THE CITY OF MANILA vs.

CHINESE COMMUNITY OF MANILA, ET AL

Facts:
The City of Manila filed a petition for expropriation or private properties for the purpose of constructing public
improvement. Included in the private properties to be expropriated is the parcel of lot covered by the Chinese
Cemetery.
The Chinese Community refused the offer on the ground that expropriation is not necessary, there will be more
expenses to be incurred and that parcels of lots to be expropriated were already devoted for public use.

Issue: WON the parcel of lot forming part of Chinese Cemetery and owned by the Chinese Community be expropriated

Ruling:
The SC ruled in the negative. Thus, it stated:
“xx Where a cemetery is open to public, it is a public use and no part of the ground can be taken for other public uses
under a general authority. And this immunity extends to the unimproved and unoccupied parts which are held in good
faith for future use… It is alleged, and not denied, that the cemetery in question may be used by the general community
of Chinese, which fact, in the general acceptation of the definition of a public cemetery, would make the cemetery in
question public property. If that is true, then, of course, the petition of the plaintiff must be denied, for the reason that
the city of Manila has no authority or right under the law to expropriate public property. xx”

The Supreme Court also added

“xx But, whether or not the cemetery is public or private property, its appropriation for the uses of a public street,
especially during the lifetime of those specially interested in its maintenance as a cemetery, should be a question of
great concern, and its appropriation should not be made for such purposes until it is fully established that the greatest
necessity exists therefor. xx”

On the issue on whether the eminent domain may be exercised by a municipality, the Supreme Court ruled in the wise:
“xx It can scarcely be contended that a municipality would be permitted to take property for some public use unless
some public necessity existed therefor. The right to take private property for public use originates in the necessity, and
the taking must be limited by such necessity. The appellant contends that inasmuch as the legislature has given it
general authority to take private property for public use, that the legislature has, therefore, settled the question of the
necessity in every case and that the courts are closed to the owners of the property upon that question. Can it be
imagined, when the legislature adopted section 2429 of Act No. 2711, that it thereby declared that it was necessary to
appropriate the property of Juan de la Cruz, whose property, perhaps, was not within the city limits at the time the law
was adopted? The legislature, then, not having declared the necessity, can it be contemplated that it intended that a
municipality should be the sole judge of the necessity in every case, and that the courts, in the face of the provision that
"if upon trial they shall find that a right exists," cannot in that trial inquire into and hear proof upon the necessity for the
appropriation in a particular case?
The Charter of the city of Manila authorizes the taking of private property for public use. Suppose the owner of the
property denies and successfully proves that the taking of his property serves no public use: Would the courts not be
justified in inquiring into that question and in finally denying the petition if no public purpose was proved? Can it be
denied that the courts have a right to inquire into that question? If the courts can ask questions and decide, upon an
issue properly presented, whether the use is public or not, is not that tantamount to permitting the courts to inquire
into the necessity of the appropriation? If there is no public use, then there is no necessity, and if there is no necessity, it
is difficult to understand how a public use can necessarily exist. If the courts can inquire into the question whether a
public use exists or not, then it seems that it must follow that they can examine into the question of the necessity.
The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity must be of a
public character. The
ascertainment of the necessity must precede or accompany, and not follow, the taking of the land. (Morrison vs.
Indianapolis, etc. Ry. Co., 166 Ind., 511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72
Ohio St., 368.)
The general power to exercise the right of eminent domain must not be confused with the right to exercise it in a
particular case. The power of the legislature to confer, upon municipal corporations and other entities within the State,
general authority to exercise the right of eminent domain cannot be questioned by the courts, but that general authority
of municipalities or entities must not be confused with the right to exercise it in particular instances. 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
which the courts have the right to inquire into.
The conflict in the authorities upon the question whether the necessity for the exercise of the right of eminent domain is
purely legislative and not judicial, arises generally in the wisdom and propriety of the legislature in authorizing the
exercise of the right of eminent domain instead of in the question of the right to exercise it in a particular case. (Creston
Waterworks Co. vs. McGrath, 89 Iowa, 502.)
By the weight of authorities, 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. (Fairchild vs. City of St. Paul. 48 Minn.,
540.) xx”

DEVORAH E. BARDILLON vs. BARANGAY MASILI of Calamba, Laguna,

Res Judicata
Expropriation not capable of pecuniary estimation
Facts:
Two lots measuring 144 square meters was to be expropriated by Bargy Masili for the purpose of constructing a
barangay hall. However, the barangay and the lot owners could not agree with the purchase price of Php 200,000.
The first complaint was filed before the MTC. Whereas, the second complaint was filed before the RTC.
The MTC dismissed the complaint for lack of interest of the petitioner lot owners.
The RTC stated that the MTC has no jurisdiction over the case. It also ruled in favor of Brgy Masili.
Issue/s:
1. WON the MTC has jurisdiction over the case of expropriation;
2. WON the State is barred from expropriating the property by reason of res judicata; and
3. Legality of entry into the premises subject of expropriation.

Ruling:
The SC held that the expropriation proceedings is within the jurisdiction of the RTC because it is incapable of pecuniary
estimation. As discussed:
“xx An expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise by the
government of its authority and right to take property for public use. As such, it is incapable of pecuniary estimation and
should be filed with the regional trial courts. xx”
As regards to the second issue, the principle of res judicata does not apply against the inherent powers of the State. The
SC has this to say:
“xx Res judicata literally means a matter adjudged, judicially acted upon or decided, or settled by judgment. It provides
that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the
parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand or
cause of action.
The following are the requisites of res judicata: (1) the former judgment must be final; (2) the court that rendered it had
jurisdiction over the subject matter and the parties; (3) it is a judgment on the merits; and (4) there is -- between the
first and the second actions -- an identity of parties, subject matter and cause of action.
Since the MTC had no jurisdiction over expropriation proceedings, the doctrine of res judicata finds no application even
if the Order of dismissal may have been an adjudication on the merits. xx”
The entry in the premises of the expropriated property was held to be justified by the SC. It ruled that:
“xx The requirements for the issuance of a writ of possession in an expropriation case are expressly and specifically
governed by Section 2 of Rule 67 of the 1997 Rules of Civil Procedure. On the part of local government units,
expropriation is also governed by Section 19 of the Local Government Code. Accordingly, in expropriation proceedings,
the requisites for authorizing immediate entry are as follows: (1) the filing of a complaint for expropriation sufficient in
form and substance; and (2) the deposit of the amount equivalent to 15 percent of the fair market value of the property
to be expropriated based on its current tax declaration.
In the instant case, the issuance of the Writ of Possession in favor of respondent after it had filed the Complaint for
expropriation and deposited the amount required was proper, because it had complied with the foregoing requisites.
The issue of the necessity of the expropriation is a matter properly addressed to the RTC in the course of the
expropriation proceedings. If petitioner objects to the necessity of the takeover of her property, she should say so in her
Answer to the Complaint. The RTC has the power to inquire into the legality of the exercise of the right of eminent
domain and to determine whether there is a genuine necessity for it. xx”

APO FRUITS V. CA
Facts: Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI) offered to sell their land pursuant to RA 6657
(Comprehensive Agrarian Reform Law, or CARL). The Department of Agrarian Reform (DAR) referred their voluntary-
offer-to-sell (VOS) applications to Land Bank for initial valuation. Land Bank fixed the just compensation at
P165,484.47/hectare, that is, P86,900,925.88, for AFC, and P164,478,178.14, for HPI. The valuation was rejected,
prompting Land Bank, upon the advice of DAR, to open deposit accounts in the names of AFC and HPI, and to credit in
said accounts the sums of P26,409,549.86 (AFC) and P45,481,706.76 (HPI). AFC and HPI withdrew the amounts in cash
from the accounts, but afterwards, they filed separate complaints for determination of just compensation with the DAR
Adjudication Board (DARAB).
When DARAB did not act on their complaints for determination of just compensation after more than three years, AFC
and HPI filed complaints for determination of just compensation with the RTC in Tagum City, acting as a special agrarian
court (SAC). Summonses were served to Land Bank and DAR, which respectively filed their answers. The RTC conducted
a pre-trial, and appointed commissioners to determine the proper valuation of the properties.
The RTC rendered a decision valuing the land at P103.33 per square meter (substantially the same price AFC and HPI
wanted). It ordered the DAR and Land Bank to pay AFC and HPI P1,383,179,000.00 for the land and its standing crops.
Interest equivalent to the market interest rates aligned with 91-day Treasury Bills, from the date of taking up to full
payment was imposed. It also ordered DAR and Land bank to pay the Commissioner‘s fees, and the attorney‘s fees, to be
computed at 2 ½ % and 10% of the just compensation of the land and standing crops plus interest equivalent to the
interest of the 91-Day Treasury Bills from date of taking until full payment, respectively. They were also ordered to pay
the costs.
Land Bank filed an MR. The decision was modified and an interest at the rate of 12% per annum was fixed from the time
the complaint was filed up to the time of the finality of the decision. The same interest rate was imposed on the total
obligation from the time it became final and executor up to its full payment. The interest on the attorney‘s fees and
Commissioner‘s fees were removed. As to all other aspects, the decision remained the same.
Land Bank filed a notice of appeal. The RTC denied it saying the proper remedy was a petition for review since it was
acting as a SAC. To question the RTC‘s denial, Land Bank filed a petition for certiorari with the CA. The CA granted the
petition and eventually nullified the RTC‘s orders.
AFC and HPI then filed a petition for review on certiorari praying that the CA be reversed and that the RTC decision be
declared final an executory. The SC 3rd Division said that the granting of the appeal was correct but that the RTC‘s
decision regarding the payment and amount should be affirmed.
Land Bank filed an MR which the 3rd Division partially granted. The new decision deleted the award of attorney‘s fees. It
also remanded the case to the RTC for a hearing on the amount of Commissioner‘s fees. Most importantly, it deleted the
12% interest rate per annum in the total amount of just compensation.
Both AFC and HPI and Land Bank filed MRs which were denied. Entry of judgment was made on May 16, 2008. Despite
this, AFC and HPI still filed on May 28, 2008 several motions, namely: (1) motion for leave to file and admit second
motion for reconsideration; (2) second motion for reconsideration (with respect to the denial of the award of legal
interest and attorney's fees); and (3) motion to refer the second motion for reconsideration to the Honorable Court en
banc.
The case was referred to the SC en banc.
Issue: WON interest and attorney‘s fees should be awarded to AFC and HPI.

Held: No! The second motion for reconsideration (with respect to the denial of the award of legal interest and attorney's
fees) is denied, because, firstly, to grant it is to jettison the immutability of a final decision – a matter of public policy and
public interest, as well as a time-honored principle of procedural law; and secondly, to award interest and attorney‘s
fees despite the fact that Land Bank paid the just compensation without undue delay is legally and factually
unwarranted. Ratio: (On the interest and attorney‘s fees) The taking of property under CARL is an exercise by the State
of the power of eminent domain. A basic limitation on the State‘s power of eminent domain is the constitutional
directive that private property shall not be taken for public use without just compensation. Just compensation refers to
the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open
market in the usual and ordinary course of legal action and competition, or the fair value of the property as between
one who receives and one who desires to sell. It is fixed at the time of the actual taking by the State. Thus, if property is
taken for public use before compensation is deposited with the court having jurisdiction over the case, the final
compensation must include interests on its just value, to be computed from the time the property is taken up to the
time when compensation is actually paid or deposited with the court.
In Land Bank of the Philippines v. Wycoco, the Court came to explicitly rule that interest is to be imposed on the just
compensation only in case of delay in its payment, which fact must be sufficiently established. Significantly, Wycoco was
moored on Article 2209, Civil Code, which provides:
Article 2209. If the obligation consists in the payment of money and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the
absence of stipulation, the legal interest, which is six per cent per annum. (1108)
`The history of this case proves that Land Bank did not incur delay in the payment of the just compensation. As earlier
mentioned, after AFC and HPI voluntarily offered to sell their lands on October 12, 1995, DAR referred their VOS
applications to Land Bank for initial valuation. Land Bank initially fixed the just compensation at P165,484.47/hectare,
that is, P86,900,925.88, for AFC, and P164,478,178.14, for HPI. However, they rejected Land Bank‘s initial valuation,
prompting Land Bank to open deposit accounts in the petitioners‘ names, and to credit in said accounts the amounts
equivalent to their valuations. Although AFC withdrew the amount of P26,409,549.86, while HPI withdrew
P45,481,706.76, they still filed with DARAB separate complaints for determination of just compensation. When DARAB
did not act upon their complaints for more than three years, AFC and HPI commenced their respective actions for
determination of just compensation in the Tagum City RTC, which rendered its decision on September 25, 2001.
It is true that Land Bank sought to appeal the RTC‘s decision to the CA, by filing a notice of appeal; and that Land Bank
filed in March 2003 its petition for certiorari in the CA only because the RTC did not give due course to its appeal. Any
intervening delay thereby entailed could not be attributed to Land Bank, however, considering that assailing an
erroneous order before a higher court is a remedy afforded by law to every losing party, who cannot thus be considered
to act in bad faith or in an unreasonable manner as to make such party guilty of unjustified delay. As stated in Land Bank
of the Philippines v. Kumassie Plantation:
The mere fact that LBP appealed the decisions of the RTC and the Court of Appeals does not mean that it deliberately
delayed the payment of just compensation to KPCI. x x x It may disagree with DAR and the landowner as to the amount
of just compensation to be paid to the latter and may also disagree with them and bring the matter to court for judicial
determination. This makes LBP an indispensable party in cases involving just compensation for lands taken under the
Agrarian Reform Program, with a right to appeal decisions in such cases that are unfavorable to it. Having only exercised
its right to appeal in this case, LBP cannot be penalized by making it pay for interest.
The Third Division justified its deletion of the award of interest thuswise:
AFC and HPI now blame LBP for allegedly incurring delay in the determination and payment of just compensation.
However, the same is without basis as AFC and HPI‘s proper recourse after rejecting the initial valuations of respondent
LBP was to bring the matter to the RTC acting as a SAC, and not to file two complaints for determination of just
compensation with the DAR, which was just circuitous as it had already determined the just compensation of the subject
properties taken with the aid of LBP.
In Land Bank of the Philippines v. Wycoco, citing Reyes v. National Housing Authority and Republic v. Court of Appeals,
this Court held that the interest of 12% per annum on the just compensation is due the landowner in case of delay in
payment, which will in effect make the obligation on the part of the government one of forbearance. On the other hand,
interest in the form of damages cannot be applied, where there was prompt and valid payment of just compensation.
Thus:
The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the
property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal
action and competition or the fair value of the property as between one who receives, and one who desires to sell, it
being fixed at the time of the actual taking by the government. Thus, if property is taken for public use before
compensation is deposited with the court having jurisdiction over the case, the final compensation must include
interests on its just value to be computed from the time the property is taken to the time when compensation is actually
paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests
accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking
occurred.
It is explicit from LBP v. Wycoco that interest on the just compensation is imposed only in case of delay in the payment
thereof which must be sufficiently established. Given the foregoing, we find that the imposition of interest on the award
of just compensation is not justified and should therefore be deleted.

REPUBLIC VS. HOLY TRINITY DEVELOPMENT INC.

FACTS: The Republic of the Philippines, represented by the Toll Regulatory Board (TRB), filed with the RTC a
Consolidated Complaint for Expropriation against landowners whose properties would be affected by the construction,
rehabilitation, and expansion of the North Luzon Expressway. The Holy Trinity Reality and Development Corporation was
one of the affected landowners.
TRB filed an Urgent Ex-Parte Motion for the Issuance of a Writ of Possession, manifesting that it deposited a sufficient
amount to cover the payment of 100% of the zonal value of the affected properties (in the total amount of 28,406,700
pesos) with the Land Bank of the Philippines, South Harbor Branch (LBP-South Harbor), an authorized government
depository. TRB maintained that since it had already complied with the provisions of Sec. 4 of RA 8974 in relation to Sec.
2 of Rule 67 of the Rules of Court, the issuance of the writ of possession becomes ministerial on the part of the RTC.
RTC issued an Order for the Issuance of the Writ of Possession as well as the Writ of Possession itself. Holy Trinity moved
for reconsideration.
The Sheriff filed with the RTC a Report on Writ of Possession stating that since none of the landowners voluntarily
vacated the properties subject of the expropriation proceedings, the assistance of the PNP would be necessary in
implementing the Writ of Possession. Accordingly, TRB, through OSG, filed with the RTC an Omnibus Motion praying for
an Order directing the PNP to assist the Sheriff in the implementation of the Writ of Possession.
The Holy Trinity filed with the RTC a Motion to Withdraw Deposit, praying that it be allowed to withdraw 22,968,000 out
of 28,406,700, including the interest which accrued thereon. RTC granted the motion (except as to the interest) since
Holy Trinity already proved its absolute ownership over the properties and paid the taxes due to the government.
RTC conducted a hearing on the accrued interest, after which it directed the issuance of an Order of Expropriation, and
granted TRB a period of 30 days to inquire from LBP-South Harbor whether the deposit made by DPWH with the bank
relative to the expropriation proceedings is earning interest or not. TRB submitted a Manifestation to which was
attached the letter by Atty. Osoteo stating that the DPWH Expropriation Account was an interest bearing current
account.
RTC resolved the issue by ruling that the interest earnings from the deposit of 22,968,000 (under the principle of
accession) are considered as fruits and should properly pertain to the property owner (in this case, Holy Trinity). Upon
motion of TRB, it issued an Order of Expropriation. But later on, it reversed itself stating that the issue as to who is
entitled to the payment of interest should be ventilated before the Board of Commissioners. The CA reversed.
ISSUE:
WON Holy Trinity is only entitled to the amount equivalent to the zonal value of the expropriated property and not to
the accrued interest? –NO. Holy Trinity is also entitled to the accrued interest.
Note: TRB is contending that Holy Trinity is only entitled to the exact amount as defined in Sec. 4 of RA 8974 and Sec. 2
Rule 67 (hindi daw kasama ang interest).
RULING:
TRB failed to distinguish between the expropriation procedures under RA 8974 and Rule 67. The former specifically
governs expropriation proceedings for national government infrastructure projects. In the case of Republic vs. Gingoyon,
the SC ruled that under RA 8974, the government is required to make immediate payment to the property owner upon
the filing of the complaint to be entitled to a writ of possession, whereas in Rule 67, the government is authorized only
to make an initial deposit with an authorized government depositary.
In the case at bar, the proceedings deal with the expropriation of properties intended for a national government
infrastructure project. Thus, the RTC was correct in applying the procedure laid out in RA 8974, by requiring the deposit
of the amount equivalent to 100% of the zonal value of the properties sought to be expropriated. The controversy
though arises not from the amount of the deposit but as to the ownership of the interest that had since accrued on the
deposited amount.
The SC agrees with the ruling of the CA. The critical factor in the different modes of effecting delivery which gives legal
effect to the act is the actual intention to deliver on the part of the party making such delivery. The intention of the TRB
in depositing such amount through DPWH was clearly to comply with the requirement of immediate payment in RA
8974, so that it could already secure a writ of possession over the properties subject of the expropriation and commence
implementation of the project. In fact, TRB did not object to Holy Trinity‘s Motion to Withdraw Deposit with the RTC, for
as long as it shows (1) that the property is free from any lien or encumbrance and (2) that it is the absolute owner
thereof.
A close scrutiny of TRB's arguments would further reveal that it does not directly challenge the CA‘s determinative
pronouncement that the interest earned by the amount deposited in the expropriation account accrues to Holy Trinity
by virtue of accession. TRB only asserts that Holy Trinity is entitled only to an amount equivalent to the zonal value of
the expropriated property, nothing more and nothing less. The SC agrees in TRB's statement since it is exactly how the
amount of the immediate payment shall be determined in accordance with Sec4 of RA 8974, i.e., an amount equivalent
to 100% of the zonal value of the expropriated properties. However, TRB already complied therewith by depositing the
required amount in the expropriation account of DPWH with LBP-South Harbor. By depositing the said amount, TRB is
already considered to have paid the same to Holy Trinity, and Holy Trinity became the owner thereof. The amount
earned interest after the deposit; hence, the interest should pertain to the owner of the principal who is already
determined as the Holy Trinity. The interest is paid by LBP-South Harbor on the deposit, and TRB cannot claim that it
paid an amount more than what it is required to do so by law.
Nonetheless, the SC finds it necessary to emphasize that Holy Trinity is determined to be the owner of only a part of the
amount deposited in the expropriation account, in the sum of P22,968,000.00. Hence, it is entitled by right of accession
to the interest that had accrued to the said amount only.