SPECIAL SECOND DIVISION

[G.R. No. 156273. August 9, 2005]

HEIRS OF TIMOTEO MORENO and MARIA ROTEA, namely, ESPERANZA

R. EDJEC, BERNARDA R. SUELA, RUBY C. ROTEA, BERNARDA R.
ROTEA, ELIA R. VDA. DE LIMBAGA, VIRGINIA R. ARBON,
ROSALINDA R. ARQUISOLA, CORAZON ROTEA, FE R. EBORA,
CARIDAD ROTEA, ANGELES VDA. DE RENACIA, JORGE ROTEA,
MARIA LUISA ROTEA-VILLEGAS, ALFREDO R. ROTEA, represented
by his heirs, namely, LIZBETH ROTEA and ELEPETH ROTEA; LUIS
ROTEA, represented by his heir JENNIFER ROTEA; and ROLANDO
R. ROTEA, represented by his heir ROLANDO R. ROTEA, JR.,
petitioners, vs. MACTAN-CEBU INTERNATIONAL AIRPORT
AUTHORITY, respondent.

RESOLUTION
CALLEJO, SR., J.:

This is a Motion for Reconsideration dated November 10, 2003 filed by respondent
Mactan-Cebu International Airport Authority (MCIAA), through the Office of the Solicitor
General (OSG), seeking the reversal of the Decision dated October 15, 2003, the
[1] [2]

dispositive portion of which reads:

WHEREFORE, the instant Petition for Review is GRANTED. The Decision of the Court
of Appeals in CA-G.R. CV No. 64456 dated 20 December 2001 and its Resolution of 28
November 2002, denying reconsideration of the Decision are REVERSED and SET ASIDE.
The Decision of RTC-Br. 19 of Cebu City dated 12 April 1999 in Civil Case No. CEB
20015 is MODIFIED IN PART by –
(a) ORDERING respondent Mactan-Cebu International Airport Authority (MCIAA) TO
RECONVEY to petitioner Heirs of Timoteo Moreno and Maria Rotea, namely: Esperanza R.
Edjec, Bernarda R. Suela, Ruby C. Rotea, Bernarda R. Rotea, Elia R. Vda. de Limbaga,
Virginia R. Arbon, Rosalinda R. Arquisola, Corazon Rotea, Fe R. Ebora, Caridad Rotea,
Angeles Vda. de Renacia, Jorge Rotea, Maria Luisa Rotea-Villegas, Alfredo R. Rotea,
represented by his heirs, namely: Lizbeth Rotea and Elepeth Rotea; Luis Rotea, represented
by his heir Jennifer Rotea; and Rolando R. Rotea, represented by his heir Rolando R.
Rotea, Jr., Lot No. 916 with an area of 2,355 square meters and Lot No. 920 consisting of
3,097 square meters in Lahug, Cebu City, with all the improvements thereon evolving
through nature or time, but excluding those that were introduced by third parties, i.e., DPWH,
which shall be governed by existing contracts and relevant provisions of law;
(b) ORDERING petitioner Heirs of Timoteo Moreno and Maria Rotea TO PAY
respondent MCIAA what the former received as just compensation for the expropriation of
Lot Nos. 916 and 920 in Civil Case No. R-1881, i.e., P7,065.00 for Lot No. 916 and
P9,291.00 for Lot No. 920 with consequential damages by way of legal interest from 16
November 1947. Petitioners must likewise PAY respondent MCIAA the necessary expenses
that the latter may have incurred in sustaining the properties and the monetary value of its
services in managing the properties to the extent that petitioners will secure a benefit from
such acts. Respondent MCIAA however may keep whatever income or fruits it may have
 obtained from the parcels of land, in the same way that petitioners need not account for the
interests that the amounts they received as just compensation may have earned in the
meantime;
(c) ORDERING respondent MCIAA TO CONVEY to petitioners the improvements it
may have built on Lot Nos. 916 and 920, if any, in which case petitioners SHALL PAY for
these improvements at the prevailing free market price, otherwise, if petitioners do not want
to appropriate such improvements, or if respondent does not choose to sell them,
respondent MCIAA SHALL REMOVE these improvements WITHOUT ANY OBLIGATION
on the part of petitioners to pay any compensation to respondent MCIAA from them;
(d) ORDERING petitioners TO PAY the amount so determined under letter (b) of this
dispositive portion as consideration for the reconveyance of Lot Nos. 916 and 920, as well
as the prevailing free market price of the improvements built thereon by respondent MCIAA,
if any and desired to be bought and sold by the parties, in ready money or cash PAYABLE
within a period of three hundred sixty-five (365) days from the date that the amount under
letter (b) above is determined with finality, unless the parties herein stipulate a different
scheme or schedule of payment, otherwise, after the period of three hundred sixty-five (365)
days or the lapse of the compromise scheme or schedule of payment and the amount so
payable is not settled, the right of repurchase of petitioners and the obligation of respondent
MCIAA to so reconvey Lot Nos. 916 and 920 and/or the improvements shall be DEEMED
FORFEITED and the ownership of those parcels of land shall VEST ABSOLUTELY upon
the respondent MCIAA;
(e) REMANDING the instant case to RTC-Br. 19 of Cebu City for purposes of
determining the amount of compensation for Lot Nos. 916 and 920 to be paid by petitioners
as mandated in letter (b) hereof, and the value of the prevailing free market price of the
improvements built thereon by respondent MCIAA, if any and desired to be bought and sold
by the parties, and in general, securing the immediate execution of this Decision under the
premises;
(f) ORDERING petitioners to respect the right of the Department of Public Works and
Highways to its lease contract until the expiration of the lease period; and
(g) DELETING the award of P60,000.00 for attorney’s fees and P15,000.00 for
litigation expenses against respondent MCIAA and in favor of petitioners.
This Decision is without prejudice to the claim of intervenor one Richard E. Enchuan on
his allegation that he acquired through deeds of assignment the rights of some of herein
petitioners over Lot Nos. 916 and 920.
No costs.
SO ORDERED.[3]
A review of the factual milieu of the case reveals that in 1949, the National Airport
Corporation (NAC), as the predecessor of herein respondent MCIAA, sought to acquire Lot
No. 916, having a total area of 2,355 square meters under Transfer Certificate of Title (TCT)
No. RT-7543 (106) T-13694, and Lot No. 920 containing an area of 3,097 square meters
covered by TCT No. RT-7544 (107) T-13695 for the proposed expansion of the Lahug
Airport. The two parcels of land located in Lahug, Cebu City were owned by the spouses
Timoteo Moreno and Maria Rotea. The spouses refused to sell their properties because the
[4]

proposed price was unacceptably way below the market value of the lands at that time. As
an incentive for the other owners to cede their lots adjoining the then existing Lahug Airport,
NAC guaranteed them or their successors-in-interest the right to repurchase their properties
for the same price paid by the government in the event that these properties were no longer
used for purposes of the airport. Some landowners executed deeds of conveyance while
[5]

others who refused to cede their properties became defendants in an action for expropriation
filed by the Republic of the Philippines before the Court of First Instance (CFI) of Cebu,
docketed as Civil Case No. R-1881. Lot Nos. 916 and 920 were among those included in
[6]

the expropriation case.

 In a Decision rendered by the trial court on December 29, 1961, Lot Nos. 916 and 920,
[7]

along with the other adjoining lands, were condemned for public use after payment of just
compensation. The trial court fixed the price at P3.00 per square meter for the two lots and
[8]

ordered the payment thereof to the owners in the sum of P7,065.00 for Lot No. 916 and
P9,291.00 for Lot No. 920, with payment of consequential damages by way of legal interest
from November 16, 1947. Thereafter, the subject lands were transferred in the name of the
[9]

Republic of the Philippines under TCT No. 58691 for Lot No. 916 and TCT No. 58692 for
[10] [11]

Lot No. 920 and subsequently turned over to MCIAA under Republic Act (Rep. Act) No. 6958
in 1990. [12]

Subsequently, the Lahug Airport was abandoned and all its functions and operations
were transferred to the Mactan Airport. In two various letters sent on different dates, the heirs
of Timoteo Moreno and Maria Rotea, the petitioners herein, wrote then President Fidel V.
Ramos and the MCIAA General Manager, requesting for the exercise of their supposed
[13] [14]

right to repurchase Lot Nos. 916 and 920 considering that the said lots intended for the
expansion of the Lahug Airport were not utilized. Their written and verbal demands were
ignored by the respondent.
Consequently, the petitioners filed a complaint for reconveyance and damages with the
Regional Trial Court of Cebu City docketed as Civil Case No. CEB-20015, against the
respondent asserting their right to reacquire the subject properties. In the complaint, the
petitioners claimed that assurances were given by the NAC officials regarding the entitlement
of the landowners to repurchase their properties for the same price paid by NAC in the event
that the lots were no longer used for airport purposes. The petitioners further added that the
[15]

guaranty of right to repurchase was the propelling factor that persuaded the registered
owners to continue with the expropriation proceedings. The same reason was given by the
petitioners for not opposing and appealing the case later on. [16]

During the pendency of the case, one Richard E. Unchuan filed a Motion for Transfer of
Interest, alleging that some of the petitioners had already assigned to him their respective
[17]

rights, interests, participation, and ownership over the subject properties. Thereafter, the
Department of Public Works and Highways (DPWH), likewise, sought to intervene alleging
that it is the lessee of Lot No. 920 and would be adversely affected by the outcome of the
litigation. [18]

At the start of the trial, the petitioners presented two witnesses to support their
allegations in the complaint. The first witness was Esperanza Rotea Edjec, who testified that
when she was just 22 years old, the airport authority representatives called for a meeting
with the landowners affected by the expropriation. The witness was present during the
gathering and attested that the registered owners of the lots were assured of the return of the
expropriated lands should the same be no longer utilized as an airport. [19]

The next witness was Asterio Uy, a retired government employee of the Civil Aeronautics
Administration (CAA), who attested that in 1957, he was sent as part of the legal team to
Mactan, Cebu City, tasked to acquire certain lots for the extension of the Lahug Airport. He
added that when the negotiations broke down, the legal contingent resorted to expropriation
proceedings. Upon instructions from the central office of CAA in Manila, Atty. Ocampo, the
head of the legal corps which undertook the procurement of the subject lands, gave the
assurance to the landowners that if the airport is transferred to Mactan, the lots will be
returned to their previous owners. [20]

The respondent, on the other hand, presented on the witness stand Michael M.
Bacarisas, a legal assistant of the MCIAA. The witness testified that as a consequence of
the expropriation proceedings, the TCTs of Lot Nos. 916 and 920 were cancelled and in lieu
thereof, new ones were issued in the name of the Republic of the Philippines in 1962. He
pronounced that the decision in Civil Case No. R-1881 did not expressly impart that the
landowners were guaranteed the reconveyance of the lots to them if the lands expropriated
would not be used for the purpose. On cross-examination, the witness admitted that he had
no personal knowledge of any agreement between the airport officials and the previous
registered owners of the disputed properties. His research likewise revealed that a total of 65
lots were expropriated by the government; 19 lots were the subject of court litigations
concerning their reconveyance; and that out of the 19 lots, 15 lots were already returned to
their former owners. Moreover, Bacarisas alleged that some of the expropriated lots were
recovered by their previous landowners because they were acquired through negotiated sale
wherein the standard contract had an express provision that should the proposed expansion
of the Lahug Airport not materialize, the landowners may recover their properties. [21]

On April 12, 1999, the trial court rendered judgment in favor of the petitioners, granting
[22]

them the right to repurchase the properties at the amount originally paid by the respondent in
Civil Case No. R-1881, including consequential damages. The trial court ruled that the public
purpose for which the lands were expropriated had ceased to exist, therefore, it is but logical
and in the higher interest of substantial justice to give back the right of ownership of the
subject lots to the former owners.
Aggrieved, the respondent appealed the decision to the Court of Appeals (CA). On
December 20, 2001, the CA reversed the trial court’s decision on the premise that the
judgment affirming the state’s right to exercise its power of eminent domain was
unconditional. In maintaining a contrary view, the CA cited Fery v. Municipality of
Cabanatuan, which held that when a land has been acquired for public use unconditionally
[23]

and in fee simple, the previous owner retains no right in the land and the title obtained will
not, in any way, be impaired. Another case relied upon by the appellate court was Mactan-
Cebu International Airport Authority v. Court of Appeals which is allegedly stare decisis to
[24]

the case to prevent the exercise of the right of repurchase as the former dealt with a parcel of
land similarly expropriated under Civil Case No. R-1881; hence, the same questions relating
to the same event have already been previously litigated and decided by a competent court.
On February 11, 2002, the petitioners filed a motion for reconsideration before the CA,
which was denied in a Resolution dated November 28, 2002.
Expectedly, the petitioners filed before this Court a petition for review of the decision of
the CA.
In reversing the decision of the CA, the Court ratiocinated that the attendance in the case
at bar of standing admissible evidence validating the claim of the petitioners’ right to
repurchase the expropriated properties took away the instant case from the ambit of Mactan-
Cebu International Airport Authority v. Court of Appeals, but still within the principles
enunciated in the Fery case. This Court moreover added:
[25]

Mactan-Cebu International Airport Authority is correct in stating that one would not find
an express statement in the Decision in Civil Case No. R-1881 to the effect that “the
[condemned] lot would return to [the landowner] or that [the landowner] had a right to
repurchase the same if the purpose for which it was expropriated is ended or abandoned or
if the property was to be used other than as the Lahug Airport.” This omission
notwithstanding, and while the inclusion of this pronouncement in the judgment of
condemnation would have been ideal, such precision is not absolutely necessary nor is it
fatal to the cause of petitioners herein. No doubt, the return or repurchase of the condemned
properties of petitioners could be readily justified as the manifest legal effect or consequence
of the trial court’s underlying presumption that “Lahug Airport will continue to be in operation”
when it granted the complaint for eminent domain and the airport discontinued its activities.
The predicament of petitioners involves a constructive trust, one that is akin to the
implied trust referred to in Art. 1454 of the Civil Code, “If an absolute conveyance of property
is made in order to secure the performance of an obligation of the grantor toward the
grantee, a trust by virtue of law is established. If the fulfillment of the obligation is offered by
 the grantor when it becomes due, he may demand the reconveyance of the property to him.”
In the case at bar, petitioners conveyed Lot Nos. 916 and 920 to the government with the
latter obliging itself to use the realties for the expansion of Lahug Airport; failing to keep its
bargain, the government can be compelled by petitioners to reconvey the parcels of land to
them, otherwise, petitioners would be denied the use of their properties upon a state of
affairs that was not conceived nor contemplated when the expropriation was authorized.[26]
Respondent MCIAA filed a Motion for Reconsideration dated November 10, 2003
[27]

praying that the Court’s decision be reconsidered and set aside. In the said motion, the
respondent reiterated its earlier claim that: (a) the decision of the trial court in Civil Case No.
R-1881, which granted to MCIAA the titles to Lot Nos. 916 and 920 in fee simple, has long
become final and executory; (b) this Court’s October 15, 2003 Decision, granting the
petitioners’ right of repurchase, effectively overturns the rulings in Fery v. Municipality of
Cabanatuan, MCIAA v. Court of Appeals, and Reyes v. National Housing Authority; (c)
[28] [29] [30]

the petitioners are not entitled to reconveyance or repurchase of the questioned lots after the
closure of the Lahug Airport; (d) Lot Nos. 916 and 920, which were expropriated in Civil Case
No. R-1881, should not be treated like those lots sold through negotiated sale with a
stipulation for reconveyance or repurchase; and (e) granting arguendo that petitioners have a
right to repurchase Lot Nos. 916 and 920, the repurchase price should be the fair market
value of the lands.
Additionally, MCIAA filed a Motion to Resolve the Motion for Reconsideration by the
Honorable Court En Banc dated November 11, 2003, alleging that the present case involves
novel questions of law.
On November 20, 2003, the petitioners filed an Opposition to the respondent’s Motion for
Reconsideration stating that no new arguments have been proffered by the respondent to
warrant the reversal of the Court’s decision.
We remain unpersuaded by the respondent’s assertions. The merits of the case have
already been discussed at length in the challenged decision and to linger further on them
herein would be inordinate. Suffice it to say that the Court considered the rulings in Fery v.
Municipality of Cabanatuan and Mactan-Cebu International Airport Authority v. Court of
Appeals which defined the rights and obligations of landowners, whose properties were
expropriated, “when the public purpose for which the eminent domain was exercised no
longer subsists.” [31]

The respondent insists that the decision effectively overturned the ruling in the Fery case
which requires that for an expropriation to be conditional, the judgment must clearly spell out
said condition. The respondent is mistaken. We reiterate what we stated in our decision, to
wit:
… In Fery, which was cited in the recent case of Reyes v. National Housing Authority,
we declared that the government acquires only such rights in expropriated parcels of land as
may be allowed by the character of its title over the properties –
If x x x land is expropriated for a particular purpose, with the condition that
when that purpose is ended or abandoned the property shall return to its former
owner, then, of course, when the purpose is terminated or abandoned the former
owner reacquires the property so expropriated. If x x x land is expropriated for a
public street and the expropriation is granted upon condition that the city can only
use it for a public street, it returns to the former owner, unless there is some
statutory provision to the contrary x x x x If, upon the contrary, however, the decree
of expropriation gives to the entity a fee simple title, then, of course, the land
becomes the absolute property of the expropriator, whether it be the State, a
province, or municipality, and in that case the non-user does not have the effect of
defeating the title acquired by the expropriation proceedings x x x x When land has
been acquired for public use in fee simple, unconditionally, either by the exercise of
 eminent domain or by purchase, the former owner retains no rights in the land, and
the public use may be abandoned, or the land may be devoted to a different use,
without any impairment of the estate or title acquired, or any reversion to the former
owner x x x x[32]
It must be pointed out that nothing in the Fery case bespeaks that there should
foremost be an express condition in the dispositive portion of the decision before the
condemned property can be returned to its former owner after the purpose for its taking has
been abandoned or ended. The indisputable certainty in the present case is that there was a
prior promise by the predecessor of the respondent that the expropriated properties may be
recovered by the former owners once the airport is transferred to Mactan, Cebu. In fact, the
witness for the respondent testified that 15 lots were already reconveyed to their previous
owners. Intervenor DPWH, likewise, manifested that Lot No. 920 is the subject of a
memorandum of agreement with the respondent’s predecessor-in-interest wherein the
[33]

property was leased to DPWH. This belated news further bolsters the fact that the purpose
for which the properties were condemned has been abandoned.
A more pressing discovery unearthed by this Court is that a significant portion of the
subject properties had been purchased by the Cebu Property Ventures, Inc. for the
development of a commercial complex. The respondent, in its answer, did not deny this
[34]

allegation in the petitioners’ complaint. Section 10, Rule 8 of the Revised Rules of Court
provides:
Specific denial. – A defendant must specify each material allegation of fact the truth of
which he does not admit and, whenever practicable, shall set forth the substance of the
matters upon which he relies to support his denial. Where a defendant desires to deny only
a part of an averment, he shall specify so much of it as is true and material and shall deny
only the remainder. Where a defendant is without knowledge or information sufficient to form
a belief as to the truth of a material averment made in the complaint, he shall so state, and
this shall have the effect of a denial.
Section 11 of the same Rule likewise states that “[m]aterial averment in the complaint, …
shall be deemed admitted when not specifically denied.” The predominant precept is that
upon abandonment of real property condemned for public purpose, the party who originally
condemned the property recovers control of the land if the condemning party continues to
use the property for public purpose; however, if the condemning authority ceases to use the
property for a public purpose, property reverts to the owner in fee simple. The government’s
[35]

taking of private property, and then transferring it to private persons under the guise of public
use or purpose is the despotism found in the immense power of eminent domain. [36]

Moreover, the direct and unconstitutional state’s power to oblige a landowner to renounce his
productive and invaluable possession to another citizen, who will use it predominantly for his
own private gain, is offensive to our laws. [37]

Next, the respondent asseverates that the Court departed from the ruling enunciated in
Mactan-Cebu International Airport Authority v. Court of Appeals. We are not convinced.
Clearly, the respondent’s contention can prevail only if the facts of the present case are
accurately in point with those in the other case. We recapitulate our rulings that in MCIAA v.
CA, respondent Virginia Chiongbian proffered “inadmissible and inconclusive evidence, while
in the present case we have preponderant proof as found by the trial court of the existence of
the right of repurchase in favor of the petitioners.” No less than Asterio Uy, one of the
members of the CAA Mactan Legal Team, which interceded for the acquisition of the lots for
the Lahug Airport’s expansion, affirmed that persistent assurances were given to the
landowners to the effect that as soon as the Lahug Airport is abandoned or transferred to
Mactan, the lot owners would be able to reacquire their properties. Unlike in the case of
MCIAA v. CA, where respondent Chiongbian offered inadmissible evidence for being
hearsay in nature, the petitioners in this case presented a witness whose testimony was
based on his own personal knowledge. Surely, Uy is a credible witness inasmuch as he was
even tasked by the negotiating panel to directly communicate to the landowners the
instructions from the CAA main office that the properties will be returned to the original
owners once the Lahug Airport is transferred to Mactan. Likewise, he cannot be considered
as a biased witness as he was a former employee of the respondent’s predecessor-in-
interest and was merely recalling and informing the court of the events that transpired during
the negotiations for the expropriations of the lots. Part of Uy’s testimony is as follows:
Atty. Jacinto
Q: Lahug Airport. In what capacity or what position were you holding at the time when you
were assigned to Cebu for the purpose of conducting negotiations with the landowners?
Witness
A: I was a member of the CAA Legal Team.
Q: I see, CAA Legal Team. Can you tell the court who were the members, if you still
remember, of that team?
A: I will mention Atty. Ocampo, Atty. Lansang, Atty. Sarigumba and myself.
Q: You stated that you were sent to Cebu as a member of the CAA Legal Team to
negotiate with the landowners for the acquisition of lots for purposes, for airport
purposes, you are referring of course to the acquisition of lot in Mactan?
A: Yes, sir.
…
Q: Now what was the purpose of your negotiations also in Lahug, what was the purpose of
those negotiations?
A: The purpose there was to purchase or buy the property affected by the Lahug
extension.
Q: When you say affected, did you have any specific instructions as to what Lahug airport
would be devoted to? I will reform Your Honor. Since Lahug airport was already in
existence, why did you still have to negotiate with the adjacent landowners?
A: For the Lahug airport expansion.
Q: Now, how did you conduct the negotiations, in what manner?
A: We convinced the landowners affected by the expansion to sell their properties and if
they refuse, there is another right of eminent domain of the government to acquire the
properties through expropriation. And with the assurance that these properties, I am
referring to the properties in Lahug, as soon as Lahug airport will be transferred to
Mactan, that will be the time that these properties will be returned to the landowners at
the same price.
Q: Why do you say that there was an assurance given, how did you come to know about
this?
A: The assurance was from the Chief of the team, Atty. Ocampo, through him and
accordingly per instruction from the Central Office in Manila.
Q: As a member of the legal team, did you gave [sic] the assurance to the landowners or
was it Atty. Ocampo?
A: We, because I was made as the spokesman considering that I am a Boholano who
knows the dialect, Cebuano, and my companions were Tagalogs, they don’t know
Cebuano so I participated in the negotiations.
Q: In short, you were the one who conducted the negotiations?
A: Together with the members of the team, I was there assisting.[38]
 Moreover, we do not subscribe to the respondent’s contention that since the possibility of
the Lahug Airport’s closure was actually considered by the trial court, a stipulation on
reversion or repurchase was so material that it should not have been discounted by the court
a quo in its decision in Civil Case No. R-1881, if, in fact, there was one. We find it proper to
cite, once more, this Court’s ruling that the fallo of the decision in Civil Case No. R-1881
must be read in reference to the other portions of the decision in which it forms a part. A
reading of the Court’s judgment must not be confined to the dispositive portion alone; rather,
it should be meaningfully construed in unanimity with the ratio decidendi thereof to grasp the
true intent and meaning of a decision.[39]

On the other hand, we agree with the respondent in asserting that Lot Nos. 916 and 920
should not be treated like those lands acquired through negotiated sale with a proviso in their
contracts for reconveyance or repurchase. Be that as it may, we however find that there is
historic as well as rational bases for affording the petitioners the right of repurchase. We are
cognizant of the incontestable fact that some landowners immediately sold their properties
upon the assurance that they could repurchase them at the cessation of the Lahug Airport’s
operations. And, indeed, these landowners who chose to cede their properties were fortunate
to have a stipulation in their contract of sale vouching for their right of repurchase.
Meanwhile, the landowners who found it burdensomely difficult to part with their cherished
lands underwent the costly expropriation proceedings which lasted for a number of years.
Inevitably, justice and equity dictates the reconveyance of the expropriated lots to their
previous owners. One must never fail to overlook the reality that the power to condemn
property is an awesome power of the State and that to compel a citizen to forcibly
[40]

surrender his precious property to the enormous governmental power is too much a sacrifice
which deserves more consideration than those landowners, who, from the very beginning
voluntarily relinquished their ownership.
We now come to the discussion of the amount of repurchase price. The respondent
maintains that the sum to be paid by the petitioners for Lot Nos. 916 and 920 should be their
prevailing market price, and not the expropriation price which would be grossly unfair
considering that the petitioners were paid just compensation and the lots are now millions of
pesos in value. Our stand on the amount of repurchase price remains unperturbed. When the
State reconveys land, it should not profit from sudden appreciations in land values. Any
increase or decrease in market value due to the proposed improvement may not be
considered in determining the market value. Thus, reconveyance to the original owner shall
be for whatever amount he was paid by the government, plus legal interest, whether or not
the consideration was based on the land’s highest and best use when the sale to the State
occurred.[41]

WHEREFORE, the motion for reconsideration is DENIED.

SO ORDERED.
 [G.R. No. 146587. July 2, 2002]

REPUBLIC OF THE PHILIPPINES, represented by the General Manager of

the PHILIPPINE INFORMATION AGENCY (PIA), petitioner, vs. THE
HONORABLE COURT OF APPEALS and the HEIRS OF LUIS
SANTOS as herein represented by DR. SABINO SANTOS and
PURIFICACION SANTOS IMPERIAL, respondents.

DECISION
VITUG, J.:

Petitioner instituted expropriation proceedings on 19 September 1969 before the

Regional Trial Court ("RTC") of Bulacan, docketed Civil Cases No. 3839-M, No. 3840-M, No.
3841-M and No. 3842-M, covering a total of 544,980 square meters of contiguous land
situated along MacArthur Highway, Malolos, Bulacan, to be utilized for the continued
broadcast operation and use of radio transmitter facilities for the “Voice of the Philippines”
project. Petitioner, through the Philippine Information Agency (“PIA”), took over the premises
after the previous lessee, the “Voice of America,” had ceased its operations thereat.
Petitioner made a deposit of P517,558.80, the sum provisionally fixed as being the
reasonable value of the property. On 26 February 1979, or more than nine years after the
institution of the expropriation proceedings, the trial court issued this order -
"WHEREFORE, premises considered, judgment is hereby rendered:
"Condemning the properties of the defendants in Civil Cases Nos. 3839-M to 3842-M
located at KM 43, MacArthur Highway, Malolos, Bulacan and covered by several transfer
certificates of title appearing in the Commissioners’ Appraisal Report consisting of the total
area of 544,980 square meters, as indicated in plan, Exhibit A, for plaintiff, also marked as
Exhibit I for the defendants, and as Appendix ‘A’ attached to the Commissioners’ Appraisal
Report, for the purpose stated by the plaintiff in its complaint;
"Ordering the plaintiff to pay the defendants the just compensation for said property
which is the fair market value of the land condemned, computed at the rate of six pesos
(P6.00) per square meter, with legal rate of interest from September 19, 1969, until fully
paid; and
"Ordering the plaintiff to pay the costs of suit, which includes the aforesaid fees of
commissioners, Atty. Victorino P. Evangelista and Mr. Pablo Domingo."i[1]
The bone of contention in the instant controversy is the 76,589-square meter property
previously owned by Luis Santos, predecessor-in-interest of herein respondents, which forms
part of the expropriated area.
It would appear that the national government failed to pay to herein respondents the
compensation pursuant to the foregoing decision, such that a little over five years later, or on
09 May 1984, respondents filed a manifestation with a motion seeking payment for the
expropriated property. On 07 June 1984, the Bulacan RTC, after ascertaining that the heirs
remained unpaid in the sum of P1,058,655.05, issued a writ of execution served on the
plaintiff, through the Office of the Solicitor General, for the implementation thereof. When the
order was not complied with, respondents again filed a motion urging the trial court to direct
the provincial treasurer of Bulacan to release to them the amount of P72,683.55, a portion of
the sum deposited by petitioner at the inception of the expropriation proceedings in 1969,
corresponding to their share of the deposit. The trial court, in its order of 10 July 1984,
granted the motion.
 In the meantime, President Joseph Ejercito Estrada issued Proclamation No. 22, ii[2]

transferring 20 hectares of the expropriated property to the Bulacan State University for the
expansion of its facilities and another 5 hectares to be used exclusively for the propagation of
the Philippine carabao. The remaining portion was retained by the PIA. This fact
notwithstanding, and despite the 1984 court order, the Santos heirs remained unpaid, and no
action was taken on their case until 16 September 1999 when petitioner filed its
manifestation and motion to permit the deposit in court of the amount of P4,664,000.00 by
way of just compensation for the expropriated property of the late Luis Santos subject to
such final computation as might be approved by the court. This time, the Santos heirs,
opposing the manifestation and motion, submitted a counter-motion to adjust the
compensation from P6.00 per square meter previously fixed in the 1979 decision to its
current zonal valuation pegged at P5,000.00 per square meter or, in the alternative, to cause
the return to them of the expropriated property. On 01 March 2000, the Bulacan RTC ruled in
favor of respondents and issued the assailed order, vacating its decision of 26 February
1979 and declaring it to be unenforceable on the ground of prescription -
"WHEREFORE, premises considered, the court hereby:
"1) declares the decision rendered by this Court on February 26, 1979 no longer
enforceable, execution of the same by either a motion or an independent action having
already prescribed in accordance with Section 6, Rule 39 of both the 1964 Revised Rules of
Court and the 1997 Rules of Civil Procedure;
"2) denies the plaintiff’s Manifestation and Motion to Permit Plaintiff to Deposit in
Court Payment for Expropriated Properties dated September 16, 1999 for the reason stated
in the next preceding paragraph hereof; and
"3) orders the return of the expropriated property of the late defendant Luis Santos to
his heirs conformably with the ruling of the Supreme Court in Government of Sorsogon vs.
Vda. De Villaroya, 153 SCRA 291, without prejudice to any case which the parties may
deem appropriate to institute in relation with the amount already paid to herein oppositors
and the purported transfer of a portion of the said realty to the Bulacan State University
pursuant to Proclamation No. 22 issued by President Joseph Ejercito."iii[3]
Petitioner brought the matter up to the Court of Appeals but the petition was outrightly
denied. It would appear that the denial was based on Section 4, Rule 65, of the 1997 Rules
of Civil Procedure which provided that the filing of a motion for reconsideration in due time
after filing of the judgment, order or resolution interrupted the running of the sixty-day period
within which to file a petition for certiorari; and that if a motion for reconsideration was
denied, the aggrieved party could file the petition only within the remaining period, but which
should not be less than five days in any event, reckoned from the notice of such denial. The
reglementary period, however, was later modified by A.M. No. 00-2-03 S.C., now reading
thusly:
“Sec. 4. When and where petition filed. --- The petition shall be filed not later than sixty
(60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the sixty
(60) day period shall be counted from notice of the denial of said motion.”
The amendatory provision, being curative in nature, should be made applicable to all cases
still pending with the courts at the time of its effectivity.
In Narzoles vs. NLRC, the Court has said:
iv[4]

“The Court has observed that Circular No. 39-98 has generated tremendous confusion
resulting in the dismissal of numerous cases for late filing. This may have been because,
historically, i.e., even before the 1997 revision to the Rules of Civil Procedure, a party had a
fresh period from receipt of the order denying the motion for reconsideration to file a petition
for certiorari. Were it not for the amendments brought about by Circular No. 39-98, the cases
so dismissed would have been resolved on the merits. Hence, the Court deemed it wise to
 revert to the old rule allowing a party a fresh 60-day period from notice of the denial of the
motion for reconsideration to file a petition for certiorari. x x x
“The latest amendments took effect on September 1, 2000, following its publication in
the Manila Bulletin on August 4, 2000 and in the Philippine Daily Inquirer on August 7, 2000,
two newspapers of general circulation.
“In view of its purpose, the Resolution further amending Section 4, Rule 65, can only be
described as curative in nature, and the principles governing curative statutes are
applicable.
“Curative statutes are enacted to cure defects in a prior law or to validate legal
proceedings which would otherwise be void for want of conformity with certain legal
requirements. (Erectors, Inc. vs. National Labor Relations Commission, 256 SCRA 629
[1996].) They are intended to supply defects, abridge superfluities and curb certain evils.
They are intended to enable persons to carry into effect that which they have designed or
intended, but has failed of expected legal consequence by reason of some statutory
disability or irregularity in their own action. They make valid that which, before the
enactment of the statute was invalid. Their purpose is to give validity to acts done that
would have been invalid under existing laws, as if existing laws have been complied with.
(Batong Buhay Gold Mines, Inc. vs. Dela Serna, 312 SCRA 22 [1999].) Curative statutes,
therefore, by their very essence, are retroactive. (Municipality of San Narciso, Quezon vs.
Mendez, Sr., 239 SCRA 11 [1994].)”v[5]
At all events, petitioner has a valid point in emphasizing the "public nature" of the
expropriated property. The petition being imbued with public interest, the Court has resolved
to give it due course and to decide the case on its merits.
Assailing the finding of prescription by the trial court, petitioner here posited that a motion
which respondents had filed on 17 February 1984, followed up by other motions subsequent
thereto, was made within the reglementary period that thereby interrupted the 5-year
prescriptive period within which to enforce the 1979 judgment. Furthermore, petitioner
claimed, the receipt by respondents of partial compensation in the sum of P72,683.55 on 23
July 1984 constituted partial compliance on the part of petitioners and effectively estopped
respondents from invoking prescription expressed in Section 6, Rule 39, of the Rules of
Court.vi[6]

In opposing the petition, respondents advanced the view that pursuant to Section 6, Rule
39, of the Rules of Court, the failure of petitioner to execute the judgment, dated 26 February
1979, within five years after it had become final and executory, rendered it unenforceable by
mere motion. The motion for payment, dated 09 May 1984, as well as the subsequent
disbursement to them of the sum of P72,683.55 by the provincial treasurer of Bulacan, could
not be considered as having interrupted the five-year period, since a motion, to be
considered otherwise, should instead be made by the prevailing party, in this case by
petitioner. Respondents maintained that the P72,683.55 paid to them by the provincial
treasurer of Bulacan pursuant to the 1984 order of the trial court was part of the initial deposit
made by petitioner when it first entered possession of the property in 1969 and should not be
so regarded as a partial payment. Respondents further questioned the right of PIA to
transfer ownership of a portion of the property to the Bulacan State University even while the
just compensation due the heirs had yet to be finally settled.
The right of eminent domain is usually understood to be an ultimate right of the
sovereign power to appropriate any property within its territorial sovereignty for a public
purpose. Fundamental to the independent existence of a State, it requires no recognition
vii[7]

by the Constitution, whose provisions are taken as being merely confirmatory of its presence
and as being regulatory, at most, in the due exercise of the power. In the hands of the
legislature, the power is inherent, its scope matching that of taxation, even that of police
power itself, in many respects. It reaches to every form of property the State needs for public
use and, as an old case so puts it, all separate interests of individuals in property are held
under a tacit agreement or implied reservation vesting upon the sovereign the right to
resume the possession of the property whenever the public interest so requires it. viii[8]

The ubiquitous character of eminent domain is manifest in the nature of the expropriation
proceedings. Expropriation proceedings are not adversarial in the conventional sense, for the
condemning authority is not required to assert any conflicting interest in the property. Thus,
by filing the action, the condemnor in effect merely serves notice that it is taking title and
possession of the property, and the defendant asserts title or interest in the property, not to
prove a right to possession, but to prove a right to compensation for the taking. ix[9]

Obviously, however, the power is not without its limits: first, the taking must be for public
use, and second, that just compensation must be given to the private owner of the property. x

These twin proscriptions have their origin in the recognition of the necessity for achieving
[10]

balance between the State interests, on the one hand, and private rights, upon the other
hand, by effectively restraining the former and affording protection to the latter. In xi[11]

determining “public use,” two approaches are utilized - the first is public employment or the
actual use by the public, and the second is public advantage or benefit. It is also useful to
xii[12]

view the matter as being subject to constant growth, which is to say that as society
advances, its demands upon the individual so increases, and each demand is a new use to
which the resources of the individual may be devoted. xiii[13]

The expropriated property has been shown to be for the continued utilization by the PIA,
a significant portion thereof being ceded for the expansion of the facilities of the Bulacan
State University and for the propagation of the Philippine carabao, themselves in line with the
requirements of public purpose. Respondents question the public nature of the utilization by
petitioner of the condemned property, pointing out that its present use differs from the
purpose originally contemplated in the 1969 expropriation proceedings. The argument is of
no moment. The property has assumed a public character upon its expropriation. Surely,
petitioner, as the condemnor and as the owner of the property, is well within its rights to alter
and decide the use of that property, the only limitation being that it be for public use, which,
decidedly, it is.
In insisting on the return of the expropriated property, respondents would exhort on the
pronouncement in Provincial Government of Sorsogon vs. Vda. de Villaroya where the xiv[14]

unpaid landowners were allowed the alternative remedy of recovery of the property there in
question. It might be borne in mind that the case involved the municipal government of
Sorsogon, to which the power of eminent domain is not inherent, but merely delegated and of
limited application. The grant of the power of eminent domain to local governments under
Republic Act No. 7160 cannot be understood as being the pervasive and all-
xv[15]

encompassing power vested in the legislative branch of government. For local governments
to be able to wield the power, it must, by enabling law, be delegated to it by the national
legislature, but even then, this delegated power of eminent domain is not, strictly speaking, a
power of eminent, but only of inferior, domain or only as broad or confined as the real
authority would want it to be. xvi[16]

Thus, in Valdehueza vs. Republic where the private landowners had remained unpaid
xvii[17]

ten years after the termination of the expropriation proceedings, this Court ruled -
“The points in dispute are whether such payment can still be made and, if so, in what
amount. Said lots have been the subject of expropriation proceedings. By final and
executory judgment in said proceedings, they were condemned for public use, as part of an
airport, and ordered sold to the government. x x x It follows that both by virtue of the
judgment, long final, in the expropriation suit, as well as the annotations upon their title
certificates, plaintiffs are not entitled to recover possession of their expropriated lots - which
are still devoted to the public use for which they were expropriated - but only to demand the
fair market value of the same.
 "Said relief may be granted under plaintiffs' prayer for: `such other remedies, which may
be deemed just and equitable under the premises'."xviii[18]
The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay City where the xix[19]

recovery of possession of property taken for public use prayed for by the unpaid landowner
was denied even while no requisite expropriation proceedings were first instituted. The
landowner was merely given the relief of recovering compensation for his property computed
at its market value at the time it was taken and appropriated by the State.
The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings
provides not only for the payment of just compensation to herein respondents but likewise
adjudges the property condemned in favor of petitioner over which parties, as well as their
privies, are bound. Petitioner has occupied, utilized and, for all intents and purposes,
xx[20]

exercised dominion over the property pursuant to the judgment. The exercise of such rights
vested to it as the condemnee indeed has amounted to at least a partial compliance or
satisfaction of the 1979 judgment, thereby preempting any claim of bar by prescription on
grounds of non-execution. In arguing for the return of their property on the basis of non-
payment, respondents ignore the fact that the right of the expropriatory authority is far from
that of an unpaid seller in ordinary sales, to which the remedy of rescission might perhaps
apply. An in rem proceeding, condemnation acts upon the property. After condemnation, xxi[21]

the paramount title is in the public under a new and independent title; thus, by giving xxii[22]

notice to all claimants to a disputed title, condemnation proceedings provide a judicial

process for securing better title against all the world than may be obtained by voluntary
conveyance. xxiii[23]

Respondents, in arguing laches against petitioner did not take into account that the same
argument could likewise apply against them. Respondents first instituted proceedings for
payment against petitioner on 09 May 1984, or five years after the 1979 judgment had
become final. The unusually long delay in bringing the action to compel payment against
herein petitioner would militate against them. Consistently with the rule that one should take
good care of his own concern, respondents should have commenced the proper action upon
the finality of the judgment which, indeed, resulted in a permanent deprivation of their
ownership and possession of the property. xxiv[24]

The constitutional limitation of “just compensation” is considered to be the sum

equivalent to the market value of the property, broadly described to be the price fixed by the
seller in open market in the usual and ordinary course of legal action and competition or the
fair value of the property as between one who receives, and one who desires to sell, it fixed
at the time of the actual taking by the government. Thus, if property is taken for public use
xxv[25]

before compensation is deposited with the court having jurisdiction over the case, the final
compensation must include interests on its just value to be computed from the time the
property is taken to the time when compensation is actually paid or deposited with the
court. In fine, between the taking of the property and the actual payment, legal interests
xxvi[26]

accrue in order to place the owner in a position as good as (but not better than) the position
he was in before the taking occurred. xxvii[27]

The Bulacan trial court, in its 1979 decision, was correct in imposing interests on the
zonal value of the property to be computed from the time petitioner instituted condemnation
proceedings and “took” the property in September 1969. This allowance of interest on the
amount found to be the value of the property as of the time of the taking computed, being an
effective forbearance, at 12% per annum should help eliminate the issue of the constant
xxviii[28]

fluctuation and inflation of the value of the currency over time. Article 1250 of the Civil
xxix[29]

Code, providing that, in case of extraordinary inflation or deflation, the value of the currency
at the time of the establishment of the obligation shall be the basis for the payment when no
agreement to the contrary is stipulated, has strict application only to contractual obligations. xxx

In other words, a contractual agreement is needed for the effects of extraordinary inflation
[30]
to be taken into account to alter the value of the currency. xxxi[31]

All given, the trial court of Bulacan in issuing its order, dated 01 March 2000, vacating its
decision of 26 February 1979 has acted beyond its lawful cognizance, the only authority left
to it being to order its execution. Verily, private respondents, although not entitled to the
return of the expropriated property, deserve to be paid promptly on the yet unpaid award of
just compensation already fixed by final judgment of the Bulacan RTC on 26 February 1979
at P6.00 per square meter, with legal interest thereon at 12% per annum computed from the
date of "taking" of the property, i.e., 19 September 1969, until the due amount shall have
been fully paid.
WHEREFORE, the petition is GRANTED. The resolution, dated 31 July 2000, of the
Court of Appeals dismissing the petition for certiorari, as well as its resolution of 04 January
2001 denying the motion for reconsideration, and the decision of the Regional Trial Court of
Bulacan, dated 01 March 2000, are SET ASIDE. Let the case be forthwith remanded to the
Regional Trial Court of Bulacan for the proper execution of its decision promulgated on 26
February 1979 which is hereby REINSTATED. No costs.
SO ORDERED.
i
ii
iii
iv
v
vi
vii
viii
ix
x
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xii
xiii
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xv
xvi
xvii
xviii
xix
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xxi
xxii
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xxx
SECOND DIVISION

PATRICIA L. TIONGSON, SPS. EDUARDO GO and PACITA GO, ROBERTO LAPERAL

III, ELISA MANOTOK, MIGUEL A.B. SISON, ET AL.,

Petitioners,

- versus -

NATIONAL HOUSING AUTHORITY,*

Respondent.G.R. No. 140377

Present:

QUISUMBING, J., Chairperson,

CARPIO MORALES,

TINGA,
VELASCO, JR., and

BRION, JJ.

Promulgated:

July 14, 2008x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CARPIO MORALES, J.:

The present petition for review on certiorari raises the question of from what date should just
compensation of the subject properties sought to be expropriated be reckoned – whether it is from
the taking of the property or on the filing of the complaint.

Respondent National Housing Authority (NHA) took possession in 1978 of properties belonging to
petitioners Patricia L. Tiongson, et al. pursuant to P.D. No. 1669, "An Act Providing for the
Expropriation of the Property Known as the ‘Tambunting Estate’ Registered Under TCT Nos.
119059, 122450, 122459, 122452 And Lot Nos. 1-A, 1-C, 1-D, 1-E, 1-F, 1-G And 1-H Of (LRC)
PSD-230517 (Previously Covered By TCT No. 119058) of the Register of Deeds of Manila and for
The Sale at Cost of the Lots Therein to the Bona Fide Occupants and Other Squatters Families and
to Upgrade the Same, and Authorizing the Appropriation of Funds For The Purpose" (underscoring
supplied), and of properties belonging to Patricia Tiongson, et al. pursuant to P.D. No. 1670, "An
Act Providing For The Expropriation of the Property Along the Estero De Sunog-Apog Formerly
Consisting of Lots Nos. 55-A, 55-B And 55-C, Block 2918 of the Subdivision Plan Psd-11746,
Covered by TCT Nos. 49286, 49287 and 49288, Respectively, of the Register of Deeds of Manila
and for The Sale at Cost of the Lots Therein to the Bona Fide Occupants and Other Squatter
Families and to Upgrade The Same, and Authorizing The Appropriation of Funds For The Purpose"
(underscoring supplied).

In G.R. Nos. L-55166, "Elisa R. Manotok, et al.v. National Housing Authority et al.," and 55167,
"Patricia Tiongson et al. v. National Housing Authority, et al.," this Court, by Decision of May 21,
1987,1 held that "Presidential Decree Numbers 1669 and 1670, which respectively proclaimed the
Tambunting Estate and

the Estero de Sunog-Apoy area expropriated, are declared unconstitutional and, therefore, null and
void," they being violative of the therein petitioners’ right to due process of law. The decision had
become final and executory.

Subsequently or on September 14, 1987, NHA filed before the Regional Trial Court of Manila a
complaint against petitioners, docketed as Civil Case No. 87-42018, which was later amended, for
expropriation of parcels of land – part of those involved in G.R. No. L-55166.

By Order of April 29, 1997,2 Branch 41 of the Manila RTC3 to which the complaint for
expropriation was raffled brushed aside a previous order dated June 15, 1988 of the then Presiding
Judge of said branch of the RTC4 and held that the determination of just compensation of the
properties should be reckoned from the date of filing of NHA’s petition or on September 14, 1987.
The NHA moved to reconsider the said April 29, 1997 Order of the trial court, contending that the
determination of the just compensation should be reckoned from the time it took possession of the
properties in 1978. The trial court, by Order of August 5, 1997,5 denied NHA’s motion for
reconsideration.

The NHA assailed the above-stated trial court’s Orders of April 29, 1997 and August 5, 1997 via
petition for certiorari before the Court of Appeals. The appellate court, by the challenged Decision
of June 16, 1999,6 reversed and set aside the trial court’s orders and held that the just compensation
should be "based on the actual taking of the property in 1978." Thus it disposed:

WHEREFORE, the lower court’s Order dated April 29, 1997 ruling that the amount of just
compensation should be based on the date of the filing of the complaint in 1987, as well as the
Order dated August 5, 1997 denying the motion for reconsideration are hereby set aside and the
appointed commissioners are ordered to re-convene and submit to the court a recommendation on
the amount of just compensation of subject property based on the actual taking of the property in
1978. (Underscoring supplied)

Petitioners moved for a reconsideration of the appellate court’s decision but the same was denied by
Resolution of October 7, 1999,7 hence, the present petition for review on certiorari.

In its Petition for Expropriation filed before the RTC on September 14, 1987, the NHA alleged,
inter alia, that:

xxxx

9. Pursuant to Presidential Decree No. 1669 providing for the expropriation of the subject properties
and granting the plaintiff the authority to immediately take possession, control and disposition, with
power of demolition of the subject properties, plaintiff took and had been in possession of the
subject properties, until Presidential Decree No. 1669 was declared unconstitutional by the Supreme
Court in the case entitled Patricia Tiongson, et al. vs. National Housing Authority and Republic of
the Philippines, G.R. No. 5516[6].8 (Emphasis and underscoring supplied) x x x,

and prayed as follows:

WHEREFORE, it is respectfully prayed of this Honorable Court that:

1. An order be issued provisionally fixing the value of said properties in the amount equal to the
assessed value of the same and authorizing the plaintiff to enter or take possession and/or placing
the plaintiff in possession of the parcels of land described above; (Emphasis and underscoring
supplied)

xxxx

In the present petition, petitioners argue that since P.D. No. 1669 pursuant to which NHA took
possession of their properties in 1978 was declared unconstitutional, "[n]ecessarily, in thereafter
resurrecting the filing of another (sic) complaint for expropriation of the same properties," it would
be unlawful . . . to fix the reckoning period for purposes of computing the just compensation . . .
based on [NHA’s] previous unlawful taking of said properties in 1978." They thus maintain that the
trial court’s Order of April 29, 1997 holding that the determination of the just compensation of their
properties should be reckoned from the date NHA filed the petition before the RTC on September
14, 1987 is in order.

The petition is impressed with merit.

In declaring, in its challenged Decision, that the determination of just compensation should be
reckoned from NHA’s taking of the properties in 1978, the appellate court simply relied on Annex
"C" of NHA’s petition before it, the Order dated June 15, 1988 of the then Presiding Judge of the
trial court reading:

In this condemnation proceedings, by agreement of the parties, the total value of the properties to be
condemned is hereby fixed at P14,264,465.00, provisionally, and considering the admission of the
parties that plaintiff has taken possession of the properties in question sometime in 1978, or long
before the complaint in this case was filed, plaintiff is hereby authorized to retain possession thereof
upon its depositing with the City Treasurer of Manila the aforesaid sum of P14,264,465.00 subject
to the Orders of this Court and forthwith submit the Official Receipt of the said deposit to this
Court,9 (Emphasis and underscoring supplied),

and thus concluded that "the parties admitted that [NHA] took possession of the subject properties
as early as 1978." The appellate court reached that conclusion, despite its recital of the antecedents
of the case including herein petitioners’ sustained moves, even before the trial court, in maintaining
that the reckoning of just compensation should be from the date of filing of the petition for
expropriation on September 14, 1987.

The earlier-quoted allegations of the body and prayer in NHA’s Petition for Expropriation filed
before the RTC constitute judicial admissions10 of NHA ─ that it possessed the subject properties
until this Court’s declaration, in its above-stated Decision in G.R. No. L-55166 promulgated on
May 21, 1987, that P.D. No. 1669 pursuant to which NHA took possession of the properties of
petitioners in 1978 was unconstitutional and, therefore, null and void. These admissions, the
appellate court either unwittingly failed to consider or escaped its notice.

Petitioners even brought to the appellate court’s attention, in their Motion for Reconsideration11 of
its Decision of June 16, 1999, the fact that they had called the trial court’s attention to NHA’s
allegation-admissions in the body and prayer of its petition. But the appellate court, by Resolution
of October 7, 1999,12 denied petitioners’ motion upon the ground that it raised substantially the
same issues that were already considered and passed upon in arriving at its decision. The appellate
court’s June 16, 1999 decision glaringly shows, however, that the matter of judicial admissions of
NHA in the body and prayer in its petition were not considered by it.

Following then Rule 67, Section 4 of the Rules of Court reading:

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.

x x x x (Emphasis and underscoring supplied),

vis a vis the factual backdrop of the case, the just compensation of petitioners’ properties must be
determined "as of the date of . . . the filing of [NHA’s] complaint" on September 14, 1987."

WHEREFORE, the challenged June 16, 1999 Decision of the Court of Appeals is REVERSED and
SET ASIDE and the April 29, 1997 Order of Branch 41 of the Regional Trial Court of Manila in
Civil Case No. 87-42018 is REINSTATED.
SO ORDERED.

xxxi
G.R. No. 166553 July 30, 2009

REPUBLIC OF THE PHILIPPINES represented by the NATIONAL POWER

CORPORATION, Petitioner,
vs.
SPOUSES RUPERTO LIBUNAO and SONIA P. SANOPO & HEIRS OF BENITA
DOMINGO, Respondents.

DECISION

DEL CASTILLO, J.:

Assailed in this petition for review on certiorari filed by the petitioner National Power Corporation
is the Decision dated April 30, 2004 and the Resolution dated January 3, 2005 of the Court of
1 2

Appeals (CA) in CA-G.R. CV No. 70582 entitled, "National Power Corporation v. Spouses Ruperto
Libunao and Sonia P. Sanopo and Heirs of Benita Domingo.

The antecedents, as summarized by the Regional Trial Court (RTC) and adopted by the CA, are as
follows:

This is an action for Eminent Domain filed by the plaintiff National Power Corporation, a
government-owned and controlled corporation, created and existing by virtue of Rep. Act No. 6395,
as amended, against the defendants spouses Ruperto Libunao and Sonia P. Sanopo, and the
defendants heirs of Benita Domingo, namely: spouses Antonio Apacible & Clarita Sioson and
spouses Eligio Garcia & Salud Sioson, represented by Clarita S. Apacible.

The plaintiff is seeking to expropriate the following properties:

1. Lot No. 1277-A-3-A covered by Transfer Certificate of Title 52726, under Tax
Declaration No. 05203-00456, located at Sumacab Norte, Cabanatuan City, with an area of
1,212 square meters registered in the name of Sonia P. Sanopo, married to Ruperto Libunao,
issued by the Register of Deeds of Cabanatuan City;

2. A portion of 4,380 square meters of Lot No. 1236 covered by Transfer Certificate of Title
No. 889 issued by the Register of Deeds of Cabanatuan City, with a total area of 113,745
square meters in the name of Heirs of Benita Domingo, namely: Clarita Sioson, married to
Antonio Apacible, and Salud Sioson, married to Eligio Garcia, covered by Tax Declaration
No. 05201-00207, located at Sumacab Norte, Cabanatuan City;

in order to construct and maintain its Cabanatuan-Talavera 69 KV Transmission Line Project for
public purpose, hence, the need to acquire an easement of right- of- way over the affected portions
of the above-described parcels of land.

The defendants, through their lawyers filed their answers to the plaintiff's complaint.

Upon motion of the plaintiff, a writ of possession was issued by the court and on January 7 and 8,
1998, the plaintiff was placed in possession of the properties in question.
Upon motion of Atty. Marianito Bote, Reynaldo Joson, Pablo Mamaclay and Clodualdo Adao were
allowed to intervene by the Court.

This Court, upon motion of the parties and pursuant to Sec. 5, Rule 67 of the Rules of Court created
a Commission or Committee composed of a Chairman and two members. The City Assessor of
Cabanatuan, Lorenza Esguerra, was appointed as Chairwoman and the members are Oligario B.
Enrile for the defendants and Atty. Manuel Bugayon and Atty. Henry Alog for the plaintiff. The
Chairman and the members took their oaths of office.

A City Appraisal Committee was likewise formed composed of City Assessor Lorenza Esguerra as
Chairwoman and City Treasurer Bernardo C. Pineda and City Engineer Mac Arthur S. Yap, all of
Cabanatuan City as members.

The aforesaid City Appraisal Committee of Cabanatuan issued Resolution No. 07-[S]-2000 dated
March 22, 2000 whereby it resolved that Lot No. 1277-A-3-A with an area of 1,212 square meters
registered in the name of defendant Sonia Sanopo, married to Ruperto Libunao has a current and
fair market value which may be appraised at P2,200 per square meter.

Likewise, said Appraisal Committee issued Resolution No. 08-[S]-2000 dated March 22, 2000
whereby it resolved that a portion of 4,480 square meters of Lot 1236 registered in the name of the
Heirs of Benita Domingo has a current and fair market value which may be appraised at P1,200 per
square meter.

Atty. Henry P. Alog, appointed Commissioner of the National Power Corporation submitted his
Commissioner's Report dated June 7, 2000 and made the following recommendations:

1. For plaintiff NPC to pay defendants for those areas affected that is classified and is
actually devoted for agricultural purposes, an easement fee equivalent to 10% of the market
value of the agricultural lots based on the area covered by the right-of-way clearance;

2. For plaintiff NPC to acquire and pay defendant Libunao the full market value of his
property (174.00 sq. m.) that is classified as residential lot.

The plaintiff NPC paid all the defendants and intervenors the damages to improvements existing on
their lands such as palay crops, fruit, trees, etc.

On August 29, 1997, the City Appraisal Committee of Cabanatuan composed of City Assessor
Engr. Norberto P. Cajucom, as Chairman and City Treasurer Bernardo C. Pineda and City Engineer
Mac Arthur S. Yapas, members, issued Resolution No. 03-[S]-97 recommending that the current
and fair market value of the lots in question be appraised at P700.00 per square meter for residential
lot and P460.00 per square meter for agricultural lot. Hence, the said committee recommended the
total amount of P122,919.61 as payment for the 1,212.00 square meters of the land owned by the
defendant Sonia P. Sanopo, married to Ruperto Libunao and the total amount of P204,480.00 as
payment for the 4,380 square meters of land owned by the defendants heirs of Benita Domingo. 3

On January 5, 2001, the RTC, taking into consideration the Commissioners' Reports, issued its
Decision, the dispositive portion of which reads:
4

WHEREFORE, premises considered, judgment is hereby rendered:

 1. Upholding the right of the plaintiff to expropriate the properties of the defendants which
are particularly described below for public use or purpose as stated in the complaint;

2. Ordering the plaintiff National Power Corporation to pay the defendants spouses Ruperto
Libunao and Sonia P. Sanopo the total sum of P1,818,000.00 at the rate of P1,500.00 per
square meter of Lot 1277-A-3-A covered by Transfer Certificate of Title No. T-52726
issued by the Register of Deeds of Cabanatuan City in the name of Sonia P. Sanopo, married
to Ruperto Libunao, located at Sumacab Norte, Cabanatuan City with an area of 1,212
square meters covered by Tax Declaration No. 05203-00456;

3. Ordering the plaintiff to pay the defendants heirs of Benita Domingo the total sum of
P2,628,000.00 at the rate of P600.00 per square meter of a portion of 4,380 square meters of
Lot 1236 covered by Transfer Certificate of Title No. T-889 issued by the Register of Deeds
of Cabanatuan City in the names of the heirs of Benita Domingo, namely: spouses Antonio
Apacible and Clarita Sioson, and Spouses Eligio Garcia and Salud Sioson, located in
Sumacab Norte, Cabanatuan City, covered by Tax Declaration No. 05201-00207;

4. Ordering the plaintiff to pay the said defendants the legal rate of interest of the said
amounts of compensation fixed by this Court from the taking of the possession of the
properties in question by the plaintiff on January 7 and 8, 1998, until fully paid;

5. Ordering the plaintiff to pay the costs of this suit;

6. Ordering a certified copy of this judgment or decision to be recorded in the Office of the
Register of Deeds of Cabanatuan City upon its finality.

SO ORDERED. 5

In so ruling, the RTC considered the 3 recommendations/resolutions of different dates submitted to

it by the City Appraisal Committee (CAC) of Cabanatuan City for the purpose of ascertaining the
just compensation for the subject properties to wit: Resolution No. 03-S-97 dated August 29, 1997,
and Resolution Nos. 07-S-2000 and 08-S-2000 both dated March 22, 2000, and the Report
submitted by Commissioner Henry P. Alog for petitioner. It ruled that the amount of just
compensation should be based on the value of the property as of the date of its taking or the filing
of the complaint, whichever came first; that petitioner's complaint was filed on October 30, 1997
and petitioner's taking of the properties was made on January 7 and 8, 1998, thus, the just
compensation for the expropriated property should be reckoned from October 30, 1997.

The RTC did not give its approval to CAC's recommended appraised value of P2,200 per sq. meter
for respondents Spouses Libunao's property and P1,200 per sq. meter for the property of
respondents Heirs of Domingo, because the appraisals were determined in 2000 and not on October
30, 1997 when the complaint was filed. The RTC then fixed the value of the properties of
respondents Spouses Libunao at P1,500 per sq. meter and of respondents Heirs of Domingo at
P600.00 per sq. meter.

Dissatisfied, petitioner and respondents Heirs of Domingo separately appealed the RTC Decision to
the CA.

On April 30, 2004, the CA issued its assailed Decision, the dispositive portion of which reads:
WHEREFORE, the appealed Decision dated January 5, 2001 is MODIFIED. The amount of just
compensation to be paid to the Sps. Libunao and to the Heirs of Domingo for NPC's taking of their
properties with an area of 1,212 square meters and 4,380 square meters described in TCT No.
52776 and T-889, respectively, is hereby fixed at P700.00 per square meter for residential land and
P460.00 per square meter for agricultural land. The costs of suit awarded in favor of the Sps.
Libunao and the Heirs of Benita Domingo are deleted. 6

Anent petitioner's appeal assailing the amounts fixed by the RTC as the fair market value for the
subject properties, the CA found that CAC Resolution No. 03-S-97 dated August 29, 1997,
recommending the rates of P700.00 per sq. meter for residential lot and P460.00 per sq. meter for
agricultural lot was the most reliable proof of valuation; that, as between the valuation based on the
prevailing market value on March 22, 2000, or almost three years after the filing of the complaint,
and another based on the appraisal made on August 29, 1997, or two months prior to the filing of
the complaint, the latter was considered as the just and equitable basis for compensation being the
closest assessment of the market value of the properties to the time the expropriation complaint was
filed.

The CA found no reversible error committed by the RTC in ordering the acquisition of the entire
1,212 sq. meters of land owned by respondents Spouses Libunao, since in the document entitled
DATA OF LOT EXPROPRIATED, which was attached to Commissioner Alog's Report, it was
admitted that the total land area affected was 1,212 sq. meters for respondents Spouses Libunao and
4,380 sq. meters for respondents Heirs of Domingo.

The CA upheld the RTC's award of legal interest on the amount of compensation since a judgment
in expropriation proceedings must provide for the payment of legal interest as a matter of law from
the time the government took over the land until it paid the owners thereof, thus, the government is
liable to pay 6% if no immediate payment was made for the value of the property at the time of
actual taking. It found that the amount which petitioner allegedly deposited in a bank merely
represented the provisional value of the properties sought to be expropriated to enable it to take
possession of the land; that the amount withdrawn by the property owners corresponded to the
consequential loss or damage to improvements suffered by the owners due to the installation of the
transmission lines. The RTC's award of the cost of the suit was deleted since petitioner's charter
exempts it from the obligation to pay the costs of the proceedings.

The CA found no merit on the appeal of respondents Heirs of Domingo and ruled that the valuation
embodied in Resolution No. 03-S-97 dated August 29, 1997 be also made applicable to them.

Petitioner moved for a partial reconsideration of the Decision, which the CA denied in its
Resolution dated January 3, 2005.
7

Hence, herein petition assigning the following errors committed by the CA:

THE COURT OF APPEALS SERIOUSLY ERRED IN PRONOUNCING THAT THE

EXPROPRIATION SHOULD COVER THE ENTIRE AREA OF RESPONDENTS'
PROPERTIES, ALTHOUGH ONLY A RIGHT-OF-WAY EASEMENT THEREON WAS
ACTUALLY TAKEN AND BEING USED BY PETITIONER.

THE COURT OF APPEALS GRAVELY ERRED IN REQUIRING PETITIONER TO PAY

INTERESTS TO BE RECKONED FROM THE DATE OF TAKING UNTIL FULL PAYMENT
OF THE WHOLE PROPERTY. 8
Petitioner contends that it simply needed a mere right-of-way easement on the aerial space above
respondents' properties; that the presence of transmission lines over the subject area will not
damage, impair or render the entire area thereof inutile for agricultural and residential purposes; that
it conducted relevant studies and initiated safety nets to ensure that the transmission lines are
technically safe, environmental-friendly and would cause least injury to the affected area
compatible with public interest; that, in contrast, respondents did not present any evidence to the
contrary and even the two CAC Resolutions failed to mention any actual damage or impairment that
the transmission lines would possibly cause on the subject properties; that it is but proper and legal
that petitioner should only be obligated to pay 10% of the market value of the subject properties in
accordance with Section 3-A of Republic Act (R.A.) 6395. 9

Petitioner claims that it had already paid respondents the full assessed value of the properties in the
amount of P5,196.58 prior to the use of the aerial space above respondents' properties and such
amount was already withdrawn by respondents; that the amount of just compensation determined by
the RTC and modified by the CA indubitably followed the formula of just compensation equals
market value plus consequential loss minus consequential benefit; that consequential loss
necessarily included whatever interest may be due to the owner relative to the unpaid balance of just
compensation; and, that a separate computation for interest in addition to the consequential loss
included in the aforesaid formula is grossly unfair and disadvantageous to the government as it will
amount to double compensation.

Respondents Spouses Libunao argue that the petition should be denied for having failed to present
issues involving questions of law; that the CA correctly ordered the payment of their 1,212 sq.
meter land since the construction of the transmission lines impaired the agricultural purpose of their
land; that the check dated August 5, 1998 in the amount of P387,699.00 issued by petitioner to
respondents Spouses Libunao was payment for the damaged improvements in their subject property
and not as payment for the assessed value of the property; and that the CA correctly upheld the
RTC's order for petitioner to pay legal interest on the amount of compensation.

Respondents Heirs of Domingo claim that the first issue raised in the petition involves a question of
fact and, therefore, it is not proper for a petition for review, nonetheless, they argue that there was
no reversible error committed by the CA. They contend that in the document entitled DATA OF
LOT EXPROPRIATED attached to the Report submitted by Commissioner Alog, it stated in no
uncertain terms that the area of respondents Heirs of Domingo’s properties affected by the
expropriation was 4,380 sq. meter; that petitioner's allegations that it had conducted relevant studies
and initiated safety nets to guarantee the safety of the transmission lines were not at all raised in the
RTC; and that payment of legal interest on the amount of just compensation is provided under
Section 10, Rule 67 of the Rules of Court.

In its Consolidated Reply, petitioner argues that there is no factual issue involved with respect to the
correct application and interpretation of Section 3-A of R.A. 6395; that there are instances where
factual findings of the appellate court may be reviewed by the Court such as when the CA failed to
notice certain relevant facts which if properly considered will justify a different conclusion; that
such exception applies in this case since the CA failed to consider that petitioner had conducted
studies on the subject properties which result showed that the installation of transmission lines on
the aerial space above the subject properties was safe and would not, in any way, affect the
beneficial use thereof for agricultural purposes.

The petition lacks merit.

The Court shall first resolve the procedural matter raised by respondents, i.e., whether petitioner
should pay just compensation for the entire area of respondents' properties or only an easement fee
of 10% of the market value of the properties traversed by the transmission lines is a factual matter
which is not proper for a petition for review.

In National Power Corporation v. Purefoods Corporation, the Court held:

10

There is a question of law when the issue does not call for an examination of the probative value of
the evidence presented, the truth or falsehood of facts being admitted and the doubt concerns the
correct application of law and jurisprudence on the matter. On the other hand, there is a question of
fact when the doubt or controversy arises as to the truth or falsity of the alleged facts. When there is
no dispute as to fact, the question of whether or not the conclusion drawn therefrom is correct is a
question of law. The issue raised by petitioner of whether or not only an easement fee of 10%
of the market value of the expropriated properties should be paid to the affected owners is a
question of law. This issue does not call for the reevaluation of the probative value of the evidence
presented but rather the determination of whether the pertinent laws cited by NAPOCOR in support
of its argument are applicable to the instant case.
11

On the substantive issue, the Court finds no reversible error committed by the CA in affirming the
RTC's conclusion that the payment of just compensation should be for the entire area of
respondents' subject properties. Petitioner's argument that it should only be required to pay an
easement fee of 10% of the market value of the properties since it simply needed a right-of-way
easement on the aerial space above respondents' properties for the passage of its transmission lines
has long been found unmeritorious by the Court.

In National Power Corporation v. Manubay Agro-Industrial Development Corporation, a case 12]

involving an easement of a right-of-way over a parcel of land that would be traversed by high-
powered transmission lines, just like the situation obtaining in the instant petition, the Court held
that the nature and effect of the installation of power lines and the limitations on the use of the land
for an indefinite period should be considered, as the owners of the properties would be deprived of
the normal use of their properties. For this reason, the property owners are entitled to the payment
of just compensation based on the full market value of the affected properties. The Court explained:

Granting arguendo that what petitioner acquired over respondent’s property was purely an easement
of a right of way, still, we cannot sustain its view that it should pay only an easement fee, and not
the full value of the property. The acquisition of such an easement falls within the purview of the
power of eminent domain. This conclusion finds support in similar cases in which the Supreme
Court sustained the award of just compensation for private property condemned for public use.
Republic v. PLDT held thus:

x x x. Normally, of course, the power of eminent domain results in the taking or appropriation of
title to, and possession of, the expropriated property; but no cogent reason appears why the said
power may not be availed of to impose only a burden upon the owner of condemned property,
without loss of title and possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right of way.

True, an easement of a right of way transmits no rights except the easement itself, and respondent
retains full ownership of the property. The acquisition of such easement is, nevertheless, not gratis.
As correctly observed by the CA, considering the nature and the effect of the installation of power
lines, the limitations on the use of the land for an indefinite period would deprive respondent of
normal use of the property. For this reason, the latter is entitled to payment of a just compensation,
which must be neither more nor less than the monetary equivalent of the land.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by
the expropriator. The measure is not the taker’s gain, but the owner’s loss. The word "just" is used
to intensify the meaning of the word "compensation" and to convey thereby the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full and ample.

In eminent domain or expropriation proceedings, the just compensation to which the owner of a
condemned property is entitled is generally 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." Such amount is not limited to the
assessed value of the property or to the schedule of market values determined by the provincial or
city appraisal committee. However, these values may serve as factors to be considered in the
judicial valuation of the property.
13

This ruling has been repeatedly reiterated in subsequent cases and continues to be the controlling
14

doctrine.

In its complaint for expropriation, petitioner sought authority to enter and take possession and
control over the subject properties, together with the improvements, and to demolish all
improvements existing thereon to commence and undertake the construction of its transmission line
project. In fact, petitioner had already taken possession of the subject properties and had demolished
the plants, trees and crops found in the subject properties as evidenced by checks payments for the
damaged improvements. The overhead transmission lines which traverse respondents’ properties
could be considered indefinite in nature. Moreover, the high-tension electric current passing through
the transmission line would expose respondents' lives and limbs to danger. Thus, the expropriation
would in fact not be limited to an easement of right-of-way only. 15

In National Power Corporation v. Aguirre-Paderanga, the Court said:

16

[I]t cannot be gainsaid that NPC’s complaint merely involves a simple case of mere passage of
transmission lines over Dilao, et al.’s property. Aside from the actual damage done to the property
traversed by the transmission lines, the agricultural and economic activity normally undertaken on
the entire property is unquestionably restricted and perpetually hampered as the environment is
made dangerous to the occupant’s life and limb.

Petitioner's allegation that it had conducted relevant studies and initiated safety nets to guarantee
that the transmission lines are technically safe and would cause least injury to the affected areas was
not raised at all in the RTC as correctly argued by respondents Heirs of Domingo, thus, could no
longer be considered on appeal.

Petitioner's reliance on Section 3-A of R.A. 6395, as amended, is misplaced. While Section 3-A of
R.A. 6395 indeed states that only 10% of the market value of the property is due to the owner of the
property subject to an easement of right-of-way, said rule is not binding on the Court. It has been
17

reiterated that the determination of "just compensation" in eminent domain cases is a judicial
function. Any valuation for just compensation laid down in the statutes may serve only as a
18

guiding principle or one of the factors in determining just compensation, but it may not substitute
the court’s own judgment as to what amount should be awarded and how to arrive at such amount. 19

Petitioner's claim that it should not be ordered to pay interest to be reckoned from the date of taking
until the full payment of the value of the subject properties deserves scant consideration.
Section 10, Rule 67 of the Rules of Court provides:

SEC. 10. Rights of plaintiff after judgment and payment. - Upon payment by the plaintiff to the
defendant of the compensation fixed by the judgment, with legal interest thereon from the taking of
the possession of the property, or after tender to him of the amount so fixed and payment of the
costs, the plaintiff shall have the right to enter upon the property expropriated and to appropriate it
for the public use or purpose defined in the judgment, or to retain it should he have taken immediate
possession thereof under the provision of section 2 hereof. x x x.

Clearly, respondents are entitled to the payment of legal interest on the compensation for the subject
lands from the time of the taking of their possession up to the time that full payment is made by
petitioner. In accordance with jurisprudence, the legal interest allowed in payment of just
20

compensation for lands expropriated for public use is six percent (6%) per annum. 21

Finally, the Court finds no merit on petitioner's claim that the amount of P5,196.58 which petitioner
deposited in a bank to be able to obtain the issuance of the writ of possession was already
withdrawn by respondents. A perusal of the records does not show any evidence that respondents
had withdrawn such amount. On the contrary, the CA found that the amount withdrawn by
respondents corresponds to the consequential loss or damages to improvements suffered by them by
reason of petitioner's installation of its transmission lines.
22

WHEREFORE, the petition is DENIED. The Decision dated April 30, 2004 and the Resolution
dated January 3, 2005 of the Court of Appeals in CA-G.R. CV No. 70582 are AFFIRMED.

SO ORDERED.