Case Title Export Processing Zone Authority (EPZA) vs Dulay

G.R. no. G.E. No. L-59603

Main Topic Power of Eminent Domain
Other Related Topic
Date: April 29, 1987

DOCTRINES
Power of Eminent Domain. Just Compensation. Rule 67 of the Revised Rules of Court states that
the court is not bound by the commissioners’ report. The court may substitute its own estimate of
the value as gathered from the records.
FACTS:
Jan. 15, 1979, Marcos issued PD 1811 reserving a certain parcel of land of public domain
situated in Lapu-lapu City, Mactan, Cebu for the establishment of an export processing zone by
EPZA. However, not all the reserved area is public land. There were 4 parcels of land which
were owned and registered under the name of private respondents. The petitioner, EPZA, offered
to purchase the land from the respondents in accordance with the valuation stipulated in PD 464,
as amended. Both parties failed to reach an agreement which prompted EPZA to file a complaint
for expropriation in pursuant of PD 66, as amended, which empowers the petitioner to acquire by
condemnation proceedings any property for the establishment of export processing zone.

On Feb. 17, 1981, the judge issued the order of condemnation declaring the petitioner as having
the lawful right to take the properties upon payment of just compensation. The judge issued a
second order, subject of this petition, appointing commissioners to ascertain and report the just
compensation for the properties to be expropriated.

On June 18, 1981, the three commissioners submitted their consolidated report recommending
the amount of 15.00 per sq meter as just compensation. On July 29, 1981, EPZA filed a motion
for reconsideration and objected the commissioners’ report on the grounds that PD 1533
superseded Sec. 5 to 8 of Rule 67 of the Rules of Court on obtaining the just compensation thru
commissioners and that the amount must not exceed the maximum amount set in PD 1533.Trial
court denied the motion. With this, EPZA filed a petition for certiorati and mandamus.

The only issue is whether or not PD 1533 repealed Rule 67 of the Revised Rules of Court insofar
as the appointment of commissioners to determine the just compensation. To simplify, is PD
1533 valid and constitutional.

Rule 67 states that the court is not bound by the commissioners’ report. The court may substitute
its own estimate of the value gathered from the record. It is held that it would be useless for the
court to appoint commissioners under Rule 67. It violates due process to deny the owner the
opportunity to prove that the valuation in documents are wrong. It is against the basic concept of
justice and fairness to allow commissioners to prevail over the judgement of courts to
promulgate. The determination of just compensation is a juridical function. The executive and
legislative department may make initial determinations however no statute, decree, or EO can
mandate that its own determination shall prevail over the court’s findings.
Therefore, the SC holds that PD 1533, which eliminates the court’s discretion to appoint
commissioners unconstitutional and void.

ISSUE:
Whether or not PD 76, 464, 794 and 1533 have repealed and superseded Sec. 5 to 8 of Rule 67 of
the Revised Rules of Court.
HELD:
No, PD 1533 is unconstitutional and void. Rule 67 which gives the court the discretion to appoint
commissioners valid.