Selling Land During Expropriation: What Philippine Law Says

G.R. No. 137569, June 23, 2000

Imagine you own a piece of land, and the government wants to build a road through it. They start the process of expropriation, but can you still sell your land while the legal proceedings are ongoing? This question lies at the heart of a complex legal issue in the Philippines, where property rights and government authority often intersect. This case clarifies the rights of landowners during expropriation proceedings and highlights the importance of understanding when ownership truly transfers.

This case revolves around a parcel of land owned by Milagros and Inocentes De la Rama. The government initiated expropriation proceedings under Batas Pambansa Blg. 340. While the case was ongoing, the De la Ramas sold the property to Alfredo Guerrero. The central question then became: who is entitled to receive the just compensation for the expropriated land – the original owners or the new buyer?

Understanding Expropriation and Just Compensation

Expropriation, also known as eminent domain, is the inherent power of the State to take private property for public use upon payment of just compensation. The Philippine Constitution recognizes this power but also sets limitations to protect property owners. Article III, Section 9 states: “Private property shall not be taken for public use without just compensation.” This means the government can’t just seize your land without paying you a fair price.

The key is “just compensation.” This isn’t just the market value; it includes all factors that determine the fair worth of the property. The determination of just compensation often involves court proceedings and the appointment of appraisers to assess the land’s value.

The process of expropriation generally involves two stages:

• Stage 1: Determination of the government’s authority to exercise eminent domain and the propriety of doing so.
• Stage 2: Determination of just compensation for the property.

The case Municipality of Biñan v. Garcia clarified that the second phase involves the determination by the court of “the just compensation for the property sought to be taken.”

Ownership of the property only transfers to the government upon full payment of just compensation. Until then, the landowner retains ownership rights, including the right to sell.

The Story of the De la Ramas, Guerrero, and the Expropriated Land

The timeline of events in this case is crucial to understanding the Supreme Court’s decision:

• 1983: Batas Pambansa Blg. 340 authorizes the expropriation of the De la Ramas’ land.
• 1988: The De la Ramas enter into a contract to sell the entire property to Alfredo Guerrero.
• 1990: The Republic of the Philippines files an expropriation case.
• 1991: Guerrero intervenes in the expropriation case, claiming he is now entitled to the just compensation.

The De la Ramas argued that since the expropriation was authorized in 1983, they could no longer sell the expropriated portion in 1988. They claimed the government already had equitable title to the land. Guerrero, on the other hand, argued that ownership remained with the De la Ramas until just compensation was paid, making the sale to him valid.

The trial court initially favored the De la Ramas, but Guerrero pursued the case, eventually leading to a Supreme Court decision. Key to Guerrero’s argument was the earlier case for specific performance, where he successfully compelled the De la Ramas to execute the final deed of sale. The Supreme Court referenced the lower court’s clarification, stating:

WHEREFORE, by way of clarification, the court holds that the transfer of title to the plaintiff under the Contract to Sell dated December 14, 1988 covers the entire Lot 834 consisting of 4,075 square meters (including the expropriated portion)…

The Supreme Court emphasized that the enactment of B.P. Blg. 340 only *commenced* the expropriation process, and did not immediately transfer ownership. It also highlighted the fact that the De la Ramas received full payment for the entire property from Guerrero.

Implications of the Supreme Court’s Ruling

The Supreme Court ruled in favor of Alfredo Guerrero, affirming that he was entitled to receive the just compensation for the expropriated land. This decision has significant implications for property owners facing expropriation.

This case underscores that ownership of land remains with the registered owner until full payment of just compensation is made in an expropriation case. Landowners retain the right to sell their property even after expropriation proceedings have begun, provided just compensation has not yet been fully paid.

The Supreme Court also emphasized the importance of the contract to sell. Because the contract encompassed the entire property, including the portion subject to expropriation, the right to receive compensation transferred to Guerrero upon completion of the sale.

Key Lessons

• Ownership Remains: Landowners retain ownership rights until just compensation is fully paid.
• Right to Sell: You can sell your land even during expropriation proceedings.
• Contract Clarity: Ensure your contracts clearly define what is being sold, including any potential expropriation issues.

Frequently Asked Questions

Q: Can the government take my land without paying me?

A: No. The Constitution requires the government to pay just compensation for any private property taken for public use.

Q: What happens if I sell my land after the government starts expropriation proceedings?

A: You can still sell your land. The right to receive just compensation will likely transfer to the new owner, as seen in this case.

Q: How is just compensation determined?

A: Just compensation is determined by the courts, often with the assistance of appraisers. It considers the fair market value and other factors relevant to the property’s worth.

Q: What is the difference between legislative and judicial expropriation?

A: Legislative expropriation is authorized by law, while judicial expropriation is initiated through a court action. Both require just compensation.

Q: What should I do if I am facing expropriation?

A: Consult with a qualified lawyer to understand your rights and options. Document everything related to the property and the expropriation proceedings.

Q: What if I disagree with the government’s valuation of my property?

A: You have the right to challenge the valuation in court and present your own evidence of the property’s worth.

ASG Law specializes in property law and expropriation cases. Contact us or email hello@asglawpartners.com to schedule a consultation.