G.R. No. 181367 - La Carlota City, Negros Occidental vs. Rojo

The petitioner, Philippine Economic Zone Authority (PEZA), is a government-owned and controlled corporation created under RA 7916, vested with governmental functions including eminent domain.
PEZA’s mandate includes acquiring private land within or adjacent to an economic zone for consolidated land development, as authorized under Section 29 of RA 7916.
On January 15, 1979, through Proclamation No. 1811 issued by then-President Marcos, certain public domain lands in Lapu-Lapu City were reserved for establishing the Mactan Export Processing Zone. However, some of the parcels, including that of respondents, were private property.

PEZA subsequently developed the economic zone and leased respondents’ 47,540 sq. m. lot to an investor, Maitland Smith Inc.
On May 19, 2001, PEZA made an offer to purchase the respondents’ lot at P1,100 per sq. m. (totaling P52,294,000) with a stipulation that failure to accept would result in expropriation proceedings in court.
Instead of accepting the offer, respondents initiated an unlawful detainer case against Maitland in the Municipal Trial Court of Lapu-Lapu City, prompting further legal actions.

PEZA commenced expropriation proceedings on August 27, 2001, before the RTC of Lapu-Lapu City, Branch 54, seeking a writ of possession upon depositing 10% of the offered amount (P5,229,400) in accordance with A.O. No. 50.
Respondents countered by moving the RTC to require PEZA to comply with RA 8974, specifically Section 4(a), which mandates the immediate payment of 100% of the current zonal valuation upon filing the expropriation complaint.
The RTC initially ruled in favor of the respondents by granting their motion on January 14, 2002, but later reversed its decision on reconsideration with subsequent orders on February 26, 2002, and September 5, 2002, reflecting an ongoing judicial struggle on the applicable standard.

PEZA contended that RA 8974 was inapplicable since the deposit requirement should only apply when the property remains in the owner’s possession and that the payment should be based on the price at the time of taking, not incorporating its improvements.
Conversely, respondents argued that RA 8974 is controlling because the expropriation complaint was filed after the law took effect (post-November 7, 2000) and irrespective of whether the government had already taken possession, the deposit must reflect 100% of the current zonal valuation.
A key source of confusion for both parties was the conflation of the provisional deposit (as a prerequisite for issuing a writ of possession) with the final determination of just compensation.
The Court’s records indicate that previous legal analysis in cases such as Capitol Steel Corporation and National Power Corporation had similarly noted the distinction between a provisional valuation and the subsequent just compensation loomed later in the proceedings.

Whether RA 8974 is applicable in the present expropriation case for the issuance of a writ of possession, despite the property having already been transferred to the government’s possession.
Whether the statutory requirement to pay 100% of the current zonal valuation under RA 8974 supersedes the guidelines provided by A.O. No. 50, which PEZA relied upon.

Whether there exists a valid legal distinction between the provisional deposit required as a prerequisite for a writ of possession and the payment of final just compensation based on the fair market value of the property.
How the trial court should treat the confusion between the two distinct concepts in determining the proper amount or structure of payment.