PROVINCE OF BULACAN, PLAINTIFF AND APPELLANT, VS. B. E. SAN DIEGO, INC., ET AL., DEFENDANTS AND APPELLEES.

On September 3, 1954, the Provincial Board of Bulacan passed
Resolution No. 787 authorizing the acquisition of the property of B. E.
San Diego, Inc., known as Hacienda Esguerra, situated in the
municipalities of Meycauayan, Obando and Polo, with an aggregate area,
of about 64 hectares, for the purpose of subdividing and reselling the
land to the tenants thereof and to the landless residents of said
municipalities, as authorized by Republic Act Nos. 267 and 498.
Accordingly, on August 26, 1955, the Provincial Fiscal of Bulacan, on
behalf of said province, filed with the lower court the corresponding
complaint for the expropriation of the land aforementioned, against its
owner, E. E. San Diego, Inc., and the Rehabilitation Finance
Corporation (now Development Bank of the Philippines), who held a
mortgage on said land.

By order of the court dated December 3, 1955, Lots 5, 6, 7, 10-C and
11 involved in the case, with, a total area of about 38 hectares, were
excluded from the complaint upon petition of, and a showing by, the
Central Cooperative Exchange, Inc., a government agency, that it had
purchased said lots from B. E. San Diego, Inc. prior to the
commencement of the action. As a result, an amended complaint was
filed, for the expropriation of the remaining portion of the estate
with a total area of about 26 hectares.

Defendant B. E. San Diego, Inc. filed a motion to dismiss the
amended complaint alleging: that plaintiff had no cause of action, the
property sought to be expropriated not being a landed estate, thus
being beyond the purview of Republic Act Nos. 267 and 498; that the
purpose to Which plaintiff intended to devote it was not public in
nature, and that it had theretofore sold several portions thereof which
were already occupied by the vendees.

On June 17, 1959, the Court issued the appealed order.

The issue to be resolved is whether or not the land sought to be
expropriated situated in three different municipalities of the province
of Bulacan, with a total area of about 26 hectares, several portions of
which have already been sold to private parties, falls within the
purview of Republic Act Nos. 267 and 498 which authorize cities,
municipalities, and provinces to purchase and/or expropriate homesites
and landed estates within their respective jurisdictions and to resell
them at cost to their respective residents etc. This issue is not new,
for in a similar case instituted by the Province of Rizal against the
same appellee herein, B.E. San Diego, Inc., 105 Phil., 33, we resolved
it against the contention of appellant, saying, among other things, the
following:

“The property involved in this case is a land of
about sixty- six (66) hectares, situated in the municipalities of
Caloocan and Malabon, Rizal, It is part of the Hacienda Esguerra, which
originally belonged to one Isabel Esguerra, from whom it was purchased
by the Archbishop of Manila. The latter leased most of it to some of
the intervenors herein, who, in turn, subleased smaller portions to
the’ alleged occupants thereof—numbering, according to the complaint in
intervention, about seven hundred—whom the intervenors claim to
represent. It would appear that, owing to difficulties encountered in
dealing with the tenants, many of whom were, either in default, or in
arrears, in the payment of rentals, the Archbishop of Manila had, upon
liberation of the Philippines from the Japanese farces, adopted the
policy of disposing of the land involved in this case. Neither its
occupants, nor the aforementioned intervenors, however, seemed inclined
to- acquire the lots respectively held by, or leased to, them, at the
price demanded by the owner or lessor. In fact, the record does not
show affirmatively that any definite offer to buy had ever been made by
said occupants and/or intervenors Hence, on June 19, 1952, the
Archbishop of Manila sold the land, for the sum of P880,000, to
defendant herein, Bartolome San Diego, Incorporated, which thereupon
dealt directly, not with the lessees, but with the actual occupants,
thus abolishing the then prevailing sub-tenancy system. Moreover, after
surveying and subdividing the land, defendant offered about 50
subdivided hectares thereof-after deducting the portions allotted for
roads, parks, playgrounds, and other public places for sale, on
installments, in small lots, at prices ranging mostly from P7.00 to
P8.00 per square meter. Thus, from September, 1952, to July, 1955,
about two hundred (200) contracts to sell such lots were made.

“Believing
that said lots could be purchased at a lesser price, if first
expropriated by the government, the intervenors persuaded the plaintiff
to institute the case at bar, on April 21, 1954. Plaintiff’s purpose,
according to the complaint, as amended, is to sell and distribute the
property in question among Filipino bona fide occupants and tenants,
and to Filipino veterans, their widows and their children, pursuant to
the conditions set forth in Republic Act No. 267 * * *”. In its answer,
dated October 14, 1954, defendant alleged that plaintiff has no cause
of action said property not being a landed estate, and being beyond the
purview of said Republic Act No. 267; that the purpose for which
plaintiff seeks to devote it is not a nubile use; that ‘defendant is
willing to sell’ it ‘to actual occupants first, and/or to any person
interested in buying the same at reasonable costs’; that defendant has
already sold ‘more than ,200 lots’ and has ‘more than 1000 lots * * *
available for sale’; and that the only purpose of this action is to
‘delay the execution’ of the judgments rendered – seemingly in
ejectment cases – against occupants of said land, eighty per centum
(80%) of whom are ‘squatters’. On November 10, 1954, defendant moved
for the dismissal of the case, upon, the ground that plaintiff is not
in a position to pay the fair market value of the property in
litigation, which, according to the complaint, is P431,856.66, it
having failed to deposit this sum, despite an order, dated May 10,
1954, requiring said deposit; that defendant has been, and is, willing
to sell the. land, at reasonable prices, to actual bonafide tenants;
and that said property is not a landed estate. In another motion dated
February 11, 1955, defendant reiterated said motion to dismiss alleging
that the complaint states no cause of action,; that the property in
litigation is ‘not intended for any public use and/or public benefit’
and that said property ‘is not a landed estate’,””

“In due
course, thereafter, the lower court rendered the aforementioned
decision, granting defendant’s motion to dismiss, and dismissing the
petition far expropriation, as well as the complaint in intervention,
upon the authority of Guido vs. Rural Progress Administration 84 Phil.,
847; (47 0. G. 1848), Commonwealth us. Borja 85 Phil,, 51; City of
Manila vs. Arellano Law School 85 Phil., 663; (47 Off. Gaz. 4197), Lee
Tay and Lee Chay vs. Choco 87 Phil., 814; Urban Estates Inc. vs.
Montesa (88 Phil., 384); Municipality of Caloocan vs. Manotok Realty
Inc. (49 Phil, 1003), Republic vs. Gabriel (L-6181, May 23, 1954),
Municipal Government of Caloocan us. Chuan Huat & Go. (50 Off. Gaz,
5309), and Republic vs. Baylosis 96 Phil., 461; (51 Off. Gaz., 722).
Relying upon these cases, the lower court concluded:

‘*
* * that the 66 hectares sought to be expropriated are not within the
purview of Article XIII, Section 4 of the Constitution especially
because the Hacienda Esguerra and other church properties were broken
up and sold to defendant and others in reasonable areas; that plaintiff
as delegate of the Republic of the Philippines can not claim greater
right under Republic Act Nos. 267 and 498 which is predicated on the
constitutional provision just cited under the truism that water cannot
rise higher than its source; that some portions of the property has
already been sold by defendant to 193 persons whose interests would be
greatly prejudiced by the present proceedings while on the other hand,
some of the principal intervenors are landowners in their own right
and, therefore, disqualified under the law to acquire land from
plaintiff; that the Constitution protects a landowner against
indiscriminate and unwarranted expropriation; that to justify
expropriation it must be for a public purpose and public benefit and
that just to enable the tenants of a piece of land of reasonable area
to own portion of it, even if their ancestors or predecessors had
cleared, improved and dwelt on the land for many years, is no valid
reason or justification under the law to deprive the owner of the
property or his vendees by means of expropriation.’ (Record on Appeal,
pp. 322 323.) “This appeal hinges on whether, as held in the decision
appealed from, the above mentioned cases are controlling in the case at
bar, or whether the same should bo determined, as claimed by appellants
herein, in accordance with the view adopted in Rural Progress
Administration vs. Clemente Reyes (L-4708, Oct.1 8, 1953), in which –
by a 6 to 4 vote – this Court sanctioned the expropriation of a land,
of about 20,737 square meters, purchased by Reyes from the San Juan de
Dios Hospital, before the landed estate of the, latter, of which it
formed part, had been acquired by the government.

“Appellants’ pretense is untenable, for the rule enunciated in the
Reyes case was explicitly abandoned, and the doctrine laid down in the
Guido case, was expressly reaffirmed, as ‘sound and wholesome,’ in the
Baylosis case. The majority opinion therein restated the position of
the Court in the following language:

‘* * * We feel that the
decision in that Reyes case was a departure from the doctrine laid down
in the leading case of Guido which doctrine has been subsequently
.affirmed and reiterated in a long1 line of cases, and we now believe
that in abandoning the ruling made in the Reyes case, this Tribunal is
merely returning to and re-affirming the sound and wholesome doctrine
laid down in the Guido case,’ (Republic vs. Baylosis, et al., 51 Off.
Gaz., 722, 735).

* * * * * * *

‘In conclusion we hold that under Section 4, Article
XIII of the Constitution, the Government may expropriate only landed
estates with extensive areas, specially those embracing the whole or a
large part of a town or city; that once a landed estate is broken up
and divided into parcels of reasonable areas, either thru voluntary
sales by the owner or owners of said landed estate, or thru
expropriation, the resulting parcels are no longer subject to further
expropriation under section 4, Article XIII of the Constitution; that
mere notice of the intention of the Government to expropriate a parcel
of land does not bind either the land or the owner so as to prevent
subsequent disposition of the property such as mortgaging or even
selling it in whole or by subdivision; that tenancy trouble alone
whether due to the fault of the tenants or of the landowners does not
justify ex- appropriation; that the Constitution protects a landowner
against indiscriminate and unwarranted expropriation; that to justify
expropriation, it must be for a public purpose and public benefit, and
that just to enable the tenants of a piece of land of reasonable area
to own portion of it, even if they and their ancestors had cleared the
land and cultivated it for their landlord for many years, is no valid
reason or justification under the Constitution to deprive the owner or
landlord of his property by means of expropriation.’ (Id., p. 739.)

“The majority of the Members of this Court still adheres to this
view which must be respected by the minority, including the writer
hereof, who concurred in the dissenting opinions in the Baylosis case.”

In view of the foregoing, the order appealed from is affirmed, with costs.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepción, Reyes, J. B. L., Paredes, Regala and Makalintal, JJ., concur.

Barrera, J., concurs in the result.