Title
Estate of Jimenez vs. Philippine Export Processing Zone
Case
G.R. No. 137285
Decision Date
Jan 16, 2001
PEZA expropriated Lot 1406-B for public use; compromise agreement breached, annulled. CA upheld rescission, ordered just compensation determination, expropriation valid.
expropriation proceedings
compromise agreement
just compensation
A

Case Summary (G.R. No. 137285)

Factual Background

PEZA initiated expropriation proceedings on May 15, 1981 against parcels of irrigated riceland in Rosario, Cavite, including Lot 1406 (A and B) registered to Salud Jimenez under TCT No. T-113498. The trial court issued a writ of possession in August 1981. The trial court in an Order dated July 11, 1991 upheld PEZA's right to expropriate Lot 1406 (A and B). On reconsideration the court released Lot 1406-A from expropriation but maintained Lot 1406-B. The parties thereafter negotiated a compromise concerning the mode of payment of just compensation. Under the compromise agreement of January 4, 1993 the Estate was to transfer Lot 1406-B to PEZA in exchange for Lot 434 (TCT No. T-14772); the agreement also contained a waiver of claims for damages and loss of income and a statement that the decision based on the compromise would be immediately final and executory. The trial court approved the compromise on August 23, 1993. PEZA thereafter failed to transfer title to Lot 434 because it was registered in the name of Progressive Realty Estate, Inc., and not in PEZA's name.

Procedural History

Petitioner moved to partially annul the August 23, 1993 approval on March 13, 1997. The trial court, by Order dated August 4, 1997, annulled the compromise agreement and directed PEZA to peacefully turn over Lot 1406-B to the Estate; the court denied PEZA's motion for reconsideration on November 3, 1997 and corrected its orders on December 4, 1997 to specify Lot 1406-B. PEZA filed a petition for certiorari and prohibition with the Court of Appeals on November 27, 1997. The Court of Appeals, in a Decision dated March 25, 1998, set aside the trial court's orders requiring turnover and directed the trial judge to proceed with the hearing on the second stage of the expropriation proceedings concerning the determination of just compensation for Lot 1406-B. The Court of Appeals denied petitioner’s motion for reconsideration by Resolution dated January 14, 1999. Petitioner then filed the present petition for review on certiorari with the Supreme Court.

Issues Presented

The petition for review presents principally two assignments of error: (I) that the Court of Appeals gravely erred in giving due course to PEZA's petition for certiorari under Rule 65, Rules of Court, because certiorari was a substitute for a lost appeal and appeal was the proper remedy; and (II) that the Court of Appeals misinterpreted the phrase “original demand” in Article 2041 of the Civil Code by treating the original demand as the determination of just compensation rather than as the return of Lot 1406-B, and that where a compromise has been approved by a court Article 2039 and related provisions should govern.

Parties' Contentions

Petitioner argued that the trial court’s August 4, 1997 Order was a final order disposing of the case and thus appeal was the exclusive remedy; PEZA's invocation of certiorari was, petitioner asserted, an impermissible substitute for a lost appeal, particularly because PEZA had earlier filed a motion for reconsideration which demonstrated reliance on the fifteen-day appeal period. Petitioner further contended that the “original demand” under Article 2041 was the return of the expropriated parcel and not merely the quantum or mode of payment; petitioner maintained that incorporation of the expropriation order in the compromise subjected that order to rescission. PEZA contended that certiorari was proper because the trial court acted with grave abuse of discretion when it annulled a final and executory expropriation order and ordered the return of Lot 1406-B; PEZA also maintained that the compromise related solely to the mode of payment of just compensation and that, under Article 2041, the aggrieved party may regard the compromise as rescinded and insist upon the original demand, which in the context of expropriation is the determination of just compensation.

Ruling of the Supreme Court

The Supreme Court denied the petition for review. The Court affirmed the Court of Appeals' decision setting aside the trial court's orders directing the return of Lot 1406-B and ordered the Regional Trial Court of Cavite City to proceed with the hearing of Civil Case No. N-4029 on the determination of just compensation for Lot 1406-B, covered by TCT No. T-113498, and to resolve the matter with dispatch.

Legal Basis and Reasoning

The Court began by reaffirming the proper scope of Rule 65, Rules of Court, and the narrow circumstances in which certiorari is appropriate, namely where a tribunal acted without or in excess of jurisdiction or with grave abuse of discretion and where there is no plain, speedy, and adequate remedy. The Court held that appellate relief is the usual remedy for final orders, but that certiorari remains available in exceptional cases to prevent manifest failure of justice where there is grave abuse of discretion. The Court found that the trial court gravely abused its discretion by annulling a final and executory expropriation order dated July 11, 1991 and ordering the return of the expropriated parcel, an act beyond its jurisdiction because a final and executory order cannot be modified except by specific remedies not invoked in this case.

On the interpretation of Article 2041 of the Civil Code, the Court endorsed the Court of Appeals' view and the precedent in Leonor v. Sycip that, when a party fails to abide by a compromise, the aggrieved party may either enforce the compromise or regard it as rescinded and insist upon his original demand without the need to bring an action for rescission. The Court concluded that in the context of expropriation proceedings, where the first phase (the expropriation order) had become final and was expressly acknowledged in the compromise, the “original demand” to which a party may insist reverts to the second stage of the expropriation process — the determination of just compensation. The Court found that the parties’ compromise expressly recognized the final expropriation order and limited their agreement to the mode of payment; the compromise thus did not subject the expropriation order itself to rescission.

The Court rejected petitioner’s contention that Article 2039 or Article 1330 governed because the compromise had been judicially approved. The Court reasoned that even if those provisions were applicable in other contexts, their application would not alter the outcome here because the compromise concerned payment only; the remedy available when PEZA failed to perform was to insist upon the original demand, i.e., seek determination of just compensation, not demand return of the property.

The Court further examined PEZA's authority to expropriate. It held that Presidential Decree No. 66 conferred broad power on PEZA to acquire property for, among other things, the construction of terminal facilities and related structures. Republic Act No. 7916 further articulated PEZA's mandate to develop ecozones with transportation, banking, and other facilities. The Court concluded that PEZA's taking of Lot 1406-B for leasing to banks and for a transportation terminal fell within these public purposes and within the permissible scope of the power of eminent domain. The Court cited precedent establishing that the concept of public

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms