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[ G.R. No. 135866. June 28, 1999]

BARANGAY DUYAN-DUYAN vs. MANUEL PEREZ, et al.

FIRST DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUN 28, 1999.

G.R. No. 135866 (Barangay Duyan-Duyan vs. Manuel Perez, et al.)

Petitioner filed the present petition for review on certiorari assailing the Decision of the Court of Appeals in CA G.R. CV No. 50194 dated June 5, 1998 and the corresponding Resolution dated October 5, 1998.

As antecedents, defendants/respondents Manuel Perez and Mercedes Perez are owners of a parcel of land covered by TCT No. RT-41127 situated in Quirino District, quezon City. Said parcel of land is registered in the name of respondent spouses. However, said lot has bee in possession of herein petitioner Barangay Duyan-Duyan since June 11, 1978.\Upon discovery that barangay hall was built on their property, private respondent filed an ejectment case against the petitioner which was successful. However, while the ejectment case was on appeal before the Regional Trial Court petitioner Barangay Duyan-Duyan filed an action for Expropriation and/or Eminent Domain before the Regional Trial Court of Quezon City. Whereupon both cases were consolidated. The Regional Trial Court resolved in favor of the petitioner, to wit:

WHEREFORE, in view of the foregoing, judgment is hereby rendered, ordering the condemnation of the property covered by TCT No. 41127 for purposes of expropriation and that the plaintiff Barangay Duyan-Duyan has the lawful right to take possession of the above described property for public use and purpose upon payment of just compensation to the defendants to be determined from the time this complaint was filed.

SO ORDERED. 1 [Rollo, p. 22.]

On appeal, the Court of Appeals reversed the decision on the ground that the expropriation procedure was not properly complied with by the petitioner. Thus:

The Local Government Code refers to an offer which is made prior to at action to improve and use the property as a public facility. However, the fact herein is clear that there has been no offer previously made before the property was actually expropriated for public use sometime in 1988. In fact, the ejectment case was successfully pursued as the barangay hall was built without even the knowledge much less the consent of the owners thereof. No building permit was ever presented. What may pass for an offer was embodied in a resolution made only in 1993, while the discovered building was admittedly built and was in use since 1988. The act of expropriation by the barangay officials was thus clearly an ultra vires act for being contrary to the legal guidelines therefor.

Moreover, the validity of the Offer embodied in the Resolution can also be faulted raised (sic) on two points: First, the questioned fair market value as submitted was more than One Million pesos while the offer was an arbitrary sum of One Hundred Twenty Five Thousand Pesos only. While expropriation is not intended to equal the fair market value of property, there has to be "reasonable" compensation to be determined by the court. it is notable though that the Offer covers only about ten per cent of the appraised market value. This is further aggravated by a latter deposit of P37,560.00, being the assessed value of the property for purposes of taxation. Secondly, the procedure was not followed in the passage of the Barangay Resolution which was not submitted to the City Council for review as mandated in the Local Government Code. In effect, the same was merely a pro forma offer to gloss over the usurpation of private property by the barangay. 2 [Id., at 15.]

Hence, the present petition.

The petition is bereft of merit.

Section 19 of the Local Government Code provides:

Section 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been precisely made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.

In the exercise of this power, the State must at all times abide by the requirements of due process. The above-quoted provisions clearly outlines the steps to be taken before a local government unit may exercise its power of eminent domain. A valid offer must first be made to the owners of the property, and it is only when the offer is rejected that expropriation proceedings may be instituted. In the instant case, no valid offer was first made to the owner of the property before the complaint for expropriation was filed. Moreover, as the Court of Appeals found, petitioner took possession of the property ahead of the filing of the expropriation proceedings. This act is clearly incompatible with the procedure for expropriation required by law.

IN VIEW OF THE FOREGOING, the Court Resolved to DENY the petition.

Very truly yours,

(Sgd.) VIRGINIA ANCHETA-SORIANO

Clerk of Court

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