Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-4060             August 29, 1952

DR. ESTEBAN MEDINA, DR. JOSE DE LA ROSA, MR. ENRIQUE SANTAMARIA, and BENGUET DEVELOPMENT CO., INC., plaintiffs-appellants, vs.CITY OF BAGUIO, defendant-appellee.

Francisco A. Reyes for appellants.Acting City Atty. Santiago C. Gregorio for appellee.

BAUTISTA ANGELO, J.:

Plaintiffs brought this action in the Court of First Instance of Baguio seeking to nullify Ordinances Nos. 62, 99 and 100 of the City Council of Baguio on the ground that they were enacted without authority or power, and are oppressive, unjust and unreasonable, and to recover the taxes and fees they had paid as itemized in the complaint.

Esteban Medina is the owner and operator of Pines Theater, a duly licensed movie houses in the City of Baguio. Jose Y. de la Rosa is the owner and operator of Plaza Theater, another duly licensed movie house in the city. Enrique Santamaria is the owner and operator under a contract of lease of Session Theater, also a duly licensed movie houses in said city, while Benguet Development Co., Inc., is an operator of a gasoline station engaged in selling gasoline, petroleum and imported oil products within the city.

Under Ordinance No. 99, Esteban Medina paid under protest a municipal license for 1949 for two quarters in the amount of P1,200, and Jose Y. de la Rosa paid under protest a municipal license for the same year in the amount of P1,800 for three quarters. Under Ordinance No. 62, Esteban Medina paid an additional tax of P4,896.60 during the months of July, August, September and November, 1949. Enrique Santamaria also paid an additional tax of P1,855.05 during the months of July and August of the same year. The Benguet Development Co., Inc., on the other hand, paid under Ordinance No. 100 the amount of P3,554.44 as specific tax for gasoline and oil sold from September 20, 1948, to November 17, 1949.

After trial, the court rendered decision declaring Ordinances Nos. 99 and 100 valid and legal but rendering Ordinance No. 62 null and void while denying the claim of the plaintiffs for reimbursement of the different amounts paid by them under protest to the City of Baguio, without special pronouncement as to costs. From this decision only the plaintiffs appealed assigning from errors as committed by the lower court.

The first question to be determined refers to the validity of Ordinance No. 99 which fixes the license fees to be paid by persons, entities or corporations which may engage in business within the city of Baguio. This ordinance fixes a license fee of P120 a year for every gasoline station installed in the city, and a fee of P2,400 for theaters which come under class "A", P1,800 for those coming under class "B", and P1,200 for those coming under class "C". Plaintiffs paid the fees required by this Ordinance, but now dispute the power of the city to enact it, contending that it only has the power to

impose a license fee but not to levy a tax upon theaters and gasoline stations which are operated within its limits. They contend that, while this ordinance expressly recites that its purpose is to fix ore impose a license fee on the business or trade therein specified, in fact its purpose is to levy a tax for purposes of revenue under the guise of a license fee. This, they contend, defendants cannot do.

This contention has no merit. Appellants apparently have in mind section 2553, paragraph (c) of the revised Administrative Code, which empowers the city of Baguio merely to impose a license fee for purpose of regulating the business that may be established in the city. The power as thus conferred is indeed limited, as it does not include the power to levy a tax. But on July 15, 1948, Republic Act No. 329 was enacted amending the charter of said city and adding to its power to license the power to tax and to regulate. And it is precisely having in view this amendment that Ordinance No. 99 was approved in order to increase the revenues of the city. In our opinion, the amendment above adverted to empowers the city council not only to impose a license fee but also to levy a tax for purposes of revenue, more on when in amending section 2553(b), the phrase "as provided by law" has been removed by section 2 of Republic Act No. 329. The city council of Baguio therefore, has now the power to tax, to license and to regulate provided that the subjects affected be one of those included in the charter, In this sense, the ordinance under consideration cannot be considered ultra vires whether its purpose to be levy a tax or impose a license fee. The terminology used as if no consequence.

Coming now to Ordinance No. 100, we find that its validity is assailed not only because of lack of power to enact it but also because of lack of power to enact it but also because it impose a specific tax on some articles which, it is claimed, is not contemplated by law.

We have already stated that under its charter, as amended, the city of Baguio has now the power not only to levy it also a specific tax on items or articles covered by the business of the taxpayer? After an examination of section 2553 of the revised Administrative Code, as amended by Republic Act No. 329, we are inclined to uphold the negative view.

It is settled that a municipal corporation, unlike a sovereign state, is clothed with no inherent power of taxation. The charter or statue must plainly show an intent to confer that power or the municipality cannot assume it. And the power when granted is to be construed strictissimi juris. Any doubt or ambiguity arising out of the term used in granting that power must be resolved against the municipality. Inferences, implications, deductions — all these — have no place in the interpretation of the taxing power of a municipal corporation (Joseph Icard vs. City Council of Baguio and the City of Baguio, 83 Phil., 870).

An examination of section 2553 (c), of the revised Administrative Code, as amended, will reveal that the power given to the city of Baguio to tax, to license and to regulate only refers to the business of the taxpayer and not to the articles used in said business. This is clearly inferred from a reading of said section and from the concluding sentence appearing therein, to wit, "and such other businesses, trade and occupations as may be established or practised in the city". One reason for this undoubtedly is the fact that under section 142 of the Internal Revenue Code (Commonwealth Act No. 466, as amended by Republic Act No. 39), most of the products mentioned in the charter, particularly gasoline and oil, are already specifically taxed, and under section 361 of said code, the city of Baguio gets a share of 20 per cent of the amount of specific tax collected. At any rate, the charter of the city of Baguio does not show plainly an intent to confer that power upon the city of Baguio and, following the rule already adverted to, this doubt or ambiguity must be resolved against the city. An indication of the legislative intent on this matter is Commonwealth Act No. 472 which confers general authority upon municipal councils to levy taxes, subjects to certain limitations, wherein it was specifically provided that the general authority so conferred shall not include "percentage taxes and taxes on specified articles". In other words, the power to levy a percentage

tax or a specific tax has been expressly withheld. It is, therefore, our considered opinion that Ordinance No. 100 is ultra vires and has no force and effect.

With respect to Ordinance No. 62, the lower court declared it null and void and from this part of the decision no appeal has been taken. That finding should be left undisturbed. As to whether appellants can collect the additional amounts they charged the public under the ordinance, the lower court said: "The amount collected from the theater goers as additional price of admission tickets is not the property of plaintiffs or any of them. It is paid by the public. If anybody has the right to claim it, it is those who paid it. Only owners of property has the right to claim said property. The cine owners acted as mere against agent of the city in collecting the additional price charged in the sale of admission tickets." Consequently, the court denied the claim of appellants for reimbursement. We find no error in this respect.

Wherefore, the decision appealed from is hereby affirmed, with the only modification as to Ordinance No. 100, which is hereby declared null and void. Defendant is hereby ordered to return to the Benguet Development Co., Inc., the amount of P3,544.44 it has paid as specific tax. No pronouncement as to costs.

Pablo, Bengzon, Padilla, Jugo and Labrador, JJ., concur.

R E S O L U T I O N

November 28, 1952

BAUTISTA ANGELO, J.:

This concerns the motion reconsideration filed by the City of Baguio in which it seeks to modify the decision rendered in this case on August 29, 1952.

It is reiterated that Ordinance No. 100 is valid under the provisions of section 2553(c), as amended by Republic Act No. 329, of the Revised Administrative Code, and that, granting arguendo that it is invalid, there is no point to order the City of Baguio to return the taxes paid under said ordinance to appellant Benguet Development Co., Inc., for the reason that said taxes were not paid by said company but by the car owners who bought the gasoline and oil subject of the tax.

The first claim is not well taken. We already held that section 2553(c), as amended by Republic Act No. 329, merely empowers the City of Baguio to impose a tax on business and not on the articles used therein. This is clear in said section and in the other authorities we cited in the main opinion. The case of Eastern Theatrical Co., Inc., et al. vs. Victor Alfonso, et al.1 (46 Off. Gaz., [Supp. 11] p. 303), can not be cited as a precedent in this case because the tax therein imposed by the City of Manila is amusement tax. this is not a specific tax but a tax on business. A municipal corporation, unlike a sovereign state, is clothed with no inherent power of taxation. The intent to confer such power must be resolved against the corporation (Icard vs. City Council of Baguio and the City of Baguio,2 (46 Off. Gaz., [Supp. 11] p. 320).

The second claim is disputed. It involves a question of fact. It does not appear in the record that the appellant corporation has collected the tax from the car owners as agent of the City of Baguio.

Counsel for the city of Baguio sustains the affirmative and pleads that the ruling applied in the case of the theater-owners wherein it was declared that the tax should be returned to the persons from whom it was collected, should also guide the determination of this case. But counsel for the appellant corporation maintains the contrary and attempted to show that the tax was collected directly from said corporation and not from the car owners.

The view of the Court on this point is to leave it pending and remand the case to the lower court in order that it may be clarified with the presentation of the necessary evidence considering the precedent already set on this matter.

Wherefore, the Court holds in abeyance that portion of the decision relative to the return of the specific tax paid by the Benguet Development Co., Inc., pending determination of the question of fact pointed out above, and orders the remand of this case to the lower court for the presentation of necessary evidence. After the presentation of evidence, the lower court may render judgment in line with the decision of this Court relative to the theater-owners. The decision of this Court is maintained in all other respects.

Paras, C.J., Pablo, Bengzon, Padilla, Montemayor, Jugo and Labrador, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

 

G.R. No. 107916 February 20, 1997

PERCIVAL MODAY, ZOTICO MODAY (deceased) and LEONORA MODAY, petitioners, vs.COURT OF APPEALS, JUDGE EVANGELINE S. YUIPCO OF BRANCH 6, REGIONAL TRIAL COURT, AGUSAN DEL SUR AND MUNICIPALITY OF BUNAWAN, respondents.

 

ROMERO, J.:

The main issue presented in this case is whether a municipality may expropriate private property by virtue of a municipal resolution which was disapproved by the Sangguniang Panlalawigan. Petitioner seeks the reversal of the Court of Appeals decision and resolution, promulgated on July 15, 1992 and October 22, 1992 respectively, 1 and a declaration that Municipal Resolution No. 43-89 of the Bunawan Sangguniang Bayan is null and void.

On July 23, 1989, the Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed Resolution No. 43-89, "Authorizing the Municipal Mayor to Initiate the Petition for Expropriation of a One (1) Hectare Portion of Lot No. 6138-Pls-4 Along the National Highway Owned by Percival Moday for the Site of Bunawan Farmers Center and Other Government Sports Facilities." 2

In due time, Resolution No. 43-89 was approved by then Municipal Mayor Anuncio C. Bustillo and transmitted to the Sangguniang Panlalawigan for its approval. On September 11, 1989, the

Sangguniang Panlalawigan disapproved said Resolution and returned it with the comment that "expropriation is unnecessary considering that there are still available lots in Bunawan for the establishment of the government center." 3

The Municipality of Bunawan, herein public respondent, subsequently filed a petition for Eminent Domain against petitioner Percival Moday before the Regional Trial Court at Prosperidad, Agusan del Sur. 4 The complaint was later amended to include the registered owners, Percival Moday's parents, Zotico and Leonora Moday, as party defendants.

On March 6, 1991, public respondent municipality filed a Motion to Take or Enter Upon the Possession of Subject Matter of This Case stating that it had already deposited with the municipal treasurer the necessary amount in accordance with Section 2, Rule 67 of the Revised Rules of Court and that it would be in the government's best interest for public respondent to be allowed to take possession of the property.

Despite petitioners' opposition and after a hearing on the merits, the Regional Trial Court granted respondent municipality's motion to take possession of the land. The lower court held that the Sangguniang Panlalawigan's failure to declare the resolution invalid leaves it effective. It added that the duty of the Sangguniang Panlalawigan is merely to review the ordinances and resolutions passed by the Sangguniang Bayan under Section 208 (1) of B.P. Blg. 337, old Local Government Code and that the exercise of eminent domain is not one of the two acts enumerated in Section 19 thereof requiring the approval of the Sangguniang Panlalawigan. 5 The dispositive portion of the lower court's Order dated July 2, 1991 reads:

WHEREFORE, it appearing that the amount of P632.39 had been deposited as per Official Receipt No. 5379647 on December 12, 1989 which this Court now determines as the provisional value of the land, the Motion to Take or Enter Upon the Possession of the Property filed by petitioner through counsel is hereby GRANTED. The Sheriff of this Court is ordered to forthwith place the plaintiff in possession of the property involved.

Let the hearing be set on August 9, 1991 at 8:30 o'clock in the morning for the purpose of ascertaining the just compensation or fair market value of the property sought to be taken, with notice to all the parties concerned.

SO ORDERED. 6

Petitioners' motion for reconsideration was denied by the trial court on October 31, 1991.

Petitioners elevated the case in a petition for certiorari alleging grave abuse of discretion on the part of the trial court, but the same was dismissed by respondent appellate court on July 15, 1992. 7 The Court of Appeals held that the public purpose for the expropriation is clear from Resolution No. 43-89 and that since the Sangguniang Panlalawigan of Agusan del Sur did not declare Resolution No. 43-89 invalid, expropriation of petitioners' property could proceed.

Respondent appellate court also denied petitioners' motion for reconsideration on October 22, 1992. 8

Meanwhile, the Municipality of Bunawan had erected three buildings on the subject property: the Association of Barangay Councils (ABC) Hall, the Municipal Motorpool, both wooden structures, and the Bunawan Municipal Gymnasium, which is made of concrete.

In the instant petition for review filed on November 23, 1992, petitioner seeks the reversal of the decision and resolution of the Court of Appeals and a declaration that Resolution No. 43-89 of the Municipality of Bunawan is null and void.

On December 8, 1993, the Court issued a temporary restraining order enjoining and restraining public respondent Judge Evangeline Yuipco from enforcing her July 2, 1991 Order and respondent municipality from using and occupying all the buildings constructed and from further constructing any building on the land subject of this petition. 9

Acting on petitioners' Omnibus Motion for Enforcement of Restraining Order and for Contempt, the Court issued a Resolution on March 15, 1995, citing incumbent municipal mayor Anuncio C. Bustillo for contempt, ordering him to pay the fine and to demolish the "blocktiendas" which were built in violation of the restraining order. 10

Former Mayor Anuncio C. Bustillo paid the fine and manifested that he lost in the May 8, 1995 election. 11 The incumbent Mayor Leonardo Barrios, filed a Manifestation, Motion to Resolve "Urgent Motion for Immediate Dissolution of the Temporary Restraining Order" and Memorandum on June 11, 1996 for the Municipality of Bunawan. 12

Petitioners contend that the Court of Appeals erred in upholding the legality of the condemnation proceedings initiated by the municipality. According to petitioners, the expropriation was politically motivated and Resolution No. 43-89 was correctly disapproved by the Sangguniang Panlalawigan, there being other municipal properties available for the purpose. Petitioners also pray that the former Mayor Anuncio C. Bustillo be ordered to pay damages for insisting on the enforcement of a void municipal resolution.

The Court of Appeals declared that the Sangguniang Panlalawigan's reason for disapproving the resolution "could be baseless, because it failed to point out which and where are those available lots.'" Respondent court also concluded that since the Sangguniang Panlalawigan did not declare the municipal board's resolution as invalid, expropriation of petitioners' property couldproceed. 13

The Court finds no merit in the petition and affirms the decision of the Court of Appeals.

Eminent domain, the power which the Municipality of Bunawan exercised in the instant case, is a fundamental State power that is inseparable from sovereignty. 14 It is government's right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose. 15 Inherently possessed by the national legislature, the power of eminent domain may be validly delegated to local governments, other public entities and public utilities. 16 For the taking of private property by the government to be valid, the taking must be for public use and there must be just compensation. 17

The Municipality of Bunawan's power to exercise the right of eminent domain is not disputed as it is expressly provided for in Batas Pambansa Blg. 337, the local Government Code 18 in force at the time expropriation proceedings were initiated. Section 9 of said law states:

Sec. 9. Eminent Domain. — A local government unit may, through its head and acting pursuant to a resolution of its sanggunian, exercise the right of eminent domain and institute condemnation proceedings for public use or purpose.

What petitioners question is the lack of authority of the municipality to exercise this right since the Sangguniang Panlalawigan disapproved Resolution No. 43-89.

Section 153 of B.P. Blg. 337 provides:

Sec. 153. Sangguniang Panlalawigan Review. — (1) Within thirty days after receiving copies of approved ordinances, resolutions and executive orders promulgated by the municipal mayor, the sangguniang panlalawigan shall examine the documents or transmit them to the provincial attorney, or if there be none, to the provincial fiscal, who shall examine them promptly and inform the sangguniang panlalawigan in writing of any defect or impropriety which he may discover therein and make such comments or recommendations as shall appear to him proper.

(2) If the sangguniang panlalawigan shall find that any municipal ordinance, resolution or executive order is beyond the power conferred upon the sangguniang bayan or the mayor, it shall declare such ordinance, resolution or executive order invalid in whole or in part, entering its actions upon the minutes and advising the proper municipal authorities thereof. The effect of such an action shall be to annul the ordinance, resolution or executive order in question in whole or in part. The action of the sangguniang panlalawigan shall be final.

xxx xxx xxx (Emphasis supplied.)

The Sangguniang Panlalawigan's disapproval of Municipal Resolution No. 43-89 is an infirm action which does not render said resolution null and void. The law, as expressed in Section 153 of B.P. Blg. 337, grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue. Although pertaining to a similar provision of law but different factual milieu then obtaining, the Court's pronouncements in Velazco v. Blas, 19 where we cited significant early jurisprudence, are applicable to the case at bar.

The only ground upon which a provincial board may declare any municipal resolution, ordinance, or order invalid is when such resolution, ordinance, or order is "beyond the powers conferred upon the council or president making the same." Absolutely no other ground is recognized by the law. A strictly legal question is before the provincial board in its consideration of a municipal resolution, ordinance, or order. The provincial (board's) disapproval of any resolution, ordinance, or order must be premised specifically upon the fact that such resolution, ordinance, or order is outside the scope of the legal powers conferred by law. If a provincial board passes these limits, it usurps the legislative function of the municipal council or president. Such has been the consistent course of executive authority. 20

Thus, the Sangguniang Panlalawigan was without the authority to disapprove Municipal Resolution No. 43-89 for the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and its Sangguniang Bayan the capacity to promulgate said resolution, pursuant to the earlier-quoted Section 9 of B.P. Blg. 337. Perforce, it follows that Resolution No. 43-89 is valid and binding and could be used as lawful authority to petition for the condemnation of petitioners' property.

As regards the accusation of political oppression, it is alleged that Percival Moday incurred the ire of then Mayor Anuncio C. Bustillo when he refused to support the latter's candidacy for mayor in previous elections. Petitioners claim that then incumbent Mayor C. Bustillo used the expropriation to retaliate by expropriating their land even if there were other properties belonging to the municipality and available for the purpose. Specifically, they allege that the municipality owns a vacant seven-hectare property adjacent to petitioners' land, evidenced by a sketch plan. 21

The limitations on the power of eminent domain are that the use must be public, compensation must be made and due process of law must be observed. 22 The Supreme Court, taking cognizance of such issues as the adequacy of compensation, necessity of the taking and the public use character or the purpose of the taking, 23 has ruled that the necessity of exercising eminent domain must be genuine and of a public character. 24 Government may not capriciously choose what private property should be taken.

After a careful study of the records of the case, however, we find no evidentiary support for petitioners' allegations. The uncertified photocopy of the sketch plan does not conclusively prove that the municipality does own vacant land adjacent to petitioners' property suited to the purpose of the expropriation. In the questioned decision, respondent appellate court similarly held that the pleadings and documents on record have not pointed out any of respondent municipality's "other available properties available for the same purpose." 25 The accusations of political reprisal are likewise unsupported by competent evidence. Consequently, the Court holds that petitioners' demand that the former municipal mayor be personally liable for damages is without basis.

WHEREFORE, the instant petition is hereby DENIED. The questioned Decision and Resolution of the Court of Appeals in the case of "Percival Moday." et al. v. Municipality of Bunawan, et al." (CA G.R. SP No. 26712) are AFFIRMED. The Temporary Restraining Order issued by the Court on December 8, 1993 is LIFTED.

SO ORDERED.

Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 72126 January 29, 1988

MUNICIPALITY OF MEYCAUAYAN, BULACAN, HON. ADRIANO D. DAEZ, MUNICIPAL MAYOR, MEYCAUAYAN, BULACAN, petitioners, vs.INTERMEDIATE APPELLATE COURT and PHILIPPINE PIPES & MERCHANDIZING CORPORATION,respondents.

 

GUTIERREZ, JR., J.:

This is a petition for review on certiorari of the resolution dated April 24,1985 by the former Intermediate Appellate Court, now Court of Appeals, setting aside its earlier decision dated January 10, 1985 and dismissing the special civil action for expropriation filed by the petitioner.

In 1975, respondent Philippine Pipes and Merchandising Corporation filed with the Office of the Municipal Mayor of Meycauayan, Bulacan, an application for a permit to fence a parcel of land with a width of 26.8 meters and a length of 184.37 meters covered by Transfer Certificates of Title Nos. 215165 and 37879. The fencing of said property was allegedly to enable the storage of the

respondent's heavy equipment and various finished products such as large diameter steel pipes, pontoon pipes for ports, wharves, and harbors, bridge components, pre-stressed girders and piles, large diameter concrete pipes, and parts for low cost housing.

In the same year, the Municipal Council of Meycauayan, headed by then Mayor Celso R. Legaspi, passed Resolution No. 258, Series of 1975, manifesting the intention to expropriate the respondent's parcel of land covered by Transfer Certificate of Title No. 37879.

An opposition to the resolution was filed by the respondent with the Office of the Provincial Governor, which, in turn, created a special committee of four members to investigate the matter.

On March 10, 1976, the Special Committee recommended that the Provincial Board of Bulacan disapprove or annul the resolution in question because there was no genuine necessity for the Municipality of Meycauayan to expropriate the respondent's property for use as a public road.

On the basis of this report, the Provincial Board of Bulacan passed Resolution No. 238, Series of 1976, disapproving and annulling Resolution No. 258, Series of 1975, of the Municipal Council of Meycauayan. The respondent, then, reiterated to the Office of the Mayor its petition for the approval of the permit to fence the aforesaid parcels of land.

On October 21, 1983, however, the Municipal Council of Meycauayan, now headed by Mayor Adriano D. Daez, passed Resolution No. 21, Series of 1983, for the purpose of expropriating anew the respondent's land. The Provincial Board of Bulacan approved the aforesaid resolution on January 25, 1984.

Thereafter, the petitioner, on February 14, 1984, filed with the Regional Trial Court of Malolos, Bulacan, Branch VI, a special civil action for expropriation.

Upon deposit of the amount of P24,025.00, which is the market value of the land, with the Philippine National Bank, the trial court on March 1, 1984 issued a writ of possession in favor of the petitioner.

On August 27, 1984, the trial court issued an order declaring the taking of the property as lawful and appointing the Provincial Assessor of Bulacan as court commissioner who shall hold the hearing to ascertain the just compensation for the property.

The respondent went to the Intermediate Appellate Court on petition for review. On January 10, 1985, the appellate court affirmed the trial court's decision. However, upon motion for reconsideration by the respondent, the decision was re-examined and reversed. The appellate court held that there is no genuine necessity to expropriate the land for use as a public road as there were several other roads for the same purpose and another more appropriate lot for the proposed public road. The court, taking into consideration the location and size of the land, also opined that the land is more Ideal for use as storage area for respondent's heavy equipment and finished products.

After its motion for reconsideration was denied, the petitioner went to this Court on petition for review on certiorari on October 25, 1985, with the following arguments:

Petitioners most respectfully submit that respondent Court has decided a question of substance not in accord with law or with applicable decisions of this Honorable Supreme Court; that the judgment is based on a misapprehension of facts and the conclusion is a finding grounded entirely on speculation, surmises, and conjectures, because:

a. It concluded, that by dismissing the complaint for expropriation the existence of legal and factual circumstance of grave abuse of discretion amounting to lack of jurisdiction committed by the respondent Judge without any shred of evidence at all contrary to the law on evidence;

b. It concluded, in its decision that respondent Philippine Pipes and Merchandising Corporation has no need of the property sought to be condemned on the use to which it is devoted as a private road but allegedly for storage contrary to the allegations of respondent Philippine Pipes and Merchandising Corporation itself;

c. It anchored its decision on factual situations obtaining a long, long time ago without regard to the relatively present situation now obtaining. (Rollo, pp. 8-9)

In refuting the petitioner's arguments, the private respondent contends that this Court may only resolve questions of law and not questions of fact such as those which the petitioner puts in issue in this case. The respondent further argues that this Court may not also interfere with an action of the Court of Appeals which involves the exercise of discretion.

We agree with the respondent.

The jurisdiction of this Court in cases brought to us from the Court of Appeals is limited to the review of errors of law (Rizal Cement Co., Inc. v. Villareal, 135 SCRA 15, 24), factual issues not being proper in certiorari proceedings (See Ygay et al. v. Hon. Escareal et al., 135 SCRA 78, 82).

This Court reviews and rectifies the findings of fact of the Court of Appeals only under certain established exceptions such as: (1) when the conclusion is a finding grounded entirely on speculations, surmises and conjectures; (2) when the inference made is manifestly mistaken, absurd and impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; and (5) when the court, in making its finding, went beyond the issues of the case and the same is contrary to the admissions of both the appellant and the appellee (Moran, Jr. v. Court of Appeals, 133 SCRA 88).

None of the exceptions warranting non-application of the rule is present in this case. On the contrary, we find that the appellate court's decision is supported by substantial evidence.

The petitioner's purpose in expropriating the respondent's property is to convert the same into a public road which would provide a connecting link between Malhacan Road and Bulac Road in Valenzuela, Bulacan and thereby ease the traffic in the area of vehicles coming from MacArthur Highway.

The records, however, reveals that there are other connecting links between the aforementioned roads. The petitioner itself admits that there are four such cross roads in existence. The respondent court stated that with the proposed road, there would be seven.

Appreciating the evidence presented before it, with particular emphasis on the Special Committee's report dated March 10, 1976, the Court of Appeals declared:

xxx xxx xxx

FACTS ESTABLISHED ON OCULAR INSPECTION

In the ocular inspection, the following facts came into the limelight:

(1) The property in question of the Philippine Pipes and Merchandazing Corporation intended to be expropriated by the Municipality of Meycauayan is embraced under Transfer Certificate of Title No. 37879 and is a private road of the company used in the conduct and operation of its business, with the inhabitation  in nearby premises tolerated to pass the same. It extends from Bulac Road to the south, to Malhacan Road on the north, with a width of about 6 to 7 meters, more or less.

(2) Adjoining this private road on the eastern side, is a vacant property also belonging to the Philippine Pipes and Merchandising Corporation and extending also from Bulac Road to Malhacan Road, with a high wall along the property line on the east side thereof serving as a fence.

(3) Opposite the private road, after crossing Bulac Road, is the gate of the factory of the Philippine Pipes and Merchandising Corporation.

(4) From the private road of the firm on the eastern direction about 30 to 40 meters distance are subdivision roads of an existing subdivision with a width of 6 to 7 meters, more or less, running parallel to the said private road of the firm and likewise extending from Bulac Road to Malhacan Road. Whether said subdivision roads had already been donated to the municipality is not known.

(5) On the western side of the private road is a vacant lot with an area of l6,071 square meters offered for sale by its owner extending also from Bulac Road to Malhacan Road.

(6) Bulac road, a municipal road with a width of about 6 to 7 meters and all the nearby subdivision roads are obviously very poorly developed and maintained, and are in dire need of repair. Like the Malhacan Road, Bulac road extends from the McArthur Highway with exit to North Diversion Road.

xxx xxx xxx

The Sketch Plan (Rollo, p. 26 or p. 97) clearly and conclusively shows that petitioner does not need this strip of land as a private road. The Sketch Plan clearly shows that petitioner's factory site is adjacent to Bulac Road which has a width of about seven meters, more or less. Petitioner can use Bulac Road in reaching McArthur Highway on the west or in reaching the Manila North Expressway on the east for the purpose of transporting its products. Petitioner does not need to go to Malhacan Road via this so-called private road before going to McArthur Highway or to the Manila North Expressway. Why should petitioner go first to Malhacan Road via this so called "private road" before going to McArthur Highway or to the Manila North Expressway when taking the Bulac Road in going to McArthur Highway or to the Manila North Expressway is more direct, nearer and more advantageous. Hence, it is beyond doubt that petitioner acquired this strip of land for the storage of its heavy equipments and various finished products and for growth and expansion and never to use it as a private road. This is the very reason why petitioner filed an application with the Office of the Municipal Mayor of Meycauayan, Bulacan to fence with hollow blocks this strip of land.

Third, We will determine whether there is a genuine necessity to expropriate this strip of land for use as a public road.

We hereby quote a relevant part of the Special Committee's Report dated March 10, 1976, which is as follows:

OBSERVATION OF COMMITTEE

From the foregoing facts, it appears obvious to this Special Committee that there is no genuine necessity for the Municipality of' Meycauayan to expropriate the aforesaid property of the Philippine Pipes and Merchandising Corporation for use as a public road. Considering that in the vicinity there are other available road and vacant lot offered for sale situated similarly as the lot in question and lying Idle, unlike the lot sought to be expropriated which was found by the Committee to be badly needed by the company as a site for its heavy equipment after it is fenced together with the adjoining vacant lot, the justification to condemn the same does not appear to be very imperative and necessary and would only cause unjustified damage to the firm. The desire of the Municipality of Meycauayan to build a public road to decongest the volume of traffic can be fully and better attained by acquiring the other available roads in the vicinity maybe at lesser costs without causing harm to an establishment doing legitimate business therein. Or, the municipality may seek to expropriate a portion of the vacant lot also in the vicinity offered for sale for a wider public road to attain decongest (sic) of traffic because as observed by the Committee, the lot of the Corporation sought to be taken will only accommodate a one-way traffic lane and therefore, will not suffice to improve and decongest the flow of traffic and pedestrians in the Malhacan area. ...

xxx xxx xxx

It must be noted that this strip of land covered by Transfer Certificates of Titles Nos. 215165 and 37879 were acquired by petitioner from Dr. Villacorta. The lot for sale and lying Idle with an area of 16,071 square meter which is adjacent and on the western side of the aforesaid strip of land and extends likewise from Bulac Road to Malhacan Road belongs also to Dr. Villacorta. This lot for sale and lying Idle is most Ideal for use as a public road because it is more than three (3) times wider that the said strip of land.

xxx xxx xxx

xxx xxx xxx

Since there is another lot ready for sale and lying Idle, adjacent and on the western side of the strip of land, and extending also from Malhacan Road to Bulac Road and most Ideal for a public road because it is very much wider than the lot sought to be expropriated, it seems that it is more just, fair, and reasonable if this lot is the one to be expropriated. (Rollo, pp. 22-26)

The petitioner objects to the appellate court's findings contending that they were based on facts obtaining long before the present action to expropriate took place. We note, however, that there is no evidence on record which shows a change in the factual circumstances of the case. There is no showing that some of the six other available cross roads have been closed or that the private roads in the subdivision may not be used for municipal purposes. What is more likely is that these roads

have already been turned over to the government. The petitioner alleges that surely the environmental progress during the span of seven years between the first and second attempts to expropriate has brought about a change in the facts of the case. This allegation does not merit consideration absent a showing of concrete evidence attesting to it.

There is no question here as to the right of the State to take private property for public use upon payment of just compensation. What is questioned is the existence of a genuine necessity therefor.

As early as City of Manila v. Chinese Community of Manila (40 Phil. 349) this Court held that the foundation of the right to exercise the power of eminent domain is genuine necessity and that necessity must be of a public character. Condemnation of private property is justified only if it is for the public good and there is a genuine necessity of a public character. Consequently, the courts have the power to inquire into the legality of the exercise of the right of eminent domain and to determine whether there is a genuine necessity therefor (Republic v. La Orden de PP. Benedictos de Filipinas, 1 SCRA 646; J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413).

In the recent case of De Knecht v. Bautista, (100 SCRA 660) this court further ruled that the government may not capriciously choose what private property should be taken. Citing the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration (supra), the Court held:

... With due recognition then of the power of Congress to designate the particular property to be taken and how much thereof may be condemned in the exercise of the power of expropriation, it is still a judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and prejudice. That the equal protection clause will not allow. (At p. 436)

There is absolutely no showing in the petition why the more appropriate lot for the proposed road which was offered for sale has not been the subject of the petitioner's attempt to expropriate assuming there is a real need for another connecting road.

WHEREFORE, the petition is hereby DISMISSED for lack of merit. The questioned resolution of the respondent court is AFFIRMED.

SO ORDERED.

Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.

SECOND DIVISION

[G.R. No. 152230.  August 9, 2005]

JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC., petitioner, vs. MUNICIPALITY (now CITY) OF PASIG, METRO MANILA, respondent.

D E C I S I O N

CALLEJO, SR., J.:

Before us is a petition for review of the Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 59050, and its Resolution dated February 18, 2002, denying the motion for reconsideration thereof.  The assailed decision affirmed the order of the Regional Trial Court (RTC) of Pasig, Branch 160, declaring the respondent Municipality (now City) of Pasig as having the right to expropriate and take possession of the subject property.

The Antecedents

The Municipality of Pasig needed an access road from E. R. Santos Street, a municipal road near the Pasig Public Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to 70 houses, mostly made of light materials, were located.  The road had to be at least three meters in width, as required by the Fire Code, so that fire trucks could pass through in case of conflagration.[2] Likewise, the residents in the area needed the road for water and electrical outlets.[3] The municipality then decided to acquire 51 square meters out of the 1,791-square meter property of Lorenzo Ching Cuanco, Victor Ching Cuanco and Ernesto Ching Cuanco Kho covered by Transfer Certificate of Title (TCT) No. PT-66585,[4]which is abutting E. R. Santos Street.

On April 19, 1993, the Sangguniang Bayan of Pasig approved an Ordinance[5] authorizing the municipal mayor to initiate expropriation proceedings to acquire the said property and appropriate the fund therefor.  The ordinance stated that the property owners were notified of the municipality’s intent to purchase the property for public use as an access road but they rejected the offer.

On July 21, 1993, the municipality filed a complaint, amended on August 6, 1993, against the Ching Cuancos for the expropriation of the property under Section 19 of Republic Act (R.A.) No. 7160, otherwise known as the Local Government Code.  The plaintiff alleged therein that it notified the defendants, by letter, of its intention to construct an access road on a portion of the property but they refused to sell the same portion.  The plaintiff appended to the complaint a photocopy of the letter addressed to defendant Lorenzo Ching Cuanco.[6]

The plaintiff deposited with the RTC 15% of the market value of the property based on the latest tax declaration covering the property.  On plaintiff’s motion, the RTC issued a writ of possession over the property sought to be expropriated.  On November 26, 1993, the plaintiff caused the

annotation of a notice of lis pendens at the dorsal portion of TCT No. PT-92579 under the name of the Jesus Is Lord Christian School Foundation, Incorporated (JILCSFI) which had purchased the property.[7] Thereafter, the plaintiff constructed therein a cemented road with a width of three meters; the road was called Damayan Street.

In their answer,[8] the defendants claimed that, as early as February 1993, they had sold the said property to JILCSFI as evidenced by a deed of sale[9] bearing the signature of defendant Ernesto Ching Cuanco Kho and his wife.

When apprised about the complaint, JILCSFI filed a motion for leave to intervene as defendant-in-intervention, which motion the RTC granted on August 26, 1994.[10]

In its answer-in-intervention, JILCSFI averred, by way of special and affirmative defenses, that the plaintiff’s exercise of eminent domain was only for a particular class and not for the benefit of the poor and the landless.  It alleged that the property sought to be expropriated is not the best portion for the road and the least burdensome to it.  The intervenor filed a crossclaim against its co-defendants for reimbursement in case the subject property is expropriated.[11] In its amended answer, JILCSFI also averred that it has been denied the use and enjoyment of its property because the road was constructed in the middle portion and that the plaintiff was not the real party-in-interest.  The intervenor, likewise, interposed counterclaims against the plaintiff for moral damages and attorney’s fees.[12]

During trial, Rolando Togonon, the plaintiff’s messenger, testified on direct examination that on February 23, 1993, he served a letter of Engr. Jose Reyes, the Technical Assistant to the Mayor on Infrastructure, to Lorenzo Ching Cuanco at his store at No. 18 Alkalde Jose Street, Kapasigan, Pasig.  A lady received the same and brought it inside the store.  When she returned the letter to him, it already bore the signature of Luz Bernarte.  He identified a photocopy of the letter as similar to the one he served at the store.  On cross-examination, he admitted that he never met Luz Bernarte. [13]

Edgardo del Rosario, a resident of Sto. Tomas Bukid since 1982 declared that he would pass through a wooden bridge to go to E. R. Santos Street.  At times, the bridge would be slippery and many had met accidents while walking along the bridge.  Because of this, they requested Mayor Vicente Eusebio to construct a road therein.  He attested that after the construction of the cemented access road, the residents had water and electricity.[14]

Augusto Paz of the City Engineer’s Office testified that, sometime in 1992, the plaintiff constructed a road perpendicular from E. R. Santos Street to Sto. Tomas Bukid; he was the Project Engineer for the said undertaking. Before the construction of the road, the lot was raw and they had to put filling materials so that vehicles could use it.  According to him, the length of the road which they constructed was 70 meters long and 3 meters wide so that a fire truck could pass through.  He averred that there is no other road through which a fire truck could pass to go to Sto. Tomas Bukid.[15]

Manuel Tembrevilla, the Fire Marshall, averred that he had seen the new road, that is, Damayan Street, and found that a fire truck could pass through it.  He estimated the houses in the area to be around 300 to 400.  Tembrevilla also stated that Damayan Street is the only road in the area.[16]

Finally, Bonifacio Maceda, Jr., Tax Mapper IV, testified that, according to their records, JILCSFI became the owner of the property only on January 13, 1994.[17]

The plaintiff offered in evidence a photocopy of the letter of Engr. Jose Reyes addressed to Lorenzo Ching Cuanco to prove that the plaintiff made a definite and valid offer to acquire the property to the co-owners.  However, the RTC rejected the same letter for being a mere photocopy.[18]

For the defendant-intervenor, Normita del Rosario, owner of the property located across the subject property, testified that there are other roads leading to E. R. Santos Street.  She asserted that only about ten houses of the urban poor are using the new road because the other residents are using an alternative right-of-way.  She averred that she did not actually occupy her property; but there were times that she visited it.[19]

Danilo Caballero averred that he had been a resident of Sto. Tomas Bukid for seven years.  From his house, he could use three streets to go to E. R. Santos Street, namely, Catalina Street, Damayan Street and Bagong Taon Street.  On cross-examination, he admitted that no vehicle could enter Sto. Tomas Bukid except through the newly constructed Damayan Street.[20]

Eduardo Villanueva, Chairman of the Board of Trustees and President of JILCSFI, testified that the parcel of land was purchased for purposes of constructing a school building and a church as worship center.  He averred that the realization of these projects was delayed due to the passing of the ordinance for expropriation.[21]

The intervenor adduced documentary evidence that on February 27, 1993, Lorenzo Ching Cuanco and the co-owners agreed to sell their property covered by TCT No. PT-66585 for P1,719,000.00.[22] It paid a down payment

of P1,000,000.00 for the property.  After payment of the total purchase price, the Ching Cuancos executed a Deed of Absolute Sale [23] over the property on December 13, 1993.  On December 21, 1993, TCT No. PT-92579 was issued in the name of JILCSFI.[24] It declared the property for taxation purposes under its name.[25]

On September 3, 1997, the RTC issued an Order in favor of the plaintiff, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing and in accordance with Section 4, Rule 67 of the Revised Rules of Court, the Court Resolves to DECLARE the plaintiff as having a lawful right to take the property in question for purposes for which the same is expropriated.

The plaintiff and intervenor are hereby directed to submit at least two (2) names of their recommended commissioners for the determination of just compensation within ten (10) days from receipt hereof.

SO ORDERED.[26]

The RTC held that, as gleaned from the declaration in Ordinance No. 21, there was substantial compliance with the definite and valid offer requirement of Section 19 of R.A. No. 7160, and that the expropriated portion is the most convenient access to the interior of Sto. Tomas Bukid.

Dissatisfied, JILCSFI elevated the case to the CA on the following assignment of errors:

First Assignment of Error

THE LOWER COURT SERIOUS[LY] ERRED WHEN IT RULED THAT PLAINTIFF-APPELLEE SUBSTANTIALLY COMPLIED WITH THE LAW WHEN IT EXPROPRIATED JIL’S PROPERTY TO BE USED AS A RIGHT OF WAY.

Second Assignment of Error

THE LOWER COURT ERRED IN DISREGARDING JIL’S EVIDENCE PROVING THAT THERE WAS NO PUBLIC NECESSITY TO WARRANT THE EXPROPRIATION OF THE SUBJECT PROPERTY.[27]

The Court of Appeals’ Decision

In a Decision dated March 13, 2001, the CA affirmed the order of the RTC.[28] The CA agreed with the trial court that the plaintiff substantially complied with Section 19 of R.A. No. 7160, particularly the requirement that a valid and definite offer must be made to the owner.  The CA declared that the letter of Engr. Reyes, inviting Lorenzo Ching Cuanco to a conference to discuss with him the road project and the price of the lot, was a substantial compliance with the “valid and definite offer” requirement under said Section 19.  In addition, the CA noted that there was also constructive notice to the defendants of the expropriation proceedings since a notice of lis pendens was annotated at the dorsal portion of TCT No. PT-92579 on November 26, 1993.[29]

Finally, the CA upheld the public necessity for the subject property based on the findings of the trial court that the portion of the property sought to be expropriated appears to be, not only the most convenient access to the interior of Sto. Tomas Bukid, but also an easy path for vehicles entering the area, particularly fire trucks.  Moreover, the CA took into consideration the provision of Article 33 of the Rules and Regulations Implementing the Local Government Code, which regards the “construction or extension of roads, streets, sidewalks” as public use, purpose or welfare.[30]

On April 6, 2001, JILCSFI filed a motion for reconsideration of the said decision alleging that the CA erred in relying on the photocopy of Engr. Reyes’ letter to Lorenzo Ching Cuanco because the same was not admitted in evidence by the trial court for being a mere photocopy.  It also contended that the CA erred in concluding that constructive notice of the expropriation proceeding, in the form of annotation of the notice oflis pendens, could be considered as a substantial compliance with the requirement under Section 19 of the Local Government Code for a valid and definite offer.  JILCSFI also averred that no inspection was ever ordered by the trial court to be conducted on the property, and, if there was one, it had the right to be present thereat since an inspection is considered to be part of the trial of the case.[31]

The CA denied the motion for reconsideration for lack of merit.  It held that it was not precluded from considering the photocopy [32] of the letter, notwithstanding that the same was excluded by the trial court, since the fact of its existence was duly established by corroborative evidence.  This corroborative evidence consisted of the testimony of the plaintiff’s messenger that he personally served the letter to Lorenzo Ching Cuanco, and Municipal Ordinance No. 21 which expressly stated that the property owners were already notified of the expropriation proceeding.  The CA noted that JILCSFI failed to adduce controverting evidence, thus the presumption of regularity was not overcome.[33]

The Present Petition

In this petition, petitioner JILCSFI raises the following issues:  (1) whether the respondent complied with the requirement, under Section 19 of the Local Government Code, of a valid and definite offer to acquire the property prior to the filing of the complaint; (2) whether its property which is already intended to be used for public purposes may still be expropriated by the respondent; and (3) whether the requisites for an easement for right-of-way under Articles 649 to 657 of the New Civil Code may be dispensed with.

The petitioner stresses that the law explicitly requires that a valid and definite offer be made to the owner of the property and that such offer was not accepted.  It argues that, in this case, there was no evidence to show that such offer has been made either to the previous owner or the petitioner, the present owner.  The petitioner contends that the photocopy of the letter of Engr. Reyes, notifying Lorenzo Ching Cuanco of the respondent’s intention to construct a road on its property, cannot be considered because the trial court did not admit it in evidence.  And assuming that such letter is admissible in evidence, it would not prove that the offer has been made to the previous owner because mere notice of intent to purchase is not equivalent to an offer to purchase.  The petitioner further argues that the offer should be made to the proper party, that is, to the owner of the property.  It noted that the records in this case show that as of February 1993, it was already the owner of the property.  Assuming, therefore, that there was an offer to purchase the property, the same should have been addressed to the petitioner, as present owner.[34]

The petitioner maintains that the power of eminent domain must be strictly construed since its exercise is necessarily in derogation of the right to property ownership.  All the requirements of the enabling law must, therefore, be strictly complied with.  Compliance with such requirements cannot be presumed but must be proved by the local government exercising the power.  The petitioner adds that the local government should, likewise, comply with the requirements for an easement of right-of-way; hence, the road must be established at a point least prejudicial to the owner of the property.  Finally, the petitioner argues that, if the property is already devoted to or intended to be devoted to another public use, its expropriation should not be allowed.[35]

For its part, the respondent avers that the CA already squarely resolved the issues raised in this petition, and the petitioner failed to show valid and compelling reason to reverse the CA’s findings.  Moreover, it is not the function of the Supreme Court to weigh the evidence on factual issues all over

again.[36] The respondent contends that the Ching Cuancos were deemed to have admitted that an offer to purchase has been made and that they refused to accept such offer considering their failure to specifically deny such allegation in the complaint.  In light of such admission, the exclusion of the photocopy of the letter of Engr. Reyes, therefore, is no longer significant.[37]

The Ruling of the Court

The petition is meritorious.

At the outset, it must be stressed that only questions of law may be raised by the parties and passed upon by the Supreme Court in petitions for review on certiorari.[38] Findings of fact of the CA, affirming those of the trial court, are final and conclusive and may not be reviewed on appeal.[39]

Nonetheless, where it is shown that the conclusion is a finding grounded on speculations, surmises or conjectures or where the judgment is based on misapprehension of facts, the Supreme Court may reexamine the evidence on record.[40]

Eminent Domain: Nature and Scope

The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate any property within its territorial sovereignty for a public purpose.  The nature and scope of such power has been comprehensively described as follows:

… It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government to serve the common need and advance the general welfare.  Thus, the right of eminent domain appertains to every independent government without the necessity for constitutional recognition.  The provisions found in modern constitutions of civilized countries relating to the taking of property for the public use do not by implication grant the power to the government, but limit the power which would, otherwise, be without limit.  Thus, our own Constitution provides that “[p]rivate property shall not be taken for public use without just compensation.”  Furthermore, the due process and equal protection clauses act as additional safeguards against the arbitrary exercise of this governmental power.[41]

Strict Construction and Burden of Proof

The exercise of the right of eminent domain, whether directly by the State or by its authorized agents, is necessarily in derogation of private rights. [42] It is one of the harshest proceedings known to the law.  Consequently, when the sovereign delegates the power to a political unit or agency, a strict construction will be given against the agency asserting the power.[43] The authority to condemn is to be strictly construed in favor of the owner and against the condemnor.[44] When the power is granted, the extent to which it may be exercised is limited to the express terms or clear implication of the statute in which the grant is contained.[45]

Corollarily, the respondent, which is the condemnor, has the burden of proving all the essentials necessary to show the right of condemnation. [46] It has the burden of proof to establish that it has complied with all the requirements provided by law for the valid exercise of the power of eminent domain.

The grant of the power of eminent domain to local government units is grounded on Section 19 of R.A. No. 7160 which reads:

SEC. 19.  Eminent Domain. – A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws; Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That the amount to be paid for the expropriated property shall be determined by the proper court based on the fair market value at the time of the taking of the property.

The Court declared that the following requisites for the valid exercise of the power of eminent domain by a local government unit must be complied with:

1.   An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the local government unit, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property.

2.   The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless.

3.   There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws.

4.   A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted.[47]

Valid and Definite Offer

Article 35 of the Rules and Regulations Implementing the Local Government Code provides:

ARTICLE 35.  Offer to Buy and Contract of Sale. – (a) The offer to buy private property for public use or purpose shall be in writing.  It shall specify the property sought to be acquired, the reasons for its acquisition, and the price offered.

(b)     If the owner or owners accept the offer in its entirety, a contract of sale shall be executed and payment forthwith made.

(c)     If the owner or owners are willing to sell their property but at a price higher than that offered to them, the local chief executive shall call them to a conference for the purpose of reaching an agreement on the selling price.  The chairman of the appropriation or finance committee of the sanggunian, or in his absence, any member of the sanggunian duly chosen as its representative, shall participate in the conference.  When an agreement is reached by the parties, a contract of sale shall be drawn and executed.

(d)     The contract of sale shall be supported by the following documents:

(1)          Resolution of the sanggunian authorizing the local chief executive to enter into a contract of sale.  The resolution shall specify the terms and conditions to be embodied in the contract;

(2)          Ordinance appropriating the amount specified in the contract; and

(3)          Certification of the local treasurer as to availability of funds together with a statement that such fund shall not be disbursed or spent for any purpose other than to pay for the purchase of the property involved.

The respondent was burdened to prove the mandatory requirement of a valid and definite offer to the owner of the property before filing its complaint and the rejection thereof by the latter. [48] It is incumbent upon the condemnor to

exhaust all reasonable efforts to obtain the land it desires by agreement.[49] Failure to prove compliance with the mandatory requirement will result in the dismissal of the complaint.[50]

An offer is a unilateral proposition which one party makes to the other for the celebration of a contract.[51] It creates a power of acceptance permitting the offeree, by accepting the offer, to transform the offeror’s promise into a contractual obligation.[52] Corollarily, the offer must be complete, indicating with sufficient clearness the kind of contract intended and definitely stating the essential conditions of the proposed contract. [53] An offer would require, among other things, a clear certainty on both the object and the cause or consideration of the envisioned contract.[54]

The purpose of the requirement of a valid and definite offer to be first made to the owner is to encourage settlements and voluntary acquisition of property needed for public purposes in order to avoid the expense and delay of a court action.[55] The law is designed to give to the owner the opportunity to sell his land without the expense and inconvenience of a protracted and expensive litigation.  This is a substantial right which should be protected in every instance.[56] It encourages acquisition without litigation and spares not only the landowner but also the condemnor, the expenses and delays of litigation.  It permits the landowner to receive full compensation, and the entity acquiring the property, immediate use and enjoyment of the property.  A reasonable offer in good faith, not merely perfunctory or pro forma offer, to acquire the property for a reasonable price must be made to the owner or his privy.[57] A single bona fide offer that is rejected by the owner will suffice.

The expropriating authority is burdened to make known its definite and valid offer to all the owners of the property.  However, it has a right to rely on what appears in the certificate of title covering the land to be expropriated.  Hence, it is required to make its offer only to the registered owners of the property.  After all, it is well-settled that persons dealing with property covered by a Torrens certificate of title are not required to go beyond what appears on its face.[58]

In the present case, the respondent failed to prove that before it filed its complaint, it made a written definite and valid offer to acquire the property for public use as an access road.  The only evidence adduced by the respondent to prove its compliance with Section 19 of the Local Government Code is the photocopy of the letter purportedly bearing the signature of Engr. Jose Reyes, to only one of the co-owners, Lorenzo Ching Cuanco.  The letter reads:

MR. LORENZO CHING CUANCO

18 Alcalde Jose StreetCapasigan, Pasig

Metro Manila

Dear Mr. Cuanco:

This refers to your parcel of land located along E. Santos Street, Barangay Palatiw, Pasig, Metro Manila embraced in and covered by TCT No. 66585, a portion of which with an area of fifty-one (51) square meters is needed by the Municipal Government of Pasig for conversion into a road-right of way for the benefit of several residents living in the vicinity of your property.  Attached herewith is the sketch plan for your information.

In this connection, may we respectfully request your presence in our office to discuss this project and the price that may be mutually agreed upon by you and the Municipality of Pasig.

Thank you.

Very truly yours,

(Sgd.)ENGR. JOSE L. REYES

Technical Asst. to the Mayoron Infrastructure[59]

It bears stressing, however, that the respondent offered the letter only to prove its desire or intent to acquire the property for a right-of-way. [60]The document was not offered to prove that the respondent made a definite and valid offer to acquire the property.  Moreover, the RTC rejected the document because the respondent failed to adduce in evidence the original copy thereof.[61] The respondent, likewise, failed to adduce evidence that copies of the letter were sent to and received by all the co-owners of the property, namely, Lorenzo Ching Cuanco, Victor Ching Cuanco and Ernesto Kho.

The respondent sought to prove, through the testimony of its messenger, Rolando Togonon, that Lorenzo Ching Cuanco received the original of the said letter.  But Togonon testified that he merely gave the letter to a lady, whom he failed to identify.  He stated that the lady went inside the store of Lorenzo Ching Cuanco, and later gave the letter back to him bearing the signature purportedly of one Luz Bernarte.  However, Togonon admitted, on cross-examination, that he did not see Bernarte affixing her signature on the

letter.  Togonon also declared that he did not know and had never met Lorenzo Ching Cuanco and Bernarte:

Q    And after you received this letter from that lady, what did you do afterwards?

A     I brought it with me, that letter, and then I went to Caruncho.

Q    So, [M]r. Witness, you are telling this Honorable Court that this letter intended to Mr. Lorenzo was served at Pasig Trading which was situated at No. 18 Alkalde Jose Street on February 23, 1993?

A     Yes, Ma’am.

ATTY. TAN:

       That is all for the witness, Your Honor.

COURT:

       Do you have any cross-examination?

ATTY. JOLO:

       Just a few cross, Your Honor, please.  With the kind permission of the Honorable Court.

COURT:

       Proceed.

CROSS-EXAMINATION

BY ATTY. JOLO:

Q    Mr. Witness, do you know Mr. Lorenzo Ching [Cuanco]

A     I do not know him.

Q    As a matter of fact, you have not seen him even once, isn’t not (sic)?

A     Yes, Sir.

Q    This Luz Bernarte, do you know her?

A     I do not know her.

Q    As a matter of fact, you did not see Mrs. Bernarte even once?

A     That is correct.

Q    And as a matter of fact, [M]r. Witness, you did not see Mrs. Luz Bernarte affixing her signature on the bottom portion of this demand letter, marked as Exh. “C-2”?

A     Yes, Sir.[62]

Even if the letter was, indeed, received by the co-owners, the letter is not a valid and definite offer to purchase a specific portion of the property for a price certain.  It is merely an invitation for only one of the co-owners, Lorenzo Ching Cuanco, to a conference to discuss the project and the price that may be mutually acceptable to both parties.

There is no legal and factual basis to the CA’s ruling that the annotation of a notice of lis pendens at the dorsal portion of petitioner’s TCT No. PT-92579 is a substantial compliance with the requisite offer.  A notice of lis pendens is a notice to the whole world of the pendency of an action involving the title to or possession of real property and a warning that those who acquire an interest in the property do so at their own risk and that they gamble on the result of the litigation over it.[63] Moreover, the lis pendens was annotated at the dorsal portion of the title only on November 26, 1993, long after the complaint had been filed in the RTC against the Ching Cuancos.

Neither is the declaration in one of the whereas clauses of the ordinance that “the property owners were already notified by the municipality of the intent to purchase the same for public use as a municipal road,” a substantial compliance with the requirement of a valid and definite offer under Section 19 of R.A. No. 7160.  Presumably, the Sangguniang Bayan relied on the erroneous premise that the letter of Engr. Reyes reached the co-owners of the property.  In the absence of competent evidence that, indeed, the respondent made a definite and valid offer to all the co-owners of the property, aside from the letter of Engr. Reyes, the declaration in the ordinance is not a compliance with Section 19 of R.A. No. 7160.

The respondent contends, however, that the Ching Cuancos, impliedly admitted the allegation in its complaint that an offer to purchase the property was made to them and that they refused to accept the offer by their failure to specifically deny such allegation in their answer.  This contention is wrong.  As gleaned from their answer to the complaint, the Ching Cuancos specifically denied such allegation for want of sufficient knowledge to form a belief as to its correctness.  Under Section 10,[64] Rule 8 of the Rules of Court, such form of denial, although not specific, is sufficient.

Public Necessity

We reject the contention of the petitioner that its property can no longer be expropriated by the respondent because it is intended for the construction of a place for religious worship and a school for its members.  As aptly explained by this Court in Manosca v. Court of Appeals,[65]thus:

It has been explained as early as Seña v. Manila Railroad Co., that:

… A historical research discloses the meaning of the term “public use”  to be one of constant growth.  As society advances, its demands upon the individual increases and

each demand is a new use to which the resources of the individual may be devoted. … for “whatever is beneficially employed for the community is a public use.”

Chief Justice Enrique M. Fernando states:

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

Chief Justice Fernando, writing the ponencia  in J.M. Tuason & Co. vs. Land Tenure Administration, has viewed the Constitution a dynamic instrument and one that “is not to be construed narrowly or pedantically so as to enable it to meet adequately whatever problems the future has in store.” Fr. Joaquin Bernas, a noted constitutionalist himself, has aptly observed that what, in fact, has ultimately emerged is a concept of public use which is just as broad as “public welfare.”

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

The petitioner asserts that the respondent must comply with the requirements for the establishment of an easement of right-of-way, more specifically, the road must be constructed at the point least prejudicial to the

servient state, and that there must be no adequate outlet to a public highway.  The petitioner asserts that the portion of the lot sought to be expropriated is located at the middle portion of the petitioner’s entire parcel of land, thereby splitting the lot into two halves, and making it impossible for the petitioner to put up its school building and worship center.

The subject property is expropriated for the purpose of constructing a road.  The respondent is not mandated to comply with the essential requisites for an easement of right-of-way under the New Civil Code.  Case law has it that in the absence of legislative restriction, the grantee of the power of eminent domain may determine the location and route of the land to be taken[66] unless such determination is capricious and wantonly injurious.[67] Expropriation is justified so long as it is for the public good and there is genuine necessity of public character.[68]Government may not capriciously choose what private property should be taken.[69]

The respondent has demonstrated the necessity for constructing a road from E. R. Santos Street to Sto. Tomas Bukid.  The witnesses, who were residents of Sto. Tomas Bukid, testified that although there were other ways through which one can enter the vicinity, no vehicle, however, especially fire trucks, could enter the area except through the newly constructed Damayan Street.  This is more than sufficient to establish that there is a genuine necessity for the construction of a road in the area.  After all, absolute necessity is not required, only reasonable and practical necessity will suffice.[70]

Nonetheless, the respondent failed to show the necessity for constructing the road particularly in the petitioner’s property and not elsewhere. [71] We note that the whereas clause of the ordinance states that the 51-square meter lot is the shortest and most suitable access road to connect Sto. Tomas Bukid to E. R. Santos Street.  The respondent’s complaint also alleged that the said portion of the petitioner’s lot has been surveyed as the best possible ingress and egress.  However, the respondent failed to adduce a preponderance of evidence to prove its claims.

On this point, the trial court made the following findings:

…  The contention of the defendants that there is an existing alley that can serve the purpose of the expropriator is not accurate.  An inspection of the vicinity reveals that the alley being referred to by the defendants actually passes thru Bagong Taon St. but only about one-half (1/2) of its entire length is passable by vehicle and the other half is merely a foot-path.  It would be more inconvenient to widen the alley considering that its sides are occupied by permanent structures and its length from the municipal road to the area sought to be served by the expropriation is considerably longer than

the proposed access road.  The area to be served by the access road is composed of compact wooden houses and literally a slum area.  As a result of the expropriation of the 51-square meter portion of the property of the intervenor, a 3-meter wide road open to the public is created.  This portion of the property of the intervenor is the most convenient access to the interior of Sto. Tomas Bukid since it is not only a short cut to the interior of the Sto. Tomas Bukid but also an easy path for vehicles entering the area, not to mention the 3-meter wide road requirement of the Fire Code.[72]

However, as correctly pointed out by the petitioner, there is no showing in the record that an ocular inspection was conducted during the trial.  If, at all, the trial court conducted an ocular inspection of the subject property during the trial, the petitioner was not notified thereof.  The petitioner was, therefore, deprived of its right to due process.  It bears stressing that an ocular inspection is part of the trial as evidence is thereby received and the parties are entitled to be present at any stage of the trial. [73] Consequently, where, as in this case, the petitioner was not notified of any ocular inspection of the property, any factual finding of the court based on the said inspection has no probative weight.  The findings of the trial court based on the conduct of the ocular inspection must, therefore, be rejected.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED.  The Decision and Resolution of the Court of Appeals are REVERSED AND SET ASIDE.  The RTC is ordered to dismiss the complaint of the respondent without prejudice to the refiling thereof.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur

S E C O N D D I V I S I O N  

LOURDES DE LA PAZ MASIKIP,                                       Petitioner,   

- versus -  

 THE CITY OF PASIG, HON.

          G.R. No. 136349            Present:

  

     PUNO, J., Chairman,     SANDOVAL-GUTIERREZ,     CORONA,     AZCUNA, and     GARCIA, JJ.

MARIETTA A. LEGASPI, in her capacity as Presiding Judge of the Regional Trial Court of Pasig City, Branch 165 and THE COURT OF APPEALS,                                   Respondents. 

           Promulgated:                   January 23, 2006

x-----------------------------------------------------------------------------------------x  

D E C I S I O N   

SANDOVAL GUTIERREZ, J.:            Where the taking by the State of private property is done for the benefit of a small community which seeks to have its own sports and recreational facility, notwithstanding that there is such a recreational facility only a short distance away, such taking cannot be considered to be for public use.  Its expropriation is not valid.  In this case, the Court defines what constitutes a genuine necessity for public use.           This petition for review on certiorari assails the Decision[1] of the Court of Appeals dated October 31, 1997 in CA-G.R. SP No. 41860 affirming the Order[2] of the Regional Trial Court, Branch 165, Pasig City, dated May 7, 1996 in S.C.A. No. 873.   Likewise assailed is the Resolution[3] of the same court dated November 20, 1998 denying petitioner’s Motion for Reconsideration.           The facts of the case are:           Petitioner Lourdes Dela Paz Masikip is the registered owner of a parcel of land with an area of 4,521 square meters located at Pag-Asa, Caniogan, Pasig City, Metro Manila.           In a letter dated January 6, 1994, the then Municipality of Pasig, now City of  Pasig, respondent, notified petitioner of its intention to expropriate a 1,500 square meter portion of her property to be used for the “sports development and recreational activities” of the residents of Barangay Caniogan.  This was pursuant

to Ordinance No. 42, Series of 1993 enacted by the thenSangguniang Bayan of Pasig.           Again, on March 23, 1994, respondent wrote another letter to petitioner, but this time the purpose was allegedly “in line with the program of the Municipal Government to provide land opportunities to deserving poor sectors of our community.”           On May 2, 1994, petitioner sent a reply to respondent stating that the intended expropriation of her property is unconstitutional, invalid, and oppressive, as the area of her lot is neither sufficient nor suitable to “provide land opportunities to deserving poor sectors of our community.”           In its letter of December 20, 1994, respondent reiterated that the purpose of the expropriation of petitioner’s property is “to provide sports and recreational facilities to its poor residents.”           Subsequently, on February 21, 1995, respondent filed with the trial court a complaint for expropriation, docketed as SCA No. 873.   Respondent prayed that the trial court, after due notice and hearing, issue an order for the condemnation of the property; that commissioners be appointed for the purpose of determining the just compensation; and that judgment be rendered based on the report of the commissioners.           On April 25, 1995, petitioner filed a Motion to Dismiss the complaint on the following grounds: 

IPLAINTIFF HAS NO CAUSE OF ACTION FOR THE EXERCISE OF THE POWER OF EMINENT DOMAIN, CONSIDERING THAT:

           (A)  THERE IS NO GENUINE NECESSITY FOR THE TAKING OF THE PROPERTY SOUGHT TO BE EXPROPRIATED.           (B)  PLAINTIFF HAS ARBITRARILY AND CAPRICIOUSLY CHOSEN THE PROPERTY SOUGHT TO BE EXPROPRIATED. 

          (C)  EVEN ASSUMING ARGUENDO THAT DEFENDANT’S PROPERTY MAY BE EXPROPRIATED BY PLAINTIFF, THE FAIR MARKET VALUE OF THE PROPERTY TO BE EXPROPRIATED FAR EXCEEDS SEVENTY-EIGHT THOUSAND PESOS (P78,000.00)

    

II 

PLAINTIFF’S COMPLAINT IS DEFECTIVE IN FORM AND SUBSTANCE, CONSIDERING THAT:

           (A)  PLAINTIFF FAILS TO ALLEGE WITH CERTAINTY THE PURPOSE OF THE EXPROPRIATION.           (B)  PLAINTIFF HAS FAILED TO COMPLY WITH THE PREREQUISITES LAID DOWN IN SECTION 34, RULE VI OF THE RULES AND REGULATIONS IMPLEMENTING THE LOCAL GOVERNMENT CODE; THUS, THE INSTANT EXPROPRIATION PROCEEDING IS PREMATURE.

 III 

THE GRANTING OF THE EXPROPRIATION WOULD VIOLATE SECTION 261 (V) OF THE OMNIBUS ELECTION CODE. 

IV 

PLAINTIFF CANNOT TAKE POSSESSION OF THE SUBJECT PROPERTY BY MERELY DEPOSITING AN AMOUNT EQUAL TO FIFTEEN PERCENT (15%) OF THE

VALUE OF THE PROPERTY BASED ON THE CURRENT TAX DECLARATION OF THE SUBJECT PROPERTY.[4]

            On May 7, 1996, the trial court issued an Order denying the Motion to Dismiss,[5] on the ground that there is a genuine necessity to expropriate the property for the sports and recreational activities of the residents of Pasig.   As to the issue of just compensation, the trial court held that the same is to be determined in accordance with the Revised Rules of Court.           Petitioner filed a motion for reconsideration but it was denied by the trial court in its Order of July 31, 1996.   Forthwith, it appointed the City Assessor and City Treasurer of Pasig City as commissioners to ascertain the just compensation.  This prompted petitioner to file with the Court of Appeals a special civil action for certiorari, docketed as CA-G.R. SP       No. 41860.   On October 31, 1997, the Appellate Court dismissed the petition for lack of merit.   Petitioner’s Motion for Reconsideration was denied in a Resolution dated November 20, 1998.           Hence, this petition anchored on the following grounds:

           THE QUESTIONED DECISION DATED 31 OCTOBER 1997 (ATTACHMENT “A”) ANDRESOLUTION DATED 20 NOVEMBER 1998 (ATTACHMENT “B”) ARE CONTRARY TO LAW, THE RULES OF COURT AND JURISPRUDENCE CONSIDERING THAT: 

I A.   THERE IS  NO  EVIDENCE  TO PROVE

THAT THERE IS GENUINE NECESSITY FOR THE TAKING OF THE PETITIONER’S PROPERTY.

 B.   THERE  IS  NO  EVIDENCE  TO PROVE

THAT THE PUBLIC USE REQUIREMENT FOR THE EXERCISE OF THE POWER OF EMINENT DOMAIN HAS BEEN COMPLIED WITH.

 

C.   THERE  IS  NO  EVIDENCE  TO PROVE THAT RESPONDENT CITY OF PASIG HAS COMPLIED WITH ALL CONDITIONS PRECEDENT FOR THE EXERCISE OF THE POWER OF EMINENT DOMAIN.

 THE COURT A QUO’S ORDER DATED 07 MAY 1996 AND 31 JULY 1996, WHICH WERE AFFIRMED BY THE COURT OF APPEALS, EFFECTIVELY AMOUNT TO THE TAKING OF PETITIONER’S PROPERTY WITHOUT DUE PROCESS OF LAW:   

II 

THE COURT OF APPEALS GRAVELY ERRED IN APPLYING OF RULE ON ACTIONABLE DOCUMENTS TO THE DOCUMENTS ATTACHED TO RESPONDENT CITY OF PASIG’SCOMPLAINT DATED 07 APRIL 1995 TO JUSTIFY THE COURT A QUO’S DENIAL OF PETITIONER’S RESPONSIVE PLEADING TO THE COMPLAINT FOR EXPROPRIATION (THE MOTION TO DISMISS DATED 21 APRIL 1995). 

III 

THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE RULE ON HYPOTHETICAL ADMISSION OF FACTS ALLEGED IN A COMPLAINT CONSIDERING THAT THE MOTION TO DISMISS FILED BY PETITIONER IN THE EXPROPRIATION CASE BELOW WAS THE RESPONSIVE PLEADING REQUIRED TO BE FILED UNDER THE THEN RULE 67 OF THE RULES OF COURT AND

NOT AN ORIDNARY MOTION TO DISMISS UNDER RULE 16 OF THE RULES OF COURT.

            The foregoing arguments may be synthesized into two main issues – one substantive and one procedural.   We will first address the procedural issue.           Petitioner filed her Motion to Dismiss the complaint for expropriation on April 25, 1995.   It was denied by the trial court on May 7, 1996.  At that time, the rule on expropriation was governed by Section 3, Rule 67 of the Revised Rules of Court which provides: 

            “SEC. 3.  Defenses and objections. – Within the time specified in the summons, each defendant, in lieu of an answer, shall present in a single motion to dismiss or for other appropriate relief, all his objections and defenses to the right of the plaintiff to take his property for the use or purpose specified in the complaint.  All such objections and defenses not so presented are waived.  A copy of the motion shall be served on the plaintiff’s attorney of record and filed with the court with proof of service.” 

           The motion to dismiss contemplated in the above Rule clearly constitutes the responsive pleading which takes the place of an answer to the complaint for expropriation.    Such motion is the pleading that puts in issue the right of the plaintiff to expropriate the defendant’s property for the use specified in the complaint.   All that the law requires is that a copy of the said motion be served on plaintiff’s attorney of record.   It is the court that at its convenience will set the case for trial after the filing of the said pleading.[6]

           The Court of Appeals therefore erred in holding that the motion to dismiss filed by petitioner hypothetically admitted the truth of the facts alleged in the complaint, “specifically that there is a genuine necessity to expropriate petitioner’s property for public use.”  Pursuant to the above Rule, the motion is a responsive pleading joining the issues.   What the trial court should have done was to set the case for the reception of evidence to determine whether there is indeed a genuine necessity for the taking of the property, instead of summarily making a finding that the taking is for public use and appointing commissioners to fix just compensation.   This is especially so considering that the purpose of the expropriation was squarely challenged and put in issue by petitioner in her motion to dismiss. 

          Significantly, the above Rule allowing a defendant in an expropriation case to file a motion to dismiss in lieu of an answer was amended by the 1997 Rules of Civil Procedure, which took effect on July 1, 1997.   Section 3, Rule 67 now expressly mandates that any objection or defense to the taking of the property of a defendant must be set forth in an answer.           The fact that the Court of Appeals rendered its Decision in CA-G.R. SP No. 41860 on October 31, after the 1997 Rules of Civil Procedure took effect, is of no moment.  It is only fair that the Rule at the time petitioner filed her motion to dismiss should govern.  The new provision cannot be applied retroactively to her prejudice.           We now proceed to address the substantive issue.           In the early case of US v. Toribio,[7] this Court defined the power of eminent domain as “the right of a government to take and appropriate private property to public use, whenever the public exigency requires it, which can be done only on condition of providing a reasonable compensation therefor.”  It has also been described as the power of the State or its instrumentalities to take private property for public use and is inseparable from sovereignty and inherent in government.[8]

           The power of eminent domain is lodged in the legislative branch of the government.   It delegates the exercise thereof to local government units, other public entities and public utility corporations,[9] subject only to Constitutional limitations.   Local governments have no inherent power of eminent domain and may exercise it only when expressly authorized by statute.[10]   Section 19 of the Local Government Code of 1991 (Republic Act No. 7160) prescribes the delegation by Congress of the power of eminent domain to local government units and lays down the parameters for its exercise, thus: 

          “SEC. 19.  Eminent Domain. – A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, purpose or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That, the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner and such offer was not accepted: Provided, further, That, the local government unit may immediately take possession of the property upon the filing of expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be

expropriated: Provided, finally, That, the amount to be paid for expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.”

           Judicial review of the exercise of eminent domain is limited to the following areas of concern:  (a) the adequacy of the compensation, (b) the necessity of the taking, and (c) the public use character of the purpose of the taking.[11]            In this case, petitioner contends that respondent City of Pasig failed to establish a genuine necessity which justifies the condemnation of her property.  While she does not dispute the intended public purpose, nonetheless, she insists that there must be a genuine necessity for the proposed use and purposes.  According to petitioner, there is already an established sports development and recreational activity center at Rainforest Park in Pasig City, fully operational and being utilized by its residents, including those from Barangay Caniogan.  Respondent does not dispute this.  Evidently, there is no “genuine necessity” to justify the expropriation.           The right to take private property for public purposes necessarily originates from “the necessity” and the taking must be limited to such necessity.   In City of Manila v. Chinese Community of Manila,[12] we held that the very foundation of the right to exercise eminent domain is a genuine necessity and that necessity must be of a public character.  Moreover, the ascertainment of the necessity must precede or accompany and not follow, the taking of the land.   In City of Manila v. Arellano Law College,[13] we ruled that “necessity within the rule that the particular property to be expropriated must be necessary, does not mean an absolute but only a reasonable or practical necessity, such as would combine the greatest benefit to the public with the least inconvenience and expense to the condemning party and the property owner consistent with such benefit.”

 Applying this standard, we hold that respondent City of Pasig has failed to

establish that there is a genuine necessity to expropriate petitioner’s property.  Our scrutiny of the records shows that the Certification[14] issued by the Caniogan Barangay Council dated November 20, 1994, the basis for the passage of Ordinance No. 42 s. 1993 authorizing the expropriation, indicates that the intended beneficiary is the Melendres Compound Homeowners Association, a private, non-profit organization, not the residents of Caniogan.  It can be gleaned that the members of the said Association are desirous of having their own private playground and recreational facility. Petitioner’s lot is the nearest vacant space available.   The purpose is, therefore, not clearly and categorically public.  The

necessity has not been shown, especially considering that there exists an alternative facility for sports development and community recreation in the area, which is the Rainforest Park, available to all residents of Pasig City, including those of Caniogan.

 The right to own and possess property is one of the most cherished rights of

men.  It is so fundamental that it has been written into organic law of every nation where the rule of law prevails.  Unless the requisite of genuine necessity for the expropriation of one’s property is clearly established, it shall be the duty of the courts to protect the rights of individuals to their private property.  Important as the power of eminent domain may be, the inviolable sanctity which the Constitution attaches to the property of the individual requires not only that the purpose for the taking of private property be specified.  The genuine necessity for the taking, which must be of a public character, must also be shown to exist.

 WHEREFORE, the petition for review is GRANTED.  The challenged

Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 41860 are REVERSED.  The complaint for expropriation filed before the trial court by respondent City of Pasig, docketed as SCA No. 873, is ordered DISMISSED.  

SO ORDERED.

                                   ANGELINA SANDOVAL-GUTIERREZ                 Associate Justice

 WE CONCUR:   

REYNATO S. PUNOAssociate Justice

Chairperson  

 RENATO C. CORONA

Associate Justice 

 ADOLFO S. AZCUNA

Associate Justice   

CANCIO C. GARCIAAssociate Justice

  

ATTESTATION            I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 153974 August 7, 2006

MIGUEL BELUSO, NATIVIDAD BELUSO, PEDRO BELUSO, ANGELITA BELUSO, RAMON BELUSO, and AMADA DANIEL, substituted by her heirs represented by TERESITA ARROBANG, Petitioners,vs.THE MUNICIPALITY OF PANAY (CAPIZ), represented by its Mayor, VICENTE B. BERMEJO, Respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before this Court is a petition for review questioning the Decision 1 of the Court of Appeals (CA) dated March 20, 2002 in CA-G.R. SP No. 47052, as well the Resolution 2 dated June 11, 2002 denying petitioners’ Motion for Reconsideration thereof.

The facts are as follows:

Petitioners are owners of parcels of land with a total area of about 20,424 square meters, covered by Free Patent Nos. 7265, 7266, 7267, 7268, 7269, and 7270. 3 On November 8, 1995, the Sangguniang Bayan of the Municipality of Panay issued Resolution No. 95-29 authorizing the

municipal government through the mayor to initiate expropriation proceedings. 4 A petition for expropriation was thereafter filed on April 14, 1997 by the Municipality of Panay (respondent) before the Regional Trial Court (RTC), Branch 18 of Roxas City, docketed as Civil Case No. V-6958. 5

Petitioners filed a Motion to Dismiss alleging that the taking is not for public use but only for the benefit of certain individuals; that it is politically motivated because petitioners voted against the incumbent mayor and vice-mayor; and that some of the supposed beneficiaries of the land sought to be expropriated have not actually signed a petition asking for the property but their signatures were forged or they were misled into signing the same. 6

On July 31, 1997, the trial court denied petitioners’ Motion to Dismiss and declared that the expropriation in this case is for "public use" and the respondent has the lawful right to take the property upon payment of just compensation. 7

Petitioners filed an Answer on August 12, 1997 reasserting the issues they raised in their Motion to Dismiss. 8

On October 1, 1997, the trial court issued an Order appointing three persons as Commissioners to ascertain the amount of just compensation for the property. 9 Petitioners filed a "Motion to Hold in Abeyance the Hearing of the Court Appointed Commissioners to Determine Just Compensation and for Clarification of the Court’s Order dated October 1, 1997" which was denied by the trial court on November 3, 1997. 10 Petitioners’ Motion for Reconsideration was also denied on December 9, 1997. 11

Petitioners then filed on March 2, 1998 a Petition for Certiorari before the CA claiming that they were denied due process when the trial court declared that the taking was for public purpose without receiving evidence on petitioners’ claim that the Mayor of Panay was motivated by politics in expropriating their property and in denying their Motion to Hold in Abeyance the Hearing of the Court Appointed Commissioners; and that the trial court also committed grave abuse of discretion when it disregarded the affidavits of persons denying that they signed a petition addressed to the municipal government of Panay. 12 On January 17, 2001, petitioners filed a Motion to Admit Attached Memorandum and the Memorandum itself where they argued that based on the Petition for Expropriation filed by respondent, such expropriation was based only on a resolution and not on an ordinance contrary to Sec. 19 of Republic Act (R.A.) No. 7160; there was also no valid and definite offer to buy the property as the price offered by respondent to the petitioners was very low. 13

On March 20, 2002, the CA rendered its Decision dismissing the Petition for Certiorari. It held that the petitioners were not denied due process as they were able to file an answer to the complaint and were able to adduce their defenses therein; and that the purpose of the taking in this case constitutes "public use". 14 Petitioners filed a Motion for Reconsideration which was denied on June 11, 2002. 15

Thus, the present petition claiming that:

A. RESPONDENT IS WITHOUT, LACKS AND DOES NOT HAVE THE LAWFUL POWER TO ACQUIRE ANY OR ALL OF THE SUBJECT PROPERTIES THROUGH EMINENT DOMAIN, IT BEING EXERCISED BY MEANS OF A MERE RESOLUTION, AND NOT THROUGH AN ORDINANCE AS REQUIRED BY LAW AND APPLICABLE JURISPRUDENCE;

B. RESPONDENT IS LIKEWISE WITHOUT, LACKS AND DOES NOT HAVE THE LAWFUL POWER TO ACQUIRE ANY OR ALL OF THE SUBJECT PROPERTIES THROUGH EMINENT DOMAIN, ITS PREVIOUS OFFER TO BUY THEM BEING NOT VALID; and

C. IT WAS A SERIOUS ERROR ON THE PART OF THE HONORABLE COURT OF APPEALS NOT TO DISCUSS, MUCH LESS RULE ON, BOTH IN ITS QUESTIONED DECISION AND ITS RESOLUTION PROMULGATED ON 11 JUNE 2002 PETITIONERS’ ARGUMENTS THAT RESPONDENT IS WITHOUT, LACKS AND DOES NOT HAVE THE LAWFUL POWER TO ACQUIRE ANY OR ALL OF THE SUBJECT PROPERTIES THROUGH EMINENT DOMAIN, IT BEING EXERCISED BY MEANS OF A MERE RESOLUTION, AND NOT THROUGH AN ORDINANCE AS REQUIRED BY LAW AND APPLICABLE JURISPRUDENCE, AND ITS PREVIOUS OFFER TO BUY THEM BEING NOT VALID, DESPITE THE FACT THAT THESE OBJECTIONS WERE PROPERLY PLEADED IN PETITIONERS’ MEMORANDUM WHICH WAS DULY ADMITTED IN ITS RESOLUTION PROMULGATED ON 29 JANUARY 2001; and

D. PETITIONERS WERE UTTERLY DENIED PROCEDURAL DUE PROCESS OF LAW BY THE COURT A QUO, WHEN IT SIMPLY DECLARED IN ITS ORDER DATED 31 JULY 1997 THAT THE TAKING BY RESPONDENT OF PETITIONERS’ PROPERTIES IS PURPORTEDLY FOR PUBLIC PURPOSE WITHOUT RECEIVING EVIDENCE ON THEIR ASSERTED CLAIM THAT RESPONDENT’S MUNICIPAL MAYOR WAS POLITICALLY MOTIVATED IN SEEKING THE EXPROPRIATION OF THEIR PROPERTIES AND NOT FOR PUBLIC PURPOSE. 16

Petitioners argue that: contrary to Sec. 19 of R.A. No. 7160 of the Local Government Code, which provides that a local government may exercise the power of eminent domain only by "ordinance," respondent’s expropriation in this case is based merely on a "resolution"; while objection on this ground was neither raised by petitioners in their Motion to Dismiss nor in their Answer, such objection may still be considered by this Court since the fact upon which it is based is apparent from the petition for expropriation itself; a defense may be favorably considered even if not raised in an appropriate pleading so long as the facts upon which it is based are undisputed; courts have also adopted a more censorious attitude in resolving questions involving the proper exercise of local bodies of the delegated power of expropriation, as compared to instances when it is directly exercised by the national legislature; respondent failed to give, prior to the petition for expropriation, a previous valid and definite offer to petitioners as the amount offered in this case was only P10.00 per square meter, when the properties are residential in nature and command a much higher price; the CA failed to discuss and rule upon the arguments raised by petitioners in their Memorandum; attached to the Motion to Dismiss were affidavits and death certificates showing that there were people whose names were in the supposed petition asking respondent for land, but who did not actually sign the same, thus showing that the present expropriation was not for a public purpose but was merely politically motivated; considering the conflicting claims regarding the purpose for which the properties are being expropriated and inasmuch as said issue may not be rightfully ruled upon merely on the basis of petitioners’ Motion to Dismiss and Answer as well as respondent’s Petition for Expropriation, what should have been done was for the RTC to conduct hearing where each party is given ample opportunity to prove its claim. 17

Respondent for its part contends that its power to acquire private property for public use upon payment of just compensation was correctly upheld by the trial court; that the CA was correct in finding that the petitioners were not denied due process, even though no hearing was conducted in the trial court, as petitioners were still able to adduce their objections and defenses therein; and that petitioners’ arguments have been passed upon by both the trial court and the CA and were all denied for lack of substantial merit. 18

Respondent filed a Memorandum quoting at length the decision of the CA to support its position. 19 Petitioners meanwhile opted to have the case resolved based on the pleadings already filed. 20

We find the petition to be impressed with merit.

Eminent domain, which is the power of a sovereign state to appropriate private property to particular uses to promote public welfare, is essentially lodged in the legislature. 21 While such power may be validly delegated to local government units (LGUs), other public entities and public utilities the exercise of such power by the delegated entities is not absolute. 22 In fact, the scope of delegated legislative power is narrower than that of the delegating authority and such entities may exercise the power to expropriate private property only when authorized by Congress and subject to its control and restraints imposed through the law conferring the power or in other legislations. 23 Indeed, LGUs by themselves have no inherent power of eminent domain. 24 Thus, strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but "inferior" since it must conform to the limits imposed by the delegation and thus partakes only of a share in eminent domain. 25 The national legislature is still the principal of the LGUs and the latter cannot go against the principal’s will or modify the same.26

The exercise of the power of eminent domain necessarily involves a derogation of a fundamental right. 27 It greatly affects a landowner’s right to private property which is a constitutionally protected right necessary for the preservation and enhancement of personal dignity and is intimately connected with the rights to life and liberty. 28Thus, whether such power is exercised directly by the State or by its authorized agents, the exercise of such power must undergo painstaking scrutiny. 29

Indeed, despite the existence of legislative grant in favor of local governments, it is still the duty of the courts to determine whether the power of eminent domain is being exercised in accordance with the delegating law.

Sec. 19 of R.A. No. 7160, which delegates to LGUs the power of eminent domain expressly provides:

SEC. 19. Eminent Domain. - A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.

It is clear therefore that several requisites must concur before an LGU can exercise the power of eminent domain, to wit:

1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the local government unit, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property.

2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless.

3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws.

4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted. 30

The Court in no uncertain terms have pronounced that a local government unit cannot authorize an expropriation of private property through a mere resolution of its lawmaking body. 31 R.A. No. 7160 otherwise known as the Local Government Code expressly requires an ordinance for the purpose and a resolution that merely expresses the sentiment of the municipal council will not suffice. 32

A resolution will not suffice for an LGU to be able to expropriate private property; and the reason for this is settled:

x x x A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. An ordinance possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the two are enacted differently -- a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of all the Sanggunian members.

If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would have simply adopted the language of the previous Local Government Code. But Congress did not. In a clear divergence from the previous Local Government Code, Sec. 19 of R.A. [No.] 7160 categorically requires that the local chief executive act pursuant to an ordinance. x x x 33

As respondent’s expropriation in this case was based merely on a resolution, such expropriation is clearly defective. While the Court is aware of the constitutional policy promoting local autonomy, the court cannot grant judicial sanction to an LGU’s exercise of its delegated power of eminent domain in contravention of the very law giving it such power. 34

The Court notes that petitioners failed to raise this point at the earliest opportunity. Still, we are not precluded from considering the same. This Court will not hesitate to consider matters even those raised for the first time on appeal in clearly meritorious situations, 35 such as in this case.

Thus, the Court finds it unnecessary to resolve the other issues raised by petitioners.

It is well to mention however that despite our ruling in this case respondent is not barred from instituting similar proceedings in the future, provided that it complies with all legal requirements. 36

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 47052 isREVERSED and SET ASIDE. The Complaint in Civil Action No. V-6958 is DISMISSED without prejudice.

No costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN

Chief JusticeChairperson

CONSUELO YNARES-SANTIAGOAssociate Justice

ROMEO J. CALLEJO, SR.Associate Justice

MINITA V. CHICO-NAZARIOAssociate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ARTEMIO V. PANGANIBANChief Justice

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 150640             March 22, 2007

BARANGAY SINDALAN, SAN FERNANDO, PAMPANGA, rep. by BARANGAY CAPTAIN ISMAEL GUTIERREZ,Petitioner, vs.COURT OF APPEALS, JOSE MAGTOTO III, and PATRICIA SINDAYAN, Respondents.

D E C I S I O N

VELASCO, JR., J.:

Expropriation, if misused or abused, would trench on the property rights of individuals without due process of law.

The Case

For review before the Court in a petition for certiorari under Rule 45 are the May 30, 2001 Decision1 and October 26, 2001 Resolution2 of the Court of Appeals (CA), reversing and setting aside the August 2, 1990 Order3 of the San Fernando, Pampanga Regional Trial Court (RTC), Branch 43. The CA Resolution denied petitioner’s Motion for Reconsideration of the May 30, 2001 Decision and in effect, the appellate court dismissed petitioner’s Complaint for eminent domain.

The Facts

On April 8, 1983, pursuant to a resolution passed by the barangay council, petitioner Barangay Sindalan, San Fernando, Pampanga, represented by Barangay Captain Ismael Gutierrez, filed a

Complaint for eminent domain against respondents spouses Jose Magtoto III and Patricia Sindayan, the registered owners of a parcel of land covered by Transfer Certificate of Title No. 117674-R. The Complaint was docketed as Civil Case No. 6756 and raffled to the San Fernando, Pampanga RTC, Branch 43. Petitioner sought to convert a portion of respondents’ land into Barangay Sindalan’s feeder road. The alleged public purposes sought to be served by the expropriation were stated in Barangay Resolution No. 6, as follows:

WHEREAS, said parcels of land shall be used, when acquired, as a barangay feeder road for the agricultural and other products of the residents, and just as inlet for their basic needs;

WHEREAS, presently, residents have to take a long circuitous dirt road before they can reach the concrete provincial road, entailing so much time, effort and money, not to mention possible damage and/or spilage [sic] on the products consigned to or coming from, the market outside the barangay; and

WHEREAS, said lots, used as outlet or inlet road, shall contribute greatly to the general welfare of the people residing therein social, cultural and health among other things, beside economic.4

Petitioner claimed that respondents’ property was the most practical and nearest way to the municipal road. Pending the resolution of the case at the trial court, petitioner deposited an amount equivalent to the fair market value of the property.5

On the other hand, respondents stated that they owned the 27,000- square meter property, a portion of which is the subject of this case. In their Memorandum,6 they alleged that their lot is adjacent to Davsan II Subdivision privately owned by Dr. Felix David and his wife. Prior to the filing of the expropriation case, said subdivision was linked to MacArthur Highway through a pathway across the land of a certain Torres family. Long before the passage of the barangay resolution, the wives of the subdivision owner and the barangay captain, who were known to be agents of the subdivision, had proposed buying a right-of-way for the subdivision across a portion of respondents’ property. These prospective buyers, however, never returned after learning of the price which the respondents ascribed to their property.

Respondents alleged that the expropriation of their property was for private use, that is, for the benefit of the homeowners of Davsan II Subdivision. They contended that petitioner deliberately omitted the name of Davsan II Subdivision and, instead, stated that the expropriation was for the benefit of the residents of Sitio Paraiso in order to conceal the fact that the access road being proposed to be built across the respondents’ land was to serve a privately owned subdivision and those who would purchase the lots of said subdivision. They also pointed out that under Presidential Decree No. (PD) 957, it is the subdivision owner who is obliged to provide a feeder road to the subdivision residents.7

After trial, the court a quo ruled, thus:

WHEREFORE, in view of all the foregoing premises duly considered, the herein plaintiff is hereby declared as having a lawful right to take the property hereinabove described and sought to be condemned for the public purpose or use as aforestated, upon payment of just compensation to be determined as of the date of the filing of the Complaint in this [sic] expropriation proceedings.

Upon the entry of this Order of Condemnation, let three (3) competent and disinterested persons be appointed as Commissioners to ascertain and report to the Court the just compensation for the property condemned.8

The Ruling of the Court of Appeals

Upon respondents’ appeal, the CA held:

We are convinced that it is the duty of the subdivision owner to provide the right of way needed by residents of Davsan II Subdivision as provided for in Section 29 of P.D. 957. Records show that Purok Paraiso, which is supposed to benefit from this [sic] expropriation proceedings is in reality Davsan II Subdivision as per the testimony of Ruben Palo, plaintiff’s own witness (TSN, p. 12, December 115, 1986) [sic]. Appellants correctly stated that:

"The act of Bo. Sindalan, San Fernando, Pampanga, in effect relieved the owners of Davsan II Subdivision of spending their own private funds for acquiring a right of way and constructing the required access road to the subdivision. It spent public funds for such private purpose and deprived herein defendants-appellants of their property for an ostensible public purpose x x x."

x x x x

WHEREFORE, premises considered, the appealed Decision is hereby REVERSED and SET ASIDE and the Complaint for Eminent Domain is DISMISSED for lack of merit.

SO ORDERED.9

The Issues

Petitioner imputes errors to the CA for (1) allegedly violating its power of eminent domain, (2) finding that the expropriation of the property is not for public use but for a privately owned subdivision, (3) finding that there was no payment of just compensation, and (4) failing to accord respect to the findings of the trial court. Stated briefly, the main issue in this case is whether the proposed exercise of the power of eminent domain would be for a public purpose. 1awphi1.nét

The Court’s Ruling

The petition lacks merit.

In general, eminent domain is defined as "the power of the nation or a sovereign state to take, or to authorize the taking of, private property for a public use without the owner’s consent, conditioned upon payment of just compensation."10 It is acknowledged as "an inherent political right, founded on a common necessity and interest of appropriating the property of individual members of the community to the great necessities of the whole community."11

1ªvvphi1.nét

The exercise of the power of eminent domain is constrained by two constitutional provisions: (1) that private property shall not be taken for public use without just compensation under Article III (Bill of Rights), Section 9 and (2) that no person shall be deprived of his/her life, liberty, or property without due process of law under Art. III, Sec. 1.

However, there is no precise meaning of "public use" and the term is susceptible of myriad meanings depending on diverse situations. The limited meaning attached to "public use" is "use by the public" or "public employment," that "a duty must devolve on the person or corporation holding property appropriated by right of eminent domain to furnish the public with the use intended, and that there must be a right on the part of the public, or some portion of it, or some public or quasi-public agency on behalf of the public, to use the property after it is condemned."12The more generally

accepted view sees "public use" as "public advantage, convenience, or benefit, and that anything which tends to enlarge the resources, increase the industrial energies, and promote the productive power of any considerable number of the inhabitants of a section of the state, or which leads to the growth of towns and the creation of new resources for the employment of capital and labor, [which] contributes to the general welfare and the prosperity of the whole community."13 In this jurisdiction, "public use" is defined as "whatever is beneficially employed for the community."14

It is settled that the public nature of the prospective exercise of expropriation cannot depend on the "numerical count of those to be served or the smallness or largeness of the community to be benefited."15 The number of people is not determinative of whether or not it constitutes public use, provided the use is exercisable in common and is not limited to particular individuals.16 Thus, the first essential requirement for a valid exercise of eminent domain is for the expropriator to prove that the expropriation is for a public use. In Municipality of Biñan v. Garcia, this Court explicated that expropriation ends with an order of condemnation declaring "that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation."17

Another vital requisite for a valid condemnation is the payment of just compensation to the property owner. In the recent case of APO Fruits Corporation v. The Honorable Court of Appeals,18 just compensation has been defined as "the full and fair equivalent of the property taken from its owner by the expropriator," and that the gauge for computation is not the taker’s gain but the owner’s loss. In order for the payment to be "just," it must be real, substantial, full, and ample. Not only must the payment be fair and correctly determined, but also, the Court inEstate of Salud Jimenez v. Philippine Export Processing Zone stressed that the payment should be made within a "reasonable time" from the taking of the property.19 It succinctly explained that without prompt payment, compensation cannot be considered "just" inasmuch as the property owner is being made to suffer the consequences of being immediately deprived of the land while being made to wait for a decade or more before actually receiving the amount necessary to cope with the loss. Thus, once just compensation is finally determined, the expropriator must immediately pay the amount to the lot owner. In Reyes v. National Housing Authority, it was ruled that 12% interest per annum shall be imposed on the final compensation until paid.20 Thus, any further delay in the payment will result in the imposition of 12% interest per annum. However, in the recent case ofRepublic v. Lim, the Court enunciated the rule that "where the government failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation proceedings, the owners concerned shall have the right to recover possession of their property."21

Since the individual stands to lose the property by compulsion of the law, the expropriation authority should not further prejudice the owner’s rights by delaying payment of just compensation. To obviate any possibility of delay in the payment, the expropriator should already make available, at the time of the filing of the expropriation complaint, the amount equal to the BIR zonal valuation or the fair market value of the property per tax declaration whichever is higher.

The delayed payment of just compensation in numerous cases results from lack of funds or the time spent in the determination of the legality of the expropriation and/or the fair valuation of the property, and could result in dismay, disappointment, bitterness, and even rancor on the part of the lot owners. It is not uncommon for the expropriator to take possession of the condemned property upon deposit of a small amount equal to the assessed value of the land per tax declaration and then challenge the valuation fixed by the trial court resulting in an "expropriate now, pay later" situation. In the event the expropriating agency questions the reasonability of the compensation fixed by the trial court before the appellate court, then the latter may, upon motion, use its sound discretion to order the payment to the lot owner of the amount equal to the valuation of the property, as proposed by the condemnor during the proceedings before the commissioners under Sec. 6, Rule 67 of the Rules of Court,

subject to the final valuation of the land. This way, the damage and prejudice to the property owner would be considerably pared down.

On due process, it is likewise basic under the Constitution that the property owner must be afforded a reasonable opportunity to be heard on the issues of public use and just compensation and to present objections to and claims on them.22 It is settled that taking of property for a private use or without just compensation is a deprivation of property without due process of law.23 Moreover, it has to be emphasized that taking of private property without filing any complaint before a court of law under Rule 67 of the Rules of Court or existing laws is patently felonious, confiscatory, and unconstitutional. Judicial notice can be taken of some instances wherein some government agencies or corporations peremptorily took possession of private properties and usurped the owner’s real rights for their immediate use without first instituting the required court action. Running roughshod over the property rights of individuals is a clear and gross breach of the constitutional guarantee of due process, which should not be countenanced in a society where the rule of law holds sway.

In the case at bar, petitioner harps on eminent domain as an inherent power of sovereignty similar to police power and taxation. As a basic political unit, its Sangguniang Barangay is clothed with the authority to provide barangay roads and other facilities for public use and welfare. Petitioner relied on the following cases which held a liberal view of the term "public use" in recognition of the evolving concept of the power of eminent domain: Seña v. Manila Railroad Co.; Philippine Columbian Association v. Panis; Sumulong v. Guerrero; Province of Camarines Sur v. Court of Appeals; and Manosca v. Court of Appeals.24

Petitioner’s delegated power to expropriate is not at issue. The legal question in this petition, however, is whether the taking of the land was for a public purpose or use. In the exercise of the power of eminent domain, it is basic that the taking of private property must be for a public purpose. A corollary issue is whether private property can be taken by law from one person and given to another in the guise of public purpose.

In this regard, the petition must fail.

Petitioner alleges that there are at least 80 houses in the place and about 400 persons will be benefited with the use of a barangay road. The trial court believed that the expropriation "will not benefit only the residents of the subdivision, but also the residents of Sitio or Purok Paraiso and the residents of the entire Barangay of Sindalan x x x."25 The trial court held that the subdivision is covered by Sitio or Purok Paraiso which is a part or parcel of Barangay Sindalan. However, this finding was not supported by evidence. On the contrary, it is Sitio Paraiso which is within Davsan II Subdivision based on the testimony of petitioner’s own witness, Ruben Palo, as follows:

Atty. Mangiliman: Mr. Palo, you said that you have been residing at Sitio Paraiso since 1973, is this Sitio Paraiso within the Davson [sic] Subdivision?

Witness: Yes, sir.

x x x x

Atty. Mangiliman: And before you purchased that or at the time you purchased it in 1972, I am referring to the lot where you are now residing, the Davson [sic] Subdivision did not provide for a road linking from the subdivision to the barrio road, am I correct?

Witness: None, sir.

Atty. Mangiliman: And despite [sic] of that you purchased a lot inside Davson [sic] Subdivision?

Witness: Yes, sir.

Atty. Mangiliman: Did you not demand from the developer of Davson [sic] Subdivision that he should provide a road linking from the subdivision to the barrio road of Sindalan?

Witness: No, sir, because I know they will provide for the road.

Atty. Mangiliman: And when you said that they will provide for that road, you mean to tell us that it is the developer of Davson [sic] Subdivision who will provide a road linking from the subdivision to the barrio road of Sindalan?

Witness: Yes, sir.

Atty. Mangiliman: Now, Mr. Witness, you will agree with me that the proposed road which will connect from Davson [sic] Subdivision to the barrio road of Sindalan would benefit mainly the lot buyers and home owners of Davson [sic] Subdivision?

Witness: Yes, sir.

Atty. Mangiliman: And you also agree with me that there is no portion of Davson [sic] Subdivision which is devoted to the production of agricultural products?

Witness: None, sir.

Atty. Mangiliman: When the road which is the subject of this case and sought to be expropriated has not yet been opened and before a Writ of Possession was issued by the Court to place the plaintiff in this case in possession, the residents of Davson [sic] Subdivision have other way in going to the barrio road?

Witness: None, sir.

Atty. Mangiliman: In that case Mr. Witness, how do you negotiate or go out of the subdivision in going to the barrio?

Witness: We passed to the lot own [sic] by Mr. Torres which is near the subdivision in going to the barrio road, sir.

Atty. Mangiliman: Did you not complain to the owner/developer of the subdivision that he should provide for a road linking to [sic] his subdivision to the barrio road because there is no available exit from the said subdivision to the barrio road?

Witness: We have been telling that and he was promising that there will be a road, sir.26

Firstly, based on the foregoing transcript, the intended feeder road sought to serve the residents of the subdivision only. It has not been shown that the other residents of Barangay Sindalan, San Fernando, Pampanga will be benefited by the contemplated road to be constructed on the lot of respondents spouses Jose Magtoto III and Patricia Sindayan. While the number of people who use or can use the property is not determinative of whether or not it constitutes public use or purpose, the factual milieu of the case reveals that the intended use of respondents’ lot is confined solely to

the Davsan II Subdivision residents and is not exercisable in common.27Worse, the expropriation will actually benefit the subdivision’s owner who will be able to circumvent his commitment to provide road access to the subdivision in conjunction with his development permit and license to sell from the Housing and Land Use Regulatory Board, and also be relieved of spending his own funds for a right-of-way. In this factual setting, the Davsan II Subdivision homeowners are able to go to the barrio road by passing through the lot of a certain Torres family. Thus, the inescapable conclusion is that the expropriation of respondents’ lot is for the actual benefit of the Davsan II Subdivision owner, with incidental benefit to the subdivision homeowners.

The intended expropriation of private property for the benefit of a private individual is clearly proscribed by the Constitution, declaring that it should be for public use or purpose. In Charles River Bridge v. Warren, the limitation on expropriation was underscored, hence:

Although the sovereign power in free government may appropriate all property, public as well as private, for public purposes, making compensation therefore; yet it has never been understood, at least never in our republic, that the sovereign power can take the private property of A and give it to B by the right of eminent domain; or that it can take it at all, except for public purposes; or that it can take it for public purposes, without the duty and responsibility of ordering compensation for the sacrifice of the private property of one, for the good of the whole (11 Pet. at 642) (emphasis supplied).28

US case law also points out that a member of the public cannot acquire a certain private easement by means of expropriation for being unconstitutional, because "even if every member of the public should acquire the easement, it would remain a bundle of private easements."29

Secondly, a compelling reason for the rejection of the expropriation is expressed in Section 29, PD 957, which provides:

Sec. 29. Right of Way to Public Road.—The owner or developer of a subdivision without access to any existing public road or street must secure a right of way to a public road or street and such right of way must be developed and maintained according to the requirement of the government authorities concerned.

Considering that the residents who need a feeder road are all subdivision lot owners, it is the obligation of the Davsan II Subdivision owner to acquire a right-of-way for them. However, the failure of the subdivision owner to provide an access road does not shift the burden to petitioner. To deprive respondents of their property instead of compelling the subdivision owner to comply with his obligation under the law is an abuse of the power of eminent domain and is patently illegal. Without doubt, expropriation cannot be justified on the basis of an unlawful purpose.

Thirdly, public funds can be used only for a public purpose. In this proposed condemnation, government funds would be employed for the benefit of a private individual without any legal mooring. In criminal law, this would constitute malversation.

Lastly, the facts tend to show that the petitioner’s proper remedy is to require the Davsan II Subdivision owner to file a complaint for establishment of the easement of right-of-way under Articles 649 to 656 of the Civil Code. Respondents must be granted the opportunity to show that their lot is not a servient estate. Plainly, petitioner’s resort to expropriation is an improper cause of action.

One last word: the power of eminent domain can only be exercised for public use and with just compensation. Taking an individual’s private property is a deprivation which can only be justified by a higher good—which is public use—and can only be counterbalanced by just compensation.

Without these safeguards, the taking of property would not only be unlawful, immoral, and null and void, but would also constitute a gross and condemnable transgression of an individual’s basic right to property as well.

For this reason, courts should be more vigilant in protecting the rights of the property owner and must perform a more thorough and diligent scrutiny of the alleged public purpose behind the expropriation. Extreme caution is called for in resolving complaints for condemnation, such that when a serious doubt arises regarding the supposed public use of property, the doubt should be resolved in favor of the property owner and against the State.

WHEREFORE, we AFFIRM the May 30, 2001 Decision and the October 26, 2001 Resolution of the CA, with costs against petitioner.

SO ORDERED.

PRESBITERO J. VELASCO, JR.Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBINGAssociate Justice

Chairperson

ANTONIO T. CARPIOAssociate Justice

CONCHITA CARPIO MORALESAsscociate Justice

DANTE O. TINGAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBINGAssociate JusticeChairperson

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNOChief Justice

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-16351             June 30, 1964

CALAPAN LUMBER COMPANY, INC., plaintiff-appellee, vs.COMMUNITY SAWMILL COMPANY, ET AL., defendants-appellants.

Ferdinand E. Marcos for plaintiff-appellee.Salvador H. Laurel and Exequiel S. Consulta for defendants-appellants.

PADILLA, J.:

This is an action for injunction, prohibition against defendant public officers, compensatory, exemplary and nominal damages, attorney's fees and costs.

All the defendants prayed in their respective answers for the dismissal of the second amended complaint, in addition to their counterclaim.

After trial, the Court of First Instance of Oriental Mindoro rendered judgment, the dispositive part of which reads:

WHEREFORE, this Court renders judgment:

1. Finding:

(a) That the road and bridge in question, known as the Biga-Communal-Goob (from Km. 12.38 to 15.88) was constructed during the period from 1950 to 1952 by the plaintiff at its exclusive expense with the knowledge and consent of the Provincial Board of Oriental Mindoro;

(b) That before actual construction of said road and bridge the personnel of the Office of the District Engineer surveyed the lay-out of the road to be constructed, also at the expense of the plaintiff;

(c) That before the actual construction of the road in question the plaintiff secured and used road-right-of-way agreements (Exhs. Y, Y-1 to Y-7 and Z-AA), executed in favor of the plaintiff by the owners of the several portions of land traversed by said road;

(d) That from the completion of the road up to the present the plaintiff has been contributing to the repair and maintenance of the said road such as stones, gravel, sand and lumber at its own expense;

(e) That since the completion of the road in question (to) the same has been used by the public without any restriction with the written consent of the plaintiff as embodied in Resolutions Nos. 222 (Exh. A) and 119 (Exh. B), with the exception of logging and lumber concerns who might use the road with the permission of the plaintiff;

(f) That Lao Kee (alias Lu Pong), Lee Cok Tan Hong, Tan Kian, Co Giac, Tan Hong Chian Hian, Tan Tak Tiao, Kick Chia and the Community Sawmill Company had

used the road and bridge in question sometime before April 6, 1953, until the issuance of the writ of preliminary injunction of June 25, 1953, manifest bad faith;

2. Declaring:

(a) That Resolution No. 186, series of 1953, marked Exh. C, is valid insofar as it repealed Resolution No. 222, series of 1953; marked Exh. "A", and Resolution No. 119, series of 1953, marked Exh. B;

(b) That Resolution No. 186, series of 1953, marked Exh. C. insofar as it declared that the road and bridge in question, public is null and void the same being in violation of Sec. 2131 of the Revised Administrative Code;

(c) That the road and bridge in question are of private ownership belonging to the plaintiff;

(d) That the said defendant Lao Kee (alias Lu Pong), Lee Cok, Tan Hong, Tan Kian, Co Giac, Tan Hong, Chia Hian, Tan Tak Tiao, Kiok Chia and Community Sawmill did not have the right to use the road and bridge in question;

3. Ordering:

(a) That the writ of preliminary injunction issued against the Community Sawmill Company be made permanent, perpetually restraining the said defendants Lao Kee (alias Lu Pong), Lee Cok, Tan Hong, Tan Kian, Co Giac, Tan Hong Chia Hian, Tan Tak Tiao, Kiok Chia and Community Sawmill Company, their agents, attorneys, or other persons or entities from acting on their behalf;

(b) The same defendants named in the immediately preceding paragraph to pay jointly and severally to the plaintiff the sum of P10,000.00 as attorney's fees and to pay the costs;

4. Absolving from the third amended complaint the defendants Marciano Roque, Pablo Lorenzo, Isaias Fernando, Francisco Infantado, Bernabe Jamilla and Cenon C. Laurena;

5. Dismissing all the counterclaims filed by the defendants for lack of sufficient merits. (Civil Case No. R-542)

From the judgment thus rendered, the defendants Lao Kee (alias Lu Pong), Lee Cok Tan Hong, Tan Kian, Co Giac, Chia Hian, Tan Tak Tiao, Kiok Chia, all acting under the name and style of Community Sawmill Company, appealed to this Court. They claim that the trial court committed the following errors:

1. The lower court erred in holding that the road in question is a private road and that, therefore, plaintiff could legally deny its use to herein appellants.

2. The lower court erred in ordering herein appellants to pay plaintiff attorney's fees.

3. The lower court erred in holding that plaintiff can recover expenses of litigation under article 2208 of the Civil Code.

4. The lower court erred in not dismissing the complaint and finding for herein appellants on their counterclaim.

At the trial, the parties submitted to the Court a stipulation of facts which reads:

1. That the parties agree to the existence and authenticity of the following resolutions which were passed by the Provincial Board of Oriental Mindoro, as follows:

(a) Resolution No. 222, Series of 1950 (Annex "A" of the Third Amended Complaint), but not its regularity and validity, which must be proven;

(b) Resolution No. 119, Series of 1953 (Annex "B" of the Third Amended Complaint);

(c) Resolution No. 186, Series of 1955, revoking Resolutions Nos. 222, Series of 1950 and 119, Series of 1953, of the Provincial Board, granting the Calapan Lumber Company the exclusive right under certain conditions to use the Biga-Communal-Goob road for a period of twenty (20) years, and declaring said road as a toll road.

2. That the parties agree as to the existence and authenticity of the following official communications, indorsements and letters re the Biga-Communal-Goob road:

(a) letter dated March 20, 1953 addressed to the Hon. Executive Secretary, signed by Rodolfo Naguit and Joe Ong, both representatives of the Community Sawmill Company:

(b) 1st Indorsement of Assistant Executive Secretary Lucas Madamba, dated March 21, 1953 (Annex "C", Third Amended Complaint);

(c) 2nd Indorsement of Governor Infantado dated March 23, 1953;

(d) 3rd Indorsement of District Engineer C. C. Laurena dated March 26, 1953;

(e) 4th Indorsement of Governor Infantado dated March 28, 1953;

(f) Letter of Rodolfo G. Naguit, representative of the Community Sawmill Company, dated May 4, 1953 and addressed to the Assistant Executive Secretary, Office of the President;

(g) Letter of Atty. Ferdinand E. Marcos, counsel for the plaintiff company addressed to Executive Secretary Marciano Roque, dated May 21, 1953 (Annex "F", Third Amended Complaint);

(h) 7th Indorsement of Director of Public Works, Isaias Fernando, dated April 20, 1953 (Annex "D", Third Amended Complaint);

(i) 8th Indorsement of Undersecretary Vicente Orosa, dated April 25, 1953;

(j) 9th Indorsement of Executive Secretary Marciano Roque dated May 11, 1953 (Annex "E", Third Amended Complaint);

(k) 3rd Indorsement of Acting Executive Secretary Marciano Roque, dated July 8, 1953 and the 4th Indorsement of Undersecretary Vicente Orosa, dated July 16, 1953;

(l) 1st Indorsement of Acting Executive Secretary Marciano Roque, dated July 17, 1953.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1äwphï1.ñët

x x x           x x x           x x x

Resolution No. 222, adopted 4 December 1950, reads:

Whereas, there is at present an unfinished provincial road in the barrio of Viga, of the municipality of Calapan, known as the Viga-Communal-Goob Road, the construction of which could not be undertaken by the province due to insufficiency of funds;

Whereas, the Calapan Lumber Co., Inc., through its President, Mr. D. M. Gotauco, in a letter addressed to the Governor of this province has made representations to undertake the construction of said road under certain conditions; and

Whereas, the province is willing to accede to the request of the Calapan Lumber Co., Inc. and to give it the sole right for its use, provided that after a period of twenty (20) years, said company shall donate to the province the road it had constructed, provided further that during the said period of 20 years other concerns dealing in logs and/or lumber may use the same road upon permission granted to them by the said Calapan Lumber Co., Inc.; and provided finally that said road is open to all non-logging concerns or individuals during the said period of 20 years. Now, therefore, be it

RESOLVED, That the Provincial Board of Oriental Mindoro grants, as hereby is granting, the Calapan Lumber Co., Inc. to undertake the construction of the unfinished provincial road in the barrio of Viga, municipality of Calapan, known as the Viga-Communal-Goob Road, subject to the stipulations stated above; and

RESOLVED FURTHER, That copies of this resolution be furnished the District Engineer and the Calapan Lumber Co., Inc., through its President, Mr. D. M. Gotauco, for their information.

x x x           x x x           x x x

Resolution No. 119, adopted 6 April 1953, reads:

Whereas, under Resolution No. 222, series of 1950, the Provincial Board of Oriental Mindoro under the former administration, granted the Calapan Lumber Co., Inc. the right to undertake the construction of the unfinished Viga-Communal-Goob provincial road the sole right for its use, under the following conditions:

(1) That after a period of twenty (20) years, said company shall donate to the province the road it had constructed;

(2) That during the said period of 20 years other concerns dealing in logs and/or lumber may use the same road upon permission granted to them by the Calapan Lumber Co.; and

(3) That said road is open to all non-logging concerns or individuals during the said period of 20 years.

Whereas, according to the records of the Provincial Board the said resolution has not been amended or modified up to the present, and, therefore, the same is still in force and binding as per agreement stipulated therein;

Whereas, this Board has received reliable information to the effect that another certain lumber company is attempting to use, or has actually used the same road, by allowing to pass thru it its heavy trucks and tractors without securing any permission from the Calapan Lumber Co., Inc., to the detriment and prejudice of the interests of the latter lumber company which shouldered the cost of its completion in accordance with the rights granted to it by the province; and

Whereas, after a careful consideration of the matter this Board is of the opinion that the right of the Calapan Lumber Co., Inc. over the said road as stipulated in the condition set forth in the resolution must be upheld for obvious reasons; Now, therefore, be it

RESOLVED by the Provincial Board of Oriental Mindoro to authorize, as it hereby authorizes, the Calapan Lumber Company, Inc., to prohibit the use of the Viga-Communal-Goob provincial road, from point Km. 12.38 up to Km. 15.88 of said road, by any other concern or company dealing in logs and/or lumber, without the permission or consent of the said Calapan Lumber Co., Inc. in accordance with one of the stipulations or conditions agreed upon in Resolution No. 222, series of 1950, of the Provincial Board; and

RESOLVED, FURTHER, That the District Engineer and the Calapan Lumber Co., Inc. be furnished with copies of this resolution, for their information.

x x x           x x x           x x x

Resolution No. 186, adopted 19 June 1953, reads:

REVOKING RESOLUTIONS NOS. 222, SERIES OF 1950, AND 119, SERIES OF 1953, OF THE PROVINCIAL BOARD, GRANTING THE CALAPAN LUMBER COMPANY THE EXCLUSIVE RIGHT UNDER CERTAIN CONDITIONS TO USE THE VIGA-COMMUNAL-GOOB PROVINCIAL ROAD FOR A PERIOD OF TWENTY (20) YEARS.

Whereas, under Resolution No. 222, series of 1950, the Provincial Board of Oriental Mindoro, under the former provincial administration, granted the Calapan Lumber Co., Inc. an authority to undertake the construction of the unfinished Viga-Goob provincial road from Point Km. 12.38 to Km. 15.88, and the exclusive right for its use, under certain conditions;

Whereas, on April 6, 1953, this Board passed another resolution (119) maintaining the right of the Calapan Lumber Co., Inc. over the said road under the conditions stipulated in the above-cited resolution No. 222, and forthwith authorized the said company to prohibit the use of the portion of said road constructed at its expense by any other concern or company dealing in logs or lumber without its permission;

Whereas, in a 9th Indorsement dated May 11, 1953, the pertinent parts of which are quoted hereunder, the Honorable, the Executive Secretary to whom the case regarding this matter was appealed for decision, and upon the recommendation of the Director of Public Works and with the concurrence of the Undersecretary of Public Works and Communications, ruled that provincial roads are considered as properties for public use and the Provincial Board may not therefore grant the exclusive use thereof to any private individual or entity which would discriminate against or exclude the general public from a reasonable use thereof, and therefore, the resolution in question should be revoked.

In this connection, it should be stated that Provincial roads are properties for public use and the provincial board may not grant the exclusive use thereof to any private individual or entitle or enter into a contract or agreement which would tend to discriminate against or exclude the general public from a reasonable use thereof. Resolutions Nos. 222, series of 1950, and 119, series of 1953, of the Provincial Board, granting the Calapan Lumber Company an exclusive right to use the said road for a period of twenty (20) year and to prohibit lumber or logging concerns from using the road in question without the company's permission, should therefore be revoked. In consonance with the policy of the law, and as correctly the suggested by the Director of Public Works and the Undersecretary of Public Works and Communications the portion of the Viga-Communal Road from Km. 12.38 to 15.89, having a length of 3.5 kilometers, should be declared a toll road in order to raise funds for its maintenance and with which to reimburse the Calapan Lumber Company for the expenses the latter had incurred in the construction of this portion of the road.

Whereas, in view of the said ruling, this Board has been requested to take immediate action on the matter to declare the above-said portion of the Viga-Communal-Goob provincial road as a toll road; and,

Whereas, according to an estimate made by the office of the District Engineer the Calapan Lumber Company has spent for the construction of the portion of the road in question having a length of 3.5 kilometers, the amount of P25,000.00 more or less; Now, therefore, be it —

RESOLVED, That Resolutions Nos. 222, series of 1950, and 119, series of 1953, of the Provincial Board, which grant the Calapan Lumber Co., Inc., the exclusive right to use the Viga-Communal-Goob provincial road for a period of 20 years, under certain conditions, be, and hereby are, revoked;

RESOLVED, FURTHER, That the portion of said Viga-Communal-Goob provincial road, from Point Km. 12.38 up to Km. 15.88 thereof, be and hereby is, declared PROVINCIAL TOLL ROAD, under the provisions of section 2131 of the Revised Administrative Code;

RESOLVED, FURTHERMORE, That the following toll rates to be paid by any motor vehicle for the use of the provincial road be, and hereby are, fixed, effective today, June 19, 1953, the proceeds from which shall be used for the maintenance of the said road and the balance thereof for the reimbursement to the said company for the expenses it had incurred in the construction for said portion of the road:

For every truck, one way P1.00 For every weapon carrier, one way .60 For every jeepney .30

PROVIDED, however, that the portion of the road declared herein as provincial toll road shall continue to be so up to and until the amount spent by the Calapan Lumber Company for its construction shall have been covered by reimbursement to said company; and

RESOLVED, FINALLY, That copies of this resolution be forwarded to His Excellency, the President of the Philippines, thru the Director of Public Works and the Honorable, the Secretary of Public Works and Communications, Manila.

x x x           x x x           x x x

Resolution No. 169, adopted 21 April 1956, revoked Resolution No. 186 in so far as it declared Provincial Toll Road that part of the road invoked in this case.

There seems to be no doubt that Resolutions Nos. 222 and 119, adopted by the Provincial Board of Oriental Mindoro quoted above, mere ultra vires, because sections 2067 (f) and (g) on powers of the provinces as political bodies corporate; 2102 (g) on powers of the provincial boards; 2106 (f) on powers of the provincial boards to be exercised with the approval of the Department Head; and 2113 (a) on road and bridge fund, of the Revised Administrative Code, do not authorize the Provincial Board of Oriental Mindoro to pass and adopt said resolutions. The contention that the Provincial Board of Oriental Mindoro under section 2106 (g) invoked by the appellee is authorized to pass those resolutions Nos. 222 and 199 quoted above, is untenable because said paragraph of the section authorizes the Provincial Board "to permit, upon favorable recommendation by the Secretary of Public Works and Communications, and subject to such conditions as may properly protect the public interests, the construction and maintenance, for private use of railways, conduits, and telephone lines across public thoroughfares, streets, roads, or other public property and in the province: Provided, That such construction and private use shall not prevent or obstruct the public use of such thoroughfares, streets, roads or other public property and that the permit granted shall at all times be subject to revocation by the Secretary of the Interior, if, in the judgment of that official, the public interest requires it." Consequently, Resolution No. 186 revoking the two previous resolutions was in order.

The road known as the Viga-Communal-Goob connecting two finished or completed parts of the provincial road, from kilometer 12.38 to 15.88, as laid out by the personnel of the office of the District Engineer was planned or intended to be laid out and constructed by the Provincial Government of Oriental Mindoro to complete said road. The fact that the survey, lay-out and actual construction of the unfinished part of the road were done at the appellee's expense, does not convert said road after construction into a private road, for it does not appear that the parts of the land where the road was laid out and constructed belong to or are owned by the appellee. The evidence shows that the owners of such parts of land ceded their parts of the land owned by them without any consideration because of their desire to have the road completed or to connect the ends of two completed parts of the road. It may be conceded that the appellee built the road in question in good faith; and such being the case, it may be argued that the appellee is entitled to keep or have possession of the road until after it shall have been reimbursed of the expenses it had incurred in constructing and maintaining the road in good condition. The provisions of the Civil Code on the right of a builder in good faith on a private land1 cannot be invoked and applied to the road in question, because public interest is involved and the people living in that part of the province are entitled to use the road.

It is true that that part of the Resolution No. 186 above quoted converting the road in question into toll road contravenes section 2131 of the Revised Administrative Code, because in the case of road the recommendation of the Secretary of Public Works and Communications and the authorization of the president of the Philippines had to be secured and such recommendation and authorization had not been obtained.

Upon the foregoing considerations, this Court is of the opinion, and so holds, that the road involved in this case cannot be declared private property, and for that reason the Provincial Board of Oriental Mindoro may elect between paying the appellee the total cost of the construction of the road together with lawful interest from the date of actual disbursement by the appellee to the date of payment by the Province of Oriental Mindoro within a reasonable period not to exceed one year from the date this judgment shall become final; or upon securing the recommendation of the Secretary of Public Works and Communications and authorization of the President of the Philippines to designate such road an toll road, to raise the necessary fund to reimburse the appellee of the total cost of construction of the road, together with lawful interest from the date of actual disbursement by the appellee to the date of payment by the Province of Oriental Mindoro, and the latter is ordered to refund the amount paid for tolls by, the appellee during the enforcement of Resolution No. 186 which, as above stated, was unauthorized. The judgment appealed from making final the preliminary writ of injunction and ordering the appellants to pay the appellee the sum of P10,000 as attorney's fees, are reversed and set aside. The rest of the judgment appealed from not inconsistent with this opinion is affirmed, without pronouncement as to costs.

Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Parades, Regala and Makalintal, JJ., concur.Barrera and Dizon, JJ., took no part.