Reyes v. City of Manila
REITERATIONFacts
The Antecedents: Petitioners, heirs of the late Justice Jose B.L. Reyes and Dr. Edmundo A. Reyes, are pro-indiviso co-owners of 11 parcels of land totaling 13,940 square meters in Sta. Cruz, Manila, under TCT No. 24359, occupied and leased to various tenants including respondents Dr. Rosario Abiog (Lot 2-E, Block 3007, 191 sqm), Angelina Maglonso (Lot 2-R, Block 2996, 112 sqm), and members of Sampaguita Bisig ng Magkakapitbahay, Inc. (SBMI). On November 9, 1993, and May 26, 1994, petitioners filed separate ejectment complaints (Civil Case Nos. 142851-CV and 144205-CV) against Abiog and Maglonso, obtaining favorable MTC judgments dated May 9, 1994, and May 4, 1995, respectively, affirmed by RTC Branches 28 and 38, and CA, becoming final and executory in 1998 with writs of execution issued. Meanwhile, on November 29, 1993, the City of Manila enacted Ordinance No. 7818 authorizing expropriation of specific lots (totaling 9,930 sqm) owned by Reyes heirs along various streets for distribution to occupants-lessees of at least 10 years as socialized housing beneficiaries. On March 10, 1995, the City offered P10,285,293.38 via letter from City Legal Officer Angel Aguirre, Jr., rejected by Adoracion D. Reyes' letter dated March 17, 1995, stating consensus to 'totally turn down' the offer. During ejectment pendency, City filed expropriation complaint on April 25, 1995 (Civil Case No. 95-73687), seeking possession upon deposit of 15% (P1,452,657) of assessed value P9,684,380 per tax declarations. Procedural History: RTC Branch 9 allowed City's possession on June 6, 1995, upon deposit of P1,542,793 (based on P10M offer); denied SBMI's May 15, 1995, intervention motion (June 2, 1995, order: interest indirect/contingent); petitioners' June 2 motion to dismiss raised insufficient deposit (should be 15% of P19.6M fair market value per tax dec.), no RA 7279 compliance, no savings/appropriation, improper ordinance adoption (no hearing), unqualified beneficiaries, no suitability clearance. RTC dismissed expropriation October 3, 1995 (willing sellers, no proven rejection); denied MR. City appealed to CA; CA denied City's TRO/MPI motions (March 21, 1996). MTC issued execution vs. Abiog (Jan 27, 1997); SBMI/occupants sought CA intervention/TRO (Jan 31/Aug 25, 1997); CA issued TRO (Aug 26, 1997), then reversed RTC (Jan 27, 1998), remanding for just compensation, finding public purpose, valid offer/rejection, no time bar. Petitioners filed GR No. 132431 (review); CA issued further resolutions (Aug 19/Dec 16, 1998) enjoining ejectment/disturbance of occupants, allowing intervention post-facto; petitioners filed GR No. 137146 (certiorari). The Petition: In GR 132431, petitioners argue CA erred: (I) no Secs 9-10 RA 7279/LGC Sec 34 compliance (no priority exhaustion, other modes); (II) Ordinance 7818 violates equal protection (discriminates lessees/10-yr occupants); (III) no valid/definite offer (no specific appropriation); (IV) insufficient deposit; (V) petitioners willing sellers (some tenants bought); (VI) no just comp pronouncement. In GR 137146, CA gravely abused: (I) no jurisdiction post-elevation to SC; (II) occupants no intervention right (trial court denied final); (III) 'protective order' is disguised injunction; (IV) forum-shopping; (V) contra Filstream. City counters: offer valid post-ordinance/pre-complaint; deposit per court order; rejection clear; Filstream inapplicable.
Issue(s)
Whether the City of Manila validly exercised eminent domain over petitioners' properties for socialized housing absent compliance with RA 7279 Sections 9 and 10. Whether the CA properly issued resolutions enjoining execution of final ejectment judgments via 'protective orders' allowing occupant intervention.
Ruling
The petitions are GRANTED. In G.R. No. 132431, the CA decision dated January 27, 1998, is REVERSED and SET ASIDE. In G.R. No. 137146, the CA resolutions dated August 19, 1998, and December 16, 1998, are REVERSED and SET ASIDE.
Ratio Decidendi
On the Validity of Expropriation (GR 132431): The Court ruled the City's exercise invalid for non-compliance with RA 7279 Secs 9 and 10, mandatory limits on LGU eminent domain for housing despite general powers under LGC Sec 19 and RA 409 Secs 3/100. Sec 9 prioritizes acquisition: (a) govt lands; (b) alienable public domain; (c) unregistered/idle; (d-e) priority/APD/ZIS/BLISS sites; (f) private lands last, unless on-site preferable. Sec 10 requires exhausting modes (mortgage, swapping, assembly, banking, donation, JV, negotiated purchase) before expropriation, exempting small owners. City failed to allege/prove exhaustion in complaint/records, even on appeal, violating due process as owners entitled to safeguards against forcible taking; trial/CA silent on issue. Reiterating Filstream v. CA (284 SCRA 716, 1998)—substantially identical facts (same Ordinance 7818, Tondo ejectments)—private lands last priority, expropriation last resort; no futile proof of prior acquisitions. State's welfare power yields to due process; complaint dismissible, mooting constitutionality (equal protection, contracts), offer/deposit issues. No need for remand; expropriation fatally infirm. On CA Resolutions Enjoining Ejectment (GR 137146): Moot and academic post-expropriation dismissal; CA lacked basis to issue 'protective orders'/TROs allowing SBMI intervention, maintaining status quo. Ejectments final/executory (1998); pendency no automatic stay sans valid expropriation. CA post-decision power residual but not for grave abuse—usurped SC jurisdiction (BP 129 Sec 9); occupants no legal interest pre-grant (trial denial final, not mooted by dismissal); disguised injunctions violate Rule 58 Sec 5 (no second TRO); forum-shopping vs. denied intervention. Contra Filstream (consolidated injunctions reversed); equity cannot override finality, due process. Reversal restores execution.
Main Doctrine
Local government units (LGUs) possess eminent domain power under Section 19 of the Local Government Code of 1991 and specific charters like RA 409 for Manila, but when exercising it for socialized housing or urban land reform, they must strictly comply with the mandatory priorities and acquisition modes under Sections 9 and 10 of RA 7279. Section 9 ranks acquisition priorities with government lands first, alienable public domain second, unregistered/idle lands third, priority development sites fourth and fifth, and privately-owned lands last, unless on-site development is more practicable. Section 10 mandates exhausting modes like community mortgage, land swapping, negotiated purchase before resorting to expropriation, exempting small owners and escheating abandoned property. Failure to allege and prove such compliance in pleadings and records constitutes a jurisdictional defect and violation of due process, as private property owners are entitled to these safeguards against forcible taking. This reiterates Filstream v. CA, emphasizing that the State's paramount interest in public welfare does not override individual due process rights, requiring vigilance in judicial review. Non-compliance renders the expropriation complaint dismissible, mooting ancillary interventions, injunctions, or stays on related ejectment executions.