THE 1987 CONSTTTUTION Sec.

9
396
OF THE REPUBLIC OF THE PHILIPPINES

SEC. 9. PRIVATE PROPERTY SHALL NOT BE TAKEN worn PUBLIC

USE WITHOUT JUST COMPENSATION.

1. Eminent domain.
Aside from the above provision, there were two other eminent
domain provisions in the 1973 Constitution: Article XIV, Section 6,
which said: "The State may, in the interest of national welfare or de-
fense, establish and operate industries and means of transportation and
communication, and, upon payment of just compensation, transfer to
public ownership utilities and other private enterprises to be operated
by the government," and Article XIV, Section 13, which said: " T h e Na-
tional Assembly may authorize, upon payment of just compensation,
the expropriation of private lands to be subdivided into small lots and
conveyed at cost to deserving citizens." T h e former was a copy of Ar-
ticle XIII, Section 6 of the 1935 Constitution and the latter modified
2
Section 4, Article XIII, of the 1935 Constitution." ' T h e provision on
30
social justice and equitable diffusion" of property as well as the pro-
31
vision on agrarian reform" of the earlier constitutions also affect the
jurisprudence on expropriation for resale.

Article XII, Section 18, of the new Constitution now also pro-
vides: "The State may, in the interest of national welfare or defense,
establish and operate vital industries and, upon payment of just c o m -
pensation, transfer to public ownership utilities and other private en-
terprises to be operated by the government." This will be discussed in
its proper place. Likewise, expropriation, in so far as it forms part of
the scheme for achieving social justice found in Article XIII, will be
discussed in its proper place.

2. Eminent d o m a i n : Definition, nature.

" T h e right of eminent domain is usually understood to be the ulti-

mate right of the sovereign power to appropriate, not only the public but
the private property of all citizens within the territorial sovereignty, to
public purpose." So wrote Justice Story in the leading case of Charles

""Article XIII, Section 4 (1935) read: "The Congress may authorize, upon payment of just
compensation, the expropriation of lands to be subdivided into small lots and conveyed at cost to
individuals."
""Article D., Section 6 (1973).
""Article XIV, Section 12(1973).
Sec. 9 ART. ITI - BILL OF RIGHTS 397

River Bridge v. Warren Bridge."" It is a power inherent in sovereignty.

H e n c e , it is a p o w e r which need not be granted by any fundamental law.
33
"In other w o r d s , " says a 1919 Philippine decision," "the provisions
now generally found in m o d e m constitutions of civilized countries to
the effect that private property shall not be taken for public use without
compensation have their origin in the recognition of a necessity for re-
straining the sovereign and protecting the individual."

T h e exercise of the power of eminent domain is by tradition

lodged with the executive arm of the government. The Visayan Refining
34
case recognized this tradition. T h e Court said:"

Therefore, when the Philippine Legislature declared in sec-

tion 64 of the Administrative Code, that the Governor-General,
who exercises supreme executive power in these Islands, should
be the person to direct the initiation of expropriation proceedings,
it placed the authority exactly where one would expect to find it,
and we conceive of no ground upon which the efficacy of the stat-
ute can reasonably be questioned.

It is, however, evident from the same authority that the power
is dormant until the Legislature sets it in motion. In the words of the
35
Court:"

We would not of course pretend that, under our modem sys-

tem of Government, in which the Legislature plays so important
a role, the Executive Department could, without the authority of
some statute, proceed to condemn property for its own uses; be-
cause the traditional prerogatives of the sovereign are not often
recognized nowadays as a valid source of power, at least in coun-
tries organized under republican forms of government. Neverthe-
less it may be observed that the real check which the modem Leg-
islature exerts over the Executive Department, in such a matter as
this, lies not so much in the extinction of the prerogative as in the
fact that the hands of the Executive can always be paralyzed by
lack of money — something which is ordinarily supplied only by
the Legislature.

""11 Pet. 420,641 (U.S. 1837).

""Visayan Refining Co. v. Camus, 40 Phil. 550,559 (1919).
I,34
4 0 Phil. 550,559 (1919). Also id. at 564.
""Id. at 559-60.
 398
THE 1987 CONSTITUTION Sec.9
OF THE REPUBLIC OF THE PHILIPPINES

The reverse, however, is not true; the executive cannot impose

36
limits on the legislature."
Once authority, however, has been given to the executive, "expro-
priation proceedings may be maintained upon the exclusive initiative
of the [executive] without the aid of any special legislative authority
37
other than that already in the statute books."" Put differently: "Once
authority is given to exercise the power of eminent domain, the matter
ceases to be wholly legislative. The executive authorities may then de-
38
cide whether the power will be invoked and to what extent.""

The power of eminent domain may also be conferred upon munic-

ipal governments and other government entities. T h e Court said in City
19
of Manila v. Chinese Community of Manila:" " T h e power of the legis-
lature to confer, upon municipal corporations and other entities within
the State, general authority to exercise the right of eminent domain can-
not be questioned by the courts " T h e scope of such delegated p o w e r
is necessarily narrower than that of the delegating authority and must be
40
sought in the terms of the delegation itself."

Likewise, the authority of the legislature to delegate the right of

eminent domain to private entities operating public utilities has never
been questioned. The Court has also said that the exercise of the del-
egated authority and the prescribed m o d e of procedure being in deroga-
tion of general right and conferring upon the public utility corporation
exceptional privileges with regard to the property of others of which it
may have need, must be construed strictly in favor of private proper-
41
ty."

It is thus seen that in the hands of the legislature, the p o w e r of

eminent domain is an inherent power. In the h a n d s of government agen-
cies, local governments and public utilities, however, eminent d o m a i n
is only a delegated power. This distinction has important legal conse-
quences both with respect to the scope of the p o w e r and with respect to
the scope of judicial review of the exercise of the power.

""'Republic v. Juan, G.R. No. 24740, July 10 1979

37
" W.at 558.
3e
" W. at 560, quoting 10 R.C.L. 14.
""40 Phil. 349, 368(1919)
"«W.
4l
" Tenorio v. Manila Railroad Co.. 22 Phil 4 1 1 . 4 1 4 H 9 1 ?\
Sec. 9 ART. Ill - BILL OF RIGHTS 399

In the hands of Congress the scope of the power is, like the scope
of legislative p o w e r itself, plenary. It is as broad as the scope of police
power itself. It can thus reach every form of property which the State
42
might need for public u s e . " It can reach even private property already
43
dedicated to public use or even property devoted to religious worship."
As one early American case put it, "All separate interests of individu-
als in property are held of the government under this tacit agreement
or implied reservation. Notwithstanding the grant to individuals, the
eminent domain, the highest and most exact idea of property, remains
in the government, or in the aggregate body of the people in their sov-
ereign capacity; and they have the right to resume the possession of the
44
property whenever the public interest requires it.""

T h e delegated power of eminent domain of local governments

is strictly speaking not a p o w e r of eminent but of inferior domain —
a share merely in eminent domain. H e n c e , it is only as broad as the
eminent authority would allow it to b e . A clear case in point is City of
5
Manila v. Chinese Community of Manila."* At issue in the case was
authority over a portion of a Chinese cemetery which had been estab-
lished under authority of the Spanish Governor-General and "founded
and maintained by the spontaneous and fraternal contribution of their
protector, merchants and industrialists." It was a cemetery "adjusted to
the taste and traditional practices of those b o m and educated in China"
and authorized by the Spanish government as a mark of recognition of
46
the civic contribution of Chinese nationals." The city was seeking to
expropriate a portion of the property in order to open a street through
the cemetery. Did the city have authority to do it?

Considering the nature of the property, expropriation was doubt-

less offensive to the cultural sensibilities of the Chinese. The Court,
while disavowing the belief "that the dead must not give place to the
47
living,"" did find a legal solution to what was undoubtedly also a so-
cial dilemma. The Court asserted that a cemetery open to the public was

2
"* Supra, note 11 at 357.
' '"Churches are outside the commerce of man under the Spanish Civil Code. But in Barlin
v. Ramirez, 7 Phil. 41,56 (1906) the Court said that "by virtue of the power of eminent domain....
[the government] might have appropriated this church or other churches."
""Beekman v. Saratoga and Schenectady R.R. Co., 3 Paige Ch. 45,72-3 (N.Y. 1831).
""Supra, note 11.
M46
W. at 369-70.
41
" W. at 370.
 400 THE 1987 CONSTITUTION Sec. 9
OF THE REPUBLIC OF THE PHILIPPINES

already in public use "and no part of the ground could be taken for other
public uses under a general authority.""*' And general authority was
all that the City of Manila could show. Hence, it was without authority
to expropriate the property. But the Court said that "if the legislature
under proper authority should grant the expropriation of a certain or
particular parcel of land for some specified purpose, the courts would
4
be without authority to enquire into the purpose of the legislation."" '
And that is what the legislature did; it authorized the City of Manila to
expropriate the specific parcel of property — which accounts for the
present extension of Rizal Avenue across what once was a portion of
the Chinese cemetery.

3. Public use.

Justice Story, in the Charles River Bridge case already cited,

50
wrote:" "Although the sovereign power in free government may ap-
propriate all property, public as well as private, for public purposes,
making compensation therefor; yet it has never been understood, at
least never in our republic, that the sovereign p o w e r 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 c o m -
pensation for the sacrifice of the private property of o n e , for the good
of the whole." Article III, Section 9, puts the matter m o r e succinctly:
"Private property shall not be taken for public use without just c o m p e n -
sation." There are thus two constitutional limitations on the p o w e r of
eminent domain: (1) the purpose of the taking must be public u s e , and
(2) just compensation must be given to the private owner.

What then is the meaning of public use which can justify state a p -
propriation of private property? Time was when the term "public u s e "
was understood as the equivalent of "use by the public." T h e eminent
Cooley, writing in 1868, said that there can be no government seizure
and appropriation of property unless the purpose implies "posses-
sion, occupation, and enjoyment of the land by the public, or public
51
agencies."" This narrow definition of public use, however, has since

""M. at 369.
4
" "W.at 357.
""Charles River Bridge v. Warren Bridge, 11 Pet. at 642.
""CONSTITUTIONAL LIMITATIONS 531
Sec. 9 ART. m - BILL OF RIGHTS 401

been rejected. As one court has put it, "public use means public useful-
ness, utility, or advantage, or what is productive of general benefit, so
that any appropriating of private property by the state under its right of
eminent d o m a i n , for purposes of great advantage to the community, is
52
a taking for public u s e . " " This is the concept that has been accepted in
Philippine jurisprudence. In Sena v. Manila Railroad Co., the Supreme
53
Court, quoting American sources, said:"

"A historical research discloses the meaning of the term

'public use' to be one of constant growth. As society advances,
its demands upon the individual increase and each demand is a
new use to which the resources of the individual may be devoted.
... for "whatever is beneficially employed for the community is a
public use . . . "

T h u s , what has emerged is a concept of public use which is as

broad as public welfare. The scope of the p o w e r of eminent domain
has b e c o m e as broad as the expansive and ever expanding scope of
police power itself. Expropriation for socialized housing, for instance,
54
is for public use." So is expropriation for the construction of irrigation
55
systems to m a k e water available for farmers," for urban and housing
56
reform" and for agrarian reform, which will be discussed more fully in
its proper place. Moreover, jurisprudence considers action by the state
to carry out its duty to provide housing as an exercise of police power
57
superior to the obligation of contracts."

But where the city authorizes the taking of private property to be

converted into a sports facility for the benefit of a small community
which seeks to have its o w n sports and recreational facility, notwith-
standing that there is such a recreational facility only a short distance
5
away, the purpose is not clearly and categorically public." *

Moreover, the predominant precept is that upon abandonment of

real property condemned for public purpose, the party who originally
condemned the property retains control of the land if the condemning

52
" Gohld Realty Co. v. Hartford, 104 A. 2d 365, 368-9 (Conn. 1954).
""42 Phil. 102,105(1921).
""Sumulong v. Guerrero, G.R. No. 48685, September 30, 1987.
""Coscolluela v. Court of Appeals, 164 SCRA 393 (1988).
""Province of Camarines Sur v. Court of Appeals, 222 SCRA 173 (1993).
""214 SCRA 475 (1992).
""Masikip v. Ciy of Pasig, G.R. No. 136349, January 2006.
 THE 1987 CONSTITUTION Sec. 9
402
OF THE REPUBLIC OF THE PHILIPPINES

party continues to use the property for public purpose. However, if the
condemning authority ceases to use the property for a public purpose,
property reverts to the owner in fee simple. The compensation due the
condemning party is the price paid upon expropriation plus legal inter-
est. (Here there was evidence that in the negotiations for appropriation
there was assurance that the former owners could recover the property
59
if public use is abandoned.)"

Public use is sometimes equated with pubic necessity. As a rule,

the determination of whether there is genuine necessity for the exercise
of eminent domain is a justiciable question. However, when the power
is exercised by the Legislature, the question of necessity is essentially
60
a political question."

4. Just compensation.

Much of the eminent domain litigation that has reached the Su-
preme Court deals with the adequacy of the compensation given. For
this reason, the concept of "just compensation" has received ample
treatment from the Court and a fairly complete explanation of the con-
cept was formed even in the early 1900's.

Just compensation has been described as "the just and complete

equivalent of the loss which the o w n e r of the thing expropriated has
6
to suffer by reason of the expropriation."" ' Expressed differently, the
compensation given to the owner is just if he receives for his property
a sum equivalent to its "market value." " M a r k e t v a l u e " has been de-
scribed in a variety of w a y s . It is the "price fixed by the buyer and seller
in the open market in the usual and ordinary course of legal trade and
competition; the price and value of the article established or s h o w n by
sale, public or private, in the ordinary way of business; the fair value of
property as between one w h o desires to purchase and one w h o desires
to sell; the current price; the general or ordinary price for which p r o p -
62
erty may be sold in that locality."" This must include "consequential

""Heirs of Moreno v. Mactan-Cebu International Airport, G.R. No. 156273, August 9.

2005.
'""Manapat v. CA, GJt. No. 110478, October 15,2007.
""Province of Tayabas v. Perez, 66 Phil. 467, 469 (1938); Manila Railroad Co. v. Velas-
quez. 32 Phil. 286,313-14 (1915); City of Manila v. Estrada, 25 Phil. 208, 234 (1913).
""Manila Railroad Co. v. Fabie, 17 Phil. 206, 208 (1910); City of Manila v. Estrada, 25
Phil- 208,215(1913); City of Manila v. Corrales, 32 Phil. 8 5 , 9 2 , 9 8 (1915); Manila Railroad Co.
Sec. 9 ART. Ill - BILL OF RIGHTS 403

d a m a g e s , " that is, d a m a g e s to other interests of the owner that can be at-
tributed to the expropriation. F r o m the "consequential damages," how-
ever, must be deducted the "consequential benefits," that is, the increase
in the value of the other interests of the owner that can be attributed to
the new use to which his former property will be put by the expropriat-
63
ing authority." If the property is taken before compensation is given
or 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 was taken to the time
64
compensation is given or deposited with the court."

In terms of time, what is the point of reference for assessing the

value of a piece of property? The general rule is that the value must
be that as of the time of the filing of the complaint for expropriation.
(Section 4, Rule 6 7 , Rules of Court). T h e filing of the case generally
coincides with the taking. W h e n , however, the filing of the case comes
later than the time of taking and meanwhile the value of the property
has increased because of the use to which the expropriator has put it,
the value is that of the time of the earlier taking. Otherwise the owner
would gain undeserved profit. But if the value increased independently
of what the expropriator did, then the value is that of the later filing of
65
the case." Moreover, between the time payment is due and the actual
payment, legal interest accrues.

This is clearly illustrated in the case of Forfom Development vs.

66
PNR" where the Philippine National Railway had taken possession of
property to be used for the extension of a railway system. No expro-
priation case was filed and no compensation was given while the PNR
continued to negotiate with the owners. Years later, with the owners
still unpaid, they asked for the return of property and damages based on
unrealized profits. Clearly there was taking and it was for public use.
The Court ruled that the proper remedy was for an expropriation court
to appoint assessors to determine the value of the property as of the
time of the P N R ' s entry. The just compensation would be the amount
determined by assessors together with 6% interest.

""Manila Railroad Co. v. Rodriguez, 13 Phil. 347 (1909) and Cases cited supra, n. 25.
""Philippine Railway Co. v. Solon, 13 Phil. 34 (1909); Philippine Railway Co. v. Duran,
33 Phil. 156(1916).
""National Power Corporation v. Court of Appeals, G.R. No. 113194, March 11, 1996.
'""Forfom Development v. PNR, G.R. No. 124795, December 10,2008.
 THE 1987 CONSTITUTION Sec. 9
404
OF THE REPUBLIC OF THE PHILIPPINES

The owners also asked for the surrender to them of whatever rent-
al PNR might have received for the leased portions of the property. But
the property had been leased out by PNR for the purpose of relieving
housing problem along the railway. It was therefore also a public use.
Moreover, the fact that the owners had negotiated with the PNR for
whatever compensation might be due estopped them from asking for
the return of the property which, in any case, had to remain with the
PNR as a matter of public policy.

It has also been held that Article 1250 of the Civil Code govern-
ing adjustments needed due to inflation is a rule on contracts and is not
applicable to the computation of compensation in expropriation even if
67
payment comes long after actual taking."

Just compensation, moreover, is due not to the owner alone. "The

defendants in an expropriation case are not limited to the owners of the
property condemned. They include all other persons o w n i n g , occupy-
ing or claiming to own the property. W h e n a parcel of land is taken by
eminent domain, the owner of the fee is not necessarily the only person
who is entitled to compensation. In the American jurisdiction, the term
' o w n e r ' when employed in statutes relating to eminent domain to desig-
nate the persons who are to be m a d e parties to the proceeding, refer, as
is the rule in respect of those entitled to compensation, to all those who
have lawful interest in the property to be condemned, including a mort-
gagee, a lessee and a vendee in possession under an executory contract.
Every person having an estate or interest at law or in equity in the land
taken is entitled to share in the award. If a person claiming an interest
in the land sought to be c o n d e m n e d is not m a d e a party, he is given the
68
right to intervene and lay claim to the compensation.""

Even before compensation is given, however, entry may be m a d e

upon the property condemned. Statutes existing prior to the 1935 C o n -
stitution prescribed previous payment as a prerequisite to deprivation of
69
property. Article 249 of the old Civil C o d e said:"

No one may be deprived of his property unless it be by com-

petent authority for some purpose of proven public utility and after
payment of the proper compensation.

""Commissioner of Public Highways v. Burgos, 96 SCRA 831 (March 31,1980).

""De Knecht v. Court of Appeals, G.R. Nos. 108015 and 109234, May 20.1998.
""Visayan Refining Co. v. Camus, 40 Phil. 550,557 (1919).
Sec. 9 ART. Ill - BILL OF RIGHTS 405

Unless this requisite has been complied with, it shall be the

duty of the court to protect the owner of such property in its pos-
session or to restore its possession to him, as the case may be.

Section 247 of the C o d e of Civil Procedure contained a similar

provision: "and the j u d g m e n t shall require payment of the sum award-
e d . . . . before the plaintiff can enter upon the ground and appropriate it
70
to the public u s e . " " Section 2 of Act N o . 2 8 2 6 , however, provided for
an instance w h e n immediate possession could be given to the govern-
71
ment before the amount had been fully settled:"

When condemnation proceedings are instituted by or in fa-

vor of the Insular Government ... in any competent court of the
Philippines, the plaintiff shall be entitled to enter immediately
upon the land covered by such proceedings, after depositing with
the provincial treasurer the value of said land in cash, as previously
and promptly determined and fixed by the competent court, which
money the provincial treasurer shall retain subject to the order and
final decision of the c o u r t . . .

A similar right of immediate entry was given to railroad compa-

72
nies by Section 1 of Act 1592." N o w the rule is found in Rule 67 of
the Rules of Court.

For purposes of entry into the property prior to full payment, Sec-
tion 10 of R . A . 7160 requires a deposit with the proper court of at least
fifteen percent (15%) of the fair market value of the property based on
73
the current tax declaration of the property to be expropriated."

There is a special rule, however, in expropriation for infrastruc-

ture projects. Whereas under Rule 67 of the Rules of Court entry may
be made into the property even before payment provided that a deposit
of an amount fixed by the curt is made, under R.A. N o . 8974 the gov-
ernment, in infrastructure projects, must make a direct payment (not
just a deposit under Rule 67) of the proffered value of the property
before it can enter and exercise proprietary rights. Against the objection

"™W.at555.
7I
" W. at 556.
""Manila Railroad Co. v. Paredes, 31 Phil. 118, 127(1915).
""Knecht v. Municipality of Cainta, GJt. No. 145254, July 20, 2006; City of Iloilo v.
Legaspi, GJl. No. 154614, November 25,2004.
 406 T H E 1987 CONSTrrUTION Sec. 9
O F THE REPUBLIC OF T H E PHILIPPINES

that Congress may not amend the Rules of Court, the argument given
was that expropriation involves both substance and procedure and the
1174
substantive aspect is within the reach of the legislature to regulate.

Is the right of immediate entry before payment constitutional? In

15
City of Manila v. Battle," where the government's right of immedi-
ate entry was involved, the Court said that the deposit of the money
with the court was necessary and sufficient to satisfy the compensation
16
requirement of the constitution. In Manila Railroad Co. v. Paredes,"
a railroad company's right of immediate entry was discussed more ex-
tensively and the discussion is applicable to any situation where a right
of immediate entry may be given to the condemnor. Reviewing conflict-
ing American authorities, the Court said that "according to the weight
of authority, if the constitution or statutes do not expressly require it,
actual payment or tender before taking is unnecessary, and it will be
sufficient if a certain and adequate remedy is provided by which the
1177
owner can obtain compensation without any unreasonable delay."
The Court opted for this more liberal view and found that the statute in
question with its provision for deposit of the money with the court satis-
fied constitutional requirements.

During the debates on Article HI, Section 1(1), of the 1935 Consti-
tution, several amendments, the principal tenor of which w a s to d e m a n d
78
"previous compensation," were proposed." Delegate D i e z argued that
the provision was not a novel one in Philippine legal history: it w a s
embodied in Article 349 of the Spanish C o d e , it was embodied in the
Malolos Constitution ("con anticipation a la expropriation"); it was
provided for in an early constitutional draft prepared by Cayetano Arel-
lano ("siendo indemnizado por adelantado el dueno"). Moreover, he
added that it was provided for in the constitutions of m a n y American
states. Such a provision, he said, would prevent the said cases, c o m m o n
in provincial towns, of long delays in the grant of final compensation.
He argued that seldom had there been a real necessity for the state to

""Republic v. Judge Gingoyon, GR. No. 1 6 6 4 2 9 , December 1 9 , 2 0 0 5 .

7 5
" 2 5 Phil. 5 6 6 , 5 7 2 ( 1 9 1 3 ) .
7 6
" 3 1 Phil. 1 1 8 ( 1 9 1 5 ) .
7 7
" W . at 1 3 4 , quoting 1 5 C Y C , 7 7 8 , and at 1 3 4 - 3 5 , quoting LEWIS EMINENT
"OMAIN. Sec. 6 7 8 .
"™3 JOURNAL OF THE ( 1 9 3 5 ) CONSTITUTIONAL CONVENTION. FRANCISCO Ed..
1 0 8 2 , hereinafter cited as JOURNAL.
Sec. 9 ART. m - BILL OF RIGHTS 407

take immediate possession and, in these rare instances of real necessity,

7
exceptions, he said, could be m a d e by law." '

Unconvinced by D i e z ' argument and fearing undue paralyzation

80 81
of governmental efforts," the Convention rejected the amendment."

Another a m e n d m e n t proposed was to require "compensation

previously assessed and tendered." It was thought that while such a
requirement would not unduly paralyze the state (because immediate
82
assessment would be m a d e by the j u d g e and not by commissioners),"
83
it would at least assure private owners prompt payment." The pro-
ponents of this a m e n d m e n t seemed to have had in mind a procedure
not unlike that already found in Section 2 of Act 2826 and in Section
1 of Act 1592 which required, as a pre-requisite for immediate posses-
sion, the deposit of an amount summarily determined by the judge and
84
changeable in its total sum upon appraisal of proper evidence." The
proposed a m e n d m e n t therefore, while it did not improve existing statu-
85
tory law," could have raised the statute to the level of a constitutional
86
precept. But the proposal was rejected by the Convention."

At present, the right to enter into immediate possession of the

property even before the final ascertainment and payment of just com-
pensation is given to any plaintiff. T h e pertinent Rules of Court provi-
87
sion reads:"

Upon the filing of the complaint or at any dme thereafter

the plaintiff shall have the right to take or enter upon the posses-
sion of the real or personal property involved if he deposits with
the National or Provincial Treasurer its value, as provisionally and
promptly ascertained and fixed by the court having jurisdiction of
the proceedings, to be held by such treasurer subject to the orders
and final disposition of the c o u r t . . . .

,m
ld. 1087.
" ld.m
1084.
""Id. 1089.
" ld.a
1084.
,m
ld. 1090.
I184
3 JOURNAL 1094.
,s
" Id. 1089-90.
1
"*/</. 1095.
'""Section 2. Rule 67.
 THE 1987 CONSTITUTION Sec. 9
408
OF THE REPUBLIC OF THE PHILIPPINES

Moreover, P.D. No. 42 removed the discretion of the court in

determining provisional value. What is to be deposited is an amount
equivalent to the assessed value for taxation purposes. No hearing is
required for that purpose. All that is required is notice to the owner of
88
the property sought to be condemned."
The Supreme Court, however, has been careful to point out that
it is not the mere filing of the condemnation proceedings which sus-
pends the condemnee's dominical rights but the deposit of the amount
summarily determined by the court. The reason for this, according to
m9
Tuason v. Court of Appeals, is that both the Bill of Rights and Article
XIII, Section 4 (1935), "prohibit any disturbance of proprietary rights
without coetaneous payment of just indemnity." As the Court said in a
90
subsequent case:"

Definitely, to hold that the mere declaration of an intention

to expropriate, without institudng the corresponding proceeding
therefor before the courts, with assurance of just compensation,
would already preclude the exercise by the owner of his rights of
ownership over the land, or bar the enforcement of any final eject-
ment order that the owner may have obtained against any intruder
into the land, is to sanction an act which is indeed confiscatory and
therefore offensive to the Constitution.

It has been held, however, that where entry is to be m a d e upon

payment of the amount fixed in R D . N o . 42 which governs entry before
actual payment, prior hearing for the purpose of determining neces-
9
sity is not required." ' Reliance on the Transitory Provisions (1973) as
confirmatory of P.D. N o . 4 2 , however, s o m e h o w confused the issue in
this case.

Aside from the assurance of adequate compensation, does the

Constitution also specify the form of compensation? Must compensa-
tion be in cash? The Rules of Court, Rule 6 7 , Section 10, speaks of the
"amount" to be paid as compensation, and Section 9 of the same Rule

"""National Power Corporation v. Judge Jocson, G.R. Nos. 94193-99, February 25, 1992.
Where proper, the legal interest in expropriation cases is 6%. National Power Corporation v. An-
gas,208 SCRA 542(1992).
'""L-18128, December 26, 1961. Also Cuatico v. Court of Appeals, L-20141-42, October
31, 1962; J.M. Tuason Co. v. Cabildo, L-17168, October 31, 1962.
'""Familara v. J. M. Tuason & Co., 49 SCRA 338, 341 (1973).
""San Diego v. Valdellon, 80 SCRA 305 (November 22,1977).
Sec. 9 ART. Ill - BILL OF RIGHTS 409

speaks of "sum or s u m s . " Jurisprudence which treats of compensation

speaks of "price, sums of money, amount of money." O n e writer would
go so far as to say that by existing jurisprudence "just compensation
92
has invariably been construed to mean fair market value in cash.""
Section 80, however, of the Agricultural Land Reform C o d e , R.A. N o .
3844, provided that the condemnee should be paid 10% in cash and the
remaining 9 0 % in bonds issued by the Land Bank. A similar structure
of payment is also provided for in Presidential Decree N o . 27 which
calls for payment in fifteen equal annual installments guaranteed with
shares of stocks in government o w n e d or controlled corporations. Do
these forms of payment satisfy the requirements of just compensation?

No case arose under the 1973 Constitution in which this ques-

tion could have been squarely set before the Court. It should be noted,
however, that, just as the Constitution does not require prior compen-
sation, neither does it specify that compensation be in money. What it
n
does require is just compensation. As Manila Railroad Co. v. Paredes"
says, "it will be sufficient if a certain and adequate remedy is provided
by which the owner can obtain compensation without any unreasonable
delay." And just as entry by the condemnor prior to actual payment
has been upheld as satisfying the constitutional requirement, so also
it would not be unreasonable for a liberal approach to the problem to
allow compensation in the form described above. Indeed, a liberal ap-
proach to the problem seems to be dictated by constitutional policy on
land distribution. Both the Agricultural Land Reform Law and Presi-
dential Decree N o . 27 under the former dispensation were attempts to
solve this problem of land distribution which, in the present history of
the country, has been clamoring for an adequate solution. And now,
Article XIII, Section 8, of the 1987 Constitution, which says "Financial
instruments used as payment for their lands shall be honored as equity
in enterprises of their choice," clearly means that payment need not
be in cash. The Agrarian Reform Law now provides for partial pay-
ment in bonds and it has been ruled that government owned corpora-
tions like the GSIS are obliged to accept at face value Land Bank notes
earlier received as payment for expropriated land. Jurisprudence has
recognized that land owners seldom get what they want for their land,
a situation which can be aggravated should they be compelled to accept

2
' " I I MONTEMAYOR, LABOR, AGRARIAN AND SOCIAL LEGISLATION 419 (1968).
""31 Phil. 118,134(1915).
 THE 1987 CONSTITUTION Sec. 9
410
OF THE REPUBLIC OF THE PHILIPPINES

1 4 195
land Bank notes at discount. " Ramirez v. Court of Appeals' added:
"If landowners are called to sacrifice in the interest of land reform, by
their acceptance of Land Bank bonds in payment of their agricultural
lands, government lending institutions should share in the sacrifice by
accepting the same Land Bank bonds at their face value, as tendered by
landowners in payment of their loans with such government lending in-
stitutions, as long as such Land Bank bonds are derived by landowners
from the sale of their agricultural lands to the Land Bank."

Finally, of interest is the question whether just compensation may

be fixed by legislation. Presidential Decree N o . 42 fixed the just com-
pensation at either the value declared by the owner for tax purposes or
the assessed value, whichever is lower. The decree was issued N o v e m -
ber 9, 1972, two months before the declared ratification of the 1973
1196
Constitution. A number of decisions assumed that the decree became
part of the law of the land via the Transitory Provisions. But in Export
97
Processing Zone v. Dulay," the just compensation provision of P.D. 42
and similar decrees were declared unconstitutional:

The method of ascertaining just compensation under the afo-

recited 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.

Thus, although in an expropriation proceeding the court

technically would still have the power to determine the just com-
pensation for the property, following the applicable decrees, its
task would be relegated to simply stating the lower value of the
property as declared either by the owner or the assessor. As a nec-
essary consequence, it would be useless for the court to appoint
commissioners under Rule 67 of the Rules of Court. Moreover,
the need to satisfy the due process clause in the taking of private
property is seemingly fulfilled since it cannot be said that a judi-
cial proceeding was not had before the actual taking. However,
the strict application of the decrees during the proceedings would

lm
Maddumba v. GSIS, G.R. No. 61293, February 15,1990.
,I95
GJ*. No. 83972, February 14,1991.
""Arce v. Genato, 69 SCRA 544 (February 27, 1976); San Diego v. Valdellon, 80 SCRA
305 (November 22,1977); Municipality of Daet v. Court of Appeals, 93 SCRA 503 (October 18,
1979).
I19,
149 SCRA 305, 311-312 (1987), reiterated in Ignacio v. Guerrero, 150 SCRA 369
(1987), in effect reversing National Housing Authority v. Reyes, 123 SCRA 235.
Sec. 9 ART. i n - BILL OF RIGHTS 411

be nothing short of a mere formality or charade as the court has

only to choose between the valuation of the owner and that of the
assessor, and its choice is always limited to the lower of the two.
The court cannot exercise its discretion or independence in deter-
mining what is just or fair. Even a grade school pupil could substi-
tute for the judge insofar as the determination of constitutional just
compensation is concerned.

However, cases applying P.D. N o . 42 and similar laws which have

98
long b e c o m e final may no longer be opened for enquiry."

Just compensation in land reform.

In a long line of cases, the Court has consistently ruled that com-
pensation for property expropriated must be determined as of the time
the expropriating authority takes possession thereof and not as of the
99
institution of the proceedings." There is, however, a little confusion in
this because the general rule in the Rules of Court for determining "just
compensation" in eminent domain is the value of the property as of the
date of the filing of the complaint. But this is because normally the time
of the taking coincides with the filing of the complaint for expropria-
tion. The general rule, however, admits of an exception. Simply stated,
the exception finds application where the owner would be given undue
incremental advantages arising from the use to which the government
devotes the property expropriated — as for instance, the extension of
a main thoroughfare, which increased the value of the property after it,
1200
was taken but before expropriation petition was filed.

Thus where the government occupied a piece of private land for

the extension of its airport runway but without expropriating it and after
lapse of many years the owner seeks compensation and rental, for pur-
poses of compensation the value of the land should be based on what it
was worth at the time of entry and not its value after many years. Be-
yond the payment for the value of the land the owner is entitled to legal
1201
interest, not rental.

""Republic v. Court of Appeals, 227 SCRA 509 (1993).

""Republic v. Sarabia, G.R. No. 157847, August 25,2005.
I2
°°NPC v, Lucman Ibrahim, G.R. No. 168732, June 29,2007.
I20,
MIAA V. Rodriguez, GJt. No. 16183, February 28,2006.
 412 THE 1987 CONSTITUTION Sec.9
OF THE REPUBLIC OF THE PHILIPPINES

Just compensation also applies in agrarian reform. Section 4, Ar-

ticle XIII of the 1987 Constitution mandates that the redistribution of
agricultural lands shall be "subject to the payment of just compensa-
tion." The deliberations of the 1986 Constitutional Commission on this
subject reveal that just compensation should not do violence to the Bill
of Rights but should also not make an insurmountable obstacle to a suc-
cessful agrarian reform. Hence, the landowners' right to just compensa-
tion should be balanced with the purpose of agrarian reform. It is the
duty of the court to protect the weak and the underprivileged, but this
duty should not be carried out to such an extent as to deny justice to the
landowner whenever truth and justice happen to be on his side.

Since land acquisition under either Presidential Decree N o . 27 and

the Comprehensive Agrarian Reform Law is an extraordinary method
of expropriating private property, the law must be strictly construed.
Faithful compliance with legal provisions especially those which relate
to the procedure for acquisition of expropriated lands, e.g., the need for
1202
notice, should be observed.

As a concept in the Bill of Rights, just compensation is defined as

the fair or market value of the property as between one w h o receives,
and one who desires to sell. R.A. N o . 6657 requires that just compensa-
tion should be the full and fair equivalent of the property taken from its
owner by the expropriator, the equivalent being real, substantial, full
1203
and ample.

The concept of just compensation, however, embraces not only

the correct determination of the amount to be paid to the owners of
the land, but also payment within a reasonable time from its taking.
Without prompt payment, compensation cannot be considered "just"
inasmuch as the property owner is m a d e to suffer the consequences of
being immediately deprived of his land while being m a d e to wait for a
decade or more before actually receiving the compensation.

Put differently, while prompt payment of just compensation re-

quires the immediate deposit and release to the landowner of the provi-
sional compensation as determined by the D A R , it does not end there.
Verily, it also encompasses the payment in full of the just compensation

'Jugalbot v. CA, GR. No. 170346, March 12,2007.

'Land Bank v. Domingo, GR. No. 168533, February 4,2008.
Sec. 9 ART. IU - BILL OF RIGHTS 413

to the landholders as finally determined by the courts. T h u s , it cannot

be said that there is already prompt payment of just compensation when
1204
there is only a partial payment thereof.

5. J u s t C o m p e n s a t i o n i n t h e 1987 C o n s t i t u t i o n .

T h e discussions of just compensation by the 1986 Constitutional

Commission reveal both adherence to traditional jurisprudence on the
subject and adjustment to the demands of social justice.

T h e subject was first discussed during the deliberations on the

Bill of Rights provision. The Commission saw just compensation as
an amount equal to the market value of the property: "that is, the price
which the property will c o m m a n d if the seller is not bound to sell and
1205
the buyer is not bound to buy." W h e n the question was asked what ef-
fect a statutory determination of the amount of just compensation would
have, Commissioner Bernas answered that any statutory determination
of just compensation would be "only a prima facie assessment. In the
end, the final determination of whether or not the compensation is just
will have to be m a d e by m e court." He added that any law fixing the
amount that would constitute just compensation would not be binding
on the courts "because it is a question of fact which is always subject to
1206
review by the courts." A n d no one contradicted him when he said: "I
think I will be speaking for the [Bill of Rights] Committee when I say
that whatever determination there may be in a decree or law of what
1207
just compensation is, is always subject to review by the courts." (As
1208
already seen, this view has been affirmed by the Court. ) Thus, Bemas
resisted as unnecessary an amendment which sought to add the phrase
1209
"as determined by the proper court."

The subject of just compensation again came up for discussion

during the deliberations on land reform. Article XIII, Section 4 dictates
that the redistribution of agricultural lands shall be "subject to the pay-
ment of just compensation." With just compensation seen as equivalent
to the market value of the property, the requirement of payment of just

l204
Land Bank v. Spouses Orilla, G.R. No. 157206, June 27,2008.
'""Commissioner Bemas, answering interpellation, I RECORD 683.
"*ld.
""Id. at 686.
'"•Export Processing Zone v. Dulay, 149 SCRA 305,311-312 (1987).
1209
I RECORD at 723-4.
 THE 1987 CONSTITUTION Sec. 9
414
OF THE REPUBLIC OF THE PHILIPPINES

compensation was seen by some sectors as an insurmountable obstacle

to the achievement of the goals of land reform because the intended
beneficiaries would not be able to afford the payment of market value.
The Commission's understanding, however, was that full compensation
need not come from the beneficiary. Land reform could require that the
state step in to make up the difference between what the farmer can af-
1210
ford and what is due to the landowner. Commissioner B e m a s pointed
out that this would fine tune the meaning of just compensation in order
to "give substance and meaning to the general concept of social j u s -
tice as an attempt to enable the law to make things more affordable for
12
those who cannot afford." " However, an explicit constitutional provi-
sion proposed by Commissioner B e m a s authorizing state subsidy for
land reform was resisted. Commissioner Ople argued: "I think I m a d e
my meaning clear that subsidies may be necessary to m a k e up the dif-
ference in price so that the landowner may be justly compensated. But,
at the same time, subsidy must always be a last resort. And I think the
less that is said about it the better, so that it does not b e c o m e an open
invitation in the future to potential confabulators. We k n o w all about
some of these scandals in land pricing. It is very easy for a government
bureaucrat and a landowner in M i n d a n a o to fix a price so that both of
1212
them will gain at the expense of the taxpayer." Yielding to O p l e ' s
argument, Bemas withdrew his proposal adding: "I also want to avoid
a situation where we m a k e acquisition of land so easy that, in effect, it
1213
may encourage the inefficient use of resources."

It is arguable, however, as will be pointed out under Article XIII,

Section 4, that just compensation in land reform, since expropriation in
land reform is both an eminent domain act and a police p o w e r act, can
be made less than market value.

Another matter taken up by the C o m m i s s i o n w a s the proposal to

require "prior payment of just compensation" in land reform expropria-
tions. Commissioner Regalado proposed the a m e n d m e n t as a measure
to protect the interest of landowners. R e g a l a d o ' s explanation, however,
revealed that all he wanted was what already obtains in expropriation
laws which requires a court deposit prior to entry into the c o n d e m n e d

,2,0
III RECORD 17.
I2
"II RECORD 647.
,3I2
UI RECORD at 19
12I3
/<J. at 20.
Sec. 9 ART. Ill - BILL OF RIGHTS 415

property. But Regalado was satisfied when this meaning was accepted
by the Commission and he did not insist on an explicit constitutional
1214
provision.

6. Expropriation for resale to the landless.

Although there has been clear and constant affirmation in Phil-

ippine jurisprudence that the power of eminent domain is inherent in
government a n d , h e n c e , need not be specifically granted by the Consti-
tution, redistribution of land in the Philippines is such a matter of great
urgency that both the 1935 and the 1973 Constitution already saw fit to
1215
formulate a special provision on expropriation of land for resale. The
extent of this power, as presently understood, took a little while to get
accepted.

T h e significance of expropriation of large landed estates may be

gathered from the role land tenure has held in the political and social
history of the country. O n e of the immediate causes of the revolt against
Spain were the abuses connected with extensive land holdings of vari-
ous religious corporations. So intense was the feeling of the Filipino
leadership in this regard that one article of the Malolos Constitution
said: " ... all the buildings, properties, and other belongings possessed
by the religious corporations in these islands will be understood as re-
1216
stored to the Filipino government." After the transfer of sovereignty
over the islands by the Treaty of Paris, this demand of the Filipino lead-
ership was not forgotten and the American administration was confront-
ed with the problem of winning Filipino cooperation and at the same
time reconciling Filipino demands with the terms of the Treaty of Paris
which protected religious and property rights of persons and corpora-
1217
tions. Confiscation of friar lands was out of the question. The Schur-
man Commission, sent by President Mckinley to survey the Philippine
situation, suggested that the purchase of the friar lands "would have
good results" and recommended "early consideration of this solution
1218
by the government hereafter to be established in the Archipelago."

l2,4
/d.at 18-21.
l2,5
Article Xin, Section 4 ( 1 9 3 5 ) and Article XIV, Section 13 ( 1 9 7 3 ) .
12
"Unnumbered last article of the Malolos Constitution.
""See FAHRELL, BACKGROUND OF THE 1902 TAFT MISSION TO ROME (parts 1-2), 3 6 CATHOLIC
HISTORICAL REVIEW I ( 1 9 5 0 ) , 37 CATHOLIC HISTORICAL REVIEW I (1951).
m
»I REPORT OF THE PHILIPPINE COMMISSION TO THE PRESIDENT 131 ( 1 9 0 1 ) .
 THE 1987 CONSTITUTION Sec. 9
416
OF THE REPUBLIC OF THE PHILIPPINES

The Taft Commission which followed up the work of the Schurman

Commission renewed the same recommendation and more specifically
asked for "authority to issue bonds with which to buy up the agricul-
tural holdings and other property of the religious orders . . . " The Taft
Commission moreover believed itself in a position to say that there was
a willingness on the part of ecclesiastical authorities "to negotiate and
1219
part with all the land to the government at reasonable prices."

Taft's belief that religious authorities were willing to negotiate the

sale of religious property was subsequently borne out by history. The
problem thereby was removed from the strict ambit of eminent domain
powers and was treated as a diplomatic challenge. Taft himself headed
a diplomatic mission to R o m e in 1902 and, within two and a half years,
there was effected a purchase of nearly all the lands in question for the
amount of a little over seven million dollars, which was raised by the
1220
sale of bonds. In a large measure, therefore, the friar lands question
was solved without the need of the exercise of eminent domain p o w e r s .

The religious corporations, however, were not the only holders of

large landed estates. T h e encomienda system brought to the Philippines
by the Spaniards created a big landlord class formed from aristocratic
1221
families who had served Spanish officialdom well. A n d it is not dis-
puted that the communist uprisings of the 1930's arose largely out of
discontent over the inequitable distribution of land. T h e speeches and
publications of socialist leaders which b e c a m e the basis of prosecutions
1222
for seditious utterances in the 1930's sufficiently illustrate this fact.
And the continuing effort of the government to r e m e d y this situation
has not yet totally resolved the problem. A disenchanted peasantry re-
mains even today a major source of recruitment for the armed forces of
1223
c o m m u n i s m in the Philippines.

1219
REPORT OF THE UNITED STATES PHILIPPINE COMMISSION TO THE SECRE-
TARY OF WAR 24-5 (1901).
12I0
P.C. JESSUP, EUHU ROOT 367 (1938).
122
"The Spaniards took to the Philippines the encomienda system which they used in their
American possessions. A large part of the land, and the best at that, was thus handed over with its
natives to the ownership of the Catholic Church or to Spanish or half-caste families, who were
termed Caciques. The natives who cultivated the encomienaas were not hired laborers, but rem-
nants of small holders or inquilinos." ROBE 329 (1954), quoted in 2 G. MYRDAL, ASM* DRAMA 1036,
n. 2 (1968) See Report of the Committee on Nationalization and Preservation of Lands, 2 ARUEGO,
THE FRAMING OF THE PHILIPPINE CONSTITUTION 971 -2 (1937), [hereinafter cited as ARGUEGO.]
l222
Section 4, supra.
II23
See 1 G. MYRDAL, ASIAN DRAMA 388-389 (1968)
Sec. 9 A R T . Ill - BILL O F R I G H T S 417

During the debates on Article XIII, Section 4 (1935), authorizing

the expropriation of lands for subdivision and resale, Delegate Araneta
raised the question whether the provision was at all necessary consid-
ering the state's inherent power of eminent domain. In reply, Delegate
Laurel recalled that Secretary Elihu Root had expressed the opinion that
the expropriation and redistribution of lands for the purpose of preserv-
ing peace and order was a public enough purpose to c o m e under the
right of eminent domain; but Governor Taft, according to Laurel, was of
1224
the contrary opinion. Whether or not Laurel accurately reported the
opinions of Root and Taft is not important for the purpose of this essay.
It should also be recalled that religious authorities were not unwilling to
sell. Laurel himself did not give a categorical answer to Araneta's ques-
tion; but implicit in the former's reply was the significant suggestion
that Article XIII, Section 4 (1935), would remove whatever doubt Gov-
ernor Taft might have succeeded in raising, if, indeed, he entertained the
doubt attributed to h i m .

A fuller explanation of the purpose of Article XIII, Section 4

(1935), m a y be found in a speech of Delegate C u a d e m o , the author and
sponsor of the provision. In a speech before the Convention entitled
1225
"Large Estates and Trusts in Perpetuity," he said:

There has been an impairment of public tranquillity, and to

be sure a continuous impairment of it, because of the existence
of these conflicts. In our folklore the oppression and exploitation
of the tenants are vividly referred to; their sufferings at the hand
of the landlords are emotionally pictured in our drama; and even
in the native movies and talkies of today, this theme of economic
slavery has been touched upon. In official documents these same
conflicts are narrated and exhaustively explained as a threat to so-
cial order and stability.
But we should go to Rizal for inspiration and illumination
in this problem of the conflicts between landlords and tenants.
The national hero and his family were persecuted because of these
same conflicts in Calamba, and Rizal himself met a martyr's death
because of his espousal of the cause of the tenant class, because
he would not close his eyes to oppression and persecution with his
own people as victims.

1 2 M
3 J O U R N A L 1086.
n2i
Quoted in Guido v. Rural Progress Administration, 84 Phil. 847, 850 (1949) and 2
ARUEGO, 610-11.
 THE 1987 CONSTITUTION Sec. 9
418
OF THE REPUBLIC OF THE PHILIPPINES

I ask you, gentlemen of the Convention, knowing this as you

do and feeling deeply as you must feel over the immolation of the
hero's life, would you not write in the Constitution the provision
on large estates and trusts in perpetuity, so that you would be the
very instrument of Providence to complete the labors of Rizal to
insure domestic tranquility for the masses of our people?
If we are to be true to our trust, if it is our purpose in drafting
our constitution to insure domestic tranquility and to provide for
the well-being of our people, we cannot, we must not fail to pro-
hibit the ownership of large estates, to make it the duty of the gov-
ernment to break up existing large estates, and to provide for their
acquisition by purchase or through expropriation and sale to their
occupants, as has been provided in the Constitution of Mexico and
Yugoslavia.

No amendment was offered and no debate ensued. T h e resolution

was readily and totally approved by the Convention. Delegate A r u e g o ,
in his authoritative account of the Convention debates, has offered the
interpretation that the purpose of C u a d e r n o ' s recommendation was to
"remove all doubts as to the power of the government to expropriate the
then existing landed estates to be distributed at cost to the tenant-dwell-
ers thereof in the event that in the future it would d e e m such expropria-
1226
tion necessary to the solution of agrarian problems therein [sic]."

T h e resolution of the doubt mentioned by A r u e g o and alluded to

by Laurel hinged on an understanding of the concept of "public u s e . "
Strangely enough, however, almost nothing w a s said about the concept
in the abstract. The statement was m a d e that "public u s e " was an elastic
concept that could mean "public utility" or "public necessity." It w a s
also said that an elaborate irrigation system undertaken by the govern-
ment to benefit large tracts of arid private land would still satisfy the
1227
flexible requirement of "public u s e . " B e y o n d this, nothing else w a s
said on the concept. A n d , certainly, there was no direct attempt to link
expropriation and resale of land with the concept of "public u s e . "

The most interesting eminent d o m a i n decisions under the 1935

Constitution were those dealing with expropriation under Article XIII,
Section 4. T h e first significant decision which put the article to use was

1 2 2 6
2 ARUEGO 6 1 1 .
I 2 2 7
3 J O U R N A L 1085.
Sec. 9 ART. m - BILL OF RIGHTS 419

1228
Guido v. Rural Progress Administration. Under authority of this con-
stitutional provision the National Assembly had passed Commonwealth
1229
Act N o . 5 3 9 . Sections 1 and 2 of the statute read:

Section 1. The President of the Philippines is authorized to

acquire private lands or any interest therein, through purchase or
expropriation, and to subdivide the same into home lots or small
farms for resale at reasonable prices and under such conditions as
he may fix to their bona fide tenants or occupants or to private indi-
viduals who will work the lands themselves and who are qualified
to acquire and own lands in the Philippines.

Section 2. The President may designate any department, bu-

reau, office or instrumentality of the National Government, or he
may organize a new agency to carry out the objectives of this Act.
For this purpose, the agency so created or designated shall be con-
sidered a public corporation.

Defendant Rural Progress Administration was the administrative

agency charged with implementing the law. T h e law was now being in-
voked to justify the purchase of two adjoining lots belonging to plaintiff
and having a combined area of 22,655 square meters. The Court was
faced with a fundamental question: What " l a n d s " did Article XIII, Sec-
230
tion 4 have in view? The Court ruminated thus:'

There are indeed powerful considerations, aside from the

intrinsic meaning of section 4 of Article XIII of the Constitution,
for interpreting Act No. 539 in a restrictive sense. Carried to ex-
tremes, this Act would be subversive of the Philippine political and
social structure. It would be in derogation of individual rights and
the time-honored constitutional guarantee that no private property
shall be taken for private use without due process of law....
Hand in hand with the announced principle, herein invoked,
that "the promotion of social justice to insure the well-being and
economic security of all the people should be the concern of the
1231
state," is a declaration, with which the former should be rec-
1232
onciled, that "the Philippines is a Republican state" created to

1 2 a
8 4 Phil. 847 (1949).
m
> ld. at 849.
,U0
W . at 850-52.
'"'Article D., Section 5,1935 Philippine Constitution.
1232
Article Q, Section 1,1935 Philippine Constitution.
 420 THE 1987 CONSTITUTION Sec. 9
OF THE REPUBLIC OF THE PHILIPPINES

secure to the Filipino people "the blessings of independence under

12
a regime of justice, liberty and democracy." " Democracy, as a
way of life enshrined in the Constitution, embraces as its necessary
components freedom of conscience, freedom of expression, and
freedom in the pursuit of happiness. Along with these freedoms
are included economic freedom and freedom of enterprise within
reasonable bounds and under proper control. In paving the way
for the breaking up of existing large estates, trusts in perpetuity,
feudalism, and their concomitant evils, the Constitution did not
propose to destroy or undermine property rights, or to advocate
equal distribution of wealth, or to authorize the taking of what is
in excess of one's personal needs and the giving of it to another.
Evincing much concern for the protection of property, the Consti-
tution distinctly recognizes the preferred position which real estate
has occupied in law for ages. ...

The promotion of social justice ordained by the Constitution

does not supply paramount basis for untrammeled expropriation
of private land by the Rural Progress Administration or any other
government instrumentality. Social justice does not champion di-
vision of property or equality of economic status; what it and the
Constitution do guarantee are equality of opportunity, equality of
political rights, equality before the law, equality between values
given and received, and equitable sharing of the social and mate-
rial goods on the basis of efforts exerted in their production....

What then must be the guiding principle in interpreting Article

XIII, Section 4 (1935)? Or, to use the language of the Court, what is its
"intrinsic meaning"? It is that the constitutional provision adds nothing
beyond a clarification of the scope of the inherent p o w e r of eminent
1234
domain:

In reality, section 4 of Article XIII of the Constitution is in

harmony with the Bill of Rights. Without that provision the right
of eminent domain, inherent in the government, may be exercised
to acquire large tracts of lands as a means reasonably calculated to
solve serious economic and social problem [sic]. As Mr. Aruego
says, "the primary reason" for Mr. Cuaderno's recommendation
was "to remove all doubts as to the power of the government to
expropriate the then existing landed estates to be distributed at

1233
'Preamble, 1935 Philippine Constitution.
'84 Phil, at 852-3. Quotation from ARUEGO is from 2 ARUEGO 6 1 1 .
Sec. 9 ART. i n - BILL OF RIGHTS 421

cost to the tenant-dwellers thereof in the event that in the future it

would deem such expropriation necessary to the solution of agrar-
ian problems therein."

H e n c e , the size of the land expropriated, the large number of peo-

ple benefited, and the extent of the social and economic reform secured
by the condemnation must be such as to clothe the expropriation with
the character of public interest and public use. Such requirement is sat-
isfied when the lands expropriated are "large estates, trusts in perpetu-
1235
ity, and land that embraces a whole town or city." Thus, the Court
1236
concluded:

The condemnation of a small property in behalf of 10, 20

or 50 persons and their families does not inure to the benefit of
the public to a degree sufficient to give the use public character.
The expropriation proceedings at bar have been instituted for the
economic relief of a few families devoid of any consideration of
public health, public peace and order, or other public advantage.
What is proposed to be done is to take plaintiff's property, which,
for all we know she acquired by sweat and sacrifice for her fam-
ily's security, and sell it at cost to a few lessees who refuse to pay
the stipulated rent or leave the premises.

The Guido ruling was adhered to closely by the cases that im-
1237
mediately followed. Urban Estates, Inc. v. Montesa summed up the
1238
doctrine thus:

In brief, the Constitution contemplates large-scale purchases

or condemnation of lands with a view to agrarian reforms and the
alleviation of acute housing shortage. These are vast social prob-
lems with which the Nation is vitally concerned and the solution
of which redound to the common weal. Condemnation of private
lands in a makeshift or piecemeal fashion, random taking of a
small lot here and a small lot there to accommodate a few tenants
or squatters is a different thing. This is true, be the land urban or
agricultural. The first sacrifices the rights and interests of one or a

l235
8 4 Phil, at 853.
,U
*W. at 854.
'"'Commonwealth v. De Bona, 85 Phil. 51 (1949); City of Manila v. Arellano Law Col-
leges, 85 Phil. 663 (1950); Rural Progress Administration v. Guzman, 87 Phil. 176 (1950); Pang-
ilinan v. Pefla, 89 Phil. 122 (1951); Republic v. Samia, 89 Phil. 483 (1951).
,J3
*88 Phil. 348,352 (1951).
 T H E 1987 CONSTITUTION Sec. 9
422
O F T H E REPUBLIC O F T H E PHILIPPINES

few for the good of all; the second is deprivation of a citizen of his
property for the convenience of another citizen or a few other citi-
zens without perceptible benefit to the public. The first carries the
connotation of public use; the last follows along the lines of a faith
or ideology alien to the institution of property and the economic
and social systems consecrated in the Constitution and embraced
by the great majority of the Filipino people.

Clearly, then, the Guido and subsequent rulings equated "public

use" with "public welfare." But does this enlarged concept of "public
use," when applied to expropriation of land, require as a constant factor
that the land be immense in size, or is it possible for "public welfare" to
be served by the expropriation of a small tract of land?

The answer to this question given by Rural Progress Administra-

1 9
tion v. Reyes " was that the size of the land need not be a constant fac-
tor. Involved in this case was a mere t w o hectare lot, of which m o r e than
a half were fishponds. T h e lot formed a part of a bigger area occupied
from time immemorial by various individuals. T h e expropriation was
made in favor of four families. Justice Pablo penned the decision; two
other Justices concurred; and two m o r e concurred in the result. T h e
thrust of Justice Pablo's opinion was away from the land-size n o r m set
by Guido. Although the small lot was considered by the Court to be part
of a bigger area of friar land, the emphasis w a s not on the size of the
land but on the requirements of social amelioration.

Within two years, however, the Reyes decision w a s rejected in

1240
Republic v. Baylosis. At issue was the expropriation of 67 hectares
of agricultural land consisting of several smaller lots belonging to vari-
ous owners. T h e land had formerly formed part of a huge estate. T h e
tenants and occupants of the land for w h o m expropriation proceedings
had been instituted had been, by themselves and by their ancestors, o c -
cupying, clearing and cultivating the land for m a n y years. It was also
claimed that the situation was far from peaceful because of misunder-
standings between landlords and tenants. T h e S u p r e m e Court, reversing
a lower court ruling in favor of expropriation, returned to the Guido rule
that "Section 4, Article XIII of the Constitution had reference only to

2M
L-14703. October 8,1953. Unpublished but summarized in 93 Phil. 1116; FERNANDO, A
THIRD YEAR OF CONSTITUTIONAL LAW. 29 PHTL.. LJ. 1,51 (1954)
,240
9 6 Phil. 461 (1955).
Sec. 9 ART. Ill - BILL OF RIGHTS 423

large estates, trusts in perpetuity, and lands that embrace a whole town
1241
or a large portion of a town or city." It rejected the argument that
"as long as any land formerly formed part of a landed or large estate,
it may, regardless of its present area, be still subject to expropriation
1242
under Section 4, Article XIII." Finally, the Court made explicit its
1243
abandonment of the Reyes decision and its return to the Guido ruling.

In a well-reasoned dissent, Justice J.B.L. Reyes, after criticizing

the reasoning of the majority as an unwarranted entry into the area of
" w i s d o m " of expropriation policies, accused the Court of misconstru-
ing the real meaning of Article XIII, Section 4 . The majority, he said,
m a d e t w o erroneous assumptions: (1) that "Section 4, Article XIII, is
an end in itself, when actually it is but one of the means chosen by
the framers of the Constitution to attain social justice, amelioration and
tranquility"; (2) "that the constitutional policy is attained by the break-
ing up of landed estates into smaller portions, entirely disregarding the
constitutional direction that the lands condemned are to be 'subdivided
into small lots and conveyed at cost to individuals.' i.e., the tenants and
1244
occupants." F r o m the premises that expropriation, subdivision and
resale to tenants and occupants were inseparable components of the
constitutional scheme and that the constitutional provision obviously
had reference only to large estates in existence at the time of the adop-
tion of the Constitution in 1935, Justice J.B.L. Reyes concluded that
any landed estate in existence in 1935 "became liable to condemnation
for the benefit of the tenants, and any subsequent acquirer of these lands
1245
took them subject to that burden or infirmity."

After the Baylosis case, decisions closely followed the lines drawn
1246
in Guido. In National Resettlement and Rehabilitation Administra-
12
tion [NARRAJ v. Francisco, " N A R R A appealed to the statement in
Ci'fy of Manila v. Chinese Community of Manila™* to the effect that,

,24l
W.at479.
,242
W.
,243
W. at 480.
I244
W. at 502.
1245
W. at 502-3.
,24
*E.g., Republic v. Prieto, L-17946, April 30, 1963; Republic v. Caro, L-18042, April
30,1963; Republic v. Samia, L-17569, May 13, 1963; Bulacan v. B.E. San Diego, Inc., L-15946,
February 28, 1964; Republic v. Manotok Realty, Inc., L-20204, July 21, 1964; Gabriel v. Reyes,
L-22305, April 30,1966.
I247
109 Phil. 764,768 (1960).
I2
"40 Phil. 349,364-65 (1919).
 THE 1987 CONSTITUTION Sec. 9
424
OF THE REPUBLIC OF THE PHILIPPINES

where the legislature itself has determined the necessity of the expro-
priation, the Court has no power to interfere. The Court, however, gave
the cryptic reply that "the doctrine thus invoked [was] entirely inappro-
priate, for the question now before the Court is not the necessity of the
expropriation but the power or authority to expropriate under Article
XIII, Section 4 of the Constitution. The validity of the statute directing
1249
the expropriation is certainly a judicial question."

This quotation from N A R R A in effect excluded all consideration

of questions of necessity whenever the "area test" prescribed in Guido
had not been followed. Thus, Justice J.B.L. Reyes was correct when he
said in Baylosis that Article XIII, Section 4 (1935) had b e c o m e an end
in itself for the Court. The provision had become a symbol of what the
Guido case called the "preferred position" of land. While "public u s e "
might indeed be equated with "public welfare," the expropriation of
smaller areas of land was, by G u i d o ' s interpretation of the Constitution,
conclusively not for the public welfare. T h u s , what had originally been
intended as a clarification of the concept of "public u s e " received an
interpretation which "froze" the concept when applied to land. It was
an interpretation which did a disservice to the flexibility of the concept
of "public use."

On the eve of the birth of the 1973 Constitution, J.M. Tuason and
1 0
Co.,Inc. v. Land Tenure Administration " attempted to restore flexibility
to the 1935 constitutional provision. It revived the neglected argument
of Justice J.B.L. Reyes found in his dissent in Baylosis and rejected the
"undue stress on property rights" found in Justice M o n t e m a y o r ' s argu-
ment in Guido. Emphasis was placed on the fact that the Constitution
speaks of "lands" and not "landed estates". T h e "area test" was rejected
1251
in favor of the state's "quest for social justice and peace." Justice
Barredo, in fact, in his concurring opinion espoused a broader p o w e r
for Congress: "I take it that the constitutional provision itself declares
the public objective, purpose or use of the expropriation contemplated,
which is the amelioration of the long standing socio-agrarian conditions
endangering the very ideology on which our government and way of
life rest, hence, it should follow that as long as a congressional legisla-
tion declares that condemnation of a particular land is for the specific

l24
'109 Phil. 768-9.
,250
31 SCRA 413 (1970).
'"'Id. at 427-8, quoting from the dissent of J.B.L Reyes in Baylosis.
Sec. 9 ART. Ill - BILL OF RIGHTS 425

purpose stated in the Constitution, it is not for the judiciary to enquire as

1252
to whether or not the taking of such land is for public use.

Unfortunately, however, the majority opinion in JM. Tuason

penned by Justice Fernando cannot be considered a definitive rejection
of the main thrust of Guido. In the first place, what was in issue in Gui-
do was the scope of the expropriatory powers delegated to the President
by statute, whereas, in JM. Tuason, the challenge was addressed to the
validity of a statute specifically m a d e applicable to a particular piece
of land. Secondly, in effect, only four Justices concurred in Fernando's
opinion; the seven others either dissented or for procedural reasons,
concurred merely in the result.

After the 1973 Constitution took effect, what was the force of the
Guido-Baylosis rule? It is submitted that the Femando-Barredo opinion
set out in JM. Tuason b e c a m e the controlling doctrine. The insistence
of the Guido-Baylosis line of decisions on making the size of the land to
be expropriated the controlling factor for legitimating expropriation for
resale could not be justified in the light of new provisions found in the
1973 Constitution. In relation to Article II, Section 6 (1973), the power
of eminent domain must be recognized as the most effective instru-
ment to "equitably diffuse property ownership" and in relation to Ar-
ticle XIV, Section 12 (1973), the power of eminent domain could most
effectively serve to "implement an agrarian reform program aimed at
emancipating the tenant from the bondage of the soil." And the problem
of inequitable distribution of land in the Philippines under the 1973
Constitution did not consist merely in the existence of single tracts of
3
land that, to paraphrase Guido,'" embraced whole towns or cities and
belonged to one owner. The problem also consisted in extensive land
holdings by single owners, although these land holdings might not be
all in one piece. Hence, although Guido might have been correct in say-
ing that this latter type of extensive land holdings was not the "lands"
contemplated by the 1935 Constitution, this type of land holdings came
within the ambit of the 1973 Constitution. By then there were very few,
if indeed there still were at all single owner land holdings that embraced
whole tdwns and cities.

xm
ld. at 442-3.
3
'" 84 Phil, at 853.
 THE 1987 CONSTITUTION Sec. 9
426
OF THE REPUBLIC OF THE PHILIPPINES

When expropriation for resale to farmers was discussed in the

Constitutional Commission of 1986, nobody even adverted to the Gui-
do-Baylosis rule. It was then taken for granted that expropriation for
resale for the purpose of alleviating the condition of landless farmers is
1254
a state duty in social justice.

7. J u d i c i a l review.
The many cases decided by the Supreme Court involving the va-
lidity of acts of expropriation clearly attest to the fact that the exercise
of the power of eminent domain is subject to judicial review. The fol-
lowing aspects of the exercise of the power have been subjected to ju-
dicial scrutiny: (1) the adequacy of the compensation, (2) the necessity
of the taking, and (3) the "public u s e " character of the purpose of the
taking.

The propriety of judicial review of the valuation of the property

made by property assessors has never been seriously questioned. A n d ,
as already discussed above, even when there is a statutory determina-
tion of the just compensation d u e , the courts may still review the ad-
equacy of even such determination.

The procedure in expropriation cases set d o w n in the C o d e of Civ-

il Procedure, which has since been superseded by the Rules of Court,
provided for the judicial appointment of three commissioners to view
the premises and assess the damages to be paid for the condemnation.
The commissioners m a d e their report to the court, and Section 245 of
the Code expressly declared that " n o n e of their proceedings shall be
effectual to bind the property or the parties until the court shall have ac-
cepted their report and rendered j u d g m e n t in accordance with their rec-
255
ommendations." T h u s , in the language of City of Manila v. Estrada,*
"There is ample authority in the statute to authorize the courts to change
or modify the report of the commissioners by increasing or decreasing
the amount of the award, if the facts of the case will justify such change
or modifications." And while this statement of the Court is merely an
affirmation of the statutory authority to review the valuation m a d e by
assessors, it is nonetheless constitutionally significant as an affirmation
that judicial review of administrative valuation is not incompatible with

l254
More on this will be said in the discussion of Article XIII, Section 4
l255
25 Phil. 208,242 (1913).
Sec. 9 ART. i n - BILL OF RIGHTS 427

the fact that the power of eminent domain is lodged with the legislative
and executive departments. That the courts can review the report of
commissioners is n o w established doctrine. Since, however, the pow-
ers given to the commissioners are discretionary, their task is not the
"mere mechanical work of taking down the evidence presented before
them," and their valuation can not be reversed by courts unless "palpa-
1256
bly excessive or inadequate." Moreover, trial by commissioners is a
1257
substantive right which a j u d g e may not dispense with.

A subtler question that has c o m e up is whether the Court can re-

view a legislative or administrative j u d g m e n t that a particular " u s e " to
which the property will be put is a public use or a public necessity. In
an obiter dictum in City of Manila v. Chinese Community, the Supreme
1258
Court m a d e this statement: "It cannot be denied, if the legislature
under proper authority should grant the expropriation of a certain or
particular parcel of land for some specified public purpose, that the
courts would be without jurisdiction to inquire into the purpose of the
legislation." This statement, however, was immediately contradicted by
a quotation m a d e by the Court from the American case of Traction Co.
v. Mining C o . : 1259

It is erroneous to suppose that the legislature of the United

States is beyond the control of courts in exercising the power of
eminent domain, either as to the nature of the use or the necessity
to the use of any particular property. For if the use be not public or
no necessity for taking exists, the legislature cannot authorize the
taking of private property against the will of the owner, notwith-
standing compensation may be required.

What then is the controlling doctrine?

W h e n expropriation is done not directly by the legislative authori-
ty but by another government agency or by a municipal corporation and
in virtue of an authorizing statute which neither specifies the purpose of
the taking nor the property to be taken, there should be no doubt but that
the courts must come in to perform its duty of enforcing the provision
of the Constitution. The Court can look into the necessity of the taking,

'"•Philippine Railway Co. v. Campbell, 13 Phil. 34,37, 38 (1917).

l257
Manila Electric Co. v. Pineda, 206 SCRA 196,204 (1992).
1
"MO Phil. 349,364-65 (1919).
,M,
1 9 6 U.S. 239 (1904), quoted in 40 Phil, at 362.
 THE 1987 CONSTITUTION Sec. 9
428
OF THE REPUBLIC OF THE PHILIPPINES

as it did in the Manila Chinese Community case and again in Republic

160
v. La Orden de PP. Benedictinos de Filipinos: Both cases involved
expropriation that was clearly for a public purpose, the construction
of a public road. The former was an attempt by the City of Manila to
expropriate in virtue of a general authorization in its charter, and the
latter was an attempt by the Philippine Government by authority of the
President pursuant to the general authority given by Section 64(b) of
the Revised Administrative Code. In the Chinese Community case the
2 1
Supreme Court disallowed the expropriation arguing in part:' * "In the
present case, even granting a necessity exists for the opening of the
street in question, the record contains no proof of the necessity of open-
ing the same through the cemetery. The record shows that adjoining and
adjacent lands have been offered to the city free of charge, which will
answer every purpose of the plaintiff." And in the PP. Benedictinos case
262
the Court ruled:'

It is the rule in this jurisdiction that private property may be

expropriated for public use and upon payment of just compensa-
tion; that condemnation of private property is justified only if it
is for the public good and there is a genuine necessity therefor
of a public character. Consequently, the courts have the power to
inquire into the legality of the exercise of the right of eminent do-
main and to determine whether or not there is a genuine necessity
therefor.

The necessity of the taking, according to the Court, was a question

1263
of fact which must be established by proper evidence. T h e need for
judicial review is even more were the legislative act w a s authored not
by a legislative body but by a President exercising legislative authori-
264
ty.'
n6>
This principle was put in doubt in Arce v. Genato but was once
1266
again forcefully recognized in De Knecht v. Bautista w h e n the Court

IM0
1 SCRA 646 (1961).
IJ6
'40Phil.at371.
IMJ
1 SCRA at 649.
,M2
Id.
,264
Manotok v. National Housing Authority, 150 SCRA 89 (1987).
I263
69 SCRA 544 (February 27, 1976).
I2&6
100 SCRA 660,666 (October 30, 1980). Later, however, recognizing changed circum-
stances, the Court upheld the validity of a law reviving the Rein and del Pan plan. Republic v. De
Knecht, GR. No. 87335, February 12,1990.
Sec. 9 ART. Ill - BILL OF RIGHTS 429

ruled that there was no real necessity for Epifanio de los Santos to be
extended to R o x a s Boulevard through Rein and del Pan streets instead
of through Cuneta Avenue. A n d as Municipality ofMeycauayan v. In-
12
termediate Court of Appeals " put it: " A s early as City of Manila v.
Chinese Community of Manila (40 Phil. 349), this Court has held that
the foundation of the right to exercise the power of eminent domain is
genuine necessity and that necessity must be of a public character. Con-
demnation of private property is justified only if it is for the public good
and there is a genuine necessity of a public character. Consequently, the
courts have the p o w e r to inquire into the legality of the exercise of the
right of eminent domain and to determine whether there is a genuine
necessity therefore."

Likewise, the courts can look into the public character of the pur-
pose of the taking by government agencies other than the legislature.
The series of cases involving expropriation of land for resale were for
the most part a discussion of whether the taking, exercised by agencies
like the Rural Progress Administration or the Land Tenure Administra-
tion, satisfied the requirement of public use.

W h e n , however, the legislature itself specifies the purpose of the

taking and singles out the property to be taken, can the Courts review the
judgment m a d e by the legislature? As already seen above, the Chinese
Community case, in two obiter dicta, gave two contradictory answers
to the question. Similarly, in American jurisprudence, there is evidence
of an ambivalent judicial attitude to the question. The more commonly
accepted American rule is that the issue of public use is a judicial ques-
126
tion. But in the 1946 case of United States v. Welch, * there was a clear
implication of the finality of legislative judgment when Justice Black
26
said:' ' "We think that it is the function of Congress to decide what type
of taking is for public use and that the agency authorized to do the tak-
ing may do so to the full extent of its statutory authority."
In Philippine jurisprudence, the authority of the courts to review
the legislative judgment has never been seriously questioned except in
the area of expropriation of land for resale. One such attempt was dealt

1247
157 SCRA 640,647 (1988).
,26
»327U.S. 546 (1946).
,w>
Id. at 551-2.
 THE 1987 CONSTITUTION Sec. 9
430
OF THE REPUBLIC OF THE PHILIPPINES

0
with in NARRA v. Francisco™ involving Republic Act No. 1266 which
specifically authorized the National Resettlement and Rehabilitation
Administration to expropriate Hacienda del Rosario situated at Valde-
fuente, Cabanatuan City, for subdivision and resale to the occupants.
When the expropriation was challenged on the ground that the size of
the land did not satisfy the Guido rule, N A R R A appealed to the obiter
dictum in Chinese Community stating that "where the legislature has
directly determined the necessity of appropriating private property for
a particular public improvement at a specified location, the utility, ne-
cessity and the expediency of the improvement and the suitableness of
the location are questions for the legislature to determine and the courts
1271
have no power to interfere and substitute their own discretion." The
Court did not accept the argument. It is noteworthy, however, that in re-
jecting the argument the Court did not categorically reject the principle
stated. Rather the Court said that the principle involved was "entirely
inappropriate, for the question now before the Court is not the neces-
sity of the expropriation but the power or authority to expropriate under
Article XIII, Section 4, of the [1935] Constitution. T h e validity of the
1272
statute directing the expropriation is certainly a judicial question."
The implication is that if the issue had been the necessity of the expro-
priation, the Court might have upheld the argument. T h e Court, h o w -
ever, could not even begin to consider the question of necessity because
it felt constrained by the mechanistic land-size Guido test for "public
u s e " which, as the Court was careful to note, "while not u n a n i m o u s ,
1273
still [stood] unreversed."

If it had been disposed to, the Court in NARRA might have side-
stepped the Guido rule by distinguishing the statutes involved in the
two cases. The statute involved in Guido did not pick out the specific
property to be expropriated; the statute in NARRA did. The NARRA
Court, however, did not even advert to the distinction. Perhaps, Jus-
tice J.B.L. R e y e s , who wrote the opinion in NARRA, did not yet d e e m
it opportune to revive the arguments raised in his dissent in Baylosis,
arguments which ten years later would not only be revived but also

l270
109 Phil. 764 (I960).
,z
"td. at 768.
1272
W. 768-9.
m
Id. 768.
Sec. 9 ART. m - BILL OF RIGHTS 431

elaborated on in the main opinion in JM. Tuason &Co.v. Land Tenure

ni
Administration. *

Like the statute in NARRA, Republic Act N o . 2616 picked out the
property to be expropriated for resale, the Tatalon Estate in Quezon
City jointly o w n e d by J.M. Tuason & C o . , Gregorio Araneta & C o . ,
Florencio Deudor and others. While Justice Fernando, who wrote the
main opinion, was less than accurate when he said that "this is the first
time the judiciary is confronted with such a challenge addressed to the
validity of a statute specifically m a d e applicable to a particular piece
1275
of land," it was indeed the first time for a main opinion to meet the
challenge head o n . NARRA as already seen had earlier side-stepped the
challenge.

Fernando, appealing to the language of the constitutional grant of

1276
power to Congress, argued:

It does not admit of doubt that the congressional power thus

conferred is far from limited. It is left to the legislative will to de-
termine what lands may be expropriated so that they could be sub-
divided for resale to those in need of them. Nor can it be doubted
either that as to when such authority may be exercised is purely
for Congress to decide. Its discretion on the matter is not to be in-
terfered with. The language employed is not swathed in obscurity.
The recognition of the broad congressional power is undeniable.
The judiciary in the discharge of its task to enforce constitutional
commands and prohibitions is denied the prerogative of curtailing
its well-nigh all embracing sweep.

In his concurring opinion, Justice Barredo re-enforced the Fer-

1277
nando argument thus:

I take it that the constitutional provision itself declares the

public objective, purpose or use of the expropriation contem-
plated, which is the amelioration of long standing socio-agrarian
conditions endangering the very ideology on which our govern-
ment and way of life rest, hence, it should follow that as long as
a congressional legislation declares that the condemnation of a
particular land is for the specific purpose stated in the Constitu-

l274
31 SCRA 413 (1970).
'"'M. at 418.
'"'M. at 423.
,277
W. at 442-3.
 4 3 2 THE 1987 CONSTITUTION Sec. 9
OF THE REPUBLIC OF THE PHILIPPINES

tion, it is not for the judiciary to enquire as to whether or not the

taking of such land is for public use. The Constitution itself which
is supposed to be the supreme law on private property rights de-
clares it to be so, and leaves it to Congress, not to the judiciary, to
make the choice of the lands to be taken to attain the objective the
constituent assembly aimed to achieve. The scope and the limit of
the power of the judiciary in this regard is only to determine the
existence of enabling legislation, to see to it that the facts are as
contemplated in such enabling act and to provide the vehicle for
compliance with procedural due process in the implementation of
the congressional act.

It can thus be seen from the reasoning of Fernando and Barredo

that their argument for the non-reviewable character of the judgment
made by the legislature is premised on a textual commitment of dis-
cretion on the subject to the legislature. Theirs is not an argument for
general non-reviewability of direct legislative exercise of the power of
eminent domain. Moreover, as already pointed out earlier, the view ex-
pressed in F e m a n d o ' s main opinion and Barredo's concurring opinion
reflects the opinion of at most five Justices. This writer will hazard the
opinion that the Fernando-Barredo view will eventually b e c o m e the ac-
cepted rule.

8. Does "res j u d i c a t a " apply?

When once the right to expropriate has been denied the state in a
specific case, it does not mean that the state may not c o m e back to the
same property. "The very nature of the eminent d o m a i n , as an inher-
ent power of the State, dictates that the right to exercise the p o w e r be
absolute and unfettered by a prior j u d g m e n t or res judicata. T h e scope
of eminent domain is plenary and, like police power, can 'reach every
form of property which the State might need for public u s e . ' " H o w e v e r ,
the impropriety of res judicata "does apply to specific issues decided in
a previous case. For e x a m p l e , a final j u d g m e n t dismissing an expropria-
tion suit on the ground that there w a s no prior offer precluded another
suit raising the same issue; it cannot, however, bar the State or its agent
from thereafter complying with this requirement, as prescribed by law,
and subsequently exercising its power of eminent domain over the same
1278
property."

'""Municipality of Paranaque v. V.M. Realty Corporation,G.R. No. 127820, July 20, 1998,
292 SCRA 678,693 citing National Power Corporation v. Court of Appeals. 254 SCRA 577 <19Q6t
Sec. 9 ART. Ill - BILL OF RIGHTS 433

9. Regulation versus taking.

Both police power and the power of eminent domain have the
general welfare for their object. The former achieves its object by regu-
lation while the latter by "taking." W h e n property right is impaired by
regulation, compensation is not required; whereas, when property is
taken, the Constitution prescribes just compensation. Hence, a sharp
distinction must be m a d e between regulation and taking.

W h e n title to property is transferred to the expropriating authority,

there is a clear case of compensable taking. However, as will be seen,
it is a settled rule that neither acquisition of title nor total destruction
of value is essential to taking. It is in cases where title remains with the
private o w n e r that inquiry must be m a d e whether the impairment of
property right is merely regulation or already amounts to compensable
taking.

An analysis of existing jurisprudence yields the rule that when a

property interest is appropriated and applied to some public purpose,
there is compensable taking. W h e r e , however, a property interest is
merely restricted because continued unrestricted use would be injuri-
ous to public welfare or where property is destroyed because continued
existence of the property would be injurious to public interest, there is
no compensable taking.

T h e distinction between police power regulation and taking under

eminent domain was established early. The cases are fairly simple. Thus,
in 1915, a statute regulating the slaughter of carabao for the purpose of
conserving an adequate supply of draft animals was upheld as a legiti-
mate exercise of police power and not a form of taking under eminent
1279
domain as to require compensation. American doctrine on zoning or-
230
dinances was likewise adopted. Following Murphy v. California: the
1
Court said, in Seng Kee & Co. v. Earnshaw: " that an ordinance divid-
ing a city into industrial and residential areas was a legitimate regu-
lation and not a taking of property without just compensation. Again,
12 2
in People v. de Guzman, ' when a zoning ordinance prohibiting the

IJ79
U.S. v. Toribio, 15 Phil. 85,92 (1910).
iao
2 2 5 U.S. 623 (1911).
m,
56 Phil. 204,214 (1931).
IM2
90Phil. 133,136(1951).
 434 THE 1987 CONSTITUTION Sec. 9
OF THE REPUBLIC OF THE PHILIPPINES

operation of a lumber yard within certain areas was challenged as con-

fiscatory, the Court upheld it as a valid exercise of police power.
What is common among the above cases is that while the regula-
tions in question affected the right of ownership, none of the property
interests in the bundle of rights which constitute ownership was appro-
priated for use by or for the benefit of the public. Use of the property
by the owner was limited, but no aspect of the property was used by or
for the public.
The deprivation of use can in fact be total and it will not consti-
tute compensable taking if nobody else acquires use of the property or
any property interest therein. For instance, if in order to check further
spread of Kadang-Kadang a law were to be passed authorizing the de-
struction of coconut trees infected with Kadang-Kadang, coconut tree
owners whose trees are ordered cut down could not complain of unlaw-
ful deprivation of property without just compensation. There would be
1283
destruction but no compensable taking.
nM
The case of People v. Fajardo illustrates compensable tak-
ing that does not involve transfer of title. T h e municipal m a y o r on the
strength of an authorization given by a municipal ordinance, had re-
fused Fajardo permission to put up a house on his land on the ground
that the proposed structure would "destroy the view or beauty of the
1285
public plaza." It is true that the ordinance upon which denial had
been based was also declared fatally defective for being an invalid del-
egation of legislative authority. T h e Court, however, considering the
ordinance, arguendo, as a valid delegation of authority to issue zoning
1286
regulations, said:

Even thus interpreted, the ordinance is unreasonable and op-

pressive in that it operates to permanently deprive appellants of
the right to use their own property; hence, it oversteps the bounds
of police power, and amounts to taking of appellant's property
without just compensation. ... The appellants would, in effect, be
constrained to let their land remain idle and unused for the obvious

See Miller v. Schoene, 276 U.S. 272 (1928). This case involves a statute authorizing the
destruction of red cedar trees infected with rust.
,2M
1 0 4 Phil. 443 (1958).
l2M
W.at445.
,m
ld. at 447-8.
Sec. 9 ART. Ill - BILL OF RIGHTS 435

purpose for which it is best suited, being urban in character. To

legally achieve that result, the municipality must give appellants
just compensation and an opportunity to be heard.

Does this decision mean that it is the permanence and the total-
ity of the deprivation which constitute compensable taking? As already
seen, total destruction without utilization is not appropriation but is
merely regulation by police power. O n e must therefore look beyond the
deprivation and ask for the ultimate purpose. In this case, the purpose
was to preserve "the view or beauty of the public plaza." Thus, in effect,
what the municipality wanted was to impose an easement on the prop-
erty of Fajardo, which was a form of utilization of Fajardo's property
1287
for public benefit.

That the establishment of an easement is a form of compensable

taking is illustrated in a n u m b e r of American cases, all of which rest
upon the o w n e r ' s right not only over the surface of the land but also
to a reasonable height of the airspace above it. T h u s , the repeated fir-
ing of guns over a piece of land was considered a compensable tak-
1288
ing. Similarly, the flight of planes from a nearby military airport over
plaintiff's property below the navigable airspace resulting in the ruin of
128
plaintiff's chicken farm was considered compensable taking. ' So also
were low landing and take-off flights which m a d e the nearby residential
1290
area unlivable.

It was also on the basis of easement that the owner of the land in
29
National Power Corporation v. Spouses Misericordia Gutierrez' ' was
awarded full compensation against the N P C ' s argument that the owners
were not totally deprived of the use of the land and could still plant the
same crops as long as they did not come into contact with the wires. The
Court said: "The right of way easement perpetually deprives defendants
of their proprietary rights as manifested by the imposition by the plain-
tiff upon defendants that below said transmission lines no plant higher
than 3 meters is allowed. Furthermore, because of the high-tension cur-

M7
' The case is thus distinguishable from the destruction of billboards in Churchill v. Raf-
ferty, 32 Phil. 580 (1915), which had for its purpose the general object of preventing structures
offensive to the sight.
'""Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. 327 (1922).
lffl
»United States v. Causby, 328 U.S. 256 (1946).
l290
Griggs v. Allegheny County, 369 U.S. 84 (1962).
,2
"G.R. No. 60077, January 18, 1991.
 436 THE 1987 CONSTITUTION Sec. 9
OF THE REPUBLIC OF THE PHILIPPINES

rent conveyed through said transmission lines, danger to life and limbs
that may be caused beneath said wires cannot altogether be discounted,
and to cap it all, plaintiff only pays the fee to defendants once, while
the latter shall continually pay the taxes due on said affected portion of
their property."
A Philippine example of compensable taking which did not in-
volve transfer of title is Republic v. Philippine Long Distance Co.
292
(PLDT): The Bureau of Telecommunications, an instrumentality of
the government performing governmental functions, had contracted
with the P L D T for the use of the latter's lines in order to enable gov-
ernment offices serviced by the Bureau of Telecommunications to call
private parties. The Bureau of Telecommunications wanted to expand
its use of the P L D T lines in order to expand the services to government
offices. PLDT, however, and the Bureau of Telecommunications could
not reach agreement on the terms of the contract for the use of P L D T
1293
facilities. The Court said:

While the Republic may not compel the PLDT to celebrate a

contract with it, the Republic may, in the exercise of the sovereign
power of eminent domain, require the telephone company to per-
mit 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. Normally, of course, the power of eminent domain re-
sults in the taking or appropriation of title to, and possession of,
the expropriated property; but 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.
It is unquestionable that real property may, through expropriation,
be subjected to an easement of right of way. The use of the PLDT's
lines and services to allow inter-service connection between both
telephone systems is not much different. In either case, private
property is subjected to a burden for public use and benefit. If,
under Section 6, Article XIII, of the [1935] 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

IK2
2 6 S C R A 620(1969).
l2W
W.at628.
Sec. 9 ART. m - BILL OF RIGHTS 437

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.

W h e r e , however, a lot owner was prejudiced by the closure of a

road in that his access to the national road had been limited, compensa-
tion was not allowed. "Petitioner is not entitled to damages because the
injury he has incurred, such as it is, is the price he and others like him
must pay for the welfare of the entire community. This is not a case
where his property has been expropriated and he is entitled to just com-
pensation. T h e construction of the new road was undertaken under the
1294
general welfare clause," and thus was an exercise of police power.
1295
And in Bel Air Village Association v. Intermediate Court of Appeals,
where the subdivision was ordered to open a gate to a road within the
subdivision, the order to open the road was ruled to be an exercise of
police power and not of eminent domain. It was found that the deed of
donation covering the road stipulated that the road would also be for the
general public. H e n c e , the order to open the gate was deemed an abate-
1296
ment of a public nuisance.

Two other cases, which at first glance look like zoning cases which
should not require compensation, were in fact found to be confiscatory.
1291
In Hipolito v. City of Manila, the Court said that to deny plaintiff a
building permit on the ground that the land on which he planned to build
would be used for widening the street and before such land is expropri-
ated is to take plaintiff's property without due process of law. Again
129i
in Clemente v. Municipal Board of Iloilo, an ordinance which, look-
ing to eventual expropriation proceedings, prohibited property owners
along a portion of a street from erecting new buildings or repair old
ones, under penalty of fine, was also declared to be confiscatory. In both
cases, the intent to appropriate the property for public use was clear.
Anticipatory of any expropriation proceedings, however, there was an
attempt to deprive the owners of their dominical right under the guise of

l294
Cabrera v. Court of Appeals, G.R. No. 78673, March 18,1991.
I2M
176 SCRA 719 (1989).
I29
*176 SCRA 719 (1989).
IM7
8 7 Phil. 180,183(1950).
llM
L-8633, April 27,1955. Unpublished but summarized in 98 Phil. 1101
 438 THE 1987 CONSTITUTION Sec. 9
OF THE REPUBLIC OF THE PHILIPPINES

regulation. As already seen, a mere declaration of an intention to expro-

129
priate does not yet serve to curtail the dominical rights of the owner. '
Recent decisions, in the context of determining as of what date the
value of the property must be fixed, have helped clarify the constitu-
tional meaning of taking. Since compensation is fixed as of the time the
property is taken, it becomes important when the property is deemed to
have been taken, especially in situations where there is a transformation
in the nature of the government's holding of the property. In Republic v.
Vda. de Castellvi,'™ where the government had initially held the land as
lessee, the Court said that the government became an expropriator only
when it took steps that satisfied the elements of taking. These elements
are "(1) that the entrance and occupation by the condemnor must be for
a permanent, or indefinite period, and (2) that in devoting the property
for public use the owner was ousted from the property and deprived of
its beneficial use." For as long as the government was still paying rent
there was no "taking" in the expropriatory sense. Similarly, for as long
as the government was staying in the property only "by permission" of
1301
the owner, there was as yet no taking. Moreover, if the expropriating
authority chooses not to take possession of the property until after j u d g -
ment is rendered, the m o m e n t of taking, for purposes of fixing c o m -
pensation, is not the date of filing the condemnation suit but the date of
1302
judgment.

The issue of "taking" also b e c o m e s involved when a piece of pri-

vate property is classified by the state as a "historical landmark." W h e n
does classification of property into a historical landmark resulting in a
limitation of its economic usefulness amount to compensable taking?
Such an action is not far different from zoning regulations although
its economic impact on a piece of property might be m o r e than that of
mere zoning regulation. In deterrmining whether the action amounts to
taking or is in fact merely regulation the factors that must be considered
are (1) the economic impact of the regulation on the property; (2) the
extent to which the regulation might interfere with investment expecta-

,2W
Familara v. J.M.Tuason & Co., 49 SCRA 338,341 (1973).
,3O0
58 SCRA 336,352 (August 15,1974).
l30l
Garcia v. Court of Appeals, 102 SCRA 597 (January 31,1981).
'^Municipality of Daet v. Court of Appeals, 93 SCRA 503 (October 18, 1979). Suit was
filed in 1962 and lower court judgment was rendered in 1969 and affirmed by the appellate court
in 1972. It was only in 1972 that the state took steps to make the deposit and take possession of
the proDerrv.
Sec. 9 ART. Ill - BILL OF RIGHTS 439

3
tions. In Penn Central Transportation Co. v. New York™ ruled that the
landmark law which did not interfere with the Terminal's present uses
or prevent Penn Central from realizing a "reasonable return" on its in-
vestment did not constitute taking but was merely an exercise of police
power. In such cases, the standard of legitimacy is not compensation but
the reasonableness of the regulation.

There have been more recent cases involving the meaning of tak-
ing. W h e r e the entry into private property is not just a simple right-
of-way, which is ordinarily allowed under the provisions of the Civil
C o d e , but the entry is for purposes of conducting mining activities such
as exploration, extraction and processing of minerals, there already is
compensable taking. All these will definitely oust the owners or oc-
1304
cupants of the affected areas the beneficial ownership of their lands.

Similarly, when the right of way enforced by the state results in

1305
making adjoining property unusable, just compensation is due. So
also, where the nature and effect of the installation of the 230 KV
Mexico-Limay transmission lines results in the imposition of limitation
against the use of the land for an indefinite period, there is compensable
1306
taking.

10. Expropriation of municipal property.

In a set of cases involving the National Waterworks and Sewerage

Authority (NAWASA), the Court unmasked an attempt to expropriate
under the guise of exercising police power. A law was passed autho-
rizing the transfer of municipal waterworks systems to the NAWASA.
NAWASA understood the law to mean that it could take the waterworks
system of Baguio City under the claim of exercising police power. In
1301
City of Baguio v. NAWASA, after finding that the waterworks system
was not national property merely held in trust by the city for the benefit
of the public but was private property held by the city in its proprietary
capacity, the Court said that the act did not authorize the confiscation
nor appropriation of the property belonging to cities but merely directed
that the waterworks belonging to municipal corporations be transferred

1303
438 U.S. 104(1978).
1304
Didipio Earth Savers, et al. v. Secretary, GJl. No. 157882, March 30,2006.
'"•Republic v. Andaya, G.R. No. 160656, June 15,2007.
1306
NPC v. San Pedro, G.R. No. 170945, September 26,2006.
,307
106Phil. 144(1959).
 440
THE 1987 CONSTITUTION Sec. 9
OF THE REPUBLIC OF THE PHILIPPINES

to the NAWASA with a view to more efficient management. But the

Act itself directed that the municipal corporation be paid with an equal
value of the assets of the NAWASA.
The same ruling requiring the NAWASA to pay for the value of
the waterworks system of municipal corporations was followed in sub-
1308
sequent cases.
This series of NAWASA cases underscores the need for clarifying
the distinction between patrimonial property of a municipal corporation
and property which it holds for public use. As Province ofZamboanga
del Norte v. City ofZamboanga noted: 1309

The principle itself is simple: If the property is owned by

the municipality (meaning municipal corporation) in its public and
governmental capacity, the property is public and Congress has
absolute control over it. But if the property is owned in its private
or proprietary capacity then it is patrimonial and Congress has no
absolute control. The municipality cannot be deprived of it without
due process and payment of just compensation.

While the principle itself is simple, its application has been c o m -

plicated by a certain degree of confusion in determining what property
is held by a municipality in its public and governmental capacity and
what property is held in its private or proprietary capacity. O n e norm
for classification of municipal property is found in the Civil C o d e which
says:

Art. 423. The property of provinces, cities, and municipali-

ties is divided into property for public use and patrimonial prop-
erty.

Art. 424. Property for public use, in the provinces, cities, and
municipalities, consist of the provincial roads, city streets, munici-
pal streets, the squares, fountains, public waters, promenades, and
public works for public service paid for by said provinces, cities,
or municipalities.

I3u
"£.g., City of Cebu v. NAWASA, L-12892, April 30, I960; Municipality of Lucban v.
NAWASA, L-15525, October 11, 1961; Municipality of Naguilian v. NAWASA, L-18540, No-
vember 29, 1963; Municipality of Compostela v. NAWASA, L-21763, December 17, 1966; NA-
WASA v. Catolico, L-21705, April 27, 1967.
Sec. 9 ART. Ill - BILL OF RIGHTS 441

All other property possessed by any of them is patrimonial

and shall be governed by this Code, without prejudice to the provi-
sions of special laws.

Interpreting this provision in the N A W A S A cases, with reference

310
to municipal waterworks, the Supreme Court said:'

Thus, the term "public works for public service" must be

interpreted, following the principle of ejusdem generis, in the con-
cept of the preceding words, "provincial roads, city streets, mu-
nicipal streets, squares, fountains, public waters and promenades"
which are used freely by all, without distinction. Hence, if the pub-
lic works is not for such free public service, it is not within the
purview of the first paragraph, but the second paragraph of Article
424, and, consequently, patrimonial in character. And as already
held by this Court, a municipal water system designed to supply
water to the inhabitants for profit is a corporate function of the
municipality.

T h e Zamboanga del Norte case, however, pointed to the existence

of another line of cases which classified property according to the use
to which it is devoted. According to this line of cases, if the property is
devoted to governmental purposes like local administration, public edu-
cation, public health, etc., the property is not patrimonial even if it is not
13 1312
indiscriminately m a d e open to the public. " T h e Court concluded:

We are more inclined to uphold this latter view. The con-

troversy here is more along the domains of the Law of Munici-
pal Corporations — State vs. Province — than along that of Civil
Law. Moreover, this Court is not inclined to hold that municipal
property held and devoted to public service is in the same cat-
egory as ordinary private property. The consequences are dire. As
ordinary private properties, they can be levied upon and attached.
They can even be acquired through adverse possession — all these
to the detriment of the local community. Lastly, the classification
of properties other than those for public use in the municipalities
as patrimonial under Art. 424 of the Civil Code is "x x x without
prejudice to the provisions of special laws." For purposes of this

mo
C e b u City v. NAWASA, 107 Phil. 1112,1120 (1960). Also City of Baguio v. NAWASA,
106 Phil, at 153.
I3
"22 SCRA at 1342-3.
Isl2
/ J . a t 1346.
 THE 1987 CONSTITUTION Sec. 9
442
OF THE REPUBLIC OF THE PHILIPPINES

article, the principles obtaining under the Law of Municipal Cor-

porations can be considered as "special laws." Hence, the classifi-
cation of municipal property devoted for distinctly governmental
purposes as public should prevail over the Civil Code classifica-
tion in this particular case.

Another type of municipal property is the legua comunal or com-

munal lands of a town. These came into existence upon the establish-
ment of a town or pueblo under Spain. The Spanish Law provided that
the usufruct of a portion of the public domain adjoining municipal ter-
ritory might be granted by the government for communal purposes. The
ultimate title, however, remained with the sovereign. Salas v. Jaren-
[m
cio involved such type of land. When R . A . N o . 4118 converted the
land, which was situated in Manila, into alienable land of the state and
provided for its subdivision and resale to the occupants, the City of M a -
nila objected to the statute as a deprivation of municipal property with-
out proper compensation. Upholding the statute, the Supreme Court,
after a narration of the history of c o m m u n a l lands under Spanish Law,
13 4
concluded: '

It may, therefore, be laid down as a general rule that regard-

less of the source or classification of land in the possession of a
municipality, excepting those acquired with its own funds in its
private or corporate capacity, such property is held in trust for the
State for the benefit of its inhabitants, whether it be for govern-
mental or proprietary purposes. It holds such lands subject to the
paramount power of the legislature to dispose of the same, for after
all it owes its creation to it as an agent for the performance of a
part of its public work, the municipality being but a subdivision or
instrumentality thereof for purposes of local administration. Ac-
cordingly, the legal situation is the same as if the State itself holds
the property and puts it to a different use.

11. Expropriation b y municipal g o v e r n m e n t .

The power of eminent domain has been given to local govern-

ments by the Local Government C o d e . T h e essential requisites are that
it must be exercised for public use and with just compensation and after
a valid offer. In addition, it must be done on the strength of a legisla-

l3,3
4 6 S C R A 734(1972).
mt
ld. at 747. Italics added.
Sec. 9 ART. in - BILL OF RIGHTS 443

tive act of the local government, that is, an ordinance It cannot be done
merely on the strength of a resolution. A resolution is not a legislative
act. It is merely a declaration of the sentiment or opinion of a lawmak-
1315
ing body on a specific matter.

Recent decisions have affirmed the limited expropriation powers

of local government. Thus has been held that expropriation by local
governments under Section 19 of the Local Government Code (R.A.
7160) must follow the following rules: (1) " A n ordinance is enacted
by the local legislative council authorizing the local chief executive,
in behalf of the L G U . (2) "The power of eminent domain is exercised
for public u s e , purpose or welfare, or for the benefit of the poor and the
landless."; (3) "There is payment of just compensation, and (4) "A valid
and definite offer has been previously m a d e to the owner of the property
316
sought to be expropriated, but said offer was not accepted."' Thus, a
local government may not expropriate on the strength merely of a sang-
13 7
gunian resolution alone. '

12. E m i n e n t domain and contracts.

In one of the earlier cases decided during the Commonwealth, the

Supreme Court had a chance to look into the relation of the power of
eminent domain to contractual obligation. T h e City of Manila, in an
attempt to back out of a contract of sale, started proceedings for the
expropriation of the property involved. The Court, in Noble v. City of
1318
Manila, stopped the city short: "Expropriation lies only when it is
made necessary by the opposition of the owner to the sale or by the lack
of any agreement as to price. There being in the present case a valid and
subsisting contract, between the owners of the building and the city,
there is no reason for the expropriation."

This is not to say, however, that the power of eminent domain can
be contracted away. Like police power, the power of eminent domain

l3l5
Heirs of Suguitan v. City of Mandaluyong, G.R. No. 135087, March 14,2000; Munici-
pality of Paranaque v. \M. Realty Corporation, GR. No. 127820, July 20,1998,292 SCRA 678.
13
'"Municipality of Paranaque v. V.M. Realty Corporation, GR. No. 127820, July 20,1998,
292 SCRA 678,688; Jesus is Lord School v. Municipality of Pasig, G.R. No. 152230, August 9,
2005.
13,7
Heirs of Suguitan v. City of Mandaluyong, GJ*. No. 135087, March 14,2000; Munici-
pality of Paranaque v. VM. Realty Corporation, G Ji. No. 127820, July 20,1998,292 SCRA 678.
,3
"67Phil. 1,6(1938).
 THE 1987 CONSTITUTION Sec.10
444
OF THE REPUBLIC OF THE PHILIPPINES

is inalienable. The Noble case simply says that the power of eminent
domain cannot be used to achieve an object when there is a subsisting
contract for the precise same object. But a contract right is property
and is itself subject to expropriation. Thus, in Pennsylvania Hospital
v. Philadelphia,"" in return for certain payments from the hospital and
for land supplied by the hospital for a public street, the state legislature
passed a statute forbidding the opening of any street through the hospi-
tal grounds. Subsequently, by authority of the state, the city sought to
open a street through the hospital grounds. The United States Supreme
Court allowed the condemnation saying that since "there can be no right
to restrain by contract the power of eminent domain, it must also of
necessity follow that any contract by which it was sought to accomplish
1520
that result would be inefficacious for want of power."

SEC. 10. No LAW IMPAIRING THE OBLIGATION OF CONTRACTS

SHALL BE PASSED.

1. The Contract Clause before the 1935 Constitution.

The Contract Clause c a m e to the Philippines after its significance

in constitutional jurisprudence had been pared d o w n by the rise of sub-
stantive due process as a restraint on legislative action. T h e fact that
the Contract Clause did not appear in President M c K i n l e y ' s Instruction
to the second Philippine Commission may be another indication of the
acuity of the architects of that M a g n a Charta of Philippine freedom. But
the contract clause did appear in both the Philippine Bill and the Auton-
omy Act. Hence, the constitutional precept w a s transported to the Phil-
ippines, but, as will be seen, only to be pared d o w n some more by an
explicitly social welfare oriented and economically protectionist 1935
Constitution. Early Philippine constitutional history, however, was a
simple process of transplantation of established American doctrine.

"The law relating to the obligation of contracts," said the S u p r e m e

1321
Court in a 1905 case, "does not prohibit every change in existing
laws. To fall within the prohibition the change must impair the obli-
gation of the existing contract, and the impairment must be substan-

1319
245 U . S . 2 0 ( 1 9 1 7 ) .
5JO
' W.ai23.
132l
Gaspar v. Molina, 5 P h i l . 197,202-03 (1905), citing U.S. Supreme Court decisions.