Eminent Domain- Constitutional Law 2

8/19/2019 Eminent Domain- Constitutional Law 2

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EMINENT DOMAIN

MACTAN CEBU INTERNATIONAL V LOZADA

DECISION

NACHURA, J .:

This is a petition for review on certiorari under Rule

45 of the Rules of Court, seeking to reverse, annul,

and set aside the Decision[1] dated Feruar! "#, "$$%

and the Resolution["] dated Feruar! &, "$$& of the

Court of 'ppeals (C') (Ceu Cit!), Twentieth

Division, in C'*+R C- .o %5&/%

The antecedent facts and proceedings are as follows0

u2ect of this case is 3ot .o ##**"5$4" (3ot

.o ##), with an area of 1,$1& s6uare 7eters, 7ore or

less, located in 3ahug, Ceu Cit! 8ts original owner

was 'nastacio Deiparine when the sa7e was su2ectto e9propriation proceedings, initiated ! the

Repulic of the :hilippines (Repulic), represented !

the then Civil 'eronautics 'd7inistration (C''), for

the e9pansion and i7prove7ent of the 3ahug

'irport The case was filed with the then Court of

First 8nstance of Ceu, Third ;ranch, and docketed as

Civil Case .o R*1##1

's earl! as 1/4&, the lots were alread! occupied !the


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owners of the lots affected ! the e9propriation

proceedings would either not appeal or withdraw their

respective appeals in consideration of a co77it7ent

that the e9propriated lots would e resold at the pricethe! were e9propriated in the event that the 'T

would aandon the 3ahug 'irport, pursuant to an

estalished polic! involving si7ilar cases ;ecause of

this pro7ise, 3o=ada did not pursue his

appeal Thereafter, 3ot .o ## was transferred and

registered in the na7e of the Repulic under TCT .o

"5$5&

The pro2ected i7prove7ent and e9pansion plan of the

old 3ahug 'irport, however, was not pursued

3o=ada, with the other landowners, contacted then

C'' Director -icente Rivera, ?r, re6uesting to

repurchase the lots, as per previous agree7ent The

C'' replied that there 7ight still e a need for

the 3ahug 'irport to e used as an e7ergenc! DC*>

airport 8t reiterated, however, the assurance that

should this ffice dispose and resell the properties

which 7a! e found to e no longer necessar! as an

airport, then the polic! of this ffice is to give priorit!

to the for7er owners su2ect to the approval of the

:resident

n .ove7er "/, 1/#/, then :resident Cora=on C

'6uino issued a @e7orandu7 to the Depart7ent of

Transportation, directing the transfer of generalaviation operations of the 3ahug 'irport to

the @actan 8nternational 'irport efore the end of

1//$ and, upon such transfer, the closure of

the 3ahug 'irport

o7eti7e in 1//$, the Congress of the :hilippines

passed Repulic 'ct (R') .o %/5#, entitled 'n 'ct

Creating the @actan*Ceu 8nternational 'irport'uthorit!, Transferring A9isting 'ssets of the @actan

8nternational 'irport and the 3ahug 'irport to the

'uthorit!, -esting the 'uthorit! with :ower to

'd7inister and perate the @actan 8nternational

'irport and the 3ahug 'irport, and For ther

:urposes

Fro7 the date of the institution of the e9propriation

proceedings up to the present, the pulic purpose of

the said e9propriation (e9pansion of the airport) was

never actuall! initiated, reali=ed, or

i7ple7ented 8nstead, the old airport was converted

into a co77ercial co7ple9 3ot .o ## eca7e the

site of a 2ail known as Bagong Buhay Rehabilitation


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Complex, while a portion thereof was occupied !

s6uatters[>] The old airport was converted into what is

now known as the '!ala 8T :ark, a co77ercial area

Thus, on ?une 4, 1//%, petitioners initiated a

co7plaint for the recover! of possession and

reconve!ance of ownership of 3ot .o ## The case

was docketed as Civil Case .o CA;*1##"> and was

raffled to the Regional Trial Court (RTC), ;ranch

5&, Ceu Cit! The co7plaint sustantiall! alleged as

follows0

(a) pouses ;ernardo and Rosario 3o=ada

were the registered owners of 3ot .o## covered ! TCT .o /$45B

() 8n the earl! 1/%$s, the Repulic sought

to ac6uire ! e9propriation 3ot .o##, a7ong others, in connection with

its progra7 for the i7prove7ent and

e9pansion of the 3ahug'irportB (c) ' decision was rendered ! the Court

of First 8nstance in favor of the+overn7ent and against the landowners, a7ong who7 was ;ernardo

3o=ada, r appealed therefro7B

(d) During the pendenc! of the appeal, the parties entered into a co7pro7isesettle7ent to the effect that the

su2ect propert! would e resold to

the original owner at the sa7e pricewhen it was e9propriated in the eventthat the +overn7ent aandons

the 3ahug 'irportB (e) Title to 3ot .o ## was suse6uentl!

transferred to the Repulic of

the :hilippines (TCT .o "5$5&)B

(f) The pro2ected e9pansion andi7prove7ent of the 3ahug 'irport did not 7ateriali=eB

(g) :laintiffs sought to repurchase their

propert! fro7 then C'' Director -icente Rivera The latter replied !giving as assurance that priorit!would e given to the previous

owners, su2ect to the approval of the:resident, should C'' decide todispose of the propertiesB

(h) n .ove7er "/, 1/#/, then :residentCora=on C '6uino, through a@e7orandu7 to the Depart7ent of Transportation and Co77unications

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(DTC), directed the transfer of general aviation operations atthe 3ahug 'irport to the @actan*

Ceu 8nternational 'irport 'uthorit!B

(i) ince the pulic purpose for the

e9propriation no longer e9ists, the

propert! 7ust e returned to the plaintiffs[4]

8n their 'nswer, petitioners asked for the i77ediate

dis7issal of the co7plaint The! specificall! deniedthat the +overn7ent had 7ade assurances to reconve!

3ot .o ## to respondents in the event that the

propert! would no longer e needed for airport

operations :etitioners instead asserted that the

2udg7ent of conde7nation was unconditional, and

respondents were, therefore, not entitled to recover the

e9propriated propert! notwithstanding non*use or

aandon7ent thereof

'fter pretrial, ut efore trial on the 7erits, the parties

stipulated on the following set of facts0

(1) The lot involved is 3ot .o ##**

"5$4" of the ;anilad Astate, situated

in the Cit! of Ceu, containing anarea of ne Thousand eventeen(1,$1&) s6uare 7eters, 7ore or lessB

(") The propert! was e9propriated a7ongseveral other properties in 3ahug infavor of the Repulic of

the :hilippines ! virtue of aDecision dated Dece7er "/, 1/%1 of the CF8 of Ceu in Civil Case .o R*1##1B

(>) The pulic purpose for which the

propert! was e9propriated was for the purpose of the 3ahug 'irportB

(4) 'fter the e9pansion, the propert! was

transferred in the na7e of @C8''B

[and] (5) n .ove7er "/, 1/#/, then :resident

Cora=on C '6uino directed the

Depart7ent of Transportation andCo77unication to transfer generalaviation operations of the 3ahug'irport to the @actan*Ceu

8nternational 'irport 'uthorit! and toclose the 3ahug 'irport after suchtransfer[][5]

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During trial, respondents presented ;ernardo 3o=ada,

r as their lone witness, while petitioners presented

their own witness, @actan*Ceu 8nternational 'irport'uthorit! legal assistant @ichael ;acarisas

n ctoer "", 1///, the RTC rendered its Decision,

disposing as follows0

ARAFRA, in the light of theforegoing, the Court here! renders

2udg7ent in favor of the plaintiffs,;ernardo 3 3o=ada, r, and the heirs of Rosario @ercado, na7el!, -icente @3o=ada, @arcia 3 +odine=, -irginia 3

Flores, ;ernardo @ 3o=ada, ?r, Dolores3 +acasan, ocorro 3 Cafaro and Rosario@ 3o=ada, represented ! their attorne!*in*fact @arcia 3o=ada +odine=, and

against defendants Ceu*@actan8nternational 'irport 'uthorit! (@C8'')and 'ir Transportation ffice ('T)0

1 ordering @C8'' and 'T to

restore to plaintiffs the possession andownership of their land, 3ot .o ## :sd*

#"1 (*">#$>), upon pa!7ent of thee9propriation price to plaintiffsB and

" ordering the Register of Deeds to

effect the transfer of the Certificate of Title

fro7 defendant[s] to plaintiffs on 3ot .o

[##], cancelling TCT .o "$>5& in thena7e of defendant @C8'' and to issue anew title on the sa7e lot in the na7e of

;ernardo 3 3o=ada, r and the heirs of Rosario @ercado, na7el!0 -icente @3o=ada, @ario @ 3o=ada, @arcia 3+odine=, -irginia 3 Flores, ;ernardo @

3o=ada, ?r, Dolores 3 +acasan, ocorro3 Cafaro and Rosario @ 3o=ada

.o pronounce7ent as to costs RDARAD[%]

'ggrieved, petitioners interposed an appeal to the

C' 'fter the filing of the necessar! appellate riefs,

the C' rendered its assailed Decision dated Feruar!"#, "$$%, den!ing petitioners appeal and affir7ing in

toto the Decision of the RTC, ;ranch

5&, Ceu Cit! :etitioners 7otion for reconsideration

was, likewise, denied in the 6uestioned C' Resolution

dated Feruar! &, "$$&



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ence, this petition arguing that0 (1) the respondents

utterl! failed to prove that there was a repurchase

agree7ent or co7pro7ise settle7ent etween the7

and the +overn7entB (") the 2udg7ent in Civil Case .o R*1##1 was asolute and unconditional, giving

title in fee si7ple to the RepulicB and (>) the

respondents clai7 of veral assurances fro7

govern7ent officials violates the tatute of Frauds

The petition should e denied

:etitioners anchor their clai7 to the controverted propert! on the supposition that the Decision in the

pertinent e9propriation proceedings did not provide

for the condition that should the intended use of 3ot

.o ## for the e9pansion of the 3ahug 'irport e

aorted or aandoned, the propert! would revert to

respondents, eing its for7er owners :etitioners cite,

in support of this position, Fery v. Municipality of

Cabanatuan,[&] which declared that the +overn7ent

ac6uires onl! such rights in e9propriated parcels of

land as 7a! e allowed ! the character of its title

over the properties

8f 9 9 9 land is e9propriated for a particular purpose, with the condition that when that

purpose is ended or aandoned the propert! shall return to its for7er owner,then, of course, when the purpose is

ter7inated or aandoned the for7er owner

reac6uires the propert! so e9propriated 8f 9 9 9 land is e9propriated for a pulicstreet and the e9propriation is granted

upon condition that the cit! can only use itfor a pulic street, then, of course, whenthe cit! aandons its use as a pulic street,it returns to the for7er owner, unless there

is so7e statutor! provision to thecontrar! 9 9 9 8f, upon the contrar!,

however, the decree of e9propriation givesto the entit! a fee si7ple title, then, of course, the land eco7es the asolute propert! of the e9propriator, whether it ethe tate, a province, or 7unicipalit!, and

in that case the non*user does not have theeffect of defeating the title ac6uired ! thee9propriation proceedings 9 9 9

hen land has een ac6uired for pulic use in fee simple, unconditionally ,either ! the e9ercise of e7inent do7ainor ! purchase, the for7er owner retains

no right in the land, and the pulic use 7a! e aandoned, or the land 7a! e devotedto a different use, without an! i7pair7ent



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of the estate or title ac6uired, or an!reversion to the for7er owner 9 9 9[#]

Contrar! to the stance of petitioners, this Court

had ruled otherwise in Heirs of Timoteo Moreno and

Maria Rotea v. MactanCebu !nternational "irport

"uthority,[/] thus

@oreover, respondent @C8'' has rought

to our attention a significant and telling portion in the #ecision in Civil Case .o

R*1##1 validating our discern7ent that thee9propriation ! the predecessors of

respondent was ordered under the runningi7pression that 3ahug 'irport wouldcontinue in operation

's for the pulic purpose of the e9propriation proceeding,it cannot now e

douted 'lthough @actan 'irport is eing constructed, itdoes not take awa! the actualusefulness and i7portance of

the 3ahug 'irport0 it ishandling the air traffic othcivilian and 7ilitar! Fro7 itaircrafts fl! to @indanao and

-isa!as and pass thru it ontheir flights to the .orthand @anila Then, no

evidence $as adduced to

sho$ ho$ soon isthe Mactan "irport to be

placed in operation and

$hether

the %ahug"irport $ill be

closed immediately

thereafter. 8t is up to the other

depart7ents of the+overn7ent to deter7ine

said 7atters The Courtcannot sustitute its 2udg7entfor those of the saiddepart7ents or agencies !nthe absence of such sho$ing,

the Court $ill presume that

the %ahug "irport $ill

continue to be in operation

&emphasis supplied'.

hile in the trial in Civil Case .o R*1##1[we] could have si7pl! acknowledged the presence of pulic purpose for the e9ercise

of e7inent do7ain regardless of thesurvival of3ahug 'irport, the trial court inits #ecision chose not to do so ut instead prefi9ed its finding of pulic purpose upon

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its understanding that %ahug "irport $ill continue to be in operation. -eril!, these7eaningful state7ents in the od! of

the #ecision warrant the conclusion that

the e9propriated properties would re7ainto e so until it was confir7edthat 3ahug 'irport was no longer in

operation. This inference further i7pliestwo (") things0 (a) after the 3ahug 'irport ceased its undertakingas such and the e9propriated lots were not

eing used for an! airport e9pansion pro2ect, the rights vis**vis the e9propriated

3ots .os /1% and /"$ as etween thetate and their for7er owners, petitionersherein, 7ust e e6uital! ad2ustedB and ()the foregoing un7istakale declarations inthe od! of the #ecision should 7erge

with and eco7e an intrinsic part of the fallo thereof which under the pre7isesis clearl! inade6uate since the dispositive portion is not in accord with the findings

as contained in the od! thereof [1$]

8ndeed, the Decision in Civil Case .o R*1##1 should

e read in its entiret!, wherein it is apparent that the

ac6uisition ! the Repulic of the e9propriated lots

was su2ect to the condition that

the 3ahug 'irport would continue its operation The

condition not having 7ateriali=ed ecause the airport

had een aandoned, the for7er owner should then e

allowed to reac6uire the e9propriated propert![11]

n this note, we take this opportunit! to revisit our

ruling in Fery, which involved an e9propriation suit

co77enced upon parcels of land to e used as a site

for a pulic 7arket 8nstead of putting up a pulic

7arket, respondent Caanatuan constructed

residential houses for lease on the area Clai7ing that

the 7unicipalit! lost its right to the propert! takensince it did not pursue its pulic purpose, petitioner

?uan Fer!, the for7er owner of the lots e9propriated,

sought to recover his properties owever, as he had

ad7itted that, in 1/15,

respondent Caanatuan ac6uired a fee si7ple title to

the lands in 6uestion, 2udg7ent was rendered in favor

of the 7unicipalit!, following '7erican

2urisprudence, particularl! City of Fort (ayne v. %a)e

*hore + M.*. R. Co.,[1"] McConihay v. Theodore

(right,[1>] and Reichling v. Covington %umber Co.,[14] all unifor7l! holding that the transfer to a third

part! of the e9propriated real propert!, which

necessaril! resulted in the aandon7ent of the

particular pulic purpose for which the propert! was

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taken, is not a ground for the recover! of the sa7e !

its previous owner, the title of the e9propriating

agenc! eing one of fee si7ple

viousl!, Fery was not decided pursuant to our now

sacredl! held constitutional right that private propert!

shall not e taken for pulic use without 2ust

co7pensation[15] 8t is well settled that the taking of

private propert! ! the +overn7ents power of

e7inent do7ain is su2ect to two 7andator!

re6uire7ents0 (1) that it is for a particular pulic

purposeB and (") that 2ust co7pensation e paid to the propert! owner These re6uire7ents partake of the

nature of i7plied conditions that should e co7plied

with to enale the conde7nor to keep the propert!

e9propriated[1%]

@ore particularl!, with respect to the ele7ent of

pulic use, the e9propriator should co77it to use the

propert! pursuant to the purpose stated in the petition

for e9propriation filed, failing which, it should file

another petition for the new purpose 8f not, it is then

incu7ent upon the e9propriator to return the said

propert! to its private owner, if the latter desires to

reac6uire the sa7e therwise, the 2udg7ent of

e9propriation suffers an intrinsic flaw, as it would lack

one indispensale ele7ent for the proper e9ercise of

the power of e7inent do7ain, na7el!, the particular

pulic purpose for which the propert! will e

devoted 'ccordingl!, the private propert! owner would e denied due process of law, and the 2udg7ent

would violate the propert! owners right to 2ustice,

fairness, and e6uit!

8n light of these pre7ises, we now e9pressl! hold that

the taking of private propert!, conse6uent to the

+overn7ents e9ercise of its power of e7inent

do7ain, is alwa!s su2ect to the condition that the propert! e devoted to the specific pulic purpose for

which it was taken Corollaril!, if this particular

purpose or intent is not initiated or not at all pursued,

and is pere7ptoril! aandoned, then the for7er

owners, if the! so desire, 7a! seek the reversion of

the propert!, su2ect to the return of the a7ount of 2ust

co7pensation received 8n such a case, the e9ercise of

the power of e7inent do7ain has eco7e i7proper

for lack of the re6uired factual 2ustification[1&]

Aven without the foregoing declaration, in the instant

case, on the 6uestion of whether respondents were

ale to estalish the e9istence of an oral co7pro7ise

agree7ent that entitled the7 to repurchase 3ot .o ##

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should the operations of the 3ahug 'irport e

aandoned, we rule in the affir7ative

8t ears stressing that oth the RTC, ;ranch 5&, Ceuand the C' have passed upon this factual issue and

have declared, in no uncertain ter7s, that a

co7pro7ise agree7ent was, in fact, entered into

etween the +overn7ent and respondents, with the

for7er undertaking to resell 3ot .o ## to the latter if

the i7prove7ent and e9pansion of the 3ahug 'irport

would not e pursued 8n affir7ing the factual finding

of the RTC to this effect, the C' declared

3o=adas testi7on! is cogent 'n

octogenarian widower*retiree and aresident of @oon :ark, California since1/&4, he testified that govern7entrepresentatives verall! pro7ised hi7 and

his late wife while the e9propriation proceedings were on*going that the

govern7ent shall return the propert! if the purpose for the e9propriation no longer

e9ists This pro7ise was 7ade at the pre7ises of the airport 's far as he couldre7e7er, there were no e9propriation

proceedings against his propert! in 1/5" ecause the first notice of e9propriation hereceived was in 1/%" ;ased on the

pro7ise, he did not hire a law!er 3o=adawas fir7 that he was pro7ised that the lotwould e reverted to hi7 once the pulic

use of the lot ceases e 7ade it clear that

the veral pro7ise was 7ade in 3ahugwith other lot owners efore the 1/%1decision was handed down, though he

could not na7e the govern7entrepresentatives who 7ade the pro7ise 8twas 2ust a veral pro7iseB nevertheless, itis inding The fact that he could not

suppl! the necessar! details for theestalish7ent of his assertions during

cross*e9a7ination, ut that hen it willnot e used as intended, it will e returned ack, we 2ust elieved in the govern7ent,does not dis7antle the crediilit! andtruthfulness of his allegation This Court

notes that he was #/ !ears old when hetestified in .ove7er 1//& for an incidentwhich happened decades ago till, he is aco7petent witness capale of perceiving

and 7aking his perception known The7inor lapses are i77aterial The decisionof the co7petenc! of a witness rests pri7aril! with the trial 2udge and 7ust not

e distured on appeal unless it is clear that it was erroneous The o2ection to hisco7petenc! 7ust e 7ade efore he hasgiven an! testi7on! or as soon as the


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inco7petenc! eco7es apparent Though3o=ada is not part of the co7pro7iseagree7ent,[1#] he nevertheless adduced

sufficient evidence to support his clai7[1/]

's correctl! found ! the C', unlike in Mactan Cebu

!nternational "irport "uthority v. Court of "ppeals,["$] cited ! petitioners, where respondent therein

offered testi7onies which were hearsa! in nature, the

testi7on! of 3o=ada was ased on personal

knowledge as the assurance fro7 the govern7ent was

personall! 7ade to hi7 is testi7on! on cross*

e9a7ination destro!ed neither his crediilit! as a

witness nor the truthfulness of his words

-eril!, factual findings of the trial court,

especiall! when affir7ed ! the C', are inding and

conclusive on this Court and 7a! not e reviewed '

petition for certiorari under Rule 45 of the Rules of

Court conte7plates onl! 6uestions of law and not of

fact["1] .ot one of the e9ceptions to this rule is present

in this case to warrant a reversal of such findings

's regards the position of petitioners that respondents

testi7onial evidence violates the tatute of Frauds,

suffice it to state that the tatute of Frauds operates

onl! with respect to e9ecutor! contracts, and does not

appl! to contracts which have een co7pletel! or

partiall! perfor7ed, the rationale thereof eing asfollows0

8n e9ecutor! contracts there is a wide fieldfor fraud ecause unless the! e in writingthere is no palpale evidence of the

intention of the contracting parties Thestatute has precisel! een enacted to prevent fraud owever, if a contract has

een totall! or partiall! perfor7ed, thee9clusion of parol evidence would pro7ote fraud or ad faith, for it wouldenale the defendant to keep the enefitsalread! delivered ! hi7 fro7 the

transaction in litigation, and, at the sa7eti7e, evade the oligations, responsiilitiesor liailities assu7ed or contracted ! hi7

there![""]

8n this case, the tatute of Frauds, invoked !

petitioners to ar the clai7 of respondents for the

reac6uisition of 3ot .o ##, cannot appl!, the oral

co7pro7ise settle7ent having een partiall!

perfor7ed ;! reason of such assurance 7ade in their

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favor, respondents relied on the sa7e ! not pursuing

their appeal efore the C' @oreover, contrar! to the

clai7 of petitioners, the fact of 3o=adas eventual

confor7it! to the appraisal of 3ot .o ## and hisseeking the correction of a clerical error in the

2udg7ent as to the true area of 3ot .o ## do not

conclusivel! estalish that respondents asolutel!

parted with their propert! To our 7ind, these acts

were si7pl! 7eant to cooperate with the govern7ent,

particularl! ecause of the oral pro7ise 7ade to the7

The right of respondents to repurchase 3ot .o ##7a! e enforced ased on a constructive trust

constituted on the propert! held ! the govern7ent in

favor of the for7er n this note, our ruling in Heirs

of Timoteo Moreno is instructive, vi-.0

MactanCebu !nternational "irport

"uthority is correct in stating that one

would not find an e9press state7ent in theDecision in Civil Case .o R*1##1 to theeffect that the condemned/ lot $ould

return to the lando$ner/ or that the

lando$ner/ had a right to repurchase the

same if the purpose for $hich it $as

expropriated is ended or abandoned or if

the property $as to be used other than as

the %ahug "irport. This o7issionnotwithstanding, and while the inclusion of this pronounce7ent in the 2udg7ent of

conde7nation would have een ideal, such

precision is not asolutel! necessar! nor isit fatal to the cause of petitionersherein .o dout, the return or repurchase

of the conde7ned properties of petitionerscould e readil! 2ustified as the 7anifestlegal effect or conse6uence of the trialcourts underl!ing presu7ption that %ahug "irport $ill continue to be in

operation when it granted the co7plaint

for e7inent do7ain and the airportdiscontinued its activities The predica7ent of petitioners involves aconstructive trust, one that is akin to the

i7plied trust referred to in 'rt 1454 of the Civil Code, !f an absolute conveyanceof property is made in order to secure the

performance of an obligation of the

grantor to$ard the grantee, a trust byvirtue of la$ is established. !f the

fulfillment of the obligation is offered by

the grantor $hen it becomes due, he may

demand the reconveyance of the property

to him. 8n the case at ar, petitionersconve!ed 3ots .o /1% and /"$ to thegovern7ent with the latter oliging itself


13/239

to use the realties for the e9pansion of 3ahug 'irportB failing to keep its argain,the govern7ent can e co7pelled !

petitioners to reconve! the parcels of land

to the7, otherwise, petitioners would edenied the use of their properties upon astate of affairs that was not conceived nor

conte7plated when the e9propriation wasauthori=ed 'lthough the s!77etr! etween the

instant case and the situation conte7plated ! 'rt 1454 is not perfect, the provision is

undoutedl! applicale For, as e9plained ! an e9pert on the law of trusts0 The only problem of great importance in the field of

constructive trust is to decide $hether in

the numerous and varying fact situations

presented to the courts there is a $rongful

holding of property and hence a

threatened un0ust enrichment of the

defendant. Constructive trusts are fictions

of e6uit! which are ound ! noun!ielding for7ula when the! are used !courts as devices to re7ed! an! situationin which the holder of legal title 7a! not

in good conscience retain the eneficialinterest

8n constructive trusts, the arrange7ent iste7porar! and passive in which thetrustees sole dut! is to transfer the title and

possession over the propert! to the

plaintiff*eneficiar!f course,the $ronged party see)ing the aid of acourt of e1uity in establishing a

constructive trust must himself do

e1uity. 'ccordingl!, the court will e9erciseits discretion in deciding what acts arere6uired of the plaintiff*eneficiar! as

conditions precedent to otaining suchdecree and has the oligation to rei7urse

the trustee the consideration received fro7the latter 2ust as the plaintiff*eneficiar!would if he proceeded on the theor! of rescission 8n the good 2udg7ent of thecourt, the trustee 7a! also e paid the

necessar! e9penses he 7a! have incurredin sustaining the propert!, his fi9ed costsfor i7prove7ents thereon, and the7onetar! value of his services in

7anaging the propert! to the e9tent that plaintiff*eneficiar! will secure a enefitfro7 his acts

The rights and oligations etween theconstructive trustee and the eneficiar!, inthis case, respondent @C8'' and petitioners over 3ots .os /1% and /"$, are


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echoed in 'rt 11/$ of the Civil Code,(hen the conditions have for their

purpose the extinguishment of an

obligation to give, the parties, upon the

fulfillment of said conditions, shall returnto each other $hat they have received x x x

!n case of the loss, deterioration or

improvement of the thing, the provisions

$hich, $ith respect to the debtor, are laid

do$n in the preceding article shall be

applied to the party $ho is bound to return

x x x.[">]

n the 7atter of the repurchase price, while

petitioners are oliged to reconve! 3ot .o ## to

respondents, the latter 7ust return to the for7er what

the! received as 2ust co7pensation for the

e9propriation of the propert!, plus legal interest to e

co7puted fro7 default, which in this case runs fro7

the ti7e petitioners co7pl! with their oligation to

respondents

Respondents 7ust likewise pa! petitioners the

necessar! e9penses the! 7a! have incurred in

7aintaining 3ot .o ##, as well as the 7onetar! value

of their services in 7anaging it to the e9tent that

respondents were enefited there!

Following 'rticle 11#&["4]

of the Civil Code, petitioners 7a! keep whatever inco7e or fruits the!

7a! have otained fro7 3ot .o ##, and respondents

need not account for the interests that the a7ounts

the! received as 2ust co7pensation 7a! have earned

in the 7eanti7e

8n accordance with 'rticle 11/$["5] of the Civil Code

vis**vis 'rticle 11#/, which provides that (i)f a thingis i7proved ! its nature, or ! ti7e, the

i7prove7ent shall inure to the enefit of the creditor

9 9 9, respondents, as creditors, do not have to pa!, as

part of the process of restitution, the appreciation in

value of 3ot .o ##, which is a natural conse6uence

of nature and ti7e["%]

WHEREFORE, the petition is DENIED. The

Feruar! "#, "$$% Decision of the Court of 'ppeals,

affir7ing the ctoer "", 1/// Decision of the

Regional Trial Court, ;ranch #&, Ceu Cit!, and its

Feruar! &, "$$& Resolution

are AFFIRMED with MODIFICATION as follows0

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1 Respondents are ORDERED to return to

petitioners the 2ust co7pensation the! received for the

e9propriation of 3ot .o ##, plus legal interest, in the

case of default, to e co7puted fro7 the ti7e petitioners co7pl! with their oligation to reconve!

3ot .o ## to the7B

" Respondents are ORDERED to pa! petitioners the

necessar! e9penses the latter incurred in 7aintaining

3ot .o ##, plus the 7onetar! value of their services

to the e9tent that respondents were enefited there!B

> :etitioners are ENTITLED to keep whatever

fruits and inco7e the! 7a! have otained fro7 3ot

.o ##B and

4 Respondents are also ENTITLED to keep

whatever interests the a7ounts the! received as 2ust

co7pensation 7a! have earned in the 7eanti7e, as

well as the appreciation in value of 3ot .o ##, which

is a natural conse6uence of nature and ti7eB

8n light of the foregoing 7odifications, the case

is REMANDED to the Regional Trial Court, ;ranch

5&, Ceu Cit!, onl! for the purpose of receiving

evidence on the a7ounts that respondents will have to

pa! petitioners in accordance with this Courts

decision .o costs

SO ORDERED

NPC V HEIRS

BERSAMIN, J.:Private prpert! "#a$$ %t &e

ta'e% (r p)&$i* )"e +it#)t )"t

*-pe%"ati%ection /, 'rticle 888, 1/#&Constitution

The application of this provision of the Constitution is

the focus of this appeal

:etitioner .ational :ower Corporation (.:C) seeks

the review on certiorari of the decision pro7ulgated

on ctoer 5, "$$4,[1] where! the Court of 'ppeals

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(C') affir7ed the decision dated 'ugust 1>, 1/// and

the supple7ental decision dated 'ugust 1#, 1///,

ordering .:C to pa! 2ust co7pensation to the

respondents, oth rendered ! the Regional TrialCourt, ;ranch 1, in 8ligan Cit! (RTC)

A%te*ee%t"

:ursuant to its legal 7andate under Repulic 'ct .o

%>/5 ( "n "ct Revising the Charter of the 2ational

3o$er Corporation), .:C undertook the 'gus River

!droelectric :ower :lant :ro2ect in the 1/&$s togenerate electricit! for @indanao The pro2ect

included the construction of several underground

tunnels to e used in diverting the water flow fro7 the

'gus River to the h!droelectric plants["]

n .ove7er "1, 1//&, the respondents, na7el!0

Ceu, ;angowa*an, a!ana, .asser, @anta, Adgar,

:utri, @ongko! and '7ir, all surna7ed @acaangkit

(eirs of @acaangkit), as the owners of land with an

area of ""1,5&> s6uare 7eters situated in Ditucalan,

8ligan Cit!, sued .:C in the RTC for the recover! of

da7ages and of the propert!, with the alternative

pra!er for the pa!7ent of 2ust co7pensation[>] The!

alleged that the! had elatedl! discovered that one of

the underground tunnels of .:C that diverted the

water flow of the 'gus River for the operation of the

!droelectric :ro2ect in 'gus -, 'gus -8 and 'gus

-88 traversed their landB that their discover! hadoccurred in 1//5 after 'tt! aidali C +anda7ra,

:resident of the Federation of 'raic @adaris chool,

had re2ected their offer to sell the land ecause of the

danger the underground tunnel 7ight pose to the

proposed 'raic 3anguage Training Center and

@usli7s kills Develop7ent CenterB that such

re2ection had een followed ! the withdrawal !

+loal 'sia @anage7ent and Resource Corporationfro7 developing the land into a housing pro2ect for

the sa7e reasonB that 'l*'7anah 8sla7ic 8nvest7ent

;ank of the :hilippines had also refused to accept

their land as collateral ecause of the presence of the

underground tunnelB that the underground tunnel had

een constructed without their knowledge and

consentB that the presence of the tunnel deprived the7

of the agricultural, co77ercial, industrial and

residential value of their landB and that their land had

also eco7e an unsafe place for haitation ecause of

the loud sound of the water rushing through the tunnel

and the constant shaking of the ground, forcing the7

and their workers to relocate to safer grounds

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17/239

8n its answer with counterclai7,[4] .:C countered that

the eirs of @acaangkit had no right to

co7pensation under section >(f) of Repulic 'ct .o

%>/5, under which a 7ere legal ease7ent on their land was estalishedB that their cause of action, should

the! e entitled to co7pensation, alread! prescried

due to the tunnel having een constructed in 1/&/B

and that ! reason of the tunnel eing an apparent and

continuous ease7ent, an! action arising fro7 such

ease7ent prescried in five !ears

R)$i%/ ( t#e RTC

n ?ul! ">, 1//#, an ocular inspection of the

land that was conducted ! RTC ?udge @a7indiara :

@angotara and the representatives of the parties

resulted in the following oservations and findings0

a That a concrete post which is aout

two feet in length fro7 the groundwhich according to the clai7ants is the7iddle point of the tunnel

That at least three fruit earing durian

trees were uprooted and as a result of the construction ! the defendant of the

tunnel and aout one hundred coconuts planted died

c T#at )%er/r)% t)%%e$ +a"

*%"tr)*te t#erei%[5]

'fter trial, the RTC ruled in favor of the plaintiffs

(eirs of @acaangkit),[%] decreeing0

ARAFRA, pre7ises considered0

1 The pra!er for the re7oval or dis7antling of defendants tunnel is deniedowever, defendant is here! directed andordered0

a)To pa! plaintiffs land with a

total area of ""&,$%5 s6uare 7eters, at

the rate of F8-A


18/239

:A, plus interest, as actualda7ages or 2ust co7pensationB

) To pa! plaintiff a 7onthl!

rental of their land in the a7ount of T8RT T


19/239

should e added to paragraph 1(a) of thedispositive portion thereof, to olster,har7oni=e, and confor7 to the findings of

the Court, which is 6uoted hereunder, to

wit0

Conse6uentl!, plaintiffs land or

properties are here! conde7ned infavor of defendant .ational :ower Corporation, upon pa!7ent of theaforesaid su7

Therefore, paragraph 1(a) of thedispositive portion of the original decision

should read, as follows0

a) To pa! plaintiffs land with a totalarea of ""&,$%5 s6uare 7eters, atthe rate of F8-A


20/239

R)$i%/ ( t#e CA

.:C raised onl! two errors in the C', na7el!0

8TA C


21/239

the reali=ation of the purposes specifiedtherein for its creationB to intercept anddivert the flow of waters fro7 lands of

riparian owners (in this case, the eirs),

and fro7 persons owning or interested inwater which are or 7a! e necessar! tosaid purposes, the sa7e 'ct e9pressl!

7andates the pa!7ent of 2ustco7pensation ARAFRA, pre7ises considered, the

instant appeal is here! DA.8AD for lack of 7erit 'ccordingl!, the appealed

Decision dated 'ugust 1>, 1///, and thesupple7ental Decision dated 'ugust 1#,1///, are here! 'FF8R@AD in toto RDARAD[1"]

I"")e

.:C has co7e to the Court, assigning the lone error that0

TA '::A33'TA C(i) of Repulic 'ct .o %>/5, which provided a period of onl! five !ears fro7 the date of

the construction within which the affected landowner

could ring a clai7 against itB and that even if

Repulic 'ct .o %>/5 should e inapplicale, the

action of the eirs of @acaangkit had alread!

prescried due to the underground tunnel eing

susceptile to ac6uisitive prescription after the lapse

of 1$ !ears pursuant to 'rticle %"$ of the Civil Code due to its eing a continuous and apparent legal

ease7ent under 'rticle %>4 of the Civil Code

The issues for resolution are, therefore, as follows0

(1) hether the C' and the RTC

erred in holding that there was an



22/239

underground tunnel traversing the eirsof @acaangkits land constructed !

.:CB and

(") hether the eirs of @acaangkits right to clai7 2ust

co7pensation had prescried under section >(i) of Repulic 'ct .o %>/5, or,

alternativel!, under 'rticle %"$ and

'rticle %4% of the Civil Code

R)$i%/

e uphold the liailit! of .:C for pa!7ent of 2ustco7pensation

0.

Fa*t)a$ (i%i%/" ( t#e RTC,

+#e% a((ir-e &! t#e CA, are &i%i%/

The e9istence of the tunnel underneath the land of the

eirs of @acaangkit, eing a factual 7atter, cannotnow e properl! reviewed ! the Court, for 6uestions

of fact are e!ond the pale of a petition for review

on certiorari @oreover, the factual findings and

deter7inations ! the RTC as the trial court are

generall! inding on the Court, particularl! after the

C' affir7ed the7[1>] ;earing these doctrines in 7ind,

the Court should rightl! dis7iss .:Cs appeal

.:C argues, however, that this appeal should not edis7issed ecause the eirs of @acaangkit

essentiall! failed to prove the e9istence of the

underground tunnel 8t insists that the topographic

surve! 7ap and the right*of*wa! 7ap presented !

the eirs of @acaangkit did not at all estalish the

presence of an! underground tunnel

.:C still fails to convinceAven assu7ing, for now, that the Court 7a! review

the factual findings of the C' and the RTC, for .:C

to insist that the evidence on the e9istence of the

tunnel was not ade6uate and inco7petent re7ains

futile n the contrar!, the evidence on the tunnel was

sustantial, for the significance of the topographic

surve! 7ap and the sketch 7ap (as indicative of the

e9tent and presence of the tunnel construction) to the

6uestion on the e9istence of the tunnel was strong, as

the C' correctl! pro2ected in its assailed decision, vi- 0

'7ong the pieces of docu7entar!

evidence presented showing the e9istenceof the said tunnel eneath the su2ect



23/239

propert! is the topographic surve! 7apThe topographic surve! 7ap is oneconducted to know aout the location and

elevation of the land and all e9isting

structures aove and underneath it'nother is the ketch @ap which showsthe location and e9tent of the land

traversed or affected ! the saidtunnel T#e"e t+ 123 pie*e" (

*)-e%tar! evie%*e reai$! pi%t t#e

e4te%t a% pre"e%*e ( t#e t)%%e$

*%"tr)*ti% *-i%/ (r- t#e p+er

*aver% %ear t#e "-a$$ -a%5-ae $a'e

+#i*# i" t#e i%$et a% appra*# t)%%e$,r at a i"ta%*e ( a&)t t+ 123

'i$-eter" a+a! (r- t#e $a% ( t#e

p$ai%ti(("5appe$$ee", a% t#e% traver"i%/

t#e e%tire a% t#e +#$e $e%/t# ( t#e

p$ai%ti(("5appe$$ee" prpert!, a% t#e

)t$et *#a%%e$ ( t#e t)%%e$ i" a%t#er

"-a$$ -a%5-ae $a'e. This is a su*terrain construction, and considering that

oth inlet and outlet are odies of water,the tunnel can hardl! e noticed 'llconstructions done were eneath thesurface of the plaintiffs*appellees propert!

This e9plains wh! the! could never otainan! knowledge of the e9istence of suchtunnel during the period that the sa7e was

constructed and installed eneath their propert![14]

The power cavern and the inlet and outlet channels

estalished the presence of the underground tunnel,

ased on the declaration in the RTC ! acedon, a

for7er e7plo!ee of the .:C[15] 8t is worth! to note

that .:C did not den! the e9istence of the power

cavern, and of the inlet and outlet channels adverted

to and as depicted in the topographic surve! 7ap and

the sketch 7ap The C' cannot e faulted for

crediting the testi7on! of acedon despite the effortof .:C to discount his credit due to his not eing an

e9pert witness, si7pl! ecause acedon had personal

knowledge ased on his eing .:Cs principal

engineer and supervisor tasked at one ti7e to la! out

the tunnels and trans7ission lines specificall! for the

h!droelectric pro2ects,[1%] and to supervise the

construction of the 'gus 1 !droelectric :lant

itself [1&]fro7 1/ until his retire7ent fro7 .:C[1#] ;esides, he declared that he personall! e9perienced

the virations caused ! the rushing currents in the

tunnel, particularl! near the outlet channel [1/]


24/239

The ocular inspection actuall! confir7ed the

e9istence of the tunnel underneath the land of the

eirs of @acaangkit Thus, the C' oserved0

@ore so, the cular inspection conductedon ?ul! ">, 1//# further olstered suchclai7 of the e9istence and e9tent of suchtunnel This was conducted ! a tea7

co7posed of the onorale :residing?udge of the Regional Trial Court, ;ranch$1, 3anao del .orte, herself and the

respective law!ers of oth of the parties

and ()% t#at, a-%/ t#er", "ai)%er/r)% t)%%e$ +a" *%"tr)*te

&e%eat# t#e ")&e*t prpert!["$]

8t ears noting that .:C did not raise an! issue

against or tender an! contrar! co77ent on the ocular

inspection report

2.Five5!ear pre"*riptive peri )%er

Se*ti% 61i3 ( Rep)&$i* A*t N. 7689

e" %t app$! t *$ai-" (r )"t

*-pe%"ati%

The C' held that ection >(i) of Repulic 'ct .o

%>/5 had no application to this action ecause it

covered facilities that could e easil! discovered, not

tunnels that were inconspicuousl! constructed eneaththe surface of the land["1]

.:C disagrees, and argues that ecause 'rticle

%>5[""] of the Civil Code directs the application of

special laws when an ease7ent, such as the

underground tunnel, was intended for pulic use, the

law applicale was ection >(i) of Repulic 'ct .o

%>/5, as a7ended, which li7its the action for recover! of co7pensation to five !ears fro7 the date

of construction 8t posits that the five*!ear prescriptive

period alread! set in due to the construction of the

underground tunnel having een co7pleted in 1/&/

!et

ithout necessaril! adopting the reasoning of the C',

we uphold its conclusion that prescription did not ar

the present action to recover 2ust co7pensation

ection > (i) of Repulic 'ct .o %>/5, the cited law,

relevantl! provides0

ection > 3o$ers and 4eneral Functionsof the Corporation The powers, functions,

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rights and activities of the Corporationshall e the following0

999

(i) To construct works across, or otherwise, an! strea7,watercourse, canal, ditch, flu7e,

street, avenue, highwa! or railwa!of private and pulic ownership,as the location of said works 7a!re6uire0 3rovided , That said works

e constructed in such a 7anner asnot to endanger life or propert!B

'nd provided, further, That thestrea7, watercourse, canal ditch,flu7e, street, avenue, highwa! or railwa! so crossed or intersected e restored as near as possile to

their for7er state, or in a 7anner not to i7pair unnecessaril! their usefulness Aver! person or entit!whose right of wa! or propert! is

lawfull! crossed or intersected !said works shall not ostruct an!such crossings or intersection andshall grant the ;oard or its

representative, the proper authorit! for the e9ecution of suchwork The Corporation is here!given the right of wa! to locate,

construct and 7aintain such worksover and throughout the landsowned ! the Repulic of the

:hilippines or an! of its ranches

and political sudivisions TheCorporation or its representative7a! also enter upon private

propert! in the lawful perfor7anceor prosecution of its usiness and purposes, including theconstruction of the trans7ission

lines thereonB 3rovided, that theowner of such propert! shall e

inde7nified for an! actual da7agecaused there!B 3rovided, further ,T#at "ai a*ti% (ra-a/e" i" (i$e +it#i% (ive

!ear" a(ter t#e ri/#t" ( +a!,

tra%"-i""i% $i%e", ")&"tati%",

p$a%t" r t#er (a*i$itie" "#a$$

#ave &ee% e"ta&$i"#eB 3rovided, finally, That after said period, no

suit shall e rought to 6uestionthe said rights of wa!,trans7ission lines, sustations, plants or other facilitiesB


26/239

' cursor! reading shows that ection >(i) covers the

construction of works across, or otherwise, an!

strea7, watercourse, canal, ditch, flu7e, street,

avenue, highwa! or railwa! of private and pulicownership, as the location of said works 7a! re6uire

8t is notale that ection >(i) includes no li7itation

e9cept those enu7erated after the ter7 $or)s

'ccordingl!, we consider the ter7 $or)s as

e7racing all kinds of constructions, facilities, and

other develop7ents that can enale or help .:C to

7eet its o2ectives of developing h!draulic power

e9pressl! provided under paragraph (g) of ection >[">] The C's restrictive construal of ection >(i) as

e9clusive of tunnels was oviousl! unwarranted, for

the provision applies not onl! to develop7ent works

easil! discoverale or on the surface of the earth ut

also to suterranean works like tunnels uch

interpretation accords with the funda7ental guideline

in statutor! construction that when the law does not

distinguish, so 7ust we not["4] @oreover, when thelanguage of the statute is plain and free fro7

a7iguit!, and e9presses a single, definite, and

sensile 7eaning, that 7eaning is conclusivel!

presu7ed to e the 7eaning that the Congress

intended to conve!["5]

Aven so, we still cannot side with .:C

e rule that the prescriptive period provided

under ection >(i) of Repulic 'ct .o %>/5 is

applicale onl! to an action for da7ages, and does note9tend to an action to recover 2ust co7pensation like

this case Conse6uentl!, .:C cannot there! ar the

right of the eirs of @acaangkit to recover 2ust

co7pensation for their land

The action to recover 2ust co7pensation fro7

the tate or its e9propriating agenc! differs fro7 the

action for da7ages The for7er, also knownas inverse condemnation, has the o2ective to recover

the value of propert! taken in fact ! the

govern7ental defendant, even though no for7al

e9ercise of the power of e7inent do7ain has een

atte7pted ! the taking agenc!["%] ?ust co7pensation

is the full and fair e6uivalent of the propert! taken

fro7 its owner ! the e9propriator The 7easure is not

the takers gain, ut the owners loss The word 0ust isused to intensif! the 7eaning of the

word compensation in order to conve! the idea that

the e6uivalent to e rendered for the propert! to e

taken shall e real, sustantial, full, and a7ple["&] n

the other hand, the latter action seeks to vindicate a

legal wrong through da7ages, which 7a! e actual,

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7oral, no7inal, te7perate, li6uidated, or e9e7plar!

hen a right is e9ercised in a 7anner not

confor7ale with the nor7s enshrined in 'rticle

1/

["#]

and like provisions on hu7an relations inthe Civil Code, and the e9ercise results to the da7age

of another, a legal wrong is co77itted and the

wrongdoer is held responsile["/]

The two actions are radicall! different in nature

and purpose The action to recover 2ust co7pensation

is ased on the Constitution[>$] while the action for

da7ages is predicated on statutor! enact7ents8ndeed, the for7er arises fro7 the e9ercise ! the

tate of its power of e7inent do7ain against private

propert! for pulic use, ut the latter e7anates fro7

the transgression of a right The fact that the owner

rather than the e9propriator rings the for7er does not

change the essential nature of the suit as an inverse

conde7nation,[>1] for the suit is not ased on tort, ut

on the constitutional prohiition against the taking of propert! without 2ust co7pensation[>"] 8t would ver!

well e contrar! to the clear language of the

Constitution to ar the recover! of 2ust co7pensation

for private propert! taken for a pulic use solel! on

the asis of statutor! prescription

Due to the need to construct the underground tunnel,

.:C should have first 7oved to ac6uire the land fro7

the eirs of @acaangkit either ! voluntar! tender to

purchase or through for7al e9propriation proceedings 8n either case, .:C would have een

liale to pa! to the owners the fair 7arket value of the

land, for ection >(h) of Repulic 'ct .o %>/5

e9pressl! re6uires .:C to pa! the fair 7arket value of

such propert! at the ti7e of the taking, thusl!0

(h) T a*)ire, pro7ote, hold, transfer,sell, lease, rent, 7ortgage, encu7er and

otherwise dispose of prpert! i%*ie%t t,r %e*e""ar!, *%ve%ie%t r prper t

*arr! )t t#e p)rp"e" (r +#i*# t#e

Crprati% +a" *reate: 3rovided , That

in case a right of wa! is necessar! for itstrans7ission lines, ease7ent of right of wa! shall onl! e sought0 3rovided,ho$ever, T#at i% *a"e t#e prpert! it"e$(

"#a$$ &e a*)ire &! p)r*#a"e, t#e *"t

t#ere( "#a$$ &e t#e (air -ar'et va$)e at

t#e ti-e ( t#e ta'i%/ ( ")*# prpert!.

This was what .:C was ordered to do

in 2ational 3o$er Corporation v. !brahim,[>>] where

.:C had denied the right of the owners to e paid 2ust

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co7pensation despite their land eing traversed ! the

underground tunnels for siphoning water fro7 3ake

3anao needed in the operation of 'gus 88, 'gus 888,

'gus 8-, 'gus -8 and 'gus -88 !droelectric:ro2ects in aguiran, 3anao del ur, in .angca and

;alo*8 in 3anao del .orte and in Ditucalan and

Fuentes in 8ligan Cit! There, .:C si7ilarl! argued

that the underground tunnels constituted a 7ere

ease7ent that did not involve an! loss of title or

possession on the part of the propert! owners, ut the

Court resolved against .:C, to wit0

:etitioner contends that the

underground tunnels in this case constitute

an ease7ent upon the propert! of therespondents which does not involve an!loss of title or possession The 7anner inwhich the ease7ent was created !

petitioner, however, violates the due process rights of respondents as it was

without notice and inde7nit! to the7 anddid not go through proper e9propriation

proceedings :etitioner could have, at an!ti7e, validl! e9ercised the power of e7inent do7ain to ac6uire the ease7entover respondents propert! as this power

enco7passes not onl! the taking or appropriation of title to and possession of

the e9propriated propert! ut likewisecovers even the i7position of a 7ere urden upon the owner of the conde7ned

propert! ignificantl!, though, landowners

cannot e deprived of their right over their land until e9propriation proceedings areinstituted in court The court 7ust then see

to it that the taking is for pulic use, thatthere is pa!7ent of 2ust co7pensation andthat there is due process of law[>4]

6.

NPC" *%"tr)*ti% ( t#e t)%%e$

*%"tit)te ta'i%/ ( t#e $a%, a%e%tit$e +%er" t )"t *-pe%"ati%

The Court held in 2ational 3o$er Corporation

v. !brahim that .:C was liale to pa! not 7erel! an

ease7ent fee ut rather the full co7pensation for land

traversed ! the underground tunnels, vi- 0

8n disregarding this procedure and

failing to recogni=e respondents ownershipof the su*terrain portion, petitioner took arisk and e9posed itself to greater liailit!

with the passage of ti7e 8t 7ust ee7phasi=ed that the ac6uisition of the



29/239

ease7ent is not without e9pense Theunderground tunnels i7pose li7itations onrespondents use of the propert! for an

indefinite period and deprive the7 of its

ordinar! use ;ased upon the foregoing,respondents are clearl! entitled to the pa!7ent of 2ust

co7pensation Nt+it#"ta%i%/ t#e (a*tt#at petiti%er %$! **)pie" t#e ")&5

terrai% prti%, it i" $ia&$e t pa! %t

-ere$! a% ea"e-e%t (ee &)t rat#er t#e

()$$ *-pe%"ati% (r $a%. T#i" i" "

&e*a)"e i% t#i" *a"e, t#e %at)re ( t#e

ea"e-e%t pra*ti*a$$! eprive" t#e+%er" ( it" %r-a$ &e%e(i*ia$ )"e.

Re"p%e%t", a" t#e +%er ( t#e

prpert! t#)" e4prpriate, are e%tit$e

t a )"t *-pe%"ati% +#i*# "#)$ &e

%eit#er -re %r $e"", +#e%ever it i"

p""i&$e t -a'e t#e a""e""-e%t, t#a%

t#e -%e! e)iva$e%t ( "ai prpert![>5]

ere, like in 2ational 3o$er Corporation v.

!brahim, .:C constructed a tunnel underneath the

land of the eirs of @acaangkit without going

through for7al e9propriation proceedings and without

procuring their consent or at least infor7ing the7

eforehand of the construction .:Cs construction

adversel! affected the owners rights and interests

ecause the suterranean intervention ! .:C

prevented the7 fro7 introducing an! develop7ents

on the surface, and fro7 disposing of the land or an! portion of it, either ! sale or 7ortgage

Did such conse6uence constitute taking of the land as

to entitle the owners to 2ust co7pensationH

e agree with oth the RTC and the C' that

there was a full taking on the part of .:C,

notwithstanding that the owners were not co7pletel!and actuall! dispossessed 8t is settled that the taking

of private propert! for pulic use, to e co7pensale,

need not e an actual ph!sical taking or appropriation[>%] 8ndeed, the e9propriators action 7a! e short of

ac6uisition of title, ph!sical possession, or occupanc!

ut 7a! still a7ount to a taking[>&] Co7pensale

taking includes destruction, restriction, di7inution, or

interruption of the rights of ownership or of theco77on and necessar! use and en2o!7ent of the

propert! in a lawful 7anner, lessening or destro!ing

its value[>#] 8t is neither necessar! that the owner e

wholl! deprived of the use of his propert!,[>/] nor

7aterial whether the propert! is re7oved fro7 the

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possession of the owner, or in an! respect changes

hands[4$]

's a result, .:C should pa! 2ust co7pensationfor the entire land 8n that regard, the RTC pegged 2ust

co7pensation at :5$$$$s6uare 7eter ased on its

finding on what the prevailing 7arket value of the

propert! was at the ti7e of the filing of the co7plaint,

and the C' upheld the RTC

e affir7 the C', considering that .:C did not assail

the valuation in the C' and in this Court .:Cssilence was proal! due to the correctness of the

RTCs valuation after careful consideration and

weighing of the parties evidence, as follows0

The 7atter of what is 2ustco7pensation for these parcels of land is a

7atter of evidence These parcels of landis (sic) located in the Cit! of 8ligan, the

8ndustrial Cit! of the outh itnessDionisio ;anawan, 8C* Cit! 'ssessorsffice, testified, ithin that area, that areais classified as industrial and residentialThat plaintiffs land is ad2acent to 7an!

sudivisions and that is within theindustrial classification e testified and

identified A9hiit '' and ''*1, aCertification, dated 'pril 4, 1//&, showingthat the appraised value of plaintiffs land

ranges fro7 :4$$$$ to :5$$$$ per s6uare

7eter (see, T., testi7on! of Dionisio;anawan, pp 51, 5&, and &1, Feruar! /,1///) 'lso, witness ;anawan, testified

and identified Two (") Deeds of ale,7arked as A9hiit ''*" and ''*>,[]showing that the appraised value of theland ad2oining or ad2acent to plaintiff land

ranges fro7 :&$$$$ to :&5$$$ per s6uare7eter 's etween the 7uch lower price of

the land as testified ! defendants witness+regorio Anterone, and that of the Cit!'ssessor of 8ligan Cit!, the latter is 7orecredile Considering however, that theappraised value of the land in the area as

deter7ined ! the Cit! 'ssessors ffice isnot unifor7, this Court, is of the opinionthat the reasonale a7ount of 2ustco7pensation of plaintiffs land should e

fi9ed at F8-A (h) of



31/239

Repulic 'ct .o %>/5 The C' did not dwell on the

reckoning ti7e, possil! ecause .:C did not assign

that as an error on the part of the RTC

e rule that the reckoning value is the value at

the ti7e of the filing of the co7plaint, as the RTC

provided in its decision Co7pensation that is

reckoned on the 7arket value prevailing at the ti7e

either when .:C entered or when it co7pleted the

tunnel, as .:C su7its, would not e 2ust, for it

would co7pound the gross unfairness alread! caused

to the owners ! .:Cs entering without the intentionof for7all! e9propriating the land, and without the

prior knowledge and consent of the eirs of

@acaangkit .:Cs entr! denied ele7entar! due

process of law to the owners since then until the

o$ners commenced the inverse condemnation

proceedings The Court is 7ore concerned with the

necessit! to prevent .:C fro7 un2ustl! profiting fro7

its delierate acts of den!ing due process of law to theowners 's a 7easure of si7ple 2ustice and ordinar!

fairness to the7, therefore, reckoning 2ust

co7pensation on the value at the ti7e the owners

co77enced these inverse conde7nation proceedings

is entirel! warranted

8n 2ational 3o$er Corporation v. Court of

"ppeals,[4"] a case that involved the si7ilar

construction of an underground tunnel ! .:C

without the prior consent and knowledge of the

owners, and in which we held that the asis in fi9ing

2ust co7pensation when the initiation of the action

preceded the entr! into the propert! was the ti7e of

the filing of the co7plaint, not the ti7e of taking,[4>] we pointed out that there was no taking when the

entr! ! .:C was 7ade without intent to e9propriate

or was not 7ade under warrant or color of legal

authorit!;.

A+ar" (r re%ta$", -ra$ a-a/e", e4e-p$ar!

a-a/e", a% attr%e!" (ee" are e$ete

(r i%")((i*ie%*! ( (a*t)a$ a% $e/a$ &a"e"

The C' upheld the RTCs granting to the eirs of

@acaangkit of rentals of : >$,$$$$$7onth fro7

1/&/ up to ?ul! 1/// with 1"E interest per annu7 !

finding .:C guilt! of ad faith in taking possession

of the land to construct the tunnel without their

knowledge and consent

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+ranting rentals is legall! and factuall! ereft

of 2ustification, in light of the taking of the land eing

alread! 2ustl! co7pensated Confor7al! with the

ruling in Manila !nternational "irport "uthority v.

Rodrigue-,[44] in which the award of interest was held

to render the grant of ack rentals unwarranted, we

delete the award of ack rentals and in its place

prescrie interest of 1"E interest per annum fro7

.ove7er "1, 1//&, the date of the filing of the

co7plaint, until the full liailit! is paid ! .:C The

i7position of interest of 1"E interest per

annum follows a long line of pertinent 2urisprudence,[45] where! the Court has fi9ed the rate of interest on

2ust co7pensation at 1"E per annum whenever the

e9propriator has not i77ediatel! paid 2ust

co7pensation

The RTC did not state an! factual and legal

2ustifications for awarding to the eirs of

@acaangkit 7oral and e9e7plar! da7ages each inthe a7ount of :"$$,$$$$$ The awards 2ust appeared

in the fallo of its decision .either did the C' proffer

an! 2ustifications for sustaining the RTC on the

awards e consider the o7issions of the lower courts

as pure legal error that we feel ound to correct even

if .:C did not su7it that for our consideration

There was, to egin with, no factual and legal ases

7entioned for the awards 8t is never trite to re7ind

that 7oral and e9e7plar! da7ages, not ! an! 7eans

li6uidated or assessed as a 7atter of routine, alwa!s

re6uire evidence that estalish the circu7stances

under which the clai7ant is entitled to the7

@oreover, the failure of oth the RTC and the C' to

render the factual and legal 2ustifications for the 7oral

and e9e7plar! da7ages in the od! of their decisions

i77ediatel! de7ands the striking out of the awards

for eing in violation of the funda7ental rule that the

decision 7ust clearl! state the facts and the law onwhich it is ased ithout the factual and legal

2ustifications, the awards are e9posed as the product

of con2ecture and speculation, which have no place in

fair 2udicial ad2udication

e also reverse and set aside the decree of the

RTC for .:C to pa! to the eirs of @acaangkit the

su7 e6uivalent to 15E of the total a7ount awarded,as attorne!s fees, and to pa! the cost The od! of the

decision did not state the factual and legal reasons

wh! .:C was liale for attorne!s fees The

terse state7ent found at the end of the od! of the

RTCs decision, stating0 999 The contingent attorne!s

fee is here! reduced fro7 "$E to onl! 15E of the



33/239

total a7ount of the clai7 that 7a! e awarded to

plaintiffs, without 7ore, did not indicate or e9plain

wh! and how the sustantial liailit! of .:C for

attorne!s fees could have arisen and een deter7ined

8n assessing attorne!s fees against .:C and in

favor of the respondents, the RTC casuall!

disregarded the funda7ental distinction etween the

two concepts of attorne!s fees the ordinar! and the

e9traordinar! These concepts were aptl!

distinguished in Traders Royal Ban) 5mployees

6nion!ndependent v. 2%RC,[4%]

thuswise0

There are two co77onl! accepted

concepts of attorne!s fees, the so*calledordinar! and e9traordinar! 8n its ordinar!concept, an attorne!s fee is the reasonaleco7pensation paid to a law!er ! his

client for the legal services he has renderedto the latter The asis of this

co7pensation is the fact of hise7plo!7ent ! and his agree7ent with the

client 8n its e9traordinar! concept, an

attorne!s fee is an inde7nit! for da7agesordered ! the court to e paid ! thelosing part! in a litigation The asis of

this is an! of the cases provided ! lawwhere such award can e 7ade, such asthose authori=ed in 'rticle ""$#, Civil

Code, and is pa!ale not to the law!er ut

to the client, unless the! have agreed thatthe award shall pertain to the law!er asadditional co7pensation or as part thereof

;! referring to the award as contingenc! fees,

and reducing the award fro7 "$E to 15E, the RTC

was reall! referring to a supposed agree7ent on

attorne!s fees etween the eirs of @acaangkit and

their counsel 's such, the concept of attorne!s fees

involved was the ordinar! et, the inclusion of the

attorne!s fees in the 2udg7ent a7ong the liailities of

.:C converted the fees to e9traordinar! e have to

disagree with the RTC thereon, and we e9press our

disco7fort that the C'did not do an!thing to

e9cise the clearl! erroneous and unfounded grant

'n award of attorne!s fees has alwa!s een the

e9ception rather than the rule To start with, attorne!s

fees are not awarded ever! ti7e a part! prevails in a

suit[4&] .or should an adverse decision ipso

facto 2ustif! an award of attorne!s fees to the winning



34/239

part![4#] The polic! of the Court is that no pre7iu7

should e placed on the right to litigate[4/] Too, such

fees, as part of da7ages, are assessed onl! in the

instances specified in 'rt ""$#, Civil Code[5$] 8ndeed, attorne!s fees are in the nature of actual

da7ages[51] ;ut even when a clai7ant is co7pelled to

litigate with third persons or to incur e9penses to

protect his rights, attorne!s fees 7a! still e

withheld where no sufficient showing of ad faith

could e reflected in a part!s persistence in

a suit other than an erroneous conviction of the

righteousness of his cause[5"]

'nd, lastl!, the trialcourt 7ust 7ake express findings of fact and law that

ring the suit within the e9ception hat

this de7ands is that the factual, legal or

e6uitale 2ustifications for the award 7ust e set forth

not onl! in the fallo ut also in the te9t of thedecision, or else, the award should e thrown out for

eing speculative and con2ectural[5>]

ound polic! dictates that even if the .:C

failed to raise the issue of attorne!s fees, we are not

precluded fro7 correcting the lower

courts patentl! erroneous application of the law[54] 8ndeed, the Court, in supervising the lower courts,

possesses the a7ple authorit! to

review legal 7atters like this one even if not

specificall! raised or assigned as error ! the parties

9.

Attr%e!" (ee" )%er quantum meruit pri%*ip$e

are (i4e at 0


35/239

;allelos suse6uentl! filed also a 7anifestation,[5#] supple7ental 7anifestation,[5/]

repl!,[%$] and ex parte 7otion reiterating the 7otion for

earl! decision[%1] 8t appears that a cop! of the C's

decision was furnished solel! to 'tt! ;allelos

owever, shortl! efore the rendition of the decision,

'tt! Diaratun filed in the C' a 7otion to register

attorne!s lien,[%"] alleging that he had not withdrawn

his appearance and had not een aware of the entr! of

appearance ! 'tt! ;allelos ' si7ilar 7otion was

also received ! the Court fro7 'tt! Diaratun a fewda!s after the petition for review was filed[%>] Thus, on

Feruar! 14, "$$5,[%4] the Court directed 'tt!

Diaratun to enter his appearance herein e co7plied

upon filing the co77ent[%5]

'7ir @acaangkit confir7ed 'tt! Diaratuns

representation through an ex parte 7anifestation that

he filed in his own ehalf and on ehalf of his silings@ongko! and :utri[%%] '7ir reiterated his

7anifestation on @arch %, "$$%,[%&] and further

i7puted 7alpractice to 'tt! ;allelos for having filed

an entr! of appearance earing '7irs forged signature

and for plagiaris7, i.e, cop!ing verati7 the

argu7ents contained in the pleadings previousl! filed

! 'tt! Diaratun[%#]

n epte7er 11, "$$#, 'tt! ;allelos su7itted two

7otions, to wit0 (a) a 7anifestation and 7otion

authori=ing a certain 'dul7a2eed D2a7la to receive

his attorne!s fees e6uivalent of 15E of the 2udg7ent

award,[%/] and (b) a 7otion to register his attorne!s lien

that he clai7ed was contingent[&$]

;oth 'tt! Diaratun and 'tt! ;allelos posited that

their entitle7ent to attorne!s fees was contingent et,a contract for a contingent fees is an agree7ent in

$riting ! which the fees, usuall! a fi9ed percentage

of what 7a! e recovered in the action, are 7ade to

depend upon the success in the effort to enforce or

defend a supposed right Contingent fees depend upon

an e9press contract, without which the attorne! can

onl! recover on the asis of 1uantum meruit [&1] ith

neither 'tt! Diaratun nor 'tt! ;allelos presenting awritten agree7ent earing upon their supposed

contingent fees, the onl! wa! to deter7ine their right

to appropriate attorne!s fees is to appl! the principle

of 1uantum meruit

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7uantum meruit literall! 7eaning as much as he

deserves is used as asis for deter7ining an attorne!s

professional fees in the asence of an e9press

agree7ent[&"]The recover! of attorne!s fees on the

asis of 1uantum meruit is a device that prevents an

unscrupulous client fro7 running awa! with the fruits

of the legal services of counsel without pa!ing for it

and also avoids un2ust enrich7ent on the part of the

attorne! hi7self[&>] 'n attorne! 7ust show that he is

entitled to reasonale co7pensation for the effort in

pursuing the clients cause, taking into account certain

factors in fi9ing the a7ount of legal fees[&4]

Rule "$$1 of the Code of 3rofessional

Responsibility lists the guidelines for deter7ining the

proper a7ount of attorne! fees, to wit0

Rule "$1 ' law!er shall e guided ! the

following factors in deter7ining his fees0

a) The ti7e spent and the e9tent of theservices rendered or re6uiredB

) The novelt! and difficult of the6uestions involvedB

c) The i7portant of the su2ect 7atterB

d) The skill de7andedB

e) The proailit! of losing other

e7plo!7ent as a result of acceptance of the

proffered caseB

f) The custo7ar! charges for si7ilar

services and the schedule of fees of the 8;:

chapter to which he elongsB

g) The a7ount involved in the

controvers! and the enefits resulting to the

client fro7 the serviceB

h) The contingenc! or certaint! of co7pensationB

i) The character of the e7plo!7ent,

whether occasional or estalishedB and

2) The professional standing of the

law!er

8n the event of a dispute as to the a7ount of

fees etween the attorne! and his client, and the

intervention of the courts is sought, the deter7ination

re6uires that there e evidence to prove the a7ount of

fees and the e9tent and value of the services rendered,

taking into account the facts deter7inative thereof[&5] rdinaril!, therefore, the deter7ination of the

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attorne!s fees on 1uantum meruit is re7anded to the

lower court for the purpose owever, it will e 2ust

and e6uitale to now assess and fi9 the attorne!s fees

of oth attorne!s in order that the resolution of a

co7parativel! si7ple controvers!, as ?ustice

Regalado put it in Traders Royal Ban) 5mployees

6nion!ndependent v. 2%RC,[&%] would not e

needlessl! prolonged, ! taking into due

consideration the accepted guidelines and so 7uch of

the pertinent data as are e9tant in the records

'tt! Diaratun and 'tt! ;allelos each clai7edattorne!s fees e6uivalent to 15E of the principal

award of :11>,5>",5$$$$, which was the a7ount

granted ! the RTC in its decision Considering that

the attorne!s fees will e defra!ed ! the eirs of

@acaangkit out of their actual recover! fro7 .:C,

giving to each of the two attorne!s 15E of the

principal award as attorne!s fees would e e9cessive

and unconscionale fro7 the point of view of theclients Thus, the Court, which holds and e9ercises the

power to fi9 attorne!s fees on

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