Consti 2 Digests

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Manosca vs CA

Fact: Petitioners inherited a piece of land located at P. Burgos Street, Calzada, Taguig. Metro Manila,
with an area of about four hundred ninety-two (492) square meters. When the parcel was
ascertained by the NHI to have been the birthsite of Felix Y. Manalo, the founder of Iglesia Ni Cristo,
it passed Resolution No. 1, Series of 1986, pursuant to Section 42 of Presidential Decree No. 260,
declaring the land to be a national historical landmark. The resolution was approved by the Minister
of Education, Culture and Sports At the same time, respondent Republic filed an urgent motion for
the issuance of an order to permit it to take immediate possession of the property. The motion was
opposed by petitioners. After a hearing, the trial court issued an order fixing the provisional market
and assessed values of the property and authorizing the Republic to take over the property once the
required sum would have been deposited with the Municipal Treasurer of Taguig, Metro Manila.

Petitioners moved to dismiss the complaint on the main thesis that the intended expropriation was
not for a public purpose and, incidentally, that the act would constitute an application of public
funds, directly or indirectly, for the use, benefit, or support of Iglesia ni Cristo, a religious entity,
contrary to the provision of the Constitution. Petitioners sought, in the meanwhile, a suspension in
the implementation of the 03rd August 1989 order of the trial court. On 15 February 1990, following
the filing by respondent Republic of its reply to petitioners’ motion seeking the dismissal of the case,
the trial court issued its denial of said motion to dismiss.6 Five (5) days later, or on 20 February
1990,7 another order was issued by the trial court, declaring moot and academic the motion for
reconsideration and/or suspension of the order of 03 August 1989 with the rejection of petitioners’
motion to dismiss. Petitioners’ motion for the reconsideration of the 20th February 1990 order was
likewise denied by the trial court in its 16th April 1991 order. Petitioners then lodged a petition with
the Court of Appeals which the appellate court dismissed for failure to show any grave abuse of
discretion or lack of jurisdictional competence on the part of the trial court. A motion for the
reconsideration of the decision was denied subsequently by appellate court.

Issue: Whether the expropriation was not for a public purpose and, incidentally, that the act would
constitute an application of public funds, directly or indirectly, for the use, benefit, or support
of Iglesia ni Cristo, a religious entity, contrary to the provision of Section 29(2), Article VI, of the 1987
Constitution.

Held: No, Public Use. Eminent domain. The constitutional and statutory basis for taking property by
eminent domain. For condemnation purposes, “public use” is one which confers same benefit or
advantage to the public; it is not confined to actual use by public. It is measured in terms of right of
public to use proposed facilities for which condemnation is sought and, as long as public has right of
use, whether exercised by one or many members of public, a “public advantage” or “public benefit”
accrues sufficient to constitute a public use. The idea that “public use” is strictly limited to clear
cases of “use by the public” has long been discarded.
City Of Manila vs. Chinese Community Of Manila, 40 Phil.
349 (1919)
CASE DIGEST

FACTS: The City of Manila, plaintiff herein, prayed for the expropriation of a portion private
cemetery for the conversion into an extension of Rizal Avenue. Plaintiff claims that it is necessary
that such public improvement be made in the said portion of the private cemetery and that the
said lands are within their jurisdiction.
Defendants herein answered that the said expropriation was not necessary because other routes
were available. They further claimed that the expropriation of the cemetery would create
irreparable loss and injury to them and to all those persons owing and interested in the graves and
monuments that would have to be destroyed.
The lower court ruled that the said public improvement was not necessary on the particular-strip of
land in question. Plaintiff herein assailed that they have the right to exercise the power of eminent
domain and that the courts have no right to inquire and determine the necessity of the
expropriation. Thus, the same filed an appeal.
ISSUE: Whether or not the courts may inquire into, and hear proof of the necessity of the
expropriation.

HELD:The courts have the power of restricting the exercise of eminent domain to the actual
reasonable necessities of the case and for the purposes designated by the law. The moment the
municipal corporation or entity attempts to exercise the authority conferred, it must comply with
the conditions accompanying the authority. The necessity for conferring the authority upon a
municipal corporation to exercise the right of eminent domain is admittedly within the power of
the legislature. But whether or not the municipal corporation or entity is exercising the right in a
particular case under the conditions imposed by the general authority, is a question that the courts
have the right to inquire to.
City Govt. of Quezon City vs. Ericta, 122 SCRA 759 (1983)

Summary: An ordinance was promulgated in Quezon city which approved the the regulation
ofestablishment of private cemeteries in the said city. According to the ordinance, 6% of the total area
of the private memorial park shall be set aside for charity burial of deceased persons who are paupers
and have been residents of QC. Himlayang Pilipino, a private memorial park, contends that the taking
or confiscation of property restricts the use of property such that it cannot be used for any reasonable
purpose and deprives the owner of all beneficial use of his property. It also contends that the taking is
not a valid exercise of police power, since the properties taken in the exercise of police power are
destroyed and not for the benefit of the public.

Gutierrez Jr., J.

Facts: Section 9 of Ordinance 6118, S-64, entitled "Ordinance Regulating the Establishment,
Maintenance and Operation of Private Memorial Type Cemetery Or Burial Ground Within the
Jurisdiction of Quezon City and Providing Penalties for the Violation thereof" provides that at least 6%
of the total area of the memorial park cemetery shall be set aside for charity burial of deceased
persons who are paupers and have been residents of Quezon City for at least 5 years prior to their
death, to be determined by competent City Authorities, and where the area so designated shall
immediately be developed and should be open for operation not later than 6 months from the date of
approval of the application. For several years, section 9 of the Ordinance was not enforced by city
authorities but 7 years after the enactment of the ordinance, the Quezon City Council passed a
resolution requesting the City Engineer, Quezon City, to stop any further selling and/or transaction of
memorial park lots in Quezon City where the owners thereof have failed to donate the required 6%
space intended for paupers burial. Pursuant to this petition, the Quezon City Engineer notified
Himlayang Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S-64 would be enforced.
Himlayang Pilipino reacted by filing with the Court of First Instance (CFI) of Rizal (Branch XVIII at
Quezon City), a petition for declaratory relief, prohibition and mandamus with preliminary injunction
(Special Proceeding Q-16002) seeking to annul Section 9 of the Ordinance in question for being
contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and the Revised
Administrative Code. There being no issue of fact and the questions raised being purely legal, both
the City Government and Himlayang Pilipino agreed to the rendition of a judgment on the pleadings.
The CFI rendered the decision declaring Section 9 of Ordinance 6118, S-64 null and void. A motion
for reconsideration having been denied, the City Government and City Council filed the petition or
review with the Supreme Court.

Issue: Whether the setting aside of 6% of the total area of all private cemeteries for charity burial
grounds of deceased paupers is tantamount to taking of private property without just compensation.

Held: There is no reasonable relation between the setting aside of at least 6% of the total area of all
private cemeteries for charity burial grounds of deceased paupers and the promotion of health,
morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking
without compensation of a certain area from a private cemetery to benefit paupers who are charges of
the municipal corporation. Instead of building or maintaining a public cemetery for this purpose, the
city passes the burden to private cemeteries. The expropriation without compensation of a portion of
private cemeteries is not covered by Section 12(t) of Republic Act 537, the Revised Charter of
Quezon City which empowers the city council to prohibit the burial of the dead within the center of
population of the city and to provide for their burial in a proper place subject to the provisions of
general law regulating burial grounds and cemeteries. When the Local Government Code, Batas
Pambansa 337 provides in Section 177 (q) that a Sangguniang panlungsod may "provide for the
burial of the dead in such place and in such manner as prescribed by law or ordinance" it simply
authorises the city to provide its own city owned land or to buy or expropriate private properties to
construct public cemeteries. This has been the law and practice in the past and it continues to the
present. Expropriation, however, requires payment of just compensation. The questioned ordinance is
different from laws and regulations requiring owners of subdivisions to set aside certain areas for
streets, parks, playgrounds, and other public facilities from the land they sell to buyers of subdivision
lots. The necessities of public safety, health, and convenience are very clear from said requirements
which are intended to insure the development of communities with salubrious and wholesome
environments. The beneficiaries of the regulation, in turn, are made to pay by the subdivision
developer when individual lots are sold to homeowners.
EPZA VS. DULAY [148 SCRA 305; G.R. No. L-59603; 29 Apr 1987]

Facts: The four parcels of land which are the subject of this case is where the Mactan Export
Processing Zone Authority in Cebu (EPZA) is to be constructed. Private respondent San Antonio
Development Corporation (San Antonio, for brevity), in which these lands are registered under,
claimed that the lands were expropriated to the government without them reaching the agreement as to
the compensation. Respondent Judge Dulay then issued an order for the appointment of the
commissioners to determine the just compensation. It was later found out that the payment of the
government to San Antonio would be P15 per square meter, which was objected to by the latter
contending that under PD 1533, the basis of just compensation shall be fair and according to the fair
market value declared by the owner of the property sought to be expropriated, or by the assessor,
whichever is lower. Such objection and the subsequent Motion for Reconsideration were denied and
hearing was set for the reception of the commissioner’s report. EPZA then filed this petition for
certiorari and mandamus enjoining the respondent from further hearing the case.

Issue: Whether or Not the exclusive and mandatory mode of determining just compensation in PD
1533 is unconstitutional.

Held: The Supreme Court ruled that the mode of determination of just compensation in PD 1533 is
unconstitutional.

The method of ascertaining just compensation constitutes impermissible encroachment to judicial


prerogatives. It tends to render the courts inutile in a matter in which under the Constitution is
reserved to it for financial determination. The valuation in the decree may only serve as 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. The
determination of just compensation is a judicial function. The executive department or the legislature
may make the initial determination but when a party claims a violation of the guarantee in the Bill of
Rights that the private party 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 court’s
findings. Much less can the courts be precluded from looking into the justness of the decreed
compensation.
PROVINCE OF CAMARINES SUR v. CA, GR No. 103125, 1993-05-17

Facts:

On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed
Resolution No. 129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate
property contiguous to the provincial capitol site, in order to establish a pilot farm for non-food and
non-traditional agricultural crops and a housing project for provincial government employees.

Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R.
Villafuerte, filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren N.
San Joaquin. Forthwith, the Province of Camarines Sur filed a motion for the issuance of a writ of
possession.

The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered
for their property.

In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129,
Series of 1988 of the Sangguniang Panlalawigan be declared null and void.

In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate
the expropriation proceedings under Sections 4 and 7 of Local Government Code and that the
expropriations are for a public purpose.

Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that
under Section 9 of the Local Government Code, there was no need for the approval by the Office of
the President of the exercise by the Sangguniang Panlalawigan of the right of eminent domain.
However, the Solicitor General expressed the view that the Province of Camarines Sur must first
secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of
petitioners for use as a housing project.

The Court of Appeals ordered the trial court to suspend the expropriation proceedings until after the
Province of Camarines Sur shall have submitted the requisite approval of the Department of Agrarian
Reform to convert the classification of the property of the private respondents from agricultural to
non-agricultural land.

Issues:

whether the expropriation of agricultural lands by local government units is subject to the prior
approval of the Secretary of the Agrarian Reform, as the implementator of the agrarian reform
program.

Ruling:

It is true that local government units have no inherent power of eminent domain and can exercise it
only when expressly authorized by the legislature. It is also true that in delegating the power to
expropriate, the legislature may retain certain control or impose certain restraints on the exercise
thereof by the local governments. While such delegated power may be a limited authority, it is
complete within its limits. Moreover, the limitations on the exercise of the delegated power must be
clearly expressed, either in the law conferring the power or in other legislations.

Section 9 of B.P. Blg. 337 does not intimate in the least that local government units must first secure
the approval of the Department of Land Reform for the conversion of lands from agricultural to non-
agricultural use, before they can institute the necessary expropriation proceedings. Likewise, there is
no provision in the Comprehensive Agrarian Reform Law which expressly subjects the expropriation
of agricultural lands by local government units to the control of the Department of Agrarian Reform.

The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No.
129 - A, Series of 1987, cannot be the source of the authority of the Department of Agrarian Reform
to determine the suitability of a parcel of agricultural land for the purpose to which it would be
devoted by the expropriating authority. While those rules vest on the Department of Agrarian Reform
the exclusive authority to approve or disapprove conversions of agricultural lands for residential,
commercial or industrial uses, such authority is limited to the applications for reclassification
submitted by the land owners or tenant beneficiaries.

Statutes confering the power of eminent domain to political subdivisions cannot be broadened or
constricted by implication.

To sustain the Court of Appeals would mean that the local government units can no longer
expropriate agricultural lands needed for the construction of roads, bridges, schools, hospitals, etc,
without first applying for conversion of the use of the lands with the Department of Agrarian Reform,
because all of these projects would naturally involve a change in the land use. In effect, it would then
be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose
or public use.
Philippine Press Institute vs COMELEC GR 119694 22 May 1995

Facts: COMELEC promulgated Resolution No 2772 directing newspapers to


provide free print space of not less than ½ page for use as “Comelec Space”
from 06March1995 to 06May1995. COMELEC Commisssioner sent letters to
publishers informing them of the same. PPI seek to declare the resolution
unconstitutional and void on the ground of taking private property w/o just
compensation. TRO was enforced. SocGen argues that even if the questioned
Resolution and its implementing letter directives are viewed as mandatory, the
same would nevertheless be valid as an exercise of the police power of the
State. COMELEC Chair stated that they will clarify the resolution that the letter
was intended to solicit and not to compel. Resolution No. 2772-A was
promulgated.
Issue: Whether or not Resolution 2772 is void on the ground of deprivation of
use w/o compensation of newspaper?
Decision: To compel print media companies to donate “Comelec-space”
amounts to “taking” of private personal property for public use. The extent of
the taking or deprivation is not insubstantial measured by the advertising rates
ordinarily charged by newspaper publishers whether in cities or in non-urban
areas.
The taking of print space here sought to be effected may first be appraised
under the rubric of expropriation of private personal property for public use. The
threshold requisites for a lawful taking of private property for public use need to
be examined here: one is the necessity for the taking; another is the legal
authority to effect the taking. The element of necessity for the taking has not
been shown by respondent Comelec. It has not been suggested that the
members of PPI are unwilling to sell print space at their normal rates to Comelec
for election purposes. It has not been suggested that Comelec has been granted
the power of eminent domain either by the Constitution or by the legislative
authority. A reasonable relationship between that power and the enforcement
and administration of election laws by Comelec must be shown.

The taking of private property for public use is, of course, authorized by the
Constitution, but not without payment of “just compensation.”
Parañaque vs. V. M. Realty (1998)

Municipality of Parañaque v. V. M. Realty Corporation


G.R. No. 127820, July 20, 1998
Eminent Domain; Remedial Law: Expropriation; Res Judicata
FACTS:
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, the Municipality of Parañaque
filed on September 20, 1993, a Complaint for expropriation against private respondent V.M. Realty
Corporation over two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a
combined area of about 10,000 square meters, located at Wakas, San Dionisio, Parañaque, Metro
Manila.
Private respondent filed its Answer containing affirmative defenses and a counterclaim, alleging in
the main that (a) the complaint failed to state a cause of action because it was filed pursuant to a
resolution and not to an ordinance as required by RA 7160 (the Local Government Code); and (b) the
cause of action, if any, was barred by a prior judgment or res judicata.
It turned out that the plaintiff had earlier filed a complaint for expropriation involving the same
parcels of land which was docketed as Civil Case No. 17939. Said case was ealier dismissed with
prejudice. The order of dismissal was not appealed, hence, the same became final.
The RTC then dismissed the second complaint, which the CA affirmed upon appeal.
Contentions of petitioner: (a) A resolution approved by the municipal council for the purpose of
initiating an expropriation case substantially complies with the requirements of the law; (b) The
principle of res judicata is not applicable.
ISSUES:
(1)Whether or not a resolution duly approved by the municipal council has the same force and effect
of an ordinance insofar as filing a complaint for expropriation is concerned;
(2) Whether or not the principle of res judicata as a ground for dismissal of case is applicable under
the circumstances.
RULING:
(1)No. A local government unit (LGU), like the Municipality of Parañaque, cannot authorize an
expropriation of private property through a mere resolution of its lawmaking body. The Local
Government Code expressly and clearly requires an ordinance or a local law for the purpose. A
resolution that merely expresses the sentiment or opinion of the Municipal Council will not suffice.
Thus, the following essential requisites must concur before an LGU can exercise the power of
eminent domain: 1. An ordinance is enacted by the local legislative council authorizing the local chief
executive, in behalf of the LGU, to exercise the power of eminent domain or pursue expropriation
proceedings over a particular private property. 2. The power of eminent domain is exercised for public
use, purpose or welfare, or for the benefit of the poor and the landless. 3. There is payment of just
compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws. 4.
A valid and definite offer has been previously made to the owner of the property sought to be
expropriated, but said offer was not accepted. In the case at bar, the local chief executive sought to
exercise the power of eminent domain pursuant to a resolution of the municipal council.
Thus, there was no compliance with the first requisite that the mayor be authorized through an
ordinance. We are not convinced by petitioner’s insistence that the terms “resolution” and
“ordinance” are synonymous. A municipal ordinance is different from a resolution. An ordinance is a
law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a
specific matter. An ordinance possesses a general and permanent character, but a resolution is
temporary in nature.
Additionally, the two are enacted differently — a third reading is necessary for an ordinance, but not
for a resolution, unless decided otherwise by a majority of all the Sanggunian members. Moreover,
the power of eminent domain necessarily involves a derogation of a fundamental or private right of
the people. Accordingly, the manifest change in the legislative language — from “resolution” under
BP 337 to “ordinance” under RA 7160 — demands a strict construction.
(2) No. The principle of res judicata, which finds application in generally all cases and proceedings,
cannot bar the right of the State or its agent to expropriate private property. The very nature of
eminent domain, as an inherent power of the State, dictates that the right to exercise the power be
absolute and unfettered even by a prior judgment or res judicata. The scope of eminent domain is
plenary and, like police power, can “reach every form of property which the State might need for
public use.” All separate interests of individuals in property are held of the government under this
tacit agreement or implied reservation. Thus, the State or its authorized agent cannot be forever barred
from exercising said right by reason alone of previous non-compliance with any legal requirement.
While the principle of res judicata does not denigrate the right of the State to exercise eminent
domain, it does apply to specific issues decided in a previous case. For example, a final judgment
dismissing an expropriation suit on the ground that there was no prior offer precludes another suit
raising the same issue; it cannot, however, bar the State or its agent from thereafter complying with
this requirement, as prescribed by law, and subsequently exercising its power of eminent domain over
the same property. By the same token, our ruling that petitioner cannot exercise its delegated power of
eminent domain through a mere resolution will not bar it from reinstituting similar proceedings, once
the said legal requirement and, for that matter, all others are properly complied with. To rule
otherwise will not only improperly diminish the power of eminent domain, but also clearly defeat
social justice.
Eslaban vs. De Onorio
Fact: Clarita De Onorio is the owner of a lot in South Cotabato. Santiago Eslaban, is a project
Manager of the NIA, who approved the construction of the main irrigation canal of the NIA on the
said lot.
Respondent’s husband agreed to the construction of the NIA canal in exchange for compensation for
the area taken after the processing of documents by the Commission on Audit. a Right-of-Way
agreement was executed between De Onorio and the NIA who paid the former for the Right-of-Way
damages. Respondent De Onorio subsequently executed an Affidavit of Waiver of Rights and Fees
whereby she waived any compensation for damages to crops and improvements which she suffered as
a result of the construction of a right-of-way on her property.
The same year, Eslaban offered the respondent the sum of P35,000.00 by way of an amicable
settlement. De Onorio demanded payment for the taking of her property, but Eslaban refused to pay.
Accordingly, De Onorio filed on a complaint against Eslaban before the RTC, praying that Eslaban be
ordered to pay as compensation for the portion of her property used in the construction of the canal
constructed by the NIA, litigation expenses, and the costs.
Eslaban filed an answer admitting that NIA constructed an irrigation canal over the property of the De
Onorio and that NIA paid a certain landowner whose property had been taken for irrigation purposes.
The trial court rendered a decision ordering NIA to pay to De Onorio the sum of P107,517.60 as just
compensation for the questioned area of 24,660 square meters of land owned by De Onorio and be
taken by said defendant NIA which used it for its main canal plus costs.
The Court of Appeals affirmed the decision of the RTC upon appeal by petitioner Eslaban. Hence this
petition.
Issue: Whether the value of just compensation shall be determined from the time of the taking or from
the time of the finality of the decision?
Held: With respect to the compensation which the owner of the condemned property is entitled to
receive, it is likewise settled that it is the market value which should be paid or “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.”
Further, just compensation means not only the correct amount to be paid to the owner of the land but
also the payment of the land within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered “just” for then the property owner is made to suffer the
consequence of being immediately deprived of his land while being made to wait for a decade or more
before actually receiving the amount necessary to cope with his loss.9 Nevertheless, there are
instances where the expropriating agency takes over the property prior to the expropriation suit, in
which case just compensation shall be determined as of the time of taking, not as of the time of filing
of the action of eminent domain.
Tax Case Digest: Commissioner of Internal Revenue vs Central Luzon Drug Corporation GR
No 159647
Facts:
Respondents operated six drugstores under the business name Mercury Drug. From January to
December 1996 respondent granted 20% sales discount to qualified senior citizens on their purchases
of medicines pursuant to RA 7432 for a total of ₱ 904,769.

On April 15, 1997, respondent filed its annual Income Tax Return for taxable year 1996 declaring
therein net losses. On Jan. 16, 1998 respondent filed with petitioner a claim for tax refund/credit of ₱
904,769.00 allegedly arising from the 20% sales discount. Unable to obtain affirmative response from
petitioner, respondent elevated its claim to the Court of Tax Appeals. The court dismissed the same
but upon reconsideration, the latter reversed its earlier ruling and ordered petitioner to issue a Tax
Credit Certificate in favor of respondent citing CA GR SP No. 60057 (May 31, 2001, Central Luzon
Drug Corp. vs. CIR) citing that Sec. 229 of RA 7432 deals exclusively with illegally collected or
erroneously paid taxes but that there are other situations which may warrant a tax credit/refund.

CA affirmed Court of Tax Appeal's decision reasoning that RA 7432 required neither a tax liability
nor a payment of taxes by private establishments prior to the availment of a tax credit. Moreover, such
credit is not tantamount to an unintended benefit from the law, but rather a just compensation for the
taking of private property for public use.

Issue:
Whether or not respondent, despite incurring a net loss, may still claim the 20% sales discount as a tax
credit.

Ruling:
Yes, it is clear that Sec. 4a of RA 7432 grants to senior citizens the privilege of obtaining a 20%
discount on their purchase of medicine from any private establishment in the country. The latter may
then claim the cost of the discount as a tax credit. Such credit can be claimed even if the establishment
operates at a loss.

A tax credit generally refers to an amount that is “subtracted directly from one’s total tax liability.” It
is an “allowance against the tax itself” or “a deduction from what is owed” by a taxpayer to the
government.
A tax credit should be understood in relation to other tax concepts. One of these is tax deduction –
which is subtraction “from income for tax purposes,” or an amount that is “allowed by law to reduce
income prior to the application of the tax rate to compute the amount of tax which is due.” In other
words, whereas a tax credit reduces the tax due, tax deduction reduces the income subject to tax in
order to arrive at the taxable income.
A tax credit is used to reduce directly the tax that is due, there ought to be a tax liability before the tax
credit can be applied. Without that liability, any tax credit application will be useless. There will be
no reason for deducting the latter when there is, to begin with, no existing obligation to the
government. However, as will be presented shortly, the existence of a tax credit or its grant by law is
not the same as the availment or use of such credit. While the grant is mandatory, the availment or
use is not. If a net loss is reported by, and no other taxes are currently due from, a business
establishment, there will obviously be no tax liability against which any tax credit can be applied. For
the establishment to choose the immediate availment of a tax credit will be premature and
impracticable.
MASIKIP vs PASIG G.R. No. 136349 January 23, 2006 Power of Eminent Domain, Expropriation,
Genuine Necessity

FACTS:

Petitioner Lourdes Dela Paz Masikip is the registered owner of a parcel of land located at Pag-Asa,
Caniogan, Pasig City, Metro Manila. The City of Pasig notified petitioner of its intention to
expropriate a 1,500 square meter portion of her property to be used for the “sports development and
recreational activities” of the residents of Barangay Caniogan. This was pursuant to Ordinance No.
42, Series of 1993 enacted by the then Sangguniang Bayan of Pasig.
Petitioner replied stating that the intended expropriation of her property is unconstitutional, invalid,
and oppressive.
Respondent reiterated that the purpose of the expropriation of petitioner’s property is “to provide
sports and recreational facilities to its poor residents” and subsequently filed with the trial court a
complaint for expropriation,
ISSUE:
Was the City of Pasig able to establish “genuine necessity”?
RULING:
The Court holds that respondent City of Pasig has failed to establish that there is a genuine necessity
to expropriate petitioner’s property. A scrutiny of the records shows that the Certification issued by
the Caniogan Barangay Council, the basis for the passage of Ordinance No. 42 s. 1993 authorizing the
expropriation, indicates that the intended beneficiary is the Melendres Compound Homeowners
Association, a private, non-profit organization, not the residents of Caniogan. Petitioner’s lot is the
nearest vacant space available. The purpose is, therefore, not clearly and categorically public. The
necessity has not been shown, especially considering that there exists an alternative facility for sports
development and community recreation in the area, which is the Rainforest Park, available to all
residents of Pasig City, including those of Caniogan.
Constitution attaches to the property of the individual requires not only that the purpose for the taking
of private property be specified. The genuine necessity for the taking, which must be of a public
character, must also be shown to exist.
Heirs of Mateo Pidacan and Romana Eigo, et al. v. ATO, et al.,
G.R. No. 162779, June 15, 2007

A property was converted into an airport by the Air Transport Office (ATO) depriving the owners of
the beneficial use and enjoyment of the same as early as 1948 without an expropriation proceeding. It
was contended that there was taking hence, just compensation should be reckoned from 1948. Is the
contention correct? Why?
No. As a rule, the determination of just compensation in eminent domain cases is reckoned from the
time of taking. (Gabatin v. LBO, 444 SCRA 176 (2004)). In this case, however, application of the said
rule would lead to grave injustice. Note that the ATO had been using the property as airport since
1948 without having instituted the proper expropriation proceedings. To peg the value of the property
at the time of taking in 1948, despite the exponential increase in its value considering the lapse of over
half a century, would be iniquitous. ATO cannot conveniently invoke the right of eminent domain to
take advantage of the ridiculously low value of the property at the time of taking that it arbitrarily
chooses to the prejudice of the owners.

Justice and fairness dictate that the appropriate reckoning point for the valuation of the property is
when the trial court made its order of expropriation in 2001. (Heirs of Mateo Pidacan & Romana
Eigo, et al. v. ATO, et al., G.R. No. 162779, June 15, 2007).
G.R. No. 161834. August 11, 2010.]

LAND BANK OF THE PHILIPPINES, petitioner, vs. HEIR OF TRINIDAD


S. VDA. DE ARIETA, represented by the sole and only heir, ALICIA
ARIETA TAN, respondent.

Facts:

- Private respondent is the registered owner of a parcel of agricultural land situated in


Sampao, Kapalong, Davao del Norte with an approximate area of 37.1010 hectares
covered by Transfer Certificate of Title No. T-49200,

- 14.999 hectares of which was covered by RA No. 6657 through the Voluntary Offer
to Sell (VOS) scheme of the Comprehensive Agrarian Reform Program (CARP).

- Private respondent offered to the Department of Agrarian Reform (DAR) the price of
P2,000,000.00 per hectare for said portion of the land covered by CARP.

- Petitioner Land Bank of the Philippines (LBP) valued and offered as just
compensation for said 14.999 hectares the amount of P1,145,806.06 or P76,387.57
per hectare. The offer was rejected by private respondent.

- In accordance with Section 16 of RA No. 6657, petitioner LBP deposited for the
account of private respondent P1,145,806.06 in cash and in bonds as provisional
compensation for the acquisition of the property.

- DARAB thru RARAD:

>Thereafter, the DAR Adjudication Board (DARAB), through the Regional Adjudicator
(RARAD) for Region XI conducted summary administrative proceedings to fix the just
compensation.

> the DARAB rendered a decision fixing the compensation of the property at
P10,294,721.00 or P686,319.36 per hectare.

- Petitioner LBP filed a motion for reconsideration of the above decision but the same
was denied.
- Petitioner LBP filed a petition against private respondent for judicial determination of
just compensation before the Special Agrarian Court, Regional Trial Court, Branch 2,
Tagum City, docketed as DAR Case No. 78-2002, which is the subject of this
petition.

- Private respondent, on the other hand, filed a similar petition against DAR before
the same Special Agrarian Court docketed as DAR Case No. 79-2002, to which
petitioner LBP filed its answer and moved for the dismissal of the petition for being
filed out of time.

- SAC (Special Agrarian Court):

> rendered the assailed resolution ordering petitioner LBP to deposit for release to
the private respondent the DARAB determined just compensation of P10,294,721.00.

- petitioner LBP filed a motion for reconsideration of the said order to deposit, which
was denied.

Hence, this petition based on the following grounds:

"I.THE SAC ORDER TO DEPOSIT HAD NO LEGAL BASIS,


CONSIDERING THAT THE REQUIREMENT FOR THE
PROMPT PAYMENT OF JUST COMPENSATION TO THE
PRIVATE RESPONDENT WAS SATISFIED BY THE
DEPOSIT OF THE PROVISIONAL COMPENSATION OF
P1,145,806.06 REQUIRED UNDER SECTION 16 (E) OF RA
6657 AND THE RULING IN THE CASE OF 'LAND BANK OF
THE PHILIPPINES V. COURT OF APPEALS, PEDRO L.
YAP, ET AL.', G.R. NO. 118712, OCTOBER 6, 1995 AND
JULY 5, 1996.

II.THE SPECIAL AGRARIAN COURT IS NOT AN APPELLATE


COURT FOR DARAB DECISIONS ON COMPENSATION
AND HAS NO JURISDICTION TO REVIEW, ADOPT, OR
ORDER THE EXECUTION OF DARAB DECISIONS ON
COMPENSATION PENDING FINAL DETERMINATION OF
JUST COMPENSATION OR TO PREJUDGE THE CASE IN
VIOLATION OF PETITIONER'S RIGHT TO DUE PROCESS
OF LAW."
- CA:
o On August 8, 2003, the CA dismissed the petition holding that the
assailed orders of the SAC are correct and within the parameters
of Republic Act (R.A.) No. 6657, thus: CHcETA
 Section 16 (a) refers to an "offer" of the DAR to pay a
corresponding value of the land. Facts of the case show that
P1,145,806.06 was the offered price which was rejected by the
private respondent.
 In cases of rejection of the offer, Section 16(d) states that there
shall be a summary administrative proceedings to determine
the compensation for the land. Hence, the proceedings before
the DARAB, through the RARAD for Region XI as in this case.
 Note that in Sections 16(a) to (d), or, during the offer until its
rejection, there was no reference to a deposit of the
compensation.
 The reference to a deposit of the compensation appears only
in Section 16(e) or after the DAR, in a summary administrative
proceedings, had determined or decided the case relative to
the compensation of the land.
o If it had been the intention of the law to require the deposit of the
compensation based on the offer or in the amount of P1,145,806.06,
the law should have stated such.
o The reference to the "deposit" right after [the] decision of the DARAB
shall have been rendered, obviously means that the amount of the
deposit should be based on the DARAB decision. Otherwise, there
would be no need to institute an administrative proceeding before the
DARAB, before a deposit shall be required.
o In the case of Association of Small Landowners in the Philippines, Inc.
vs. Secretary of Agrarian Reform, the Supreme Court held that the
determination made by the DAR is only preliminary unless accepted
by all parties concerned.
o Apropos, it was held in the case of Land Bank of the Philippines vs.
Court of Appeals and Jose Pascual that it is the DARAB which has
the authority to determine the initial valuation of lands involving
agrarian reform although such valuation may only be considered
preliminary as the final determination of just compensation is vested in
the courts.
o Therefore, the deposit of the initial valuation referred to in Section 16
of RA No. 6657 is the DAR-determined amount or in this case, the
amount of P10,294,721.00.

- Petitioner LBP filed a motion for reconsideration but the same was denied by the CA

Issue:

- The lone issue in this controversy is the correct amount of provisional compensation
which the LBP is required to deposit in the name of the landowner if the latter rejects
the DAR/LBP's offer.
- Petitioner maintains it should be its initial valuation of the land subject of Voluntary
Offer to Sell (VOS) while respondent claims it pertains to the sum awarded by the
PARAD/RARAD/DARAB in a summary administrative proceeding pending final
determination by the courts.

Ruling:

- The petition is meritorious.


A. Section 16 of R.A. No. 6657 reads:

SEC. 16.Procedure for Acquisition of Private Lands. — For purposes of


acquisition of private lands, the following procedures shall be followed:

(a)After having identified the land, the landowners and the beneficiaries, the
DAR shall send its notice to acquire the land to the owners thereof, by
personal delivery or registered mail, and post the same in a conspicuous
place in the municipal building and barangay hall of the place where the
property is located. Said notice shall contain the offer of the DAR to pay a
corresponding value in accordance with the valuation set forth in Sections
17, 18, and other pertinent provisions hereof.

(b)Within thirty (30) days from the date of receipt of written notice by
personal delivery or registered mail, the landowners, his administrator or
representative shall inform the DAR of his acceptance or rejection of the
offer.
(c)If the landowner accepts the offer of the DAR, the LBP shall pay the
landowner the purchase price of the land within thirty (30) days after he
executes and delivers a deed of transfer in favor of the Government and
surrenders the Certificate of Title and other muniments of title.

(d)In case of rejection or failure to reply, the DAR shall conduct


summary administrative proceedings to determine the compensation
for the land by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land, within
fifteen (15) days from the receipt of the notice. After the expiration of the
above period, the matter is deemed submitted for decision. The DAR shall
decide the case within thirty (30) days after it is submitted for
decision. aSEHDA

(e)Upon receipt by the landowner of the corresponding payment or in case


of rejection or no response from the landowner, upon the deposit with
an accessible bank designated by the DAR of the compensation in
cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of
Deeds to issue a Transfer Certificate of Title (TCT) in the name of the
Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.

(f)Any party who disagrees with the decision may bring the matter to the
court of proper jurisdiction for final determination of just compensation.
[EMPHASIS SUPPLIED.]

- According to the CA, the deposit of provisional compensation mentioned in sub-paragraph


(e) pertains to that amount awarded by the DAR in the summary administrative proceeding
under the preceding sub-paragraph (d). It noted that the word "deposit" was not mentioned
until after sub-paragraph (d), when the DAR is tasked to conduct a summary administrative
proceeding. Otherwise, said the appellate court, there would be no need to institute an
administrative proceeding before the DARAB, before a deposit is required.

- We find the foregoing as a strained interpretation of a simple and clear enough provision on
the procedure governing acquisition of lands under CARP, whether under the compulsory
acquisition or VOS scheme.
- Sub-paragraph (d) provides for the consequence of the landowner's rejection of the
initial valuation of his land, that is, the conduct of a summary administrative
proceeding for a preliminary determination by the DARAB through the PARAD or
RARAD, during which the LBP, landowner and other interested parties are required to
submit evidence to aid the DARAB/RARAD/PARAD in the valuation of the subject
land.

- Sub-paragraph (e), on the other hand, states the precondition for the State's taking of
possession of the landowner's property and the cancellation of the landowner's title, thus
paving the way for the eventual redistribution of the land to qualified
beneficiaries: payment of the compensation (if the landowner already accepts the offer
of the DAR/LBP) or deposit of the provisional compensation (if the landowner rejects
or fails to respond to the offer of the DAR/LBP).

- Indeed, the CARP Law conditions the transfer of possession and ownership of the land to
the government on receipt by the landowner of the corresponding payment or the deposit of
the compensation in cash or LBP bonds with an accessible bank.

- It was thus erroneous for the CA to conclude that the provisional compensation required to
be deposited as provided in Section 16 (e) is the sum determined by the
DARAB/PARAD/RARAD in a summary administrative proceeding merely because the word
"deposit" appeared for the first time in the sub-paragraph immediately succeeding that sub-
paragraph where the administrative proceeding is mentioned (sub-paragraph d).

- On the contrary, sub-paragraph (e) should be related to sub-paragraphs (a), (b) and (c)
considering that the taking of possession by the State of the private agricultural land placed
under the CARP is the next step after the DAR/LBP has complied with notice requirements
which include the offer of just compensation based on the initial valuation by LBP. To
construe sub-paragraph (e) as the appellate court did would hamper the land redistribution
process because the government still has to wait for the termination of the summary
administrative proceeding before it can take possession of the lands.

- Contrary to the CA's view, the deposit of provisional compensation is made even before the
summary administrative proceeding commences, or at least simultaneously with it, once the
landowner rejects the initial valuation ("offer") by the LBP. Such deposit results from his
rejection of the DAR offer (based on the LBP's initial valuation). Both the conduct of
summary administrative proceeding and deposit of provisional compensation follow as a
consequence of the landowner's rejection under both the compulsory acquisition and VOS.
This explains why the words "rejection or failure to reply" and "rejection or no response from
the landowner" are found in sub-paragraphs (d) and (e). Such "rejection"/"no response
from the landowner" could not possibly refer to the award of just compensation in the
summary administrative proceeding considering that the succeeding sub-paragraph
(f) states that the landowner who disagrees with the same is granted the right to
petition in court for final determination of just compensation.

- We also find the CA's conclusion that petitioner's interpretation of Section 16 (e) would
render unnecessary the filing of an administrative proceeding before the deposit is made, as
untenable. Said court raised a perceived inconsistency or contradiction not found in the law.
Precisely, the deposit of provisional compensation is required to be made because the
landowner has rejected the initial valuation or amount offered by the DAR, which is
then mandated to conduct a summary administrative proceeding for preliminary
determination of just compensation. It may be that the confusion in reading the provision
stems from the words "offer of the DAR"/"rejection or acceptance of the offer" used in
Section 16 (b) and (c), which seemingly leaves out the active role of the LBP at the early
stage of the land acquisition procedure, whether under compulsory acquisition or VOS.

B. Section 18 of R.A. No. 6657 provides:

SECTION 18.Valuation and Mode of Compensation. — The LBP shall


compensate the landowner in such amount as may be agreed upon by the
landowner and the DAR and the LBP, in accordance with the criteria
provided for in Sections 16 and 17, and other pertinent provisions hereof, or
as may be finally determined by the court, as the just compensation for the
land.

xxx xxx xxx

- Under the law, the LBP is charged with the initial responsibility of determining
the value of lands placed under land reform and the compensation to be paid
for their taking. 12
- Once an expropriation proceeding or the acquisition of private agricultural lands is
commenced by the DAR, the indispensable role of LBP begins.
- EO No. 405, issued on June 14, 1990, provides that the DAR is required to
make use of the determination of the land valuation and compensation by the
LBP as the latter is primarily responsible for the determination of the land
valuation and compensation. In fact, the LBP can disagree with the decision of the
DAR in the determination of just compensation, and bring the matter to the RTC
designated as SAC for final determination of just compensation. 13
- The amount of “offer” which the DAR gives to the landowner as compensation
for his land, as mentioned in Section 16 (b) and (c), is based on the initial
valuation by the LBP. 14 This then is the amount which may be accepted or
rejected by the landowner under the procedure established in Section 16.
Perforce, such initial valuation by the LBP also becomes the basis of the
deposit of provisional compensation pending final determination of just
compensation, in accordance with sub-paragraph €.
- DAR AO No. 02, series of 1996, "Revised Rules and Procedures Governing the
Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory
Acquisition Pursuant to Republic Act No. 6657" reinforces the view that it is the
initial valuation of the LBP which becomes the basis of the provisional
compensation deposit.
- The following procedural steps on Valuation and Compensation under DAR AO No.
02 clearly show that such deposit of provisional compensation is to be made by LBP
either before or simultaneously with the conduct of the summary administrative
proceedings, without awaiting the termination of the proceedings or rendition of
judgment/decision by the DARAB/RARAD/PARAD. Consequently, the amount
of just compensation determined by the DARAB/RARAD/PARAD cannot be the
deposit contemplated in Section 16 (e).

- It must also be noted that under the DARAB 2003 Rules of Procedure, there is no
requirement of delivery or deposit of provisional compensation based on the
judgment or award by the PARAD/RARAD or DARAB. Section 10, Rule XIX of
the DARAB 2003 Rules only allows execution of judgments for compensation which
have become final and executory. 16 This only underscores the primary responsibility
of the LBP to submit an initial valuation at which DAR would offer to purchase the
land, and to deposit said amount after the landowner has rejected the offer.

- The objective of the procedures on land valuation provided by the Comprehensive


Agrarian Reform Law (CARL) as amplified by the issuances of the DAR/DARAB is to
enforce the constitutional guarantee of just compensation for the taking of private
agricultural lands placed under the CARP. It must be stressed that the DAR's
authority to determine just compensation is merely preliminary. On the other
hand, under Section 1 of EO No. 405, series of 1990, the LBP 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. SCHATc

- In both voluntary and compulsory acquisitions, wherein 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 RTC, acting as a special agrarian court. But as with
the DAR-awarded compensation, LBP's valuation of lands covered by CARL is
considered only as an initial determination, which is not conclusive, as it is the RTC,
sitting as a Special Agrarian Court, that should make the final determination of just
compensation, taking into consideration the factors enumerated in Section 17 of R.A.
No. 6657 and the applicable DAR regulations. It is now settled that the valuation
of property in eminent domain is essentially a judicial function which is vested
with the RTC acting as Special Agrarian Court. The same cannot be lodged
with administrative agencies and may not be usurped by any other branch or
official of the government.
- Although under the CARL of 1988, the landowners are entitled to withdraw the
amount deposited in their behalf pending the final resolution of the case involving the
final valuation of his property, 20 the SAC may not, as in this case, order the
petitioner to deposit or deliver the much higher amount adjudged by the RARAD
considering that it already complied with the deposit of provisional compensation by
depositing the amount of its initial valuation which was rejected by the respondent.
And while the DARAB Rules of Procedure provides for execution pending appeal
upon "meritorious grounds," 21 respondent has not established such meritorious
reasons for allowing execution of the RARAD decision pending final determination of
just compensation by the court.
- the LBP is primarily responsible for the valuation and determination of compensation
for all private lands. It has the discretion to approve or reject the land valuation and
just compensation for a private agricultural land placed under the CARP. In case the
LBP disagrees with the valuation of land and determination of just compensation by a
party, the DAR, or even the courts, the LBP not only has the right, but the duty, to
challenge the same, by appeal to the CA or to this Court, if appropriate.
- Both LBP and respondent filed petitions before the SAC disputing the RARAD
judgment awarding compensation in the amount of P10,294,721.00. In view of the
substantial difference in the valuations — the initial valuation by the LBP being only
P1,145,806.06 — the more prudent course is to await the final resolution of the
issue of just compensation already filed with said court.
- Lastly, the Court finds no merit in the contention of respondent that the RARAD's
decision had already become final due to failure of the petitioner to appeal the same
to the Board, in accordance with Section 5, Rule XIX of the 2003 DARAB Rules of
Procedure. It must be noted that said Rules was adopted only on January 17, 2003.
Section 1, Rule XXIV of the 2003 DARAB Rules explicitly states that:

SECTION 1. Transitory Provisions. — These rules shall govern all cases


filed on or after its effectivity. All cases pending with the Board and the
Adjudicators, prior to the date of effectivity of these Rules, shall be
governed by the DARAB Rules prevailing at the time of their filing.

The applicable rule is Section 2, Rule XIV (Judicial Review) of the Revised Rules of the
Department of Agrarian Reform Adjudication Board which provides:

Section 2.Just Compensation Cases to the Special Agrarian Courts. — The


decision, resolution or order of the Adjudicator or the Board on land
valuation or determination of just compensation, may be brought to the
proper Special Agrarian Court for final judicial determination.

Order: The decision of CA is reversed.


CASE DIGEST: NPC V. DIATO-BERNAL (G.R. NO. 180979, DECEMBER 15, 2010)
NATIONAL POWER CORPORATION, Petitioner, v. TERESITA DIATO-BERNAL, Respondent. (G.R. No.
180979, December 15, 2010)

FACTS: Respondent Teresita Diato-Bernal is the registered owner of a parcel of land. In order to
complete the construction of structures and steel posts for NAPOCORs Dasmaris-Zapote 230 KV
Transmission Line Project, it had to acquire an easement of right of way over respondents property.
NAPOCOR filed an expropriation suit against respondent, alleging, inter alia, that: the project is for
public purpose; NAPOCOR negotiated with respondent for the price of the property, as prescribed by
law, but the parties failed to reach an agreement; and NAPOCOR is willing to deposit the amount
representing the assessed value of the property for taxation purposes.

With the first phase of the expropriation proceedings having been laid to rest by the partial
compromise agreement, the RTC proceeded to determine the amount of just compensation. To
assist in the evaluation of the fair market value of the subject property, the RTC appointed three (3)
commissioners, viz.:(1) the Provincial Assessor of Cavite; (2) the Municipal Assessor of Imus, Cavite,
upon recommendation of NAPOCOR; and (3) Soledad Zamora, respondents representative. The
commissioners submitted their report to the RTC on September 14, 1999. In the main, they
recommended that the just compensation due from NAPOCOR be pegged atP10,000.00 per sq m,
based on the property's fair market value.

NAPOCOR filed an Opposition to the Commissioners Valuation Report, asserting that it was not
substantiated by any official documents or registered deeds of sale of the subject propertys
neighboring lots. The RTC issued an Order adopting the recommendation of the commissioners. On
appeal, the CA rendered its Decision affirming the RTCs judgment.

ISSUE: Whether or not the CA erred in relying on the unsubstantiated and insufficient findings
contained in the commissioners report.

HELD: Court of Appeals decision is reversed.

The CA and the RTC erred in relying on the unsubstantiated and insufficient findings contained in the
commissioners report. First, the market values of the subject property's neighboring lots were mere
estimates and unsupported by any corroborative documents, such as sworn declarations of realtors
in the area concerned, tax declarations or zonal valuation from the Bureau of Internal Revenue for
the contiguous residential dwellings and commercial establishments. The report also failed to
elaborate on how and by how much the community centers and convenience facilities enhanced the
value of respondents property. Finally, the market sales data and price listings alluded to in the
report were not even appended thereto.

As correctly invoked by NAPOCOR, a commissioners report of land prices which is not based on any
documentary evidence is manifestly hearsay and should be disregarded by the court. The trial court
adopted the flawed findings of the commissioners hook, line, and sinker. It did not even bother to
require the submission of the alleged market sales data and price listings. Further, the RTC
overlooked the fact that the recommended just compensation was gauged as of September 10, 1999
or more than two years after the complaint was filed on January 8, 1997. It is settled that just
compensation is to be ascertained as of the time of the taking, which usually coincides with the
commencement of the expropriation proceedings. Where the institution of the action precedes
entry into the property, the just compensation is to be ascertained as of the time of the filing of the
complaint. Clearly, the recommended just compensation in the commissioner’s report is
unacceptable.

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 takers gain, but the owners 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. Indeed, the
just-ness of the compensation can only be attained by using reliable and actual data as bases in
fixing the value of the condemned property.

The trial court should have been more circumspect in its evaluation of just compensation due the
property owner, considering that eminent domain cases involve the expenditure of public funds.
Hence, the legal basis for the determination of just compensation being insufficient, the ruling of the
RTC and the affirming Decision and Resolution of the CA ought to be set aside. The petition for
review on certiorari is GRANTED.
Case Digest: LBP vs Honeycomb Farms Corp
GR No 166259 November 12, 2012

Facts:
Honeycomb Farms Corp. (HFC) is a registered owner of a parcel of land covered by TCT No. T-2550
with an area of 29.0966 hectares. Through a letter HFC voluntarily offered its land to the DAR for
acquisition pursuant to CARP for P 581,932.00 @ P 20,000.00 per hectare. The DAR and LBP
determined an acquirable and compensable area of 27.5871 hectares while the remaining were
excluded for being hilly and underdeveloped.

LBP pursuant to DAR-AO No. 6 fixed the value of the land in the amount of P 165,739.44. HFC
rejected the said valuation and filed with the DARAB a petition for determination of just
compensation. HFC claimed that the just compensation should be in the amount of P 25,000.00 per
hectare considering its location and productivity for a total of P 725,000.00.

Pending this case, HFC filed a complaint for determination of just compensation with the RTC (SAC)
praying for a P 725,000.00 just compensation plus attorneys fee of 10% of the just compensation.
HFC justified the filing in the RTC (SAC) for the unreasonable delay of DARAB. LBP countered that
HFC's petition was premature for failure to exhaust administrative remedies.

Issue:

Whether or not RTC (SAC) properly acquired jurisdiction over HFC's complaint despite pendency of
the determination of just compensation with the DARAB.
How much is the just compensation of the property?

Ruling:

HFC correctly filed a petition for the determination of just compensation with the RTC (SAC), which
has the original and exclusive jurisdiction in just compensation cases under RA 6657. The DARAB's
valuation is being preliminary in nature, could not have attained finality, as only the courts cas
resolve the issue of just compensation.
However, the SAC committed error in applying the bais formula in determining the just
compensation prescribed by DAR-AO No. 6. The case is remanded to the RTC (SAC) for
determination of just compensation.
CITY OF MANILA v. ALEJANDRO ROCES PRIETO, GR No. 221366, 2019-07-08

Facts:

On January 19, 2004

City Council of Manila enacted Ordinance No. 8070 that authorized the City Mayor to acquire certain
parcels of land belonging to respondents

Prieto... to be used for Land-For-The-Landless Program... petitioner attempted to acquire the subject
lots by negotiated sale... amount of P2,000.00 per square meter... respondents refused... their
respective properties are worth more than that... petitioner filed a Complaint September 3, 2004...
asserting its authority to expropriate the subject lots for its project.

Instead of the general provisions on expropriation under Rule 67 of the Rules of Court, the RTC
applied the provisions of LGC... mandating the deposit of 15% of the fair market value of the
properties subject of expropriation, for petitioner's immediate possession thereof Petitioner
deposited the amount of P425,519.00

RTC issued a Writ of Possession... there was an ordinance passed by the City Council of Manila to
expropriate the subject lots for public purpose. The requirement that it should be for public use
was... satisfied by the fact that the properties were sought to be expropriated pursuant to the
petitioner's "Land for the Landless and Onsite Development Programs.

despite "privately-owned lands" being last in the list of priorities in land acquisition under Section 9
of R.A.) No. 7279 or the Urban Development Housing Act of 1992 RTC dispensed with said list,
subscribing to petitioner's allegation that an on-site development is more practicable and
advantageous to the beneficiaries CA found the records lacking... to support petitioner's claim that
an on-site development program is the most practicable and advantageous for the beneficiaries, to
justify the non-applicability of the list of priorities in land acquisition under Section 9 of R.A. No.
7279.

CA ruled that bare and unsupported assertions that the lots sought to be expropriated are blighted
lands to be the proper subject of an on-site development program, and that on-site development is
the most practical, advantageous, and beneficial to the beneficiaries, should not suffice to justify the
mandatory provisions of R.A. No. 7279 CA further found petitioner to have failed to exhaust other
modes of acquisition before it resorted to expropriation in violation of Section 10 of R.A. No. 7279.

CA found that the intended beneficiaries of petitioner's socialized housing program are not
"underprivileged and homeless," in violation of Section 8... of R.A. No. 7279 CA REVERSED
petitioner's argument... assertion of its power to expropriate and its claim that it had complied with
the provisions of the Constitution and pertinent laws in the exercise thereof

Issues:

whether or not the CA erred in finding that petitioner failed to prove that it complied with pertinent
laws in the exercise of its power of eminent domain

Ruling:
The exercise of the power of eminent domain drastically affects a landowner's right to private
property, which is as much a constitutionally-protected right necessary for the preservation and
enhancement of personal dignity and intimately connected with the rights to life and liberty.

Therefore, the exercise of such power must undergo painstaking scrutiny.

Such scrutiny is especially necessary when... local government unit has no inherent power of
eminent domain

Such power is essentially lodged in the legislature although it may be validly delegated to local
government units, other public entities and public utilities.

national legislature delegated the power of eminent domain to the local government units.

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

requisites... before a local government unit can exercise the power of eminent domain

(1) an ordinance is enacted by the local legislative council authorizing the local chief executive, in
behalf of the local government unit, to exercise the power of eminent domain or pursue
expropriation proceedings over a particular private property; (2) the power of eminent domain is
exercised for public use, purpose or welfare, or for the benefit of the poor and the landless; (3) there
is payment of just compensation, as required under Section 9, Article III of the Constitution, and
other pertinent laws; and (4) a valid and definite offer has been previously made to the owner of the
property sought to be expropriated, but said offer was not accepted... the exercise of such delegated
power should be pursuant to the Constitution and pertinent laws

R.A. No. 7279... governs the local expropriation of properties for purposes of urban land reform and
housing... the rules and limitations set forth therein cannot be disregarded

SEC 9. Priorities in the Acquisition of Land. - Lands for socialized housing shall be acquired in the
following order:(a) Those owned by the Government or any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their subsidiaries;(b)
Alienable lands of the public domain;(c) Unregistered or abandoned and idle lands;(d) Those within
the declared Areas or Priority Development, Zonal Improvement Program sites, and Slum
Improvement and Resettlement Program sites which have not yet been acquired;(e) Bagong Lipunan
Improvement of 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 advantageous to the
beneficiaries, the priorities mentioned in this section shall not apply. The local government units
shall give budgetary priority to on-site development of government lands.SEC. 10. Modes of Land
Acquisition. - The modes of acquiring lands for purposes of this Act shall include, among 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 where expropriation is resorted to, parcels of land owned by small property
owners shall be exempted for purposes of this Act: x x x

RTC... sweepingly concluded that petitioner had met all the aforecited requisites.

courts have a duty to judiciously scrutinize and determine whether the local government's exercise
of the delegated power of eminent domain is in accordance with the delegating law... bare
allegations and unsupported generalizations do not suffice, considering the drastic effect of the
exercise of such power to constitutionally-protected rights

In the case of Estate or Heirs of the Late Ex-Justice Jose B.L. Reyes v. City of Manila... provisions are
strict limitations on the exercise of the power of eminent domain by local government units,... with
respect to: (1) the order of priority in acquiring land for socialized housing; and (2) the resort to
expropriation proceedings as a means of acquiring it.

Compliance with these conditions is mandatory because these are the only safeguards of oftentimes
helpless owners of private property against what may be a tyrannical violation of due process when
their property is forcibly taken from them allegedly for public use.

Petitioner... alleges that it conducted a study and observed the order of priority in land acquisition
for expropriation under Section 9... and found that on-site development is the most practicable and
advantageous to the prospective beneficiaries... however, no evidence was presented to prove such
claim

There was no showing that any attempt was made to first acquire the lands listed in Section 9(a) to
(e) before proceeding to expropriate respondents' private lands... there was no evidence presented
showing that the subject properties were those contemplated under R.A. 7279 to be proper subjects
of on-site development

R.A. No. 7279 provides for a detailed description of specific areas which are the proper subjects of
on-site development... as defined under Section 3(1), in relation to Section 3(c)

It is... incumbent upon petitioner to show that the areas they sought to expropriate for socialized
housing and urban development are those contemplated under the law... there was... no evidence
presented to show that the prospective beneficiaries of the expropriation are the "underprivileged
and homeless" contemplated under Section 8 of R.A. No. 7279... records show that the prospective
beneficiaries are not such "underprivileged and homeless."... said purported "underprivileged and
homeless" beneficiaries were able to put up a substantial amount to complete the additional deposit
ordered by the court for the petitioner to satisfy.

petitioner failed to establish that the other modes of acquisition under Section 10... were first
exhausted... in cases of land acquisitions by the government, when the property owner rejects the
offer but hints for a better price, the government should renegotiate by calling the property owner
to a conference.

This finds further legal basis in Article 35 of the Rules and Regulations Implementing the Local
Government Code, which reads:
ART. 35. Offer to Buy and Contract of Sale, (a) The offer to buy private property for public use or
purpose shall be in writing. It shall specify the property sought to be acquired, the reasons for its
acquisition, and the price offered.x x x x(c) If the owner or owners are willing to sell their property
but at a price higher than that offered to them, the local chief executive shall call them to a
conference for the purpose of reaching an agreement on the selling price. The chairman of the
appropriation or finance committee of the sanggunian, or in his absence, any member of the
sanggunian duly chosen as its representative, shall participate in the conference. When an
agreement is reached by the parties, a contract of sale shall be drawn and executed.

it is undisputed that after respondents rejected petitioner's offer of P2,000.00 per square meter...
for being too low compared to the fair market value of their properties... petitioner readily instituted
the present expropriation suit without bothering to renegotiate its offer.

there is no valid and definite offer made by petitioner before it filed the expropriation complaint.

The intent of the law is for the State or the local government to make a reasonable offer in good
faith, not merely & pro forma offer to acquire the property

Principles:

the exercise of such delegated power should be pursuant to the Constitution and pertinent laws

R.A. No. 7279... governs the local expropriation of properties for purposes of urban land reform and
housing... the rules and limitations set forth therein cannot be disregarded... local government units
do not have an unbridled authority to exercise such formidable power in seeking solutions to such
problem.

such formidable power greatly affects a citizen's fundamental right to property, hence, there is a
need to strictly comply with the conditions and restrictions set forth in the Constitution and
pertinent laws to assure that every right is protected and every mandate is properly discharged.

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