Expropriation by LGUs | Eminent Domain | THE BILL OF RIGHTS

Expropriation by Local Government Units (LGUs) under the Bill of Rights (Eminent Domain)

Eminent Domain and Constitutional Framework: Eminent domain is the inherent power of the state to take or appropriate private property for public use upon payment of just compensation. It is anchored in the Bill of Rights, specifically under Article III, Section 9 of the 1987 Philippine Constitution, which states:

"Private property shall not be taken for public use without just compensation."

This provision applies to both national and local governments, including Local Government Units (LGUs). The power of eminent domain, while inherent to the State, is delegated to LGUs under Republic Act No. 7160 (the Local Government Code of 1991) and other relevant laws.

Legal Framework Governing LGU Expropriation Powers:

1. Local Government Code of 1991 (RA 7160)

   • Section 19 of the Local Government Code provides the authority for LGUs to exercise the power of eminent domain. It explicitly grants provinces, cities, municipalities, and barangays the power to expropriate private property for public use, upon the determination of necessity, and with the observance of certain procedural safeguards.

   • The LGU's power to expropriate must be exercised:

     • For public use, purpose, or welfare, or for the benefit of the poor and the landless;
     • Through an ordinance enacted by the Sangguniang Panlalawigan, Sangguniang Panlungsod, Sangguniang Bayan, or Sangguniang Barangay, as the case may be.

2. Essential Elements for the Exercise of Eminent Domain by LGUs: LGUs must meet certain requirements before they can validly expropriate property:

   • Public Use: The expropriation must be for a public purpose, such as the construction of public infrastructure (e.g., roads, schools, markets) or for projects benefiting the public at large, including low-cost housing for the poor.

   • Necessity: The LGU must establish the necessity of the expropriation. This means that the property being taken is essential for the public purpose intended and that there is no viable alternative.

   • Just Compensation: The LGU must pay the property owner just compensation. This is the fair market value of the property, determined by the court, and must be paid before the LGU takes possession of the property, except in cases allowed by law.

   • Due Process: LGUs are bound by procedural due process requirements, ensuring that property owners are given notice, a chance to be heard, and just compensation before the property is taken.

3. Judicial Confirmation Required:

   • The power of eminent domain is not self-executing. LGUs cannot take private property without judicial approval. After the passage of an ordinance authorizing expropriation, the LGU must file a petition in the Regional Trial Court (RTC) in the jurisdiction where the property is located.

   • The court will then determine the propriety of the expropriation and the amount of just compensation.

   • LGUs are required to deposit an amount equivalent to the fair market value of the property, as assessed by the Bureau of Internal Revenue (BIR), before taking possession of the property. This deposit ensures that the property owner is secured of initial compensation pending final determination by the court.

Judicial Process in Expropriation by LGUs:

1. Filing of Petition:

   • After the ordinance is passed, the LGU files a verified complaint for expropriation before the RTC. The complaint must state the public use or purpose of the expropriation, describe the property, and identify the owners.

   • The LGU must attach a copy of the ordinance authorizing the expropriation and an offer letter made to the property owner, if applicable.

2. Issuance of a Writ of Possession:

   • Once the LGU makes a deposit equivalent to 100% of the property's value as assessed by the BIR or an independent appraiser, the court issues a writ of possession, authorizing the LGU to take immediate possession of the property, even if the expropriation case is still pending.

   • However, if the owner challenges the validity of the expropriation, the court must resolve the challenge before issuing the writ of possession.

3. Determination of Just Compensation:

   • The court appoints a commission composed of three competent and disinterested persons, one of whom may be nominated by the property owner and one by the LGU, to ascertain the fair market value of the property.

   • The commission conducts an evaluation of the property, considering factors such as the property's current use, location, and market value.

4. Final Judgment on Compensation:

   • After hearing the commissioners’ report and any objections from the parties, the court determines the final amount of just compensation. The LGU must then pay the balance, if any, based on the court's judgment.

5. Effect of Abandonment or Discontinuance:

   • If an LGU decides to abandon or discontinue the expropriation, the property owner is entitled to recover the property, and any deposits or payments made must be returned. In case the LGU has already taken possession, it must restore the property to the owner or provide additional compensation for damages suffered by the owner due to the partial expropriation.

Limitations and Safeguards on LGU Expropriation:

1. Requirement of Prior Negotiation:

   • Before an LGU resorts to expropriation, it is mandated to make an offer to purchase the property. Expropriation should be a last resort if a voluntary sale cannot be negotiated.

2. Protection of Certain Properties:

   • Publicly-owned properties such as those used for national defense, military installations, and public buildings, or those owned by the National Government, are exempt from expropriation by LGUs.

   • Private cemeteries, places of worship, and educational institutions are also generally protected from expropriation, unless the property is no longer used for such purposes.

3. Expropriation of Agricultural Lands:

   • Special rules apply to agricultural lands under the Comprehensive Agrarian Reform Law (CARL) and related laws. Expropriation of these lands must be consistent with the national agrarian reform program and is subject to the Department of Agrarian Reform’s (DAR) approval if it involves lands covered by agrarian reform.

   • The expropriation of agricultural lands for urban development must comply with specific zoning and land use regulations.

4. Expropriation for Housing and Urban Development:

   • Under Republic Act No. 7279 (Urban Development and Housing Act of 1992), LGUs are empowered to expropriate idle or underutilized lands for socialized housing purposes, particularly for the benefit of the poor and homeless. Such expropriation must follow the guidelines set forth in the law, particularly in terms of land valuation, prioritization, and relocation.

5. Judicial Review:

   • The courts retain the power of judicial review to determine whether the LGU has complied with the requisites of expropriation, including necessity, public use, and just compensation. Property owners have the right to challenge the legality of the expropriation in court.

6. Public Consultation and Participation:

   • While not always a legal requirement, public consultation and participation may be advisable in cases where the expropriation affects communities or raises significant public interest. LGUs are encouraged to involve stakeholders to avoid opposition and ensure the transparency of the expropriation process.

Conclusion:

Expropriation by LGUs is a potent tool for local governments to implement infrastructure projects and social programs for public benefit, but it is tempered by constitutional limitations and legal safeguards to protect private property rights. These include strict adherence to the requirements of public use, just compensation, and due process, all under the watchful eye of the courts. LGUs must exercise this power cautiously and responsibly, ensuring that the rights of property owners are balanced against the needs of the greater community.

Just Compensation | Eminent Domain | THE BILL OF RIGHTS

Topic: Political Law and Public International Law

XII. The Bill of Rights

J. Eminent Domain

3. Just Compensation

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I. Overview of Eminent Domain

Eminent domain refers to the inherent power of the state to appropriate private property for public use upon payment of just compensation. This power is explicitly recognized in Section 9, Article III of the 1987 Philippine Constitution, which provides:

“Private property shall not be taken for public use without just compensation.”

The exercise of eminent domain is a fundamental aspect of state sovereignty, enabling the government to pursue projects for the public good, such as infrastructure development, utility projects, and other governmental undertakings. However, this power is not unlimited and is balanced by the constitutional guarantee of just compensation.

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II. Just Compensation

Just compensation is the indemnity or payment that the government must provide to the private property owner when exercising its power of eminent domain. It represents the fair equivalent of the value of the property taken. The concept ensures that the property owner is made whole and does not suffer any loss due to the taking.

A. Constitutional Basis

The right to just compensation is enshrined in Section 9, Article III of the 1987 Philippine Constitution, which mandates that no private property shall be taken for public use without just compensation. This provision is rooted in the principle that the burden of public projects should be borne by the public and not just by individual property owners.

B. Definition and Purpose of Just Compensation

Just compensation is typically defined as the fair market value of the property at the time of the taking, ensuring that the owner is indemnified for the loss of property. Fair market value is the price at which the property would likely sell between a willing buyer and a willing seller under ordinary circumstances, neither party being under compulsion.

C. Key Elements of Just Compensation

1. Fair Market Value – The amount to be paid must reflect the current market value of the property.
2. Determination of Value at the Time of Taking – The value must be based on the property's state at the time of its actual taking or when possession is assumed by the government.
3. Payment in Money – The compensation must be in the form of money. The property owner cannot be forced to accept something other than monetary payment (e.g., other property).
4. Full Compensation – The owner must be fully compensated for all aspects of the loss, including consequential damages.

D. When is Compensation Due?

Just compensation is due immediately at the time of taking or as soon as possession is transferred to the government. Delayed payment may entitle the property owner to interest, calculated from the time the property was taken until full payment is made. In cases where there is no prompt payment, legal interest is typically imposed to compensate for the delay.

E. Judicial Determination of Just Compensation

While the government may initially offer a valuation, it is ultimately the courts that determine the amount of just compensation. Judicial determination of just compensation is essential to ensure fairness. The courts usually appoint commissioners to assist in determining the value, considering various factors such as:

• The nature and location of the property
• The actual use and potential uses of the property
• The property's condition
• Comparable sales data
• Other relevant criteria based on existing circumstances

F. Interest on Just Compensation

If there is a delay in the payment of just compensation, interest is generally imposed from the time the government takes possession of the property until full payment is made. The Supreme Court has set a uniform interest rate of 12% per annum before July 1, 2013, and 6% per annum thereafter, as guided by Bangko Sentral ng Pilipinas Circular No. 799.

G. Payment of Taxes and Fees

Just compensation is exempt from taxes. It is well-established that property owners are not liable for taxes or capital gains taxes on the just compensation they receive, as the taking is involuntary and should not be burdened by additional costs.

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III. Components in the Determination of Just Compensation

The determination of just compensation must take into account various elements and considerations, including the nature, location, and potential of the property. These factors influence the property's fair market value, including the following:

A. Nature and Location of the Property

• The physical characteristics, such as size, shape, topography, access to roads, and zoning classifications, are relevant.
• Strategic location—proximity to commercial or developed areas—affects value.

B. Actual and Potential Uses

• The actual current use of the property, as well as its highest and best use, which refers to its most profitable, likely use, must be considered.
• The value may increase if there is a potential for development or if the property is located in an area that is expected to grow.

C. Comparable Sales and Market Data

• Sales of similar properties in the vicinity within a reasonable time frame before or after the taking provide a strong basis for fair market value.
• Appraisal data from real estate professionals may be used to provide an accurate assessment of market conditions.

D. Consequential Damages

• In some cases, the taking of a portion of the property results in consequential damages to the remaining property (e.g., reduced access or usability). The property owner must be compensated for such damages.

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IV. Instances Where Just Compensation May Be Reduced or Mitigated

There are certain instances where the payment of just compensation may be reduced or mitigated:

A. Benefits to Remaining Property

In cases where the remaining property experiences special benefits as a result of the government project (e.g., improved access or increased value due to new infrastructure), the amount of just compensation may be reduced. However, this offset applies only to special benefits, not general benefits enjoyed by the public at large.

B. Waiver or Consent by Property Owner

A property owner may, in some instances, waive the right to just compensation if they voluntarily donate the property for public use or execute an agreement that diminishes or removes their entitlement to compensation.

C. Voluntary Agreements with the Government

In practice, property owners may enter into a voluntary agreement with the government, wherein the terms of the compensation are negotiated and agreed upon outside the courts.

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V. Issues in the Application of Just Compensation

The application of just compensation has resulted in numerous legal disputes, which typically involve the following issues:

A. Discrepancies in Property Valuation

• The property owner and the government often disagree on the valuation of the property, leading to litigation to settle the fair market value.

B. Delays in Payment

• Delays in payment are frequent, especially when the government takes possession before actual payment of compensation. The property owner is entitled to interest in such cases.

C. Lack of Immediate Recourse

• While property owners can seek provisional remedies (such as injunctions) to prevent the government from taking possession before just compensation is determined, this may delay public projects and strain relations between the government and property owners.

D. Partial Takings and Severance Damages

• Where only part of the property is taken, disputes often arise over whether the remaining property has suffered a diminished value or should be compensated for consequential damages.

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VI. Conclusion

The principle of just compensation is essential in balancing the state's right to exercise eminent domain with the property rights of individuals. It ensures fairness by indemnifying property owners for their loss and providing adequate compensation based on the fair market value of their property at the time of taking. Courts play a crucial role in ensuring that just compensation is properly determined and that any delays in payment are rectified with appropriate interest.

This guarantee under the 1987 Philippine Constitution reflects the importance of protecting private property rights while recognizing the necessity of public use projects for the greater good.

Public Use | Eminent Domain | THE BILL OF RIGHTS

POLITICAL LAW AND PUBLIC INTERNATIONAL LAW

The Bill of Rights

J. Eminent Domain

2. Public Use

Eminent domain is the inherent power of the state to take private property for public use, with just compensation. This power is rooted in the sovereign nature of the State and recognized under the Constitution, particularly in Section 9, Article III (The Bill of Rights) of the 1987 Philippine Constitution, which states:

"Private property shall not be taken for public use without just compensation."

A. Concept of Public Use in Eminent Domain

The requirement of "public use" is one of the essential limitations on the exercise of eminent domain. It ensures that the taking of private property is justified by a legitimate governmental or public purpose, and not for the benefit of private interests. The interpretation of "public use" has evolved over time, from a strict view to a broader, more liberal interpretation.

1. Traditional View of Public Use

Historically, public use was narrowly construed to refer to uses that are available to the general public, such as roads, bridges, and public utilities. This literal understanding of "public use" required that the property taken must be used directly by the public or a segment of the public. Examples of this traditional interpretation include:

• Construction of public infrastructure (roads, highways, bridges, etc.)
• Public facilities (schools, hospitals, parks)
• Utilities (power lines, water systems, railways)

2. Expanded View of Public Use

In the 20th century, the concept of public use was broadened to encompass any purpose that serves a public interest or public welfare, even if the property is not directly used by the public. Under this functional view, it is sufficient that the property is used for a purpose that benefits society as a whole, such as:

• Economic development projects
• Socialized housing programs
• Urban redevelopment and slum clearance
• Industrial or agricultural promotion

The broader understanding of public use recognizes that public welfare, safety, and economic improvement are valid public purposes, even if the property is ultimately transferred to private entities for development (e.g., the expropriation of land for industrial zones or public-private partnerships).

3. Judicial Interpretation in Philippine Jurisprudence

Philippine courts have adopted this broader interpretation of public use. Several key rulings illustrate the flexible and evolving nature of the term:

• Heirs of Juancho Ardona v. Reyes (1983): The Supreme Court held that public use is equated with public welfare. The Court explained that public use should not be confined to actual use by the public but extends to purposes that serve the public interest, such as housing projects.

• Filstream International, Inc. v. Court of Appeals (1999): The Court reiterated that public use does not necessarily mean that the public has a right to access or use the expropriated property. Rather, public use encompasses any project that serves the broader public welfare.

• Manosca v. Court of Appeals (1995): This case confirmed that the government may expropriate land for national historical or cultural purposes (e.g., the preservation of a national shrine), as it promotes national identity and public welfare.

• Province of Camarines Sur v. Court of Appeals (1995): The Supreme Court upheld the taking of land for the development of an industrial estate as serving a public purpose. The Court emphasized that the concept of public use has evolved to mean public benefit, encompassing activities that promote economic growth, employment, and industrialization.

B. Taking for Public Use

Taking under eminent domain involves the deprivation of private property, either permanently or temporarily, for public use. To constitute a valid exercise of eminent domain, the following elements must be present:

1. Actual Taking: There must be a physical invasion, appropriation, or deprivation of the use or enjoyment of the property. The taking can be:

   • Direct: When the government physically occupies or acquires the property.
   • Constructive: Where government action results in substantial interference with the owner's rights, such as restricting access to the property or depriving the owner of its use.

2. Public Use: As discussed above, the taking must be for a public purpose or benefit. This ensures that the government's power is not used arbitrarily.

3. Just Compensation: The property owner must be fairly compensated for the loss of property. Compensation is generally based on the fair market value of the property at the time of the taking. This ensures that the owner is not unjustly burdened by the taking.

4. Due Process: The process of taking must follow the law. The owner must be notified, and the taking must be subject to judicial scrutiny if contested. The courts will determine whether the taking is for a legitimate public use and whether the compensation offered is just.

C. Expropriation for Social Justice and Public Welfare

The 1987 Constitution introduces social justice as a guiding principle, which further expands the interpretation of public use. Under this framework, the power of eminent domain may be used to promote:

1. Agrarian Reform: The Comprehensive Agrarian Reform Program (CARP) allows for the expropriation of large tracts of agricultural land to be distributed to landless farmers. In Association of Small Landowners v. Secretary of Agrarian Reform (1989), the Court held that expropriation for agrarian reform is a valid exercise of eminent domain, as it serves public welfare by redistributing land to promote social equity.

2. Socialized Housing: The Urban Development and Housing Act of 1992 (RA 7279) provides for the expropriation of idle and underutilized lands for socialized housing purposes. The Supreme Court, in Ferrer v. Bautista (2008), affirmed the validity of such expropriation, citing the government's duty to promote the public welfare by addressing housing needs for the poor and homeless.

3. Economic Development: The expropriation of land for industrial zones or infrastructure projects aimed at promoting economic development is recognized as a legitimate public purpose. In Lagcao v. Judge Labra (2004), the Court reiterated that projects designed to stimulate the economy or address urban blight serve the public welfare, even if the direct beneficiaries are private enterprises.

D. Public Use in Public-Private Partnerships (PPP)

In recent years, the Philippine government has increasingly engaged in Public-Private Partnerships (PPP) for infrastructure development. These partnerships may involve the expropriation of land for projects such as tollways, airports, railways, and power plants. Despite the involvement of private companies, the projects are considered to serve public use because they provide services to the public and promote national development.

• Philippine Ports Authority v. City of Iloilo (2008): The Court upheld the expropriation of land for the expansion of the Iloilo port, despite the project being implemented through a public-private partnership. The Court emphasized that the primary purpose of the expropriation was to improve public access to shipping and trade.

E. Limitations on the Power of Eminent Domain

The exercise of eminent domain is subject to several constitutional and statutory limitations, including:

1. Due Process Clause: The taking must follow lawful procedures, and affected property owners must have the opportunity to challenge the validity of the taking or the sufficiency of the compensation offered.

2. Equal Protection Clause: The exercise of eminent domain must not discriminate against certain individuals or classes of property owners.

3. Prohibition Against Taking without Compensation: Just compensation must be provided, and it must be timely. In Republic v. Vda. de Castellvi (1973), the Court ruled that failure to provide prompt payment of just compensation may invalidate the taking.

F. Conclusion

The power of eminent domain is an essential tool for advancing the public good, but it is balanced by the constitutional requirement of public use and the obligation to pay just compensation. Philippine jurisprudence reflects a liberal approach to defining public use, recognizing that public welfare, economic growth, and social justice can justify the taking of private property. However, this power remains subject to judicial oversight to ensure that it is exercised fairly and within the bounds of the law.

Concept | Eminent Domain | THE BILL OF RIGHTS

Concept of Eminent Domain (Political Law and Public International Law > The Bill of Rights)

Eminent domain is the inherent power of the state to take or appropriate private property for public use, subject to the payment of just compensation. It is a concept grounded in the state's power to promote public welfare and interests, recognized in both national and international law. In the Philippines, this power is embodied in Section 9, Article III (Bill of Rights) of the 1987 Constitution, which states:

“Private property shall not be taken for public use without just compensation.”

Below is a meticulous breakdown of the concept of eminent domain as it applies to the Philippine legal context.

1. Inherent Nature and Foundation

Eminent domain is inherent in sovereignty. It is not dependent on constitutional or legislative grant but is an attribute of the government to ensure public welfare. The state, for public necessity, may take private property without the owner’s consent.

Sources and Legal Bases:

• 1987 Philippine Constitution, Article III, Section 9 (Bill of Rights)
• Jurisprudence:
  • Manosca v. Court of Appeals (252 SCRA 412) affirmed that the power of eminent domain is inherent and may be exercised even in the absence of an express constitutional or legislative provision.

2. Essential Elements of Eminent Domain

Eminent domain, in its exercise, involves the following critical elements:

a. Private Property

• The subject of eminent domain must be private property. This can include both real and personal property, as well as tangible or intangible property, such as intellectual property rights.
• However, some properties are immune from expropriation, such as properties already devoted to public use (e.g., streets, public hospitals).

b. Taking

• There must be a taking of the property, which implies not just physical acquisition but also acts that may affect the ownership or utility of the property.
• The concept of taking is broad and includes:
  • Physical invasion or occupation
  • Legal interference with the rights of ownership (e.g., restricting the use of property)
  • Where the government acts in a manner that effectively deprives the owner of its ordinary use.
  • Cases: In Republic v. Vda. de Castellvi (58 SCRA 336), the Supreme Court laid down the requisites for "taking," emphasizing that it occurs when the government exercises control over the property or permanently deprives the owner of its beneficial use.

c. Public Use

• The taking must be for public use, which traditionally meant public projects such as roads, bridges, or schools. Over time, jurisprudence has expanded this definition to include any use that benefits the public or addresses a legitimate public interest, such as public housing or slum clearance.
• The term “public use” is now interpreted liberally, evolving into “public purpose” or “public welfare.”
  • Cases: In Heirs of Ardona v. Reyes (125 SCRA 220), the Supreme Court ruled that the provision of low-cost housing for the poor satisfies the requirement of public use.

d. Just Compensation

• Just compensation refers to the full and fair equivalent of the property taken, measured in terms of the property's fair market value at the time of the taking.
• It is a constitutionally protected right, ensuring that the owner does not bear a disproportionate share of the public burden.
• Just compensation must be prompt, certain, and adequate.
  • Prompt: Compensation must be paid without delay; otherwise, interest may accrue.
  • Certain: The amount should be determined through due process.
  • Adequate: Compensation must reflect the full value of the property.
  • Cases: In Manila Railroad Co. v. Velasquez (32 Phil. 286), the Court held that the measure of compensation is the market value of the property at the time it is taken, including consequential damages to the remaining property if only a portion is expropriated.
• The determination of just compensation is a judicial function, not an executive or legislative one.

3. Due Process and Judicial Oversight

The exercise of eminent domain is subject to due process of law, which requires judicial oversight and adherence to the constitutional guarantees for the protection of private property. Due process entails:

• Notice to the property owner
• Opportunity to be heard
• Judicial review of whether the expropriation is justified and whether just compensation has been adequately determined.

a. Filing of Complaint for Expropriation

• The government (or any authorized entity) must initiate a complaint for expropriation in court. In the complaint, the public purpose for which the property is sought must be explicitly stated.

b. Writ of Possession

• Once the complaint is filed and the government deposits the provisional amount of just compensation, the court may issue a writ of possession allowing the government to take immediate control over the property.
• Cases: In Association of Small Landowners v. Secretary of Agrarian Reform (175 SCRA 343), the Supreme Court upheld that the deposit of the estimated compensation in court allows the government to take immediate possession of the property.

c. Judicial Determination of Just Compensation

• A court-appointed commissioner evaluates the property and determines the fair market value, which is then approved by the court as the just compensation.

4. Scope and Limitations on Eminent Domain

While eminent domain is a broad power, it is not unlimited. The limitations include:

a. Legislative Delegation

• The power of eminent domain may be delegated to local government units and public utilities, provided they comply with the constitutional safeguards of public use and just compensation.
• Local Government Code of 1991 (RA 7160) gives local government units the power to exercise eminent domain within their jurisdictions.

b. No Expropriation of Public Properties

• Properties already devoted to public use cannot be expropriated unless the taking will not interfere with their public use or there is a clear necessity for their expropriation.

c. Limitations on Just Compensation

• The property owner is entitled to just compensation but not more than the property’s fair market value. Emotional attachment, potential future value, or speculative future uses are not factors in determining just compensation.

5. International Perspectives

In public international law, the right of a sovereign state to expropriate property is also recognized, provided it is:

• For a public purpose
• Accompanied by just compensation
• Executed with due process of law

In international contexts, especially in cases involving foreign investments, expropriation may be subject to bilateral investment treaties or international arbitration under treaties such as the International Centre for Settlement of Investment Disputes (ICSID).

Conclusion

The concept of eminent domain in the Philippines is grounded in both constitutional law and public international law. It reflects the balance between the state's need to promote public welfare and the individual's right to property. The exercise of eminent domain must always adhere to the fundamental requirements of due process, public use, and just compensation, ensuring that private property is not taken arbitrarily or without fair remuneration.