Case Summary (G.R. No. 137152)
Petitioner’s Expropriation Complaint
On August 4, 1997, Mandaluyong filed an expropriation complaint to acquire three registered parcels (TCTs 59780, 63766, 63767) for socialized housing, offering P3,000/sqm as just compensation. Tenants had long occupied residential structures on the lots; respondents refused earlier purchase offers.
Respondents’ Answer and Counterclaim
Respondents (except the deceased Eusebio) denied receipt of the purchase offer and contended the taking was arbitrary, not for a public purpose, and exempt under Republic Act No. 7279 as small property owners. They argued the BIR zonal valuation (P7,000/sqm) exceeded the offered price and counterclaimed damages of P21 million.
Motion for Preliminary Hearing and Amended Complaint
Respondents moved for a preliminary hearing to test jurisdiction and cause of action. Petitioner amended its complaint (Nov 5, 1997), dropping TCT 59780 and adding Virginia Aguilar and Eusebio’s heirs, reducing the expropriation area to two lots (TCTs 63766, 63767; 1,636 sqm). The trial court admitted the amendment on December 18, 1997.
Trial Court Findings and Dismissal
At the February 25, 1998 hearing, respondents presented testimonial and documentary evidence; petitioner offered none. The Regional Trial Court held respondents were “small property owners” exempt under RA 7279 and found no proof the beneficiaries were landless or homeless. It dismissed the amended complaint on September 17, 1998, and denied reconsideration on December 29, 1998.
Issue on Review
Whether Mandaluyong may expropriate privately owned parcels within an APD irrespective of size, and whether respondents qualify as small property owners exempt under RA 7279, given the 1987 Constitution’s public use requirement.
Constitutional and Statutory Framework
Under the 1987 Constitution (Art. III, Sec. 9; Art. XIII, Sec. 4) and RA 7279 (Urban Development and Housing Act of 1992):
- Expropriation for socialized housing is a public purpose but permitted only after exhausting other acquisition modes (Sec. 10).
- Small property owners are exempt from expropriation (Sec. 10 proviso).
- Priorities in acquisition (Sec. 9) place privately owned lands last, with APD lands fourth.
Modes and Priorities of Acquisition (RA 7279)
Section 9 lists six categories of land to be acquired in order, with private lands last. Section 10 prescribes modes—community mortgage, land banking, negotiated purchase, expropriation, etc.—but mandates expropriation only when other modes are exhausted and exempts small property owners.
Definition of Small Property Owner
RA 7279, Sec. 3(q): only real property consisting of residential land not exceeding 300 sqm in highly urbanized cities and 800 sqm elsewhere. Two prerequisites: (1) size limit; (2) exclusive ownership of that real property.
Co-Ownership, Partition, and Good Faith
Originally co-owned undivided shares (Titles issued 1987). Under Civil Code Art. 493, each sibling held an ideal quota capable of alienation. In 1998, six months after filing, they partitioned in good faith:
- Francisco, Thelma, Rodolfo, Antonio each received 300 sqm.
- Eusebio’s 347 sqm share p
Case Syllabus (G.R. No. 137152)
Facts
- On August 4, 1997, the City of Mandaluyong filed with the Regional Trial Court (RTC), Branch 168, Pasig City, a complaint for expropriation of three adjoining parcels (1,847 sq.m.) under TCT Nos. 59780, 63766 and 63767, owned by the Aguilar defendants, located at 9 de Febrero Street, Barangay Mauwag, Mandaluyong City.
- Respondents had constructed and leased out residential houses on part of the lots; other families built structures on the vacant portions.
- In 1983, the lots were declared an Area for Priority Development (APD) under HUDCC Resolution No. 125, pursuant to Proclamations 1967 and 2284.
- Tenants and occupants offered to buy the land; respondents refused.
- On November 7, 1996, the Sangguniang Panlungsod adopted Resolution No. 516 authorizing expropriation and construction of a medium‐rise condominium for qualified occupants.
- On January 10, 1996, the Mayor offered to purchase at ₱3,000/sq.m.; respondents did not respond.
- Petitioner prayed for expropriation and just compensation at ₱3,000/sq.m.
Procedural History
- Respondents (except pre‐1995 deceased Eusebio) answered, denied receipt of the purchase offer, and challenged public purpose, valuation, and size; counterclaimed ₱21 million damages.
- They moved for a preliminary hearing, asserting lack of jurisdiction over person and cause of action.
- On November 5, 1997, petitioner filed an Amended Complaint: added Virginia N. Aguilar, substituted heirs of Eusebio, and excluded TCT No. 59780, reducing the area to 1,636 sq.m. (TCT Nos. 63766 and 63767).
- The RTC admitted the Amended Complaint (December 18, 1997); respondents adopted prior pleadings.
- At the February 25, 1998 preliminary hearing, respondents presented testimony and documents; petitioner did not.
- On September 17, 1998, the RTC dismissed the Amended Complaint, ruling respondents were “small property owners” exempt under R.A. 7279 and that petitioner did not prove public purpose.
- Petitioner’s motion for reconsideration was denied on December 29, 1998.
- Petitioner filed this Rule 45 petition for review.
Issues Presented
- Whether respondents qualify as “small property owners” exempt from expropriation under R.A. 7279.
- Whether classification of the land as an Area for Priority Development (APD) removes the size‐based exemption.
- Whether petition