Curata vs. PPA

The just compensation for expropriated lots must be based on the character of the property at the time of taking, not on its potential future use; and RA 8974, being a substantive law prescribing the standard of just compensation and the manner of provisional payment, cannot be applied retroactively to expropriation cases filed before its effectivity. The August 15, 2000 RTC Order fixing just compensation is a final order appealable to the CA, while the subsequent implementing orders are merely interlocutory. Government funds and properties of the PPA, as a government instrumentality, are exempt from execution and garnishment, rendering discretionary execution pending appeal under Rule 39 inapplicable to eminent domain proceedings.

Executive Order No. 385 (Series of 1989) and Executive Order No. 431 (Series of 1990) delineated the Batangas Port Zone (BPZ) and placed it under the administrative jurisdiction of the Philippine Ports Authority (PPA) for zoning, planning, development, and utilization. PPA is a government instrumentality attached to the Department of Transportation and Communication, vested with corporate powers to perform governmental functions in managing, supervising, controlling, and regulating major ports of the country. The lots sought to be expropriated for Phase II of the BPZ project were located in Barangays Bolbok, Calicanto, and Sta. Clara, Batangas City, and were owned by some 231 individuals or entities, with a total area of approximately 1,298,340 square meters. Administrative Order No. 50, issued on February 17, 1999, prescribed guidelines for land acquisition by government agencies, requiring a deposit of 10% of the offered amount. Republic Act No. 8974, signed into law on November 7, 2000 and effective November 26, 2000, mandated immediate payment of 100% of the BIR zonal valuation upon filing of an expropriation complaint for national government infrastructure projects.

Pursuant to Executive Order No. 385 (Series of 1989) and Executive Order No. 431 (Series of 1990), which delineated and expanded the Batangas Port Zone and placed it under PPA's administrative jurisdiction, PPA instituted on October 14, 1999 a complaint for expropriation of 185 lots before the RTC of Batangas City, Branch 84, docketed as Civil Case No. 5447. The lots, owned by some 231 individuals or entities and totaling approximately 1,298,340 square meters, were intended for the development of Phase II of the BPZ. PPA alleged a fair market value of PhP 336.83 per square meter and had previously offered PhP 336.40 per square meter, which the lot owners rejected. For convenience, the RTC divided the defendant-lot owners into three groups: the Dimayacyac Group (represented by Atty. Reynaldo Dimayacyac), the Ortega and Cruz Groups (represented by Attys. Gregorio Ortega and Cesar Cruz, respectively), and the Agustin Group (represented by Atty. Emmanuel Agustin). On March 31, 2000, the RTC declared the expropriation proper for public use and appointed three commissioners—Provincial Engineer Arturo V. Magtibay (Chairman), Provincial Assessor Lauro C. Andaya, and Provincial Treasurer Jessie E. Cantos—to determine just compensation.

The commissioners submitted a First Partial Report dated May 29, 2000 recommending PhP 4,800 per square meter as just compensation for the lots of 15 lot owners in the Dimayacyac Group. PPA protested, claiming the lands were agricultural and the compensation should be lower. On July 10, 2000, the RTC issued the First Compensation Order, increasing the recommended amount and fixing just compensation at PhP 5,500 per square meter for the Dimayacyac Group, citing prior sales transactions including a 1996 sale at PhP 5,000 per square meter and a 1997 compromise agreement at PhP 5,211 per square meter. The Dimayacyac Group moved for execution pending appeal, which the RTC granted on July 24, 2000, followed by a writ of execution on July 31, 2000 and notices of garnishment served on Land Bank of the Philippines. PPA filed a notice of appeal with motion for extension to pay docket fees and file record on appeal, but the RTC denied the appeal on August 25, 2000 for non-payment of appellate docket fees, denied the record on appeal on August 28, 2000, and denied the motion for reconsideration on September 18, 2000. PPA elevated these matters to the CA via certiorari.

On August 15, 2000, the RTC issued the Second Compensation Order, likewise fixing just compensation at PhP 5,500 per square meter for the Agustin, Ortega, and Cruz Groups, Pastor Realty Corp., et al., and those similarly situated, including those who did not file an answer. The order cited the findings of amicus curiae Cuervo Appraisers, Inc. (recommending PhP 5,500 to PhP 6,000 per square meter), three prior land sales, and a compromise agreement in Dimaano vs. PPA pegging the price at PhP 10,000 per square meter. PPA seasonably filed an appeal from this order. The RTC then issued implementing orders dated August 17, 2000 (Agustin Group, PhP 854,293,000), August 18, 2000 (Ortega Group, PhP 3,384,212,425), August 23, 2000 (Cruz Group, PhP 1,526,109,750), and August 23, 2000 (Pastor Realty Corp., et al., PhP 566,879,500), each prefaced as issued "pursuant to" the August 15, 2000 Order. PPA did not file separate appeals from these implementing orders but included them in its appeal from the August 15, 2000 Order.

While PPA's appeal was pending, the RTC issued various orders directing the release of deposits to lot owners. On May 15, 2002, the RTC directed PPA to release 10% of the zonal valuation pursuant to Administrative Order No. 50. The Cruz and Ortega Groups moved for partial reconsideration, contending that 100% should be released under RA 8974. PPA's Director for Legal Services, Atty. Arturo S. Bernardino, interposed "no objection" to the motions via a June 27, 2002 Manifestation. On July 12, 2002, the RTC ordered PPA to release 100% of the zonal valuation. PPA later disowned Bernardino's manifestation and challenged the retroactive application of RA 8974. Separately, the Agustin Group sought immediate payment of 100% of the zonal value at PhP 4,250 per square meter, based on a July 9, 2002 Certification issued by BIR Assistant Revenue District Officer Abencio T. Torres. PPA opposed, asserting the relevant zonal valuation was only PhP 290 per square meter because the lots were agricultural. The RTC nevertheless ordered payment at PhP 4,250 per square meter on December 2, 2003, and issued subsequent orders directing partial execution and release of funds.

PPA took possession of the subject lots on September 11, 2001 upon depositing PhP 400 per square meter. Meanwhile, intervenors Caroline B. Acosta, Abigail B. Acosta, Nemesio D. Balina, and Erlinda D. Balina moved to intervene, claiming their properties were inadvertently omitted from PPA's complaint. The RTC granted their motion on September 7, 2000 and applied the PhP 5,500 per square meter rate to their lots. Separately, Rosalinda Buenafe and Melencio Castillo, whose names did not appear in the July 10, 2000 First Compensation Order, secured an RTC order on November 6, 2003 granting them a writ of execution on the theory that the order was final as to them because they were not included in PPA's appeal. The CA nullified this order on March 31, 2005, holding that Buenafe and Castillo were not covered by the July 10, 2000 Order in the first place. Throughout the proceedings, Judge Paterno V. Tac-an issued multiple orders implementing the compensation orders despite CA temporary restraining orders and writs of preliminary injunction, including conducting a hearing on June 21, 2005 in violation of a CA cease-and-desist order. The CA denied PPA's petition to cite Judge Tac-an for contempt, and the Court's First Division initially considered the contempt issue moot due to the judge's compulsory retirement, but the En Banc reconsidered and found him guilty of indirect contempt.

• Retroactivity of RA 8974 (PPA, G.R. No. 158252): PPA asserted that RA 8974 is a substantive law that cannot be given retroactive effect to Civil Case No. 5447, which was filed on October 14, 1999, before RA 8974 took effect on November 26, 2000.
• Finality of July 10, 2000 Order (Curata, et al., G.R. Nos. 154211-12): Petitioners Ernesto Curata, et al. (Dimayacyac Group) maintained that the July 10, 2000 First Compensation Order was already final and executory, and that the CA erred in allowing PPA's appeal despite PPA's failure to pay appellate docket fees within the reglementary period.
• Writ of Possession (Curata, et al., G.R. Nos. 154211-12): Petitioners argued that the CA erred in taking cognizance of PPA's motion for a writ of possession filed for the first time in a certiorari proceeding, and in declaring PPA entitled to possession as a matter of right.
• Execution Pending Appeal (Curata, et al., G.R. Nos. 154211-12): Petitioners contended that the CA erred in ruling that execution pending appeal would render moot the issue of just compensation.
• Supplemental Petition (Curata, et al., G.R. Nos. 154211-12): Petitioners argued that the CA erred in taking cognizance of PPA's supplemental petition in CA-G.R. SP No. 60314.
• Due Process (PPA, G.R. No. 170683): PPA maintained that it was deprived of its right to pre-trial and to present evidence, hence its right to due process was violated.
• Agricultural Classification (PPA, G.R. No. 170683): PPA argued that the expropriated lots were agricultural in nature, not industrial or commercial.
• CA Grave Abuse of Discretion (PPA, G.R. No. 170683): PPA asserted that the CA misapprehended the facts and acted with grave abuse of discretion in affirming the RTC's September 7, 2000 Order.
• Timeliness of Appeal (PPA, G.R. No. 173392 MR): PPA argued that it timely interposed an appeal from the August 15, 2000 Order, which was the final order disposing of the merits of the expropriation case.
• Inapplicability of Execution Pending Appeal to Eminent Domain (PPA, G.R. No. 173392 MR): PPA maintained that rules on civil cases relative to executions pending appeal should not be applied to the special civil action of eminent domain, lest the remedy of appeal becomes nugatory.
• Patently Unjust Compensation (PPA, G.R. No. 173392 MR): PPA argued that PhP 5,500 per square meter for raw marshland in Batangas—inaccessible and submerged in water at the time of the taking—was patently unjust.
• Interest Rate (PPA, G.R. No. 173392 MR): PPA contended that the interest rate applicable to expropriation proceedings is 6% per annum, not 12%.
• Finality of December 2, 2003 Order (PPA, G.R. No. 166200): PPA argued that the CA erred in denying its petition for certiorari and concluding that the December 2, 2003 Order had already attained finality, and in declining to annul various RTC orders.
• Execution Pending Appeal Treatment (PPA, G.R. No. 166200): PPA asserted that the CA erred in ruling that the private respondents' motion for issuance of writ of execution may be treated as a motion for execution pending appeal.
• Coverage of July 10, 2000 Order (Buenafe and Castillo, G.R. No. 168272): Petitioners Rosalinda Buenafe and Melencio Castillo argued that the CA erred in setting aside the RTC's November 6, 2003 Order and related processes that allowed execution vis-à-vis their claim for just compensation of PhP 5,500 per square meter based on the July 10, 2000 Order.

• Retroactive Application of RA 8974 (Cruz and Ortega Groups): Respondent lot owners maintained that RA 8974, being a procedural/remedial law, should apply retroactively to Civil Case No. 5447, and that AO 50 was repealed by RA 8974.
• PPA's No-Objection Manifestation (Cruz Group): Respondents relied on the June 27, 2002 Manifestation of PPA's Director for Legal Services, Atty. Arturo S. Bernardino, interposing "no objection" to the application of RA 8974, arguing this constituted an admission against PPA's interests.
• Industrial Classification of Lots (Agustin Group): Respondents argued that their properties were classified as industrial/port zone under EO 431 and as adopted by the Sangguniang Panglunsod of Batangas in Resolution No. 53-893, and that the zonal value for industrial lots in adjacent Barangay Sta. Clara was PhP 4,250 per square meter.
• Validity of PhP 5,500 Compensation (All Groups): Respondents maintained that the just compensation of PhP 5,500 per square meter was proper, supported by prior sales transactions, the findings of court-appointed commissioners, and the appraisal report of Cuervo Appraisers, Inc. recommending PhP 5,500 to PhP 6,000 per square meter.
• Finality of RTC Orders (Cruz Group): Respondents argued that the August 23, 2000 Order in their favor had become final and executory because PPA did not file a separate appeal therefrom, and that execution was therefore warranted.
• Highest and Best Use (Cruz and Dimayacyac Groups): Respondents contended that the owner of the land is entitled to the highest and best use of the property, and that the classification need not refer to the actual use at the time of expropriation but to the potential suitability of the land.

• Perfection of Appeal: Whether PPA's appeal from the July 10, 2000 First Compensation Order was properly allowed by the CA despite PPA's failure to pay appellate docket fees within the reglementary period.
• Execution Pending Appeal in Eminent Domain: Whether discretionary execution of judgments pending appeal under Sec. 2(a) of Rule 39 applies to eminent domain proceedings.
• Retroactivity of RA 8974: Whether RA 8974, which mandates immediate payment of 100% of the BIR zonal valuation upon filing of an expropriation complaint, applies retroactively to Civil Case No. 5447, which was filed before the law took effect.
• Governing Law on Deposit: Whether Rule 67, AO 50, or RA 8974 governs the amount of deposit or initial payment required in Civil Case No. 5447.
• Final vs. Interlocutory Order: Whether the August 15, 2000 RTC Order (Second Compensation Order) fixing just compensation at PhP 5,500 per square meter is a final appealable order or an interlocutory order.
• Just Compensation Amount: Whether the RTC's determination of PhP 5,500 per square meter as just compensation for the expropriated lots is proper and supported by factual basis.
• Validity of Torres Certification: Whether the July 9, 2002 BIR Certification issued by Assistant RDO Abencio T. Torres pegging the zonal value at PhP 4,250 per square meter is a valid basis for provisional payment.
• Coverage of First Compensation Order: Whether Rosalinda Buenafe and Melencio Castillo, who were not named in the July 10, 2000 First Compensation Order, may claim the benefit of execution thereunder.
• Contempt of Court — Mootness by Retirement: Whether the compulsory retirement of Judge Tac-an rendered moot the petition to cite him for contempt.
• Contempt of Court — Guilt: Whether Judge Tac-an committed indirect contempt of court for defying CA temporary restraining orders and writs of preliminary injunction.

• Perfection of Appeal: Yes. The CA did not err in allowing PPA's appeal. While payment of docket fees is mandatory for perfection of an appeal, the rule admits of exceptions where public interest and substantial justice dictate relaxation, especially given the billions of pesos of taxpayers' money involved and the 1,000% increase from PPA's offered price to the RTC's award.
• Execution Pending Appeal in Eminent Domain: No. Discretionary execution of judgments pending appeal under Sec. 2(a) of Rule 39 does not apply to eminent domain proceedings. PPA's monies, facilities, and assets are government properties exempt from execution and garnishment; what cannot be done directly cannot be done indirectly.
• Retroactivity of RA 8974: No. RA 8974 is a substantive law that cannot be applied retroactively to Civil Case No. 5447, which was filed before RA 8974's effectivity on November 26, 2000. The appropriate standard of just compensation, including the manner of provisional payment, is a substantive matter within the sole province of the legislature.
• Governing Law on Deposit: Rule 67 of the Rules of Court governs the deposit in Civil Case No. 5447, not RA 8974 or AO 50. The correct deposit is the assessed value of the subject lots per tax declarations, or alternatively, the level proposed by PPA pursuant to AO 50.
• Final vs. Interlocutory Order: The August 15, 2000 Order is a final order. It finally disposes of the issue of just compensation, leaving nothing more for future determination except execution. The subsequent implementing orders (August 17, 18, and 23, 2000) are interlocutory, as they merely clarify and implement the mother order.
• Just Compensation Amount: No. The just compensation of PhP 5,500 per square meter has no solid factual basis. The subject lots were agricultural at the time of taking, as shown by aerial photographs, tax declarations, DO 31-97 zonal valuations, and judicial admissions of lot owners' counsel. The just compensation is fixed at PhP 425 per square meter.
• Validity of Torres Certification: No. The Torres certification is bereft of weight and credit. It was issued by an assistant RDO without demonstrated authority, was not under oath, its contents were self-serving and hearsay, and it contradicted DO 31-97, the official government repository of zonal valuations for Batangas.
• Coverage of First Compensation Order: No. Buenafe and Castillo were not among the defendants listed in the July 10, 2000 Order and cannot claim its benefit. An order of execution that exceeds the final order from which it derives has no validity pro tanto.
• Contempt of Court — Mootness by Retirement: No. The retirement of the respondent judge does not render the contempt petition moot and academic. By analogy to the settled principle in administrative disciplinary cases, separation from service does not render the case moot.
• Contempt of Court — Guilt: Yes. Judge Tac-an is guilty of indirect contempt for issuing orders and conducting hearings in defiance of four CA resolutions: the January 10, 2005 TRO, the March 15, 2005 writ of preliminary injunction, the April 19, 2005 TRO, and the June 3, 2005 cease-and-desist resolution.

• Perfection of Appeal: While the payment of appellate docket fees within the prescribed period is mandatory under Secs. 4 and 9 of Rule 41, and non-payment is a ground for dismissal under Sec. 13, the Court recognized exceptions justifying relaxation of the rule. Among the recognized grounds are: relieving a litigant from injustice disproportionate to the procedural failure, good faith, the merits of the case, lack of fault attributable to the party, the importance of the issues, and the absence of frivolous or dilatory intent. The Court found that the public interest and higher interests of justice dictated allowing PPA's appeal, given the billions of pesos of taxpayers' money at stake, the 1,000% increase from PPA's offered price of PhP 500 to the RTC's award of PhP 5,500 per square meter, and the RTC judge's own increase of the commissioners' recommendation from PhP 4,800 to PhP 5,500. The trial court should have liberally applied procedural rules to afford the higher court a review, consistent with the axiom that cases should be decided on the merits rather than on technicality. The Court cited Fil-Estate Properties, Inc. vs. Homena-Valencia and La Salette College vs. Pilotin for the principle that failure to pay docket fees allows only discretionary, not automatic, dismissal.

• Execution Pending Appeal in Eminent Domain: The Court held that PPA is a government instrumentality, not a GOCC, because it has no shares of stock or members, and the docks, piers, and buildings it administers are owned by the Republic and thus outside the commerce of man. PPA is a mere trustee of these properties. Applying Manila International Airport Authority vs. Court of Appeals, the Court concluded that PPA's funds partake of government funds and may not be garnished absent an allocation by its Board or statutory grant. Citing Commissioner of Public Highways vs. San Diego and Visayan Refining Co. vs. Camus and Paredes, the Court explained that government funds and properties cannot be seized under writs of execution, as disbursements of public funds must be covered by corresponding appropriations. If PPA's funds cannot be garnished pursuant to a final judgment, then the trial court likewise cannot grant discretionary execution pending appeal, as this would circumvent the established exemption. The Court noted that this issue was rendered moot by its disposition on just compensation.

• Retroactivity of RA 8974: The Court agreed with PPA that RA 8974 is a substantive law. Citing Republic vs. Gingoyon, the Court observed that the appropriate standard of just compensation—including the manner of payment and the initial compensation to the lot owners—is a substantive, not merely procedural, matter. The Court quoted its Resolution in Gingoyon stating that if a rule creates a right, it is substantive; the right of the owner to receive just compensation prior to acquisition of possession by the State is a proprietary right classified as substantive. Lintag vs. National Power Corporation reiterated that RA 8974 is a substantive law that cannot be applied retroactively, as there is nothing in the law expressly or impliedly providing for retroactive effect. The general rule on prospectivity, embodied in Art. 4 of the Civil Code, applies: laws shall have no retroactive effect unless the contrary is provided. The retroactive application of RA 8974 would unsettle vested rights and disturb the legal effect of prior transactions. The Court also held that AO 50, as an internal executive issuance, binds only executive branch officials and agencies, not the courts; the determination of just compensation is a judicial function. Rule 67, which requires a deposit equivalent to the assessed value for taxation purposes, governs Civil Case No. 5447.

• Governing Law on Deposit: Since RA 8974 cannot apply retroactively and AO 50 is merely an internal executive issuance that cannot bind the courts, Rule 67 governs the deposit requirement. Under Sec. 2 of Rule 67, the plaintiff must deposit an amount equivalent to the assessed value of the property for purposes of taxation. The RTC's May 15, 2002 Order pegging the deposit at 10% of the offered amount pursuant to AO 50 was affirmed as an acceptable alternative, but the July 12, 2002 and July 29, 2002 Orders applying RA 8974 were annulled. The Court noted this issue was rendered moot by its determination of just compensation, as the lot owners can already be paid upon finality of the decision.

• Final vs. Interlocutory Order: The Court reversed its earlier ruling in the August 24, 2007 Decision that the August 15, 2000 Order was interlocutory. Applying the test from BA Finance Corp. vs. CA and Investments, Inc. vs. Court of Appeals, the Court held that a final order is one that finally disposes of a case, leaving nothing more to be done except execution. The August 15, 2000 Order definitively settled the issue of just compensation at PhP 5,500 per square meter for the named defendants and those similarly situated, leaving nothing for future determination. The order stated the facts and the law on which it was based, was signed by the judge, and declared the rights of the lot owners and the obligation of PPA. Citing Municipality of Biñan vs. Garcia, the Court held that an order fixing just compensation on the basis of the evidence and the commissioners' findings is final, as it leaves nothing more to be done by the court regarding the issue. The subsequent implementing orders (August 17, 18, and 23, 2000) were merely clarificatory and interlocutory, as the issue of just compensation had already been resolved in the mother order. These implementing orders did not need to be separately appealed, as the decision on the appeal from the August 15, 2000 Order would be binding on them.

• Just Compensation Amount: The Court conducted a circumspect reevaluation of the records, evidence, and oral arguments, and concluded that the just compensation at the time of taking was PhP 425 per square meter. The Court identified six reasons for reducing the compensation. First, EO 385 and EO 431 did not convert the subject lots into industrial or commercial; they merely delineated the BPZ and are not land-reclassifying instruments. Second, aerial photographs showed the lots were agricultural—horticultural land, salt beds, fish ponds, and swampy areas. Third, the tax declarations of the lot owners—veritable admissions against interest—overwhelmingly classified their lands as agricultural, with only three out of some 88 lot owners declaring their properties as non-agricultural. Fourth, DO 31-97, the official government repository of zonal valuations for Batangas, classified all lots in Barangays Bolbok and Calicanto as agricultural, with zonal values of PhP 290 and PhP 400 per square meter, respectively. Fifth, during the March 25, 2008 oral arguments, counsels for the lot owners admitted that the properties were vacant, undeveloped, and earning no income prior to and during the taking, except for fishponds. Sixth, compromise and purchase agreements between PPA and around 28 lot owners from 2002 onwards priced their lands at PhP 500 per square meter, reflecting the true fair market value. The Court found that the RTC relied on evidence unworthy of credit: the three prior sales involved properties outside the BPZ Phase II area and of different categorization (residential lots with structures); the Dimaano compromise agreement was unreliable as a gauge of fair market value; and the Cuervo Appraisers report by Oscianas was biased (commissioned and paid by the Ortega Group), factually baseless (contradicting aerial photographs and tax declarations), and showed an implausible 400% increase in valuation within less than one year. The Court also took judicial cognizance of the CA's final decision in CA-G.R. SP No. 81091 involving the Llana lot, which characterized similarly situated lots as swampy, salt bed, and horticultural, and held that PhP 5,500 per square meter was unconscionable.

• Validity of Torres Certification: The Court found that Judge Tac-an committed gross abuse of discretion in relying on the Torres certification. The BIR official who certified the zonal value was an assistant, not the head of the BIR revenue district office, and had not been shown to have the authority to issue such certification. The certification was not under oath, Torres was not called to testify, and the contents were self-serving and hearsay. Torres did not cite the basis for his certification or explain the process used. Judge Tac-an should have applied DO 31-97, the official DOF issuance on zonal valuation for Batangas, which was the product of a rigorous process involving a BIR technical committee, public hearings, endorsement to the CIR, and approval by the Secretary of Finance. Under DO 31-97, the zonal values were PhP 400 per square meter for Calicanto and PhP 290 per square meter for Bolbok, both classified as agricultural—a far cry from the PhP 4,250 fixed by Torres.

• Coverage of First Compensation Order: The Court held that Buenafe and Castillo were not among the defendants enumerated in the July 10, 2000 Order, which specifically listed 15 lot owners by name. Since they were not covered by the order, they could not claim that because they were not included in PPA's appeal, they could demand execution of an order that did not apply to them. The CA correctly nullified the November 6, 2003 RTC Order. Even if Buenafe and Castillo were covered by the catch-all clause in the August 15, 2000 Order ("those similarly situated, including those who did not file answer"), the November 6, 2003 Order granting them PhP 5,500 per square meter had to be amended in light of the Court's ruling reducing just compensation to PhP 425 per square meter.

• Contempt of Court — Mootness by Retirement: The Court ruled that the retirement of Judge Tac-an did not render the contempt petition moot. The objective of criminal contempt is to vindicate public authority and protect the dignity and authority of courts. Applying by analogy the settled principle in administrative disciplinary cases that separation from service does not render the case moot and academic, the Court held that a petition for contempt must proceed to its final conclusion despite the retirement of the government official, lest a civil servant strategize to avail of early retirement to escape sanctions.

• Contempt of Court — Guilt: The Court found that Judge Tac-an committed contumacious acts in utter disobedience of four CA resolutions. First, despite the January 10, 2005 TRO (effective until March 10, 2005), he issued the February 1, 2005 Order directing issuance of a writ of execution, the February 2, 2005 Writ of Execution, and the February 3, 2005 Notice of Garnishment. Second, despite the March 15, 2005 writ of preliminary injunction and the April 19, 2005 TRO, he acted on the Bureau of Treasury's Manifestation and Motion by setting it for hearing on April 25, 2005. Third, on April 26, 2005, he issued another order implementing the February 2, 2005 Writ of Execution and ordering the BT to deliver escrowed proceeds, in violation of the April 19, 2005 TRO and the March 15, 2005 injunction. Fourth, despite the June 3, 2005 CA Resolution ordering him to "cease and desist from further proceeding with Civil Case No. 5447," he conducted a hearing on June 21, 2005 over PPA's objection. The Court fined him PhP 30,000 for each of the four violations, totaling PhP 120,000.

• Government Immunity from Execution — Government funds and properties cannot be seized under writs of execution or garnishment to satisfy judgments against the State. Disbursements of public funds must be covered by corresponding appropriations, and the functions and public services rendered by the State cannot be paralyzed by diversion of public funds from their legitimate and specific objects. The Court applied this doctrine to PPA, holding that as a government instrumentality whose funds partake of government funds, PPA's properties are exempt from execution and garnishment, and discretionary execution pending appeal cannot be granted against it.

• Prospectivity of Laws; Substantive vs. Remedial Laws — Laws operate prospectively, not retroactively, unless the legislative intent to the contrary is manifest by express terms or necessary implication. A well-settled exception applies when the law is remedial in nature, as no person can claim a vested right in any particular mode of procedure. However, when a law creates rights or takes away vested rights, it is substantive and cannot be given retroactive effect. The Court held that RA 8974, prescribing the standard of just compensation and the manner of provisional payment, is substantive because it creates the right of the owner to receive a specific amount prior to acquisition of possession by the State—a proprietary right within the sole province of the legislature.

• Final vs. Interlocutory Orders — A final order is one that finally disposes of a case, leaving nothing more to be done by the court except execution; it adjudicates on the merits and declares categorically the rights and obligations of the parties. An interlocutory order does not finally dispose of the case and indicates that other things remain to be done. The test: does the order leave something to be done in the trial court with respect to the merits? If yes, it is interlocutory; if not, it is final. The Court applied this test to hold that the August 15, 2000 Order fixing just compensation was a final order, while the subsequent implementing orders naming specific lot owners were interlocutory.

• Just Compensation — Character at Time of Taking — Fair market value in eminent domain is determined by, among other factors, the character of the property at the time of taking. The nature and character of the land at the time of taking is the principal criterion, not the potential of the expropriated area. The adaptability for future conversion is a factor but not the ultimate determinant. The Court applied this doctrine to reduce the compensation from PhP 5,500 to PhP 425 per square meter, finding that the lots were agricultural at the time of taking.

• Determination of Just Compensation as Judicial Function — The determination of just compensation in expropriation cases is a judicial function. Executive issuances such as AO 50 may serve as guiding norms but cannot take the place of the court's own disposition as to what amount should be paid and how to arrive at such amount. An executive issuance cannot decree that the executive's own determination shall have primacy over the court's findings.

• Contempt Survives Retirement — A petition for contempt must proceed to its final conclusion despite the retirement of the government official or employee charged, by analogy to the settled principle in administrative disciplinary cases that separation from service does not render the case moot and academic.

• "RA 8974, to the extent that it imposes a certain requirement that is substantive in nature or disturbs substantive rights, cannot be made to apply to Civil Case 5447." — This passage states the ratio decidendi on the retroactivity issue, establishing that RA 8974's prescription on the amount and manner of provisional payment is substantive and therefore prospectively applicable only.

• "PPA's monies, facilities and assets are government properties. Ergo, they are exempt from execution whether by virtue of a final judgment or pending appeal." — This pronouncement defines the scope of government immunity from execution as applied to PPA as a government instrumentality, precluding both garnishment and discretionary execution pending appeal in eminent domain proceedings.

• "The Court rules that the August 15, 2000 Order is a final order." — This sentence marks the Court's reversal of its earlier holding that the compensation order was interlocutory, establishing that an order fixing just compensation in an expropriation case is a final, appealable order.

• "the just compensation or the full and fair equivalent of the property sought to be expropriated at the time of taking is PhP 425 per square meter." — This is the Court's definitive determination of just compensation, dramatically reducing the RTC's award from PhP 5,500 to PhP 425 per square meter based on the agricultural character of the lots at the time of taking.

• Republic vs. Gingoyon, G.R. No. 166429, December 19, 2005, 478 SCRA 474 — Controlling precedent on the substantive nature of the standard of just compensation. The Court relied on Gingoyon's holding that the appropriate standard of just compensation, including the manner of payment and initial compensation, is a substantive matter within the province of the legislature, and that RA 8974 prescribes new standards for determining just compensation.

• Lintag vs. National Power Corporation, G.R. No. 158609, July 27, 2007, 528 SCRA 287 — Followed. The Court reiterated Lintag's holding that RA 8974 is a substantive law that cannot be applied retroactively, as there is nothing in the law expressly or impliedly providing for retroactive effect.

• Manila International Airport Authority vs. Court of Appeals, G.R. No. 155650, July 20, 2006, 495 SCRA 591 — Applied by analogy. The Court relied on MIAA's characterization of MIAA as a government instrumentality (not a GOCC) and its properties as owned by the Republic, finding these conclusions squarely applicable to PPA as similarly situated.

• Commissioner of Public Highways vs. San Diego, No. L-30098, February 18, 1970, 313 SCRA 616 — Followed. The Court cited Chief Justice Teehankee's explanation of the doctrine that government funds and properties may not be seized under writs of execution or garnishment, based on considerations of public policy.

• Visayan Refining Co. vs. Camus and Paredes, 40 Phil. 550 (1919) — Followed. The Court cited this early precedent for the principle that when the Government is plaintiff, the judgment takes the form of an order requiring payment as a condition precedent to transfer of title, as a personal judgment against the Government cannot be realized upon execution.

• EPZA vs. Dulay, No. L-59603, April 29, 1987, 149 SCRA 305 — Followed. Cited for the principle that the determination of just compensation is a judicial function and that executive issuances cannot decree that the executive's determination shall have primacy over the court's findings.

• Municipality of Biñan vs. Garcia, G.R. No. 69260, December 22, 1989, 180 SCRA 576 — Followed. Cited for the proposition that an order fixing just compensation on the basis of the evidence and the commissioners' findings would be final, as it would leave nothing more to be done by the court regarding the issue.

• BA Finance Corp. vs. CA, G.R. No. 84294, October 16, 1989, 178 SCRA 589 — Followed. Cited for the test distinguishing final from interlocutory orders: whether the order leaves something to be done in the trial court with respect to the merits.

• Fil-Estate Properties, Inc. vs. Homena-Valencia, G.R. No. 173942, October 15, 2007, 495 SCRA 252 — Followed. Cited for the rule that payment of appellate docket fees is mandatory for the perfection of an appeal, and that Sec. 13 of Rule 41 provides the additional ground for dismissal for non-payment.

• La Salette College vs. Pilotin, G.R. No. 149227, December 11, 2003, 418 SCRA 380 — Followed. Cited for the qualification that failure to pay docket fees allows only discretionary, not automatic, dismissal, and that the court's power should be exercised with sound discretion and circumspection.

• Section 2, Rule 67, Rules of Court — Governs the deposit or initial payment in expropriation proceedings, requiring the plaintiff to deposit an amount equivalent to the assessed value of the property for purposes of taxation. The Court held this provision, not RA 8974 or AO 50, governs the deposit in Civil Case No. 5447.

• Sections 4, 9, and 13, Rule 41, Rules of Court — Govern the payment of appellate docket fees and perfection of appeal. Sec. 4 requires payment of full appellate docket fees within the period for taking an appeal; Sec. 9 provides that appeal by record on appeal is perfected upon approval of the record on appeal filed in due time; Sec. 13 allows the trial court to dismiss an appeal for non-payment of docket fees. The Court held that while these provisions are mandatory, they admit of exceptions where public interest and substantial justice warrant relaxation.

• Section 2(a), Rule 39, Rules of Court — Governs discretionary execution pending appeal. The Court held this provision does not apply to eminent domain proceedings, as government funds and properties are exempt from execution and garnishment.

• Section 1(c), Rule 50, Rules of Court — Provides that the appellate court may refuse to entertain a suit for non-payment of appellate docket fees. Cited complementarily with Rule 41 provisions.

• Section 4, Republic Act No. 8974 — Mandates immediate payment of 100% of the BIR zonal valuation upon filing of an expropriation complaint for national government infrastructure projects. The Court held this provision is substantive in nature and cannot be applied retroactively to cases filed before the law's effectivity on November 26, 2000.

• Section 2, Administrative Order No. 50 — Requires a deposit of 10% of the offered amount to initiate expropriation proceedings. The Court held that AO 50 is an internal executive issuance binding only on executive branch agencies, not on the courts, and was repealed by RA 8974 upon the latter's effectivity.

• Article 4, Civil Code — Provides that laws shall have no retroactive effect unless the contrary is provided. The Court applied this provision in holding that RA 8974, as a substantive law, operates prospectively only.

• Section 1, Rule 36, Rules of Court — Requires that a judgment or final order determining the merits of the case shall be in writing, personally prepared by the judge, stating clearly the facts and the law on which it is based, signed, and filed. The Court found that the August 15, 2000 Order complied with this provision, supporting its characterization as a final order.

• Section 5, Rule 58, Rules of Court — Provides that a TRO is effective for 60 days from notice to the party enjoined. The Court applied this in determining the effectivity period of the January 10, 2005 TRO issued by the CA against Judge Tac-an.

• DOF Department Order No. 31-97 — The official government repository of zonal valuations for lots in the province of Batangas, approved by the Secretary of Finance and effective July 14, 1997. The Court held that this order, not the Torres certification, is the proper legal basis for zonal valuation, and that it classified the subject lots in Barangays Calicanto and Bolbok as agricultural with zonal values of PhP 400 and PhP 290 per square meter, respectively.

• Executive Order No. 385 (1989) and Executive Order No. 431 (1990) — Delineated and expanded the Batangas Port Zone and placed it under PPA's administrative jurisdiction. The Court held that these executive orders are not land-reclassifying instruments and did not ipso facto convert the lots within the zone from agricultural to industrial or commercial.

Chief Justice Reynato S. Puno, Associate Justice Leonardo A. Quisumbing, Associate Justice Consuelo Ynares-Santiago, Associate Justice Antonio T. Carpio, Associate Justice Minita V. Chico-Nazario, Associate Justice Teresita J. Leonardo-De Castro, Associate Justice Arturo D. Brion, Associate Justice Diosdado M. Peralta, and Associate Justice Lucas P. Bersamin concurred. Associate Justice Renato C. Corona was on official leave, and Associate Justice Conchita Carpio Morales was on official leave. Associate Justice Antonio Eduardo B. Nachura took no part.