JOAQUIN CUATICO, ET AL. PETITIONERS, VS. COURT OF APPEALS, ET AL., RESPONDENTS

On May 7, 1959, J. M. Tuason & Co., Inc. filed before the Court
of First Instance of Rizal, Quezon City, an action to eject Joaquin
Cuatico from a parcel of land situated in said city which forms part of
a subdivision known as Tatalon Estate, having been docketed as Civil
Case No. Q-4294. In due time, Cuatico filed an answer with a
counterclaim for damages.

On September 24, 1959, Cuatico asked leave to file a third-party
complaint in order to bring as party defendants the persons from whom
he claimed to have acquired the land in question, namely, Pedro and
Florencio Deudor Deodati Gochangco and Virginia T. Martinez. Because of
the opposition interposed thereto by J. M. Tuason & Co., Inc., the
lower court denied the motion.

On May 31, 1960, the lower court rendered decision finding J. M.
Tuason & Co., Inc. to be the owner of the land in litigation and
ordering Cuatico to vacate the same as well as to remove the house he
had constructed thereon paying in the meantime a rental of P90.00 per
month from April, 1950 until its possession is restored to the
plaintiff. From this decision Cuatico appealed to the Court of Appeals.

On July 7, 1962, Cuatico filed with the Court of Appeals a petition
to suspend the case as well as other proceedings in connection
therewith invoking Section 4 of Republic Act No. 2616, as recently
amended by Republic Act No. 3453, which provides, among others, that
upon approval of the amendatory Act “no ejectment proceedings already
commenced shall be continued” when the same refers to a piece of land
which forms part of the Tatalon Estate in Quezon City.

J. M. Tuason & Co., Inc. filed an opposition to the petition
alleging that Republic Act No. 3453 which authorizes the suspension of
ejectment proceedings upon its approval is unconstitutional because, if
interpreted as a bar to the filing of ejectment actions or suspending
their prosecution before the filing of an expropriation proceeding, it
would amount to confiscation repugnant to our Constitution.

On July 20, 1962, the Court of Appeals issued a resolution denying the petition for suspension.

Cuatico’s motion for reconsideration having been denied, he interposed the present petition for review.

In the meantime, on March 18, 1960, Joaquin Cuatico and Deodati
Gochangco filed before the same Court of First Instance of Quezon City
a complaint against J. M. Tuason & Co., Inc., G. Araneta, Inc., and
Pedro Deudor to compel the latter to execute in favor of plaintiffs the
necessary deeds of transfer to enable them to obtain a title in their
names over the lot in question free from all liens and encumbrances,
and if plaintiffs are adjudged not to have any rights to said lot, to
order defendant Pedro Deudor to compensate plaintiffs for the damages
they may have suffered in relation thereto, aside from attorney’s fees.
This complaint was docketed as Civil Case No. Q-5062. The complaint was
later amended by including as party plaintiff the wife of plaintiff
Joaquin Cuatico.

Defendants filed their answer to this action and on August 31, 1960,
the lower court rendered decision dismissing it. Again, Joaquin Cuatico
and his co-plaintiffs took the case to the Court of Appeals, where on
July 7, 1962 they filed a petition for suspension of the proceedings,
invoking Section 4 of Republic Act No. 3453. J. M. Tuason & Co.,
Inc., as well as its co-defendants, filed an opposition thereto, and
after both parties had filed a reply and rejoinder, respectively, the
Court of Appeals, on July 20, 1962, issued a resolution denying the
petition for suspension. Joaquin Cuatico and his co-plaintiffs again
filed a petition for review jointly with the petition the former had
filed in connection with the previous case.

It appears that on August 3, 1959 Congress approved Republic Act No. 2616, Section 4 of which provides:

“SEC. 4. After the expropriation proceedings
mentioned in section two of this Act shall have been initiated and
during the pendency of the same, no ejectment proceedings shall be
instituted or prosecuted against the present occupant of any lot in
said Tatalon Estate, and no ejectment proceedings already commenced
shall be continued, and such lot or any portion thereof shall not be
sold by the owners of said estate to any person other than the present
occupant without the consent of the latter given in a public
instrument.”

And on June 16, 1962, Congress again approved Republic Act No. 3453, which amends Section 4 of Republic Act No. 2616 as follows:

“SEC. 4. Upon approval of this amendatory Act, no
ejectment proceedings shall be instituted or prosecuted against the
present occupants of any lot in said Tatalon Estate, and no ejectment
proceedings already commenced shall be continued, and such lot or any
portion thereof shall not be sold by the owners of said estate to any
person other than the present occupant without the consent of the
latter given in a public instrument.”

Since the amendatory Act above-referred to was enacted while the two
cases herein involved were pending before the Court of Appeals,
petitioners herein filed in each case a petition for suspension of the
proceedings, invoking in their favor the benefit accorded by said
amendatory Act. The Court of Appeals denied the petitions for
suspension and so petitioners have come before this Court alleging that
the Court of Appeals has committed a grave abuse of discretion in
denying their petitions for suspension.

The question that now arises is: Are the provisions embodied in the
amendatory Act which prescribe that upon approval of said Act no
ejectment proceedings shallbe instituted or prosecuted against any
occupant of any lot in the Tatalon Estate, or that no ejectment
proceedings already commenced shall be continued, constitutional and
valid such that it may be said that the Court of Appeals abused its
discretion in denying the petitions for suspension filed by petitioners?

Petitioners contend that they are valid while respondents sustain
the contrary. The latter expressed the view that if they are
interpreted as barring the filing of ejectment actions or suspending
the prosecution of the same even before the filing of an expropriation
proceeding it would amount to confiscation repugnant to our
constitution.

It should be noted that Republic Act No. 3453 is but an amendment of
Republic Act No. 2616 which authorizes the expropriation by the
government of the Tatalon Estate for resale to its actual tenants or
occupants. The original provision concerning the expropriation of the
estate expressly prescribes that, after the expropriation proceedings shall have been initiated and during the pendency of the same,
no ejectment proceedings shall be instituted or prosecuted against the
present occupants of any lot in said estate, as well as no ejectment
proceedings already commenced shall be continued. On the other hand,
the amendatory Act has the effect merely of eliminating any mention of
the expropriation proceedings by providing that, even in the absence
thereof, or upon the approval of said amendatory Act, no ejectment
proceedings shall be instituted against any occupant, and if one has
already been commenced the same shall not be continued, without stating
any period for their suspension. Note also that the amendment is a
radical one. It allows the continuance of the occupation of the land on
the part of the tenant indefinitely even if no expropriation
proceedings are taken or contemplated. The effect of this amendment is
clearly confiscatory for its result is to eventually take from the
owner his property without compensation or to deprive him of his
dominical rights of ownership over it in violation of our Constitution.

This is not the first time that this Court has been called upon to
pass upon the validity of a provision which places a landowner in the
situation of losing his dominical rights over the property without due
process or compensation. We refer to the provisions of Republic Act
2616 before they were amended by Republic Act No. 3453. Note that, as
originally provided, Republic Act No. 2616 prohibited the institution
of an ejectment proceeding against any occupant of any lot in the
Tatalon Estate or the continuance of one that has already been
commenced after the expropriation proceedings shall have been initiated and during the pendency of the same.
On the surface this provision would appear to be valid if the same is
carried out in the light of the provisions of our Constitution relative
to cases of eminent domain, for in that case the rights of the owner of
the property to be expropriated are protected. But then an attempt came
to circumvent that provision in an effort to safeguard or protect the
interest of some occupants of the land, which reached this Court for
adjudication, as when some occupants attempted to block their ejectment
upon the plea that the government would soon start expropriation
proceedings even if no sufficient funds were appropriated to provide
compensation to the owner and even if it was not in a position to take
possession of the estate, and so the owner contested the attempt
invoking its rights under the Constitution. And this Court upheld the
contention of the owner by declaring the attempt unconstitutional.

We refer to the twin cases of J. M. Tuason & Co., Inc. vs. Court of Appeals, et al., (G. R. No. L-18128) and Republic of the Philippines vs. J. M. Tuason & Co., Inc., et al., (G. R. No. L-18672) which were jointly decided by this Court on December 26, 1961^[*]
In ruling that the attempt made by the Land Tenure Administration to
stay the ejectment proceedings even if the government is not in a
position to, take over the possession of the property involved, or to
start expropriation proceedings as provided for by law, is
unconstitutional, this Court made the following comment:

“In moving for the lifting of the preliminary
injunction and for a stay of the ejectment proceedings, the Land Tenure
Administration and the other movants assume that, upon filing of the
condemnation petition, the land owner will be barred from enforcing its
final judgments of ejectment against the possessors of the land, even
if the Government should not take over the possession of the property
involved. This view, in our opinion, is not warranted. We see nothing
in the terms of Republic Act No. 2616 to justify the belief that the
Legislature intended a departure from the normal course prescribed for
eminent domain cases, where the rights of the owner of the land may not
be disturbed without previous deposit of the provisional value of the
property sought to be condemned. The effectivity of section 4 of
Republic Act 2616, discontinuing ejectment proceedings against the
present occupants, and restraining any act of disposition of the
property, is justifiable only if the Government takes possession of the
land in question by depositing its value. It needs no argument to show
that by restraining the land owner from enforcing even final judgments
in his favor to recover possession of his property, as well as from
disposing of it to persons of his choice, he is deprived of the
substance of ownership, and his title is left as an empty shell. The
land owner would then be deprived of those attributes of ownership that
give it value, and his property is virtually taken from him without
compensation and in violation of the Constitution, particularly in view
of the fact that R. A. 2616 (unlike previous Acts of similar character)
does not even provide for a deposit of the current rentals by the
tenants during the pendency of the proceedings (cf. R. A. No. 1162,
section 5). The Bill of Rights, in requiring that ‘private property
shall not be taken for public use without just compensation, and
Article XIII, section 4, in prescribing that ‘Congress may authorize, upon payment of just compensation,
the expropriation of lands to be subdivided into small lots and
conveyed at cost to individuals’, prohibit any disturbance of
proprietary rights without coetaneous payment of just indemnity. Hence,
the mere filing of the condemnation proceedings for the benefit of
tenants can not, by itself alone, lawfully suspend the condemnee’s
dominical rights, whether of possession, enjoyment, or disposition. And
this is especially the case where final and executory judgments of
ejectment have been obtained against the occupants of the property.”

Thus, from the language employed by this Court in the above cases we can draw the following conclusion: (a)
that Republic Act No. 2616 cannot have the effect of divesting the
owner of his dominical rights of possession, enjoyment and disposition
of his property; (b) the mere filing of an action for
expropriation will not bar the enforcement of any final judgment of
ejectment the owner may have against the possessors of the land; and (c)
the effectivity of Section 4 of said Act is justifiable only if the
government takes possession of the land and is in a position to make a
coetaneous payment of just compensation to its owner. In other words,
an ejectment proceeding cannot be barred or suspended under Republic
Act No. 2616 unless (a) an action for expropriation is actually filed; (b) the government takes possession of the land; and (c) coetaneous payment of just compensation is made.

But the amendment wrought into Republic Act No. 2616 by Republic Act
No. 3453 brushes aside all these requirements for the valid exercise of
the power of eminent domain contemplated in our Constitution. It in
effect commands that no ejectment proceedings shall be instituted, or
if one shall have been commenced it shall be suspended, even if no
expropriation proceedings shall have been filed by the government. This
is indeed confiscatory, for its necessary implication is that as long
as the government refrains from filing an action for expropriation the
owner cannot enjoy its dominical rights over the property. And if the
government chooses not to take any action for expropriation indefinitely the occupant would remain in the illegal possession of the land also indefinitely.
Such a situation cannot be sanctioned by this Court for it will result
in a flagrant confiscation of private property without due process in
violation of our Constitution. It is, therefore, imperative that we
declare, as we now do, that Section 4 of Republic Act No. 3453 which
prohibits the filing of an ejectment proceeding, or the continuance of
one that has already been commenced, even in the absence of
expropriation proceedings, offends our Constitution and, hence, is
unenforceable.

Parenthetically, we may add that this ruling is in line with what
this Court has said in interpreting similar provisions of Republic Act
No. 1162 relative to the expropriation of landed estates in general:

“One of the issues raised refers to the denial by
the trial court of the motion filed by defendants to suspend the
present ejectment case invoking in their favor the provisions of
Republic Act No. 1162, particularly Section 5, which provides that
‘Prom the approval of this Act, and until the expropriation herein
provided, no ejectment proceedings shall be instituted or prosecuted
against any tenant or occupant or any landed estates or haciendas
herein authorized to be expropriated if he pays his current rentals.’ It
is claimed that said Act was approved on June 18, 1954 and since this
action was instituted on March 31, 1954, and remained pending when said
Act was approved, it was the duty of the court to suspend the case in
order that the purpose of said Act may be carried out which is to
expropriate the land and subdivide it into small lots for sale at cost
to its bonande tenants or occupants.

“Appellee, on the other
hand, contends that said Act is inapplicable to the present case for
the reason that there is no evidence showing that the property in
question forms part of a landed estate within the meaning of said Act,
and even if it were so, still the Act cannot apply because there is no
showing that the Government has ever taken any step relative to the
expropriation of the property.

“We are inclined to agree to
appellee’s contention for it cannot be supposed that Congress in
approving Republic Act No. 1162 had intended to actually suspend the
prosecution of an ejectment proceeding even before any definite step or
action is taken by the Government relative to the expropriation of the
property, for to hold otherwise would be to deprive a landlord of his
right to protect his interest by merely claiming that the Government
may someday act on the matter thereby placing him at the mercy of an
unscrupulous tenant. While it is laudable and proper that a landed
estate be expropriated in order that it may be subdivided and sold to
bonande tenants or occupants, the same should be undertaken in a manner
not repugnant to law or to the Constitution. In other words, the
suspension of an ejectment proceeding should only be made after the
Government has taken step or action relative to the expropriation of
the property in accordance with the procedure laid down by law,
otherwise the action would place the interest of the landlord in
jeopardy. Such cannot be the intendment of the law. As aptly explained
by the Court of Appeals in several cases involving the applicability of
Republic Act No. 1162, to which we agree, ‘until such a proceeding is
actually commenced the right of a landowner to prosecute an action for
ejectment under existing laws cannot be deemed suspended under section
5 of Republic Act No. 1162. To hold otherwise, that is, to deprive a
landlord of his remedy because of the possibility that the Government
may some day, in the near or distant future, act to expropriate his
property would be to place him at the mercy of a thoroughly uncertain
contingency. * * * We think that the prohibition against the
institution or prosecution of ejectment proceedings applies only when
expropriation has actually commenced.’ (Barcelon vs. Isip, CA-G. R. No. 13650-R, Oct. 14, 1954; See also Cacho vs. Tan, CA-G. R. Nos. 13888-R to 13891-R, Dec. 10, 1954; Antonio Tuason, Jr. vs.
Narvasa, CA-G. R. No. 14479-R, July 30, 1955).” (Teresa Realty, Inc. vs
State Construction & Supply Co., et al., 105 Phil., 353; See also Teresa Realty, Inc. vs. Maxima Blouse de Potenciano, G. R. No. L-17588, May 30, 1962.)

Wherefore, we find no abuse of discretion on the part of the Court
of Appeals in denying the petitions for suspension sought for by herein
petitioners. Hence, the resolutions subject of review are affirmed. No
costs.

Bengzon, C. J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon, Regala and Makalintal, JJ., concur.