Rem2 Case Digests Rule 67

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco G.R. No. 142304 June 20, 2001 CITY OF MANILA, petitioner, vs.OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA AND ADELAIDA, ALL SURNAMED SERRANO, respondents.

Whether the Court of Appeals erred in interpreting the RTC order which authorized the issuance of writ of possession and petitioner’s entry into the subject property as an order of condemnation of said property.

FACTS: On December 21, 1993, the City Council of Manila enacted the Ordinance No. 7833, authorizing the expropriation of certain properties in Manila 's First District in Tondo, covered by TCT Nos. 70869, 105201, 105202, and 138273 of the Register of Deeds of Manila, which are to be sold and distributed to qualified occupants pursuant to the Land Use Development Program of the City of Manila. One of the properties sought to be expropriated, denominated as Lot 1-C, consists of 343.10 square meters. It is covered by TCT No. 138272 which was derived from TCT No. 70869 issued in the name of Feliza De Guia. 1 After her death, the estate of Feliza De Guia was settled among her heirs by virtue of a compromise agreement. In 1989, Alberto De Guia, one of the heirs of Feliza De Guia, died, as a result of which his estate, consisting of his share in the properties left by his mother, was partitioned among his heirs. Lot 1-C was assigned to Edgardo De Guia, one of the heirs of Alberto De Guia. 3 On April 15, 1994, Edgardo De Guia was issued TCT No. 215593, covering Lot 1-C. 4 On July 29, 1994, the said property was transferred to Lee Kuan Hui, in whose name TCT No. 217018 was issued. 5 The property was subsequently sold on January 24,1996 to Demetria De Guia to whom TCT No. 226048 was issued.6 On September 26, 1997, petitioner City of Manila filed an amended complaint for expropriation, docketed as Civil Case No. 94-72282, with the Regional Trial Court, Branch 16, Manila, against the supposed owners of the lots covered by TCT Nos. 70869 (including Lot 1C), 105201, 105202 and 138273, which included herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida, all surnamed are Serrano. 7 On November 12, 1997, respondents filed a consolidated answer, in which they alleged that their mother, the late Demetria De Guia, had acquired Lot l-C from Lee Kian Hui; that they had been the bona fide occupants of the said parcel of land for more than 40 years; that the expropriation of Lot l-C would result in their disclosure, it being the only residential land left to them by their deceased mother; and that the said lot was exempt from expropriation because dividing the said parcel of land among them would entitle each of them to only about 50 square meters of land. Respondents, therefore, prayed that judgment be rendered declaring Lot l-C exempt from expropriation and ordering the cancellation of the notice annotated on the back of TCT No. 226048,8 regarding the pendency of Civil Case No. 94-72282. for eminent domain filed by petitioner.9 Upon motion by petitioner, the trial court issued an order, dated October 9, 1998, directing petitioner to deposit the amount of Pl,825,241.00 equivalent to the assessed value of the properties.10 After petitioner had made the deposit, the trial court issued another order, dated December 15, 1998, directing the issuance of a writ of possession in favor of petitioner. ll Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot l-C would render respondents, who are actual occupants thereof, landless; that Lot l-C is exempt from expropriation because R.A. No. 7279 provides that properties consisting of residential lands not exceeding 300 square meters in highly urbanized cities are exempt from expropriations; that respondents would only receive around 49 square meters each after the partition of Lot l-C which consists of only 343.10 square meters; and that R.A. No. 7279 was not meant to deprive an owner of the entire residential land but only that in excess of 300 square meters.12 On November 16, 1999, the Court of Appeals rendered a decision holding that Lot l-C is not exempt from expropriation because it undeniably exceeds 300 square meters which is no longer considered a small property within the framework of R.A. No. 7279. However, it held that in accordance with the ruling in Filstream International Inc. v. Court of Appeals, 13 the other modes of acquisition of lands enumerated in §§9-10 of the law must first be tried by the city government before it can resort to expropriation. As petitioner failed to show that it had done so, the Court of Appeals gave judgment for respondents and enjoined petitioner from expropriating Lot 1-C. Petitioner’s motion for reconsideration was also denied by the CA, hence, this petition. ISSUE:

HELD: Yes. The CA erroneously presumed that Lot 1-C has been ordered condemned in petitioner’s favor when the fact is that the order of the trial court, dated December 15, 1998, merely authorized the issuance of a writ of possession and petitioner's entry into the property pursuant to Rule 67, Sec. 2. At that stage, it was premature to determine whether the requirements of RA. No. 7279, Sec. 9 - 10 have been complied with since no evidentiary hearing had yet been conducted by the trial court. Rule 67, Sec. 2 provides: Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon possession of the real property involved if he deposits with the authorized government depository an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of the Philippines payable on demand to the authorized government depositary. If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be fixed by the court. After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of copies to the parties. Thus, a writ of execution may be issued by a court upon the filing by the government of a complaint for expropriation sufficient in form and substance and upon deposit made by the government of the amount equivalent to the assessed value of the property subject to expropriation. Upon compliance with these requirements, the issuance of the writ of possession becomes ministerial. 22 In this case, these requirements were satisfied and, therefore, it became the ministerial duty of the court to issue the writ of possession. The Court of Appeals, however, ruled that petitioner failed to comply with the requirements laid down in §§9 - 10 of RA. No. 7279 and reiterated in Filstream ruling. This is error. The ruling in the Filstream was necessitated because an order of condemnation had already been issued by the trial court in that case. Thus, the judgment in that case had already become final. In this case, the trial court has not gone beyond the issuance of a writ of possession. Hearing is still to be held to determine whether or not petitioner indeed complied with the requirements provided in RA. No. 7279. It is, therefore, premature at this stage of the proceedings to find that petitioner resorted expropriation without first trying the other modes of acquisition enumerated in § 10 of the law. Whether petitioner has complied with these provisions requires the presentation of evidence, although in its amended complaint petitioner did allege that it had complied with the requirements.23 The determination of this question must await that hearing on the complaint for expropriation, particularly the hearing for the condemnation of the properties sought to be expropriated. Expropriation proceedings consist of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of the private property to be made by the court with the assistance of not more than three commissioners. This case is REMANDED to the trial court to further proceedings.

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco G.R. No. 106804 August 12, 2004 NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS and ANTONINO POBRE, respondents. FACTS: Petitioner National Power Corporation ("NPC") is a public corporation created to generate geothermal, hydroelectric, nuclear and other power and to transmit electric power nationwide. NPC is authorized by law to acquire property and exercise the right of eminent domain. Private respondent Antonino Pobre ("Pobre") is the owner of a 68,969 square-meter land ("Property") located in Barangay Bano, Municipality of Tiwi, Albay. The Property is covered by TCT No. 4067 and Subdivision Plan 11-9709. On 4 August 1965, the Commission on Volcanology certified that thermal mineral water and steam were present beneath the Property. The Commission on Volcanology found the thermal mineral water and steam suitable for domestic use and potentially for commercial or industrial use. NPC then became involved with Pobre's Property in three instances. First was on 18 February 1972 when Pobre leased to NPC for one year eleven lots from the approved subdivision plan. Second was sometime in 1977, the first time that NPC filed its expropriation case against Pobre to acquire an 8,311.60 square-meter portion of the Property. On 23 October 1979, the trial court ordered the expropriation of the lots upon NPC's payment of P25 per square meter or a total amount of P207,790. NPC began drilling operations and construction of steam wells. While this first expropriation case was pending, NPC dumped waste materials beyond the site agreed upon by NPC with Pobre. The dumping of waste materials altered the topography of some portions of the Property. NPC did not act on Pobre's complaints and NPC continued with its dumping. Third was on 1 September 1979, when NPC filed its second expropriation case against Pobre to acquire an additional 5,554 square meters of the Property. This is the subject of this petition. NPC needed the lot for the construction and maintenance of Naglagbong Well Site F20. On 10 December 1984, Pobre filed a motion to dismiss the second complaint for expropriation. Pobre claimed that NPC damaged his Property. Pobre prayed for just compensation of all the lots affected by NPC's actions and for the payment of damages. On 29 April 1987, the trial court issued its Decision in favor of Pobre. In its 69-page decision, the trial court recounted in great detail the scale and scope of the damage NPC inflicted on the Property that Pobre had developed into a resort-subdivision. Pobre's Property suffered "permanent injury" because of the noise, water, air and land pollution generated by NPC's geothermal plants. The construction and operation of the geothermal plants drastically changed the topography of the Property making it no longer viable as a resort-subdivision. The chemicals emitted by the geothermal plants damaged the natural resources in the Property and endangered the lives of the residents. NPC did not only take the 8,311.60 square-meter portion of the Property, but also the remaining area of the 68,969 square-meter Property. NPC had rendered Pobre's entire Property useless as a resort-subdivision. The Property has become useful only to NPC. NPC must therefore take Pobre's entire Property and pay for it. The trial court found the just compensation to be P50 per square meter or a total of P3,448,450 for Pobre's 68,969 square-meter Property. On 13 July 1987, NPC filed its motion for reconsideration of the decision. On 30 October 1987, the trial court issued its Order denying NPC's motion for reconsideration. NPC appealed to the Court of Appeals. On 30 March 1992, the Court of Appeals upheld the decision of the trial court. NPC, represented by the Office of the Solicitor General, insists that at the time that it moved for the dismissal of its complaint, Pobre had yet to serve an answer or a motion for summary judgment on NPC. Thus, NPC as plaintiff had the right to move for the automatic dismissal of

its complaint. NPC relies on Section 1, Rule 17 of the 1964 Rules of Court, the Rules then in effect. NPC argues that the dismissal of the complaint should have carried with it the dismissal of the entire case including Pobre's counterclaim. ISSUES: 1) 2)

Whether or not dismissal of the complaint should have carried with it the dismissal of the entire case including Pobre's counterclaim. Whether or not NPC had "taken" the entire Property of Pobre.

HELD: 1. No We must correct NPC's claim that it filed the notice of dismissal just "shortly" after it had filed the complaint for expropriation. While NPC had intimated several times to the trial court its desire to dismiss the expropriation case it filed on 5 September 1979, it was only on 2 January 1985 that NPC filed its notice of dismissal. It took NPC more than five years to actually file the notice of dismissal. Five years is definitely not a short period of time. NPC obviously dillydallied in filing its notice of dismissal while NPC meanwhile burdened Pobre's property rights. Even a timely opposition against Pobre's claim for damages would not yield a favorable ruling for NPC. It is not Section 1, Rule 17 of the 1964 Rules of Court that is applicable to this case but Rule 67 of the same Rules, as well as jurisprudence on expropriation cases. Rule 17 referred to dismissal of civil actions in general while Rule 67 specifically governed eminent domain cases. Eminent domain is the authority and right of the state, as sovereign, to take private property for public use upon observance of due process of law and payment of just compensation. The power of eminent domain may be validly delegated to the local governments, other public entities and public utilities such as NPC. Expropriation is the procedure for enforcing the right of eminent domain. "Eminent Domain" was the former title of Rule 67 of the 1964 Rules of Court. In the 1997 Rules of Civil Procedure, which took effect on 1 July 1997, the prescribed method of expropriation is still found in Rule 67, but its title is now "Expropriation." Section 1, Rule 17 of the 1964 Rules of Court provided the exception to the general rule that the dismissal of the complaint is addressed to the sound discretion of the court. For as long as all of the elements of Section 1, Rule 17 were present the dismissal of the complaint rested exclusively on the plaintiff's will. The defending party and even the courts were powerless to prevent the dismissal. The courts could only accept and record the dismissal. A plain reading of Section 1, Rule 17 of the 1964 Rules of Court makes it obvious that this rule was not intended to supplement Rule 67 of the same Rules. Section 1, Rule 17 of the 1964 Rules of Court, provided that: SECTION 1. Dismissal by the plaintiff. — An action may be dismissed by the plaintiff without order of court by filing a notice of dismissal at any time before service of the answer or of a motion for summary judgment. Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in a competent court an action based on or including the same claim. A class suit shall not be dismissed or compromised without approval of the court. While Section 1, Rule 17 spoke of the "service of answer or summary judgment," the Rules then did not require the filing of an answer or summary judgment in eminent domain cases. In lieu of an answer, Section 3 of Rule 67 required the defendant to file a single motion to dismiss where he should present all of his objections and defenses to the taking of his property for the purpose specified in the complaint. In short, in expropriation cases under Section 3 of Rule 67, the motion to dismiss took the place of the answer. The records show that Pobre had already filed and served on NPC his "motion to dismiss/answer" even before NPC filed its own motion to dismiss. NPC filed its notice of dismissal of the complaint on 2 January 1985. However, as early as 10 December 1984, Pobre had already filed with the trial court and served on NPC his "motion to dismiss/answer." A certain Divina Cerela received Pobre's pleading on behalf of NPC. Unfortunately for NPC, even Section 1, Rule 17 of the 1964 Rules of Court could not save its cause. In expropriation cases, there is no such thing as the plaintiff's matter of right to dismiss the complaint precisely because the landowner may have already suffered damages at the start

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco of the taking. The plaintiff's right in expropriation cases to dismiss the complaint has always been subject to court approval and to certain conditions. The exceptional right that Section 1, Rule 17 of the 1964 Rules of Court conferred on the plaintiff must be understood to have applied only to other civil actions. The 1997 Rules of Civil Procedure abrogated this exceptional right. The power of eminent domain is subject to limitations. A landowner cannot be deprived of his right over his land until expropriation proceedings are instituted in court. The court must then see to it that the taking is for public use, there is payment of just compensation and there is due process of law. If the propriety of the taking of private property through eminent domain is subject to judicial scrutiny, the dismissal of the complaint must also pass judicial inquiry because private rights may have suffered in the meantime. The dismissal, withdrawal or abandonment of the expropriation case cannot be made arbitrarily. If it appears to the court that the expropriation is not for some public use, then it becomes the duty of the court to dismiss the action. However, when the defendant claims that his land suffered damage because of the expropriation, the dismissal of the action should not foreclose the defendant's right to have his damages ascertained either in the same case or in a separate action. Thus, NPC's theory that the dismissal of its complaint carried with it the dismissal of Pobre's claim for damages is baseless. There is nothing in Rule 67 of the 1964 Rules of Court that provided for the dismissal of the defendant's claim for damages, upon the dismissal of the expropriation case. Case law holds that in the event of dismissal of the expropriation case, the claim for damages may be made either in a separate or in the same action, for all damages occasioned by the institution of the expropriation case. The dismissal of the complaint can be made under certain conditions, such as the reservation of the defendant's right to recover damages either in the same or in another action. The trial court in this case reserved Pobre's right to prove his claim in the same case, a reservation that has become final due to NPC's own fault. 2. Yes Ordinarily, the dismissal of the expropriation case restores possession of the expropriated land to the landowner. However, when possession of the land cannot be turned over to the landowner because it is neither convenient nor feasible anymore to do so, the only remedy available to the aggrieved landowner is to demand payment of just compensation. In this case, we agree with the trial and appellate courts that it is no longer possible and practical to restore possession of the Property to Pobre. The Property is no longer habitable as a resort-subdivision. The Property is worthless to Pobre and is now useful only to NPC. Pobre has completely lost the Property as if NPC had physically taken over the entire 68,969 squaremeter Property. In this case, NPC appropriated Pobre's Property without resort to expropriation proceedings. NPC dismissed its own complaint for the second expropriation. At no point did NPC institute expropriation proceedings for the lots outside the 5,554 square-meter portion subject of the second expropriation. The only issues that the trial court had to settle were the amount of just compensation and damages that NPC had to pay Pobre. We have held that the usual procedure in the determination of just compensation is waived when the government itself initially violates procedural requirements. NPC's taking of Pobre's property without filing the appropriate expropriation proceedings and paying him just compensation is a transgression of procedural due process. From the beginning, NPC should have initiated expropriation proceedings for Pobre's entire 68,969 square-meter Property. NPC did not. Instead, NPC embarked on a piecemeal expropriation of the Property. Even as the second expropriation case was still pending, NPC was well aware of the damage that it had unleashed on the entire Property. NPC, however, remained impervious to Pobre's repeated demands for NPC to abate the damage that it had wrought on his Property. NPC moved for the dismissal of the complaint for the second expropriation on the ground that it had found an alternative site and there was stiff opposition from Pobre. NPC abandoned the second expropriation case five years after it had already deprived the Property virtually of all its value. NPC has demonstrated its utter disregard for Pobre's property rights.

Thus, it would now be futile to compel NPC to institute expropriation proceedings to determine the just compensation for Pobre's 68,969 square-meter Property. Pobre must be spared any further delay in his pursuit to receive just compensation from NPC. Just compensation is the fair and full equivalent of the loss. The trial and appellate courts endeavored to meet this standard. The P50 per square meter valuation of the 68,969 squaremeter Property is reasonable considering that the Property was already an established resortsubdivision. NPC has itself to blame for not contesting the valuation before the trial court. Based on the P50 per square meter valuation, the total amount of just compensation that NPC must pay Pobre is P3,448,450.

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco Asia’s Emerging Dragon Corp. vs. DOTC ( G.R. No. 169914) DOTC vs. C.A. and SalacnibBaternia (G.R. No. 174166) (Digest c/o Ms. Amen) FACTS: This is a consolidated case, but in view of the topic of expropriation we focus more in the case of DOTC vs. SalacnibBaternia. In order to better appreciate the case we must first discuss the facts and rulings in the case of Agan and Gingoyon. In 1995 Asia’s Emerging Dragon (AEDC), (composed of the 6 most influential businessman in the Philippines mainly John Gokongwei, Lucio Tan, Henry Sy, Andrew Gotianun, George Ty and Alfonso Yuchengco.,) – submitted an unsolicited proposal to the Government through the DOTC for the development of NAIA III under a build-operate-and transfer-arrangement pursuant to RA 6957 as amended by RA 7718. Wherefore the proposal was indeed approved by the Government. Biddings were held, in which in the end the Project was awarded to PIATCO. Objections were raised by AEDC but in the end the Government justified the award to PIATCO mainly because AEDC was not able to match the bid of PIATCO. In 2002 the Build-operate-and transfer-arrangement (BOT) between the Gov’t. and PIATCO was questioned in the case of Agan. Wherefore the court ruled among others that, in view of anomalies in awarding PIATCO the BOT , the contract/ award (BOT) was declared null and void. However the court ruled that it was not unmindful of the reality that the structures comprising the NAIA III facility are almost complete and that the funds have been spent by PIATCO in their construction. For the Government to take over said facility, it has to compensate respondent PIATCO as builder of the said structures. The compensation must be just and accordance with law and equity for the government can not unjustly enriched itself at the expense of PIATCO and its investors. The abovementioned pronouncement of the Court in Agan gave rise to the petition in the Gingoyan case. The facts of which are as follows. After the promulgation of the ruling in Agan case, NAIA III was still in the possession of PIATCO, despite the avowed intent of the Government to put the airport terminal into immediate operation. Whereby the Govt. and PIATCO entered into several rounds of negotiation and even appeared before arbitral proceedings before International Chamber of Commerce International Court of Arbitration. Then on, Dec. 21, 2004 the Gov’t filed a complaint for expropriation with the Pasay RTC. The Gov’t seeks the issuance of a writ of possession authorizing immediate possession of NAIA III, it also declared that it had deposited the amount of 3 Billion in cash with the Land Bank, representing the NAIA 3 terminal assessed value for tax purposes. The RTC through Judge Gingoyon issued in the same day the Writ of Possession prayed for by the Government citing the case of Manila vs. Serrano that the RTC had the ministerial duty to issue the writ of possession upon filing of a complaint for expropriation sufficient in form and substance, and upon deposit made by the Government of the amount equivalent to assessed value of the property subject for expropriation. However, on Jan 4. 2005, the RTC issued another order – the assailed order in this case of Gingoyon- to supplement its earlier order dated Dec. 21, 2004. The RTC noted that the first order was issued pursuant to Sec. 2, Rule 67 of the Rules of Court. However, it was observed that R.A.8974, had amended Rule 67 in many respects. That there are at least two crucial differences between the respective procedures under RA 8974 and Rule 67. Under the Statute the Govt. is required to make immediate payment to the property owner upon filing of the complaint to be entitled to a writ of possession, whereas in Rule 67, the Govt. is required only to make an initial deposit with an authorized government depositary. Moreover Rule 67 prescribes that the initial deposit be equivalent to the assessed value of the property for purposes of Tax, unlike in RA 8974 which provides, as the relevant standard for initial compensation, the market value of the property as stated in the tax declarations or the current relevant zonal valuation of the BIR, whichever is higher, and the value of the improvements and/or structure using the replacement cost method. The Govt. in this case of Gingoyon questioned the above ruling. The Supreme Court held the validity of the RTC’s ruling. It held among others that 1. RA 8947 applies in this case, particularly insofar as it requires the immediate payment by the Govt. of

at least the proffered value of the NAIA III facilities to PIATCO and provides certain valuation standard method for the determination of just compensation. 2. That in applying RA 8974, the implementation of Writ of Possession in favor of the Gov’t over NAIA is held in abeyance until PIATCO is directly paid the amount of 3 Billion pesos, representing the proffered value of NAIA III 3. The Govt. shall pay the just compensation fixed in the decision of the trial court to PIATCO immediately upon the finality of said decision. Finally we tackle the facts of the case of Republic vs. CA and Baterina. Congressman Baterina, together with other member of the Lower House filed a petition for Prohibition in Intervention with application for TRO. Baterina, et. al believes that the Govt. need not file expropriation proceedings to gain possession if NAIA 3 and that PIATCO is not entitled to just compensation, arguing that PIATCO does not own NAIA 3 because BOT contract do not vest ownership. That the land in which NAIA 3 is situated is owned by the Government. ISSUE: In essence, Baterina is opposing the expropriation proceedings on the ground that NAIA 3 is already a public property. Hence PIATCO is not entitled to just compensation for NAIA 3. HELD: PIATCO is entitled to just compensation and that the expropriation proceedings commenced by the Government was proper and valid.. The Government has chosen to resort to expropriation, a remedy available under the law, which has the added benefit of an integrated process for the determination of just compensation and the payment thereof to PIATCO. We appreciate that the case at bar is a highly unusual case, whereby the Government seeks to expropriated a building complex constructed on land which the State already owns. The right of eminent domain extends to personal property and real property, and the NAIA 3 structures, adhered as they are to the soil, are considered real property. The public purpose for the expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67 recognizes the possibility that the property sought to be expropriated may be titled in the name of the Republic of the Philippines, although occupied by private individuals, and in such case an averment to that effect should be made in the complaint. The instant expropriation complaint did aver that the NAIA 3 complex “stands on a parcel of land owned by the Bases Conversion Development Authority, another agency of the Republic”. Admittedly, eminent domain is not the sole judicial recourse by which the government may have acquired the NAIA 3 facilities while satisfying the requisites in the order held by the SC in the Case of Agan. Eminent Domain though may be the most effective, as well as the speediest means by which such goals may be accomplished. Not only does it enable immediate possession after satisfaction of the requisites under the law, it also has a built-in procedure through which just compensation may be ascertained. Thus, there should be no question as to the propriety of eminent domain proceedings in this case.

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco G.R. No. 170375 October 13, 2010 REPUBLIC OF THE PHILIPPINES, Petitioner, vs. HON. MAMINDIARA P. MANGOTARA, in his capacity as Presiding Judge of the Regional Trial Court, Branch 1, Iligan City, Lanao del Norte, and MARIA CRISTINA FERTILIZER CORPORATION, and the PHILIPPINE NATIONAL BANK, Respondents, The Complaint for Expropriation was originally filed on August 15, 1983 by the Iron and Steel Authority (ISA), now the NSC, against Maria Cristina Fertilizer Corporation (MCFC), and the latter’s mortgagee, the Philippine National Bank (PNB). The Complaint was docketed as Civil Case No. 106 and raffled to RTC-Branch 1, presided over by Judge Mangotara. ISA was created pursuant to Presidential Decree No. 2729 dated August 9, 1973, to strengthen, develop, and promote the iron and steel industry in the Philippines. Its existence was extended until October 10, 1988. On November 16, 1982, during the existence of ISA, then President Ferdinand E. Marcos issued Presidential Proclamation No. 2239, reserving in favor of ISA a parcel of land in Iligan City, measuring 302,532 square meters or 30.25 hectares, to be devoted to the integrated steel program of the Government. MCFC occupied certain portions of this parcel of land. When negotiations with MCFC failed, ISA was compelled to file a Complaint for Expropriation. When the statutory existence of ISA expired during the pendency of Civil Case No. 106, MCFC filed a Motion to Dismiss the case alleging the lack of capacity to sue of ISA. The RTC-Branch 1 granted the Motion to Dismiss in an Order dated November 9, 1988. ISA moved for reconsideration or, in the alternative, for the substitution of the Republic as plaintiff in Civil Case No. 106, but the motion was denied by RTC-Branch 1. The dismissal of Civil Case No. 106 was affirmed by the Court of Appeals, thus, ISA appealed to this Court. In Iron and Steel Authority v. Court of Appeals (ISA case), the Court remanded the case to RTCBranch 1, which was ordered to allow the substitution of the Republic for ISA as plaintiff. Entry of Judgment was made in the ISA case on August 31, 1998. In an Order dated November 16, 2001, the RTC-Branch 1 allowed the substitution of the Republic for ISA as plaintiff in Civil Case No. 106. Alleging that Lots 1 and 2 involved in the 1997 Cacho case encroached and overlapped the parcel of land subject of Civil Case No. 106, the Republic filed with the RTC-Branch 1 a Motion for Leave to File Supplemental Complaint dated October 7, 2004 and to Admit the Attached Supplemental Complaint dated September 28, 2004 seeking to implead in Civil Case No. 106 Teofilo Cacho and Demetria Vidal and their respective successors-in-interest, LANDTRADE and AZIMUTH.

Republic on October 13, 2004 of an action for the reversion of the same parcels subject of the instant case for expropriation. Judge Mangotara of RTC-Branch 1 issued a Resolution on July 12, 2005, denying for lack of merit the Motion for Reconsideration of the Order dated April 4, 2005 filed by the Republic, and granting the Motion to Dismiss Civil Case No. 106 filed by MCFC. Judge Mangotara justified the dismissal of the Expropriation Case thus: What the Republic seeks [herein] is the expropriation of the subject parcels of land. Since the exercise of the power of eminent domain involves the taking of private lands intended for public use upon payment of just compensation to the owner x x x, then a complaint for expropriation must, of necessity, be directed against the owner of the land subject thereof. In the case at bar, the decision of the Supreme Court in Cacho v. Government of the United States x x x, decreeing the registration of the subject parcels of land in the name of the late Doña Demetria Cacho has long attained finality and is conclusive as to the question of ownership thereof. Since MCFC, the only defendant left in this case, is not a proper party defendant in this complaint for expropriation, the present case should be dismissed. This Court notes that the Republic [has filed reversion proceedings] dated September 27, 2004, involving the same parcels of land, docketed as Case No. 6686 pending before the Regional Trial Court of Lanao del Norte, Iligan City Branch 4. [The Republic], however, did not state such fact in its "Verification and Certification of Non-Forum Shopping" attached to its Supplemental Complaint dated September 28, 2004. [It is therefore] guilty of forum shopping. Moreover, considering that in the Reversion case, [the Republic] asserts ownership over the subject parcels of land, it cannot be allowed to take an inconsistent position in this expropriation case without making a mockery of justice. The Republic filed a Motion for Reconsideration of the Resolution dated July 12, 2005, insofar as it dismissed Civil Case No. 106, but said Motion was denied by Judge Mangatora in a Resolution31 dated October 24, 2005. On January 16, 2006, the Republic filed with this Court the consolidated Petition for Review on Certiorari and Petition for Certiorari under Rules 45 and 65 of the Rules of Court, respectively, docketed as G.R. No. 170375. The Republic, in its consolidated Petitions challenging the Resolutions dated July 12, 2005 and October 24, 2005 of the RTC-Branch 1 in Civil Case No. 106, made the following assignment of errors: RESPONDENT JUDGE GRAVELY ERRED IN ORDERING THE DISMISSAL OF THE EXPROPRIATION COMPLAINT IN CIVIL CASE NO. 106 CONSIDERING THAT: (a) (b)

THE NON-JOINDER OF PARTIES IS NOT A GROUND FOR THE DISMISSAL OF AN ACTION PURSUANT TO SECTION 11, RULE 3 OF THE 1997 RULES OF CIVIL PROCEDURE; AN EXPROPRIATION PROCEEDING IS AN ACTION QUASI IN REM WHEREIN THE FACT THAT THE OWNER OF THE PROPERTY IS MADE A PARTY TO THE ACTION IS NOT ESSENTIALLY INDISPENSABLE;

MCFC opposed the Motion for leave to file and to admit the Supplemental Complaint on the ground that the Republic was without legal personality to file the same because ISA was the plaintiff in Civil Case No. 106. MCFC argued that the Republic failed to move for the execution of the decision in the ISA case within the prescriptive period of five years, hence, the only remedy left was for the Republic to file an independent action to revive the judgment. MCFC further pointed out that the unreasonable delay of more than six years of the Republic in seeking the substitution and continuation of the action for expropriation effectively barred any further proceedings therein on the ground of estoppel by laches.

The Court shall now consider the propriety of the dismissal by the RTC-Branch 1 of the Complaint for Expropriation of the Republic.

In its Reply, the Republic referred to the Order dated November 16, 2001 of the RTC-Branch 1 allowing the substitution of the Republic for ISA.

The proper parties in the expropriation proceedings

In an Order dated April 4, 2005, the RTC-Branch 1 denied the Motion of the Republic for leave to file and to admit its Supplemental Complaint. The RTC-Branch 1 agreed with MCFC that the Republic did not file any motion for execution of the judgment of this Court in the ISA case. Since no such motion for execution had been filed, the RTC-Branch 1 ruled that its Order dated November 16, 2001, which effected the substitution of the Republic for ISA as plaintiff in Civil Case No. 106, was an honest mistake. The Republic filed a Motion for Reconsideration of the April 4, 2005 Order of the RTC-Branch 1. MCFC then filed a Motion to Dismiss Civil Case No. 106 for: (1) failure of the Republic to implead indispensable parties because MCFC insisted it was not the owner of the parcels of land sought to be expropriated; and (2) forum shopping considering the institution by the

(c)

PETITIONER DID NOT COMMIT ANY FORUM SHOPPING WITH THE FILING OF THE REVERSION COMPLAINT DOCKETED AS CIVIL CASE NO. 6686 WHICH IS PENDING BEFORE BRANCH 4 OF THE REGIONAL TRIAL COURT OF ILIGAN CITY.

The right of the Republic to be substituted for ISA as plaintiff in Civil Case No. 106 had long been affirmed by no less than this Court in the ISA case. The dispositive portion of the ISA case reads: WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October 1991 to the extent that it affirmed the trial court’s order dismissing the expropriation proceedings, is hereby REVERSED and SET ASIDE and the case is REMANDED to the court a quo which shall allow the substitution of the Republic of the Philippines for petitioner Iron Steel Authority for further proceedings consistent with this Decision. No pronouncement as to costs.

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco The ISA case had already become final and executory, and entry of judgment was made in said case on August 31, 1998. The RTC-Branch 1, in an Order dated November 16, 2001, effected the substitution of the Republic for ISA. The failure of the Republic to actually file a motion for execution does not render the substitution void. A writ of execution requires the sheriff or other proper officer to whom it is directed to enforce the terms of the writ. The November 16, 2001 Order of the RTC-Branch 1 should be deemed as voluntary compliance with a final and executory judgment of this Court, already rendering a motion for and issuance of a writ of execution superfluous. Besides, no substantive right was violated by the voluntary compliance by the RTC-Branch 1 with the directive in the ISA case even without a motion for execution having been filed. To the contrary, the RTC-Branch 1 merely enforced the judicially determined right of the Republic to the substitution. While it is desirable that the Rules of Court be faithfully and even meticulously observed, courts should not be so strict about procedural lapses that do not really impair the administration of justice. If the rules are intended to insure the orderly conduct of litigation it is because of the higher objective they seek which is the protection of the substantive rights of the parties. The Court also observes that MCFC did not seek any remedy from the Order dated November 16, 2001 of the RTC-Branch 1. Consequently, the said Order already became final, which even the RTC-Branch 1 itself cannot reverse and set aside on the ground of "honest mistake." The RTC-Branch 1 dismissed the Complaint in Civil Case No. 106 on another ground: that MCFC is not a proper party to the expropriation proceedings, not being the owner of the parcels of land sought to be expropriated. The RTC-Branch 1 ratiocinated that since the exercise of the power of eminent domain involves the taking of private land intended for public use upon payment of just compensation to the owner, then a complaint for expropriation must be directed against the owner of the land sought to be expropriated. The Republic insists, however, that MCFC is a real party-in-interest, impleaded as a defendant in the Complaint for Expropriation because of its possessory or occupancy rights over the subject parcels of land, and not by reason of its ownership of the said properties. In addition, the Republic maintains that non-joinder of parties is not a ground for the dismissal of an action. Rule 67, Section 1 of the then Rules of Court described how expropriation proceedings should be instituted: Section 1. The complaint. – The right of eminent domain shall be exercised by the filing of a complaint which shall state with certainty the right and purpose of condemnation, describe the real or personal property sought to be condemned, and join as defendants all persons owning or claiming to own, or occupying, any part thereof or interest therein, showing, so far as practicable, the interest of each defendant separately. If the title to any property sought to be condemned appears to be in the Republic of the Philippines, although occupied by private individuals, or if the title is otherwise obscure or doubtful so that the plaintiff cannot with accuracy or certainty specify who are the real owners, averment to that effect may be made in the complaint. For sure, defendants in an expropriation case are not limited to the owners of the property to be expropriated, and just compensation is not due to the property owner alone. As this Court held in De Knecht v. Court of Appeals 74: The defendants in an expropriation case are not limited to the owners of the property condemned. They include all other persons owning, occupying or claiming to own the property. When [property] is taken by eminent domain, the owner x x x is not necessarily the only person who is entitled to compensation. In the American jurisdiction, the term ‘owner’ when employed in statutes relating to eminent domain to designate the persons who are to be made parties to the proceeding, refer, as is the rule in respect of those entitled to compensation, to all those who have lawful interest in the property to be condemned, including a mortgagee, a lessee and a vendee in possession under an executory contract. Every person having an estate or interest at law or in equity in the land taken is entitled to share in the award. If a person claiming an interest in the land sought to be condemned is not made a party, he is given the right to intervene and lay claim to the compensation. At the time of the filing of the Complaint for Expropriation in 1983, possessory/occupancy rights of MCFC over the parcels of land sought to be expropriated were undisputed. In fact, Letter of Instructions No. 127775 dated November 16, 1982 expressly recognized that portions of the lands reserved by Presidential Proclamation No. 2239, also dated November 16, 1982,

for the use and immediate occupation by the NSC, were then occupied by an idle fertilizer plant/factory and related facilities of MCFC. It was ordered in the same Letter of Instruction that: (1)

(2)

NSC shall negotiate with the owners of MCFC, for and on behalf of the Government, for the compensation of MCFC's present occupancy rights on the subject lands at an amount of Thirty (P30.00) Pesos per square meter or equivalent to the assessed value thereof (as determined by the City Assessor of Iligan), whichever is higher. NSC shall give MCFC the option to either remove its aforesaid plant, structures, equipment, machinery and other facilities from the lands or to sell or cede ownership thereof to NSC at a price equivalent to the fair market value thereof as appraised by the Asian Appraisal Inc. as may be mutually agreed upon by NSC and MCFC. In the event that NSC and MCFC fail to agree on the foregoing within sixty (60) days from the date hereof, the Iron and Steel Authority (ISA) shall exercise its authority under Presidential Decree (PD) No. 272, as amended, to initiate the expropriation of the aforementioned occupancy rights of MCFC on the subject lands as well as the plant, structures, equipment, machinery and related facilities, for and on behalf of NSC, and thereafter cede the same to NSC. During the pendency of the expropriation proceedings, NSC shall take possession of the properties, subject to bonding and other requirements of P.D. 1533. (Emphasis supplied.)

Being the occupant of the parcel of land sought to be expropriated, MCFC could very well be named a defendant in Civil Case No. 106. The RTC-Branch 1 evidently erred in dismissing the Complaint for Expropriation against MCFC for not being a proper party. Also erroneous was the dismissal by the RTC-Branch 1 of the original Complaint for Expropriation for having been filed only against MCFC, the occupant of the subject land, but not the owner/s of the said property. Dismissal is not the remedy for misjoinder or non-joinder of parties. According to Rule 3, Section 11 of the Rules of Court: SEC. 11. Misjoinder and non-joinder of parties. – Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined party may be severed and proceeded with separately. MCFC contends that the aforequoted rule does not apply in this case where the party not joined, i.e., the owner of the property to be expropriated, is an indispensable party. An indispensable party is a party-in-interest without whom no final determination can be had of an action. Now, is the owner of the property an indispensable party in an action for expropriation? Not necessarily. Going back to Rule 67, Section 1 of the Rules of Court, expropriation proceedings may be instituted even when "title to the property sought to be condemned appears to be in the Republic of the Philippines, although occupied by private individuals." The same rule provides that a complaint for expropriation shall name as defendants "all persons owning or claiming to own, or occupying, any part thereof or interest" in the property sought to be condemned. Clearly, when the property already appears to belong to the Republic, there is no sense in the Republic instituting expropriation proceedings against itself. It can still, however, file a complaint for expropriation against the private persons occupying the property. In such an expropriation case, the owner of the property is not an indispensable party. To recall, Presidential Proclamation No. 2239 explicitly states that the parcels of land reserved to NSC are part of the public domain, hence, owned by the Republic. Letter of Instructions No. 1277 recognized only the occupancy rights of MCFC and directed NSC to institute expropriation proceedings to determine the just compensation for said occupancy rights. Therefore, the owner of the property is not an indispensable party in the original Complaint for Expropriation in Civil Case No. 106. Assuming for the sake of argument that the owner of the property is an indispensable party in the expropriation proceedings, the non-joinder of said party would still not warrant immediate dismissal of the complaint for expropriation. In Vda. De Manguerra v. Risos, the Court applied Rule 3, Section 11 of the Rules of Court even in case of non-joinder of an indispensable party, viz:

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco [F]ailure to implead an indispensable party is not a ground for the dismissal of an action. In such a case, the remedy is to implead the non-party claimed to be indispensable. Parties may be added by order of the court, on motion of the party or on its own initiative at any stage of the action and/or such times as are just. If the petitioner/plaintiff refuses to implead an indispensable party despite the order of the court, the latter may dismiss the complaint/petition for the petitioner's/plaintiff's failure to comply. In this case, the RTC-Branch 1 did not first require the Republic to implead the alleged owner/s of the parcel of land sought to be expropriated. Despite the absence of any order from the Court, the Republic – upon becoming aware that the parcels of land involved in the 1914 Cacho case and 1997 Cacho case, claimed by Teofilo and LANDTRADE, and Vidal and AZIMUTH, encroached into and overlapped with the parcel of land subject of Civil Case No. 106 – sought leave of court to file a Supplemental Complaint to implead these four parties. The RTC-Branch 1 did not take the Supplemental Complaint of the Republic into consideration. Instead, it dismissed outright the original Complaint for Expropriation against MCFC. Expropriation vis-à-vis reversion The Republic is not engaging in contradictions when it instituted both expropriation and reversion proceedings for the same parcels of land. The expropriation and reversion proceedings are distinct remedies that are not necessarily exclusionary of each other. The filing of a complaint for reversion does not preclude the institution of an action for expropriation. Even if the land is reverted back to the State, the same may still be subject to expropriation as against the occupants thereof. Also, Rule 67, Section 1 of the Rules of Court allows the filing of a complaint for expropriation even when "the title to any property sought to be condemned appears to be in the Republic of the Philippines, although occupied by private individuals, or if the title is otherwise obscure or doubtful so that the plaintiff cannot with accuracy or certainty specify who are the real owners." Rule 67, Section 9 of the Rules of Court further provides: SEC. 9. Uncertain ownership; conflicting claims. – If the ownership of the property taken is uncertain, or there are conflicting claims to any part thereof, the court may order any sum or sums awarded as compensation for the property to be paid to the court for the benefit of the person adjudged in the same proceeding to be entitled thereto. But the judgment shall require the payment of the sum or sums awarded to either the defendant or the court before the plaintiff can enter upon the property, or retain it for the public use or purpose if entry has already been made. Hence, the filing by the Republic of the Supplemental Complaint for Expropriation impleading Teofilo, Vidal, LANDTRADE, and AZIMUTH, is not necessarily an admission that the parcels of land sought to be expropriated are privately owned. At most, the Republic merely acknowledged in its Supplemental Complaint that there are private persons also claiming ownership of the parcels of land. The Republic can still consistently assert, in both actions for expropriation and reversion, that the subject parcels of land are part of the public domain. In sum, the RTC-Branch 1 erred in dismissing the original Complaint and disallowing the Supplemental Complaint in Civil Case No. 106. The Court reverses and sets aside the Resolutions dated July 12, 2005 and October 24, 2005 of the RTC-Branch 1 in Civil Case 106, and reinstates the Complaint for Reversion of the Republic.

G.R. No. 189239

November 24, 2010

SPOUSES LETICIA & JOSE ERVIN ABAD, SPS. ROSARIO AND ERWIN COLLANTES, SPS. RICARDO AND FELITA ANN, SPS. ELSIE AND ROGER LAS PIÑAS, LINDA LAYDA, RESTITUTO MARIANO, SPS. ARNOLD AND MIRIAM MERCINES, SPS. LUCITA AND WENCESLAO A. RAPACON, SPS. ROMEO AND EMILYN HULLEZA, LUZ MIPANTAO, SPS. HELEN AND ANTHONY TEVES, MARLENE TUAZON, SPS. ZALDO AND MIA SALES, SPS. JOSEFINA AND JOEL YBERA, SPS. LINDA AND JESSIE CABATUAN, SPS. WILMA AND MARIO ANDRADA, SPS. RAYMUNDO AND ARSENIA LELIS, FREDY AND SUSANA PILONEO, Petitioners, vs.FIL-HOMES REALTY and DEVELOPMENT CORPORATION and MAGDIWANG REALTY CORPORATION, Respondents. FACTS: Fil-Homes Realty and Development Corporation and Magdiwang Realty Corporation (respondents), co-owners of two lots situated in Sucat, Parañaque City and covered by Transfer Certificates of Title Nos. 21712 and 21713, filed a complaint for unlawful detainer on May 7, 2003 against above-named petitioners before the Parañaque Metropolitan Trial Court (MeTC). Respondents alleged that petitioners, through tolerance, had occupied the subject lots since 1980 but ignored their repeated demands to vacate them. Petitioners countered that there is no possession by tolerance for they have been in adverse, continuous and uninterrupted possession of the lots for more than 30 years; and that respondent’s predecessor-in-interest, Pilipinas Development Corporation, had no title to the lots. In any event, they contend that the question of ownership must first be settled before the issue of possession may be resolved. During the pendency of the case or on June 30, 2004, the City of Parañaque filed expropriation proceedings covering the lots before the Regional Trial Court of Parañaque with the intention of establishing a socialized housing project therein for distribution to the occupants including petitioners. A writ of possession was consequently issued and a Certificate of Turn-over given to the City. Branch 77 of the MeTC, by Decision of March 3, 2008, rendered judgment in the unlawful detainer case against petitioners, ordering them and all persons claiming rights under them to VACATE and SURRENDER possession of the premises. The MeTC held that as no payment had been made to respondents for the lots, they still maintain ownership thereon. It added that petitioners cannot claim a better right by virtue of the issuance of a Writ of Possession for the project beneficiaries have yet to be named. On appeal, the Regional Trial Court (RTC), by Decision of September 4, 2008, 2 reversed the MeTC decision and dismissed respondents’ complaint. The RTC went on to rule that the issuance of a writ of possession in favor of the City bars the continuation of the unlawful detainer proceedings, and since the judgment had already been rendered in the expropriation proceedings which effectively turned over the lots to the City, the MeTC has no jurisdiction to "disregard the . . . final judgment and writ of possession" due to non-payment of just compensation. The RTC held that “It is serious error for the court a quo to rule in the unlawful detainer case that Magdiwang Realty Corporation and Fil-Homes Realty and Development Corporation could still be given possession of the properties which were already expropriated in favor of the City of Parañaque”. Respondents filed a petition for review before the CA. By Decision of May 27, 2009, 6 the appellate court, noting that petitioners did not present evidence to rebut respondents’ allegation of possession by tolerance, and considering petitioners’ admission that they commenced occupation of the property without the permission of the previous owner ─ Pilipinas Development Corporation ─ as indicium of tolerance by respondents’ predecessor-ininterest, ruled in favor of respondents. The CA reinstated the MeTC’s March 3, 2008 decision. Petitioners’ motion for reconsideration was denied by Resolution dated August 26, 2009, hence, the filing of the present petition for review. ISSUE: Whether the issuance of the writ of possession in favor or the City of Manila signifies the completion of the expropriation proceedings, thus, depriving the respondents the right to assert a better right of possession and entitling herein petitioners to continue staying in the

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco subject property since the City Ordinance authorizing the initiation of the proceedings designated them as beneficiaries of the lots. HELD: The petition fails. In the exercise of the power of eminent domain, the State expropriates private property for public use upon payment of just compensation. A socialized housing project falls within the ambit of public use as it is in furtherance of the constitutional provisions on social justice. 9 As a general rule, ejectment proceedings, due to its summary nature, are not suspended or their resolution held in abeyance despite the pendency of a civil action regarding ownership. Section 1 of Commonwealth Act No. 53810 enlightens, however: Section 1. When the Government seeks to acquire, through purchase or expropriation proceedings, lands belonging to any estate or chaplaincy (cappellania), any action for ejectment against the tenants occupying said lands shall be automatically suspended, for such time as may be required by the expropriation proceedings or the necessary negotiations for the purchase of the lands, in which latter case, the period of suspension shall not exceed one year. To avail himself of the benefits of the suspension, the tenants shall pay to the landowner the current rents as they become due or deposit the same with the court where the action for ejectment has been instituted. Petitioners did not comply with any of the acts mentioned in the law to avail of the benefits of the suspension. They nevertheless posit that since the lots are the subject of expropriation proceedings, respondents can no longer assert a better right of possession; and that the City Ordinance authorizing the initiation of expropriation proceedings designated them as beneficiaries of the lots, hence, they are entitled to continue staying there. Petitioners’ position does not lie. Expropriation of lands consists of two stages: The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint x x x. The second phase of the eminent domain action is concerned with the determination by the court of "the just compensation for the property sought to be taken." This is done by the court with the assistance of not more than three (3) commissioners x x x It is only upon the completion of these two stages that expropriation is said to have been completed. The process is not complete until payment of just compensation. Accordingly, the issuance of the writ of possession in this case does not write finis to the expropriation proceedings. To effectuate the transfer of ownership, it is necessary for the NPC to pay the property owners the final just compensation. In the present case, the mere issuance of a writ of possession in the expropriation proceedings did not transfer ownership of the lots in favor of the City. Such issuance was only the first stage in expropriation. There is even no evidence that judicial deposit had been made in favor of respondents prior to the City’s possession of the lots. Respecting petitioners’ claim that they have been named beneficiaries of the lots, the city ordinance authorizing the initiation of expropriation proceedings does not state so. 13 Petitioners cannot thus claim any right over the lots on the basis of the ordinance. Even if the lots are eventually transferred to the City, it is non sequitur for petitioners to claim that they are automatically entitled to be beneficiaries thereof. For certain requirements must be met and complied with before they can be considered to be beneficiaries. In another vein, petitioners posit that respondents failed to prove that their possession is by mere tolerance. This too fails. In allowing several years to pass without requiring the occupant to vacate the premises nor filing an action to eject him, plaintiffs have acquiesced to defendant’s possession and use of the premises. It has been held that a person who occupies

the land of another at the latter’s tolerance or permission, without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action for ejectment is the proper remedy against them. The status of the defendant is analogous to that of a lessee or tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner. In such a case, the unlawful deprivation or withholding of possession is to be counted from the date of the demand to vacate.

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco G. R. No. 185124 January 25, 2012 REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL IRRIGATION ADMINISTRATION (NIA),Petitioner, vs. RURAL BANK OF KABACAN, INC., LITTIE SARAH A. AGDEPPA, LEOSA NANETTE AGDEPPA and MARCELINO VIERNES, MARGARITA TABOADA, PORTIA CHARISMA RUTH ORTIZ, represented by LINA ERLINDA A. ORTIZ and MARIO ORTIZ, JUAN MAMAC and GLORIA MATAS, Respondents. FACTS: NIA needed some parcels of land for the purpose of constructing the Malitubog-Marigadao Irrigation Project. On 08 September 1994, it filed with the RTC of Kabacan, Cotabato a Complaint for the expropriation of a portion of three (3) parcels of land covering a total of 14,497.91 square meters. The case was docketed as Special Civil Case No. 61 and was assigned to RTC-Branch 22. The affected parcels of land were the following: 1) 2) 3)

Lot No. 3080 – covered by Transfer Certificate of Title (TCT) No. T-61963 and registered under the Rural Bank of Kabacan Lot No. 455 – covered by TCT No. T-74516 and registered under the names of RG May, Ronald and Rolando, all surnamed Lao Lot No. 3039 – registered under the name of Littie Sarah Agdeppa

On 11 July 1995, NIA filed an Amended Complaint to include Leosa Nanette A. Agdeppa and Marcelino Viernes as registered owners of Lot No. 3039. On 25 September 1995, NIA filed a Second Amended Complaint to allege properly the area sought to be expropriated, the exact address of the expropriated properties and the owners thereof. NIA further prayed that it be authorized to take immediate possession of the properties after depositing with the Philippine National Bank the amount of P 19,246.58 representing the provisional value thereof. On 31 October 1995, respondents filed their Answer with Affirmative and Special Defenses and Counterclaim. They alleged, inter alia, that NIA had no authority to expropriate portions of their land, because it was not a sovereign political entity; that it was not necessary to expropriate their properties, because there was an abandoned government property adjacent to theirs, where the project could pass through; that Lot No. 3080 was no longer owned by the Rural Bank of Kabacan; that NIA’s valuation of their expropriated properties was inaccurate because of the improvements on the land that should have placed its value at P 5 million; and that NIA never negotiated with the landowners before taking their properties for the project, causing permanent and irreparable damages to their properties valued at P 250,000. On 11 September 1996, the RTC issued an Order forming a committee tasked to determine the fair market value of the expropriated properties to establish the just compensation to be paid to the owners. The committee was composed of the Clerk of Court of RTC Branch 22 as chairperson and two (2) members of the parties to the case. On 21 October 1996, issued a Writ of Possession in favor of NIA. On 15 October 1996, the committee submitted a Commissioners’ Report to the RTC. The report, however, stated that the committee members could not agree on the market value of the subject properties and recommended the appointment of new independent commissioners to replace the ones coming from the parties only. On 22 October 1996, the RTC issued an Order revoking the appointments of Atty. Agdeppa and Engr. Mabang as members of the committee and, in their stead, appointed Renato Sambrano, Assistant Provincial Assessor of the Province of Cotabato; and Jack Tumacmol, Division Chief of the Land Bank of the Philippines–Kidapawan Branch. On 25 November 1996, the new committee submitted its Commissioners’ Report to the lower court. The committee had agreed that the fair market value of the land to be expropriated should be P 65 per square meter based on the zonal valuation of the Bureau of Internal Revenue (BIR). On 03 December 1997, the committee submitted to the RTC another report, which had adopted the first Committee Report, as well as the former’s 25 November 1996 report. However, the committee added to its computation the value of the earthfill excavated from

portions of Lot Nos. 3039 and 3080. Petitioner objected to the inclusion of the value of the excavated soil in the computation of the value of the land. On 31 August 1999, the RTC promulgated its "Judgment," the dispositive portion of which reads: WHEREFORE, IN VIEW of all the foregoing considerations, the court finds and so holds that the commissioners have arrived at and were able to determine the fair market value of the properties. NIA, through the Office of the Solicitor General (OSG), appealed the Decision of the RTC to the CA, which docketed the case as CA-G.R. CV No. 65196. NIA assailed the trial court’s adoption of the Commissioners’ Report, which had determined the just compensation to be awarded to the owners of the lands expropriated. NIA also impugned as error the RTC’s inclusion for compensation of the excavated soil from the expropriated properties. Finally, it disputed the trial court’s Order to deliver the payment intended for the Rural Bank of Kabacan to defendants-intervenors, who allegedly acquired ownership of the land still titled in the name of the said rural bank. On 12 August 2008, the CA through its Twenty-First (21st) Division, promulgated a Decision affirming with modification the RTC Decision. The assailed CA Decision, however, deleted the inclusion of the value of the soil excavated from the properties in the just compensation. It ruled that the property owner was entitled to compensation only for the value of the property at the time of the taking. ISSUE: Whether or not The Court of appeals seriously erred in affirming the trial court’s finding of just compensation of the land and the improvements thereon based on the report of the commissioners. HELD: No In expropriation proceedings, just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain, but the owner's loss. The word "just" is used to intensify the meaning of the word "compensation" and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample. The constitutional limitation of "just compensation" is considered to be a sum equivalent to the market value of the property, broadly defined as the price fixed by the seller in open market in the usual and ordinary course of legal action and competition; or the fair value of the property; as between one who receives and one who desires to sell it, fixed at the time of the actual taking by the government. In the instant case, we affirm the appellate court’s ruling that the commissioners properly determined the just compensation to be awarded to the landowners whose properties were expropriated by petitioner. The records show that the trial court dutifully followed the procedure under Rule 67 of the 1997 Rules of Civil Procedure when it formed a committee that was tasked to determine the just compensation for the expropriated properties. The first set of committee members made an ocular inspection of the properties, subject of the expropriation. They also determined the exact areas affected, as well as the kinds and the number of improvements on the properties. When the members were unable to agree on the valuation of the land and the improvements thereon, the trial court selected another batch of disinterested members to carry out the task of determining the value of the land and the improvements. The new committee members even made a second ocular inspection of the expropriated areas. They also obtained data from the BIR to determine the zonal valuation of the expropriated properties, interviewed the adjacent property owners, and considered other factors such as distance from the highway and the nearby town center. Further, the committee members also considered Provincial Ordinance No. 173, which was promulgated by the Province of Cotabato on 15 June 1999, and which provide for the value of the properties and the improvements for taxation purposes. We can readily deduce from these established facts that the committee members endeavored a rigorous process to determine the just compensation to be awarded to the owners of the

RemRev 2 Case Digests || Rule 67: Expropriation || Castro | Boco expropriated properties. We cannot, as petitioner would want us to, oversimplify the process undertaken by the committee in arriving at its recommendations, because these were not based on mere conjectures and unreliable data. In National Power Corporation v. Diato-Bernal, this Court emphasized that the "just"-ness of the compensation could only be attained by using reliable and actual data as bases for fixing the value of the condemned property. The reliable and actual data we referred to in that case were the sworn declarations of realtors in the area, as well as tax declarations and zonal valuation from the BIR. In disregarding the Committee Report assailed by the National Power Corporation in the said case, we ruled thus: It is evident that the above conclusions are highly speculative and devoid of any actual and reliable basis. First, the market values of the subject property’s neighboring lots were mere estimates and unsupported by any corroborative documents, such as sworn declarations of realtors in the area concerned, tax declarations or zonal valuation from the Bureau of Internal Revenue for the contiguous residential dwellings and commercial establishments. The report also failed to elaborate on how and by how much the community centers and convenience facilities enhanced the value of respondent’s property. Finally, the market sales data and price listings alluded to in the report were not even appended thereto. As correctly invoked by NAPOCOR, a commissioners’ report of land prices which is not based on any documentary evidence is manifestly hearsay and should be disregarded by the court. The trial court adopted the flawed findings of the commissioners hook, line, and sinker. It did not even bother to require the submission of the alleged "market sales data" and "price listings." Further, the RTC overlooked the fact that the recommended just compensation was gauged as of September 10, 1999 or more than two years after the complaint was filed on January 8, 1997. It is settled that just compensation is to be ascertained as of the time of the taking, which usually coincides with the commencement of the expropriation proceedings. Where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint. Clearly, the recommended just compensation in the commissioners’ report is unacceptable. In the instant case, the committee members based their recommendations on reliable data and, as aptly noted by the appellate court, considered various factors that affected the value of the land and the improvements. Petitioner, however, strongly objects to the CA’s affirmation of the trial court’s adoption of Provincial Ordinance No. 173. The OSG, on behalf of petitioner, strongly argues that the recommendations of the committee formed by the trial court were inaccurate. The OSG contends that the ordinance reflects the 1999 market values of real properties in the Province of Cotabato, while the actual taking was made in 1996. We are not persuaded. We note that petitioner had ample opportunity to rebut the testimonial, as well as documentary evidence presented by respondents when the case was still on trial. It failed to do so, however. The issue raised by petitioner was adequately addresses by the CA’s assailed Decision in this wise: A thorough scrutiny of the records reveals that the second set of Commissioners, with Atty. Marasigan still being the Chairperson and Mr. Zambrano and Mr. Tomacmol as members, was not arbitrary and capricious in performing the task assigned to them. We note that these Commissioners were competent and disinterested persons who were handpicked by the court a quo due to their expertise in appraising the value of the land and the improvements thereon in the province of Cotabato. They made a careful study of the area affected by the expropriation, mindful of the fact that the value of the land and its may be affected by many factors. The duly appointed Commissioners made a second ocular inspection of the subject area on 4 September 1997; went to the BIR office in order to get the BIR zonal valuation of the properties located in Carmen, Cotabato; interviewed adjacent property owners; and took into consideration various factors such as the location of the land which is just less than a kilometer away from the Poblacion and half a kilometer away from the highway and the fact that it is near a military reservation. With regard to the improvements, the Commissioners took into consideration the valuation of the Provincial Assessor, the age of the trees, and the inputs and their productivity. Thus, it could not be said that the schedule of market values in Ordinance No. 173 was the sole basis of the Commissioners in arriving at their valuation. Said ordinance merely gave credence to their valuation which is comparable to the current price at that time. Besides, Mr.

Zambrano testified that the date used as bases for Ordinance No. 173 were taken from 1995 to 1996. Moreover, factual findings of the CA are generally binding on this Court. The rule admits of exceptions, though, such as when the factual findings of the appellate court and the trial court are contradictory, or when the findings are not supported by the evidence on record. These exceptions, however, are not present in the instant case. Thus, in the absence of contrary evidence, we affirm the findings of the CA, which sustained the trial court’s Decision adopting the committee’s recommendations on the just compensation to be awarded to herein respondents. We also uphold the CA ruling, which deleted the inclusion of the value of the excavated soil in the payment for just compensation. There is no legal basis to separate the value of the excavated soil from that of the expropriated properties, contrary to what the trial court did. In the context of expropriation proceedings, the soil has no value separate from that of the expropriated land. Just compensation ordinarily refers to the value of the land to compensate for what the owner actually loses. Such value could only be that which prevailed at the time of the taking. In National Power Corporation v. Ibrahim, et al., we held that rights over lands are indivisible, viz: [C]onsequently, the CA’s findings which upheld those of the trial court that respondents owned and possessed the property and that its substrata was possessed by petitioner since 1978 for the underground tunnels, cannot be disturbed. Moreover, the Court sustains the finding of the lower courts that the sub-terrain portion of the property similarly belongs to respondents. This conclusion is drawn from Article 437 of the Civil Code which provides: ART. 437. The owner of a parcel of land is the owner of its surface and of everything under it, and he can construct thereon any works or make any plantations and excavations which he may deem proper, without detriment to servitudes and subject to special laws and ordinances. He cannot complain of the reasonable requirements of aerial navigation. Thus, the ownership of land extends to the surface as well as to the subsoil under it. Registered landowners may even be ousted of ownership and possession of their properties in the event the latter are reclassified as mineral lands because real properties are characteristically indivisible. For the loss sustained by such owners, they are entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings. Moreover, petitioner’s argument that the landowners’ right extends to the sub-soil insofar as necessary for their practical interests serves only to further weaken its case. The theory would limit the right to the sub-soil upon the economic utility which such area offers to the surface owners. Presumably, the landowners’ right extends to such height or depth where it is possible for them to obtain some benefit or enjoyment, and it is extinguished beyond such limit as there would be no more interest protected by law. Hence, the CA correctly modified the trial court’s Decision when it ruled thus: We agree with the OSG that NIA, in the construction of irrigation projects, must necessarily make excavations in order to build the canals. Indeed it is preposterous that NIA will be made to pay not only for the value of the land but also for the soil excavated from such land when such excavation is a necessary phase in the building of irrigation projects. That NIA will make use of the excavated soil is of no moment and is of no concern to the landowner who has been paid the fair market value of his land. As pointed out by the OSG, the law does not limit the use of the expropriated land to the surface area only. Further, NIA, now being the owner of the expropriated property, has the right to enjoy and make use of the property in accordance with its mandate and objectives as provided by law. To sanction the payment of the excavated soil is to allow the landowners to recover more than the value of the land at the time when it was taken, which is the true measure of the damages, or just compensation, and would discourage the construction of important public improvements