The Supreme Court ruled that when the government fails to utilize expropriated property for its intended public purpose and abandons it for an extended period, the original owner has the right to reclaim the land. This decision reinforces the principle that the power of eminent domain is not absolute and is contingent upon the actual use of the property for the public good. It emphasizes that the failure to implement the intended public use justifies the return of the property to its original owner, along with compensation for damages incurred during the period of dispossession.

From Public Promise to Private Possession: The Unfulfilled Expropriation of the Jao Tayag Estate

In this case, the National Housing Authority (NHA) sought to expropriate land owned by the Spouses Jao Tayag for a public purpose. However, the NHA failed to utilize the property for any public purpose for over 15 years, leading the original owners to seek its return. The central legal question revolves around whether the NHA’s failure to use the land for its intended purpose warranted the reconveyance of the property to the Jao Tayag estate. The resolution of this question underscores the conditions under which expropriated land can revert to its original owners due to non-use and abandonment.

The facts reveal that on July 28, 1982, the NHA initiated expropriation proceedings against the property of Ignacio and Andrea Jao Tayag. The property, located in Tondo, Manila, was covered by Transfer Certificate of Title (TCT) No. 95355. The NHA deposited P66,400 with the Philippine National Bank (PNB) and subsequently obtained a writ of possession on December 29, 1982. The NHA took possession of the property on March 10, 1983, and on March 30, 1984, the trial court upheld the NHA’s right to expropriate the property, setting the just compensation at P66,400. Following this, TCT No. 95355 was canceled and a new one was issued in the name of the NHA. However, despite taking possession and securing the title, the NHA failed to develop or utilize the property for over 15 years. The land was left to deteriorate, occupied by squatters, and the improvements on the property were destroyed.

On May 20, 1997, Perico V. Jao, representing the estate of the Spouses Jao Tayag, filed a case for recovery of possession and damages against the NHA. The trial court ruled in favor of Jao, stating that the NHA had not devoted the property to any public purpose since taking possession in 1983. Furthermore, the court noted that there had been no actual payment of just compensation to the landowners, as the mere deposit with the PNB was not considered legal payment. The court also found that the plaintiffs had suffered damages due to their dispossession without any concrete moves by the NHA to develop the property for public use, awarding P10,000 a month to compensate for the deprivation of occupancy and use from March 1983. Considering the failure to pay just compensation and the non-use of the property, the trial court ordered the NHA to reconvey the land to the plaintiff.

The trial court’s decision was grounded in the constitutional provisions and Article 435 of the Civil Code on Eminent Domain, emphasizing that there was taking without payment of just compensation and no devotion of the property to public use. The NHA filed a motion for reconsideration, which was denied by the trial court, highlighting the NHA’s failure to realize the envisioned socialized housing project. The NHA then appealed to the Court of Appeals, which dismissed the appeal for failure to pay the docket and other lawful fees. The dismissal became final and executory on March 9, 2000.

Subsequently, Jao filed a motion for the issuance of a writ of execution, which the trial court granted. Sheriff Benjamin E. Garvida was commanded to cause the NHA to reconvey the property, pay P10,000 per month for the deprivation of possession, pay P500,000 for damages to the improvements, with 6% annual interest, and pay P20,000 for attorney’s fees and costs of suit. The NHA then filed a motion to quash the writ of execution, arguing that all damages should be limited to the initial deposit of P66,400. The trial court denied this motion, holding that Rule 67, Section 11 of the Rules of Court allows for the recovery of damages when the right of expropriation is annulled. The court emphasized that the provision does not limit the amount of damages recoverable to the preliminary deposit.

The trial court cited jurisprudence, including Visayan Refining Co. v. Camus, to support its decision, noting that the preliminary deposit serves as protection and security for the property owner, not as a limitation on damages. The court also referenced Metropolitan Water District vs. Sixto de los Angeles, which underscored that the government should answer for all damages occasioned to the defendants when expropriation proceedings are dismissed after causing damage. The NHA’s motion for reconsideration of this order was denied, leading the NHA to file a petition for certiorari with the Court of Appeals.

The Court of Appeals dismissed the petition, emphasizing that it essentially constituted an appeal on the original decision, which had long attained finality. The appellate court held that the trial court had not committed a grave abuse of discretion in issuing the writ of execution, as it was a consequence of the final and executory judgment. The Court of Appeals stated:

“Foremost, this petition in essence takes the form of an appeal on the original decision that adjudged NHA’s liability in excess of the initial deposit of the just compensation. However, we cannot allow petitioner to attack anew the merits of this case after it has long attained finality and is already executory.”

The Court of Appeals further noted that the NHA had failed to advance its case, allowing it to reach finality, as evidenced by the entry of judgment dated March 9, 2000. Consequently, the NHA filed a motion for reconsideration, which was also denied, leading to the petition before the Supreme Court. The Supreme Court affirmed the decision of the Court of Appeals, holding that a final and executory order can no longer be disturbed, regardless of any potential errors. The Court emphasized that any judicial error should be corrected through an appeal, not through repeated suits on the same claim. Allowing the NHA to limit damages to the initial deposit would, in effect, amend the final and executory order of the trial court, which the Supreme Court could not permit.

The Supreme Court’s ruling in this case reinforces the principle that the power of eminent domain is not absolute and is subject to the condition that the expropriated property must be used for the public purpose for which it was taken. The failure to utilize the property for the intended purpose, coupled with abandonment, justifies the return of the property to its original owner. Moreover, the Court’s decision underscores the importance of adhering to final and executory judgments, preventing parties from repeatedly litigating the same issues.

FAQs

What was the key issue in this case?	The key issue was whether the National Housing Authority (NHA) could retain expropriated land when it failed to use it for the intended public purpose for over 15 years and had not fully paid just compensation.
What did the trial court initially rule?	The trial court ruled in favor of the landowners, ordering the NHA to reconvey the property, pay monthly compensation for loss of possession, and pay damages for the destroyed improvements. The court emphasized that the NHA had failed to comply with constitutional and Civil Code provisions on eminent domain.
Why did the Court of Appeals dismiss the NHA’s appeal?	The Court of Appeals dismissed the NHA’s appeal because the NHA failed to pay the required docket and other lawful fees, leading to the finality of the trial court’s decision.
What was the NHA’s main argument against the writ of execution?	The NHA argued that any damages owed to the landowners should be limited to the initial deposit of P66,400 made at the start of the expropriation proceedings.
How did the Supreme Court rule on the NHA’s argument?	The Supreme Court rejected the NHA’s argument, stating that limiting damages to the initial deposit would effectively amend the final and executory order of the trial court, which is not permissible.
What legal principle did the Supreme Court emphasize in its decision?	The Supreme Court emphasized that a final and executory order can no longer be disturbed, regardless of any potential errors. Any judicial error should be corrected through an appeal, not through repeated suits on the same claim.
What is the significance of the NHA’s failure to utilize the property?	The failure to utilize the property for its intended public purpose, coupled with abandonment, justified the return of the property to its original owner, reinforcing the conditional nature of eminent domain.
What does this case imply for other expropriation cases?	This case implies that the government must ensure that expropriated property is actually used for the public purpose for which it was taken; otherwise, the original owner may have grounds to reclaim the property.

In conclusion, this case underscores the importance of adhering to the constitutional requirements of just compensation and public use in eminent domain proceedings. It serves as a reminder that the government’s power to expropriate private property is not absolute and is contingent upon the actual use of the property for the intended public purpose. Failure to do so can result in the reversion of the property to its original owner, along with compensation for damages incurred.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: NATIONAL HOUSING AUTHORITY vs. PERICO V. JAO, G.R. No. 156850, October 24, 2008