SECTION 9 Private property shall not be taken for public use

without just compensation.

Expropriation in General; Reversion
Vda. De Ouna v. Republic (reversion; expansion of Lahug airport)
The abandonment of the public use for which the subject properties
were expropriated entitled the petitioners Ouanos, et al. and
respondents Inocian, et al. to reacquire them. It is well settled that
the taking of private property by the Governments power of eminent
domain is subject to two mandatory requirements:
1. That it is for a particular public purpose; and
2. That just compensation be paid to the property owner.
These requirements partake of the nature of implied conditions that
should be complied with to enable the condemnor to keep the
property expropriated. The taking of private property, consequent to
the Governments exercise of its power of eminent domain, is always
subject to the condition that the property be devoted to the specific
public purpose for which it was taken. Corollarily, if this particular
purpose or intent is not initiated or not at all pursued, and is
peremptorily abandoned, then the former owners, if they so desire,
may seek the reversion of the property, subject to the return of the
amount of just compensation received.
Power to Undertake Expropriation Case
Iron and Steel Authority v. CA (substitution of the Republic)
Iron and Steel Authority, created through PD 272, was vested with
some of the powers or attributes normally associated with juridical
personality but did not possess general or comprehensive juridical
personality separate and distinct from that of the Government. The
ISA in fact appears to the Court to be a non-incorporated agency or
instrumentality of the Government of the Republic of the Philippines.
ISA may thus be properly regarded as an agent or delegate of the
Republic of the Philippines. When the statutory term of a nonincorporated agency expires, the powers, duties and functions as
well as the assets and liabilities of that agency revert back to, and
are re-assumed by, the Republic of the Philippines. The Philippines
is entitled to be substituted in the expropriation proceedings as party-

plaintiff in lieu of ISA, the statutory term of ISA having expired.

Right of Owner Before Expropriation
Greater Balanga v. Mun. of Balanga (rights prior to expropriation)
Sangguniang Bayan of Balanga passed Resolution No. 12, s-88
annulling the Mayor's permit issued to petitioner and advising the
Mayor to revoke the permit "to operate a public market."The SB's
Resolution merely mentioned the plan to acquire the Lot for
expansion of the Balanga Public Market adjacent thereto. The SB
doesn't actually maintain a public market on the area. Until
expropriation proceedings are instituted in court, the landowner
cannot be deprived of its right over the land.
Republic v. Salem (title not cancelled until paid)
The expropriation consists in 2 stages: 1) determination of the
authority to exercise the power of eminent domain and propriety of its
exercise in the context of the facts involved. It ends with an order, if
not a dismissal, declaring that the government has a lawful right to
take the property sought, upon payment of just compensation. 2) The
determination by the court of the just compensation. It is only upon
the completion of these two stages that expropriation is said to have
been completed. Until the action for expropriation has been
completed and terminated, ownership over he property remains with
the registered owner. Consequently, the latter can exercise all rights
pertaining to an owner, including the right to dispose of his property,
subject to the power of the State ultimately to acquire it through
expropriation.
Elements of "Taking"
Republic of Vda. de Castelvi (rent by military)
The requisites for taking are:
1. The expropriator must enter a private property;
2. The entry must be for more than a momentary period;
3. It must be under warrant or color of authorities;
4. The property must be devoted for public use or otherwise
informally appropriated or injuriously affected; and
5. The utilization of the property for public use must be such a way
as to oust the owner and deprive him of beneficial enjoyment of the

property.
Under Sec. 4, Rule 67 of the Rules of Court, just compensation is
to be determined as of the date of the filing of the complaint. The
Supreme Court has ruled that when the taking of the property sought
to be expropriated coincides with the commencement of the
expropriation proceedings, or takes place subsequent to the filing of
the complaint for eminent domain, the just compensation should be
determined as of the date of the filing of the complaint.
US v. Causby (navigable airspace)
The United States had conceded in oral argument that if flights over
the Respondents property rendered it uninhabitable then there
would be a taking compensable under the Fifth Amendment. The
measure of the value of the property taken is the owners loss, not
the takers gain. The airspace is a public highway. But it is obvious
that if the landowner is to have the full enjoyment of his land, he
must have exclusive control of the immediate reaches of the
enveloping atmosphere. If this were not true then landowners could
not build buildings, plant trees or run fences. Flights over private land
are not a taking, unless, like here, they are so low and frequent as to
be a direct and immediate interference with the enjoyment of the
land.
Republic v. PLDT (requiring PLDT to contract with the govt)
The parties can not be coerced to enter into a contract where there is
no agreement. However, The Republic may, in the exercise of the
sovereign power of eminent domain, require the telephone company
to permit interconnection of the government telephone system and
that of the PLDT, as the needs of the government service may
require, subject to the payment of just compensation to be
determined by the court. There is 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.
If, under section 6, Article XIII, of the Constitution, the State may, in
the interest of national welfare, transfer utilities to public ownership
upon payment of just compensation, there is no reason why the
State may not require a public utility to render services in the general
interest, provided just compensation is paid therefor. Ultimately, the

beneficiary of the interconnecting service would be the users of both

telephone systems, so that the condemnation would be for public
use.
Penn Central Transportation v. NY City
There restriction of the Landmark Preservation Commission on Penn
Centrals request to construct a building on top of the terminal does
not constitute a taking of property. If a law or rule interferes with the
present use of the property, it constitutes as a taking. In this case,
the law, which the LPC follows simply prohibits the petitioner from
occupying portions of the airspace above the terminal.
OSG v. Ayala (free parking)
Title to and/or possession of the parking facilities remain/s with
respondents, the prohibition against their collection of parking fees
from the public, for the use of said facilities, is already tantamount to
a taking or confiscation of their properties. The State is not only
requiring that respondents devote a portion of the latters properties
for use as parking spaces, but is also mandating that they give the
public access to said parking spaces for free. Such is already an
excessive intrusion into the property rights of respondents. Not only
are they being deprived of the right to use a portion of their
properties as they wish, they are further prohibited from profiting from
its use or even just recovering therefrom the expenses for the
maintenance and operation of the required parking facilities.
The total prohibition against the collection by respondents of parking
fees from persons who use the mall parking facilities has no basis in
the National Building Code or its IRR. The State also cannot impose
the same prohibition by generally invoking police power, since said
prohibition amounts to a taking of respondents property without
payment of just compensation.
"Public Use"
Sumulong v. Guerrero (housing is for public use)
The public use requirement for a valid exercise of the power of
eminent domain is a flexible and evolving concept influenced by
changing conditions. As long as the purpose of the taking is public,
then the power of eminent domain comes into play. In this case,

socialized housing comes within the ambit of public purpose.

Housing is a basic human need. Shortage in housing is a matter of
state concern since it directly and significantly affects public health,
safety, the environment and in sum, the general welfare.
Phil. Columbian Assn. v. Hon. Panis (housing project)
The City of Manila, acting through its legislative branch, has the
express power to acquire private lands in the city and subdivide
these lands into home lots for sale to bona fide tenants or occupants
thereof, and to laborers and low- salaried employees of the city. That
only a few could actually benefit from the expropriation of the
property does not diminish its public use character. It is simply not
possible to provide all at once land and shelter for all who need
them.
Province of Camarines Sur v. CA (expropriation to establish a pilot
farm for non-traditional crops)
There has been a shift from the literal to a broader interpretation of
public purpose or public use for which the power of eminent
domain may be exercised. The old concept was that the condemned
property must actually be used by the general public before the
taking thereof could satisfy the constitutional requirement if public
use. Under the new concept, public use means public advantage,
convenience, or benefit, which tends to contribute to the general
welfare and prosperity of the community.
The establishment if a pilot development center would be to the
direct benefit and advantage of the people of Cam Sur. The court
stresses that the power of expropriation is superior to the power to
distribute lands under the land reform program. Ordinarily, it is the
legislative branch of the LGU that shall determine whether the use of
property sought to be expropriated shall be public. The courts defer
to such legislative determination and will intervene only when a
particular undertaking has no real relation to public use.
Just Compensation
City of Manila v. Estrada
The general rule that the market value of the land taken is the just
compensation to which the owner of condemned property is entitled

under the law meets with our unqualified approval. "Just

compensation," therefore, as used in section 246 of the Code of Civil
Procedure, means a fair and full equivalent for the loss sustained."
The compensation must be just to the public as well as to the
owners.
Municipality of Daet v. CA (conversion into a public park)
The value of lands expropriated must be reckoned as of the time of
the actual possession not as of the time of the filing of the complaint.
Where property is taken ahead of the filing of the condemnation
proceedings, the value thereof may be enhanced by the public
purpose for which it is taken, the entry of the plaintiff upon the
property may have depreciated its value thereby, or there may have
been a natural increase in the value of the property from the time it is
taken to the time the complaint is filed, due to general economic
conditions. The owner of the private property should be
compensated only for what he actually loses, it is not intended that
his compensation shall extend beyond his loss or injury. And what he
loses is only the actual value of his property at the time it is taken.
This means that the value of the property may increase or decrease
from the time the case fro expropriation is filed. Just compensation
requires that the owner be compensated for what he actually loses.
The compensation should be valued at P36,500, which is the value
at the time of the judgment by the trial court.
EPZA v. Dulay
Under P.D. No. 1533, the basis of just compensation shall be the fair
and current market value declared by the owner of the property
sought to be expropriated or such market value as determined by the
assessor, whichever is lower. Therefore, there is no more need to
appoint commissioners as prescribed by Rule 67 of the Revised
Rules of Court and for said commissioners to consider other highly
variable factors in order to determine just compensation.
The Court is constrained to declare the provisions of the Decrees on
just compensation unconstitutional and void and accordingly dismiss
the instant petition for lack of merit. The method of ascertaining just
compensation
under
the
aforecited
decrees
constitutes
impermissible encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter, which under the Constitution is

reserved to it for final determination. The determination of "just

compensation" in eminent domain cases is a judicial function.
San Roque v. Republic
Without full payment, there can be no transfer of title from the land
owner to the expropriator. Thus, the Republics failure to pay just
compensation precluded the perfection of its title over the lot sought
to be expropriated. In fact, the Court has upheld the right of the
unpaid owner to recover the property if within 5 years from the
decision, the expropriator fails to effect payment. Eminent domain
cases are strictly construed against the expropriator. The payment of
just compensation is an indispensable requisite for the exercise of
the States sovereign power of eminent domain.
Judicial Review
Note: Aspects of the exercise of eminent domain subject to judicial
review:
Adequacy of the compensation
Necessity of the taking
Public use character of the purpose
De Knecht v. Bautista (EDSA extension)
The government may not capriciously or arbitrarily choose what
private property should be taken. A landowner is covered by the
mantle of protection due process affords. It is a mandate of reason. It
frowns on arbitrariness. It is the antithesis of any governmental act
that smacks of whim or caprice. It negates state power to act in an
oppressive manner. It is, as had been stressed so often, the
embodiment of the sporting idea off air play. In that sense, it stands
as a guaranty of justice. That is the standard that must be met by any
governmental agency in the exercise of whatever competence is
entrusted to it.
The Solicitor General justifies the change to Del Pan Fernando
Rein Streets on the ground that the government "wanted to minimize
the social impact factor or problem involved." It is doubtful whether
the extension of EDSA along Cuneta Avenue can be objected to on
the ground of social impact. The improvements and buildings along
Cuneta Avenue to be affected by the extension are mostly motels.. It

is clear that the choice of Fernando Rein Del Pan Streets as the
line through which the EDSA should be extended to Roxas
Boulevard is arbitrary and should not receive judicial approval. The
Human Settlements Commission concluded that the cost factor is so
minimal that it can be disregarded in making a choice between the
two lines.The factor of functionality strongly militates against the
choice of Fernando Rein and Del Pan Streets, while the factor of
social and economic impact bears grievously on the residents of
Cuneta Avenue. While the issue would seem to boil down to a choice
between people, on one hand, and progress and development, on
the other, it is to be remembered that progress and development are
carried out for the benefit of the people.
Manotoc v. NHA
The government, in taking of personal/private property, must show a
reasonable or practical necessity. In this case, there is no showing
whatsoever as to why the properties involved were singled out for
expropriation through decrees or what necessity impelled the
particular choices or selections. The area where the property is
located is well developed, there are no squatters and it is a thriving
commercial area.
The determination of just compensation based on respondents
contention under PD 1533, which states that the market value of the
property prior to the recommendation or decision of the appropriate
Government Office to acquire the property, is not fair. The reckoning
point for the value of the property for the purpose of just
compensation must be based from the time a formal notice was
made known to the owner of the property. Such formal notice
contemplates a hearing or a judicial proceeding laid down by Rule 67
of the Revised Rules of Court. In this case, the Presidents public
announcement that the government shall acquire subject properties
for the fire victims is not sufficient. NHA can only acquire property
through a proceeding, judicial or otherwise. In addition, the market
value stated by the city assessor alone cannot substitute for the
courts judgment in expropriation proceedings. Such would be a
violation of the due process and eminent domain provisions of the
Constitution.

Republic v. De Knecht (EDSA extension)

An expropriation proceeding that was determined by final judgment
of this Court could be subject of a subsequent legislation for
expropriation. While it is true that said final judgment of this Court on
the subject becomes the law of the case between the parties, it is
equally true that the right of the Republic to take private properties
for public use upon the payment of the just compensation is so
provided in the Constitution and our laws. Such expropriation
proceedings may be undertaken by the Republic not only by
voluntary negotiation with the land owners but also by taking
appropriate court action or by legislation. B.P. Blg. 340, expropriating
the subject properties, therefore effectively superseded the aforesaid
final and executory decision of this Court.

Rutter v. Esteban (unreasonable delay of 8 years)

Moratorium laws have been adopted "during times of financial
distress, especially when incident to, or caused by, a war." The
Moratorium Law is a valid exercise by the State of its police power,
being an emergency measure. Although the obligations of the
contract were impaired, the impairment was within the police power
of the State as that power was called into exercise by the public
economic emergency, which the legislature had found to exist. The
State also continues to possess authority to safeguard the vital
interest of its people. Not only are existing laws read into contracts in
order to fix obligations as between the parties, but the reservation of
essential attributes of sovereign power is also read into contracts as
a postulate of the legal order.

SECTION 10 No law impairing the obligation of contracts shall

be passed.

The true test, therefore, of the constitutionality of a moratorium

statute lies in the determination of the period of suspension of the
remedy. It is required that such suspension be definite and
reasonable, otherwise it would be violative of the constitution.

Home Building and Loan Assn. v. Blaisell (extended mortgage

redemption)
The Minnesota law, extending the time in which mortgagers could
pay back their debts, was a legitimate use of its police powers since
Minnesota faced massive economic difficulties.
The Contract Clause was established to counter the ignoble array of
legislative schemes of State legislatures which were designed to
defeat the obligations of debtors owed to creditors by interfering with
contractual arrangements. The Framers feared that if private
contracts were not respected, the destruction of credit would result,
and credit was essential to the prosperity of the Nations economy.
The Contract Clause was not intended to confer absolute rights onto
private parties entering into contracts. Rather, it was intended to
serve as qualified right, over which the State retained some power to
control, for the benefits of the Nation as a whole. The question to be
asked is whether legislative action is reasonably appropriate to the
achievement of a legitimate end.

Abella v. NLRC
Art. 284 of the Labor Codes (granting separation pay) purpose is the
protection of the worker whose employment is terminated because of
the closure of the establishment. Without said law, employees like
private respondents in this case will lose benefits to which they are
entitled for their long years of service. Although they were absorbed
by the new management of the hacienda, in the absence of any
showing that the latter has assumed the responsibilities of the former
employer, they will be considered as new employees and the years
of service behind them would amount to nothing.
The guarantee on non-impairment is not absolute and unqualified.
The prohibition is not to read with literal exactness like a
mathematical formula, for it prohibits unreasonable impairments only.
In spite of the constitutional prohibition, the State continues to
possess authority to safeguard the vital interests of its people.
Legislation appropriate to safeguard said interest may modify or
abrogate contracts already in effect. Therefore, Art. 284 is not
violative of the non-impairment clause.

Presley v. Bel-Air Village Asso (Deed of Restrictions stating that the

lot be used only for residential and not commercial purposes)
Since the provisions of the Deed of Restrictions are in the nature of
contractual obligations freely entered into by the parties, they are
valid and can be enforced against the petitioner. However, these
contractual stipulations on the use of the land even if said conditions
are annotated on the torrens title can be impaired if necessary to
reconcile with the legitimate exercise of police power.
The Court upholds the Sangalang doctrine (absolving the Ayala
Corporation, finding that is not liable for the opening of Jupiter Street
to the general public given that had reclassified Jupiter Street into a
'high density commercial zone), seeing no reason why the petitioner
should be singled out and prohibited from putting up her hot pan de
sal store since the area has been long commercialized and the
records indicate that commercial buildings, offices, restaurants, and
stores have already sprouted in this said area.
Miners Association v. Factoran
The prohibition contained in the constitutional provisions against
impairing the obligation of contracts is not an absolute one. Such
provisions have no application to statute relating to public subjects
within the domain of the general legislative powers of the State and
involving the public rights and welfare of the entire community
affected by it. They do not prevent a proper exercise by the State of
its police powers.
The exploration, development and utilization of the country's natural
resources are matters vital to the public interest and the general
welfare of the people. Accordingly, the State, in the exercise of its
police power in this regard, may not be precluded by the
constitutional restriction on non- impairment of contract from altering,
modifying and amending the mining leases or agreements granted
under EO 211.
Ortigas v. Feati Bank
While non-impairment of contracts is constitutionally guaranteed, the
rule is not absolute, since it has to be reconciled with the legitimate
exercise of police power. The exercise of the power may be judicially
inquired into and corrected only if it is capricious, whimsical, unjust or

unreasonable, there having been a denial of due process or a

violation of any other applicable constitutional guarantee. Public
welfare when clashing with the individual right to property should
prevail through the state's exercise of its police power.
The Municipal Council of Mandaluyong was reasonably justified
under the circumstances in passing the subject resolution, declaring
the western part of Highway 54, now EDSA, from Shaw Boulevard to
the Pasig River as an industrial and commercial zone. The motives
behind the passage of the questioned resolution being reasonable,
and it being a "legitimate response to a felt public need," not
whimsical or oppressive, the non-impairment of contracts clause of
the Constitution will not bar the municipality's proper exercise of the
power. Herein, the municipality of Mandaluyong exercised police
power to safeguard or promote the health, safety, peace, good order
and general welfare of the people in the locality. EDSA, a main traffic
artery, which runs through several cities and municipalities in the
Metro Manila area, supports an endless stream of traffic and the
resulting activity, noise and pollution are hardly conducive to the
health, safety or welfare of the residents in its route.
Hacienda Luisita v. PARC
A law authorizing interference, when appropriate, in the contractual
relations between or among parties is deemed read into the contract
and its implementation cannot successfully be resisted by force of
the non-impairment guarantee. There is, in that instance, no
impingement of the impairment clause, the non-impairment
protection being applicable only to laws that derogate prior acts or
contracts by enlarging, abridging or in any manner changing the
intention of the parties. Impairment, in fine, obtains if a subsequent
law changes the terms of a contract between the parties, imposes
new conditions, dispenses with those agreed upon or withdraws
existing remedies for the enforcement of the rights of the parties.
Necessarily, the constitutional proscription would not apply to laws
already in effect at the time of contract execution.
Goldenway Merchandising Corp v. Equitable PCI (redemption
period)
The purpose of the non-impairment clause of the Constitution is to

safeguard the integrity of contracts against unwarranted interference

by the State.
Sec. 47 of RA 8791, providing for a shorter redemption period, than
Act 3135 (stipulated in the contract as applicable) did not divest
juridical persons of the right to redeem their foreclosed properties but
only modified the time for exercise of such right by reducing the oneyear redemption period originally provided in Act No. 3135. A shorter
term is deemed necessary for juridical persons to reduce the period
of uncertainty of ownership and enable mortgagee-banks to dispose
sooner of these acquires assets. Such amendment embodied one of
a safe and sound practice aimed at ensuring the solvency or liquidity
of our banks. The provision amending the redemption period was
based on a reasonable classification and germane to the purpose of
the law.
Pryce Corp v. China Banking Corp (rehabilitation plan)
Corporate rehabilitation is one of many statutorily provided remedies
for businesses that experience a downturn. Rather than leave the
various creditors unprotected, legislation now provides for an orderly
procedure of equitably and fairly addressing their concerns.
Successful rehabilitation of a distressed corporation will benefit its
debtors, creditors, employees, and the economy in general. The
court may approve a rehabilitation plan even over the opposition of
creditors holding a majority of the total liabilities of the debtor if, in its
judgment, the rehabilitation of the debtor is feasible and the
opposition of the creditors is manifestly unreasonable.