I. Eminent Domain

Atty. Jericho Del Puerto

Atty. Jericho Del Puerto

Lawyer, Author, Mentor

Frequency: ★★★☆☆

1. Concept

Concept: Eminent domain. Eminent domain – is the power of the State to take private property for public use. It is an inherent power of State as it is a power necessary for the State’s existence; it is a power the State cannot do without. As an inherent power, it does not need at all to be embodied in the Constitution; if it is mentioned at all, it is solely for purposes of limiting what is otherwise an unlimited power. The limitation is found in the Bill of Rights – that part of the Constitution whose provisions all aim at the protection of individuals against the excessive exercise of governmental powers. (Apo Fruits Corporation v. Land Bank of the Philippines, En Banc, G.R. No. 164195, 12 October 2010)

Same; Expropriation. Eminent domain is often referred to as expropriation and, with less frequency, as condemnation, it is, like police power and taxation, an inherent power of sovereignty and need not be clothed with any constitutional gear to exist; instead, provisions in our Constitution on the subject are meant more to regulate, rather than to grant, the exercise of the power. It is a right to take or reassert dominion over property within the state for public use or to meet a public exigency and is said to be an essential part of governance even in its most primitive form and thus inseparable from sovereignty. (Air Transportation Office v. Gopuco, Jr., G.R. No. 158563, 30 June 2005)

2 essential limitations to the power of eminent domain:
1) The purpose of taking must be for public use; and
2) Just compensation must be given to the owner of the private property. (Apo Fruits Corporation v. Land Bank of the Philippines, supra.)

Limitations as Implied conditions. These requirements partake the nature of implied conditions that should be complied with to enable the condemnor to keep the property expropriated. (Republic v. Heirs of Saturnino Q. Borbon, G.R. No. 165354, 12 January 2015)

Determined by courts. The Constitution does not explicitly define this power but subjects it to a limitation: that it be exercised only for public use and with payment of just compensation. Whether the use is public or whether the compensation is constitutionally just will be determined finally by the courts. (National Corporation v. Posada, G.R. No. 191945, 11 March 2015)

a. Public use

Concept: Public use. In common acceptation, public use – means “use by the public.” However, the concept has expanded to include utility, advantage or productivity for the benefit of the public. (Ibid.)

Same; Evolved in meaning. To be valid, the taking must be for public use. The meaning of the term “public use” has evolved over time in response to changing public needs and exigencies. Public use which was traditionally understood as strictly limited to actual “use by the public” has already been abandoned. “Public use” has now been held to be synonymous with “public interest,” “public benefit,” and “public convenience.” (Asia’s Emerging Dragon Corporation v. DOTC, G.R. No. 169914, 18 April 2008)

Be maintained. It is essential that the element of public use of the property be maintained throughout the proceedings for expropriation. (Republic v. Heirs of Saturnino Q. Borbon, supra.)

Same; Expropriator to return property if original purpose is not maintained. More particularly, with respect to the element of public use, the expropriator should commit to use the property pursuant to the purpose stated in the petition for expropriation filed, failing which, it should file another petition for the new purpose. If not, it is then incumbent upon the expropriator to return the said property to its private owner, if the latter desires to reacquire the same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it would lack one indispensable element for the proper exercise of the power of eminent domain, namely, the particular public purpose for which the property will be devoted. Accordingly, the private property owner would be denied due process of law, and the judgment would violate the property owner’s right to justice, fairness and equity. (Mactan-Cebu International Airport Authority v. Lozada, Sr., G.R. No. 176625, 25 February 2010)

b. Just compensation

Same; Public use. Private property shall not be taken for public use without just compensation. (Section 9, Article III, 1987 Constitution)

2. Just compensation

Concept: Just compensation Just compensation – is the sum equivalent to the market value of the property, broadly described as the price fixed by the seller in open market in the usual and ordinary course of legal action and competition, or the fair value of the property as between the one who receives and the one who desires to sell, it being fixed at the time of the actual taking by the government. (Landbank of the Philippines v. Sps. Orilla, G.R. No. 157206, 27 June 2008)

Same. Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. It has been repeatedly stressed by the Court that the true measure is not the taker’s gain but the owner’s loss. The word “just” is used to modify the meaning of the word “compensation” to convey the idea that the equivalent to be given for the property to be taken shall be real, substantial, full, and ample. (Ibid.)

Same; Prompt payment. The concept of just compensation 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 made to suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. (Ibid.)

Apart from the requirement that compensation for expropriated land must be fair and reasonable, compensation, to be “just,” must also be made without delay. Without prompt payment, compensation cannot be considered “just” if the property is immediately taken as the property owner suffers the immediate deprivation of both his land and its fruits or income. (Apo Fruits Corporation v. Land Bank of the Philippines, supra.)

Same; Full payment. Put differently, while prompt payment of just compensation requires the immediate deposit and release to the landowner of the provisional compensation. Verily, it also encompasses the payment in full of the just compensation to the landholders as finally determined by the courts. Thus, it cannot be said that there is already prompt payment of just compensation when there is only a partial payment thereof. (Landbank of the Philippines v. Sps. Orilla, supra.)

Same; Same; Including interest. If property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred. (Republic v. CA, G.R. No. 146587, 02 July 2002)

Same; Same; Same; 12% legal interest. The just compensation due to the landowners for their expropriated property amounted to an effective forbearance on the part of the State. Thus, the Court fixed the applicable interest rate at 12% per annum, computed from the time the property was taken until the full amount of just compensation was paid, in order to eliminate the issue of the constant fluctuation and inflation of the value of the currency over time. (Apo Fruits Corporation v. Land Bank of the Philippines, supra.)

3. Expropriation by local government units

Eminent domain – legislative in nature. The power of eminent domain is essentially legislative in nature. It is firmly settled, however, that such power may be validly delegated to local government units, other public entities and public utilities, although the scope of this delegated legislative power is necessarily narrower than that of the delegating authority and may only be exercised in strict compliance with the terms of the delegating law. (Heirs of Alberto Suguitan v. City of Mandaluyong, G.R. No. 135087, 14 March 2000)

LGU’s expropriation authority – a delegated authority. A local government unit has no inherent power of eminent domain. Such power is essentially lodged in the legislature although it may be validly delegated to local government units, other public entities and public utilities. Thus, inasmuch as the principal’s exercise of the power of eminent domain is subject to certain conditions, with more reason that the exercise of a delegated power is not absolute. In fact, strictly speaking, the power of eminent domain delegated to the local government unit is, in reality, not eminent but inferior since it must conform to the limits imposed by the principal. (City of Manila v. Prieto, G.R. No. 221366, 08 July 2019)

Same; R.A. 7160, Local Government Code. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose[,] or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property. (Section 19, R.A. 7160)

Requisites for LGU expropriation:
1) An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the local government unit, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property;
2) The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless;
3) There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws; and
4) A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted. (City of Manila v. Prieto, supra.)

a. Proceedings

Concept: Expropriation. Expropriation – is the procedure by which the government takes possession of private property. (National Corporation v. Posada, supra.)

Same; Non-adversarial. The ubiquitous character of eminent domain is manifest in the nature of the expropriation proceedings. Expropriation proceedings are not adversarial in the conventional sense, for the condemning authority is not required to assert any conflicting interest in the property. Thus, by filing the action, the condemnor in effect merely serves notice that it is taking title and possession of the property, and the defendant asserts title or interest in the property, not to prove a right to possession, but to prove a right to compensation for the taking. (Air Transportation Office v. Gopuco, Jr., supra.)

Concept: Taking. In the context of the State’s inherent power of eminent domain, there is a “taking” when the owner is actually deprived or dispossessed of his property; when there is a practical destruction or a material impairment of the value of his property or when he is deprived of the ordinary use thereof. There is a “taking” in this sense when the expropriator enters private property not only for a momentary period but for a more permanent duration, for the purpose of devoting the property to a public use in such a manner as to oust the owner and deprive him of all beneficial enjoyment thereof. For ownership, after all, “is nothing without the inherent rights of possession, control and enjoyment. Where the owner is deprived of the ordinary and beneficial use of his property or of its value by its being diverted to public use, there is taking within the Constitutional sense.” (Republic v. Heirs of Saturnino Q. Borbon, supra.)

Abandonment of intende use and right of repurchase. When private land is expropriated for a particular public use, and that particular public use is abandoned, does the land so expropriated return to its former owner? The answer to that question depends upon the character of the title acquired by the expropriator, whether it be the State, a province, a municipality, or a corporation which has the right to acquire property under the power of eminent domain. (Air Transportation Office v. Gopuco, Jr., G.R. No. 158563, 30 June 2005)

Rules:
1) If land is expropriated for a particular purpose, with the condition that when that purpose is ended or abandoned the property shall return to its former owner, then, of course, when the purpose is terminated or abandoned the former owner reacquires the property so expropriated. (Ibid.)
2) If land is expropriated for a public street and the expropriation is granted upon condition that the city can only use it for a public street, then, of course, when the city abandons its use as a public street, it returns to the former owner, unless there is some statutory provision to the contrary. (Ibid.)
3) If the decree of expropriation gives to the entity a fee simple title, then of course, the land becomes the absolute property of the expropriator, whether it be the State, a province, or municipality, and in that case the non-user does not have the effect of defeating the title acquired by the expropriation proceedings. (Ibid.)

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