Republic vs. Salem Investment Corporation

G.R. No. 137569. June 23, 2000

FACTS

In 1983, Batas Pambansa Blg. 340 was passed authorizing the expropriation of parcels of lands belonging to Milagros and Inocentes De la Rama. In 1988, 5 years after, De la Rama’s agreed to sell to Alfredo Guerrero the entire property for the amount of, in which they received P2,200,000.00 as partial payment. While the case is pending the Republic of the Philippines filed the present case for expropriation pursuant to B.P. Blg. 340 which includes the properties of De la Ramas’.Upon the deposit of P12,970,350.00 representing 10 percent of the approximate market value of the subject lands, a writ of possession was issued on August 29, 1990 in favor of the government.

De la Ramas and Guerrero entered into a contract to sell with respect to Lot 834 amounting to P11,800,000.00. The entire lot has an area of 4,075 square meters. This contract was executed on December 14, 1988, 5 years after B.P. Blg. 340 was passed authorizing the expropriation of a portion of the land, consisting of 1,380 square meters, of the De la Ramas.

In 1989, Guerrero filed in the Regional Trial Court in Pasay City a complaint for specific performance (Civil Case No. 6974-P) to compel the De la Ramas’ to proceed with the sale, which was granted by the trial court.

De la Ramas claim that they should receive the amount of just compensation because when they agreed to sell Lot 834 in 1988 to Guerrero, it did not include the portion expropriated by the Republic since, at that time, such portion had been expropriated by the government by virtue of B.P. Blg. 340, which took effect on February 17, 1983.

Alfredo Guerrero argues that the title to the expropriated portion of Lot 834 did not immediately pass to the government upon the enactment of B.P. Blg. 340 in 1983, as payment of just compensation was yet to be made before ownership of the land was transferred to the government. As a result, petitioners still owned the entire Lot 834 at the time they agreed to sell it to Guerrero. Therefore, since Guerrero obtained ownership of Lot 834, including the 920 square meters expropriated by the government, he has the right to receive the just compensation over the said property.

ISSUE

Who, between the De la Ramas and Guerrero, is/are entitled to receive payment of just compensation for the taking of 920 square meters of the land in question?

HELD

GUERRERO’S. It is only upon payment of just compensation that title over the property passes to the government. Therefore, until the action for expropriation has been completed and terminated, ownership over the property being expropriated remains with the registered owner. Consequently, the latter can exercise all rights pertaining to an owner, including the right to dispose of his property, subject to the power of the State ultimately to acquire it through expropriation.

In the case at hand, the first stage of expropriation was completed when B.P. Blg. 340 was enacted providing for the expropriation of 1,380 square meters of the land in question. Thus, in 1988, the De la Ramas still had authority to transfer ownership of their land and convey all rights, including the right to receive just compensation, to Guerrero.

The De la Ramas make much of the fact that ownership of the land was transferred to the government because the equitable and the beneficial title was already acquired by it in 1983, leaving them with only the naked title. The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions.

DISPOSITIVE PORTION

WHEREFORE, the decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

DOCTRINE

The power of eminent domain is an inherent power of the State. No constitutional conferment is necessary to vest it in the State. The constitutional provision on eminent domain, Art. III, §9, provides a limitation rather than a basis for the exercise of such power by the government. Thus, it states that “Private property shall not be taken for public use without just compensation.” Expropriation may be initiated by court action or by legislation. In both instances, just compensation is determined by the courts.

Expropriation of land consist of 2 stages : (1) determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, “of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint (2) concerned with the determination by the court of “the just compensation for the property sought to be taken.” This is done by the court with the assistance of not more than three (3) commissioners.

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