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Eminent Domain, A Study Guide

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EMINENT DOMAIN: COMPREHENSIVE STUDY GUIDE

Article III, Section 9 - 1987 Philippine Constitution

I. CONSTITUTIONAL TEXT

Section 9. Private property shall not be taken for public use without just compensation.

II. NATURE AND DEFINITION

A. Definition and Constitutional Basis

Duka Commentary: Duka defines the power of eminent domain as "the inherent power of the state to take, or to authorize the taking of, private property for a public use provided the owner is paid just compensation." Eminent domain is also often referred to as expropriation or condemnation. Like police power and taxation, eminent domain is an inherent power of sovereignty. It need not be clothed with any constitutional gear to exist; instead, provisions in our Constitution on the subject are meant more to regulate, rather than to grant, the exercise of the power.

Duka emphasizes that eminent domain is generally 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 forced purchase by the State. It is a right to take or reassert dominion over property within the state for public use or to meet a public exigency. It is said to be an essential part of governance even in its most primitive form and thus inseparable from sovereignty. The only direct constitutional qualification is that "private property shall not be taken for public use without just compensation." This proscription is intended to provide a safeguard against possible abuse and so to protect the individual against whose property the power is sought to be enforced.

Bernas Commentary: Bernas emphasizes that eminent domain is the ultimate right of the sovereign power to appropriate not only public but also private property of all citizens within the territorial sovereignty for public purpose. It is an inherent power of the State that need not be granted even by the fundamental law. Section 9, Article III merely imposes a limit on the government's exercise of this power by mandating that private property shall not be taken for public use without just compensation.

Cruz Commentary: Cruz describes the power of eminent domain as the power of the state to take private property for public use upon payment of just compensation. This is an inherent power possessed by the State and exercised by the national government.

B. Scope and Nature

Duka Commentary: Duka notes that Article III, Section 9(1) of the Constitution provides a substantive guarantee that private property that is taken by the state for public use should be paid for with just compensation. If the state does not agree with the property owner on a price, the state, through the competent government agency, should file the proper expropriation action under Rule 67 of the Revised Rules of Court.

Bernas Commentary: Bernas explains that the scope of the power is, like the scope of legislative power itself, plenary when exercised by Congress. The power is dormant until the Legislature sets it in motion. The exercise of eminent domain is by tradition lodged with the executive arm of government, though it requires legislative authorization.

Cruz Commentary: Cruz notes that anything that can come under the dominion of man is subject to expropriation, including real and personal, tangible and intangible properties. A franchise is a property right and may be expropriated. Churches and religious properties are likewise expropriable notwithstanding the principle of separation of Church and State. Even cemeteries may when necessary be taken under the power of eminent domain.

C. Exceptions to Expropriable Property

Cruz Commentary: Cruz explains that the only exceptions are money and choses in action. Expropriation of money would be futile because of the requirement for payment of just compensation, usually also in money. A chose in action is "a personal right not reduced into possession but recoverable by a suit at law" and is essentially conjectural both as to its validity and value.

D. Eminent Domain as an Effective Means

Duka Commentary: Duka observes that eminent domain may be the most effective, as well as the speediest means by which public goals may be accomplished. Not only does it enable immediate possession after satisfaction of the requisites under the law, it also has a built-in procedure through which just compensation may be ascertained.

E. Necessary Derogation of Private Rights

Duka Commentary: Duka emphasizes that the exercise of the power of eminent domain necessarily involves a derogation of a fundamental right. It greatly affects a landowner's right to private property which is a constitutionally protected right necessary for the preservation and enhancement of personal dignity and is intimately connected with the rights to life and liberty. Thus, whether such power is exercised directly by the State or by its authorized agents, the exercise of such power must undergo painstaking scrutiny.

Duka stresses that the exercise of the power of eminent domain drastically affects a landowner's right to private property, which is as much a constitutionally-protected right necessary for the preservation and enhancement of personal dignity and intimately connected with the rights to life and liberty. Whether directly exercised by the State or by its authorized agents, the exercise of eminent domain is necessarily in derogation of private rights. For this reason, the need for a painstaking scrutiny cannot be over-emphasized.

III. ESSENTIAL ELEMENTS OF EMINENT DOMAIN

A. The Three Constitutional Requirements

Bernas Commentary: Bernas identifies the elements as: (1) there is "taking" of private property; (2) the taking must be for needed "public use;" (3) there must be "just compensation."

B. Requisites of Taking

Duka Commentary: Duka outlines the following requisites that must be present in the taking of a property under eminent domain:

  1. The expropriator must enter a private property
  2. The entry must be for more than a momentary period
  3. The entry must be under a warrant or color of authority
  4. The property must be devoted to public use or otherwise informally appropriated or injuriously affected
  5. The utilization of the property must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property

Bernas Commentary: Bernas notes that the following circumstances must concur: the expropriator must enter upon the private property; the entrance must not be for a momentary period (must be permanent); the entry must be under warrant or color of legal authority; the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and the utilization of the property must oust the owner and deprive him of all beneficial enjoyment.

Cruz Commentary: Cruz explains that taking imports a physical dispossession of the owner, but in law has a broader connotation. Taking may include trespass without actual eviction, material impairment of property value, or prevention of ordinary uses for which the property was intended.

IV. CONCEPT OF "TAKING"

A. Beyond Physical Dispossession

Duka Commentary: Duka explains that taking under the power of eminent domain may be defined as entering upon private property for more than a momentary period, and, under the warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as substantially to oust the owner and deprive him of all beneficial enjoyment thereof.

Duka further notes that while expropriation normally involves a taking of title to and possession of the property, an easement of right of way on a private property can be considered a taking under eminent domain under certain conditions. There is "taking" of property under the power of eminent domain: (1) when the owner is actually deprived or dispossessed of his property; or (2) when there is a practical destruction or a material impairment of the value of his property; or (3) when he is deprived of the ordinary use of his property; or (4) when he is deprived of the jurisdiction, supervision and control of his property.

Bernas Commentary: Bernas explains that although eminent domain usually involves a taking of title, there may also be compensable taking of only some, not all, of the property interests in the bundle of rights that constitute ownership. Taking may include trespass without actual eviction, material impairment of property value, or prevention of ordinary uses such as establishment of an easement.

Cruz Commentary: Cruz notes that where farmland is permanently inundated because of construction of a dam nearby, the owner prevented from planting is entitled to compensation although he remains in possession. If government planes fly over private property at such low altitude as to practically touch the tops of trees, there would be such intrusion into the superjacent rights as to entitle the owner to payment although there is no divestiture of title.

B. Examples of Compensable Taking

Bernas Commentary: Bernas explains that the right-of-way easement resulting in restriction or limitation on property rights over land traversed by transmission lines falls within the ambit of expropriation. Where entry into private property is not just a simple right-of-way but for conducting mining activities such as exploration, extraction and processing of minerals, there is compensable taking as this will oust owners from beneficial ownership.

Cruz Commentary: Cruz provides examples of compensable taking:

C. Types of Taking

Duka Commentary: Duka identifies two different types of taking:

  1. Possessory taking - occurs when the government confiscates or physically occupies property
  2. Regulatory taking - occurs when the government's regulation leaves no reasonable economically viable use of the property

Duka explains that the Constitution expressly provides in Article III, Section 9 that "private property shall not be taken for public use without just compensation." The provision is the most important protection of property rights in the Constitution. This is a restriction on the general power of the government to take property. The constitutional provision is about ensuring that the government does not confiscate the property of some to give it to others. In part too, it is about loss spreading. If the government takes away a person's property to benefit society, then society should pay. The principal purpose of the guarantee is "to bar the Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."

D. Regulatory Taking

Duka Commentary: Duka discusses regulatory taking extensively, noting that in the landmark case of Pennsylvania Coal v. Mahon, it was held that a taking could also be found if government regulation of a certain magnitude requires exercise of eminent domain and compensation to support the act. While property may be regulated to a certain extent, if regulation goes too far, it will be recognized as a taking.

Duka explains that no formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking. The issue of when regulation constitutes a taking is a matter of considering the facts in each case. The Court asks whether justice and fairness require that the economic loss caused by public action must be compensated by the government and thus borne by the public as a whole, or whether the loss should remain concentrated on those few persons subject to the public action.

What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. A regulation that permanently denies all economically beneficial or productive use of land is, from the owner's point of view, equivalent to a "taking" unless principles of nuisance or property law that existed when the owner acquired the land make the use prohibitable. When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.

Duka further notes that a regulation which denies all economically beneficial or productive use of land will require compensation under the takings clause. Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations, and the character of government action. These inquiries are informed by the purpose of the takings clause which is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.

Duka adds that a restriction on use of property may also constitute a "taking" if not reasonably necessary to the effectuation of a substantial public purpose or if it has an unduly harsh impact on the distinct investment-backed expectations of the owner.

E. Non-Compensable Taking Under Police Power

Cruz Commentary: Cruz clarifies that not every taking is compensable, as it may be justified under the police power. A building on the verge of collapse may be ordered demolished in the interest of public safety, and the owner will not be entitled to payment even if completely deprived of property. The property subject of expropriation must be wholesome, as it is intended for public use—this differs from property taken under police power, which is noxious.

V. PUBLIC USE

A. Evolution of the Concept

Duka Commentary: Duka explains that the term "public use" not having been otherwise defined by the Constitution, must be considered in its general concept of meeting a public need or a public exigency. Public use has been broadened to include not only uses directly available to the public but also those which redound to their indirect benefit; that only a few would actually benefit from the expropriation of the property does not necessarily diminish the essence and character of public use.

Duka emphasizes that public use is not limited to the use by the public. The validity of the exercise of the power of eminent domain for traditional purposes is beyond question; it is not at all to be said, however, that public use should thereby be restricted to such traditional uses. The idea that "public use" is strictly limited to clear cases of "use by the public" has long been discarded.

Bernas Commentary: Bernas notes that time was when "public use" was understood to mean "use by the public." Public use is sometimes equated with public necessity. Public use is now equivalent to "public welfare" in police power. Expropriation for socialized housing, for instance, is for public use.

Cruz Commentary: Cruz explains that public use as traditionally understood as actual use by the public has been abandoned. The requirement of public use means the expropriator must use the property for the purpose specified in the petition. If this is not done, the expropriator must return the property, even if there was no agreement for reversal.

B. Modern Interpretation

Bernas Commentary: Bernas notes that the establishment of a pilot development center that would inure to direct benefit and advantage of the people is for public purpose. The housing project satisfies the public purpose requirement. Slum clearance is regarded as a valid object of expropriation under the modern expanded interpretation of public use.

Cruz Commentary: Cruz explains that public use is now synonymous with public interest, public benefit, public welfare and public convenience, including the broader notion of indirect public benefit or advantage. Mining industry plays a pivotal role in economic development and is indisputably an industry of public benefit.

C. Judicial Review of Public Use

Duka Commentary: Duka explains that when the power of eminent domain is exercised by the legislative body (Congress), the question of necessity is generally a political question. However, when it is exercised by the delegate, the question of necessity is a justiciable question.

Duka notes that it is the rule in this jurisdiction that private property may be expropriated for public use and upon payment of just compensation; that condemnation of private property is justified only if it is for the public good and there is a genuine necessity therefor of a public character. Consequently, the courts have the power to inquire into the legality of the exercise of the right of eminent domain and to determine whether or not there is a genuine necessity therefore.

Bernas Commentary: Bernas explains that as a rule, the determination of whether there is genuine necessity for the exercise of eminent domain is a justiciable question. However, when the power is exercised by the Legislature, the question of necessity is essentially a political question.

When expropriation is done not directly by the legislative authority but by another government agency or municipal corporation in virtue of an authorizing statute which neither specifies the purpose nor the property to be taken, the courts must enforce the constitutional provision and can look into the necessity of the taking.

D. Abandonment of Public Use

Duka Commentary: Duka explains that once expropriated, change of public use is of no moment. It is well within the rights of the condemnor as owner to alter and decide its use so long as it still for public use.

Duka further explains that if the 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 when the purpose is terminated or abandoned the former owner reacquires the property so expropriated. If the 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 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.

However, if the decree of expropriation gives to the entity a fee simple title, then 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. 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.

Duka emphasizes that 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.

Duka concludes 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.

Bernas Commentary: Bernas notes that the predominant precept is that upon abandonment of real property condemned for public purpose, the party who originally condemned the property recovers control if the condemning party continues to use the property for public purpose. However, if the condemning authority ceases to use the property for public purpose, property reverts to the owner in fee simple.

VI. JUST COMPENSATION

A. Definition and Nature

Duka Commentary: Duka explains that just compensation is qualified by the word "just" to convey that the equivalent must be real, substantial, full, and fair; the value of the property must be determined either as of the date of the taking of the property or the filing of the complaint, whichever came first.

Bernas Commentary: Bernas describes just compensation as "the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation." It means payment that matches "market value."

Cruz Commentary: Cruz explains that just compensation is a full and fair equivalent of the property taken from the private owner by the expropriator, intended to indemnify the owner fully for the loss sustained. The measure is not the taker's gain but the owner's loss. The word "just" intensifies the meaning of "compensation," to convey that the equivalent shall be real, substantial, full, ample.

B. Market Value Standard

Duka Commentary: Duka notes that in eminent domain or expropriation proceedings, the general rule is that the just compensation to which the owner of condemned property is entitled to is the market value—the price agreed on by a purchaser desirous but not compelled to buy, and an owner willing but not compelled to sell, would agree on as a price to be given and received therefor.

Duka explains that it has been consistently held that the property's fair market value is the just compensation to which the owner of condemned property is entitled. Market value is the price agreed on by a willing buyer and willing seller, both of whom are not compelled to enter into the transaction. It has also been described as the amount fixed in the open market in the usual and ordinary course of legal trade and competition.

Duka further notes that fair market value is the price that may be agreed upon by the parties who are willing but not compelled to enter into a contract of sale. For the purpose of appraisal, the fair market value of the property is taken into account and such value refers to the highest price in terms of money which a property will bring if exposed for sale in the public market.

Bernas Commentary: Bernas explains that market value is the price that may be agreed upon by parties willing but not compelled to enter into a contract of sale. The price fixed by buyer and seller in the open market in the usual and ordinary course of legal trade and competition; the fair value of property as between one who desires to purchase and one who desires to sell.

Cruz Commentary: Cruz notes that however, compensation must be fair not only to the owner but also to the expropriator. Payment in excess of the full and fair equivalent of the loss, being prejudicial to the public, will not satisfy the requirement of just compensation.

C. Components of Just Compensation

Duka Commentary: Duka explains that where the entire property is not expropriated, the general rule is modified. In such a case the owner is not restricted to compensation for the portion actually taken. In addition to the market value of the portion taken, he is also entitled to recover for the consequential damage, if any, to the remaining part of the property. At the same time, from the total compensation must be deducted the value of the consequential benefits.

Duka further notes that the award of consequential damages is specifically enunciated under Section 6 of Rule 67, which provides that the commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owner from the public use or purpose of the property taken. However, in no case shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual value of his property so taken.

Accordingly, if as a result of expropriation, the remaining portion of the property suffers from impairment or decrease in value, the award of consequential damages is proper. On the other hand, if the expropriation resulted in benefits to the remaining lot, such consequential benefits may be deducted from the consequential damages or from the value of the expropriated property. However, such consequential benefits refer to the actual benefits derived by the landowner which are the direct and particular results of the improvements made by the expropriating authority.

Bernas Commentary: Bernas explains that just compensation includes:

Where the entire property is not expropriated, there should be added to the basic value the owner's consequential damages after deducting consequential benefits arising from expropriation. If consequential benefits exceed consequential damages, these items should be disregarded as the basic value should be paid in every case.

Cruz Commentary: Cruz notes that according to Knecht v. Court of Appeals, the term "owner" in eminent domain cases refers to all those who have lawful interest in the property to be condemned, including a mortgagee, a lessee and a vendee in possession under an executory contract.

D. Time of Valuation

Duka Commentary: Duka explains that the value of the property must be determined either as of the date of the taking of the property or the filing of the complaint, whichever came first. Section 4, Rule 67 of the Rules of Court provides that just compensation is to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first.

Bernas Commentary: Bernas notes that the general rule is that the value must be that as of the time of filing of the complaint for expropriation (Section 4, Rule 67, Rules of Court). Moreover, filing generally coincides with the taking. When filing comes later than taking and the value increased because of the use to which the expropriator put it, the value is that of the earlier taking. Otherwise the owner would gain undeserved profit. But if value increased independently of what the expropriator did, then the value is that of the later filing.

Cruz Commentary: Cruz explains that the property should be assessed as of the time of the taking, which usually coincides with commencement of expropriation proceedings. Where entry precedes filing of complaint for expropriation, assessment should be made as of time of entry.

E. Determination of Just Compensation

Duka Commentary: Duka notes that the determination of just compensation could very well be agreed upon by the parties without judicial intervention.

Bernas Commentary: Bernas explains that in Export Processing Zone v. Dulay, just compensation provisions of P.D. 42 and similar decrees were declared unconstitutional as they constitute impermissible encroachment on judicial prerogatives. The determination of just compensation is essentially a judicial function. Although court technically would still have power to determine just compensation, following the decrees its task would be relegated to simply stating the lower value as declared either by owner or assessor.

F. Interest on Just Compensation

Cruz Commentary: Cruz notes that the owner is entitled to payment of interest from the time of taking until just compensation is actually paid. Interests must be claimed, however, or are deemed waived. Taxes paid from time of taking until transfer of title, during which owner did not enjoy beneficial use, are reimbursable.

G. Non-Payment and Right to Recover

Cruz Commentary: Cruz explains that in Republic v. Lim, while the prevailing doctrine is that non-payment does not entitle the private landowner to recover possession of expropriated lots, in cases where government failed to pay compensation within five years from finality of judgment in expropriation proceedings, the owner shall have the right to recover possession. The government cannot keep the property and dishonor the judgment. The five-year period should encourage government to pay just compensation punctually, keeping with justice and equity.

VII. PROCEDURAL ASPECTS

A. Procedure for Expropriation

Duka Commentary: Duka explains that expropriation proceedings, or the procedure to enforce the power of eminent domain, are governed by Rule 67 of the Rules of Court. There are two stages in every action for expropriation: first, condemnation of the property after determination that its acquisition is for public purpose; and, second, the ascertainment of just compensation.

During the condemnation stage, the court may either issue: (1) an order of expropriation, declaring that the plaintiff has a lawful right to take the property sought to be condemned for public use or purpose; or (2) an order of dismissal, if it appears that the expropriation is not for some public use.

Duka notes that Rule 67 presupposes a prior filing of a complaint by the expropriator for eminent domain with the appropriate court. If no such complaint is filed, the expropriator is considered to have violated procedural requirements and, hence, waived the usual procedure prescribed in Rule 67.

B. Inverse Condemnation

Duka Commentary: Duka explains that in case of a taking without the proper expropriation action filed, the property owner may file its own action to question the propriety of the taking or to compel the payment of just compensation. Among these inverse condemnation actions are a complaint for payment of just compensation and damages.

When an inverse condemnation is filed, the provisions for the appointment of commissioners under Rule 32—not Sections 5, 6, 7, or 8 of Rule 67 of the Rules of Court—will be followed.

C. Entry Before Full Payment

Bernas Commentary: Bernas notes that for purposes of entry into property prior to full payment, Section 10 of R.A. No. 7160 requires deposit with proper court of at least fifteen percent (15%) of fair market value based on current tax declaration. However, where expropriation is for public works, R.A. 8974 requires prior full payment.

Cruz Commentary: Cruz explains that title to property shall not be transferred until after actual payment of just compensation is made to the owner.

D. Commissioners in Expropriation

Bernas Commentary: Bernas explains that for purposes of determining just compensation, commissioners are required and cannot be dispensed with. The powers given to commissioners are discretionary, their task is not "mere mechanical work," and their valuation cannot be reversed by courts unless "palpably excessive or inadequate." Trial by commissioners is a substantive right which a judge may not dispense with.

VIII. WHO MAY EXERCISE THE POWER OF EMINENT DOMAIN

A. General Rule: Lodged in the Legislature

Duka Commentary: Duka explains that eminent domain, which is the power of a sovereign state to appropriate private property to particular uses to promote public welfare, is essentially lodged in the legislature. While such power may be validly delegated to local government units (LGUs), other public entities and public utilities, the exercise of such power by the delegated entities is not absolute. In fact, the scope of delegated legislative power is narrower than that of the delegating authority and such entities may exercise the power to expropriate private property only when authorized by Congress and subject to its control and restraints imposed through the law conferring the power or in other legislations.

Duka emphasizes that LGUs by themselves have no inherent power of eminent domain. Thus, strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but "inferior" since it must conform to the limits imposed by the delegation and thus partakes only of a share in eminent domain. The national legislature is still the principal of the LGUs and the latter cannot go against the principal's will or modify the same.

Duka notes that the power of eminent domain is generally lodged in the legislature, but may also be validly delegated to:

  1. The President
  2. Lawmaking bodies of LGUs
  3. Public corporations
  4. Quasi-public corporations

B. Local Government Units

Duka Commentary: Duka explains that local government units have no inherent power of eminent domain and can exercise it only when expressly authorized by the legislature. By virtue of Republic Act No. 7160, Congress conferred upon local government units the power to expropriate.

C. Public Corporations

Duka Commentary: Duka explains that the true criterion to determine whether a corporation is public or private is found in the totality of the relation of the corporation to the State. If the corporation is created by the State as the latter's own agency or instrumentality to help it in carrying out its governmental functions, then that corporation is considered public; otherwise, it is private.

Applying this test, provinces, chartered cities, and barangays can best exemplify public corporations. They are created by the State as its own device and agency for the accomplishment of parts of its own public works.

IX. EMINENT DOMAIN DISTINGUISHED FROM POLICE POWER

Cruz Commentary: Cruz distinguishes the two powers:

Police Power:

Eminent Domain:

Bernas Commentary: Bernas notes that while both have general welfare as their object, property condemned under police power is usually noxious without compensation, while property taken under eminent domain must be for public use with just compensation.

X. EXPROPRIATION BY LOCAL GOVERNMENTS

Bernas Commentary: Bernas explains that the power of eminent domain has been given to local governments by the Local Government Code. Essential requisites are that it must be:

The power requires: (1) ordinance enacted by local legislative council authorizing the local chief executive on behalf of the LGU, (2) exercise for public use, purpose or welfare, or for benefit of the poor and landless, (3) payment of just compensation, and (4) valid and definite offer previously made to the owner.

XI. EMINENT DOMAIN AND CONTRACTS

Bernas Commentary: Bernas explains that expropriation lies only when it is made necessary by opposition of the owner to the sale or by lack of any agreement as to price. Where there is valid and subsisting contract between owners and expropriating authority, there is no reason for expropriation. The state may not waive its right to exercise an inherent power through contract.

XII. JUDICIAL REVIEW

Bernas Commentary: Bernas notes that the exercise of eminent domain powers is subject to judicial review as to:

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it applies to specific issues decided in a previous case. A final judgment dismissing an expropriation suit on the ground of no prior offer cannot bar the State from thereafter complying with this requirement and subsequently exercising eminent domain over the same property.

XIII. INTEGRATED CASE APPLICATIONS

CASE 1: REPUBLIC v. TAGLE (G.R. No. 129079, December 2, 1998)

Focus: Writ of Possession in Expropriation

Facts: The Republic sought to expropriate private property for public use but was already in physical possession of the property. The trial court refused to issue a writ of possession, reasoning that the government already occupied the property.

Issue: Whether the trial court has a ministerial duty to issue a writ of possession in expropriation proceedings even when the expropriator is already in physical possession of the property.

Held: The Supreme Court held that the trial court has a ministerial duty to issue a writ of possession when the required deposit is made under E.O. 1035, and cannot refuse based on the expropriator's existing physical possession.

Ratio Decidendi: Expropriation of real property does not include mere physical entry or occupation of land. Although eminent domain usually involves taking of title, there may be compensable taking of only some property interests in the bundle of rights that constitute ownership. Physical entry and occupation fall short of taking of title, which includes all rights exercisable by an owner. The petitioner sought to acquire not only physical possession but also the legal right to possess and ultimately own the subject property.

Expropriation proceedings serve to prevent the government from being ejected from property needed for public use. The writ of possession is both necessary and practical—without it, the expropriator would first vacate pursuant to ejectment judgment, then soon afterwards seek writ pursuant to expropriation proceedings, causing bureaucratic waste and pernicious delay.

Key Principles Established:

  1. "Taking" requires legal formalization, not just physical presence
  2. Physical possession does not equal legal right to possess
  3. Courts have ministerial duty to issue writs upon proper deposit
  4. Ejectment suits should not prevail over State's power of eminent domain

Integration with Constitutional Text and Commentary:

Bernas: The case exemplifies the principle that eminent domain is an inherent power needing no grant from the fundamental law—Section 9 merely imposes limits. The ministerial duty of courts to issue writs upon deposit reflects the legislative policy of expediting public projects.

Cruz: This demonstrates that taking includes not just physical dispossession but legal rights to property. The requirement for writ of possession even when already in physical occupation shows that eminent domain seeks to formalize all property rights in the expropriator.

CASE 2: DESAMA v. GOZUN (G.R. No. 157882, March 30, 2006)

Focus: Taking of Private Property in Mining Operations

Facts: Section 76 of R.A. 7942 (Mining Act) provides for entry of mining right holders into private property and payment of just compensation. Property owners challenged this as unconstitutional taking without proper expropriation proceedings.

Issue: Whether mining operations under Section 76 of R.A. 7942 constitute compensable "taking" under eminent domain requiring just compensation.

Held: The Supreme Court held that mining operations constitute compensable taking under eminent domain. Section 76 is a valid taking provision that constitutes valid exercise of eminent domain, with mining for public benefit justifying taking, and the law providing for just compensation with judicial determination remaining available.

Ratio Decidendi: The entry granted under Section 76 of R.A. 7942 is not ordinary Civil Code right-of-way. Mining right holders may build warehouses, port facilities, electric transmission lines, railroads and other infrastructures that will substantially oust owners or occupants from beneficial ownership. Taking occurs once mining operations commence.

The case demonstrates the modern evolution of "public use" from literal use by the public to public benefit. Mining industry plays pivotal role in economic development and is indisputably for public benefit, justifying taking from private persons for public use.

Key Principles Established:

  1. Taking includes substantial interference with beneficial use even without complete ouster
  2. Mining operations are more than mere easement—they constitute compensable taking
  3. "Public use" includes public benefit through economic development
  4. Just compensation provisions can be preliminary administrative determinations subject to judicial review

Integration with Constitutional Text and Commentary:

Bernas: The case illustrates that taking includes "trespass without actual eviction, material impairment of the value of the property or prevention of the ordinary uses for which the property was intended." Mining operations preventing normal agricultural use constitute such taking.

Cruz: This exemplifies that taking may include "material impairment of the value of the property or prevention of the ordinary uses for which the property was intended" even when owner retains technical possession.

Duka: The case demonstrates that regulation substantially depriving owner of proprietary rights and restricting beneficial use and enjoyment for public use amounts to compensable taking. The evolution of mining laws shows legislative recognition that mining operators need eminent domain authority.

CASE 3: NATIONAL POWER CORPORATION v. ANGAS (G.R. Nos. 60225-26, May 8, 1992)

Focus: Legal Interest Rate on Just Compensation

Facts: NPC expropriated property and delayed payment of just compensation. The trial court awarded interest at 12% per annum under Central Bank Circular No. 416. NPC challenged the interest rate, arguing that 6% under Article 2209 of the Civil Code should apply.

Issue: What is the proper interest rate applicable to delayed payment of just compensation in expropriation proceedings?

Held: The Supreme Court held that the proper interest rate is 6% per annum under Article 2209 of the Civil Code, not 12% under Central Bank Circular No. 416.

Ratio Decidendi: Just compensation includes not only correct determination of amount but also timely payment. Interest compensates for delay in payment from time of taking until actual payment. The interest is in the nature of indemnity for damages for delay in payment, not earnings from loans. Therefore, Article 2209 of the Civil Code (6% per annum) applies, not Central Bank Circular No. 416 (12% per annum for loan or forbearance of money).

The Court applied the principle of ejusdem generis—the general term "judgments" in Central Bank Circular 416 refers only to judgments involving loans or forbearance of money, goods or credits. In cases requiring payment of indemnities as damages in connection with delay other than loans, Article 2209 applies. The two provisions contemplate different situations with no conflict requiring implied repeal.

Key Principles Established:

  1. Just compensation includes temporal component—timely payment is essential
  2. Interest on delayed just compensation is damages for delay, not contractual interest
  3. Different types of legal interest apply depending on the nature of the obligation
  4. Compensation is not "just" if indefinitely delayed

Integration with Constitutional Text and Commentary:

Bernas: The concept of just compensation "embraces not only the correct determination of the amount to be paid to the owners of the land, but also payment within a reasonable time from its taking." Interest compensates for the delay component.

Cruz: "Without prompt payment, compensation cannot be considered just." The owner is "entitled to payment of interest from the time of the taking until just compensation is actually paid to him."

XIV. SYNTHESIS AND EXAMINATION STRATEGY

A. Interconnected Constitutional Principles

The three cases demonstrate how Section 9's simple text ("Private property shall not be taken for public use without just compensation") encompasses complex doctrines:

B. Evolution of Constitutional Understanding

Bernas, Cruz, and Duka commentaries reveal evolution from narrow to broad interpretations:

C. Key Points for Examination

Essential Elements:

  1. Taking - Physical or beneficial deprivation
  2. Public Use - Broadly construed as public benefit
  3. Just Compensation - Market value plus timely payment

Critical Distinctions:

Procedural Requirements:

For Bar Examinations:

  1. Always begin with constitutional text
  2. Identify which element is at issue: taking, public use, or just compensation
  3. Distinguish police power from eminent domain using the noxious/wholesome test
  4. Remember the three-part judicial review: adequacy, necessity, public use character
  5. Apply appropriate commentary based on the specific issue

D. Common Examination Issues

  1. Validity of taking - Test: Is there genuine public necessity?
  2. Adequacy of compensation - Test: Does it equal fair market value?
  3. Time of valuation - Rule: Date of taking or filing of complaint, whichever is earlier
  4. LGU expropriation - Requirements: Ordinance, public use, just compensation, prior valid offer
  5. Abandonment of public use - Effect: Property may revert to original owner

The ultimate principle, as Cruz, Bernas, and Duka would agree: Eminent domain serves the public welfare, but that welfare includes the protection of individual property rights through just compensation and proper procedure. The challenge lies in striking the proper balance between collective needs and constitutional protection of property rights.

End of Study Guide