Lagcao v. Labra
REITERATIONFacts
The Antecedents: In 1964, the Province of Cebu donated 210 lots to the City of Cebu, including Lot 1029. Petitioners purchased Lot 1029 on installment in 1965, but the lots subsequently reverted to the Province. After a protracted legal battle for specific performance, the Court of Appeals affirmed the petitioners' right to the property in 1992. Consequently, the Province executed a deed of absolute sale in 1994, and Transfer Certificate of Title (TCT) No. 129306 was issued to the petitioners. Upon attempting to take possession, petitioners discovered the lot was occupied by squatters. Procedural History: Petitioners filed ejectment proceedings in 1997. The Municipal Trial Court in Cities (MTCC) ordered the squatters to vacate in 1998, which was affirmed by the Regional Trial Court (RTC). However, Cebu City Mayor Alvin Garcia requested the MTCC to defer the demolition. During this suspension, the Sangguniang Panlungsod (SP) of Cebu City passed Resolution and Ordinance No. 1772, identifying Lot 1029 for socialized housing. On July 19, 2000, the SP enacted Ordinance No. 1843, authorizing the Mayor to expropriate Lot 1029 for the benefit of the actual occupants. Petitioners filed an action for declaration of nullity of Ordinance No. 1843 with the RTC. The RTC dismissed the complaint on July 1, 2002, and denied the motion for reconsideration on August 26, 2002. The Petition: Petitioners filed a petition for review with the Supreme Court, arguing that Ordinance No. 1843 is unconstitutional. They contend that the expropriation of their property for the purpose of selling it to squatters does not constitute 'public use' as contemplated by the Constitution. They further allege that the ordinance was passed for political reasons and that the City failed to comply with the mandatory requirements of Republic Act No. 7160 (Local Government Code of 1991) and Republic Act No. 7279 (Urban Development and Housing Act of 1992) regarding the order of priority and exhaustion of other acquisition modes.
Issue(s)
Whether Ordinance No. 1843 is a valid exercise of the power of eminent domain by the City of Cebu. Whether the City of Cebu complied with the mandatory requirements of Republic Act No. 7279 regarding the order of priority and modes of land acquisition.
Ruling
The petition is GRANTED. The July 1, 2002 decision of the Regional Trial Court of Cebu City is REVERSED and SET ASIDE. Ordinance No. 1843 is declared null and void.
Ratio Decidendi
On Issue 1: The Court ruled that while local government units (LGUs) are granted the power of eminent domain under Section 19 of Republic Act No. 7160 (Local Government Code of 1991), this power is not inherent and must be exercised in accordance with the Constitution and pertinent laws. The foundation of eminent domain is genuine necessity of a public character; the government cannot arbitrarily or capriciously choose which private property to take. In this case, Ordinance No. 1843 failed to provide any reason why petitioners' property was singled out for expropriation. The Court emphasized that the random expropriation of small lots to accommodate a few squatters does not satisfy the 'public use' requirement and constitutes a deprivation of property for the convenience of a few without perceptible public benefit. Applying the standard from De Knecht v. Bautista, the Court held that the due process clause protects landowners from governmental acts that are oppressive or whimsical. Thus, the ordinance failed to meet the substantive requirements of a valid legislative act. On Issue 2: The Court held that the City of Cebu failed to comply with the mandatory requirements of Sections 9 and 10 of Republic Act No. 7279 (Urban Development and Housing Act of 1992). Section 9 establishes a strict order of priority for land acquisition for socialized housing, placing privately-owned lands as the last resort. Section 10 further mandates that expropriation may only be used after other modes of acquisition, such as negotiated purchase, have been exhausted. There was no evidence that the City attempted to acquire government-owned or abandoned lands first, nor did it prove that it exhausted other acquisition modes. Furthermore, the City failed to make a valid and definite offer to buy the property as required by Section 19 of Republic Act No. 7160. The Court noted that the ordinance was passed in bad faith to circumvent a final judgment of eviction against the squatters. Consequently, the ordinance is constitutionally infirm for violating the petitioners' right to due process.
Main Doctrine
The power of eminent domain delegated to local government units is not absolute and must comply with the limitations set by the Constitution and pertinent laws. For an expropriation of private land for socialized housing to be valid, the local government unit must strictly adhere to the mandatory order of priority in land acquisition and demonstrate that all other modes of acquisition have been exhausted, as required by Sections 9 and 10 of Republic Act No. 7279. Failure to comply with these conditions, or the use of expropriation to circumvent a final judgment of eviction, constitutes a violation of the landowner's right to due process and renders the authorizing ordinance null and void.