Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

BARANGAY SINDALAN, SAN G.R. No. 150640
FERNANDO, PAMPANGA,
rep. by BARANGAY CAPTAIN
ISMAEL GUTIERREZ, Present:
Petitioner,
QUISUMBING, J., Chairperson,
CARPIO,
- versus - CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
COURT OF APPEALS, JOSE
MAGTOTO III, and PATRICIA Promulgated:
SINDAYAN,
Respondents. March 22, 2007

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D E C I S I O N

VELASCO, JR., J .:

Expropriation, if misused or abused, would trench on the property rights of
individuals without due process of law.

The Case

For review before the Court in a petition for certiorari under Rule 45 are the
May 30, 2001 Decision1[1] and October 26, 2001 Resolution2[2] of the Court of
Appeals (CA), reversing and setting aside the August 2, 1990 Order3[3] of the San
Fernando, Pampanga Regional Trial Court (RTC), Branch 43. The CA Resolution
denied petitioners Motion for Reconsideration of the May 30, 2001 Decision and
in effect, the appellate court dismissed petitioners Complaint for eminent domain.







The Facts

On April 8, 1983, pursuant to a resolution passed by the barangay council,
petitioner Barangay Sindalan, San Fernando, Pampanga, represented by Barangay
Captain Ismael Gutierrez, filed a Complaint for eminent domain against
respondents spouses Jose Magtoto III and Patricia Sindayan, the registered owners
of a parcel of land covered by Transfer Certificate of Title No. 117674-R. The
Complaint was docketed as Civil Case No. 6756 and raffled to the San Fernando,
Pampanga RTC, Branch 43. Petitioner sought to convert a portion of respondents
land into Barangay Sindalans feeder road. The alleged public purposes sought to
be served by the expropriation were stated in Barangay Resolution No. 6, as
follows:

WHEREAS, said parcels of land shall be used, when acquired, as a
barangay feeder road for the agricultural and other products of the residents,
and just as inlet for their basic needs;

WHEREAS, presently, residents have to take a long circuitous dirt road
before they can reach the concrete provincial road, entailing so much time,
effort and money, not to mention possible damage and/or spilage [sic] on
the products consigned to or coming from, the market outside the barangay;
and

WHEREAS, said lots, used as outlet or inlet road, shall contribute greatly to
the general welfare of the people residing therein social, cultural and health
among other things, beside economic.4[4]





Petitioner claimed that respondents property was the most practical and
nearest way to the municipal road. Pending the resolution of the case at the trial
court, petitioner deposited an amount equivalent to the fair market value of the
property.5[5]

On the other hand, respondents stated that they owned the 27,000- square
meter property, a portion of which is the subject of this case. In their
Memorandum,6[6] they alleged that their lot is adjacent to Davsan II Subdivision
privately owned by Dr. Felix David and his wife. Prior to the filing of the
expropriation case, said subdivision was linked to MacArthur Highway through a
pathway across the land of a certain Torres family. Long before the passage of the
barangay resolution, the wives of the subdivision owner and the barangay captain,
who were known to be agents of the subdivision, had proposed buying a right-of-
way for the subdivision across a portion of respondents property. These
prospective buyers, however, never returned after learning of the price which the
respondents ascribed to their property.






Respondents alleged that the expropriation of their property was for private
use, that is, for the benefit of the homeowners of Davsan II Subdivision. They
contended that petitioner deliberately omitted the name of Davsan II Subdivision
and, instead, stated that the expropriation was for the benefit of the residents of
Sitio Paraiso in order to conceal the fact that the access road being proposed to be
built across the respondents land was to serve a privately owned subdivision and
those who would purchase the lots of said subdivision. They also pointed out that
under Presidential Decree No. (PD) 957, it is the subdivision owner who is obliged
to provide a feeder road to the subdivision residents.7[7]

After trial, the court a quo ruled, thus:

WHEREFORE, in view of all the foregoing premises duly considered,
the herein plaintiff is hereby declared as having a lawful right to take the
property hereinabove described and sought to be condemned for the public
purpose or use as aforestated, upon payment of just compensation to be
determined as of the date of the filing of the Complaint in this [sic]
expropriation proceedings.

Upon the entry of this Order of Condemnation, let three (3) competent
and disinterested persons be appointed as Commissioners to ascertain and
report to the Court the just compensation for the property condemned.8[8]


The Ruling of the Court of Appeals






Upon respondents appeal, the CA held:

We are convinced that it is the duty of the subdivision owner to provide
the right of way needed by residents of Davsan II Subdivision as provided
for in Section 29 of P.D. 957. Records show that Purok Paraiso, which is
supposed to benefit from this [sic] expropriation proceedings is in reality
Davsan II Subdivision as per the testimony of Ruben Palo, plaintiffs own
witness (TSN, p. 12, December 115, 1986) [sic]. Appellants correctly
stated that:

The act of Bo. Sindalan, San Fernando, Pampanga, in effect
relieved the owners of Davsan II Subdivision of spending their
own private funds for acquiring a right of way and constructing the
required access road to the subdivision. It spent public funds for
such private purpose and deprived herein defendants-appellants of
their property for an ostensible public purpose x x x.

x x x x

WHEREFORE, premises considered, the appealed Decision is hereby
REVERSED and SET ASIDE and the Complaint for Eminent Domain is
DISMISSED for lack of merit.

SO ORDERED.9[9]

The Issues




Petitioner imputes errors to the CA for (1) allegedly violating its power of
eminent domain, (2) finding that the expropriation of the property is not for public
use but for a privately owned subdivision, (3) finding that there was no payment of
just compensation, and (4) failing to accord respect to the findings of the trial
court. Stated briefly, the main issue in this case is whether the proposed exercise
of the power of eminent domain would be for a public purpose.
The Courts Ruling

The petition lacks merit.

In general, eminent domain is defined as the power of the nation or a
sovereign state to take, or to authorize the taking of, private property for a public
use without the owners consent, conditioned upon payment of just
compensation.10[10] It is acknowledged as an inherent political right, founded
on a common necessity and interest of appropriating the property of individual
members of the community to the great necessities of the whole
community.11[11]







The exercise of the power of eminent domain is constrained by two
constitutional provisions: (1) that private property shall not be taken for public use
without just compensation under Article III (Bill of Rights), Section 9 and (2) that
no person shall be deprived of his/her life, liberty, or property without due process
of law under Art. III, Sec. 1.

However, there is no precise meaning of public use and the term is
susceptible of myriad meanings depending on diverse situations. The limited
meaning attached to public use is use by the public or public employment,
that a duty must devolve on the person or corporation holding property
appropriated by right of eminent domain to furnish the public with the use
intended, and that there must be a right on the part of the public, or some portion of
it, or some public or quasi-public agency on behalf of the public, to use the
property after it is condemned.12[12] The more generally accepted view sees
public use as public advantage, convenience, or benefit, and that anything
which tends to enlarge the resources, increase the industrial energies, and promote
the productive power of any considerable number of the inhabitants of a section of
the state, or which leads to the growth of towns and the creation of new resources
for the employment of capital and labor, [which] contributes to the general welfare
and the prosperity of the whole community.13[13] In this jurisdiction, public
use is defined as whatever is beneficially employed for the community.14[14]





It is settled that the public nature of the prospective exercise of expropriation
cannot depend on the numerical count of those to be served or the smallness or
largeness of the community to be benefited.15[15] The number of people is not
determinative of whether or not it constitutes public use, provided the use is
exercisable in common and is not limited to particular individuals.16[16] Thus, the
first essential requirement for a valid exercise of eminent domain is for the
expropriator to prove that the expropriation is for a public use. In Municipality of
Bian v. Garcia, this Court explicated that expropriation ends with an order of
condemnation declaring that the plaintiff has a lawful right to take the property
sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation.17[17]

Another vital requisite for a valid condemnation is the payment of just
compensation to the property owner. In the recent case of APO Fruits Corporation










v. The Honorable Court of Appeals,18[18] just compensation has been defined as
the full and fair equivalent of the property taken from its owner by the
expropriator, and that the gauge for computation is not the takers gain but the
owners loss. In order for the payment to be just, it must be real, substantial,
full, and ample. Not only must the payment be fair and correctly determined, but
also, the Court in Estate of Salud Jimenez v. Philippine Export Processing Zone
stressed that the payment should be made within a reasonable time from the
taking of the property.19[19] It succinctly explained that without prompt payment,
compensation cannot be considered just inasmuch as the property owner is being
made to suffer the consequences of being immediately deprived of the land while
being made to wait for a decade or more before actually receiving the amount
necessary to cope with the loss. Thus, once just compensation is finally
determined, the expropriator must immediately pay the amount to the lot owner. In
Reyes v. National Housing Authority, it was ruled that 12% interest per annum
shall be imposed on the final compensation until paid.20[20] Thus, any further
delay in the payment will result in the imposition of 12% interest per annum.
However, in the recent case of Republic v. Lim, the Court enunciated the rule that
where the government failed to pay just compensation within five (5) years from







the finality of the judgment in the expropriation proceedings, the owners concerned
shall have the right to recover possession of their property.21[21]

Since the individual stands to lose the property by compulsion of the law,
the expropriation authority should not further prejudice the owners rights by
delaying payment of just compensation. To obviate any possibility of delay in the
payment, the expropriator should already make available, at the time of the filing
of the expropriation complaint, the amount equal to the BIR zonal valuation or the
fair market value of the property per tax declaration whichever is higher.

The delayed payment of just compensation in numerous cases results from
lack of funds or the time spent in the determination of the legality of the
expropriation and/or the fair valuation of the property, and could result in dismay,
disappointment, bitterness, and even rancor on the part of the lot owners. It is not
uncommon for the expropriator to take possession of the condemned property upon
deposit of a small amount equal to the assessed value of the land per tax
declaration and then challenge the valuation fixed by the trial court resulting in an
expropriate now, pay later situation. In the event the expropriating agency
questions the reasonability of the compensation fixed by the trial court before the
appellate court, then the latter may, upon motion, use its sound discretion to order
the payment to the lot owner of the amount equal to the valuation of the property,
as proposed by the condemnor during the proceedings before the commissioners



under Sec. 6, Rule 67 of the Rules of Court, subject to the final valuation of the
land. This way, the damage and prejudice to the property owner would be
considerably pared down.

On due process, it is likewise basic under the Constitution that the property
owner must be afforded a reasonable opportunity to be heard on the issues of
public use and just compensation and to present objections to and claims on
them.22[22] It is settled that taking of property for a private use or without just
compensation is a deprivation of property without due process of law.23[23]
Moreover, it has to be emphasized that taking of private property without filing
any complaint before a court of law under Rule 67 of the Rules of Court or existing
laws is patently felonious, confiscatory, and unconstitutional. Judicial notice can be
taken of some instances wherein some government agencies or corporations
peremptorily took possession of private properties and usurped the owners real
rights for their immediate use without first instituting the required court action.
Running roughshod over the property rights of individuals is a clear and gross
breach of the constitutional guarantee of due process, which should not be
countenanced in a society where the rule of law holds sway.






In the case at bar, petitioner harps on eminent domain as an inherent power
of sovereignty similar to police power and taxation. As a basic political unit, its
Sangguniang Barangay is clothed with the authority to provide barangay roads
and other facilities for public use and welfare. Petitioner relied on the following
cases which held a liberal view of the term public use in recognition of the
evolving concept of the power of eminent domain: Sea v. Manila Railroad Co.;
Philippine Columbian Association v. Panis; Sumulong v. Guerrero; Province of
Camarines Sur v. Court of Appeals; and Manosca v. Court of Appeals.24[24]

Petitioners delegated power to expropriate is not at issue. The legal
question in this petition, however, is whether the taking of the land was for a public
purpose or use. In the exercise of the power of eminent domain, it is basic that the
taking of private property must be for a public purpose. A corollary issue is
whether private property can be taken by law from one person and given to another
in the guise of public purpose.

In this regard, the petition must fail.

Petitioner alleges that there are at least 80 houses in the place and about 400
persons will be benefited with the use of a barangay road. The trial court believed
that the expropriation will not benefit only the residents of the subdivision, but



also the residents of Sitio or Purok Paraiso and the residents of the entire Barangay
of Sindalan x x x.25[25] The trial court held that the subdivision is covered by
Sitio or Purok Paraiso which is a part or parcel of Barangay Sindalan. However,
this finding was not supported by evidence. On the contrary, it is Sitio Paraiso
which is within Davsan II Subdivision based on the testimony of petitioners own
witness, Ruben Palo, as follows:
Atty. Mangiliman: Mr. Palo, you said that you have been residing at Sitio
Paraiso since 1973, is this Sitio Paraiso within the Davson [sic]
Subdivision?

Witness: Yes, sir.

x x x x

Atty. Mangiliman: And before you purchased that or at the time you
purchased it in 1972, I am referring to the lot where you are now
residing, the Davson [sic] Subdivision did not provide for a road
linking from the subdivision to the barrio road, am I correct?

Witness: None, sir.

Atty. Mangiliman: And despite [sic] of that you purchased a lot inside
Davson [sic] Subdivision?

Witness: Yes, sir.

Atty. Mangiliman: Did you not demand from the developer of Davson [sic]
Subdivision that he should provide a road linking from the
subdivision to the barrio road of Sindalan?

Witness: No, sir, because I know they will provide for the road.

Atty. Mangiliman: And when you said that they will provide for that road,
you mean to tell us that it is the developer of Davson [sic]
Subdivision who will provide a road linking from the subdivision to
the barrio road of Sindalan?




Witness: Yes, sir.

Atty. Mangiliman: Now, Mr. Witness, you will agree with me that the
proposed road which will connect from Davson [sic] Subdivision to
the barrio road of Sindalan would benefit mainly the lot buyers and
home owners of Davson [sic] Subdivision?

Witness: Yes, sir.

Atty. Mangiliman: And you also agree with me that there is no portion of
Davson [sic] Subdivision which is devoted to the production of
agricultural products?

Witness: None, sir.

Atty. Mangiliman: When the road which is the subject of this case and
sought to be expropriated has not yet been opened and before a Writ
of Possession was issued by the Court to place the plaintiff in this
case in possession, the residents of Davson [sic] Subdivision have
other way in going to the barrio road?

Witness: None, sir.

Atty. Mangiliman: In that case Mr. Witness, how do you negotiate or go
out of the subdivision in going to the barrio?

Witness: We passed to the lot own [sic] by Mr. Torres which is near the
subdivision in going to the barrio road, sir.

Atty. Mangiliman: Did you not complain to the owner/developer of the
subdivision that he should provide for a road linking to [sic] his
subdivision to the barrio road because there is no available exit from
the said subdivision to the barrio road?

Witness: We have been telling that and he was promising that there will be
a road, sir.26[26]




Firstly, based on the foregoing transcript, the intended feeder road sought to
serve the residents of the subdivision only. It has not been shown that the other
residents of Barangay Sindalan, San Fernando, Pampanga will be benefited by the
contemplated road to be constructed on the lot of respondents spouses Jose
Magtoto III and Patricia Sindayan. While the number of people who use or can use
the property is not determinative of whether or not it constitutes public use or
purpose, the factual milieu of the case reveals that the intended use of respondents
lot is confined solely to the Davsan II Subdivision residents and is not exercisable
in common.27[27] Worse, the expropriation will actually benefit the subdivisions
owner who will be able to circumvent his commitment to provide road access to
the subdivision in conjunction with his development permit and license to sell from
the Housing and Land Use Regulatory Board, and also be relieved of spending his
own funds for a right-of-way. In this factual setting, the Davsan II Subdivision
homeowners are able to go to the barrio road by passing through the lot of a certain
Torres family. Thus, the inescapable conclusion is that the expropriation of
respondents lot is for the actual benefit of the Davsan II Subdivision owner, with
incidental benefit to the subdivision homeowners.

The intended expropriation of private property for the benefit of a private
individual is clearly proscribed by the Constitution, declaring that it should be for
public use or purpose. In Charles River Bridge v. Warren, the limitation on
expropriation was underscored, hence:




Although the sovereign power in free government may appropriate all
property, public as well as private, for public purposes, making
compensation therefore; yet it has never been understood, at least never
in our republic, that the sovereign power can take the private property
of A and give it to B by the right of eminent domain; or that it can take it
at all, except for public purposes; or that it can take it for public purposes,
without the duty and responsibility of ordering compensation for the
sacrifice of the private property of one, for the good of the whole (11 Pet. at
642) (emphasis supplied).28[28]


US case law also points out that a member of the public cannot acquire a
certain private easement by means of expropriation for being unconstitutional,
because even if every member of the public should acquire the easement, it would
remain a bundle of private easements.29[29]

Secondly, a compelling reason for the rejection of the expropriation is
expressed in Section 29, PD 957, which provides:

Sec. 29. Right of Way to Public Road.The owner or developer of a
subdivision without access to any existing public road or street must secure
a right of way to a public road or street and such right of way must be
developed and maintained according to the requirement of the government
authorities concerned.







Considering that the residents who need a feeder road are all subdivision lot
owners, it is the obligation of the Davsan II Subdivision owner to acquire a right-
of-way for them. However, the failure of the subdivision owner to provide an
access road does not shift the burden to petitioner. To deprive respondents of their
property instead of compelling the subdivision owner to comply with his obligation
under the law is an abuse of the power of eminent domain and is patently illegal.
Without doubt, expropriation cannot be justified on the basis of an unlawful
purpose.

Thirdly, public funds can be used only for a public purpose. In this
proposed condemnation, government funds would be employed for the benefit of a
private individual without any legal mooring. In criminal law, this would
constitute malversation.

Lastly, the facts tend to show that the petitioners proper remedy is to
require the Davsan II Subdivision owner to file a complaint for establishment of
the easement of right-of-way under Articles 649 to 656 of the Civil Code.
Respondents must be granted the opportunity to show that their lot is not a servient
estate. Plainly, petitioners resort to expropriation is an improper cause of action.

One last word: the power of eminent domain can only be exercised for
public use and with just compensation. Taking an individuals private property is a
deprivation which can only be justified by a higher goodwhich is public use
and can only be counterbalanced by just compensation. Without these safeguards,
the taking of property would not only be unlawful, immoral, and null and void, but
would also constitute a gross and condemnable transgression of an individuals
basic right to property as well.

For this reason, courts should be more vigilant in protecting the rights of the
property owner and must perform a more thorough and diligent scrutiny of the
alleged public purpose behind the expropriation. Extreme caution is called for in
resolving complaints for condemnation, such that when a serious doubt arises
regarding the supposed public use of property, the doubt should be resolved in
favor of the property owner and against the State.
WHEREFORE, we AFFIRM the May 30, 2001 Decision and the October
26, 2001 Resolution of the CA, with costs against petitioner.

SO ORDERED.