Republic v. Court of Appeals
REITERATIONFacts
The Antecedents: The Republic of the Philippines initiated expropriation proceedings to acquire portions of land owned by private respondents for the widening and concreting of the Nabua-Bato-Agos Section of the Philippine-Japan Highway Loan (PJHL) road. The private respondents did not dispute the Republic's right of expropriation but contested the basis for just compensation, arguing it should be based on fair market value rather than the valuation set by Presidential Decree No. 76, as amended, which stipulated payment based on the lower of the assessor's assessment or the owner's declared valuation. Procedural History: The Regional Trial Court ruled in favor of the private respondents, a decision affirmed by the Court of Appeals. The Republic elevated the case to the Supreme Court. The Petition: The Republic sought review of the appellate court's decision, raising issues concerning the effect of the judicial declaration of Presidential Decree No. 1533 as unconstitutional and void, its retroactivity, and its application to the pending case, as well as the use of tax declaration values for the preliminary deposit required under Rule 67 of the Revised Rules of Court.
Issue(s)
Whether the declaration of Presidential Decree No. 1533 as unconstitutional and void has retroactive effect. Whether the ruling in Export Processing Zone Authority (EPZA) vs. Dulay declaring Presidential Decree No. 1533 unconstitutional and void should be applied in the instant case. Whether the valuation of land on the tax declaration can be used as a preliminary basis for the ten percent (10%) deposit required under Rule 67 of the Revised Rules of Court.
Ruling
The Supreme Court dismissed the petition for review. It held that the Court of Appeals committed no error in its appealed decision. The Court affirmed that the declaration of unconstitutionality of Presidential Decree No. 76, as amended, and Presidential Decree No. 1533, as pronounced in EPZA vs. Dulay, should be applied to the case, as the controversy regarding just compensation was still pending appeal when the EPZA ruling was rendered.
Ratio Decidendi
On the effect of judicial declaration of unconstitutionality: The Court discussed two views: the orthodox view, where an unconstitutional act is considered void ab initio and as if it had never been passed, conferring no rights and imposing no duties, and the modern view, where the court simply refuses to recognize the statute and affects only the parties to the suit. The Court cited Article 7 of the Civil Code, which aligns with the orthodox view, stating that when courts declare a law inconsistent with the Constitution, the former shall be void and the latter shall govern. This strict view considers a legislative enactment declared unconstitutional as a total nullity, not existing for any legal purpose. However, the Court also noted exceptions where a judicial declaration of invalidity may not obliterate all prior effects, such as in cases involving moratorium laws or situations that have become fait accompli, or where a law is invalid only in its retrospective application. The instant case, however, was deemed too far removed from these exceptions. On the application of the EPZA vs. Dulay ruling: The Court reiterated its pronouncement in Export Processing Zone Authority (EPZA) vs. Dulay, etc. et al., which declared Presidential Decree No. 76, as amended, and related decrees, including Presidential Decree No. 1533, unconstitutional for encroaching upon the judicial function of determining just compensation. The Republic conceded this ruling and its reiteration in subsequent cases. The Court found that the expropriation cases involved in the instant petition were still pending appeal when the EPZA ruling was rendered and was forthwith invoked by the private respondents. Therefore, the ruling in EPZA vs. Dulay was applicable to the case at bar, as the controversy had not yet attained finality. On the use of tax declaration for preliminary deposit: The Court noted that this issue was not an actual point of contention, as it was merely provisional in character and had not been questioned by the private respondents. Therefore, the Court limited its discussion to the first two issues concerning the constitutionality and retroactivity of the decrees.
Main Doctrine
The determination of just compensation in eminent domain is a judicial function, and Presidential Decrees that encroach upon this prerogative are unconstitutional. A declaration of unconstitutionality, under the orthodox view, renders the law void ab initio and inoperative as if it had never existed, affecting all parties and subsequent cases.