Sunday, March 18, 2012

Reyes vs. National Housing Authority (NHA) (January 20, 2003)

Facts: National Housing Authority filed several expropriation complaints on the sugarland owned by the petitioners Reyes. The land is located in Dasmarinas, Cavite. The purpose of the expropriation is for the expansion of the Dasmarinas Resettlement Project to accommodate the squatters who were relocated from Manila. The trial court rendered judgment ordering the expropriation of these lots with payment of just compensation. It was affirmed by the Supreme Court. 

The petitioners Reyes alleged the failure of the respondents to comply with the Supreme Court order, so they filed a complaint for forfeiture of their rights before the RTC of Quezon City. They also said that NHA did not relocate squatters from Manila on the expropriated lands which violate the reason for public purpose. The petitioners prayed that NHA be enjoined from disposing and alienating the expropriated properties and that judgment be rendered forfeiting all its rights and interests under the expropriation judgment. 

In the answer of NHA, they already paid a substantial amount to the petitioners. Thus, several issues are already raised in the expropriation court. 

The trial court dismissed the case. It held that NHA did not abandon the public purpose because the relocation of squatters involves a long and tedious process. It also entered into a contract with a developer for the construction of a low-cost housing to be sold to qualified low income beneficiaries. The payment of just compensation is independent of the obligation of the petitioners to pay capital gains tax. Lastly, the payment of just compensation is based on the value at the time the property was taken. 

The Court of Appeals affirmed the decision. 

Issue: Whether or not the property expropriated is taking for public purpose. 

Held: The decision appealed is modified. 

The 1987 Constitution explicitly provides for the exercise of the power of eminent domain over the private properties upon payment of just compensation. Sec. 9, Article III states that private property shall not be taken for public use without just compensation. The constitutional restraints are public use and just compensation. 

The expropriation judgment declared that NHA has a lawful right to take petitioners properties “for the public use or purpose of expanding the Dasmarinas Resettlement Project”. 

The “public use” is synonymous with “public interest”, “public benefit”, “public welfare”, and “public convenience”. The act of NHA in entering a contract with a real estate developer for the construction of low cost housing cannot be taken to mean as a deviation from the stated public purpose of their taking. 

Expropriation of private lands for slum clearance and urban development is for a public purpose even if the developed area is later sold to private homeowners, commercial firms, entertainment and service companies and other private concerns. 

The expropriation of private property for the purpose of socialized housing for the marginalized sector is in furtherance of the social justice provision under Section 1, Article XIII of the Constitution. 

When land has been acquired for public use in fee simple unconditionally, either by the exercise of eminent domain or by purchase, the former owner retains no rights in the land, and the public use may be abandoned, or the land may be devoted to a different use, without any impairment of the estate or title acquired, or any reversion to the former owner.

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