G.R. No. 227432 - Forfom Development Corp. vs. Philippine National Railways

Forfom Development Corporation (Forfom) and Philippine National Railways (PNR) were involved in a dispute centered on the expropriation of subject lots for PNR’s San Pedro-Carmona Commuter Line Project.
The case builds on the earlier decision in G.R. No. 124795 (Forfom vs. PNR) where the Supreme Court directed PNR to institute the appropriate expropriation case to determine just compensation and awarded Forfom attorney’s fees and litigation expenses.
In that decision, besides awarding monetary relief, the Court emphasized that the expropriation proceeding must conform to the constitutional requirement that property be taken for public use.

Following the finality of the December 10, 2008 decision in G.R. No. 124795, PNR initiated the expropriation complaint docketed as Civil Case No. SPL-1542-10 aimed at seizing the subject lots for its railway project.
Forfom responded with various pleadings and motions:

An Answer with a prayer for an injunction seeking again the dismissal of the case with demands for damages.
A motion to set its affirmative defenses for hearing, which was denied by the trial court.
A subsequent motion for production or inspection of documents (plans for the rehabilitation of railroad tracks, demand letters, PNR regulations, and proof of deposit), which was also denied.

A Pre-Trial Order dated February 9, 2012 set forth the issues to be resolved, including the determination of the amount of just compensation, validity of the expropriation proceedings without the required deposit, legality of leasing out the properties, and whether the taking was for public purpose.
Additional motions filed by Forfom, including another motion for dismissal on procedural grounds (failure of respondents to appear during hearings) and an omnibus motion to address leasing and contempt issues, were succeeded sequentially by filings from the Office of the Solicitor General (OSG) that sought to modify the pre-trial order.

Forfom moved to the Court of Appeals via CA-G.R. SP. No. 131316 challenging several trial court orders and motions filed between 2011 and 2013.
In July 2015, while the appeal was pending, the Supreme Court in G.R. No. 124795 issued a Resolution charging PNR officials with indirect contempt for delaying the filing of the expropriation case and failing to inform the Court of the removal of railroad tracks—an action that led to the modification of the December 10, 2008 decision.
The Court of Appeals later dismissed portions of Forfom’s petition due to procedural lapses, while some issues (illegal leasing and public purpose) were remanded back to the trial court for resolution.

The trial court, through various orders, set the framework for addressing issues such as just compensation calculated from 1973, the legality of PNR’s leasing of the lots, and whether in fact the expropriation served a legitimate public purpose.
Forfom’s renewed petition now requested the Court to:

Order PNR to refrain from leasing out the subject lots and to turn over its rental collections to Forfom;
Reverse the trial court’s denial of its motion for production of documents;
Permit, by leave of court, the filing of a supplemental answer with a third-party complaint; and
Direct the trial court to proceed with the expropriation case with dispatch.

Whether the amount of just compensation due to Forfom should be reckoned from January 1973, in line with the precedent set in G.R. No. 124795.
How to compute the compensation for the taking of the subject lots dating back to 1972 or 1973, including any damages for improvements.

Whether the expropriation of the subject lots truly served a public purpose, particularly in light of PNR’s abandonment of the railway project.
Whether the absence of a functioning railway system negates the justification for expropriation under the constitutional requirement.

Whether the petition for certiorari should be dismissed due to the lapse of the sixty-day reglementary period for filing reconsiderations.
Whether the filing of a supplemental answer with third-party complaint should be permitted once the case had already entered pre-trial, potentially causing undue delay.

Whether PNR’s act of leasing out the subject properties is ultra vires and beyond its statutory authority.
Whether Forfom is entitled to recover the rentals collected by PNR on the subject lots.

Whether the actions (or inactions) of PNR officials—failure to file the expropriation case promptly and misleading the Court—amount to indirect contempt as charged in the Resolution of July 1, 2015.