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Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 127820 July 20, 1998
MUNICIPALITY OF PARAÑAQUE, petitioner,
vs.
V.M. REALTY CORPORATION, respondent.
PANGANIBAN, J.:
A local government unit (LGU), like the Municipality of Parañaque, cannot
authorize an expropriation of private property through a mere resolution of its
lawmaking body. The Local Government Code expressly and clearly requires
an ordinance or a local law for the purpose. A resolution that merely expresses
the sentiment or opinion of the Municipal Council will not suffice. On the other
hand, the principle of res judicata does not bar subsequent proceedings for the
expropriation of the same property when all the legal requirements for its valid
exercise are complied with.
Statement of the Case
These principles are applied by this Court in resolving this petition for review
on certiorari of the July 22, 1996 Decision 1 of the Court of Appeals 2 in CA GR
CV No. 48048, which affirmed in toto3 the Regional Trial Court's August 9,
1994 Resolution. 4 The trial court dismissed the expropriation suit as follows:
The right of the plaintiff to exercise the power of eminent
domain is not disputed. However, such right may be exercised
only pursuant to an Ordinance (Sec. 19, R.A No. 7160). In the
instant case, there is no such ordinance passed by the
Municipal Council of Parañaque enabling the Municipality, thru
its Chief Executive, to exercise the power of eminent domain.
The complaint, therefore, states no cause of action.
Assuming that plaintiff has a cause of action, the same is
barred by a prior judgment. On September 29, 1987, the
plaintiff filed a complaint for expropriation involving the same
parcels of land which was docketed as Civil Case No. 17939
of this Court (page 26, record). Said case was dismissed with
prejudice on May 18, 1988 (page 39, record). The order of
dismissal was not appealed; hence, the same became final.
The plaintiff cannot be allowed to pursue the present action
without violating the principle of [r]es [j]udicata. While
defendant in Civil Case No. 17939 was Limpan Investment
Corporation, the doctrine of res judicata still applies because
the judgment in said case (C.C. No. 17939) is conclusive
between the parties and their successors-in-interest (Vda. de
Buncio vs. Estate of the late Anita de Leon). The herein
defendant is the successor-in-interest of Limpan Investment
Corporation as shown by the "Deed of Assignment Exchange"
executed on June 13, 1990.
WHEREFORE, defendant's motion for reconsideration is
hereby granted. The order dated February 4, 1994 is vacated
and set aside.
This case is hereby dismissed. No pronouncement as to
costs.

2. SO ORDERED.5
Factual Antecedents
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, 6 the
Municipality of Parañaque filed on September 20, 1993, a Complaint for
expropriation 7 against Private Respondent V.M. Realty Corporation over two
parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a
combined area of about 10,000 square meters, located at Wakas, San
Dionisio, Parañaque, Metro Manila, and covered by Torrens Certificate of Title
No. 48700. Allegedly, the complaint was filed "for the purpose of alleviating the
living conditions of the underprivileged by providing homes for the homeless
through a socialized housing project." 8 Parenthetically, it was also for this
stated purpose that petitioner, pursuant to its Sangguniang Bayan Resolution
No. 577, Series of 1991, 9 previously made an offer to enter into a negotiated
sale of the property with private respondent, which the latter did not accept. 10
Finding the Complaint sufficient in form and substance, the Regional Trial
Court of Makati, Branch 134, issued an Order dated January 10, 1994, 11
giving it due course. Acting on petitioner's motion, said court issued an Order
dated February 4, 1994, 12 authorizing petitioner to take possession of the
subject property upon deposit with its clerk of court of an amount equivalent to
15 percent of its fair market value based on its current tax declaration.
On February 21, 1994, private respondent filed its Answer containing
affirmative defenses and a counterclaim, 13 alleging in the main that (a) the
complaint failed to state a cause of action because it was filed pursuant to a
resolution and not to an ordinance as required by RA 7160 (the Local
Government Code); and (b) the cause of action, if any, was barred by a prior
judgment or res judicata. On private respondent's motion, its Answer was
treated as a motion to dismiss. 14 On March 24, 1991, 15 petitioner filed its
opposition, stressing that the trial court's Order dated February 4, 1994 was in
accord with Section 19 of RA 7160, and that the principle of res judicata was
not applicable.
Thereafter, the trial court issued its August 9, 1994 Resolution 16nullifying its
February 4, 1994 Order and dismissing the case. Petitioner's motions for
reconsideration and transfer of venue were denied by the trial court in a
Resolution dated December 2, 1994. 17 Petitioner then appealed to
Respondent Court, raising the following issues:
1. Whether or not the Resolution of the
Parañaque Municipal Council No. 93-95,
Series of 1993 is a substantial compliance of
the statutory requirement of Section 19, R.A.
7180 [sic] in the exercise of the power of
eminent domain by the plaintiff-appellant.
2. Whether or not the complaint in this case
states no cause of action.
3. Whether or not the strict adherence to the
literal observance to the rule of procedure
resulted in technicality standing in the way of
substantial justice.
4. Whether or not the principle of res judicata
is applicable to the present case. 18
As previously mentioned, the Court of Appeals affirmed in toto the trial court's
Decision. Respondent Court, in its assailed Resolution promulgated on
January 8, 1997, 19 denied petitioner's Motion for Reconsideration for lack of
merit.
Hence, this appeal.20
The Issues
Before this Court, petitioner posits two issues, viz.:
1. A resolution duly approved by the municipal council has the
same force and effect of an ordinance and will not deprive an
expropriation case of a valid cause of action.
2. The principle of res judicata as a ground for dismissal of
case is not applicable when public interest is primarily
involved. 21
The Court's Ruling
The petition is not meritorious.
First Issue:
Resolution Different from an Ordinance
Petitioner contends that a resolution approved by the municipal council for the
purpose of initiating an expropriation case "substantially complies with the
requirements of the law" 22 because the terms "ordinance" and "resolution" are
synonymous for "the purpose of bestowing authority [on] the local government

3. unit through its chief executive to initiate the expropriation proceedings in court
in the exercise of the power of eminent domain." 23 Petitioner seeks to bolster
this contention by citing Article 36, Rule VI of the Rules and Regulations
Implementing the Local Government Code, which provides. "If the LGU fails to
acquire a private property for public use, purpose, or welfare through
purchase, the LGU may expropriate said property through a resolution of the
Sanggunian authorizing its chief executive to initiate expropriation
proceedings." 24 (Emphasis supplied.)
The Court disagrees. The power of eminent domain is lodged in the legislative
branch of government, which may delegate the exercise thereof to LGUs,
other public entities and public utilities. 25 An LGU may therefore exercise the
power to expropriate private property only when authorized by Congress and
subject to the latter's control and restraints, imposed "through the law
conferring the power or in other legislations." 26In this case, Section 19 of RA
7160, which delegates to LGUs the power of eminent domain, also lays down
the parameters for its exercise. It provides as follows:
Sec. 19.Eminent Domain. A local government unit may,
through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public
use, or purpose, or welfare for the benefit of the poor and the
landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws: Provided,
however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously
made to the owner, and such offer was not accepted:
Provided, further, That the local government unit may
immediately take possession of the property upon the filing of
the expropriation proceedings and upon making a deposit with
the proper court of at least fifteen percent (15%) of the fair
market value of the property based on the current tax
declaration of the property to be expropriated: Provided,
finally, That, the amount to be paid for the expropriated
property shall be determined by the proper court, based on the
fair market value at the time of the taking of the property.
(Emphasis supplied)
Thus, the following essential requisites must concur before an LGU can
exercise the power of eminent domain:
1. An ordinance is enacted by the local legislative council
authorizing the local chief executive, in behalf of the LGU, to
exercise the power of eminent domain or pursue expropriation
proceedings over a particular private property.
2. The power of eminent domain is exercised for public use,
purpose or welfare, or for the benefit of the poor and the
landless.
3. There is payment of just compensation, as required under
Section 9, Article III of the Constitution, and other pertinent
laws.
4. A valid and definite offer has been previously made to the
owner of the property sought to be expropriated, but said offer
was not accepted. 27
In the case at bar, the local chief executive sought to exercise the power of
eminent domain pursuant to a resolution of the municipal council. Thus, there
was no compliance with the first requisite that the mayor be authorized through
an ordinance. Petitioner cites Camarines Sur vs. Court of Appeals28 to show
that a resolution may suffice to support the exercise of eminent domain by an
LGU. 29 This case, however, is not in point because the applicable law at that
time was BP 337, 30 the previous Local Government Code, which had provided
that a mere resolution would enable an LGU to exercise eminent domain. In
contrast, RA 7160, 31 the present Local Government Code which was already
in force when the Complaint for expropriation was filed, explicitly required an
ordinance for this purpose.
We are not convinced by petitioner's insistence that the terms "resolution" and
"ordinance" are synonymous. A municipal ordinance is different from a
resolution. An ordinance is a law, but a resolution is merely a declaration of the
sentiment or opinion of a lawmaking body on a specific matter. 32 An ordinance
possesses a general and permanent character, but a resolution is temporary in
nature. Additionally, the two are enacted differently — a third reading is
necessary for an ordinance, but not for a resolution, unless decided otherwise
by a majority of all the Sanggunian members. 33
If Congress intended to allow LGUs to exercise eminent domain through a
mere resolution, it would have simply adopted the language of the previous
Local Government Code. But Congress did not. In a clear divergence from the
previous Local Government Code, Section 19 of RA 7160 categorically
requires that the local chief executive act pursuant to an ordinance. Indeed,
"[l]egislative intent is determined principally from the language of a statute.
Where the language of a statute is clear and unambiguous, the law is applied
according to its express terms, and interpretation would be resorted to only
where a literal interpretation would be resorted to only where a literal
interpretation would be either impossible or absurd or would lead to an
injustice." 34 In the instant case, there is no reason to depart from this rule,
since the law requiring an ordinance is not at all impossible, absurd, or unjust.

4. Moreover, the power of eminent domain necessarily involves a derogation of a
fundamental or private right of the people. 35 Accordingly, the manifest change
in the legislative language — from "resolution" under BP 337 to "ordinance"
under RA 7160 — demands a strict construction. "No species of property is
held by individuals with greater tenacity, and is guarded by the Constitution
and laws more sedulously, than the right to the freehold of inhabitants. When
the legislature interferes with that right and, for greater public purposes,
appropriates the land of an individual without his consent, the plain meaning of
the law should not be enlarged by doubtful interpretation." 36
Petitioner relies on Article 36, Rule VI of the Implementing Rules, which
requires only a resolution to authorize an LGU to exercise eminent domain.
This is clearly misplaced, because Section 19 of RA 7160, the law itself, surely
prevails over said rule which merely seeks to implement it. 37 It is axiomatic
that the clear letter of the law is controlling and cannot be amended by a mere
administrative rule issued for its implementation. Besides, what the
discrepancy seems to indicate is a mere oversight in the wording of the
implementing rules, since Article 32, Rule VI thereof, also requires that, in
exercising the power of eminent domain, the chief executive of the LGU act
pursuant to an ordinance.
In this ruling, the Court does not diminish the policy embodied in Section 2,
Article X of the Constitution, which provides that "territorial and political
subdivisions shall enjoy local autonomy." It merely upholds the law as worded
in RA 7160. We stress that an LGU is created by law and all its powers and
rights are sourced therefrom. It has therefore no power to amend or act
beyond the authority given and the limitations imposed on it by law. Strictly
speaking, the power of eminent domain delegated to an LGU is in reality not
eminent but "inferior" domain, since it must conform to the limits imposed by
the delegation, and thus partakes only of a share in eminent domain. 38
Indeed, "the national legislature is still the principal of the local government
units, which cannot defy its will or modify or violate it." 39
Complaint Does Not
State a Cause of Action
In its Brief filed before Respondent Court, petitioner argues that its
Sangguniang Bayan passed an ordinance on October 11, 1994 which
reiterated its Resolution No. 93-35, Series of 1993, and ratified all the acts of
its mayor regarding the subject expropriation. 40
This argument is bereft of merit. In the first place, petitioner merely alleged the
existence of such an ordinance, but it did not present any certified true copy
thereof. In the second place, petitioner did not raise this point before this
Court. In fact, it was mentioned by private respondent, and only in passing. 41
In any event, this allegation does not cure the inherent defect of petitioner's
Complaint for expropriation filed on September 23, 1993. It is hornbook
doctrine that
. . . in a motion to dismiss based on the ground that the
complaint fails to state a cause of action, the question
submitted before the court for determination is the sufficiency
of the allegations in the complaint itself. Whether those
allegations are true or not is beside the point, for their truth is
hypothetically admitted by the motion. The issue rather is:
admitting them to be true, may the court render a valid
judgment in accordance with the prayer of the complaint? 42
The fact that there is no cause of action is evident from the face of the
Complaint for expropriation which was based on a mere resolution. The
absence of an ordinance authorizing the same is equivalent to lack of cause of
action. Consequently, the Court of Appeals committed no reversible error in
affirming the trial court's Decision which dismissed the expropriation suit.
Second Issue:
Eminent Domain Not Barred by Res Judicata
As correctly found by the Court of Appeals 43 and the trial court, 44all the
requisites for the application of res judicata are present in this case. There is a
previous final judgment on the merits in a prior expropriation case involving
identical interests, subject matter and cause of action, which has been
rendered by a court having jurisdiction over it.
Be that as it may, the Court holds that the principle of res judicata, which finds
application in generally all cases and proceedings, 45cannot bar the right of the
State or its agent to expropriate private property. The very nature of eminent
domain, as an inherent power of the State, dictates that the right to exercise
the power be absolute and unfettered even by a prior judgment or res judicata.
The scope of eminent domain is plenary and, like police power, can "reach
every form of property which the State might need for public use." 46 "All
separate interests of individuals in property are held of the government under
this tacit agreement or implied reservation. Notwithstanding the grant to
individuals, the eminent domain, the highest and most exact idea of property,
remains in the government, or in the aggregate body of the people in their
sovereign capacity; and they have the right to resume the possession of the
property whenever the public interest requires it." 47Thus, the State or its
authorized agent cannot be forever barred from exercising said right by reason
alone of previous non-compliance with any legal requirement.

5. While the principle of res judicata does not denigrate the right of the State to
exercise eminent domain, it does apply to specific issues decided in a previous
case. For example, a final judgment dismissing an expropriation suit on the
ground that there was no prior offer precludes another suit raising the same
issue; it cannot, however, bar the State or its agent from thereafter complying
with this requirement, as prescribed by law, and subsequently exercising its
power of eminent domain over the same property. 48 By the same token, our
ruling that petitioner cannot exercise its delegated power of eminent domain
through a mere resolution will not bar it from reinstituting similar proceedings,
once the said legal requirement and, for that matter, all others are properly
complied with. Parenthetically and by parity of reasoning, the same is also true
of the principle of "law of the case." In Republic vs. De Knecht, 49 the Court
ruled that the power of the State or its agent to exercise eminent domain is not
diminished by the mere fact that a prior final judgment over the property to be
expropriated has become the law of the case as to the parties. The State or its
authorized agent may still subsequently exercise its right to expropriate the
same property, once all legal requirements are complied with. To rule
otherwise will not only improperly diminish the power of eminent domain, but
also clearly defeat social justice.
WHEREFORE, the petition is hereby DENIED without prejudice to petitioner's
proper exercise of its power of eminent domain over subject property. Costs
against petitioner.
SO ORDERED.
Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 132431 February 13, 2004
ESTATE OR HEIRS OF THE LATE EX-JUSTICE JOSE B. L. REYES representedby
their Administratrix and Attorney-In-Fact, Adoracion D. Reyes, and the ESTATE
OR HEIRS OF THE LATE DR. EDMUNDO A. REYES,
representedby MARIA TERESA P. REYES and CARLOS P. REYES, petitioners
vs.
CITY OF MANILA, respondent.
G.R. No. 137146 February 13, 2004
ESTATE OF HEIRS OF THE LATE EX-JUSTICE JOSE B.L. REYES and ESTATE OR
HEIRS OF THE LATE DR. EDMUNDO REYES, petitioners
vs.
COURT OF APPEALS, DR. ROSARIO ABIOG, ANGELINA MAGLONSO and
SAMPAGUITA BISIG NG MAGKAKAPITBAHAY, INC. and the CITY OF MANILA,
respondents.
D E C I S I O N
CORONA, J.:
Before us are the following consolidated petitions filed by petitioners Heirs of Jose B.L.
Reyes and Edmundo Reyes: (1) a petition for review1
of the decision2
of the Court of
Appeals dated January 27, 1998 which ordered the condemnation of petitioners’
properties and reversed the order3
of the Regional Trial Court (RTC) of Manila, Branch
9, dated October 3, 1995 dismissing the complaint of respondent City of Manila (City)
for expropriation, and (2) a petition for certiorari4
alleging that the Court of Appeals
committed grave abuse of discretion in rendering a resolution5
dated August 19, 1998
which issued a temporary restraining order against the Municipal Trial Court (MTC) of
Manila, Branch 10, not to "(disturb) the occupancy of Dr. Rosario Abiog, one of the
members of SBMI, until the Supreme Court has decided the Petition for Review on
Certiorari" and a resolution6
dated December 16, 1998 enjoining petitioners "from
disturbing the physical possession of all the properties subject of the expropriation
proceedings."
The undisputed facts follow.
The records show that Jose B. L. Reyes and petitioners Heirs of Edmundo Reyes are
the pro-indiviso co-owners in equal proportion of 11 parcels of land with a total area of
13,940 square meters situated at Sta. Cruz District, Manila and covered by Transfer
Certificate of Title No. 24359 issued bythe Register of Deeds of Manila. These parcels
of land are being occupied and leased by different tenants, among whom are
respondents Abiog, Maglonso and members of respondent
SampaguitaBisigngMagkakapitbahay, Incorporated (SBMI). Petitioners leased to
respondentAbiog Lot2-E, Block 3007 of the consolidated subdivision plan (LRC) Psd-
328345, with an area of 191 square meters7 and to respondent Maglonso, Lot 2-R,
Block 2996 of the same consolidation plan, with an area of 112 square meters.8
On November 9, 1993 and May 26, 1994,respectively, Jose B.L. Reyes and petitioners
Heirs of Edmundo Reyes filed ejectmentcomplaints againstrespondents Rosario Abiog
and Angelina Maglonso, among others. Upon his death, Jose B.L. Reyes was
substituted by his heirs. Petitioners obtained favorable judgments against said
respondents. In Civil Case No. 142851-CV, the Metropolitan Trial Court (MTC) of
Manila, Branch 10, rendered a decision dated May 9, 1994 against respondent Abiog.
In Civil Case No. 144205-CV, the MTC of Manila, Branch 3, issued judgment dated
May 4, 1995 against respondent Maglonso.
Respondents Abiog and Maglonso appealed the MTC decisions but the same were
denied9
by the RTC of Manila, Branch 28, and the RTC of Manila, Branch 38,
respectively. Their appeals to the Court of Appeals were likewise denied.10
As no
appeals were further taken, the judgments of eviction against respondents Abiog and
Maglonso became final and executory in 1998.

6. Meanwhile,during the pendencyof the two ejectmentcases againstrespondents Abiog
and Maglonso,respondent City filed on April 25, 1995 a complaint for eminent domain
(expropriation)11
of the properties of petitioners at the RTC of Manila, Branch 9. The
properties sought to be acquired by the City included parcels of land occupied by
respondents Abiog, Maglonso and members of respondent SBMI.
The complaint was based on Ordinance No. 7818 enacted on November 29, 1993
authorizing the City Mayor of Manila to expropriate certain parcels of land with an
aggregate area of 9,930 square meters, more or less, owned by Jose B.L. Reyes and
Edmundo Reyes situated along the streets of Rizal Avenue, Tecson, M. Natividad,
Sampaguita, Oroquieta, M. Hizon, Felix Huertes, Bulacan, Sulu, Aurora Boulevard,
Pedro Guevarra and Kalimbas in the third district of Manila. These parcels of land are
more particularlydescribed in the pertinent Cadastral Plan as Lot 3, Block 2995, Lot 2,
Block 2996; Lot 2, Block 2999; Lot 5, Block 2999, and Lot 2, Block 3007. According to
the ordinance, the said properties were to be distributed to the intended beneficiaries,
who were "the occupants ofthe said parcels ofland who (had) been occupying the said
lands as lessees or any term thereof for a period of at least 10 years."12
The complaint alleged that, on March 10, 1995, respondent City thru City Legal Officer
Angel Aguirre, Jr. sentthe petitioners a written offer to purchase the subject properties
for P10,285,293.38 but the same was rejected. Respondent City prayed that an order
be issued fixing the provisional value of the property in the amount of P9,684,380
based on the current tax declaration of the real properties and that it be authorized to
enter and take possession thereofupon the deposit with the trial court of the amount of
P1,452,657 or 15% of the aforesaid value.
On May 15, 1995, respondent SBMI, a registered non-stock corporation composed of
the residents of the subject properties (including as well as representing herein
respondents Abiog and Maglonso),filed a motion for intervention and admission oftheir
attached complaint with prayer for injunction. Respondent SBMI alleged that it had a
legal interest over the subject matter of the litigation as its members were the lawful
beneficiaries ofthe subjectmatter of the case.It prayed for the issuance of a temporary
restraining order to enjoin the petitioners from ousting the occupants of the subject
properties. The trial court denied the motion for intervention in an order dated June 2,
1995 on the ground that "the movants’ interest (was) indirect, contingent, remote,
conjectual (sic), consequential (sic) and collateral. At the very least, it (was), if it
(existed) at all, purely inchoate, or in sheer expectancy of a right that may or may not
be granted."13
On the day SBMI’s motion for intervention was denied, petitioners filed a motion to
dismiss the complaintfor eminentdomain for lack of merit. Among the grounds alleged
were the following:
xxx that the amount allegedly deposited by the plaintiff is based on an erroneous
computation since Sec. 19 of the Local Government Code of 1991 provides that in
order for the plaintiff to take possession of the property, the deposit should be at least
15% of the fair market value of the property based on the current tax declaration of the
property to be expropriated which is P19,619,520.00, 15% of which is P2,942,928.00;
that since the subject property is allegedly being expropriated for socialized housing,
the guidelines for their equitable valuation shall be setby the Departmentof Finance on
the basis of the market value reflected in the zonal valuation conformably to Sec. 13 of
R.A. No. 7279; that under Department Order No. 33-93 adopted by the Department of
Finance, through the Bureau of Internal Revenue, on 26 April 1992, the zonal valuation
of the subject property is conservatively estimated at approximately P76M; that the
plaintiff has no savings or unappropriated funds to pay for the just compensation; that
instead of expropriating the subject property which enjoys the least priority in the
acquisition bythe City of Manila for socialized housing under Sec. 9(t) of R.A. 7279, the
moneyto be paid should be channeled to the development of 244 sites in Metro Manila
designated as area for priority development; that the City Ordinance was not properly
adopted since there was no public hearing and neither were the defendants notified;
that the tenants occupying the subject property cannot be categorized as
"underprivileged and homeless citizens"or those whose income falls within the poverty
threshold to be qualified as beneficiaries of the intended socialized housing; and that
the plaintiff failed to comply with Art. 34, Rule 6 of the Rules and Regulations
Implementing the Local GovernmentCode of 1991 which requires the local government
unit to first establish the suitability of the property to be acquired for the use intended
and then proceed to obtain from the proper authorities, like the National Housing
Authority, the necessary locational clearance and other requirements imposed under
existing laws, rules and regulations.14
On June 6, 1995, the trial court allowed respondent City to take possession of the
subject property upon deposit of the amount of P1,542,793, based on the
P10,285,293.38 offer by respondent City to petitioners which the trial court fixed as the
provisional amount of the subject properties. On June 14, 1995, respondent City filed
an opposition to petitioners’ motion to dismiss.
On October 3, 1995,the City’s complaintfor eminentdomain was dismissed.15
The trial
court held that expropriation was inappropriate because herein petitioners were in fact
willing to sell the subjectproperties under terms acceptable to the purchaser. Moreover,
respondent City failed to show that its offer was rejected by petitioners. Respondent
City’s motion for reconsideration was denied.
On January 12, 1996, respondent City appealed the decision of the trial court to the
Court of Appeals. Thereafter, several motions16
seeking the issuance of a temporary
restraining order and preliminary injunction were filed by respondent City to prevent
petitioners from ejecting the occupants ofthe subjectpremises.On March 21, 1996, the
Court of Appeals issued a resolution17
denying the motions for lack of merit.
Respondent City’s motion for reconsideration was likewise denied.
Meanwhile,on January 27, 1997, in view of the finality of the judgment in the ejectment
case against respondent Abiog, the MTC of Manila, Branch 10, issued a writ of
execution.
On January 31, 1997, respondent SBMI filed in the Court of Appeals a motion for leave
to intervene with prayer for injunctive relief praying that the ejectment cases be
suspended or that the execution thereof be enjoined in view of the pendency of the
expropriation case filed by respondent City over the same parcels of land.
As a follow-up, respondent Abiog filed in the appellate court, on August 25, 1997, a
reiteratory motion for issuance oftemporaryrestraining order and to stop the execution
of the order dated June 27, 1997 of the Hon. Judge Tranquil P. Salvador, MTC of
Manila, Branch 10.

7. On August 26, 1997, the Court of Appeals issued a resolution18
finding prima facie
basis to grant SBMI’s motions. It issued a temporary restraining order to Judge
Salvador, his employees and agents to maintain the status quo. After the hearing on
the propriety of the issuance ofa writ of preliminary injunction, respondent SBMI filed a
reiteratory motion for injunctive relief on December 11, 1997.
On January 27, 1998, the Court of Appeals rendered the assailed decision reversing
the trial court judgment and upholding as valid respondent City’s exercise of its power
of eminent domain over petitioners’ properties. The dispositive portion of the decision
stated:
WHEREFORE, the Orders appealed from are hereby REVERSED and SET ASIDE.
The case is remanded to the lower court to determine specifically the amount of just
compensation.
SO ORDERED.19
According to the Court of Appeals:
xxx there is no doubt as to the public purpose of the plaintiff-appellant in expropriating
the property of the defendants-appellees.Ordinance No.7818 expressly states that the
subjectparcels ofland are to be distributed to the landless poor residents therein who
have been in possession of the said property for at least ten (10) years.
x xxxxxxxx
xxx In the absence of any law which expressly provides for a period for filing an
expropriation proceeding, the lower court erred in dismissing the complaint based on
unsupported accusations and mere speculations, such as political motivation. The fact
that the expropriation proceeding was not immediately instituted does not negate the
existence of the public purpose for which the ordinance was enacted.
Another reason for the lower court’s dismissal was its finding that there was no proof
that the offer of the plaintiff-appellant, through the City Legal Office, was not accepted.
This conclusion by the lower court is belied by the letter of Adoracion D. Reyes, dated
17 March 1995, xxx.
x xxxxxxxx
There can be no interpretation of the letter of the defendant-appellee other than that the
valid and definite offer of the plaintiff-appellantto purchase the subjectpropertywas not
accepted and, in the words of the defendant-appellee, was totally turned down.
The lower court in denying the plaintiff-appellant’s motion for reconsideration of the
order of dismissal held that the defendants-appellees were actually willing to sell, in
fact, some of the tenants have already purchased the land that they occupy. However,
we agree with the plaintiff-appellant that the contracts entered into by the defendants-
appellees with some of the tenants do not affect the offer it made. The plaintiff-
appellant was not a party in those transactions and as pointed out, its concern is the
majorityof those who have no means to provide themselves with decent homes to live
on.20
From the aforementioned decision of the Court of Appeals, petitioners filed on March
19, 1998 the present petition for review21
before this Court. Alleging that respondent
City cannot expropriate the subject parcels of land, petitioners assigned the following
as errors of the Court of Appeals:
The Court Appeals committed grave abuse and irreversible errors in holding that
respondentCityof Manila may expropriate petitioners’ parcels of land considering that:
I. Respondent did not comply with Secs. 9 and 10 of P.D. (sic) No. 7279,
otherwise known as the "Urban Development and Housing Act of 1992 and
Sec. 34 of the Local Government Code of 1991 (sic)."
II. Ordinance No. 7818 enacted by the City of Manila is violative of the equal
protection clause.
III. There was no valid and definite offer by the respondent City of Manila to
purchase subject parcels of land.
IV. Assuming there was a valid offer, the amount deposited for the payment of
just compensation was insufficient.
V. Petitioners are not unwilling to sell the subject parcels of land.
VI. There was no pronouncement as to just compensation. 22
What followed were incidents leading to the filing of the petition for certiorari against the
resolutions of the Court of Appeals which essentially sought to enjoin the petitioners
from enforcing the final judgments against respondents Abiog, Maglonso and SBMI
(hereinafter, respondent occupants) in the ejectment cases.
On August 17, 1998,respondents Abiog and Maglonso filed in the Court of Appeals an
urgent motion for protective order.
Meanwhile, on September 8, 1998, petitioners were able to secure from the MTC of
Manila, Branch 3, a writ of execution of the final judgment in the other ejectment case
against respondent Maglonso.
On October 19, 1998, respondent SBMI filed in the CA a similar motion for protective
order. In essence, the respondents’ motions for "protective order" sought to stop the
execution of the final and executory judgments in the ejectment cases against them.
On August 19, 1998, the Court of Appeals promulgated the first assailed resolution,23
the dispositive portion of which read:

8. Considering thatthis case has been elevated to the Supreme Court, the Municipal Trial
Court of Manila, Branch 10 and Sheriff Jess Areola or any other sheriff of the City of
Manila, are hereby TEMPORARILY RESTRAINED from disturbing the occupancy of Dr.
Rosario Abiog, one of the members of the SBMI until the Supreme Court has decided
the Petition for Review on Certiorari.
On September 4, 1998, petitioners filed a motion to set aside as ineffective and/or null
and void the said August 19, 1998 resolution. But the Court of Appeals denied the
same in a resolution dated December 16, 1998,24
the dispositive portion of which read:
WHEREFORE, the Estate or heirs of J.B.L. Reyes and all persons acting in their behalf
are hereby ENJOINED from disturbing the physical possession ofall the properties (sic)
subject of the expropriation proceedings.
SO ORDERED.
In enjoining the petitioners from evicting respondent occupants and in effect
suspending the execution of the MTC judgments, the appellate court held that:
We do not agree with the contention of the defendants -appellees that we no longer
have any jurisdiction to issue the subject resolution. In spite of having rendered the
decision on 27 January 1998, the appellate Court still has the inherent power and
discretion to amend whatever order or decision it had made before in order to render
substantial justice.
x xxxxxxxx
There is no doubt that the members of SBMI have a personality to intervene before this
Court. The plaintiff-appellant itself, in their Comment to the defendants-appellees’
motion to set aside this Court’s 19 August 1998 resolution, recognized Dr. Rosario
Abiog, as one of the intended beneficiaries of the expropriation case. The plaintiff-
appellantalso enumerated the ejectmentcases pending before the lower courts when it
filed a motion for the issuance of temporary restraining order and/or writ of preliminary
injunction upon appeal to this Court. Moreover, the plaintiff-appellantalso furnished this
Court with a copy of the THIRD PARTY CLAIM it filed before the City Sheriff Office and
Sheriff Dante Lot to enjoin them from implementing and executing the Demolition Order
issued bythe Metropolitan Trial Court of Manila (Branch 3) against Angelina Maglonso.
In their motion to set aside the 19 August 1998 resolution, the defendants -appellees,
quoting the Order of the lower court denying the motion for intervention stated that:
The petition of the plaintiff to expropriate the property does not ipso facto create any fiat
that would give rise to the claim of the movant of "legal interest" in the property. The
petition could well be denied leaving any assertion of interest on the part of the movant
absolutely untenable. If the petition, on the other hand, is granted, that would be the
time for the movant to intervene, to show that they are the intended beneficiaries, and if
the plaintiff would distribute the property to other persons, the remedy is to compel the
plaintiff to deliver the lot to them.
Having established that they are the intended beneficiaries, the intervenors then have
the right to seek protection from this Court.
On 27 January 1998, we held that the plaintiff-appellant validly exercised its power of
eminentdomain and consequently may expropriate the subject property upon payment
of justcompensation.The record before us shows that on 6 June 1995, the lower court
allowed the plaintiff-appellant to take possession of the subject property upon filing of
P1,542,793.00 deposit. The property to be expropriated includes the same properties
subject of the ejectment cases against the intervenors. There is nothing in the record
that would show that the order of possession was ever setaside or the depositreturned
to the plaintiff-appellant.
Based on the foregoing considerations, we find that the intervenors are entitled to the
injunction that they prayed for.
To allow the demolition of the premises of the intervenors would defeat the very
purpose of expropriation which is to distribute the subject property to the intended
beneficiaries who are the occupants of the said parcels of land who have been
occupying the said lands as lessees or any term thereof for a period of at least ten (10)
years.
In the case of Lourdes GuardacasaVda. De Legaspi vs. Hon. Herminion A. Avendano,
et al., the Supreme Court ordered the suspension of the enforcement and
implementation ofthe writ of execution and order of demolition issued in the ejectment
case until after the final termination of the action for quieting of title because it is more
equitable and just and less productive of confusion and disturbance of physical
possession with all its concomitant inconvenience and expenses.
As held in Wilmon Auto Supply Corp., et al. vs. Hon. Court of Appeals, et al., the
exception to the rule in the case of Vda. De Legaspi case, execution of the decision in
the ejectment case would also have meant demolition of the premises, which is the
situation in the case at bar.25
Claiming that the Court of Appeals committed grave abuse of discretion amounting to
lack or excess of jurisdiction,petitioners filed the subject petition for certiorari26
with the
following assignments of error:
I
PUBLIC RESPONDENT COURT OF APPEALS HAS NO JURISDICTION IN ISSUING
THE "PROTECTIVE ORDER" ENJOINING THE EXECUTION OF THE FINAL AND
EXECUTORY JUDGMENTS IN THE EJECTMENT CASES AGAINST PRIVATE
RESPONDENTS BECAUSE THE POWER TO ISSUE SUCH ORDER HAS BEEN
LODGED WITH THE HONORABLE COURT IN VIEW OF THE PENDENCY OF G.R.
NO. 132431.
II
ASSUMING ARGUENDO THAT PUBLIC RESPONDENT COURT OF APPEALS
COULD ISSUE SUCH ORDER, IT ACTED WITH GRAVE ABUSE OF DISCRETION

9. AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE
PROTECTIVE ORDER IN FAVOR OF PRIVATE RESPONDENTS BECAUSE IT HAS
LONG BEEN SETTLED THAT THEIR INTERESTS IN THE PROPERTIES SUBJECT
OF THE EXPROPRIATION CASE ARE NOT SUFFICIENT FOR THEM TO BE
DECLARED AS INTERVENORS.
III
THE SO-CALLED PROTECTIVE ORDER IS AN INJUNCTIVE RELIEF IN DISGUISE.
IV
PRIVATE RESPONDENTS’ ACT OF SEEKING THE PROTECTIVE ORDER FROM
THE COURT OF APPEALS, DESPITE THE FINALITY OF THE ORDER BY THE
TRIAL COURT DISALLOWING INTERVENTION, CONSTITUTES FORUM
SHOPPING.
V
The assailed resolutions of the Court of Appeals should be set aside, following the
ruling inFilstream International, Inc. vs. CA, Judge Tongco and the City of Manila (G.R.
No. 125218, January 23, 1998) and Filstream International, Inc. vs. CA, Malit et al.
(G.R. No. 128077, January 23, 1998).27
In G.R. No 132431, petitioners allege: (1) that Ordinance 7818 is unconstitutional for
violating the equal protection clause of the 1987 Constitution and for abridging the
"contracts" between petitioners and prospective buyers of the subject parcels of land;
(2) that, in expropriating the subjectproperties,respondent City’s act of expropriation is
illegal because it did not comply with Sections 9 and 10 of Republic Act No. 7279 (The
Urban Developmentand Housing Act of 1992); (3) that, prior to the filing of the eminent
domain complaint, respondent City did not make a valid and definite offer to purchase
the subjectproperties,and (4) that, assuming the offer as valid, the amountoffered was
insufficient.28
On the other hand, in insisting that its offer was valid and that the amount it deposited
was sufficient, respondent City reiterates the reasons cited by the Court of Appeals.
According to respondent City, there is nothing in the Local Government Code of 1991
which requires the offer to be made before enacting an enabling ordinance. The actual
exercise of the power of eminentdomain begins onlyupon the filing of the complaint for
eminent domain with the RTC by the Chief Executive and not when an ordinance
pursuantthereto has been enacted. It is therefore safe to say that the offer to purchase
can be made before the actual filing of the complaint, whether that is before or after the
ordinance is enacted.
On the sufficiency of the amount deposited, respondent City alleges that the
determination of the provisional value of the property was judicially determined by the
trial court at P10,285,293.38 in its order dated June 6, 1995. On the basis of this order,
respondentCityfiled its compliance dated June 13,1995 manifesting the deposit of the
additional amount of P1,452,793 (15% of P10,285,293.38).
RespondentCity also claims thatall along petitioners were notwilling to sell the subject
parcels of land as proved by the tenor of the letter of petitioners’ agent, Adoracion
Reyes, who wrote respondent City that "it is the consensus of the heirs xxx to turn
down as we are totally turning down your offer to purchase the parcels of land subject
matter of the aforesaid ordinance, or your offer is not acceptable to us in every
respect."
In G.R. No. 137146 (the petition for certiorari questioning the resolutions of the Court of
Appeals which issued a temporaryrestraining order and ordered the parties to maintain
the status quo), petitioners assail the resolutions of the Court of Appeals which in effect
enjoined the MTC of Manila, Branches 9 and 10, from enforcing the final judgments in
the ejectment cases while the appeal from the decision involving the same parcels of
land in the expropriation case remains pending before this Court. Petitioners maintain
that, first, only this Court and not the Court of Appeals has jurisdiction to enjoin the
execution of the judgments in the ejectment cases considering that the expropriating
case is now being reviewed by this Court; second, the orders are void as they protect
an alleged right that does not belong to respondent City but to a non-party in the
expropriation case; third, said orders deprive petitioners of their property without due
process oflaw because they amount to a second temporary restraining order which is
expressly prohibited by Section 5, Rule 58 of the Rules of Court29
; last, petitioners
brand respondentoccupants’ actof seeking the assailed "protective order," despite the
finality of the trial court order disallowing intervention, as forum -shopping.
To justify the propriety of their intervention and the legality of the assailed resolutions,
respondent occupants aver the following:
first, Section 9(1)30
of BP 129 (The Judiciary Reorganization Act of 1980) is broad
enough to include "protective orders." If the Court of Appeals has the power to annul
judgments ofthe RTC, with more reason does it have the power to annul judgments of
the MTC.
second,as the undisputed rightful beneficiaries of the expropriation, they have the right
to intervene.
third, their rightto intervene has never been barred with finality. Due to the dismissal of
the complaint for expropriation, their motion for reconsideration of the trial court order
denying their motion to intervene was never ruled upon as it became moot and
academic. The trial court’s silence does not mean a denial of the intervention and
injunction that respondent occupants prayed for.
fourth, it is more appropriate in the interest of equity and justice to preserve the
statusquo pending resolution by this Court of petitioners’ appeal in the expropriation
case because they are anyway the beneficiaries of the subject properties. The
expropriation case should be considered as a supervening event that necessitated a
modification, suspension or abandonment of the MTC decisions.
fifth, respondents are not guilty of forum-shopping for the reason that the Court of
Appeals never made a ruling or decision on respondents’ motion to intervene.
Moreover, the causes of action in the two cases were different and distinct from each
other. In the motion to intervene, respondent occupants sought to be recognized and
included as parties to the expropriation case. On the other hand, in the motion for

10. protective order, respondents sought to enjoin the execution of the decisions in the
ejectment cases against them.
Before proceeding to the discussion of the issues, it would be best to first recapitulate
the confusing maze of facts of this case.
It is not disputed that the petitioners acquired a favorable judgment of eviction against
herein respondents Abiog and Maglonso.In 1998,the said judgments became final and
executory. Consequently, writs of execution were issued. During the pendency of the
complaints for unlawful detainer, respondent City filed a case for the expropriation of
the same properties involved in the ejectmentcases.From thereon,numerous motions
to intervene and motions for injunction were filed in the expropriation case by
respondents.The trial court allowed respondentCity to take possession of the property;
it denied the motions for intervention and injunction,and,after allowing respondent City
to oppose the motion to dismiss, dismissed the complaint for expropriation. On appeal,
the Court of Appeals reversed the trial court and found that respondent City properly
exercised its right to expropriate the subject properties. Petitioners appealed the CA
decision to this Court. Thereafter, on motion of respondent occupants, the Court of
Appeals issued protective orders that required the parties to maintain the statusquo
(prohibiting any ejectment) pending this Court’s resolution of the appeal.
Petitioner is now before us questioning the legality of the CA’s expropriation order and
the propriety of its act enjoining the execution of the final judgments in the ejectment
cases.
With these given facts, it is imperative to first resolve the issue of whether the
respondent City may legally expropriate the subject properties, considering that a
negative finding will necessarily moot the issue of the propriety of the "protective
orders" of the Court of Appeals.
Whether respondent City deprived petitioners of their property without due process of
law depends on whether the City complied with the legal requirements for expropriation.
Before respondent City can exercise its power of eminent domain, the same must be
sanctioned and must not violate any law. Being a mere creation of the legislature, a
local governmentunit can only exercise powers granted to it by the legislature. Such is
the nature of the constitutional power of control of Congress over local government
units, the latter being mere creations of the former.31
When it expropriated the subject properties, respondent City relied on its powers
granted by Section 19 of the Local Government Code of 199132
and RA 409 (The
Revised Charter of the City of Manila). The latter specifically gives respondent City the
power to expropriate private property in the pursuitof its urban land reform and housing
program.33
Respondent City, however, is also mandated to follow the conditions and
standards prescribed by RA 7279 (the Urban Development and Housing Act of 1992),
the law governing the expropriation of property for urban land reform and housing.
Sections 9 and 10 of RA 7279 specifically provide that:
Sec. 9. Priorities in the acquisition of Land – Lands for socialized housing shall be
acquired in the following order:
(a) Those owned by the Government or any of its sub-divisions,
instrumentalities, or agencies, including government-owned or –controlled
corporations and their subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas of Priority Development, Zonal
Improvement sites, and Slum Improvement and Resettlement Program sites
which have not yet been acquired;
(e) BagongLipunan Improvement sites and Services or BLISS sites which
have not yet been acquired; and
(f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to the
beneficiaries, the priorities mentioned in this section shall not apply. The local
government units shall give budgetary priority to on-site development of government
lands.
Sec. 10.Modes of Land Acquisition. – The modes ofacquiring lands for purposes ofthis
Act shall include,among others, community mortgage, land swapping, land assembly
or consolidation, land banking, donation to the Government, joint venture agreement,
negotiated purchase,and expropriation: Provided,however,That expropriation shall be
resorted to only when other modes of acquisition have been exhausted: Provided
further, That where expropriation is resorted to, parcels ofland owned by small property
owners shall be exempted for purposes of this Act: Provided, finally, that abandoned
property, as herein defined, shall be reverted and escheated to the State in a
proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.
[italics supplied]
In Filstream vs. Court of Appeals,34
we held that the above-quoted provisions are
limitations to the exercise of the power of eminentdomain, specially with respect to the
order of priority in acquiring private lands and in resorting to expropriation proceedings
as a means to acquire the same. Private lands rank last in the order of priority for
purposes ofsocialized housing. In the same vein, expropriation proceedings are to be
resorted to only after the other modes ofacquisition have been exhausted.Compliance
with these conditions is mandatory because these are the only safeguards of
oftentimes helpless owners of private property against violation of due process when
their property is forcibly taken from them for public use.
We find that herein respondent City failed to prove strict compliance with the
requirements of Sections 9 and 10 of RA 7279. Respondent City neither alleged in its
complaintnor proved during the proceedings before the trial court that it complied with
said requirements.Even in the Courtof Appeals,respondentCity in its pleadings failed
to show its compliance with the law. The Court of Appeals was likewise silent on this
specific jurisdictional issue. This is a clear violation of the right to due process of the
petitioners.

11. We also take note of the fact that Filstream is substantiallysimilar in facts and issues to
the case at bar.
In that case,Filstream acquired a favorable judgmentof eviction against the occupants
of its properties in Tondo, Manila. But prior thereto, on the strength of Ordinance 7818
(the same ordinance used by herein respondent City as basis to file the complaint for
eminentdomain), respondent City initiated a complaint for expropriation of Filstream’s
properties in Tondo, Manila, for the benefit of the residents thereof. Filstream filed a
motion to dismiss and the City opposed the same. The trial court denied the motion.
When the judgmentin the ejectmentcase became final, Filstream was able to obtain a
writ of execution and demolition.It thereafter filed a motion to dismiss the expropriation
complaint but the trial court denied the same and ordered the condemnation of the
subject properties. On appeal, the Court of Appeals denied Filstream’s petition on a
technical ground. Thus, the case was elevated to this Court for review of the power of
the City to expropriate the Filstream’s properties.
Meanwhile,the occupants and respondentCity filed in separate branches ofthe RTC of
Manila several petitions for certiorari with prayer for injunction to prevent the execution
of the judgments in the ejectment cases. After the consolidation of the petitions for
certiorari,the designated branch of RTC Manila dismissed the cases on the ground of
forum-shopping. The dismissal was appealed to the Court of Appeals which reversed
the trial court’s dismissal and granted respondent’s prayer for injunction. Filstream
appealed the same to this Court, which appeal was consolidated with the earlier
petition for review of the decision of the Court of Appeals in the main expropriation
case.
Due to the substantial resemblance of the facts and issues of the case at bar to those
in Filstream, we find no reason to depart from our ruling in said case. To quote:
The propriety of the issuance of the restraining order and the writ of preliminary
injunction is but a mere incident to the actual controversy which is rooted in the
assertion ofthe conflicting rights of the parties in this case over the disputed premises.
In order to determine whether private respondents are entitled to the injunctive reliefs
granted by respondent CA, we deemed it proper to extract the source of discord.
x xxxxxxxx
Proceeding from the parameters laid out in the above disquisitions, we now pose the
crucial question: Did the city of Manila comply with the abovementioned conditions
when it expropriated petitioner Filstream’s properties? We have carefully scrutinized the
records of this case and found nothing that would indicate the respondent City of
Manila complied with Sec. 9 and Sec. 10 of R.A. 7279. Petitioners Filstream’s
properties were expropriated and ordered condemned in favor of the City of Manila
sans anyshowing that resort to the acquisition of other lands listed under Sec. 9 of RA
7279 have proved futile. Evidently, there was a violation of petitioner Filstream’s right to
due process which must accordingly be rectified.
Indeed,it mustbe emphasized thatthe State has a paramount interest in exercising its
power of eminentdomain for the general good considering that the right of the State to
expropriate private property as long as it is for public use always takes precedence over
the interest of private property owners. However we must not lose sight of the fact that
the individual rights affected by the exercise of such rightare also entitled to protection,
bearing in mind that the exercise of this superior right cannot override the guarantee of
due process extended by the law to owners of the property to be expropriated. In this
regard, vigilance over compliance with the due process requirements is in order.35
Due to the fatal infirmity in the City’s exercise of the power of eminent domain, its
complaint for expropriation must necessarily fail. Considering that the consolidated
cases before us can be completelyresolved by the application of our Filstream ruling, it
is needless to discuss the constitutionality of Ordinance 7818. We herein apply the
general precept that constitutional issues will not be passed upon if the case can be
decided on other grounds.36
In view of the dismissal ofthe complaintfor expropriation and the favorable adjudication
of petitioners’ appeal from the decision of the Court of Appeals on the expropriation of
the subject properties, the petition for certiorari questioning the validity of the Court of
Appeals resolutions (allowing respondent occupants to intervene and granting their
motion to enjoin the execution of the executory judgments in the ejectment cases)
becomes moot and academic.
WHEREFORE, the petitions are hereby GRANTED. In G.R. No. 132431, the decision
of the Court of Appeals dated January 27, 1998 is hereby REVERSED and SET
ASIDE. In G.R. No. 137146, the resolutions of the Court of Appeals dated August 19,
1998 and December 16, 1998 are hereby REVERSED and SET ASIDE.
SO ORDERED.
Sandoval-Gutierrez,and Carpio-Morales,JJ., concur.
Vitug, (Chairman),J., no part. Did not participate in the deliberation.

12. Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 136349 January23, 2006
LOURDES DE LA PAZ MASIKIP, Petitioner,
vs.
THE CITY OF PASIG, HON. MARIETTA A. LEGASPI, in her capacity as Presiding
Judge of the Regional Trial Court of Pasig City, Branch 165 and THE COURT OF
APPEALS, Respondents.
D E C I S I O N
SANDOVAL GUTIERREZ, J.:
Where the taking by the State of private property is done for the benefit of a small
communitywhich seeks to have its own sports and recreational facility,notwithstanding
that there is such a recreational facility only a short distance away, such taking cannot
be considered to be for public use. Its expropriation is not valid. In this case, the Court
defines what constitutes a genuine necessity for public use.
This petition for review on certiorari assails the Decision1
of the Court of Appeals dated
October 31, 1997 in CA-G.R. SP No. 41860 affirming the Order2
of the Regional Trial
Court, Branch 165, Pasig City, dated May 7, 1996 in S.C.A. No. 873. Likewise assailed
is the Resolution3
of the same court dated November 20, 1998 denying petitioner’s
Motion for Reconsideration.
The facts of the case are:
Petitioner Lourdes Dela Paz Masikip is the registered owner of a parcel of land with an
area of 4,521 square meters located at Pag-Asa, Caniogan, Pasig City, Metro Manila.
In a letter dated January 6, 1994, the then Municipality of Pasig, now City of Pasig,
respondent, notified petitioner of its intention to expropriate a 1,500 square meter
portion of her property to be used for the "sports development and recreational
activities" of the residents of Barangay Caniogan. This was pursuant to Ordinance No.
42, Series of 1993 enacted by the then Sangguniang Bayan of Pasig.
Again, on March 23, 1994, respondent wrote another letter to petitioner, but this time
the purpose was allegedly "in line with the program of the Municipal Government to
provide land opportunities to deserving poor sectors of our community."
On May 2, 1994, petitioner sent a reply to respondent stating that the intended
expropriation of her property is unconstitutional, invalid, and oppressive, as the area of
her lot is neither sufficient nor suitable to "provide land opportunities to deserving poor
sectors of our community."
In its letter of December 20, 1994, respondent reiterated that the purpose of the
expropriation of petitioner’s propertyis "to provide sports and recreational facilities to its
poor residents."
Subsequently, on February 21, 1995, respondent filed with the trial court a complaint
for expropriation, docketed as SCA No. 873. Respondent prayed that the trial court,
after due notice and hearing, issue an order for the condemnation of the property; that
commissioners be appointed for the purpose ofdetermining the justcompensation; and
that judgment be rendered based on the report of the commissioners.
On April 25, 1995, petitioner filed a Motion to Dismiss the complaint on the following
grounds:
I
PLAINTIFF HAS NO CAUSE OF ACTION FOR THE EXERCISE OF THE POWER OF
EMINENT DOMAIN, CONSIDERING THAT:
(A) THERE IS NO GENUINE NECESSITY FOR THE TAKING OF THE
PROPERTY SOUGHT TO BE EXPROPRIATED.
(B) PLAINTIFF HAS ARBITRARILY AND CAPRICIOUSLY CHOSEN THE
PROPERTY SOUGHT TO BE EXPROPRIATED.
(C) EVEN ASSUMING ARGUENDO THAT DEFENDANT’S PROPERTY MAY
BE EXPROPRIATED BY PLAINTIFF, THE FAIR MARKET VALUE OF THE
PROPERTY TO BE EXPROPRIATED FAR EXCEEDS SEVENTY-EIGHT
THOUSAND PESOS (P78,000.00)
II
PLAINTIFF’S COMPLAINT IS DEFECTIVE IN FORM AND SUBSTANCE,
CONSIDERING THAT:
(A) PLAINTIFF FAILS TO ALLEGE WITH CERTAINTY THE PURPOSE OF
THE EXPROPRIATION.
(B) PLAINTIFF HAS FAILED TO COMPLY WITH THE PREREQUISITES
LAID DOWN IN SECTION 34, RULE VI OF THE RULES AND
REGULATIONS IMPLEMENTING THE LOCAL GOVERNMENT CODE;
THUS, THE INSTANT EXPROPRIATION PROCEEDING IS PREMATURE.
III
THE GRANTING OF THE EXPROPRIATION WOULD VIOLATE SECTION 261 (V) OF
THE OMNIBUS ELECTION CODE.
IV

13. PLAINTIFF CANNOT TAKE POSSESSION OF THE SUBJECT PROPERTY BY
MERELY DEPOSITING AN AMOUNT EQUAL TO FIFTEEN PERCENT (15%) OF THE
VALUE OF THE PROPERTY BASED ON THE CURRENT TAX DECLARATION OF
THE SUBJECT PROPERTY.4
On May 7, 1996, the trial court issued an Order denying the Motion to Dismiss,5
on the
ground that there is a genuine necessity to expropriate the property for the sports
and recreational activities of the residents of Pasig. As to the issue of just
compensation,the trial court held that the same is to be determined in accordance with
the Revised Rules of Court.
Petitioner filed a motion for reconsideration but it was denied by the trial court in its
Order of July 31, 1996. Forthwith, it appointed the City Assessor and City Treasurer of
Pasig City as commissioners to ascertain the just compensation. This prompted
petitioner to file with the Court of Appeals a special civil action for certiorari, docketed
as CA-G.R. SP No. 41860. On October 31, 1997, the Appellate Court dismissed the
petition for lack of merit. Petitioner’s Motion for Reconsideration was denied in a
Resolution dated November 20, 1998.
Hence, this petition anchored on the following grounds:
THE QUESTIONED DECISION DATED 31 OCTOBER 1997 (ATTACHMENT "A") AND
RESOLUTION DATED 20 NOVEMBER 1998 (ATTACHMENT "B") ARE CONTRARY
TO LAW, THE RULES OF COURT AND JURISPRUDENCE CONSIDERING THAT:
I
A. THERE IS NO EVIDENCE TO PROVE THAT THERE IS GENUINE
NECESSITY FOR THE TAKING OF THE PETITIONER’S PROPERTY.
B. THERE IS NO EVIDENCE TO PROVE THAT THE PUBLIC USE
REQUIREMENT FOR THE EXERCISE OF THE POWER OF EMINENT
DOMAIN HAS BEEN COMPLIED WITH.
C. THERE IS NO EVIDENCE TO PROVE THAT RESPONDENT CITY OF
PASIG HAS COMPLIED WITH ALL CONDITIONS PRECEDENT FOR THE
EXERCISE OF THE POWER OF EMINENT DOMAIN.
THE COURT A QUO’S ORDER DATED 07 MAY 1996 AND 31 JULY 1996, WHICH
WERE AFFIRMED BY THE COURT OF APPEALS, EFFECTIVELY AMOUNT TO THE
TAKING OF PETITIONER’S PROPERTY WITHOUT DUE PROCESS OF LAW:
II
THE COURT OF APPEALS GRAVELY ERRED IN APPLYING OF RULE ON
ACTIONABLE DOCUMENTS TO THE DOCUMENTS ATTACHED TO RESPONDENT
CITY OF PASIG’S COMPLAINT DATED 07 APRIL 1995 TO JUSTIFY THE COURT A
QUO’S DENIAL OF PETITIONER’S RESPONSIVE PLEADING TO THE COMPLAINT
FOR EXPROPRIATION (THE MOTION TO DISMISS DATED 21 APRIL 1995).
III
THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE RULE ON
HYPOTHETICAL ADMISSION OF FACTS ALLEGED IN A COMPLAINT
CONSIDERING THAT THE MOTION TO DISMISS FILED BY PETITIONER IN THE
EXPROPRIATION CASE BELOW WAS THE RESPONSIVE PLEADING REQUIRED
TO BE FILED UNDER THE THEN RULE 67 OF THE RULES OF COURT AND NOT
AN ORIDNARY MOTION TO DISMISS UNDER RULE 16 OF THE RULES OF COURT.
The foregoing arguments may be synthesized into two main issues – one substantive
and one procedural. We will first address the procedural issue.
Petitioner filed her Motion to Dismiss the complaint for expropriation on April 25, 1995.
It was denied by the trial court on May 7, 1996. At that time, the rule on expropriation
was governed by Section 3, Rule 67 of the Revised Rules of Court which provides:
"SEC. 3.Defenses and objections. – Within the time specified in the summons, each
defendant,in lieu of an answer,shall present in a single motion to dismiss or for other
appropriate relief, all his objections and defenses to the right of the plaintiff to take his
property for the use or purpose specified in the complaint. All such objections and
defenses not so presented are waived. A copy of the motion shall be served on the
plaintiff’s attorney of record and filed with the court with proof of service."
The motion to dismiss contemplated in the above Rule clearly constitutes the
responsive pleading which takes the place of an answer to the complaint for
expropriation. Such motion is the pleading that puts in issue the right of the plaintiff to
expropriate the defendant’s property for the use specified in the complaint. All that the
law requires is that a copy of the said motion be served on plaintiff’s attorney of record.
It is the court that at its convenience will set the case for trial after the filing of the said
pleading.6
The Court of Appeals therefore erred in holding that the motion to dismiss filed by
petitioner hypothetically admitted the truth of the facts alleged in the complaint,
"specifically that there is a genuine necessity to expropriate petitioner’s property for
public use."Pursuantto the above Rule,the motion is a responsive pleading joining the
issues. What the trial court should have done was to set the case for the reception of
evidence to determine whether there is indeed a genuine necessity for the taking of the
property, instead of summarily making a finding that the taking is for public use and
appointing commissioners to fix just compensation. This is especially so considering
that the purpose of the expropriation was squarely challenged and put in issue by
petitioner in her motion to dismiss.
Significantly, the above Rule allowing a defendant in an expropriation case to file a
motion to dismiss in lieu of an answer was amended by the 1997 Rules of Civil
Procedure, which took effect on July 1, 1997. Section 3, Rule 67 now expressly
mandates that any objection or defense to the taking of the property of a defendant
must be set forth in an answer.
The fact that the Court of Appeals rendered its Decision in CA-G.R. SP No. 41860 on
October 31, after the 1997 Rules of Civil Procedure took effect, is of no moment. It is

14. only fair that the Rule at the time petitioner filed her motion to dismiss should govern.
The new provision cannot be applied retroactively to her prejudice.
We now proceed to address the substantive issue.
In the early case of US v. Toribio,7
this Court defined the power of eminent domain as
"the right of a government to take and appropriate private property to public use,
whenever the public exigency requires it, which can be done only on condition of
providing a reasonable compensation therefor." It has also been described as the
power of the State or its instrumentalities to take private property for public use and is
inseparable from sovereignty and inherent in government.8
The power of eminent domain is lodged in the legislative branch of the government. It
delegates the exercise thereof to local government units, other public entities and
public utility corporations,9
subjectonlyto Constitutional limitations. Local governments
have no inherent power of eminent domain and may exercise it only when expressly
authorized by statute.10
Section 19 of the Local Government Code of 1991 (Republic
Act No. 7160) prescribes the delegation by Congress of the power of eminent domain
to local government units and lays down the parameters for its exercise, thus:
"SEC. 19.Eminent Domain. – A local government unit may, through its chief executive
and acting pursuant to an ordinance, exercise the power of eminent domain for public
use, purpose or welfare for the benefit of the poor and the landless, upon payment of
just compensation, pursuant to the provisions of the Constitution and pertinent laws:
Provided,however, That, the power of eminent domain may not be exercised unless a
valid and definite offer has been previously made to the owner and such offer was not
accepted: Provided, further, That, the local government unit may immediately take
possession of the property upon the filing of expropriation proceedings and upon
making a deposit with the proper court of at least fifteen percent (15%) of the fair
market value of the property based on the current tax declaration of the property to be
expropriated: Provided, finally, That, the amount to be paid for expropriated property
shall be determined by the proper court, based on the fair market value at the time of
the taking of the property."
Judicial review of the exercise of eminent domain is limited to the following areas of
concern: (a) the adequacy of the compensation, (b) the necessity of the taking, and (c)
the public use character of the purpose of the taking.11
In this case, petitioner contends that respondent City of Pasig failed to establish a
genuine necessitywhich justifies the condemnation ofher property. While she does not
dispute the intended public purpose, nonetheless, she insists that there must be a
genuine necessityfor the proposed use and purposes. According to petitioner, there is
already an established sports developmentand recreational activity center at Rainforest
Park in Pasig City, fully operational and being utilized by its residents, including those
from Barangay Caniogan. Respondent does not dispute this. Evidently, there is no
"genuine necessity" to justify the expropriation.
The right to take private property for public purposes necessarily originates from "the
necessity"and the taking mustbe limited to such necessity.In City of Manila v. Chinese
Community of Manila,12
we held that the very foundation of the right to exercise
eminent domain is a genuine necessity and that necessity must be of a public
character. Moreover, the ascertainment of the necessity must precede or accompany
and not follow, the taking of the land. In City of Manila v. Arellano Law College,13
we
ruled that "necessity within the rule that the particular property to be expropriated must
be necessary,does notmean an absolute butonly a reasonable or practical necessity,
such as would combine the greatest benefit to the public with the least inconvenience
and expense to the condemning party and the property owner cons istent with such
benefit."
Applying this standard, we hold that respondent City of Pasig has failed to establish
that there is a genuine necessity to expropriate petitioner’s property. Our scrutiny of the
records shows that the Certification14
issued by the Caniogan Barangay Council dated
November 20, 1994,the basis for the passage ofOrdinance No. 42 s. 1993 authorizing
the expropriation, indicates that the intended beneficiary is the Melendres Compound
Homeowners Association, a private, non-profit organization, not the residents of
Caniogan.It can be gleaned that the members of the said Association are desirous of
having their own private playground and recreational facility. Petitioner’s lot is the
nearestvacant space available.The purpose is, therefore, not clearly and categorically
public. The necessity has not been shown, especially considering that there exists an
alternative facility for sports development and community recreation in the area, which
is the Rainforest Park, available to all residents of Pasig City, including those of
Caniogan.
The right to own and possess property is one of the most cherished rights of men. It is
so fundamental that it has been written into organic law of every nation where the rule
of law prevails.Unless the requisite of genuine necessity for the expropriation of one’s
property is clearly established, it shall be the duty of the courts to protect the rights of
individuals to their private property. Importantas the power of eminent domain may be,
the inviolable sanctity which the Constitution attaches to the property of the individual
requires not only that the purpose for the taking of private property be specified. The
genuine necessity for the taking, which must be of a public character, must also be
shown to exist.
WHEREFORE, the petition for review is GRANTED. The challenged Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 41860 are REVERSED. The
complaint for expropriation filed before the trial court by respondent City of Pasig,
docketed as SCA No. 873, is ordered DISMISSED.
SO ORDERED.

15. Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 97764 August 10, 1992
LEVY D. MACASIANO, Brigadier General/PNP Superintendent, Metropolitan
Traffic Command, petitioner,
vs.
HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch 62, Regional Trial
Court of Makati, Metro Manila, MUNICIPALITY OF PARAÑAQUE, METRO MANILA,
PALANYAG KILUSANG BAYAN FOR SERVICE, respondents.
Ceferino,Padua Law Office for PalanyagKilusang Bayan for service.
Manuel de Guia for Municipality of Parañaque.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the
annulment of the decision of the Regional Trial Court of Makati, Branch 62, which
granted the writ of preliminary injunction applied for by respondents Municipality of
Parañaque and PalanyagKilusang Bayan for Service (Palanyag for brevity) against
petitioner herein.
The antecedent facts are as follows:
On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series of
1990 which authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia
Extension and Opena Streets located at Baclaran, Parañaque, Metro Manila and the
establishment of a flea market thereon. The said ordinance was approved by the
municipal council pursuant to MMC Ordinance No. 2, Series of 1979, authorizing and
regulating the use of certain city and/or municipal streets,roads and open spaces within
Metropolitan Manila as sites for flea market and/or vending areas, under certain terms
and conditions.
On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s.
1990 of the municipal council of respondent municipality subject to the following
conditions:
1. That the aforenamed streets are not used for vehicular traffic, and
that the majority of the residents do not oppose the establishment of
the flea market/vending areas thereon;
2. That the 2-meter middle road to be used as flea market/vending
area shall be marked distinctly,and that the 2 meters on both sides of
the road shall be used by pedestrians;
3. That the time during which the vending area is to be used shall be
clearly designated;
4. That the use of the vending areas shall be temporary and shall be
closed once the reclaimed areas are developed and donated by the
Public Estate Authority.
On June 20, 1990,the municipal council ofParañaque issued a resolution authorizing
Parañaque Mayor Walfrido N. Ferrer to enter into contract with any service cooperative
for the establishment,operation,maintenance and managementofflea markets and/or
vending areas.
On August 8, 1990, respondent municipality and respondent Palanyag, a service
cooperative, entered into an agreement whereby the latter shall operate, maintain and
manage the flea marketin the aforementioned streets with the obligation to remit dues
to the treasury of the municipal governmentofParañaque.Consequently, market stalls
were put up by respondent Palanyag on the said streets.
On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the
Metropolitan Traffic Command,ordered the destruction and confiscation of stalls along
G.G. Cruz and J. Gabriel St. in Baclaran.These stalls were later returned to respondent
Palanyag.
On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent
Palanyag giving the latter ten (10) days to discontinue the flea market; otherwise, the
market stalls shall be dismantled.
Hence,on October 23, 1990, respondents municipality and Palanyag filed with the trial
court a joint petition for prohibition and mandamus with damages and prayer for
preliminary injunction, to which the petitioner filed his memorandum/opposition to the
issuance of the writ of preliminary injunction.
On October 24, 1990, the trial court issued a temporaryrestraining order to enjoin
petitioner from enforcing his letter-order of October 16, 1990 pending the hearing on
the motion for writ of preliminaryinjunction.
On December 17, 1990, the trial court issued an order upholding the validity of
Ordinance No. 86 s. 1990 of the Municipality' of Parañaque and enjoining petitioner
Brig. Gen. Macasiano from enforcing his letter-order against respondent Palanyag.
Hence, this petition was filed by the petitioner thru the Office of the Solicitor General
alleging grave abuse of discretion tantamount to lack or excess of jurisdiction on the
part of the trial judge in issuing the assailed order.
The sole issue to be resolved in this case is whether or not an ordinance or resolution
issued by the municipal council of Parañaque authorizing the lease and use of public
streets or thoroughfares as sites for flea markets is valid.

16. The Solicitor General,in behalfof petitioner,contends thatmunicipal roads are used for
public service and are therefore public properties; that as such, they cannot be subject
to private appropriation or private contract by any person, even by the respondent
Municipality of Parañaque. Petitioner submits that a property already dedicated to
public use cannotbe used for another public purpose and that absent a clear showing
that the Municipality of Parañaque has been granted by the legislature specific authority
to convert a property already in public use to another public use, respondent
municipality is, therefore, bereft of any authority to close municipal roads for the
establishment of a flea market. Petitioner also submits that assuming that the
respondent municipality is authorized to close streets, it failed to comply with the
conditions set forth by the Metropolitan Manila Authority for the approval of the
ordinance providing for the establishment of flea markets on public streets. Lastly,
petitioner contends thatby allowing the municipal streets to be used by market vendors
the municipal council of respondent municipality violated its duty under the Local
Government Code to promote the general welfare of the residents of the municipality.
In upholding the legality of the disputed ordinance, the trial court ruled:
. . . that Chanter II Section 10 of the Local Government Code is a
statutory grant of power given to local government units, the
Municipality of Parañaque as such, is empowered under that law to
close its roads, streets or alley subject to limitations stated therein
(i.e., that it is in accordance with existing laws and the provisions of
this code).
xxxxxxxxx
The actuation of the respondent Brig. Gen. Levi Macasiano, though
apparently within its power is in fact an encroachment of power
legally vested to the municipality, precisely because when the
municipality enacted the ordinance in question — the authority of the
respondent as Police Superintendent ceases to be operative on the
ground that the streets covered by the ordinance ceases to be a
public thoroughfare. (pp. 33-34, Rollo)
We find the petition meritorious. In resolving the question of whether the disputed
municipal ordinance authorizing the flea market on the public streets is valid, it is
necessaryto examine the laws in force during the time the said ordinance was enacted,
namely, Batas PambansaBlg. 337, otherwise known as Local Government Code, in
connection with established principles embodied in the Civil Code an property and
settled jurisprudence on the matter.
The property of provinces, cities and municipalities is divided into property for public
use and patrimonial property (Art. 423, Civil Code). As to what consists of property for
public use, Article 424 of Civil Code states:
Art. 424. Property for public use, in the provinces, cities and
municipalities, consists of the provincial roads, city streets, the
squares,fountains,public waters,promenades, and public works for
public service paid for by said provinces, cities or municipalities.
All other property possessed by any of them is patrimonial and shall
be governed by this Code, without prejudice to the provisions of
special laws.
Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and
Opena streets are local roads used for public service and are therefore considered
public properties of respondent municipality. Properties of the local government which
are devoted to public service are deemed public and are under the absolute control of
Congress (Province of Zamboanga del Norte v. City of Zamboanga, L-24440, March
28, 1968, 22 SCRA 1334). Hence, local governments have no authority whatsoever to
control or regulate the use of public properties unless specific authority is vested upon
them by Congress. One such example of this authority given by Congress to the local
governments is the power to close roads as provided in Section 10, Chapter II of the
Local Government Code, which states:
Sec. 10.Closure of roads. — A local government unit may likewise,
through its head acting pursuant to a resolution of its sangguniang
and in accordance with existing law and the provisions of this Code,
close any barangay, municipal, city or provincial road, street, alley,
park or square. No such way or place or any part of thereof shall be
close without indemnifying any person prejudiced thereby. A property
thus withdrawn from public use may be used or conveyed for any
purpose for which other real property belonging to the local unit
concerned might be lawfully used or conveyed. (Emphasis ours).
However, the aforestated legal provision which gives authorityto local governmentunits
to close roads and other similar public places should be read and interpreted in
accordance with basic principles already established by law. These basic principles
have the effect of limiting such authority of the province, city or municipality to close a
public streetor thoroughfare.Article 424 of the Civil Code lays down the basic principle
that properties of public dominion devoted to public use and made available to the
public in general are outside the commerce of man and cannot be disposed of or
leased by the local government unit to private persons. Aside from the requirement of
due process which should be complied with before closing a road, street or park, the
closure should be for the sole purpose of withdrawing the road or other public property
from public use when circumstances show that such property is no longer intended or
necessary for public use or public service. When it is already withdrawn from public
use, the property then becomes patrimonial property of the local government unit
concerned (Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et al., G.R. No.
L-40474, August 29, 1975, 66 SCRA 481). It is only then that the respondent
municipality can "use or convey them for any purpose for which other real property
belonging to the local unit concerned might be lawfully used or conveyed" in
accordance with the lastsentence of Section 10, Chapter II of Blg. 337, known as Local
Government Code. In one case, the City Council of Cebu, through a resolution,
declared the terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned
road, the same not being included in the City Development Plan. Thereafter, the City
Council passes another resolution authorizing the sale of the said abandoned road
through public bidding. We held therein that the City of Cebu is empowered to close a
city street and to vacate or withdraw the same from public use. Such withdrawn portion
becomes patrimonial property which can be the object of an ordinary contract (Cebu
Oxygen and Acetylene Co., Inc. v. Bercilles, et al., G.R. No.
L-40474,August29, 1975, 66 SCRA 481). However, those roads and streets which are

17. available to the public in general and ordinarily used for vehicular traffic are still
considered public property devoted to public use. In such case, the local government
has no power to use it for another purpose or to dispose of or lease it to private
persons. This limitation on the authority of the local government over public properties
has been discussed and settled by this Court en banc in "Francisco V. Dacanay,
petitioner v. Mayor MacariaAsistio, Jr., et al., respondents, G.R. No. 93654, May 6,
1992." This Court ruled:
There is no doubt that the disputed areas from which the private
respondents'marketstalls are soughtto be evicted are public streets,
as found by the trial court in Civil Case No. C-12921. A public street
is property for public use hence outside the commerce of man (Arts.
420, 424,Civil Code). Being outside the commerce ofman,it may not
be the subject of lease or others contract (Villanueva, et al. v.
Castañeda and Macalino, 15 SCRA 142 citing the Municipality of
Cavite v. Rojas, 30 SCRA 602; Espiritu v. Municipal Council of
Pozorrubio, 102 Phil. 869; And Muyot v. De la Fuente, 48 O.G. 4860).
As the stallholders pay fees to the City Government for the right to
occupy portions of the public street, the City Government, contrary to
law, has been leasing portions ofthe streets to them. Such leases or
licenses are null and void for being contrary to law. The right of the
public to use the city streets may not be bargained away through
contract. The interests of a few should not prevail over the good of
the greater number in the community whose health, peace, safety,
good order and general welfare, the respondent city officials are
under legal obligation to protect.
The Executive Order issued by acting Mayor Robles authorizing the
use of Heroes del '96 Street as a vending area for stallholders who
were granted licenses by the city government contravenes the
general law that reserves city streets and roads for public use. Mayor
Robles' Executive Order may not infringe upon the vested right of the
public to use city streets for the purpose they were intended to serve:
i.e., as arteries of travel for vehicles and pedestrians.
Even assuming, in gratia argumenti, that respondent municipality has the authority to
pass the disputed ordinance, the same cannot be validly implemented because it
cannot be considered approved by the Metropolitan Manila Authority due to non-
compliance byrespondentmunicipality of the conditions imposed by the former for the
approval of the ordinance, to wit:
1. That the aforenamed streets are not used for vehicular traffic, and
that the majority of the residents do(es) notoppose the establishment
of the flea market/vending areas thereon;
2. That the 2-meter middle road to be used as flea market/vending
area shall be marked distinctly,and that the 2 meters on both sides of
the road shall be used by pedestrians;
3. That the time during which the vending area is to be used shall be
clearly designated;
4. That the use of the vending areas shall be temporary and shall be
closed once the reclaimed areas are developed and donated by the
Public Estate Authority. (p. 38, Rollo)
Respondent municipality has not shown any iota of proof that it has complied with the
foregoing conditions precedent to the approval of the ordinance. The allegations of
respondent municipality that the closed streets were not used for vehicular traffic and
that the majority of the residents do not oppose the establishment of a flea market on
said streets are unsupported by any evidence that will show that this first condition has
been met. Likewise, the designation by respondents of a time schedule during which
the flea market shall operate is absent.
Further, it is of public notice that the streets along Baclaran area are congested with
people, houses and traffic brought about by the proliferation of vendors occupying the
streets. To license and allow the establishment of a flea market along J. Gabriel, G.G.
Cruz, Bayanihan,Lt. Garcia Extension and Opena streets in Baclaran would not help in
solving the problem of congestion. We take note of the other observations of the
Solicitor General when he said:
. . . There have been many instances ofemergencies and fires where
ambulances and fire engines, instead of using the roads for a more
direct access to the fire area, have to maneuver and look for other
streets which are not occupied by stalls and vendors thereby losing
valuable time which could, otherwise, have been spent in saving
properties and lives.
Along G.G. Cruz Street is a hospital, the St. Rita Hospital. However,
its ambulances and the people rushing their patients to the hospital
cannot pass through G.G. Cruz because of the stalls and the
vendors. One can only imagine the tragedy of losing a life just
because of a few seconds delay brought about by the inaccessibility
of the streets leading to the hospital.
The children, too, suffer. In view of the occupancy of the roads by
stalls and vendors,normal transportation flow is disrupted and school
children have to get off at a distance still far from their schools and
walk, rain or shine.
Indeed one can only imagine the garbage and litter left by vendors on
the streets at the end of the day. Needless to say, these cause
further pollution,sickness and deterioration of health of the residents
therein. (pp. 21-22, Rollo)
Respondents do not refute the truth of the foregoing findings and observations of
petitioners. Instead, respondents want this Court to focus its attention solely on the
argument that the use of public spaces for the establishment of a flea market is well

18. within the powers granted by law to a local government which should not be interfered
with by the courts.
Verily, the powers of a local government unit are not absolute. They are subject to
limitations laid down bytoe Constitution and the laws such as our Civil Code. Moreover,
the exercise of such powers should be subservient to paramount considerations of
health and well-being of the members of the community. Every local government unit
has the sworn obligation to enact measures that will enhance the public health, safety
and convenience,maintain peace and order, and promote the general prosperity of the
inhabitants of the local units. Based on this objective, the local government should
refrain from acting towards that which might prejudice or adversely affect the general
welfare.
As what we have said in the Dacanay case, the general public have a legal right to
demand the demolition ofthe illegallyconstructed stalls in public roads and streets and
the officials of respondentmunicipalityhave the corresponding duty arising from public
office to clear the city streets and restore them to their specific public purpose.
The instantcase as well as the Dacanaycase,involves an ordinance which is void and
illegal for lack of basis and authority in laws applicable during its time. However, at this
point, We find it worthy to note that Batas PambansaBlg. 337, known as Local
Government Lode, has already been repealed by Republic Act No. 7160 known as
Local Government Code of 1991 which took effect on January 1, 1992. Section 5(d) of
the new Code provides that rights and obligations existing on the date of effectivity of
the new Code and arising out of contracts or any other source of prestation involving a
local governmentunitshall be governed by the original terms and conditions ofthe said
contracts or the law in force at the time such rights were vested.
ACCORDINGLY, the petition is GRANTED and the decision ofthe respondentRegional
Trial Court dated December 17, 1990 which granted the writ of preliminary injunction
enjoining petitioner as PNP Superintendent, Metropolitan Traffic Command from
enforcing the demolition of market stalls along J. Gabriel, G.G. Cruz, Bayanihan, Lt.
Garcia Extension and Opena streets is hereby RESERVED and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado,
Davide, Jr., Romero, Nocon and Bellosillo, JJ., concur.

19. Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 122058 May 5, 1999
IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS C. TENSUAN, ROMAN E.
NIEFES, ROGER C. SMITH, RUFINO B. JOAQUIN, NOLASCO L. DIAZ, and RUFINO
IBE, petitioners,
vs.
SANDIGANBAYAN (SECOND DIVISION), PEOPLE OF THE PHILIPPINES, and the
KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA SA BAGONG
PAMILIHANG BAYAN NG MUNTINLUPA, INC., (KBMBPM), respondents.
PURISIMA, J.:
Docketed as Criminal Case No. 13966 before the Second Division 1
of the
Sandiganbayan, the Amended Information charging the herein petitioners with a
violation of Section 3, paragraph (e) of R.A. No. 3019, 2 alleges:
That on or about August 1988, in the Municipality of Muntinlupa,
Metro Manila, Philippines,and within the jurisdiction ofthis Honorable
Court, the above-named accused all public officers being the Mayor
(Ignacio R. Bunye), Vice Mayor (Jaime D. Fresnedi), Municipal
Attorney (Victor C. Aguinaldo), Municipal Councilors (Carlos C.
Tensuan, Alejandro B. Martinez, Epifanio A. Espeleta, Rey E. Bulay,
Lucio B. Constantino,Roman E. Niefes, Nemesio Q. Mozo, Rutino J.
Joaquin,Nolasco L.Diaz and Roger C. Smith,Barangay Chairman of
Putatan (Rufino Ibe) and Barangay Chairman of Alabang (Nestor
Santos), all in the municipality of Muntinlupa, Metro Manila, said
accused while in the performance of their official functions in
conspiracy with one another and taking advantage of their official
positions,did then and there wilfully, unlawfully, and feloniouslyenact
KapasiyahanBilang 45 on August 1, 1988, and on the basis thereof,
forcibly took possession of the New Public Market in Alabang,
Muntinlupa, Metro Manila, and thereafter took over the operation and
managementofthe aforesaid public marketstarting August14, 1998,
despite the fact that, there was a valid and subsisting lease contract
executed on September 2,1985 for a term of 25 years, renewable for
another 25 years, between the Municipality of Muntinlupa, Metro
Manila, represented by the former Municipal Mayor Santiago Carlos,
Jr. and the Kilusang Bayan
saPaglilingkodngmgaMagtitindasaBagongPaminlihang Bayan
ngMuntinlupa, Inc. (KilusangMagtitinda, for brevity), a Cooperative,
represented by its General Manager then, Amado G. Perez, and
despite also the warnings from COA Chairman Domingo and MMC
Governor Cruz "that appropriate legal steps be taken by the MMC
toward the rescission/annulment of the contract . . . to protect the
interest of the Government," and ". . . to evaluate thoroughly and
study further the case to preclude possible damages of financial
liabilities which the Courtmayadjudge againstthatmunicipalityas an
off-shoot of the case, which forcible take-over had caused undue
injury to the aforesaid Cooperative members,and in effect, the herein
accused themselves, unwarranted benefits, advantage or benefits,
advantage or preference in the discharge of their official functions as
aforesaid through evidentbad faith or gross inexcusable negligence,
considering that, the Cooperative members had introduced
improvements, including the construction of the "KBS" Building, RR
Section-Phases I and II, asphalting of the roads surrounding the
market place, and for the purpose, the cooperative had invested
Thirteen Million Four Hundred Seventy Nine Thousand Nine Hundred
Pesos (P13,479,900.00) in connection therewith, which had been
deposited in trust to the Municipal Government, and in consideration
thereof, the cooperative was extended the above long term lease to
manage and operate the public market and to pay a monthly rental of
P35,000.00 only — said offense having been committed by the
accused in their performance of official duties. 3
On July 24, 1992, petitioners interposed a Motion to Dismiss, 4
placing reliance on the
September 23, 1991 Decision 5
of the Court of Appeals in CA-G.R. SP No. 16930 6
"that
unless and until declared to be unconstitutional and expresslyannulled"Resolution No.
45 7
"deserves the presumption ofconstitutionalityand therefore is entitled to obedience
and respect." 8
On September 23,1992, the respondentcourtdenied petitioners'motion to dismiss on
the ground that the C.A. Decision by movants did not touch squarely on the
constitutionality of the subject Resolution No. 45 9
.
After trial on the merits,the Sandiganbayan came outwith its July 26, 1995 Decision, 10
findings petitioners guilty of a violation of the Anti-graft and Corrupt Practices Act and
sentencing them, thus:
WHEREFORE, judgment is hereby rendered finding accused
IganacioBunye y Rivera, Jaime Fresnedi y de la Rosa, Victor
Aguinaldo y Duliabi, Carlos Tensuan y Gutierrez, Roman Niefes y
Esporlas,NemesioMozo y Rillana, Rufino Joaquin y Bunye, Nolasco
Diaz y Lampito, Roger Smith y de la Cruz and Rufino Ibe y Lacanilao
GUILTY beyond reasonable doubt as co-principals in the violation of
Section 3, paragraph (e) of Republic Act. No. 3019, as amended,
otherwise known as the Anti-Graft and Corrupt Practices Act, and
each of them are hereby sentenced to suffer the indeterminate
penalty of imprisonment ranging from SIX (6) YEARS and ONE (1)
MONTH, as the minimum, to TEN (10) YEARS and ONE (1) DAY, as
the maximum, to indemnify, jointly and severally, the offended party,
the Kilusang Bayan saPaglilingkod Ng
MgaMagtitindangBagongPamilihang Bayan ngMuntinlupa, Inc.
(KBMBPM) in the amountof P13,479,900.00 as actual damages,and
to pay their proportionate share of the costs of this action.
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