Manapat vs. Court of Appeals

The State, through the National Housing Authority, may validly exercise the power of eminent domain over titled residential lots for socialized housing under the Zonal Improvement Program as this satisfies the "public use" requirement; however, the exemption for small property owners under Republic Act No. 7279 cannot be applied retroactively to expropriation cases pending at the time of its enactment.

The dispute originated in the 1960s when occupants of the Grace Park Subdivision in Caloocan City, unable to purchase lots from the Roman Catholic Archbishop of Manila (RCAM) due to high prices, petitioned the government for acquisition and resale at affordable rates. After initial government efforts failed due to budgetary constraints, RCAM subdivided and sold the lots to private individuals who acquired transfer certificates of title. In 1977, President Ferdinand Marcos issued Presidential Decree No. 1072 appropriating funds for the expropriation of these lots for resale to bona fide occupants, leading the NHA to file expropriation cases against the titled owners.

• The Grace Park Subdivision in Caloocan City was originally owned by the Roman Catholic Archbishop of Manila (RCAM) and/or the Philippine Realty Corporation (PRC).
• In the 1960s, RCAM allowed individuals to occupy portions of the property on condition that they would vacate if a school was constructed; when the plan did not materialize, occupants offered to purchase but could not afford the proposed price.
• The occupants organized themselves as the Eulogio Rodriguez, Jr. Tenants Association, Inc. and petitioned the government for acquisition, subdivision, and resale at low prices.
• In 1963, the government (through the Land Tenure Administration, later the People's Homesite and Housing Corporation) attempted to negotiate acquisition but discontinued efforts due to RCAM's high asking price and budgetary constraints.
• RCAM subsequently subdivided the property and sold individual lots to the public, including petitioners Fermin Manapat and Domingo Lim, and respondents Maximo Loberanes, Eladio Quimque, Cesario Vega, Juanito Santos, Alejandro Oracion, and Gonzalo Mercado, who acquired transfer certificates of title.
• In 1977, President Ferdinand Marcos issued Presidential Decree No. 1072 appropriating P1.2 million for the expropriation of 51 lots in Grace Park for resale to bona fide occupants.
• The National Housing Authority (NHA), successor to the People's Homesite and Housing Corporation, filed expropriation proceedings in 1977 against the titled owners to implement the Zonal Improvement Program (ZIP), which aimed to develop the area through road construction, installation of facilities, and subdivision into smaller lots (averaging 66.5 square meters) for distribution to approximately 510 families.
• The Court of Appeals initially ordered condemnation but later exempted lots owned by small property owners (not exceeding 300 square meters) based on Republic Act No. 7279, enacted in 1992.

• Fermin Manapat (G.R. No. 110478): Argued that as a member of the tenant association and intended beneficiary of the expropriation, it would be incongruous to take his land only to give it back to him; contended that the issuance of PD 1072 did not remove from the judiciary the determination of the necessity of the taking; claimed that supervening events rendered the expropriation improper; asserted that his title should not be subject to collateral attack; and argued that the eventual beneficiaries were squatters.
• National Housing Authority (G.R. Nos. 116491-503): Contended that the Court of Appeals erred in applying retroactively Article VI, Section 10 of Republic Act No. 7279 to expropriation cases instituted in 1977; argued that RA 7279 is a substantive law that should operate prospectively and not affect vested rights arising from the exercise of eminent domain; maintained that RA 7279 and PD 1072 are not in pari materia; and asserted that selective expropriation would result in impractical consequences.
• Domingo Lim (G.R. No. 116176): Argued that the NHA could not legally re-group several smaller lots previously subdivided from a larger lot and treat them as one again for the purpose of subdividing into still smaller lots; contended that there was no genuine necessity for the expropriation; and claimed that the NHA failed to present sufficient evidence that the expropriation would provide healthful, decent, and peaceful surroundings to improve the quality of life for residents.

• Landowners (Loberanes, Quimque, Vega, Santos, Oracion, Mercado): Relied on the Court of Appeals' ruling that their lots, being not more than 300 square meters and owned by small property owners, were exempt from expropriation under Section 10 of Republic Act No. 7279, the Urban Development and Housing Act of 1992.
• Domingo Lim (as respondent in G.R. No. 116176): Asserted that the lots were already titled and subdivided, and that the expropriation lacked genuine necessity and public purpose.

• Procedural Issues:
  • Whether the Court of Appeals properly applied Republic Act No. 7279 retroactively to pending expropriation cases instituted in 1977.
• Substantive Issues:
  • Whether the NHA has the lawful right to expropriate the subject lots for public use under the Zonal Improvement Program.
  • Whether the determination of necessity for the taking is a political question when authorized by Presidential Decree No. 1072.
  • Whether socialized housing satisfies the constitutional requirement of "public use."
  • Whether the fact that the lots are titled and already subdivided into small parcels affects the validity of the expropriation.
  • Whether landowners who are also intended beneficiaries of the expropriation are exempt from the taking.

• Procedural:
  • The Supreme Court held that Republic Act No. 7279, enacted in 1992, cannot be applied retroactively to expropriation cases instituted in 1977. Citing the maxim nova constitutio futuris formam imponere debet, non praeteritis and Article 4 of the Civil Code, the Court ruled that laws shall have no retroactive effect unless expressly provided. Section 49 of RA 7279 indicates it shall take effect upon publication, confirming its prospective application. Thus, the Court reversed the March 2, 1994 and July 25, 1994 Resolutions of the Court of Appeals that exempted small property owners' lots from expropriation.
• Substantive:
  • The Court ruled that the NHA may validly expropriate the subject parcels of land. The power of eminent domain is inherent and subject to five requisites: (1) private property is taken; (2) there is genuine necessity; (3) taking is for public use; (4) just compensation is paid; and (5) due process is observed. The Court held that: (1) the lots are private property; (2) necessity is a political question when determined by the legislature (or the President exercising legislative powers under the 1973 Constitution through PD 1072); (3) socialized housing under the Zonal Improvement Program satisfies "public use" as it benefits approximately 510 families and aligns with constitutional mandates on urban land reform and housing; (4) the size of the lots (being less than 300 sq m) does not negate public use, citing J.M. Tuason & Co., Inc. v. Land Tenure Administration; and (5) due process was observed. The Court affirmed the remand to the trial court for determination of just compensation.

• Power of Eminent Domain — Defined as the inherent power of the State to acquire private property for public use upon payment of just compensation; subject to five requisites: (1) private property is taken; (2) genuine necessity exists; (3) for public use; (4) just compensation is paid; and (5) due process is observed.
• Political Question Doctrine — When the legislature (or the President exercising legislative powers) determines the necessity for appropriating private property for public use, the question of necessity becomes a political question not subject to judicial review, absent a showing of abuse of discretion.
• Public Use as a Flexible Concept — The concept of "public use" is evolving and now includes indirect public benefit or advantage, such as socialized housing, urban land reform, and slum improvement; it is not determined by the number of people benefited or the size of the land.
• Non-Retroactivity of Laws — Nova constitutio futuris formam imponere debet, non praeteritis (a new statute should affect the future, not the past); laws shall have no retroactive effect unless expressly provided.

• "The power of eminent domain is an inherent and indispensable power of the State. Also called the power of expropriation, it is described as 'the highest and most exact idea of property remaining in the government' that may be acquired for some public purpose through a method 'in the nature of a compulsory sale to the State.'"
• "As a rule, the determination of whether there is genuine necessity for the exercise is a justiciable question. However, when the power is exercised by the Legislature, the question of necessity is essentially a political question."
• "Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum, the general welfare."
• "Nova constitutio futuris formam imponere debet, non praeteritis. A new statute should affect the future, not the past. The law looks forward, not backward."

• Sumulong v. Guerrero — Cited as controlling precedent establishing that "socialized housing" falls within the confines of "public use" and satisfies the constitutional mandate for urban land reform and housing.
• J.M. Tuason & Co., Inc. v. Land Tenure Administration — Cited for the principle that the propriety of exercising eminent domain cannot be determined on a purely quantitative or area basis; the Constitution speaks of "lands," not "landed estates."
• City of Manila v. Chinese Community — Cited for the doctrine that when the legislature directly determines the necessity for appropriating private property, the extent of public necessity and the expediency of construction are questions exclusively for the legislature.
• Lagcao v. Judge Labra — Cited for the principle that the foundation of the right to exercise eminent domain is genuine necessity, and that necessity must be of a public character.
• Filstream International Inc. v. Court of Appeals — Cited for the proposition that the power of eminent domain prevails over the non-impairment clause and is superior to final judgments in ejectment cases.

• Article III, Section 9 of the 1987 Constitution — Mandates that private property shall not be taken for public use without just compensation; cited as the constitutional limitation on the exercise of eminent domain.
• Presidential Decree No. 1072 — Appropriated funds for the expropriation of Grace Park lots; cited as the legislative authorization for the expropriation, making the necessity thereof a political question.
• Republic Act No. 7279 (Urban Development and Housing Act of 1992), Section 10 — Provides that where expropriation is resorted to, parcels of land owned by small property owners shall be exempted; held not applicable retroactively.
• Article 4 of the Civil Code — States that laws shall have no retroactive effect, unless the contrary is provided; cited to support the non-retroactivity of RA 7279.
• Rule 67 of the Revised Rules of Court — Cited regarding the procedure for determining just compensation in expropriation proceedings.