Association of Small Landowners in the Philippines, Inc.

vs Secretary of
Agrarian Reform
Facts:
These are four consolidated cases questioning the constitutionality of the Comprehensive
Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A.
No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes
a call for the adoption by the State of an agrarian reform program. The State shall, by law,
undertake an agrarian reform program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively the lands they till or, in the case
of other farmworkers, to receive a just share of the fruits thereof. RA 3844 was enacted
in 1963. P.D. No. 27 was promulgated in 1972 to provide for the compulsory acquisition of
private lands for distribution among tenant-farmers and to specify maximum retention limits
for landowners. In 1987, President Corazon Aquino issued E.O. No. 228, declaring full land
ownership in favor of the beneficiaries of PD 27 and providing for the valuation of still unvalued
lands covered by the decree as well as the manner of their payment. In 1987, P.P. No. 131,
instituting a comprehensive agrarian reform program (CARP) was enacted; later, E.O. No.
229, providing the mechanics for its (PP131s) implementation, was also enacted. Afterwhich
is the enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This law,
while considerably changing the earlier mentioned enactments, nevertheless gives them
suppletory effect insofar as they are not inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from
the land distribution scheme provided for in R.A. 6657. The Association is comprised of
landowners of ricelands and cornlands whose landholdings do not exceed 7 hectares. They
invoke that since their landholdings are less than 7 hectares, they should not be forced to
distribute their land to their tenants under R.A. 6657 for they themselves have shown
willingness to till their own land. In short, they want to be exempted from agrarian reform
program because they claim to belong to a different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228,
and 229) on the ground that these laws already valuated their lands for the agrarian reform
program and that the specific amount must be determined by the Department of Agrarian
Reform (DAR). Manaay averred that this violated the principle in eminent domain which
provides that only courts can determine just compensation. This, for Manaay, also violated
due process for under the constitution, no property shall be taken for public use without just
compensation.
Manaay also questioned the provision which states that landowners may be paid for
their land in bonds and not necessarily in cash. Manaay averred that just compensation has
always been in the form of money and not in bonds.
ISSUE:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of
cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt
from the agrarian reform program. Under the law, classification has been defined as the
grouping of persons or things similar to each other in certain particulars and different from
each other in these same particulars. To be valid, it must conform to the following
requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be treated
alike both as to the rights conferred and the liabilities imposed. The Association have not
shown that they belong to a different class and entitled to a different treatment. The argument
that not only landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a substantial distinction
between these two classes of owners that is clearly visible except to those who will not see.
There is no need to elaborate on this matter. In any event, the Congress is allowed a wide
leeway in providing for a valid classification. Its decision is accorded recognition and respect
by the courts of justice except only where its discretion is abused to the detriment of the Bill
of Rights. In the contrary, it appears that Congress is right in classifying small landowners as
part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts.
However, there is no law which prohibits administrative bodies like the DAR from determining
just compensation. In fact, just compensation can be that amount agreed upon by the
landowner and the government even without judicial intervention so long as both parties
agree. The DAR can determine just compensation through appraisers and if the landowner
agrees, then judicial intervention is not needed. What is contemplated by law however is that,
the just compensation determined by an administrative body is merely preliminary. If the
landowner does not agree with the finding of just compensation by an administrative body,
then it can go to court and the determination of the latter shall be the final determination. This
is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.

3. No. Money as [sole] payment for just compensation is merely a concept in traditional
exercise of eminent domain. The agrarian reform program is a revolutionary exercise of
eminent domain. The program will require billions of pesos in funds if all compensation have
to be made in cash if everything is in cash, then the government will not have sufficient
money hence, bonds, and other securities, i.e., shares of stocks, may be used for just
compensation.
 PPI vs. COMELEC

Facts:
On March 2, 1995, COMELEC promulgated Resolution No. 2772 stating that the
Commission shall have free print space of not less than one-half page in at least one
newspaper in every province or city as Comelec Space. This ad space will be used by
candidates for their campaign and platforms of government, and for the Commissions
dissemination of vital information. Moreover, COMELEC released a letter-directive ordering
the different newspapers to comply with the said resolution.
The petitioner Philippine Press Institute (PPI) filed a petition contending that
COMELEC violated the prohibition imposed by the Constitution against the taking of
properties without just compensation due to Sec 2. Moreover, the directive of COMELEC
amounts to involuntary servitude and violation of the freedom of expression and of the press
due to Sec 8. On the other hand, COMELEC asserts their directive is not mandatory and
compelling. They only ask for a donation. They aver that even if the order is mandatory, it
would still be valid through the use of police power.
Issue:
Is COMELECs action constitutional through the exercise of police power?
Held:
No. Looking at Sec 2, it seems that respondent is correct that the order to give a free
space to COMELEC is not mandatory as there is no compelling language or any criminal or
administrative charges for violation. The respondents reason for creating the resolution was
due to the voluntary offers given by the newspaper company in the 1992 elections to help
them advertise important election matters.
However, the court will have to disagree that even if the order is mandatory, it would
still be valid as an exercise of police power. First, only the legislature can exercise police
power except if it is delegated to some other body. The COMELEC did not give any effort to
specify evidences that they were given police power.
According to the Constitution, when a property is taken, it must be given a just
compensation. In the case at bar, there is no just compensation as the newspapers will give
the space for free as a donation. Moreover, there was no showing of reasonable necessity or
emergency for the taking of print space confronted the Commission. However, Sec 8 still
stands as it is within the power of COMELEC to control the media influences of candidates to
prevent unequal campaigns.

Petition is partially granted. Sec 2 is not mandatory and Sec 8 is valid.

 Forfom Development Corporation v. PNR
Facts:
Petitioner Forform Development Corporation is a domestic corporation duly organized
and existing under the Philippine laws and is the registered owner of several parcels of land
in San Vicente, San Pedro, Laguna under Transfer Certificates of Title. The said parcels of
land were originally registered in the name of Felix Limcaoco, predecessor-in-interest of
Forfom. While respondent Philippine National Railways is a government corporation engaged
in proprietary functions with principal office at the PNR Railway. President Ferdinand Marcos
approved the Presidential Commuter Service Project known as Carmona Project. During the
construction of the said project, several properties owned by private individuals/corporations
were traversed as right-of-way and one of those was a 100,128 square-meter portion owned
by Forfom.
Forform filed before the Trial Court for Recovery of Posssession of Real Property
and/or Damages which in its decision dated October 29, 1992 ordering the PNR to pay
FORFORM for just compensation. Plaintiff's claim for recovery of possession and the other
prayers in the complaint are dismissed for want of merit but the trial court found that the
properties of Forfom were taken by PNR without due process of law and without just
compensation. Both parties appealed the decision which the Court of Appeals affirmed insofar
as (1) it denies plaintiff's claim for recovery of possession and (2) it awards just compensation
at the rate of P10.00 per square meter which defendant must pay to plaintiff, but with legal
rate of interest thereon hereby specifically fixed at six (6) percent per annum starting from
January of 1973 until full payment is made. However, the appealed decision is MODIFIED in
the sense that plaintiff's claim for damages is DENIED for lack of merit.
Issue:
Can petitioner Forfom recover possession of its property because respondent PNR
failed to file any expropriation case and to pay just compensation?
Ruling:
The power of eminent domain is an inherent and indispensable power of the State.
Being inherent, the power need not be specifically conferred on the government by the
Constitution. Section 9, Article III states that private property shall not be taken for public use
without just compensation. A number of circumstances must be present in the taking of
property for purposes of eminent domain: (1) the expropriator must enter a private property;
(2) the entrance into private property must be for more than a momentary period; (3) the entry
into the property should be under warrant or color of legal authority; (4) the property must be
devoted to a public purpose or otherwise informally, appropriately or injuriously affected; and
(5) the utilization of the property for public use must be in such a way as to oust the owner
and deprive him of all beneficial enjoyment of the property. In the case at bar, with the
entrance of PNR into the property, Forfom was deprived of material and beneficial use and
enjoyment of the property. It is clear from the foregoing that there was a taking of property
within the constitutional sense. Forfom's inaction on and acquiescence to the taking of its land
without any expropriation case being filed, and its continued negotiation with PNR on just
compensation for the land, prevent him from raising any issues regarding the power and right
of the PNR to expropriate and the public purpose for which the right was exercised.
It is clear that recovery of possession of the property by the landowner can no longer
be allowed on the grounds of estoppel and, more importantly, of public policy which imposes
upon the public utility the obligation to continue its services to the public. The non-filing of the
case for expropriation will not necessarily lead to the return of the property to the landowner.
What is left to the landowner is the right of compensation.

Republic vs Spouses Cancio

Petitioner Philippine Economic Zone Authority is a government-owned and controlled
corporation created and existing under and by virtue of RA 7916, as amended. It is vested
with governmental functions, including the power of eminent domain, thus enabling it to
acquire private land within or adjacent to the ecozone for consolidation with land for zone
development purposes.
On May 19, 2001, petitioner offered to purchase respondents. The letter containing
the offer further instructed respondents "to consider and accept, otherwise we will initiate
expropriation proceedings in the proper court."
Instead of accepting the offer, respondents filed an unlawful detainer case against
Maitland in the Municipal Trial Court of Lapu Lapu City.
Thereafter, petitioner commenced expropriation proceedings for respondents
property with the Regional Trial Court (RTC) of Lapu Lapu City, Branch 54 on August 27,
2001.6 Accordingly, it sought a writ of possession for the property for which it was willing to
deposit 10% of the offered amount or a total of P5,229,400 with the Land Bank of the
Philippines in accordance with Administrative Order (A.O.) No. 50.
Respondents, however, filed a motion to require petitioner to comply with RA 8974,
specifically Section 4(a) thereof, which requires that, upon the filing of the complaint for
expropriation, the implementing agency shall immediately pay the owner of the property an
amount equivalent to 100% of the current zonal valuation thereof for purposes of the issuance
of a writ of possession.
Held:
RA 8974 governs this case, not A.O. No. 50 as petitioner insists. A perusal of RA 8974
readily reveals that it applies to instances when the national government expropriates
property for national government infrastructure projects. Undeniably, the economic zone is a
national government project a matter undisputed by both parties. Also, the complaint for
expropriation was filed only on August 27, 2001 or almost one year after the law was approved
on November 7, 2000. Thus, there is no doubt about its applicability to this case.
We note that this expropriation case is still in its initial stages. The trial court had yet
to approve a writ of possession in petitioners favor when the issue of payment of just
compensation cropped up. Both parties seemed to have confused the requirement of paying
100% of the current zonal valuation of the property (as a prerequisite to the issuance of a writ
of possession) with the payment of just compensation itself.
Clearly, there was a confusion regarding the nature of the amount to be paid for the
issuance of a writ of possession. In Capitol Steel Corporation v. PHIVIDEC Industrial Authority,
we clarified that the payment of the provisional value as a condition for the issuance of a writ
of possession is different from the payment of just compensation for the expropriated property.
While the provisional value is based on the current relevant zonal valuation, just
compensation is based on the prevailing fair market value of the property.
The first refers to the preliminary or provisional determination of the value of the
property. It serves a double-purpose of pre-payment if the property is fully expropriated, and
of an indemnity for damages if the proceedings are dismissed. It is not a final determination
of just compensation and may not necessarily be equivalent to the prevailing fair market value
of the property. Of course, it may be a factor to be considered in the determination of just
compensation.
Just compensation, on the other hand, is the final determination of the fair market
value of the property. It has been described as "the just and complete equivalent of the loss
which the owner of the thing expropriated has to suffer by reason of the expropriation." Market
value[s,] has also been described in a variety of ways as the "price fixed by the buyer and
seller in the open market in the usual and ordinary course of legal trade and competition; the
price and value of the article established as shown by sale, public or private, in the ordinary
way of business; the fair value of the property between one who desires to purchase and one
who desires to sell; the current price; the general or ordinary price for which property may be
sold in that locality."
There is therefore no need yet to determine with reasonable certainty the final amount
of just compensation in resolving the issue of a writ of possession. In fact, it is the ministerial
duty of the trial court to issue the writ upon compliance with the requirements of Section 4 of
the law. No hearing is required and the court cannot exercise its discretion in order to arrive
at the amount of the provisional value of the property to be expropriated as the legislature
has already fixed the amount under the aforementioned provision of the law. It is only after
the trial court ascertains the provisional amount to be paid that just compensation will be
determined.
In establishing the amount of just compensation, the parties may present evidence
relative to the propertys fair market value, as provided under Section 5 of RA 8974. This must
be so as just compensation should take into account the consequential benefits and damages
which may arise from the expropriation. Furthermore, it is well to remember that the concept
of just compensation does not mean fairness to the property owner alone. It must also be just
to the public which ultimately bears the cost of expropriation.

LBP vs Raymunda Martinez

After compulsory acquisition by the Department of Agrarian Reform (DAR), on
November 16, 1993, of respondent's 62.5369-hectare land, pursuant to Republic Act No.
6657 or the Comprehensive Agrarian Reform Law of 1988petitioner Land Bank of the
Philippines (LBP) offered P1,955,485.60 as just compensation.
Convinced that the offered amount was unjust and confiscatory, respondent rejected
it. Thus, the Department of Agrarian Reform Adjudication Board (DARAB), through its
Provincial Agrarian Reform Adjudicator (PARAD) conducted summary administrative
proceedings for the preliminary determination of just compensation in accordance with
Section 16 (d) of the CARL.
On September 4, 2002, PARAD Virgilio M. Sorita rendered judgment Ordering the
Land Bank of the Philippines to pay Php12,179,492.50 for the property.
A petition for the fixing of just compensation was filed by LBPs counsel 26 days after
it received a copy of PARAD Soritas decision. Respondent, after filing answer to the petition,
moved for the dismissal of the petition for being filed out of time contending that the orders,
rulings and decisions of the DARAB become final after the lapse of 15 days from their receipt.
Respondent, still asserting the finality of PARAD Soritas decision, filed before the Office of
the PARAD a motion for the issuance of a writ of execution, which was eventually granted on
November 11, 2003.
LBP, on March 12, 2004, moved to quash the said February 23, 2004 PARAD
resolution. On April 6, 2004, even as the motion to quash was yet unresolved, LBP instituted
a petition for certiorari before the CA. LBP primarily contended that the Office of the PARAD
gravely abused its discretion when it issued the writ of execution despite the pendency with
the SAC of a petition for the fixing of just compensation.
The CA, finding LBP guilty of forum-shopping for not disclosing the pendency of the
Motion to Quash dated March 12, 2004, dismissed the petition.
Held:
Philippine Veterans Bank v. Court of Appeals and Department of Agrarian Reform
Adjudication Board v. Lubrica decision had already attained finality because LBP filed the
petition for just compensation beyond the 15-day reglementary period.
Following settled doctrine, we ruled in this case that the PARADs decision had already
attained finality because of LBPs failure to file the petition for the fixing of just compensation
within the 15-day period.
Thus, while a petition for the fixing of just compensation with the SAC is not an appeal
from the agrarian reform adjudicators decision but an original action, the same has to be filed
within the 15-day period stated in the DARAB Rules; otherwise, the adjudicators decision will
attain finality. This rule is not only in accord with law and settled jurisprudence but also with
the principles of justice and equity. Verily, a belated petition before the SAC, e.g., one filed a
month, or a year, or even a decade after the land valuation of the DAR adjudicator, must not
leave the dispossessed landowner in a state of uncertainty as to the true value of his property.
 Eusebio v Luis
Facts:
Respondents are the registered owners of a parcel of land covered by Transfer
Certificate of Title Nos. 53591 and 53589 with an area of 1,586 square meters. Said parcel
of land was taken by the City of Pasig sometime in 1980 and used as a municipal road now
known as A. Sandoval Avenue, Barangay Palatiw, Pasig City. On February 1, 1993,
the Sanggunian of Pasig City passed Resolution No. 15 authorizing payments to
respondents for said parcel of land. However, the Appraisal Committee of the City of Pasig,
in Resolution No. 93-13 dated October 19, 1993, assessed the value of the land only
at P150.00 per square meter. In a letter dated June 26, 1995, respondents requested the
Appraisal Committee to consider P2,000.00 per square meter as the value of their land.
The respondents counsel sent a demand letter to Mayor Eusebio , demanding the
amount of P5,000.00 per square meter, or a total of P7,930,000.00, as just compensation for
respondents property. In response, Mayor Eusebio wrote a letter dated September 9,
1996 informing respondents that the City of Pasig cannot pay them more than the amount set
by the Appraisal Committee.
The RTC then rendered a in favor of the plaintiffs and against the defendants. Hence the
petition.

Issue:
whether respondents are entitled to regain possession of their property taken by the
city government in the 1980s and, in the event that said property can no longer be returned,
how should just compensation to respondents be determined.

Held:
Respondents failed to question the taking of their property for a long period of
time (from 1980 until the early 1990s). The non-filing of the case for
expropriation will not necessarily lead to the return of the property to the
landowner. What is left to the landowner is the right of compensation.

With regard to the time as to when just compensation should be fixed, it is settled
jurisprudence that where property was taken without the benefit of expropriation proceedings,
and its owner files an action for recovery of possession thereof before the commencement of
expropriation proceedings, it is the value of the property at the time of taking that is controlling.
In taking respondents property without the benefit of expropriation proceedings and without
payment of just compensation, the City of Pasig clearly acted in utter disregard of
respondents proprietary rights. Such conduct cannot be countenanced by the Court. For said
illegal taking, the City of Pasig should definitely be held liable for damages to respondents.
Again, in Manila International Airport Authority v. Rodriguez, the Court held that the
government agencys illegal occupation of the owners property for a very long period of time
surely resulted in pecuniary loss to the owner.
 NATIONAL POWER CORPORATION vs HEIRS OF MACABANGKIT
SANGKAY
FACTS:

Pursuant to its legal mandate under Republic Act No. 6395 (An Act Revising the
Charter of the National Power Corporation), NPC undertook the Agus River
Hydroelectric Power Plant Project in the 1970s to generate electricity for Mindanao.
The project included the construction of several underground tunnels to be used in
diverting the water flow from the Agus River to the hydroelectric plants.
1997: Respondents sued NPC in the RTC for the recovery of damages and of the
property, with the alternative prayer for the payment of just compensation
Allegations: that one of the underground tunnels of NPC that diverted the water
flow of the Agus River for the operation of the Hydroelectric Project in Agus V,
Agus VI and Agus VII traversed their land
that the underground tunnel had been constructed without their knowledge and
consent; that the presence of the tunnel deprived them of the agricultural,
commercial, industrial and residential value of their land
NPCs Answer: the Heirs of Macabangkit had no right to compensation under section
3(f) of Republic Act No. 6395, under which a mere legal easement on their land was
established; that their cause of action, should they be entitled to compensation,
already prescribed due to the tunnel having been constructed in 1979; and that by
reason of the tunnel being an apparent and continuous easement, any action arising
from such easement prescribed in five years
RTC ruled in favor of the plaintiffs finding that an underground tunnel was constructed
therein
Ordered NPC to pay P113,532,500.00 as actual damages or just
compensation
NPC to pay rental fees
the RTC issued a supplemental decision stating that respondents land or properties
are condemned in favor of defendant National Power Corporation, upon payment of
the aforesaid sum
the Heirs of Macabangkit filed an urgent motion for execution of judgment pending
appeal.
The RTC granted the motion and issued a writ of execution
NPC assailed such decision by filing a writ by petition for certiorari in the CA
CA: affirmed the decision of the RTC
Rationale:
the testimonies of NPCs witness Gregorio Enterone and of the respondents
witness Engr. Pete Sacedon, the topographic survey map, the sketch map, and
the ocular inspection report sufficiently established the existence of the
underground tunnel traversing the land of the Heirs of Macabangkit
Section 3(i) of R.A. No. 6395, being silent about tunnels, did not apply to the
present case
Contention of NPC: the CA should have applied Section 3(i) of Republic Act No. 6395,
which provided a period of only five years from the date of the construction within
which the affected landowner could bring a claim against it; and that even if Republic
 Act No. 6395 should be inapplicable, the action of the Heirs of Macabangkit had
already prescribed due to the underground tunnel being susceptible to acquisitive
prescription after the lapse of 10 years pursuant to Article 620 of the Civil Code due
to its being a continuous and apparent legal easement under Article 634 of the Civil
Code.
National Power Corporation (NPC) seeks the review on certiorari of the decision of the
CA

ISSUE: WON NPC is liable for payment of just compensation?

RULING: Yes.
1. Factual findings of the RTC are binding since it was affirmed by the RTC
the evidence on the tunnel was substantial, for the significance of the
topographic survey map and the sketch map (as indicative of the extent and
presence of the tunnel construction) to the question on the existence of the
tunnel was strong
These two (2) pieces of documentary evidence readily point the extent and
presence of the tunnel construction coming from the power cavern near the
small man-made lake which is the inlet and approach tunnel, or at a distance
of about two (2) kilometers away from the land of the plaintiffs-appellees, and
then traversing the entire and the whole length of the plaintiffs-appellees
property, and the outlet channel of the tunnel is another small man-made lake
The ocular inspection done by the RTC actually confirmed the existence of the
tunnel
2. Five-year prescriptive period under Section 3(i) of Republic Act No. 6395
does not apply to claims for just compensation
prescription did not bar the present action to recover just
compensation
Section 3(i) includes no limitation except those enumerated after the
term works. Accordingly, the term works is considered as
embracing all kinds of constructions, facilities, and other developments
that can enable or help NPC to meet its objectives of developing
hydraulic power expressly provided under paragraph (g) of Section
3. The CAs restrictive construal of Section 3(i) as exclusive of tunnels
was obviously unwarranted, for the provision applies not only to
development works easily discoverable or on the surface of the earth
but also to subterranean works like tunnels
the prescriptive period provided under Section 3(i) of Republic
Act No. 6395 is applicable only to an action for damages, and
does not extend to an action to recover just compensation like
this case

JUST COMPENSATION DAMAGES

(inverse condemnation)
has the objective to recover
the value of property taken in
fact by the governmental
defendant, even though no
seeks to vindicate a legal
wrong through damages,
which may be actual,
 formal exercise of the power of
eminent domain has been
attempted by the taking
agency.
Just compensation is the full
and fair equivalent of the
property taken from its owner
by the expropriator. The
measure is not the takers gain,
but the owners loss. The
word just is used to intensify
the meaning of the
word compensation in order to
convey the idea that the
equivalent to be rendered for
the property to be taken shall
be real, substantial, full, and
ample
Basis: Constitution
arises from the exercise by the
State of its power of eminent
domain against private
property for public use
moral, nominal, temperate,
liquidated, or exemplary
When a right is exercised in
a manner not conformable
with the norms enshrined in
Article 19 and like
provisions on human
relations in the Civil
Code, and the exercise
results to the damage of
another, a legal wrong is
committed and the
wrongdoer is held
responsible
statutory enactments
emanates from the
transgression of a right

Due to the need to construct the underground tunnel, NPC should

have first moved to acquire the land from the Heirs of Macabangkit
either by voluntary tender to purchase or through formal expropriation
proceedings. In either case, NPC would have been liable to pay to the
owners the fair market value of the land, for Section 3(h) of Republic
Act No. 6395 expressly requires NPC to pay the fair market value of
such property at the time of the taking
3. The construction constitutes taking of the land as to entitle the owners to just
compensation
there was a full taking on the part of NPC, notwithstanding that the owners
were not completely and actually dispossessed.
It is settled that the taking of private property for public use, to be
compensable, need not be an actual physical taking or appropriation.[
Indeed, the expropriators action may be short of acquisition of title,
physical possession, or occupancy but may still amount to a taking
As a result, NPC should pay just compensation for the entire land
Just compensation was based on the valuation of the OIC of the City Assessors
Office who testified that, within that area, that area is classified as industrial
and residential. That plaintiffs land is adjacent to many subdivisions and that is
within the industrial classification. He also issued a certificate stating that the
appraised value of plaintiffs land ranges fromP400.00 to P500.00 per square
meter
 the fixing of just compensation must be based on the prevailing market
value at the time of the filing of the complaint, instead of reckoning from the
time of the taking pursuant to Section 3(h) of Republic Act No. 6395
Compensation that is reckoned on the market value prevailing at the
time either when NPC entered or when it completed the tunnel, as NPC
submits, would not be just, for it would compound the gross unfairness
already caused to the owners by NPCs entering without the intention of
formally expropriating the land, and without the prior knowledge and
consent of the Heirs of Macabangkit
NPCs entry denied elementary due process of law to the owners since
then until the owners commenced the inverse condemnation
proceedings

VDA. DE OUANO, MARIO P. OUANO vs THE REPUBLIC OF THE

PHILIPPINES
FACTS:

At the center of these two (2) Petitions for Review on Certiorari under Rule 45 is the
issue of the right of the former owners of lots acquired for the expansion of the Lahug Airport
in Cebu City to repurchase or secure reconveyance of their respective properties.

At the outset, three (3) fairly established factual premises ought to be emphasized:

First, the MCIAA and/or its predecessor agency had not actually used the lots subject of the
final decree of expropriation in Civil Case No. R-1881 for the purpose they were originally
taken by the government, i.e., for the expansion and development of Lahug Airport.

Second, the Lahug Airport had been closed and abandoned. A significant portion of it had, in
fact, been purchased by a private corporation for development as a commercial complex.

Third, it has been preponderantly established by evidence that the NAC, through its
team of negotiators, had given assurance to the affected landowners that they would be
entitled to repurchase their respective lots in the event they are no longer used for airport
purposes. "No less than Asterio Uy," the Court noted in Heirs of Moreno, "one of the members
of the CAA Mactan Legal Team, which interceded for the acquisition of the lots for the Lahug
Airports expansion, affirmed that persistent assurances were given to the landowners to the
effect that as soon as the Lahug Airport is abandoned or transferred to Mactan, the lot owners
would be able to reacquire their properties." In Civil Case No. CEB-20743, Exhibit "G," the
transcript of the deposition of Anunciacion vda. de Ouano covering the assurance made had
been formally offered in evidence and duly considered in the initial decision of the RTC Cebu
City. In Civil Case No. CEB-18370, the trial court, on the basis of testimonial evidence, and
later the CA, recognized the reversionary rights of the suing former lot owners or their
successors in interest and resolved the case accordingly. In point with respect to the
representation and promise of the government to return the lots taken should the planned
airport expansion do not materialize is what the Court said in Heirs of Moreno, thus:
This is a difficult case calling for a difficult but just solution. To begin with there exists
an undeniable historical narrative that the predecessors of respondent MCIAA had suggested
to the landowners of the properties covered by the Lahug Airport expansion scheme that they
could repurchase their properties at the termination of the airports venue. Some acted on
this assurance and sold their properties; other landowners held out and waited for the
exercise of eminent domain to take its course until finally coming to terms with respondents
predecessors that they would not appeal nor block further judgment of condemnation if the
right of repurchase was extended to them. A handful failed to prove that they acted on such
assurance when they parted with ownership of their land.

ISSUES:
Whether abandonment of the public use for which the subject properties were
expropriated entitles petitioners Ouanos, et al. and respondents Inocian, et al. to reacquire
them.

HELD:
YES.

Providing added support to the Ouanos and the Inocians right to repurchase is what
in Heirs of Moreno was referred to as constructive trust, one that is akin to the implied trust
expressed in Art. 1454 of the Civil Code, the purpose of which is to prevent unjust
enrichment. In the case at bench, the Ouanos and the Inocians parted with their respective
lots in favor of the MCIAA, the latter obliging itself to use the realties for the expansion of
Lahug Airport; failing to keep its end of the bargain, MCIAA can be compelled by the former
landowners to reconvey the parcels of land to them, otherwise, they would be denied the use
of their properties upon a state of affairs that was not conceived nor contemplated when the
expropriation was authorized. In effect, the government merely held the properties
condemned in trust until the proposed public use or purpose for which the lots were
condemned was actually consummated by the government. Since the government failed to
perform the obligation that is the basis of the transfer of the property, then the lot owners
Ouanos and Inocians can demand the reconveyance of their old properties after the payment
of the condemnation price.

In esse, expropriation is forced private property taking, the landowner being really
without a ghost of a chance to defeat the case of the expropriating agency. In other words, in
expropriation, the private owner is deprived of property against his will. Withal, the mandatory
requirement of due process ought to be strictly followed, such that the state must show, at
the minimum, a genuine need, an exacting public purpose to take private property, the
purpose to be specifically alleged or least reasonably deducible from the complaint.

Public use, as an eminent domain concept, has now acquired an expansive meaning
to include any use that is of "usefulness, utility, or advantage, or what is productive of general
benefit [of the public]." If the genuine public necessitythe very reason or condition as it
wereallowing, at the first instance, the expropriation of a private land ceases or disappears,
then there is no more cogent point for the governments retention of the expropriated land.
The same legal situation should hold if the government devotes the property to another public
use very much different from the original or deviates from the declared purpose to benefit
another private person. It has been said that the direct use by the state of its power to oblige
landowners to renounce their productive possession to another citizen, who will use it
predominantly for that citizens own private gain, is offensive to our laws.

A condemnor should commit to use the property pursuant to the purpose stated in the
petition for expropriation, failing which it should file another petition for the new purpose. If
not, then it behooves the condemnor to return the said property to its private owner, if the
latter so desires. The government cannot plausibly keep the property it expropriated in any
manner it pleases and, in the process, dishonor the judgment of expropriation. This is not in
keeping with the idea of fair play,
The notion, therefore, that the government, via expropriation proceedings, acquires
unrestricted ownership over or a fee simple title to the covered land, is no longer tenable.

Expropriated lands should be differentiated from a piece of land, ownership of which

was absolutely transferred by way of an unconditional purchase and sale contract freely
entered by two parties, one without obligation to buy and the other without the duty to sell. In
that case, the fee simple concept really comes into play. There is really no occasion to apply
the "fee simple concept" if the transfer is conditional. The taking of a private land in
expropriation proceedings is always conditioned on its continued devotion to its public
purpose. As a necessary corollary, once the purpose is terminated or peremptorily
abandoned, then the former owner, if he so desires, may seek its reversion, subject of course
to the return, at the very least, of the just compensation received.

To be compelled to renounce dominion over a piece of land is, in itself, an already

bitter pill to swallow for the owner. But to be asked to sacrifice for the common good and yield
ownership to the government which reneges on its assurance that the private property shall
be for a public purpose may be too much. But it would be worse if the power of eminent
domain were deliberately used as a subterfuge to benefit another with influence and power
in the political process, including development firms. The mischief thus depicted is not at all
far-fetched with the continued application of Fery. Even as the Court deliberates on these
consolidated cases, there is an uncontroverted allegation that the MCIAA is poised to sell, if
it has not yet sold, the areas in question to Cebu Property Ventures, Inc. This provides an
added dimension to abandon Fery.