POLITICAL LAW REVIEW

General Considerations; Separation of Powers and Checks and Balances

REPUBLIC V. GINGOYON Doctrine

December 19, 2005 | Tinga, J. The appropriate standard of just compensation is a
substantive matter well within the province of the
Petitioners: Republic of the Philippines, represented by legislature to fix. Meanwhile, rules of procedure, as
Executive Secretary Eduardo R. Ermita, the Department distinguished from substantive matters, remain the
of Transportation and Communications (DOTC), and exclusive preserve of the Supreme Court.
the Manila International Airport Authority (MIAA)

Respondents: Hon. Henrick F. Gingoyon, In his

capacity as Presiding, and Judge of the Regional Trial
Court, Branch 117, Pasay City and Philippine
International Air Terminals Co., Inc. (PIATCO)

Facts: Following the 2003 Agan decision, the contracts entered into between the Government and PIATCO for
the operation of the NAIA 3 terminal were nullified, without providing for the rights of PIATCO to reimbursement
for construction expenses. However, in its 2004 Resolution, the Court ordered the government to compensate
PIATCO in accordance with law and equity. The Government thus filed a complaint for expropriation, deposited
P3 billion with Land Bank as initial compensation, and sought the issuance of a Writ of Possession.
Respondent RTC Judge Gingoyon issued the writ in a December 2004 Order following Rule 67 of the ROC, but
subsequently released another Order in January 2005 directing Land Bank to immediately release the amount
of USD 62.3 million to PIATCO as just compensation, pursuant to RA 8974, which requires the Government to
make immediate payment to the property owner upon the filing of the complaint to be entitled to a writ of
possession, and not merely to make an initial deposit with an authorized government depositary as provided by
Rule 67.

Main Issue: Whether Rule 67 of the ROC or RA 8974 governs the expropriation proceedings

Ruling: RA 8974 applies to the case at bar and complements the 2004 Agan Resolution. The appropriate
standard of just compensation is a substantive matter well within the province of Congress to fix, which it did
through the enactment of RA 8974. Meanwhile, rules of procedure remain the exclusive preserve of the
Supreme Court by virtue of Art. VIII, Sec. 5(5) of the Constitution. The plain intent of RA 8974 is to supersede
the deposit system under Rule 67 with the immediate payment scheme in cases involving national
infrastructure projects. Therefore, the use of RA 8974 guarantees compliance with the requirement of payment
of just compensation before any takeover of the NAIA 3 facilities by the Government in accordance with the
2004 Agan Resolution

Dissent:
Corona, J.: The majority allowed Congress to encroach upon the rule-making power which the Constitution has
reserved exclusively to the Supreme Court. The manner of determining just compensation, including how it
shall be paid and under what conditions a writ of possession may be issued, is a matter of procedure, not of
substantive law.

Puno, J.: Rule 67 cannot be repealed or amended by Congress. The 1987 Constitution took away the power of
Congress to repeal, alter, or supplement rules concerning pleading, practice and procedure, which is now
exclusively vested in the SC. The prohibition against repeal or amendment refers to any part of Rule 67 since
the same is pure procedural law.

Pertinent Provision: 1987 Const., Article VIII, Sec. 5. The Supreme Court shall have the following powers:
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and
procedure in all courts, the admission to the practice of law, the integrated bar, and legal assistance to the
underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive
rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved
by the Supreme Court.

DELA CRUZ, Cedric

POLITICAL LAW REVIEW
General Considerations; Separation of Powers and Checks and Balances

FACTS
● In the 2003 Agan v. PIATCO decision, the Court nullified the contracts 1 entered into between the
Philippine Government and PIATCO, which previously authorized the latter to build the NAIA 3 and
granted Philippine International Air Terminals Co., Inc. (PIATCO) a franchise to operate and maintain the
terminal for 25 years.
o The contracts were nullified since Paircargo Consortium, the predecessor of PIATCO, did not
possess the required financial capacity when it was awarded the NAIA 3 contract and since the
agreement was contrary to public policy.
● When the 2003 decision was promulgated, the NAIA 3 facilities had already been built by PIATCO and
were nearing completion. However, the decision was silent as to the rights of PIATCO for reimbursement
for its expenses in constructing the facilities.
● This was until the January 2004 Agan Resolution, where the Court held that the government should
compensate PIATCO as builder of the structures. The compensation must be just and in accordance with
law and equity because the government cannot unjustly enrich itself at the expense of PIATCO and its
investors.
● In the meantime, the NAIA 3 facilities remained in the possession of PIATCO despite the government’s
intent to put the terminal into operation. Negotiations and arbitral proceedings were also initiated.
● Eventually, in December 2004, the Government filed a complaint for expropriation with the Pasay RTC
and sought the immediate issuance of a writ of possession to allow it to immediately possess and control
the NAIA 3 facilities. The Government alleged that it had deposited P3 billion in cash with the Land Bank
of the Philippines (LBP), representing the NAIA 3’s assessed value for taxation purposes.
● On the same date the complaint was filed, the RTC directed the issuance of a writ of possession in favor
of the Government, finding all requisites for expropriation present.
● However, in January 2005, the RTC issued an order supplementing the December 2004 Order. The
January 2005 Order:
o Directed the LBP to immediately release the amount of USD 62.3 million to PIATCO, which shall
be deducted from the amount of just compensation to be determined eventually by the RTC;
o Directed the Government to submit to the RTC a Certificate of Availability of Funds signed by
authorized officials to cover the payment of just compensation; and
o Directed the Government to preserve the NAIA 3 facilities pending expropriation proceedings and
full payment of just compensation; but
o Prohibited the Government from performing acts of ownership such as awarding concessions or
leasing any part of NAIA 3 to other parties.
● The January 2005 Order was made due to crucial differences between the procedures under Rule
67 of the Rules of Civil Procedure and RA 8974.
o 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 required only to make an initial deposit with an authorized government depositary.
o Rule 67 prescribes that the initial deposit be equivalent to the assessed value of the property for
purposes of taxation, unlike RA 8974 which provides, as the standard for initial compensation, the
market value of the property as stated in the tax declaration or the current relevant zonal
valuation of the BIR, whichever is higher, and the value of the improvements and/or structures
using the replacement cost method.
● Accordingly, the RTC appointed three Commissioners to ascertain the amount of just compensation for
the NAIA 3 Complex.
● Hence, the present petition for certiorari and prohibition seeking to nullify the orders of the RTC.

1
Concession Agreement for the Build-Operate-and-Transfer Arrangement of the Ninoy Aquino International Airport Passenger
Terminal III, as well as the amendments and supplements thereto.
DELA CRUZ, Cedric
POLITICAL LAW REVIEW
General Considerations; Separation of Powers and Checks and Balances

ISSUES + HELD
ISSUE # 1 - Whether Rule 67 of the ROC or RA 8974 governs the expropriation proceedings – RA 8974
governs [most important issue]
● Proceeding with the expropriation proceedings with the exclusive use of Rule 67 would allow the
Government to take over the NAIA 3 facilities in a manner contrary to the 2004 Resolution in Agan, which
is the law of this case.
○ While Rule 67 outlines the procedure for the exercise of eminent domain by the government, it is
not the sole guideline for expropriating private property. RA 8974, which provides a more
favorable procedure to the property owner, applies when the national government expropriates
property for national infrastructure projects, as in the NAIA 3 terminal in this case.
○ The most crucial difference between Rule 67 and RA 8974 concerns the particular essential step
the Government has to undertake to be entitled to a writ of possession.
■ Rule 67 merely requires the Government to deposit with an authorized government
depositary the assessed value of the property for expropriation for it to be entitled to a
writ of possession.
■ On the other hand, RA 8974 requires that the Government make a direct payment to the
property owner before the writ may issue. Such payment is based on the zonal valuation
of the BIR in the case of land, the value of the improvements or structures under the
replacement cost method, or if no such valuation is available and in cases of utmost
urgency, the proffered value of the property to be seized.
● It is clear that the Government prefers to apply Rule 67 instead of RA 8974 since under Rule 67, it would
not be required to immediately pay any amount to PIATCO before it can obtain the writ of possession,
because what is merely needed is the deposit of the amount equivalent to the assessed value with an
authorized government depositary.
○ The deposit under Rule 67 would not satisfy the requirement of compensation laid down in the
2004 Resolution, since if Rule 67 were to apply, PIATCO would be enjoined from receiving
anything as just compensation before the Government takes over the NAIA 3 facility by virtue of a
writ of possession.
○ The plain intent of RA 8974 is to supersede the deposit system under Rule 67 with the immediate
payment scheme in cases involving national infrastructure projects.
○ Thus, Rule 67 cannot apply in this case without violating the 2004 Resolution.
● Moreover, the appropriate standard of just compensation is a substantive matter which is well
within the province of the legislature to fix, which it did through the enactment of RA 8974.
○ RA 8974 prescribes the new standards in determining the amount of just compensation in
expropriation cases relating to national government infrastructure projects, as well as the
payment of the provisional value as a prerequisite to the issuance of a writ of possession.
● Meanwhile, rules of procedure, as distinguished from substantive matters, remain the exclusive
preserve of the Supreme Court by virtue of Art. VIII, Sec. 5(5) of the Constitution.
○ Section 14 of the RA 8974 IRR recognizes the continued applicability of Rule 67 on procedural
aspects when it provides that all matters regarding defenses and objections to the complaint,
issues on uncertain ownership and conflicting claims, effects of appeal on the rights of the
parties, and such other incidents affecting the complaint shall be resolved under the provisions on
expropriation of Rule 67 of the ROC.
● Consequently, RA 8974 applies to the case at bar and complements the 2004 Agan Resolution.
○ Sec. 2 of RA 8974 includes in the definition of national government projects those projects
covered by RA 6957. In the 2003 Agan decision, NAIA 3 was developed pursuant to a build-
operate-and-transfer agreement under RA 6957, which pertains to infrastructure projects normally
financed by the public sector but which are now wholly or partly implemented by the private
sector.
○ It is established that PIATCO has ownership rights over the NAIA 3 facilities, based on the 2004
Resolution which ordered the payment of just compensation to PIATCO and on the fact that the
Government resorted to eminent domain proceedings. If PIATCO had no ownership rights, the
Government should have seized control of NAIA 3 through ordinary ejectment proceedings.
DELA CRUZ, Cedric
POLITICAL LAW REVIEW
General Considerations; Separation of Powers and Checks and Balances

○ Thus, the NAIA 3 facilities are real property owned by PIATCO, in line with Art. 415(1) of the
NCC. Such properties fall under the scope of RA 8974, Sec. 4 of which states that the law relates
to the acquisition of “real property.” Clearly, RA 8974 covers not only the expropriation of parcels
of land but also improvements and structures adhered thereto.
○ In sum, the use of RA 8974 guarantees compliance with the requirement of payment of just
compensation before any takeover of the NAIA 3 facilities by the Government under the 2004
Agan Resolution, as it assures the private property owner the payment of the proffered value of
the property to be seized.

ISSUE # 2 - Whether PIATCO is entitled to USD 62.3 million or P3 billion – P3 billion

 The determination of just compensation to PIATCO cannot include the BIR zonal valuation of under Sec.
4 of RA 8974. PIATCO is not the owner of the land on which the NAIA 3 stands, and thus, its entitlement
to just compensation should be limited to the value of the improvements and/or structure themselves,
which could be ascertained using the replacement cost method.
 In addition, the 2004 Agan Resolution also mandated that the amount of just compensation conform not
only to the law but also to principles of equity.
 Sec. 4(c) of RA 8974 permits an expedited means by which the Government can immediately take
possession of the property without having to await precise determination of the valuation through payment
of the proffered value of the property.
 In this case, the Government alleged to have deposited the amount of P3 Billion earmarked for
expropriation, representing the assessed value of the property. While made under the assumption that
Rule 67 applies, such sum can still be recognized as the proffered value.
o In the initial determination of the proffered value, the Government is not strictly required to adhere
to any predetermined standards, although its proffered value may later be subjected to judicial
review.
 The amount of USD 62.3 million determined by respondent Judge Gingoyon could not be used as the
basis for the immediate payment to PIATCO. The RTC cites without qualification Sec. 4(a) of RA 8974 as
basis for the said amount, which leaves the impression that the BIR zonal valuation forms part of the
basis for just compensation, which should not be the case.
o While there is certification from the LBP that the Government maintained a total balance of USD
62.3 million, there is no clear evidence that it intended to offer the entire amount as initial
payment of just compensation. Instead, credence should be given to the consistent position of the
Government to offer P3 billion as payment.
 Accordingly, the RTC erred in issuing the writ of possession to the Government despite non-payment of
just compensation to PIATCO. While the RTC directed the immediate release of USD 62.3 million to
PIATCO, it should have held in abeyance the writ of possession until the Government has actually paid
PIATCO in accordance with RA 8974.
o Under the new modality prescribed by RA 8974, private owners see immediate monetary
recompense with the same degree of speed as the taking of their property.
o While eminent domain is one of the inherent powers of the State, there is no requirement that it
undertake a prolonged procedure, or that the payment of the private owner be protracted. The
immediate payment under RA 8974 placates to some degree whatever ill-will that arises from
expropriation, as well as satisfies the demand of basic fairness.
 Lastly, the final determination of just compensation to PIATCO must be had within 60 days from the
finality of this decision.
o Sec. 4 of RA 8974 states that when the owner contests the proffered value, the court shall
determine the just compensation to be paid the owner within 60 days from the date of filing of the
expropriation case.
o Since there already has been irreversible delay in the prompt payment of PIATCO, and it is no
longer possible for the RTC to determine the just compensation due PIATCO within 60 days from
the filing of the complaint in December 2004, the spirit of the law must be effected by requiring
the RTC to make such determination within 60 days from finality of this decision.

DELA CRUZ, Cedric

POLITICAL LAW REVIEW
General Considerations; Separation of Powers and Checks and Balances

ISSUE # 3 – Whether the Government is prohibited from operating NAIA 3 upon the effectivity of the Writ
of Possession – NO
 The 2004 Agan Resolution must be viewed less stringently to allow the operation by the Government of
NAIA 3 upon the effectivity of the Writ of Possession.
o The national prestige is diminished every day that passes with the NAIA 3 remaining unutilized.
o The continued non-use of the facilities contributes to its physical deterioration, if it has not
already.
o The economic benefits to the Government and the country at large are beyond dispute once the
NAIA 3 is put in operation.
 Pursuant to Sec. 4 of RA 8974, once the Writ of Possession is effective, the Government itself is
authorized to perform the acts that are essential to the operation of the NAIA 3 as an international airport
terminal.

ISSUE # 4 - Whether there was grave abuse of discretion in the appointment of the commissioners – NO
 Although the RTC appointed three commissioners without prior consultation with either the Government
or PIATCO, or without giving the Government opportunity to object to the appointments, there is nothing
in Rule 67 or RA 8974 which requires that the RTC consult with the parties in the expropriation case on
who should be appointed as commissioners.
o In Talisay v. Ramirez, the Court held that the RTC may seek the recommendations of the parties,
but such solicitation of recommendations is not mandatory on the part of the court.
 Moreover, Sec. 5 of Rule 67 allows the parties to protest the appointment of any of the commissioners.
Hence, the proper recourse of the Government to challenge the choice of the commissioners is to file an
objection with the RTC, and not assail the same through a special civil action for certiorari.
o The parties are allowed to file their objections with the RTC within 5 days from finality of this
decision.

ISSUE # 5 - Whether there is sufficient ground to inhibit respondent Judge – NO

 The disqualification of judges is a deprivation of judicial power and should not be allowed on the basis of
mere speculations and surmises. It cannot be predicated on the adverse nature of the judge's rulings
towards the movant for inhibition, especially if these rulings are in accord with law. Neither could inhibition
be justified merely on the erroneous nature of the rulings of the judge.
 While the Government contends that the January 2005 Order was issued motu proprio, without any
preceding motion, notice or hearing, the same was issued to rectify the December 2004 Order which
erroneously applied the provisions of Rule 67 of the ROC instead of RA 8974.
 Further, the motu proprio issuance of the January 2005 Order does not evince bias on the part of Judge
Gingoyon. The motu proprio amendment by a court of an erroneous order previously issued may be
sanctioned depending on the circumstances, in accordance with the principle that every court has
inherent power to do all things reasonably necessary for the administration of justice within the scope of
its jurisdiction.
o Sec. 5(g), Rule 135 of the ROC recognizes the inherent power of a court to reverse itself,
especially when in its honest opinion it has committed an error or mistake in judgment, and that to
adhere to its decision will cause injustice to a party litigant.
 Likewise, nothing in Rule 67 or RA 8974 requires the conduct of a hearing prior to the issuance of the writ
of possession, which by design is available immediately upon the filing of the complaint provided that the
requisites attaching thereto are present.
 In sum, there is no sufficient ground to direct the inhibition of Judge Gingoyon from hearing the
expropriation case.

RULING

DELA CRUZ, Cedric

POLITICAL LAW REVIEW
General Considerations; Separation of Powers and Checks and Balances

The Petition is GRANTED in PART with respect to the orders dated 4 January 2005 and 10 January 2005 of the
lower court. Said orders are AFFIRMED with MODIFICATIONS.

JUSTICE DISSENTING/CONCURRING/SEPARATE OPINION

J. CORONA, The majority allowed Congress to encroach upon the rule-making power which the
dissenting Constitution has reserved exclusively to the Supreme Court.
Joined by C.J.
 The majority erroneously applied RA 8974 on the mistaken premise that the application
Davide, JJ.
Puno, of Rule 67 will violate the 2004 Agan Resolution, the alleged governing law of the case.
Panganiban, o It is incorrect to say that Agan constitutes the law of the case. The "law of the
Carpio-Morales case" doctrine refers to the rule that when an appellate court passes on a
question and remands the case to the lower court for further proceedings, the
question there settled becomes the law of the case on subsequent appeal.
Unlike the doctrine of stare decisis, the doctrine of the law of the case operates
only in the particular case.
o Since the law of the case finds application only in the same case between the
parties, the decision in Agan cannot constitute the law of the case here since
this case, which refers to the expropriation of NAIA 3, is not the same as Agan,
which was about the validity of the PIATCO contracts.
 Moreover, the resolution only requires that PIATCO be given just compensation as a
condition for any government take-over of NAIA 3. The just compensation should be in
accordance with law and equity. There is something seriously wrong with the
argument that RA 8974 is the only legal and equitable way to compensate
PIATCO in accordance with the 2004 resolution.
o The application of Rule 67 in the expropriation proceedings of NAIA 3 is in
consonance with Agan. Under Rule 67, PIATCO will be given full just
compensation by the government for the taking of NAIA 3.
o Likewise, Sec. 9 of Rule 67 prevents unjust enrichment on the part of the
government by requiring the payment of interest from the time government
takes possession of the property.
o The requirement to pay the proffered value was a strained way of establishing
that the application of RA 8974 is in consonance with the 2004 Agan
resolution. If the majority opinion were to be true to its pronouncement that the
2004 resolution demands payment of just compensation prior to the takeover
of NAIA 3, then payment of the proffered value is not enough, since the same
is not equivalent to just compensation.
 Hence, Judge Gingoyon gravely abused his discretion when he ruled that Rule 67
of the ROC and all the laws on expropriation involving infrastructure projects
had been expressly repealed by RA 8974 and its IRR.
o RA 8974 did not expressly repeal Rule 67. Neither its repealing clause nor any
of its provisions even mentioned or referred to the ROC, whether on
expropriation or anything else.
o Nor is there an implied repeal, which is not favored. Before the inference of
implied repeal may be drawn, the two laws must be absolutely incompatible,
and a clear finding thereof must surface.
o On the contrary, Sec. 14 of the IRR of RA 8974 makes an explicit reference to
Rule 67 and mandates its applicability to certain matters.
 Any talk of repeal by legislative enactment of the rules of procedure duly
promulgated by the Court goes against the Constitution itself. The power to
promulgate rules of pleading, practice and procedure was granted by the
Constitution to the Court to enhance its independence. It is no longer shared

DELA CRUZ, Cedric

POLITICAL LAW REVIEW
General Considerations; Separation of Powers and Checks and Balances

with Congress, who no longer has power to repeal, alter, or supplement rules
concerning pleading, practice, and procedure. (Echegaray v. Secretary of Justice)
o The majority properly recognized that Rule 67 governs the procedure
undertaken for eminent domain. And yet, they declared that, as a rule of
procedure, Rule 67 can be superseded by statutory amendment.
o The radical change brought about by RA 8974 subverts the fundamental law
and defeats the constitutional intent to strengthen the independence of the
Court.
 It is true that the appropriate standard of just compensation is a substantive matter, not
procedural. However, the manner of determining just compensation, including
how it shall be paid and under what conditions a writ of possession may be
issued, is a matter of procedure, not of substantive law.
o If a rule or statute creates a right or takes away a vested right, it is substantive.
If it operates as a means of implementing an existing right, then it is
procedural.
o The provisions of Rule 67 neither vest a new power on the State nor create a
new right in favor of the property owner. Rule 67 merely provides the
procedure for the State's exercise of eminent domain and ensures the
enforcement of the right of the private owner to receive just compensation for
the taking of his property. It is purely a matter of procedure exclusively within
the domain of the Court.
o Neither can Congress legislate the manner of payment of just compensation
nor impose a condition on the issuance of a writ of possession. Yet, that is
what RA 8974 precisely does.
 Therefore, in denying the petition, the majority effectively sustained respondent
judge's repeal theory. They allowed Congress to infringe on the Court's rule-
making power, a power vested by the Constitution exclusively on the SC.

J. PUNO, RA 8974 cannot amend Rule 67; otherwise, it will weaken the institutional
separate and independence of the Supreme Court.
dissenting  Art. VIII, Sec. 5 of the Constitution gave the SC the power to promulgate rules
concerning the protection and enforcement of constitutional rights, pleading, practice,
and procedure in all courts, the admission to the practice of law, the integrated bar, and
legal assistance to the underprivileged.
 In Echegaray v. Secretary of Justice, the Court noted that the 1987 Constitution took
away the power of Congress to repeal, alter, or supplement rules concerning
pleading, practice and procedure, which is now exclusively vested in the SC.
 Rule 67 of the ROC was promulgated to govern the proceedings in expropriation cases
filed in court. Following Art. VIII, Sec. 5(5) of the 1987 Constitution and Echegaray,
Rule 67 cannot be repealed or amended by Congress. This prohibition refers to
any part of Rule 67 since the same is pure procedural law.
o The Court cannot chop Rule 67 into pieces and hold that some can be changed
by Congress but others can be changed. This will dilute the rule making power
of this Court which must not be allowed for it will weaken its institutional
independence.

J. CARPIO, The requirement of immediate payment of the initial amount for just compensation is a
concurring substantive matter within the power of Congress. Rules of procedure set by the Court
must adjust to such new laws on substantive matters.
 Congress has no power to amend or repeal rules of procedure adopted by the SC.
However, Congress can enact laws on substantive matters which are the subject of
court procedures. Thus, Congress can prescribe the initial or minimum amount for

DELA CRUZ, Cedric

POLITICAL LAW REVIEW
General Considerations; Separation of Powers and Checks and Balances

just compensation in expropriation cases, and require immediate payment of

such initial or minimum amount as condition for the immediate takeover of the
property by the government. The rules of procedure, like Rule 67 of the ROC, must
adjust automatically to such new laws on substantive matters.
o Sec. 4 of RA 8974 is a substantive requirement and hence, must apply to all
expropriation cases under RA 8974 involving the acquisition of real property,
like the NAIA 3.
 Even assuming that Sec. 4 of RA 8974 is not applicable, the Court must still apply the
substantive concept in Section 4 of RA 8974 to expropriation proceedings under Rule
67 to insure equal protection of the law to property owners.
o There is no substantial reason to discriminate against property owners in
expropriation cases under Rule 67.

DELA CRUZ, Cedric