City of Manila vs. Te

In expropriation proceedings governed by the 1997 Rules of Civil Procedure, a defendant must file an Answer to raise objections and defenses against the taking of property; a Motion to Dismiss is procedurally improper. Issues concerning compliance with the Urban Development and Housing Act (RA 7279) and small property owner status are affirmative defenses that require a full trial and presentation of evidence, and cannot be resolved via a Rule 16 Motion to Dismiss.

The case arises from the City of Manila's effort to acquire private lands for low-cost housing under Ordinance No. 7951 and the Urban Development and Housing Act of 1992 (RA 7279). The respondent owned a 475-square-meter residential lot occupied by illegal settlers, against whom she had obtained a favorable ejectment judgment and writ of demolition. The City had previously filed an expropriation case that was dismissed for lack of an authorizing ordinance and non-compliance with RA 7279, prompting the filing of the second expropriation case subject to this petition.

• On March 15, 1998, Manila City Mayor Joselito L. Atienza approved Ordinance No. 7951, enacted on February 3, 1998, authorizing the acquisition by negotiation or expropriation of certain parcels of land (totaling 1,425 square meters) along Maria Clara and Governor Forbes Streets for low-cost housing to be awarded to bona fide residents.
• The subject property is a 475-square-meter lot owned by respondent Melba Tan Te, covered by Transfer Certificate of Title No. 233273, located in Sta. Cruz, Manila.
• Respondent acquired the property from the heirs of Emerlinda Dimayuga Reyes in 1996; at the time of acquisition, the property was occupied by families whose leasehold rights had expired.
• In 1998, respondent filed an ejectment case against the occupants before the Metropolitan Trial Court of Manila, Branch 15, and obtained a favorable judgment and a Writ of Demolition.
• Prior to the issuance of the writ of demolition, the City of Manila instituted a first expropriation case (Civil Case No. 97-85700) which was dismissed on August 6, 1998 for lack of cause of action, lack of showing of an ordinance, and non-compliance with RA 7279.
• On November 16, 2000, petitioner filed the second Complaint for Expropriation, attaching a copy of Ordinance No. 7951 and alleging that it had offered to purchase the property for P824,330.00 via a letter dated May 21, 1999 from the City Legal Officer, which respondent allegedly failed to retrieve despite repeated notices.
• Petitioner deposited P1,000,000.00 in trust with the Land Bank of the Philippines on April 7, 2000 as provisional just compensation.
• Respondent did not file an answer and instead submitted a Motion to Dismiss, arguing that Ordinance No. 7951 was invalid for lack of appropriation and violation of just compensation; that petitioner failed to comply with the mandatory requirements of Sections 9 and 10 of RA 7279; and that she qualified as a small property owner under Section 3(q) of RA 7279, being the only real property she owned.

• The dismissal of the complaint was premature and denied petitioner the opportunity to demonstrate previous compliance with Sections 9 and 10 of RA 7279 during the trial on the merits.
• Whether petitioner complied with RA 7279 and whether respondent actually owns other real properties are issues requiring a full-blown trial and presentation of evidence, not resolution at the hearing of a motion to dismiss.
• Dismissal without trial constitutes a denial of due process.
• In its Reply, petitioner asserted an alternative theory that by virtue of the eminent domain powers vested in it by its charter (RA 409), it is not bound by the requirements of Sections 9 and 10 of RA 7279.
• Petitioner claimed immediate right to enter the property based on the sufficiency of the complaint and the deposit of just compensation.

• Ordinance No. 7951 is an invalid expropriation measure because it lacks an appropriation of funds and the P1,000,000.00 deposit is incredible without certification from the City Treasurer's Office.
• The complaint fails to state a valid cause of action because it does not allege prior compliance with Sections 9 and 10 of RA 7279, which establish priorities in land acquisition (government lands first, privately-owned lands last) and modes of acquisition (expropriation as last resort).
• Expropriation of privately-owned lands under RA 7279 is allowed only when other modes of acquisition have been exhausted.
• Respondent qualifies as a "small property owner" under Section 3(q) of RA 7279, as the subject lot (475 sqm, less than 300 sqm limit for highly urbanized cities) is her only real property, rendering it exempt from expropriation.
• She has been unable to build her own home on the property due to the presence of illegal occupants whom she successfully battled in the ejectment court.

• Procedural:
  • Whether the trial court erred in granting the Motion to Dismiss instead of requiring the respondent to file an Answer under Rule 67 of the 1997 Rules of Civil Procedure.
  • Whether issues regarding compliance with RA 7279 and small property owner status may be resolved on a Motion to Dismiss or require a full trial.
• Substantive Issues:
  • Whether the complaint stated a valid cause of action for expropriation under RA 7279.
  • Whether the City of Manila complied with the mandatory requirements of Sections 9 and 10 of RA 7279 regarding priorities and modes of land acquisition.
  • Whether the respondent qualifies as a small property owner exempt from expropriation under Section 3(q) of RA 7279.

• Procedural:
  • The Supreme Court held that under Section 3 of Rule 67 of the 1997 Rules of Civil Procedure (effective July 1, 1997), a defendant in an expropriation case who has objections to the taking of his property is required to file an Answer, not a Motion to Dismiss, and must raise all objections and defenses therein.
  • The grounds raised by respondent—compliance with Sections 9 and 10 of RA 7279 and small property owner status—are affirmative defenses requiring the presentation of evidence aliunde; they cannot be resolved on a Motion to Dismiss under Rule 16, Section 1, which enumerates exclusive grounds for dismissal.
  • Dismissal of the complaint on these grounds without a trial constitutes a denial of due process.
  • The Court cited Robern Development Corporation v. Quitain as controlling precedent that motions to dismiss in expropriation cases filed after the 1997 Rules are nullities; the proper remedy is to require the filing of an answer.
• Substantive:
  • The Court declined to rule definitively on the substantive issues, holding that these require a full-blown trial for proper determination of facts.
  • The Court acknowledged that socialized housing constitutes "public use" under the expanded constitutional concept, citing Sumulong v. Guerrero.
  • The Court noted that Sections 9 and 10 of RA 7279 are mandatory in character, but compliance therewith must be established during the trial, not at the pleading stage.
  • The case was remanded to the trial court for further proceedings, with respondent directed to file an Answer within ten days from the finality of the Decision.

• Two-Pronged Nature of Expropriation Proceedings — Expropriation involves two distinct stages: (1) the determination of the authority of the plaintiff to exercise the power and the propriety of its exercise, which terminates in an order of dismissal or condemnation; and (2) the determination by the court of the just compensation for the property sought to be expropriated.
• Expanded Concept of Public Use — The term "public use" has evolved to include indirect public benefit or advantage; socialized housing for underprivileged citizens constitutes a valid public use and purpose for the exercise of eminent domain.
• Answer as Responsive Pleading in Expropriation — Under the amended Rule 67 (1997 Rules), the Motion to Dismiss as a responsive pleading in expropriation cases has been abolished; defendants must file an Answer to raise objections or defenses, subject to the omnibus motion rule but with leeway for amendments within 10 days.
• Affirmative Defenses vs. Motion to Dismiss — Issues requiring the presentation of evidence aliunde, such as compliance with statutory prerequisites for expropriation or exemption status, are affirmative defenses that must be raised in an Answer and resolved at trial; they are not grounds for dismissal under Rule 16.

• "Expropriation is a two-pronged proceeding: first, the determination of the authority of the plaintiff to exercise the power and the propriety of its exercise in the context of the facts which terminates in an order of dismissal or an order of condemnation affirming the plaintiff's lawful right to take the property for the public use or purpose described in the complaint and second, the determination by the court of the just compensation for the property sought to be expropriated."
• "The defendant in an expropriation case who has objections to the taking of his property is now required to file an answer and in it raise all his available defenses against the allegations in the complaint for eminent domain."
• "Dismissal of an action upon a motion to dismiss constitutes a denial of due process if, from a consideration of the pleadings, it appears that there are issues that cannot be decided without a trial of the case on the merits."
• "The term 'public use' has acquired a more comprehensive coverage. To the literal import of the term signifying strict use or employment by the public has been added the broader notion of indirect public benefit or advantage."
• "It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirement of public use."

• Robern Development Corporation v. Quitain — Controlling precedent establishing that under the 1997 amended Rule 67, objections to expropriation must be raised in an Answer, not a Motion to Dismiss; an order dismissing an expropriation complaint based on a motion to dismiss is a nullity.
• Sumulong v. Guerrero — Established the expanded concept of public use to include socialized housing and indirect public benefit.
• Heirs of Juancho Ardona v. Reyes — Cited in Sumulong regarding the flexible and evolving concept of public use influenced by changing conditions.
• Borre v. Court of Appeals — Held that statutes regulating court procedure apply to actions pending and undetermined at the time of their passage.
• Laguio v. Gamet — Held that new court rules apply to proceedings taking place after their effectivity.
• Abad v. Fil-Homes Realty and Development Corporation — Cited for the two-pronged nature of expropriation proceedings.
• Lintag v. National Power Corporation — Cited for the two-pronged nature of expropriation proceedings.
• Panes v. Visayas State College of Agriculture — Cited regarding the requirement of evidence aliunde for certain defenses.
• Borje v. CFI of Misamis Occidental — Cited for the principle that grounds for motion to dismiss are exclusive to those enumerated in Rule 16, Section 1.

• Rule 67, Section 3 of the 1997 Rules of Civil Procedure — Mandates that defendants in expropriation cases file an Answer to raise objections or defenses to the taking; abolishes the Motion to Dismiss as the responsive pleading.
• Rule 16, Section 1 of the Rules of Court — Enumerates the exclusive grounds for a motion to dismiss; issues raised in this case do not fall under these grounds.
• Rule 15, Section 8 (Omnibus Motion Rule) — Requires all objections to be included in a motion attacking a pleading, but amended Rule 67 provides a special exception for expropriation cases.
• Republic Act No. 7279 (Urban Development and Housing Act of 1992), Sections 2, 3(q), 9, and 10 — Governs socialized housing, defines small property owners (residential lands not exceeding 300 sqm in highly urbanized cities), establishes priorities in land acquisition (government lands first), and mandates that expropriation be resorted to only when other modes have been exhausted.
• Presidential Decree No. 1517 (Urban Land Reform Act) — Cited as the precursor legislation institutionalizing urban land reform in 1978.
• Republic Act No. 409 (Charter of the City of Manila) — Cited by petitioner as the source of its eminent domain powers.