Manila v. Alegar
REITERATIONFacts
The Antecedents: The City of Manila passed Ordinance 8012 authorizing the Mayor to acquire certain lots totaling 1,505.30 square meters owned by respondents Alegar Corporation, Terocel Realty Corporation, and Filomena Vda. De Legarda for a socialized housing project. The City offered ₱1,500.00 per square meter, which the owners rejected as too low. On December 2, 2003, the City filed a complaint for expropriation, depositing ₱1,500,000.00 with the Land Bank of the Philippines. Procedural History: The trial court issued a writ of possession. The parties agreed to forego pre-trial and submit memoranda on the issue of necessity. On February 12, 2008, the Regional Trial Court (RTC) dismissed the complaint, finding that the City failed to comply with Sections 9 and 10 of Republic Act (R.A.) 7279, specifically the order of priority in land acquisition and the exhaustion of other modes of acquisition like negotiated sale. The RTC also noted the City's failure to renegotiate the price after the initial offer was rejected and its failure to present evidence on the genuine necessity for expropriation. The City appealed to the Court of Appeals (CA). The Petition: The Court of Appeals affirmed the RTC's dismissal. The City filed a petition for review before the Supreme Court, raising issues of due process, compliance with R.A. 7279, genuine necessity, and the effect of the owners' withdrawal of the deposit.
Issue(s)
Whether or not the CA erred in failing to rule that the RTC denied the City its right to due process when it dismissed the case without hearing the City’s side; Whether or not the CA erred in affirming the RTC’s ruling that the City failed to comply with the requirements of Sections 9 and 10 of R.A. 7279 in trying to acquire the subject lots by expropriation; Whether or not the CA erred in failing to set aside the RTC’s ruling that the City failed to establish the existence of genuine necessity in expropriating the subject lots for public use or purpose; Whether or not the CA erred in failing to rule that the owners’ withdrawal of its ₱1.5 million deposit constituted implied consent to the expropriation of their lots.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, with modifications regarding attorney's fees and the return of the advance deposit. The Court held that the City of Manila failed to comply with the mandatory requirements of R.A. 7279 and the Local Government Code implementing rules regarding expropriation for socialized housing.
Ratio Decidendi
On Issue 1 (Due Process): The Court ruled that the RTC did not deny the City its right to be heard. The expropriation proceeding was in its first stage, determining the authority to exercise eminent domain. The parties agreed to submit memoranda on this issue, and the City's subsequent appeal, rather than awaiting resolution of its motion for reconsideration, indicated it was not denied a hearing. The City's failure to submit a memorandum, despite agreeing to do so, was a waiver of its right to present evidence on the matter. On Issue 2 (Compliance with R.A. 7279): The Court affirmed the CA's ruling that the City failed to comply with Sections 9 and 10 of R.A. 7279. Section 9 mandates an order of priority in land acquisition for socialized housing, with privately-owned lands ranked last, unless on-site development is more practicable. The City did not present evidence to support this claim. Section 10 prefers negotiated sale over expropriation, which should only be resorted to after other modes are exhausted. The City failed to prove it exhausted reasonable efforts to negotiate, especially after the owners rejected the initial offer and indicated willingness to sell at a higher price, and the City did not renegotiate. On Issue 3 (Genuine Necessity): The Court found that the owners' challenge to the validity of the expropriation objective, alleging it would benefit only a few, raised a factual issue requiring proof from the City. The City, by agreeing to submit the issue for resolution without presenting evidence, failed to establish the affirmative of its allegations regarding genuine necessity for public use or purpose. On Issue 4 (Withdrawal of Deposit): The Court clarified that the ₱1.5 million deposit was an advance payment and a prerequisite for the writ of possession, serving as indemnity if the expropriation failed. Withdrawal of this deposit by the owners did not constitute implied consent to the expropriation. It was a procedural step, and with the dismissal of the complaint, the owners were entitled to indemnity for expenses incurred in defending their rights, which the Court quantified as ₱50,000.00 in attorney's fees.
Main Doctrine
A local government unit must strictly comply with the requirements of Republic Act No. 7279 (Urban Development and Housing Act) and Article 35 of the Rules and Regulations Implementing the Local Government Code, particularly regarding the order of priority in land acquisition and the exhaustion of negotiated sale as a mode of acquisition, before resorting to expropriation for socialized housing projects. Failure to do so warrants the dismissal of the expropriation complaint.