National Housing Authority v. Heirs of Isidro Guivelondo
REITERATIONFacts
The Antecedents: Petitioner, the National Housing Authority (NHA), initiated an eminent domain action to acquire several lots within the Banilad Estate in Cebu City for a socialized housing project. The respondents, the Heirs of Isidro Guivelondo, were among the owners of the properties targeted for expropriation. The underlying dispute centers on the NHA's power to expropriate these lands and the determination of just compensation. Procedural History: The NHA filed an amended complaint for eminent domain in the Regional Trial Court (RTC) of Cebu City. The Heirs of Isidro Guivelondo initially waived objections to the expropriation, leading the RTC to issue an order declaring the NHA's lawful right to expropriate their properties. Commissioners were appointed, who recommended a just compensation of P11,200.00 per square meter. The RTC issued a Partial Judgment adopting this recommendation. Following motions for reconsideration by both parties, the RTC issued an Omnibus Order denying the Heirs' motion and the NHA's motion regarding the compensation amount, but granting the NHA's motion to exclude certain lots from the compensation calculation. The NHA then filed a petition for certiorari with the Court of Appeals (CA), which was dismissed as the Partial Judgment and Omnibus Order had become final and executory due to the NHA's failure to appeal. The NHA's subsequent attempts to appeal to the Supreme Court (SC) and to dismiss the case in the RTC were also unsuccessful, leading to further petitions for certiorari with the CA and ultimately this petition for review before the SC. The Petition: The National Housing Authority filed this petition for review under Rule 45 of the Rules of Court, seeking to annul the Court of Appeals' decision that affirmed the trial court's order denying the NHA's motion to dismiss the expropriation proceedings. The NHA raises three main issues: (1) whether the State can be compelled to exercise or continue exercising its power of eminent domain; (2) whether a judgment in an expropriation case has become final and executory, and if estoppel or laches applies to the government; and (3) whether writs of execution and garnishment may be issued against the State in an expropriation where the exercise of eminent domain would not serve a public use or purpose, referencing Supreme Court Administrative Circular No. 10-2000.
Issue(s)
Whether the State can be compelled and coerced by the courts to exercise or continue with the exercise of its inherent power of eminent domain. Whether judgment has become final and executory and if estoppel or laches applies to government. Whether writs of execution and garnishment may be issued against the State in an expropriation wherein the exercise of the power of eminent domain will not serve public use or purpose.
Ruling
The Supreme Court denied the petition for review, affirmed the Court of Appeals' decision dismissing NHA's petition for certiorari, and denied NHA's prayer for injunctive relief against the levy and garnishment of its funds and personal properties. The Temporary Restraining Order was lifted.
Ratio Decidendi
On the issue of whether the State can be compelled to exercise or continue with the exercise of its inherent power of eminent domain: The Court reiterated that expropriation proceedings consist of two stages: condemnation and determination of just compensation. An order of condemnation, which declares the plaintiff's lawful right to take the property for public use, is final and appealable. If no appeal is taken, the authority to expropriate and its public use can no longer be questioned. In this case, NHA did not appeal the trial court's Order dated December 10, 1999, which declared its lawful right to expropriate the properties. Therefore, this Order became final and executory and could no longer be subject to review or reversal. The Court emphasized that a final and executory decision or order can no longer be disturbed or reopened, even if it may be erroneous, as judicial errors should be corrected through appeals, not repeated suits. The Court also noted that NHA's continued pursuit of appeals regarding the just compensation indicated that a public use for the housing project still existed, making its subsequent turn-around to abandon the property untenable. On the issue of whether judgment has become final and executory and if estoppel or laches applies to government: The Court affirmed that the judgment had become final and executory. The Order of the trial court dated December 10, 1999, which declared NHA's lawful right to expropriate, was not appealed by NHA and thus became final and executory. The Court cited Rule 67, Section 4 of the Rules of Civil Procedure, which states that after an order of expropriation is rendered, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable. NHA's argument that the unconscionable just compensation rendered the public use nugatory was deemed tenuous. Socialized housing was recognized as a public use, and the need for it was not diminished by the cost of the land. The Court found it arbitrary and capricious for a government agency to initiate expropriation, allow the judgment to become final, and then refuse to pay. The principle that the State may be estopped by laches or the actions of its agents was implicitly applied, as the Court disallowed NHA's attempt to abandon the proceedings after the judgment had become final. On the issue of whether writs of execution and garnishment may be issued against the State in an expropriation wherein the exercise of the power of eminent domain will not serve public use or purpose: The Court clarified that while generally, funds and properties of the government cannot be garnished, this rule does not apply to government-owned or controlled corporations (GOCCs) that have a personality separate and distinct from the government. NHA, being a GOCC, is clothed with its own juridical personality. Therefore, its funds are not exempt from garnishment or execution. The Court cited previous rulings that established that the funds of GOCCs, although public in character, are not exempt from garnishment. The Court reiterated that when the government enters into commercial business, it abandons its sovereign capacity and is treated like any other corporation. Thus, NHA's prayer for injunctive relief against the levy and garnishment of its funds and properties was denied.
Main Doctrine
Once an order of condemnation in an expropriation case becomes final and executory, the plaintiff cannot unilaterally dismiss the proceedings, even if the determined just compensation exceeds its financial capacity, as the State's power of eminent domain, once validly exercised for public use, cannot be rendered nugatory by subsequent financial difficulties.