Belen v. Court of Appeals
REITERATIONFacts
The Antecedents: Pedro M. Belen leased a 100-square meter lot from Manotok Services, Inc. on which he built a house. Alfredo Juliano occupied a portion of the land in 1978, initially without Belen's knowledge, but later agreed to stay temporarily and pay half the rental. A fire destroyed both houses. Belen allowed Juliano to stay on the explicit condition that it would not exceed two and a half years. Procedural History: When Juliano failed to vacate after the stipulated period, Belen filed an ejectment suit in the Metropolitan Trial Court (MTC). The MTC ruled in favor of Belen, ordering Juliano to vacate and pay attorney's fees. Juliano appealed to the Regional Trial Court (RTC), which reversed the MTC decision, citing Presidential Decree No. 1670 (PD 1670) which expropriated the land. The RTC declared that Manotok Realty, Inc. was no longer the owner and the lease relations were terminated, dismissing Belen's complaint. Belen appealed to the Court of Appeals (CA), which affirmed the RTC's decision, holding that PD 1670 terminated the lease and sublease, and Juliano was a prospective beneficiary of the National Housing Authority (NHA) project. The Petition: Belen filed a petition for certiorari with the Supreme Court, arguing that PD 1670 did not divest Manotok Realty Services, Inc. of its title as of August 1983 because no payment was received and the NHA had not taken possession in an appropriate action. He also argued that he, not Juliano, was entitled to the rights under PD 1670. The Supreme Court noted that PD 1670 had been declared unconstitutional in a prior case.
Issue(s)
Whether Presidential Decree No. 1670, which declared the expropriation of the land, is constitutional and valid. Whether the lease contract between Belen and Manotok Realty, Inc., and the subsequent sublease between Belen and Juliano, were terminated by the alleged expropriation under PD 1670. Whether Belen is entitled to eject Juliano from the premises.
Ruling
The Supreme Court granted the petition, reversed the decisions of the Court of Appeals and the Regional Trial Court, and reinstated the decision of the Metropolitan Trial Court. The Court declared Presidential Decree No. 1670 unconstitutional and void ab initio, along with all acts performed pursuant to it. Consequently, the lease and sublease agreements were deemed valid, and Belen was entitled to eject Juliano.
Ratio Decidendi
On the constitutionality of PD 1670: The Supreme Court reiterated its ruling in Manotok, et al. v. National Housing Authority, et al. (150 SCRA 89-112) that Presidential Decree No. 1670 is unconstitutional and void ab initio. The decree violated the owners' right to due process by not providing for any hearing or procedure to question the expropriation or the just compensation. The Court emphasized that the government should have filed an expropriation case under Rule 67 of the Revised Rules of Court instead of enacting decrees that automatically expropriated properties. Furthermore, the method of determining just compensation, which pegged it to the market value determined by the City Assessor while considering depressed conditions due to squatting, was also found infirm and contrary to established precedents. The Court noted that this method was even more problematic than those in previous decrees that had already been invalidated. On the termination of lease and sublease agreements: Since PD 1670 was declared void ab initio, all acts performed in reliance thereon, including the taking of possession by the National Housing Authority and its attempts to convert the property into a housing project, were also void. Consequently, the expropriation of the land owned by Manotok Realty, Inc. did not validly occur. Therefore, the lease contract between Manotok Realty, Inc. and Pedro M. Belen, and the subsequent sublease agreement between Belen and Alfredo Juliano, were not terminated by any valid act of expropriation. The original contractual relationship between the parties remained in full force and effect. On the right to eject Juliano: Given that the lease and sublease agreements were not validly terminated, Belen, as the lessee and sublessor, retained his superior right of possession over the lot in question. The RTC and CA decisions, which dismissed Belen's complaint based on the supposed termination of his lease due to PD 1670, were premised on an unconstitutional law. Therefore, these decisions were erroneous. The MTC's original judgment, which recognized Belen's right to eject Juliano, was consistent with the valid lease agreement and the subsequent invalidity of PD 1670. The Court found no error in the MTC's factual and legal dispositions.
Main Doctrine
Presidential Decree No. 1670, which declared certain properties expropriated without due process and with infirmities in the determination of just compensation, was declared unconstitutional and void ab initio. Consequently, all acts done in reliance thereon, including the taking of possession and selection of beneficiaries, are also void. The original lease and sublease agreements remain valid in the absence of a valid expropriation.