Heirs of Arturo Reyes v. Socco-Beltran, G.R. No.

176474
Facts: Elena Socco-Beltran (Socco) filed an application for Lot No. 6-B, alleging that it
wasadjudicated in her favor in the extra-judicial settlement of ConstanciaSocco’s estate,
beforethe Department of Agrarian Reform (DAR). The heirs of Arturo Reyes
opposed theapplication on the ground that Lot No. 6-B was sold by Miguel R. Socco, brother of
Socco, infavor of their father, Atty. Arturo Reyes, as evidenced by the Contract to Sell.
Issue: Whether or not petitioners have a better right to the subject property over
therespondent’s?
Ruling: The Court ruled that the petitioner’s could not derive title of Lot No. 6-B becauseMiguel
R. Socco was not yet the owner of the said lot and was only expecting to inherit thesame. The
contract was a conditional sale, conditioned upon the event Miguel Socco wouldactually inherit
and become the owner of the said property. The Court, relying on Article1459 of the Civil Code
on contracts of sale, said that, “The thing must be licit and the vendormust have the right to
transfer the ownership thereof at the time it is delivered.” The lawspecifically requires that the
vendor must have ownership of the property at the time of it isdelivered. Hence, there was no
valid sale from which ownership of the property could havetransferred from Miguel Socco to
Arturo Reyes, since, at the time of the execution, theformer was not yet the owner of the same
and was only expecting to inherit it. Furthermore,Arturo Reyes, not having acquired ownership
of the property, could not have conveyed thesame to his heirs.

G.R. No. L-46955 February 27, 1989

CONSORCIA, TEODORO and ERNESTO, all surnamed AGUSTINO, and SPOUSES BENITO
VILLAVICENCIO & CORAZON SOTTO, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (Third Division) and SEVERINO MOLDOGO and
CATALINA MERCENE, respondents.

Rio Sesinando E. Venturanza and J.V. Balili for petitioners.

Reynaldo MagalangMambil and Ramon Y Pardo for private respondents.

GUTIERREZ, JR. J.:

This petition involves a three hectare parcel of land forming part of a sixteen hectare homestead
which was originally covered by Original Certificate of Title (OCT) No. 597 issued in accordance with
the provisions of Commonwealth Act No. 141 on Homesteads in favor of one, Ambrocio Loren, way
back in 1925. It was only in 1958 or about 32 years after Loren's death that his heirs, herein
petitioners (who are all surnamed Agustino) executed an affidavit of adjudication over the said parcel
of land and obtained Transfer Certificate of Title (TCT) No. 7894 in their favor. However, in 1937, the
private respondents had acquired the same parcel of land from a certain GavinoLuarca, who in turn
acquired the same from Loren in 1926.
The appellate court awarded the parcel of land to the private respondents. It also ordered the
cancellation of the titles of the petitioners and their co-petitioners, the vendees of the said land.
Hence, this petition.

The records show that in 1926 Ambrocio Loren executed a deed of sale over the parcel of land for a
consideration of P150.00 in favor of GavinoLuarca. Admittedly, Loren's original certificate of title
which covered the land was barely one year old at the time so there is no question that the sale was
within the 5-year prohibition against alienation of homesteads under Com. Act 141. Luarca
immediately took possession of the land consisting of three (3) hectares and remained there until
1937, when he sold the same land to the private respondents for P180.00. Since then, the private
respondents have been in possession of the land. The deed of sale, between Loren and Luarca and
between Luarca and the private respondents were both unregistered.

Meanwhile, in 1958, the heirs of Juana Loren who was the only child of Ambrocio Loren, executed
an affidavit of adjudication, thereby succeeding to the land covered by OCT No. 597 which included
the three hectare parcel in dispute. OCT No. 597 was cancelled and TCT No. 7894 was issued in
the petitioner's favor. According to the private respondents, prior to execution of the affidavit and the
issuance of TCT No. 7894, the petitioners approached them and asked them to pay P500.00 a
hectare for the land they were occupying in consideration of a new document to be signed by the
petitioners but the respondents failed to pay so they were left out of the project of partition.

As alleged by the private respondents and as it appears from the records, the other areas covered
by OCT No. 597 were also previously sold to different persons. Apparently, these people were able
to pay the petitioners the corresponding amounts that the latter demanded because when TCT No.
7894 was issued, four (4) partial sales were annotated on the Memorandum of Encumbrances of the
title; then, another one in 1962 and another in 1967. In 1962, however, the private respondents,
were able to annotate their adverse claim on the petitioners' title. The respondents remained in
possession of the land up to the events leading to the filing of the case.

In 1967, the petitioners sold a portion of the land covered by TCT No. 7894 to their co-petitioners,
Villavicencio and Sotto. This portion is the land occupied by the private respondents. The sale
covered four (4) hectares; 1 hectare was designated as Parcel B which the private respondents
bought from a certain Ines Pastrana, who in turn, bought the same from the deceased Juana Loren
after the 5-year prohibition period in the Homestead Law and 3 hectares designated as Parcel A,
which is the subject of this present petition, TCT No. 31676 was issued in favor of Villavicencio and
Sotto. The new owners succeeded in ousting the private respondents from the land. Hence, the
private respondents instituted an action for recovery of possession with damages.

The trial court adjudicated Parcel B to the private respondents. Parcel A was awarded to the
petitioners on the ground that the sale between Ambrocio Loren to GavinoLuarca and that between
Luarca and the private respondents were null and void as the first sale was executed within the 5-
year prohibitive period under the Homestead law.

The private respondents appealed the decision as regards Parcel A.

On April 28, 1977, the Court of Appeals rendered the questioned decision, adjudicating Parcel A to
the private respondents on the ground that the petitioners, heirs of Ambrocio Loren, by their inaction
from 1926 to 1958, have lost their right to claim the land because of the equitable principle of laches.

In this petition, therefore, the petitioners raise the issue of whether or not the Court of Appeals
committed grave abuse of discretion in holding that the defense of laches can be set up against the
petitioner-heirs who are presumed by law to have continued possession of the land from the time
their grandfather, Ambrocio Loren, acquired the same in 1926 until the time when they, themselves,
acquired title thereto by virtue of succession. May it also be set up against the other petitioners who
acquired the said land as innocent purchasers for value, especially since the original sale by
Ambrocio Loren to GavinoLuarca from whom the private respondents acquired the land was void ab
initio being contrary to public policy?

If the sale by Ambrocio Loren to GavinoLuarca had been outside the 5-year prohibitory period
pursuant to Commonwealth Act No. 141 and the sale had been void on some other grounds, there
would be no question about the application of the equitable principle of laches. However, it is an
established rule that equity cannot be set up against clear provisions of law based on public policy.
Thus, in a number of cases, we have consistently ruled that a sale of a homestead within the 5-year
prohibitive period is void ab initio and the same cannot be ratified nor can it acquire validity through
the passage of time. In the case of Arsenal v. Intermediate Appellate Court (143 SCRA 49,53 [1986]
we said:

The above provisions of law are clear and explicit. A contract which purports to
alienate, transfer, convey or encumber any homestead within the prohibitory period
of five years from the date of the issuance of the patent is void from its execution. In
a number of cases, this Court has held that such provision is mandatory (De Los
Santos v. Roman Catholic Church of Midsayap, 94 Phil. 405).

Under the provision of the Civil Code, a void contract is inexistent from the beginning.
It cannot be ratified neither can the right to set up the defense of its illegality be
waived. (Art. 1409, Civil Code).

xxxxxxxxx

xxxxxxxxx

Concededly, the contract of sale executed between the respondents Palaos and
Suralta in 1957 is void. It was entered into three (3) years and eight (8) months after
the grant of the homestead patent to the respondent Palaos in 1954.

xxxxxxxxx

xxxxxxxxx

At first blush, the equities of the case seem to lean in favor of the respondent Suralta
who, since 1957, has been in possession of the land which was almost acquired in
an underhanded manner by the petitioners. We cannot, however, gloss over the fact
that the respondent Suralta was himself guilty of transgressing the law by entering, in
1957, into a transaction clearly prohibited by law. It is a long standing principle that
equity follows the law. Court exercising equity jurisdiction are bound by rules of law
and have no arbitrary discretion to disregard them. Equitable reasons will not control
against any well-settled rule of law or public policy (McCurdy v. County of
Shiawassee 118 N.W. 625). Thus, equity cannot give validity to a void contract. If, on
the basis of equity, we uphold the respondent Suralta's claim over the land which is
anchored on the contracts previously executed we would in effect be giving life to a
void contract.
Neither can the doctrine of pari delicto which could have effectively barred Loren's heirs from
recovering the property, be set up against them by the mere fact that Loren, himself, was guilty of
violating the 5-year prohibition. In the case of Santos v. Roman Catholic Church of Midsayap, et
al., (94 Phil. 405, 411) we ruled:

... Ordinarily the principle of pari delicto would apply to her because her predecessor-
in-interest has carried out the sale with the presumed knowledge of its illegality (8
Manresa 4th Ed., pp. 717718), but because the subject of the transaction is a piece
of public land, public policy requires that she, as heir, be not prevented from re-
acquiring it because it was given by law to her family for her home and cultivation.
This is the policy on which our homestead law is predicated (Pascua v. Talens, 80
Phil. 792). This right cannot be waived. 'It is not within the competence of any citizen
to barter away what public policy by law seeks to preserve (Gonzalo Puyat and Sons,
Inc. v. Pantaleon de lasAma, et al., 74 Phil. 3). ...

It is, however, noteworthy to mention that the petitioners' interest in the land in question hardly
exemplifies the beneficent purpose for which the provisions on homesteads were enacted and the
spirit behind the homestead law. We should also stress that the petitioner-vendees are not, as they
claim to be, innocent purchasers for value because at the time they bought the land, the private
respondents had already caused the annotation of their adverse claim on the title of the land. Be that
as it may, it is not within the power of this Court to pass judgment on who is more deserving of the
land in question. We only decide who, under the law, is entitled to the disputed property. It is up to
the government to decide whether or not the petitioners should retain ownership of the land. Our
decision, therefore, in this present petition is without prejudice to the Government's institution of
reversion proceedings as provided by law.

WHEREFORE, the petition is hereby GRANTED. The appealed decision and resolution of the Court
of Appeals are ANNULLED and SET ASIDE. The decision of the then Court of First Instance of
Oriental Mindoro is REINSTATED with the modification that the petitioner who are heirs are ordered
to reimburse the private respondents the amount of P150.00, which represents the purchase price
received by the late Ambrocio Loren in consideration for the sale of the land.

Let a copy of this decision be furnished the Solicitor General and the Director of Lands for
appropriate action.

SO ORDERED.

Manapat vs. CA G.R. No. 110478 October 15, 2007 Eminent Domain
NOVEMBER 28, 2017
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FACTS:
Sometime in the 1960’s, RCAM allowed a number of individuals to occupy the Grace Park
property on condition that they would vacate the premises should the former push through
with the plan to construct a school in the area. The plan, however, did not materialize, thus,
the occupants offered to purchase the portions they occupied. Later, as they could not
afford RCAM’s proposed price, the occupants, organizing themselves as exclusive
members of the Eulogio Rodriguez, Jr. Tenants Association, Inc., petitioned the
Government for the acquisition of the said property, its subdivision into home lots, and the
resale of the subdivided lots to them at a low price.

ISSUE:

Is the issue of “genuine necessity” a justiciable question?

RULING:
YES. In Lagcao v. Judge Labra, we declared that the foundation of the right to exercise
eminent domain is genuine necessity, and that necessity must be of a public character. As a
rule, the determination of whether there is genuine necessity for the exercise is a justiciable
question. However, when the power is exercised by the Legislature, the question of
necessity is essentially a political question.
In the instant cases, the authority to expropriate came from Presidential Decree No. 1072,
issued by then President Ferdinand E. Marcos in 1977. At that time, and as explicitly
recognized under the 1973 Constitution, President Marcos had legislative powers.
Perforce, the expropriation of the subject properties – identified with specificity in the P.D.
— was directed by legislation. The issue of necessity then assumed the nature of a political
question.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 110478               October 15, 2007

FERMIN MANAPAT, 1 Petitioner,
vs.
COURT OF APPEALS and NATIONAL HOUSING AUTHORITY, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 116176

DOMINGO LIM, Petitioner,
vs.
COURT OF APPEALS and NATIONAL HOUSING AUTHORITY, Respondents.

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

G.R. Nos. 116491-503

NATIONAL HOUSING AUTHORITY, Petitioner,

vs.
MAXIMO LOBERANES, ELADIO QUIMQUE, CESARIO VEGA, JUANITO SANTOS, ALEJANDRO
ORACION and GONZALO MERCADO, Respondents.

DECISION

NACHURA, J.:

For the resolution of the Court are three consolidated petitions for review on certiorari under Rule 45
of the Rules of Court. G.R. No. 110478 assails the May 27, 1993 Decision 2 of the Court of Appeals
(CA) in CA-G.R. CV Nos. 10200-10212. G.R. No. 116176 questions the June 28, 1994 Decision 3 of
the appellate court in CA-G.R. CV No. 27159. G.R. Nos. 116491-503 assails the March 2, 1994 and
the July 25, 1994 Resolutions4 of the CA also in CA-G.R. CV Nos. 10200-10212.

The three-decade saga of the parties herein has for its subject parcels of land forming part of what
was originally known as the Grace Park Subdivision in Caloocan City and formerly owned by the
Roman Catholic Archbishop of Manila (RCAM) and/or the Philippine Realty Corporation (PRC).

The Facts

Sometime in the 1960’s, RCAM allowed a number of individuals to occupy the Grace Park property
on condition that they would vacate the premises should the former push through with the plan to
construct a school in the area. The plan, however, did not materialize, thus, the occupants offered to
purchase the portions they occupied. Later, as they could not afford RCAM’s proposed price, the
occupants, organizing themselves as exclusive members of the Eulogio Rodriguez, Jr. Tenants
Association, Inc., petitioned the Government for the acquisition of the said property, its subdivision
into home lots, and the resale of the subdivided lots to them at a low price. 5

Acting on the association’s petition, the Government, in 1963, through the Land Tenure
Administration (LTA), later succeeded by the People’s Homesite and Housing Corporation (PHHC),
negotiated for the acquisition of the property from RCAM/PRC. But because of the high asking price
of RCAM and the budgetary constraints of the Government, the latter’s effort to purchase and/or to
expropriate the property was discontinued. RCAM then decided to effect, on its own, the subdivision
of the property and the sale of the individual subdivided lots to the public. 6 Petitioners Manapat and
Lim and respondents Loberanes, Quimque, Vega, Santos, Oracion and Mercado in these
consolidated cases were among those who purchased individual subdivided lots of Grace Park
directly from RCAM and/or PRC.7

A significant turn of events however happened in 1977 when the late President Ferdinand E. Marcos
issued Presidential Decree (PD) No. 1072,8 appropriating ₱1.2M out of the President’s Special
Operations Funds to cover the additional amount needed for the expropriation of Grace Park. The
National Housing Authority (NHA), PHHC’s successor, then filed several expropriation proceedings
over the already subdivided lots for the purpose of developing Grace Park under the Zonal
Improvement Program (ZIP) and subdividing it into small lots for distribution and resale at a low cost
to the residents of the area.9 The following cases were filed by the NHA with the Regional Trial Court
(RTC) of Caloocan City: C-6225, C-6226, C-6227, C-6228, C-6229, C-6230, C-6231, C-6232, C-
6233, C-6234, C-6235, C-6236, C-6237, C-6238, C-6255 and C-6435. 10

After due proceedings, the trial court rendered separate decisions dismissing the expropriation
cases, with the exceptions of Cases Nos. C-6233 and C-6236 in which it ordered the condemnation
of the involved lots.11 On motion for reconsideration by the NHA in Cases Nos. C-6227, C-6228, C-
6230, C-6234, C-6235, C-6238 and C-6255, the trial court later amended its decision, set aside its
dismissal of the said cases, ordered the condemnation of the involved lots and fixed the amount of
just compensation at ₱180.00 per square meter. In Cases Nos. C-6225, C-6229, C-6231, C-6232,
C-6237 and C-6435, the RTC however denied NHA’s motion for reconsideration. 12

NHA eventually appealed to the CA the decisions in Cases Nos. C-6225, C-6229, C-6231, C-6232,
C-6237 and C-6435 on the issue of the necessity of the taking, and the amended ruling in Cases
Nos. C-6227, C-6228, C-6230, C-6234, C-6235, C-6238 and C-6255 on the issue of just
compensation.13 The CA consolidated the appeals and docketed them as CA-G.R. CV No. 10200-
10212. NHA likewise filed with the CA an appeal from the decision in C-6226, which was docketed
as CA-G.R. CV No. 27159.

On May 27, 1993, the appellate court rendered its Decision 14 in CA-G.R. CV No. 10200-10212
disposing of the appealed cases as follows:

WHEREFORE, premises considered, judgment is hereby rendered:

1) Reversing and setting aside the decisions of dismissal in Cases Nos. C-6225, C-6229, C-
6231, C-6232, C-6237 and C-6435; and in lieu thereof an order of condemnation is entered
declaring that plaintiff-appellant NHA has a lawful right to take the lots involved for the public
use described in the complaints;

2) Affirming the decisions in Case Nos. C-6227, C-6228, C-6234, C-6235, C-6238 and C-
6255 insofar as said decision granted the expropriation; declaring that plaintiff-appellant NHA
has a lawful right to take the lots involved for the public use stated in the complaint; but
annulling and setting aside the just compensation fixed by the trial court at ₱180.00 per
square meter in the said cases;

3) Ordering the remand of all the appealed cases, except for Case No. C-6230, to the trial
court for determination of the just compensation to which defendants are entitled in
accordance with Rule 67 of the Revised Rules of Court;

4) Finding the compromise agreement in Case No. C-6230, entitled, "NHA v. Aurora Dydela
Costa, et al." in accordance with law, and not contrary to morals or public policy, and
rendering judgment in accordance therewith;

5) Ordering RemediosMacato to be joined as defendant with Julia C. Diaz in Case No. C-

6227.

No pronouncement as to costs.
SO ORDERED.15

Rosemarie and Dolores Guanzon, two of the owners of the lots in C-6225, filed before this Court a
petition for review on certiorari of the aforesaid decision of the appellate court [Their petition was
docketed as G.R. Nos. 110462-74]. On September 5, 1994, we dismissed their petition for failure to
sufficiently show that the CA had committed any reversible error in the challenged decision. 16 An
Entry of Judgment was issued on February 2, 1995.17

Likewise, Julia Diez and RemediosMacato, the owners of the lots in C-6227, assailed before us the
afore-quoted CA decision through a petition under Rule 45. On July 28, 1993, however, in G.R. No.
110770, we denied their Motion for Extension of Time to file a petition for review on certiorari for their
failure to submit an affidavit of service of the motion as required by

Circular No. 19-91.18 After denying their motion for reconsideration, 19 we issued an Entry of Judgment
on August 27, 1993.20

Petitioner Manapat, the defendant-landowner in C-6229, also elevated the case before us via a
petition for review on certiorari docketed as G.R. No. 110478. 21 We initially dismissed this petition for
having been filed out of time,22 but we reinstated it on motion for reconsideration.23

In the meantime, the other defendants-landowners in the expropriation cases—RCAM/PRC in C-

6225, Maximo Loberanes and EladioQuimque in C-6231, Alejandro Oracion, Gonzalo Mercado,
Cesario Vega and Juanito Santos in C-6435, and RemediosMacato in C-6227—moved for the
reconsideration of the said May 27, 1993 Decision of the CA.24 In the March 2, 1994 Resolution, 25 the
appellate court resolved the motions in this wise:

WHEREFORE, premises considered, the motion for reconsideration of movants Roman Catholic
Archbishop of Manila and Philippine Realty Corporation (in Special Civil Action No. 6225) and
movant-intervenorRemediosMacato (in Special Civil Action No. 6227) are DENIED.

The motions for reconsideration of movants Gonzalo Mercado, Cesario Vega and Juanito Santos (in
Special Civil Action No. 6435) and movants Maximo Loberanes and EladioQuimque (in Special Civil
Action No. 6231) are GRANTED. The motion for reconsideration of movant Alejandro Oracion (in
Special Civil Action No. 6435) is partially granted to the extent of Three Hundred (300) square
meters of Lot 22, Block 157. The decision of this Court promulgated May 27, 1993 is accordingly
MODIFIED. Lot No. 26, Block No. 157 owned by Cesario Vega and Juanito Santos, and Lot No. 4,
Block No. 157 owned by Maximo Loberanes and EladioQuimque are declared exempt from
expropriation and the corresponding complaints for expropriation (sic) DISMISSED insofar as said
lots are concerned. Lot No. 22, Block No. 157 owned by movant Alejandro Oracion is declared
exempt from expropriation to the extent of Three Hundred (300) square meters. Only the remaining
Ninety (90) square meters shall be the subject of expropriation, the portion to be determined by the
lower court in the manner most beneficial to the owner and consistent with the objective of PD 1072.

SO ORDERED.26

Aggrieved by the said March 2, 1994 CA Resolution specifically with regard to the exemption from
expropriation of the lots of Loberanes, Quimque, Mercado, Vega and Santos, and the partial
exemption of the lot of Oracion, NHA moved for the reconsideration of the same. In the subsequent
July 25, 1994 Resolution,27 the appellate court denied NHA’s motion, together with the belated
motion of Vivencio S. de Guzman, the defendant-landowner in C-6255. The dispositive portion of the
July 25, 1994 Resolution reads:
WHEREFORE, the motions for reconsideration of defendant-appellant Vivencio S. de Guzman of the
decision promulgated May 27, 1993 and of plaintiff-appellant National Housing Authority of the
resolution promulgated March 2, 1994 are DENIED.

SO ORDERED.28

With the denial of its motion for reconsideration, NHA filed with this Court a Consolidated Petition for
Review29 under Rule 45, as aforesaid, assailing the March 2, 1994 and the July 25, 1994 Resolutions
of the appellate court. NHA’s petition was docketed as G.R. Nos. 116491-503 against respondents
Loberanes and Quimque (in C-6231), Vega, Santos, Oracion and Mercado (in C-6435).

In a separate development, the CA, on June 28, 1994, rendered its Decision 30 in CA-G.R. CV No.
27159, reversing the RTC’s ruling in C-6226. The fallo of the decision reads:

WHEREFORE, FOREGOING PREMISES CONSIDERED, the appealed decision dated October 29,
1986 is hereby REVERSED for want of merit. Let the record of this case be remanded to the court of
origin for further proceedings.

IT IS SO ORDERED.31

Discontented with the appellate court’s ruling, petitioner Domingo Lim, one of the owners of the lots
subject of C-6226, elevated the case to us via a petition for review on certiorari docketed as G.R.
No. 116176.32

The Issues

Thus, for resolution by this Court are the following consolidated cases: (1) G.R. No. 110478 of
Manapat; (2) G.R. Nos. 116491-503 of the NHA; and (3) G.R. No. 116176 of Lim.

In G.R. No. 110487, petitioner Manapat argues in the main that, as he is also a member of the
tenant association, the beneficiary of the expropriation, it would be incongruous to take the land
away from him only to give it back to him as an intended beneficiary. Accordingly, the CA, in its May
27, 1993 Decision in CA-G.R. CV No. 10200-10212, should not have allowed the expropriation of his
lot. To further support his stance, Manapat raises the following grounds:

THE COURT OF APPEALS ERRED IN HOLDING THAT THE ISSUANCE MADE IN THE
EXERCISE OF LEGISLATIVE POWER, SPECIFYING THE LOTS TO BE EXPROPRIATED
AND THE PURPOSE FOR WHICH THEY ARE INTENDED, REMOVES FROM THE
JUDICIARY THE DETERMINATION OF THE NECESSITY OF THE TAKING, THERE
BEING NO SHOWING OF ABUSE OF DISCRETION.33

II

SUPERVENING EVENT RENDERS IMPROPER THE DISPOSITION BY THE COURT OF

APPEALS FOR AN ORDER OF CONDEMNATION DECLARING THAT NHA HAS A
LAWFUL RIGHT TO TAKE THE LOT OF FERMIN MANAPAT FOR SUPPOSED PUBLIC
USE AND FOR REMAND OF HIS CASE TO THE TRIAL COURT FOR DETERMINATION
OF JUST COMPENSATION.34
 III

THE COURT OF APPEALS SHOULD HAVE CONSIDERED THAT FERMIN MANAPAT IS

NOT ONLY A BONA FIDE OCCUPANT IN THE GRACE PARK SUBDIVISION FOR
PURPOSES OF P.D. 1072 BUT LIKEWISE HAS A TRANSFER CERTIFICATE OF TITLE
NO. 42370 OF THE REGISTRY OF DEEDS FOR THE CITY OF CALOOCAN OVER THE
SAME LOT SOUGHT TO BE EXPROPRIATED WHICH SHOULD NOT BE SUBJECT TO
COLLATERAL ATTACK AS DISPOSED BY THE COURT OF APPEALS. 35

IV

THE COURT OF APPEALS SHOULD HAVE CONSIDERED THAT THE EVENTUAL

BENEFICIARIES OF ITS BENEVOLENT EXPROPRIATION ARE SQUATTERS. 36

NHA, in its petition in G.R. Nos. 116491-503, primarily contends that the CA erred when it issued its
March 2, 1994 Resolution and modified the May 27, 1993 Decision in CA-G.R. CV No. 10200-10212
to the extent that it applied retroactively Article VI, Section 10 of Republic Act (R.A.) No. 7279, thus
exempting from expropriation the 300-sq m lots of respondents Loberanes, Quimque, Vega, Santos,
Oracion and Mercado. NHA summarized its arguments as follows:

The Honorable Court of Appeals erred in applying retroactively Article VI, Section 10 of Republic Act
No. 7279 to the subject expropriation cases instituted back in 1977 by petitioner-appellant NHA. 37

A. Republic Act 7279 passed in 1992 should operate prospectively and, therefore, should not
be given retroactive effect.38

Republic Act 7279 is a substantive and penal law with a penalty clause which cannot apply
retroactively especially to pending actions.39

B. Republic Act No. 7279 and PD 1072 are not in pari materia. 40

The retroactive application of Article VI, Section 10 of RA 7279 will affect vested rights of petitioner-
appellant NHA arising from its exercise of the power of eminent domain. 41

II

The Honorable Court of Appeals erred in ignoring the impractical consequences resulting from a
selective expropriation of lots.42

In G.R. No. 116176, petitioner Lim, a non-member of the tenant association who bought from
RCAM/PRC four lots of the subdivided Grace Park Subdivision, 43 argues as follows:

Respondent NHA may not, as it would herein, legally re-group several smaller lots into which
a much bigger lot had previously been subdivided, and consider and treat them as one again
for the purpose of subdividing it once more into still smaller lots for distribution to its
supposed or intended beneficiaries. 44
 2

There really was no genuine necessity for the expropriation of the lots in question to satisfy
the purpose thereof as alleged in the complaint therefor. 45

Respondent Court did not sustain the clear finding of the trial court that no evidence
sufficient to prove its claim that the expropriation of said lots and subdividing them again into
much smaller lots for resale to their present occupants would provide the latter with more
healthful, decent and peaceful surroundings and thus improve the quality of their lives was
ever presented by respondent NHA.46

Stripped of non-essentials, the petitions raise only one fundamental issue, and that is, whether the
NHA may validly expropriate the parcels of land subject of these cases.

The Court’s Ruling

The power of eminent domain is an inherent and indispensable power of the State. Also called the
power of expropriation, it is described as "the highest and most exact idea of property remaining in
the government" that may be acquired for some public purpose through a method "in the nature of a
compulsory sale to the State."47 By virtue of its sovereign character, the exercise of the power
prevails over the non-impairment clause,48 and is clearly superior to the final and executory judgment
rendered by a court in an ejectment case.49

Being inherent, the power need not be specifically conferred on the government by the Constitution.
Section 9, Article III of the Constitution, which mandates that "private property shall not be taken for
a public use without just compensation," merely imposes a limit on the government’s exercise of the
power and provides a measure of protection to the individual’s right to property. 50

Just like its two companion fundamental powers of the State, 51 the power of eminent domain is
exercised by the Legislature. However, it may be delegated by Congress to the President,
administrative bodies, local government units, and even to private enterprises performing public
services.52

Albeit the power partakes of a sovereign character, it is by no means absolute. Its exercise is subject
to limitations, one of which is, precisely, Section 9, Article III of the Constitution.

Over the years and in a plethora of cases, this Court has recognized the following requisites for the
valid exercise of the power of eminent domain: (1) the property taken must be private property; (2)
there must be genuine necessity to take the private property; (3) the taking must be for public use;
(4) there must be payment of just compensation; and (5) the taking must comply with due process of
law.53 Accordingly, the question that this Court must resolve is whether these requisites have been
adequately addressed.

It is incontrovertible that the parcels of land subject of these consolidated petitions are private
property. Thus, the first requisite is satisfied.

With respect to the second, it is well to recall that in Lagcao v. Judge Labra, 54 we declared that the
foundation of the right to exercise eminent domain is genuine necessity, and that necessity must be
of a public character. As a rule, the determination of whether there is genuine necessity for the
exercise is a justiciable question. 55 However, when the power is exercised by the Legislature, the
question of necessity is essentially a political question. 56 Thus, in City of Manila v. Chinese
Community,57 we held:

The legislature, in providing for the exercise of the power of eminent domain, may directly determine
the necessity for appropriating private property for a particular improvement for public use, and it
may select the exact location of the improvement. In such a case, it is well-settled that the utility of
the proposed improvement, the extent of the public necessity for its construction, the expediency of
constructing it, the suitableness of the location selected and the consequent necessity of taking the
land selected for its site, are all questions exclusively for the legislature to determine, and the courts
have no power to interfere, or to substitute their own views for those of the representatives of the
people.

In the instant cases, the authority to expropriate came from Presidential Decree No. 1072, issued by
then President Ferdinand E. Marcos in 1977. At that time, and as explicitly recognized under the
1973 Constitution, President Marcos had legislative powers. Perforce, the expropriation of the
subject properties – identified with specificity in the P.D. --- was directed by legislation. The issue of
necessity then assumed the nature of a political question.

As to the third requisite of "public use," we examine the purpose for which the expropriation was
undertaken by NHA. As set forth in its petition, NHA justifies the taking of the subject property for the
purpose of improving and upgrading the area by constructing roads and installing facilities thereon
under the Government’s zonal improvement program and subdividing them into much smaller lots
for distribution and sale at a low cost to qualified beneficiaries, mostly underprivileged long-time
occupants of Grace Park. Around 510 families with approximately 5 members each will be benefited
by the project.58 The only remaining obstacle in the completion of this project is the lots subject of
these consolidated petitions as the other lots in Grace Park have already been expropriated. 59

The Zonal Improvement Program (ZIP), being implemented for government by NHA, draws breath
from policy mandates found in the 1987 Constitution. 60 It is an integral part of the government’s
"socialized housing" program which, in Sumulong v. Guerrero, 61 we deemed compliant with the
"public use" requirement, it being a program clearly devoted to a "public purpose." Justice Irene R.
Cortes, speaking eloquently for the Court, said:

"Socialized housing" is defined as, "the construction of dwelling units for the middle and lower class
members of our society, including the construction of the supporting infrastructure and other
facilities" (Pres. Decree No. 1224, par. 1). This definition was later expanded to include among
others:

a) The construction and/or improvement of dwelling units for the middle and lower income
groups of the society, including the construction of the supporting infrastructure and other
facilities;

b) Slum clearance, relocation and resettlement of squatters and slum dwellers as well as the
provision of related facilities and services;

c) Slum improvement which consists basically of allocating homelots to the dwellers in the
area or property involved, rearrangement and re-alignment of existing houses and other
dwelling structures and the construction and provision of basic community facilities and
services, where there are none, such as roads, footpaths, drainage, sewerage, water and
power system, schools, barangay centers, community centers, clinics, open spaces, parks,
playgrounds and other recreational facilities;
 d) The provision of economic opportunities, including the development of commercial and
industrial estates and such other facilities to enhance the total community growth; and

e) Such other activities undertaken in pursuance of the objective to provide and maintain
housing for the greatest number of people under Presidential Decree No. 757. (Pres. Decree
No. 1259, sec. 1)

x xxx

Specifically, urban renewal or redevelopment and the construction of low-cost housing is recognized
as a public purpose, not only because of the expanded concept of public use but also because of
specific provisions in the Constitution. The 1973 Constitution made it incumbent upon the State to
establish, maintain and ensure adequate social services including housing [Art. II, sec. 7]. The 1987
Constitution goes even further by providing that:

The State shall promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that provide adequate
social services, promote full employment, a rising standard of living and an improved quality of life
for all. [Art. II, sec. 9]

The state shall, by law, and for the common good, undertake, in cooperation with the private sector,
a continuing program of urban land reform and housing which will make available at affordable cost
decent housing and basic services to underprivileged and homeless citizens in urban centers and
resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the
implementation of such program the State shall respect the rights of small property owners. (Art. XIII,
sec. 9, Emphasis supplied)

Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and
significantly affects public health, safety, the environment and in sum, the general welfare. The
public character of housing measures does not change because units in housing projects cannot be
occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made,
for it is not possible to provide housing for all who need it, all at once.

Population growth, the migration to urban areas and the mushrooming of crowded makeshift
dwellings is a worldwide development particularly in developing countries. So basic and urgent are
housing problems that the United Nations General Assembly proclaimed 1987 as the "International
Year of Shelter for the Homeless" "to focus the attention of the international community on those
problems". The General Assembly is "[s]eriously concerned that, despite the efforts of Governments
at the national and local levels and of international organizations, the living conditions of the majority
of the people in slums and squatter areas and rural settlements, especially in developing countries,
continue to deteriorate in both relative and absolute terms." [G.A. Res. 37/221, Yearbook of the
United Nations 1982, Vol. 36, p. 1043-4]

In the light of the foregoing, this Court is satisfied that "socialized housing" falls within the confines of
"public use". It is, particularly important to draw attention to paragraph (d) of Pres. Dec. No. 1224
which should be construed in relation with the preceding three paragraphs. Provisions on economic
opportunities inextricably linked with low-cost housing, or slum clearance, relocation and
resettlement, or slum improvement emphasize the public purpose of the project. 62

It need only be added, at this juncture, that the "public use" requisite for the valid exercise of the
power of eminent domain is a flexible and evolving concept influenced by changing conditions. At
present, it may not be amiss to state that whatever is beneficially employed for the general welfare
satisfies the requirement of public use.63

 G.R. No. 131679, February 01, 2000 ]

CAVITE DEVELOPMENT BANK AND FAR EAST BANK AND TRUST
COMPANY, PETITIONERS, VS. SPOUSES CYRUS LIM AND LOLITA
CHAN LIM AND COURT OF APPEALS, RESPONDENTS.
Facts:
Rodolfo Guansing obtained a loan from Cavite Development Bank(CDB)  and offered as
security his real estate property. For failing to pay his loan the property was foreclosed and title
was issued in the name of CDB.
Now here comes Lolita Chan Lim, the respondent on this case who offered to buy the property
from CDB. Mrs. Lim paid P30,000.00 as option money and was issued receipt by CDB.
However ,Mrs. Lim later discovered that the title of the property is being disputed by Perfecto
Guansing, the father of the mortgagee Rodolfo Guansing. In fact, in a separate case it was
declared that Rodolfo fraudulently secured title to the said mortgaged property and title to it was
restored to Perfecto . The decision has since become final and executory.
Aggrieved by what she considered a serious misrepresentation by CDB and its mother company
FEBTC, on their ability to sell the subject property, filed an action for specific performance and
damage against petitioners.

Issues: Was the sale between CDB and Mrs. Lim perfected?
Is CDB liable for damges?
Is the sale valid?

Decision: Contracts are not defined by the parties thereto but by the principles of law. In
determining the nature of a contract, the courts are not bound by the name or title given to it by
the contracting parties. In the case at bar, the sum of P30,000.00, although denominated in the
offer to purchase as “option money’ is actually in the nature of  “earnest money’ or down
payment when considered with the other terms of the offer.
It is because when Mrs. Lim offered to buy the property the 10% so called “option money” forms
part of the purchase price as contemplated under Art. 1482 of the Civil Code. It is clear then that
the parties in this case actually entered into a contract of sale, partially consummated as to the
payment of the price.
CDB cannot invoke the defense that it is a mortgagee in good faith. It only applies to private
individuals and not to banking institutions. They cannot be excused from the duty of exercising
the due diligence required of banking institutions. It is standard practice for banks, before
approving a loan, to investigate who are the real owners thereof. Banking is affected with public
interest that is why they are expected to exercise more care and prudence than private
individuals.
Considering CDB’s negligence it is therefore liable for damages.
As to its validity, the doctrine of “Nemodat quod non habet” applies. One cannot give what one
does not have. The seller not being the owner the sale is void.

Heirs of Salvador Hermosilla vs. Spouses Remoquillo

FACTS:
The subject property is a 65 sq.m. lot located in the San Pedro TunasanHomesite. This Homesite
was acquired by the Republic of the Philippines in 1931. ApolinarioHermosilla(Apolinario) was
occupying a lot in such homesite until his death in 1964. He caused the subdivision of the lots
into two, Lot 12 and Lot 19, with the same area of 341 sq. m. The 65sq.m. subject of this
controversy forms part of Lot 19.In 1962, Apolinario made a deed of assignment transferring
possession of Lot 19in favor of his grandson, Jaime Remoquillo. The Land Tenure
Administration later found that Lot 19 is still available for qualified applicants. Jaime, being its
occupant filed an application in 1963.
On that same year, Apolinario conveyed Lot 12 to his son Salvador. He filed for anapplication to
purchase the said lot, which the LTA granted in 1971.In 1972, Jaime and Salvador made a
Kasunduan whereby Jaime transferredownership of the 65 sq.m. in Lot 19 in favor of Salvador.
In 1986, the NHA (then LTA)awarded Lot 19 to Jaime, for which he and his wife were issued a
title. The petitioners filed for the annulment of the title on the ground of fraud becauseby the
virtue of the Kasunduan, the 65 sq.m. in Lot 19 were already conveyed to Salvador.
The trial court held that the petitioners were co-owners of the subject propertyand allowed for
the action for specific performance. The CA reversed the trial court’sdecision, rendering the
Kasunduan void because at the time of its execution (1972), the lotwas still owned by the
Republic of the Philippines. Hence, no right was transferred to Jaime,who was awarded the lot in
1986 and no right was transferred by Salvador to the petitioners. Also, the CA held that the
action had prescribed, it having been filed in 1992,more than four years from the issuance of the
title to the spouses Remoquillo.
Hence, this petition.

ISSUE:
(1)Whether or not the property was acquired by the spouses Remoquillo through fraud which by
force of law, considered them trustees of an implied trusts
(2)Whether or not the prescriptive period to recover the property obtained by fraud is applicable
in the case at bar
HELD:
(1) NO. The property was previously a public land, petitioners have no personality to impute
fraud or misrepresentation against the State or violation of the law.
If the title was in fact fraudulently obtained, it is the State which should file the suit to recover
the property through the Office of the Solicitor General. The title originated from a grant by the
government, hence, its cancellation is a matter between the grantor and the grantee. At all events,
for an action for reconveyance based on fraud to prosper, the petitioners must prove by clear and
convincing evidence not only his title to the property but also the fact of fraud. Fraud is never
presumed.
Intentional acts to deceive and deprive another of his right, or in some manner injure him must
be specifically alleged and proved by the petitioners by clear and convincing evidence.
Petitioners failed to discharge this burden.

(2) NO. From the allegations of the Complaint, petitioners seek the reconveyance of the property
based on implied trust. The prescriptive period for the reconveyanceof fraudulently registered
real property is 10 years, reckoned from the date of the issuance of the certificate of title, if the
plaintiff is not in possession, but imprescriptible if he is in possession of the property.It is
undisputed that petitioners’ houses occupy the questioned property and thatrespondents have not
been in possession thereof. Since there was no actual need to reconvey the property as petitioners
remained in possession thereof, the action took the nature of a suit for quieting of title, it having
been filed to enforce an alleged implied trust after Jaime refused to segregate title over Lot
19.One who is in actual possession of a piece of land claiming to be the owner thereof may wait
until his possession is disturbed or his title is attacked before taking steps to vindicate his right.
From the body of the complaint, this type of action denotes imprescriptibility.
In Summary:
The CA, reversing the decision of the trial court, held that the ‘Kasunduan’ was void because at
the time of its execution in 1972, the Republic of the Philippines was still the owner of Lot 19,
hence, no right thereover was transmitted by Jaime who was awarded the said lot in 1986, and
consequently, no right was transmitted by Salvador through succession to petitioners. And it
found no evidence of fraud in Jaime's act of having Lot 19, including the questioned property,
registered in his and his wife's name in 1987.

As priorly stated, when the Kasunduan was executed in 1972 by Jaime in favor of Salvador -
petitioners' predecessor-in-interest - Lot 19, of which the questioned property forms part, was
still owned by the Republic. Nemodat quod no habet, Nobody can give what he does not possess.
Jaime could not thus have transferred anything to Salvador via the Kasunduan.