EN BANC

G.R. No. 81958 June 30, 1988

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,

vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D. ACHACOSO, as Administrator of the Philippine
Overseas Employment Administration, respondents.

Gutierrez & Alo Law Offices for petitioner.

SARMIENTO, J.:

The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged principally in the recruitment of Filipino
workers, male and female, for overseas placement," 1 challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the
Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF
DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for certiorari and prohibition. Specifically, the
measure is assailed for "discrimination against males or females;" 2 that it "does not apply to all Filipino workers but only to domestic helpers
and females with similar skills;" 3 and that it is violative of the right to travel. It is held likewise to be an invalid exercise of the lawmaking
power, police power being legislative, and not executive, in character.

In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution, providing for worker participation "in policy and
decision-making processes affecting their rights and benefits as may be provided by law." 4 Department Order No. 1, it is contended, was
passed in the absence of prior consultations. It is claimed, finally, to be in violation of the Charter's non-impairment clause, in addition to the
"great and irreparable injury" that PASEI members face should the Order be further enforced.

On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and Administrator of the Philippine Overseas
Employment Administration, filed a Comment informing the Court that on March 8, 1988, the respondent Labor Secretary lifted the
deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and Switzerland. * In
submitting the validity of the challenged "guidelines," the Solicitor General invokes the police power of the Philippine State.

It is admitted that Department Order No. 1 is in the nature of a police power measure. The only question is whether or not it is valid under the
Constitution.

The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may
interfere with personal liberty or property in order to promote the general welfare." 5 As defined, it consists of (1) an imposition of restraint
upon liberty or property, (2) in order to foster the common good. It is not capable of an exact definition but has been, purposely, veiled in
general terms to underscore its all-comprehensive embrace.

"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough room
for an efficient and flexible response to conditions and circumstances thus assuring the greatest benefits." 6

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the Charter. Along with the taxing power and
eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a fundamental attribute of government that has enabled it to
perform the most vital functions of governance. Marshall, to whom the expression has been credited, 7 refers to it succinctly as the plenary
power of the State "to govern its citizens." 8

"The police power of the State ... is a power coextensive with self- protection, and it is not inaptly termed the "law of overwhelming necessity."
It may be said to be that inherent and plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety, and
welfare of society." 9

It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the conception that men in organizing the state
and imposing upon its government limitations to safeguard constitutional rights did not intend thereby to enable an individual citizen or a
group of citizens to obstruct unreasonably the enactment of such salutary measures calculated to ensure communal peace, safety, good
order, and welfare." 10 Significantly, the Bill of Rights itself does not purport to be an absolute guaranty of individual rights and liberties "Even
liberty itself, the greatest of all rights, is not unrestricted license to act according to one's will." 11 It is subject to the far more overriding
demands and requirements of the greater number.

Notwithstanding its extensive sweep, police power is not without its own limitations. For all its awesome consequences, it may not be
exercised arbitrarily or unreasonably. Otherwise, and in that event, it defeats the purpose for which it is exercised, that is, to advance the
public good. Thus, when the power is used to further private interests at the expense of the citizenry, there is a clear misuse of the power. 12

In the light of the foregoing, the petition must be dismissed.

As a general rule, official acts enjoy a presumed vahdity. 13 In the absence of clear and convincing evidence to the contrary, the presumption
logically stands.

The petitioner has shown no satisfactory reason why the contested measure should be nullified. There is no question that Department Order
No. 1 applies only to "female contract workers," 14 but it does not thereby make an undue discrimination between the sexes. It is well-settled
that "equality before the law" under the Constitution 15does not import a perfect Identity of rights among all men and women. It admits of
classifications, provided that (1) such classifications rest on substantial distinctions; (2) they are germane to the purposes of the law; (3) they
are not confined to existing conditions; and (4) they apply equally to all members of the same class. 16

The Court is satisfied that the classification made-the preference for female workers — rests on substantial distinctions.

As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our female labor force abroad, especially
domestic servants, amid exploitative working conditions marked by, in not a few cases, physical and personal abuse. The sordid tales of
maltreatment suffered by migrant Filipina workers, even rape and various forms of torture, confirmed by testimonies of returning workers, are
compelling motives for urgent Government action. As precisely the caretaker of Constitutional rights, the Court is called upon to protect
victims of exploitation. In fulfilling that duty, the Court sustains the Government's efforts.

The same, however, cannot be said of our male workers. In the first place, there is no evidence that, except perhaps for isolated instances,
our men abroad have been afflicted with an Identical predicament. The petitioner has proffered no argument that the Government should act
similarly with respect to male workers. The Court, of course, is not impressing some male chauvinistic notion that men are superior to
women. What the Court is saying is that it was largely a matter of evidence (that women domestic workers are being ill-treated abroad in
massive instances) and not upon some fanciful or arbitrary yardstick that the Government acted in this case. It is evidence capable indeed of
unquestionable demonstration and evidence this Court accepts. The Court cannot, however, say the same thing as far as men are
concerned. There is simply no evidence to justify such an inference. Suffice it to state, then, that insofar as classifications are concerned, this
Court is content that distinctions are borne by the evidence. Discrimination in this case is justified.

As we have furthermore indicated, executive determinations are generally final on the Court. Under a republican regime, it is the executive
branch that enforces policy. For their part, the courts decide, in the proper cases, whether that policy, or the manner by which it is
implemented, agrees with the Constitution or the laws, but it is not for them to question its wisdom. As a co-equal body, the judiciary has
great respect for determinations of the Chief Executive or his subalterns, especially when the legislature itself has specifically given them
enough room on how the law should be effectively enforced. In the case at bar, there is no gainsaying the fact, and the Court will deal with
this at greater length shortly, that Department Order No. 1 implements the rule-making powers granted by the Labor Code. But what should
be noted is the fact that in spite of such a fiction of finality, the Court is on its own persuaded that prevailing conditions indeed call for a
deployment ban.

There is likewise no doubt that such a classification is germane to the purpose behind the measure. Unquestionably, it is the avowed
objective of Department Order No. 1 to "enhance the protection for Filipino female overseas workers" 17 this Court has no quarrel that in the
midst of the terrible mistreatment Filipina workers have suffered abroad, a ban on deployment will be for their own good and welfare.

The Order does not narrowly apply to existing conditions. Rather, it is intended to apply indefinitely so long as those conditions exist. This is
clear from the Order itself ("Pending review of the administrative and legal measures, in the Philippines and in the host countries . . ." 18),
meaning to say that should the authorities arrive at a means impressed with a greater degree of permanency, the ban shall be lifted. As a
stop-gap measure, it is possessed of a necessary malleability, depending on the circumstances of each case. Accordingly, it provides:

9. LIFTING OF SUSPENSION. — The Secretary of Labor and Employment (DOLE) may, upon recommendation of the Philippine
Overseas Employment Administration (POEA), lift the suspension in countries where there are:

1. Bilateral agreements or understanding with the Philippines, and/or,

2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection of Filipino workers. 19

The Court finds, finally, the impugned guidelines to be applicable to all female domestic overseas workers. That it does not apply to "all
Filipina workers" 20 is not an argument for unconstitutionality. Had the ban been given universal applicability, then it would have been
unreasonable and arbitrary. For obvious reasons, not all of them are similarly circumstanced. What the Constitution prohibits is the singling
out of a select person or group of persons within an existing class, to the prejudice of such a person or group or resulting in an unfair
advantage to another person or group of persons. To apply the ban, say exclusively to workers deployed by A, but not to those recruited by
B, would obviously clash with the equal protection clause of the Charter. It would be a classic case of what Chase refers to as a law that
"takes property from A and gives it to B." 21 It would be an unlawful invasion of property rights and freedom of contract and needless to state,
an invalid act. 22 (Fernando says: "Where the classification is based on such distinctions that make a real difference as infancy, sex, and
stage of civilization of minority groups, the better rule, it would seem, is to recognize its validity only if the young, the women, and the cultural
minorities are singled out for favorable treatment. There would be an element of unreasonableness if on the contrary their status that calls for
the law ministering to their needs is made the basis of discriminatory legislation against them. If such be the case, it would be difficult to
refute the assertion of denial of equal protection." 23 In the case at bar, the assailed Order clearly accords protection to certain women
workers, and not the contrary.)

It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas deployment. From scattered provisions of the Order, it is
evident that such a total ban has hot been contemplated. We quote:
 5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers of similar skills defined herein to the following [sic]
are authorized under these guidelines and are exempted from the suspension.

5.1 Hirings by immediate members of the family of Heads of State and Government;

5.2 Hirings by Minister, Deputy Minister and the other senior government officials; and

5.3 Hirings by senior officials of the diplomatic corps and duly accredited international organizations.

5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral labor agreements or understanding.

xxx xxx xxx

7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS--Vacationing domestic helpers and/or workers of
similar skills shall be allowed to process with the POEA and leave for worksite only if they are returning to the same employer to finish an
existing or partially served employment contract. Those workers returning to worksite to serve a new employer shall be covered by the
suspension and the provision of these guidelines.

xxx xxx xxx

9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may, upon recommendation of the Philippine Overseas
Employment Administration (POEA), lift the suspension in countries where there are:

1. Bilateral agreements or understanding with the Philippines, and/or,

2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection of Filipino workers. 24

xxx xxx xxx

The consequence the deployment ban has on the right to travel does not impair the right. The right to travel is subject, among other things, to
the requirements of "public safety," "as may be provided by law." 25 Department Order No. 1 is a valid implementation of the Labor Code, in
particular, its basic policy to "afford protection to labor," 26 pursuant to the respondent Department of Labor's rule-making authority vested in it
by the Labor Code. 27 The petitioner assumes that it is unreasonable simply because of its impact on the right to travel, but as we have
stated, the right itself is not absolute. The disputed Order is a valid qualification thereto.

Neither is there merit in the contention that Department Order No. 1 constitutes an invalid exercise of legislative power. It is true that police
power is the domain of the legislature, but it does not mean that such an authority may not be lawfully delegated. As we have mentioned, the
Labor Code itself vests the Department of Labor and Employment with rulemaking powers in the enforcement whereof. 28

The petitioners's reliance on the Constitutional guaranty of worker participation "in policy and decision-making processes affecting their rights
and benefits" 29 is not well-taken. The right granted by this provision, again, must submit to the demands and necessities of the State's power
of regulation.

The Constitution declares that:

Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all. 30

"Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution more paramountly is that such an
employment be above all, decent, just, and humane. It is bad enough that the country has to send its sons and daughters to strange lands
because it cannot satisfy their employment needs at home. Under these circumstances, the Government is duty-bound to insure that our
toiling expatriates have adequate protection, personally and economically, while away from home. In this case, the Government has
evidence, an evidence the petitioner cannot seriously dispute, of the lack or inadequacy of such protection, and as part of its duty, it has
precisely ordered an indefinite ban on deployment.

The Court finds furthermore that the Government has not indiscriminately made use of its authority. It is not contested that it has in fact
removed the prohibition with respect to certain countries as manifested by the Solicitor General.

The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier purposes targetted by the
Government. 31 Freedom of contract and enterprise, like all other freedoms, is not free from restrictions, more so in this jurisdiction,
where laissez faire has never been fully accepted as a controlling economic way of life.

This Court understands the grave implications the questioned Order has on the business of recruitment. The concern of the Government,
however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits that suffer as a result of
Government regulation. The interest of the State is to provide a decent living to its citizens. The Government has convinced the Court in this
case that this is its intent. We do not find the impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary relief
prayed for.

WHEREFORE, the petition is DISMISSED. No costs.

SO ORDERED.
 EN BANC

G.R. No. 177807 October 11, 2011

EMILIO GANCAYCO, Petitioner,

vs.
CITY GOVERNMENT OF QUEZON CITY AND METRO MANILA DEVELOPMENT AUTHORITY, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 177933

METRO MANILA DEVELOPMENT AUTHORITY, Petitioner,

vs.
JUSTICE EMILIO A. GANCAYCO (Retired), Respondent,

DECISION

SERENO, J.:

Before us are consolidated Petitions for Review under Rule 45 of the Rules of Court assailing the Decision1promulgated on 18 July 2006 and
the Resolution2 dated 10 May 2007 of the Court of Appeals in CA-G.R. SP No. 84648.

The Facts

In the early 1950s, retired Justice Emilio A. Gancayco bought a parcel of land located at 746 Epifanio delos Santos Avenue (EDSA), 3 Quezon
City with an area of 375 square meters and covered by Transfer Certificate of Title (TCT) No. RT114558.

On 27 March 1956, the Quezon City Council issued Ordinance No. 2904, entitled "An Ordinance Requiring the Construction of Arcades, for
Commercial Buildings to be Constructed in Zones Designated as Business Zones in the Zoning Plan of Quezon City, and Providing Penalties
in Violation Thereof."4

An arcade is defined as any portion of a building above the first floor projecting over the sidewalk beyond the first storey wall used as
protection for pedestrians against rain or sun.5

Ordinance No. 2904 required the relevant property owner to construct an arcade with a width of 4.50 meters and height of 5.00 meters along
EDSA, from the north side of Santolan Road to one lot after Liberty Avenue, and from one lot before Central Boulevard to the Botocan
transmission line.

At the outset, it bears emphasis that at the time Ordinance No. 2904 was passed by the city council, there was yet no building code passed
by the national legislature. Thus, the regulation of the construction of buildings was left to the discretion of local government units. Under this
particular ordinance, the city council required that the arcade is to be created by constructing the wall of the ground floor facing the sidewalk
a few meters away from the property line. Thus, the building owner is not allowed to construct his wall up to the edge of the property line,
thereby creating a space or shelter under the first floor. In effect, property owners relinquish the use of the space for use as an arcade for
pedestrians, instead of using it for their own purposes.

The ordinance was amended several times. On 8 August 1960, properties located at the Quezon City-San Juan boundary were exempted by
Ordinance No. 60-4477 from the construction of arcades. This ordinance was further amended by Ordinance No. 60-4513, extending the
exemption to commercial buildings from Balete Street to Seattle Street. Ordinance No. 6603 dated 1 March 1966 meanwhile reduced the
width of the arcades to three meters for buildings along V. Luna Road, Central District, Quezon City.

The ordinance covered the property of Justice Gancayco. Subsequently, sometime in 1965, Justice Gancayco sought the exemption of a
two-storey building being constructed on his property from the application of Ordinance No. 2904 that he be exempted from constructing an
arcade on his property.

On 2 February 1966, the City Council acted favorably on Justice Gancayco’s request and issued Resolution No. 7161, S-66, "subject to the
condition that upon notice by the City Engineer, the owner shall, within reasonable time, demolish the enclosure of said arcade at his own
expense when public interest so demands."6

Decades after, in March 2003, the Metropolitan Manila Development Authority (MMDA) conducted operations to clear obstructions along the
sidewalk of EDSA in Quezon City pursuant to Metro Manila Council’s (MMC) Resolution No. 02-28, Series of 2002. 7 The resolution
authorized the MMDA and local government units to "clear the sidewalks, streets, avenues, alleys, bridges, parks and other public places in
Metro Manila of all illegal structures and obstructions."8
On 28 April 2003, the MMDA sent a notice of demolition to Justice Gancayco alleging that a portion of his building violated the National
Building Code of the Philippines (Building Code) 9 in relation to Ordinance No. 2904. The MMDA gave Justice Gancayco fifteen (15) days to
clear the portion of the building that was supposed to be an arcade along EDSA.10

Justice Gancayco did not comply with the notice. Soon after the lapse of the fifteen (15) days, the MMDA proceeded to demolish the party
wall, or what was referred to as the "wing walls," of the ground floor structure. The records of the present case are not entirely clear on the
extent of the demolition; nevertheless, the fact of demolition was not disputed. At the time of the demolition, the affected portion of the
building was being used as a restaurant.

On 29 May 2003, Justice Gancayco filed a Petition 11 with prayer for a temporary restraining order and/or writ of preliminary injunction before
the Regional Trial Court (RTC) of Quezon City, docketed as Civil Case No. Q03-49693, seeking to prohibit the MMDA and the City
Government of Quezon City from demolishing his property. In his Petition, 12 he alleged that the ordinance authorized the taking of private
property without due process of law and just compensation, because the construction of an arcade will require 67.5 square meters from the
375 square meter property. In addition, he claimed that the ordinance was selective and discriminatory in its scope and application when it
allowed the owners of the buildings located in the Quezon City-San Juan boundary to Cubao Rotonda, and Balete to Seattle Streets to
construct arcades at their option. He thus sought the declaration of nullity of Ordinance No. 2904 and the payment of damages. Alternately,
he prayed for the payment of just compensation should the court hold the ordinance valid.

The City Government of Quezon City claimed that the ordinance was a valid exercise of police power, regulating the use of property in a
business zone. In addition, it pointed out that Justice Gancayco was already barred by estoppel, laches and prescription.

Similarly, the MMDA alleged that Justice Gancayco could not seek the nullification of an ordinance that he had already violated, and that the
ordinance enjoyed the presumption of constitutionality. It further stated that the questioned property was a public nuisance impeding the safe
passage of pedestrians. Finally, the MMDA claimed that it was merely implementing the legal easement established by Ordinance No.
2904.13

The RTC rendered its Decision on 30 September 2003 in favor of Justice Gancayco. 14 It held that the questioned ordinance was
unconstitutional, ruling that it allowed the taking of private property for public use without just compensation. The RTC said that because 67.5
square meters out of Justice Gancayco’s 375 square meters of property were being taken without compensation for the public’s benefit, the
ordinance was confiscatory and oppressive. It likewise held that the ordinance violated owners’ right to equal protection of laws. The
dispositive portion thus states:

WHEREFORE, the petition is hereby granted and the Court hereby declares Quezon City Ordinance No. 2094, 15Series of 1956 to be
unconstitutional, invalid and void ab initio. The respondents are hereby permanently enjoined from enforcing and implementing the said
ordinance, and the respondent MMDA is hereby directed to immediately restore the portion of the party wall or wing wall of the building of the
petitioner it destroyed to its original condition.

IT IS SO ORDERED.

The MMDA thereafter appealed from the Decision of the trial court. On 18 July 2006, the Court of Appeals (CA) partly granted the
appeal.16 The CA upheld the validity of Ordinance No. 2904 and lifted the injunction against the enforcement and implementation of the
ordinance. In so doing, it held that the ordinance was a valid exercise of the right of the local government unit to promote the general welfare
of its constituents pursuant to its police powers. The CA also ruled that the ordinance established a valid classification of property owners
with regard to the construction of arcades in their respective properties depending on the location. The CA further stated that there was no
taking of private property, since the owner still enjoyed the beneficial ownership of the property, to wit:

Even with the requirement of the construction of arcaded sidewalks within his commercial lot, appellee still retains the beneficial ownership of
the said property. Thus, there is no "taking" for public use which must be subject to just compensation. While the arcaded sidewalks
contribute to the public good, for providing safety and comfort to passersby, the ultimate benefit from the same still redounds to appellee, his
commercial establishment being at the forefront of a busy thoroughfare like EDSA. The arcaded sidewalks, by their nature, assure clients of
the commercial establishments thereat some kind of protection from accidents and other hazards. Without doubt, this sense of protection can
be a boon to the business activity therein engaged. 17

Nevertheless, the CA held that the MMDA went beyond its powers when it demolished the subject property. It further found that Resolution
No. 02-28 only refers to sidewalks, streets, avenues, alleys, bridges, parks and other public places in Metro Manila, thus excluding Justice
Gancayco’s private property. Lastly, the CA stated that the MMDA is not clothed with the authority to declare, prevent or abate nuisances.
Thus, the dispositive portion stated:

WHEREFORE, the appeals are PARTLY GRANTED. The Decision dated September 30, 2003 of the Regional Trial Court, Branch 224,
Quezon City, is MODIFIED, as follows:

1) The validity and constitutionality of Ordinance No. 2094, 18 Series of 1956, issued by the City Council of Quezon City, is UPHELD;
and

2) The injunction against the enforcement and implementation of the said Ordinance is LIFTED.
SO ORDERED.

This ruling prompted the MMDA and Justice Gancayco to file their respective Motions for Partial Reconsideration.19

On 10 May 2007, the CA denied the motions stating that the parties did not present new issues nor offer grounds that would merit the
reconsideration of the Court.20

Dissatisfied with the ruling of the CA, Justice Gancayco and the MMDA filed their respective Petitions for Review before this Court. The
issues raised by the parties are summarized as follows:

I. WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM ASSAILING THE VALIDITY OF ORDINANCE NO. 2904.

II. WHETHER OR NOT ORDINANCE NO. 2904 IS CONSTITUTIONAL.

III. WHETHER OR NOT THE WING WALL OF JUSTICE GANCAYCO’S BUILDING IS A PUBLIC NUISANCE.

IV. WHETHER OR NOT THE MMDA LEGALLY DEMOLISHED THE PROPERTY OF JUSTICE GANCAYCO.

The Court’s Ruling

Estoppel

The MMDA and the City Government of Quezon City both claim that Justice Gancayco was estopped from challenging the ordinance,
because, in 1965, he asked for an exemption from the application of the ordinance. According to them, Justice Gancayco thereby recognized
the power of the city government to regulate the construction of buildings.

To recall, Justice Gancayco questioned the constitutionality of the ordinance on two grounds: (1) whether the ordinance "takes" private
property without due process of law and just compensation; and (2) whether the ordinance violates the equal protection of rights because it
allowed exemptions from its application.

On the first ground, we find that Justice Gancayco may still question the constitutionality of the ordinance to determine whether or not the
ordinance constitutes a "taking" of private property without due process of law and just compensation. It was only in 2003 when he was
allegedly deprived of his property when the MMDA demolished a portion of the building. Because he was granted an exemption in 1966,
there was no "taking" yet to speak of.

Moreover, in Acebedo Optical Company, Inc. v. Court of Appeals,21 we held:

It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner acquiesced in the special conditions imposed by
the City Mayor in subject business permit does not preclude it from challenging the said imposition, which is ultra vires or beyond the ambit of
authority of respondent City Mayor. Ultra vires acts or acts which are clearly beyond the scope of one's authority are null and void and cannot
be given any effect. The doctrine of estoppel cannot operate to give effect to an act which is otherwise null and void or ultra vires. (Emphasis
supplied.)

Recently, in British American Tobacco v. Camacho,22 we likewise held:

We find that petitioner was not guilty of estoppel. When it made the undertaking to comply with all issuances of the BIR, which at that time it
considered as valid, petitioner did not commit any false misrepresentation or misleading act. Indeed, petitioner cannot be faulted for initially
undertaking to comply with, and subjecting itself to the operation of Section 145(C), and only later on filing the subject case praying for the
declaration of its unconstitutionality when the circumstances change and the law results in what it perceives to be unlawful discrimination.
The mere fact that a law has been relied upon in the past and all that time has not been attacked as unconstitutional is not a ground for
considering petitioner estopped from assailing its validity. For courts will pass upon a constitutional question only when presented before it
in bona fide cases for determination, and the fact that the question has not been raised before is not a valid reason for refusing to allow it to
be raised later. (Emphasis supplied.)

Anent the second ground, we find that Justice Gancayco may not question the ordinance on the ground of equal protection when he also
benefited from the exemption. It bears emphasis that Justice Gancayco himself requested for an exemption from the application of the
ordinance in 1965 and was eventually granted one. Moreover, he was still enjoying the exemption at the time of the demolition as there was
yet no valid notice from the city engineer. Thus, while the ordinance may be attacked with regard to its different treatment of properties that
appears to be similarly situated, Justice Gancayco is not the proper person to do so.

Zoning and the regulation of the construction of buildings are valid exercises of police power .

In MMDA v. Bel-Air Village Association,23 we discussed the nature of police powers exercised by local government units, to wit:
Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the legislature to make,
ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant
to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same. The power is
plenary and its scope is vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and the general
welfare.

It bears stressing that police power is lodged primarily in the National Legislature. It cannot be exercised by any group or body of individuals
not possessing legislative power. The National Legislature, however, may delegate this power to the President and administrative boards as
well as the lawmaking bodies of municipal corporations or local government units. Once delegated, the agents can exercise only such
legislative powers as are conferred on them by the national lawmaking body.

To resolve the issue on the constitutionality of the ordinance, we must first determine whether there was a valid delegation of police power.
Then we can determine whether the City Government of Quezon City acted within the limits of the delegation.

It is clear that Congress expressly granted the city government, through the city council, police power by virtue of Section 12(oo) of Republic
Act No. 537, or the Revised Charter of Quezon City,24 which states:

To make such further ordinances and regulations not repugnant to law as may be necessary to carry into effect and discharge the powers
and duties conferred by this Act and such as it shall deem necessary and proper to provide for the health and safety, promote the prosperity,
improve the morals, peace, good order, comfort, and convenience of the city and the inhabitants thereof, and for the protection of property
therein; and enforce obedience thereto with such lawful fines or penalties as the City Council may prescribe under the provisions of
subsection (jj) of this section.

Specifically, on the powers of the city government to regulate the construction of buildings, the Charter also expressly provided that the city
government had the power to regulate the kinds of buildings and structures that may be erected within fire limits and the manner of
constructing and repairing them.25

With regard meanwhile to the power of the local government units to issue zoning ordinances, we apply Social Justice Society v. Atienza. 26 In
that case, the Sangguniang Panlungsod of Manila City enacted an ordinance on 28 November 2001 reclassifying certain areas of the city
from industrial to commercial. As a result of the zoning ordinance, the oil terminals located in those areas were no longer allowed. Though
the oil companies contended that they stood to lose billions of pesos, this Court upheld the power of the city government to pass the assailed
ordinance, stating:

In the exercise of police power, property rights of individuals may be subjected to restraints and burdens in order to fulfil the objectives of the
government. Otherwise stated, the government may enact legislation that may interfere with personal liberty, property, lawful businesses and
occupations to promote the general welfare. However, the interference must be reasonable and not arbitrary. And to forestall arbitrariness,
the methods or means used to protect public health, morals, safety or welfare must have a reasonable relation to the end in view.

The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified the area where the depot is situated
from industrial to commercial. A zoning ordinance is defined as a local city or municipal legislation which logically arranges, prescribes,
defines and apportions a given political subdivision into specific land uses as present and future projection of needs. As a result of the
zoning, the continued operation of the businesses of the oil companies in their present location will no longer be permitted. The power to
establish zones for industrial, commercial and residential uses is derived from the police power itself and is exercised for the protection and
benefit of the residents of a locality. Consequently, the enactment of Ordinance No. 8027 is within the power of the Sangguniang
Panlungsod of the City of Manila and any resulting burden on those affected cannot be said to be unjust... (Emphasis supplied)

In Carlos Superdrug v. Department of Social Welfare and Development,27 we also held:

For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of police power
because property rights, though sheltered by due process, must yield to general welfare.

Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners that they will suffer
loss of earnings and capital, the questioned provision is invalidated. Moreover, in the absence of evidence demonstrating the alleged
confiscatory effect of the provision in question, there is no basis for its nullification in view of the presumption of validity which every law has
in its favor. (Emphasis supplied.)

In the case at bar, it is clear that the primary objectives of the city council of Quezon City when it issued the questioned ordinance ordering
the construction of arcades were the health and safety of the city and its inhabitants; the promotion of their prosperity; and the improvement
of their morals, peace, good order, comfort, and the convenience. These arcades provide safe and convenient passage along the sidewalk
for commuters and pedestrians, not just the residents of Quezon City. More especially so because the contested portion of the building is
located on a busy segment of the city, in a business zone along EDSA.

Corollarily, the policy of the Building Code,28 which was passed after the Quezon City Ordinance, supports the purpose for the enactment of
Ordinance No. 2904. The Building Code states:
Section 102. Declaration of Policy. – It is hereby declared to be the policy of the State to safeguard life, health, property, and public welfare,
consistent with the principles of sound environmental management and control; and to this end, make it the purpose of this Code to provide
for all buildings and structures, a framework of minimum standards and requirements to regulate and control their location, site, design
quality of materials, construction, occupancy, and maintenance.

Section 1004 likewise requires the construction of arcades whenever existing or zoning ordinances require it. Apparently, the law allows the
local government units to determine whether arcades are necessary within their respective jurisdictions.

Justice Gancayco argues that there is a three-meter sidewalk in front of his property line, and the arcade should be constructed above that
sidewalk rather than within his property line. We do not need to address this argument inasmuch as it raises the issue of the wisdom of the
city ordinance, a matter we will not and need not delve into.

To reiterate, at the time that the ordinance was passed, there was no national building code enforced to guide the city council; thus, there
was no law of national application that prohibited the city council from regulating the construction of buildings, arcades and sidewalks in their
jurisdiction.

The "wing walls" of the building are not nuisances per se.

The MMDA claims that the portion of the building in question is a nuisance per se.

We disagree.

The fact that in 1966 the City Council gave Justice Gancayco an exemption from constructing an arcade is an indication that the wing walls
of the building are not nuisances per se. The wing walls do not per se immediately and adversely affect the safety of persons and property.
The fact that an ordinance may declare a structure illegal does not necessarily make that structure a nuisance.

Article 694 of the Civil Code defines nuisance as any act, omission, establishment, business, condition or property, or anything else that (1)
injures or endangers the health or safety of others; (2) annoys or offends the senses; (3) shocks, defies or disregards decency or morality;
(4) obstructs or interferes with the free passage of any public highway or street, or any body of water; or, (5) hinders or impairs the use of
property. A nuisance may be per se or per accidens. A nuisance per se is that which affects the immediate safety of persons and property
and may summarily be abated under the undefined law of necessity.29

Clearly, when Justice Gancayco was given a permit to construct the building, the city council or the city engineer did not consider the
building, or its demolished portion, to be a threat to the safety of persons and property. This fact alone should have warned the MMDA
against summarily demolishing the structure.

Neither does the MMDA have the power to declare a thing a nuisance. Only courts of law have the power to determine whether a thing is a
nuisance. In AC Enterprises v. Frabelle Properties Corp.,30 we held:

We agree with petitioner's contention that, under Section 447(a)(3)(i) of R.A. No. 7160, otherwise known as the Local Government Code,
the Sangguniang Panglungsod is empowered to enact ordinances declaring, preventing or abating noise and other forms of nuisance. It
bears stressing, however, that the Sangguniang Bayan cannot declare a particular thing as a nuisance per se and order its condemnation. It
does not have the power to find, as a fact, that a particular thing is a nuisance when such thing is not a nuisance per se; nor can it authorize
the extrajudicial condemnation and destruction of that as a nuisance which in its nature, situation or use is not such. Those things must be
determined and resolved in the ordinary courts of law. If a thing be in fact, a nuisance due to the manner of its operation, that question cannot
be determined by a mere resolution of the Sangguniang Bayan. (Emphasis supplied.)

MMDA illegally demolished

the property of Justice Gancayco.

MMDA alleges that by virtue of MMDA Resolution No. 02-28, Series of 2002, it is empowered to demolish Justice Gancayco’s property. It
insists that the Metro Manila Council authorized the MMDA and the local government units to clear the sidewalks, streets, avenues, alleys,
bridges, parks and other public places in Metro Manila of all illegal structures and obstructions. It further alleges that it demolished the
property pursuant to the Building Code in relation to Ordinance No. 2904 as amended.

However, the Building Code clearly provides the process by which a building may be demolished. The authority to order the demolition of any
structure lies with the Building Official. The pertinent provisions of the Building Code provide:

SECTION 205. Building Officials. — Except as otherwise provided herein, the Building Official shall be responsible for carrying out the
provisions of this Code in the field as well as the enforcement of orders and decisions made pursuant thereto.

Due to the exigencies of the service, the Secretary may designate incumbent Public Works District Engineers, City Engineers and Municipal
Engineers act as Building Officials in their respective areas of jurisdiction.
The designation made by the Secretary under this Section shall continue until regular positions of Building Official are provided or unless
sooner terminated for causes provided by law or decree.

xxx xxx xxx

SECTION 207. Duties of a Building Official. — In his respective territorial jurisdiction, the Building Official shall be primarily responsible for
the enforcement of the provisions of this Code as well as of the implementing rules and regulations issued therefor. He is the official charged
with the duties of issuing building permits.

In the performance of his duties, a Building Official may enter any building or its premises at all reasonable times to inspect and determine
compliance with the requirements of this Code, and the terms and conditions provided for in the building permit as issued.

When any building work is found to be contrary to the provisions of this Code, the Building Official may order the work stopped and prescribe
the terms and/or conditions when the work will be allowed to resume. Likewise, the Building Official is authorized to order the discontinuance
of the occupancy or use of any building or structure or portion thereof found to be occupied or used contrary to the provisions of this Code.

xxx xxx xxx

SECTION 215. Abatement of Dangerous Buildings. — When any building or structure is found or declared to be dangerous or ruinous, the
Building Official shall order its repair, vacation or demolition depending upon the degree of danger to life, health, or safety. This is without
prejudice to further action that may be taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of the Philippines.
(Emphasis supplied.)

MMDA v. Trackworks Rail Transit Advertising, Vending and Promotions, Inc. 31 is applicable to the case at bar. In that case, MMDA, invoking
its charter and the Building Code, summarily dismantled the advertising media installed on the Metro Rail Transit (MRT) 3. This Court held:

It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of Trackworks' billboards, signages and other advertising
media. MMDA simply had no power on its own to dismantle, remove, or destroy the billboards, signages and other advertising media
installed on the MRT3 structure by Trackworks. In Metropolitan Manila Development Authority v. Bel-Air Village
Association, Inc., Metropolitan Manila Development Authority v. Viron Transportation Co., Inc., and Metropolitan Manila Development
Authority v. Garin, the Court had the occasion to rule that MMDA's powers were limited to the formulation, coordination, regulation,
implementation, preparation, management, monitoring, setting of policies, installing a system, and administration. Nothing in Republic Act
No. 7924 granted MMDA police power, let alone legislative power.

Clarifying the real nature of MMDA, the Court held:

...The MMDA is, as termed in the charter itself, a "development authority". It is an agency created for the purpose of laying down policies and
coordinating with the various national government agencies, people's organizations, non-governmental organizations and the private sector
for the efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in nature and these
are actually summed up in the charter itself, viz:

Sec.2. Creation of the Metropolitan Manila Development Authority.- xxx.

The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise regulatory and supervisory authority
over the delivery of metro-wide services within Metro Manila, without diminution of the autonomy of local government units concerning purely
local matters.

The Court also agrees with the CA's ruling that MMDA Regulation No. 96-009 and MMC Memorandum Circular No. 88-09 did not apply to
Trackworks' billboards, signages and other advertising media. The prohibition against posting, installation and display of billboards, signages
and other advertising media applied only to public areas, but MRT3, being private property pursuant to the BLT agreement between the
Government and MRTC, was not one of the areas as to which the prohibition applied. Moreover, MMC Memorandum Circular No. 88-09 did
not apply to Trackworks' billboards, signages and other advertising media in MRT3, because it did not specifically cover MRT3, and because
it was issued a year prior to the construction of MRT3 on the center island of EDSA. Clearly, MMC Memorandum Circular No. 88-09 could
not have included MRT3 in its prohibition.

MMDA's insistence that it was only implementing Presidential Decree No. 1096 (Building Code) and its implementing rules and regulations is
not persuasive. The power to enforce the provisions of the Building Code was lodged in the Department of Public Works and Highways
(DPWH), not in MMDA, considering the law's following provision, thus:

Sec. 201. Responsibility for Administration and Enforcement. –

The administration and enforcement of the provisions of this Code including the imposition of penalties for administrative violations thereof is
hereby vested in the Secretary of Public Works, Transportation and Communications, hereinafter referred to as the "Secretary."
There is also no evidence showing that MMDA had been delegated by DPWH to implement the Building Code. (Emphasis supplied.)

Additionally, the penalty prescribed by Ordinance No. 2904 itself does not include the demolition of illegally constructed buildings in case of
violations. Instead, it merely prescribes a punishment of "a fine of not more than two hundred pesos (₱200.00) or by imprisonment of not
more than thirty (30) days, or by both such fine and imprisonment at the discretion of the Court, Provided, that if the violation is committed by
a corporation, partnership, or any juridical entity, the Manager, managing partner, or any person charged with the management thereof shall
be held responsible therefor." The ordinance itself also clearly states that it is the regular courts that will determine whether there was a
violation of the ordinance.

As pointed out in Trackworks, the MMDA does not have the power to enact ordinances. Thus, it cannot supplement the provisions of Quezon
City Ordinance No. 2904 merely through its Resolution No. 02-28.

Lastly, the MMDA claims that the City Government of Quezon City may be considered to have approved the demolition of the structure,
simply because then Quezon City Mayor Feliciano R. Belmonte signed MMDA Resolution No. 02-28. In effect, the city government delegated
these powers to the MMDA. The powers referred to are those that include the power to declare, prevent and abate a nuisance 32 and to
further impose the penalty of removal or demolition of the building or structure by the owner or by the city at the expense of the owner.33

MMDA’s argument does not hold water. There was no valid delegation of powers to the MMDA. Contrary to the claim of the MMDA, the City
Government of Quezon City washed its hands off the acts of the former. In its Answer, 34 the city government stated that "the demolition was
undertaken by the MMDA only, without the participation and/or consent of Quezon City." Therefore, the MMDA acted on its own and should
be held solely liable for the destruction of the portion of Justice Gancayco’s building.

WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals in CA-G.R. SP No. 84648 is AFFIRMED.

SO ORDERED.
 FIRST DIVISION

G.R. No. 135962 March 27, 2000

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner,

vs.
BEL-AIR VILLAGE ASSOCIATION, INC., respondent.

PUNO, J.:

Not infrequently, the government is tempted to take legal shortcuts solve urgent problems of the people. But even when government is armed
with the best of intention, we cannot allow it to run roughshod over the rule of law. Again, we let the hammer fall and fall hard on the illegal
attempt of the MMDA to open for public use a private road in a private subdivision. While we hold that the general welfare should be
promoted, we stress that it should not be achieved at the expense of the rule of law.

Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Respondent Bel-Air Village Association,
Inc. (BAVA) is a non-stock, non-profit corporation whose members are homeowners in Bel-Air Village, a private subdivision in Makati City.
Respondent BAVA is the registered owner of Neptune Street, a road inside Bel-Air Village.

On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, 1995 requesting
respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. The notice reads:

SUBJECT: NOTICE of the Opening of Neptune Street to Traffic.

Dear President Lindo,

Please be informed that pursuant to the mandate of the MMDA law or Republic Act No. 7924 which requires the Authority to rationalize
the use of roads and/or thoroughfares for the safe and convenient movement of persons, Neptune Street shall be opened to vehicular
traffic effective January 2, 1996.

In view whereof, the undersigned requests you to voluntarily open the points of entry and exit on said street.

Thank you for your cooperation and whatever assistance that may be extended by your association to the MMDA personnel who will be
directing traffic in the area.

Finally, we are furnishing you with a copy of the handwritten instruction of the President on the matter.

Very truly yours,

PROSPERO I. ORETA

Chairman 1

On the same day, respondent was apprised that the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would
be demolished.

On January 2, 1996, respondent instituted against petitioner before the Regional Trial Court, Branch 136, Makati City, Civil Case No. 96-001
for injunction. Respondent prayed for the issuance of a temporary restraining order and preliminary injunction enjoining the opening of
Neptune Street and prohibiting the demolition of the perimeter wall. The trial court issued a temporary restraining order the following day.

On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary injunction. 2 Respondent questioned the denial before
the Court of Appeals in CA-G.R. SP No. 39549. The appellate court conducted an ocular inspection of Neptune Street 3 and on February 13,
1996, it issued a writ of preliminary injunction enjoining the implementation of the MMDA's proposed action. 4

On January 28, 1997, the appellate court rendered a Decision on the merits of the case finding that the MMDA has no authority to order the
opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter walls. It held that the authority is lodged in the
City Council of Makati by ordinance. The decision disposed of as follows:

WHEREFORE, the Petition is GRANTED; the challenged Order dated January 23, 1995, in Civil Case No. 96-001, is SET ASIDE and
the Writ of Preliminary Injunction issued on February 13, 1996 is hereby made permanent.

For want of sustainable substantiation, the Motion to Cite Roberto L. del Rosario in contempt is denied. 5
 No pronouncement as to costs.

SO ORDERED. 6

The Motion for Reconsideration of the decision was denied on September 28, 1998. Hence, this recourse.

Petitioner MMDA raises the following questions:

I. HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THE MANDATE TO OPEN NEPTUNE STREET TO
PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND POLICE POWERS?

II. IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THE MMDA MAY ORDER THE OPENING OF
SUBDIVISION ROADS TO PUBLIC TRAFFIC?

III. IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYING OR ASSAILING THE AUTHORITY OF
THE MMDA TO OPEN THE SUBJECT STREET?

IV. WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGS HELD BETWEEN MMDA AND THE
AFFECTED EEL-AIR RESIDENTS AND BAVA OFFICERS?

V. HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?7

Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private residential subdivision in the heart of the
financial and commercial district of Makati City. It runs parallel to Kalayaan Avenue, a national road open to the general public. Dividing the
two (2) streets is a concrete perimeter wall approximately fifteen (15) feet high. The western end of Neptune Street intersects Nicanor Garcia,
formerly Reposo Street, a subdivision road open to public vehicular traffic, while its eastern end intersects Makati Avenue, a national road.
Both ends of Neptune Street are guarded by iron gates.

Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agent of the state endowed with
police power in the delivery of basic services in Metro Manila. One of these basic services is traffic management which involves the
regulation of the use of thoroughfares to insure the safety, convenience and welfare of the general public. It is alleged that the police power
of MMDA was affirmed by this Court in the consolidated cases of Sangalang v. Intermediate Appellate Court. 8 From the premise that it has
police power, it is now urged that there is no need for the City of Makati to enact an ordinance opening Neptune street to the public. 9

Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the legislature to make,
ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant
to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same. 10 The power is
plenary and its scope is vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and the general
welfare. 11

It bears stressing that police power is lodged primarily in the National Legislature. 12 It cannot be exercised by any group or body of
individuals not possessing legislative power. 13 The National Legislature, however, may delegate this power to the President and
administrative boards as well as the lawmaking bodies of municipal corporations or local government units. 14 Once delegated, the agents
can exercise only such legislative powers as are conferred on them by the national lawmaking body. 15

A local government is a "political subdivision of a nation or state which is constituted by law and has substantial control of local affairs." 16 The
Local Government Code of 1991 defines a local government unit as a "body politic and corporate." 17 — one endowed with powers as a
political subdivision of the National Government and as a corporate entity representing the inhabitants of its territory. 18 Local government
units are the provinces, cities, municipalities and barangays. 19 They are also the territorial and political subdivisions of the state. 20

Our Congress delegated police power to the local government units in the Local Government Code of 1991. This delegation is found in
Section 16 of the same Code, known as the general welfare clause, viz:

Sec. 16. General Welfare. — Every local government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and
support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities,
improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of their inhabitants. 21

Local government units exercise police power through their respective legislative bodies. The legislative body of the provincial government is
the sangguniang panlalawigan, that of the city government is the sangguniang panlungsod, that of the municipal government is
the sangguniang bayan, and that of the barangay is the sangguniang barangay. The Local Government Code of 1991 empowers
the sangguniang panlalawigan, sangguniang panlungsod and sangguniang bayan to "enact ordinances, approve resolutions and appropriate
funds for the general welfare of the [province, city or municipality, as the case may be], and its inhabitants pursuant to Section 16 of the Code
and in the proper exercise of the corporate powers of the [province, city municipality] provided under the Code . . . " 22 The same Code gives
the sangguniang barangay the power to "enact ordinances as may be necessary to discharge the responsibilities conferred upon it by law or
ordinance and to promote the general welfare of the inhabitants thereon." 23

Metropolitan or Metro Manila is a body composed of several local government units — i.e., twelve (12) cities and five (5) municipalities,
namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pinas, Marikina, Paranaque and
Valenzuela, and the municipalities of Malabon, Navotas, Pateros, San Juan and Taguig. With the passage of Republic Act (R. A.)
No. 7924 24 in 1995, Metropolitan Manila was declared as a "special development and administrative region" and the Administration
of "metro-wide" basic services affecting the region placed under "a development authority" referred to as the MMDA. 25

"Metro-wide services" are those "services which have metro-wide impact and transcend local political boundaries or entail huge expenditures
such that it would not be viable for said services to be provided by the individual local government units comprising Metro Manila." 26 There
are seven (7) basic metro-wide services and the scope of these services cover the following: (1) development planning; (2) transport and
traffic management; (3) solid waste disposal and management; (4) flood control and sewerage management; (5) urban renewal, zoning and
land use planning, and shelter services; (6) health and sanitation, urban protection and pollution control; and (7) public safety. The basic
service of transport and traffic management includes the following:

(b) Transport and traffic management which include the formulation, coordination, and monitoring of policies, standards, programs and
projects to rationalize the existing transport operations, infrastructure requirements,the use of thoroughfares, and promotion of safe and
convenient movement of persons and goods; provision for the mass transport system and the institution of a system to regulate road
users; administration and implementation of all traffic enforcement operations, traffic engineering services and traffic education
programs, including the institution of a single ticketing system in Metropolitan Manila;" 27

In the delivery of the seven (7) basic services, the MMDA has the following powers and functions:

Sec. 5. Functions and powers of the Metro Manila Development Authority. — The MMDA shall:

(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and programs for the delivery of metro-wide
services, land use and physical development within Metropolitan Manila, consistent with national development objectives and priorities;

(b) Prepare, coordinate and regulate the implementation of medium-term investment programs for metro-wide services which shall
indicate sources and uses of funds for priority programs and projects, and which shall include the packaging of projects and presentation
to funding institutions;

(c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific services under its jurisdiction,
subject to the approval of the Council. For this purpose, MMDA can create appropriate project management offices;

(d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila; identify bottlenecks and adopt
solutions to problems of implementation;

(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and regulate the implementation of all
programs and projects concerning traffic management, specifically pertaining to enforcement, engineering and education. Upon request,
it shall be extended assistance and cooperation, including but not limited to, assignment of personnel, by all other government agencies
and offices concerned;

(f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and
regulations, whether moving or non-moving in nature, and confiscate and suspend or revoke drivers' licenses in the enforcement of such
traffic laws and regulations, the provisions of RA 4136 and PD 1605 to the contrary notwithstanding. For this purpose, the Authority shall
impose all traffic laws and regulations in Metro Manila, through its traffic operation center, and may deputize members of the PNP, traffic
enforcers of local government units, duly licensed security guards, or members of non-governmental organizations to whom may be
delegated certain authority, subject to such conditions and requirements as the Authority may impose; and

(g) Perform other related functions required to achieve the objectives of the MMDA, including the undertaking of delivery of basic
services to the local government units, when deemed necessary subject to prior coordination with and consent of the local government
unit concerned.

The implementation of the MMDA's plans, programs and projects is undertaken by the local government units, national government
agencies, accredited people's organizations, non-governmental organizations, and the private sector as well as by the MMDA itself. For this
purpose, the MMDA has the power to enter into contracts, memoranda of agreement and other arrangements with these bodies for the
delivery of the required services Metro Manila. 28

The governing board of the MMDA is the Metro Manila Council. The Council is composed of the mayors of the component 12 cities and 5
municipalities, the president of the Metro Manila Vice-Mayors' League and the president of the Metro Manila Councilors' League. 29 The
Council is headed by Chairman who is appointed by the President and vested with the rank of cabinet member. As the policy-making body of
the MMDA, the Metro Manila Council approves metro-wide plans, programs and projects, and issues the necessary rules and regulations for
the implementation of said plans; it approves the annual budget of the MMDA and promulgate the rules and regulations for the delivery of
basic services, collection of service and regulatory fees, fines and penalties. These functions are particularly enumerated as follows:

Sec. 6. Functions of the Metro Manila Council. —

(a) The Council shall be the policy-making body of the MMDA;

(b) It shall approve metro-wide plans, programs and projects and issue rules and regulations deemed necessary by the MMDA to carry
out the purposes of this Act;

(c) It may increase the rate of allowances and per diems of the members of the Council to be effective during the term of the succeeding
Council. It shall fix the compensation of the officers and personnel of the MMDA, and approve the annual budget thereof for submission
to the Department of Budget and Management (DBM);

(d) It shall promulgate rules and regulations and set policies and standards for metro-wide application governing the delivery of basic
services, prescribe and collect service and regulatory fees, and impose and collect fines and penalties.

Clearly, the scope of the MMDA's function is limited to the delivery of the seven (7) basic services. One of these is transport and traffic
management which includes the formulation and monitoring of policies, standards and projects to rationalize the existing transport
operations, infrastructure requirements, the use of thoroughfares and promotion of the safe movement of persons and goods. It also covers
the mass transport system and the institution of a system of road regulation, the administration of all traffic enforcement operations, traffic
engineering services and traffic education programs, including the institution of a single ticketing system in Metro Manila for traffic violations.
Under the service, the MMDA is expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the implementation
of all traffic management programs." In addition, the MMDA may "install and administer a single ticketing system," fix, impose and collect
fines and penalties for all traffic violations.

It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation,
preparation, management, monitoring, setting of policies, installation of a system and administration. There is no syllable in R.A. No. 7924
that grants the MMDA police power, let alone legislative power. Even the Metro Manila Council has not been delegated any legislative power.
Unlike the legislative bodies of the local government units, there is no provision in R.A. No. 7924 that empowers the MMDA or its Council to
"enact ordinances, approve resolutions appropriate funds for the general welfare" of the inhabitants of Metro Manila. The MMDA is, as
termed in the charter itself, "development authority." 30 It is an agency created for the purpose of laying down policies and coordinating with
the various national government agencies, people's organizations, non-governmental organizations and the private sector for the efficient
and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in nature and these are actually
summed up in the charter itself, viz:

Sec. 2. Creation of the Metropolitan Manila Development Authority. — . . . .

The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise regulatory and supervisory
authority over the delivery of metro-wide services within Metro Manila, without diminution of the autonomy of the local government units
concerning purely local matters. 31

Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court 32 where we upheld a zoning ordinance issued by the
Metro Manila Commission (MMC), the predecessor of the MMDA, as an exercise of police power. The first Sangalang decision was on the
merits of the petition, 33 while the second decision denied reconsideration of the first case and in addition discussed the case of Yabut
v. Court of Appeals. 34

Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and three residents of Bel-Air Village against other
residents of the Village and the Ayala Corporation, formerly the Makati Development Corporation, as the developer of the subdivision. The
petitioners sought to enforce certain restrictive easements in the deeds of sale over their respective lots in the subdivision. These were the
prohibition on the setting up of commercial and advertising signs on the lots, and the condition that the lots be used only for residential
purposes. Petitioners alleged that respondents, who were residents along Jupiter Street of the subdivision, converted their residences into
commercial establishments in violation of the "deed restrictions," and that respondent Ayala Corporation ushered in the full
commercialization" of Jupiter Street by tearing down the perimeter wall that separated the commercial from the residential section of the
village. 35

The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of Makati and Ordinance No. 81-01 of the Metro Manila
Commission (MMC). Municipal Ordinance No. 81 classified Bel-Air Village as a Class A Residential Zone, with its boundary in the south
extending to the center line of Jupiter Street. The Municipal Ordinance was adopted by the MMC under the Comprehensive Zoning
Ordinance for the National Capital Region and promulgated as MMC Ordinance No. 81-01. Bel-Air Village was indicated therein as bounded
by Jupiter Street and the block adjacent thereto was classified as a High Intensity Commercial Zone. 36

We ruled that since both Ordinances recognized Jupiter Street as the boundary between Bel-Air Village and the commercial district, Jupiter
Street was not for the exclusive benefit of Bel-Air residents. We also held that the perimeter wall on said street was constructed not to
separate the residential from the commercial blocks but simply for security reasons, hence, in tearing down said wall, Ayala Corporation did
not violate the "deed restrictions" in the deeds of sale.
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate exercise of police power. 37 The power of the MMC and the
Makati Municipal Council to enact zoning ordinances for the general welfare prevailed over the "deed restrictions".

In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street was warranted by the demands of the common good in
terms of "traffic decongestion and public convenience." Jupiter was opened by the Municipal Mayor to alleviate traffic congestion along the
public streets adjacent to the Village. 38 The same reason was given for the opening to public vehicular traffic of Orbit Street, a road inside the
same village. The destruction of the gate in Orbit Street was also made under the police power of the municipal government. The gate, like
the perimeter wall along Jupiter, was a public nuisance because it hindered and impaired the use of property, hence, its summary abatement
by the mayor was proper and legal. 39

Contrary to petitioner's claim, the two Sangalang cases do not apply to the case at bar. Firstly, both involved zoning ordinances passed by
the municipal council of Makati and the MMC. In the instant case, the basis for the proposed opening of Neptune Street is contained in the
notice of December 22, 1995 sent by petitioner to respondent BAVA, through its president. The notice does not cite any ordinance or law,
either by the Sangguniang Panlungsod of Makati City or by the MMDA, as the legal basis for the proposed opening of Neptune Street.
Petitioner MMDA simply relied on its authority under its charter "to rationalize the use of roads and/or thoroughfares for the safe and
convenient movement of persons." Rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of transport
and traffic management. By no stretch of the imagination, however, can this be interpreted as an express or implied grant of ordinance-
making power, much less police power.

Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunner of the present MMDA, an
examination of Presidential Decree (P. D.) No. 824, the charter of the MMC, shows that the latter possessed greater powers which were not
bestowed on the present MMDA.

Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It comprised the Greater Manila Area composed of the
contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen (13) municipalities of Makati, Mandaluyong, San Juan,
Las Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque, Marikina, Muntinlupa and Taguig in the province of Rizal, and Valenzuela in the
province of Bulacan. 40 Metropolitan Manila was created as a response to the finding that the rapid growth of population and the increase of
social and economic requirements in these areas demand a call for simultaneous and unified development; that the public services rendered
by the respective local governments could be administered more efficiently and economically if integrated under a system of central planning;
and this coordination, "especially in the maintenance of peace and order and the eradication of social and economic ills that fanned the
flames of rebellion and discontent [were] part of reform measures under Martial Law essential to the safety and security of the State." 41

Metropolitan Manila was established as a "public corporation" with the following powers:

Sec. 1. Creation of the Metropolitan Manila. — There is hereby created a public corporation, to be known as the Metropolitan
Manila, vested with powers and attributes of a corporation including the power to make contracts, sue and be
sued, acquire, purchase, expropriate, hold, transfer and dispose of property and such other powers as are necessary to carry out its
purposes. The Corporation shall be administered by a Commission created under this Decree. 42

The administration of Metropolitan Manila was placed under the Metro Manila Commission (MMC) vested with the following powers:

Sec. 4. Powers and Functions of the Commission. — The Commission shall have the following powers and functions:

1. To act as a central government to establish and administer programs and provide services common to the area;

2. To levy and collect taxes and special assessments, borrow and expend money and issue bonds, revenue certificates, and other
obligations of indebtedness. Existing tax measures should, however, continue to be operative until otherwise modified or repealed by the
Commission;

3. To charge and collect fees for the use of public service facilities;

4. To appropriate money for the operation of the metropolitan government and review appropriations for the city and municipal units
within its jurisdiction with authority to disapprove the same if found to be not in accordance with the established policies of the
Commission, without prejudice to any contractual obligation of the local government units involved existing at the time of approval of this
Decree;

5. To review, amend, revise or repeal all ordinances, resolutions and acts of cities and municipalities within Metropolitan Manila;

6. To enact or approve ordinances, resolutions and to fix penalties for any violation thereof which shall not exceed a fine of P10,000.00
or imprisonment of six years or both such fine and imprisonment for a single offense;

7. To perform general administrative, executive and policy-making functions;

8. To establish a fire control operation center, which shall direct the fire services of the city and municipal governments in the
metropolitan area;
 9. To establish a garbage disposal operation center, which shall direct garbage collection and disposal in the metropolitan area;

10. To establish and operate a transport and traffic center, which shall direct traffic activities;

11. To coordinate and monitor governmental and private activities pertaining to essential services such as transportation, flood control
and drainage, water supply and sewerage, social, health and environmental services, housing, park development, and others;

12. To insure and monitor the undertaking of a comprehensive social, economic and physical planning and development of the area;

13. To study the feasibility of increasing barangay participation in the affairs of their respective local governments and to propose to the
President of the Philippines definite programs and policies for implementation;

14. To submit within thirty (30) days after the close of each fiscal year an annual report to the President of the Philippines and to submit
a periodic report whenever deemed necessary; and

15. To perform such other tasks as may be assigned or directed by the President of the Philippines.

The MMC was the "central government" of Metro Manila for the purpose of establishing and administering programs providing services
common to the area. As a "central government" it had the power to levy and collect taxes and special assessments, the power to charge and
collect fees; the power to appropriate money for its operation, and at the same time, review appropriations for the city and municipal units
within its jurisdiction. It was bestowed the power to enact or approve ordinances, resolutions and fix penalties for violation of such ordinances
and resolutions. It also had the power to review, amend, revise or repeal all ordinances, resolutions and acts of any of the four (4) cities and
thirteen (13) municipalities comprising Metro Manila.

P.D. No. 824 further provided:

Sec. 9. Until otherwise provided, the governments of the four cities and thirteen municipalities in the Metropolitan Manila shall continue
to exist in their present form except as may be inconsistent with this Decree. The members of the existing city and municipal councils in
Metropolitan Manila shall, upon promulgation of this Decree, and until December 31, 1975, become members of the Sangguniang
Bayan which is hereby created for every city and municipality of Metropolitan Manila.

In addition, the Sangguniang Bayan shall be composed of as many barangay captains as may be determined and chosen by the
Commission, and such number of representatives from other sectors of the society as may be appointed by the President upon
recommendation of the Commission.

xxx xxx xxx

The Sangguniang Bayan may recommend to the Commission ordinances, resolutions or such measures as it may adopt; Provided, that
no such ordinance, resolution or measure shall become effective, until after its approval by the Commission; and Provided further, that
the power to impose taxes and other levies, the power to appropriate money and the power to pass ordinances or resolutions with penal
sanctions shall be vested exclusively in the Commission.

The creation of the MMC also carried with it the creation of the Sangguniang Bayan. This was composed of the members of the component
city and municipal councils, barangay captains chosen by the MMC and sectoral representatives appointed by the President.
The Sangguniang Bayan had the power to recommend to the MMC the adoption of ordinances, resolutions or measures. It was the MMC
itself, however, that possessed legislative powers. All ordinances, resolutions and measures recommended by the Sangguniang Bayan were
subject to the MMC's approval. Moreover, the power to impose taxes and other levies, the power to appropriate money, and the power to
pass ordinances or resolutions with penal sanctions were vested exclusively in the MMC.

Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully possessed legislative police powers. Whatever legislative
powers the component cities and municipalities had were all subject to review and approval by the MMC.

After President Corazon Aquino assumed power, there was a clamor to restore the autonomy of the local government units in Metro Manila.
Hence, Sections 1 and 2 of Article X of the 1987 Constitution provided:

Sec. 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities and barangays.
There shall be autonomous regions in Muslim Mindanao and the Cordilleras as herein provided.

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.

The Constitution, however, recognized the necessity of creating metropolitan regions not only in the existing National Capital Region but also
in potential equivalents in the Visayas and Mindanao. 43 Section 11 of the same Article X thus provided:
 Sec. 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as set forth in Section 10
hereof. The component cities and municipalities shall retain their basic autonomy and shall be entitled to their own local executives and
legislative assemblies. The jurisdiction of the metropolitan authority that will thereby be created shall be limited to basic services
requiring coordination.

Constitution itself expressly provides that Congress may, by law, create "special metropolitan political subdivisions" which shall be subject to
approval by a majority of the votes cast in a plebiscite in the political units directly affected; the jurisdiction of this subdivision shall be limited
to basic services requiring coordination; and the cities and municipalities comprising this subdivision shall retain their basic services requiring
coordination; and the cities and municipalities comprising this subdivision shall retain their basic autonomy and their own local executive and
legislative assemblies. 44 Pending enactment of this law, the Transitory Provisions of the Constitution gave the President of the Philippines the
power to constitute the Metropolitan Authority, viz:

Sec. 8. Until otherwise provided by Congress, the President may constitute the Metropolitan Authority to be composed of the heads of all
local government units comprising the Metropolitan Manila area. 45

In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted the Metropolitan Manila Authority (MMA). The powers and
functions of the MMC were devolved to the MMA. 46 It ought to be stressed, however, that not all powers and functions of the MMC were
passed to the MMA. The MMA's power was limited to the "delivery of basic urban services requiring coordination in Metropolitan
Manila." 47 The MMA's governing body, the Metropolitan Manila Council, although composed of the mayors of the component cities and
municipalities, was merely given power of: (1) formulation of policies on the delivery of basic services requiring coordination and
consolidation; and (2) promulgation resolutions and other issuances, approval of a code of basic services and the exercise of its rule-making
power. 48

Under the 1987 Constitution, the local government units became primarily responsible for the governance of their respective political
subdivisions. The MMA's jurisdiction was limited to addressing common problems involving basic services that transcended local
boundaries. It did not have legislative power. Its power was merely to provide the local government units technical assistance in the
preparation of local development plans. Any semblance of legislative power it had was confined to a "review [of] legislation proposed by the
local legislative assemblies to ensure consistency among local governments and with the comprehensive development plan of Metro
Manila," and to "advise the local governments accordingly." 49

When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative region" and the MMDA a "special
development authority" whose functions were "without prejudice to the autonomy of the affected local government units." The character of
the MMDA was clearly defined in the legislative debates enacting its charter.

R.A. No. 7924 originated as House Bill No. 14170/11116 and was introduced by several legislators led by Dante Tinga, Roilo Golez and
Feliciano Belmonte. It was presented to the House of Representatives by the Committee on Local Governments chaired by Congressman
Ciriaco R. Alfelor. The bill was a product of Committee consultations with the local government units in the National Capital Region (NCR),
with former Chairmen of the MMC and MMA, 50 and career officials of said agencies. When the bill was first taken up by the Committee on
Local Governments, the following debate took place:

THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been debated a long time ago, you know. It's a special . . . we
can create a special metropolitan political subdivision.

Actually, there are only six (6) political subdivisions provided for in the Constitution: barangay, municipality, city, province, and we have
the Autonomous Region of Mindanao and we have the Cordillera. So we have 6. Now. . . . .

HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the Autonomous Region, that is also specifically mandated by the
Constitution.

THE CHAIRMAN: That's correct. But it is considered to be a political subdivision. What is the meaning of a political subdivision?
Meaning to say, that it has its own government, it has its own political personality, it has the power to tax, and all governmental powers:
police power and everything. All right. Authority is different; because it does not have its own government. It is only a council, it is an
organization of political subdivision, powers, "no, which is not imbued with any political power.

If you go over Section 6, where the powers and functions of the Metro Manila Development Authority, it is purely coordinative. And it
provides here that the council is policy-making. All right.

Under the Constitution is a Metropolitan Authority with coordinative power. Meaning to say, it coordinates all of the different basic
services which have to be delivered to the constituency. All right.

There is now a problem. Each local government unit is given its respective . . . as a political subdivision. Kalookan has its powers, as
provided for and protected and guaranteed by the Constitution. All right, the exercise. However, in the exercise of that power, it might be
deleterious and disadvantageous to other local government units. So, we are forming an authority where all of these will be members
and then set up a policy in order that the basic services can be effectively coordinated. All right.
 Of course, we cannot deny that the MMDA has to survive. We have to provide some funds, resources. But it does not possess any
political power. We do not elect the Governor. We do not have the power to tax. As a matter of fact, I was trying to intimate to the author
that it must have the power to sue and be sued because it coordinates. All right. It coordinates practically all these basic services so that
the flow and the distribution of the basic services will be continuous. Like traffic, we cannot deny that. It's before our eyes. Sewerage,
flood control, water system, peace and order, we cannot deny these. It's right on our face. We have to look for a solution. What would be
the right solution? All right, we envision that there should be a coordinating agency and it is called an authority. All right, if you do not
want to call it an authority, it's alright. We may call it a council or maybe a management agency.

xxx xxx x x x 51

Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given to the Metro Manila Council to
promulgate administrative rules and regulations in the implementation of the MMDA's functions. There is no grant of authority to enact
ordinances and regulations for the general welfare of the inhabitants of the metropolis. This was explicitly stated in the last Committee
deliberations prior to the bill's presentation to Congress. Thus:

THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think this was already approved before, but it was
reconsidered in view of the proposals, set-up, to make the MMDA stronger. Okay, so if there is no objection to paragraph "f". . . And then
next is paragraph "b," under Section 6. "It shall approve metro-wide plans, programs and projects and issue ordinances or resolutions
deemed necessary by the MMDA to carry out the purposes of this Act." Do you have the powers? Does the MMDA... because that takes
the form of a local government unit, a political subdivision.

HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we say that it has the policies, it's very clear that those policies must
be followed. Otherwise, what's the use of empowering it to come out with policies. Now, the policies may be in the form of a resolution or
it may be in the form of a ordinance. The term "ordinance" in this case really gives it more teeth, your honor. Otherwise, we are going to
see a situation where you have the power to adopt the policy but you cannot really make it stick as in the case now, and I think here is
Chairman Bunye. I think he will agree that that is the case now. You've got the power to set a policy, the body wants to follow your policy,
then we say let's call it an ordinance and see if they will not follow it.

THE CHAIRMAN: That's very nice. I like that. However, there is a constitutional impediment.1âwphi1 You are making this MMDA a
political subdivision. The creation of the MMDA would be subject to a plebiscite. That is what I'm trying to avoid. I've been trying to avoid
this kind of predicament. Under the Constitution it states: if it is a political subdivision, once it is created it has to be subject to a
plebiscite. I'm trying to make this as administrative. That's why we place the Chairman as a cabinet rank.

HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is . . . . .

THE CHAIRMAN: In setting up ordinances, it is a political exercise, Believe me.

HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and regulations. That would be . . . it shall also be
enforced.

HON. BELMONTE: Okay, I will . . . .

HON. LOPEZ: And you can also say that violation of such rule, you impose a sanction. But you know, ordinance has a different legal
connotation.

HON. BELMONTE: All right, I defer to that opinion, your Honor.

THE CHAIRMAN: So instead of ordinances, say rules and regulations.

HON. BELMONTE: Or resolutions. Actually, they are actually considering resolutions now.

THE CHAIRMAN: Rules and resolutions.

HON. BELMONTE: Rules, regulations and resolutions. 52

The draft of H. B. No. 14170/11116 was presented by the Committee to the House of Representatives. The explanatory note to the bill stated
that the proposed MMDA is a "development authority" which is a "national agency, not a political government unit." 53 The explanatory note
was adopted as the sponsorship speech of the Committee on Local Governments. No interpellations or debates were made on the floor and
no amendments introduced. The bill was approved on second reading on the same day it was presented. 54

When the bill was forwarded to the Senate, several amendments were made.1âwphi1 These amendments, however, did not affect the nature
of the MMDA as originally conceived in the House of Representatives. 55

It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed with legislative power. It is not even a
"special metropolitan political subdivision" as contemplated in Section 11, Article X of the Constitution. The creation of a "special metropolitan
political subdivision" requires the approval by a majority of the votes cast in a plebiscite in the political units directly affected." 56 R. A. No.
7924 was not submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people,
but appointed by the President with the rank and privileges of a cabinet member. In fact, part of his function is to perform such other duties as
may be assigned to him by the President, 57 whereas in local government units, the President merely exercises supervisory authority. This
emphasizes the administrative character of the MMDA.

Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has no
power to enact ordinances for the welfare of the community. It is the local government units, acting through their respective legislative
councils, that possess legislative power and police power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any
ordinance or resolution ordering the opening of Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the
respondent Court of Appeals did not err in so ruling. We desist from ruling on the other issues as they are unnecessary.

We stress that this decision does not make light of the MMDA's noble efforts to solve the chaotic traffic condition in Metro Manila. Everyday,
traffic jams and traffic bottlenecks plague the metropolis. Even our once sprawling boulevards and avenues are now crammed with cars
while city streets are clogged with motorists and pedestrians. Traffic has become a social malaise affecting our people's productivity and the
efficient delivery of goods and services in the country. The MMDA was created to put some order in the metropolitan transportation system
but unfortunately the powers granted by its charter are limited. Its good intentions cannot justify the opening for public use of a private street
in a private subdivision without any legal warrant. The promotion of the general welfare is not antithetical to the preservation of the rule of
law.1âwphi1.nêt

IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 39549 are affirmed.

SO ORDERED.
 EN BANC

April 18, 2017

G.R. No. 213948

KNIGHTS OF RIZAL, Petitioner.

vs.
DMCI HOMES, INC., DMCI PROJECT DEVELOPERS, INC., CITY OF MANILA, NATIONAL COMMISSION FOR CULTURE AND THE
ARTS, NATIONAL HISTORICAL COMMISSION OF THE PHILIPPINES, Respondents.

DECISION

CARPIO, J.:

Bury me in the ground, place a stone and a cross over it.

My name, the date of my birth, and of my death. Nothing more.
If you later wish to surround my grave with a fence, you may do so.
No anniversaries. I prefer Paang Bundok.

- Jose Rizal

The Case

Before this Court is a Petition for Injunction, with Applications for Temporary Restraining Order, Writ of Preliminary Injunction, and
Others 1 filed by the Knights of Rizal (KOR) seeking, among others, for an order to stop the construction of respondent DMCI Homes, Inc. 's
condominium development project known as the Torre de Manila. In its Resolution dated 25 November 2014, the Court resolved to treat the
petition as one for mandamus. 2

The Facts

On 1 September 2011, DMCI Project Developers, Inc. (DMCI-PDI) 3 acquired a 7,716.60-square meter lot in the City of Manila, located near
Taft Avenue, Ermita, beside the former Manila Jai-Alai Building and Adamson University. 4The lot was earmarked for the construction of
DMCI-PDI's Torre de Manila condominium project.

On 2 April 2012, DMCI-PDI secured its Barangay Clearance to start the construction of its project. It then obtained a Zoning Permit from the
City of Manila's City Planning and Development Office (CPDO) on 19 June 2012.5

Then, on 5 July 2012, the City of Manila's Office of the Building Official granted DMCI-PDI a Building Permit, allowing it to build a "Forty Nine
(49) Storey w/ Basement & 2 penthouse Level Res'l./Condominium" on the property. 6

On 24 July 2012, the City Council of Manila issued Resolution No. 121 enjoining the Office of the Building Official to temporarily suspend the
Building Permit of DMCI-PDI, citing among others, that "the Torre de Manila Condominium, based on their development plans, upon
completion, will rise up high above the back of the national monument, to clearly dwarf the statue of our hero, and with such towering
heights, would certainly ruin the line of sight of the Rizal Shrine from the frontal Roxas Boulevard vantage point[.]"7

Building Official Melvin Q. Balagot then sought the opinion of the City of Manila's City Legal Officer on whether he is bound to comply with
Resolution No. 121.8 In his letter dated 12 September 2012, City Legal Officer Renato G. Dela Cruz stated that there is "no legal justification
for the temporary suspension of the Building Permit issued in favor of [DMCI-PDI]" since the construction "lies outside the Luneta Park" and
is "simply too far to I be a repulsive distraction or have an objectionable effect on the artistic and historical significance" of the Rizal
Monument. 9 He also pointed out that "there is no showing that the [area of subject property has been officially declared as an
anthropological or archeological area. Neither has it ' been categorically designated by the National Historical Institute as a heritage zone, a
cultural property, a historical landmark or even a national treasure."

Subsequently, both the City of Manila and DMCI-PDI sought the opinion or the National Historical Commission of the Philippines (NHCP) on
the matter. In the letter10 dated 6 November 2012 from NHCP I Chairperson Dr. Maria Serena I. Diokno addressed to DMCI-PDI and the
letter 11 dated 7 November 2012 from NHCP Executive Director III Ludovico D. Bado)f addressed to then Manila Mayor Alfredo S. Lim, the
NHCP maintained that the Torre de Manila project site is outside the boundaries of the Rizal f.ark and well to the rear of the Rizal Monument,
and thus, cannot possibly obstruct the frontal view of the National Monument.

On 26 November 2013, following an online petition against the Torre de Manila project that garnered about 7,800 signatures, the City Council
of Manila issued Resolution No. 146, reiterating its directive in Resolution No. 121 1 enjoining the City of Manila's building officials to
temporarily suspend ~MCI-PDI's Building Permit. 12

In a letter to Mayor Joseph Ejercito Estrada dated 18 December 2013, DMCI-PIDI President Alfredo R. Austria sought clarification on the
controversy surrounding its Zoning Permit. He stated that since the CPDO granted its Zoning Permit, DMCI-PDI continued with the
application for the Building Permit, which was granted, and did not deem it necessary to go through the process of appealing to the local
zoning board. He then expressed DMCI-PDI's willingness to comply with the process if the City of Manila deemed it necessary. 13

On 23 December 2013, the Manila Zoning Board of Adjustments and Appeals (MZBAA) issued Zoning Board Resolution No. 06, Series of
2013, 14 recommending the approval of DMCI-PDI's application for variance. ;The MZBAA noted that the Torre de Manila project "exceeds the
prescribed maximum Percentage of Land Occupancy (PLO) and exceeds the prescribeµ Floor Area Ratio (FAR) as stipulated in Article V,
Section 17 of City Ordinance No. 8119[.]" However, the MZBAA still recommended the approval of the variance subject to the five conditions
set under the same resolution.

15
After some clarification sought by DMCI-PDI, the MZBAA issued Zoning Board Resolution No. 06-A, Series of 2013, on 8 January 2014,
amending condition (c) in the earlier resolution. 16

On 16 January 2014, the City Council of Manila issued Resolution No. 5, Series of 2014, 17 adopting Zoning Board Resolution Nos. 06 and
06- A. The City Council resolution states that "the City Council of Manila find[ s] no cogent reason to deny and/or reverse the aforesaid
recommendation of the [MZBAA] and hereby ratif[ies] and confirm[s] all previously issued permits, licenses and approvals issued by the City
[Council] of Manila for Torre de Manila[.]"

Arguments of the KOR

On 12 September 2014, the KOR, a "civic, patriotic, cultural, nonpartisan, non-sectarian and non-profit organization" 18 created under
Republic Act No. 646, 19 filed a Petition for Injunction seeking a temporary restraining I order, and later a permanent injunction, against the
construction of DMCIPDI's Torre de Manila condominium project. The KOR argues that the subject matter of the present suit is one of
"transcendental importance, paramount public interest, of overarching significance to society, or with far-reaching implication" involving the
desecration of the Rizal Monument.

The KOR asserts that the completed Torre de Manila structure will "[stick] out like a sore thumb, [dwarf] all surrounding buildings within a
radius of two kilometer/s" and "forever ruin the sightline of the Rizal Monument in Luneta Park: Torre de Manila building would loom at the
back I and overshadow the entire monument, whether up close or viewed from a distance. ''20

Further, the KOR argues that the Rizal Monument, as a National Treasure, is entitled to "full protection of the law" 21and the national
government must abate the act or activity that endangers the nation's cultural heritage "even against the wishes of the local government
hosting it." 22

Next, the KOR contends that the project is a nuisance per se23 because "[t]he despoliation of the sight view of the Rizal Monument is a
situation that annoy's or offends the senses' of every Filipino who honors the memory of the National Hero Jose Rizal. It is a present,
continuing, worsening and aggravating status or condition. Hence, the PROJECT is a nuisance per se. It deserves I to be abated summarily,
even without need of judicial proceeding. "24

The KOR also claims that the Torre de Manila project violates the NHCP's Guidelines on Monuments Honoring National Heroes, Illustrious
Filipinos and Other Personages, which state that historic monuments should assert a visual "dominance" over its surroundings, 25 as well as
the country's commitment under the International Charter for the Conservation and Restoration of Monuments and Sites, otherwise known as
the Venice Charter. 26

Lastly, the KOR claims that the DMCI-PDI's construction was commenced and continues in bad faith, and is in violation of the City of Manila's
zoning ordinance. 27

Arguments of DMCI-PDI

In its Comment, DMCI-PDI argues that the KOR's petition should be dismissed on the following grounds:

I. THIS HONORABLE COURT HAS NO JURISDICTION OVER THIS ACTION.

 II. KOR HAS NO LEGAL RIGHT OR INTEREST TO FILE OR PR0SECUTE THIS ACTION.

III. TORRE DE MANILA IS NOT A NUISANCE PER SE.

IV. DMCI-PDI ACTED IN GOOD FAITH IN CONSTRUCTING TORRE DE MANILA; AND

28
V. KOR IS NOT ENTITLED TO A TEMPORARY RESTRAINING ORPER AND/OR A WRIT OF PRELIMINARY INJUNCTION.

First, DMCI-PDI asserts that the Court has no original jurisdiction over actions for injunction. 29 Even assuming that the Court has concurrent
jurisdiction, DMCI-PDI maintains that the petition should still have been filed with the Regional Trial Court under the doctrine of hierarchy of
courts and because the petition involves questions of fact. 30

DMCI-PDI also contends that the KOR's petition is in actuality an opposition' or appeal from the exemption granted by the City of Manila's
MZBAA, a matter which is also not within the jurisdiction of the Court. 31 DMCI-PDI claims that the proper forum should be the MZBAA, and
should the KOR fail there, it should appeal the same to the Housing and Land Use Regulatory Board (HLURB). 32

DMCI-PDI further argues that since the Rizal Monument has been declared a National Treasure, the power to issue a cease and desist order
is lodged with the "appropriate cultural agency" under Section 25 of Republic Act No. li0066 or the National Cultural Heritage Act of
2009. 33 Moreover, DMCI-PDI asserts that the KOR availed of the wrong remedy since an action for injunction is not the proper remedy for
abatement of a nuisance. 34

Second, DMCI-PDI maintains that the KOR has no standing to institute this proceeding because it is not a real party in interest in this case.
The purposes of the KOR as a public corporation do not include the preservation of the Rizal Monument as a cultural or historical heritage
site.35 The KOR has also not shown that it suffered an actual or threatened injury as a result of the alleged illegal conduct of the City of
Manila. If there is any injury to the KOR at all, the same was caused by the private conduct of a private entity and not the City of Manila. 36

Third, DMCI-PDI argues that the Torre de Manila is not a nuisance per se. DMCI-PDI reiterates that it obtained all the necessary permits,
licenses, clearances, and certificates for its construction. 37 It also refutes the KOR's claim that the Torre de Manila would dwarf all other
structures around it; considering that there are other tall buildings even closer to the Rizal Monument itself, namely, the Eton Baypark Tower
at the corner of Roxas Boulevard and T.M. Kalaw Street (29 storeys; 235 meters from the Rizal Monument) and Sunview Palace at the
corner of M.H. Del Pilar and T.M. Kalaw Streets (42 storeys; 250 meters from the Rizal Monument). 38

Fourth, DMCI-PDI next argues that it did not act in bad faith when it started construction of its Torre de Manila project. Bad faith cannot be
attributed to it since it was within the "lawful exercise of [its] rights." 39 The KOR failed to present any proof that DMCI-PDI did not follow the
proper procedure and zoning restrictions of the City of Manila. Aside from obtaining all the necessary permits from the appropriate
government agencies,40 DMCI-PDI also sought clarification on its right to build on its site from the Office of the City Legal Officer of Manila,
the Manila CPDO, and the NHCP.41 Moreover, even if the KOR proffered such proof, the Court would be 1 in no position to declare DMCI-
PDI's acts as illegal since the Court is not a trier of facts. 42

Finally, DMCI-PDI opposes the KOR's application for a Temporary Restraining Order (TRO) and writ of preliminary injunction. DMCI-PDI
asserts that the KOR has failed to establish "a clear and unmistakable right to enjoin I the construction of Torre de Manila, much less request
its demolitior."43 DMCI-PDI further argues that it "has complied with all the legal requirements for the construction of Torre de Manila x x x
[and] has violated o right of KOR that must be protected. Further, KOR stands to suffer o damage because of its lack of direct pecuniary
interest in this petiti1 on. To grant the KOR's application for injunctive relief would constitute an unjust taking of property without due process
of law. "44

Arguments of the City of Manila

In its Comment, the City of Manila argues that the writ of mandamus cannot issue "considering that no property or substantive rights
whatsoever in favor of [the KOR] is being affected or x x x entitled to judicial protection[.]"45

The City of Manila also asserts that the "issuance and revocation of a Building Permit undoubtedly fall under the category of a discretionary
act or duty performed by the proper officer in light of his meticulous appraisal and evaluation of the pertinent supporting documents of the
application in accordance with the rules laid out under the National Building Code [and] Presidential Decree No. 1096," 46 while the remedy of
mandamus is available only to compel the performance of a ministerial duty. 47

Further, the City of Manila maintains that the construction of the Torre de Manila did not violate any existing law, since the "edifice [is] well
behind (some 789 meters away) the line of sight of the Rizal Monument." 48 It adds that the City of Manila's "prevailing Land Use and Zoning
Ordinance [Ordinance No. 8119] x xx allows an adjustment in Floor Area Ratios thru the [MZBAA] subject to further final approval of the City
Council."49 The City Council adopted the MZBAA's favorable: recommendation in its Resolution No. 5, ratifying all the licenses and permits
issued to DMCI-PDI for its Torre de Manila project.

In its Position Paper dated 15 July 2015, the City of Manila admitted that the Zoning Permit issued to DMCI-PDI was "in breach of certain
provisions of City Ordinance No. 8119."50 It maintained, however, 1 that the deficiency is "procedural in nature and pertains mostly td the
failure of [DMCI-PDI] to comply with the stipulations that allow an excess in the [FAR] provisions." 51 Further, the City of Manila argued that
the MZBAA, when it recommended the allowance of the project's variance, imposed certain conditions upon the Torre de Manila project in
order to mitigate the possible adverse effects of an excess FAR. 52

The Issue

The issues raised by the parties can be summed up into one main point: Can the Court issue a writ of mandamus against the officials of the
City of Manila to stop the construction of DMCI-PDI's Torre de Manila project?

The Court's Ruling

The petition for mandamus lacks merit and must be dismissed.

There is no law prohibiting the construction of the Torre de Manila.

In Manila Electric Company v. Public Service Commission,53 the Court held that "what is not expressly or impliedly prohibited by law
may be done, except when the act is contrary to morals, customs and I public order." This principle is fundamental in a democratic
society, to protect the weak against the strong, the minority against the majority, and the individual citizen against the government. In
essence, this principle, which is the foundation of a civilized society under the rule of law, prescribes that the freedom to act can be curtailed
only through law. Without this principle, the rights, freedoms, and civil liberties of citizens can be arbitrarily and whimsically trampled upon by
the shifting passions of those who can spout the loudest, or those who can gather the biggest crowd or the most number of Internet trolls. In
other instances,54 the Court has allowed or upheld actions that were not expressly prohibited by statutes when it determined that these acts
were not contrary to morals, customs, and public order, or that upholding the same would lead to a more equitable solution to the
controversy. However, it is the law itself - Articles 1306 55 and 1409(1)56 of the Civil Code - which prescribes that acts not contrary to morals,
good customs, public order, or public policy are allowed if also not contrary to law.

In this case, there is no allegation or proof that the Torre de Manila project is "contrary to morals, customs, and public order" or that it brings
harm, danger, or hazard to the community. On the contrary, the City of Manila has determined that DMCI-PDI complied with the standards set
under the pertinent laws and local ordinances to construct its Torre de Manila project.

There is one fact that is crystal clear in this case. There is no law prohibiting the construction of the Torre de Manila due to its effect on
the background "view, vista, sightline, or setting" of the Rizal Monument.

Specifically, Section 47 reads:

SEC. 47. Historical Preservation and Conservation Standards. - Historic site and facilities shall be conserved and preserved. These shall, to
the extent possible, be made accessible for the educational and cultural enrichment of the general public.

The following shall guide the development of historic sites and facilities:

1. Sites with historic buildings or places shall be developed to conserve and enhance their heritage values.

2. Historic sites and facilities shall be adaptively re-used.

3. Any person who proposes to add, to alter, or partially demolish a designated heritage property will require the approval of the City Planning
and Development Office (CPDO) and shall be required to prepare a heritage impact statement that will demonstrate to the satisfaction of
CPDO that the proposal will not adversely impact the heritage significance of the property and shall submit plans for review by the CPDO in
coordination with the National Historical Institute (NHI).

4. Any proposed alteration and/or re-use of designated heritage properties shall be evaluated based on criteria established by the heritage
significance of the particular property or site.

5. Where an owner of a heritage property applies for approval to demolish a designated heritage property or properties, the owner shall be
required to provide evidence to satisfaction that demonstrates that rehabilitation and re-use of the property is not viable.

6. Any designated heritage property which is to be demolished or significantly altered shall be thoroughly documented for archival purposes
with! a history, photographic records, and measured drawings, in accordance with accepted heritage recording guidelines, prior to demolition
or alteration.

7. Residential and commercial infill in heritage areas will be sensitive to the existing scale and pattern of those areas, which maintains the
existing landscape and streetscape qualities of those areas, and which does not result in the loss of any heritage resources.

8. Development plans shall ensure that parking facilities (surface lots residential garages, stand-alone parking garages and parking
components as parts of larger developments) are compatibly integrated into heritage areas, and/or are compatible with adjacent heritage
resources.
9. Local utility companies (hydro, gas, telephone, cable) shall be required to place metering equipment, transformer boxes, power lines,
conduit, equipment boxes, piping, wireless telecommunication towers and other utility equipment and devices in locations which do not
detract from the visual character of heritage resources, and which do not have a negative impact on its architectural integrity.

10. Design review approval shall be secured from the CPDO for any alteration of the heritage property to ensure that design guidelines and
standards are met and shall promote preservation and conservation of the heritage property. (Emphasis supplied)

It is clear that the standards laid down in Section 47 of Ordinance No. 8119 only serve as guides, as it expressly states that "the following
shall guide the :development of historic sites and facilities." A guide simply sets a direction 'or gives an instruction to be followed by prope1iy
owners and developers in order to conserve and enhance a property's heritage values.

On the other hand, Section 48 states:

SEC. 48. Site Performance Standards. - The City considers it in the public interest that all projects are designed and developed in a safe,
efficient and aesthetically pleasing manner. Site development shall consider the environmental character and limitations of the site and its
adjacent properties. All project elements shall be in complete harmony according to good design principles and the subsequent development
must be visually pleasing as well as efficiently functioning especially in relation to the adjacent properties and bordering streets.

The design, construction, operation and maintenance of every facility shall be in harmony with the existing and intended character of its
neighborhood. It shall not change the essential character of the said area but will be a substantial improvement to the value of the properties
in the neighborhood in particular and the community in general.

Furthermore, designs should consider the following:

1. Sites, buildings and facilities shall be designed and developed with1 regard to safety, efficiency and high standards of design. The natural
environmental character of the site and its adjacent properties shall be considered in the site development of each building and facility.

2. The height and bulk of buildings and structures shall be so designed that it does not impair the entry of light and ventilation, cause the loss
I of privacy and/or create nuisances, hazards or inconveniences to adjacent developments.

3. Abutments to adjacent properties shall not be allowed without the neighbor's prior written consent which shall be required by the City
Planning and Development Office (CPDO) prior to the granting of a Zoning Permit (Locational Clearance).

4. The capacity of parking areas/lots shall be per the minimum requirements of the National Building Code. These shall be located,
developed and landscaped in order to enhance the aesthetic quality of the facility. In no case, shall parking areas/lots encroach into street
rights-of-way and shall follow the Traffic Code as set by the City.

5. Developments that attract a significant volume of public modes of transportation, such as tricycles, jeepneys, buses, etc., shall provide on-
site parking for the same. These shall also provide vehicular loading and unloading bays so as street traffic flow will not be impeded.

6. Buffers, silencers, mufflers, enclosures and other noise-absorbing I materials shall be provided to all noise and vibration-producing
machinery. Noise levels shall be maintained according to levels specified in DENR DA9 No. 30 - Abatement of Noise and Other Forms of
Nuisance as Defined by Law.

7. Glare and heat from any operation or activity shall not be radiated, seen or felt from any point beyond the limits of the property.

8. No large commercial signage and/or pylon, which will be detrimental to the skyline, shall be allowed.

9. Design guidelines, deeds of restriction, property management plans and other regulatory tools that will ensure high quality developments
shall be required from developers of commercial subdivisions and condominiums. These shall be submitted to the City Planning and
Development Office (CPDO) for review and approval. (Emphasis supplied)

Se9tion 4 7 of Ordinance No. 8119 specifically regulates the "development of historic sites and facilities."Section 48 regulates "large
commercial signage and/or pylon." There is nothing in Sections 47 and 48 of Ordinance No. 8119 that disallows the construction of
a building outside the boundaries of a historic site or facility, where such building may affect the1 background of a historic site. In this
case, the Torre de Manila stands 870 meters outside and to the rear of the Rizal Monument and "cannot possibly obstruct the front view of
the [Rizal] Monument." 57 Likewise, ;the Torre de Manila is not in an area that has been declared as an "anthropological or archeological
area" or in an area designated as a heritage zone, cultural property, historical landmark, or a national treasure by the NHCP. 58

Section 15, Article XIV of the Constitution, which deals with the subject of arts and culture, provides that "[t]he State shall conserve, promote
and popularize the nation's historical and cultural heritage and resources x x x." Since this provision is not self-executory, Congress passed
laws dealing with the preservation and conservation of our cultural heritage.

One such law is Republic Act No. 10066, 59 or the National Cultural Heritage Act of 2009, which empowers the National Commission for
Culture and the Arts and other cultural agencies to issue a cease and desist order "when the physical integrity of the national cultural
treasures or important cultural properties [is] found to be in danger of destruction or significant alteration from its original state." 60 This
law declares that the State should protect the "physical integrity" of the heritage property or building if there is "danger of destruction or
significant alteration from its original state." Physical integrity refers to the structure itself - how strong and sound the structure is. The
same law does not mention that another project, building, or property, not itself a heritage property or building, may be the subject of a cease
and desist order when it adversely affects the background view, vista, or sightline of a heritage property or building. Thus, Republic Act No.
10066 cannot apply to the Torre de Manila condominium project.

Mandamus does not lie against the City of Manila.

The Constitution states that "[n]o person shall be deprived of life, liberty or 1property without due process of law x x x." 61 It is a fundamental
principle that no property shall be taken away from an individual without due process, whether substantive or procedural. The dispossession
of property, or in this case the stoppage of the construction of a building in one's own property would violate substantive due process.

The Rules on Civil Procedure are clear that mandamus only issues when there is a clear legal duty imposed upon the office or the officer
sought to be compelled to perform an act, and when the party seeking mandamus has a clear legal right to the performance of such act.

In the present case, nowhere is it found in Ordinance No. 8119 or in any law, ordinance, or rule for that matter, that the construction of a
building outside the Rizal Park is prohibited if the building is within the background sightline or view of the Rizal Monument. Thus, there is no
legal duty on the part of the City of Manila "to consider," in the words of the Dissenting Opinion, "the standards set under Ordinance No.
8119" in relation to the applications of DMCI-PDI for the Torre de Manila since under the ordinance these standards can never be applied
outside the boundaries of Rizal Park. While the Rizal Park has been declared a National Historical Site, the area where Torre de Manila is
being built is a privately-owned property that is "not pap: of the Rizal Park that has been declared as a National Heritage Site in 1095," and
the Torre de Manila area is in fact "well-beyond" the Rizal Park, according to NHCP Chairperson Dr. Maria Serena I. Diokno. 62 Neither has
the area of the Torre de Manila been designated as a "heritage zone, a cultural property, a historical landmark or even a national treasure."63

Also, to declare that the City of Manila failed to consider the standards under Ordinance No. 8119 would involve making a finding of fact. A
finding lot fact requires notice, hearing, and the submission of evidence to ascertain compliance with the law or regulation. In such a case, it
is the Regional Trial Court which has the jurisdiction to hear the case, receive evidence, make a proper finding of fact, and determine
whether the Torre de Manila project properly complied with the standards set by the ordinance. In Meralco v. Public Service
Commission, 64 we held that it is the cardinal right of a party in trials and administrative proceedings to be heard, which includes the right of
the party interested or affected to present his own case and submit evidence in support thereof and to have such evidence presented
considered by the proper court or tribunal.

To compel the City of Manila to consider the standards under Ordinance No. 8119 to the Torre de Manila project will be an empty exercise
since these standards cannot apply outside of the Rizal Park - and the Torre de Manila is outside the Rizal Park. Mandamus will lie only if the
officials

The KOR also invokes this Court's exercise of its extraordinary certiorari power of review under Section 1, Article VIII65 of the Constitution.
However, this Court can only exercise its extraordinary certiorari power if the City of Manila, in issuing the required permits and
licenses, gravely abused its discretion amounting to lack or excess of jurisdiction. Tellingly, neither the majority nor minority opinion in
this case has found that the City of Manila committed grave abuse of discretion in issuing the permits and licenses to DMCI-PDI. Thus, there
is no justification at all for this Court to exercise its extraordinary certiorari power.

Moreover, the exercise of this Court's extraordinary certiorari power is limited to actual cases and controversies that necessarily involve a
violation of the Constitution or the determination of the constitutionality or validity of a governmental act or issuance. Specific violation of a
statute that does not raise the issue of constitutionality or validity of the statute cannot, as a rule, be the subject of the Court's direct exercise
of its expanded certiorari power. Thus, the KOR's recourse lies with other judicial remedies or proceedings allowed under the Rules of Court.

In Association of Medical Clinics for Overseas Workers, Inc. v. GCC Approved Medical Centers Association, Inc., 66we held that in cases
where the question of constitutionality of a governmental action is raised, the judicial power that the courts exercise is likewise identified as
the power of judicial review - the power to review the constitutionality of the actions of other branches of government. As a rule, as required
by the hierarchy of courts principle, these cases are filed with the lowest court with jurisdiction over the 1subject matter. The judicial review
that the courts undertake requires:

1) there be an actual case or controversy calling for the exercise of judicial power;

2) the person challenging the act must have "standing" to challenge; he must have a personal and substantial interest in the case such that
he has sustained, or will sustain, direct injury as a result of its enforcement;

3) the question of constitutionality must be raised at the earliest possible opportunity; and

4) the issue of constitutionality must be the very lismota of the case.

The lower court's decision under the constitutional scheme reaches the Supreme Court through the appeal process, through a petition for
review on certiorari under Rule 45 of the Rules of Court.
In the present case, the KOR elevated this case immediately to this Court in an original petition for injunction which we later on treated as
one for mandamus under Rule 65. There is, however, no clear legal duty on the City of Manila to consider the provisions of Ordinance No.
8119 for applications for permits to build outside the protected areas of the Rizal Park. Even if there were such legal duty, the determination
of whether the City of .Manila failed to abide by this legal duty would involve factual matters which have not been admitted or established in
this case. Establishing factual matters is not within the realm of this Court. Findings of fact are the province of the trial courts.

There is no standard in Ordinance No. 8119 for defining or determining the background sightline that is supposed to be protected or that is
part of the "physical integrity" of the Rizal Monument. How far should a building like the Torre de Manila be from the Rizal Monument - one,
two, three, four, or five kilometers? Even the Solicitor General, during the Oral Arguments, conceded that the ordinance does not prescribe
how sightline is determined, neither is there any way to measure by metes and bounds whether al construction that is not part of the
historic monument itself or is outside the protected area can be said to violate the Rizal Monument's physicalintegrity, except only to
say "when you stand in front of the Rizal Monument, there can be no doubt that your view is marred and impaired." This kind of a standard
has no parameters and can include a sightline or a construction as far as the human eyes can see when standing in front of the Rizal
Monument. Obviously, this Court cannot apply such a subjective and non-uniform standard that adversely affects property rights several
kilometers away from a historical sight or facility.

The Dissenting Opinion claims that "the City, by reason of a mistaken or erroneous construction of its own Ordinance, had failed to consider
its duties under [Ordinance No. 8119] when it issued permits in DMCI-PDI's favor." However, MZBAA Zoning Board Resolution Nos. 06 and
06-A67 easily dispel this claim. According to the resolutions, the City of Manila, through the MZBAA, acted on DMCI-PDI's application for
variance under the powers and standards set forth in Ordinance No. 8119.

Without further proof that the MZBAA acted whimsically, capriciously, or arbitrarily in issuing said resolution, the Court should respect
MZBAA's exercise of discretion. The Court cannot "substitute its I judgment :for that of said officials who are in a better position to consider
and weigh the same in the light of the authority specifically vested in them by law." 68 Since the Court has "no supervisory power over the
proceedings I and actions of the administrative departments of the government," it "should not generally interfere with purely administrative
and discretionary functions.; 69 The power of the Court in mandamus petitions does not extend "to direct the exercise of judgment or
discretion in a particular way or the retraction or reversal of an action already taken in the exercise of either." 70

Still, the Dissenting Opinion insists on directing the re-evaluation by the City of Manila, through the CPDO, of the permits previously issued in
favor of the Torre de Manila project to determine compliance with the standards ]under Ordinance No. 8119. It also declares that the
circumstances in this case warrant the prohacvice conversion of the proceedings in the issuance of the permits into a "contested case"
necessitating notice and hearing with all the parties involved.

Prohac vice means a specific decision does not constitute a precedent because the decision is for the specific case only, not to be followed
in other cases. A prohac vice decision violates statutory law - Article 8 of the Civil Code - which states that "judicial decisions applying or
interpreting the laws or the Constitution shall form part of the legal system of the Philippines." The decision of the Court in this case cannot
be prohac vice because by mandate bf the law everydecision of the Court forms part of the legal system of the Philippines. If another case
comes up with the same facts as the present case, that case must be decided in the same way as this case to comply with the constitutional
mandate of equal protection of the law. Thus, a prohac vice decision also violates the equal protection clause of the Constitution.

It is the policy of the courts not to interfere with the discretionary executive acts of the executive branch unless there is a clear showing of
grave abuse of discretion amounting to lack or excess of jurisdiction. Mandamus does not lie against the legislative and executive branches
or their members acting in the exercise of their official discretionary functions. This emanates from the respect accorded by the judiciary to
said branches as co-equal entities under the principle of separation of powers.

In De Castro v. Salas,71 we held that no rule of law is better established than the one that provides that mandamus will not issue to control the
discretion of an officer or a court when honestly exercised and when such power and authority is not abused.

In exceptional cases, the Court has granted a prayer for mandamus to compel action in matters involving judgment and discretion, only "to
act, but not to act lone way or the other," 72 and only in cases where there has been a clear showing of grave abuse of discretion,
manifest injustice, or palpable excess of authority.73

In this case, there can be no determination by this Court that the City of Manila had been negligent or remiss in its duty under Ordinance No.
8119 considering that this determination will involve questions of fact. DMCI- PDI had been issued the proper permits and had secured all
approvals and licenses months before the actual construction began. Even the KOR could not point to any law that respondent City of Manila
had violated and could only point to declarations of policies by the NHCP and the Venice Charter which do not constitute clear legal bases for
the issuance of a writ of mandam1s.

The Venice Charter is merely a codification of guiding principles for the preservation and restoration of ancient monuments, sites, and
buildings. It brings I together principles in the field of historical conservation and restoration that have been developed, agreed upon, and and
laid down by experts over the years. Each country, however, remains "responsible for applying the plan within the framework of its own
culture and traditions."74

The Venice Charter is not a treaty and therefore does not become enforceable as law. The Philippines is not legally bound to follow its
directive, as in fact, these are not directives but mere guidelines - a set of the best practices and techniques that have been proven over the
years to be the most effective in preserving and restoring historical monuments, sites and buildings.
The City of Manila concedes that DMCI-PDI's Zoning Permit was granted without going through the process under Ordinance No. 8119.
However, the same was properly rectified when, faced with mounting opposition, DMCI-PDI itself sought clarification from the City of Manila
and immediately began complying with the procedure for applying for a variance. The MZBAA did subsequently recommend the approval of
the variance and the City Council of Manila approved the same, ratifying the licenses and permits already given to DMCI-PDI. Such
ratification was well within the right of the City Council of Manila. The City Council of Manila could have denied the application had it seen
any reason to do so. Again, the ratification is a function of the City Council of Manila, an exercise of its discretion1 and well within the
authority granted it by law and the City's own Ordinance No. 8119.

The main purpose of zoning is the protection of public safety, health, convenience, and welfare. There is no indication that the Torre de
Manila project brings any harm, danger, or hazard to the people in the surrounding areas except that the building allegedly poses an
unsightly view on the taking of photos or the visual appreciation of the Rizal Monument by locals and tourists. In fact, the Court must take the
approval of the MZBAA, and its subsequent ratification by the City Council of Manila, as the duly authorized exercise of discretion by the city
officials. Great care must be taken that the Court does not unduly tread upon the local government's performance of its duties. It is not for
this Court to dictate upon the other branches bf the government how their discretion must be exercised so long as these branches do not
commit grave abuse of discretion amounting to lack or excess of jurisdiction.

Likewise, any violation of Ordinance No. 8119 must be determined in the proper case and before the proper forum. It is not within the power
of this Court in this case to make such determination. Without such determination, this Court cannot simply declare that the City of Manila
had failed to consider its duties under Ordinance No. 8119 when it issued the permits in DMCI-PDI's favor without making a finding of fact
how the City of Manila failed "to consider" its duties with respect to areas outside the boundaries of the Rizal Park. In the first place, this
Court has no jurisdiction to make findings of fact in an original action like this before this Court. Moreover the City of Manila could not legally
apply standards to sites outside the area covered by the ordinance that prescribed the standards. With this, I taken in light of the lack of
finding that there was grave abuse of discretion I on the part of the City of Manila, there is no basis to issue the writ of mandamus against the
City of Manila.

During the Oral Arguments, it was established that the granting of a variance neither uncommon nor irregular. On the contrary, current
practice has made granting of a variance the rule rather than the exception:

JUSTICE CARPIO: Let's go to Ordinance 8119. For residential condominium that stand alone, in other words not part of a commercial
complex or an industrial complex ...

ATTY. FLAMINIANO: Yes, Your Honor.

JUSTICE CARPIO: The [Floor Area Ratio (FAR)] is uniform for the entire City of Manila, the FAR 4, correct? ATTY. FLAMINIANO: I believe
so, Your Honor, it's FAR 4.

JUSTICE CARPIO: So it's FAR 4 for all residential condominium complex or industrial projects.

ATTY. FLAMINIANO: There might be, the FAR might be different when it comes to condominiums in commercial areas, Your Honor.

JUSTICE CARPIO: Yes, I'm talking of stand-alone ...

ATTY. FLAMINIANO: Yes, Your Honor.

JUITICE CARPIO: ... residential condominiums...

ATTY. FLAMINIANO: Uniform at FAR 4, Your Honor.

JUSTICE CARPIO: And the percentage of land occupancy is always 60 percent.

ATTY. FLAMINIANO: 60 percent correct, Your Honor.

JUSTICE CARPIO: Okay ... how many square meters is this Torre de Manila?

xxx

ATTY. FLAMINIANO: The land area, Your Honor, it's almost 5,000 ... 5,556.

JUSTICE CARPIO: So, it's almost half a hectare.

ATTY. FLAMINIANO: Yes, Your Honor.

JUSTICE CARPIO: And at FAR 4, it can only build up to 18 storeys, I mean at FAR 4, is that correct?
ATTY. FLAMINIANO: If the 60 percent of the lot...

JUSTICE CARPIO: Yes, but that is a rule.

ATTY. FLAMINIANO: That is a rule, that's the rule, Your Honor.

JUSTICE CARPIO: 60 percent of...

ATTY. FLAMINIANO: Of the land area.

JUSTICE CARPIO: ... buildable, the rest not buildable.

ATTY. FLAMINIANO: Yes, Your Honor.

JUSTICE CARPIO: Okay, so if you look around here in the City of Manila anywhere you go, you look at stand alone residential condominium
buildings...

ATTY. FLAMINIANO: There's a lot of them, Your Honor.

JUSTICE CARPIO: It's always not FAR 4, it's more than FAR 4.

ATTY. FLAMINIANO: Yes, Your Honor.

JUSTICE CARPIO: And the buildable area is to the edge of the property ...it's not 60 percent, correct?

ATTY. FLAMINIANO: Yes, Your Honor.

JUSTICE CARPIO: So, if you look at all the ... residential buildings in the last ten years, they [have] all variances. They did not
follow the original FAR 4 or the 60 percent (of land occupancy). Every residential building that stand alone was a variance. ATTY.
FLAMINIANO: That's correct, Your Honor.

JUSTICE CARPIO: So the rule really in the City of Manila is variance, and the exception which is never followed is FAR 4.

ATTY. FLAMINIANO: FAR 4, it appears to be that way, Your Honor.

xxxx

JUSTICE CARPIO: Every developer will have to get a variance because it doesn't make sense to follow FAR 4 because the land is
so expensive and if you can build only two storeys on a 1,000-square meter lot, you will surely lose money, correct? ATTY.
FLAMINIANO: Exactly, Your Honor. 75 (Emphasis supplied)

This, the MZBAA's grant of the variance cannot be used as a basis to grant the mandamus petition absent any clear finding that
said act amo'1nted to "grave abuse of discretion, manifest injustice, or palpable excess of authority."

The KOR is Estopped from Questioning the

Torre de Manila Construction.

The KOR is now estopped from questioning the construction of the Torre de Manila project. The KOR itself came up with the idea to build a
structure right behind the Rizal Monument that would dwarf the Rizal Monument.

In the mid-1950s, the Jose Rizal National Centennial Commission (JRNCC) l formulated a plan to build an Educational Center within the
Rizal Park. In July 1955, the KOR proposed the inclusion of a national theater on the site of the Educational Center. The JRNCC adopted the
proposal. The following[ year, a law - Republic Act No. 1427 76 - authorized the establishment of the Jose Rizal National Cultural Shrine
consisting of a national theater, a national museum, and a national library on a single site. 77

To be built on the open space right behind the 12.7 meter high Rizal Monument were: the KOR's proposed nationaltheater, standing 29.25
meters high and 286 meters in distance from the Rizal Monument; the nationallibrary, standing 25 .6 meters high and 180 meters in distance
from the Rizal ;Monument, with its rear along San Luis Street (now T.M. Kalaw Street); and facing it, the nationalmuseum, at 19.5 meters
high and 190 meters in I distance from the Rizal Monument, with its back along P. Burgos Street. 78

However, several sectors voiced their objections to the construction for various reasons. Among them, the need to preserve the open space
of the park, the high cost of construction, the desecration of the park's hallowed grounds, and the fact that the proposed cultural center
 79
including the 129.25 meter high national theater proposed by the KOR would dwarf the 12.7 meter high Rizal Monument. The
JRNCC revised the plan and only the National Library - which still stands today - was built. 80

According to the NHCP, the KOR even proposed to build a Rizal Center on the park as recently as 2013. 81 The proposal was disapproved by
the NHCR and the Department of Tourism.

Surely, as noble as the KOR's intentions were, its proposed center would have dwarfed the Rizal Monument with its size and proximity.

In contrast, the Torre de Manila is located well outside the Rizal Park, and to the rear of the Rizal Monument - approximately 870 meters from
the Rizal Monument and 3 0 meters from the edge of Rizal Park. 82

It is a basic principle that "one who seeks equity and justice must come to court with clean hands. " 83 In Jenosa v. Delariarte, 84 the Court
reiterated ,that he who seeks equity must do equity, and he who comes into equity must come with clean hands. This "signifies that a litigant
may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent, or deceitful
as to the controversy in issue. " 85Thus, the KOR, having earlier proposed a national theater a mere 286meters in distance from the back of
the Rizal Monument that would have dwarfed the Rizal Monument, comes to this I Court with unclean hands. It is now precluded from
"seeking any equitable refuge" 86 from the Court. The KOR's petition should be dismissed on this ground alone.

Torre de Manila is Not a Nuisance Per Se.

In its petition, the KOR claims that the Torre de Manila is a nuisance perse that deserves to be summarily abated even without judicial
proceedings. 87 However, during the Oral Arguments, counsel for the KOR argued that the KOR now believes that the Torre de Manila is a
nuisance per accidens and not a nuisance perse. 88

Article 694 of the Civil Code defines a nuisance as any act, omission, establishment, business, condition of property, or anything else which:
(1) injures or endangers the health or safety of others; (2) annoys or offends the senses; (3) shocks, defies or disregards decency or
morality; (4) obstructs or interferes with the free passage of any public highway or street, or any body of water; or (5) hinders or impairs the
use of property.

Thy Court recognizes two kinds of nuisances. The first, nuisance perse, is on "recognized as a nuisance under any and all circumstances,
because it constitutes a direct menace to public health or safety, and, for that reason, may be abated summarily under the undefined law of
necessity." 89 The second, nuisance peraccidens, is that which "depends upon certain conditions and circumstances, and its existence being
a question of fact, it cannot be abated without due hearing thereon in a tribunal authorized to decide whether such a thing in law constitutes a
nuisance. "90

It can easily be gleaned that the Torre de Manila is not a nuisance per se. The Torre de Manila project cannot be considered as a "direct
menace to I public health or safety." Not only is a condominium project commonplace in the City of Manila, DMCI-PDI has, according to the
proper government agencies, complied with health and safety standards set by law. DMCI-PDI has been granted the following permits and
clearances prior to starting the project: (1) Height Clearance Permit from the Civil Aviation Authority of the Philippines; 91 (2) Development
Permit from the HLURB;92 (3) Zoning Certification from the HLURB;93 (4) Certificate of Environmental Compliance Commitment from the
Environment Management Bureau of the Department of Environment and Natural Resources; 94 (5) Barangay Clearance95 (6) Zoning
Permit;96 (7) Building Permit;97 (8) and Electrical and Mechanical Permit.98

Later, DMCI-PDI also obtained the right to build under a variance recommended by the MZBAA and granted by the City Council of Manila.
Thus, there can be no doubt that the Torre de Manila project is not a nuisance perse.

On the other hand, the KOR now claims that the Torre de Manila is a nuisance peraccidens.

By definition, a nuisance peraccidens is determined based on its surrounding conditions and circumstances. These conditions and
circumstances must be well established, not merely alleged. The Court cannot simply accept these conditions and circumstances as
established facts as the KOR would have us do in this case. 99 The KOR itself concedes that the question of whether the Torre de Manila is a
nuisance peraccidens is a question of fact. 100

The authority to decide when a nuisance exists is an authority to find facts, to estimate their force, and to apply rules of law to the case thus
made. 101 1lhis Court is no such authority. It is not a trier of facts. It cannot simply take the allegations in the petition and accept these as
facts, more so in this case where these allegations are contested by the respondents.

The task to receive and evaluate evidence is lodged with the trial courts. The question, then, of whether the Torre de Manila project is a
nuisance peraccidens must be settled after due proceedings brought before the proper Regional Trial Court. The KOR cannot circumvent the
process in the guise be protecting national culture and heritage.

The TRO must be lifted.

Injunctive reliefs are meant to preserve substantive rights and prevent further injury 102 until final adjudication on the merits of the case. In the
present case, since the legal rights of the KOR are not well-defined, clear, and certain, the petition for mandamus must be dismissed and the
TRO lifted.
The general rule is that courts will not disturb the findings of I administrative agencies when they are supported by substantial evidence. In
this case, DMCI-PDI already acquired vested rights in the various permits, licenses, or even variances it had applied for in order to build a
49-storey building which is, and had been, allowed by the City of Manila's zoning ordinance.

As we have time and again held, courts generally hesitate to review discretionary decisions or actions of administrative agencies in the
absence of proof that such decisions or actions were arrived at with grave abuse of discretion amounting to lack or excess of jurisdiction.

In JRS Business Corp. v. Montesa, 103 we held that mandamus is the proper remedy if it could be shown that there was neglect on the part of
a tribunal in the performance of an act which the law specifically enjoins as a duty, or there was an unlawful exclusion of a party from the use
and enjoyment be a right to which he is clearly entitled. Only specific legal rights may be enforced by mandamus if they are clear and certain.
If the legal rights of th6 petitioner are not well-defined, definite, clear, and certain, 104 the petition must be dismissed. Stated otherwise, the
writ never issues in doubtful cases. It neither confers powers nor imposes duties. It is simply a command to exercise a power already
possessed and to perform a duty already imposed. 105

In sum, bearing in mind the Court does not intervene in discretionary acts of the executive department in the absence of grave abuse of
discretion, 106 and considering that mandamus may only be issued to enforce a clear and certain legal right, 107 the present special civil action
for mandamus must be dismissed and the TRO issued earlier must be lifted.

A FINAL WORD

It had been Rizal’s wish to die facing the rising sun. In his Mi Ultimo Adios, the poem he left for his family the night before he was executed,
Rizal wrote:

Yo muero cuando veo que el cielo se colora

Y al fin anuncia el dia tras lobrego capuz 108

[Ako’y mamamatay, ngayong namamalas

na sa Silanganan ay namamanaag
yaong maligayang araw na sisikat
sa likod ng luksang nagtabing na ulap.] 109

[I die just when I see the dawn break,

Through the gloom of night, to herald the day] 110

Yet at the point of his execution, he was made to stand facing West towards Manila Bay, with his back to the firing squad, like the traitor the
colonial government wished to portray him. He asked to face his executioners, facing the East where the sun would be rising since it was
early morning, but the Spanish captain did not allow it. As he was shot and a single bullet struck his frail body, Rizal forced himself, with his
last remaining strength, to turn around to face the East and thus he fell on his back with] his face to the sky and the rising sun. Then, the
Spanish captain approached Rizal and finished him off with one pistol shot to his head.

Before his death, Rizal wrote a letter to his family. He asked for a simple tomb, marked with a cross and a stone with only his name and the
date of his birth and death; no anniversary celebrations; and interment at Paang Bundok(now, the Manila North Cemetery). Rizal never
wanted his grave to be a burden to future generations.

The letter never made it to his family and his wishes were not carried out. The letter was discovered many years later, in 1953. By then, his
remains had been entombed at the Rizal Monument, countless anniversaries had been . celebrated, with memorials and monuments built
throughout the world.

111
Rizal's wish was unmistakable: to be buried without pomp or pageantry; to the point of reaching oblivion or obscurity in the future. For
Rizal's life was never about fame or vainglory, but for the country he loved dearly and for which he gave up his life.

The Rizal Monument is expressly against Rizal' s own wishes. That Rizal's statue now stands facing West towards Manila Bay, with Rizal's
back to the East, adds salt to the wound. If we continue the present orientation of Rizal's statue, with Rizal facing West, we would be like the
Spanish captain who refused Rizal's request to die facing the rising sun in the East. On the other hand, if Rizal' s statue is made to face East,
as Rizal had desired when he was about to be shot, the background - the blue sky above Manila Bay - would forever be clear of obstruction,
and we would be faithful to Rizal's dying wish.

WHEREFORE, the petition for mandamus is DISMISSED for lack of merit. The Temporary Restraining Order issued by the Court on 16 June
2015 is LIFTED effective immediately.

SO ORDERED.
 EN BANC

G.R. No. L-2929 February 28, 1950

THE CITY OF MANILA, plaintiff-appellant,

vs.
THE ARRELANO LAW COLLEGES, INC., defendant-appellee.

City Fiscal Eugenio Angeles and Assistant City Fiscal Arsenio Nañawa for appellant.
Emmanuel Pelaez for appellee.

TUASON, J.:

Section 1 of Republic Act No. 267 provides:

Cities and municipalities are authorized to contract loans from the Reconstruction Finance Corporation, the Philippine National Bank,
and/or other entity or person at the rate of interest not exceeding eight per cent annum for the purpose of purchasing or expropriating
homesites within their respective territorial jurisdiction and reselling them at cost to residents of the said cities and municipalities.

The court below ruled that this provision empowers cities to purchase but not to expropriate lands for the purpose of subdivision and resale,
and so dismissed the present action, which seeks to condemn, for the purpose just stated, several parcels of land having a combined area of
7,270 square meters and situated on Legarda Street, City of Manila.

In the cases of Guido vs. Rural Progress Administration (G. R. No. L-2089)1 and Commonwealth of the Philippines vs. De Borja (G. R. No. L-
1496),2 we discussed at great length the extent of the Philippine Government's power to condemn private property for resale. Among other
things, we said:

It has been truly said that the assertion of the right on the part of the legislature to take the property of one citizen and transfer it to
another, even for a full compensation, when the public interest is not promoted thereby, is claiming a despotic power, and one
inconsistent with every just principle and fundamental maxim of a free government. (29 C. J. S., 820.)

In a broad sense, expropriation of large estates, trusts in perpetuity, and land that embraces a whole town, or large section of a town or
city, bears direct relation to the public welfare. The size of the land expropriated, the large number of people benefited, and the extent of
social and economic reform secured by the condemnation, clothes the expropriation with public interest and public use. The
expropriation in such cases tends to abolish economic slavery, feudalistic practices, endless conflicts between landlords and tenants,
and other evils inimical to community prosperity and contentment and public peace and order. Although courts are not in agreement as
to the tests to applied in determining whether the use is public or not, some go so far in the direction of a liberal construction as to hold
that public use is synonymous with public benefit, public utility, or public advantage, and to authorize the exercise of the power of
eminent domain to promote such public benefit, etc., especially where the interest involved are of considerable magnitude. (29 C. J. S.;
823, 824; see also People of Puerto Rico vs. Eastern Sugar Associate et al., 156 Fed. [2d], 316.) In some instances, slumsites have
been acquired by condemnation. The highest court of New York State has ruled that slum clearance and erection of houses for low-
income families were public purpose for which New York City Housing authorities could exercise the power of condemnation. and this
decision was followed by similar ones in other states. The underlying reasons for these decisions are that the destruction of congested
areas and unsanitary dwellings diminished the potentialities of epidemics, crime and waste, prevents the spread of crime and diseases
to unaffected areas, enhances the physical and moral value of the surrounding communities, and promote the safety and welfare of the
public in general. (Murray et al. vs. La Guardia, 52 N. e. [2d], 884; General Development Coop. vs. City of Detroit, 33 N. W. [2d], 919;
Weizner vs. Stichman, 64 N. Y. S. [2d], 50.) But it will be noted that in all these cases and of similar nature extensive areas were
involved and numerous people and the general public benefited by the action taken.

The condemnation of a small property in behalf of 10, 20 or 50 persons and their families does not insure 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 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 sacrifices for her and her family's security, and sell it at cost to a few
lessees who refuse to pay the stipulated rent or leave the premises.

No fixed line of demarcation between what taking is for public use and what is not can made; each case has to be judged according to
its peculiar circumstances. It suffices to say for the purpose of this decision that the case under consideration is far wanting in those
elements which make for public convenience or public use. It is patterned upon an ideology far removed from the majority of the citizens
of this country. If upheld, this case would open the gates to more oppressive expropriations. If this expropriation be constitutional, we
see no reason why a 10-, 15-, or 25-hectare farm land might not be expropriated and subdivided, and sold to those who want to own a
portion of it. to make the analogy closer, we find no reason why the Rural Progress Administration could not take by condemnation an
urban lot containing and area of 1,000 or 2,000 square meters for subdivision into tiny lots for resale to its occupations or those who
want to build thereon.

We are inclined to believe that Act No. 267 empowers cities to expropriate as well as to purchase lands for homesites. The word
"expropriating," taken singly or with the text, is susceptible of only meaning. But this power to expropriate is necessarily subject to the
limitations and conditions noted in the decisions above cited. The National Government may not confer its instrumentalities authority which
itself may not exercise. A stream can not run higher than its source.

Viewed from another angle, the case at bar is weaker for the condemnor. In the first place, the land that is the subject of the present
expropriation is only one-third of the land sought to be taken in the Guido case, and about two-thirds of that involved in the Borja
condemnation proceeding. In the second place, the Arellano Colleges' land is situated in a highly commercial section of the city and is
occupied by persons who are not bona fide tenants. Lastly, this land was brought by the defendant for a university site to take the place of
rented buildings that are unsuitable for schools of higher learning.

To authorize the condemnation of any particular land by a grantee of the power of eminent domain, a necessity must exist for the taking
thereof for the proposed uses and purposes. (29 C. J. S., 884-885.) In City of Manila vs. Manila Chinese Community (40 Phil., 349), this
Court, citing American decision, laid done this rule:

The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity must be of a public character. The
ascertainment of the necessity must precede or accompany, and not follow, the taking of the land. (Morrison vs. Indianapolis, etc. Ry.
Co., 166 Ind., 511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co. vs. Toledo, Ry. etc. Co., 72 Ohio St., 368.)

And this passage in Blackstone's Commentaries on the English Law is cited in that decision: "So great is the regard of the law for private
property that it will not authorize the least violation of it, even for the public good, unless there exist a very great necessity thereof."

Perhaps modern decisions are not so exigent. Necessity within the rule that the particular property to be expropriated must be necessary.
does not mean an absolute but only a reasonable or practical necessity, such as would combine the greatest benefit to the public with the
least inconvenience and expense to the condemning party and property owner consistent with such benefits. (29 C. J. S., 386.) But
measured even by this standard, and forgetting for a moment the private character of the intended use, necessity for the condemnation has
not been shown. The land in question has cost the owner P140,000. The people for whose benefit the condemnation is being undertaken are
so poor they could ill afford to meet this high price, unless they intend to borrow the money with a view to disposing of the property later for a
profits. Cheaper lands not dedicated to a purpose so worthy as a school and more suited to the occupants' needs and means, if really they
only want to own their own homes, are plenty elsewhere. On the other hand, the defendant not only has invested a considerable amount for
its property but had the plans for construction ready and would have completed the project a long time ago had it not been stopped by the
city authorities. And again, while a handful of people stand to profits by the expropriation, the development of a university that has a present
enrollment of 9,000 students would be sacrificed. Any good that would accrue to the public from providing homes to a few families fades into
insignificance in comparison with the preparation of a young men and young women for useful citizenship and for service to the government
and the community, a task which the government alone is not in a position to undertake. As the Rural Progress Administration, the national
agency lands for resale as homesites and to which the petition to purchase the land in question on behalf of the occupants was referred by
the President, turning down the occupants request after proper investigation, commented that "the necessity of the Arellano Law College to
acquire a permanent site of its own is imperative not only because denial of the same would hamper the objectives of that educational
institution, but it would likewise be taking a property intended already for public benefit." The Mayor of the City of Manila himself confessed
that he believes the plaintiff is entitled to keep this land.

The order of the Court of First Instance of Manila is affirmed without costs.
 FIRST DIVISION

G.R. No. 168770 February 9, 2011

ANUNCIACION VDA. DE OUANO, MARIO P. OUANO, LETICIA OUANO ARNAIZ, and CIELO OUANO MARTINEZ, Petitioners,
vs.
THE REPUBLIC OF THE PHILIPPINES, THE MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY, and THE REGISTER OF
DEEDS FOR THE CITY OF CEBU, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 168812

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner,

vs.
RICARDO L. INOCIAN, in his personal capacity and as Attorney-in-Fact of OLYMPIA E. ESTEVES, EMILIA E. BACALLA, RESTITUTA
E. MONTANA, and RAUL L. INOCIAN; and ALETHA SUICO MAGAT, in her personal capacity and as Attorney-in-Fact of PHILIP M.
SUICO, DORIS S. DELA CRUZ, JAMES M. SUICO, EDWARD M. SUICO, ROSELYN SUICO-LAWSIN, REX M. SUICO, KHARLA SUICO-
GUTIERREZ, ALBERT CHIONGBIAN, and JOHNNY CHAN, Respondents.

DECISION

VELASCO, JR., J.:

At the center of these two (2) Petitions for Review on Certiorari under Rule 45 is the issue of the right of the former owners of lots acquired
for the expansion of the Lahug Airport in Cebu City to repurchase or secure reconveyance of their respective properties.

In the first petition, docketed as G.R. No. 168770, petitioners Anunciacion vda. de Ouano, Mario Ouano, Leticia Ouano Arnaiz and Cielo
Ouano Martinez (the Ouanos) seek to nullify the Decision 1 dated September 3, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 78027,
affirming the Order dated December 9, 2002 of the Regional Trial Court (RTC), Branch 57 in Cebu City, in Civil Case No. CEB-20743, a suit
to compel the Republic of the Philippines and/or the Mactan-Cebu International Airport Authority (MCIAA) to reconvey to the Ouanos a parcel
of land.

The second petition, docketed as G.R. No. 168812, has the MCIAA seeking principally to annul and set aside the Decision 2 and
Resolution3 dated January 14, 2005 and June 29, 2005, respectively, of the CA in CA-G.R. CV No. 64356, sustaining the RTC, Branch 13 in
Cebu City in its Decision of October 7, 1988 in Civil Case No. CEB-18370.

Per its October 19, 2005 Resolution, the Court ordered the consolidation of both cases.

Except for the names of the parties and the specific lot designation involved, the relevant factual antecedents which gave rise to these
consolidated petitions are, for the most part, as set forth in the Court’s Decision 4 of October 15, 2003, as reiterated in a Resolution5 dated
August 9, 2005, in G.R. No. 156273 entitled Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu International Airport Authority (Heirs
of Moreno), and in other earlier related cases.6

In 1949, the National Airport Corporation (NAC), MCIAA’s predecessor agency, pursued a program to expand the Lahug Airport in Cebu City.
Through its team of negotiators, NAC met and negotiated with the owners of the properties situated around the airport, which included Lot
Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947 of the Banilad Estate. As the landowners would later claim, the government
negotiating team, as a sweetener, assured them that they could repurchase their respective lands should the Lahug Airport expansion project
do not push through or once the Lahug Airport closes or its operations transferred to Mactan-Cebu Airport. Some of the landowners accepted
the assurance and executed deeds of sale with a right of repurchase. Others, however, including the owners of the aforementioned lots,
refused to sell because the purchase price offered was viewed as way below market, forcing the hand of the Republic, represented by the
then Civil Aeronautics Administration (CAA), as successor agency of the NAC, to file a complaint for the expropriation of Lot Nos. 744-A, 745-
A, 746, 747, 761-A, 762-A, 763-A, 942, and 947, among others, docketed as Civil Case No. R-1881 entitled Republic v. Damian Ouano, et al.

On December 29, 1961, the then Court of First Instance (CFI) of Cebu rendered judgment for the Republic, disposing, in part, as follows:

IN VIEW OF THE FOREGOING, judgment is hereby rendered:

1. Declaring the expropriation of Lots Nos. 75, 76, 76, 89, 90, 91, 92, 105, 106, 107, 108, 104, 921-A, 88, 93, 913-B, 72, 77, 916, 777-A,
918, 919, 920, 764-A, 988, 744-A, 745-A, 746, 747, 762-A, 763-A, 951, 942, 720-A, x x x and 947, included in the Lahug Airport, Cebu
City, justified in and in lawful exercise of the right of eminent domain.

xxxx

3. After the payment of the foregoing financial obligation to the landowners, directing the latter to deliver to the plaintiff the corresponding
Transfer Certificates of Title to their respective lots; and upon the presentation of the said titles to the Register of Deeds, ordering the
latter to cancel the same and to issue, in lieu thereof, new Transfer Certificates of Title in the name of the plaintiff.7

In view of the adverted buy-back assurance made by the government, the owners of the lots no longer appealed the decision of the trial
court.8 Following the finality of the judgment of condemnation, certificates of title for the covered parcels of land were issued in the name of
the Republic which, pursuant to Republic Act No. 6958,9 were subsequently transferred to MCIAA.

At the end of 1991, or soon after the transfer of the aforesaid lots to MCIAA, Lahug Airport completely ceased operations, Mactan Airport
having opened to accommodate incoming and outgoing commercial flights. On the ground, the expropriated lots were never utilized for the
purpose they were taken as no expansion of Lahug Airport was undertaken. This development prompted the former lot owners to formally
demand from the government that they be allowed to exercise their promised right to repurchase. The demands went unheeded. Civil suits
followed.

G.R. No. 168812 (MCIAA Petition)

On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel Limbaga who originally owned six [6] of the lots expropriated);
and Aletha Suico Magat and seven others, successors-in-interest of Santiago Suico, the original owner of two (2) of the condemned lots
(collectively, the Inocians), filed before the RTC in Cebu City a complaint for reconveyance of real properties and damages against MCIAA.
The complaint, docketed as Civil Case No. CEB-18370, was eventually raffled to Branch 13 of the court.

On September 29, 1997, one Albert Chiongbian (Chiongbian), alleging to be the owner of Lot Nos. 761-A and 762-A but which the Inocians
were now claiming, moved and was later allowed to intervene.

During the pre-trial, MCIAA admitted the following facts:

1. That the properties, which are the subject matter of Civil Case No. CEB-18370, are also the properties involved in Civil Case R-1881;

2. That the purpose of the expropriation was for the expansion of the old Lahug Airport; that the Lahug Airport was not expanded;

3. That the old Lahug Airport was closed sometime in June 1992;

4. That the price paid to the lot owners in the expropriation case is found in the decision of the court; and

5. That some properties were reconveyed by the MCIAA because the previous owners were able to secure express waivers or riders
wherein the government agreed to return the properties should the expansion of the Lahug Airport not materialize.

During trial, the Inocians adduced evidence which included the testimony of Ricardo Inocian (Inocian) and Asterio Uy (Uy). Uy, an employee
of the CAA, testified that he was a member of the team which negotiated for the acquisition of certain lots in Lahug for the proposed
expansion of the Lahug Airport. He recalled that he acted as the interpreter/spokesman of the team since he could speak the Cebuano
dialect. He stated that the other members of the team of negotiators were Atty. Pedro Ocampo, Atty. Lansang, and Atty. Saligumba. He
recounted that, in the course of the negotiation, their team assured the landowners that their landholdings would be reconveyed to them in
the event the Lahug Airport would be abandoned or if its operation were transferred to the Mactan Airport. Some landowners opted to sell,
while others were of a different bent owing to the inadequacy of the offered price.

Inocian testified that he and his mother, Isabel Lambaga, attended a meeting called by the NAC team of negotiators sometime in 1947 or
1949 where he and the other landowners were given the assurance that they could repurchase their lands at the same price in the event the
Lahug Airport ceases to operate. He further testified that they rejected the NAC’s offer. However, he said that they no longer appealed the
decree of expropriation due to the repurchase assurance adverted to.
The MCIAA presented Michael Bacarizas (Bacarizas), who started working for MCIAA as legal assistant in 1996. He testified that, in the
course of doing research work on the lots subject of Civil Case No. CEB-18370, he discovered that the same lots were covered by the
decision in Civil Case No. R-1881. He also found out that the said decision did not expressly contain any condition on the matter of
repurchase.

Ruling of the RTC

On October 7, 1998, the RTC rendered a Decision in Civil Case No. CEB-18370, the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered directing defendant Mactan Cebu International Airport Authority
(MCIAA) to reconvey (free from liens and encumbrances) to plaintiffs Ricardo Inocian, Olimpia E. Esteves, Emilia E. Bacalla, Restituta E.
Montana and Raul Inocian Lots No. 744-A, 745-A, 746, 762-A, 747, 761-A and to plaintiffs Aletha Suico Magat, Philip M. Suico, Doris S. dela
Cruz, James M. Suico, Edward M. Suico, Roselyn S. Lawsin, Rex M. Suico and Kharla Suico-Gutierrez Lots No. 942 and 947, after plaintiffs
shall have paid MCIAA the sums indicated in the decision in Civil Case No. R-1881. Defendant MCIAA is likewise directed to pay the
aforementioned plaintiffs the sum or P50,000.00 as and for attorney’s fees and P10,000.00 for litigation expenses.

Albert Chiongbian’s intervention should be, as it is hereby DENIED for utter lack of factual basis.

With costs against defendant MCIAA.10

Therefrom, MCIAA went to the CA on appeal, docketed as CA-G.R. CV No. 64356.

Ruling of the CA

On January 14, 2005, the CA rendered judgment for the Inocians, declaring them entitled to the reconveyance of the questioned lots as the
successors-in-interest of the late Isabel Limbaga and Santiago Suico, as the case may be, who were the former registered owners of the
said lots. The decretal portion of the CA’s Decision reads:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the appeal filed in this case
and AFFFIRMING the decision rendered by the court a quo on October 7, 1998 in Civil Case No. CEB-18370.

SO ORDERED.

The CA, citing and reproducing excerpts from Heirs of Moreno, 11 virtually held that the decision in Civil Case No. R-1881 was conditional,
stating "that the expropriation of [plaintiff-appellees’] lots for the proposed expansion of the Lahug Airport was ordered by the CFI of Cebu
under the impression that Lahug Airport would continue in operation." 12 The condition, as may be deduced from the CFI’s decision, was that
should MCIAA, or its precursor agency, discontinue altogether with the operation of Lahug Airport, then the owners of the lots expropriated
may, if so minded, demand of MCIAA to make good its verbal assurance to allow the repurchase of the properties. To the CA, this assurance,
a demandable agreement of repurchase by itself, has been adequately established.

On September 21, 2005, the MCIAA filed with Us a petition for review of the CA’s Decision, docketed as G.R. No. 168812.

G.R. No. 168770 (Ouano Petition)

Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal settlers entered and occupied Lot No. 763-A which, before its
expropriation, belonged to the Ouanos. The Ouanos then formally asked to be allowed to exercise their right to repurchase the
aforementioned lot, but the MCIAA ignored the demand. On August 18, 1997, the Ouanos instituted a complaint before the Cebu City RTC
against the Republic and the MCIAA for reconveyance, docketed as Civil Case No. CEB-20743.

Answering, the Republic and MCIAA averred that the Ouanos no longer have enforceable rights whatsoever over the condemned Lot No.
763-A, the decision in Civil Case No. R-1881 not having found any reversionary condition.

Ruling of the RTC

By a Decision dated November 28, 2000, the RTC, Branch 57 in Cebu City ruled in favor of the Ouanos, disposing as follows:

WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in favor of the plaintiffs, Anunciacion Vda. De Ouano, Mario
P. Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez and against the Republic of the Philippines and Mactan Cebu International Airport
Authority (MCIAA) to restore to plaintiffs, the possession and ownership of their land, Lot No. 763-A upon payment of the expropriation price
to defendants; and

2. Ordering the Register of Deeds to effect the transfer of the Certificate of Title from defendant Republic of the Philippines on Lot 763-A,
canceling TCT No. 52004 in the name of defendant Republic of the Philippines and to issue a new title on the same lot in the names of
Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez.
No pronouncement as to costs.13

Acting on the motion of the Republic and MCIAA for reconsideration, however, the RTC, Branch 57 in Cebu City, presided this time by Judge
Enriqueta L. Belarmino, issued, on December 9, 2002, an Order 14 that reversed its earlier decision of November 28, 2000 and dismissed the
Ouanos’ complaint.

Ruling of the CA

In time, the Ouanos interposed an appeal to the CA, docketed as CA-G.R. CV No. 78027. Eventually, the appellate court rendered a
Decision15 dated September 3, 2004, denying the appeal, thus:

WHEREFORE, premises considered, the Order dated December 9, 2002, of the Regional Trial Court, 7th Judicial Region, Branch 57, Cebu
City, in Civil Case No. CEB-20743, is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.

Explaining its case disposition, the CA stated that the decision in Civil Case No. R-1881 did not state any condition that Lot No. 763-A of the
Ouanos––and all covered lots for that matter––would be returned to them or that they could repurchase the same property if it were to be
used for purposes other than for the Lahug Airport. The appellate court also went on to declare the inapplicability of the Court’s
pronouncement in MCIAA v. Court of Appeals, RTC, Branch 9, Cebu City, Melba Limbago, et al.,16 to support the Ouanos’ cause, since the
affected landowners in that case, unlike the Ouanos, parted with their property not through expropriation but via a sale and purchase
transaction.

The Ouanos filed a motion for reconsideration of the CA’s Decision, but was denied per the CA’s May 26, 2005 Resolution. 17 Hence, they
filed this petition in G.R. No. 168770.

The Issues

G.R. No. 168812

GROUNDS FOR ALLOWANCE OF THE PETITION

l. THE ASSAILED ISSUANCES ILLEGALLY STRIPPED THE REPUBLIC OF ITS ABSOLUTE AND UNCONDITIONAL TITLE TO
THE SUBJECT EXPROPRIATED PROPERTIES.

ll. THE IMPUNGED DISPOSITIONS INVALIDLY OVERTURNED THIS HONORABLE COURT’S FINAL RULINGS IN FERY V.
MUNICIPALITY OF CABANATUAN, MCIAA V. COURT OF APPEALS AND REYES V. NATIONAL HOUSING AUTHORITY.

lll. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THIS HONORABLE COURT’S RULING IN MORENO, ALBEIT IT
HAS NOT YET ATTAINED FINALITY.18

G.R. No. 168770

Questions of law presented in this Petition

Whether or not the testimonial evidence of the petitioners proving the promises, assurances and representations by the airport officials and
lawyers are inadmissbale under the Statute of Frauds.

Whether or not under the ruling of this Honorable Court in the heirs of Moreno Case, and pursuant to the principles enunciated therein,
petitioners herein are entitiled to recover their litigated property.

Reasons for Allowances of this Petition

Respondents did not object during trial to the admissibility of petitioners’ testimonial evidence under the Statute of Frauds and have thus
waived such objection and are now barred from raising the same. In any event, the Statute of Frauds is not applicable herein. Consequently,
petitioners’ evidence is admissible and should be duly given weight and credence, as initially held by the trial court in its original Decision.19

While their respective actions against MCIAA below ended differently, the Ouanos and the Inocians’ proffered arguments presented before
this Court run along parallel lines, both asserting entitlement to recover the litigated property on the strength of the Court’s ruling in Heirs of
Moreno. MCIAA has, however, formulated in its Consolidated Memorandum the key interrelated issues in these consolidated cases, as
follows:

I. WHETHER ABANDONMENT OF THE PUBLIC USE FOR WHICH THE SUBJECT PROPERTIES WERE EXPROPRIATED ENTITLES
PETITIONERS OUANOS, ET AL. AND RESPONDENTS INOCIAN, ET AL. TO REACQUIRE THEM.
 II. WHETHER PETITIONERS OUANOS, ET AL. AND RESPONDENTS INOCIAN, ET AL. ARE ENTITLED TO RECONVEYANCE OF THE
SUBJECT PROPERTIES SIMPLY ON THE BASIS OF AN ALLEGED VERBAL PROMISE OR ASSURANCE OF SOME NAC OFFICIALS
THAT THE SUBJECT PROPERTIES WILL BE RETUNRED IF THE AIRPORT PROJECT WOULD BE ABANDONED.

The Court’s Ruling

The Republic and MCIAA’s petition in G.R. No. 168812 is bereft of merit, while the Ouano petition in G.R. No. 168770 is meritorious.

At the outset, three (3) fairly established factual premises ought to be emphasized:

First, the MCIAA and/or its predecessor agency had not actually used the lots subject of the final decree of expropriation in Civil Case No. R-
1881 for the purpose they were originally taken by the government, i.e., for the expansion and development of Lahug Airport.

Second, the Lahug Airport had been closed and abandoned. A significant portion of it had, in fact, been purchased by a private corporation
for development as a commercial complex.20

Third, it has been preponderantly established by evidence that the NAC, through its team of negotiators, had given assurance to the affected
landowners that they would be entitled to repurchase their respective lots in the event they are no longer used for airport purposes.21 "No less
than Asterio Uy," the Court noted in Heirs of Moreno, "one of the members of the CAA Mactan Legal Team, which interceded for the
acquisition of the lots for the Lahug Airport’s expansion, affirmed that persistent assurances were given to the landowners to the effect that as
soon as the Lahug Airport is abandoned or transferred to Mactan, the lot owners would be able to reacquire their properties." 22 In Civil Case
No. CEB-20743, Exhibit "G," the transcript of the deposition23 of Anunciacion vda. de Ouano covering the assurance made had been formally
offered in evidence and duly considered in the initial decision of the RTC Cebu City. In Civil Case No. CEB-18370, the trial court, on the basis
of testimonial evidence, and later the CA, recognized the reversionary rights of the suing former lot owners or their successors in
interest24 and resolved the case accordingly. In point with respect to the representation and promise of the government to return the lots
taken should the planned airport expansion do not materialize is what the Court said in Heirs of Moreno, thus:

This is a difficult case calling for a difficult but just solution. To begin with there exists an undeniable historical narrative that the
predecessors of respondent MCIAA had suggested to the landowners of the properties covered by the Lahug Airport expansion scheme that
they could repurchase their properties at the termination of the airport’s venue. Some acted on this assurance and sold their properties; other
landowners held out and waited for the exercise of eminent domain to take its course until finally coming to terms with respondent’s
predecessors that they would not appeal nor block further judgment of condemnation if the right of repurchase was extended to them. A
handful failed to prove that they acted on such assurance when they parted with ownership of their land. 25(Emphasis supplied; citations
omitted.)

For perspective, Heirs of Moreno––later followed by MCIAA v. Tudtud (Tudtud)26 and the consolidated cases at bar––is cast under the same
factual setting and centered on the expropriation of privately-owned lots for the public purpose of expanding the Lahug Airport and the
alleged promise of reconveyance given by the negotiating NAC officials to the private lot owners. All the lots being claimed by the former
owners or successors-in-interest of the former owners in the Heirs of Moreno, Tudtud, and the present cases were similarly adjudged
condemned in favor of the Republic in Civil Case No. R-1881. All the claimants sought was or is to have the condemned lots reconveyed to
them upon the payment of the condemnation price since the public purpose of the expropriation was never met. Indeed, the expropriated
lots were never used and were, in fact, abandoned by the expropriating government agencies.

In all then, the issues and supporting arguments presented by both sets of petitioners in these consolidated cases have already previously
been passed upon, discussed at length, and practically peremptorily resolved in Heirs of Moreno and the November 2008 Tudtud ruling. The
Ouanos, as petitioners in G.R. No. 168770, and the Inocians, as respondents in G.R. No. 168812, are similarly situated as the heirs of
Moreno in Heirs of Moreno and Benjamin Tudtud in Tudtud. Be that as it may, there is no reason why the ratio decidendi in Heirs of
Moreno and Tudtud should not be made to apply to petitioners Ouanos and respondents Inocians such that they shall be entitled to recover
their or their predecessors’ respective properties under the same manner and arrangement as the heirs of Moreno and Tudtud. Stare decisis
et non quieta movere (to adhere to precedents, and not to unsettle things which are established).27

Just like in Tudtud and earlier in Heirs of Moreno, MCIAA would foist the theory that the judgment of condemnation in Civil Case No. R-1881
was without qualification and was unconditional. It would, in fact, draw attention to the falloof the expropriation court’s decision to prove that
there is nothing in the decision indicating that the government gave assurance or undertook to reconvey the covered lots in case the Lahug
airport expansion project is aborted. Elaborating on this angle, MCIAA argues that the claim of the Ouanos and the Inocians regarding the
alleged verbal assurance of the NAC negotiating team that they can reacquire their landholdings is barred by the Statute of Frauds.28

Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil Code, a contract for the sale or acquisition of real property
shall be unenforceable unless the same or some note of the contract be in writing and subscribed by the party charged. Subject to defined
exceptions, evidence of the agreement cannot be received without the writing, or secondary evidence of its contents.

MCIAA’s invocation of the Statute of Frauds is misplaced primarily because the statute applies only to executory and not to completed,
executed, or partially consummated contracts.29 Carbonnel v. Poncio, et al., quoting Chief Justice Moran, explains the rationale behind this
rule, thusly:

x x x "The reason is simple. In executory contracts there is a wide field for fraud because unless they may be in writing there is no palpable
evidence of the intention of the contracting parties. The statute has been precisely been enacted to prevent fraud." x x x However, if a
contract has been totally or partially performed, the exclusion of parol evidence would promote fraud or bad faith, for it would enable the
defendant to keep the benefits already derived by him from the transaction in litigation, and at the same time, evade the obligations,
responsibilities or liabilities assumed or contracted by him thereby.30 (Emphasis in the original.)

Analyzing the situation of the cases at bar, there can be no serious objection to the proposition that the agreement package between the
government and the private lot owners was already partially performed by the government through the acquisition of the lots for the
expansion of the Lahug airport. The parties, however, failed to accomplish the more important condition in the CFI decision decreeing the
expropriation of the lots litigated upon: the expansion of the Lahug Airport. The project––the public purpose behind the forced property
taking––was, in fact, never pursued and, as a consequence, the lots expropriated were abandoned. Be that as it may, the two groups of
landowners can, in an action to compel MCIAA to make good its oral undertaking to allow repurchase, adduce parol evidence to prove the
transaction.

At any rate, the objection on the admissibility of evidence on the basis of the Statute of Frauds may be waived if not timely raised. Records
tend to support the conclusion that MCIAA did not, as the Ouanos and the Inocians posit, object to the introduction of parol evidence to prove
its commitment to allow the former landowners to repurchase their respective properties upon the occurrence of certain events.

In a bid to deny the lot owners the right to repurchase, MCIAA, citing cases, 31 points to the dispositive part of the decision in Civil Case R-
1881 which, as couched, granted the Republic absolute title to the parcels of land declared expropriated. The MCIAA is correct about the
unconditional tone of the dispositive portion of the decision, but that actuality would not carry the day for the agency. Addressing the matter of
the otherwise absolute tenor of the CFI’s disposition in Civil Case No. R-1881, the Court, in Heirs of Moreno, after taking stock of the ensuing
portion of the body of the CFI’s decision, said:

As for the public purpose of the expropriation proceeding, it cannot now be doubted. Although Mactan Airport is being constructed, it does not
take away the actual usefulness and importance of the Lahug Airport: it is handling the air traffic of both civilian and military. From it aircrafts
fly to Mindanao and Visayas and pass thru it on their flights to the North and Manila. Then, no evidence was adduced to show how soon is
the Mactan Airport to be placed in operation and whether the Lahug Airport will be closed immediately thereafter. It is up to the other
departments of the Government to determine said matters. The Court cannot substitute its judgments for those of the said departments or
agencies. In the absence of such showing, the court will presume that the Lahug Airport will continue to be in operation. 32 (Emphasis
supplied.)

We went on to state as follows:

While the trial court in Civil Case No. R-1881 could have simply acknowledged the presence of public purpose for the exercise of eminent
domain regardless of the survival of the Lahug Airport, the trial court in its Decision chose not to do so but instead prefixed its finding of
public purpose upon its understanding that ‘Lahug Airport will continue to be in operation’. Verily, these meaningful statements in the body of
the Decision warrant the conclusion that the expropriated properties would remain to be so until it was confirmed that Lahug Airport was no
longer ‘in operation’. This inference further implies two (2) things: (a) after the Lahug Airport ceased its undertaking as such and the
expropriated lots were not being used for any airport expansion project, the rights vis-à-vis the expropriated lots x x x as between the State
and their former owners, petitioners herein, must be equitably adjusted; and (b) the foregoing unmistakable declarations in the body of
the Decision should merge with and become an intrinsic part of the fallo thereof which under the premises is clearly inadequate since the
dispositive portion is not in accord with the findings as contained in the body thereof.33

Not to be overlooked of course is what the Court said in its Resolution disposing of MCIAA’s motion to reconsider the original ruling in Heirs
of Moreno. In that resolution, We stated that the fallo of the decision in Civil Case R-1881 should be viewed and understood in connection
with the entire text, which contemplated a return of the property taken if the airport expansion project were abandoned. For ease of
reference, following is what the Court wrote:

Moreover, we do not subscribe to the [MCIAA’s] contention that since the possibility of the Lahug Airport’s closure was actually considered by
the trial court, a stipulation on reversion or repurchase was so material that it should not have been discounted by the court a quo in its
decision in Civil Case No. R-1881, if, in fact, there was one. We find it proper to cite, once more, this Court’s ruling that the fallo of the
decision in Civil Case No. R-1881 must be read in reference to the other portions of the decision in which it forms a part. A reading of the
Court’s judgment must not be confined to the dispositive portion alone; rather it should be meaningfully construed in unanimity with the ratio
decidendi thereof to grasp the true intent and meaning of a decision.34

The Court has, to be sure, taken stock of Fery v. Municipality of Cabanatuan,35 a case MCIAA cites at every possible turn, where the Court
made these observations:

If, for example, 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. x x x If, upon the contrary, however the decree of expropriation gives to the entity a fee simple title, then, of course, the land
becomes the absolute property of the expropriator x x x and in that case the non-user does not have the effect of defeating the title acquired
by the expropriation proceedings x x x.

Fery notwithstanding, MCIAA cannot really rightfully say that it has absolute title to the lots decreed expropriated in Civil Case No. R-1881.
The correct lesson of Fery is captured by what the Court said in that case, thus: "the government acquires only such rights in expropriated
parcels of land as may be allowed by the character of its title over the properties." In light of our disposition in Heirs of Moreno and Tudtud,
the statement immediately adverted to means that in the event the particular public use for which a parcel of land is expropriated is
abandoned, the owner shall not be entitled to recover or repurchase it as a matter of right, unless such recovery or repurchase is expressed
in or irresistibly deducible from the condemnation judgment. But as has been determined below, the decision in Civil Case No. R-1881
enjoined MCIAA, as a condition of approving expropriation, to allow recovery or repurchase upon abandonment of the Lahug airport project.
To borrow from our underlying decision in Heirs of Moreno, "[n]o doubt, the return or repurchase of the condemned properties of petitioners
could readily be justified as the manifest legal effect of consequence of the trial court’s underlying presumption that ‘Lahug Airport will
continue to be in operation’ when it granted the complaint for eminent domain and the airport discontinued its activities."36

Providing added support to the Ouanos and the Inocians’ right to repurchase is what in Heirs of Moreno was referred to as constructive trust,
one that is akin to the implied trust expressed in Art. 1454 of the Civil Code,37 the purpose of which is to prevent unjust enrichment.38 In the
case at bench, the Ouanos and the Inocians parted with their respective lots in favor of the MCIAA, the latter obliging itself to use the realties
for the expansion of Lahug Airport; failing to keep its end of the bargain, MCIAA can be compelled by the former landowners to reconvey the
parcels of land to them, otherwise, they would be denied the use of their properties upon a state of affairs that was not conceived nor
contemplated when the expropriation was authorized. In effect, the government merely held the properties condemned in trust until the
proposed public use or purpose for which the lots were condemned was actually consummated by the government. Since the government
failed to perform the obligation that is the basis of the transfer of the property, then the lot owners Ouanos and Inocians can demand the
reconveyance of their old properties after the payment of the condemnation price.

Constructive trusts are fictions of equity that courts use as devices to remedy any situation in which the holder of the legal title, MCIAA in this
case, may not, in good conscience, retain the beneficial interest. We add, however, as in Heirs of Moreno, that the party seeking the aid of
equity––the landowners in this instance, in establishing the trust––must himself do equity in a manner as the court may deem just and
reasonable.

The Court, in the recent MCIAA v. Lozada, Sr., revisited and abandoned the Fery ruling that the former owner is not entitled to reversion of
the property even if the public purpose were not pursued and were abandoned, thus:

On this note, we take this opportunity to revisit our ruling in Fery, which involved an expropriation suit commenced upon parcels of land to be
used as a site for a public market. Instead of putting up a public market, respondent Cabanatuan constructed residential houses for lease on
the area. Claiming that the municipality lost its right to the property taken since it did not pursue its public purpose, petitioner Juan Fery, the
former owner of the lots expropriated, sought to recover his properties. However, as he had admitted that, in 1915, respondent Cabanatuan
acquired a fee simple title to the lands in question, judgment was rendered in favor of the municipality, following American jurisprudence,
particularly City of Fort Wayne v. Lake Shore & M.S. RY. Co., McConihay v. Theodore Wright, and Reichling v. Covington Lumber Co., all
uniformly holding that the transfer to a third party of the expropriated real property, which necessarily resulted in the abandonment of the
particular public purpose for which the property was taken, is not a ground for the recovery of the same by its previous owner, the title of the
expropriating agency being one of fee simple.1avvphi1

Obviously, Fery was not decided pursuant to our now sacredly held constitutional right that private property shall not be taken for public use
without just compensation. It is well settled that the taking of private property by the Governments power of eminent domain is subject to two
mandatory requirements: (1) that it is for a particular public purpose; and (2) that just compensation be paid to the property owner. These
requirements partake of the nature of implied conditions that should be complied with to enable the condemnor to keep the property
expropriated.

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 owners right to justice, fairness, and equity.

In light of these premises, we now expressly hold that the taking of private property, consequent to the Governments exercise of its power of
eminent domain, is always subject to the condition that the property be devoted to the specific public purpose for which it was taken.
Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and is peremptorily abandoned, then the former owners, if
they so desire, may seek the reversion of the property, subject to the return of the amount of just compensation received. In such a case, the
exercise of the power of eminent domain has become improper for lack of the required factual justification.39 (Emphasis supplied.)

Clinging to Fery, specifically the fee simple concept underpinning it, is no longer compelling, considering the ensuing inequity such
application entails. Too, the Court resolved Fery not under the cover of any of the Philippine Constitutions, each decreeing that private
property shall not be taken for public use without just compensation. The twin elements of just compensation and public purpose are, by
themselves, direct limitations to the exercise of eminent domain, arguing, in a way, against the notion of fee simple title. 1avvphi1 The fee
does not vest until payment of just compensation.40

In esse, expropriation is forced private property taking, the landowner being really without a ghost of a chance to defeat the case of the
expropriating agency. In other words, in expropriation, the private owner is deprived of property against his will. Withal, the mandatory
requirement of due process ought to be strictly followed, such that the state must show, at the minimum, a genuine need, an exacting public
purpose to take private property, the purpose to be specifically alleged or least reasonably deducible from the complaint.

Public use, as an eminent domain concept, has now acquired an expansive meaning to include any use that is of "usefulness, utility, or
advantage, or what is productive of general benefit [of the public]." 41 If the genuine public necessity—the very reason or condition as it were
—allowing, at the first instance, the expropriation of a private land ceases or disappears, then there is no more cogent point for the
government’s retention of the expropriated land. The same legal situation should hold if the government devotes the property to another
public use very much different from the original or deviates from the declared purpose to benefit another private person. It has been said that
the direct use by the state of its power to oblige landowners to renounce their productive possession to another citizen, who will use it
predominantly for that citizen’s own private gain, is offensive to our laws.42

A condemnor should commit to use the property pursuant to the purpose stated in the petition for expropriation, failing which it should file
another petition for the new purpose. If not, then it behooves the condemnor to return the said property to its private owner, if the latter so
desires. The government cannot plausibly keep the property it expropriated in any manner it pleases and, in the process, dishonor the
judgment of expropriation. This is not in keeping with the idea of fair play,

The notion, therefore, that the government, via expropriation proceedings, acquires unrestricted ownership over or a fee simple title to the
covered land, is no longer tenable. We suggested as much in Heirs of Moreno and in Tudtud and more recently in Lozada, Sr. Expropriated
lands should be differentiated from a piece of land, ownership of which was absolutely transferred by way of an unconditional purchase and
sale contract freely entered by two parties, one without obligation to buy and the other without the duty to sell. In that case, the fee simple
concept really comes into play. There is really no occasion to apply the "fee simple concept" if the transfer is conditional. The taking of a
private land in expropriation proceedings is always conditioned on its continued devotion to its public purpose. As a necessary corollary, once
the purpose is terminated or peremptorily abandoned, then the former owner, if he so desires, may seek its reversion, subject of course to
the return, at the very least, of the just compensation received.

To be compelled to renounce dominion over a piece of land is, in itself, an already bitter pill to swallow for the owner. But to be asked to
sacrifice for the common good and yield ownership to the government which reneges on its assurance that the private property shall be for a
public purpose may be too much. But it would be worse if the power of eminent domain were deliberately used as a subterfuge to benefit
another with influence and power in the political process, including development firms. The mischief thus depicted is not at all far-fetched with
the continued application of Fery. Even as the Court deliberates on these consolidated cases, there is an uncontroverted allegation that the
MCIAA is poised to sell, if it has not yet sold, the areas in question to Cebu Property Ventures, Inc. This provides an added dimension to
abandon Fery.

Given the foregoing disquisitions, equity and justice demand the reconveyance by MCIAA of the litigated lands in question to the Ouanos and
Inocians. In the same token, justice and fair play also dictate that the Ouanos and Inocian return to MCIAA what they received as just
compensation for the expropriation of their respective properties plus legal interest to be computed from default, which in this case should
run from the time MCIAA complies with the reconveyance obligation. 43 They must likewise pay MCIAA the necessary expenses it might have
incurred in sustaining their respective lots and the monetary value of its services in managing the lots in question to the extent that they, as
private owners, were benefited thereby.

In accordance with Art. 1187 of the Civil Code on mutual compensation, MCIAA may keep whatever income or fruits it may have obtained
from the parcels of land expropriated. In turn, the Ouanos and Inocians need not require the accounting of interests earned by the amounts
they received as just compensation.44

Following Art. 1189 of the Civil Code providing that "[i]f the thing is improved by its nature, or by time, the improvement shall inure to the
benefit of the creditor x x x," the Ouanos and Inocians do not have to settle the appreciation of the values of their respective lots as part of
the reconveyance process, since the value increase is merely the natural effect of nature and time.

Finally, We delete the award of PhP 50,000 and PhP 10,000, as attorney’s fees and litigation expenses, respectively, made in favor of the
Inocians by the Cebu City RTC in its judgment in Civil Case No. CEB-18370, as later affirmed by the CA. As a matter of sound policy, no
premium should be set on the right to litigate where there is no doubt about the bona fides of the exercise of such right,45 as here, albeit the
decision of MCIAA to resist the former landowners’ claim eventually turned out to be untenable.

WHEREFORE, the petition in G.R. No. 168770 is GRANTED. Accordingly, the CA Decision dated September 3, 2004 in CA-G.R. CV No.
78027 is REVERSED and SET ASIDE. Mactan-Cebu International Airport Authority is ordered to reconvey subject Lot No. 763-A to
petitioners Anunciacion vda. de Ouano, Mario P. Ouano, Leticia Ouano Arnaiz, and Cielo Ouano Martinez. The Register of Deeds of Cebu
City is ordered to effect the necessary cancellation of title and transfer it in the name of the petitioners within fifteen (15) days from finality of
judgment.

The petition of the Mactan-Cebu International Airport Authority in G.R. No. 168812 is DENIED, and the CA’s Decision and Resolution dated
January 14, 2005 and June 29, 2005, respectively, in CA-G.R. CV No. 64356 are AFFIRMED, except insofar as they awarded attorney’s fees
and litigation expenses that are hereby DELETED. Accordingly, Mactan-Cebu International Airport Authority is ordered to reconvey to
respondents Ricardo L. Inocian, Olympia E. Esteves, Emilia E. Bacalla, Restituta E. Montana, and Raul L. Inocian the litigated Lot Nos. 744-
A, 745-A, 746, 762-A, 747, and 761-A; and to respondents Aletha Suico Magat, Philip M. Suico, Dolores S. dela Cruz, James M. Suico,
Edward M. Suico, Roselyn S. Lawsin, Rex M. Suico, and Kharla Suico-Gutierrez the litigated Lot Nos. 942 and 947. The Register of Deeds of
Cebu City is ordered to effect the necessary cancellation of title and transfer it in the name of respondents within a period of fifteen (15) days
from finality of judgment.

The foregoing dispositions are subject to QUALIFICATIONS, to apply to these consolidated petitions, when appropriate, as follows:

(1) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L Inocian, et al. in G.R. No. 168812 are ordered to return
to the MCIAA the just compensation they or their predecessors-in-interest received for the expropriation of their respective lots as
stated in Civil Case No. R-1881, within a period of sixty (60) days from finality of judgment;
 (2) The MCIAA shall be entitled to RETAIN whatever fruits and income it may have obtained from the subject expropriated lots
without any obligation to refund the same to the lot owners; and

(3) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L. Inocian, et al. in G.R. No. 168812 shall RETAIN
whatever interests the amounts they received as just compensation may have earned in the meantime without any obligation to
refund the same to MCIAA.

SO ORDERED.

EN BANC

G.R. No. 176625

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY and AIR TRANSPORTATION OFFICE, Petitioners,

vs.
BERNARDO L. LOZADA, SR., and the HEIRS OF ROSARIO MERCADO, namely, VICENTE LOZADA, MARIO M. LOZADA, MARCIA L.
GODINEZ, VIRGINIA L. FLORES, BERNARDO LOZADA, JR., DOLORES GACASAN, SOCORRO CAFARO and ROSARIO LOZADA,
represented by MARCIA LOZADA GODINEZ, Respondents.

DECISION

NACHURA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse, annul, and set aside the Decision 1 dated
February 28, 2006 and the Resolution2 dated February 7, 2007 of the Court of Appeals (CA) (Cebu City), Twentieth Division, in CA-G.R. CV
No. 65796.

The antecedent facts and proceedings are as follows:

Subject of this case is Lot No. 88-SWO-25042 (Lot No. 88), with an area of 1,017 square meters, more or less, located in Lahug, Cebu City.
Its original owner was Anastacio Deiparine when the same was subject to expropriation proceedings, initiated by the Republic of the
Philippines (Republic), represented by the then Civil Aeronautics Administration (CAA), for the expansion and improvement of the Lahug
Airport. The case was filed with the then Court of First Instance of Cebu, Third Branch, and docketed as Civil Case No. R-1881.

As early as 1947, the lots were already occupied by the U.S. Army. They were turned over to the Surplus Property Commission, the Bureau
of Aeronautics, the National Airport Corporation and then to the CAA.

During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr. acquired Lot No. 88 from Deiparine.
Consequently, Transfer Certificate of Title (TCT) No. 9045 was issued in Lozada’s name.

On December 29, 1961, the trial court rendered judgment in favor of the Republic and ordered the latter to pay Lozada the fair market value
of Lot No. 88, adjudged at ₱3.00 per square meter, with consequential damages by way of legal interest computed from November 16, 1947
—the time when the lot was first occupied by the airport. Lozada received the amount of ₱3,018.00 by way of payment.

The affected landowners appealed. Pending appeal, the Air Transportation Office (ATO), formerly CAA, proposed a compromise settlement
whereby the owners of the lots affected by the expropriation proceedings would either not appeal or withdraw their respective appeals in
consideration of a commitment that the expropriated lots would be resold at the price they were expropriated in the event that the ATO would
abandon the Lahug Airport, pursuant to an established policy involving similar cases. Because of this promise, Lozada did not pursue his
appeal. Thereafter, Lot No. 88 was transferred and registered in the name of the Republic under TCT No. 25057.

The projected improvement and expansion plan of the old Lahug Airport, however, was not pursued.

Lozada, with the other landowners, contacted then CAA Director Vicente Rivera, Jr., requesting to repurchase the lots, as per previous
agreement. The CAA replied that there might still be a need for the Lahug Airport to be used as an emergency DC-3 airport. It reiterated,
however, the assurance that "should this Office dispose and resell the properties which may be found to be no longer necessary as an
airport, then the policy of this Office is to give priority to the former owners subject to the approval of the President."
On November 29, 1989, then President Corazon C. Aquino issued a Memorandum to the Department of Transportation, directing the transfer
of general aviation operations of the Lahug Airport to the Mactan International Airport before the end of 1990 and, upon such transfer, the
closure of the Lahug Airport.

Sometime in 1990, the Congress of the Philippines passed Republic Act (R.A.) No. 6958, entitled "An Act Creating the Mactan-Cebu
International Airport Authority, Transferring Existing Assets of the Mactan International Airport and the Lahug Airport to the Authority, Vesting
the Authority with Power to Administer and Operate the Mactan International Airport and the Lahug Airport, and For Other Purposes."

From the date of the institution of the expropriation proceedings up to the present, the public purpose of the said expropriation (expansion of
the airport) was never actually initiated, realized, or implemented. Instead, the old airport was converted into a commercial complex. Lot No.
88 became the site of a jail known as Bagong Buhay Rehabilitation Complex, while a portion thereof was occupied by squatters. 3 The old
airport was converted into what is now known as the Ayala I.T. Park, a commercial area.1avvphi1

Thus, on June 4, 1996, petitioners initiated a complaint for the recovery of possession and reconveyance of ownership of Lot No. 88. The
case was docketed as Civil Case No. CEB-18823 and was raffled to the Regional Trial Court (RTC), Branch 57, Cebu City. The complaint
substantially alleged as follows:

(a) Spouses Bernardo and Rosario Lozada were the registered owners of Lot No. 88 covered by TCT No. 9045;

(b) In the early 1960’s, the Republic sought to acquire by expropriation Lot No. 88, among others, in connection with its program for the
improvement and expansion of the Lahug Airport;

(c) A decision was rendered by the Court of First Instance in favor of the Government and against the land owners, among whom was
Bernardo Lozada, Sr. appealed therefrom;

(d) During the pendency of the appeal, the parties entered into a compromise settlement to the effect that the subject property would be
resold to the original owner at the same price when it was expropriated in the event that the Government abandons the Lahug Airport;

(e) Title to Lot No. 88 was subsequently transferred to the Republic of the Philippines (TCT No. 25057);

(f) The projected expansion and improvement of the Lahug Airport did not materialize;

(g) Plaintiffs sought to repurchase their property from then CAA Director Vicente Rivera. The latter replied by giving as assurance that
priority would be given to the previous owners, subject to the approval of the President, should CAA decide to dispose of the properties;

(h) On November 29, 1989, then President Corazon C. Aquino, through a Memorandum to the Department of Transportation and
Communications (DOTC), directed the transfer of general aviation operations at the Lahug Airport to the Mactan-Cebu International
Airport Authority;

(i) Since the public purpose for the expropriation no longer exists, the property must be returned to the plaintiffs.4

In their Answer, petitioners asked for the immediate dismissal of the complaint. They specifically denied that the Government had made
assurances to reconvey Lot No. 88 to respondents in the event that the property would no longer be needed for airport operations.
Petitioners instead asserted that the judgment of condemnation was unconditional, and respondents were, therefore, not entitled to recover
the expropriated property notwithstanding non-use or abandonment thereof.

After pretrial, but before trial on the merits, the parties stipulated on the following set of facts:

(1) The lot involved is Lot No. 88-SWO-25042 of the Banilad Estate, situated in the City of Cebu, containing an area of One Thousand
Seventeen (1,017) square meters, more or less;

(2) The property was expropriated among several other properties in Lahug in favor of the Republic of the Philippines by virtue of a
Decision dated December 29, 1961 of the CFI of Cebu in Civil Case No. R-1881;

(3) The public purpose for which the property was expropriated was for the purpose of the Lahug Airport;

(4) After the expansion, the property was transferred in the name of MCIAA; [and]

(5) On November 29, 1989, then President Corazon C. Aquino directed the Department of Transportation and Communication to transfer
general aviation operations of the Lahug Airport to the Mactan-Cebu International Airport Authority and to close the Lahug Airport after
such transfer[.]5

During trial, respondents presented Bernardo Lozada, Sr. as their lone witness, while petitioners presented their own witness, Mactan-Cebu
International Airport Authority legal assistant Michael Bacarisas.
On October 22, 1999, the RTC rendered its Decision, disposing as follows:

WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in favor of the plaintiffs, Bernardo L. Lozada, Sr., and the
heirs of Rosario Mercado, namely, Vicente M. Lozada, Marcia L. Godinez, Virginia L. Flores, Bernardo M. Lozada, Jr., Dolores L. Gacasan,
Socorro L. Cafaro and Rosario M. Lozada, represented by their attorney-in-fact Marcia Lozada Godinez, and against defendants Cebu-
Mactan International Airport Authority (MCIAA) and Air Transportation Office (ATO):

1. ordering MCIAA and ATO to restore to plaintiffs the possession and ownership of their land, Lot No. 88 Psd-821 (SWO-23803), upon
payment of the expropriation price to plaintiffs; and

2. ordering the Register of Deeds to effect the transfer of the Certificate of Title from defendant[s] to plaintiffs on Lot No. [88], cancelling
TCT No. 20357 in the name of defendant MCIAA and to issue a new title on the same lot in the name of Bernardo L. Lozada, Sr. and the
heirs of Rosario Mercado, namely: Vicente M. Lozada, Mario M. Lozada, Marcia L. Godinez, Virginia L. Flores, Bernardo M. Lozada, Jr.,
Dolores L. Gacasan, Socorro L. Cafaro and Rosario M. Lozada.

No pronouncement as to costs.

SO ORDERED.6

Aggrieved, petitioners interposed an appeal to the CA. After the filing of the necessary appellate briefs, the CA rendered its assailed Decision
dated February 28, 2006, denying petitioners’ appeal and affirming in toto the Decision of the RTC, Branch 57, Cebu City. Petitioners’ motion
for reconsideration was, likewise, denied in the questioned CA Resolution dated February 7, 2007.

Hence, this petition arguing that: (1) the respondents utterly failed to prove that there was a repurchase agreement or compromise settlement
between them and the Government; (2) the judgment in Civil Case No. R-1881 was absolute and unconditional, giving title in fee simple to
the Republic; and (3) the respondents’ claim of verbal assurances from government officials violates the Statute of Frauds.

The petition should be denied.

Petitioners anchor their claim to the controverted property on the supposition that the Decision in the pertinent expropriation proceedings did
not provide for the condition that should the intended use of Lot No. 88 for the expansion of the Lahug Airport be aborted or abandoned, the
property would revert to respondents, being its former owners. Petitioners cite, in support of this position, Fery v. Municipality of
Cabanatuan,7 which declared that the Government acquires only such rights in expropriated parcels of land as may be allowed by the
character of its title over the properties—

If x x x 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. If x x x 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. x x x. If, upon the contrary, however, 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. x x x.

When land has been acquired for public use in fee simple, unconditionally, either by the exercise of eminent domain or by purchase, the
former owner retains no right in the land, and the public use may be abandoned, or the land may be devoted to a different use, without any
impairment of the estate or title acquired, or any reversion to the former owner. x x x.8

Contrary to the stance of petitioners, this Court had ruled otherwise in Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu
International Airport Authority,9 thus—

Moreover, respondent MCIAA has brought to our attention a significant and telling portion in the Decision in Civil Case No. R-1881 validating
our discernment that the expropriation by the predecessors of respondent was ordered under the running impression that Lahug Airport
would continue in operation—

As for the public purpose of the expropriation proceeding, it cannot now be doubted. Although Mactan Airport is being constructed, it does not
take away the actual usefulness and importance of the Lahug Airport: it is handling the air traffic both civilian and military. From it aircrafts fly
to Mindanao and Visayas and pass thru it on their flights to the North and Manila. Then, no evidence was adduced to show how soon is the
Mactan Airport to be placed in operation and whether the Lahug Airport will be closed immediately thereafter. It is up to the other departments
of the Government to determine said matters. The Court cannot substitute its judgment for those of the said departments or agencies. In the
absence of such showing, the Court will presume that the Lahug Airport will continue to be in operation (emphasis supplied).

While in the trial in Civil Case No. R-1881 [we] could have simply acknowledged the presence of public purpose for the exercise of eminent
domain regardless of the survival of Lahug Airport, the trial court in its Decision chose not to do so but instead prefixed its finding of public
purpose upon its understanding that "Lahug Airport will continue to be in operation." Verily, these meaningful statements in the body of the
Decision warrant the conclusion that the expropriated properties would remain to be so until it was confirmed that Lahug Airport was no
longer "in operation." This inference further implies two (2) things: (a) after the Lahug Airport ceased its undertaking as such and the
expropriated lots were not being used for any airport expansion project, the rights vis-à-vis the expropriated Lots Nos. 916 and 920 as
between the State and their former owners, petitioners herein, must be equitably adjusted; and (b) the foregoing unmistakable declarations in
the body of the Decision should merge with and become an intrinsic part of the fallo thereof which under the premises is clearly inadequate
since the dispositive portion is not in accord with the findings as contained in the body thereof.10

Indeed, the Decision in Civil Case No. R-1881 should be read in its entirety, wherein it is apparent that the acquisition by the Republic of the
expropriated lots was subject to the condition that the Lahug Airport would continue its operation. The condition not having materialized
because the airport had been abandoned, the former owner should then be allowed to reacquire the expropriated property.11

On this note, we take this opportunity to revisit our ruling in Fery, which involved an expropriation suit commenced upon parcels of land to be
used as a site for a public market. Instead of putting up a public market, respondent Cabanatuan constructed residential houses for lease on
the area. Claiming that the municipality lost its right to the property taken since it did not pursue its public purpose, petitioner Juan Fery, the
former owner of the lots expropriated, sought to recover his properties. However, as he had admitted that, in 1915, respondent Cabanatuan
acquired a fee simple title to the lands in question, judgment was rendered in favor of the municipality, following American jurisprudence,
particularly City of Fort Wayne v. Lake Shore & M.S. RY. Co., 12 McConihay v. Theodore Wright,13 and Reichling v. Covington Lumber Co.,14 all
uniformly holding that the transfer to a third party of the expropriated real property, which necessarily resulted in the abandonment of the
particular public purpose for which the property was taken, is not a ground for the recovery of the same by its previous owner, the title of the
expropriating agency being one of fee simple.

Obviously, Fery was not decided pursuant to our now sacredly held constitutional right that private property shall not be taken for public use
without just compensation.15 It is well settled that the taking of private property by the Government’s power of eminent domain is subject to
two mandatory requirements: (1) that it is for a particular public purpose; and (2) that just compensation be paid to the property owner. These
requirements partake of the nature of implied conditions that should be complied with to enable the condemnor to keep the property
expropriated.16

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.

In light of these premises, we now expressly hold that the taking of private property, consequent to the Government’s exercise of its power of
eminent domain, is always subject to the condition that the property be devoted to the specific public purpose for which it was taken.
Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and is peremptorily abandoned, then the former owners, if
they so desire, may seek the reversion of the property, subject to the return of the amount of just compensation received. In such a case, the
exercise of the power of eminent domain has become improper for lack of the required factual justification.17

Even without the foregoing declaration, in the instant case, on the question of whether respondents were able to establish the existence of an
oral compromise agreement that entitled them to repurchase Lot No. 88 should the operations of the Lahug Airport be abandoned, we rule in
the affirmative.

It bears stressing that both the RTC, Branch 57, Cebu and the CA have passed upon this factual issue and have declared, in no uncertain
terms, that a compromise agreement was, in fact, entered into between the Government and respondents, with the former undertaking to
resell Lot No. 88 to the latter if the improvement and expansion of the Lahug Airport would not be pursued. In affirming the factual finding of
the RTC to this effect, the CA declared—

Lozada’s testimony is cogent. An octogenarian widower-retiree and a resident of Moon Park, California since 1974, he testified that
government representatives verbally promised him and his late wife while the expropriation proceedings were on-going that the government
shall return the property if the purpose for the expropriation no longer exists. This promise was made at the premises of the airport. As far as
he could remember, there were no expropriation proceedings against his property in 1952 because the first notice of expropriation he
received was in 1962. Based on the promise, he did not hire a lawyer. Lozada was firm that he was promised that the lot would be reverted
to him once the public use of the lot ceases. He made it clear that the verbal promise was made in Lahug with other lot owners before the
1961 decision was handed down, though he could not name the government representatives who made the promise. It was just a verbal
promise; nevertheless, it is binding. The fact that he could not supply the necessary details for the establishment of his assertions during
cross-examination, but that "When it will not be used as intended, it will be returned back, we just believed in the government," does not
dismantle the credibility and truthfulness of his allegation. This Court notes that he was 89 years old when he testified in November 1997 for
an incident which happened decades ago. Still, he is a competent witness capable of perceiving and making his perception known. The
minor lapses are immaterial. The decision of the competency of a witness rests primarily with the trial judge and must not be disturbed on
appeal unless it is clear that it was erroneous. The objection to his competency must be made before he has given any testimony or as soon
as the incompetency becomes apparent. Though Lozada is not part of the compromise agreement, 18 he nevertheless adduced sufficient
evidence to support his claim.19

As correctly found by the CA, unlike in Mactan Cebu International Airport Authority v. Court of Appeals, 20 cited by petitioners, where
respondent therein offered testimonies which were hearsay in nature, the testimony of Lozada was based on personal knowledge as the
assurance from the government was personally made to him. His testimony on cross-examination destroyed neither his credibility as a
witness nor the truthfulness of his words.
Verily, factual findings of the trial court, especially when affirmed by the CA, are binding and conclusive on this Court and may not be
reviewed. A petition for certiorari under Rule 45 of the Rules of Court contemplates only questions of law and not of fact. 21 Not one of the
exceptions to this rule is present in this case to warrant a reversal of such findings.

As regards the position of petitioners that respondents’ testimonial evidence violates the Statute of Frauds, suffice it to state that the Statute
of Frauds operates only with respect to executory contracts, and does not apply to contracts which have been completely or partially
performed, the rationale thereof being as follows:

In executory contracts there is a wide field for fraud because unless they be in writing there is no palpable evidence of the intention of the
contracting parties. The statute has precisely been enacted to prevent fraud. However, if a contract has been totally or partially performed,
the exclusion of parol evidence would promote fraud or bad faith, for it would enable the defendant to keep the benefits already delivered by
him from the transaction in litigation, and, at the same time, evade the obligations, responsibilities or liabilities assumed or contracted by him
thereby.22

In this case, the Statute of Frauds, invoked by petitioners to bar the claim of respondents for the reacquisition of Lot No. 88, cannot apply, the
oral compromise settlement having been partially performed. By reason of such assurance made in their favor, respondents relied on the
same by not pursuing their appeal before the CA. Moreover, contrary to the claim of petitioners, the fact of Lozada’s eventual conformity to
the appraisal of Lot No. 88 and his seeking the correction of a clerical error in the judgment as to the true area of Lot No. 88 do not
conclusively establish that respondents absolutely parted with their property. To our mind, these acts were simply meant to cooperate with
the government, particularly because of the oral promise made to them.

The right of respondents to repurchase Lot No. 88 may be enforced based on a constructive trust constituted on the property held by the
government in favor of the former. On this note, our ruling in Heirs of Timoteo Moreno is instructive, viz.:

Mactan-Cebu International Airport Authority is correct in stating that one would not find an express statement in the Decision in Civil Case
No. R-1881 to the effect that "the [condemned] lot would return to [the landowner] or that [the landowner] had a right to repurchase the same
if the purpose for which it was expropriated is ended or abandoned or if the property was to be used other than as the Lahug Airport." This
omission notwithstanding, and while the inclusion of this pronouncement in the judgment of condemnation would have been ideal, such
precision is not absolutely necessary nor is it fatal to the cause of petitioners herein. No doubt, the return or repurchase of the condemned
properties of petitioners could be readily justified as the manifest legal effect or consequence of the trial court’s underlying presumption that
"Lahug Airport will continue to be in operation" when it granted the complaint for eminent domain and the airport discontinued its activities.

The predicament of petitioners involves a constructive trust, one that is akin to the implied trust referred to in Art. 1454 of the Civil Code, "If
an absolute conveyance of property is made in order to secure the performance of an obligation of the grantor toward the grantee, a trust by
virtue of law is established. If the fulfillment of the obligation is offered by the grantor when it becomes due, he may demand the
reconveyance of the property to him." In the case at bar, petitioners conveyed Lots No. 916 and 920 to the government with the latter
obliging itself to use the realties for the expansion of Lahug Airport; failing to keep its bargain, the government can be compelled by
petitioners to reconvey the parcels of land to them, otherwise, petitioners would be denied the use of their properties upon a state of affairs
that was not conceived nor contemplated when the expropriation was authorized.

Although the symmetry between the instant case and the situation contemplated by Art. 1454 is not perfect, the provision is undoubtedly
applicable. For, as explained by an expert on the law of trusts: "The only problem of great importance in the field of constructive trust is to
decide whether in the numerous and varying fact situations presented to the courts there is a wrongful holding of property and hence a
threatened unjust enrichment of the defendant." Constructive trusts are fictions of equity which are bound by no unyielding formula when
they are used by courts as devices to remedy any situation in which the holder of legal title may not in good conscience retain the beneficial
interest.

In constructive trusts, the arrangement is temporary and passive in which the trustee’s sole duty is to transfer the title and possession over
the property to the plaintiff-beneficiary. Of course, the "wronged party seeking the aid of a court of equity in establishing a constructive trust
must himself do equity." Accordingly, the court will exercise its discretion in deciding what acts are required of the plaintiff-beneficiary as
conditions precedent to obtaining such decree and has the obligation to reimburse the trustee the consideration received from the latter just
as the plaintiff-beneficiary would if he proceeded on the theory of rescission. In the good judgment of the court, the trustee may also be paid
the necessary expenses he may have incurred in sustaining the property, his fixed costs for improvements thereon, and the monetary value
of his services in managing the property to the extent that plaintiff-beneficiary will secure a benefit from his acts.

The rights and obligations between the constructive trustee and the beneficiary, in this case, respondent MCIAA and petitioners over Lots
Nos. 916 and 920, are echoed in Art. 1190 of the Civil Code, "When the conditions have for their purpose the extinguishment of an obligation
to give, the parties, upon the fulfillment of said conditions, shall return to each other what they have received x x x In case of the loss,
deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid down in the preceding article shall be
applied to the party who is bound to return x x x."23

On the matter of the repurchase price, while petitioners are obliged to reconvey Lot No. 88 to respondents, the latter must return to the
former what they received as just compensation for the expropriation of the property, plus legal interest to be computed from default, which in
this case runs from the time petitioners comply with their obligation to respondents.

Respondents must likewise pay petitioners the necessary expenses they may have incurred in maintaining Lot No. 88, as well as the
monetary value of their services in managing it to the extent that respondents were benefited thereby.
Following Article 118724 of the Civil Code, petitioners may keep whatever income or fruits they may have obtained from Lot No. 88, and
respondents need not account for the interests that the amounts they received as just compensation may have earned in the meantime.

In accordance with Article 119025 of the Civil Code vis-à-vis Article 1189, which provides that "(i)f a thing is improved by its nature, or by time,
the improvement shall inure to the benefit of the creditor x x x," respondents, as creditors, do not have to pay, as part of the process of
restitution, the appreciation in value of Lot No. 88, which is a natural consequence of nature and time.26

WHEREFORE, the petition is DENIED. The February 28, 2006 Decision of the Court of Appeals, affirming the October 22, 1999 Decision of
the Regional Trial Court, Branch 87, Cebu City, and its February 7, 2007 Resolution are AFFIRMED with MODIFICATION as follows:

1. Respondents are ORDERED to return to petitioners the just compensation they received for the expropriation of Lot No. 88, plus legal
interest, in the case of default, to be computed from the time petitioners comply with their obligation to reconvey Lot No. 88 to them;

2. Respondents are ORDERED to pay petitioners the necessary expenses the latter incurred in maintaining Lot No. 88, plus the
monetary value of their services to the extent that respondents were benefited thereby;

3. Petitioners are ENTITLED to keep whatever fruits and income they may have obtained from Lot No. 88; and

4. Respondents are also ENTITLED to keep whatever interests the amounts they received as just compensation may have earned in the
meantime, as well as the appreciation in value of Lot No. 88, which is a natural consequence of nature and time;

In light of the foregoing modifications, the case is REMANDED to the Regional Trial Court, Branch 57, Cebu City, only for the purpose of
receiving evidence on the amounts that respondents will have to pay petitioners in accordance with this Court’s decision. No costs.

SO ORDERED.
 FIRST DIVISION

G.R. No. 165828 August 24, 2011

NATIONAL POWER CORPORATION, Petitioner,

vs.
HEIRS OF MACABANGKIT SANGKAY, namely: CEBU, BATOWA-AN, SAYANA, NASSER, MANTA, EDGAR, PUTRI , MONGKOY*, and
AMIR, all surnamed MACABANGKIT, Respondents.

DECISION

BERSAMIN, J.:

Private property shall not be taken for public use without just compensation.

– Section 9, Article III, 1987 Constitution

The application of this provision of the Constitution is the focus of this appeal.

Petitioner National Power Corporation (NPC) seeks the review on certiorari of the decision promulgated on October 5, 2004, 1 whereby the
Court of Appeals (CA) affirmed the decision dated August 13, 1999 and the supplemental decision dated August 18, 1999, ordering NPC to
pay just compensation to the respondents, both rendered by the Regional Trial Court, Branch 1, in Iligan City (RTC).

Antecedents

Pursuant to its legal mandate under Republic Act No. 6395 (An Act Revising the Charter of the National Power Corporation), NPC undertook
the Agus River Hydroelectric Power Plant Project in the 1970s to generate electricity for Mindanao. The project included the construction of
several underground tunnels to be used in diverting the water flow from the Agus River to the hydroelectric plants.2

On November 21, 1997, the respondents, namely: Cebu, Bangowa-an, Sayana, Nasser, Manta, Edgar, Putri, Mongkoy and Amir, all
surnamed Macabangkit (Heirs of Macabangkit), as the owners of land with an area of 221,573 square meters situated in Ditucalan, Iligan
City, sued NPC in the RTC for the recovery of damages and of the property, with the alternative prayer for the payment of just
compensation.3 They alleged that they had belatedly discovered that one of the underground tunnels of NPC that diverted the water flow of
the Agus River for the operation of the Hydroelectric Project in Agus V, Agus VI and Agus VII traversed their land; that their discovery had
occurred in 1995 after Atty. Saidali C. Gandamra, President of the Federation of Arabic Madaris School, had rejected their offer to sell the
land because of the danger the underground tunnel might pose to the proposed Arabic Language Training Center and Muslims Skills
Development Center; that such rejection had been followed by the withdrawal by Global Asia Management and Resource Corporation from
developing the land into a housing project for the same reason; that Al-Amanah Islamic Investment Bank of the Philippines had also refused
to accept their land as collateral because of the presence of the underground tunnel; that the underground tunnel had been constructed
without their knowledge and consent; that the presence of the tunnel deprived them of the agricultural, commercial, industrial and residential
value of their land; and that their land had also become an unsafe place for habitation because of the loud sound of the water rushing
through the tunnel and the constant shaking of the ground, forcing them and their workers to relocate to safer grounds.

In its answer with counterclaim,4 NPC countered that the Heirs of Macabangkit had no right to compensation under section 3(f) of Republic
Act No. 6395, under which a mere legal easement on their land was established; that their cause of action, should they be entitled to
compensation, already prescribed due to the tunnel having been constructed in 1979; and that by reason of the tunnel being an apparent
and continuous easement, any action arising from such easement prescribed in five years.
 Ruling of the RTC

On July 23, 1998, an ocular inspection of the land that was conducted by RTC Judge Mamindiara P. Mangotara and the representatives of
the parties resulted in the following observations and findings:

a. That a concrete post which is about two feet in length from the ground which according to the claimants is the middle point of the
tunnel.

b. That at least three fruit bearing durian trees were uprooted and as a result of the construction by the defendant of the tunnel and
about one hundred coconuts planted died.

c. That underground tunnel was constructed therein.5

After trial, the RTC ruled in favor of the plaintiffs (Heirs of Macabangkit),6 decreeing:

WHEREFORE, premises considered:

1. The prayer for the removal or dismantling of defendant’s tunnel is denied. However, defendant is hereby directed and ordered:

a)To pay plaintiffs’ land with a total area of 227,065 square meters, at the rate of FIVE HUNDRED (₱500.00) PESOS per square meter,
or a total of ONE HUNDRED THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE HUNDRED
(₱113,532,500.00), PESOS, plus interest, as actual damages or just compensation;

b) To pay plaintiff a monthly rental of their land in the amount of THIRTY THOUSAND (₱30,000.00) PESOS from 1979 up to July 1999
with 12% interest per annum;

c)To pay plaintiffs the sum of TWO HUNDRED THOUSAND (₱200,000.00) PESOS, as moral damages;

d) To pay plaintiffs, the sum of TWO HUNDRED THOUSAND (₱200,000.00) PESOS, as exemplary damages;

e)To pay plaintiffs, the sum equivalent to 15% of the total amount awarded, as attorney’s fees, and to pay the cost.

SO ORDERED.

The RTC found that NPC had concealed the construction of the tunnel in 1979 from the Heirs of Macabangkit, and had since continuously
denied its existence; that NPC had acted in bad faith by taking possession of the subterranean portion of their land to construct the tunnel
without their knowledge and prior consent; that the existence of the tunnel had affected the entire expanse of the land, and had restricted
their right to excavate or to construct a motorized deep well; and that they, as owners, had lost the agricultural, commercial, industrial and
residential value of the land.

The RTC fixed the just compensation at ₱500.00/square meter based on the testimony of Dionisio Banawan, OIC-City Assessor of Iligan
City, to the effect that the appraised value of the adjoining properties ranged from ₱700.00 to ₱750.00, while the appraised value of their
affected land ranged from ₱400.00 to ₱500.00. The RTC also required NPC to pay rentals from 1979 due to its bad faith in concealing the
construction of the tunnel from the Heirs of Macabangkit.

On August 18, 1999, the RTC issued a supplemental decision,7 viz:

Upon a careful review of the original decision dated August 13, 1999, a sentence should be added to paragraph 1(a) of the dispositive portion
thereof, to bolster, harmonize, and conform to the findings of the Court, which is quoted hereunder, to wit:

"Consequently, plaintiffs’ land or properties are hereby condemned in favor of defendant National Power Corporation, upon payment of the
aforesaid sum."

Therefore, paragraph 1(a) of the dispositive portion of the original decision should read, as follows:

a) To pay plaintiffs’ land with a total area of 227,065 square meters, at the rate of FIVE HUNDRED (₱500.00) PESOS per square meter, or a
total of ONE HUNDRED THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE HUNDRED (₱113,532,500.00)
PESOS, plus interest, as actual damages or just compensation; Consequently, plaintiffs’ land or properties are hereby condemned in favor of
defendant National Power Corporation, upon payment of the aforesaid sum;

This supplemental decision shall be considered as part of paragraph 1(a) of the dispositive portion of the original decision.

Furnish copy of this supplemental decision to all parties immediately.

SO ORDERED.

On its part, NPC appealed to the CA on August 25, 1999.8

Earlier, on August 18, 1999, the Heirs of Macabangkit filed an urgent motion for execution of judgment pending appeal. 9 The RTC granted
the motion and issued a writ of execution, 10 prompting NPC to assail the writ by petition for certiorari in the CA. On September 15, 1999, the
CA issued a temporary restraining order (TRO) to enjoin the RTC from implementing its decision. The Heirs of Macabangkit elevated the
ruling of the CA (G.R. No. 141447), but the Court upheld the CA on May 4, 2006.11

Ruling of the CA

NPC raised only two errors in the CA, namely:

I. THE COURT A QUO SERIOUSLY ERRED IN RULING THAT NAPOCOR’S UNDERGROUND TUNNEL IN ITS AGUS RIVER HYDRO-
ELECTRIC PLANT PROJECT TRAVERSED AND/OR AFFECTED APPELLEES’ PROPERTY AS THERE IS NO CLEAR EVIDENCE
INDUBITABLY ESTABLISHING THE SAME

II. THE COURT A QUO SERIOUSLY ERRED IN GRANTING APPELLEES’ CLAIMS IN THEIR ENTIRETY FOR GRANTING ARGUENDO
THAT NAPOCOR’S UNDERGROUND TUNNEL INDEED TRAVERSED APPELLEE’S PROPERTY, THEIR CAUSE OF ACTION HAD
ALREADY BEEN BARRED BY PRESCRIPTION, ESTOPPEL AND LACHES

On October 5, 2004, the CA affirmed the decision of the RTC, holding that the testimonies of NPC’s witness Gregorio Enterone and of the
respondents’ witness Engr. Pete Sacedon, the topographic survey map, the sketch map, and the ocular inspection report sufficiently
established the existence of the underground tunnel traversing the land of the Heirs of Macabangkit; that NPC did not substantiate its
defense that prescription already barred the claim of the Heirs of Macabangkit; and that Section 3(i) of R.A. No. 6395, being silent about
tunnels, did not apply, viz:

As regard Section 3(i) of R.A. No. 6395 (An Act Revising the Charter of the National Power Corporation), it is submitted that the same
provision is not applicable. There is nothing in Section 3(i) of said law governing claims involving tunnels. The same provision is applicable to
those projects or facilities on the surface of the land, that can easily be discovered, without any mention about the claims involving tunnels,
particularly those surreptitiously constructed beneath the surface of the land, as in the instant case.

Now, while it is true that Republic Act No. 6395 authorizes NAPOCOR to take water from any public stream, river, creek, lake, spring or
waterfall in the Philippines for the realization of the purposes specified therein for its creation; to intercept and divert the flow of waters from
lands of riparian owners (in this case, the "Heirs"), and from persons owning or interested in water which are or may be necessary to said
purposes, the same Act expressly mandates the payment of just compensation.

WHEREFORE, premises considered, the instant appeal is hereby DENIED for lack of merit. Accordingly, the appealed Decision dated
August 13, 1999, and the supplemental Decision dated August 18, 1999, are hereby AFFIRMED in toto.

SO ORDERED.12

Issue

NPC has come to the Court, assigning the lone error that:

THE APPELLATE COURT ERRED ON A QUESTION OF LAW WHEN IT AFFIRMED THE DECISION AND SUPPLEMENTAL DECISION OF
THE COURT A QUO DIRECTING AND ORDERING PETITIONER TO PAY JUST COMPENSATION TO RESPONDENTS.

NPC reiterates that witnesses Enterone and Sacedon lacked personal knowledge about the construction and existence of the tunnel and
were for that reason not entitled to credence; and that the topographic and relocation maps prepared by Sacedon should not be a basis to
prove the existence and location of the tunnel due to being self-serving.

NPC contends that the CA should have applied Section 3(i) of Republic Act No. 6395, which provided a period of only five years from the
date of the construction within which the affected landowner could bring a claim against it; and that even if Republic Act No. 6395 should be
inapplicable, the action of the Heirs of Macabangkit had already prescribed due to the underground tunnel being susceptible to acquisitive
prescription after the lapse of 10 years pursuant to Article 620 of the Civil Code due to its being a continuous and apparent legal easement
under Article 634 of the Civil Code.

The issues for resolution are, therefore, as follows:

(1) Whether the CA and the RTC erred in holding that there was an underground tunnel traversing the Heirs of Macabangkit’s land
constructed by NPC; and
 (2) Whether the Heirs of Macabangkit’s right to claim just compensation had prescribed under section 3(i) of Republic Act No. 6395, or,
alternatively, under Article 620 and Article 646 of the Civil Code.

Ruling

We uphold the liability of NPC for payment of just compensation.

1. Factual findings of the RTC, when affirmed by the CA, are binding

The existence of the tunnel underneath the land of the Heirs of Macabangkit, being a factual matter, cannot now be properly reviewed by the
Court, for questions of fact are beyond the pale of a petition for review on certiorari. Moreover, the factual findings and determinations by the
RTC as the trial court are generally binding on the Court, particularly after the CA affirmed them. 13 Bearing these doctrines in mind, the Court
should rightly dismiss NPC’s appeal.

NPC argues, however, that this appeal should not be dismissed because the Heirs of Macabangkit essentially failed to prove the existence of
the underground tunnel. It insists that the topographic survey map and the right-of-way map presented by the Heirs of Macabangkit did not at
all establish the presence of any underground tunnel.

NPC still fails to convince.

Even assuming, for now, that the Court may review the factual findings of the CA and the RTC, for NPC to insist that the evidence on the
existence of the tunnel was not adequate and incompetent remains futile. On the contrary, the evidence on the tunnel was substantial, for the
significance of the topographic survey map and the sketch map (as indicative of the extent and presence of the tunnel construction) to the
question on the existence of the tunnel was strong, as the CA correctly projected in its assailed decision, viz:

Among the pieces of documentary evidence presented showing the existence of the said tunnel beneath the subject property is the
topographic survey map. The topographic survey map is one conducted to know about the location and elevation of the land and all existing
structures above and underneath it. Another is the Sketch Map which shows the location and extent of the land traversed or affected by the
said tunnel. These two (2) pieces of documentary evidence readily point the extent and presence of the tunnel construction coming from the
power cavern near the small man-made lake which is the inlet and approach tunnel, or at a distance of about two (2) kilometers away from
the land of the plaintiffs-appellees, and then traversing the entire and the whole length of the plaintiffs-appellees’ property, and the outlet
channel of the tunnel is another small man-made lake. This is a sub-terrain construction, and considering that both inlet and outlet are bodies
of water, the tunnel can hardly be noticed. All constructions done were beneath the surface of the plaintiffs-appellees’ property. This explains
why they could never obtain any knowledge of the existence of such tunnel during the period that the same was constructed and installed
beneath their property.14

The power cavern and the inlet and outlet channels established the presence of the underground tunnel, based on the declaration in the RTC
by Sacedon, a former employee of the NPC.15 It is worthy to note that NPC did not deny the existence of the power cavern, and of the inlet
and outlet channels adverted to and as depicted in the topographic survey map and the sketch map. The CA cannot be faulted for crediting
the testimony of Sacedon despite the effort of NPC to discount his credit due to his not being an expert witness, simply because Sacedon
had personal knowledge based on his being NPC’s principal engineer and supervisor tasked at one time to lay out the tunnels and
transmission lines specifically for the hydroelectric projects,16 and to supervise the construction of the Agus 1 Hydroelectric Plant itself17 from
1978 until his retirement from NPC.18 Besides, he declared that he personally experienced the vibrations caused by the rushing currents in
the tunnel, particularly near the outlet channel.19 Under any circumstances, Sacedon was a credible and competent witness.

The ocular inspection actually confirmed the existence of the tunnel underneath the land of the Heirs of Macabangkit. Thus, the CA
observed:

More so, the Ocular inspection conducted on July 23, 1998 further bolstered such claim of the existence and extent of such tunnel. This was
conducted by a team composed of the Honorable Presiding Judge of the Regional Trial Court, Branch 01, Lanao del Norte, herself and the
respective lawyers of both of the parties and found that, among others, said underground tunnel was constructed beneath the subject
property.20

It bears noting that NPC did not raise any issue against or tender any contrary comment on the ocular inspection report.

2. Five-year prescriptive period under Section 3(i) of Republic Act No. 6395 does not apply to claims for just compensation

The CA held that Section 3(i) of Republic Act No. 6395 had no application to this action because it covered facilities that could be easily
discovered, not tunnels that were inconspicuously constructed beneath the surface of the land.21

NPC disagrees, and argues that because Article 63522 of the Civil Code directs the application of special laws when an easement, such as
the underground tunnel, was intended for public use, the law applicable was Section 3(i) of Republic Act No. 6395, as amended, which limits
the action for recovery of compensation to five years from the date of construction. It posits that the five-year prescriptive period already set
in due to the construction of the underground tunnel having been completed in 1979 yet.
Without necessarily adopting the reasoning of the CA, we uphold its conclusion that prescription did not bar the present action to recover just
compensation.

Section 3 (i) of Republic Act No. 6395, the cited law, relevantly provides:

Section 3. Powers and General Functions of the Corporation. – The powers, functions, rights and activities of the Corporation shall be the
following:

xxx

(i) To construct works across, or otherwise, any stream, watercourse, canal, ditch, flume, street, avenue, highway or railway of private and
public ownership, as the location of said works may require:Provided, That said works be constructed in such a manner as not to endanger
life or property; And provided, further, That the stream, watercourse, canal ditch, flume, street, avenue, highway or railway so crossed or
intersected be restored as near as possible to their former state, or in a manner not to impair unnecessarily their usefulness. Every person or
entity whose right of way or property is lawfully crossed or intersected by said works shall not obstruct any such crossings or intersection and
shall grant the Board or its representative, the proper authority for the execution of such work. The Corporation is hereby given the right of
way to locate, construct and maintain such works over and throughout the lands owned by the Republic of the Philippines or any of its
branches and political subdivisions. The Corporation or its representative may also enter upon private property in the lawful performance or
prosecution of its business and purposes, including the construction of the transmission lines thereon; Provided, that the owner of such
property shall be indemnified for any actual damage caused thereby;Provided, further, That said action for damages is filed within five years
after the rights of way, transmission lines, substations, plants or other facilities shall have been established; Provided, finally, That after said
period, no suit shall be brought to question the said rights of way, transmission lines, substations, plants or other facilities;

A cursory reading shows that Section 3(i) covers the construction of "works across, or otherwise, any stream, watercourse, canal, ditch,
flume, street, avenue, highway or railway of private and public ownership, as the location of said works may require." It is notable that
Section 3(i) includes no limitation except those enumerated after the term works. Accordingly, we consider the term works as embracing all
kinds of constructions, facilities, and other developments that can enable or help NPC to meet its objectives of developing hydraulic power
expressly provided under paragraph (g) of Section 3.23 The CA’s restrictive construal of Section 3(i) as exclusive of tunnels was obviously
unwarranted, for the provision applies not only to development works easily discoverable or on the surface of the earth but also to
subterranean works like tunnels. Such interpretation accords with the fundamental guideline in statutory construction that when the law does
not distinguish, so must we not. 24 Moreover, when the language of the statute is plain and free from ambiguity, and expresses a single,
definite, and sensible meaning, that meaning is conclusively presumed to be the meaning that the Congress intended to convey.25

Even so, we still cannot side with NPC.

We rule that the prescriptive period provided under Section 3(i) of Republic Act No. 6395 is applicable only to an action for damages, and
does not extend to an action to recover just compensation like this case. Consequently, NPC cannot thereby bar the right of the Heirs of
Macabangkit to recover just compensation for their land.

The action to recover just compensation from the State or its expropriating agency differs from the action for damages. The former, also
known as inverse condemnation, has the objective to recover the value of property taken in fact by the governmental defendant, even though
no formal exercise of the power of eminent domain has been attempted by the taking agency. 26 Just compensation is the full and fair
equivalent of the property taken from its owner by the expropriator. The measure is not the taker’s gain, but the owner’s loss. The word just is
used to intensify the meaning of the word compensation in order to convey the idea that the equivalent to be rendered for the property to be
taken shall be real, substantial, full, and ample. 27 On the other hand, the latter action seeks to vindicate a legal wrong through damages,
which may be actual, moral, nominal, temperate, liquidated, or exemplary. When a right is exercised in a manner not conformable with the
norms enshrined in Article 1928 and like provisions on human relations in the Civil Code, and the exercise results to the damage of another, a
legal wrong is committed and the wrongdoer is held responsible.29

The two actions are radically different in nature and purpose. The action to recover just compensation is based on the Constitution 30 while the
action for damages is predicated on statutory enactments. Indeed, the former arises from the exercise by the State of its power of eminent
domain against private property for public use, but the latter emanates from the transgression of a right. The fact that the owner rather than
the expropriator brings the former does not change the essential nature of the suit as an inverse condemnation, 31 for the suit is not based on
tort, but on the constitutional prohibition against the taking of property without just compensation. 32 It would very well be contrary to the clear
language of the Constitution to bar the recovery of just compensation for private property taken for a public use solely on the basis of
statutory prescription.

Due to the need to construct the underground tunnel, NPC should have first moved to acquire the land from the Heirs of Macabangkit either
by voluntary tender to purchase or through formal expropriation proceedings. In either case, NPC would have been liable to pay to the
owners the fair market value of the land, for Section 3(h) of Republic Act No. 6395 expressly requires NPC to pay the fair market value of
such property at the time of the taking, thusly:

(h) To acquire, promote, hold, transfer, sell, lease, rent, mortgage, encumber and otherwise dispose of property incident to, or necessary,
convenient or proper to carry out the purposes for which the Corporation was created: Provided, That in case a right of way is necessary for
its transmission lines, easement of right of way shall only be sought: Provided, however, That in case the property itself shall be acquired by
purchase, the cost thereof shall be the fair market value at the time of the taking of such property.
This was what NPC was ordered to do in National Power Corporation v. Ibrahim, 33 where NPC had denied the right of the owners to be paid
just compensation despite their land being traversed by the underground tunnels for siphoning water from Lake Lanao needed in the
operation of Agus II, Agus III, Agus IV, Agus VI and Agus VII Hydroelectric Projects in Saguiran, Lanao del Sur, in Nangca and Balo-I in
Lanao del Norte and in Ditucalan and Fuentes in Iligan City. There, NPC similarly argued that the underground tunnels constituted a mere
easement that did not involve any loss of title or possession on the part of the property owners, but the Court resolved against NPC, to wit:

Petitioner contends that the underground tunnels in this case constitute an easement upon the property of the respondents which does not
involve any loss of title or possession. The manner in which the easement was created by petitioner, however, violates the due process rights
of respondents as it was without notice and indemnity to them and did not go through proper expropriation proceedings. Petitioner could
have, at any time, validly exercised the power of eminent domain to acquire the easement over respondents’ property as this power
encompasses not only the taking or appropriation of title to and possession of the expropriated property but likewise covers even the
imposition of a mere burden upon the owner of the condemned property. Significantly, though, landowners cannot be deprived of their right
over their land until expropriation proceedings are instituted in court. The court must then see to it that the taking is for public use, that there
is payment of just compensation and that there is due process of law.34

3. NPC’s construction of the tunnel constituted taking of the land, and entitled owners to just compensation

The Court held in National Power Corporation v. Ibrahim that NPC was "liable to pay not merely an easement fee but rather the full
compensation for land" traversed by the underground tunnels, viz:

In disregarding this procedure and failing to recognize respondents’ ownership of the sub-terrain portion, petitioner took a risk and exposed
itself to greater liability with the passage of time. It must be emphasized that the acquisition of the easement is not without expense. The
underground tunnels impose limitations on respondents’ use of the property for an indefinite period and deprive them of its ordinary use.
Based upon the foregoing, respondents are clearly entitled to the payment of just compensation. Notwithstanding the fact that petitioner only
occupies the sub-terrain portion, it is liable to pay not merely an easement fee but rather the full compensation for land. This is so because in
this case, the nature of the easement practically deprives the owners of its normal beneficial use. Respondents, as the owner of the property
thus expropriated, are entitled to a just compensation which should be neither more nor less, whenever it is possible to make the
assessment, than the money equivalent of said property.35

Here, like in National Power Corporation v. Ibrahim, NPC constructed a tunnel underneath the land of the Heirs of Macabangkit without going
through formal expropriation proceedings and without procuring their consent or at least informing them beforehand of the construction.
NPC’s construction adversely affected the owners’ rights and interests because the subterranean intervention by NPC prevented them from
introducing any developments on the surface, and from disposing of the land or any portion of it, either by sale or mortgage.

Did such consequence constitute taking of the land as to entitle the owners to just compensation?

We agree with both the RTC and the CA that there was a full taking on the part of NPC, notwithstanding that the owners were not completely
and actually dispossessed. It is settled that the taking of private property for public use, to be compensable, need not be an actual physical
taking or appropriation.36 Indeed, the expropriator’s action may be short of acquisition of title, physical possession, or occupancy but may still
amount to a taking.37 Compensable taking includes destruction, restriction, diminution, or interruption of the rights of ownership or of the
common and necessary use and enjoyment of the property in a lawful manner, lessening or destroying its value. 38 It is neither necessary that
the owner be wholly deprived of the use of his property, 39 nor material whether the property is removed from the possession of the owner, or
in any respect changes hands.40

As a result, NPC should pay just compensation for the entire land. In that regard, the RTC pegged just compensation at ₱500.00/square
meter based on its finding on what the prevailing market value of the property was at the time of the filing of the complaint, and the CA
upheld the RTC.

We affirm the CA, considering that NPC did not assail the valuation in the CA and in this Court. NPC’s silence was probably due to the
correctness of the RTC’s valuation after careful consideration and weighing of the parties’ evidence, as follows:

The matter of what is just compensation for these parcels of land is a matter of evidence. These parcels of land is (sic) located in the City of
Iligan, the Industrial City of the South. Witness Dionisio Banawan, OIC- City Assessor’s Office, testified, "Within that area, that area is
classified as industrial and residential. That plaintiffs’ land is adjacent to many subdivisions and that is within the industrial classification. He
testified and identified Exhibit "AA" and "AA-1", a Certification, dated April 4, 1997, showing that the appraised value of plaintiffs land ranges
from ₱400.00 to ₱500.00 per square meter (see, TSN, testimony of Dionisio Banawan, pp. 51, 57, and 71, February 9, 1999). Also, witness
Banawan, testified and identified Two (2) Deeds of Sale, marked as Exhibit "AA-2" and "AA-3,["] showing that the appraised value of the land
adjoining or adjacent to plaintiff land ranges from ₱700.00 to ₱750.00 per square meter. As between the much lower price of the land as
testified by defendant’s witness Gregorio Enterone, and that of the City Assessor of Iligan City, the latter is more credible. Considering
however, that the appraised value of the land in the area as determined by the City Assessor’s Office is not uniform, this Court, is of the
opinion that the reasonable amount of just compensation of plaintiff’s land should be fixed at FIVE HUNDRED (500.00) PESOS, per square
meter. xxx.41

The RTC based its fixing of just compensation ostensibly on the prevailing market value at the time of the filing of the complaint, instead of
reckoning from the time of the taking pursuant to Section 3(h) of Republic Act No. 6395. The CA did not dwell on the reckoning time, possibly
because NPC did not assign that as an error on the part of the RTC.
We rule that the reckoning value is the value at the time of the filing of the complaint, as the RTC provided in its decision. Compensation that
is reckoned on the market value prevailing at the time either when NPC entered or when it completed the tunnel, as NPC submits, would not
be just, for it would compound the gross unfairness already caused to the owners by NPC’s entering without the intention of formally
expropriating the land, and without the prior knowledge and consent of the Heirs of Macabangkit. NPC’s entry denied elementary due
process of law to the owners since then until the owners commenced the inverse condemnation proceedings. The Court is more concerned
with the necessity to prevent NPC from unjustly profiting from its deliberate acts of denying due process of law to the owners. As a measure
of simple justice and ordinary fairness to them, therefore, reckoning just compensation on the value at the time the owners commenced
these inverse condemnation proceedings is entirely warranted.

In National Power Corporation v. Court of Appeals, 42 a case that involved the similar construction of an underground tunnel by NPC without
the prior consent and knowledge of the owners, and in which we held that the basis in fixing just compensation when the initiation of the
action preceded the entry into the property was the time of the filing of the complaint, not the time of taking, 43 we pointed out that there was
no taking when the entry by NPC was made "without intent to expropriate or was not made under warrant or color of legal authority."

4. Awards for rentals, moral damages, exemplary damages, and attorney’s fees are deleted for insufficiency of factual and legal bases

The CA upheld the RTC’s granting to the Heirs of Macabangkit of rentals of ₱ 30,000.00/month "from 1979 up to July 1999 with 12% interest
per annum" by finding NPC guilty of bad faith in taking possession of the land to construct the tunnel without their knowledge and consent.

Granting rentals is legally and factually bereft of justification, in light of the taking of the land being already justly compensated. Conformably
with the ruling in Manila International Airport Authority v. Rodriguez, 44 in which the award of interest was held to render the grant of back
rentals unwarranted, we delete the award of back rentals and in its place prescribe interest of 12% interest per annum from November 21,
1997, the date of the filing of the complaint, until the full liability is paid by NPC. The imposition of interest of 12% interest per annum follows
a long line of pertinent jurisprudence,45 whereby the Court has fixed the rate of interest on just compensation at 12% per annum whenever
the expropriator has not immediately paid just compensation.

The RTC did not state any factual and legal justifications for awarding to the Heirs of Macabangkit moral and exemplary damages each in the
amount of ₱200,000.00. The awards just appeared in the fallo of its decision. Neither did the CA proffer any justifications for sustaining the
RTC on the awards. We consider the omissions of the lower courts as pure legal error that we feel bound to correct even if NPC did not
submit that for our consideration. There was, to begin with, no factual and legal bases mentioned for the awards. It is never trite to remind
that moral and exemplary damages, not by any means liquidated or assessed as a matter of routine, always require evidence that establish
the circumstances under which the claimant is entitled to them. Moreover, the failure of both the RTC and the CA to render the factual and
legal justifications for the moral and exemplary damages in the body of their decisions immediately demands the striking out of the awards
for being in violation of the fundamental rule that the decision must clearly state the facts and the law on which it is based. Without the factual
and legal justifications, the awards are exposed as the product of conjecture and speculation, which have no place in fair judicial
adjudication.

We also reverse and set aside the decree of the RTC for NPC to pay to the Heirs of Macabangkit "the sum equivalent to 15% of the total
amount awarded, as attorney’s fees, and to pay the cost." The body of the decision did not state the factual and legal reasons why NPC was
liable for attorney’s fees. The terse statement found at the end of the body of the RTC’s decision, stating: "xxx The contingent attorney’s fee
is hereby reduced from 20% to only 15% of the total amount of the claim that may be awarded to plaintiffs," without more, did not indicate or
explain why and how the substantial liability of NPC for attorney’s fees could have arisen and been determined.

In assessing attorney’s fees against NPC and in favor of the respondents, the RTC casually disregarded the fundamental distinction between
the two concepts of attorney’s fees — the ordinary and the extraordinary. These concepts were aptly distinguished in Traders Royal Bank
Employees Union-Independent v. NLRC,46 thuswise:

There are two commonly accepted concepts of attorney’s fees, the so-called ordinary and extraordinary. In its ordinary concept, an attorney’s
fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis of this
compensation is the fact of his employment by and his agreement with the client.

In its extraordinary concept, an attorney’s fee is an indemnity for damages ordered by the court to be paid by the losing party in a litigation.
The basis of this is any of the cases provided by law where such award can be made, such as those authorized in Article 2208, Civil Code,
and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional
compensation or as part thereof.

By referring to the award as contingency fees, and reducing the award from 20% to 15%, the RTC was really referring to a supposed
agreement on attorney’s fees between the Heirs of Macabangkit and their counsel. As such, the concept of attorney’s fees involved was the
ordinary. Yet, the inclusion of the attorney’s fees in the judgment among the liabilities of NPC converted the fees to extraordinary. We have to
disagree with the RTC thereon, and we express our discomfort that the CA did not do anything to excise the clearly erroneous and
unfounded grant.

An award of attorney’s fees has always been the exception rather than the rule. To start with, attorney’s fees are not awarded every time a
party prevails in a suit.47 Nor should an adverse decision ipso facto justify an award of attorney’s fees to the winning party. 48 The policy of the
Court is that no premium should be placed on the right to litigate. 49 Too, such fees, as part of damages, are assessed only in the instances
specified in Art. 2208, Civil Code.50 Indeed, attorney’s fees are in the nature of actual damages. 51 But even when a claimant is compelled to
litigate with third persons or to incur expenses to protect his rights, attorney’s fees may still be withheld where no sufficient showing of bad
faith could be reflected in a party’s persistence in a suit other than an erroneous conviction of the righteousness of his cause. 52 And, lastly,
the trial court must make express findings of fact and law that bring the suit within the exception. What this demands is that the factual, legal
or equitable justifications for the award must be set forth

not only in the fallo but also in the text of the decision, or else, the award should be thrown out for being speculative and conjectural.53

Sound policy dictates that even if the NPC failed to raise the issue of attorney’s fees, we are not precluded from correcting the lower courts’
patently erroneous application of the law.54 Indeed, the Court, in supervising the lower courts, possesses the ample authority to review legal
matters like this one even if not specifically raised or assigned as error by the parties.

5. Attorney’s fees under quantum meruit principle are fixed at 10% of the judgment award

Based on the pending motions of Atty. Macarupung Dibaratun and Atty. Manuel D. Ballelos to assert their respective rights to attorney’s fees,
both contending that they represented the Heirs of Macabangkit in this case, a conflict would ensue from the finality of the judgment against
NPC.

A look at the history of the legal representation of the Heirs of Macabangkit herein provides a helpful predicate for resolving the conflict.

Atty. Dibaratun was the original counsel of the Heirs of Macabangkit. When the appeal was submitted for decision in the CA, 55 Atty. Ballelos
filed his entry of appearance,56 and a motion for early decision.57 Atty. Ballelos subsequently filed also a manifestation,58 supplemental
manifestation,59

reply,60 and ex parte motion reiterating the motion for early decision. 61 It appears that a copy of the CA’s decision was furnished solely to Atty.
Ballelos. However, shortly before the rendition of the decision, Atty. Dibaratun filed in the CA a motion to register attorney’s lien, 62 alleging
that he had not withdrawn his appearance and had not been aware of the entry of appearance by Atty. Ballelos. A similar motion was also
received by the Court from Atty. Dibaratun a few days after the petition for review was filed. 63 Thus, on February 14, 2005,64 the Court
directed Atty. Dibaratun to enter his appearance herein. He complied upon filing the comment.65

Amir Macabangkit confirmed Atty. Dibaratun’s representation through an ex parte manifestation that he filed in his own behalf and on behalf
of his siblings Mongkoy and Putri.66 Amir reiterated his manifestation on March 6, 2006, 67and further imputed malpractice to Atty. Ballelos for
having filed an entry of appearance bearing Amir’s forged signature and for plagiarism, i.e., copying verbatim the arguments contained in the
pleadings previously filed by Atty. Dibaratun.68

On September 11, 2008, Atty. Ballelos submitted two motions, to wit: (a) a manifestation and motion authorizing a certain Abdulmajeed
Djamla to receive his attorney’s fees equivalent of 15% of the judgment award, 69 and (b) a motion to register his attorney’s lien that he
claimed was contingent.70

Both Atty. Dibaratun and Atty. Ballelos posited that their entitlement to attorney’s fees was contingent. Yet, a contract for a contingent fees is
an agreement in writing by which the fees, usually a fixed percentage of what may be recovered in the action, are made to depend upon the
success in the effort to enforce or defend a supposed right. Contingent fees depend upon an express contract, without which the attorney
can only recover on the basis of quantum meruit. 71 With neither Atty. Dibaratun nor Atty. Ballelos presenting a written agreement bearing
upon their supposed contingent fees, the only way to determine their right to appropriate attorney’s fees is to apply the principle of quantum
meruit.

Quantum meruit – literally meaning as much as he deserves – is used as basis for determining an attorney’s professional fees in the
absence of an express agreement.72 The recovery of attorney’s fees on the basis of quantum meruit is a device that prevents an
unscrupulous client from running away with the fruits of the legal services of counsel without paying for it and also avoids unjust enrichment
on the part of the attorney himself.73 An attorney must show that he is entitled to reasonable compensation for the effort in pursuing the
client’s cause, taking into account certain factors in fixing the amount of legal fees.74

Rule 20.01 of the Code of Professional Responsibility lists the guidelines for determining the proper amount of attorney fees, to wit:

Rule 20.1 – A lawyer shall be guided by the following factors in determining his fees:

a) The time spent and the extent of the services rendered or required;

b) The novelty and difficult of the questions involved;

c) The important of the subject matter;

d) The skill demanded;

e) The probability of losing other employment as a result of acceptance of the proffered case;
 f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs;

g) The amount involved in the controversy and the benefits resulting to the client from the service;

h) The contingency or certainty of compensation;

i) The character of the employment, whether occasional or established; and

j) The professional standing of the lawyer.

In the event of a dispute as to the amount of fees between the attorney and his client, and the intervention of the courts is sought, the
determination requires that there be evidence to prove the amount of fees and the extent and value of the services rendered, taking into
account the facts determinative thereof.75 Ordinarily, therefore, the determination of the attorney’s fees on quantum meruit is remanded to the
lower court for the purpose. However, it will be just and equitable to now assess and fix the attorney’s fees of both attorneys in order that the
resolution of "a comparatively simple controversy," as Justice Regalado put it in Traders Royal Bank Employees Union-Independent v.
NLRC,76 would not be needlessly prolonged, by taking into due consideration the accepted guidelines and so much of the pertinent data as
are extant in the records.

Atty. Dibaratun and Atty. Ballelos each claimed attorney’s fees equivalent to 15% of the principal award of ₱113,532,500.00, which was the
amount granted by the RTC in its decision. Considering that the attorney’s fees will be defrayed by the Heirs of Macabangkit out of their
actual recovery from NPC, giving to each of the two attorney’s 15% of the principal award as attorney’s fees would be excessive and
unconscionable from the point of view of the clients. Thus, the Court, which holds and exercises the power to fix attorney’s fees on a
quantum meruit basis in the absence of an express written agreement between the attorney and the client, now fixes attorney’s fees at 10%
of the principal award of ₱113,532,500.00.

Whether it is Atty. Dibaratun or Atty. Ballelos, or both, who should receive attorney’s fees from the Heirs of Macabangkit is a question that the
Court must next determine and settle by considering the amount and quality of the work each performed and the results each obtained.

Atty. Dibaratun, the attorney from the outset, unquestionably carried the bulk of the legal demands of the case. He diligently prepared and
timely filed in behalf of the Heirs of Macabangkit every pleading and paper necessary in the full resolution of the dispute, starting from the
complaint until the very last motion filed in this Court. He consistently appeared during the trial, and examined and cross-examined all the
witnesses presented at that stage of the proceedings. The nature, character, and substance of each pleading and the motions he prepared
for the Heirs of Macabangkit indicated that he devoted substantial time and energy in researching and preparing the case for the trial. He
even advanced ₱250,000.00 out of his own pocket to defray expenses from the time of the filing of the motion to execute pending appeal
until the case reached the Court.77 His representation of all the Heirs of Macabangkit was not denied by any of them.

We note that Atty. Dibaratun possessed some standing in the legal profession and in his local community. He formerly served as a member
of the Board of Director of the Integrated Bar of the Philippines (IBP), Lanao del Norte-Iligan City Chapter, and was an IBP national awardee
as Best Legal Aid Committee Chairman. He taught at Mindanao State University College of Law Extension. He was a Municipal Mayor of
Matungao, Lanao del Norte, and was enthroned Sultan a Gaus.

In contrast, not much about the character and standing of Atty. Ballelos, as well as the nature and quality of the legal services he rendered for
the Heirs of Macabangkit are in the records. The motions he filed in the

Court and in the CA lacked enlightening research and were insignificant to the success of the clients’ cause. His legal service, if it can be
called that, manifested no depth or assiduousness, judging from the quality of the pleadings from him. His written submissions in the case
appeared either to have been lifted verbatim from the pleadings previously filed by Atty. Dibaratun, or to have been merely quoted from the
decisions and resolutions of the RTC and the CA. Of the Heirs of Macabangkit, only Cebu, Batowa-an, Sayana, Nasser, Manta,
Mongkoy78 and Edgar gave their consent to Atty. Ballelos to appear in their behalf in the CA, which he did despite Atty. Dibaratun not having
yet filed any withdrawal of his appearance. The Court did not receive any notice of appearance for the Heirs of Macabangkit from Atty.
Ballelos, but that capacity has meanwhile become doubtful in the face of Amir’s strong denial of having retained him.1avvphil

In fairness and justice, the Court accords full recognition to Atty. Dibaratun as the counsel de parte of the Heirs of Macabangkit who
discharged his responsibility in the prosecution of the clients’ cause to its successful end. It is he, not Atty. Ballelos, who was entitled to the
full amount of attorney’s fees that the clients ought to pay to their attorney. Given the amount and quality of his legal work, his diligence and
the time he expended in ensuring the success of his prosecution of the clients’ cause, he deserves the recognition, notwithstanding that
some of the clients might appear to have retained Atty. Ballelos after the rendition of a favorable judgment.79

Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser, Manta and Edgar, the only parties who engaged him. The Court
considers his work in the case as very minimal. His compensation under the quantum meruit principle is fixed at ₱5,000.00, and only the
Heirs of Macabangkit earlier named are liable to him.

WHEREFORE, the Court AFFIRMS the decision promulgated on October 5, 2004 by the Court of Appeals, subject to the following
MODIFICATIONS, to wit:
 (a) Interest at the rate of 12% per annum is IMPOSED on the principal amount of ₱113,532,500.00 as just compensation, reckoned
from the filing of the complaint on November 21, 1997 until the full liability is paid;

(b) The awards of ₱30,000.00 as rental fee, ₱200,000.00 as moral damages, and ₱200,000.00 as exemplary damages are
DELETED; and

(c) The award of 15% attorney’s fees decreed to be paid by National Power Corporation to the Heirs of Macabangkit is DELETED.

The Court PARTLY GRANTS the motion to register attorney’s lien filed by Atty. Macarupung Dibaratun, and FIXES Atty. Dibaratun’s
attorney’s fees on the basis of quantum meruit at 10% of the principal award of ₱113,532,500.00.

The motion to register attorney’s lien of Atty. Manuel D. Ballelos is PARTLY GRANTED, and Atty. Ballelos is DECLARED ENTITLED TO
RECOVER from Cebu, Batowa-an, Sayana, Nasser, Manta and Edgar, all surnamed Macabangkit, the amount of ₱5,000.00 as attorney’s
fees on the basis of quantum meruit.

Costs of suit to be paid by the petitioner.

SO ORDERED.

FIRST DIVISION

G.R. No. 192100 March 12, 2014

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH) 1, Petitioner,
vs.
ASIA PACIFIC INTEGRATED STEEL CORPORATION, Respondent.

DECISION

VILLARAMA, JR., J.:

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the July 21,
2009 Decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 90539. The CA partially affirmed the September 21, 2007 Decision 3 of the
Regional Trial Court (RTC), Branch 54, of Macabebe, Pampanga, and reduced the annual legal interest awarded from 12% to 6% per
annum. Also assailed is the appellate court's April 28, 2010 Resolution4 denying petitioner's motion for reconsideration.

As culled from the records, the following are the pertinent facts:

Asia Pacific Integrated Steel Corporation (respondent) is the registered owner of a 17,175-square meter property situated in Barangay Sta.
Monica, Municipality of San Simon, Province of Pampanga and covered by Transfer Certificate of Title (TCT) No. 271813-R.5

On March 1, 2002, the Republic of the Philippines (petitioner) through the Toll Regulatory Board (TRB) instituted expropriation proceedings
against the respondent over a portion of their property. The affected area, consisting of 2,024 square meters, shall be traversed by the
expansion of the San Simon Interchange, an integral component of the construction, rehabilitation and expansion of the North Luzon
Expressway (NLEX Project). Subsequently, petitioner filed an urgent ex-parte motion for issuance of writ of possession, stating that it
deposited with the Land Bank of the Philippines (LBP) the amount of ₱607,200.00 (100% of the value of the property based on current zonal
valuation of the Bureau of Internal Revenue [BIR]) in accordance with Section 4(a) of Republic Act No. 8974 6 (R.A. 8794), and hence the
court has the ministerial duty to place petitioner in possession pursuant to Section 2, Rule 67 of the Rules of Civil Procedure.7

On March 19, 2002, the trial court issued an order granting petitioner’s motion and directing the Register of Deeds of Pampanga to cause the
annotation of the writ of possession on TCT No. 271813-R.8

In its Answer with Opposition to the Motion for Issuance of Writ of Possession, 9 respondent questioned the TRB’s authority to expropriate the
subject property and objected to petitioner’s offered compensation which respondent deems unjust because the basis thereof - the BIR zonal
valuation - was an unofficial valuation, being merely based on an internal memorandum issued by BIR Revenue District No. 21, not by the
Asset Valuation Department of the BIR National Office. Respondent asserted that just compensation should be at ₱3,036,000.00 or at
₱1,500.00 per square meter plus consequential damages, considering the fair market value and the industrial classification of the subject
property.

During the pre-trial conference, the parties agreed on TRB’s authority to expropriate the subject property but disagreed as to the amount of
just compensation. Petitioner offered to pay ₱607,200.00 for the portion taken but respondent made a counter-offer of ₱1,821,600.00. The
parties eventually agreed to submit the issue of just compensation to three Commissioners composed of the Municipal Assessor of San
Simon as Chairman, and the RTC Branch Clerk of Court and the Register of Deeds for the Province of Pampanga as Members.10
On June 1, 2004, the trial court granted respondent’s motion to withdraw the ₱607,200.00 deposited by petitioner with the LBP as partial
payment for just compensation.11

On June 9, 2004, the Commissioners submitted their Report with the following findings and recommendation:

The affected lot is within the area wherein the land use are residential, commercial, and industrial (mixed land use), as per Vicinity Map
hereto attached as Annex "B". The area is along MacArthur Highway, Quezon Road, Municipal and Barangay Roads[.]

In the absence of bonafide sales transaction in the area, the Assessor’s Office being aware of the actual conditions of subject property
decided to use opinion values in the determination of the current and fair market value for the purpose of payment of just compensation.

OPINION VALUES

A. Real Estate Brokers/Independent Appraisers/Owners, etc.

1. Residential - ranging from ₱2,000.00 to ₱2,500.00 per square meter

2. Commercial - ranging from ₱2,500.00 to ₱3,000.00 per square meter

3. Industrial - ranging from ₱1,000.00 above per square meter

B. Banks and Financial Institutions

1. Residential - ranging from ₱1,000.00 to ₱2,000.00 per square meter

2. Commercial - ranging from ₱2,000.00 to ₱3,000.00 per square meter

3. Residential - ranging from ₱1,000.00 to ₱1,500.00 per square meter

Appraisal conducted by the Assessor of San Simon, Pampanga for various properties within the area, recommended an amount ranging from
₱1,000.00 to ₱1,500.00, Philippine currency, per square meter, depending on their proximity to the national roads, municipal roads, and
barangay roads, and the improvement/development put in place. The amount of ₱1,000.00 to ₱1,500.00 was arrived at by the undersigned
commissioners due to the conversion of the subject property from agricultural to industrial use as evidenced by the Order of Conversion
dated July 8, 1991, issued by Renato B. Padilla, Undersecretary, Department of Agrarian Reform, a xerox copy of which is hereto attached
[as] Annex "C".12

On September 23, 2004, an ocular inspection was conducted in the presence of the parties’ representatives and their respective counsels,
during which the trial court noted the following:

1. There is an existing toll plaza on the right lane of the expressway facing the direction of Manila with blue colored roofing.

2. Comprised in the aforesaid toll plaza are three toll booths. The third booth located on the extreme right facing Manila occupies a
portion of the expropriated portion of defendant’s property.

3. The expropriated portion which is shown in a sketch which was marked as Exhibit H is indicated by its color: green. It has an area of
2,021 square meters. The remaining unexpropriated portion of defendant’s land has an area of 15,151 square meters.

4. The unexpropriated portion of the land of defendant is presently very much below the level of the expressway because the
expressway was upgraded. It is immediately adjacent to the existing expressway, located as it is, on its right side facing Manila. It is
swampy with little water.13

In its Decision, the trial court ruled as follows:

x x x Although there was no documentary evidence attached to substantiate the opinions of the banks and the realtors indicated in the
Commissioners’ Report, the Court finds the commissioners’ recommendation of the valuation of industrial lands at ₱1,000.00 to ₱1,500.00 to
be fair, absent any showing that the valuation is exorbitant or otherwise unjustified. There was no fraud or prejudice that tainted the report.

The Court finds the valuation of the Republic of the Philippines which was pegged at Php300.00 per square meter to be very low. The zonal
valuation of the Bureau of Internal Revenue (Exhibits A and B with submarkings) is merely a gauge or is necessary in the assessment of
correct transfer taxes by the said office. Furthermore the Department Order No. 23-98 took effect only last February 2, 1998 which was four
(4) years prior to the filing of the complaint. The same is true with Ordinance No. 17, Series of 1994 issued by the Sangguniang
Panlalawigan of Pampanga (Exhibit E) which was issued eight (8) years also prior to the filing of the complaint.
Concerning the Deed of Absolute Sale (Exhibit C) notarized on July 19, 2002, the same was undated and pertains only to a right of way. An
easement of right of way transmits no rights except the easement itself. Hence, the just compensation pertaining to easement of right of way
should be lower than that in the Deed of Absolute Sale. x x x

xxxx

Using the recommendation of the three (3) commissioners as guide, the Court finds the amount of ONE THOUSAND THREE HUNDRED
PESOS (Php1,300.00) per square meter as just compensation for the property subject of expropriation.

WHEREFORE, premises considered, judgment is rendered:

1) Ordering the plaintiff to pay the defendant in the amount of TWO MILLION TWENTY FOUR THOUSAND PESOS (Php2,024,000.00)
representing the net amount of just compensation after deducting the partial payment of ₱607,200.00 based on the valuation of
Php1,300.00 per square meter on the expropriated portion of the parcel of land [Lot 329-A of the subdivision, plan (LRC) Psd-246403,
being a portion of lot 329, San Simon, LRC. Cad Rec. No. 1316] with an area of 2,024 square meters situated in Sta. Monica, San
Simon, Pampanga covered by Transfer Certificate of Title No. 271813-R plus legal interest of 12% per annum from the time of taking
(March 21, 2002) until fully paid less taxes due on the land.

2) Ordering the plaintiff to pay the costs and/or expenses in relation to the transfer of ownership of the property in its favor from
defendant Asia Pacific Integrated Steel Corporation.

3) Condemning the property subject of expropriation free from all liens and encumbrances for the construction, rehabilitation and
expansion of the North Luzon Expressway.

SO ORDERED.14

Petitioner appealed to the CA, arguing that the just compensation should not be more than ₱300.00 per square meter and that the correct
rate of interest is 6% per annum.

The CA upheld the trial court’s ruling, reiterating the principle that the determination of just compensation is an inherently judicial function. It
stressed that any valuation for just compensation laid down in statutes merely serve as guides or factors and may not substitute the court’s
own judgment as to what amount should be awarded and how to arrive at such amount.15

Further, the CA noted that petitioner itself admitted that the BIR zonal valuation is only for the purpose of determining the correct amount of
transfer taxes. It held that while BIR zonal valuation may be a factor in determining just compensation, the same is not a competent basis
thereof. Citing R.A. 8974, the CA pointed out the distinction between provisional value as a precondition for the issuance of a writ of
possession and the payment of just compensation for the expropriated property. While the provisional value is based on the zonal value as
may be determined by the BIR, just compensation is based on the prevailing fair market value of the property. Necessarily, the zonal
valuation of properties is not equivalent to their fair market value.16

After examining the records, the CA found no reversible error in the trial court’s determination of just compensation and held that the
valuation of ₱1,500.00 per square meter is more in consonance with the concept of just compensation based upon due consideration of all
evidence. Thus:

It is equally settled that the valuation of a property in tax declarations cannot be a substitute to just compensation. Elsewise stated, the
market value reflected in the tax declaration of the condemned property is no longer conclusive. Accordingly, we cannot appreciate the herein
tax declaration in favor of the Republic.

Further, it is uncontested that the deed of sale dated July 19, 2002 between San Simon Realty, Inc. and the Republic pertained only to a right
of way, hence, the value thereof should be considerably lower. Ordinance No. 17, as correctly found by the RTC, was issued on June 22,
1994 or eight (8) years prior to the institution of the herein complaint. Certainly, the valuation of properties therein can by no means be
reflective of the current, prevailing and fair value of the subject property. The Republic failed to present evidence to controvert he RTC’s
finding on the matter. Neither has it shown that the property sold thereunder shares the same features as the herein subject property as to
warrant a similar valuation. We cannot, thus, yield to the Republic’s submission that its evidence are the proper basis in determining just
compensation for Asia Pacific’s property.17

However, the CA modified the rate of interest imposed on the amount due as just compensation from 12% to 6% in conformity with prevailing
jurisprudence.

On April 28, 2010, the CA denied petitioner’s motion for reconsideration, stating that the argument on valuation by petitioner was merely a
rehash of what the CA had already passed upon.

Hence, this petition assailing the CA’s affirmance of the trial court’s award of just compensation, the legal basis of which is allegedly
insufficient.
Petitioner argues that the evidence for determining the amount of just compensation in expropriation cases should be on those factors
provided in Section 5 of R.A. 8974. Considering such factors and the evidence submitted by the parties before the trial court, petitioner
maintains that just compensation for the subject property should be no more than the zonal valuation (₱300.00 per square meter), and in no
case should it amount to the market value of ₱1,300.00 per square meter adjudged by the trial and appellate courts. Petitioner claims that
such huge sum for only 2,024-square meter portion of respondent’s 17,175-square meter property, is unbelievably 433.4% more than the
1998 BIR zonal value for an underdeveloped industrial land at the time of its taking.

On the other hand, respondent contends that no reversible error was committed by the CA in affirming the trial court’s decision after
considering all the arguments raised by petitioner and the evidence on record. It asserts that the main issue of just compensation and the
findings thereon by the trial court as affirmed by the CA is a question of fact which should not be disturbed by this Court. Moreover,
respondent asserts that the determination by the trial court is entitled to the highest respect considering that the judge has personal
knowledge of the condition of the subject property, having conducted an ocular inspection on September 23, 2004.

We grant the petition.

As a rule, a petition for review under Rule 45 of the Rules of Court covers only questions of law. Questions of fact are not reviewable and
cannot be passed upon by this Court in the exercise of its power to review. The distinction between questions of law and questions of fact is
established. A question of law exists when the doubt or difference centers on what the law is on a certain state of facts. A question of fact, on
the other hand, exists if the doubt centers on the truth or falsity of the alleged facts. 18 This being so, the findings of fact of the CA are final and
conclusive and this Court will not review them on appeal.19

For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or
any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. 20 In this case, the only
legal issue raised by petitioner is whether the trial court based its determination of just compensation on the factors provided under existing
laws and jurisprudence.

Section 5 of R.A. 8974 enumerates the standards for assessing the value of expropriated land taken for national government infrastructure
projects, thus:

SECTION 5. Standards for the Assessment of the Value of the Land Subject of Expropriation Proceedings or Negotiated Sale. – In order to
facilitate the determination of just compensation, the court may consider, among other well-established factors, the following relevant
standards:

(a) The classification and use for which the property is suited;

(b) The developmental costs for improving the land;

(c) The value declared by the owners;

(d) The current selling price of similar lands in the vicinity;

(e) The reasonable disturbance compensation for the removal and/or demolition of certain improvements on the land and for the value of
the improvements thereon;

(f) The size, shape or location, tax declaration and zonal valuation of the land;

(g) The price of the land as manifested in the ocular findings, oral as well as documentary evidence presented; and

(h) Such facts and events as to enable the affected property owners to have sufficient funds to acquire similarly-situated lands of
approximate areas as those required from them by the government, and thereby rehabilitate themselves as early as possible.

In this case, the trial court considered only (a) and (d): (1) the classification of the subject property which is located in an area with mixed
land use (commercial, residential and industrial) and the property’s conversion from agricultural to industrial land, and (2) the current selling
price of similar lands in the vicinity – the only factors which the commissioners included in their Report. It also found the commissioners’
recommended valuation of ₱1,000.00 to ₱1,500.00 per square to be fair and just despite the absence of documentary substantiation as said
prices were based merely on the opinions of bankers and realtors.

In National Power Corporation v. Manubay Agro-Industrial Development Corporation, 21 the recommended price of the city assessor was
rejected by this Court. The opinions of the banks and the realtors as reflected in the computation of the market value of the property and in
the Commissioners’ Report, were not substantiated by any documentary evidence.

Similarly, in National Power Corporation v. Diato-Bernal, 22 this Court rejected the valuation recommended by court-appointed commissioners
whose conclusions were devoid of any actual and reliable basis. The market values of the subject property’s neighboring lots were found to
be mere estimates and unsupported by any corroborative documents, such as sworn declarations of realtors in the area concerned, tax
declarations or zonal valuation from the BIR for the contiguous residential dwellings and commercial establishments. Thus, we ruled that a
commissioners’ report of land prices which is not based on any documentary evidence is manifestly hearsay and should be disregarded by
the court.

We find that the trial court did not judiciously determine the fair market value of the subject property as it failed to consider other relevant
factors such as the zonal valuation, tax declarations and current selling price supported by documentary evidence. Indeed, just
compensation must not be arrived at arbitrarily, but determined after an evaluation of different factors.23

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the
taker’s gain, but the owner’s loss. The word "just" is used to intensify the meaning of the word "compensation" and to convey thereby the
idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, and ample. Such "just"-ness of the
compensation can only be attained by using reliable and actual data as bases in fixing the value of the condemned property. 24 Trial courts are
required to be more circumspect in its evaluation of just compensation due the property owner, considering that eminent domain cases
involve the expenditure of public funds.25

We agree with the trial court that it was not bound by the assessment report of the commissioners and that it had the discretion to reject the
same and substitute its own judgment on its value as gathered from the record, or it may accept the report/recommendation of the
commissioners in toto and base its judgment thereon. However, the decision of the court must be based on all established rules, upon
correct legal principles and competent evidence.26The court is proscribed from basing its judgment on speculations and surmises.

Nonetheless, we cannot subscribe to petitioner’s argument that just compensation for the subject property should not exceed the zonal
valuation (₱300.00 per square meter).

In Republic v. Court of Appeals,27 we held that --

The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the property, broadly
described to be 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 one who receives, and one who desires to sell, it fixed at the time of the actual taking by the government. x x x

Zonal valuation is just one of the indices of the fair market value of real estate. By itself, this index cannot be the sole basis of "just
compensation" in expropriation cases.28 As this Court ruled in Leca Realty Corporation v. Rep. of the Phils.29:

The Republic is incorrect, however, in alleging that the values were exorbitant, merely because they exceeded the maximum zonal value of
real properties in the same location where the subject properties were located. The zonal value may be one, but not necessarily the sole,
index of the value of a realty. National Power Corporation v. Manubay Agro-Industrial held thus:

"x x x [Market value] is not limited to the assessed value of the property or to the schedule of market values determined by the provincial or
city appraisal committee. However, these values may serve as factors to be considered in the judicial valuation of the property."

The above ruling finds support in EPZA v. Dulay in this wise:

"Various factors can come into play in the valuation of specific properties singled out for expropriation.1âwphi1 The values given by provincial
assessors are usually uniform for very wide areas covering several barrios or even an entire town with the exception of the poblacion.
Individual differences are never taken into account. The value of land is based on such generalities as its possible cultivation for rice, com,
coconuts or other crops. Very often land described as 'cogonal' has been cultivated for generations. Buildings are described in terms of only
two or three classes of building materials and estimates of areas are more often inaccurate than correct. Tax values can serve as guides but
cannot be absolute substitutes for just compensation." (Emphasis supplied.)

Among the factors to be considered in arriving at the fair market value of the property are the cost of acquisition, the current value of like
properties, its actual or potential uses, and in the particular case of lands, their size, shape, location, and the tax declarations thereon. The
measure is not the taker's gain but the owner's loss.30 To be just, the compensation must be fair not only to the owner but also to the taker.31

It is settled that the final conclusions on the proper amount of just compensation can only be made after due ascertainment of the
requirements set forth under R.A. 8974 and not merely based on the declarations of the parties. 32 Since these requirements were not
satisfactorily complied with, and in the absence of reliable and actual data as bases in fixing the value of the condemned property, remand of
this case to the trial court is in order.

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated July 21, 2009 and Resolution dated April 28, 2010 of
the Court of Appeals in CA-G.R. CV No. 90539 are hereby SET ASIDE.

This case is remanded to the trial court for the proper determination of just compensation, in conformity with this Decision.

SO ORDERED.
 FIRST DIVISION

G.R. No. 127820 July 20, 1998

MUNICIPALITY OF PARAÑAQUE, petitioner,

vs.

V.M. REALTY CORPORATION, respondent.

PANGANIBAN, J.:

A local government unit (LGU), like the Municipality of Parañaque, cannot authorize an expropriation of private property through a mere
resolution of its lawmaking body. The Local Government Code expressly and clearly requires an ordinance or a local law for the purpose. A
resolution that merely expresses the sentiment or opinion of the Municipal Council will not suffice. On the other hand, the principle of res
judicata does not bar subsequent proceedings for the expropriation of the same property when all the legal requirements for its valid exercise
are complied with.

Statement of the Case

These principles are applied by this Court in resolving this petition for review on certiorari of the July 22, 1996 Decision 1 of the Court of
Appeals 2 in CA GR CV No. 48048, which affirmed in toto 3 the Regional Trial Court's August 9, 1994 Resolution. 4 The trial court dismissed
the expropriation suit as follows:

The right of the plaintiff to exercise the power of eminent domain is not disputed. However, such right may be exercised only pursuant to
an Ordinance (Sec. 19, R.A No. 7160). In the instant case, there is no such ordinance passed by the Municipal Council of Parañaque
enabling the Municipality, thru its Chief Executive, to exercise the power of eminent domain. The complaint, therefore, states no cause of
action.

Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On September 29, 1987, the plaintiff filed a
complaint for expropriation involving the same parcels of land which was docketed as Civil Case No. 17939 of this Court (page 26,
record). Said case was dismissed with prejudice on May 18, 1988 (page 39, record). The order of dismissal was not appealed, hence,
the same became final. The plaintiff can not be allowed to pursue the present action without violating the principle of [r]es [j]udicata.
While defendant in Civil Case No. 17939 was Limpan Investment Corporation, the doctrine of res judicata still applies because the
judgment in said case (C.C. No. 17939) is conclusive between the parties and their successors-in-interest (Vda. de Buncio vs. Estate of
the late Anita de Leon). The herein defendant is the successor-in-interest of Limpan Investment Corporation as shown by the "Deed of
Assignment Exchange" executed on June 13, 1990.

WHEREFORE, defendant's motion for reconsideration is hereby granted. The order dated February 4, 1994 is vacated and set aside.

This case is hereby dismissed. No pronouncement as to costs.

 SO ORDERED. 5

Factual Antecedents

Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, 6 the Municipality of Parañaque filed on September 20, 1993, a
Complaint for expropriation 7 against Private Respondent V.M. Realty Corporation over two parcels of land (Lots 2-A-2 and 2-B-1 of
Subdivision Plan Psd-17917), with a combined area of about 10,000 square meters, located at Wakas, San Dionisio, Parañaque, Metro
Manila, and covered by Torrens Certificate of Title No. 48700. Allegedly, the complaint was filed "for the purpose of alleviating the living
conditions of the underprivileged by providing homes for the homeless through a socialized housing project." 8 Parenthetically, it was also for
this stated purpose that petitioner, pursuant to its Sangguniang Bayan Resolution No. 577, Series of 1991, 9 previously made an offer to
enter into a negotiated sale of the property with private respondent, which the latter did not accept. 10

Finding the Complaint sufficient in form and substance, the Regional Trial Court of Makati, Branch 134, issued an Order dated January 10,
1994, 11 giving it due course. Acting on petitioner's motion, said court issued an Order dated February 4, 1994, 12 authorizing petitioner to take
possession of the subject property upon deposit with its clerk of court of an amount equivalent to 15 percent of its fair market value based on
its current tax declaration.

On February 21, 1994, private respondent filed its Answer containing affirmative defenses and a counterclaim, 13 alleging in the main that (a)
the complaint failed to state a cause of action because it was filed pursuant to a resolution and not to an ordinance as required by RA 7160
(the Local Government Code); and (b) the cause of action, if any, was barred by a prior judgment or res judicata. On private respondent's
motion, its Answer was treated as a motion to dismiss. 14 On March 24, 1991, 15 petitioner filed its opposition, stressing that the trial court's
Order dated February 4, 1994 was in accord with Section 19 of RA 7160, and that the principle of res judicata was not applicable.

Thereafter, the trial court issued its August 9, 1994 Resolution 16 nullifying its February 4, 1994 Order and dismissing the case. Petitioner's
motions for reconsideration and transfer of venue were denied by the trial court in a Resolution dated December 2, 1994. 17 Petitioner then
appealed to Respondent Court, raising the following issues:

1. Whether or not the Resolution of the Parañaque Municipal Council No. 93-95, Series of 1993 is a substantial compliance of the
statutory requirement of Section 19, R.A. 7180 [sic] in the exercise of the power of eminent domain by the plaintiff-appellant.

2. Whether or not the complaint in this case states no cause of action.

3. Whether or not the strict adherence to the literal observance to the rule of procedure resulted in technicality standing in the way of
substantial justice.

4. Whether or not the principle of res judicata is applicable to the present case. 18

As previously mentioned, the Court of Appeals affirmed in toto the trial court's Decision. Respondent Court, in its assailed Resolution
promulgated on January 8, 1997, 19 denied petitioner's Motion for Reconsideration for lack of merit.

Hence, this appeal. 20

The Issues

Before this Court, petitioner posits two issues, viz.:

1. A resolution duly approved by the municipal council has the same force and effect of an ordinance and will not deprive an
expropriation case of a valid cause of action.

2. The principle of res judicata as a ground for dismissal of case is not applicable when public interest is primarily involved. 21

The Court's Ruling

The petition is not meritorious.

First Issue:

Resolution Different from an Ordinance

Petitioner contends that a resolution approved by the municipal council for the purpose of initiating an expropriation case "substantially
complies with the requirements of the law" 22 because the terms "ordinance" and "resolution" are synonymous for "the purpose of bestowing
authority [on] the local government unit through its chief executive to initiate the expropriation proceedings in court in the exercise of the
power of eminent domain." 23 Petitioner seeks to bolster this contention by citing Article 36, Rule VI of the Rules and Regulations
Implementing the Local Government Code, which provides. "If the LGU fails to acquire a private property for public use, purpose, or welfare
through purchase, the LGU may expropriate said property through a resolution of the Sanggunian authorizing its chief executive to initiate
expropriation proceedings." 24 (Emphasis supplied.)

The Court disagrees. The power of eminent domain is lodged in the legislative branch of government, which may delegate the exercise
thereof to LGUs, other public entities and public utilities. 25 An LGU may therefore exercise the power to expropriate private property only
when authorized by Congress and subject to the latter's control and restraints, imposed "through the law conferring the power or in other
legislations." 26 In this case, Section 19 of RA 7160, which delegates to LGUs the power of eminent domain, also lays down the parameters
for its exercise. It provides as follows:

Sec. 19. Eminent Domain. 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. (Emphasis supplied)

Thus, the following essential requisites must concur before an LGU can exercise the power of eminent domain:

1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the LGU, 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.

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. 27

In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to a resolution of the municipal council.
Thus, there was no compliance with the first requisite that the mayor be authorized through an ordinance. Petitioner cites Camarines Sur vs.
Court of Appeals 28 to show that a resolution may suffice to support the exercise of eminent domain by an LGU. 29 This case, however, is not
in point because the applicable law at that time was BP 337, 30 the previous Local Government Code, which had provided that a mere
resolution would enable an LGU to exercise eminent domain. In contrast, RA 7160, 31 the present Local Government Code which was
already in force when the Complaint for expropriation was filed, explicitly required an ordinance for this purpose.

We are not convinced by petitioner's insistence that the terms "resolution" and "ordinance" are synonymous. A municipal ordinance is
different from a resolution. An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on
a specific matter. 32 An ordinance possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the two
are enacted differently — a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of all
the Sanggunian members. 33

If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would have simply adopted the language of the
previous Local Government Code. But Congress did not. In a clear divergence from the previous Local Government Code, Section 19 of RA
7160 categorically requires that the local chief executive act pursuant to an ordinance. Indeed, "[l]egislative intent is determined principally
from the language of a statute. Where the language of a statute is clear and unambiguous, the law is applied according to its express terms,
and interpretation would be resorted to only where a literal interpretation would be resorted to only where a literal interpretation would be
either impossible or absurd or would lead to an injustice." 34 In the instant case, there is no reason to depart from this rule, since the law
requiring an ordinance is not at all impossible, absurd, or unjust.

Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private right of the people. 35 Accordingly, the
manifest change in the legislative language — from "resolution" under BP 337 to "ordinance" under RA 7160 — demands a strict
construction. "No species of property is held by individuals with greater tenacity, and is guarded by the Constitution and laws more
sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right and, for greater public purposes,
appropriates the land of an individual without his consent, the plain meaning of the law should not be enlarged by doubtful interpretation." 36

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to authorize an LGU to exercise eminent
domain. This is clearly misplaced, because Section 19 of RA 7160, the law itself, surely prevails over said rule which merely seeks to
implement it. 37 It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its
implementation. Besides, what the discrepancy seems to indicate is a mere oversight in the wording of the implementing rules, since Article
32, Rule VI thereof, also requires that, in exercising the power of eminent domain, the chief executive of the LGU act pursuant to an
ordinance.

In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of the Constitution, which provides that "territorial and
political subdivisions shall enjoy local autonomy." It merely upholds the law as worded in RA 7160. We stress that an LGU is created by law
and all its powers and rights are sourced therefrom. It has therefore no power to amend or act beyond the authority given and the limitations
imposed on it by law. Strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but "inferior" domain,
since it must conform to the limits imposed by the delegation, and thus partakes only of a share in eminent domain. 38 Indeed, "the national
legislature is still the principal of the local government units, which cannot defy its will or modify or violate it." 39

Complaint Does Not State a Cause of Action

In its Brief filed before Respondent Court, petitioner argues that its Sangguniang Bayan passed an ordinance on October 11, 1994 which
reiterated its Resolution No. 93-35, Series of 1993, and ratified all the acts of its mayor regarding the subject expropriation. 40

This argument is bereft of merit. In the first place, petitioner merely alleged the existence of such an ordinance, but it did not present any
certified true copy thereof. In the second place, petitioner did not raise this point before this Court. In fact, it was mentioned by private
respondent, and only in passing. 41 In any event, this allegation does not cure the inherent defect of petitioner's Complaint for expropriation
filed on September 23, 1993. It is hornbook doctrine that

. . . in a motion to dismiss based on the ground that the complaint fails to state a cause of action, the question submitted before the
court for determination is the sufficiency of the allegations in the complaint itself. Whether those allegations are true or not is beside
the point, for their truth is hypothetically admitted by the motion. The issue rather is: admitting them to be true, may the court render
a valid judgment in accordance with the prayer of the complaint? 42

The fact that there is no cause of action is evident from the face of the Complaint for expropriation which was based on a mere resolution.
The absence of an ordinance authorizing the same is equivalent to lack of cause of action. Consequently, the Court of Appeals committed no
reversible error in affirming the trial court's Decision which dismissed the expropriation suit.

Second Issue:

Eminent Domain Not Barred by Res Judicata

As correctly found by the Court of Appeals 43 and the trial court, 44 all the requisites for the application of res judicata are present in this case.
There is a previous final judgment on the merits in a prior expropriation case involving identical interests, subject matter and cause of action,
which has been rendered by a court having jurisdiction over it.

Be that as it may, the Court holds that the principle of res judicata, which finds application in generally all cases and proceedings, 45 cannot
bar the right of the State or its agent to expropriate private property. The very nature of eminent domain, as an inherent power of the State,
dictates that the right to exercise the power be absolute and unfettered even by a prior judgment or res judicata. The scope of eminent
domain is plenary and, like police power, can "reach every form of property which the State might need for public use." 46 "All separate
interests of individuals 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 sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires
it." 47 Thus, the State or its authorized agent cannot be forever barred from exercising said right by reason alone of previous non-compliance
with any legal requirement.

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it does apply to specific issues
decided in a previous case. For example, a final judgment dismissing an expropriation suit on the ground that there was no prior offer
precludes 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 property. 48 By the same token, our ruling that
petitioner cannot exercise its delegated power of eminent domain through a mere resolution will not bar it from reinstituting similar
proceedings, once the said legal requirement and, for that matter, all others are properly complied with. Parenthetically and by parity of
reasoning, the same is also true of the principle of "law of the case." In Republic vs. De Knecht, 49 the Court ruled that the power of the State
or its agent to exercise eminent domain is not diminished by the mere fact that a prior final judgment over the property to be expropriated has
become the law of the case as to the parties. The State or its authorized agent may still subsequently exercise its right to expropriate the
same property, once all legal requirements are complied with. To rule otherwise will not only improperly diminish the power of eminent
domain, but also clearly defeat social justice.

WHEREFORE, the petition is hereby DENIED without prejudice to petitioner's proper exercise of its power of eminent domain over subject
property. Costs against petitioner.

SO ORDERED.