REPUBLIC OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. CELESTINO C. JUAN AND ANA TANSECO JUAN, DEFENDANTS-APPELLANTS.

Republic versus Juan

The Case

This is an expropriation case. The Republic of the Philippines, through the Solicitor General, sued the spouses Celestino Juan and Ana Tanseco Juan to condemn some 338 hectares of titled land in Bacnotan, La Union, as the site of the La Union Regional Agricultural School. The case matters for two reasons. First, it settles that the State's power of eminent domain is inherent and sovereign, and that the administrative steps in Executive Order Number 132 are not conditions precedent to a valid expropriation suit. Second, it teaches how just compensation is fixed when the commissioners of appraisal disagree, and how the owner's conduct, such as withdrawing the provisional deposit without qualification, can bar him from later attacking the taking.

Procedural History

The Republic filed its complaint for expropriation in the Court of First Instance of La Union. The trial court allowed the government to take immediate possession upon a provisional deposit, later raised the provisional value to 100,000 pesos, and, after the spouses withdrew that amount, ordered the condemnation of the property and appointed three commissioners of appraisal, one for the court as chairman, one for the plaintiff, and one for the defendants. The commissioners inspected the land and heard the parties, but they did not agree on the classification of the land, the areas per class, or the values. The trial court then rendered its decision, fixing just compensation at 190,000 pesos, of which 100,000 pesos had already been paid, leaving a balance of 90,000 pesos with interest at six percent from May 1963, plus costs. The spouses moved for reconsideration, and the trial court denied the motion. The spouses appealed directly to the Supreme Court.

Facts

The spouses owned two adjoining parcels in Barrio Sapilang, Bacnotan, La Union, with an aggregate area of 338.7480 hectares, covered by a certificate of title issued in April 1959. The property was mortgaged to a bank. In January 1963, Victor Luis, the principal of the proposed agricultural school, and Mrs. Avelina Osias negotiated with the spouses for the purchase of the land. Celestino Juan confirmed in writing that his selling price was 170,000 pesos net to him, exclusive of his bank obligation, with at least 90,000 pesos down and the balance within one year. No voluntary sale was concluded because the parties did not agree on the price.

On the strength of a presidential authorization issued in March 1963, the Solicitor General filed the complaint for expropriation in April 1963. The trial court authorized the government to take possession upon a provisional deposit, which it later fixed at 100,000 pesos. The Republic took possession in May 1963, deposited the 100,000 pesos, and the spouses withdrew the amount that same day. The spouses then moved to dismiss and moved to raise the provisional value, but the trial court denied the motion to dismiss.

In January 1964, the trial court ordered the condemnation of the property and appointed the three commissioners. Their reports diverged sharply. The commissioner for the government recommended 135,000 pesos, the midpoint between the government's offer and the spouses' asking price. The commissioner for the spouses recommended 1,407,856 pesos with legal interest. The court's commissioner recommended 1,045,876 pesos for the land and improvements, with interest on the balance. The spouses objected and claimed a higher value, then filed a petition to submit the case for decision without further hearing on the reports. The trial court then fixed just compensation at 190,000 pesos.

Issues

• Whether or not the expropriation is invalid because the government did not comply with Executive Order Number 132 on prior negotiations before filing suit.
• Whether or not the spouses, by withdrawing the provisional deposit without qualification, are barred from questioning the propriety of the expropriation and the manner of its exercise.
• Whether or not the amount fixed by the trial court is the just compensation required by the Constitution.

Applicable Provisions

Section 64(h) of the Revised Administrative Code, as discussed by the Court, provides:

Section 64(h) of the Revised Administrative Code confers upon the Chief Executive the power to determine when it is necessary or advantageous to exercise the power of eminent domain in behalf of the Republic of the Philippines and to direct the Solicitor General to cause the filing of the appropriate condemnation proceedings in court.

This provision is the statutory source of the executive's authority to decide whether, and to what extent, the power of eminent domain will be invoked.

Ruling

On the first issue, the Court held that the expropriation is valid. The Republic exercises the right of eminent domain inherent in it as a sovereign, and that right is subject to no limitation other than those imposed by the Constitution: the taking must be for a public use, just compensation must be paid, and due process must be observed. Executive Order Number 132 is purely an administrative procedure within the executive department, designed to govern the taking of private property by voluntary sale or donation short of judicial action. Nothing in it makes its procedures conditions precedent to a valid expropriation suit, and it cannot limit the sovereign right of the State to expropriate through the courts. The Court also found substantial compliance, since negotiations were conducted by the principal of the proposed school and Mrs. Osias, and the term "other officials concerned" in the executive order can comprehend the principal. Education, the Court added, is a public use, and the law expressly authorized the establishment of the school and the acquisition of a suitable site.

On the second issue, the Court held that the spouses were barred. Their unqualified withdrawal of the 100,000 pesos deposited as provisional value constituted recognition of the government's right to expropriate, and it necessarily estopped them from raising any objection to the manner and propriety of the exercise of that right.

On the third issue, the Court held that the valuation must be fair and just, not only to the owner but also to the taxpayers who pay for it. The owner is entitled to the value of what he has been deprived of, and no more, because to award him less would be unjust to him, and to award him more would be unjust to the public. Because the commissioners did not reach a consensus, the trial court was left to weigh their conflicting reports, and the Court sustained the compensation fixed below.

Doctrine

The power of eminent domain is inherent in the State and is subject to no restraint beyond the constitutional requirements of public use, just compensation, and due process. Administrative rules such as Executive Order Number 132 are internal executive procedures, not conditions precedent to a valid expropriation suit. An owner who withdraws the provisional deposit without qualification recognizes the government's right to expropriate and is estopped from later questioning the propriety of the taking and the manner of its exercise. Just compensation must be fair to both the owner and the taxpayers, measured by the value of what the owner has lost and no more.

Disposition

The Supreme Court affirmed the decision of the trial court, upholding the expropriation and the compensation of 190,000 pesos, with the balance of 90,000 pesos plus interest at six percent from May 1963 to be paid to the spouses, aside from costs.

Remember This

Memorize this line: the State's right of eminent domain is inherent and sovereign, and Executive Order Number 132 is not a condition precedent to expropriation. Examiners use this case to test the requisites of eminent domain, the effect of an unqualified withdrawal of the provisional deposit, and the standard of just compensation measured against both owner and taxpayer.