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II
THE ANTECENT FACTS
OF THE PETITIONS AT BAR
Expropriation Case
(G.R. No. 170375)
The Complaint for Expropriation was originally filed on August 15, 1983 by
the Iron and Steel Authority (ISA), now the NSC, against Maria Cristina Fertilizer
Corporation (MCFC), and the latters mortgagee, the Philippine National Bank
(PNB). The Complaint was docketed as Civil Case No. 106 and raffled to RTCBranch 1, presided over by Judge Mangotara.
ISA was created pursuant to Presidential Decree No. 2729 [24] dated August 9,
1973, to strengthen, develop, and promote the iron and steel industry in the
Philippines. Its existence was extended until October 10, 1988.
On November 16, 1982, during the existence of ISA, then President
Ferdinand E. Marcos issued Presidential Proclamation No. 2239, [25] reserving in
favor of ISA a parcel of land in Iligan City, measuring 302,532 square meters or
30.25 hectares, to be devoted to the integrated steel program of the
In its Reply, the Republic referred to the Order dated November 16, 2001 of
the RTC-Branch 1 allowing the substitution of the Republic for ISA.
In an Order dated April 4, 2005, the RTC-Branch 1 denied the Motion of the
Republic for leave to file and to admit its Supplemental Complaint. The RTCBranch 1 agreed with MCFC that the Republic did not file any motion for
execution of the judgment of this Court in the ISA case. Since no such motion for
execution had been filed, the RTC-Branch 1 ruled that its Order dated November
16, 2001, which effected the substitution of the Republic for ISA as plaintiff in
Civil Case No. 106, was an honest mistake. The Republic filed a Motion for
Reconsideration of the April 4, 2005 Order of the RTC-Branch 1.
MCFC then filed a Motion to Dismiss Civil Case No. 106 for: (1) failure of
the Republic to implead indispensable parties because MCFC insisted it was not
the owner of the parcels of land sought to be expropriated; and (2) forum shopping
considering the institution by the Republic on October 13, 2004 of an action for the
reversion of the same parcels subject of the instant case for expropriation.
Judge Mangotara of RTC-Branch 1 issued a Resolution[29] on July 12, 2005,
denying for lack of merit the Motion for Reconsideration of the Order dated April
4, 2005 filed by the Republic, and granting the Motion to Dismiss Civil Case No.
106 filed by MCFC. Judge Mangotara justified the dismissal of the Expropriation
Case thus:
What the Republic seeks [herein] is the expropriation of the
subject parcels of land. Since the exercise of the power of eminent
domain involves the taking of private lands intended for public use upon
payment of just compensation to the owner x x x, then a complaint for
expropriation must, of necessity, be directed against the owner of the
land subject thereof. In the case at bar, the decision of the Supreme
Court in Cacho v. Government of the United States x x x, decreeing the
registration of the subject parcels of land in the name of the late Doa
Demetria Cacho has long attained finality and is conclusive as to the
question of ownership thereof. Since MCFC, the only defendant left in
this case, is not a proper party defendant in this complaint for
expropriation, the present case should be dismissed.
III
ISSUES AND DISCUSSIONS
Expropriation Case
(G.R. No. 170375)
The Republic, in its consolidated Petitions challenging the Resolutions dated
July 12, 2005 and October 24, 2005 of the RTC-Branch 1 in Civil Case No. 106,
made the following assignment of errors:
RESPONDENT JUDGE GRAVELY ERRED IN ORDERING THE
DISMISSAL OF THE EXPROPRIATION COMPLAINT IN CIVIL
CASE NO. 106 CONSIDERING THAT:
(a) THE NON-JOINDER OF PARTIES IS NOT A
GROUND FOR THE DISMISSAL OF AN ACTION
It is apparent in the case at bar that the Republic availed itself of the wrong
mode of appeal by filing Consolidated Petitions for Review under Rule 45 and
forCertiorari under Rule 65, when these are two separate remedies that are
mutually exclusive and neither alternative nor successive. Nevertheless, the Court
shall treat the Consolidated Petitions as a Petition for Review on Certiorari under
Rule 45 and the allegations therein as errors of judgment. As the records show, the
Petition was filed on time under Rules 45. Before the lapse of the 15-day
reglementary period to appeal under Rule 45, the Republic filed with the Court a
motion for extension of time to file its petition. The Court, in a Resolution[64] dated
January 23, 2006, granted the Republic a 30-day extension, which was to expire on
December 29, 2005. The Republic was able to file its Petition on the last day of the
extension period.
Hierarchy of courts
The direct filing of the instant Petition with this Court did not violate the
doctrine of hierarchy of courts.
According to Rule 41, Section 2(c) [65] of the Rules of Court, a decision or
order of the RTC may be appealed to the Supreme Court by petition for review
oncertiorari under Rule 45, provided that such petition raises only questions of
law.[66]
A question of law exists when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts; or when the issue does
not call for an examination of the probative value of the evidence presented, the
truth or falsehood of facts being admitted. [67] A question of fact exists when the
doubt or difference arises as to the truth or falsehood of facts or when the query
invites calibration of the whole evidence considering mainly the credibility of the
witnesses, the existence and relevancy of specific surrounding circumstances, as
well as their relation to each other and to the whole, and the probability of the
situation.[68]
Here, the Petition of the Republic raises pure questions of law, i.e., whether
Civil Case No. 106 should have been dismissed for failure to implead
indispensable parties and for forum shopping. Thus, the direct resort by the
Republic to this Court is proper.
The Court shall now consider the propriety of the dismissal by the RTCBranch 1 of the Complaint for Expropriation of the Republic.
The ISA case had already become final and executory, and entry of judgment
was made in said case on August 31, 1998. The RTC-Branch 1, in an Order dated
November 16, 2001, effected the substitution of the Republic for ISA.
The failure of the Republic to actually file a motion for execution does not
render the substitution void. A writ of execution requires the sheriff or other
proper officer to whom it is directed to enforce the terms of the writ. [70] The
November 16, 2001 Order of the RTC-Branch 1 should be deemed as voluntary
compliance with a final and executory judgment of this Court, already rendering a
motion for and issuance of a writ of execution superfluous.
For sure, defendants in an expropriation case are not limited to the owners
of the property to be expropriated, and just compensation is not due to the property
owner alone. As this Court held in De Knecht v. Court of Appeals[74]:
The defendants in an expropriation case are not limited to the
owners of the property condemned. They include all other persons
owning, occupying or claiming to own the property. When
[property] is taken by eminent domain, the owner x x x is not
necessarily the only person who is entitled to compensation. In the
American jurisdiction, the term owner when employed in statutes
relating to eminent domain to designate the persons who are to be made
parties to the proceeding, refer, as is the rule in respect of those entitled
to compensation, to all those who have lawful interest in the property to
be condemned, including a mortgagee, a lessee and a vendee in
possession under an executory contract. Every person having an estate
or interest at law or in equity in the land taken is entitled to share in the
award. If a person claiming an interest in the land sought to be
condemned is not made a party, he is given the right to intervene and lay
claim to the compensation. (Emphasis supplied.)
(1)
NSC shall negotiate with the owners of MCFC, for and on
behalf of the Government, for the compensation of MCFC's
present occupancy rights on the subject lands at an amount of Thirty
(P30.00) Pesos per square meter or equivalent to the assessed value
thereof (as determined by the City Assessor of Iligan), whichever is
higher. NSC shall give MCFC the option to either remove its aforesaid
plant, structures, equipment, machinery and other facilities from the
lands or to sell or cede ownership thereof to NSC at a price equivalent to
the fair market value thereof as appraised by the Asian Appraisal Inc. as
may be mutually agreed upon by NSC and MCFC.
(2)
In the event that NSC and MCFC fail to agree on the
foregoing within sixty (60) days from the date hereof, the Iron and Steel
Authority (ISA) shall exercise its authority under Presidential Decree
(PD) No. 272, as amended, to initiate the expropriation of the
aforementioned occupancy rights of MCFC on the subject lands as well
as the plant, structures, equipment, machinery and related facilities, for
and on behalf of NSC, and thereafter cede the same to NSC. During the
pendency of the expropriation proceedings, NSC shall take possession of
the properties, subject to bonding and other requirements of P.D. 1533.
(Emphasis supplied.)
non-joinder
of
on such terms as are just. Any claim against a misjoined party may be
severed and proceeded with separately. (Emphasis supplied.)
MCFC contends that the aforequoted rule does not apply in this case where
the party not joined, i.e., the owner of the property to be expropriated, is an
indispensable party.
An indispensable party is a party-in-interest without whom no final
determination can be had of an action.[76]
Now, is the owner of the property an indispensable party in an action for
expropriation? Not necessarily. Going back to Rule 67, Section 1 of the Rules of
Court, expropriation proceedings may be instituted even when title to the property
sought to be condemned appears to be in the Republic of the Philippines, although
occupied by private individuals. The same rule provides that a complaint for
expropriation shall name as defendants all persons owning or claiming to own, or
occupying, any part thereof or interest in the property sought to be
condemned. Clearly, when the property already appears to belong to the Republic,
there is no sense in the Republic instituting expropriation proceedings against
itself. It can still, however, file a complaint for expropriation against the private
persons occupying the property. In such an expropriation case, the owner of the
property is not an indispensable party.
To recall, Presidential Proclamation No. 2239 explicitly states that the
parcels of land reserved to NSC are part of the public domain, hence, owned by the
Republic. Letter of Instructions No. 1277 recognized only the occupancy rights of
MCFC and directed NSC to institute expropriation proceedings to determine the
just compensation for said occupancy rights. Therefore, the owner of the property
is not an indispensable party in the original Complaint for Expropriation in Civil
Case No. 106.
Assuming for the sake of argument that the owner of the property is an
indispensable party in the expropriation proceedings, the non-joinder of said party
would still not warrant immediate dismissal of the complaint for
In this case, the RTC-Branch 1 did not first require the Republic to implead
the alleged owner/s of the parcel of land sought to be expropriated. Despite the
absence of any order from the Court, the Republic upon becoming aware that the
parcels of land involved in the 1914 Cacho case and 1997 Cacho case, claimed by
Teofilo and LANDTRADE, and Vidal and AZIMUTH, encroached into and
overlapped with the parcel of land subject of Civil Case No. 106 sought leave of
court to file a Supplemental Complaint to implead these four parties. The RTCBranch 1 did not take the Supplemental Complaint of the Republic into
consideration. Instead, it dismissed outright the original Complaint for
Expropriation against MCFC.
Forum shopping
The RTC-Branch 1 further erred in finding that the Republic committed
forum shopping by (1) simultaneously instituting the actions for expropriation
(Civil Case No. 106) and reversion (Civil Case No. 6686) for the same parcels of
land; and (2) taking inconsistent positions when it conceded lack of ownership
over the parcels of land in the expropriation case but asserted ownership of the
same properties in the reversion case.
There is no dispute that the Republic instituted reversion proceedings (Civil
Case No. 6686) for the same parcels of land subject of the instant Expropriation
Case (Civil Case No. 106). The Complaint for Cancellation of Titles and
Reversion[78] dated September 27, 2004 was filed by the Republic with the RTC on
October 13, 2004. The records, however, do not show when the Supplemental
Complaint for Expropriation[79] dated September 28, 2004 was filed with the
RTC. Apparently, the Supplemental Complaint for Expropriation was
filed after the Complaint for Cancellation of Titles and Reversion since the
Republic mentioned in the former the fact of filing of the latter.[80] Even then, the
Verification and Certification of Non-Forum Shopping[81] attached to the
Supplemental Complaint for Expropriation did not disclose the filing of the
Complaint for Cancellation of Titles and Reversion. Notwithstanding such nondisclosure, the Court finds that the Republic did not commit forum shopping for
filing both Complaints.
In NBI-Microsoft Corporation v Hwang,[82] the
circumstances when forum shopping exists:
Court
laid
down
the