Republic of the Philippines vs. Spouses Cornelio Alforte and Susana Alforte

A legal easement of right-of-way under Section 112 of CA 141, as amended, exists in favor of the Government over land originally awarded by free patent even after it is sold to another, and the Government may take the portion within the 60-meter width without paying just compensation except for improvements; however, if enforcement of the easement materially impairs or practically destroys the value of the remaining property or deprives the owner of its normal use, the owner is entitled to just compensation for the remaining portion.

Respondents Spouses Cornelio and Susana Alforte held TCT No. 29597 over a 300-square-meter parcel that traced its origin to a March 21, 1956 Free Patent and April 14, 1956 Original Certificate of Title No. 235 issued under Commonwealth Act No. 141, the Public Land Act. The DPWH’s Naga City-Milaor Bypass Road construction project required a portion of the property. The dispute implicated Section 112 of CA 141, as amended by Presidential Decree No. 1361, which subjects land granted by patent to a right-of-way not exceeding 60 meters in width for public highways and similar works, with damages for improvements only, and Section 44 of Presidential Decree No. 1529 on statutory liens affecting registered title.

Respondents Spouses Cornelio and Susana Alforte were the registered owners of a 300-square-meter parcel of land, which appears to be a vacant lot, covered by Transfer Certificate of Title No. 29597. The property was originally covered by a March 21, 1956 Free Patent and April 14, 1956 Original Certificate of Title No. 235 issued pursuant to Commonwealth Act No. 141, or the Public Land Act, to Beatriz Santos and Bienvenido Santos, who later transferred the property to respondents.

A total of 127 square meters of the subject property would be traversed by the Naga City-Milaor Bypass Road construction project of the Department of Public Works and Highways. For this reason, respondents filed a Complaint before the Naga RTC, docketed as Civil Case No. RTC 2012-0013, to compel petitioners to pay them just compensation for the 127-square-meter area in the amount of ₱381,000.00, with additional prayer for attorney’s fees and litigation expenses.

Petitioners filed their Answer praying for dismissal on the ground, among others, of lack of cause of action. They argued that because the property was originally acquired by free patent, an easement in favor of the government of 60 meters existed without need of payment of just compensation, except if there were improvements, pursuant to Section 112 of CA 141, as amended by Presidential Decree No. 1361. They further argued that this lien followed the property even when respondents acquired it from the original grantee or the latter’s successor-in-interest, pursuant to Section 44 of Presidential Decree No. 1529. A writ of possession was issued in favor of petitioners.

The RTC found that respondents owned the property; that it was originally covered by Original Certificate of Title No. 235 dated April 14, 1956 pursuant to a Free Patent issued to Beatriz Santos and Bienvenido Santos, who later transferred the property to respondents; and that 127 square meters would be traversed by the bypass road. It also found that respondents agreed and DPWH assured them that it would pay just compensation for the affected area; that in a letter dated July 13, 2010, then District Engineer Rolando Valdez made a formal offer to pay for the affected area; and that in a letter dated May 11, 2011, Engr. Valdez informed respondents that they were not entitled to the payment of just compensation. The RTC noted that the 127 square meters was almost half of the 300-square-meter property.

• Section 112 Easement: Petitioners argued that the trial court erred in declaring respondents entitled to just compensation because CA 141 specifically provides that every title to land obtained under its provisions shall be subject to a right-of-way easement not exceeding 60 meters in width, with damages for improvements only.
• Lien Follows the Property: Petitioners maintained that this lien followed the subject property even when respondents acquired it from the original grantee or the latter’s successor-in-interest, pursuant to Section 44 of PD 1529.
• Jurisprudential Support: Petitioners invoked National Irrigation Administration vs. Court of Appeals and Republic vs. Andaya as upholding the enforcement of the Government’s right-of-way or legal easement under Section 112 of the Public Land Act.
• Width, Not Area: Petitioners contended that the trial court erred in treating the 60-meter right-of-way as limited to 60 square meters, as opposed to the 127 square meters being taken, because the law speaks of width, not area.
• Plain-Meaning Rule: Petitioners argued that the RTC violated the plain-meaning rule or verba legis when it pronounced that injustice would result because of CA 141.
• Exhaustion of Administrative Remedies: Petitioners argued that respondents failed to exhaust administrative remedies by filing a case in court instead of filing a claim with the Commission on Audit.

• Just Compensation: Respondents maintained that they were entitled to just compensation for the 127-square-meter portion taken from their land for use by the government in its road project.
• Constitutional Supremacy: Respondents argued that CA 141 cannot prevail over the constitutional provision that no private property shall be taken for public use without payment of just compensation.
• Vested Rights: Respondents claimed that as owners of the subject property, they had vested rights over the same which must be protected.
• Exhaustion Not Required: Respondents countered that there was no need to exhaust administrative remedies because there was nothing of an administrative nature involved in the case.

• Applicability of Section 112 to Free Patent Land Subsequently Transferred: Whether a legal easement of right-of-way under Section 112 of CA 141 exists in favor of the Government over land originally awarded by free patent even after it has been transferred to subsequent owners, such that the Government may take a portion without paying just compensation except for improvements.
• Effect on the 127-Square-Meter Portion: Whether respondents are entitled to just compensation for the 127-square-meter portion traversed by the bypass road, or must instead execute a quitclaim because the portion falls within the statutory right-of-way, considering that Section 112 speaks of width rather than area.
• Taking of the Remaining Portion: Whether the taking of 127 square meters from respondents’ 300-square-meter property amounts to a taking of the remaining portion or material impairment of its value, entitling respondents to just compensation.

• Applicability of Section 112 to Free Patent Land Subsequently Transferred: Yes. A legal easement of right-of-way exists in favor of the Government over land originally public land awarded by free patent even if subsequently sold; TCT No. 29597 was subject to the Public Land Act, and Section 112 imposes the easement.
• Effect on the 127-Square-Meter Portion: No just compensation is due for the 127-square-meter portion as land. Section 112 grants a right-of-way not exceeding 60 meters in width free of charge, except damages to improvements; respondents must execute a quitclaim for that portion.
• Taking of the Remaining Portion: Remand required. If enforcement of the easement materially impairs or practically destroys the value of the remaining property or deprives respondents of its normal use, there is a compensable taking of the remaining portion; the trial court must determine this and the just compensation, if any.

• Applicability of Section 112 to Free Patent Land Subsequently Transferred: The controversy was characterized as purely substantive, involving the interpretation of Section 112 of CA 141. TCT No. 29597 contained a proviso stating that it was subject to the Property Registration Decree and the Public Land Act, and the title derived from a free patent issued on March 21, 1956. Under Republic vs. Spouses Regulto, a legal easement of right-of-way exists in favor of the Government over land that was originally public land awarded by free patent even if the land was subsequently sold to another. Section 112, as amended, subjects lands granted by patent to a right-of-way not exceeding 60 meters in width for public highways, irrigation ditches, aqueducts, and similar works, free of charge, except only for the value of improvements. Thus, the government may appropriate the necessary portion without paying for the land itself, except for damages to improvements. Respondents were accordingly required to execute a quitclaim for the 127 square meters.
• Effect on the 127-Square-Meter Portion: Because the statutory easement exists, no just compensation is due for the land within the right-of-way. The Court quoted Section 112 and Regulto: lands granted by patent are subject to a right-of-way not exceeding 60 meters in width, free of charge, except improvements. The 127-square-meter portion must be covered by a quitclaim in favor of the State. The statutory limitation is width, not area; the Court did not award compensation for that portion as land.
• Taking of the Remaining Portion: Although no compensation is due for the 127-square-meter portion, the property was only 300 square meters and the State required 127 square meters, nearly half. This could affect the integrity of the whole property and materially impair it to the extent of a taking, entitling respondents to just compensation for the remaining portion. Under Regulto, taking exists when the owner is deprived or dispossessed, when there is practical destruction or material impairment of value, or when the owner is deprived of ordinary use. In Regulto, taking 162 square meters of a 300-square-meter property reduced it to 138 square meters and materially impaired value; just compensation was due for the remaining area with interest at 6% per annum from the date of writ of possession or actual taking until full payment. Under Bartolata vs. Republic, two elements must concur before just compensation is due for the remaining property under Section 112: (1) the remainder is not subject to the statutory lien of right-of-way; and (2) enforcement of the right-of-way results in practical destruction or material impairment of the value of the remaining property, or the owner is dispossessed or otherwise deprived of the normal use thereof. In Bartolata, no evidence supported compensation for the remaining 177 square meters. Here, a thorough determination is required whether the utilization and taking of the 127-square-meter portion amounts to a taking of the whole property—material impairment of the remaining portion or deprivation of normal use. If so, just compensation, defined as the full and fair equivalent of the property taken, must be determined and computed. The case was remanded for that purpose.

• Legal Easement of Right-of-Way Under Section 112 of CA 141 — Lands granted by free patent are subject to a right-of-way not exceeding 60 meters in width for public highways, irrigation ditches, aqueducts, and similar works, free of charge, except only for the value of improvements affected. The lien follows the land even if subsequently sold. The Court applied this because TCT No. 29597 derived from a 1956 free patent and contained a proviso subjecting it to the Public Land Act; the 127-square-meter portion must be quitclaimed.
• Compensable Taking of the Remaining Portion — Under Section 112, just compensation for the remaining property requires two elements: (1) the remainder is not subject to the statutory lien of right-of-way; and (2) enforcement of the right-of-way results in practical destruction or material impairment of the value of the remaining property, or the owner is dispossessed or deprived of its normal use. The Court applied this test and remanded because the 127 square meters taken was nearly half of the 300-square-meter lot and could materially impair the remainder.
• Just Compensation — Just compensation is the full and fair equivalent of the property taken from its owner by the expropriator; the amount must be real, substantial, full, and ample, and compensation means full indemnity or remuneration for the loss or damage sustained. The Court stated that if a taking of the remaining portion is found, the amount must be determined and computed.

• "A legal easement of right-of-way exists in favor of the Government over land that was originally public land awarded by free patent even if the land was subsequently sold to another." — States the core rule applied to reject the claim that just compensation was due for the 127-square-meter portion as land.
• "In other words, lands granted by patent shall be subject to a right-of-way not exceeding 60 meters in width for public highways, irrigation ditches, aqueducts, and other similar works of the government or any public enterprise, free of charge, except only for the value of the improvements existing thereon that may be affected." — Defines the scope and cost-free character of the Section 112 easement.
• "To recapitulate, two elements must concur before the property owner will be entitled to just compensation for the remaining property under Sec. 112 of CA 141: (1) that the remainder is not subject to the statutory lien of right of way; and (2) that the enforcement of the right of way results in the practical destruction or material impairment of the value of the remaining property, or in the property owner being dispossessed or otherwise deprived of the normal use of the said remainder." — Sets the two-part test for compensation for the remaining property, which the Court applied on remand.
• "Just compensation is defined as 'the full and fair equivalent of the property taken from its owner by the expropriator.'" — Provides the definition of just compensation that governs the amount, if any, to be determined on remand.

• Republic vs. Spouses Regulto, 784 Phil. 805 (2016) — Controlling precedent; held that a legal easement of right-of-way exists over land originally public land awarded by free patent even if subsequently sold, and that taking 162 square meters of a 300-square-meter property materially impaired the remainder, requiring just compensation with 6% interest per annum from writ of possession or actual taking until full payment.
• Bartolata vs. Republic, G.R. No. 223334, June 7, 2017, 827 SCRA 100 — Cited for the two elements required before just compensation is due for the remaining property under Section 112; applied by the Court to require a thorough determination on remand.
• Republic vs. Andaya, 552 Phil. 40 (2007) — Cited by petitioners and referred to in Bartolata as the doctrine on just compensation for the remaining property under Section 112, later reiterated in Regulto.
• National Irrigation Administration vs. Court of Appeals, 395 Phil. 48 (2000) — Invoked by petitioners as upholding the Government’s enforcement of its right-of-way or legal easement under Section 112 of the Public Land Act.
• Republic vs. Judge Mupas, 769 Phil. 21 (2015) — Cited for the definition of just compensation as the full and fair equivalent of the property taken.

• Section 112, Commonwealth Act No. 141 (Public Land Act), as amended by Presidential Decree No. 1361 — Subjects lands granted by patent to a right-of-way not exceeding 60 meters in width for public highways, railroads, irrigation ditches, aqueducts, telegraph and telephone lines, airport runways, and similar works, with damages for improvements only; government officials may take immediate possession after due notice. Applied to require respondents to execute a quitclaim for the 127-square-meter portion and to deny just compensation for the land itself, except improvements.
• Section 44, Presidential Decree No. 1529 (Property Registration Decree) — Provides that registered owners and subsequent purchasers in good faith hold title free from encumbrances except those noted in the certificate and statutory liens, claims, or rights arising under law and the Constitution not required to appear of record. Petitioners invoked this to show the Section 112 lien followed the property despite transfer to respondents.
• Article III, Sections 1 and 9, 1987 Constitution — Guarantee due process and provide that private property shall not be taken for public use without just compensation. The RTC relied on these provisions in ruling for respondents; the Supreme Court applied the statutory easement but recognized that a compensable taking of the remaining portion would still require just compensation.
• Rule 67, Sections 2, 5, and 12, 1997 Rules of Civil Procedure — Govern expropriation proceedings, including deposit of the assessed value, appointment of commissioners to ascertain just compensation, and payment of commissioners’ fees. The RTC ordered a deposit and appointed commissioners under these provisions; the Supreme Court reversed the RTC dispositions except the appointment of commissioners, which becomes necessary if respondents are found entitled to just compensation.

Diosdado M. Peralta (Acting Chairperson), Noel Gimenez Tijam, Alexander G. Gesmundo, and Jose C. Reyes, Jr.