G.R. No. 132431 - Estate or Heirs of Reyes vs. City of Manila

Case Summary (G.R. No. 132431)

Key Dates and Procedural Posture

Relevant procedural milestones include ejectment complaints filed by petitioners on November 9, 1993 and May 26, 1994; favorable MTC judgments for petitioners in 1994–1995 that became final and executory by 1998; the City’s expropriation complaint filed April 25, 1995 based on City Ordinance No. 7818 (Nov. 29, 1993); RTC dismissal of the expropriation complaint (Oct. 3, 1995); Court of Appeals reversal ordering condemnation (Jan. 27, 1998); Court of Appeals protective orders temporarily restraining execution of ejectment writs (Aug. 19, 1998 and Dec. 16, 1998); and consolidation of petitions to the Supreme Court challenging the CA decisions and resolutions.

Properties, Titles and Occupancy

The contested properties comprise 11 parcels totaling 13,940 square meters in Sta. Cruz, Manila, covered by Transfer Certificate of Title No. 24359 and held pro indiviso (equal co-ownership) by the Reyes heirs. Specific leased lots include Lot 2-E, Block 3007 (191 sq. m.) leased to Abiog and Lot 2-R, Block 2996 (112 sq. m.) leased to Maglonso. Numerous tenants and members of SBMI occupied and leased these parcels.

Ejectment Proceedings and Finality of Judgments

Petitioners successfully obtained judgments of eviction against Abiog and Maglonso: MTC Branch 10 decision dated May 9, 1994 (Abiog) and MTC Branch 3 decision dated May 4, 1995 (Maglonso). Appeals were denied by the RTCs and Court of Appeals; the eviction judgments became final and executory by 1998 and writs of execution were issued.

Origin and Basis of the Expropriation Case

The City filed Civil Case No. 95-73687 (expropriation) relying on Ordinance No. 7818, which authorized expropriation of certain parcels (aggregate area ~9,930 sq. m., including the subject lots) for distribution to occupants who had been in possession as lessees for at least ten years. The City alleged it offered to purchase the properties for P10,285,293.38 and sought provisional value fixed at P9,684,380 with authority to take possession upon deposit of 15% (P1,452,657) of the provisional value.

SBMI Intervention and Trial Court Findings on Intervention

SBMI (a non-stock corporation of resident-occupants) filed to intervene and sought injunctive relief to enjoin evictions. The trial court denied intervention (June 2, 1995), finding the movants’ interest indirect, contingent, remote or inchoate. Petitioners moved to dismiss the expropriation complaint on multiple grounds, including alleged insufficiency of the deposit, failure to comply with RA 7279 procedures for socialized housing expropriation, absence of appropriation for just compensation in the ordinance, lack of public hearing, and alleged inapplicability of the beneficiaries’ definition.

Trial Court Disposition on Expropriation

On June 6, 1995, the trial court initially allowed the City to take possession upon deposit of P1,542,793 (based on the City’s P10,285,293.38 valuation). However, after hearing, the trial court dismissed the City’s complaint for eminent domain on October 3, 1995. The trial court concluded expropriation was inappropriate because petitioners were willing to sell under acceptable terms and found the City failed to prove its offer was rejected.

Court of Appeals Reversal (January 27, 1998)

The Court of Appeals reversed and ordered condemnation, finding a valid public purpose (distribution to landless occupants with ten-year possession) and concluding the delay in instituting expropriation did not negate public purpose. The CA interpreted a March 17, 1995 letter from Adoracion Reyes as a clear rejection of the City’s offer, and held that private contracts between petitioners and some tenants did not defeat the City’s concern for the majority landless beneficiaries. The CA remanded the case to determine just compensation.

Motions for Protective Orders and CA Resolutions Restraining Ejectment Execution

While the expropriation appeal was pending, SBMI and occupant-respondents sought protective orders in the CA to enjoin enforcement of final ejectment judgments. The CA issued a temporary restraining order on Aug. 19, 1998 preventing disturbance of Abiog’s occupancy pending Supreme Court resolution. On Dec. 16, 1998, the CA denied petitioners’ motion to set aside and enjoined petitioners from disturbing physical possession of all properties subject to the expropriation proceedings, reasoning that enforcement of demolition/execution would defeat the purpose of expropriation and relying on precedents that favored preserving possession to avoid inequity and confusion.

Issues Brought to the Supreme Court

Petitioners sought: (1) review of the CA decision ordering condemnation (G.R. No. 132431) contending noncompliance with Sections 9 and 10 of RA 7279 and Section 34 of the Local Government Code, equal protection violations in Ordinance 7818, lack of a valid and definite offer, insufficiency of deposit, willingness of petitioners to sell, and absence of pronouncement as to just compensation; and (2) certiorari to annul the CA protective orders (G.R. No. 137146) alleging the CA lacked jurisdiction to enjoin execution of final MTC judgments, abused discretion in permitting intervention, improperly issued injunctive relief in disguise, and that occupant-respondents engaged in forum-shopping.

Applicable Legal Provisions and Governing Constitution

The Court applied the 1987 Philippine Constitution (decision date post-1990). Key statutory provisions involved were Section 19 of the Local Government Code of 1991 (authorizing local government expropriation subject to prior valid and definite offer and deposit of at least 15% of fair market value) and R.A. No. 7279 (Urban Development and Housing Act of 1992), specifically Sections 9 (priorities in land acquisition) and 10 (modes of land acquisition, with expropriation as a secondary, residual method to be used only when other modes are exhausted). R.A. 409 (City of Manila powers) was also cited as authorizing municipal expropriation for urban land reform and housing.

Supreme Court Analysis: Mandatory Compliance with RA 7279 Sections 9 and 10

The Supreme Court emphasized that RA 7279’s Sections 9 and 10 impose mandatory preconditions that limit and regulate the exercise of eminent domain for socialized housing: (a) private lands rank last in acquisition priority and (b) expropriation shall be resorted to only when other modes of acquisition have been exhausted. These safeguards protect private owners’ due process rights when their property is taken for public use. The Court found that the City neither alleged nor proved compliance with Sections 9 and 10 in the trial court proceedings, nor did it adequately demonstrate such compliance in the Court of Appeals. The CA opinion was silent on this jurisdictional requirement.

Reliance on Filstream Precedent and Application Here

The Supreme Court relied on its prior decision in Filstream (284 SCRA 716 [1998]), which involved substantially similar facts and the same Ordinance No. 7818.

Case Syllabus (G.R. No. 132431)

Court and Citation

Decision of the Supreme Court of the Philippines, Third Division, reported at 467 Phil. 165.
G.R. No. 132431 (petition for review) and G.R. No. 137146 (petition for certiorari).
Decision promulgated February 13, 2004; opinion authored by Justice Corona; concurred by Justices Sandoval-Gutierrez and Carpio-Morales; Justice Vitug (Chairman) did not participate in the deliberation.

Parties

Petitioners: Estate or heirs of the late Ex-Justice Jose B. L. Reyes (represented by administratrix and attorney-in-fact Adoracion D. Reyes) and estate or heirs of the late Dr. Edmundo A. Reyes (represented by Maria Teresa P. Reyes and Carlos P. Reyes).
Respondents: City of Manila; in related proceedings also named: Court of Appeals, Dr. Rosario Abiog, Angelina Maglonso, and Sampaguita Bisig ng Magkakapitbahay, Inc. (SBMI).
Mentioned officials and entities: City Legal Officer Angel Aguirre, Jr.; Sheriffs Jess Areola and Dante Lot; Judge Tranquil P. Salvador (MTC Branch 10).

Subject Matter and Property Description

Eleven parcels of land, pro-indiviso co-owned in equal proportion by petitioners (heirs of Jose B.L. Reyes and heirs of Edmundo Reyes).
Total area: 13,940 square meters, situated in Sta. Cruz District, Manila.
Title: covered by Transfer Certificate of Title No. 24359, Register of Deeds of Manila.
Parcels described in cadastral plan/consolidation plan (LRC Psd-328345): Lot 3, Block 2995; Lot 2, Block 2996; Lot 2, Block 2999; Lot 5, Block 2999; Lot 2, Block 3007, among others; parcels fronting streets including Rizal Avenue, Tecson, M. Natividad, Sampaguita, Oroquieta, M. Hizon, Felix Huertes, Bulacan, Sulu, Aurora Boulevard, Pedro Guevarra, and Kalimbas in the third district.
Specific leased lots: Lot 2-E, Block 3007 (area 191 sq. m.) leased to respondent Rosario Abiog; Lot 2-R, Block 2996 (area 112 sq. m.) leased to respondent Angelina Maglonso; other tenants include members of SBMI.

Background Facts — Ejectment Proceedings

Jose B.L. Reyes and heirs of Edmundo Reyes filed ejectment complaints: November 9, 1993 (against Abiog) and May 26, 1994 (against Maglonso), respectively.
Upon Jose B.L. Reyes’s death, his heirs were substituted.
Metropolitan Trial Court (MTC) decisions:
- Civil Case No. 142851-CV, MTC Manila Branch 10: decision dated May 9, 1994 against respondent Abiog.
- Civil Case No. 144205-CV, MTC Manila Branch 3: judgment dated May 4, 1995 against respondent Maglonso.
Appeals from MTC to RTC denied:
- RTC Manila Branch 28 denied Abiog’s appeal; RTC Manila Branch 38 denied Maglonso’s appeal.
Appeals to the Court of Appeals were likewise denied; judgments of eviction became final and executory in 1998.
Writs of execution were issued in 1997 (e.g., MTC Branch 10 issued writ of execution on January 27, 1997 after finality in the Abiog ejectment).

Background Facts — City of Manila Expropriation Complaint

City of Manila filed a complaint for eminent domain (expropriation) on April 25, 1995 in the RTC of Manila, Branch 9 (docketed as Civil Case No. 95-73687).
Basis: Ordinance No. 7818 enacted November 29, 1993, authorizing the City Mayor to expropriate certain parcels aggregating approximately 9,930 sq. m. (more or less), owned by Jose B.L. Reyes and Edmundo Reyes, to be distributed to intended beneficiaries described as occupants who had been occupying as lessees for at least ten (10) years.
City Legal Officer Angel Aguirre, Jr. sent a written offer to petitioners on March 10, 1995 (letter referenced in the case); petitioners rejected the offer per a letter of Adoracion D. Reyes dated March 17, 1995 (stating they were “totally turning down your offer”).
City alleged it made an offer to purchase for P10,285,293.38 and prayed the court to fix provisional value at P9,684,380 based on current tax declarations, and to authorize entry and possession upon deposit of P1,452,657 (15% of value as alleged in the complaint).
Trial court allowed City to take possession upon deposit of P1,542,793, based on the P10,285,293.38 figure in an order dated June 6, 1995; City filed compliance manifesting deposit of additional P1,452,793 on June 13, 1995 (records reflect multiple related figures and computations).

Motions to Intervene and SBMI’s Participation

Respondent Sampaguita Bisig ng Magkakapitbahay, Inc. (SBMI), a registered non-stock corporation composed of residents of the subject properties (including Abiog and Maglonso), filed on May 15, 1995 a motion for intervention with an attached complaint and prayer for injunction to enjoin eviction of occupants and to be recognized as legal interest holders and intended beneficiaries.
Trial court denied SBMI’s motion for intervention on June 2, 1995, finding the movants’ interest indirect, contingent, remote, conjectural, consequential and collateral, at best inchoate or expectancy (order cited).

Trial Court Disposition on Expropriation

Petitioners filed a motion to dismiss the City’s eminent domain complaint on multiple grounds, including alleged incorrect computation of deposit, failure to follow valuation guidelines for socialized housing (R.A. No. 7279), alleged zonal valuation estimates under Department Order No. 33-93 (approx. P76M estimate cited by petitioners), insufficiency of City funds for just compensation, priority rules under R.A. 7279, alleged improper adoption of Ordinance No. 7818 (no public hearing, no notice to defendants), failure to classify tenants as underprivileged and homeless, and failure to comply with Art. 34, Rule 6 of the Rules and Regulations Implementing the Local Government Code.
On October 3, 1995, the Regional Trial Court (RTC) of Manila, Branch 9, dismissed the City’s complaint for eminent domain.
Trial court rationale: expropriation inappropriate because petitioners were willing to sell under acceptable terms; City failed to show its offer was rejected; trial court denied City’s motion for reconsideration.

Court of Appeals Proceedings and Decision

City appealed the trial court’s dismissal to the Court of Appeals on January 12, 1996.
The Court of Appeals, after motions and proceedings including denials of some TROs by a different CA panel (March 21, 1996 resolution denying TRO and PI motions), rendered decision on January 27, 1997 (reported in G.R. No. 132431 rollo) reversing and setting aside the RTC dismissal and remanding for determination of just compensation.
Dispositive language of CA decision (January 27, 1997): Orders appealed from are reversed and set aside; case remanded to determine amount of just compensation.
Court of Appeals’ reasoning:
- Found no doubt as to public purpose: Ordinance No. 7818 expressly states distribution to landless poor residents who had possession for at least ten years.
- Held lapse of time in instituting expropriation did not negate public purpose and absence of statutory filing period is not fatal.
- Found evidence the City’s offer was not accepted (relying on Adoracion D. Reyes’ letter of March 17, 1995), contradicting trial court’s finding.
- Rejected the trial court’s emphasis on contracts between petitioners and certain tenants as affecting the City’s offer.
Court of Appeals remanded to RTC to determine just compensation.

Subsequent Motions, TROs, and Protective Orders by Court of Appeals

Following the CA decision, numerous motions for injunctive relief were filed by City and by occupants to prevent eviction executions.
On August 25, 1997, Abiog filed a reiteratory motion for a TRO to stop execution; on August 26, 1997 the CA issued a resolution finding prima facie basis to grant SBMI’s motions and issued a TRO to Judge Salvador and agents to maintain the status quo.
On August 19, 1998, the CA issued a resolution (first assailed resolution) temporarily restraining the MTC of Manila, Branch 10 and Sheriff Jess Areola or any other she