The Supreme Court (SC) has affirmed a Court of Appeal (CA) decision that nullified the 2017 writ of possession issued by a trial court to the Mandaluyong City government over 4,987 square meters of land for the city’s “Land for the Landless Home for Homeless Program.”
In a resolution released last March 25, the SC said the CA correctly found that the Mandaluyong City government violated two laws and the High Court’s previous decisions in the 2016 expropriation of the land belonging to Pagong Realty Corporation.
The CA in its Aug. 9, 2019 decision ruled that the city government violated the provisions of the Local Government Code under Republic Act No. 7160 and the Urban Development and Housing Act under RA 7279.
The SC, in denying Mandaluyong City’s petition and citing its previous ruling on a similar case, said that compliance with the laws on expropriation “is mandatory because these are the only safeguards for the oftentimes helpless owners of private property against what may be a tyrannical violation of due process when their property is forcibly taken from them allegedly for public use.”
It pointed out based on another ruling that “while We recognize petitioner’s power to expropriate and the fact that housing is one of the most serious social problems that it needs to address, it is equally important to acknowledge that local government units do not have an unbridled authority to exercise such formidable power in seeking solutions to such problem.”
“Again, such formidable power greatly affects a citizen’s fundamental right to property, hence, there is a need to strictly comply with the conditions and restrictions set forth in the Constitution and pertinent laws to assure that every right is protected and every mandate is properly discharged.”
The SC pointed out: “Thus, the ruling here is not meant to disparage the local government units’ delegated power to expropriate. It merely calls for compliance with all the legal requirements, as well as the presentation of proof of such compliance.”
Records showed that in 2015, Mandaluyong City sent a letter to Pagong Realty Corporation to buy the property for P3,500 per square meter for its mass housing program.
When Pagong Realty did not accept the offer, the city government filed an expropriation case on Jan. 25, 2016 before the RTC and deposited P3 million as partial payment for the 4,897-square-meter land it offered to buy for P17.45 million. It then sought the issuance of a writ of possession.
On March 23, 2017, the RTC issued a writ of possession without prejudice on the hearing on the expropriation case and the issue on just compensation.
When its motion for reconsideration was denied on Aug. 22, 2017, Pagong Realty elevated the issue to the CA which reversed and set aside the trial court’s order. Mandaluyong City appealed to SC.
Among the violations cited by the SC in denying Mandaluyong City’s petition, as reflected in the CA decision, were lack of a valid and definitive offer to buy the property and proof that the amount deposited constituted 15 per cent of the total fair market value.
It said that when the owner refused the offer contained in the 2015 letter, the city government should have renegotiated to improve the offer.
It said the intent of the law “is for the State or the local government to make a reasonable offer in good faith, not merely a proforma offer to acquire the property.”
“Since, petitioner did not exert an honest to goodness effort to secure the subject property via negotiated sale, there was actually no valid and definite offer to speak of as condition precedent to the filing of the expropriation complaint,” it said.
Also, the SC said that the law mandates that there must be a deposit of 15 percent of the total market value of the property sought to be expropriated.
It pointed out that while the city government made a deposit of P3 million, “the case records do not show if the same was indeed equivalent to fifteen percent (15%) of the fair market value based on the current tax declaration of subject property.”
It cited the CA ruling which stated that “it does not appear in the records that a copy of the latest tax declaration at the time of the filing of the complaint in 2016 was presented by the City Government.”
It said the CA also stated: “The City Government does not refute the claim of [respondent] that the amount of deposit (Php3 Million) was based on a 1993 tax declaration. Neither does it appear in the questioned Order of 23 March 2017 that the true ‘current tax declaration’ was used as the basis in the computation of the fifteen percent (15%) deposit….”
“All told, the Court of Appeals did not err, much less, gravely abuse its discretion when it set aside the assailed writ of possession in view of petitioner’s non-compliance with the mandatory requirements for its issuance,” the SC ruled.