G.R. No.171496 March 3, 2014
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), Petitioner,
vs.
ORTIGAS AND COMPANY LIMITED PARTNERSHIP, Respondents.
"x x x.
In any event, we resolve the substantive issue on whether respondent Ortigas may not sell and may only donate its property to the government in accordance with Section 50 of Presidential Decree No. 1529.
Section 50 of Presidential Decree No. 1529 does not apply in a case that is the proper subject of an expropriation proceeding
Respondent Ortigas may sell its property to the government. It must be compensated because its property was taken and utilized for public road purposes.
Petitioner Republic of the Philippines insists that the subject property may not be conveyed to the government through modes other than by donation. It relies on Section 50 of the Property Registration Decree, which provides that delineated boundaries, streets, passageways, and waterways of a subdivided land may not be closed or disposed of by the owner except by donation to the government. It reads:
Section 50. Subdivision and consolidation plans. Any owner subdividing a tract of registered land into lots which do not constitute a subdivision project as defined and provided for under P.D. No. 957, shall file with the Commissioner of Land Registration or the Bureau of Lands a subdivision plan of such land on which all boundaries, streets, passageways and waterways, if any, shall be distinctly and accurately delineated.
If a subdivision plan, be it simple or complex, duly approved by the Commissioner of Land Registration or the Bureau of Lands together with the approved technical descriptions and the corresponding owner’s duplicate certificate of title is presented for registration, the Register of Deeds shall, without requiring further court approval of said plan, register the same in accordance with the provisions of the Land Registration Act, as amended: Provided, however, that the Register of Deeds shall annotate on the new certificate of title covering the street, passageway or open space, a memorandum to the effect that except by way of donation in favor of the national government, province, city or municipality, no portion of any street, passageway, waterway or open space so delineated on the plan shall be closed or otherwise disposed of by the registered owner without the approval of the Court of First Instance of the province or city in which the land is situated. (Emphasis supplied)
Petitioner Republic of the Philippines’ reliance on Section 50 of the Property Registration Decree is erroneous. Section 50 contemplates roads and streets in a subdivided property, not public thoroughfares built on a private property that was taken from an owner for public purpose. A public thoroughfare is not a subdivision road or street.
More importantly, when there is taking of private property for some public purpose, the owner of the property taken is entitled to be compensated.48
There is taking when the following elements are present:
1. The government must enter the private property;
2. The entrance into the private property must be indefinite or permanent;
3. There is color of legal authority in the entry into the property;
4. The property is devoted to public use or purpose;
5. The use of property for public use removed from the owner all beneficial enjoyment of the property.49
All of the above elements are present in this case. Petitioner Republic of the Philippines’ construction of a road — a permanent structure — on respondent Ortigas’ property for the use of the general public is an obvious permanent entry on petitioner Republic of the Philippines’ part. Given that the road was constructed for general public use stamps it with public character, and coursing the entry through the Department of Public Works and Highways gives it a color of legal authority.
As a result of petitioner Republic of the Philippines’ entry, respondent Ortigas may not enjoy the property as it did before. It may not anymore use the property for whatever legal purpose it may desire. Neither may it occupy, sell, lease, and receive its proceeds. It cannot anymore prevent other persons from entering or using the property. In other words, respondent Ortigas was effectively deprived of all the bundle of rights50 attached to ownership of property.
It is true that the lot reserved for road widening, together with five other lots, formed part of a bigger property before it was subdivided. However, this does not mean that all lots delineated as roads and streets form part of subdivision roads and streets that are subject to Section 50 of the Property Registration Decree. Subdivision roads and streets are constructed primarily for the benefit of the owners of the surrounding properties. They are, thus, constructed primarily for private use — as opposed to delineated road lots taken at the instance of the government for the use and benefit of the general public.
In this case, the lot was reserved for road widening at the instance of petitioner Republic of the Philippines. While the lot segregated for road widening used to be part of the subdivided lots, the intention to separate it from the delineated subdivision streets was obvious from the fact that it was located at the fringes of the original lot51 — exactly at petitioner Republic of the Philippines’ intended location for the road widening project. Moreover, petitioner Republic of the Philippines’ intention to take the property for public use was obvious from the completion of the road widening for the C-5 flyover project and from the fact that the general public was already taking advantage of the thoroughfare.
Delineated roads and streets, whether part of a subdivision or segregated for public use, remain private and will remain as such until conveyed to the government by donation or through expropriation proceedings.52 An owner may not be forced to donate his or her property even if it has been delineated as road lots because that would partake of an illegal taking.53 He or she may even choose to retain said properties.54 If he or she chooses to retain them, however, he or she also retains the burden of maintaining them and paying for real estate taxes.
An owner of a subdivision street which was not taken by the government for public use would retain such burden even if he or she would no longer derive any commercial value from said street. To remedy such burden, he or she may opt to donate it to the government. In such case, however, the owner may not force the government to purchase the property. That would be tantamount to allowing the government to take private property to benefit private individuals. This is not allowed under the Constitution, which requires that taking must be for public use.55
Further, since the Constitution proscribes taking of private property without just compensation,56 any taking must entail a corresponding appropriation for that purpose. Public funds, however, may only be appropriated for public purpose.57 Employment of public funds to benefit a private individual constitutes malversation.58 Therefore, private subdivision streets not taken for public use may only be donated to the government.
In contrast, when the road or street was delineated upon government request and taken for public use, as in this case, the government has no choice but to compensate the owner for his or her sacrifice, lest it violates the constitutional provision against taking without just compensation, thus:
Section 9. Private property shall not be taken for public use without just compensation.59
As with all laws, Section 50 of the Property Registration Decree cannot be interpreted to mean a license on the part of the government to disregard constitutionally guaranteed rights.
The right to compensation under Article III, Section 9 of the Constitution was put in place to protect the individual from and restrain the State’s sovereign power of eminent domain,60 which is the government’s power to condemn private properties within its territory for public use or purpose.61 This power is inherent and need not be granted by law.62 Thus, while the government’s power to take for public purpose is inherent, immense, and broad in scope, it is delimited by the right of an individual to be compensated. In a nutshell, the government may take, but it must pay.
Respondent Ortigas, immediately upon the government’s suggestion that it needed a portion of its property for road purposes, went so far as to go through the process of annotating on its own title that the property was reserved for road purposes. Without question, respondent Ortigas allowed the government to construct the road and occupy the property when it could have compelled the government to resort to expropriation proceedings and ensure that it would be compensated. Now, the property is being utilized, not for the benefit of respondent Ortigas as a private entity but by the public. Respondent Ortigas remains uncompensated. Instead of acknowledging respondent Ortigas’ obliging attitude, however, petitioner Republic of the Philippines refuses to pay, telling instead that the property must be given to it at no cost. This is unfair.
In the parallel case of Alfonso v. Pasay City63 wherein Alfonso was deprived of his property for road purposes, was uncompensated, and was left without any expropriation proceeding undertaken, this court said:
When a citizen, because of this practice loses faith in the government and its readiness and willingness to pay for what it gets and appropriates, in the future said citizen would not allow the Government to even enter his property unless condemnation proceedings are first initiated, and the value of the property, as provisionally ascertained by the Court, is deposited, subject to his disposal. This would mean delay and difficulty for the Government, but all of its own making.64
"There is nothing that can more speedily and effectively embitter a citizen and taxpayer against his Government and alienate his faith in it, than an injustice and unfair dealing like the present case."65
Title to the subject lot remains under respondent Ortigas’ name. The government is already in possession of the property but is yet to acquire title to it. To legitimize such possession, petitioner Republic of the Philippines must acquire the property from respondent Ortigas by instituting expropriation proceedings or through negotiated sale, which has already been recognized in law as a mode of government acquisition of private property for public purpose.66
In a negotiated sale, the government offers to acquire for public purpose a private property, and the owner may accept or reject it. A rejection of the offer, however, would most likely merely result in the commencement of an expropriation proceeding that would eventually transfer title to the government. Hence, the government's offer to acquire for public purpose a private property may be considered as an act preparatory to an expropriation proceeding. Therefore, a private owner's initiative to segregate a property to accommodate government needs saves the government from a long and arduous expropriation proceeding. This is a commendable act on the part of the owner. It must be encouraged, not dampened by threats of property deprivation without compensation.
Respondent Ortigas, which merely accommodated petitioner Republic of the Philippines' request, remains uncompensated for the taking of its property. Respondent Ortigas could have brought action to recover possession of the property, but it instead chose to sell its property to petitioner Republic of the Philippines. This is both fair and convenient as the road construction had long been completed, and the road is already being utilized by the public.
Taking of private property without just compensation is a violation of a person's property right.1âwphi1 In situations where the government does not take the trouble of initiating an expropriation proceeding, the private owner has the option to compel payment of the property taken, when justified. The trial court should continue to proceed with this case to determine just compensation in accordance with law.
x x x."
In any event, we resolve the substantive issue on whether respondent Ortigas may not sell and may only donate its property to the government in accordance with Section 50 of Presidential Decree No. 1529.
Section 50 of Presidential Decree No. 1529 does not apply in a case that is the proper subject of an expropriation proceeding
Respondent Ortigas may sell its property to the government. It must be compensated because its property was taken and utilized for public road purposes.
Petitioner Republic of the Philippines insists that the subject property may not be conveyed to the government through modes other than by donation. It relies on Section 50 of the Property Registration Decree, which provides that delineated boundaries, streets, passageways, and waterways of a subdivided land may not be closed or disposed of by the owner except by donation to the government. It reads:
Section 50. Subdivision and consolidation plans. Any owner subdividing a tract of registered land into lots which do not constitute a subdivision project as defined and provided for under P.D. No. 957, shall file with the Commissioner of Land Registration or the Bureau of Lands a subdivision plan of such land on which all boundaries, streets, passageways and waterways, if any, shall be distinctly and accurately delineated.
If a subdivision plan, be it simple or complex, duly approved by the Commissioner of Land Registration or the Bureau of Lands together with the approved technical descriptions and the corresponding owner’s duplicate certificate of title is presented for registration, the Register of Deeds shall, without requiring further court approval of said plan, register the same in accordance with the provisions of the Land Registration Act, as amended: Provided, however, that the Register of Deeds shall annotate on the new certificate of title covering the street, passageway or open space, a memorandum to the effect that except by way of donation in favor of the national government, province, city or municipality, no portion of any street, passageway, waterway or open space so delineated on the plan shall be closed or otherwise disposed of by the registered owner without the approval of the Court of First Instance of the province or city in which the land is situated. (Emphasis supplied)
Petitioner Republic of the Philippines’ reliance on Section 50 of the Property Registration Decree is erroneous. Section 50 contemplates roads and streets in a subdivided property, not public thoroughfares built on a private property that was taken from an owner for public purpose. A public thoroughfare is not a subdivision road or street.
More importantly, when there is taking of private property for some public purpose, the owner of the property taken is entitled to be compensated.48
There is taking when the following elements are present:
1. The government must enter the private property;
2. The entrance into the private property must be indefinite or permanent;
3. There is color of legal authority in the entry into the property;
4. The property is devoted to public use or purpose;
5. The use of property for public use removed from the owner all beneficial enjoyment of the property.49
All of the above elements are present in this case. Petitioner Republic of the Philippines’ construction of a road — a permanent structure — on respondent Ortigas’ property for the use of the general public is an obvious permanent entry on petitioner Republic of the Philippines’ part. Given that the road was constructed for general public use stamps it with public character, and coursing the entry through the Department of Public Works and Highways gives it a color of legal authority.
As a result of petitioner Republic of the Philippines’ entry, respondent Ortigas may not enjoy the property as it did before. It may not anymore use the property for whatever legal purpose it may desire. Neither may it occupy, sell, lease, and receive its proceeds. It cannot anymore prevent other persons from entering or using the property. In other words, respondent Ortigas was effectively deprived of all the bundle of rights50 attached to ownership of property.
It is true that the lot reserved for road widening, together with five other lots, formed part of a bigger property before it was subdivided. However, this does not mean that all lots delineated as roads and streets form part of subdivision roads and streets that are subject to Section 50 of the Property Registration Decree. Subdivision roads and streets are constructed primarily for the benefit of the owners of the surrounding properties. They are, thus, constructed primarily for private use — as opposed to delineated road lots taken at the instance of the government for the use and benefit of the general public.
In this case, the lot was reserved for road widening at the instance of petitioner Republic of the Philippines. While the lot segregated for road widening used to be part of the subdivided lots, the intention to separate it from the delineated subdivision streets was obvious from the fact that it was located at the fringes of the original lot51 — exactly at petitioner Republic of the Philippines’ intended location for the road widening project. Moreover, petitioner Republic of the Philippines’ intention to take the property for public use was obvious from the completion of the road widening for the C-5 flyover project and from the fact that the general public was already taking advantage of the thoroughfare.
Delineated roads and streets, whether part of a subdivision or segregated for public use, remain private and will remain as such until conveyed to the government by donation or through expropriation proceedings.52 An owner may not be forced to donate his or her property even if it has been delineated as road lots because that would partake of an illegal taking.53 He or she may even choose to retain said properties.54 If he or she chooses to retain them, however, he or she also retains the burden of maintaining them and paying for real estate taxes.
An owner of a subdivision street which was not taken by the government for public use would retain such burden even if he or she would no longer derive any commercial value from said street. To remedy such burden, he or she may opt to donate it to the government. In such case, however, the owner may not force the government to purchase the property. That would be tantamount to allowing the government to take private property to benefit private individuals. This is not allowed under the Constitution, which requires that taking must be for public use.55
Further, since the Constitution proscribes taking of private property without just compensation,56 any taking must entail a corresponding appropriation for that purpose. Public funds, however, may only be appropriated for public purpose.57 Employment of public funds to benefit a private individual constitutes malversation.58 Therefore, private subdivision streets not taken for public use may only be donated to the government.
In contrast, when the road or street was delineated upon government request and taken for public use, as in this case, the government has no choice but to compensate the owner for his or her sacrifice, lest it violates the constitutional provision against taking without just compensation, thus:
Section 9. Private property shall not be taken for public use without just compensation.59
As with all laws, Section 50 of the Property Registration Decree cannot be interpreted to mean a license on the part of the government to disregard constitutionally guaranteed rights.
The right to compensation under Article III, Section 9 of the Constitution was put in place to protect the individual from and restrain the State’s sovereign power of eminent domain,60 which is the government’s power to condemn private properties within its territory for public use or purpose.61 This power is inherent and need not be granted by law.62 Thus, while the government’s power to take for public purpose is inherent, immense, and broad in scope, it is delimited by the right of an individual to be compensated. In a nutshell, the government may take, but it must pay.
Respondent Ortigas, immediately upon the government’s suggestion that it needed a portion of its property for road purposes, went so far as to go through the process of annotating on its own title that the property was reserved for road purposes. Without question, respondent Ortigas allowed the government to construct the road and occupy the property when it could have compelled the government to resort to expropriation proceedings and ensure that it would be compensated. Now, the property is being utilized, not for the benefit of respondent Ortigas as a private entity but by the public. Respondent Ortigas remains uncompensated. Instead of acknowledging respondent Ortigas’ obliging attitude, however, petitioner Republic of the Philippines refuses to pay, telling instead that the property must be given to it at no cost. This is unfair.
In the parallel case of Alfonso v. Pasay City63 wherein Alfonso was deprived of his property for road purposes, was uncompensated, and was left without any expropriation proceeding undertaken, this court said:
When a citizen, because of this practice loses faith in the government and its readiness and willingness to pay for what it gets and appropriates, in the future said citizen would not allow the Government to even enter his property unless condemnation proceedings are first initiated, and the value of the property, as provisionally ascertained by the Court, is deposited, subject to his disposal. This would mean delay and difficulty for the Government, but all of its own making.64
"There is nothing that can more speedily and effectively embitter a citizen and taxpayer against his Government and alienate his faith in it, than an injustice and unfair dealing like the present case."65
Title to the subject lot remains under respondent Ortigas’ name. The government is already in possession of the property but is yet to acquire title to it. To legitimize such possession, petitioner Republic of the Philippines must acquire the property from respondent Ortigas by instituting expropriation proceedings or through negotiated sale, which has already been recognized in law as a mode of government acquisition of private property for public purpose.66
In a negotiated sale, the government offers to acquire for public purpose a private property, and the owner may accept or reject it. A rejection of the offer, however, would most likely merely result in the commencement of an expropriation proceeding that would eventually transfer title to the government. Hence, the government's offer to acquire for public purpose a private property may be considered as an act preparatory to an expropriation proceeding. Therefore, a private owner's initiative to segregate a property to accommodate government needs saves the government from a long and arduous expropriation proceeding. This is a commendable act on the part of the owner. It must be encouraged, not dampened by threats of property deprivation without compensation.
Respondent Ortigas, which merely accommodated petitioner Republic of the Philippines' request, remains uncompensated for the taking of its property. Respondent Ortigas could have brought action to recover possession of the property, but it instead chose to sell its property to petitioner Republic of the Philippines. This is both fair and convenient as the road construction had long been completed, and the road is already being utilized by the public.
Taking of private property without just compensation is a violation of a person's property right.1âwphi1 In situations where the government does not take the trouble of initiating an expropriation proceeding, the private owner has the option to compel payment of the property taken, when justified. The trial court should continue to proceed with this case to determine just compensation in accordance with law.
x x x."
