HERMANO OIL MANUFACTURING & SUGAR CORPORATION v.

TOLL REGULATORY BOARD et

al.
FACTS:
The petitioner owned a parcel of land located at the right side of the Sta. Rita Exit of the NLEX situated at Barangay
Sta. Rita, Guiguinto, Bulacan. The parcel of land was bounded by an access fence along the NLEX. The petitioner
requested that respondent Toll Regulatory Board (TRB), which supervises and regulates the construction, operation,
and maintenance of toll facilities, and is also responsible for the collection of toll fees, to grant an easement of right
of way, contending that it had been totally deprived of the enjoyment and possession of its property by the access
fence that had barred its entry into and exit from the NLEX. The TRB denied the petitioner’s request. Stating that
allowing easement of right-of-way may have detrimental/adverse effect on the scheduled rehabilitation and
improvement of the North Luzon Expressway Interchanges, as well as on the operational problems, like traffic
conflicts that may arise. The petitioner alleged in its complaint that the access fence had totally deprived it of the use
and enjoyment of its property by preventing ingress and egress to its property; that the only access leading to its
property was the road network situated in front of its property; that it was thereby deprived of its property without
due process of law and just compensation; and that it was also denied equal protection of the law because adjacent
property owners had been given ingress and egress access to their properties. Appearing for the TRB, the Office of
the Solicitor General (OSG) filed a Motion to Dismiss with Opposition to the Application for the Issuance of
Temporary Restraining Order and/or Writ of Preliminary Injunction. The RTC granted the motion to dismiss the
complaint. The CA promulgated its assailed judgment, affirming the RTC’s dismissal of the complaint saying that
when the plaintiff-appellant bought the property in 1999, the NLEX was already in existence and so was the access
fence.
ISSUE:
Whether the decision of the court of appeals is repugnant to the due process and equal protection clause enshrined in
our constitution and prevailing jurisprudence.
Whether or not the limited access imposed on the petitioner’s property may be considered as a compensable taking
due to the exercise of the power of eminent domain.
HELD:
There can be no question that the respondents’ maintenance of safety measures, including the establishment of the
access fence along the NLEX, was a component of the continuous improvement and development of the NLEX. Nor
did the establishment of the access fence violate the petitioner’s constitutional and legal rights. It is relevant to
mention that the access fence was put up pursuant to Republic Act No. 2000 (Limited Access Highway Act).
Clarifying the DOTC’s jurisdiction under this law in Mirasol v. Department of Public Works and Highways, the
Court has said–
RA 2000, otherwise known as the Limited Access Highway Act, was approved on 22 June 1957. Section 4 of RA
2000 provides that “the Department of Public Works and Communications is authorized to do so design any limited
access facility and to so regulate, restrict, or prohibit access as to best serve the traffic for which such facility is
intended.” Moreover, the putting up of the access fence on the petitioner’s property was in the valid exercise of
police power, assailable only upon proof that such putting up unduly violated constitutional limitations like due
process and equal protection of the law.25 In Mirasol v. Department of Public Works and Highways, the Court has
further noted that: A toll way is not an ordinary road. As a facility designed to promote the fastest access to certain
destinations, its use, operation, and maintenance require close regulation. Public interest and safety require the
imposition of certain restrictions on toll ways that do not apply to ordinary roads. As a special kind of road, it is but
reasonable that not all forms of transport could use it. Clearly, therefore, the access fence was a reasonable
restriction on the petitioner’s property given the location thereof at the right side of Sta. Rita Exit of the NLEX.
Although some adjacent properties were accorded unrestricted access to the expressway, there was a valid and
reasonable classification for doing so because their owners provided ancillary services to motorists using the NLEX,
like gasoline service stations and food stores. A classification based on practical convenience and common
knowledge is not unconstitutional simply because it may lack purely theoretical or scientific uniformity.

Lastly, the limited access imposed on the petitioner’s property did not partake of a compensable taking due to the
exercise of the power of eminent domain. There is no question that the property was not taken and devoted for
public use. Instead, the property was subjected to a certain restraint, i.e. the access fence, in order to secure the
general safety and welfare of the motorists using the NLEX. There being a clear and valid exercise of police power,
the petitioner was certainly not entitled to any just compensation. 29
FILSTREAM INTERNATIONAL INCORPORATED vs. COURT OF APPEALS, JUDGE FELIPE S.
TONGCO and THE CITY OF MANILA, 
FACTS:
Petitioner is the registered owner of the properties subject of this dispute consisting of adjacent parcels of land
situated in Antonio Rivera Street, Tondo II, Manila. Petitioner filed an ejectment suit before the Metropolitan Trial
Court of Manila against the occupants of the above mentioned parcels of land on the grounds of termination of the
lease contract and non-payment of rentals. Judgment was rendered by the MTC ordering private respondents to
vacate the premises and pay back rentals to petitioner. RTC and CA affirmed MTC’S decision. However, it
appeared that during the pendency of the ejectment proceedings private respondents filed on May 25, 1993, a
complaint for Annulment of Deed of Exchange against petitioner. It was at this stage that respondent City of Manila
came into the picture when the city government approved Ordinance No. 7813, authorizing Mayor Alfredo S. Lim to
initiate the acquisition by negotiation, expropriation, purchase, or other legal means certain parcels of land registered
under Registry of Deeds of Manila which formed part of the properties of petitioner then occupied by private
respondents. Subsequently, the City of Manila approved Ordinance No. 7855 4 declaring the expropriation of certain
parcels of land situated along Antonio Rivera and Fernando Ma. Guerrero streets in Tondo, Manila which were
owned by Mr. Enrique Quijano Gutierrez, petitioner's predecessor-in-interest. The said properties were to be sold
and distributed to qualified tenants of the area pursuant to the Land Use Development Program of the City of
Manila. Respondent City of Manila filed a complaint for eminent domain seeking to expropriate the aforecited
parcels of land owned by petitioner Pursuant to the complaint filed by respondent City of Manila, the trial court
issued a Writ of Possession in favor of the former which ordered the transfer of possession over the disputed
premises to the City of Manila. At this juncture, petitioner Filstream filed a motion to dismiss the complaint for
eminent domain as well as a motion to quash the writ of possession. The motion to dismiss was premised on the
following grounds: no valid cause of action; the petition does not satisfy the requirements of public use and a mere
clandestine maneuver to circumvent the writ of execution issued by the RTC of Manila in the ejectment suit;
violation of the constitutional guarantee against non-impairment of obligations and contracts; price offered was too
low hence violative of the just compensation provision of the constitution and the said amount is without the
certification of the City Treasurer for availability of funds. 
ISSUE:
Did the City of Manila comply with the conditions when it expropriated petitioner Filstream's properties?
HELD:
The governing law that deals with the subject of expropriation for purposes of urban land reform and housing is
Republic Act No. 7279 (Urban Development and Housing Act of 1992) and Sections 9 and 10 of which specifically
provide as follows:

Sec. 9. Priorities in the acquisition of Land. - Lands for socialized housing shall be acquired in the following order:

(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas for Priority Development, Zonal Improvement sites, and Slum Improvement
and Resettlement Program sites which have not yet been acquired;

(e) Bagong Lipunan Improvement of Sites and Services or BLISS sites which have not yet been acquired; and

(f) Privately-owned lands.

Sec. 10. Modes of Land Acquisition. - The modes of acquiring lands for purposes of this Act shall include, among
others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the
Government, joint-venture agreement, negotiated purchase, and expropriation. Provided, however, That
expropriation shall be resorted to only when other modes of acquisition have been exhausted. Provided further,
That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for
purposes of this Act. Provided, finally, That abandoned property, as herein defined, shall be reverted and escheated
to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.

For the purpose of socialized housing, government-owned and foreclosed properties shall be acquired by the local
government units, or by the National Housing Authority primarily through negotiated purchase: Provided,
That qualified beneficiaries who are actual occupants of the land shall be given the right of first refusal.

Expropriation proceedings are to be resorted to only when the other modes of acquisition have been exhausted.
Compliance with these conditions must be deemed mandatory because these are the only safeguards in securing the
right of owners of private property to due process when their property is expropriated for public use.

We have carefully scrutinized the records of this case and found nothing that would indicate that respondent City of
Manila complied with Sec. 9 and Sec. 10 of R.A. 7279. Petitioner Filstream's properties were expropriated and
ordered condemned in favor of the City of Manila sans any showing that resort to the acquisition of other lands
listed under Sec. 9 of RA 7279 have proved futile. Evidently, there was a violation of petitioner Filstream's right to
due process which must accordingly be rectified.

CRISTINA DE KNECHT vs. HON. PEDRO JL. BAUTISTA, as Judge presiding over Branch III of the
Court of First Instance (Pasay City) and the REPUBLIC OF THE PHILIPPINES

FACTS:
The petitioner alleges that than ten (10) years ago, the government through the Department of Public Workmen's and
Communication (now MPH) prepared a plan to Epifanio de los Santos Avenue (EDSA) to Roxas Boulevard; that the
proposed extension, an adjunct of building program, the Manila — Cavite Coastal Read Project, would pass through
Cuneta Avenue up to Roxas Boulevard that this route would be a straight one taking into account the direction of
EDSA; that preparation to the implementation of the aforesaid plan, or on December 13, 1974, then Secretary
Baltazar Aquino of the Department of Public Highways directed the City Engineer of Pasay City not to issue
temporary or permanent permits for the construction and/or improvement of buildings and other structures located
within the proposed extension through Cuneta Avenue that shortly thereafter the Department of Public Highways
decided to make the proposed extension go through Fernando Rein and Del Pan Streets which are lined with old
substantial houses; that upon learning of the changed the owners of the residential houses that would be affected, the
herein petitioner being one of them, filed on April 15, 1977 a formal petition to President Ferdinand E. Marcos
asking him to order the Ministry of Public Highways to adoption, the original plan of making the extension of
EDSA through Araneta Avenue instead of the new plan going through Fernando Rein and Del Pan Streets; that
President Marcos directed then Minister Baltazar Aquino to explain within twenty-four (24) hours why the proposed
project should not be suspended; that on April 21, 1977 then Minister Aquino submitted his explanation defending
the new proposed route; that the President then referred the matter to the Human Settlements Commission for
investigation and recommendation; that after formal hearings to which all the parties proponents and oppositors
were given full opportunity to ventilate their views and to present their evidence, the Settlements Commission
submitted a report recommending the reversion of the extension of EDSA to the original plan passing through
Cuneta Avenue; and that notwithstanding the said report and recommendation, the Ministry of Public Highways
insisted on implementing the plan to make the extension of EDSA go through Fernando Rein and Del Pan Streets. In
June 1979 the Republic of the Philippines filed a motion for the issuance of a writ of possession of the property
sought to be expropriated on the ground that said Republic had made the required deposit with the Philippine
National Bank. The respondent judge issued a writ of possession dated June 14, 1979 authorizing the Republic of
the Philippines to take and enter upon the possession of the properties sought be condemned. The petitioner assails
the choice of the Fernando Rein and Del Pan Streets route on the following grounds: Where the legislature has
delegated a power of eminent do-main, the question of the necessity for taking a particular fine for the intended
improvement rests in the discretion of the grantee power subject however to review by the courts in case of fraud,
bad faith or gross abuse of discretion. The choice of property must be examined for bad faith, arbitrariness or
capriciousness and due process determination as to whether or not the proposed location was proper in terms of the
public interests.
ISSUE:
Whether the expropriation of the residential lots in Fernando Rein and Del Pan Streets is genuinely necessary, in
light of similar acceptable lots along Cuneta Avenue which were subject of the original plan.
HELD:
It is recognized that the government may not capriciously or arbitrarily' choose what private property should be
taken. In J. M. Tuazon & Co., Inc. vs. Land Tenure Administration, the failure to meet tile exacting standard of due
process would likewise constitute a valid objection to the exercise of this congressional power. It is obvious then
that a landowner is covered by the mantle of protection due process affords. It frowns on arbitrariness, it is the
antithesis of any governmental act that smacks of whim or caprice.

In the instant case, it is a fact that the Department of Public Highways originally establish the extension of EDSA
along Cuneta Avenue. It is to be presumed that the Department of Public Highways made studies before deciding on
Cuneta Avenue. It is indeed odd why suddenly the proposed extension of EDSA to Roxas Boulevard was changed to
go through Fernando Rein-Del Pan Streets which the Solicitor General con- cedes "... the Del Pan — Fernando Rein
Streets line follows northward and inward direction. While admit "that both lines, Cuneta Avenue and Del Pan —
Fernando Rein Streets lines, meet satisfactorily planning and design criteria and therefore are both acceptable ... the
Solicitor General justifies the change to Del Pan — Fernando Rein Streets on the ground that the government
"wanted to the social impact factor or problem involved. It is doubtful whether the extension of EDSA along Cuneta
Avenue can be objected to on the ground of social impact. The improvements and buildings along Cuneta Avenue to
be affected by the extension are mostly motels. Even granting, arguendo, that more people be affected, the Human
Setlements Commission has suggested coordinative efforts of said Commission with the National Housing Authority
and other government agencies in the relocation and resettlement of those adversely affected.

After considering all the issues and factors, the Human Setlements Commission made the following
recommendations: Weighing in the balance the issues and factors of necessity, functionality, impact, cost and
property valuation as basis for scheme of compensation to be adopted in the instant case, the Hearing Board takes
cognizance of the following points: the EDSA extension to Roxas Boulevard is necessary and desirable from the
strictly technical viewpoint and the overall perspective of the Metro Manila transport system. the right-of-way
acquisition cost difference factor is so minimal as to influence in any way the choice of either alignment as the
extension of EDSA to Roxas Boulevard. And the factor of functionality states strongly against the selection of
alignment 2 while the factor of great social and economic impact bears grieviously on the residents of alignment 1.
The course of the decision in this case consequently boils down to the soul-searching and heart-rending choice
between people on one hand and progress and development on the other. In deciding in favor of the latter, the
Hearing Board is not unmindful that progress and development are carried out by the State precisely and ultimately
for the benefit of its people and therefore, recommends the reverend of the extension project to alignment 1. From
all the foregoing, the facts of record and recommendations of the Human Settlements Commission, it is clear that the
choice of Fernando Rein — Del Pan Streets as the line through which the Epifanio de los Santos Avenue should be
extended to Roxas Boulevard is arbitrary and should not receive judicial approval.

REPUBLIC OF THE PHILIPPINES (Ministry of Education and Culture) vs. INTERMEDIATE

APPELLATE COURT and AMEREX ELECTRONICS, PHILS. CORPORATION
FACTS:
The property involved consists of four (4) parcels of land Its previous owner, Avegon Inc., offered it for sale to the
City School Board of Manila at P2,300,000. The school board was willing to buy at P1,800,000 but then Mayor of
Manila intervened and volunteered to negotiate with Avegon Inc. for a better price. The alleged negotiation did not
materialize. Avegon Inc. sold the property and its improvements to Amerex Electronics, Phils. Corporation for
P1,800,000. The Solicitor General filed for the Department of Education and Culture (DEC) a complaint against
Amerex for the expropriation of said property before the Court of First Instance of Manila. The complaint stated that
the property was needed by the government as a permanent site for the Manuel de la Fuente High School (later
renamed Don Mariano Marcos Memorial High School); that the fair market value of the property had been declared
by Amerex as P2,435,000, and that the assessor had determined its market value as P2,432,042 and assessed it for
taxation purposes in the amount of P1,303,470. In a motion praying that the plaintiff be authorized to take immediate
possession of the property, the then Acting Solicitor General Hugo E. Gutierrez, Jr., invoking Presidential Decree
No. 42, informed the court that said assessed value of the property for taxation purposes had been deposited with the
Philippine National Bank. Amerex filed a motion to dismiss the complaint stating that while it was not contesting
the merits of the complaint, the same failed to categorically state the amount of just compensation for the property. It
therefore prayed that in consonance with P.D. No. 794, the just compensation be fixed at P2,432,042, the market
value of the property determined by the assessor which was lower than Amerex's own declaration. Thereafter, the
lower court ordered Amerex to submit an audited financial statement on the acquisition cost of the property
including expenses for its improvement. Amerex was also allowed by the court, after it had filed a second motion
therefor, to withdraw the P1,303,470 deposit with the PNB. On March 12, 1976, the plaintiff filed a motion for leave
of court to amend its complaint stating that after it had filed the same, P.D. No. 464 2 was amended by P.D. No. 794;
that Section 92 of said Code, as amended, provided that when private property is acquired for public use, its just
compensation "shall not exceed the market value declared by the owner or administrator or anyone having legal
interest in the property, or such market value as determined by the assessor, whichever is lower"; and that the
amended complaint would state that the fair market value of the property could not be in excess of P1,800,000, the
amount for which defendant's predecessor-in-interest had offered to sell said properties to the Division of Public
Schools of Manila and which amount was also the purchase price paid by Amerex to Avegon Inc. Amerex, however,
opposed the motion for leave to amend the complaint contending that the plaintiff was insisting on a valuation given
by neither the owner nor the assessor as mandated by P.D. No. 794 but by another person in August 1973 when the
peso value was much higher. City Assessor in the sum of P2,432,042.00, this being lower than that declared by the
owner in the sum of P2,435,000.00.
ISSUE:
Whether the just compensation for the expropriated property should be the price first offered to the Government in
1973.
HELD:
The determination of just compensation for a condemned property is basically a judicial function. As the court is not
bound by the commissioners' report, it may make such order or render such judgment as shall secure to the plaintiff
the property essential to the exercise of its right of condemnation, and to the defendant just compensation for the
property expropriated. For that matter, this Court may even substitute its own estimate of the value as gathered from
the record. Hence, although the determination of just compensation appears to be a factual matter which is ordinarily
outside the ambit of its jurisdiction, this Court may disturb the lower court's factual finding on appeal when there is
clear error or grave abuse of discretion. 

We hold that the courts below made an erroneous determination of just compensation in this case.

This Court having declared as unconstitutional the mode of fixing just compensation under P.D. No. 794 just
compensation should be determined either at the time of the actual taking of the government or at the time of the
judgment of the court, whichever comes first. It must be emphasized, however, that legal interest on the balance of
the just compensation of P2,400,000 after deducting the amount of P1,303,470 which had been delivered to Amerex,
should be paid by petitioner from the time the government actually took over the property.

We cannot agree with the petitioner that the just compensation for the property should be the price it commanded
when it was first offered for sale to the City School Board of Manila. Petitioner failed to substantiate its claim that
the property is worth the lower amount of P1,800,000. In contrast, Amerex submitted evidence consisting of the
aforesaid appraisal report which fixed the fair market value of the property at P2,400,000.