Case Digest (G.R. No. 210669) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Hi-Lon Manufacturing, Inc. v. Commission on Audit (G.R. No. 210669, August 1, 2017), the Supreme Court addressed a petition for certiorari under Rules 64 and 65 of the 1997 Rules of Civil Procedure. In 1978, the Ministry of Public Works and Highways (now DPWH) converted a 29,690 sq. m. portion of a registered 89,070 sq. m. parcel in Mayapa, Calamba, Laguna, into a road right-of-way (RROW) for the Manila South Expressway Extension Project without formal expropriation or annotation on the titles. The property passed from Commercial and Industrial Real Estate Corporation (CIREC) to Philippine Polymide Industrial Corporation (PPIC), was foreclosed and acquired by the Development Bank of the Philippines (DBP) in 1985, and thereafter transferred to the Asset Privatization Trust (APT) in 1987. APT conducted a public bidding for the “useable” 59,380 sq. m. portion, expressly excluding the RROW, and sold it to TG Property, Inc. (TGPI) for ₱2,222,967.00. TGPI paid taxes and in 1995 sol Case Digest (G.R. No. 210669) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Government taking and lack of expropriation
- In 1978, the Ministry of Public Works and Highways (now DPWH) converted 29,690 sq m of an 89,070 sq m parcel in Mayapa, Calamba, Laguna—registered to CIREC—into a road right-of-way (RROW) for the Manila South Expressway Extension without initiating expropriation proceedings or paying just compensation.
- The parcel’s Torrens title passed through foreclosure and transfers: CIREC → Philippine Polymide Industrial Corp. (PPIC) → Development Bank of the Philippines (DBP) (foreclosure, 1985) → Asset Privatization Trust (APT) (pursuant to Proclamation No. 50/ Administrative Order No. 14, 1987).
- APT public bidding and deeds of sale
- On June 30, 1987, APT conducted a public bidding for PPIC assets (5.9 ha) and improvements; the 29,690 sq m assigned as RROW was expressly excluded from the auction.
- APT executed two deeds:
- Deed of Sale (Oct. 29, 1987) conveying 59,380 sq m (usable area) to TG Property, Inc. (TGPI) for ₱2,222,967.00, expressly excluding the RROW.
- Deed of Sale (Aug. 19, 1987) conveying improvements to Fibertex Corp. for ₱154,315,615.39.
- The Register of Deeds issued TCT No. T-158786 in TGPI’s name covering the full 89,070 sq m.
- HI-LON’s acquisition and COA proceedings
- On April 16, 1995, TGPI sold the entire 89,070 sq m parcel to HI-LON Manufacturing, Inc. for ₱44,535,000.00; TCT No. 383819 was issued to HI-LON.
- In December 2001, DPWH paid HI-LON ₱10,461,338.00 as partial just compensation (zonal valuation at ₱2,500/sq m).
- A DPWH post-audit (2003) recalculated just compensation at ₱19.40/sq m based on 1978 values and recommended recovery of excess payments.
- LAO-N issued Notice of Disallowance No. 2004-032 (Jan. 29, 2004) disallowing ₱9,937,596.20; COA Decision No. 2011-003 (Jan. 20, 2011) denied HI-LON’s review petition and affirmed the ND; COA Decision No. 2013-212 (Dec. 3, 2013) denied reconsideration and ordered refund of ₱10,461,338.00.
Issues:
- Ownership and entitlement to just compensation
- Did HI-LON (or its predecessor TGPI) acquire ownership of the 29,690 sq m RROW, entitling it to just compensation?
- Jurisdiction and due process
- Did COA commit grave abuse of discretion by collaterally attacking HI-LON’s Torrens title and adjudicating ownership?
- Did COA exceed its audit authority in disallowing payment based on ownership rather than valuation alone?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)