are as follows (in square meter unless specified):

Agri-Orchard
(Interior)

Riceland
unirrigated
(Interior)

Subd.
along
Sta.
Maria
(Garay)

Provincial Appraisal
Committee
Bulacan (Res. No. 97-005)
(Annex "D")

Res'l

Agr'l

P600.00 P400.00

NP Board Resolution No.

97-246
(Annex "E")

P89.00

P80.00

P230.00

Cuervo Appraisers, Inc.

(Annex "F")

P890,000/ha. P800,000/ha. P230.0021

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

Eight Hundred Two Thousand Three

Hundred Sixty Eight Pesos and 50/100
(P802,368.50)

Payment for damaged

crops/plants/trees

One Hundred Sixty Two Thousand Eight

Hundred Sixty Five Pesos and 65/100
(P162,865.65)

Payment for structures

One Million Five Hundred Nine Thousand

Nine Hundred Fifty Pesos (P1,509,950.00)

Payment for residential

portion of lot

One Hundred Fifty One Thousand Six

Hundred Ninety One Pesos and 60/100
(P151,691.60)

Easement fee for

agricultural portion of lot

Thirteen Thousand Three Hundred NinetyEight and 95/100 (P13,398.95)22

Tower Occupancy Fee

On October 28, 1999, the RTC rendered judgment, 23 declaring as well-grounded, fair and reasonable
the compensation for the property as recommended by Atty. Baltazar and Engr. Cruz. The fallo of the
RTC decision reads:
WHEREFORE, premises considered, this Court hereby orders the above-described 5,700square meter lot from Lot No. 1250 of defendants Spouse (sic) Raul (sic) and the aforedescribed 6,362-square meter lot from Lot No. 1251 of same defendants, subject to the
covering Compromise Agreements; and the above-described 17,195-square meter lot from
Lot No. 2076 of defendant Maria Mendoza San Pedro, CONDEMNED and/or
EXPROPRIATED for the construction and maintenance of plaintiff's Northwestern Luzon
Transmission Line Project (San Manuel - San Jose 500 KV Transmission Line Project), a
project for public purpose.
Accordingly, this Court hereby fixes the just compensation for the expropriated lots, as
follows:

OWNERS

Sps. Raul & Edna

LOT
NO.

AREA
EXPROPRIATED

1250

5,700 sq. m.

PRICE/
S.Q.
METER

P499.00

JUST
COMPENSATION

P2,844,300.00

Lagula

Sps. Raul & Edna

Lagula

1251

6,362 sq. m.

499.00

2,174,638

Ma. Mendoza San

Pedro her heirs

2076

17,195 sq. m.

800.00

13,756,000

Hence, plaintiff is ordered to pay, as soon as possible, herein defendants the just
compensation enumerated above for their respective lots aforementioned. For this purpose,
plaintiff may withdraw the sum of money deposited with the Land Bank of the Philippines or
any other banks pursuant to Section 2 of Rule 67 of the Rules of Court, as amended by P.D.
No. 42.
FURTHER, defendants are ordered to clear and vacate the lots in question within 30 days
from receipt hereof and to surrender possession thereof to the plaintiff.
The fees for the 3 Commissioners of the Appraisal Committee in the sum of P6,000.00 for
the Chairman and P5,000.00 each for the 2 members, shall be paid by the plaintiff.
SO ORDERED.24
On November 19, 1999, the heirs of Maria San Pedro filed a Manifestation and Motion 25 for the
partial reconsideration of the decision on the ground that the court failed to include in its decision the
just compensation for the 6,565-square-meter residential portion of their land, with prayer for
attorney's fees equivalent to 10% of the total amount to be awarded to them.
On December 3, 1999, NPC filed its motion for reconsideration,26 insisting that the just compensation
awarded to defendants was without legal and factual basis, and that it should only be made to pay
an easement fee.
On June 6, 2001, the trial court issued an Order granting the motion of the heirs and denied that of
NPC.27 The RTC declared that the just compensation for the residential portion of the property should
be the same as that of the spouses Lagula's property, which was P499.00 per sq m. On the claim of
NPC in its motion for reconsideration that it should be made to pay only an easement fee, the trial
court ruled that Lot No. 2076 should be treated the same way as NPC treated the properties of the
spouses Lagula. It was pointed out that in the compromise agreements executed by plaintiff and
spouses Lagula, plaintiff paid P499.00 per sq m on the basis of a straight sale of their agricultural
land, and not merely an easement fee for a right of way thereon. The fallo of the amended decision
reads:
WHEREFORE, in the light of the foregoing, the Court hereby:

1. Grants the motion of defendant Maria Mendoza San Pedro and thus orders that
the 1st paragraph of page 8 of the Decision be amended to read as follows:
"Plaintiff is expropriating portions of defendants' above-described properties to give
way to the construction and maintenance of its Northern Luzon Transmission Line
Project (San Manuel - San Jose 500 KV Transmission Line Project), a project for
public purpose. The area of the lots sought to be expropriated from the lot of
defendant Maria Mendoza San Pedro, represented by her heirs, are17,195 square
meters more or less of agricultural land and 6,565 square meters of residential land,
while the area of the land sought to be expropriated from the two lots of defendants
Sps. Raul and Edna Lagula are only 5,166.50 square meters, more or less, from Lot
No. 1250 and 6,363 (sic) square meters, more or less, from Lot No. 1251.
Furthermore, the second paragraph of the dispositive portion of the Decision should be
amended as follows:
"Accordingly, this Court hereby fixes the just compensation for the expropriated lots,
as follows:

OWNERS

LOT
NO.

AREA
EXPROPRIATED

Sps. Raul & Edna

Lagula

1250

5,700 sq. m.

P499.00

P2,844,300.00

Sps. Raul & Edna

Lagula

1251

6,362 sq. m.

499.00

3,174,638.00

Ma. Mendoza San

Pedro her heirs

2076

17,195 sq. m.

499.00

8,580,305.00

6,565 sq. m.

800.00

5,252,000.00

Ma. Mendoza San

Pedro her heirs

PRICE/
S.Q.
METER

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

SO ORDERED.28
NPC appealed the amended decision to the CA, asserting that:

JUST
COMPENSATION

THE LOWER COURT GRAVELY ERRED IN FIXING P800.00 AND P499.00 PER SQUARE
METER AS JUST COMPENSATION FOR APPELLEE'S 6,565 SQUARE METERS OF
RESIDENTIAL LAND AND 17,195 SQUARE METERS OF AGRICULTURAL LAND,
RESPECTIVELY.29
On September 28, 2005, the CA rendered judgment dismissing the appeal. The CA ruled that the
July 12, 1999 majority report was based on uncontroverted facts, supported by documentary
evidence and confirmed by
the commissioners' ocular inspection of the subject properties. To arrive at a reasonable estimate of
just compensation, the commissioners considered factors such as the location, the most profitable
likely use of the remaining area, size, shape, accessibility, as well as listings of other properties
within the vicinity. Citing National Power Corporation v. Manubay Agro-Industrial Development
Corporation,30 the CA found as unpersuasive NPC's argument that it should only pay an easement
fee. It ruled that considering the nature and effect of the installation of power lines, the limitations on
the use of land for an indefinite period deprives the owner of its normal use. Thefallo of the CA
decision reads:
WHEREFORE, the Appeal is hereby DENIED. The assailed Decision and Order dated 28
October 1999 and 6 June 2001, respectively, are AFFIRMED.
SO ORDERED.31
NPC filed a Motion for Reconsideration,32 which the CA denied in its Resolution33 dated December
22, 2005; hence, the instant petition based on the following ground:
THE COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT UPHELD THE
DECISION OF THE TRIAL COURT FIXING THE JUST COMPENSATION FOR
RESPONDENT'S 6,565 SQ. METERS OF RESIDENTIAL LAND AND 17,195 SQUARE
METERS OF AGRICULTURAL LAND, AT PHP800.00 AND PHP499.00 PER SQUARE
METER RESPECTIVELY, INSTEAD OF THE EASEMENT FEE AS PRAYED FOR IN THE
COMPLAINT AND PROVIDED UNDER REPUBLIC ACT NO. 6395, AS AMENDED,
OTHERWISE KNOWN AS THE REVISED NPC CHARTER.34
The Ruling of the Court
The petition is denied for lack of merit.
The CA found no reversible error in the trial court's finding of just compensation. Inasmuch as the
determination of just compensation in eminent domain cases is a judicial function and factual
findings of the CA are conclusive on the parties and reviewable only when the case falls within the
recognized exceptions, which does not obtain in this case, we see no reason to disturb the factual
findings as to the valuation of the subject property.35
Petitioner avers that the rulings of the trial court affirmed by the appellate court, based on the
majority report on the subject property's just compensation, is not supported by documentary
evidence. It avers that in the majority report, Commissioners Atty. Baltazar and Engr. Cruz, even
admit that there were no available sales data on properties within the vicinity of the subject property
for the years 1996 and 1997. Moreover, the Bureau of Internal Revenue (BIR) valued the property
at P60.00 per sq m for residential, and P30.00 per sq m for agricultural lot.36

Petitioner further argues that respondents have not shown that the condition of the adjoining
properties or improvements thereon had increased their land's economic value. 37 The valuation, thus,
of the trial court, as affirmed by the CA, was exorbitant and devoid of factual and legal basis. 38
We are not persuaded.
The constitutional limitation of "just compensation" is considered to be the sum equivalent to the
market value of the property, broadly described to be the price fixed by the seller in open market in
the usual and ordinary course of legal action and competition or the fair value of the property as
between one who receives, and one who desires to sell it, fixed at the time of the actual taking by
the government.39 To determine the just compensation to be paid to the landowner, the nature and
character of the land at the time of its taking is the principal criterion. 40
In the July 12, 1999 Majority Report, the commissioners found that the property was located in a
highly-developed area and was accessible through an all-weather road. The fact that the property
had potential for full development as shown by the existence of building projects in the vicinity, and
the long-term effect of the expropriation on the lives, comfort and financial condition of petitioners
was likewise considered. The report also took into account the ocular inspection conducted by the
commissioners on May 11, 1999. The tax declaration of the subject property,41the NPC sketch
plan,42 the location plan,43 the zoning certificates,44 the zonal valuation of the BIR,45 and the opinion
values46 were also considered.
The lone fact that there was no available sales data on properties within the vicinity of respondent's
land for 1996 and 1997 and that the BIR zonal value was P60.00 per sq m for residential and P30.00
per sq m for agricultural did not proscribe the commissioners and the trial court from making their
own reasonable estimates of just compensation, after considering all the facts as to the condition of
the property and its surroundings, its improvements and capabilities. As had been amply explained
by this Court in Export Processing Zone Authority v. Dulay:47
Various factors can come into play in the valuation of specific properties singled out for
expropriation. The values given by provincial assessors are usually uniform for very wide
areas covering several barrios or even an entire town with the exception of the poblacion.
Individual differences are never taken into account. The value of land is based on such
generalities as its possible cultivation for rice, corn, coconuts, or other crops. Very often land
described as "cogonal" has been cultivated for generations. Buildings are described in terms
of only two or three classes of building materials and estimates of areas are more often
inaccurate than correct. Tax values can serve as guides but cannot be absolute substitutes
for just compensation.
To say that the owners are estopped to question the valuations made by assessors since
they had the opportunity to protest is illusory. The overwhelming mass of land owners accept
unquestioningly what is found in the tax declarations prepared by local assessors or
municipal clerks for them. They do not even look at, much less analyze, the statements. The
idea of expropriation simply never occurs until a demand is made or a case filed by an
agency authorized to do so.
It is violative of due process to deny to the owner the opportunity to prove that the valuation
in the tax documents is unfair or wrong. And it is repulsive to basic concepts of justice and
fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over
the judgment of a court promulgated only after expert commissioners have actually viewed
the property, after evidence and arguments pro and con have been presented, and after all

factors and considerations essential to a fair and just determination have been judiciously
evaluated.48
Conformably with the rulings of this Court, the majority report took into account the most profitable
likely use of the remaining area; and the size, shape, accessibility, as well as listings of other
properties within the vicinity.49
As gleaned from the location plan50 of the property in the case at bar, Lot No. 2076 is connected via
a cemented road to the National Road, 1.5 kilometers away. The same is likewise strategically
located at a junction of the barrio road leading to the Provincial Road, the National Road and to
Sapang Palay. The lot is also on the same side of the road as the land owned by the Jesus Is Lord
Congregation and the Partida Elementary School. The ocular inspection of the commissioners also
reveals that opposite the road, about half a km away, is an ongoing resort project, the Falcon Crest
Resort, and, about 200 meters away, the proposed Catholic Retreat House. While there are no
existing structures or improvements on the residential portion of the lot, the same is situated along
the all-weather (gravel) road and is fronting the property. On the agricultural portion thereof, the
same appears to have been cultivated prior to the taking, as petitioner offered to compensate
respondent's heirs' damages to the crops, plants and trees.
The trial court fixed the just compensation for the property as follows: (1) P499.00 per sq m on the
17,195 sq m agricultural portion of the subject land; and (2) P800.00 per sq m on the 6,565 sq m
residential portion of the lot. Noticeably, the trial court did not blindly accept the recommendation of
majority of the commissioners of P800.00 per sq m for the residential lot and P700.00 per sq m for
the agricultural lot. Indeed, the trial court took into account the evidence of the parties, in tandem
with the findings and recommendation of the majority of the commissioners. Considering that such
valuation of the trial court as affirmed by the CA is reasonable as it is and supported by the evidence
on record, we find no compelling reason to disturb the same.51
The Court is not persuaded by petitioner's argument that respondents had not shown that the
condition of the adjoining properties, i.e., improvements, had increased their land's economic value.
It bears stressing that there is absence of any available sales data on properties within the vicinity of
respondent's land for the years 1996 and 1997, the time of the taking. The property of respondent
was the first to be sold. It is thus an exercise in futility for respondents to require evidence of sales of
properties in the vicinity when no such transactions took place.
Petitioner's contention that the trial court should have based the fixing of just compensation on the
appraisal report of Cuervo Appraisers, Inc. (where petitioner based its Resolution No. 97-246) is
likewise untenable. Petitioner failed to present the so-called report of the Cuervo Appraisers, Inc. as
evidence. We note that annexed to NPC Resolution No. 97-246 is a data of the NPC Board
Appraisal on the Fair Market Value of residential lands along the concrete road in Sapang Palay,
San Jose Del Monte, valued at P499.00 per sq m, which, however, is not signed nor authenticated.
If, at all, the values indicated therein are self-serving to petitioner.
Parenthetically, petitioner has not explained why it agreed on paying just compensation of P499.00
per sq m on the agricultural lands of the spouses Lagula, when the purported Cuervo Appraisal
Report indicates that the fair market value of unirrigated riceland along the road is only P110.00 per
sq m, and for an unirrigated interior onlyP85.00 per sq m.52 Had petitioner really believed Cuervo's
appraisal, then, it should have likewise insisted on the values therein when it dealt with the spouses
Lagulas.
Notably, the lower court's valuations of respondent's property P499.00 per sq m on the agricultural
portion andP800.00 per sq m on the residential portion of the lot are near the estimates made by

the following: (1) the Provincial Appraisal Committee, in its Resolution No. 97-005, which
are P400.00 for agricultural and P600.00 for residential;53 (2) the recommendation in the majority
report of the commissioners (P700.00 for agricultural andP800.00 for residential); and (3) the opinion
values, which are P643.00 for agricultural and P1,075.00 for residential. On the other hand, the
valuations made by Atty. Alog, P89.00 for agricultural and P230.00 for residential, are
unconscionably low, understandably so because he works for petitioner.
On the question as to whether petitioner shall pay only an easement fee to respondent's heirs, the
following pronouncement in National Power Corporation v. Aguirre-Paderanga54 is enlightening:
Indeed, expropriation is not limited to the acquisition of real property with a corresponding
transfer of title or possession. The right-of-way easement resulting in a restriction or
limitation on property rights over the land traversed by transmission lines, as in the present
case, also falls within the ambit of the term "expropriation."As explained in National Power
Corporation v. Gutierrez, viz:
The trial court's observation shared by the appellate court show that "x x x While it is
true that plaintiff [is] only after a right-of-way easement, it nevertheless perpetually
deprives defendants of their proprietary rights as manifested by the imposition by the
plaintiff upon defendants that below said transmission lines no plant higher than
three (3) meters is allowed. Furthermore, because of the high-tension current
conveyed through said transmission lines, danger to life and limbs that may be
caused beneath said wires cannot altogether be discounted, and to cap it all, plaintiff
only pays the fee to defendants once, while the latter shall continually pay the taxes
due on said affected portion of their property."
The foregoing facts considered, the acquisition of the right-of-way easement falls
within the purview of the power of eminent domain. Such conclusion finds support in
similar cases of easement of right-of-way where the Supreme Court sustained the
award of just compensation for private property condemned for public use
(See National Power Corporation v. Court of Appeals, 129 SCRA 665, 1984; Garcia
v. Court of Appeals, 102 SCRA 597, 1981). The Supreme Court, in Republic of the
Philippines v. PLDT, thus held that:
"Normally, of course, the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated property; but no cogent
reason appears why said power may not be availed of to impose only a burden upon
the owner of condemned property, without loss of title and possession. It is
unquestionable that real property may, through expropriation, be subjected to an
easement of right-of-way."
In the case at bar, the easement of right-of-way is definitely a taking under the power of
eminent domain. Considering the nature and effect of the installation of the 230 KV MexicoLimay transmission lines, the limitation imposed by NPC against the use of the land for an
indefinite period deprives private respondents of its ordinary use.55
Similarly, in this case, the commissioners' observation on the reported constant loud buzzing and
exploding sounds emanating from the towers and transmission lines, especially on rainy days; the
constant fear on the part of the landowners that the large transmission lines looming not far above
their land and the huge tower in front of their lot will affect their safety and health; and the slim
chance that no one would be interested to buy the remaining portions on each side of the residential
lot affected by the project, to the damage of the landowners, both as to future actual use of the land

and financial gains to be derived therefrom, makes the instant case fall within the ambit of
expropriation.
WHEREFORE, premises considered, the appeal is hereby DENIED for lack of merit. The ruling of
the Court of Appeals in CA-G.R. CV No. 72860 is AFFIRMED.
SO ORDERED.

G.R.
No.
170945,
September
26,
2006NATIONAL
POWER
CORPORATION vs. MARIA MENDOZA SAN PEDRO
FACTS:
The National Power Corporation (NPC) is a government-owned-andcontrolled
corporationc re a t e d t o u n d e r t a ke t h e d e v e l o p m e n t o f h y d r o e l e c t r i c g e n e r a t i o n o f p o w e r a n d t h e p ro d u c t i o n o f e l e c t r i c i t y
f ro m a n y a n d a l l s o u rc e s ; a n d p a r t i c u l a r l y t h e c o n s t r u c t i o n , op
eration, and maintenance of power plants, auxiliary plants, dams, reservoirs,
pipes,
mains,t r a n s m i s s i o n l i n e s , p o w e r s t a t i o n s a n d s u b s t a t i o n s , a n d
other works for the purpose of developing hydraulic power fro
m a n y r i v e r , l a ke , c re e k , s p r i n g a n d w a t e r f a l l s i n t h e Philippines
and supplying such power to the inhabitants thereof.
Under Republic Act No.6395, as amended, the NPC is authorized to
enter private property provided that the owners thereof shall be indemnified
for any actual damage caused thereby.
For the construction of its San Manuel-San Jose 500 KV Transmission
Line and Tower No.SMJ-389, NPC negotiated with Maria Mendoza San
Pedro, then represented by her son, Vicente, for an easement of
right of way over her property, Lot No. 2076. The property, which
was partly agricultural and partly residential land, was located in
Barangay Partida, Norzagaray, Bulacan and covered by Tax Declaration No.
00386. On June 19, 1997, Maria executed a Right of Way Grant in favor
of NPC over the lot for P1,277,886.90. The NPC paid her P524,635.50
for the damaged improvements thereon.
T h e p a y m e n t v o u c h e r f o r t h e re s i d e n t i a l p o r t i o n o f t h e l o
t v a l u e d a t P 6 , 0 0 0 , 0 0 0 . 0 0 ( a t P600.00 per square meter) was then
processed. However, the NPC Board of Directors approved Board
Resolution No. 97-246 stating that it would pay only P230.00 per sq m for the
residential portion and P89.00 per sq m for the agricultural portion.

On July 12, 1999, Atty. Baltazar and Engr. Cruz submitted their report,
recommending as payment for just compensation P800.00 per sq m for the
residential lot and P700.00 per sq m for the agricultural lot. On October 28,
1999, the RTC rendered judgment, declaring as well-grounded, fair and
reasonable the compensation for the property as recommended by
Atty.Baltazar and Engr. Cruz.

ISSUE: Whether or not the just compensation was achieved with regards to
the fair market value of the residential and agricultural property?
HELD:

The trial court fixed the just compensation for the property as follows: (1) P
499.00 per sq mon the 17,195 sq m agricultural portion of the subject land;
and (2) P800.00 per sq m on the6,565 sq m residential portion of the lot.
Noticeably, the trial court did not blindly accept the recommendation of
majority of the commissioners of P800.00 per sq m for the residential lot and
P700.00 per sq m for the agricultural lot. Indeed, the trial court took
into account the evidence of the parties, in tandem with the findings and
recommendation of the majority of the commissioners. Considering that such
valuation of the trial court as affirmed by the CA is reasonable as it is and
supported by the evidence on record, we find no compelling reason to
disturb the same.
The constant loud buzzing and exploding sounds emanating from the
towers and transmission lines, especially on rainy days; the constant fear on
the part of the landowners that the large transmission lines looming not
far above their land and the huge tower in front of their lot will affect
their safety and health; and the slim chance that no one would be interested
to buy the remaining portions on each side of the residential lot
aff ected by the project, to the damage of the landowners, both as to
future actual use of the land and financial gains to be derived therefrom,
makes the instant case fall within the ambit of expropriation.