Heirs of the Estate of JBL Reyes vs City of Manila

422 SCRA 550
February 13, 2004

FACTS:
Petitioners acquired a favorable judgment of eviction against respondents Abiog and Maglonso. In 1998, the said judgments became final and executory. Consequently, writs of execution were issued.
During the pendency of the complaints for unlawful detainer, respondent City filed a case for the expropriation of the same properties involved in the ejectment cases.
The trial court allowed respondent City to take possession of the property; it denied the motions for intervention and injunction, and, after allowing respondent City to oppose the motion to dismiss, dismissed the complaint for expropriation.
On appeal, the Court of Appeals reversed the trial court and found that respondent City properly exercised its right to expropriate the subject properties. Petitioners appealed the CA decision to this Court. Thereafter, on motion of respondent occupants, the Court of Appeals issued protective orders that required the parties to maintain the status quo (prohibiting any ejectment) pending this Court’s resolution of the appeal.
Petitioner now questions the legality of the CA’s expropriation order and the propriety of its act enjoining the execution of the final judgments in the ejectment cases.

ISSUES:
Whether the respondent City may legally expropriate the subject properties, considering that a negative finding will necessarily moot the issue of the propriety of the “protective orders” of the Court of Appeals.
Did the city of Manila comply with RA 7279 (Secs.9-10) when it expropriated petitioner’s properties?

HELD:

Whether respondent City deprived petitioners of their property without due process of law depends on whether it complied with the legal requirements for expropriation. Before respondent City can exercise its power of eminent domain, the same must be sanctioned and must not violate any law.
A local government unit can only exercise powers granted to it by the legislature since it is only a mere creation of the latter.

Basis of Manila City’s expropriation:
Local Gov’t Code:
Sec. 19 Eminent Domain. – LGU, through its chief executive + acting pursuant to an ordinance, may exercise Eminent Domain for:
– public use/purpose or
– benefit of the poor and the landless
upon payment of just compensation.
Provided:
– Valid and definite offer has been previously made to the owner, and was not accepted
– LGU may immediately take possession of the property upon
> filing of the expropriation proceedings &
> making a deposit with the proper court of at least 15% of the property’s fair market value based on its current tax declaration
– amount to be paid for the expropriated property – determined by the proper court, based on the fair market value at the time of its taking

RA 409 (Revised Charter of the City of Manila):
Power of Manila City to expropriate private property in the pursuit of its urban land reform and housing program.

Respondent City, however, is also mandated to follow the conditions and standards prescribed by RA7279 (the Urban Development and Housing Act of 1992).
RA 7279:
Sec. 9 Priorities in Land acquisition – Acquire lands for socialized housing in the following order:
(a) Those owned by Gov’t, subdivisions, instrumentalities + GOCCs and subsidiaries
(b) Public, Alienable lands
(c) Unregistered or abandoned and idle lands
(d) Those w/in declared areas Areas of Priority Dev’t, Zonal Improvement Sites, & Slum Improvement Sites – not yet acquired
(e) BLISS (Bagong Lipunan Improvement Sites & Services) – not yet acquired
(f) Privately-owned lands
Priorities – not apply when on-site dev’t is found more practicable & advantageous to beneficiaries
LGU – give budgetary priority to on-site dev’t of Gov’t lands

Sec. 10 Modes of Land Acquisition – include:
– Community Mortgage
– Land swapping
– Land assembly/consolidation
– Land banking
– donation to the Gov’t
– Joint venture agreement
– Negotiated purchase
– Expropriation
Provided:
– Only resort to expropriation when other modes of acquisition have been exhausted
– Exempt parcels of land owned by small property owners
– Revert and escheat abandoned property to the State in a proceeding analogous to Rule 91, RoC

Filstream vs. Court of Appeals
– the above-quoted provisions are limitations to the exercise of the power of eminent domain. Private lands rank last in the order of priority for purposes of socialized housing.
– expropriation proceedings are to be resorted to only after the other modes of acquisition have been exhausted.
– Compliance with these conditions = mandatory -> only safeguards of private property owners against violation of due process

Respondent City failed to prove strict compliance with the requirements of Sections 9 and 10 of RA 7279.
> RTC: no allegations in its complaint; no proof during proceedings
> CA: no showing in its pleadings.
The CA was likewise silent on this specific jurisdictional issue.
This is a clear violation of the right to due process of the petitioners which must accordingly be rectified.

It must be emphasized that the State has a paramount interest in exercising its power of eminent domain for the general good.
State’s right to expropriate private property for public use always takes precedence over the interest of private property owners.
However, the individual rights affected by the exercise of such right are also entitled to protection.
The exercise of this superior right cannot override the guarantee of due process extended to property owners.
Due to the fatal infirmity in the City’s exercise of the power of eminent domain, its complaint for expropriation must necessarily fail.

The complaint for expropriation is dismissed. The petitioner’s appeal from the CA is favorably adjudicated.
The petition for certiorari questioning the validity of the Court of Appeals resolutions becomes moot and academic.

Filstream is substantially similar in facts and issues to the case at bar.

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