G.R. No. 166973 February 10, 2009 NATIONAL POWER CORPORATION, Petitioner, vs. BENJAMIN ONG CO, Respondent.

DECISION TINGA, J.: Before us is a Rule 45 petition1 which seeks the reversal of the Decision2 and Resolution3 of the Court of Appeals in CA-G.R. No. 79211. The Court of Appeals Decision affirmed the Partial Decision4 of the Regional Trial Court (RTC) of San Fernando, Pampanga, Branch 41 in Civil Case No. 12281, fixing the compensation due respondent following the expropriation of his property for the construction of petitioners power transmission lines. Petitioner was established by R.A. No. 6395 to undertake the development of hydroelectric generation of power and the production of electricity from nuclear, geothermal and other sources, as well as the transmission of electric power on a nationwide basis.5 Its charter grants to petitioner, among others, the power to exercise the right to eminent domain.6 On 27 June 2001, petitioner filed a complaint7 with the RTC of San Fernando, Pampanga, for the acquisition of an easement of right-of-way over three (3) lots at Barangay Cabalantian, Bacolor, Pampanga with a total area of 575 square meters belonging to respondent, in connection with the construction of its transmission lines for its Lahar Affected Transmission Line Project (Lahar Project). On 25 March 2002, petitioner obtained a writ of possession and on 15 April 2002 it took possession of the property. At the pre-trial conference, respondent conceded the necessity of expropriation.1avvphi1.zw+ Thus, the sole issue for litigation revolved around the determination of just compensation. The RTC appointed three (3) commissioners8 to determine the fair market value of the property as of 15 April 2002. Commissioners Dayrit and Garcia submitted their joint report9 wherein they appraised the value of the property at P1,900.00 per square meter or a total of P1,179,000.00, while Commissioner Abcejo submitted his Commissioner's Report10 pegging the value of the property at P875.00 per square meter. The RTC rendered its Partial Decision,11 wherein it declared the validity of the expropriation and ordered petitioner to pay the sum of P1,179,000.00, with interest at 6% per annum beginning 15 April 2002, the date of actual taking, until full payment. It adopted the findings of Commissioners Dayrit and Garcia as more reliable since their report was based on established facts and they had evaluated the market, location and physical characteristics of the property while Commissioner Abcejos report had merely taken the average between the Provincial Appraisal Report (P1,500.00/sq.m.) and the Land Bank Appraisal Report (P250.00/sq.m.) that were both done in 1998. Not satisfied, petitioner filed an appeal with the Court of Appeals. On 20 October 2004, the Court of Appeals rendered its Decision12 holding petitioner liable to pay the full fair market value at the time of actual taking, with interest at 6% per annum from 15 April 2002. To determine the actual valuation of the property, the Court of Appeals ordered the RTC to appoint a new set of disinterested commissioners. Petitioner filed a motion for partial reconsideration, questioning the order to pay the full fair market value computed as of the date of its actual possession of the property. The Court of Appeals denied the motion for partial reconsideration; hence, the present petition. On 11 April 2007,13 the Court required the parties to submit their supplemental memoranda discussing the following issues: Is Republic Act No. 8974 (2000), otherwise known as "An Act to Facilitate the Acquisition of Right-of-Way, site or Location for National Government Infrastructure Projects and for other purposes," applicable to actions for eminent domain filed by the National Power Corporation (Napocor) pursuant to its charter (Rep. Act. No. 6395, as amended) for the purpose of constructing power transmission lines on the properties subject of said actions? Assuming that Rep. Act No. 8974 is applicable to said expropriation proceedings: a. What are the effects, if any, of Rep. Act No. 8974 and its implementing Rules on the Standards for the determination of the provisional value and the final amount of just compensation in the present case, including on the question of whether the just compensation should be reckoned from the date of the filing of the complaint since such date preceded the date of the taking of the property in this case? b. Is the 10% limit on the amount of just compensation for the acquisition of right-of-way easements on lands or portions thereof to be traversed by the transmission lines, as provided for in Section 3-a(b) of Napocor's charter, still in effect in light of the valuation standards provided for in Rep. Act No. 8974 and its implementing rules? Eminent domain "is the inherent power of a sovereign state to appropriate private property to particular use to promote public welfare."14 In the exercise of its power of eminent domain, just compensation must be given to the property owner to satisfy the requirements of Sec. 9, Art. III15 of the Constitution. Just compensation is the fair market value of the property.16 Fair market value is that "sum of money which a person desirous but not compelled to buy, and an owner willing but not compelled to sell, would agree on as a price to be given and received therefor."17 Judicial determination is needed to arrive at the exact amount due to the property owner. The power to expropriate is legislative in character and must be expressly conferred by statute. Under its charter, petitioner is vested with the power of eminent domain. The first aspect of the compensation issue is whether what should be paid is the full fair market value of the property or a mere easement fee. Petitioner relies on Sec. 3A18 of R.A. No. 6395, as amended, which provides that only an easement fee equivalent to 10% of the market value shall be paid to affected property owners. Based on this amendatory provision, petitioner is willing to pay an easement fee of 10% for the easement of right-of-way it acquired for the installation of power transmission lines. As intimated in the Courts 2007 Resolution, the case at bar is further complicated by the enactment of R.A. No. 8974 before the filing of the expropriation complaint. R.A. No. 8974,19 entitled "An Act To Facilitate The Acquisition Of Right-Of-Way, Site Or Location For National Government Infrastructure Projects And For Other Purposes," defines "national government projects" as follows: Sec. 2. National Government ProjectsThe term "national government projects" shall refer to all national government infrastructure, engineering works and service contracts, including projects undertaken by government-owned and -controlled corporations, all projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the Build-Operate-and-Transfer Law, and other related and necessary activities, such as site acquisition, supply and/or installation of equipment and materials, implementation, construction, completion, operation, maintenance, improvement, repair and rehabilitation, regardless of source of funding. Petitioner expropriated respondents property for its Lahar Project, a project for public use. 20 In Republic v. Gingoyon (Gingoyon), we observed that R.A. No. 8974 covers expropriation proceedings intended for national government infrastructure projects.21 The Implementing Rules and Regulations22 of R.A. No. 8974 explicitly include power generation, transmission and distribution projects among the national government projects covered by the law. There is no doubt that the installation of transmission lines is important to the continued growth of the country. Electricity moves our economy, it is a national concern. R.A. No. 8974 should govern the expropriation of respondent's property since the Lahar Project is a national government project. Significantly, Gingoyon is explicit authority that R.A. No. 8974 applies with respect to substantive matters covered by it to the exclusion of Rule 67 in cases when expropriation is availed of for a national government project. We noted in Gingoyon: It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule 67 with the scheme of "immediate payment" in cases involving national government infrastructure projects. xxx It likewise bears noting that the appropriate standard of just compensation is a substantive matter. It is well within the province of the legislature to fix the standard, which it did through the enactment of Rep. Act No. 8974. Specifically, this prescribes the new standards in determining the amount of just compensation in expropriation cases relating to national government infrastructure projects, as well

as the manner of payment thereof. At the same time, Section 14 of the Implementing Rules recognizes the continued applicability of Rule 67 on procedural aspects when it provides "all matters regarding defenses and objections to the complaint, issues on uncertain ownership and conflicting claims, effects of appeal on the rights of the parties, and such other incidents affecting the complaint shall be resolved under the provisions on expropriation of Rule 67 of the Rules of Court.23 The right of a property owner to receive just compensation prior to the actual taking of the property by the State is a proprietary right which Congress can legislate on.24 R.A. No. 8974 being applicable in this case, the government agency involved must comply with the guidelines set forth in Sec. 425 of R.A. No. 8974. As earlier mentioned, Section 3A of R.A. No. 6395, as amended, substantially provides that properties which will be traversed by transmission lines will only be considered as easements and just compensation for such right of way easement shall not exceed 10 percent of the market value.26 However, this Court has repeatedly ruled that when petitioner takes private property to construct transmission lines, it is liable to pay the full market value upon proper determination by the courts.27 In National Power Corporation v. Manubay Agro-Industrial Development Corporation,28 we held that the taking of property was purely an easement of a right of way, but we nevertheless ruled that the full market value should be paid instead of an easement fee. 29 This Court is mindful of the fact that the construction of the transmission lines will definitely have limitations and will indefinitely deprive the owners of the land of their normal use. The presence of transmission lines undoubtedly restricts respondents use of his property. 1avvphi1 Petitioner is thus liable to pay respondent the full market value of the property. The second aspect of the compensation issue relates to the reckoning date for the determination of just compensation. Petitioner contends that the computation should be made as of 27 June 2001, the date when it filed the expropriation complaint, as provided in Rule 67. We agree. Rule 67 clearly provides that the value of just compensation shall "be determined as of the date of the taking of the property or the filing of the complaint, whichever came first."30 In B.H. Berkenkotter & Co. v. Court of Appeals, we held that: 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.31 (emphasis supplied) Typically, the time of taking is contemporaneous with the time the petition is filed. The general rule is what is provided for by Rule 67. There are exceptionsgrave injustice to the property owner,32 the taking did not have color of legal authority,33 the taking of the property was not initially for expropriation34 and the owner will be given undue increment advantages because of the expropriation.35 However, none of these exceptions are present in the instant case. Moreover, respondents reliance on the ruling in City of Cebu v. Spouses Dedamo,36 is misplaced since the applicable law therein was the Local Government Code which explicitly provides that the value of just compensation shall be computed at the time of taking.37 Based on the foregoing, the reckoning date for the determination of the amount of just compensation is 27 June 2001, the date when petitioner filed its expropriation complaint. As a final note, the function for determining just compensation remains judicial in character. In Export Processing Zone Authority v. Dulay,38 and National Power Corporation v. Purefoods,39 we ruled: The determination of "just compensation" in eminent domain cases is a judicial function. The executive department or legislature may make the initial determinations but when a party claims a violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or executive order can mandate its own determination shall prevail over the court's findings. Much less can the courts be precluded from looking into the "just-ness" of the decreed compensation.40 Thus, the lower court must use the standards set forth in Sec. 541 of R.A. No. 8974 to arrive at the amount of just compensation. To recapitulate, R.A. No. 8974 applies to properties expropriated for the installation of petitioners power transmission lines. Also, petitioner is liable to pay the full amount of the fair market value and not merely a 10 percent easement fee for the expropriated property. Likewise, the value of the property should be reckoned as of 27 June 2001, the date of the filing of the complaint in compliance with Rule 67. Lastly, respondent failed to assign as error the Court of Appeals ruling regarding the need to appoint a new set of commissioners. 42 However, even if respondent had assigned the matter as error, it would still be denied since the conflicting appraisals submitted by the commissioners were not both reckoned as of the date of filing of the complaint. Thus, there is need to remand this case in line with the appellate courts valid directive for the new set of commissioners. WHEREFORE the petition is partially GRANTED. The Decision of the Court of Appeals is AFFIRMED insofar as it ordered petitioner to pay the full amount of the fair market value of the property involved as just compensation and is REVERSED insofar as it directed that such compensation be computed as of the date of taking instead of earlier which is the date of filing of the complaint. This case is REMANDED to the trial court for the appointment of a new set of commissioners in accordance with Sec. 8, Rule 67 of the Rules of Court and the determination of just compensation in conformity with this Decision. The Regional Trial Court of San Fernando City, Pampanga is directed to conduct, complete and resolve the further proceedings with deliberate dispatch. G.R. No. 173085 January 19, 2011 PHILIPPINE VETERANS BANK, Petitioner, vs. BASES CONVERSION DEVELOPMENT AUTHORITY, LAND BANK OF THE PHILIPPINES, ARMANDO SIMBILLO, CHRISTIAN MARCELO, ROLANDO DAVID, RICARDO BUCUD, PABLO SANTOS, AGRIFINA ENRIQUEZ, CONRADO ESPELETA, CATGERUBE CASTRO, CARLITO MERCADO and ALFREDO SUAREZ, Respondents. DECISION ABAD, J.: This case is about the authority of the court in an expropriation case to adjudicate questions of ownership of the subject properties where such questions involve the determination of the validity of the issuance to the defendants of Certificates of Land Ownership Awards (CLOAs) and Emancipation Patents (EPs), questions that fall within the jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB). The Facts and the Case In late 2003 respondent Bases Conversion Development Authority (BCDA), a government corporation, filed several expropriation actions before the various branches of the Regional Trial Court (RTC) of Angeles City, for acquisition of lands needed for the construction of the Subic-Clark-Tarlac Expressway Project. Ten of these cases were raffled to Branch 58 of the court1 and it is these that are the concern of the present petition. The defendants in Branch 58 cases were respondents Armando Simbillo, Christian Marcelo, Rolando David, Ricardo Bucud, Pablo Santos, Agrifina Enriquez, Conrado Espeleta, Catgerube Castro, Carlito Mercado, and Alfredo Suarez. They were the registered owners of the expropriated lands that they acquired as beneficiaries of the comprehensive agrarian reform program. Another defendant was Land Bank of the Philippines, the mortgagee of the lands by virtue of the loans it extended for their acquisition. The lands in these cases were located in Porac and Floridablanca, Pampanga. On learning of the expropriation cases before Branch 58, petitioner Philippine Veterans Bank (PVB) filed motions to intervene in all the cases with attached complaints-in-intervention, a remedy that it adopted in similar cases with the other branches. PVB alleged that the covered properties actually belonged to Belmonte Agro-Industrial Development Corp. which mortgaged the lands to PVB in 1976. PVB had since foreclosed on the mortgages and bought the same at public auction in 1982. Unfortunately, the bank had been unable to consolidate ownership in its name. But, in its order of August 18, 2004,2 Branch 58 denied PVBs motion for intervention on the ground that the intervention amounts to a third-party complaint that is not allowed in expropriation cases and that the intervention would delay the proceedings in the cases before it. Besides, said Branch 58, PVB had a pending action for annulment of the titles issued to the individual defendants and this was pending before Branch 62 of the court. PVB filed its motion for reconsideration but Branch 58 denied the same, prompting the bank to file a petition for certiorari with the Court of Appeals (CA).3 On January 26, 2006 the CA rendered a decision, dismissing the petition for lack of merit. 4 It also denied in a resolution dated June 2, 20065 PVBs motion for reconsideration.

Meanwhile, on April 3, 2006 Branch 58 issued separate decisions in all 10 cases before it, granting the expropriation of the subject properties. The court noted the uncertainty as to the ownership of such properties but took no action to grant BCDAs prayer in its complaint that it determine the question of ownership of the same pursuant to Section 9, Rule 67 of the Revised Rules of Civil Procedure.6 The Issue Presented The issue presented in this case is whether or not the CA erred in holding that PVB was not entitled to intervene in the expropriation cases before Branch 58 of the Angeles City RTC. The Courts Ruling PVB maintains that in deciding the case, the RTC and the CA ignored Section 9, Rule 67 of the 1997 Rules of Civil Procedure, which authorizes the court adjudicating the expropriation case to hear and decide conflicting claims regarding the ownership of the properties involved while the compensation for the expropriated property is in the meantime deposited with the court. Section 9 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. PVBs point regarding the authority of the court in expropriation cases to hear and adjudicate conflicting claims over the ownership of the lands involved in such cases is valid. But such rule obviously cannot apply to PVB for the following reasons: 1. At the time PVB tried to intervene in the expropriation cases, its conflict with the farmer beneficiaries who held CLOAs, EPs, or TCTs emanating from such titles were already pending before Angeles City RTC Branch 62, a co-equal branch of the same court. Branch 58 had no authority to pre-empt Branch 62 of its power to hear and adjudicate claims that were already pending before it. 2. Of course, subsequently, after the CA dismissed PVBs petition on January 26, 2006, the latter filed a motion for reconsideration, pointing out that it had in the meantime already withdrawn the actions it filed with Branch 62 after learning from the decision of the Supreme Court in Department of Agrarian Reform v. Cuenca,7 that jurisdiction over cases involving the annulment of CLOAs and EPs were vested by Republic Act 6657 in the DARAB.8 PVB now points out that, since there was no longer any impediment in RTC Branch 58 taking cognizance of its motion for intervention and adjudicating the parties conflicting claims over the expropriated properties, the CA was in error in not reconsidering its decision. But PVBs withdrawal of its actions from Branch 62 cannot give Branch 58 comfort. As PVB itself insists, jurisdiction over the annulment of the individual defendants CLOAs and EPs (which titles if annulled would leave PVBs titles to the lands unchallenged) lies with the DARAB. Branch 58 would still have no power to adjudicate the issues of ownership presented by the PVBs intervention. Actually, PVBs remedy was to secure an order from Branch 58 to have the proceeds of the expropriation deposited with that branch in the meantime, pending adjudication of the issues of ownership of the expropriated lands by the DARAB. Section 9 above empowers the court to order payment to itself of the proceeds of the expropriation whenever questions of ownership are yet to be settled. There is no reason why this rule should not be applied even where the settlement of such questions is to be made by another tribunal.1avvphi1 WHEREFORE, the Court DENIES the petition and AFFIRMS the decision of the Court of Appeals dated January 26, 2006 and its resolution dated June 2, 2006 in CA-G.R. SP 88144. G.R. No. 169914 April 18, 2008 ASIA'S EMERGING DRAGON CORPORATION, petitioner, vs. DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO R. MENDOZA and MANILA INTERNATIONAL AIRPORT AUTHORITY, respondents. x ----------------------------------------- x G.R. No. 174166 April 18, 2008 REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner, vs. HON. COURT OF APPEALS and SALACNIB BATERINA, respondents. DECISION CHICO-NAZARIO, J.: This Court is still continuously besieged by Petitions arising from the awarding of the Ninoy Aquino International Airport International Passenger Terminal III (NAIA IPT III) Project to the Philippine International Air Terminals Co., Inc. (PIATCO), despite the promulgation by this Court of Decisions and Resolutions in two cases, Agan, Jr. v. Philippine International Air Terminals Co., Inc. 1 and Republic v. Gingoyon,2 which already resolved the more basic and immediate issues arising from the said award. The sheer magnitude of the project, the substantial cost of its building, the expected high profits from its operations, and its remarkable impact on the Philippine economy, consequently raised significant interest in the project from various quarters. Once more, two new Petitions concerning the NAIA IPT III Project are before this Court. It is only appropriate, however, that the Court first recounts its factual and legal findings in Agan and Gingoyon to ascertain that its ruling in the Petitions at bar shall be consistent and in accordance therewith.

Agan, Jr. v. Philippine International Air Terminals Co., Inc. (G.R. Nos. 155001, 155547, and 155661) Already established and incontrovertible are the following facts in Agan:
In August 1989, the [Department of Trade and Communications (DOTC)] engaged the services of Aeroport de Paris (ADP) to conduct a comprehensive study of the Ninoy Aquino International Airport (NAIA) and determine whether the present airport can cope with the traffic development up to the year 2010. The study consisted of two parts: first, traffic forecasts, capacity of existing facilities, NAIA future requirements, proposed master plans and development plans; and second, presentation of the preliminary design of the passenger terminal building. The ADP submitted a Draft Final Report to the DOTC in December 1989. Some time in 1993, six business leaders consisting of John Gokongwei, Andrew Gotianun, Henry Sy, Sr., Lucio Tan, George Ty and Alfonso Yuchengco met with then President Fidel V. Ramos to explore the possibility of investing in the construction and operation of a new international airport terminal. To signify their commitment to pursue the project, they formed the Asia's Emerging Dragon Corp. (AEDC) which was registered with the Securities and Exchange Commission (SEC) on September 15, 1993. On October 5, 1994, AEDC submitted an unsolicited proposal to the Government through the DOTC/[Manila International Airport Authority (MIAA)] for the development of NAIA International Passenger Terminal III (NAIA IPT III) under a build-operate-and-transfer arrangement pursuant to RA 6957 as amended by RA 7718 (BOT Law). On December 2, 1994, the DOTC issued Dept. Order No. 94-832 constituting the Prequalification Bids and Awards Committee (PBAC) for the implementation of the NAIA IPT III project. On March 27, 1995, then DOTC Secretary Jose Garcia endorsed the proposal of AEDC to the National Economic and Development Authority (NEDA). A revised proposal, however, was forwarded by the DOTC to NEDA on December 13, 1995. On January 5, 1996, the NEDA Investment Coordinating Council (NEDA ICC) - Technical Board favorably endorsed the project to the ICC - Cabinet Committee which approved the same, subject to certain conditions, on January 19, 1996. On February 13, 1996, the NEDA passed Board Resolution No. 2 which approved the NAIA IPT III project. On June 7, 14, and 21, 1996, DOTC/MIAA caused the publication in two daily newspapers of an invitation for competitive or comparative proposals on AEDC's unsolicited proposal, in accordance with Sec. 4-A of RA 6957, as amended. The alternative bidders were required to submit three (3) sealed envelopes on or before 5:00 p.m. of September 20, 1996. The first envelope should contain the Prequalification Documents, the second envelope the Technical Proposal, and the third envelope the Financial Proposal of the proponent.

On June 20, 1996, PBAC Bulletin No. 1 was issued, postponing the availment of the Bid Documents and the submission of the comparative bid proposals. Interested firms were permitted to obtain the Request for Proposal Documents beginning June 28, 1996, upon submission of a written application and payment of a non-refundable fee of P50,000.00 (US$2,000). The Bid Documents issued by the PBAC provided among others that the proponent must have adequate capability to sustain the financing requirement for the detailed engineering, design, construction, operation, and maintenance phases of the project. The proponent would be evaluated based on its ability to provide a minimum amount of equity to the project, and its capacity to secure external financing for the project. On July 23, 1996, the PBAC issued PBAC Bulletin No. 2 inviting all bidders to a pre-bid conference on July 29, 1996. On August 16, 1996, the PBAC issued PBAC Bulletin No. 3 amending the Bid Documents. The following amendments were made on the Bid Documents: a. Aside from the fixed Annual Guaranteed Payment, the proponent shall include in its financial proposal an additional percentage of gross revenue share of the Government, as follows: i. ii. iii. First 5 years Next 10 years Next 10 years 5.0% 7.5% 10.0%

b. The amount of the fixed Annual Guaranteed Payment shall be subject of the price challenge. Proponent may offer an Annual Guaranteed Payment which need not be of equal amount, but payment of which shall start upon site possession. c. The project proponent must have adequate capability to sustain the financing requirement for the detailed engineering, design, construction, and/or operation and maintenance phases of the project as the case may be. For purposes of pre-qualification, this capability shall be measured in terms of: i. Proof of the availability of the project proponent and/or the consortium to provide the minimum amount of equity for the project; and ii. a letter testimonial from reputable banks attesting that the project proponent and/or the members of the consortium are banking with them, that the project proponent and/or the members are of good financial standing, and have adequate resources. d. The basis for the prequalification shall be the proponent's compliance with the minimum technical and financial requirements provided in the Bid Documents and the [Implementing Rules and Regulations (IRR)] of the BOT Law. The minimum amount of equity shall be 30% of the Project Cost. e. Amendments to the draft Concession Agreement shall be issued from time to time. Said amendments shall only cover items that would not materially affect the preparation of the proponent's proposal. On August 29, 1996, the Second Pre-Bid Conference was held where certain clarifications were made. Upon the request of prospective bidder People's Air Cargo & Warehousing Co., Inc (Paircargo), the PBAC warranted that based on Sec. 11.6, Rule 11 of the Implementing Rules and Regulations of the BOT Law, only the proposed Annual Guaranteed Payment submitted by the challengers would be revealed to AEDC, and that the challengers' technical and financial proposals would remain confidential. The PBAC also clarified that the list of revenue sources contained in Annex 4.2a of the Bid Documents was merely indicative and that other revenue sources may be included by the proponent, subject to approval by DOTC/MIAA. Furthermore, the PBAC clarified that only those fees and charges denominated as Public Utility Fees would be subject to regulation, and those charges which would be actually deemed Public Utility Fees could still be revised, depending on the outcome of PBAC's query on the matter with the Department of Justice. In September 1996, the PBAC issued Bid Bulletin No. 5, entitled "Answers to the Queries of PAIRCARGO as Per Letter Dated September 3 and 10, 1996." Paircargo's queries and the PBAC's responses were as follows:

1. It is difficult for Paircargo and Associates to meet the required minimum equity requirement as prescribed in Section 8.3.4 of the Bid Documents considering that the capitalization of each member company is so structured to meet the requirements and needs of their current respective business undertaking/activities. In order to comply with this equity requirement, Paircargo is requesting PBAC to just allow each member of (sic) corporation of the Joint Venture to just execute an agreement that embodies a commitment to infuse the required capital in case the project is awarded to the Joint Venture instead of increasing each corporation's current authorized capital stock just for prequalification purposes.
In prequalification, the agency is interested in one's financial capability at the time of prequalification, not future or potential capability. A commitment to put up equity once awarded the project is not enough to establish that "present" financial capability. However, total financial capability of all member companies of the Consortium, to be established by submitting the respective companies' audited financial statements, shall be acceptable.

2. At present, Paircargo is negotiating with banks and other institutions for the extension of a Performance Security to the joint venture in the event that the Concessions Agreement (sic) is awarded to them. However, Paircargo is being required to submit a copy of the draft concession as one of the documentary requirements. Therefore, Paircargo is requesting that they'd (sic) be furnished copy of the approved negotiated agreement between the PBAC and the AEDC at the soonest possible time.
A copy of the draft Concession Agreement is included in the Bid Documents. Any material changes would be made known to prospective challengers through bid bulletins. However, a final version will be issued before the award of contract. The PBAC also stated that it would require AEDC to sign Supplement C of the Bid Documents (Acceptance of Criteria and Waiver of Rights to Enjoin Project) and to submit the same with the required Bid Security. On September 20, 1996, the consortium composed of People's Air Cargo and Warehousing Co., Inc. (Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp. (Security Bank) (collectively, Paircargo Consortium) submitted their competitive proposal to the PBAC. On September 23, 1996, the PBAC opened the first envelope containing the prequalification documents of the Paircargo Consortium. On the following day, September 24, 1996, the PBAC prequalified the Paircargo Consortium. On September 26, 1996, AEDC informed the PBAC in writing of its reservations as regards the Paircargo Consortium, which include: a. The lack of corporate approvals and financial capability of PAIRCARGO; b. The lack of corporate approvals and financial capability of PAGS; c. The prohibition imposed by RA 337, as amended (the General Banking Act) on the amount that Security Bank could legally invest in the project; d. The inclusion of Siemens as a contractor of the PAIRCARGO Joint Venture, for prequalification purposes; and e. The appointment of Lufthansa as the facility operator, in view of the Philippine requirement in the operation of a public utility. The PBAC gave its reply on October 2, 1996, informing AEDC that it had considered the issues raised by the latter, and that based on the documents submitted by Paircargo and the established prequalification criteria, the PBAC had found that the challenger, Paircargo, had prequalified to undertake the project. The Secretary of the DOTC approved the finding of the PBAC. The PBAC then proceeded with the opening of the second envelope of the Paircargo Consortium which contained its Technical Proposal. On October 3, 1996, AEDC reiterated its objections, particularly with respect to Paircargo's financial capability, in view of the restrictions imposed by Section 21-B of the General Banking Act and Sections 1380 and 1381 of the Manual Regulations for Banks and Other Financial Intermediaries. On October 7, 1996, AEDC again manifested its objections and requested that it be furnished with excerpts of the PBAC meeting and the accompanying technical evaluation report where each of the issues they raised were addressed. On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and the Paircargo Consortium containing their respective financial proposals. Both proponents offered to build the NAIA Passenger Terminal III for at least $350 million at no cost to the government and to pay the government: 5% share in gross revenues for the first five years of operation, 7.5% share in gross revenues for the next ten years of operation, and 10% share in gross revenues for the last ten years of operation, in accordance with the Bid Documents. However, in addition to the foregoing, AEDC offered to pay the government a total of P135 million as guaranteed payment for 27 years while Paircargo Consortium offered to pay the government a total of P17.75 billion for the same period. Thus, the PBAC formally informed AEDC that it had accepted the price proposal submitted by the Paircargo Consortium, and gave AEDC 30 working days or until November 28, 1996 within which to match the said bid, otherwise, the project would be awarded to Paircargo.

As AEDC failed to match the proposal within the 30-day period, then DOTC Secretary Amado Lagdameo, on December 11, 1996, issued a notice to Paircargo Consortium regarding AEDC's failure to match the proposal. On February 27, 1997, Paircargo Consortium incorporated into Philippine International Airport Terminals Co., Inc. (PIATCO). AEDC subsequently protested the alleged undue preference given to PIATCO and reiterated its objections as regards the prequalification of PIATCO. On April 11, 1997, the DOTC submitted the concession agreement for the second-pass approval of the NEDA-ICC. On April 16, 1997, AEDC filed with the Regional Trial Court of Pasig a Petition for Declaration of Nullity of the Proceedings, Mandamus and Injunction against the Secretary of the DOTC, the Chairman of the PBAC, the voting members of the PBAC and Pantaleon D. Alvarez, in his capacity as Chairman of the PBAC Technical Committee. xxxx On July 9, 1997, the DOTC issued the notice of award for the project to PIATCO. On July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile, and PIATCO, through its President, Henry T. Go, signed the "Concession Agreement for the Build-Operate-and-Transfer Arrangement of the Ninoy Aquino International Airport Passenger Terminal III" (1997 Concession Agreement). x x x. On November 26, 1998, the Government and PIATCO signed an Amended and Restated Concession Agreement (ARCA). x x x. Subsequently, the Government and PIATCO signed three Supplements to the ARCA. The First Supplement was signed on August 27, 1999; the Second Supplement on September 4, 2000; and the Third Supplement on June 22, 2001 (collectively, Supplements). xxxx Meanwhile, the MIAA which is charged with the maintenance and operation of the NAIA Terminals I and II, had existing concession contracts with various service providers to offer international airline airport services, such as in-flight catering, passenger handling, ramp and ground support, aircraft maintenance and provisions, cargo handling and warehousing, and other services, to several international airlines at the NAIA. x x x. On September 17, 2002, the workers of the international airline service providers, claiming that they stand to lose their employment upon the implementation of the questioned agreements, filed before this Court a petition for prohibition to enjoin the enforcement of said agreements. On October 15, 2002, the service providers, joining the cause of the petitioning workers, filed a motion for intervention and a petition-in-intervention. On October 24, 2002, Congressmen Salacnib Baterina, Clavel Martinez and Constantino Jaraula filed a similar petition with this Court. On November 6, 2002, several employees of the MIAA likewise filed a petition assailing the legality of the various agreements. On December 11, 2002, another group of Congressmen, Hon. Jacinto V. Paras, Rafael P. Nantes, Eduardo C. Zialcita, Willie B. Villarama, Prospero C. Nograles, Prospero A. Pichay, Jr., Harlin Cast Abayon and Benasing O. Macaranbon, moved to intervene in the case as Respondents-Intervenors. They filed their Comment-In-Intervention defending the validity of the assailed agreements and praying for the dismissal of the petitions. During the pendency of the case before this Court, President Gloria Macapagal Arroyo, on November 29, 2002, in her speech at the 2002 Golden Shell Export Awards at Malacaang Palace, stated that she will not "honor (PIATCO) contracts which the Executive Branch's legal offices have concluded (as) null and void."3 The Court first dispensed with the procedural issues raised in Agan, ruling that (a) the MIAA service providers and its employees, petitioners in G.R. Nos. 155001 and 155661, had the requisite standing since they had a direct and substantial interest to protect by reason of the implementation of the PIATCO Contracts which would affect their source of livelihood;4 and (b) the members of the House of Representatives, petitioners in G.R. No. 155547, were granted standing in view of the serious legal questions involved and their impact on public interest.5 As to the merits of the Petitions in Agan, the Court concluded that: In sum, this Court rules that in view of the absence of the requisite financial capacity of the Paircargo Consortium, predecessor of respondent PIATCO, the award by the PBAC of the contract for the construction, operation and maintenance of the NAIA IPT III is null and void. Further, considering that the 1997 Concession Agreement contains material and substantial amendments, which amendments had the effect of converting the 1997 Concession Agreement into an entirely different agreement from the contract bidded upon, the 1997 Concession Agreement is similarly null and void for being contrary to public policy. The provisions under Sections 4.04(b) and (c) in relation to Section 1.06 of the 1997 Concession Agreement and Section 4.04(c) in relation to Section 1.06 of the ARCA, which constitute a direct government guarantee expressly prohibited by, among others, the BOT Law and its Implementing Rules and Regulations are also null and void. The Supplements, being accessory contracts to the ARCA, are likewise null and void.6 Hence, the fallo of the Court's Decision in Agan reads: WHEREFORE, the 1997 Concession Agreement, the Amended and Restated Concession Agreement and the Supplements thereto are set aside for being null and void.7 In a Resolution8 dated 21 January 2004, the Court denied with finality the Motions for Reconsideration of its 5 May 2003 Decision in Agan filed by therein respondents PIATCO and Congressmen Paras, et al., and respondents-intervenors.9 Significantly, the Court declared in the same Resolution that: This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in their construction. For the government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures. The compensation must be just and in accordance with law and equity for the government can not unjustly enrich itself at the expense of PIATCO and its investors.10 (Emphasis ours.) It is these afore-quoted pronouncements that gave rise to the Petition in Gingoyon.

Republic v. Gingoyon (G.R. No. 166429) According to the statement of facts in Gingoyon: After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the possession of PIATCO, despite the avowed intent of the

Government to put the airport terminal into immediate operation. The Government and PIATCO conducted several rounds of negotiation regarding the NAIA 3 facilities. It also appears that arbitral proceedings were commenced before the International Chamber of Commerce International Court of Arbitration and the International Centre for the Settlement of Investment Disputes, although the Government has raised jurisdictional questions before those two bodies. Then, on 21 December 2004, the Government filed a Complaint for expropriation with the Pasay City Regional Trial Court (RTC), together with an Application for Special Raffle seeking the immediate holding of a special raffle. The Government sought upon the filing of the complaint the issuance of a writ of possession authorizing it to take immediate possession and control over the NAIA 3 facilities. The Government also declared that it had deposited the amount of P3,002,125,000.00 (3 Billion) in Cash with the Land Bank of the Philippines, representing the NAIA 3 terminal's assessed value for taxation purposes. The case was raffled to Branch 117 of the Pasay City RTC, presided by respondent judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the same day that the Complaint was filed, the RTC issued an Order directing the issuance of a writ of possession to the Government, authorizing it to "take or enter upon the possession" of the NAIA 3 facilities. Citing the case of City of Manila v. Serrano, the RTC noted that it had the ministerial duty to issue the writ of possession upon the filing 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. The RTC found these requisites present, particularly noting that "[t]he case record shows that [the Government has] deposited the assessed value of the [NAIA 3 facilities] in the Land Bank of the Philippines, an authorized depositary, as shown by the certification attached to their complaint." Also on the same day, the RTC issued a Writ of Possession. According to PIATCO, the Government was able to take possession over the NAIA 3 facilities immediately after the Writ of Possession was issued. However, on 4 January 2005, the RTC issued another Order designed to supplement its 21 December 2004 Order and the Writ of Possession. In the 4 January 2005 Order, now assailed in the present petition, the RTC noted that its earlier issuance of its writ of possession was pursuant to Section 2, Rule 67 of the 1997 Rules of Civil Procedure. However, it was observed that Republic Act No. 8974 (Rep. Act No. 8974), otherwise known as "An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and For Other Purposes" and its Implementing Rules and Regulations (Implementing Rules) had amended Rule 67 in many respects.

There are at least two crucial differences between the respective procedures under Rep. Act No. 8974 and Rule 67. Under the statute, the Government is required to make immediate payment to the property owner upon the filing of the complaint to be entitled to a writ of possession, whereas in Rule 67, the Government 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 taxation, unlike Rep. Act No. 8974 which provides, as the relevant standard for initial compensation, the market value of the property as stated in the tax declaration or the current relevant zonal valuation of the Bureau of Internal Revenue (BIR), whichever is higher, and the value of the improvements and/or structures using the replacement cost method. Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the Implementing Rules, the RTC made key qualifications to its earlier issuances. First, it directed the Land Bank of the Philippines, Baclaran Branch (LBP-Baclaran), to immediately release the amount of US$62,343,175.77 to PIATCO, an amount which the RTC characterized as that which the Government "specifically made available for the purpose of this expropriation;" and such amount to be deducted from the amount of just compensation due PIATCO as eventually determined by the RTC. Second, the Government was directed to submit to the RTC a Certificate of Availability of Funds signed by authorized officials to cover the payment of just compensation. Third, the Government was directed "to maintain, preserve and safeguard" the NAIA 3 facilities or "perform such as acts or activities in preparation for their direct operation" of the airport terminal, pending expropriation proceedings and full payment of just compensation. However, the Government was prohibited "from performing acts of ownership like awarding concessions or leasing any part of [NAIA 3] to other parties." The very next day after the issuance of the assailed 4 January 2005 Order, the Government filed an Urgent Motion for Reconsideration, which was set for hearing on 10 January 2005. On 7 January 2005, the RTC issued another Order, the second now assailed before this Court, which appointed three (3) Commissioners to ascertain the amount of just compensation for the NAIA 3 Complex. That same day, the Government filed a Motion for Inhibition of Hon. Gingoyon. The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on 10 January 2005. On the same day, it denied these motions in an Omnibus Order dated 10 January 2005. This is the third Order now assailed before this Court. Nonetheless, while the Omnibus Order affirmed the earlier dispositions in the 4 January 2005 Order, it excepted from affirmance "the superfluous part of the Order prohibiting the plaintiffs from awarding concessions or leasing any part of [NAIA 3] to other parties." Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on 13 January 2005. The petition prayed for the nullification of the RTC orders dated 4 January 2005, 7 January 2005, and 10 January 2005, and for the inhibition of Hon. Gingoyon from taking further action on the expropriation case. A concurrent prayer for the issuance of a temporary restraining order and preliminary injunction was granted by this Court in a Resolution dated 14 January 2005.11 The Court resolved the Petition of the Republic of the Philippines and Manila International Airport Authority in Gingoyon in this wise: In conclusion, the Court summarizes its rulings as follows: (1) The 2004 Resolution in Agan sets the base requirement that has to be observed before the Government may take over the NAIA 3, that there must be payment to PIATCO of just compensation in accordance with law and equity. Any ruling in the present expropriation case must be conformable to the dictates of the Court as pronounced in the Agan cases. (2) Rep. Act No. 8974 applies in this case, particularly insofar as it requires the immediate payment by the Government of at least the proffered value of the NAIA 3 facilities to PIATCO and provides certain valuation standards or methods for the determination of just compensation. (3) Applying Rep. Act No. 8974, the implementation of Writ of Possession in favor of the Government over NAIA 3 is held in abeyance until PIATCO is directly paid the amount of P3 Billion, representing the proffered value of NAIA 3 under Section 4(c) of the law. (4) Applying Rep. Act No. 8974, the Government is authorized to start the implementation of the NAIA 3 Airport terminal project by performing the acts that are essential to the operation of the NAIA 3 as an international airport terminal upon the effectivity of the Writ of Possession, subject to the conditions above-stated. As prescribed by the Court, such authority encompasses "the repair, reconditioning and improvement of the complex, maintenance of the existing facilities and equipment, installation of new facilities and equipment, provision of services and facilities pertaining to the facilitation of air traffic and transport, and other services that are integral to a modern-day international airport." 5) The RTC is mandated to complete its determination of the just compensation within sixty (60) days from finality of this Decision. In doing so, the RTC is obliged to comply with the standards set under Rep. Act No. 8974 and its Implementing Rules. Considering that the NAIA 3 consists of structures and improvements, the valuation thereof shall be determined using the replacements cost method, as prescribed under Section 10 of the Implementing Rules. (6) There was no grave abuse of discretion attending the RTC Order appointing the commissioners for the purpose of determining just compensation. The provisions on commissioners under Rule 67 shall apply insofar as they are not inconsistent with Rep. Act No. 8974, its Implementing Rules, or the rulings of the Court in Agan. (7) The Government shall pay the just compensation fixed in the decision of the trial court to PIATCO immediately upon the finality of the said decision. (8) There is no basis for the Court to direct the inhibition of Hon. Gingoyon. All told, the Court finds no grave abuse of discretion on the part of the RTC to warrant the nullification of the questioned orders. Nonetheless, portions of these orders should be modified to conform with law and the pronouncements made by the Court herein.12 The decretal portion of the Court's Decision in Gingoyon thus reads: WHEREFORE, the Petition is GRANTED in PART with respect to the orders dated 4 January 2005 and 10 January 2005 of the lower court. Said orders are AFFIRMED with the following MODIFICATIONS: 1) The implementation of the Writ of Possession dated 21 December 2004 is HELD IN ABEYANCE, pending payment by petitioners to PIATCO of the amount of Three Billion Two Million One Hundred Twenty Five Thousand Pesos (P3,002,125,000.00), representing the proffered value of the NAIA 3 facilities; 2) Petitioners, upon the effectivity of the Writ of Possession, are authorized [to] start the implementation of the Ninoy Aquino International Airport Pasenger Terminal III project by performing the acts that are essential to the operation of the said International Airport Passenger Terminal project; 3) RTC Branch 117 is hereby directed, within sixty (60) days from finality of this Decision, to determine the just compensation to be paid to PIATCO by the Government. The Order dated 7 January 2005 is AFFIRMED in all respects subject to the qualification that the parties are given ten (10) days from finality of this Decision to file, if they so choose, objections to the appointment of the commissioners decreed therein. The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED. No pronouncement as to costs.13 Motions for Partial Reconsideration of the foregoing Decision were filed by therein petitioners Republic and MIAA, as well as the three other parties who sought to intervene, namely, Asakihosan Corporation, Takenaka Corporation, and Congressman Baterina. In a Resolution dated 1 February 2006, this Court denied with finality the Motion for Partial Reconsideration of therein petitioners and remained faithful to its assailed Decision based on the following ratiocination: Admittedly, the 2004 Resolution in Agan could be construed as mandating the full payment of the final amount of just compensation before the Government may be permitted to take over the NAIA 3. However, the Decision ultimately rejected such a construction, acknowledging the public good that would result from the immediate operation of the NAIA 3. Instead, the Decision adopted an interpretation which is in consonance with Rep. Act No. 8974 and with equitable standards as well, that allowed the Government to take possession of the NAIA 3 after payment of the proffered value of the facilities to PIATCO. Such a reading is substantially compliant with the pronouncement in the 2004 Agan Resolution, and is in accord with law and equity. In contrast, the Government's position, hewing to the strict application of Rule 67, would permit the Government to acquire possession over the NAIA 3 and implement its operation without having to pay PIATCO a single centavo, a situation that is obviously unfair. Whatever animosity the Government may have towards PIATCO does not acquit it from settling its obligations to the latter, particularly those which had already been previously affirmed by this Court.14 The Court, in the same Resolution, denied all the three motions for intervention of Asakihosan Corporation, Takenaka Corporation, and Congressman Baterina, and ruled as follows:

We now turn to the three (3) motions for intervention all of which were filed after the promulgation of the Court's Decision. All three (3) motions must be denied. Under Section 2, Rule 19 of the 1997 Rules of Civil Procedure the motion to intervene may be filed at any time before rendition of judgment by the court. Since this case originated from an original action filed before this Court, the appropriate time to file the motions-in-intervention in this case if ever was before and not after resolution of this case. To allow intervention at this juncture would be highly irregular. It is extremely improbable that the movants were unaware of the pendency of the present case before the Court, and indeed none of them allege such lack of knowledge. Takenaka and Asahikosan rely on Mago v. Court of Appeals wherein the Court took the extraordinary step of allowing the motion for intervention even after the challenged order of the trial court had already become final. Yet it was apparent in Mago that the movants therein were not impleaded despite being indispensable parties, and had not even known of the existence of the case before the trial court, and the effect of the final order was to deprive the movants of their land. In this case, neither Takenaka nor Asahikosan stand to be dispossessed by reason of the Court's Decision. There is no palpable due process violation that would militate the suspension of the procedural rule. Moreover, the requisite legal interest required of a party-in-intervention has not been established so as to warrant the extra-ordinary step of allowing intervention at this late stage. As earlier noted, the claims of Takenaka and Asahikosan have not been judicially proved or conclusively established as fact by any trier of facts in this jurisdiction. Certainly, they could not be considered as indispensable parties to the petition for certiorari. In the case of Representative Baterina, he invokes his prerogative as legislator to curtail the disbursement without appropriation of public funds to compensate PIATCO, as well as that as a taxpayer, as the basis of his legal standing to intervene. However, it should be noted that the amount which the Court directed to be paid by the Government to PIATCO was derived from the money deposited by the Manila International Airport Authority, an agency which enjoys corporate autonomy and possesses a legal personality separate and distinct from those of the National Government and agencies thereof whose budgets have to be approved by Congress. It is also observed that the interests of the movants-in-intervention may be duly litigated in proceedings which are extant before lower courts. There is no compelling reason to disregard the established rules and permit the interventions belatedly filed after the promulgation of the Court's Decision.15

Asia's Emerging Dragon Corporation v. Department of Transportation and Communications and Manila International Airport Authority (G.R. No. 169914) Banking on this Court's declaration in Agan that the award of the NAIA IPT III Project to PIATCO is null and void, Asia's Emerging Dragon Corporation (AEDC) filed before this Court the present Petition for Mandamus and Prohibition (with Application for Temporary Restraining Order), praying of this

Court that: (1) After due hearing, judgment be rendered commanding the Respondents, their officers, agents, successors, representatives or persons or entities acting on their behalf, to formally award the NAIA-APT [sic] III PROJECT to Petitioner AEDC and to execute and formalize with Petitioner AEDC the approved Draft Concession Agreement embodying the agreed terms and conditions for the operation of the NAIA-IPT III Project and directing Respondents to cease and desist from awarding the NAIA-IPT Project to third parties or negotiating into any concession contract with third parties. (2) Pending resolution on the merits, a Temporary Restraining Order be issued enjoining Respondents, their officers, agents, successors or representatives or persons or entities acting on their behalf from negotiating, re-bidding, awarding or otherwise entering into any concession contract with PIATCO and other third parties for the operation of the NAIA-IPT III Project. Other relief and remedies, just and equitable under the premises, are likewise prayed for.16 AEDC bases its Petition on the following grounds: I. PETITIONER AEDC, BEING THE RECOGNIZED AND UNCHALLENGED ORIGINAL PROPONENT, HAS THE EXCLUSIVE, CLEAR AND VESTED STATUTORY RIGHT TO THE AWARD OF THE NAIA-IPT III PROJECT; II. RESPONDENTS HAVE A STATUTORY DUTY TO PROTECT PETITIONER AEDC AS THE UNCHALLENGED ORIGINAL PROPONENT AS A RESULT OF THE SUPREME COURT'S NULLIFICATION OF THE AWARD OF THE NAIA-IPT III PROJECT TO PIATCO[; and] III. RESPONDENTS HAVE NO LEGAL BASIS OR AUTHORITY TO TAKE OVER THE NAIA-IPT III PROJECT, TO THE EXCLUSION OF PETITIONER AEDC, OR TO AWARD THE PROJECT TO THIRD PARTIES.17 At the crux of the Petition of AEDC is its claim that, being the recognized and unchallenged original proponent of the NAIA IPT III Project, it has the exclusive, clear, and vested statutory right to the award thereof. However, the Petition of AEDC should be dismissed for lack of merit, being as it is, substantially and procedurally flawed. SUBSTANTIVE INFIRMITY A petition for mandamus is governed by Section 3 of Rule 65 of the Rules of Civil Procedure, which reads SEC. 3. Petition for mandamus. When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. It is well-established in our jurisprudence that only specific legal rights are enforceable by mandamus, that the right sought to be enforced must be certain and clear, and that the writ will not issue in cases where the right is doubtful. Just as fundamental is the principle governing the issuance of mandamus that the duties to be performed must be such as are clearly and peremptorily enjoined by law or by reason of official station.18 A rule long familiar is that mandamus never issues in doubtful cases. It requires a showing of a complete and clear legal right in the petitioner to the performance of ministerial acts. In varying language, the principle echoed and reechoed is that legal rights may be enforced by mandamus only if those rights are well-defined, clear and certain. Otherwise, the mandamus petition must be dismissed.19 The right that AEDC is seeking to enforce is supposedly enjoined by Section 4-A of Republic Act No. 6957,20 as amended by Republic Act No. 7718, on unsolicited proposals, which provides SEC. 4-A. Unsolicited proposals. Unsolicited proposals for projects may be accepted by any government agency or local government unit on a negotiated basis: Provided, That, all the following conditions are met: (1) such projects involve a new concept or technology and/or are not part of the list of priority projects, (2) no direct government guarantee, subsidy or equity is required, and (3) the government agency or local government unit has invited by publication, for three (3) consecutive weeks, in a newspaper of general circulation, comparative or competitive proposals and no other proposal is received for a period of sixty (60) working days: Provided, further, That in the event another proponent submits a lower price proposal, the original proponent shall have the right to match the price within thirty (30) working days. In furtherance of the afore-quoted provision, the Implementing Rules and Regulations (IRR) of Republic Act No. 6957, as amended by Republic Act No. 7718, devoted the entire Rule 10 to Unsolicited Proposals, pertinent portions of which are reproduced below Sec. 10.1. Requisites for Unsolicited Proposals. Any Agency/LGU may accept unsolicited proposals on a negotiated basis provided that all the following conditions are met: a. the project involves a new concept or technology and/or is not part of the list of priority projects; b. no direct government guarantee, subsidy or equity is required; and c. the Agency/LGU concerned has invited by publication, for three (3) consecutive weeks, in a newspaper of general circulation, comparative or competitive proposals and no other proposal is received for a period of sixty (60) working days. In the event that another project proponent submits a price proposal lower than that submitted by the original proponent, the latter shall have the right to match said price proposal within thirty (30) working days. Should the original proponent fail to match the lower price proposal submitted within the specified period, the contract shall be awarded to the tenderer of the lowest price. On the other hand, if the original project proponent matches the submitted lowest price within the specified period, he shall be immediately be awarded the project. xxxx Sec. 10.6. Evaluation of Unsolicited Proposals. The Agency/LGU is tasked with the initial evaluation of the proposal. The Agency/LGU shall: 1) appraise the merits of the project; 2) evaluate the qualification of the proponent; and 3) assess the appropriateness of the contractual arrangement and

reasonableness of the risk allocation. The Agency/LGU is given sixty (60) days to evaluate the proposal from the date of submission of the complete proposal. Within this 60-day period, the Agency/LGU, shall advise the proponent in writing whether it accepts or rejects the proposal. Acceptance means commitment of the Agency/LGU to pursue the project and recognition of the proponent as the "original proponent." At this point, the Agency/LGU will no longer entertain other similar proposals until the solicitation of comparative proposals. The implementation of the project, however, is still contingent primarily on the approval of the appropriate approving authorities consistent with Section 2.7 of these IRR, the agreement between the original proponent and the Agency/LGU of the contract terms, and the approval of the contract by the [Investment Coordination Committee (ICC)] or Local Sanggunian. xxxx Sec. 10.9. Negotiation With the Original Proponent. Immediately after ICC/Local Sanggunian's clearance of the project, the Agency/LGU shall proceed with the in-depth negotiation of the project scope, implementation arrangements and concession agreement, all of which will be used in the Terms of Reference for the solicitation of comparative proposals. The Agency/LGU and the proponent are given ninety (90) days upon receipt of ICC's approval of the project to conclude negotiations. The Agency/LGU and the original proponent shall negotiate in good faith. However, should there be unresolvable differences during the negotiations, the Agency/LGU shall have the option to reject the proposal and bid out the project. On the other hand, if the negotiation is successfully concluded, the original proponent shall then be required to reformat and resubmit its proposal in accordance with the requirements of the Terms of Reference to facilitate comparison with the comparative proposals. The Agency/LGU shall validate the reformatted proposal if it meets the requirements of the TOR prior to the issuance of the invitation for comparative proposals. xxxx Sec. 10.11. Invitation for Comparative Proposals. The Agency/LGU shall publish the invitation for comparative or competitive proposals only after ICC/Local Sanggunian issues a no objection clearance of the draft contract. The invitation for comparative or competitive proposals should be published at least once every week for three (3) weeks in at least one (1) newspaper of general circulation. It shall indicate the time, which should not be earlier than the last date of publication, and place where tender/bidding documents could be obtained. It shall likewise explicitly specify a time of sixty (60) working days reckoned from the date of issuance of the tender/bidding documents upon which proposals shall be received. Beyond said deadline, no proposals shall be accepted. A pre-bid conference shall be conducted ten (10) working days after the issuance of the tender/bidding documents. Sec. 10.12. Posting of Bid Bond by Original Proponent. The original proponent shall be required at the date of the first date of the publication of the invitation for comparative proposals to submit a bid bond equal to the amount and in the form required of the challengers. Sec. 10.13. Simultaneous Qualification of the Original Proponent. The Agency/LGU shall qualify the original proponent based on the provisions of Rule 5 hereof, within thirty (30) days from start of negotiation. For consistency, the evaluation criteria used for qualifying the original proponent should be the same criteria used for qualifying the original proponent should be the criteria used in the Terms of Reference for the challengers. xxxx Sec. 10.16. Disclosure of the Price Proposal. The disclosure of the price proposal of the original proponent in the Tender Documents will be left to the discretion of the Agency/LGU. However, if it was not disclosed in the Tender Documents, the original proponent's price proposal should be revealed upon the opening of the financial proposals of the challengers. The right of the original proponent to match the best proposal within thirty (30) working days starts upon official notification by the Agency/LGU of the most advantageous financial proposal. (Emphasis ours.) In her sponsorship speech on Senate Bill No. 1586 (the precursor of Republic Act No. 7718), then Senator (now President of the Republic of the Philippines) Gloria Macapagal-Arroyo explained the reason behind the proposed amendment that would later become Section 4-A of Republic Act No. 6957, as amended by Republic Act No. 7718: The object of the amendment is to protect proponents which have already incurred costs in the conceptual design and in the preparation of the proposal, and which may have adopted an imaginative method of construction or innovative concept for the proposal. The amendment also aims to harness the ingenuity of the private sector to come up with solutions to the country's infrastructure problems.21 It is irrefragable that Section 4-A of Republic Act No. 6957, as amended by Republic Act No. 7718, and Section 10 of its IRR, accord certain rights or privileges to the original proponent of an unsolicited proposal for an infrastructure project. They are meant to encourage private sector initiative in conceptualizing infrastructure projects that would benefit the public. Nevertheless, none of these rights or privileges would justify the automatic award of the NAIA IPT III Project to AEDC after its previous award to PIATCO was declared null and void by this Court in Agan. The rights or privileges of an original proponent of an unsolicited proposal for an infrastructure project are never meant to be absolute. Otherwise, the original proponent can hold the Government hostage and secure the award of the infrastructure project based solely on the fact that it was the first to submit a proposal. The absurdity of such a situation becomes even more apparent when considering that the proposal is unsolicited by the Government. The rights or privileges of an original proponent depends on compliance with the procedure and conditions explicitly provided by the statutes and their IRR. An unsolicited proposal is subject to evaluation, after which, the government agency or local government unit (LGU) concerned may accept or reject the proposal outright. Under Section 10.6 of the IRR, the "acceptance" of the unsolicited proposal by the agency/LGU is limited to the "commitment of the [a]gency/LGU to pursue the project and recognition of the proponent as the 'original proponent.'" Upon acceptance then of the unsolicited proposal, the original proponent is recognized as such but no award is yet made to it. The commitment of the agency/LGU upon acceptance of the unsolicited proposal is to the pursuit of the project, regardless of to whom it shall subsequently award the same. The acceptance of the unsolicited proposal only precludes the agency/LGU from entertaining other similar proposals until the solicitation of comparative proposals. Consistent in both the statutes and the IRR is the requirement that invitations be published for comparative or competitive proposals. Therefore, it is mandatory that a public bidding be held before the awarding of the project. The negotiations between the agency/LGU and the original proponent, as provided in Section 10.9 of the IRR, is for the sole purpose of coming up with draft agreements, which shall be used in the Terms of Reference (TOR) for the solicitation of comparative proposals. Even at this point, there is no definite commitment made to the original proponent as to the awarding of the project. In fact, the same IRR provision even gives the concerned agency/LGU, in case of unresolvable differences during the negotiations, the option to reject the original proponent's proposal and just bid out the project. Generally, in the course of processing an unsolicited proposal, the original proponent is treated in much the same way as all other prospective bidders for the proposed infrastructure project. It is required to reformat and resubmit its proposal in accordance with the requirements of the TOR.22 It must submit a bid bond equal to the amount and in the form required of the challengers. 23 Its qualification shall be evaluated by the concerned agency/LGU, using evaluation criteria in accordance with Rule 524 of the IRR, and which shall be the same criteria to be used in the TOR for the challengers. 25 These requirements ensure that the public bidding under Rule 10 of IRR on Unsolicited Proposals still remain in accord with the three principles in public bidding, which are: the offer to the public, an opportunity for competition, and a basis for exact comparison of bids.26 The special rights or privileges of an original proponent thus come into play only when there are other proposals submitted during the public bidding of the infrastructure project. As can be gleaned from the plain language of the statutes and the IRR, the original proponent has: (1) the right to match the lowest or most advantageous proposal within 30 working days from notice thereof, and (2) in the event that the original proponent is able to match the lowest or most advantageous proposal submitted, then it has the right to be awarded the project. The second right or privilege is contingent upon the actual exercise by the original proponent of the first right or privilege. Before the project could be awarded to the original proponent, he must have been able to match the lowest or most advantageous proposal within the prescribed period. Hence, when the original proponent is able to timely match the lowest or most advantageous proposal, with all things being equal, it shall enjoy preference in the awarding of the infrastructure project. This is the extent of the protection that Legislature intended to afford the original proponent, as supported by the exchange between Senators Neptali Gonzales and Sergio Osmea during the Second Reading of Senate Bill No. 1586: Senator Gonzales: xxxx

The concept being that in case of an unsolicited proposal and nonetheless public bidding has been held, then [the original proponent] shall, in effect, be granted what is the equivalent of the right of first refusal by offering a bid which shall equal or better the bid of the winning bidder within a period of, let us say, 30 days from the date of bidding. Senator Osmea: xxxx To capture the tenor of the proposal of the distinguished Gentleman, a subsequent paragraph has to be added which says, "IF THERE IS A COMPETITIVE PROPOSAL, THE ORIGINAL PROPONENT SHALL HAVE THE RIGHT TO EQUAL THE TERMS AND CONDITIONS OF THE COMPETITIVE PROPOSAL." In other words, if there is nobody who will submit a competitive proposal, then nothing is lost. Everybody knows it, and it is open and transparent. But if somebody comes in with another proposal and because it was the idea of the original proponent that proponent now has the right to equal the terms of the original proposal. SENATOR GONZALES: That is the idea, Mr. President. Because it seems to me that it is utterly unfair for one who has conceived an idea or a concept, spent and invested in feasibility studies, in the drawing of plans and specifications, and the project is submitted to a public bidding, then somebody will win on the basis of plans and specifications and concepts conceived by the original proponent. He should at least be given the right to submit an equalizing bid. x x x.27 (Emphasis ours.) As already found by this Court in the narration of facts in Agan, AEDC failed to match the more advantageous proposal submitted by PIATCO by the time the 30-day working period expired on 28 November 1996;28 and, without exercising its right to match the most advantageous proposal, it cannot now lay claim to the award of the project. The bidding process as to the NAIA IPT III Project was already over after the award thereof to PIATCO, even if eventually, the said award was nullified and voided. The nullification of the award to PIATCO did not revive the proposal nor re-open the bidding. AEDC cannot insist that this Court turn back the hands of time and award the NAIA IPT III Project to it, as if the bid of PIATCO never existed and the award of the project to PIATCO did not take place. Such is a simplistic approach to a very complex problem that is the NAIA IPT III Project. In his separate opinion in Agan, former Chief Justice Artemio V. Panganiban noted that "[T]here was effectively no public bidding to speak of, the entire bidding process having been flawed and tainted from the very outset, therefore, the award of the concession to Paircargo's successor Piatco was void, and the Concession Agreement executed with the latter was likewise void ab initio. x x x.29" (Emphasis ours.) In consideration of such a declaration that the entire bidding process was flawed and tainted from the very beginning, then, it would be senseless to re-open the same to determine to whom the project should have been properly awarded to. The process and all proposals and bids submitted in participation thereof, and not just PIATCO's, were placed in doubt, and it would be foolhardy for the Government to rely on them again. At the very least, it may be declared that there was a failure of public bidding.30 In addition, PIATCO is already close to finishing the building of the structures comprising NAIA IPT III,31 a fact that this Court cannot simply ignore. The NAIA IPT III Project was proposed, subjected to bidding, and awarded as a build-operate-transfer (BOT) project. A BOT project is defined as A contractual arrangement whereby the project proponent undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof. The project proponent operates the facility over a fixed term during which it is allowed to charge facility users appropriate tolls, fees, rentals, and charges not exceeding those proposed in its bid or as negotiated and incorporated in the contract to enable the project proponent to recover its investment, and operating and maintenance expenses in the project. The project proponent transfers the facility to the government agency or local government unit concerned at the end of the fixed term that shall not exceed fifty (50) years. This shall include a supply-and-operate situation which is a contractual arrangement whereby the supplier of equipment and machinery for a given infrastructure facility, if the interest of the Government so requires, operates the facility providing in the process technology transfer and training to Filipino nationals.32 (Emphasis ours.) The original proposal of AEDC is for a BOT project, in which it undertook to build, operate, and transfer to the Government the NAIA IPT III facilities. This is clearly no longer applicable or practicable under the existing circumstances. It is undeniable that the physical structures comprising the NAIA IPT III Project are already substantially built, and there is almost nothing left for AEDC to construct. Hence, the project could no longer be awarded to AEDC based on the theory of legal impossibility of performance. Neither can this Court revert to the original proposal of AEDC and award to it only the unexecuted components of the NAIA IPT III Project. Whoever shall assume the obligation to operate and maintain NAIA IPT III and to subsequently transfer the same to the Government (in case the operation is not assumed by the Government itself) shall have to do so on terms and conditions that would necessarily be different from the original proposal of AEDC. It will no longer include any undertaking to build or construct the structures. An amendment of the proposal of AEDC to address the present circumstances is out of the question since such an amendment would be substantive and tantamount to an entirely new proposal, which must again be subjected to competitive bidding. AEDC's offer to reimburse the Government the amount it shall pay to PIATCO for the NAIA IPT III Project facilities, as shall be determined in the ongoing expropriation proceedings before the RTC of Pasay City, cannot restore AEDC to its status and rights as the project proponent. It must be stressed that the law requires the project proponent to undertake the construction of the project, including financing; financing, thus, is but a component of the construction of the structures and not the entirety thereof. Moreover, this "reimbursement arrangement" may even result in the unjust enrichment of AEDC. In its original proposal, AEDC offered to construct the NAIA IPT III facilities for $350 million or P9 billion at that time. In exchange, AEDC would share a certain percentage of the gross revenues with, and pay a guaranteed annual income to the Government upon operation of the NAIA IPT III. In Gingoyon, the proferred value of the NAIA IPT III facilities was already determined to be P3 billion. It seems improbable at this point that the balance of the value of said facilities for which the Government is still obligated to pay PIATCO shall reach or exceed P6 billion. There is thus the possibility that the Government shall be required to pay PIATCO an amount less than P9 billion. If AEDC is to reimburse the Government only for the said amount, then it shall acquire the NAIA IPT III facilities for a price less than its original proposal of P9 billion. Yet, per the other terms of its original proposal, it may still recoup a capital investment of P9 billion plus a reasonable rate of return of investment. A change in the agreed value of the NAIA IPT III facilities already built cannot be done without a corresponding amendment in the other terms of the original proposal as regards profit sharing and length of operation; otherwise, AEDC will be unjustly enriched at the expense of the Government. Again, as aptly stated by former Chief Justice Panganiban, in his separate opinion in Agan: If the PIATCO contracts are junked altogether as I think they should be, should not AEDC automatically be considered the winning bidder and therefore allowed to operate the facility? My answer is a stone-cold 'No.' AEDC never won the bidding, never signed any contract, and never built any facility. Why should it be allowed to automatically step in and benefit from the greed of another?33 The claim of AEDC to the award of the NAIA IPT III Project, after the award thereof to PIATCO was set aside for being null and void, grounded solely on its being the original proponent of the project, is specious and an apparent stretch in the interpretation of Section 4-A of Republic Act No. 6957, as amended by Republic Act No. 7718, and Rule 10 of the IRR. In all, just as AEDC has no legal right to the NAIA IPT III Project, corollarily, it has no legal right over the NAIA IPT III facility. AEDC does not own the NAIA IPT III facility, which this Court already recognized in Gingoyon as owned by PIATCO; nor does AEDC own the land on which NAIA IPT III stands, which is undisputedly owned by the Republic through the Bases Conversion Development Authority (BCDA). AEDC did not fund any portion of the construction of NAIA IPT III, which was entirely funded by PIATCO. AEDC also does not have any kind of lien over NAIA IPT III or any kind of legal entitlement to occupy the facility or the land on which it stands. Therefore, nothing that the Government has done or will do in relation to the project could possibly prejudice or injure AEDC. AEDC then does not possess any legal personality to interfere with or restrain the activities of the Government as regards NAIA IPT III. Neither does it have the legal personality to demand that the Government deliver or sell to it the NAIA IPT III facility despite the express willingness of AEDC to reimburse the Government the proferred amount it had paid PIATCO and complete NAIA IPT III facility at its own cost. AEDC invokes the Memorandum of Agreement, purportedly executed between the DOTC and AEDC on 26 February 1996, following the approval of the NAIA IPT III Project by the National Economic Development Authority Board in a Resolution dated 13 February 1996, which provided for the following commitments by the parties:

a. commitment of Respondent DOTC to target mid 1996 as the time frame for the formal award of the project and commencement of site preparation and construction activities with the view of a partial opening of the Terminal by the first quarter of 1998; b. commitment of Respondent DOTC to pursue the project envisioned in the unsolicited proposal and commence and conclude as soon as possible negotiations with Petitioner AEDC on the BOT contract; c. commitment of Respondent DOTC to make appropriate arrangements through which the formal award of the project can be affected[;] d. commitment of Petitioner AEDC to a fast track approach to project implementation and to commence negotiations with its financial partners, investors and creditors; e. commitment of Respondent DOTC and Petitioner AEDC to fast track evaluation of competitive proposals, screening and eliminating nuisance comparative bids;34 It is important to note, however, that the document attached as Annex "E" to the Petition of AEDC is a "certified photocopy of records on file." This Court cannot give much weight to said document considering that its existence and due execution have not been established. It is not notarized, so it does not enjoy the presumption of regularity of a public document. It is not even witnessed by anyone. It is not certified true by its supposed signatories, Secretary Jesus B. Garcia, Jr. for DOTC and Chairman Henry Sy, Sr. for AEDC, or by any government agency having its custody. It is certified as a photocopy of records on file by an Atty. Cecilia L. Pesayco, the Corporate Secretary, of an unidentified corporation. Even assuming for the sake of argument, that the said Memorandum of Agreement, is in existence and duly executed, it does little to support the claim of AEDC to the award of the NAIA IPT III Project. The commitments undertaken by the DOTC and AEDC in the Memorandum of Agreement may be simply summarized as a commitment to comply with the procedure and requirements provided in Rules 10 and 11 of the IRR. It bears no commitment on the part of the DOTC to award the NAIA IPT III Project to AEDC. On the contrary, the document includes express stipulations that negate any such government obligation. Thus, in the first clause,35 the DOTC affirmed its commitment to pursue, implement and complete the NAIA IPT III Project on or before 1998, noticeably without mentioning that such commitment was to pursue the project specifically with AEDC. Likewise, in the second clause,36 it was emphasized that the DOTC shall pursue the project under Rules 10 and 11 of the IRR of Republic Act No. 6957, as amended by Republic Act No. 7718. And most significantly, the tenth clause of the same document provided: 10. Nothing in this Memorandum of Understanding shall be understood, interpreted or construed as permitting, allowing or authorizing the circumvention of, or non-compliance with, or as waiving, the provisions of, and requirements and procedures under, existing laws, rules and regulations.37 AEDC further decries that: 24. In carrying out its commitments under the DOTC-AEDC MOU, Petitioner AEDC undertook the following activities, incurring in the process tremendous costs and expenses. a. pre-qualified 46 design and contractor firms to assist in the NAIA-IPT III Project; b. appointed a consortium of six (6) local banks as its financial advisor in June 1996; c. hired the services of GAIA South, Inc. to prepare the Project Description Report and to obtain the Environmental Clearance Certificate (ECC) for the NAIA-IPT III Project; d. coordinated with the Airline Operators Association, Bases Conversion Development Authority, Philippine Air Force, Bureau of Customs, Bureau of Immigration, relative to their particular requirements regarding the NAIA-IPT III [P]roject; and e. negotiated and entered into firm commitments with Ital Thai, Marubeni Corporation and Mitsui Corporation as equity partners.38 While the Court may concede that AEDC, as the original proponent, already expended resources in its preparation and negotiation of its unsolicited proposal, the mere fact thereof does not entitle it to the instant award of the NAIA IPT III Project. AEDC was aware that the said project would have to undergo public bidding, and there existed the possibility that another proponent may submit a more advantageous bid which it cannot match; in which case, the project shall be awarded to the other proponent and AEDC would then have no means to recover the costs and expenses it already incurred on its unsolicited proposal. It was a given business risk that AEDC knowingly undertook. Additionally, the very defect upon which this Court nullified the award of the NAIA IPT III Project to PIATCO similarly taints the unsolicited proposal of AEDC. This Court found Paircargo Consortium financially disqualified after striking down as incorrect the PBAC's assessment of the consortium's financial capability. According to the Court's ratio in Agan: As the minimum project cost was estimated to be US$350,000,000.00 or roughly P9,183,650,000.00, the Paircargo Consortium had to show to the satisfaction of the PBAC that it had the ability to provide the minimum equity for the project in the amount of at least P2,755,095,000.00. xxxx Thus, the maximum amount that Security Bank could validly invest in the Paircargo Consortium is only P528,525,656.55, representing 15% of its entire net worth. The total net worth therefore of the Paircargo Consortium, after considering the maximum amounts that may be validly invested by each of its members is P558,384,871.55 or only 6.08% of the project cost, an amount substantially less than the prescribed minimum equity investment required for the project in the amount of P2,755,095,000.00 or 30% of the project cost. The purpose of pre-qualification in any public bidding is to determine, at the earliest opportunity, the ability of the bidder to undertake the project. Thus, with respect to the bidder's financial capacity at the pre-qualification stage, the law requires the government agency to examine and determine the ability of the bidder to fund the entire cost of the project by considering the maximum amounts that each bidder may invest in the project at the time of pre-qualification. xxxx Thus, if the maximum amount of equity that a bidder may invest in the project at the time the bids are submitted falls short of the minimum amounts required to be put up by the bidder, said bidder should be properly disqualified. Considering that at the pre-qualification stage, the maximum amounts which the Paircargo Consortium may invest in the project fell short of the minimum amounts prescribed by the PBAC, we hold that Paircargo Consortium was not a qualified bidder. Thus the award of the contract by the PBAC to the Paircargo Consortium, a disqualified bidder, is null and void.39 Pursuant to the above-quoted ruling, AEDC, like the Paircargo Consortium, would not be financially qualified to undertake the NAIA IPT III Project. Based on AEDC's own submissions to the Government, it had then a paid-in capital of only P150,000,000.00,40 which was less than the P558,384,871.55 that Paircargo Consortium was capable of investing in the NAIA IPT III Project, and even far less that what this Court prescribed as the minimum equity investment required for the project in the amount of P2,755,095,000.00 or 30% of the project cost. AEDC had not sufficiently demonstrated that it would have been financially qualified to undertake the project at the time of submission of the bids. Instead, AEDC took pains to present to this Court that allowing it to take over and operate NAIA IPT III at present would be beneficial to the Government. This Court must point out, however, that AEDC is precisely making a new proposal befitting the current status of the NAIA IPT III Project, contrary to its own argument that it is merely invoking its original BOT proposal. And it is not for this Court to evaluate AEDC's new proposal and assess whether it would truly be most beneficial for the Government, for the same is an executive function rather than judicial, for which the statutes and regulations have sufficiently provided standards and procedures for evaluation. It can even be said that if the award of the NAIA IPT III Project was merely a matter of choosing between PIATCO and AEDC (which it is not), there could be no doubt that PIATCO is more qualified to operate the structure that PIATCO itself built and PIATCO's offer of P17.75 Billion in annual guaranteed payments to the Government is far better that AEDC's offer of P135 Million. Hence, AEDC is not entitled to a writ of mandamus, there being no specific, certain, and clear legal right to be enforced, nor duty to be performed that is clearly and peremptorily enjoined by law or by reason of official station. PROCEDURAL LAPSES In addition to the substantive weaknesses of the Petition of AEDC, the said Petition also suffers from procedural defects. AEDC revived its hope to acquire the NAIA IPT III Project when this Court promulgated its Decision in Agan on 5 May 2003. The said Decision became final and executory on 17 February 2004 upon the denial by this Court of the Motion for Leave to File Second Motion for Reconsideration submitted by

10

PIATCO. It is this Decision that declared the award of the NAIA IPT III Project to PIATCO as null and void; without the same, then the award of the NAIA IPT III Project to PIATCO would still subsist and other persons would remain precluded from acquiring rights thereto, including AEDC. Irrefutably, the present claim of AEDC is rooted in the Decision of this Court in Agan. However, AEDC filed the Petition at bar only 20 months after the promulgation of the Decision in Agan on 5 May 2003. It must be emphasized that under Sections 2 and 3, Rule 65 of the revised Rules of Civil Procedure, petitions for prohibition and mandamus, such as in the instant case, can only be resorted to when there is no other plain, speedy and adequate remedy for the party in the ordinary course of law. In Cruz v. Court of Appeals,41 this Court elucidates that Although Rule 65 does not specify any period for the filing of a petition for certiorari and mandamus, it must, nevertheless, be filed within a reasonable time. In certiorari cases, the definitive rule now is that such reasonable time is within three months from the commission of the complained act. The same rule should apply to mandamus cases. The unreasonable delay in the filing of the petitioner's mandamus suit unerringly negates any claim that the application for the said extraordinary remedy was the most expeditious and speedy available to the petitioner. (Emphasis ours.) As the revised Rules now stand, a petition for certiorari may be filed within 60 days from notice of the judgment, order or resolution sought to be assailed.42 Reasonable time for filing a petition for mandamus should likewise be for the same period. The filing by the AEDC of its petition for mandamus 20 months after its supposed right to the project arose is evidently beyond reasonable time and negates any claim that the said petition for the extraordinary writ was the most expeditious and speedy remedy available to AEDC. AEDC contends that the "reasonable time" within which it should have filed its petition should be reckoned only from 21 September 2005, the date when AEDC received the letter from the Office of the Solicitor General refusing to recognize the rights of AEDC to provide the available funds for the completion of the NAIA IPT III Project and to reimburse the costs of the structures already built by PIATCO. It has been unmistakable that even long before said letter especially when the Government instituted with the RTC of Pasay City expropriation proceedings for the NAIA IPT III on 21 December 2004 that the Government would not recognize any right that AEDC purportedly had over the NAIA IPT III Project and that the Government is intent on taking over and operating the NAIA IPT III itself. Another strong argument against the AEDC's Petition is that it is already barred by res judicata. In Agan,43 it was noted that on 16 April 1997, the AEDC instituted before the RTC of Pasig City Civil Case No. 66213, a Petition for the Declaration of Nullity of the Proceedings, Mandamus and Injunction, against the DOTC Secretary and the PBAC Chairman and members. In Civil Case No. 66213, AEDC prayed for: i) the nullification of the proceedings before the DOTC-PBAC, including its decision to qualify Paircargo Consortium and to deny Petitioner AEDC's access to Paircargo Consortium's technical and financial bid documents; ii) the protection of Petitioner AEDC's right to match considering the void challenge bid of the Paircargo Consortium and the denial by DOTCPBAC of access to information vital to the effective exercise of its right to match; iii) the declaration of the absence of any other qualified proponent submitting a competitive bid in an unsolicited proposal.44 Despite the pendency of Civil Case No. 66213, the DOTC issued the notice of award for the NAIA IPT III Project to PIATCO on 9 July 1997. The DOTC and PIATCO also executed on 12 July 1997 the 1997 Concession Agreement. AEDC then alleges that: k) On September 3, 1998, then Pres. Joseph Ejercito Estrada convened a meeting with the members of the Board of Petitioner AEDC to convey his "desire" for the dismissal of the mandamus case filed by Petition AEDC and in fact urged AEDC to immediately withdraw said case. l) The President's direct intervention in the disposition of this mandamus case was a clear imposition that Petitioner AEDC had not choice but to accept. To do otherwise was to take a confrontational stance against the most powerful man in the country then under the risk of catching his ire, which could have led to untold consequences upon the business interests of the stakeholders in AEDC. Thus, Petitioner AEDC was constrained to agree to the signing of a Joint Motion to Dismiss and to the filing of the same in court. m) Unbeknownst to AEDC at that time was that simultaneous with the signing of the July 12, 1997 Concession Agreement, the DOTC and PIATCO executed a secret side agreement grossly prejudicial and detrimental to the interest of Government. It stipulated that in the event that the Civil Case filed by AEDC on April 16, 1997 is not resolved in a manner favorable to the Government, PIATCO shall be entitled to full reimbursement for all costs and expenses it incurred in order to obtain the NAIA IPT III BOT project in an amount not less than One Hundred Eighty Million Pesos (Php 180,000,000.00). This was apparently the reason why the President was determined to have AEDC's case dismissed immediately. n) On February 9, 1999, after the Amended and Restated Concession Agreement (hereinafter referred to as "ARCA") was signed without Petitioner AEDC's knowledge, Petitioner AEDC signed a Joint Motion to Dismiss upon the representation of the DOTC that it would provide AEDC with a copy of the 1997 Concession Agreement. x x x.45 On 30 April 1999, the RTC of Pasig City issued an Order dismissing with prejudice Civil Case No. 66213 upon the execution by the parties of a Joint Motion to Dismiss. According to the Joint Motion to Dismiss The parties, assisted by their respective counsel, respectfully state: 1. Philippine International Air Terminals Company, Inc. ("PIATCO") and the respondents have submitted to petitioner, through the Office of the Executive Secretary, Malacaang, a copy of the Concession Agreement which they executed for the construction and operation of the Ninoy Aquino International Airport International Passenger Terminal III Project ("NAIA IPT III Project), which petitioner requested. 2. Consequently, the parties have decided to amicably settle the instant case and jointly move for the dismissal thereof without any of the parties admitting liability or conceding to the position taken by the other in the instant case. 3. Petitioner, on the other hand, and the respondents, on the other hand, hereby release and forever discharge each other from any and all liabilities, direct or indirect, whether criminal or civil, which arose in connection with the instant case. 4. The parties agree to bear the costs, attorney's fees and other expenses they respectively incurred in connection with the instant case. (Emphasis ours.) AEDC, however, invokes the purported pressure exerted upon it by then President Joseph E. Estrada, the alleged fraud committed by the DOTC, and paragraph 2 in the afore-quoted Joint Motion to Dismiss to justify the non-application of the doctrine of res judicata to its present Petition. The elements of res judicata, in its concept as a bar by former judgment, are as follows: (1) the former judgment or order must be final; (2) it must be a judgment or order on the merits, that is, it was rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the case; (3) it must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be, between the first and second actions, identity of parties, of subject matter and of cause of action.46 All of the elements are present herein so as to bar the present Petition. First, the Order of the RTC of Pasig City, dismissing Civil Case No. 66213, was issued on 30 April 1999. The Joint Motion to Dismiss, deemed a compromise agreement, once approved by the court is immediately executory and not appealable.47 Second, the Order of the RTC of Pasig City dismissing Civil Case No. 66213 pursuant to the Joint Motion to Dismiss filed by the parties constitutes a judgment on the merits. The Joint Motion to Dismiss stated that the parties were willing to settle the case amicably and, consequently, moved for the dismissal thereof. It also contained a provision in which the parties the AEDC, on one hand, and the DOTC Secretary and PBAC, on the other released and forever discharged each other from any and all liabilities, whether criminal or civil, arising in connection with the case. It is undisputable that the parties entered into a compromise agreement, defined as "a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.48" Essentially, it is a contract perfected by mere consent, the latter being manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Once an agreement is stamped with judicial approval, it becomes more than a mere contract binding upon the parties; having the sanction of the court and entered as its determination of the controversy, it has the force and effect of any other judgment.49 Article 2037 of the Civil Code explicitly provides that a compromise has upon the parties the effect and authority of res judicata.

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Because of the compromise agreement among the parties, there was accordingly a judicial settlement of the controversy, and the Order, dated 30 April 1999, of the RTC of Pasig City was no less a judgment on the merits which may be annulled only upon the ground of extrinsic fraud. 50 Thus, the RTC of Pasig City, in the same Order, correctly granted the dismissal of Civil Case No. 66213 with prejudice. A scrutiny of the Joint Motion to Dismiss submitted to the RTC of Pasig City would reveal that the parties agreed to discharge one another from any and all liabilities, whether criminal or civil, arising from the case, after AEDC was furnished with a copy of the 1997 Concession Agreement between the DOTC and PIATCO. This complete waiver was the reciprocal concession of the parties that puts to an end the present litigation, without any residual right in the parties to litigate the same in the future. Logically also, there was no more need for the parties to admit to any liability considering that they already agreed to absolutely discharge each other therefrom, without necessarily conceding to the other's position. For AEDC, it was a declaration that even if it was not conceding to the Government's position, it was nonetheless waiving any legal entitlement it might have to sue the Government on account of the NAIA IPT III Project. Conversely, for the Government, it was an avowal that even if it was not accepting AEDC's stance, it was all the same relinquishing its right to file any suit against AEDC in connection with the same project. That none of the parties admitted liability or conceded its position is without bearing on the validity or binding effect of the compromise agreement, considering that these were not essential to the said compromise. Third, there is no question as to the jurisdiction of the RTC of Pasig City over the subject matter and parties in Civil Case No. 66213. The RTC can exercise original jurisdiction over cases involving the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction.51 To recall, the Petition of AEDC before the RTC of Pasig City was for the declaration of nullity of proceedings, mandamus and injunction. The RTC of Pasig City likewise had jurisdiction over the parties, with the voluntary submission by AEDC and proper service of summons on the DOTC Secretary and the PBAC Chairman and members. Lastly, there is, between Civil Case No. 66213 before the RTC of Pasig City and the Petition now pending before this Court, an identity of parties, of subject matter, and of causes of action. There is an identity of parties. In both petitions, the AEDC is the petitioner. The respondents in Civil Case No. 66213 are the DOTC Secretary and the PBAC Chairman and members. The respondents in the instant Petition are the DOTC, the DOTC Secretary, and the Manila International Airport Authority (MIAA). While it may be conceded that MIAA was not a respondent and did not participate in Civil Case No. 66213, it may be considered a successor-ininterest of the PBAC. When Civil Case No. 66213 was initiated, PBAC was then in charge of the NAIA IPT III Project, and had the authority to evaluate the bids and award the project to the one offering the lowest or most advantageous bid. Since the bidding is already over, and the structures comprising NAIA IPT III are now built, then MIAA has taken charge thereof. Furthermore, it is clear that it has been the intention of the AEDC to name as respondents in their two Petitions the government agency/ies and official/s who, at the moment each Petition was filed, had authority over the NAIA IPT III Project. There is an identity of subject matter because the two Petitions involve none other than the award and implementation of the NAIA IPT III Project. There is an identity of cause of action because, in both Petitions, AEDC is asserting the violation of its right to the award of the NAIA IPT III Project as the original proponent in the absence of any other qualified bidders. As early as in Civil Case No. 66213, AEDC already sought a declaration by the court of the absence of any other qualified proponent submitting a competitive bid for the NAIA IPT III Project, which, ultimately, would result in the award of the said project to it. AEDC attempts to evade the effects of its compromise agreement by alleging that it was compelled to enter into such an agreement when former President Joseph E. Estrada asserted his influence and intervened in Civil Case No. 66213. This allegation deserves scant consideration. Without any proof that such events did take place, such statements remain mere allegations that cannot be given weight. One who alleges any defect or the lack of a valid consent to a contract must establish the same by full, clear and convincing evidence, not merely by preponderance thereof. 52 And, even assuming arguendo, that the consent of AEDC to the compromise agreement was indeed vitiated, then President Estrada was removed from office in January 2001. AEDC filed the present Petition only on 20 October 2005. The four-year prescriptive period, within which an action to annul a voidable contract may be brought, had already expired.53 The AEDC further claims that the DOTC committed fraud when, without AEDC's knowledge, the DOTC entered into an Amended and Restated Concession Agreement (ARCA) with PIATCO. The fraud on the part of the DOTC purportedly also vitiated AEDC's consent to the compromise agreement. It is true that a judicial compromise may be set aside if fraud vitiated the consent of a party thereof; and that the extrinsic fraud, which nullifies a compromise, likewise invalidates the decision approving it.54 However, once again, AEDC's allegations of fraud are unsubstantiated. There is no proof that the DOTC and PIATCO willfully and deliberately suppressed and kept the information on the execution of the ARCA from AEDC. The burden of proving that there indeed was fraud lies with the party making such allegation. Each party must prove his own affirmative allegations. The burden of proof lies on the party who would be defeated if no evidence were given on either side. In this jurisdiction, fraud is never presumed.55 Moreover, a judicial compromise may be rescinded or set aside on the ground of fraud in accordance with Rule 38 of the Rules on Civil Procedure on petition for relief from judgment. Section 3 thereof prescribes the periods within which the petition for relief must be filed: SEC. 3. Time for filing petition; contents and verification. A petition provided for in either of the preceding sections of this Rule must be verified, filed within sixty (60) days after the petitioner learns of the judgment, final order or other proceeding to be set aside, and not more than six (6) months after such judgment or final order was entered, or such proceeding was taken, and must be accompanied with affidavits showing the fraud, accident, mistake or excusable negligence relied upon, and the facts constituting the petitioner's good and substantial cause of action or defense, as the case may be. According to this Court's ruling in Argana v. Republic,56 as applied to a judgment based on compromise, both the 60-day and six-month reglementary periods within which to file a petition for relief should be reckoned from the date when the decision approving the compromise agreement was rendered because such judgment is considered immediately executory and entered on the date that it was approved by the court. In the present case, the Order of the RTC of Pasig City granting the Joint Motion to Dismiss filed by the parties in Civil Case No. 66213 was issued on 30 April 1999, yet AEDC only spoke of the alleged fraud which vitiated its consent thereto in its Petition before this Court filed on 20 October 2005, more than six years later. It is obvious that the assertion by AEDC of its vitiated consent to the Joint Motion to Dismiss Civil Case No. 66213 is nothing more than an after-thought and a desperate attempt to escape the legal implications thereof, including the barring of its present Petition on the ground of res judicata. It is also irrelevant to the legal position of AEDC that the Government asserted in Agan that the award of the NAIA IPT III Project to PIATCO was void. That the Government eventually took such a position, which this Court subsequently upheld, does not affect AEDC's commitments and obligations under its judicially-approved compromise agreement in Civil Case No. 66213, which AEDC signed willingly, knowingly, and ably assisted by legal counsel. In addition, it cannot be said that there has been a fundamental change in the Government's position since Civil Case No. 66213, contrary to the allegation of AEDC. The Government then espoused that AEDC is not entitled to the award of the NAIA IPT III Project. The Government still maintains the exact same position presently. That the Government eventually reversed its position on the validity of its award of the project to PIATCO is not inconsistent with its position that neither should AEDC be awarded the project. For the foregoing substantive and procedural reasons, the instant Petition of AEDC should be dismissed.

Republic of the Philippines v. Court of Appeals and Baterina (G.R. No. 174166) As mentioned in Gingoyon, expropriation proceedings for the NAIA IPT III was instituted by the Government with the RTC of Pasay City, docketed as Case

No. 04-0876CFM. Congressman Baterina, together with other members of the House of Representatives, sought intervention in Case No. 04-0876CFM by filing a Petition for Prohibition in Intervention (with Application for Temporary Restraining Order and Writ of Preliminary Injunction). Baterina, et al. believe that the Government need not file expropriation proceedings to gain possession of NAIA IPT III and that PIATCO is not entitled to payment of just compensation, arguing thus A) Respondent PIATCO does not own Terminal III because BOT Contracts do not vest ownership in PIATCO. As such, neither PIATCO nor FRAPORT are entitled to compensation. B) Articles 448, ET SEQ., of the New Civil Code, as regards builders in good faith/bad faith, do not apply to PIATCO's Construction of Terminal III. C) Article 1412(2) of the New Civil Code allows the Government to demand the return of what it has given without any obligation to comply with its promise.

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D) The payment of compensation to PIATCO is unconstitutional, violative of the Build-Operate-Transfer Law, and violates the Civil Code and other laws. 57 On 27 October 2005, the RTC of Pasay City issued an Order admitting the Petition in Intervention of Baterina, et al., as well as the Complaint in Intervention of Manuel L. Fortes, Jr. and the Answer in Intervention of Gina B. Alnas, et al. The Republic sought reconsideration of the 27 October 2005 Order of the RTC of Pasay City, which, in an Omnibus Order dated 13 December 2005, was denied by the RTC of Pasay City as regards the intervention of Baterina, et al. and Fortes, but granted as to the intervention of Alnas, et al. On 22 March 2006, Baterina, et al. filed with the RTC of Pasay City a Motion to Declare in Default and/or Motion for Summary Judgment considering that the Republic and PIATCO failed to file an answer or any responsive pleading to their Petition for Prohibition in Intervention. In the meantime, on 19 December 2005, the Court's Decision in Gingoyon was promulgated. Baterina also filed a Motion for Intervention in said case and sought reconsideration of the Decision therein. However, his Motion for Intervention was denied by this Court in a Resolution dated 1 February 2006. On 27 March 2006, the RTC of Pasay City issued an Order and Writ of Execution, the dispositive portion of which reads WHEREFORE, let a writ of execution be issued in this case directing the Sheriff of this court to immediately implement the Order dated January 4, 2005 and January 10, 2005, as affirmed by the Decision of the Supreme Court in G.R. No. 166429 in the above-entitled case dated December 19, 2005, in the following manner: 1. Ordering the General Manager, the Senior Assistant General Manager and the Vice President of Finance of the Manila International Airport Authority (MIAA) to immediately withdraw the amount of P3,002,125,000.00 from the above-mentioned Certificates of US Dollar Time Deposits with the Land Bank of the Philippines, Baclaran Branch; 2. Ordering the Branch Manager, Land Bank of the Philippines, Baclaran Branch to immediately release the sum of P3,002,125,000.00 to PIATCO; Return of Service of the Writs shall be made by the Sheriff of this court immediately thereafter;58 The RTC of Pasay City, in an Order, dated 15 June 2006, denied the Motions for Reconsideration of its Order and Writ of Execution filed by the Government and Fortes. Baterina, meanwhile, went before the Court of Appeals via a Petition for Certiorari and Prohibition (With Urgent Prayer for the Issuance of a Temporary Restraining Order and Writ of Preliminary Injunction), docketed as CA-G.R. No. 95539, assailing the issuance, in grave abuse of discretion, by the RTC of Pasay City of its Orders dated 27 March 2006 and 15 June 2006 and Writ of Execution dated 27 March 2006. During the pendency of CA-G.R. No. 95539 with the Court of Appeals, the RTC of Pasay City issued an Order, dated 7 August 2006, denying the Urgent Manifestation and Motion filed by the Republic in which it relayed willingness to comply with the Order and Writ of Execution dated 27 March 2006, provided that the trial court shall issue an Order expressly authorizing the Republic to award concessions and lease portions of the NAIA IPT III to potential users. The following day, on 8 August 2006, the RTC of Pasay City issued an Order denying the intervention of Baterina, et al. and Fortes in Case No. 04-0876CFM. In a third Order, dated 9 August 2006, the RTC of Pasay City directed PIATCO to receive the amount of P3,002,125,000.00 from the Land Bank of the Philippines, Baclaran Branch. By 24 August 2006, the Republic was all set to comply with the 9 August 2006 Order of the RTC of Pasay City. Hence, the representatives of the Republic and PIATCO met before the RTC of Pasay City for the supposed payment by the former to the latter of the proferred amount. However, on the same day, the Court of Appeals, in CA G.R. No. 95539, issued a Temporary Restraining Order (TRO) enjoining, among other things, the RTC of Pasay City from implementing the questioned Orders, dated 27 March 2006 and 15 June 2006, or "from otherwise causing payment and from further proceeding with the determination of just compensation in the expropriation case involved herein, until such time that petitioner's motion to declare in default and motion for partial summary judgment shall have been resolved by the trial court; or it is clarified that PIATCO categorically disputes the proferred value for NAIA Terminal 3." The TRO was to be effective for 30 days. Two days later, on 26 August 2006, the Republic filed with the Court of Appeals an Urgent Motion to Lift Temporary Restraining Order, which the appellate court scheduled for hearing on 5 September 2006. While the Urgent Motion to lift the TRO was still pending with the Court of Appeals, the Republic already filed the present Petition for Certiorari and Prohibition With Urgent Application for a Temporary Restraining Order and/or Writ of Preliminary Injunction, attributing to the Court of Appeals grave abuse of discretion in granting the TRO and seeking a writ of prohibition against the Court of Appeals to enjoin it from giving due course to Baterina's Petition in CA-G.R. No. 95539. The Republic thus raises before this Court the following arguments: I THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO AN EXCESS OR LACK OF JURISDICTION WHEN IT GRANTED THE TEMPORARY RESTRAINING ORDER. A. THIS HONORABLE COURT'S DECISION IN GINGOYON CONSTITUTES THE "LAW OF THE CASE". B. THE TRO IS IN DIRECT CONTRAVENTION OF THIS COURT'S DECISION WICH HAD ATTAINED FINALITY. II THE REPUBLIC IS SUFFERING IRREPARABLE DAMAGE. III THE COURT OF APPEALS MUST BE PROHIBITED FROM GIVING DUE COURSE TO A PETITION THAT IS DEFECTIVE IN FORM AND SUBSTANCE. A. PRIVATE RESPONDENT HAS NO LEGAL STANDING. 1. THIS HONORABLE COURT HAS RULED THAT PRIVATE RESPONDENT HAS NO LEGAL STANDING. 2. PRIVATE RESPONDENT HAS LOST HIS STANDING AS AN INTERVENOR. B. PRIVATE RESPONDENT FAILED TO DEMONSTRATE THAT HE IS ENTITLED TO THE INJUNCTIVE RELIEFS PRAYED FOR. C. THE BOND POSTED IS INSUFFICIENT. IV GRANTING ARGUENDO THAT PRIVATE RESPONDENT'S PETITION IS SUFFICIENT IN FORM AND SUBSTANCE, THE SAME HAS BECOME MOOT AND ACADEMIC. A. THE MOTION TO DECLARE IN DEFAULT AND/OR MOTION FOR PARTIAL SUMMARY JUDGMENT HAS ALREADY BEEN RESOLVED. B. PIATCO HAS CATEGORICALLY DISPUTED THE PROFFERED VALUE FOR NAIA TERMINAL III.59 The Republic prays of this Court that: (a) Pending the determination of the merits of this petition, a temporary restraining order and/or a writ of preliminary injunction be ISSUED restraining the Court of Appeals from implementing the writ of preliminary injunction in CA-G.R. SP No. 95539 and proceeding in said case such as hearing it on September 5, 2006. After both parties have been heard, the preliminary injunction be MADE PERMANENT; (b) The Resolution date 24 August 2006 of the Court of Appeals be SET ASIDE; and (c) CA-G.R. SP No. 95539 be ORDERED DISMISSED. Other just and equitable reliefs are likewise prayed for.60 On 4 September 2006, the Republic filed a Manifestation and Motion to Withdraw Urgent Motion to Lift Temporary Restraining Order with the Court of Appeals stating, among other things, that it had decided to withdraw the said Motion as it had opted to avail of other options and remedies. Despite the Motion to Withdraw filed by the Government, the Court of Appeals issued a Resolution, dated 8 September 2006, lifting the TRO it issued, on the basis of the following In view of the pronouncement of the Supreme Court in the Gingoyon case upholding the right of PIATCO to be paid the proferred value in the amount of P3,002,125,000.00 prior to the implementation of the writ of possession issued by the trial court on December 21, 2004 over the NAIA Passenger Terminal III, and directing the determination of just compensation, there is no practical and logical reason to maintain the effects of the Temporary Restraining Order contained in our Resolution dated August 24, 2006. Thus, We cannot continue restraining what has been mandated in a final and executory decision of the Supreme Court.

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WHEREFORE, Our Resolution dated 24 August 2006 be SET ASIDE. Consequently, the Motion to Withdraw the Motion to Lift the Temporary Restraining Order is rendered moot and academic.61 There being no more legal impediment, the Republic tendered on 11 September 2006 Land Bank check in the amount of P3,002,125,000.00 representing the proferred value of NAIA IPT III, which was received by a duly authorized representative of PIATCO. On 27 December 2006, the Court of Appeals rendered a Decision in CA G.R. No. 95539 dismissing Baterina's Petition. The latest developments before the Court of Appeals and the RTC of Pasay City render the present Petition of the Republic moot. Nonetheless, Baterina, as the private respondent in the instant Petition, presented his own prayer that a judgment be rendered as follows: A. For this Honorable Court, in the exercise of its judicial discretion to relax procedural rules consistent with Metropolitan Traffic Command v. Gonong and deem that justice would be better served if all legal issues involved in the expropriation case and in Baterina are resolved in this case once and for all, to DECLARE that: i. TERMINAL 3, as a matter of law, is public property and thus not a proper object of eminent domain proceedings; and ii. PIATCO, as a matter of law, is merely the builder of TERMINAL 3 and, as such, it may file a claim for recovery on quantum meruit with the Commission on Audi[t] for determination of the amount thereof, if any. B. To DIRECT the Regional Trial Court of Pasay City, Branch 117 to dismiss the expropriation case; C. To DISMISS the instant Petition and DENY The Republic's application for TRO and/or writ of preliminary injunction for lack of merit; D. To DECLARE that the P3 Billion (representing the proferred value of TERMINAL 3) paid to PIATCO on 11 September 2006 as funds held in trust by PIATCO for the benefit of the Republic and subject to the outcome of the proceedings for the determination of recovery on quantum meruit due to PIATCO, if any. E. To DIRECT the Solicitor General to disclose the evidence it has gathered on corruption, bribery, fraud, bad faith, etc., to this Honorable Court and the Commission on Audit, and to DECLARE such evidence to be admissible in any proceeding for the determination of any compensation due to PIATCO, if any. [F]. In the alternative, to: i. SET ASIDE the trial court's Order dated 08 August 2006 denying Private Respondent's motion for intervention in the expropriation case, and ii. Should this Honorable Court lend credence to the argument of the Solicitor General in its Comment dated 20 April 2006 that "there are issues as to material fact that require presentation of evidence", to REMAND the resolution of the legal issues raised by Private Respondent to the trial court consistent with this Honorable Court's holding in the Gingoyon Resolution that "the interests of the movants-in-intervention [meaning Takenaka, Asahikosan, and herein Private Respondent] may be duly litigated in proceedings which are extant before the lower courts."62 In essence, Baterina is opposing the expropriation proceedings on the ground that NAIA IPT III is already public property. Hence, PIATCO is not entitled to just compensation for NAIA IPT III. He is asking the Court to make a definitive ruling on this matter considering that it was not settled in either Agan or Gingoyon. We disagree. Contrary to Baterina's stance, PIATCO's entitlement to just and equitable consideration for its construction of NAIA IPT III and the propriety of the Republic's resort to expropriation proceedings were already recognized and upheld by this Court in Agan and Gingoyon. The Court's Decisions in both Agan and Gingoyon had attained finality, the former on 17 February 2004 and the latter on 17 March 2006. This Court already made an unequivocal pronouncement in its Resolution dated 21 January 2004 in Agan that for the Government of the Republic to take over the NAIA IPT III facility, it has to compensate PIATCO as a builder of the structures; and that "[t]he compensation must be just and in accordance with law and equity for the government cannot unjustly enrich itself at the expense of PIATCO and its investors." 63 As between the Republic and PIATCO, the judgment on the need to compensate PIATCO before the Government may take over NAIA IPT III is already conclusive and beyond question. Hence, in Gingoyon, this Court declared that: This pronouncement contains the fundamental premises which permeate this decision of the Court. Indeed, Agan, final and executory as it is, stands as governing law in this case, and any disposition of the present petition must conform to the conditions laid down by the Court in its 2004 Resolution. xxxx The pronouncement in the 2004 Resolution is especially significant to this case in two aspects, namely: (i) that PIATCO must receive payment of just compensation determined in accordance with law and equity; and (ii) that the government is barred from taking over NAIA 3 until such just compensation is paid. The parties cannot be allowed to evade the directives laid down by this Court through any mode of judicial action, such as the complaint for eminent domain. It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory guidelines which the Government must observe before it could acquire the NAIA 3 facilities. Thus, the actions of respondent judge under review, as well as the arguments of the parties must, to merit affirmation, pass the threshold test of whether such propositions are in accord with the 2004 Resolution.64 The Court then, in Gingoyon, directly addressed the issue on the appropriateness of the Republic's resort to expropriation proceedings: 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 expropriate a building complex constructed on land which the State already owns. There is an inherent illogic in the resort to eminent domain on property already owned by the State. At first blush, since the State already owns the property on which NAIA 3 stands, the proper remedy should be akin to an action for ejectment. However, the reason for the resort by the Government to expropriation proceedings is understandable in this case. The 2004 Resolution, in requiring the payment of just compensation prior to the takeover by the Government of NAIA 3, effectively precluded it from acquiring possession or ownership of the NAIA 3 through the unilateral exercise of its rights as the owner of the ground on which the facilities stood. Thus, as things stood after the 2004 Resolution, the right of the Government to take over the NAIA 3 terminal was preconditioned by lawful order on the payment of just compensation to PIATCO as builder of the structures. xxxx The right of eminent domain extends to personal and real property, and the NAIA 3 structures, adhered as they are to the soil, are considered as real property. The public purpose for the expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67 (on Expropriation) 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 of the Philippines]." 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 2004 Resolution. 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. Still, in applying the laws and rules on expropriation in the case at bar, we are impelled to apply or construe these rules in accordance with the Court's prescriptions in the 2004 Resolution to achieve the end effect that the Government may validly take over the NAIA 3 facilities. Insofar as this case is concerned, the 2004 Resolution is effective not only as a legal precedent, but as the source of rights and prescriptions that must be guaranteed, if not enforced, in the resolution of this petition. Otherwise, the integrity and efficacy of the rulings of this Court will be severely diminished.65 (Emphasis ours.) The Court, also in Gingoyon, categorically recognized PIATCO's ownership over the structures it had built in NAIA IPT III, to wit:

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There can be no doubt that PIATCO has ownership rights over the facilities which it had financed and constructed. The 2004 Resolution squarely recognized that right when it mandated the payment of just compensation to PIATCO prior to the takeover by the Government of NAIA 3. The fact that the Government resorted to eminent domain proceedings in the first place is a concession on its part of PIATCO's ownership. Indeed, if no such right is recognized, then there should be no impediment for the Government to seize control of NAIA 3 through ordinary ejectment proceedings. xxxx Thus, the property subject of expropriation, the NAIA 3 facilities, are real property owned by PIATCO. x x x (Emphasis ours.)66 It was further settled in Gingoyon that the expropriation proceedings shall be held in accordance with Republic Act No. 8974,67 thus: Unlike in the case of Rule 67, the application of Rep. Act No. 8974 will not contravene the 2004 Resolution, which requires the payment of just compensation before any takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does not particularize the extent such payment must be effected before the takeover, but it unquestionably requires at least some degree of payment to the private property owner before a writ of possession may issue. The utilization of Rep. Act No. 8974 guarantees compliance with this bare minimum requirement, as it assures the private property owner the payment of, at the very least, the proffered value of the property to be seized. Such payment of the proffered value to the owner, followed by the issuance of the writ of possession in favor of the Government, is precisely the schematic under Rep. Act No. 8974, one which facially complies with the prescription laid down in the 2004 Resolution. And finally, as to the determination of the amount due PIATCO, this Court ruled in Gingoyon that: Under Rep. Act No. 8974, the Government is required to "immediately pay" the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuation of the [BIR]; and (2) the value of the improvements and/or structures as determined under Section 7. As stated above, the BIR zonal valuation cannot apply in this case, thus the amount subject to immediate payment should be limited to "the value of the improvements and/or structures as determined under Section 7," with Section 7 referring to the "implementing rules and regulations for the equitable valuation of the improvements and/or structures on the land." Under the present implementing rules in place, the valuation of the improvements/structures are to be based using "the replacement cost method." However, the replacement cost is only one of the factors to be considered in determining the just compensation. In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also mandated that the payment of just compensation should be in accordance with equity as well. Thus, in ascertaining the ultimate amount of just compensation, the duty of the trial court is to ensure that such amount conforms not only to the law, such as Rep. Act No. 8974, but to principles of equity as well. Admittedly, there is no way, at least for the present, to immediately ascertain the value of the improvements and structures since such valuation is a matter for factual determination. Yet Rep. Act No. 8974 permits an expedited means by which the Government can immediately take possession of the property without having to await precise determination of the valuation. Section 4(c) of Rep. Act No. 8974 states that "in case the completion of a government infrastructure project is of utmost urgency and importance, and there is no existing valuation of the area concerned, the implementing agency shall immediately pay the owner of the property its proferred value, taking into consideration the standards prescribed in Section 5 [of the law]." The "proffered value" may strike as a highly subjective standard based solely on the intuition of the government, but Rep. Act No. 8974 does provide relevant standards by which "proffered value" should be based, as well as the certainty of judicial determination of the propriety of the proffered value. In filing the complaint for expropriation, the Government alleged to have deposited the amount of P3 Billion earmarked for expropriation, representing the assessed value of the property. The making of the deposit, including the determination of the amount of the deposit, was undertaken under the erroneous notion that Rule 67, and not Rep. Act No. 8974, is the applicable law. Still, as regards the amount, the Court sees no impediment to recognize this sum of P3 Billion as the proffered value under Section 4(b) of Rep. Act No. 8974. After all, in the initial determination of the proffered value, the Government is not strictly required to adhere to any predetermined standards, although its proffered value may later be subjected to judicial review using the standards enumerated under Section 5 of Rep. Act No. 8974.68 Gingoyon constitutes as the law of the case for the expropriation proceedings, docketed as Case No. 04-0876CFM, before the RTC of Pasay City. Law of the case has been defined in the following manner By "law of the case" is meant that "whatever is once irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case" so long as the "facts on which such decision was predicated continue to be the facts of the case before the court" (21 C.J.S. 330). And once the decision becomes final, it is binding on all inferior courts and hence beyond their power and authority to alter or modify (Kabigting vs. Acting Director of Prisons, G.R. L-15548, October 30, 1962).69 A ruling rendered on the first appeal, constitutes the law of the case, and, even if erroneous, it may no longer be disturbed or modified since it has become final long ago.70 The extensive excerpts from Gingoyon demonstrate and emphasize that the Court had already adjudged the issues raised by Baterina, which he either conveniently overlooked or stubbornly refused to accept. The general rule precluding the relitigation of material facts or questions which were in issue and adjudicated in former action are commonly applied to all matters essentially connected with the subject matter of the litigation. Thus, it extends to questions necessarily involved in an issue, and necessarily adjudicated, or necessarily implied in the final judgment, although no specific finding may have been made in reference thereto, and although such matters were directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself. Reasons for the rule are that a judgment is an adjudication on all the matters which are essential to support it, and that every proposition assumed or decided by the court leading up to the final conclusion and upon which such conclusion is based is as effectually passed upon as the ultimate question which is finally solved.71 Since the issues Baterina wishes to raise as an intervenor in Case No. 04-0876CFM were already settled with finality in both Agan and Gingoyon, then there is no point in still allowing his intervention. His Petition-in-Intervention would only be a relitigation of matters that had been previously adjudicated by no less than the Highest Court of the land. And, in no manner can the RTC of Pasay City in Case No. 04-0876CFM grant the reliefs he prayed for without departing from or running afoul of the final and executory Decisions of this Court in Agan and Gingoyon. While it is true that when this Court, in a Resolution dated 1 February 2006, dismissed the Motions for Intervention in Gingoyon, including that of Baterina, it also observed that the interests of the movants-in-intervention may be duly litigated in proceedings which are extant before the lower courts. This does not mean, however, that the said movants-in-interest were assured of being allowed as intervenors or that the reliefs they sought as such shall be granted by the trial courts. The fate of their intervention still rests on their interest or legal standing in the case and the merits of their arguments. WHEREFORE, in view of the foregoing: a. The Petition in G.R. No. 169914 is hereby DISMISSED for lack of merit; and b. The Petition in G.R. No. 174166 is hereby likewise DISMISSED for being moot and academic. No costs.

G.R. No. 166429 December 19, 2005 REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary Eduardo R. Ermita, the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), and the MANILA INTERNATIONAL AIRPORT AUTHORITY (MIAA), Petitioners, vs. HON. HENRICK F. GINGOYON, In his capacity as Presiding Judge of the Regional Trial Court, Branch 117, Pasay City and PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., Respondents. DECISION TINGA, J.:

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The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was conceived, designed and constructed to serve as the countrys show window to the world. Regrettably, it has spawned controversies. Regrettably too, despite the apparent completion of the terminal complex way back it has not yet been operated. This has caused immeasurable economic damage to the country, not to mention its deplorable discredit in the international community. In the first case that reached this Court, Agan v. PIATCO,1 the contracts which the Government had with the contractor were voided for being contrary to law and public policy. The second case now before the Court involves the matter of just compensation due the contractor for the terminal complex it built. We decide the case on the basis of fairness, the same norm that pervades both the Courts 2004 Resolution in the first case and the latest expropriation law. The present controversy has its roots with the promulgation of the Courts decision in Agan v. PIATCO,2 promulgated in 2003 (2003 Decision). This decision nullified the "Concession Agreement for the Build-Operate-and-Transfer Arrangement of the Ninoy Aquino International Airport Passenger Terminal III" entered into between the Philippine Government (Government) and the Philippine International Air Terminals Co., Inc. (PIATCO), as well as the amendments and supplements thereto. The agreement had authorized PIATCO to build a new international airport terminal (NAIA 3), as well as a franchise to operate and maintain the said terminal during the concession period of 25 years. The contracts were nullified, among others, that Paircargo Consortium, predecessor of PIATCO, did not possess the requisite financial capacity when it was awarded the NAIA 3 contract and that the agreement was contrary to public policy.3 At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities had already been built by PIATCO and were nearing completion. 4 However, the ponencia was silent as to the legal status of the NAIA 3 facilities following the nullification of the contracts, as well as whatever rights of PIATCO for reimbursement for its expenses in the construction of the facilities. Still, in his Separate Opinion, Justice Panganiban, joined by Justice Callejo, declared as follows: Should government pay at all for reasonable expenses incurred in the construction of the Terminal? Indeed it should, otherwise it will be unjustly enriching itself at the expense of Piatco and, in particular, its funders, contractors and investors both local and foreign. After all, there is no question that the State needs and will make use of Terminal III, it being part and parcel of the critical infrastructure and transportation-related programs of government.5 PIATCO and several respondents-intervenors filed their respective motions for the reconsideration of the 2003 Decision. These motions were denied by the Court in its Resolution dated 21 January 2004 (2004 Resolution).6 However, the Court this time squarely addressed the issue of the rights of PIATCO to refund, compensation or reimbursement for its expenses in the construction of the NAIA 3 facilities. The holding of the Court on this crucial point follows: This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in their construction. For the government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures. The compensation must be just and in accordance with law and equity for the government can not unjustly enrich itself at the expense of PIATCO and its investors.7 After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the possession of PIATCO, despite the avowed intent of the Government to put the airport terminal into immediate operation. The Government and PIATCO conducted several rounds of negotiation regarding the NAIA 3 facilities.8 It also appears that arbitral proceedings were commenced before the International Chamber of Commerce International Court of Arbitration and the International Centre for the Settlement of Investment Disputes, 9 although the Government has raised jurisdictional questions before those two bodies.10 Then, on 21 December 2004, the Government11 filed a Complaint for expropriation with the Pasay City Regional Trial Court (RTC), together with an Application for Special Raffle seeking the immediate holding of a special raffle. The Government sought upon the filing of the complaint the issuance of a writ of possession authorizing it to take immediate possession and control over the NAIA 3 facilities. The Government also declared that it had deposited the amount of P3,002,125,000.0012 (3 Billion)13 in Cash with the Land Bank of the Philippines, representing the NAIA 3 terminals assessed value for taxation purposes.14 The case15 was raffled to Branch 117 of the Pasay City RTC, presided by respondent judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the same day that the Complaint was filed, the RTC issued an Order16 directing the issuance of a writ of possession to the Government, authorizing it to "take or enter upon the possession" of the NAIA 3 facilities. Citing the case of City of Manila v. Serrano,17 the RTC noted that it had the ministerial duty to issue the writ of possession upon the filing 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. The RTC found these requisites present, particularly noting that "[t]he case record shows that [the Government has] deposited the assessed value of the [NAIA 3 facilities] in the Land Bank of the Philippines, an authorized depositary, as shown by the certification attached to their complaint." Also on the same day, the RTC issued a Writ of Possession. According to PIATCO, the Government was able to take possession over the NAIA 3 facilities immediately after the Writ of Possession was issued.18 However, on 4 January 2005, the RTC issued another Order designed to supplement its 21 December 2004 Order and the Writ of Possession. In the 4 January 2005 Order, now assailed in the present petition, the RTC noted that its earlier issuance of its writ of possession was pursuant to Section 2, Rule 67 of the 1997 Rules of Civil Procedure. However, it was observed that Republic Act No. 8974 (Rep. Act No. 8974), otherwise known as "An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and For Other Purposes" and its Implementing Rules and Regulations (Implementing Rules) had amended Rule 67 in many respects. There are at least two crucial differences between the respective procedures under Rep. Act No. 8974 and Rule 67. Under the statute, the Government is required to make immediate payment to the property owner upon the filing of the complaint to be entitled to a writ of possession, whereas in Rule 67, the Government 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 taxation, unlike Rep. Act No. 8974 which provides, as the relevant standard for initial compensation, the market value of the property as stated in the tax declaration or the current relevant zonal valuation of the Bureau of Internal Revenue (BIR), whichever is higher, and the value of the improvements and/or structures using the replacement cost method. Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the Implementing Rules, the RTC made key qualifications to its earlier issuances. First, it directed the Land Bank of the Philippines, Baclaran Branch (LBP-Baclaran), to immediately release the amount of US$62,343,175.77 to PIATCO, an amount which the RTC characterized as that which the Government "specifically made available for the purpose of this expropriation;" and such amount to be deducted from the amount of just compensation due PIATCO as eventually determined by the RTC. Second, the Government was directed to submit to the RTC a Certificate of Availability of Funds signed by authorized officials to cover the payment of just compensation. Third, the Government was directed "to maintain, preserve and safeguard" the NAIA 3 facilities or "perform such as acts or activities in preparation for their direct operation" of the airport terminal, pending expropriation proceedings and full payment of just compensation. However, the Government was prohibited "from performing acts of ownership like awarding concessions or leasing any part of [NAIA 3] to other parties."19 The very next day after the issuance of the assailed 4 January 2005 Order, the Government filed an Urgent Motion for Reconsideration, which was set for hearing on 10 January 2005. On 7 January 2005, the RTC issued another Order, the second now assailed before this Court, which appointed three (3) Commissioners to ascertain the amount of just compensation for the NAIA 3 Complex. That same day, the Government filed a Motion for Inhibition of Hon. Gingoyon. The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on 10 January 2005. On the same day, it denied these motions in an Omnibus Order dated 10 January 2005. This is the third Order now assailed before this Court. Nonetheless, while the Omnibus Order affirmed the earlier dispositions in the 4 January 2005 Order, it excepted from affirmance "the superfluous part of the Order prohibiting the plaintiffs from awarding concessions or leasing any part of [NAIA 3] to other parties."20 Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on 13 January 2005. The petition prayed for the nullification of the RTC orders dated 4 January 2005, 7 January 2005, and 10 January 2005, and for the inhibition of Hon. Gingoyon from taking further action on the expropriation case. A concurrent prayer for the issuance of a temporary restraining order and preliminary injunction was granted by this Court in a Resolution dated 14 January 2005.21 The Government, in imputing grave abuse of discretion to the acts of Hon. Gingoyon, raises five general arguments, to wit:

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(i) that Rule 67, not Rep. Act No. 8974, governs the present expropriation proceedings; (ii) that Hon. Gingoyon erred when he ordered the immediate release of the amount of US$62.3 Million to PIATCO considering that the assessed value as alleged in the complaint was only P3 Billion; (iii) that the RTC could not have prohibited the Government from enjoining the performance of acts of ownership; (iv) that the appointment of the three commissioners was erroneous; and (v) that Hon. Gingoyon should be compelled to inhibit himself from the expropriation case.22 Before we delve into the merits of the issues raised by the Government, it is essential to consider the crucial holding of the Court in its 2004 Resolution in Agan, which we repeat below: This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in their construction. For the government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures. The compensation must be just and in accordance with law and equity for the government can not unjustly enrich itself at the expense of PIATCO and its investors.23 This pronouncement contains the fundamental premises which permeate this decision of the Court. Indeed, Agan, final and executory as it is, stands as governing law in this case, and any disposition of the present petition must conform to the conditions laid down by the Court in its 2004 Resolution.

The 2004 Resolution Which Is Law of This Case Generally Permits Expropriation
The pronouncement in the 2004 Resolution is especially significant to this case in two aspects, namely: (i) that PIATCO must receive payment of just compensation determined in accordance with law and equity; and (ii) that the government is barred from taking over NAIA 3 until such just compensation is paid. The parties cannot be allowed to evade the directives laid down by this Court through any mode of judicial action, such as the complaint for eminent domain. It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory guidelines which the Government must observe before it could acquire the NAIA 3 facilities. Thus, the actions of respondent judge under review, as well as the arguments of the parties must, to merit affirmation, pass the threshold test of whether such propositions are in accord with the 2004 Resolution. The Government does not contest the efficacy of this pronouncement in the 2004 Resolution,24 thus its application to the case at bar is not a matter of controversy. Of course, questions such as what is the standard of "just compensation" and which particular laws and equitable principles are applicable, remain in dispute and shall be resolved forthwith. 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 expropriate a building complex constructed on land which the State already owns. 25 There is an inherent illogic in the resort to eminent domain on property already owned by the State. At first blush, since the State already owns the property on which NAIA 3 stands, the proper remedy should be akin to an action for ejectment. However, the reason for the resort by the Government to expropriation proceedings is understandable in this case. The 2004 Resolution, in requiring the payment of just compensation prior to the takeover by the Government of NAIA 3, effectively precluded it from acquiring possession or ownership of the NAIA 3 through the unilateral exercise of its rights as the owner of the ground on which the facilities stood. Thus, as things stood after the 2004 Resolution, the right of the Government to take over the NAIA 3 terminal was preconditioned by lawful order on the payment of just compensation to PIATCO as builder of the structures. The determination of just compensation could very well be agreed upon by the parties without judicial intervention, and it appears that steps towards that direction had been engaged in. Still, ultimately, the Government resorted to its inherent power of eminent domain through expropriation proceedings. Is eminent domain appropriate in the first place, with due regard not only to the law on expropriation but also to the Courts 2004 Resolution in Agan? The right of eminent domain extends to personal and real property, and the NAIA 3 structures, adhered as they are to the soil, are considered as real property.26 The public purpose for the expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67 (on Expropriation) 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 of the Philippines]."27 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 2004 Resolution. 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. Still, in applying the laws and rules on expropriation in the case at bar, we are impelled to apply or construe these rules in accordance with the Courts prescriptions in the 2004 Resolution to achieve the end effect that the Government may validly take over the NAIA 3 facilities. Insofar as this case is concerned, the 2004 Resolution is effective not only as a legal precedent, but as the source of rights and prescriptions that must be guaranteed, if not enforced, in the resolution of this petition. Otherwise, the integrity and efficacy of the rulings of this Court will be severely diminished. It is from these premises that we resolve the first question, whether Rule 67 of the Rules of Court or Rep. Act No. 8974 governs the expropriation proceedings in this case.

Application of Rule 67 Violates the 2004 Agan Resolution

The Government insists that Rule 67 of the Rules of Court governs the expropriation proceedings in this case to the exclusion of all other laws. On the other hand, PIATCO claims that it is Rep. Act No. 8974 which does apply. Earlier, we had adverted to the basic differences between the statute and the procedural rule. Further elaboration is in order. Rule 67 outlines the procedure under which eminent domain may be exercised by the Government. Yet by no means does it serve at present as the solitary guideline through which the State may expropriate private property. For example, Section 19 of the Local Government Code governs as to the exercise by local government units of the power of eminent domain through an enabling ordinance. And then there is Rep. Act No. 8974, which covers expropriation proceedings intended for national government infrastructure projects. Rep. Act No. 8974, which provides for a procedure eminently more favorable to the property owner than Rule 67, inescapably applies in instances when the national government expropriates property "for national government infrastructure projects."28 Thus, if expropriation is engaged in by the national government for purposes other than national infrastructure projects, the assessed value standard and the deposit mode prescribed in Rule 67 continues to apply. Under both Rule 67 and Rep. Act No. 8974, the Government commences expropriation proceedings through the filing of a complaint. Unlike in the case of local governments which necessitate an authorizing ordinance before expropriation may be accomplished, there is no need under Rule 67 or Rep. Act No. 8974 for legislative authorization before the Government may proceed with a particular exercise of eminent domain. The most crucial difference between Rule 67 and Rep. Act No. 8974 concerns the particular essential step the Government has to undertake to be entitled to a writ of possession. The first paragraph of Section 2 of Rule 67 provides: SEC. 2. Entry of plaintiff upon depositing value with authorized government depository. Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such

17

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. In contrast, Section 4 of Rep. Act No. 8974 relevantly states: SEC. 4. Guidelines for Expropriation Proceedings. Whenever it is necessary to acquire real property for the right-of-way, site or location for any national government infrastructure project through expropriation, the appropriate proceedings before the proper court under the following guidelines: a) Upon the filing of the complaint, and after due notice to the defendant, the implementing agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR); and (2) the value of the improvements and/or structures as determined under Section 7 hereof; ... c) In case the completion of a government infrastructure project is of utmost urgency and importance, and there is no existing valuation of the area concerned, the implementing agency shall immediately pay the owner of the property its proffered value taking into consideration the standards prescribed in Section 5 hereof. Upon completion with the guidelines abovementioned, the court shall immediately issue to the implementing agency an order to take possession of the property and start the implementation of the project. Before the court can issue a Writ of Possession, the implementing agency shall present to the court a certificate of availability of funds from the proper official concerned. ... As can be gleaned from the above-quoted texts, Rule 67 merely requires the Government to deposit with an authorized government depositary the assessed value of the property for expropriation for it to be entitled to a writ of possession. On the other hand, Rep. Act No. 8974 requires that the Government make a direct payment to the property owner before the writ may issue. Moreover, such payment is based on the zonal valuation of the BIR in the case of land, the value of the improvements or structures under the replacement cost method,29 or if no such valuation is available and in cases of utmost urgency, the proffered value of the property to be seized. It is quite apparent why the Government would prefer to apply Rule 67 in lieu of Rep. Act No. 8974. Under Rule 67, it would not be obliged to immediately pay any amount to PIATCO before it can obtain the writ of possession since all it need do is deposit the amount equivalent to the assessed value with an authorized government depositary. Hence, it devotes considerable effort to point out that Rep. Act No. 8974 does not apply in this case, notwithstanding the undeniable reality that NAIA 3 is a national government project. Yet, these efforts fail, especially considering the controlling effect of the 2004 Resolution in Agan on the adjudication of this case. It is the finding of this Court that the staging of expropriation proceedings in this case with the exclusive use of Rule 67 would allow for the Government to take over the NAIA 3 facilities in a fashion that directly rebukes our 2004 Resolution in Agan. This Court cannot sanction deviation from its own final and executory orders. Section 2 of Rule 67 provides that the State "shall have the right to take or enter upon the possession of the real property involved if [the plaintiff] deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court."30 It is thus apparent that under the provision, all the Government need do to obtain a writ of possession is to deposit the amount equivalent to the assessed value with an authorized government depositary. Would the deposit under Section 2 of Rule 67 satisfy the requirement laid down in the 2004 Resolution that "[f]or the government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures"? Evidently not. If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from receiving a single centavo as just compensation before the Government takes over the NAIA 3 facility by virtue of a writ of possession. Such an injunction squarely contradicts the letter and intent of the 2004 Resolution. Hence, the position of the Government sanctions its own disregard or violation the prescription laid down by this Court that there must first be just compensation paid to PIATCO before the Government may take over the NAIA 3 facilities. Thus, at the very least, Rule 67 cannot apply in this case without violating the 2004 Resolution. Even assuming that Rep. Act No. 8974 does not govern in this case, it does not necessarily follow that Rule 67 should then apply. After all, adherence to the letter of Section 2, Rule 67 would in turn violate the Courts requirement in the 2004 Resolution that there must first be payment of just compensation to PIATCO before the Government may take over the property. It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule 67 with the scheme of "immediate payment" in cases involving national government infrastructure projects. The following portion of the Senate deliberations, cited by PIATCO in its Memorandum, is worth quoting to cogitate on the purpose behind the plain meaning of the law: THE CHAIRMAN (SEN. CAYETANO). "x x x Because the Senate believes that, you know, we have to pay the landowners immediately not by treasury bills but by cash. Since we are depriving them, you know, upon payment, no, of possession, we might as well pay them as much, no, hindi lang 50 percent. xxx THE CHAIRMAN (REP. VERGARA). Accepted. xxx THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is really in favor of the landowners, e. THE CHAIRMAN (REP. VERGARA). Thats why we need to really secure the availability of funds. xxx THE CHAIRMAN (SEN. CAYETANO). No, no. Its the same. It says here: iyong first paragraph, diba? Iyong zonal talagang magbabayad muna. In other words, you know, there must be a payment kaagad. (TSN, Bicameral Conference on the Disagreeing Provisions of House Bill 1422 and Senate Bill 2117, August 29, 2000, pp. 14-20) xxx THE CHAIRMAN (SEN. CAYETANO). Okay, okay, no. Unang-una, it is not deposit, no. Its payment." REP. BATERINA. Its payment, ho, payment." (Id., p. 63)31 It likewise bears noting that the appropriate standard of just compensation is a substantive matter. It is well within the province of the legislature to fix the standard, which it did through the enactment of Rep. Act No. 8974. Specifically, this prescribes the new standards in determining the amount of just compensation in expropriation cases relating to national government infrastructure projects, as well as the manner of payment thereof. At the same time, Section 14 of the Implementing Rules recognizes the continued applicability of Rule 67 on procedural aspects when it provides "all matters regarding defenses and objections to the complaint, issues on uncertain ownership and conflicting claims, effects of appeal on the rights of the parties, and such other incidents affecting the complaint shall be resolved under the provisions on expropriation of Rule 67 of the Rules of Court."32 Given that the 2004 Resolution militates against the continued use of the norm under Section 2, Rule 67, is it then possible to apply Rep. Act No. 8974? We find that it is, and moreover, its application in this case complements rather than contravenes the prescriptions laid down in the 2004 Resolution.

Rep. Act No. 8974 Fits to the Situation at Bar and Complements the 2004 Agan Resolution
Rep. Act No. 8974 is entitled "An Act To Facilitate The Acquisition Of Right-Of-Way, Site Or Location For National Government Infrastructure Projects And For Other Purposes." Obviously, the law is intended to cover expropriation proceedings intended for national government infrastructure projects. Section 2 of Rep. Act No. 8974 explains what are considered as "national government projects."

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Sec. 2. National Government Projects. The term "national government projects" shall refer to all national government infrastructure, engineering works and service contracts, including projects undertaken by government-owned and controlled corporations, all projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the Build-Operate-and-Transfer Law, and other related and necessary activities, such as site acquisition, supply and/or installation of equipment and materials, implementation, construction, completion, operation, maintenance, improvement, repair and rehabilitation, regardless of the source of funding. As acknowledged in the 2003 Decision, the development of NAIA 3 was made pursuant to a build-operate-and-transfer arrangement pursuant to Republic Act No. 6957, as amended,33 which pertains to infrastructure or development projects normally financed by the public sector but which are now wholly or partly implemented by the private sector.34 Under the build-operate-and-transfer scheme, it is the project proponent which undertakes the construction, including the financing, of a given infrastructure facility. 35 In Tatad v. Garcia,36 the Court acknowledged that the operator of the EDSA Light Rail Transit project under a BOT scheme was the owner of the facilities such as "the rail tracks, rolling stocks like the coaches, rail stations, terminals and the power plant."37 There can be no doubt that PIATCO has ownership rights over the facilities which it had financed and constructed. The 2004 Resolution squarely recognized that right when it mandated the payment of just compensation to PIATCO prior to the takeover by the Government of NAIA 3. The fact that the Government resorted to eminent domain proceedings in the first place is a concession on its part of PIATCOs ownership. Indeed, if no such right is recognized, then there should be no impediment for the Government to seize control of NAIA 3 through ordinary ejectment proceedings. Since the rights of PIATCO over the NAIA 3 facilities are established, the nature of these facilities should now be determined. Under Section 415(1) of the Civil Code, these facilities are ineluctably immovable or real property, as they constitute buildings, roads and constructions of all kinds adhered to the soil.38 Certainly, the NAIA 3 facilities are of such nature that they cannot just be packed up and transported by PIATCO like a traveling circus caravan. Thus, the property subject of expropriation, the NAIA 3 facilities, are real property owned by PIATCO. This point is critical, considering the Governments insistence that the NAIA 3 facilities cannot be deemed as the "right-of-way", "site" or "location" of a national government infrastructure project, within the coverage of Rep. Act No. 8974. There is no doubt that the NAIA 3 is not, under any sensible contemplation, a "right-of-way." Yet we cannot agree with the Governments insistence that neither could NAIA 3 be a "site" or "location". The petition quotes the definitions provided in Blacks Law Dictionary of "location" as the specific place or position of a person or thing and site as pertaining to a place or location or a piece of property set aside for specific use."39 Yet even Blacks Law Dictionary provides that "[t]he term [site] does not of itself necessarily mean a place or tract of land fixed by definite boundaries."40 One would assume that the Government, to back up its contention, would be able to point to a clear-cut rule that a "site" or "location" exclusively refers to soil, grass, pebbles and weeds. There is none. Indeed, we cannot accept the Governments proposition that the only properties that may be expropriated under Rep. Act No. 8974 are parcels of land. Rep. Act No. 8974 contemplates within its coverage such real property constituting land, buildings, roads and constructions of all kinds adhered to the soil. Section 1 of Rep. Act No. 8974, which sets the declaration of the laws policy, refers to "real property acquired for national government infrastructure projects are promptly paid just compensation."41 Section 4 is quite explicit in stating that the scope of the law relates to the acquisition of "real property," which under civil law includes buildings, roads and constructions adhered to the soil. It is moreover apparent that the law and its implementing rules commonly provide for a rule for the valuation of improvements and/or structures thereupon separate from that of the land on which such are constructed. Section 2 of Rep. Act No. 8974 itself recognizes that the improvements or structures on the land may very well be the subject of expropriation proceedings. Section 4(a), in relation to Section 7 of the law provides for the guidelines for the valuation of the improvements or structures to be expropriated. Indeed, nothing in the law would prohibit the application of Section 7, which provides for the valuation method of the improvements and or structures in the instances wherein it is necessary for the Government to expropriate only the improvements or structures, as in this case. The law classifies the NAIA 3 facilities as real properties just like the soil to which they are adhered. Any sub-classifications of real property and divergent treatment based thereupon for purposes of expropriation must be based on substantial distinctions, otherwise the equal protection clause of the Constitution is violated. There may be perhaps a molecular distinction between soil and the inorganic improvements adhered thereto, yet there are no purposive distinctions that would justify a variant treatment for purposes of expropriation. Both the land itself and the improvements thereupon are susceptible to private ownership independent of each other, capable of pecuniary estimation, and if taken from the owner, considered as a deprivation of property. The owner of improvements seized through expropriation suffers the same degree of loss as the owner of land seized through similar means. Equal protection demands that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. For purposes of expropriation, parcels of land are similarly situated as the buildings or improvements constructed thereon, and a disparate treatment between those two classes of real property infringes the equal protection clause. Even as the provisions of Rep. Act No. 8974 call for that laws application in this case, the threshold test must still be met whether its implementation would conform to the dictates of the Court in the 2004 Resolution. Unlike in the case of Rule 67, the application of Rep. Act No. 8974 will not contravene the 2004 Resolution, which requires the payment of just compensation before any takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does not particularize the extent such payment must be effected before the takeover, but it unquestionably requires at least some degree of payment to the private property owner before a writ of possession may issue. The utilization of Rep. Act No. 8974 guarantees compliance with this bare minimum requirement, as it assures the private property owner the payment of, at the very least, the proffered value of the property to be seized. Such payment of the proffered value to the owner, followed by the issuance of the writ of possession in favor of the Government, is precisely the schematic under Rep. Act No. 8974, one which facially complies with the prescription laid down in the 2004 Resolution. Clearly then, we see no error on the part of the RTC when it ruled that Rep. Act No. 8974 governs the instant expropriation proceedings.

The Proper Amount to be Paid under Rep. Act No. 8974

Then, there is the matter of the proper amount which should be paid to PIATCO by the Government before the writ of possession may issue, consonant to Rep. Act No. 8974. At this juncture, we must address the observation made by the Office of the Solicitor General in behalf of the Government that there could be no "BIR zonal valuations" on the NAIA 3 facility, as provided in Rep. Act No. 8974, since zonal valuations are only for parcels of land, not for airport terminals. T G.R. No. 166429 February 1, 2006 REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary Eduardo R. Ermita, the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), and the MANILA INTERNATIONAL AIRPORT AUTHORITY (MIAA), Petitioners, vs. HON. HENRICK F. GINGOYON, In his capacity as Presiding and Judge of the Regional Trial Court, Branch 117, Pasay City and PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., Respondents. R E S O L U T I ON TINGA, J.: This Resolution treats of the following motions: (a) MOTION FOR PARTIAL RECONSIDERATION, dated 2 January 2006 of the decision of 19 December 2005 filed by the Office of the Solicitor General for petitioners; (b) MOTION FOR LEAVE (To File Motion for Partial Reconsideration-in-Intervention), dated 5 January 2006 filed by counsel for petitionerintervenor Asahikosan Corporation praying that the attached Motion for Partial Reconsideration and Intervention dated January 5, 2006 be admitted; (b-1) Aforesaid MOTION FOR PARTIAL RECONSIDERATION-IN-INTERVENTION, dated January 5, 2006; (c) MOTION FOR LEAVE (To File Motion for Partial Reconsideration-in-Intervention), dated 5 January 2006 filed by counsel for petitionerintervenor Takenaka Corp.; (c-1) Aforesaid MOTION FOR PARTIAL RECONSIDERATION-IN-INTERVENTION, dated 5 January 2006;

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(d) MOTION FOR INTERVENTION and MOTION TO ADMIT THE ATTACHED MOTION FOR RECONSIDERATION-IN-INTERVENTION (of the Decision dated 19 December 2005), dated 6 January 2006 filed by counsel for movant-in-intervention Rep. Salacnib F. Baterina; and (d-1) Aforesaid MOTION FOR RECONSIDERATION-IN-INTERVENTION (of the Decision dated 19 December 2005) dated 6 January 2006. We first dispose of the Motion for Partial Reconsideration filed by petitioner Republic of the Philippines (Government). It propounds several reasons for the reconsideration of the Courts Decision dated 19 December 2005. Some of the arguments merely rehash points raised in the petition and already dispensed with exhaustively in the Decision. This applies in particular to the argument that Republic Act No. 8974 does not apply to the expropriation of the Ninoy Aquino International Airport Passenger Terminal 3 (NAIA 3), which is not a right-of-way, site or location. This Resolution will instead focus as it should on the new arguments, as well as the perspectives that were glossed over in the Decision. On the newly raised arguments, there are considerable factual elements brought up by the Government. In the main, the Government devotes significant effort in diminishing PIATCOs right to just compensation as builder or owner of the NAIA 3. Particularly brought to fore are the claims relating to two entities, Takenaka Corporation (Takenaka) and Asahikosan (Asahikosan) Corporation, who allegedly claim "significant liens" on the terminal, arising from their alleged unpaid bills by virtue of an Engineering, Procurement and Construction Contract they had with PIATCO. On account of these adverse claims, the Government now claims as controvertible the question of who is the builder of the NAIA 3. The Government likewise claims as "indispensable" the need of Takenaka and Asahikosan to provide the necessary technical services and supplies so that all the various systems and equipment will be ready and operational in a manner that allows the Government to possess a fully-capable international airport terminal. The Governments concerns that impelled the filing of its Motion for Reconsideration are summed up in the following passage therein: "The situation the Republic now faces is that if any part of its Php3,002,125,000 deposit is released directly to PIATCO, and PIATCO, as in the past, does not wish to settle its obligations directly to Takenaka, Asahikosan and Fraport, the Republic may end up having expropriated a terminal with liens and claims far in excess of its actual value, the liens remain unextinguished, and PIATCO on the other hand, ends up with the Php3,0002,125,000 in its pockets gratuitously." The Court is not wont to reverse its previous rulings based on factual premises that are not yet conclusive or judicially established. Certainly, whatever claims or purported liens Takenaka and Asahikosan against PIATCO or over the NAIA 3 have not been judicially established. Neither Takenaka nor Asahikosan are parties to the present action, and thus have not presented any claim which could be acted upon by this Court. The earlier adjudications in Agan v. PIATCO made no mention of either Takenaka or Asahikosan, and certainly made no declaration as to their rights to any form of compensation. If there is indeed any right to remuneration due to these two entities arising from NAIA 3, they have not yet been established by the courts of the land. It must be emphasized that the conclusive ruling in the Resolution dated 21 January 2004 in Agan v. PIATCO (Agan 2004) is that PIATCO, as builder of the facilities, must first be justly compensated in accordance with law and equity for the Government to take over the facilities. It is on that premise that the Court adjudicated this case in its 19 December 2005 Decision. While the Government refers to a judgment rendered by a London court in favor of Takenaka and Asahikosan against PIATCO in the amount of US$82 Million, it should be noted that this foreign judgment is not yet binding on Philippine courts. It is entrenched in Section 48, Rule 39 of the Rules of Civil Procedure that a foreign judgment on the mere strength of its promulgation is not yet conclusive, as it can be annulled on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. 1 It is likewise recognized in Philippine jurisprudence and international law that a foreign judgment may be barred from recognition if it runs counter to public policy.2 Assuming that PIATCO indeed has corresponding obligations to other parties relating to NAIA 3, the Court does not see how such obligations, yet unproven, could serve to overturn the Decision mandating that the Government first pay PIATCO the amount of 3.02 Million Pesos before it may acquire physical possession over the facilities. This directive enjoining payment is in accordance with Republic Act No. 8974, and under the mechanism established by the law the amount to be initially paid is that which is provisionally determined as just compensation. The provisional character of this payment means that it is not yet final, yet sufficient under the law to entitle the Government to the writ of possession over the expropriated property. There are other judicial avenues outside of this Motion for Reconsideration wherein all other claims relating to the airport facilities may be ventilated, proved and determined. Since such claims involve factual issues, they must first be established by the appropriate trier of facts before they can be accorded any respect by or binding force on this Court. The other grounds raised in the Motion for Reconsideration are similarly flawed. The Government argues that the 2004 Resolution in Agan did not strictly require the payment of just compensation before the Government can take over the airport facilities. Reliance is placed on the use by the Court of the word "for", instead of "before." Yet the clear intent of that ruling is to mandate payment of just compensation as a condition precedent before the Government could acquire physical possession over the airport facilities. The qualification was made out of due consideration of the fact that PIATCO had already constructed the facilities at its own expense when its contracts with the Government were nullified. Even assuming that "for" may be construed as not necessarily meaning "prior to", it cannot be denied that Rep. Act No. 8974 does require prior payment to the owner before the Government may acquire possession over the property to be expropriated. Even Rule 67 requires the disbursement of money by way of deposit as a condition precedent prior to entitlement to a writ of possession. As the instant case is one for expropriation, our pronouncement is worthily consistent with the principles and laws that govern expropriation cases. The Government likewise adopts the position raised by the Dissenting Opinion of Mr. Justice Corona that Rep. Act No. 8974 could not repeal Rule 67 of the Rules of Court, since the deposit of the assessed value is a procedural matter. It adds that otherwise, Rep. Act No. 8974 is unconstitutional. Of course it is too late in the day to question the constitutionality of Rep. Act No. 8974, an issue that was not raised in the petition. Still, this point was already addressed in the Decision, which noted that the determination of the appropriate standards for just compensation is a substantive matter well within the province of the legislature to fix.3 As held in Fabian v. Desierto, if the rule takes away a vested right, it is not procedural, 4 and so the converse certainly holds that if the rule or provision creates a right, it should be properly appreciated as substantive in nature. Indubitably, a matter is substantive when it involves the creation of rights to be enjoyed by the owner of property to be expropriated. The right of the owner to receive just compensation prior to acquisition of possession by the State of the property is a proprietary right, appropriately classified as a substantive matter and, thus, within the sole province of the legislature to legislate on. It is possible for a substantive matter to be nonetheless embodied in a rule of procedure5 , and to a certain extent, Rule 67 does contain matters of substance. Yet the absorption of the substantive point into a procedural rule does not prevent the substantive right from being superseded or amended by statute, for the creation of property rights is a matter for the legislature to enact on, and not for the courts to decide upon. Indeed, if the position of the Government is sustained, it could very well lead to the absurd situation wherein the judicial branch of government may shield laws with the veneer of irrepealability simply by absorbing the provisions of law into the rules of procedure. When the 1987 Constitution restored to the judicial branch of government the sole prerogative to promulgate rules concerning pleading, practice and procedure, it should be understood that such rules necessarily pertain to points of procedure, and not points of substantive law. The Government also exhaustively cites the Dissenting Opinion in arguing that the application of Rule 67 would violate the 2004 Resolution of the Court in Agan. It claims that it is not possible to determine with reasonable certainty the proper amount of just compensation to be paid unless it first acquires possession of the NAIA 3. Yet what the Decision mandated to be paid to PIATCO before the writ of possession could issue is merely the provisionally determined amount of just compensation which, under the auspices of Rep. Act No. 8974, constitutes the proffered value as submitted by the Government itself. There is thus no need for the determination with reasonable certainty of the final amount of just compensation before the writ of possession may be issued. Specifically in this case, only the payment or release by the Government of the proffered value need be made to trigger the operability of the writ of possession. Admittedly, the 2004 Resolution in Agan could be construed as mandating the full payment of the final amount of just compensation before the Government may be permitted to take over the NAIA 3. However, the Decision ultimately rejected such a construction, acknowledging the public good that would result from the immediate operation of the NAIA 3. Instead, the Decision adopted an interpretation which is in consonance with Rep. Act No. 8974 and with equitable standards as well, that allowed the Government to take possession of the NAIA 3 after payment of the proffered value of the facilities to PIATCO. Such a reading is substantially compliant with the pronouncement in the 2004 Agan Resolution, and is in accord with law and equity. In contrast, the Governments position, hewing to the strict application of Rule 67, would permit the Government to acquire possession over the NAIA 3 and implement its operation without having to pay PIATCO a single centavo, a situation that is obviously unfair. Whatever animosity the Government

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may have towards PIATCO does not acquit it from settling its obligations to the latter, particularly those which had already been previously affirmed by this Court. We now turn to the three (3) motions for intervention all of which were filed after the promulgation of the Courts Decision. All three (3) motions must be denied. Under Section 2, Rule 19 of the 1997 Rules of Civil Procedure the motion to intervene may be filed at any time before rendition of judgment by the court.6 Since this case originated from an original action filed before this Court, the appropriate time to file the motions-in-intervention in this case if ever was before and not after resolution of this case. To allow intervention at this juncture would be highly irregular. It is extremely improbable that the movants were unaware of the pendency of the present case before the Court, and indeed none of them allege such lack of knowledge. Takenaka and Asahikosan rely on Mago v. Court of Appeals7 wherein the Court took the extraordinary step of allowing the motion for intervention even after the challenged order of the trial court had already become final.8 Yet it was apparent in Mago that the movants therein were not impleaded despite being indispensable parties, and had not even known of the existence of the case before the trial court9 , and the effect of the final order was to deprive the movants of their land.10 In this case, neither Takenaka nor Asahikosan stand to be dispossessed by reason of the Courts Decision. There is no palpable due process violation that would militate the suspension of the procedural rule. Moreover, the requisite legal interest required of a party-in-intervention has not been established so as to warrant the extra-ordinary step of allowing intervention at this late stage. As earlier noted, the claims of Takenaka and Asahikosan have not been judicially proved or conclusively established as fact by any trier of facts in this jurisdiction. Certainly, they could not be considered as indispensable parties to the petition for certiorari. In the case of Representative Baterina, he invokes his prerogative as legislator to curtail the disbursement without appropriation of public funds to compensate PIATCO, as well as that as a taxpayer, as the basis of his legal standing to intervene. However, it should be noted that the amount which the Court directed to be paid by the Government to PIATCO was derived from the money deposited by the Manila International Airport Authority, an agency which enjoys corporate autonomy and possesses a legal personality separate and distinct from those of the National Government and agencies thereof whose budgets have to be approved by Congress. It is also observed that the interests of the movants-in-intervention may be duly litigated in proceedings which are extant before lower courts. There is no compelling reason to disregard the established rules and permit the interventions belatedly filed after the promulgation of the Courts Decision. WHEREFORE, the Motion for Partial Reconsideration of the petitioners is DENIED WITH FINALITY. The motions respectively filed by Takenaka Corporation, Asahikosan Corporation and Representative Salacnib Baterina are DENIED.

G.R. No. 140160 January 13, 2004 LAND BANK OF THE PHILIPPINES, petitioner, vs. FELICIANO F. WYCOCO, respondent. x------------------------x G.R. No. 146733 January 13, 2004 FELICIANO F. WYCOCO, petitioner, vs. THE HONORABLE RODRIGO S. CASPILLO, Pairing Judge of the Regional Trial Court, Third Judicial Region, Branch 23, Cabanatuan City and the Department of Agrarian Reform, respondents. DECISION YNARES-SANTIAGO, J.: Before the Court are consolidated petitions, the first seeking the review of the February 9, 1999 Decision 1 and the September 22, 1999 Resolution2 of the Court of Appeals in CA-G.R. No. SP No. 39913, which modified the Decision3 of Regional Trial Court of Cabanatuan City, Branch 23, acting as a Special Agrarian Court in Agrarian Case No. 91 (AF); and the second for mandamus to compel the said trial court to issue a writ of execution and to direct Judge Rodrigo S. Caspillo to inhibit himself from Agrarian Case No. 91 (AF). The undisputed antecedents show that Feliciano F. Wycoco is the registered owner of a 94.1690 hectare unirrigated and untenanted rice land, covered by Transfer Certificate of Title No. NT-206422 and situated in the Sitios of Ablang, Saguingan and Pinamunghilan, Barrio of San Juan, Licab, Nueva Ecija.4 In line with the Comprehensive Agrarian Reform Program (CARP) of the government, Wycoco voluntarily offered to sell the land to the Department of Agrarian Reform (DAR) for P14.9 million.5 In November 1991, after the DARs evaluation of the application and the determination of the just compensation by the Land Bank of the Philippines (LBP), a notice of intention to acquire 84.5690 hectares of the property for P1,342,667.466 was sent to Wycoco. The amount offered was later raised to P2,594,045.39 and, upon review, was modified to P2,280,159.82. 7 The area which the DAR offered to acquire excluded idle lands, river and road located therein. Wycoco rejected the offer, prompting the DAR to indorse the case to the Department of Agrarian Reform Adjudication Board (DARAB) for the purpose of fixing the just compensation in a summary administrative proceeding.8 The case was docketed as DARAB VOS Case No. 232 NE 93. Thereafter, the DARAB requested LBP to open a trust account in the name of Wycoco and deposited the compensation offered by DAR.9 In the meantime, the property was distributed to farmer-beneficiaries. On March 29, 1993, DARAB required the parties to submit their respective memoranda or position papers in support of their claim.10 Wycoco, however, decided to forego with the filing of the required pleadings, and instead filed on April 13, 1993, the instant case for determination of just compensation with the Regional Trial Court of Cabanatuan City, Branch 23, docketed as Agrarian Case No. 91 (AF).11 Impleaded as party-defendants therein were DAR and LBP. On April 30, 1993, Wycoco filed a manifestation in VOS Case No. 232 NE 93, informing the DARAB of the pendency of Agrarian Case No. 91 (AF) with the Cabanatuan court, acting as a special agrarian court.12 On March 9, 1994, the DARAB issued an order dismissing the case to give way to the determination of just compensation by the Cabanatuan court. Pertinent portion thereof states: Admittedly, this Forum is vested with the jurisdiction to conduct administrative proceeding to determine compensation. [H]owever, a thorough perusal of petitioners complaint showed that he did not only raise the issue of valuation but such other matters which are beyond the competence of the Board. Besides, the petitioner has the option to avail the administrative remedies or bring the matter on just compensation to the Special Agrarian Court for final determination. WHEREFORE, premises considered, this case is hereby dismissed. SO ORDERED.13 Meanwhile, DAR and LBP filed their respective answers before the special agrarian court in Agrarian Case No. 91 (AF), contending that the valuation of Wycocos property was in accordance with law and that the latter failed to exhaust administrative remedies by not participating in the summary administrative proceedings before the DARAB which has primary jurisdiction over determination of land valuation.14 After conducting a pre-trial on October 3, 1994, the trial court issued a pre-trial order as follows: The parties manifested that there is no possibility of amicable settlement, neither are they willing to admit or stipulate on facts, except those contained in the pleadings. The only issue left is for the determination of just compensation or correct valuation of the land owned by the plaintiff subject of this case. The parties then prayed to terminate the pre-trial conference.

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AS PRAYED FOR, the pre-trial conference is considered terminated, and instead of trial, the parties are allowed to submit their respective memoranda. WHEREFORE, the parties are given twenty (20) days from today within which to file their simultaneous memoranda, and another ten (10) days from receipt thereof to file their Reply/Rejoinder, if any, and thereafter, this case shall be deemed submitted for decision. SO ORDERED.15 The evidence presented by Wycoco in support of his claim were the following: (1) Transfer Certificate of Title No. NT-206422; (2) Notice of Land Valuation dated June 18, 1992; and (3) letter dated July 10, 1992 rejecting the counter-offer of LBP and DAR.16 On the other hand, DAR and LBP presented the Land Valuation Worksheets.17 On November 14, 1995, the trial court rendered a decision in favor of Wycoco. It ruled that there is no need to present evidence in support of the land valuation inasmuch as it is of public knowledge that the prevailing market value of agricultural lands sold in Licab, Nueva Ecija is from P135,000.00 to 150,000.00 per hectare. The court thus took judicial notice thereof and fixed the compensation for the entire 94.1690 hectare land at P142,500.00 per hectare or a total of P13,428,082.00. It also awarded Wycoco actual damages for unrealized profits plus legal interest. The dispositive portion thereof states: WHEREFORE, premises considered, judgment is hereby rendered: 1. Ordering the defendants to pay the amount of P13,419,082.00 to plaintiff as just compensation for the property acquired; 2. Ordering the defendants to pay plaintiff the amount of P29,663,235.00 representing the unrealized profits from the time of acquisition of the subject property and the sum of P8,475,210.00 for every calendar year, until the amount of compensation is fully paid including legal interest which had accrued thereon. No pronouncement as to costs. SO ORDERED.18 The DAR and the LBP filed separate petitions before the Court of Appeals. The petition brought by DAR on jurisdictional and procedural issues, docketed as CA-G.R. No. SP No. 39234, was dismissed on May 29, 1997.19 The dismissal became final and executory on June 26, 1997.20 This prompted Wycoco to file a petition for mandamus before this Court, docketed as G.R. No. 146733, praying that the decision of the Regional Trial Court of Cabanatuan City, Branch 23, in Agrarian Case No. 91 (AF) be executed, and that Judge Rodrigo S. Caspillo, the now presiding Judge of said court, be compelled to inhibit himself from hearing the case. The petition brought by LBP on both substantive and procedural grounds, docketed as CA-G.R. No. SP No. 39913, was likewise dismissed by the Court of Appeals on February 9, 1999.21 On September 22, 1999, however, the Court of Appeals modified its decision by deducting from the compensation due Wycoco the amount corresponding to the 3.3672 hectare portion of the 94.1690 hectare land which was found to have been previously sold by Wycoco to the Republic, thus WHEREFORE, and conformably with the above, Our decision of February 9, 1999 is hereby MODIFIED in the sense that the value corresponding to the aforesaid 3.3672 hectares and all the awards appertaining thereto in the decision a quo are ordered deducted from the totality of the awards granted to the private respondent. In all other respects, the decision sought to be reconsidered is hereby RE-AFFIRMED and REITERATED. SO ORDERED.22 In its petition, LBP contended that the Court of Appeals erred in ruling: I THAT THE TRIAL COURT ACTING AS A SPECIAL AGRARIAN COURT MAY ASSUME JURISDICTION OVER AGRARIAN CASE NO. 91 (AF) AND RENDER JUDGMENT THEREON WITHOUT AN INITIAL ADMINISTRATIVE DETERMINATION OF JUST COMPENSATION BY THE DARAB PURSUANT TO SECTION 16 OF RA 6657, OVER THE TIMELY OBJECTION OF THE PETITIONER, AND IN VIOLATION OF THE RULE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES AND ON FORUM SHOPPING; II THAT THE JUST COMPENSATION DETERMINED BY THE TRIAL COURT WAS SUPPORTED BY SUBSTANTIAL EVIDENCE, WHEN IT WAS BASED ONLY ON JUDICIAL NOTICE OF THE PREVAILING MARKET VALUE OF LAND BASED ON THE ALLEGED PRICE OF TRANSFER OF TENURAL RIGHTS, TAKEN WITHOUT NOTICE AND HEARING IN VIOLATION OF RULE 129 OF THE RULES OF COURT; III THAT THE TRIAL COURT CAN REQUIRE THE PETITIONER TO COMPENSATE THE PORTIONS OF RESPONDENTS PROPERTY WHICH WERE NOT DECLARED BY THE DAR FOR ACQUISITION, NOR SUITABLE FOR AGRICULTURE NOR CAPABLE OF DISTRIBUTION TO FARMER BENEFICIARIES UNDER THE CARP; IV THAT THE TRIAL COURT CAN AWARD AS PART OF JUST COMPENSATION LEGAL INTEREST ON THE PRINCIPAL AND ALLEGED UNREALIZED PROFITS OF P29,663,235.00 FROM THE TIME OF ACQUISITION OF THE SUBJECT PROPERTY AND P8,475,210.00 FOR EVERY CALENDAR YEAR THEREAFTER, CONSIDERING THAT THE SAME HAS NO LEGAL BASIS AND THAT THE RESPONDENT RETAINED THE TITLE TO HIS PROPERTY DESPITE THE DARS NOTICE OF ACQUISITION; V THAT THE TRIAL COURT HAD VALIDLY GRANTED EXECUTION PENDING APPEAL ON THE ALLEGEDLY GOOD REASON OF THE PETITIONERS ADVANCED AGE AND WEAK HEALTH, CONTRARY TO THE APPLICABLE JURISPRUDENCE AND CONSIDERING THAT THE RESPONDENT IS NOT DESTITUTE. 23 The issues for resolution are as follows: (1) Did the Regional Trial Court, acting as Special Agrarian Court, validly acquire jurisdiction over the instant case for determination of just compensation? (2) Assuming that it acquired jurisdiction, was the compensation arrived at supported by evidence? (3) Can Wycoco compel the DAR to purchase the entire land subject of the voluntary offer to sell? (4) Were the awards of interest and damages for unrealized profits valid? Anent the issue of jurisdiction, the laws in point are Sections 50 and 57 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988) which, in pertinent part, provide: Section 50. Quasi-judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). Section 57. Special Jurisdiction. The Special Agrarian Court shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. In Republic v. Court of Appeals,24 it was held that Special Agrarian Courts are given original and exclusive jurisdiction over two categories of cases, to wit: (1) all petitions for the determination of just compensation; and (2) the prosecution of all criminal offenses under R.A. No. 6657. Section 50 must be construed in harmony with Section 57 by considering cases involving the determination of just compensation and criminal cases for violations of R.A. No. 6657 as excepted from the plenitude of power conferred to the DAR. Indeed, there is a reason for this distinction. The DAR, as an administrative agency, cannot be granted jurisdiction over cases of eminent domain and over criminal cases. The valuation of property in eminent domain is essentially a judicial function which is vested with the Special Agrarian Courts and cannot be lodged with administrative agencies. 25 In fact, Rule XIII, Section 11 of the New Rules of Procedure of the DARAB acknowledges this power of the court, thus Section 11. Land Valuation and Preliminary Determination and Payment of Just Compensation. The decision of the Adjudicator on land valuation and preliminary determination and payment of just compensation shall not be appealable to the Board but shall be brought directly to the Regional Trial Courts designated as Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration. (Emphasis supplied)

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Under Section 1 of Executive Order No. 405, Series of 1990, the Land Bank of the Philippines is charged with the initial responsibility of determining the value of lands placed under land reform and the just compensation to be paid for their taking.26 Through a notice of voluntary offer to sell (VOS) submitted by the landowner, accompanied by the required documents, the DAR evaluates the application and determines the lands suitability for agriculture. The LBP likewise reviews the application and the supporting documents and determines the valuation of the land. Thereafter, the DAR issues the Notice of Land Valuation to the landowner. In both voluntary and compulsory acquisition, where the landowner rejects the offer, the DAR opens an account in the name of the landowner and conducts a summary administrative proceeding. If the landowner disagrees with the valuation, the matter may be brought to the Regional Trial Court acting as a special agrarian court. This in essence is the procedure for the determination of just compensation.27 In Land Bank of the Philippines v. Court of Appeals,28 the landowner filed an action for determination of just compensation without waiting for the completion of DARABs re-evaluation of the land. This, notwithstanding, the Court held that the trial court properly acquired jurisdiction because of its exclusive and original jurisdiction over determination of just compensation, thus It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners." This "original and exclusive" jurisdiction of the RTC would be undermined if the DAR would vest in administrative officials original jurisdiction in compensation cases and make the RTC an appellate court for the review of administrative decisions. Thus, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into an appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus, direct resort to the SAC [Special Agrarian Court] by private respondent is valid. (Emphasis supplied)29 In the case at bar, therefore, the trial court properly acquired jurisdiction over Wycocos complaint for determination of just compensation. It must be stressed that although no summary administrative proceeding was held before the DARAB, LBP was able to perform its legal mandate of initially determining the value of Wycocos land pursuant to Executive Order No. 405, Series of 1990. What is more, DAR and LBPs conformity to the pre-trial order which limited the issue only to the determination of just compensation estopped them from questioning the jurisdiction of the special agrarian court. The pre-trial order limited the issues to those not disposed of by admission or agreements; and the entry thereof controlled the subsequent course of action.30 Besides, the issue of whether Wycoco violated the rule on exhaustion of administrative remedies was rendered moot and academic in view of the DARABs dismissal31 of the administrative case to give way to and in recognition of the courts power to determine just compensation.32 In arriving at the valuation of Wycocos land, the trial court took judicial notice of the alleged prevailing market value of agricultural lands in Licab, Nueva Ecija without apprising the parties of its intention to take judicial notice thereof. Section 3, Rule 129 of the Rules on Evidence provides: Sec. 3. Judicial Notice, When Hearing Necessary. During the trial, the court, on its own initiative, or on request of a party, may announce its intention to take judicial notice of any matter and allow the parties to be heard thereon. After trial and before judgment or on appeal, the proper court, on its own initiative, or on request of a party, may take judicial notice of any matter and allow the parties to be heard thereon if such matter is decisive of a material issue in the case. Inasmuch as the valuation of the property of Wycoco is the very issue in the case at bar, the trial court should have allowed the parties to present evidence thereon instead of practically assuming a valuation without basis. While market value may be one of the bases of determining just compensation, the same cannot be arbitrarily arrived at without considering the factors to be appreciated in arriving at the fair market value of the property e.g., the cost of acquisition, the current value of like properties, its size, shape, location, as well as the tax declarations thereon. 33 Since these factors were not considered, a remand of the case for determination of just compensation is necessary. The power to take judicial notice is to be exercised by courts with caution especially where the case involves a vast tract of land. Care must be taken that the requisite notoriety exists; and every reasonable doubt on the subject should be promptly resolved in the negative. To say that a court will take judicial notice of a fact is merely another way of saying that the usual form of evidence will be dispensed with if knowledge of the fact can be otherwise acquired. This is because the court assumes that the matter is so notorious that it will not be disputed. But judicial notice is not judicial knowledge. The mere personal knowledge of the judge is not the judicial knowledge of the court, and he is not authorized to make his individual knowledge of a fact, not generally or professionally known, the basis of his action.34 Anent the third issue, the DAR cannot be compelled to purchase the entire property voluntarily offered by Wycoco. The power to determine whether a parcel of land may come within the coverage of the Comprehensive Agrarian Reform Program is essentially lodged with the DAR. That Wycoco will suffer damages by the DARs non-acquisition of the approximately 10 hectare portion of the entire land which was found to be not suitable for agriculture is no justification to compel DAR to acquire the whole area. We find Wycocos claim for payment of interest partly meritorious. In Land Bank of the Philippines v. Court of Appeals,35 this Court struck down as void DAR Administrative Circular No. 9, Series of 1990, which provides for the opening of trust accounts in lieu of the deposit in cash or in bonds contemplated in Section 16 (e) of RA 6657. "It is very explicit from [Section 16 (e)] that the deposit must be made only in cash or in LBP bonds. Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a trust account among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a trust account is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term deposit. xxx xxx xxx "In the present suit, the DAR clearly overstepped the limits of its powers to enact rules and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in cash or in LBP bonds. In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations can not outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and void."36 Pursuant to the forgoing decision, DAR issued Administrative Order No. 2, Series of 1996, converting trust accounts in the name of landowners into deposit accounts. The transitory provision thereof states VI. TRANSITORY PROVISIONS All trust accounts issued pursuant to Administrative Order No. 1, S. 1993 covering landholdings not yet transferred in the name of the Republic of the Philippines as of July 5, 1996 shall immediately be converted to deposit accounts in the name of the landowners concerned. All Provincial Agrarian Reform Officers and Regional Directors are directed to immediately inventory the claim folders referred to in the preceding paragraph, wherever they may be found and request the LBP to establish the requisite deposit under this Administrative Order and to issue a new certification to that effect. The Original Certificate of Trust Deposit previously issued should be attached to the request of the DAR in order that the same may be replaced with a new one. All previously established Trust Deposits which served as the basis for the transfer of the landowners title to the Republic of the Philippines shall likewise be converted to deposits in cash and in bonds. The Bureau of Land Acquisition and Distribution shall coordinate with the LBP for this purpose. In light of the foregoing, the trust account opened by LBP in the name of Wycoco as the mode of payment of just compensation should be converted to a deposit account. Such conversion should be retroactive in application in order to rectify the error committed by the DAR in opening a trust account and to grant the landowners the benefits concomitant to payment in cash or LBP bonds prior to the ruling of the Court in Land Bank of the Philippines v. Court of Appeals. Otherwise, petitioners right to payment of just and valid compensation for the expropriation of his property would be violated.37 The interest earnings accruing on the deposit account of landowners would suffice to compensate them pending payment of just compensation. In some expropriation cases, the Court imposed an interest of 12% per annum on the just compensation due the landowner. It must be stressed, however, that in these cases, the imposition of interest was in the nature of damages for delay in payment which in effect makes the obligation on the part of the government one of forbearance.38 It follows that the interest in the form of damages cannot be applied where there was prompt and valid payment of just compensation. Conversely, where there was delay in tendering a valid payment of just compensation, imposition of interest is in order. This is because the replacement of the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for essentially, the determination of this compensation was marred by lack of due process.39

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Accordingly, the just compensation due Wycoco should bear 12% interest per annum from the time LBP opened a trust account in his name up to the time said account was actually converted into cash and LBP bonds deposit accounts. The basis of the 12% interest would be the just compensation that would be determined by the Special Agrarian Court upon remand of the instant case. In the same vein, the amount determined by the Special Agrarian Court would also be the basis of the interest income on the cash and bond deposits due Wycoco from the time of the taking of the property up to the time of actual payment of just compensation. The award of actual damages for unrealized profits should be deleted. The amount of loss must not only be capable of proof, but must be proven with a reasonable degree of certainty. The claim must be premised upon competent proof or upon the best evidence obtainable, such as receipts or other documentary proof.40 None having been presented in the instant case, the claim for unrealized profits cannot be granted. From the foregoing discussion, it is clear that Wycocos petition for mandamus in G.R. No. 146733 should be dismissed. The decision of the Regional Trial Court of Cabanatuan City, Branch 23, acting as Special Agrarian Court in Agrarian Case No. 91 (AF), cannot be enforced because there is a need to remand the case to the trial court for determination of just compensation. Likewise, the prayer for the inhibition of Judge Rodrigo S. Caspillo in Agrarian Case No. 91 (AF) is denied for lack of basis. WHEREFORE, in view of all the foregoing, the petition in G.R. No. 140160 is PARTIALLY GRANTED. Agrarian Case No. 91 (AF) is REMANDED to the Regional Trial Court of Cabanatuan City, Branch 23, for the determination of just compensation. The petition for mandamus in G.R. No. 146733 is dismissed. G.R. Nos. 60225-26 May 8, 1992 NATIONAL POWER CORPORATION, petitioner, vs. HONORABLE ZAIN B. ANGAS, District Judge of the Court of First Instance of Lanao del Sur, HADJI DALUMA KINIDAR, EBRA ALI and/or GASNARA ALI (intervenors), MANGORSI CASAN, CASNANGAN BATUGAN, PUNDAMARUG ATOCAL, PASAYOD PADO, DIMAAMPAO BAUTE, CASNANGAN BAUTE, DIMAPORO SUBANG, TAMBILAWAN OTE, MANISUN ATOCAL, MASACAL TOMIARA (In Civil Case No. 2277) and LACSAMAN BATUGAN, and/or GUIMBA SHIPPING & DEVELOPMENT CORPORATION, MAGANCONG DIGAYAN, MOCTARA LAMPACO, LAMPACO PASANDALAN, DIMAPORO SUBANG, HADJI DALUMA KINIDAR, DIMAAMPAO BAUTE, PANGONOTAN COSNA TAGOL, SALACOP DIMACALING, HADJI SITTIE SOHRA LINANG BATARA, BERTUDAN PIMPING and/or CADUROG PIMPING, BUTUAN TAGOL, DISANGCOPAN MARABONG, and HADJI SALIC SAWA (In Civil Case No. 2248), respondents.

Lucio C. Dimnatang Saro for private respondents. PARAS, J.:

Badelles

for

petitioner.

The basic issue in this original action for certiorari and mandamus filed by the National Power Corporation is whether or not, in the computation of the legal rate of interest on just compensation for expropriated lands, the law applicable is Article 2209 of the Civil Code which prescribes a 6% legal interest rate or Central Bank Circular No. 416 which fixed the legal interest rate at 12% per annum. Pending consideration of this code on the merits, petitioner seeks the issuance of a writ of preliminary injunction and/or restraining order to restrain or enjoin the respondent judge of the lower court from enforcing the herein assailed orders and from further acting or proceeding with Civil Case Nos. 2248 and 2277. The following are the antecedents of the case: On April 13, 1974 and December 3, 1974, petitioner National Power Corporation, a government-owned and controlled corporation and the agency through which the government undertakes the on-going infrastructure and development projects throughout the country, filed two complaints for eminent domain against private respondents with the Court of First Instance (now Regional Trial Court) of Lanao del Sur, docketed as Civil Case No. 2248 and Civil Case No. 2277, respectively. The complaint which sought to expropriate certain specified lots situated at Limogao, Saguiaran, Lanao del Sur was for the purpose of the development of hydro-electric power and production of electricity as well as the erection of such subsidiary works and constructions as may be necessarily connected therewith. Both cases were jointly tried upon agreement of the parties. After responsive pleadings were filed and issues joined, a series of hearings before courtdesignated commissioners were held. On June 15, 1979, a consolidated decision in Civil Cases Nos. 2248 and 2277 was rendered by the lower court, declaring and confirming that the lots mentioned and described in the complaints have entirely been lawfully condemned and expropriated by the petitioner, and ordering the latter to pay the private respondents certain sums of money as just compensation for their lands expropriated "with legal interest thereon . . . until fully paid." Two consecutive motions for reconsideration of the said consolidated decision were filed by the petitioner. The same were denied by the respondent court. Petitioner did not appeal the aforesaid consolidated decision, which became final and executory. Thus, on May 16, 1980, one of the private respondents (Sittie Sohra Batara) filed an ex-parte motion for the execution of the June 15, 1979 decision, praying that petitioner be directed to pay her the unpaid balance of P14,300.00 for the lands expropriated from her, including legal interest which she computed at 6% per annum. The said motion was granted by the lower court. Thereafter, the lower court directed the petitioner to deposit with its Clerk of Court the sums of money as adjudged in the joint decision dated June 15, 1979. Petitioner complied with said order and deposited the sums of money with interest computed at 6% per annum. On February 10, 1981, one of the private respondents (Pangonatan Cosna Tagol), through counsel, filed with the trial court an ex-parte motion in Civil Case No. 2248 praying, for the first time, that the legal interest on the just compensation awarded to her by the court be computed at 12% per annum as allegedly "authorized under and by virtue of Circular No. 416 of the Central Bank issued pursuant to Presidential Decree No. 116 and in a decision of the Supreme Court that legal interest allowed in the judgment of the courts, in the absence of express contract, shall be computed at 12% per annum." (Brief for Respondents, p. 3) On February 11, 1981, the lower court granted the said motion allowing 12% interest per annum. (Annex L, Petition). Subsequently, the other private respondents filed motions also praying that the legal interest on the just compensation awarded to them be computed at 12% per annum, on the basis of which the lower court issued on March 10, 1981 and August 28, 1981 orders bearing similar import. Petitioner moved for a reconsideration of the lower court's last order dated August 28, 1981, alleging that the main decision had already become final and executory with its compliance of depositing the sums of money as just compensation for the lands condemned, with legal interest at 6% per annum; that the said main decision can no longer be modified or changed by the lower court; and that Presidential Decree No. 116 is not applicable to this case because it is Art. 2209 of the Civil Code which applies. On January 25, 1982, the lower court denied petitioner's, motion for reconsideration, stating that the rate of interest at the time of the promulgation of the June 15, 1981 decision is that prescribed by Central Bank Circular No. 416 issued pursuant to Presidential Decree No. 116, which is 12% per annum, and that it did not modify or change but merely amplified its order of August 28, 1981 in the determination of the legal interest. Petitioner brings the case to Us for a determination of which legal interest is applicable to the transaction in question. Central Bank Circular No. 416 reads: By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise known as the "Usury Law," the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve per cent (12%) per annum. It is clear from the foregoing provision that the Central Bank circular applies only to loan or forbearance of money, goods or credits. This has already been settled in several cases decided by this Court. Private respondents, however, take exception to the inclusion of the term "judgments" in the said circular, claiming that such term refers to any judgment directing the payment of legal interest, which term includes the questioned judgment of the lower court in the case at bar. Private respondents' contention is bereft of merit. The term "judgments" as used in Section 1 of the Usury Law, as well as in Central Bank Circular No. 416, should be interpreted to mean only judgments involving loan or forbearance of money, goods or credits, following the principle of ejusdem generis.

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Under this doctrine, where general terms follow the designation of particular things or classes of persons or subjects, the general term will be construed to comprehend those things or persons of the same class or of the same nature as those specifically enumerated (Crawford, Statutory Construction, p. 191; Go Tiaco vs. Union Ins. Society of Canton, 40 Phil. 40; Mutuc vs. COMELEC, 36 SCRA 228) The purpose of the rule on ejusdem generis is to give effect to both the particular and general words, by treating the particular words as indicating the class and the general words as including all that is embraced in said class, although not specifically named by the particular words. This is justified on the ground that if the lawmaking body intended the general terms to be used in their unrestricted sense, it would have not made an enumeration of particular subjects but would have used only general terms (2 Sutherland, Statutory Construction, 3rd ed., pp. 395-400). Applying the said rule on statutory construction to Central Bank Circular No. 416, the general term "judgments" can refer only to judgments in cases involving loans or forbearance of any money, goods or credits. As significantly laid down by this Court in the case of Reformina vs. Tomol, 139 SCRA 260: The judgments spoken of and referred to are judgments in litigations involving loans or forbearance of any money, goods or credits. Any other kind of monetary judgment which has nothing to do with, nor involving loans or forbearance of any money, goods or credits does not fall within the coverage of the said law for it is not within the ambit of the authority granted to the Central Bank. The Monetary Board may not tread on forbidden grounds. It cannot rewrite other laws. That function is vested solely with the legislative authority. It is axiomatic in legal hermeneutics that statutes should be construed as a whole and not as a series of disconnected articles and phrases. In the absence of a clear contrary intention, words and phrases in statutes should not be interpreted in isolation from one another. A word or phrase in a statute is always used in association with other words or phrases and its meaning may thus be modified or restricted by the latter. Obviously, therefore, Art. 2209 of the Civil Code, and not Central Bank Circular No. 416, is the law applicable to the case at bar. Said law reads: Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs a delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six percent per annum. The Central Bank circular applies only to loan or forbearance of money, goods or credits and to judgments involving such loan or forbearance of money, goods or credits. This is evident not only from said circular but also from Presidential Decree No. 116, which amended Act No. 2655, otherwise known as the Usury Law. On the other hand, Art. 2209 of the Civil Code applies to transactions requiring the payment of indemnities as damages, in connection with any delay in the performance of the obligation arising therefrom other than those covering loan or forbearance of money, goods or credits. In the case at bar, the transaction involved is clearly not a loan or forbearance of money, goods or credits but expropriation of certain parcels of land for a public purpose, the payment of which is without stipulation regarding interest, and the interest adjudged by the trial court is in the nature of indemnity for damages. The legal interest required to be paid on the amount of just compensation for the properties expropriated is manifestly in the form of indemnity for damages for the delay in the payment thereof. Therefore, since the kind of interest involved in the joint judgment of the lower court sought to be enforced in this case is interest by way of damages, and not by way of earnings from loans, etc. Art. 2209 of the Civil Code shall apply. As for private respondents' argument that Central Bank Circular No. 416 impliedly repealed or modified Art. 2209 of the Civil Code, suffice it to state that repeals or even amendments by implication are not favored if two laws can be fairly reconciled. The Courts are slow to hold that one statute has repealed another by implication, and they will not make such an adjudication if they can refrain from doing so, or if they can arrive at another result by any construction which is just and reasonable. Besides, the courts will not enlarge the meaning of one act in order to decide that it repeals another by implication, nor will they adopt an interpretation leading to an adjudication of repeal by implication unless it is inevitable and a clear and explicit reason therefor can be adduced. (82 C.J.S. 479-486). In this case, Central Bank Circular No. 416 and Art. 2209 of the Civil Code contemplate different situations and apply to different transactions. In transactions involving loan or forbearance of money, goods or credits, as well as judgments relating to such loan or forbearance of money, goods or credits, the Central Bank circular applies. It is only in such transactions or judgments where the Presidential Decree allowed the Monetary Board to dip its fingers into. On the other hand, in cases requiring the payment of indemnities as damages, in connection with any delay in the performance of an obligation other than those involving loan or forbearance of money, goods or credits, Art. 2209 of the Civil Code applies. For the Court, this is the most fair, reasonable, and logical interpretation of the two laws. We do not see any conflict between Central Bank Circular No. 416 and Art. 2209 of the Civil Code or any reason to hold that the former has repealed the latter by implication. WHEREFORE, the petition is GRANTED. The Orders promulgated on February 11, 1981, March 10, 1981, August 28, 1981 and January 25, 1982 (as to the recomputation of interest at 12% per annum) are ANNULLED and SET ASIDE. It is hereby declared that the computation of legal interest at 6% per annum is the correct and valid legal interest allowed in payments of just compensation for lands expropriated for public use to herein private respondents by the Government through the National Power Corporation. The injunction heretofore granted is hereby made permanent. No costs. G.R. No. 142304 June 20, 2001 CITY OF MANILA, petitioner, vs. OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA AND ADELAIDA, ALL SURNAMED SERRANO, respondents. Mendoza, J.: This is a petition for review on certiorari of the decision, dated November 16, 1999, and resolution, dated February 23, 2000, of the Court of Appeals reversing the order, dated December 15, 1998, of the Regional Trial Court, Branch 16, Manila and perpetually enjoining it from proceeding with the petitioner's complaint for eminent domain in Civil Case No. 94-72282. The facts are as follows: 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, which was duly approved by the Regional Trial Court, Branch 53, Manila in its decision, dated May 8, 1986.2 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 1-C), 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

25

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. The dispositive portion of its decision reads: WHEREFORE, in view of all the foregoing, the instant petition is hereby GIVEN DUE COURSE and accordingly GRANTED. The Order, dated December 15, 1998, denying petitioner's motion for reconsideration issued by the respondent Regional Trial Court of Manila, Branch 16, in Civil Case No. 94-72282 is hereby REVERSED and SET ASIDE. Let a writ of injunction issue perpetually enjoining the same respondent court from proceeding with the complaint for eminent domain in Civil Case No. 94-72282,14 In its resolution, dated February 23, 2000, the Court of Appeals likewise denied two motions for reconsideration filed by petitioner.l5 Hence this petition. Petitioner contends that the Court of Appeals erred in -1) Giving due course to the petition of the Serranos under Rule 65 notwithstanding its own declaration of the impropriety of the resort to the writ and filing thereof with the wrong appellate court; 2) Concluding that the Order of October 9, 1998 which authorizes the immediate entry of the City as the expropriating agency into the property sough to be expropriated upon the deposit of the provisionally fixed fair market value thereof as tantamount to condemnation of the property without prior showing of compliance with the acquisition of other lands enumerated in Sec. 9 of R.A. 7279 ergo a violation of due process of the Serranos by the doctrinaire application of FILSTREAM ruling and corrollarily, 3) In prohibiting permanently, by writ of injunction, the trial court from proceeding with a complaint for expropriation of the City in Civil Case No. 94-72282.16 We will deal with these contentions in the order they are presented. First. Petitioner contends that the respondents' remedy against the order of the trial court granting a writ of possession was not to file a petition for certiorari under Rule 65 but a petition for review under Rule 45 which should have been filed in the Supreme Court.17 This contention has no merit. A petition for review under Rule 45 is a mode of appeal. Accordingly, it could not have been resorted to by the respondents inasmuch as the order of the trial court granting a writ of possession was merely interlocutory from which no appeal could be taken. Rule 45, 1 of the 1997 Rules for Civil Procedure applies only to final judgments or orders of the Court of Appeals, the Sandiganbayan, and the Regional Trial Court. On the other hand, a petition for certiorari is the suitable remedy in view of Rule 65, 1 which provides: When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainly and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as laws and justice may require. Respondents' petition before the Court of Appeals alleged that the trial court had acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the order, dated December 15, 1998, resolving that Lot 1-C is not exempt from expropriation and ordering the issuance of the writ of possession in favor of petitioner.18 Second. Petitioner faults the Court of Appeals for deciding issues not raised in the trial court, specifically the question of whether or not there was compliance with 9 and 10 of RA. No. 7279. It argues that the sole defense set up by respondents in their petition before the Court of Appeals was that their property was exempted from expropriation because it comes within the purview of a "small property" as defined by R.A. No. 7279 . Accordingly, the Court of Appeals should not have applied the doctrine laid down by this Court in the Filstream19 case as such issue was not raised by respondents in their petition before the Court of Appeals. This contention likewise has no merit. In their petition before the Court of Appeals, respondents raised the following issues: 1. Whether or not the subject Lot 1-C with an area of 343.10 square meters covered by T.C.T. No. 226048 in the name of petitioners' mother, the late Demetria [De Guia] Serrano, may be lawfully expropriated "for the public purpose of providing landless occupants thereof homelots of their own under the "land-for-the landless program of respondent City of Manila." 2. Whether or not the expropriation of the said Lot l-C by respondent City of Manila violates the equal protection clause of the Constitution, since petitioners, with the exemption of petitioner Oscar G. Serranno, who are likewise landless are actual occupants hereof. 3. Whether or not Lot 1-C is or may be exempted from expropriation pursuant to R.A. 7279, otherwise known as the Urban Development and Housing Act of 1992.20 It is clear that respondents raised in issue the propriety of the expropriation of their property in connection with RA. No. 7279. Although what was discussed at length in their petition before the Court of Appeals was whether or not the said property could be considered a small property within the purview of the exemption under the said law, the other provisions of the said law concerning expropriation proceedings need also be looked into to address the first issue raised by the respondents and to determine whether or not expropriation of Lot 1-C was proper under the circumstances. The Court of Appeals properly considered relevant provisions of R A. No.7279 to determine the issues raised by respondents. Whether or not it correctly applied the doctrine laid down in Filstream in resolving the issues raised by respondents, however, is a different matter altogether, and this brings us to the next point. Third. Petitioner contends that the Court of Appeals erroneously presumed that Lot 1-C has been ordered condemned in its 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, 2. At that stage, it was premature to determine whether the requirements of RA. No. 7279, 9 - 10 have been complied with since no evidentiary hearing had yet been conducted by the trial court.21 This contention is well taken. Rule 67, 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. RA. No 7279 in pertinent parts provide: SEC. 9. Priorities in the Acquisition of Land Lands for socialized housing shall be acquired in the following order:

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(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including government owned and controlled corporations and their subsidiaries; (b) Alienable lands of the public domain; (c) Unregistered or abandoned and idle lands; (d) Those within the declares Areas or Priority Development, Zone Improvement Program sites, and Slum Improvement and Resettlement Programs sites which have not yet been acquired; (e) Bagong Lipunan Improvement and Sites and Services or BLISS sites which have not yet been acquired, and; (f) Privately-owned lands. Where on-site development is found more practicable and advantageously to the beneficiaries, the priorities mentioned in this section shall not apply. The local government units shall give budgetary priority on-site development of government lands. SEC. 10. Modes of Lands Acquisition. -- The modes of acquiring lands for purposes of this Act shall include, amount others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, joint-venture agreement, negotiated purchase, and expropriation: Provided, however; That expropriation shall be resorted to only when other modes of acquisition have been exhausted: Provided, further; That were expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: Provided finally, That abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court. For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by the local government units, or by the National Housing Authority primarily through negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the lands shall be given the right of first refusal. 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.24 WHEREFORE, the decision, dated November 16,1999, and resolution, dated February 23, 2000, of the Court of Appeals are REVERSED and the order of the trial court, dated December 15,1998, is REINSTATED. This case is REMANDED to the trial court to further proceedings. 1wphi1.nt G.R. No. 175983 April 16, 2009 METROPOLITAN CEBU WATER DISTRICT (MCWD), Petitioner, vs. J. KING AND SONS COMPANY, INC., Respondent. DECISION TINGA, J.: Before us is a Rule 45 petition1 which seeks the reversal of the decision2 and resolution3 of the Court of Appeals in CA-G.R. CEB-SP No. 00810. The Court of Appeals decision nullified the orders4 and the writ of possession5 issued by the Regional Trial Court (RTC) of Cebu City, Branch 23, allowing petitioner to take possession of respondents property. Petitioner Metropolitan Cebu Water District is a government-owned and controlled corporation created pursuant to Presidential Decree No. 198, as amended. Among its purposes are to acquire, install, improve, maintain and operate water supply and distribution systems within the boundaries of the District.6 Petitioner wanted to acquire a five (5)-square meter lot occupied by its production well. The lot is part of respondents property covered by TCT No. 168605 and located in Banilad, Cebu City. Petitioner initiated negotiations7 with respondent J. King and Sons Company, Inc. for the voluntary sale of the latters property. Respondent did not acquiesce to petitioners proposal. After the negotiations had failed, petitioner pursuant to its charter8 initiated expropriation proceedings through Board Resolution No. 015-20049 which was duly approved by the Local Water Utilities Administration (LWUA).10 On 10 November 2004, petitioner filed a complaint11 to expropriate the five (5)-square meter portion of respondents property. On 7 February 2005, petitioner filed a motion12 for the issuance of a writ of possession. Petitioner wanted to tender the amount to respondent during a rescheduled hearing which petitioners counsel had failed to attend.13 Petitioner deposited14 with the Clerk of Court the amount of P17,500.00 equivalent to one hundred percent (100%) of the current zonal value of the property which the Bureau of Internal Revenue had pegged at P3,500.00 per square meter.15 Subsequently, the trial court granted the motion16 and issued the writ of possession.17 Respondent moved for reconsideration but the motion was denied.18 Respondent filed a petition19 for certiorari under Rule 65 with the Court of Appeals. It sought the issuance of a temporary restraining order (TRO) which the Court of Appeals granted.20 Thus, petitioner was not able to gain entry to the lot.21 On 26 July 2006, the Court of Appeals rendered the assailed decision22 granting respondents petition. It ruled that the board resolution which authorized the filing of the expropriation complaint lacked exactitude and particularity which made it invalid; that there was no genuine necessity for the expropriation of the five (5)-square meter lot and; that the reliance on Republic Act (R.A.) No. 8974 in fixing the value of the property contravenes the judicial determination of just compensation. Petitioner moved23 for reconsideration but the motion was rejected.24 Hence, this petition. The issues raised by petitioner can be summarized as follows: 1. Whether there was sufficient authority from the petitioners board of directors to institute the expropriation complaint; and 2. Whether the procedure in obtaining a writ of possession was properly observed. Eminent domain is the right of the state to acquire private property for public use upon payment of just compensation. 25 The power of eminent domain is inseparable in sovereignty being essential to the existence of the State and inherent in government. Its exercise is proscribed by only two Constitutional requirements: first, that there must be just compensation, and second, that no person shall be deprived of life, liberty or property without due process of law26 . As an inherent sovereign prerogative, the power to expropriate pertains to the legislature. However, Congress may, as in fact it often does, delegate the exercise of the power to government agencies, public officials and quasi-public entities. Petitioner is one of the numerous government offices so empowered. Under its charter, P.D. No. 198, as amended,27 petitioner is explicitly granted the power of eminent domain. On 7 November 2000, Congress enacted R.A. No. 8974, entitled "An Act To Facilitate The Acquisition Of Right-Of-Way, Site Or Location For National Government Infrastructure Projects And For Other Purposes." Section 2 thereof defines national government projects as follows: Sec. 2. National Government Projects.The term "national government projects" shall refer to all national government infrastructure, engineering works and service contracts, including projects undertaken by government-owned and -controlled corporations, all projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the Build-Operate-and-Transfer Law, and other related and necessary activities, such as site acquisition, supply and/or installation of equipment and materials, implementation, construction, completion, operation, maintenance, improvement, repair and rehabilitation, regardless of source of funding." (emphasis ours) R.A. No. 8974 includes projects undertaken by government owned and controlled corporations, 28 such as petitioner. Moreover, the Implementing Rules and Regulations of R.A. No. 8974 explicitly includes water supply, sewerage, and waste management facilities among the national government projects covered by the law.29 It is beyond question, therefore, that R.A. No. 8974 applies to the expropriation subject of this case. The Court of Appeals held that the board resolution authorizing the expropriation lacked exactitude and particularity. It described the board resolution as akin to a general warrant in criminal law and as such declared it invalid. Respondent reiterates the same argument in its comment and adds that petitioners exercise of the power of eminent domain was not reviewed by the LWUA.

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A corporation does not have powers beyond those expressly conferred upon it by its enabling law. Petitioners charter provides that it has the powers, rights and privileges given to private corporations under existing laws, in addition to the powers granted in it. 30 All the powers, privileges, and duties of the district shall be exercised and performed by and through the board and that any executive, administrative or ministerial power may be delegated and redelegated by the board to any of its officers or agents for such purpose.31 Being a corporation, petitioner can exercise its powers only through its board of directors. For petitioner to exercise its power of eminent domain, two requirements should be met, namely: first, its board of directors passed a resolution authorizing the expropriation, and; second, the exercise of the power of eminent domain was subjected to review by the LWUA. In this case, petitioners board of directors approved on 27 February 2004, Board Resolution No. 015-200432 authorizing its general manager to file expropriation and other cases. Moreover, the LWUA did review and gave its stamp of approval to the filing of a complaint for the expropriation of respondents lot. Specifically, the LWUA through its Administrator, Lorenzo H. Jamora, wrote petitioners manager, Armando H. Paredes, a letter dated 28 February 200533 authorizing petitioner to file the expropriation case "against the owner of the five-square meter portion of Lot No. 921-A covered by TCT No. 168805, pursuant to Section 25 of P.D. No. 198, as amended." The letter not only explicitly debunks respondents claim that there was no authorization from LWUA but it also identifies the lot sought to be expropriated with sufficient particularity. It is settled that the validity of a complaint may be questioned immediately upon its filing through a motion to dismiss or raised thereafter as an affirmative defense. However, there is no need to further belabor the issue since it is established that petitioner has the legal capacity to institute the expropriation complaint. Anent the second issue involving the issuance of a writ of possession, a discussion on the various stages in an expropriation proceeding is necessary. The general rule is that upon filing of the expropriation complaint, the plaintiff has the right to take or enter into possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation. An exception to this procedure is provided by R.A. No. 897434 . It requires the payment of one hundred percent (100%) of the zonal value of the property to be expropriated to entitle the plaintiff to a writ of possession. In an expropriation proceeding there are two stages, first, is the determination of the validity of the expropriation, and second is the determination of just compensation.35 In Tan v. Republic,36 we explained the two (2) stages in an expropriation proceeding to wit: (1) Determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, with condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned for the public use or purpose described in the complaint, upon payment of just compensation. An order of expropriation is final. An order of dismissal, if this be ordained, would be a final one, as it finally disposes of the action and leaves nothing more to be done by the courts on the merits. The order of expropriation would also be a final one for after its issuance, no objection to the right of condemnation shall be heard. The order of expropriation may be appealed by any party aggrieved thereby by filing a record on appeal. (2) Determination by the court of the just compensation for the property sought to be taken with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before the court and findings of the commissioners would likewise be a final one, as it would leave nothing more to be done by the court regarding the issue. A second and separate appeal may be taken from this order fixing the just compensation.37 Thus, the determination of the necessity of the expropriation is a justiciable question which can only be resolved during the first stage of an expropriation proceeding. Respondents claim that the expropriated property is too small to be considered for public use can only be resolved during that stage. Further, the Court of Appeals ruled that Section 4 of R.A. No. 8974 runs counter to the express mandate of Section 2 of Rule 67. 38 It held that the law undermined the principle that the determination of just compensation is a judicial function. However, this Court has already settled the issue. In Republic v. Gingoyon,39 this Court held that: It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule 67 with the scheme of "immediate payment" in cases involving national government infrastructure projects. xxx It likewise bears noting that the appropriate standard of just compensation is a substantive matter. It is well within the province of the legislature to fix the standard, which it did through the enactment of Rep. Act No. 8974. Specifically, this prescribes the new standards in determining the amount of just compensation in expropriation cases relating to national government infrastructure projects, as well as the manner of payment thereof. At the same time, Section 14 of the Implementing Rules recognizes the continued applicability of Rule 67 on procedural aspects when it provides "all matters regarding defenses and objections to the complaint, issues on uncertain ownership and conflicting claims, effects of appeal on the rights of the parties, and such other incidents affecting the complaint shall be resolved under the provisions on expropriation of Rule 67 of the Rules of Court.40 R.A. No. 8974 does not take away from the courts the power to judicially determine the amount of just compensation. The law merely sets the minimum price of the property as the provisional value. Thus, the amount of just compensation must still be determined by the courts according to the standards set forth in Section 541 of R.A. No. 8974. R.A. No. 8974 provides a different scheme for the obtention of a writ of possession. The law does not require a deposit with a government bank; instead it requires the government to immediately pay the property owner.42 The provisional character of this payment means that it is not yet final, yet, sufficient under the law to entitle the Government to the writ of possession over the expropriated property. 43 The provisional payment is a prerequisite44 and a trigger45 for the issuance of the writ of possession. In Gingoyon,46 we held that: It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule 67 with the scheme of "immediate payment" in cases involving national government infrastructure projects.47 xxx Rep. Act. No. 8974 is plainly clear in imposing the requirement of immediate prepayment, and no amount of statutory deconstruction can evade such requisite. It enshrines a new approach towards eminent domain that reconciles the inherent unease attending expropriation proceedings with a position of fundamental equity. While expropriation proceedings have always demanded just compensation in exchange for private property, the previous deposit requirement impeded immediate compensation to the private owner, especially in cases wherein the determination of the final amount of compensation would prove highly disputed. Under the new modality prescribed by Rep. Act. No. 8974, the private owner sees immediate monetary recompense, with the same degree of speed as the taking of his/her property.481avvphi1 Petitioner was supposed to tender the provisional payment directly to respondent during a hearing which it had failed to attend. Petitioner, then, deposited the provisional payment with the court. The trial court did not commit an error in accepting the deposit and in issuing the writ of possession. The deposit of the provisional amount with the court is equivalent to payment. Indeed, Section 4 of R.A. No. 8974 is emphatic to the effect that "upon compliance with the guidelinesthe court shall immediately issue to the implementing agency an order to take possession of the property and start the implementation of the project."49 Under this statutory provision, when the government, its agencies or government-owned and controlled corporations, make the required provisional payment, the trial court has a ministerial duty to issue a writ of possession. In Capitol Steel Corporation v. PHIVIDEC Industrial Authority,50 we held that: Upon compliance with the requirements, a petitioner in an expropriation caseis entitled to a writ of possession as a matter of right and it becomes the ministerial duty of the trial court to forthwith issue the writ of possession. No hearing is required and the court neither exercises its discretion or judgment in determining the amount of the provisional value of the properties to be expropriated as the legislature has fixed the amount under Section 4 of R.A. No. 8974.51 (emphasis ours) It is mandatory on the trial courts part to issue the writ of possession and on the sheriffs part to deliver possession of respondents property to petitioner pursuant to the writ.

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WHEREFORE, the Court of Appeals Decision dated 26 July 2006 and Resolution dated 28 September 2006 are REVERSED. The ORDERS of the Regional Trial Court dated 01 April 2005 and 9 May 2005 are hereby REINSTATED. The Regional Trial Court is further DIRECTED to immediately REMIT the amount of P17,500.00 to respondent and to REQUIRE the sheriff to implement the writ of possession. The case is REMANDED to the trial court for further proceedings. G.R. No. 129079 December 2, 1998 REPUBLIC OF THE PHILIPPINES represented by the Department of Trade and Industry, petitioner, vs. HON. LUCENITO N. TAGLE, Presiding Judge of RTC, Imus, Cavite, Branch 20; and HELENA Z. BENITEZ, respondents. PANGANIBAN, J.: Executive Order No. 1035 1 (EO 1035) was enacted to facilitate government acquisition of private property to be used for infrastructure or other development projects. Under Section 7 thereof, it is the ministerial duty of courts to issue a writ of possession within five days from the time the government deposits 10 percent of just compensation payable. Moreover, such writ cannot be nullified by an adverse decision in an ejectment proceeding involving the same property and the same parties.

Statement of the Case

This principium is used by this Court in resolving this petition for certiorari under Rule 65 assailing the Orders dated July 26, 1996 2 and February 20, 1997, 3 promulgated by the Regional Trial Court 4 of Imus, Cavite Civil Case No. 1277-96. The first ruling quashed the May 21, 1996 writ of possession issued earlier, pursuant to EO 1035, and the second denied petitioner's plea for reconsideration.

The Antecedent Facts

The facts, as narrated in the solicitor general's Memorandum, are as follows: Private respondent Helena Z. Benitez is the registered owner of two (2) parcels of land located in Barangay Salawag, Dasmarias, Cavite covered [by] TCT No. 14701 containing an area of Four Hundred Eighty Three Thousand Three Hundred Thirty One (483,331) square meters more or less. Sometime in September 1982, the Philippine Government, through the Philippine Human Resources Development Center (PHRDC for short), an agency under the then Ministry of Human Settlements, negotiated with the Japanese International Cooperation Agency (JICA) Survey Team on the technicalities of the establishment of the ASEAN Human Resources Development Project in the Philippines. Among the five (5) main programs of the proposed project was Program III (Construction Manpower Development) which involved the establishment of a Construction Manpower Development Center (CMDC for short), an agency now under the Department of Trade and Industry. On March 30, 1983, PHRDC and private respondent Helena Z. Benitez (BENITEZ for short), signed a Memorandum of Agreement (Annex 'C', Petition) which provides, among others, [that] BENITEZ "undertakes to lease within the period of twenty (20) years and/or sell a portion of that property (which is no less than ten-hectares)" in favor of PHRDC "which likewise agrees to lease" within period of twenty (20) years and/or buy said property site". On September 22, 1983, the Philippine Women's University (PWU for short) and BENITEZ granted a permit to PHRDC "to occupy and use" the land in question and "to undertake land development, electrical and road network installations and other related works necessary to attain its objectives . . .". Pursuant thereto, the CMDF took possession of the property and erected buildings and other related facilities necessary for its operations. Accordingly, in December 1983, PWU entered into a purported contract of lease with PHRDC on a ten (10)-hectare piece of land which stipulated, among other things, a rental of P200,000.00 per annum for an initial term of four (4) years from January 1, 1984 to January 1, 1988, with an option granted to PHRDC to renew the lease, upon agreement of both parties, "for a further period up to, but not exceeding twenty (20) years from the expiration of the initial term hereof . . .". PWU entered into the aforesaid lease contract, dated December 3, 1983, purporting to be the donee of the property involved in a deed of donation executed by BENITEZ in its favor; which deed of donation, however, was executed only in December 1984, much later than the execution of the lease contract. After the expiration of the lease contract on January 1, 1988, negotiations began on the purchase of the property in question on a plain offer of BENITEZ to sell the same. In her letter of 21 August 1989, BENITEZ advised the PHRDC, through its General Manager Mr. Juvenal Catajoy, to "pursue the successful completion of the sale of the subject 7-hectare property within 30 days from August 31, 1989 at the agreed price of P70.00 per square meter". Again, in BENITEZ' letter of February 4, 1991, she stated the position of the University regarding the negotiated sale of the 7-hectare property in Dasmarias, Cavite' and "confirme(d) that the agreed purchase price in 1989 [was] P70.00 per sq. m. . . .". In view of the agreement on the sale of the land in question, PHRDC prepared a Deed of Absolute Sale with BENITEZ, as vendor, and PHRDC and CMDF, as vendees, duly represented by then Undersecretary Gloria M. Arroyo, for the signature of BENITEZ. Subsequently, BENITEZ and PHRDC, represented by PHRDC General Manager Juvenal Catajoy, Jr., agreed that the payment of "rentals for the Dasmarias lot [would] cease effective July 1, 1989 in view of on-going negotiations for the eventual sale of the lot". However, for reasons known only to her, BENITEZ did not sign the Deed of Absolute Sale thus reneging on her commitment to sell the lot in question. Thereafter, in a letter dated August 15, 1995, BENITEZ and PWU demanded from PHRDC the payment of rentals and to vacate the premises within 30 days from notice. It later filed an unlawful detainer suit against petitioner. Falling to acquire the properly involved through negotiated sale, petitioner through the Department of Trade and Industry, to which CMDF is attached, instituted a complaint for Eminent Domain, pursuant to be provisions of Executive Order No. 1035, dated June 25, 1985. In compliance with Section 2, Rule 67 of the Rules of Court, as amended by Presidential Decree No. 42, petitioner deposited with the Philippine National Bank (PNB), Makati Avenue Branch, in favor of defendant, Seven Hundred Eight Thousand Four Hundred Ninety Pesos (P708,490.00) an amount equivalent to the provisional value of the land sought to be expropriated. On May 16, 1996, petitioner filed a Motion for Issuance of a Writ of Possession. On May 24, 1996 respondent Judge issued an Order (Annex 'D', Petition) granting petitioner's Motion for issuance of a Writ of Possession. In compliance with the Order of May 24, 1996, the Clerk of Court issued a Writ of Possession (Annex 'E', Petition) which the Sheriff duly implemented. Private respondent filed a Motion for Reconsideration of the Order of May 24, 1996 . . . which petitioner opposed. On July 26, 1996, respondent Judge issued the assailed Order (Annex 'A', Petition) the dispositive portion of which reads: WHEREFORE, in view of the foregoing, defendant's Motion for Reconsideration is granted. Accordingly, the Order dated May 24, 1996 is hereby set aside and reconsidered. The Writ of Possession issued in consonance therewith is hereby quashed. On August 21, 1996, petitioner filed a Motion for Reconsideration (Annex 'F', Petition) of the above Order. Private respondent filed an Opposition (Annex 'G', Petition) thereto. On February 20, 1997, respondent Judge denied petitioner's motion for reconsideration (Annex 'B', Petition). 5

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The foregoing narration of the facts was not contradicted by private respondent. 6 Not satisfied by the court a quo's rulings, petitioner thus elevated the matter to this Court. 7

The Issue
In its Memorandum, petitioner submits that "[t]he only legal issue raised in the petition is whether or not respondent judge committed grave abuse of discretion when he quashed the writ of possession which he had previously issued. 8 Put differently, the issue is whether the respondent judge may quash a writ of possession on the ground that the expropriating government agency is already occupying the property sought to be expropriated.

The Court's Ruling

The petition is impressed with merit. Issuance of Writ of Possession:

A Duty Mandated by Law

It is undisputed that the expropriation proceeding in the case at bar involves a development project covered by EO 1035. The site, which is being used by the Philippine Human Resources Development Center (PHRDC), is sought to be expropriated for the establishment and operation of the Association of Southeast Asian Nations (ASEAN) Human Resources Development Project of the Philippines, a component of which is the Construction Manpower Development Center (CMDC), an agency now under the Department of Trade and Industry (DTI). Plainly, the respondent judge is required to issue a writ of possession in favor of petitioner, pursuant to Section 7 of EO 1035, which reads: Sec 7. Expropriation. If the parties fail to agree in negotiation of the sale of the land as provided in the preceding section, the government implementing agency/instrumentality concerned shall have authority to immediately institute expropriation proceedings through the Office of the Solicitor General, as the case may be. The just compensation to be paid for the property acquired through expropriation shall be in accordance with the provisions of P.D. No. 1533. Courts shall give priority to the adjudication of cases on expropriation and shall immediately issue the necessary writ of possession upon deposit by the government implementing agency/instrumentality concerned of an amount equivalent to ten percent (10%) of the amount of just compensation provided under P.D. No. 1533; Provided, That the period within which said writ of possession shall be issued shall in no case extend beyond five (5) days from the date such deposit was made. Under this statutory provision, when the government or its authorized agent makes the required deposit, the trial court has a ministerial duty to issue a writ of possession. We note that the respondent judge indeed issued such writ in favor of petitioner, aptly stating: There being a deposit made by the plaintiff with the Philippine National Bank (PNB) in the amount of P708,490.00 which is equivalent to the assessed value of the property subject matter hereof based on defendant's 1990 tax declaration, coupled with the fact that notice to defendant as landowner has been effected, the Motion for Issuance of Writ of Possession is hereby GRANTED. Forthwith, let a Writ of Possession be issued ordering the Sheriff to place plaintiff in possession of the property involved in this case.
9

Writ of Possession Necessary

As previously mentioned, the trial court reversed itself by later issuing an Order quashing the writ of possession, reasoning as follows: While this Court fully agrees with the plaintiff that it is entitled to be placed in possession of the property subject of the Complaint at once, the position of the parties in the case at bar is different. For, plaintiff admitted that it is already in possession of subject premises. Such being the case, it is obvious that plaintiff's purpose in securing a writ of possession is only to utilize it as leverage in the ejectment suit filed against it by defendant Benitez wherein the issue is possession. 10 In denying the motion for reconsideration of said Order, the respondent judge reiterated his position, adding that "the present case is different from the ordinary action for eminent domain because prior to the filing of this case, there was already an ejectment suit instituted against plaintiff-corporation." 11 Agreeing with the trial court, private respondent contends that "the writ of possession is warranted only in cases where the party seeking [it] is nor yet in possession [of] the property sought to be expropriated." 12 Private respondent underscores Section 2, Rule 67 of the 1997 Rules on Civil Procedure, which in part states that "the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation . . . . 13 She also points out that since Presidential Decree (PD) 42 provides that the "plaintiff shall have the right to take or enter upon the possession of the real property involved," the writ of possession it requires to be issued "is not to maintain possession but intended for the purpose of taking or entering possession." 14 The Court is not persuaded. The expropriation of real property does not include mere physical entry or occupation of land. Although eminent domain usually involves a taking of title, there may also be compensable taking of only some, not all, of the property interests in the bundle of rights that constitute ownership. 15 In the instant case, it is manifest that the petitioner, in pursuit of an objective beneficial to public interest, seeks to realize the same through its power of eminent domain. In exercising this power, petitioner intended to acquire not only physical possession but also the legal right to possess and ultimately to own the subject property. Hence, its mere physical entry and occupation of the property fall short of the taking of title, which includes all the rights that may be exercised by an owner over the subject property. Its actual occupation, which renders academic the need for it to enter, does not by itself include its acquisition of all the rights of ownership. Its right to possess did not attend its initial physical possession of the property because the lease, which had authorized said possession, lapsed. In short, petitioner wanted not merely possession de facto but possession de jure as well. What will happen if the required writ of possession is not issued? This question becomes very important because the Municipal Trial Court (MTC), where private respondent sued petitioner for unlawful detainer, has rendered a decision ordering petitioner to vacate the property. 16 It would be circuitous, if not legally absurd, for this Court to require petitioner to first vacate the property in view of the adverse judgement in the unlawful detainer case, and soon afterwards, order the trial court to issue in petitioner's favor a writ of possession pursuant to the expropriation proceedings. Such a scenario is a bureaucratic waste of precious time and resources. This precisely is the sort of pernicious and unreasonable delay of government infrastructure or development projects, which EO 1035 intended to address by requiring the immediate issuance of a writ of possession. Ineludibly, said writ is both necessary and practical, because mere physical possession that is gained by entering the property is not equivalent to expropriating it with the aim of acquiring ownership over, or even the right to possess, the expropriated property. Citing J. M. Tuason & Co., Inc. v. Court of Appeals 17 and Cuatico v. Court of Appeals, 18 private respondent further submits that "the eminent domain case, much less the writ of possession, cannot be entertained to defeat the ejectment case." 19 Such argument is untenable. It is well-settled that eminent domain is an inherent power of the State that need not be granted even by the fundamental law." 20 Section 9, Article III of the Constitution, in mandating that "[p]rivate property shall not be taken for public use without just compensation," merely imposes a limit on the government's exercise of this power and provides a measure of protection to the individual's right to property. 21 Thus, in J. M. Tuason & Co. and Cuatico, the Court merely enforced the constitutional limitation regarding the payment of just compensation. Clearly, an ejectment suit ordinarily should not prevail over the State's power of eminent domain. We note that in the present case, petitioner has deposited not just the 10 percent required under EO 1035, but the whole amount of the just compensation that private respondent is entitled to. Thus, we are unable to find any legal impediment for the issuance of a writ of possession in favor of petitioner. Precisely, the purpose of instituting expropriation proceedings is to prevent petitioner from being ejected from the subject property; otherwise, the above-mentioned absurd and circuitous rulings would arise.

Assailed Orders Tainted by Grave Abuse of Discretion

It is clear that, in quashing the writ of possession, respondent judge violated EO 1035 on the quaint and whimsical ground that petitioner was already in actual possession of the property. 22 His assailed Orders dated July 26, 1996 and February 20, 1997 are therefore void for having been issued with grave abuse of discretion. 23 WHEREFORE, the petition is GRANTED, and the assailed Orders dated July 26, 1996 and February 20, 1997 are hereby ANNULLED and SET ASIDE. No costs.

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G.R. No. 142971 May 7, 2002 THE CITY OF CEBU, petitioner, vs. SPOUSES APOLONIO and BLASA DEDAMO, respondents. DAVIDE, JR., C.J.: In its petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner City of Cebu assails the decision of 11 October 1999 of the Court of Appeals in CA-G.R. CV No. 592041 affirming the judgment of 7 May 1996 of the Regional Trial Court, Branch 13, Cebu City, in Civil Case No. CEB-14632, a case for eminent domain, which fixed the valuation of the land subject thereof on the basis of the recommendation of the commissioners appointed by it. The material operation facts are not disputed. On 17 September 1993, petitioner City of Cebu filed in Civil Case No. CEB-14632 a complaint for eminent domain against respondents spouses Apolonio and Blasa Dedamo. The petitioner alleged therein that it needed the following parcels of land of respondents, to wit: Lot No. 1527 Area-----------------------------------------------Tax Declaration---------------------------------Title No. -----------------------------------------Market value------------------------------------Assessed Value---------------------------------1,146 square meters 03472 31833 P240,660.00 P72,200.00

Lot No. 1528 Area-----------------------------------------------Area sought to be expropriated ---------------Tax Declaration ----------------------------------Title No. -------------------------------------------Market value for the whole lot -----------------Market value of the Area to be expropriated -Assessed Value -----------------------------------793 square meters 478 square meters 03450 31832 P1,666,530.00 P100,380.00 P49,960.00

for a public purpose, i.e., for the construction of a public road which shall serve as an access/relief road of Gorordo Avenue to extend to the General Maxilum Avenue and the back of Magellan International Hotel Roads in Cebu City. The lots are the most suitable site for the purpose. The total area sought to be expropriated is 1,624 square meters with an assessed value of P1,786.400. Petitioner deposited with the Philippine National Bank the amount of P51,156 representing 15% of the fair market value of the property to enable the petitioner to take immediate possession of the property pursuant to Section 19 of R.A. No. 7160.2 Respondents, filed a motion to dismiss the complaint because the purpose for which their property was to be expropriated was not for a public purpose but for benefit of a single private entity, the Cebu Holdings, Inc. Petitioner could simply buy directly from them the property at its fair market value if it wanted to, just like what it did with the neighboring lots. Besides, the price offered was very low in light of the consideration of P20,000 per square meter, more or less, which petitioner paid to the neighboring lots. Finally, respondents alleged that they have no other land in Cebu City. A pre-trial was thereafter had. On 23 August 1994, petitioner filed a motion for the issuance of a writ of possession pursuant to Section 19 of R.A. No. 7160. The motion was granted by the trial court on 21 September 1994.3 On 14 December 1994, the parties executed and submitted to the trial court an Agreement4 wherein they declared that they have partially settled the case and in consideration thereof they agreed: 1. That the SECOND PARTY hereby conforms to the intention to [sic] the FIRST PARTY in expropriating their parcels of land in the above-cited case as for public purpose and for the benefit of the general public; 2. That the SECOND PARTY agrees to part with the ownership of the subject parcels of land in favor of the FIRST PARTY provided the latter will pay just compensation for the same in the amount determined by the court after due notice and hearing; 3. That in the meantime the SECOND PARTY agrees to receive the amount of ONE MILLION SEVEN HUNDRED EIGHTY SIX THOUSAND FOUR HUNDRED PESOS (1,786,400.00) as provisional payment for the subject parcels of land, without prejudice to the final valuation as maybe determined by the court; 4. That the FIRST PARTY in the light of the issuance of the Writ of Possession Order dated September 21, 1994 issued by the Honorable Court, agreed to take possession over that portion of the lot sought to be expropriated where the house of the SECOND PARTY was located only after fifteen (15) days upon the receipt of the SECOND PARTY of the amount of P1,786,400.00; 5. That the SECOND PARTY upon receipt of the aforesaid provisional amount, shall turn over to the FIRST PARTY the title of the lot and within the lapse of the fifteen (15) days grace period will voluntarily demolish their house and the other structure that may be located thereon at their own expense; 6. That the FIRST PARTY and the SECOND PARTY jointly petition the Honorable Court to render judgment in said Civil Case No. CEB-14632 in accordance with this AGREEMENT;

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7. That the judgment sought to be rendered under this agreement shall be followed by a supplemental judgment fixing the just compensation for the property of the SECOND PARTY after the Commissioners appointed by this Honorable Court to determine the same shall have rendered their report and approved by the court. Pursuant to said agreement, the trial court appointed three commissioners to determine the just compensation of the lots sought to be expropriated. The commissioners were Palermo M. Lugo, who was nominated by petitioner and who was designated as Chairman; Alfredo Cisneros, who was nominated by respondents; and Herbert E. Buot, who was designated by the trial court. The parties agreed to their appointment. Thereafter, the commissioners submitted their report, which contained their respective assessments of and recommendation as to the valuation of the property.1wphi1.nt On the basis of the commissioners' report and after due deliberation thereon, the trial court rendered its decision on 7 May 1996,5 the decretal portion o which reads: WHEREFORE, in view of the foregoing, judgment is hereby rendered in accordance with the report of the commissioners. Plaintiff is directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the sum of pesos: TWENTY FOUR MILLION EIGHT HUNDRED SIXTY-FIVE THOUSAND AND NINE HUNDRED THIRTY (P24,865.930.00) representing the compensation mentioned in the Complaint. Plaintiff and defendants are directed to pay the following commissioner's fee; 1. To Palermo Lugo 2. To Herbert Buot 3. To Alfredo Cisneros - P21,000.00 - P19,000.00 - P19,000.00

Without pronouncement as to cost. SO ORDERED. Petitioner filed a motion for reconsideration on the ground that the commissioners' report was inaccurate since it included an area which was not subject to expropriation. More specifically, it contended that Lot No. 1528 contains 793 square meters but the actual area to be expropriated is only 478 square meters. The remaining 315 square meters is the subject of a separate expropriation proceeding in Civil Case No. CEB-8348, then pending before Branch 9 of the Regional Trial Court of Cebu City. On 16 August 1996, the commissioners submitted an amended assessment for the 478 square meters of Lot No. 1528 and fixed it at P12,824.10 per square meter, or in the amount of P20,826,339.50. The assessment was approved as the just compensation thereof by the trial court in its Order of 27 December 1996.6 Accordingly, the dispositive portion of the decision was amended to reflect the new valuation. Petitioner elevated the case to the Court of Appeals, which docketed the case as CA-G.R. CV No. 59204. Petitioner alleged that the lower court erred in fixing the amount of just compensation at P20,826,339.50. The just compensation should be based on the prevailing market price of the property at the commencement of the expropriation proceedings. The petitioner did not convince the Court of Appeals. In its decision of 11 October 1999,7 the Court of Appeals affirmed in toto the decision of the trial court. Still unsatisfied, petitioner filed with us the petition for review in the case at bar. It raises the sole issue of whether just compensation should be determined as of the date of the filing of the complaint. It asserts that it should be, which in this case should be 17 September 1993 and not at the time the property was actually taken in 1994, pursuant to the decision in "National Power Corporation vs. Court of Appeals."8 In their Comment, respondents maintain that the Court of Appeals did not err in affirming the decision of the trial court because (1) the trial court decided the case on the basis of the agreement of the parties that just compensation shall be fixed by commissioners appointed by the court; (2) petitioner did not interpose any serious objection to the commissioners' report of 12 August 1996 fixing the just compensation of the 1,624-square meter lot at P20,826,339.50; hence, it was estopped from attacking the report on which the decision was based; and (3) the determined just compensation fixed is even lower than the actual value of the property at the time of the actual taking in 1994. Eminent domain is a fundamental State power that is inseparable from sovereignty. It is the Government's right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose.9 However, the Government must pay the owner thereof just compensation as consideration therefor. In the case at bar, the applicable law as to the point of reckoning for the determination of just compensation is Section 19 of R.A. No. 7160, which expressly provides that just compensation shall be determined as of the time of actual taking. The Section reads as follows: SECTION 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 petitioner has misread our ruling in The National Power Corp. vs. Court of Appeals.10 We did not categorically rule in that case that just compensation should be determined as of the filing of the complaint. We explicitly stated therein that although the general rule in determining just compensation in eminent domain is the value of the property as of the date of the filing of the complaint, the rule "admits of an exception: where this Court fixed the value of the property as of the date it was taken and not at the date of the commencement of the expropriation proceedings." Also, the trial court followed the then governing procedural law on the matter, which was Section 5 of Rule 67 of the Rules of Court, which provided as follows: SEC. 5. Ascertainment of compensation. Upon the entry of the order of condemnation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report is to be filed with the court. More than anything else, the parties, by a solemn document freely and voluntarily agreed upon by them, agreed to be bound by the report of the commission and approved by the trial court. The agreement is a contract between the parties. It has the force of law between them and should be complied with in good faith. Article 1159 and 1315 of the Civil Code explicitly provides: Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. Furthermore, during the hearing on 22 November 1996, petitioner did not interpose a serious objection. 11 It is therefore too late for petitioner to question the valuation now without violating the principle of equitable estoppel. Estoppel in pais arises when one, by his acts, representations or admissions, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts.12 Records show that petitioner consented to conform with the valuation recommended by the commissioners. It cannot detract from its agreement now and assail correctness of the commissioners' assessment.1wphi1.nt

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Finally, while Section 4, Rule 67 of the Rules of Court provides that just compensation shall be determined at the time of the filing of the complaint for expropriation,13 such law cannot prevail over R.A. 7160, which is a substantive law.14 WHEREFORE, finding no reversible error in the assailed judgment on the Court of Appeals in CA-G.R. CV No. 59204, the petition in this case is hereby DENIED.

G.R. No. 181562-63 October 2, 2009 SPOUSES CIRIACO and ARMINDA ORTEGA, Petitioners, vs. CITY OF CEBU, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 181583-84 CITY OF CEBU, Petitioner, vs. SPOUSES CIRIACO and ARMINDA ORTEGA, Respondents. DECISION NACHURA, J.: These are consolidated petitions for review on certiorari filed by petitioners Ciriaco and Arminda Ortega (Spouses Ortega) in G.R. Nos. 181562-63 and petitioner City of Cebu (Cebu City) in G.R. Nos. 181583-84 assailing the Decision of the Court of Appeals (CA) in the similarly consolidated petitions docketed as CA-G.R. SP No. 80187 and CA-G.R. SP No. 00147, respectively.1 The facts, summarized by the CA, follow. Spouses Ciriaco and Arminda Ortega x x x are the registered owners of a parcel of land known as Lot No. 310-B, situated in Hipodromo, Cebu City, with an area of 5,712 square meters and covered by Transfer Certificate of Title No. 113311, issued by the Register of Deeds of the City of Cebu. One-half of the above described land is occupied by squatters. On September 24, 1990, [the Spouses Ortega] filed an ejectment case against the squatters before the Municipal Trial Court in Cities (MTCC) of Cebu City, which rendered decision in favor of [the spouses Ortega]. The case eventually reached the Supreme Court, which affirmed the decision of the MTCC. The decision of the MTCC became final and executory, and a writ of execution was issued on February 1, 1994. On May 23, 1994, the Sangguniang Panglungsod of [Cebu City] enacted City Ordinance No. 1519, giving authority to the City Mayor to expropriate onehalf (1/2) portion (2,856 square meters) of [the spouses Ortegas] land (which is occupied by the squatters), and appropriating for that purpose the amount of P3,284,400.00 or at the price of ONE THOUSAND ONE HUNDRED FIFTY PESOS (P1,150.00) per square meter. The amount will be charged against Account No. 8-93-310, Continuing Appropriation, Account No. 101-8918-334, repurchase of lots for various projects. The value of the land was determined by the Cebu City Appraisal Committee in Resolution No. 19, series of 1994, dated April 15, 1994. Pursuant to said ordinance, [Cebu City] filed a Complaint for Eminent Domain [before the Regional Trial Court (RTC), Branch 23, Cebu City] against [the spouses Ortega], docketed as Civil Case No. CEB-16577. On March 13, 1998, the [RTC] issued an order declaring that [Cebu City] "has the lawful right to take the property subject of the instant case, for public use or purpose described in the complaint upon payment of just compensation." Based on the recommendation of the appointed Commissioners (one of whom was the City Assessor of [Cebu City], the [RTC] issued another Order dated May 21, 1999, fixing the value of the land subject to expropriation at ELEVEN THOUSAND PESOS (P11,000.00) per square meter and ordering [Cebu City] to pay [Spouses Ortega] the sum of THIRTY ONE MILLION AND FOUR HUNDRED SIXTEEN THOUSAND PESOS (P31,416,000.00) as just compensation for the expropriated portion of Lot No. 310-B. The Decision of the [RTC] became final and executory because of [Cebu Citys] failure to perfect an appeal on time, and a Writ of Execution was issued on September 17, 1999 to enforce the courts judgment. Upon motion of [the Spouses Ortega], the [RTC] issued an Order dated March 11, 2002, quoted as follows: "Reading of the aforestated resolution shows that the City Council of Cebu approved Ordinance No. 1519 appropriating the sum of P3,284,400.00 for payment of the subject lot chargeable to Account No. 101-8918-334. "In view thereof, the above-mentioned sum is now subject for execution or garnishment for the same is no longer exempt from execution." [Cebu City] filed an Omnibus Motion to Stay Execution, Modification of Judgment and Withdrawal of the Case, contending that the price set by the [RTC] as just compensation to be paid to [the Spouses Ortega] is way beyond the reach of its intended beneficiaries for its socialized housing program. The motion was denied by the [RTC]. [Cebu Citys] Motion for Reconsideration was likewise denied. By virtue of the Order of the [RTC], dated July 2, 2003, x x x Sheriff Benigno B. Reas[,] Jr. served a Notice of Garnishment to Philippine Postal Bank, P. del Rosario and Junquera Branch Cebu City, garnishing [Cebu Citys] bank deposit therein. Hence, [Cebu City] filed the instant Petition for Certiorari before [the CA] (CA-G.R. SP NO. 80187). During the pendency of x x x CA-G.R. SP NO. 80187, [Cebu City] filed before the [RTC] a Motion to Dissolve, Quash or Recall the Writ of Garnishment, contending that Account No. 101-8918-334 mentioned in Ordinance No. 1519 is not actually an existing bank account and that the garnishment of [Cebu Citys] bank account with Philippine Postal Bank was illegal, because government funds and properties may not be seized under writ of execution or garnishment to satisfy such judgment, on obvious reason of public policy. The [RTC] issued an Order dated March 8, 2004, denying said motion. [Cebu Citys] Motion for Reconsideration was also denied. [The Spouses Ortega] filed an Ex-Parte Motion to Direct the New Manager of Philippine Postal Bank to Release to the Sheriff the Garnished Amount, which was granted by the [RTC]. [Cebu City] filed a Motion for Reconsideration, but the same was denied. Hence, [Cebu City] filed another Petition for Certiorari (CA-G.R. SP NO. 00147) [with the Court of Appeals].2 Ruling on the petitions for certiorari, the CA disposed of the cases, to wit: WHEREFORE, all the foregoing premises considered, the instant Petitions for Certiorari are hereby PARTIALLY GRANTED. The assailed Orders of the [RTC] [Assailed Orders dated March 11, 2002 and July 2, 2003, respectively, in CA-G.R SP NO. 80187] are hereby ANNULLED AND SET ASIDE insofar as they denied [Cebu Citys] Motion to Stay Execution, but they are hereby AFFIRMED insofar as they denied [Cebu Citys] Motion to Modify Judgment and Withdraw from the Expropriation Proceedings. Furthermore, the assailed Orders of the [RTC dated March 8, 2004 in CA-G.R. SP NO. 00147] are hereby ANNULLED AND SET ASIDE. Let the Decision of the [RTC] be executed in a manner prescribed by applicable law and jurisprudence. SO ORDERED.3 Hence, these consolidated appeals by petitioners Cebu City and the Spouses Ortega positing the following issues: 1. Whether the CA erred in affirming the RTCs denial of Cebu Citys Omnibus Motion to Modify Judgment and to be Allowed to Withdraw from the Expropriation Proceedings. 2. Whether the deposit of Cebu City with the Philippine Postal Bank, appropriated for a different purpose by its Sangguniang Panglungsod, can be subject to garnishment as payment for the expropriated lot covered by City Ordinance No. 1519. We deny both petitions. On the first issue, the CA did not err in affirming the RTCs Order that the expropriation case had long been final and executory. Consequently, both the Order of expropriation and the Order fixing just compensation by the RTC can no longer be modified. In short, Cebu City cannot withdraw from the expropriation proceedings.

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Section 4, Rule 67 of the Rules of Court on Expropriation provides: SEC. 4. Order of expropriation. If the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first. A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just compensation to be paid. After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable. Plainly, from the aforequoted provision, expropriation proceedings speak of two (2) stages, i.e.: 1. Determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. This ends with an order, if not of dismissal of the action, of condemnation [or order of expropriation] declaring that the plaintiff has the 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; and 2. Determination by the court of the just compensation for the property sought to be taken.4 We held in the recent case of Republic v. Phil-Ville Development and Housing Corporation5 that: [A]n order of expropriation denotes the end of the first stage of expropriation. Its end then paves the way for the second stagethe determination of just compensation, and, ultimately, payment. An order of expropriation puts an end to any ambiguity regarding the right of the petitioner to condemn the respondents properties. Because an order of expropriation merely determines the authority to exercise the power of eminent domain and the propriety of such exercise, its issuance does not hinge on the payment of just compensation. After all, there would be no point in determining just compensation if, in the first place, the plaintiffs right to expropriate the property was not first clearly established.6 Conversely, as is evident from the foregoing, an order by the trial court fixing just compensation does not affect a prior order of expropriation. As applied to the case at bar, Cebu City can no longer ask for modification of the judgment, much less, withdraw its complaint, after it failed to appeal even the first stage of the expropriation proceedings. Cebu City is adamant, however, that it should be allowed to withdraw its complaint as the just compensation fixed by the RTC is too high, and the intended expropriation of the Spouses Ortegas property is dependent on whether Cebu City would have sufficient funds to pay for the same. We cannot subscribe to Cebu Citys ridiculous contention. It is well-settled in jurisprudence that the determination of just compensation is a judicial prerogative.7 In Export Processing Zone Authority v. Dulay,8 we declared: The determination of "just compensation" in eminent domain cases is a judicial function. The executive department or the legislature may make the initial determinations but when a party claims a violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or executive order can mandate that its own determination shall prevail over the courts findings. Much less can the courts be precluded from looking into the "just-ness" of the decreed compensation. We, therefore, hold that P.D. No. 1533, which eliminates the courts discretion to appoint commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To hold otherwise would be to undermine the very purpose why this Court exists in the first place. Likewise, in the recent cases of National Power Corporation v. dela Cruz9 and Forfom Development Corporation v. Philippine National Railways,10 we emphasized the primacy of judicial prerogative in the ascertainment of just compensation as aided by the appointed commissioners, to wit: Though the ascertainment of just compensation is a judicial prerogative, the appointment of commissioners to ascertain just compensation for the property sought to be taken is a mandatory requirement in expropriation cases. While it is true that the findings of commissioners may be disregarded and the trial court may substitute its own estimate of the value, it may only do so for valid reasons; that is, where the commissioners have applied illegal principles to the evidence submitted to them, where they have disregarded a clear preponderance of evidence, or where the amount allowed is either grossly inadequate or excessive. Thus, "trial with the aid of the commissioners is a substantial right that may not be done away with capriciously or for no reason at all." As regards the second issue raised by the Spouses Ortega, we quote with favor the CAs disquisition thereon, to wit: While the claim of [the Spouses Ortega] against [Cebu City] is valid, the [RTC] cannot, by itself, order the City Council of [Cebu City] to enact an appropriation ordinance in order to satisfy its judgment. The proper remedy of [the Spouses Ortega] is to file a mandamus case against [Cebu City] in order to compel its Sangguniang Panglungsod to enact an appropriation ordinance for the satisfaction of [the Spouses Ortegas] claim. This remedy is provided in the case of Municipality of Makati v. Court of Appeals, which provides: Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason[s], to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor. x x x. xxxx The Sangguniang Panglungsod of [Cebu City] enacted Ordinance No. 1519, appropriating the sum of P3,284,400.00 for payment of just compensation for the expropriated land, chargeable to Account No. 101-8918-334. Pursuant to such ordinance, the [RTC] issued an order dated March 11, 2002, which was the basis for the issuance of the Writ of Garnishment, garnishing [Cebu Citys] bank account with Philippine Postal Bank. However, Philippine Postal Bank issued a Certification dated February 7, 2005, certifying that Account No. 8-93-310 (Continuing Account) and Account No. 101-8918-334 intended for purchase of lot for various projects are not bank account numbers with Philippine Postal Bank. It is a settled rule that government funds and properties may not be seized under writs of execution or garnishment to satisfy judgments, based on obvious consideration of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law. In Municipality of Makati v. Court of Appeals, x x x where the Municipality of Makati enacted an ordinance appropriating certain sum of money as payment for the land the municipality expropriated, chargeable to Account No. S/A 265-537154-3 deposited in PNB Buendia Branch, the Supreme Court held that the trial court has no authority to garnish the Municipalitys other bank account (Account No. S/A 263-530850-7) in order to cover the deficiency in Account No. S/A 265-537154-3, even if both accounts are in the same branch of the PNB. In said case, the Supreme Court held: Absent any showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7. The foregoing rules find application in the case at bar. While the Sangguniang Panglungsod of petitioner enacted Ordinance No. 1519 appropriating the sum of P3,284,400.00 for payment of just compensation for the expropriated land, such ordinance cannot be considered as a source of authority for the [RTC] to garnish [Cebu Citys] bank account with Philippine Postal Bank, which was already appropriated for another purpose. [Cebu Citys] account with Philippine Postal Bank was not specifically opened for the payment of just compensation nor was it specifically appropriated by Ordinance No. 1519 for such purpose. Said account, therefore, is exempt from garnishment.1avvphi1 Since the [RTC] has no authority to garnish [Cebu Citys] other bank accounts in order to satisfy its judgment, consequently, it has no authority to order the release of [Cebu Citys] other deposits with Philippine Postal Bank x x x.11 Even assuming that Cebu City Ordinance No. 1519 actually appropriated the amount of P3,284,400.00 for payment of just compensation thus, within the reach of a writ of garnishment issued by the trial court12 there remains the inescapable fact that the Philippine Postal Bank account referred to in

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the ordinance does not actually exist, as certified to by the Bank. Accordingly, no writ of garnishment may be validly issued against such non-existent account with Philippine Postal Bank. This circumstance translates to a situation where there is no valid appropriation ordinance. WHEREFORE, the petitions in G.R. Nos. 181562-63 and 181583-84 are hereby DENIED. The Decision of the Court of Appeals in CA-G.R. SP Nos. 80187 and 00147 is AFFIRMED. No pronouncement as to costs.

G.R. No. 160890 November 10, 2004 BANK OF THE PHILIPPINE vs. COURT OF APPEALS and NATIONAL POWER CORPORATION, respondents. DECISION

ISLANDS,

petitioner,

YNARES-SANTIAGO, J.: This is a petition for review under Rule 45 of the Rules of Court, assailing the Decision dated August 30, 2002 of the Court of Appeals in CA-G.R. CV No. 69402,1 which reversed the Decision of the Regional Trial Court of Imus, Cavite, Branch 21, 2 reducing from P10,000.00 to P3,000.00 the amount of just compensation for the expropriated land of petitioner; and decreasing from P10,000.00 to P3,000.00 the commissioners' fee for each of the three commissioners. On April 15, 1996, private respondent National Power Corporation (NAPOCOR) filed a Complaint for Eminent Domain, seeking to expropriate a portion of petitioner Bank of the Philippine Islands' (BPI) property located in Barrio Bucal, Dasmarias, Cavite, for the purpose of constructing and maintaining its Dasmarias-Zapote 230 KV Transmission Line Project. On August 1, 1996, pursuant to Section 2 of Rule 67 of the Rules of Court,3 NAPOCOR deposited with the Philippine National Bank, NPC Branch, in Quezon City, the amount of P3,013.60, equivalent to the assessed value of the property. On August 15, 1996, NAPOCOR notified BPI, through registered mail, of its intention to take possession of the property. Thereafter, the trial court granted their urgent ex-parte motion for the issuance of a writ of possession and authorized them to enter and take possession of the premises.4 Previously, petitioner BPI filed a motion for bill of particulars which the trial court denied. 5 Consequently, BPI moved for the dismissal of the case and the same was granted without prejudice to its reinstatement.6 Private respondent NAPOCOR filed a motion for reconsideration. The trial court granted the motion and reinstated the case.7 In its Order dated November 28, 1997,8 the trial court designated three commissioners to determine the just value of the property subject of the expropriation in this case, namely: Mr. Lamberto C. Parra, Provincial Assessor of Cavite; Mr. Regalado Andaya, Municipal Assessor of Dasmarias, Cavite; and Mr. Rodolfo D. Leonen, Defendant's Representative. Accordingly, on February 26, 1999, the Commissioners submitted its Report which assessed the sum of the area of the property taken and the estimated value of just compensation at 75.34 square meters x P10,000.00 = P753,400.00, and recommended an additional payment of P524,660.00 as severance damage, or a total of P1,278,060.00.9 Likewise, they submitted an undated Commissioners' Valuation Report citing the "Market Data Approach" as the method used in arriving at the amount of P10,000.00 per square meter as just compensation, whereby the value of the land is based on sales and listing of comparable property registered within the immediate vicinity.10 On August 5, 1999, the trial court rendered judgment in favor of BPI, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered declaring that the portion of the parcel of land situated in Bucal, Dasmarias, Cavite, embraced in, and covered by, Transfer Certificate of Title No. T-292517 of the Registry of Deed of Cavite consisting of 75.34 square meters to have been lawfully expropriated and now belongs to the plaintiff to be used for the construction and maintenance of its Dasmarias-Zapote 230 KV Transmission Line Project. The plaintiff is hereby ordered to pay to the defendant, through the Branch Clerk of this Court, the fair market value of the property at P10,000.00 per square meter or a total sum of P753,400.00 with legal rate of interest reckoned from the date of possession by the plaintiff. The commissioner's fee is hereby fixed at P10,000.00 each to be paid by the plaintiff through the Branch Clerk of this Court. The Clerk of this Court is ordered to have a certified copy of this decision be registered in the office of the Register of Deeds of Cavite. SO ORDERED.11 After the denial of its motion for reconsideration, NAPOCOR appealed to the Court of Appeals, which ruled as follows: WHEREFORE, the appealed judgment is hereby REVERSED. A new one is entered ordering plaintiff-appellant NAPOCOR to pay defendant-appellant BPI the amount of P3,000.00 per square meter as just compensation for the expropriated land; and P3,000.00 commissioner's fee to each of the three (3) commissioners. SO ORDERED.12 Petitioner BPI moved for the reconsideration of the decision of the Court of Appeals, but the same was denied for lack of merit. Hence, this petition for review based on the sole issue of whether the Court of Appeals gravely abused its discretion and seriously erred in fixing the just compensation for the subject property at P3,000.00 per square meter. In petitions for review on certiorari under Rule 45 of the Rules of Court, the general rule is that only questions of law may be raised by the parties and passed upon by this Court. However, this rule admits of exceptions, to wit: (a) where there is grave abuse of discretion; (b) when the finding is grounded entirely on speculations, surmises or conjectures; (c) when the inference made is manifestly mistaken, absurd or impossible; (d) when the judgment of the Court of Appeals was based on a misapprehension of facts; (e) when the factual findings are conflicting; (f) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee; (g) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion; and, (h) where the findings of fact of the Court of Appeals are contrary to those of the trial court, or are mere conclusions without citation of specific evidence, or where the facts set forth by the petitioner are not disputed by the respondent, or where the findings of fact of the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record.13 (Emphasis provided) The case at bar falls under one of the exceptions, i.e., where the findings of fact of the Court of Appeals are contrary to those of the trial court. Petitioner asserts that the finding of just compensation by the court-appointed commissioners was based on clear evidence of prior sales and acceptable market valuation methods. Petitioner likewise avers that the valuation made by the commissioners must be accorded weight. Likewise it argues that NAPOCOR is estopped from questioning the valuation of the land considering that its own nominee concurred with the findings of the other commissioners. 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.14 To compensate is to render something which is equal in value to that taken or received. The word "just" is used to intensify the meaning of the word "compensation"; to convey the idea that the equivalent to be rendered for the property taken shall be real, substantial, full, ample.15 In eminent domain or expropriation proceedings, the general rule is that the just compensation which the owner of condemned property is entitled to is the market value. Market value is "that sum of money which a person desirous but not compelled to buy, and an owner willing but not compelled to sell, would agree on as a price to be given and received therefor."16

35

After a careful perusal of the records, we find no reason to disturb this finding of fact by the Court of Appeals, sufficiently supported as it is, by the evidence on record.17 We find that the rate imposed by the Commissioners is unsubstantiated. No official documents were presented to reflect the true market value of the subject lots in the surrounding area. The Commissioner's Report merely states that the value of the land is based on sales and listings of comparable property registered within the immediate vicinity without any evidence to support the market data provided. In this instance, we accord more weight to Resolution No. 08-95 promulgated by the Provincial Appraisal Committee of Cavite held at the Office of the Provincial Assessor on October 25, 1995.18 Said Resolution pegs as fair and reasonable the value of P3,000.00 per square meter of all the lots in the Municipality of Dasmarias, specifically along General Aguinaldo Highway. The just compensation is determined as of the date of the taking of the property or the filing of the complaint whichever came first.19 NAPOCOR filed the complaint on April 15, 1996. A period of 6 months has elapsed from the valuation of the Provincial Assessors and the filing of the complaint. We note the considerable discrepancy between the valuation of the former and that of the Commissioners. Indeed, the appellate court computed the increase of the valuation to be 233%. The Court of Appeals pointed out that more than 70% of the 200 lot owners have entered into compromise agreements and accepted the price set by the Provincial Appraisal Committee of Cavite. It is also worthy to note that one of the Commissioners in this case, Mr. Lamberto C. Parra, was the Chairman Provincial Assessor and signatory of the same Resolution. WHEREFORE, the petition for review on certiorari is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 69402, which reversed the decision of the Regional Trial Court of Imus, Cavite, Branch 21 in Civil Case No. 1298-96, is AFFIRMED in toto.

G.R. No. 146886 April 30, 2003 DEVORAH E. BARDILLON, petitioner, vs. BARANGAY MASILI OF CALAMBA, LAGUNA, respondent. PANGANIBAN, J.: An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within the jurisdiction of regional trial courts, regardless of the value of the subject property.

The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the January 10, 2001 Decision and the February 5, 2001 Resolution of the Court of Appeals2 (CA) in CA-GR SP No. 61088. The dispositive part of the Decision reads: "WHEREFORE, premises considered, the present [P]etition for [C]ertiorari is hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of merit."3 The assailed Resolution4 denied petitioner's Motion for Reconsideration.

The Facts
The factual antecedents are summarized by the CA as follows: "At the root of this present [P]etition is the controversy surrounding the two (2) [C]omplaints for eminent domain which were filed by herein respondent for the purpose of expropriating a ONE HUNDRED FORTY FOUR (144) square meter-parcel of land, otherwise known as Lot 4381-D situated in Barangay Masili, Calamba, Laguna and owned by herein petitioner under Transfer Certificate of Title No. 383605 of the Registry of Deeds of Calamba, Laguna. Petitioner acquired from Makiling Consolidated Credit Corporation the said lot pursuant to a Deed of Absolute Sale which was executed by and between the former and the latter on October 7, 1996. "The first [C]omplaint for eminent domain, docketed as Civil Case No. 3648 and entitled 'Brgy. Masili, Calamba, Laguna v. Emelita A. Reblara, Eugenia Almazan & Devorah E. Bardillon,' was filed before the Municipal Trial Court of Calamba, Laguna ('MTC') on February 23, 1998, following the failure of Barangay Masili to reach an agreement with herein petitioner on the purchase offer of TWO HUNDRED THOUSAND PESOS (P200,000.00). The expropriation of Lot 4381-D was being pursued in view of providing Barangay Masili a multi-purpose hall for the use and benefit of its constituents. "On March 5, 1999, the MTC issued an order dismissing Civil Case No. 3648 'for lack of interest' for failure of the [respondent] and its counsel to appear at the pre-trial. The MTC, in its Order dated May 3, 1999, denied [respondent's] [M]otion for [R]econsideration thereof. "The second [C]omplaint for eminent domain, docketed as Civil Case No. 2845-99-C and entitled 'Brgy. Masili, Calamba, Laguna v. Devorah E. Bardillon' was filed before Branch 37 of the Regional Trial Court of Calamba, Laguna ('RTC') on October 18, 1999. This [C]omplaint also sought the expropriation of the said Lot 4381-D for the erection of a multi-purpose hall of Barangay Masili, but petitioner, by way of a Motion to Dismiss, opposed this [C]omplaint by alleging in the main that it violated Section 19(f) of Rule 16 in that [respondent's] cause of action is barred by prior judgment, pursuant to the doctrine of res judicata. "On January 21, 2000, [the] Judge issued an order denying petitioner's Motion to Dismiss, holding that the MTC which ordered the dismissal of Civil Case No. 3648 has no jurisdiction over the said expropriation proceeding. "With the subsequent approval of Municipal Ordinance No. 2000-261 on July 10, 2000, and the submission thereof in compliance with [the] Judge's Order dated June 9, 2000 requiring herein respondent to produce the authority for the expropriation through the Municipal Council of Calamba, Laguna, the assailed Order dated August 4, 2000 was issued in favor of Barangay Masili x x x and, on August 16, 2000, the corresponding order for the issuance of the [W]rit of [P]ossession over Lot 4381-D."5

Ruling of the Court of Appeals

In dismissing the Petition, the CA held that the Regional Trial Court (RTC) of Calamba, Laguna (Branch 37) 6 did not commit grave abuse of discretion in issuing the assailed Orders. It ruled that the second Complaint for eminent domain (Civil Case No. 2845-99-C) was not barred by res judicata. The reason is that the Municipal Trial Court (MTC), which dismissed the first Complaint for eminent domain (Civil Case No. 3648), had no jurisdiction over the action. Hence, this Petition.7

The Issues
In her Memorandum, petitioner raises the following issues for our consideration: "A. Whether or not, the Honorable Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction when it denied and dismissed petitioner's appeal; "B. Whether or not, the Honorable Respondent Court committed grave abuse of discretion when it did not pass upon and consider the pending Motion for Reconsideration which was not resolved by the Regional Trial Court before issuing the questioned Orders of 4 and 16 August 2000; "C. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in taking the total amount of the assessed value of the land and building to confer jurisdiction to the court a quo; "D. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in ignoring the fact that there is an existing multi-purpose hall erected in the land owned by Eugenia Almazan which should be subject of expropriation; and "E. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in failing to consider the issue of forum shopping committed by Respondent Masili."8 Simply put, the issues are as follows: (1) whether the MTC had jurisdiction over the expropriation case; (2) whether the dismissal of that case before the MTC constituted res judicata; (3) whether the CA erred when it ignored the issue of entry upon the premises; and (4) whether respondent is guilty of forum shopping.

The Court's Ruling

36

The Petition has no merit.

First Jurisdiction Over Expropriation

Issue:

Petitioner claims that, since the value of the land is only P11,448, the MTC had jurisdiction over the case. 9 On the other hand, the appellate court held that the assessed value of the property was P28,960. 10 Thus, the MTC did not have jurisdiction over the expropriation proceedings, because the amount involved was beyond the P20,000 jurisdictional amount cognizable by MTCs. An expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise by the government of its authority and right to take property for public use.11 As such, it is incapable of pecuniary estimation and should be filed with the regional trial courts.12 This was explained by the Court in Barangay San Roque v. Heirs of Francisco Pastor:13 "It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an expropriation suit is the government's exercise of eminent domain, a matter that is incapable of pecuniary estimation. "True, the value of the property to be expropriated is estimated in monetary terms, for the court is duty-bound to determine the just compensation for it. This, however, is merely incidental to the expropriation suit. Indeed, that amount is determined only after the court is satisfied with the propriety of the expropriation." "Verily, the Court held in Republic of the Philippines v. Zurbano that 'condemnation proceedings are within the jurisdiction of Courts of First Instance,' the forerunners of the regional trial courts. The said case was decided during the effectivity of the Judiciary Act of 1948 which, like BP 129 in respect to RTCs, provided that courts of first instance had original jurisdiction over 'all civil actions in which the subject of the litigation is not capable of pecuniary estimation.' The 1997 amendments to the Rules of Court were not intended to change these jurisprudential precedents.14 To reiterate, an expropriation suit is within the jurisdiction of the RTC regardless of the value of the land, because the subject of the action is the government's exercise of eminent domain a matter that is incapable of pecuniary estimation.

Second Res Judicata

Issue:

Petitioner claims that the MTC's dismissal of the first Complaint for eminent domain was with prejudice, since there was no indication to the contrary in the Order of dismissal. She contends that the filing of the second Complaint before the RTC should therefore be dismissed on account of res judicata. Res judicata literally means a matter adjudged, judicially acted upon or decided, or settled by judgment.15 It provides that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand or cause of action.16 The following are the requisites of res judicata: (1) the former judgment must be final; (2) the court that rendered it had jurisdiction over the subject matter and the parties; (3) it is a judgment on the merits; and (4) there is between the first and the second actions an identity of parties, subject matter and cause of action.17 Since the MTC had no jurisdiction over expropriation proceedings, the doctrine of res judicata finds no application even if the Order of dismissal may have been an adjudication on the merits.

Declared Tax Owner Declaration No.

Market Value 1981 Schedule

Recommended Description Appraised Value

Third Legality of Entry Into Premises

Issue:

Rosario Reyes

90066

P400/sq.m. P4,000/sq.m.

Petitioner argues that the CA erred when it ignored the RTC's Writ of Possession over her property, issued despite the pending Motion for Reconsideration of the ruling dismissing the Complaint. We are not persuaded. P3,200/sq.m. 21 to 40 meters The requirements for the issuance of a writ of possession in an expropriation from Claro case are expressly and specifically governed by Section 2 of Rule 67 of the M. Recto 1997 Rules of Civil Procedure.18 On the part of local government units, Super expropriation is also governed by Section 19 of the Local Government Highway Code.19 Accordingly, in expropriation proceedings, the requisites for authorizing immediate entry are as follows: (1) the filing of a complaint for expropriation sufficient in form and substance; and (2) the deposit of the P2,400/sq.m. 41 to 60 amount equivalent to 15 percent of the fair market value of the property to meters be expropriated based on its current tax declaration.20 from Claro M. Recto In the instant case, the issuance of the Writ of Possession in favor of Super respondent after it had filed the Complaint for expropriation and deposited Highway the amount required was proper, because it had complied with the foregoing requisites. The issue of the necessity of the expropriation is a matter properly addressed to the RTC in the course of the expropriation proceedings. If petitioner objects to the necessity of the takeover of her property, she should say so in her Answer to the Complaint.21 The RTC has 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 for it. 22

1 to 20 meters from Claro M. Recto Super Highway

Fourth Forum Shopping

Issue:

Petitioner claims that respondent is guilty of forum shopping, because it scouted for another forum after obtaining an unfavorable Decision from the MTC. The test for determining the presence of forum shopping is whether the elements of litis pendentia are present in two or more pending cases, such that a final judgment in one case will amount to res judicata in another.23 Be it noted that the earlier case lodged with the MTC had already been dismissed when the Complaint was filed before the RTC. Even granting arguendo that both cases were still pending, a final judgment in the MTC case will not constitute res judicata in the RTC, since the former had no jurisdiction over the expropriation case. WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.

G.R. No. 160379

August 14, 2009

37

REPUBLIC OF THE PHILIPPINES THROUGH THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, Petitioner, vs. COURT OF APPEALS and ROSARIO RODRIGUEZ REYES, Respondents. DECISION CARPIO, J.: The Case This is a petition for review1 of the Court of Appeals Decision2 dated 15 November 2002 and Resolution dated 17 September 2003 in CA-G.R. CV No. 50358. The Court of Appeals affirmed with modifications the Amended Decision of the Regional Trial Court of Cagayan de Oro City, Branch 19 (RTC). The Antecedent Facts Private respondent Rosario Rodriguez Reyes is the absolute owner of a parcel of land identified as Lot 849-B and covered by TCT No. T-7194. The 1,043square meter lot is situated on Claro M. Recto and Osmea Streets, Cagayan de Oro City. On 6 November 1990, private respondent received a letter from petitioner Republic of the Philippines, through the Department of Public Works and Highways (DPWH), requesting permission to enter into a portion of private respondents lot consisting of 663 square meters, and to begin construction of the Osmea Street extension road. On 20 December 1990, petitioner took possession of private respondents property without initiating expropriation proceedings. Consequently, on 4 and 7 January 1991, private respondent sent letters to the DPWH stating her objection to the taking of her property. On 16 May 1991, private respondent sent a letter to the City Appraisal Committee (CAC) rejecting the latters appraisal of the subject property, to wit:3

In the same letter, private respondent requested the City Assessor for a reappraisal of her property, but said request was denied.4 On 17 March 1992 , private respondent filed with the Regional Trial Court (RTC) of Cagayan de Oro City a complaint claiming just compensation and damages against petitioner. On 30 June 1993, the RTC appointed three commissioners5 to determine the subject propertys fair market value, as well as the consequential benefits and damages of its expropriation. On 15 September 1993, one of the three commissioners, Provincial Assessor Corazon Beltran, submitted to the RTC a separate report, the dispositive portion of which reads: WHEREFORE, the undersigned deems it only to be just, fair and reasonable to adopt the market value of FOUR THOUSAND PESOS (P4,000.00) per square meter as the highest price obtaining and prevailing in 1990, the time of the taking of the property subject of the above entitled case, and fairly reasonable also to impose an additional value equivalent to 5% of the market value as fixed for severance fee.6 On 13 April 1994, the scheduled hearing was reset to 19 May 1994, to give private respondent (plaintiff) time to consider the offer of petitioner (defendant) to amicably settle the case and to accept the just compensation of P3,200 per square meter, or a total of P2,212,600, for the 663-square meter portion of private respondents lot.7 On 16 May 1994, private respondent filed with the RTC an "Urgent Motion to Deposit The Amount of P2,121,600 in Court," alleging that petitioners counsel previously manifested in open court that the amount of P2,121,600 was ready for release should the amount be acceptable to private respondent, and praying that said amount of P2,121,600 be deposited by petitioner with the trial court.8 The RTC granted the motion in an Order dated 16 June 1994.9 However, it was only on 21 October 1994 that petitioner deposited with the RTC Clerk of Court a Landbank check amounting to P2,121,600 as just compensation.10 On 16 June 1994, the RTC ordered the commissioners to submit their report as soon as possible, but until the scheduled hearing on 15 July 1994, the commissioners still failed to submit their report. Upon motion of private respondent, the RTC issued an order appointing a new set of commissioners.11 On 11 October 1994, the new commissioners submitted their report, the pertinent portions of which provide, thus: COMMISSIONERS REPORT xxx The property litigated upon is strategically located along Recto Avenue (National Highway) which is a commercial district. Fronting it across the national highway is the Cagayan Coca Cola Plant and the Shell Gasoline Station. It adjoins an establishment known as the Palana Grocery Store and after it is the Northern Mindanao Development Bank. Three Hundred (300) meters to the west of plaintiffs property is the gigantic structure of the Gaisano City department store along Recto Avenue and Corrales Avenue Extension. Towards the eastern direction of the property are banking institution buildings and the Ororama Superstore along the national highway (Recto Avenue) and the Limketkai Commercial Complex. For purpose of affording a fair assessment of the market value of plaintiffs property, the herein Commissioners have divided the whole parcel of land into three parts, viz: 1. Front portion along Recto Avenue measuring 21.52 meters from south to north ------------347.66 SQM

2. Middle portion with a measurement of 21.52 meters ---------------------------------------------- 347.66 SQM 3. Rear/back portion with a measurement of 21.52 meters ------------------------------------TOTAL AREA: ------347.66 SQM 1,043 SQM

Taking into consideration, among others, the location of the property and a research of the prevailing prices of lots proximate to and/or near the vicinity of plaintiff's property, the undersigned Commissioners respectfully recommend to the Honorable Court the following valuation, to wit: (CURRENT VALUE) 1. Front portion along Recto Avenue with a measurement of 21.52 meters from south to north with an area of 347.66 square meters at P18,000.00 to P20,000.00 per square meter; 2. Middle portion with a measurement of 21.52 meters containing an area of 347.66 square meters at P16,000.00 to P18,000.00 per square meter; 3. Rear/back portion measuring 21.52 meters with an area of 347.66 square meters at P14,000.00 to P16,000.00 per square meter; VALUATION AS OF 1990 1. Front Portion - P10,000.00 to P12,000.00 per square meter; 2. Middle Portion- P8,000.00 to P10,000.00 per square meter; 3. Rear Portion - P6,000.00 to P8,000.00 per square meter; The undersigned Commissioners would however like to bring to the attention of the Honorable Court that in the subdivision plan prepared by the City Engineers Office, the whole of plaintiffs property was subdivided into three (3) lots designated as follows: Lot 849-B-1 (Road Lot)-83 square meters; Lot 849-B-2 (Road Lot traversed by the RCDP Osmea Extension Street)-663 SQM; Lot 849-B-3 remaining portion with an area of 297 square meters; In effect, what has been taken over and used by the defendant is not only 663 square meters but 746 square meters, more or less, which includes Lot No. 849-B-1. On the other hand, the remaining portion left to the plaintiff, Lot No. 849-B-3 will not actually be 297 square meters. If we deduct the setback area from Osmea Extension Street, the usable/buildable area left to the plaintiff would only be a little over 50 square meters. This portion would not command a good price if sold. Neither is it ideal for purposes of any building construction because aside from its being a very small strip of land, the shape is triangular.12

38

The Trial Courts Ruling On 2 June 1995, the RTC rendered a Decision, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants, declaring the former as having the right to retain 590 square meters of the property covered by TCT No. T-7194, and ordering the latter to return 210 square meters of the 663 square meters taken; that defendants are solidarily liable to pay the sum of P5,526,000.00, the fair market value of 1990 (sic), as just compensation for the 536 square meters taken for the Osmea street extension; to pay P185,000.00 representing damages for 37 months computed at the rate of P5,000.00 per month from the filing of this case; and Attorneys fees of P10,000.00 plus costs of suit. Plaintiff herein is ordered to forthwith defray the expenses to be incurred in undertaking the road construction of the 210 square meters which the defendants will later on provide along the right portion of her property. SO ORDERED.13 On 15 June 1995, the RTC rendered an Amended Decision with the following dispositive portion, thus: WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants, declaring the former as having the right to retain 590 square meters of the property covered by TCT No. T-7194, and ordering the latter to return 293 square meters of the 746 square meters taken; that defendants are solidarily liable to pay the sum of P4,696,000.00, the fair market value of 1990 (sic), as just compensation for the 453 square meters taken for the Osmea Street extension; to pay P185,000.00 representing damages for 37 months computed at the rate of P5,000.00 per month from the filing of this case; and Attorneys fees of P10,000.00 plus costs of suit. Plaintiff herein is ordered to forthwith defray the expenses to be incurred in undertaking the road construction of the 293 square meters which the defendants will later on provide along the right portion of her property. SO ORDERED.14 The Court of Appeals Ruling On appeal by petitioner, the Court of Appeals rendered judgment,15 affirming with modifications the decision of the RTC. The Court of Appeals found that the commissioners recommendations on just compensation were not supported by valid documents. Also, it was unclear in the RTC decision whether the trial court merely adopted the commissioners recommendations or the court made its own independent valuation of the subject property. Thus, the Court of Appeals held that a reconvening of the commissioners or an appointment of new commissioners to determine just compensation was necessary. The appellate court further held that the trial courts order for petitioners return of the 293-square meter lot had no legal basis and was no longer feasible since the lot was already part of the completed Sergio Osmea extension road. Moreover, consequential damages should be awarded in lieu of actual damages for private respondents alleged loss of income from the remaining 297-square meter lot. We quote the dispositive portion of the Court of Appeals decision below. WHEREFORE , the appealed judgment is hereby MODIFIED. 1. The case is REMANDED to the trial court which is ordered to reconvene the commissioners or appoint new commissioners to determine, in accordance with this Decision, the amount of just compensation due to plaintiff-appellee Rosario Rodriguez Reyes for the 746 square meters of land taken from her and consequential damages to the 297-square meter portion left. 2. Defendant-appellant DWPH16 is ordered to pay plaintiff-appellee the following amounts: a. the balance, if any, of just compensation to be finally determined after deducting the amount of P2,161,600.0017 DPWH previously advanced and deposited with the trial court; b. 6% legal interest per annum on the amount it provisionally deposited from the time of taking up to the time it is deposited with the trial court on October 21, 1994; and on the balance, if any, from the time of taking on December 20, 1990 until fully paid; c. attorneys fees of P20,000.00. 3. Defendant-appellant City Government of Cagayan de Oro is relieved from any liability; 4. The award of P185,000.00 as actual damages is deleted; 5. No pronouncement as to costs. SO ORDERED.18 Petitioner filed a Motion for Reconsideration, but this was denied by the Court of Appeals in its Resolution of 17 September 2003.19 Hence, this appeal. The Issues Petitioner raises the following issues: 1. Whether the Court of Appeals erred in ordering the remand of the case to the trial court, to order the reconvening of the commissioners or appointment of new commissioners to determine the consequential damages for the remaining 297- square meter lot; and 2. Whether the Court of Appeals erred in ordering petitioner to pay attorneys fees. The Courts Ruling We find the appeal unmeritorious.

On

whether

the

Court

of

Appeals

erred

in

ordering

the

remand of the case to the trial court to order the reconvening of the commissioners or appointment of new commissioners to determine the consequential damages for the remaining 297-square meter lot 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 ofjust compensation.20 The Constitution provides that, "[p]rivate property shall not be taken for public use without just compensation."21 Just compensation is the full and fair equivalent of the property sought to be expropriated. 22 Among the factors to be considered in arriving at the fair market value of the property are the cost of acquisition, the current value of like properties, its actual or potential uses, and in the particular case of lands, their size, shape, location, and the tax declarations thereon.23 The measure is not the takers gain but the owners loss. 24 To be just, the compensation must be fair not only to the owner but also to the taker.25 J ust compensation is based on the price or value of the property at the time it was taken from the owner and appropriated by the government. 26 However, if the government takes possession before the institution of expropriation proceedings, the value should be fixed as of the time of the taking of said possession, not of the filing of the complaint. The value at the time of the filing of the complaint should be the basis for the determination of the value when the taking of the property involved coincides with or is subsequent to the commencement of the proceedings. 27 The procedure for determining just compensation is set forth in Rule 67 of the 1997 Rules of Civil Procedure. Section 5 of Rule 67 partly states that "[u]pon the rendition of the order of expropriation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken." However, we held in Republic v. Court of Appeals28 that Rule 67 presupposes a prior filing of complaint for eminent domain with the appropriate court by the expropriator. If no such complaint is filed, the expropriator is considered to have violated procedural requirements, and hence, waived the usual procedure prescribed in Rule 67, including the appointment of commissioners to ascertain just compensation.29 In National Power Corporation v. Court of Appeals,30 we clarified that when there is no action for expropriation and the case involves only a complaint for damages or just compensation, the provisions of the Rules of Court on ascertainment of just compensation (i.e., provisions of Rule 67) are no longer applicable, and a trial before commissioners is dispensable, thus: In this case, NPC appropriated Pobres 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.

39

This case ceased to be an action for expropriation when NPC dismissed its complaint for expropriation. Since this case has been reduced to a simple case of recovery of damages, the provisions of the Rules of Court on the ascertainment of the just compensation to be paid were no longer applicable. A trial before commissioners, for instance, was dispensable.31 In this case, petitioner took possession of the subject property without initiating expropriation proceedings. Consequently, private respondent filed the instant case for just compensation and damages. To determine just compensation, the trial court appointed three commissioners pursuant to Section 5 of Rule 67 of the 1997 Rules of Civil Procedure. None of the parties objected to such appointment. The trial courts appointment of commissioners in this particular case is not improper. The appointment was done mainly to aid the trial court in determining just compensation, and it was not opposed by the parties. Besides, the trial court is not bound by the commissioners recommended valuation of the subject property. The court has the discretion on whether to adopt the commissioners valuation or to substitute its own estimate of the value as gathered from the records.32 However, we agree with the appellate court that the trial courts decision is not clear as to its basis for ascertaining just compensation. The trial court mentioned in its decision the valuations in the reports of the City Appraisal Committee and of the commissioners appointed pursuant to Rule 67. But whether the trial court considered these valuations in arriving at the just compensation, or the court made its own independent valuation based on the records, was obscure in the decision. The trial court simply gave the total amount of just compensation due to the property owner without laying down its basis. Thus, there is no way to determine whether the adjudged just compensation is based on competent evidence. For this reason alone, a remand of the case to the trial court for proper determination of just compensation is in order. In National Power Corporation v. Bongbong, 33 we held that although the determination of just compensation lies within the trial courts discretion, it should not be done arbitrarily or capriciously. The decision of the trial court must be based on all established rules, correct legal principles, and competent evidence. 34 The court is proscribed from basing its judgment on speculations and surmises.35 Petitioner questions the appellate courts decision to remand the case to determine the consequential damages for the remaining 297-square meter lot of private respondent. Petitioner contends that no consequential damages may be awarded as the remaining lot was "not actually taken" by the DPWH, and to award consequential damages for the lot which was retained by the owner is tantamount to unjust enrichment on the part of the latter. Petitioners contention is unmeritorious. No actual taking of the remaining portion of the real property is necessary to grant consequential damages. If as a result of the expropriation made by petitioner, the remaining lot (i.e., the 297-square meter lot) of private respondent suffers from an impairment or decrease in value, consequential damages may be awarded to private respondent. On the other hand, if the expropriation results to benefits to the remaining lot of private respondent, these consequential benefits36 may be deducted from the awarded consequential damages, if any, or from the market value of the expropriated property. We held in B.H. Berkenkotter & Co. v. Court of Appeals37 that: To determine just compensation, the trial court should first ascertain the market value of the property, to which should be added the consequential damages after deducting therefrom the consequential benefits which may arise from the expropriation. If the consequential benefits exceed the consequential damages, these items should be disregarded altogether as the basic value of the property should be paid in every case. Section 6 of Rule 67 of the Rules of Civil Procedure provides: x x x The commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owner from the public use or purpose of the property taken, the operation of its franchise by the corporation or the carrying on of the business of the corporation or person taking the property. But in no case shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual value of his property so taken. An award of consequential damages for property not taken is not tantamount to unjust enrichment of the property owner. 1awphi1 There is unjust enrichment "when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience."38 Article 22 of the Civil Code provides that "[e]very person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him." The principle of unjust enrichment under Article 22 requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at anothers expense or damage.39 There is no unjust enrichment when the person who will benefit has a valid claim to such benefit.40 As stated, consequential damages are awarded if as a result of the expropriation, the remaining property of the owner suffers from an impairment or decrease in value. Thus, there is a valid basis for the grant of consequential damages to the property owner, and no unjust enrichment can result therefrom. On whether the Court of Appeals erred

in ordering petitioner to pay attorneys fees.

The Court of Appeals did not err in granting attorneys fees to private respondent. Article 2208(2) of the New Civil Code provides that attorneys fees may be awarded: xxx (2) When the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. xxx Attorneys fees may be awarded by a court if one who claims it is compelled to litigate with third persons or to incur expenses to protect ones interest by reason of an unjustified act or omission on the part of the party from whom it is sought.41 In this case, petitioner took possession of private respondents real property without initiating expropriation proceedings, and over the latters objection. As a result, private respondent was compelled to litigate and incur expenses to protect her interests over her property. Thus, the appellate courts award of attorneys fees is proper, viz: We find, however, the award of attorneys fees in plaintiff-appellees favor justified. x x x It is admitted that defendant-appellant DPWH neglected to file the appropriate expropriation proceedings before taking over plaintiff-appellees land. That their road contractor no longer has any portion to work on except on plaintiff-appellees property is no justification for the precipitate taking of her lot. It is incumbent upon defendant-appellant DPWH to foresee whether private lands will be affected by their project and to file appropriate expropriation proceedings if necessary. They did not do so. Thus, plaintiffappellee was constrained to institute the instant suit to protect her rights.42 WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals Decision dated 15 November 2002 and Resolution dated 17 September 2003 in CA-G.R. CV No. 50358.

G.R. No. 162474 October 13, 2009 HON. VICENTE P. EUSEBIO, LORNA A. BERNARDO, VICTOR ENDRIGA, and the CITY OF PASIG, Petitioners, vs. * JOVITO M. LUIS, LIDINILA LUIS SANTOS, ANGELITA CAGALINGAN, ROMEO M. LUIS, and VIRGINIA LUIS-BELLESTEROS, Respondents. DECISION PERALTA, J.: This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that the Decision1 of the Court of Appeals (CA) dated November 28, 2003, affirming the trial court judgment, and the CA Resolution2 dated February 27, 2004, denying petitioners motion for reconsideration, be reversed and set aside. The antecedent facts are as follows: Respondents are the registered owners of a parcel of land covered by Transfer Certificate of Title Nos. 53591 and 53589 with an area of 1,586 square meters. Said parcel of land was taken by the City of Pasig sometime in 1980 and used as a municipal road now known as A. Sandoval Avenue, Barangay Palatiw, Pasig City. On February 1, 1993, the Sanggunian of Pasig City passed Resolution No. 15 authorizing payments to respondents for said parcel of land. However, the Appraisal Committee of the City of Pasig, in Resolution No. 93-13 dated October 19, 1993, assessed the value of the land only at

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P150.00 per square meter. In a letter dated June 26, 1995, respondents requested the Appraisal Committee to consider P2,000.00 per square meter as the value of their land. One of the respondents also wrote a letter dated November 25, 1994 to Mayor Vicente P. Eusebio calling the latters attention to the fact that a property in the same area, as the land subject of this case, had been paid for by petitioners at the price of P2,000.00 per square meter when said property was expropriated in the year 1994 also for conversion into a public road. Subsequently, respondents counsel sent a demand letter dated August 26, 1996 to Mayor Eusebio, demanding the amount of P5,000.00 per square meter, or a total of P7,930,000.00, as just compensation for respondents property. In response, Mayor Eusebio wrote a letter dated September 9, 1996 informing respondents that the City of Pasig cannot pay them more than the amount set by the Appraisal Committee. Thus, on October 8, 1996, respondents filed a Complaint for Reconveyance and/or Damages (Civil Case No. 65937) against herein petitioners before the Regional Trial Court (RTC) of Pasig City, Branch 155. Respondents prayed that the property be returned to them with payment of reasonable rental for sixteen years of use at P500.00 per square meter, or P793,000.00, with legal interest of 12% per annum from date of filing of the complaint until full payment, or in the event that said property can no longer be returned, that petitioners be ordered to pay just compensation in the amount of P7,930,000.00 and rental for sixteen years of use at P500.00 per square meter, or P793,000.00, both with legal interest of 12% per annum from the date of filing of the complaint until full payment. In addition, respondents prayed for payment of moral and exemplary damages, attorneys fees and costs. After trial, the RTC rendered a Decision3 dated January 2, 2001, the dispositive portion of which reads as follows: WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiffs and against the defendants: 1. Declaring as ILLEGAL and UNJUST the action of the defendants in taking the properties of plaintiffs covered by Transfer Certificates of Title Nos. 53591 and 53589 without their consent and without the benefit of an expropriation proceedings required by law in the taking of private property for public use; 2. Ordering the defendants to jointly RETURN the subject properties to plaintiffs with payment of reasonable rental for its use in the amount of P793,000.00 with legal interest at the rate of 6% per annum from the filing of the instant Complaint until full payment is made; 3. In the event that said properties can no longer be returned to the plaintiffs as the same is already being used as a public road known as A. Sandoval Avenue, Pasig City, the defendants are hereby ordered to jointly pay the plaintiffs the fair and reasonable value therefore at P5,000.00 per square meter or a total of P7,930,000.00 with payment of reasonable rental for its use in the amount of P500.00 per square meter or a total of P793,000.00, both with legal interest at the rate of 6% per annum from the filing of the instant Complaint until full payment is made; and 4. Ordering the defendants to jointly pay the plaintiffs attorneys fees in the amount of P200,000.00. No pronouncement as to costs. SO ORDERED. Petitioners then appealed the case to the CA, but the CA affirmed the RTC judgment in its Decision dated November 28, 2003.1avvphi1 Petitioners motion for reconsideration of the CA Decision was denied per Resolution dated February 27, 2004. Hence, this petition where it is alleged that: I. PUBLIC RESPONDENT COURT ERRED IN UPHOLDING THE RULING OF THE LOWER COURT DESPITE THE APPARENT LACK OF JURISDICTION BY REASON OF PRESCRIPTION OF PRIVATE RESPONDENTS CLAIM FOR JUST COMPENSATION; II. PUBLIC RESPONDENT COURT ERRED IN FIXING THE FAIR AND REASONABLE COMPENSATION FOR RESPONDENTS PROPERTY AT P5,000.00 PER SQUARE METER DESPITE THE GLARING FACT THAT AT THE TIME OF TAKING IN THE YEAR 1980 THE FAIR MARKET VALUE WAS PEGGED BY AN APPRAISAL COMMITTEE AT ONE HUNDRED SIXTY PESOS (PHP160.00); III. PUBLIC RESPONDENT COURT ERRED IN UPHOLDING THE JUDGMENT OF THE LOWER COURT AWARDING THE AMOUNT OF P793,000.00 AS REASONABLE RENTAL FOR THE USE OF RESPONDENTS PROPERTY IN SPITE OF THE FACT THAT THE SAME WAS CONVERTED INTO A PUBLIC ROAD BY A PREVIOUSLY ELECTED MUNICIPAL MAYOR WITHOUT RESPONDENTS REGISTERING ANY COMPLAINT OR PROTEST FOR THE TAKING AND DESPITE THE FACT THAT SUCH TAKING DID NOT PERSONALLY BENEFIT THE PETITIONERS BUT THE PUBLIC AT LARGE; AND IV. PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE P200,000.00 AWARD FOR ATTORNEYS FEES TO THE PRIVATE RESPONDENTS COUNSEL DESPITE THE ABSENCE OF NEGLIGENCE OR INACTION ON THE PART OF PETITIONERS RELATIVE TO THE INSTANT CLAIM FOR JUST COMPENSATION.4 At the outset, petitioners must be disabused of their belief that respondents action for recovery of their property, which had been taken for public use, or to claim just compensation therefor is already barred by prescription. In Republic of the Philippines v. Court of Appeals,5 the Court emphasized "that where private property is taken by the Government for public use without first acquiring title thereto either through expropriation or negotiated sale, the owners action to recover the land or the value thereof does not prescribe." The Court went on to remind government agencies not to exercise the power of eminent domain with wanton disregard for property rights as Section 9, Article III of the Constitution provides that "private property shall not be taken for public use without just compensation." 6 The remaining issues here are whether respondents are entitled to regain possession of their property taken by the city government in the 1980s and, in the event that said property can no longer be returned, how should just compensation to respondents be determined. These issues had been squarely addressed in Forfom Development Corporation v. Philippine National Railways,7 which is closely analogous to the present case. In said earlier case, the Philippine National Railways (PNR) took possession of the private property in 1972 without going through expropriation proceedings. The San Pedro-Carmona Commuter Line Project was then implemented with the installation of railroad facilities on several parcels of land, including that of petitioner Forfom. Said owner of the private property then negotiated with PNR as to the amount of just compensation. No agreement having been reached, Forfom filed a complaint for Recovery of Possession of Real Property and/or Damages with the trial court sometime in August 1990. In said case, the Court held that because the landowner did not act to question the lack of expropriation proceedings for a very long period of time and even negotiated with the PNR as to how much it should be paid as just compensation, said landowner is deemed to have waived its right and is estopped from questioning the power of the PNR to expropriate or the public use for which the power was exercised. It was further declared therein that: x x x recovery of possession of the property by the landowner can no longer be allowed on the grounds of estoppel and, more importantly, of public policy which imposes upon the public utility the obligation to continue its services to the public. The non-filing of the case for expropriation will not necessarily lead to the return of the property to the landowner. What is left to the landowner is the right of compensation. x x x It is settled that non-payment of just compensation does not entitle the private landowners to recover possession of their expropriated lot. 8 Just like in the Forfom case, herein respondents also failed to question the taking of their property for a long period of time (from 1980 until the early 1990s) and, when asked during trial what action they took after their property was taken, witness Jovito Luis, one of the respondents, testified that "when we have an occasion to talk to Mayor Caruncho we always asked for compensation."9 It is likewise undisputed that what was constructed by the city government on respondents property was a road for public use, namely, A. Sandoval Avenue in Pasig City. Clearly, as in Forfom, herein respondents are also estopped from recovering possession of their land, but are entitled to just compensation. Now, with regard to the trial courts determination of the amount of just compensation to which respondents are entitled, the Court must strike down the same for being contrary to established rules and jurisprudence. The prevailing doctrine on judicial determination of just compensation is that set forth in Forfom. 10 Therein, the Court ruled that even if there are no expropriation proceedings instituted to determine just compensation, the trial court is still mandated to act in accordance with the procedure provided for in Section 5, Rule 67 of the 1997 Rules of Civil Procedure, requiring the appointment of not more than three competent and disinterested commissioners to ascertain and report to the court the just compensation for the subject property. The Court reiterated its ruling in National Power Corporation v. Dela Cruz11 that "trial with the aid of commissioners is a substantial right that may not be done away with capriciously or for no reason at all."12 It was also emphasized therein that although ascertainment of just compensation is a judicial prerogative, the commissioners findings may only be disregarded or substituted with the trial courts own estimation of the propertys value only if the commissioners have applied illegal principles to the evidence submitted to them, where they have disregarded a clear preponderance of evidence, or where the amount allowed is either grossly inadequate or excessive. Thus, the Court concluded in Forfom that:

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The judge should not have made a determination of just compensation without first having appointed the required commissioners who would initially ascertain and report the just compensation for the property involved. This being the case, we find the valuation made by the trial court to be ineffectual, not having been made in accordance with the procedure provided for by the rules.13 Verily, the determination of just compensation for property taken for public use must be done not only for the protection of the landowners interest but also for the good of the public. In Republic v. Court of Appeals,14 the Court explained as follows: The concept of just compensation, however, does not imply fairness to the property owner alone. Compensation must be just not only to the property owner, but also to the public which ultimately bears the cost of expropriation.15 It is quite clear that the Court, in formulating and promulgating the procedure provided for in Sections 5 and 6, Rule 67, found this to be the fairest way of arriving at the just compensation to be paid for private property taken for public use. With regard to the time as to when just compensation should be fixed, it is settled jurisprudence that where property was taken without the benefit of expropriation proceedings, and its owner files an action for recovery of possession thereof before the commencement of expropriation proceedings, it is the value of the property at the time of taking that is controlling.16 Explaining the reason for this rule in Manila International Airport Authority v. Rodriguez,17 the Court, quoting Ansaldo v. Tantuico, Jr.,18 stated, thus: The reason for the rule, as pointed out in Republic v. Lara, is that . . . [w]here property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enchanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or, there may have been a natural increase in the value of the property from the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is taken. This is the only way that compensation to be paid can be truly just; i.e., just not only to the individual whose property is taken,' 'but to the public, which is to pay for it.19 In this case, the trial court should have fixed just compensation for the property at its value as of the time of taking in 1980, but there is nothing on record showing the value of the property at that time. The trial court, therefore, clearly erred when it based its valuation for the subject land on the price paid for properties in the same location, taken by the city government only sometime in the year 1994. However, in taking respondents property without the benefit of expropriation proceedings and without payment of just compensation, the City of Pasig clearly acted in utter disregard of respondents proprietary rights. Such conduct cannot be countenanced by the Court. For said illegal taking, the City of Pasig should definitely be held liable for damages to respondents. Again, in Manila International Airport Authority v. Rodriguez,20 the Court held that the government agencys illegal occupation of the owners property for a very long period of time surely resulted in pecuniary loss to the owner. The Court held as follows: Such pecuniary loss entitles him to adequate compensation in the form of actual or compensatory damages, which in this case should be the legal interest (6%) on the value of the land at the time of taking, from said point up to full payment by the MIAA. This is based on the principle that interest "runs as a matter of law and follows from the right of the landowner to be placed in as good position as money can accomplish, as of the date of the taking." The award of interest renders unwarranted the grant of back rentals as extended by the courts below. In Republic v. Lara, et al., the Court ruled that the indemnity for rentals is inconsistent with a property owners right to be paid legal interest on the value of the property, for if the condemnor is to pay the compensation due to the owners from the time of the actual taking of their property, the payment of such compensation is deemed to retroact to the actual taking of the property; and, hence, there is no basis for claiming rentals from the time of actual taking.http://127.0.0.1:7860/source/2006.zip%3e17e,df|2006/FEB2006/161836.htm - _ftn#_ftn More explicitly, the Court held in Republic v. Garcellano that: The uniform rule of this Court, however, is that this compensation must be, not in the form of rentals, but by way of 'interest from the date that the company [or entity] exercising the right of eminent domain take possession of the condemned lands, and the amounts granted by the court shall cease to earn interest only from the moment they are paid to the owners or deposited in court x x x. xxxx For more than twenty (20) years, the MIAA occupied the subject lot without the benefit of expropriation proceedings and without the MIAA exerting efforts to ascertain ownership of the lot and negotiating with any of the owners of the property. To our mind, these are wanton and irresponsible acts which should be suppressed and corrected. Hence, the award of exemplary damages and attorneys fees is in order. However, while Rodriguez is entitled to such exemplary damages and attorneys fees, the award granted by the courts below should be equitably reduced. We hold that Rodriguez is entitled only to P200,000.00 as exemplary damages, and attorneys fees equivalent to one percent (1%) of the amount due.21 Lastly, with regard to the liability of petitioners Vicente P. Eusebio, Lorna A. Bernardo, and Victor Endriga all officials of the city government the Court cannot uphold the ruling that said petitioners are jointly liable in their personal capacity with the City of Pasig for payments to be made to respondents. There is a dearth of evidence which would show that said petitioners were already city government officials in 1980 or that they had any involvement whatsoever in the illegal taking of respondents property. Thus, any liability to respondents is the sole responsibility of the City of Pasig. IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated November 28, 2003 is MODIFIED to read as follows: 1. The valuation of just compensation and award of back rentals made by the Regional Trial Court of Pasig City, Branch 155 in Civil Case No. 65937 are hereby SET ASIDE. The City of Pasig, represented by its duly-authorized officials, is DIRECTED to institute the appropriate expropriation action over the subject parcel of land within fifteen (15) days from finality of this Decision, for the proper determination of just compensation due to respondents, with interest at the legal rate of six (6%) percent per annum from the time of taking until full payment is made. 2. The City of Pasig is ORDERED to pay respondents the amounts of P200,000.00 as exemplary damages and P200,000.00 as attorneys fees. No costs.

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