LORENZO SUMULONG AND EMILIA VIDANES-BALAOING, PETITIONERS, VS. HON. BUENAVENTURA GUERRERO AND NATIONAL HOUSING AUTHORITY, RESPONDENTS.

On December 5, 1977
the National Housing Authority (NHA) filed a complaint for expropriation of
parcels of land covering approximately twenty five (25) hectares, (in Antipolo, Rizal) including the
lots of petitioners Lorenzo Sumulong and Emilia Vidanes-Balaoing with an
area of 6,667 square meters and 3,333 square meters respectively.  The land sought to
be expropriated were valued by the NHA at one peso (P1.00) per square meter adopting the market value fixed by the
provincial assessor in accordance with presidential decrees prescribing the
valuation of property in expropriation proceedings.

Together with the
complaint was a motion for immediate possession of the properties.  The NHA deposited the amount of P158,980.00
with the Philippine National Bank, representing the “total market
value” of the subject twenty five hectares of land, pursuant to
Presidential Decree No. 1224 which defines “the policy on the
expropriation of private property for socialized housing upon payment of just
compensation.”

On January
17, 1978, respondent
Judge issued the following Order:

Plaintiff having deposited with the Philippine National Bank, Heart
Center Extension Office, Diliman, Quezon City, Metro Manila, the
amount of P158,980.00 representing the total market
value of the subject parcels of land, let a writ of possession be issued.”

SO ORDERED.

Pasig,
Metro Manila, January 17, 1978.

(SGD) BUENAVENTURA
S. GUERRERO

Judge

Petitioners filed a
motion for reconsideration on the ground that they had been deprived of the
possession of their property without due process of law.  This was however, denied.

Hence, this petition
challenging the orders of respondent Judge and assailing the constitutionality
of Pres. Decree No. 1224, as amended. 
Petitioners argue that:

1)  Respondent Judge acted
without or in excess of his jurisdiction or with grave abuse of discretion by
issuing the Order of January 17, 1978
without notice and without hearing and in issuing the Order dated June 28, 1978 denying the motion for
reconsideration.

2)  Pres. Decree 1224, as
amended, is unconstitutional for being violative of
the due process clause, specifically:

a)  The Decree would allow
the taking of property regardless of size and no matter how small the area to
be expropriated;

b)  “Socialized
housing” for the purpose of condemnation proceeding, as defined in said
Decree, is not really for a public purpose;

c)  The Decree violates
procedural due process as it allows immediate taking of possession, control and
disposition of property without giving the owner his day in court;

d)  The Decree would allow
the taking of private property upon payment of unjust and unfair valuations
arbitrarily fixed by government assessors;

e)  The Decree would deprive
the courts of their judicial discretion to determine what would be the “just
compensation” in each and every case of expropriation.

Indeed, the exercise of
the power of eminent domain is subject to certain limitations imposed by the
constitution, to wit:

Private property shall
not be taken for public use without just compensation” (Art. IV, sec. 9);

No person shall be deprived of life, liberty, or property without
due process of law, nor shall any person be denied the equal protection of the
laws” (Art. IV, sec. 1).

Nevertheless, a clear case of constitutional infirmity has to be
established for this Court to nullify legislative or executive measures adopted
to implement specific constitutional provisions aimed at promoting the general
welfare.

Petitioners’ objections to the taking of their property subsumed
under the headings of public use, just compensation, and due process have to be
balanced against competing interests of the public recognized and sought to be
served under declared policies of the constitution as implemented by
legislation.

1.  Public use

a)  Socialized Housing

Petitioners contend that “socialized housing” as
defined in Pres. Decree No. 1224, as amended, for the purpose of condemnation
proceedings is not “public use” since it will benefit only “a
handful of people, bereft of public character.”

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

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

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

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

d)  The provision of economic
opportunities, including the development of commercial and industrial estates and
such other facilities to enhance the total community growth; and

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

The “public
use” requirement for a valid exercise of the power of eminent domain is a
flexible and evolving concept
influenced by changing conditions.  In this jurisdiction, the statutory and
judicial trend has been summarized as follows:

The taking to be valid must be for public use.  There was a time when it was felt that a literal meaning should be attached to such a requirement.  Whatever project is undertaken must be for
the public to enjoy, as in the case of streets or parks.  Otherwise, expropriation is not
allowable.  It is not anymore.  As long as the purpose of the taking is
public, then the power of eminent domain comes into play.  As just noted, the constitution in at least
two cases, to remove any doubt, determines what is public use.  One is the expropriation of lands to be
subdivided into small lots for resale at cost to individuals.  The other is in the transfer, through the
exercise of this power, of utilities and other private enterprise to the
government.  It is accurate
to state then that at present whatever
may be beneficially employed
for the general welfare satisfies the
requirement of public use [Heirs of Juancho Ardona v. Reyes, G.R. Nos. 60549, 60553-60555, October 26, 1983, 125 SCRA 220 (1983) at 234-5 quoting E. FERNANDO, THE
CONSTITUTION OF THE PHILIPPINES 523-4, (2nd
ed., 1977) Underscoring
supplied].

The term “public use” has
acquired a more comprehensive coverage. 
To the literal import of the term signifying strict use or employment by the public has been added the broader
notion of indirect public benefit or advantage. 
As discussed in the above cited case of Heirs of Juancho Ardona:

The restrictive view of public use may be appropriate for a nation
which circumscribes the scope of government activities and public concerns and
which possesses big and correctly located public lands that obviate the need to
take private property for public
purposes.  Neither circumstance applies
to the Philippines.  We have never been a laissez faire State.  And the necessities which impel the exertion
of sovereign power are all too often found in areas of scarce public land or limited government
resources.  (p. 231)

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

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

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

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

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

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

In the case at bar, the
use to which it is proposed to put the subject parcels of land meets the
requisites of “public use”. 
The lands in question are being expropriated by the NHA for the
expansion of Bagong Nayon
Housing Project to provide housing facilities to low-salaried government
employees.  Quoting respondents:

1.  The
Bagong Nayon Project
is a housing and community development undertaking of the National
Housing Authority.  Phase I covers about
60 hectares of GSIS property in Antipolo, Rizal; Phase II includes about 30 hectares for industrial
development and the rest are for residential housing development.

It is intended for low-salaried government employees and aims to
provide housing and community services for about 2,000 families in Phase I and
about 4,000 families in Phase II.

It is situated on rugged terrain 7.5 kms.
from Marikina
Town proper; 22 Kms.
east of Manila; and is within the Lungsod Silangan Townsite Reservation (created by Presidential Proclamation
No. 1637 on April 18, 1977).

The lands involved in the present petitions are parts of the
expanded/additional areas for the Bagong Nayon Project totalling 25.9725
hectares.  They likewise include raw,
rolling hills.  (Rollo,
pp. 266-7)

The acute shortage of housing units in the country is of public
knowledge.  Official data indicate that
more than one third of the households nationwide do not own their dwelling
places.  A significant number live in
dwellings of unacceptable standards, such as shanties, natural shelters, and
structures intended for commercial, industrial,
or agricultural purposes.  Of these
unacceptable dwelling units, more than one third is located within the National
Capital Region (NCR) alone which lies proximate to and is expected to be the
most benefited by the housing project involved in the case at bar [See,
National Census and Statistics Office, 1980 Census of Population and Housing].

According to the National Economic and Development Authority at
the time of the expropriation in question, about “50 per cent of urban
families, cannot afford adequate shelter even at reduced rates and will need
government support to provide them with social housing,
subsidized either partially or totally” [NEDA, FOUR YEAR DEVELOPMENT PLAN FY 1974-1977, p. 357].  Up to the present, housing
“still remains to be out of the reach of a sizable proportion of the population” [NEDA, MEDIUM-TERM PHILIPPINE
DEVELOPMENT PLAN 1987-1992, p. 240].

The mushrooming of squatter colonies in the Metropolitan Manila
area as well as in other cities and centers of population throughout the
country, and, the efforts of the government to initiate housing and other
projects are matters of public knowledge [See NEDA, FOUR YEAR DEVELOPMENT PLAN
FY 1974-1977, pp. 357-361; NEDA, FIVE – YEAR PHILIPPINE DEVELOPMENT PLAN
1978-1982, pp. 215-228; NEDA, FIVE YEAR PHILIPPINE DEVELOPMENT PLAN 1983-1987,
pp. 109-117; NEDA, MEDIUM TERM PHILIPPINE DEVELOPMENT PLAN 1987-1992, pp
240-254].

b)  Size of Property

Petitioners further contend that Pres. Decree 1224, as amended,
would allow the taking of “any private land” regardless of the size and no matter how small the area
of the land to be expropriated. 
Petitioners claim that “there are vast areas of lands in Mayamot, Cupang, and San
Isidro, Antipolo, Rizal hundred of hectares of which are owned by a few
landowners only.  It is surprising
[therefore] why respondent National Housing Authority [would] include [their]
two small lots . . .”

In J.M.
Tuason Co., Inc. v. Land
Tenure Administration, [G.R. No. L-21064, February 18, 1970, 31 SCRA 413 (1970) at 428] this Court
earlier ruled that expropriation is not confined to landed estates.  This Court, quoting the dissenting opinion of
Justice J.B.L. Reyes in Republic v Baylosis,
[96 Phil. 461 (1955)], held that:

The propriety of exercising the power of eminent domain under
Article XIII, section 4 of our Constitution cannot be determined on a purely
quantitative or area basis.  Not only
does the constitutional provision speak of lands instead of landed estates, but
I see no cogent reason why the government, in its quest for social justice and
peace, should exclusively devote attention to conflicts of large proportions,
involving a considerable number of individuals, and eschew small controversies
and wait until they grow into a major
problem before taking remedial action.

The said case of J.M.
Tuason Co., Inc. departed from
the ruling in Guido v. Rural Progress Administration
[84 Phil. 847 (1949)] which held that the test to be applied for a valid
expropriation of private lands was the area of the land and not the number of
people who stood to be benefited.  Since
then “there has evolved a clear pattern of adherence to the ‘number of
people to be benefited test'” [Mataas na Lupa Tenants Association, Inc.
v. Dimayuga, G.R. No. 32049, June 25, 1984, 130 SCRA
30 (1984) at 39].  Thus, in Pulido v. Court of Appeals
[G.R. No. 57625, May 3, 1983, 122 SCRA 63 (1983) at 73], this Court stated
that, “[i]t is unfortunate that the petitioner
would be deprived of his landholdings, but his interest and that of his family
should not stand in the way of progress and the benefit of the greater majority
of the inhabitants of the country.”

The State acting through
the NHA is vested with broad discretion to designate the particular
property/properties to be taken for socialized housing purposes and how
much thereof may be expropriated.  Absent
a clear showing of fraud, bad faith, or gross abuse of discretion, which
petitioners herein failed to demonstrate, the Court will give due weight to and
leave undisturbed the NHA’s choice and the size of
the site for the project.  The property
owner may not interpose objections merely because in their judgment some other
property would have been more suitable, or just as suitable, for the purpose.  The right to the use, enjoyment and disposal of private property is tempered by and
has to yield to the demands of the common good.  The Constitutional provisions on the subject
are clear:

The State shall promote social justice in all phases of national
development.  (Art. II, sec. 10)

The Congress shall give highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic,
and political inequalities, and remove cultural inequities by equitably diffusing
wealth and political power for the common good. 
To this end, the State shall
regulate the acquisition, ownership, use and disposition of property and its
increments.  (Art. XIII, sec. 1)

Indeed, the foregoing provisions, which
are restatements of the provisions in the 1935 and 1973 Constitution’s,
emphasize:

. . . the
stewardship concept, under which private property is supposed to be held by the
individual only as a trustee for the people in general, who are its real
owners.  As a mere steward, the individual
must exercise his rights to the
property not for his own exclusive and selfish benefit but for the good of the
entire community or nation [Mataas na Lupa Tenants Association, Inc.
supra at 42-3 citing I. CRUZ, PHILIPPINE
POLITICAL LAW, 70 (1983 ed.)].

2.  Just Compensation

Petitioners maintain that
Pres. Decree No. 1224, as amended, would allow the taking of private property
upon payment of unjust and unfair valuations arbitrarily fixed by government
assessors.  In addition, they assert that
the Decree would deprive the courts of their judicial discretion to determine
what would be “just compensation”.

The foregoing contentions
have already been ruled upon by this Court in the case of Ignacio v. Guerrero (G.R. No. L-49088, May 29, 1987) which, incidentally, arose from the same
expropriation complaint that led to this instant petition.  The
provisions on just compensation found in Presidential Decree Nos. 1224, 1259 and 1313 are the same provisions found in
Presidential Decree Nos. 76, 464, 794 and 1533 which were declared
unconstitutional in Export Processing Zone Authority
v. Dulay (G.R. No. 59603, April 29,
1987) for being encroachments on judicial prerogatives.

This Court abandoned the
ruling in National Housing Authority v. Reyes
[G.R. No. 49439, June 29, 1983, 123 SCRA 245 (1983)] which upheld Pres. Decree
No. 464, as amended by Presidential Decree Nos. 794, 1224 and 1259.

In said case of Export
Processing Zone Authority, this Court pointed out that:

The basic unfairness of the decrees is readily apparent.

Just compensation means the value of the property at the time of the taking.  It means a fair and full
equivalent for the loss sustained. 
All the facts as to the condition of the property and its surroundings,
its improvements and capabilities, should be considered.

*    
*     *

Various factors can come into play in the valuation of specific
properties singled out for expropriation. 
The values given by provincial assessors are usually uniform for very
wide areas covering several barrios or even an entire town with the exception
of the poblacion. 
Individual differences are never taken into account.  The value of land is based on such
generalities as its possible cultivation for rice, corn, coconuts, or other
crops.  Very often land described as
“cogonal” has been cultivated for
generations.  Buildings are described in
terms of only two or three classes of building materials and estimates of areas
are more often inaccurate than correct. 
Tax values can serve as guides but cannot be absolute substitutes for
just compensation.

To say that the owners are estopped to
question the valuations made by assessors since thay
had the opportunity to protest is illusory. 
The overwhelming mass of landowners accept unquestioningly
what is found in the tax declarations prepared by local assessors or municipal
clerks for them.  They do not even look
at, much less analyze, the statements. 
The idea of expropriation simply never occurs until a demand is made or
a case filed by an agency authorized to do so. 
(pp. 12-3)

3.  Due Process

Petitioners assert that Pres. Decree 1224, as amended, violates
procedural due process as it allows immediate taking of possession, control and
disposition of property without giving the
owner his day in court.  Respondent Judge
ordered the issuance of a writ of possession without notice and without
hearing.

The constitutionality of this procedure has also been ruled upon
in the Export Processing Zone Authority case,
viz:

It is violative of due process to deny to
the owner the opportunity to prove that the valuation in the tax documents is
unfair or wrong.  And it is repulsive to
basic concepts of justice and fairness to allow the haphazard work of a minor
bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all
factors and considerations essential to a fair and just determination have been
judiciously evaluated.  (p. 13)

On the matter of the
issuance of a writ of possession, the ruling in the Ignacio case is
reiterated, thus:

[I]t is imperative that before a writ of possession is issued by
the Court in expropriation proceedings, the following requisites must be
met:  (1) There must be a Complaint for
expropriation sufficient in form and in substance; (2) A provisional
determination of just compensation for the properties sought to be expropriated
must be made by the trial court on the basis of judicial (not legislative or
executive) discretion; and (3) The deposit requirement under Section 2, Rule 67
must be complied with.  (p. 14)

This Court holds that
“socialized housing” defined in Pres. Decree No. 1224, as amended by
Pres. Decree Nos. 1259 and 1313, constitutes “public use” for
purposes of expropriation.  However, as
previously held by this Court, the provisions of such decrees on just
compensation are unconstitutional; and in the instant case the Court finds that
the Orders issued pursuant to the corollary provisions of those decrees
authorizing immediate taking without notice and hearing are violative
of due process.

WHEREFORE, the Orders of the lower court dated January
17, 1978 and June 28, 1978 issuing the
writ of possession on the basis of the market value appearing therein are
annulled for having been issued in excess of jurisdiction.  Let this case be remanded to the court of
origin for further proceedings to determine the compensation the petitioners
are entitled to be paid.  No costs.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin,
and Sarmiento,
JJ., concur.