Primary Holding

The expropriation of private commercial land by the RPA for resale to tenants does not constitute public use and is therefore unconstitutional under Commonwealth Act No. 539 and the Philippine Constitution.

Background

The RPA sought to expropriate two adjoining commercial lots owned by Justa G. Guido in Maypajo, Caloocan, Rizal, to resell them to tenants. Guido challenged the expropriation, arguing that the land was commercial and thus excluded from the purview of Commonwealth Act No. 539, which allows expropriation for agrarian reform.

Facts

• 1. Guido owns two adjoining commercial lots in Maypajo, Caloocan, Rizal, with a combined area of 22,655 square meters.
• 2. The RPA filed a complaint to expropriate the land for resale to tenants.
• 3. Guido argued that the land was commercial and thus excluded from expropriation under Commonwealth Act No. 539.
• 4. The RPA sought to negotiate a loan of P100,000 from the RFC to partially pay for the land.
• 5. The lower court fixed the provisional value of the land at P118,780 and ordered its delivery to the RPA.

Arguments of the Petitioners

• 1. The RPA acted without jurisdiction or corporate power in filing the expropriation complaint.
• 2. The land is commercial and thus excluded from the purview of Commonwealth Act No. 539.
• 3. Majority of the tenants have valid lease contracts or options to buy, and expropriation would impair these contracts.
• 4. The provisional value fixed by the lower court was too low.

Arguments of the Respondents

• 1. The RPA has the authority to expropriate land under Commonwealth Act No. 539.
• 2. The expropriation is for public use, as it aims to provide land to tenants.
• 3. The provisional value fixed by the court is reasonable.

Issues

• 1. The RPA has the authority to expropriate land under Commonwealth Act No. 539.
• 2. The expropriation is for public use, as it aims to provide land to tenants.
• 3. The provisional value fixed by the court is reasonable.

Ruling

• 1. The Supreme Court ruled in favor of Guido, holding that the expropriation was not for public use.
• 2. The Court emphasized that Commonwealth Act No. 539 was intended for agrarian reform and not for expropriating commercial land.
• 3. The expropriation would benefit only a few tenants and not the general public, thus lacking the public character required for eminent domain.
• 4. The Court also noted that the expropriation would impair existing contracts between Guido and her tenants.
• 5. The provisional value fixed by the lower court was not addressed, as the expropriation was deemed unconstitutional.

Doctrines

• 1. Public Use Doctrine: Expropriation must be for public use, and the benefit must accrue to the general public, not just a few individuals.
• 2. Impairment of Contracts: The government cannot impair existing contracts through expropriation.
• 3. Due Process: The expropriation of private property must comply with due process and just compensation.

Precedents Cited

• 1. "The promotion of social justice ordained by the Constitution does not supply paramount basis for untrammeled expropriation of private land by the Rural Progress Administration or any other government instrumentality."

Statutory and Constitutional Provisions

• 1. Section 4, Article XIII of the Philippine Constitution: Authorizes the expropriation of lands for subdivision and resale to tenants.
• 2. Commonwealth Act No. 539: Provides for the expropriation of private lands for resale to tenants.