G.R. No. 56219-20 - Panes vs. Visayas State College of Agriculture

Case Summary (G.R. No. 56219-20)

Principal Statutes and Constitutional Framework

The expropriation authority invoked by VISCA stemmed from P.D. No. 1107, which authorized it to acquire private agricultural properties through negotiated sale or expropriation and specifically provided for expropriation for root crop research purposes. Immediate possession was claimed through P.D. No. 42, which allowed the expropriating entity to take possession upon depositing with the PNB an amount equivalent to the assessed value of the subject properties for taxation purposes. The legal landscape later became decisive due to the Court’s pronouncements in Export Processing Zone Authority v. Dulay, which declared unconstitutional provisions that permitted an executive determination of just compensation, including the provisions related to P.D. No. 1533, and likewise nullified similar executive-determined compensation mechanisms found in other decrees, including those relied upon for deposits.

Factual Background and Filing of the Expropriation Suit

On March 21, 1977, President Marcos issued P.D. No. 1107, creating the Root Crops Center within VISCA. Under that decree, VISCA was authorized to acquire by negotiated sale or expropriation private agricultural properties in specified barrios in Baybay, Leyte, namely Pangasugan (up to 250 hectares) and Guadalupe, Baybay, Leyte (up to 75 hectares). The public purposes stated in VISCA’s complaint were to (one) establish experimental fields; (two) construct buildings, laboratories, and housing facilities for Root Crops Center personnel; and (three) integrate and conduct country-wide root crop researches.

VISCA filed a complaint for expropriation against the petitioners and deposited P74,050.00 with the PNB, which it claimed represented the assessed value of the lands for taxation purposes under P.D. No. 76. On this deposit, VISCA prayed for the issuance of a writ of possession. The petitioners later contested the expropriation by filing an answer on May 15, 1978, raising issues that included: (a) that the lands sought were not within the areas specified under P.D. No. 1107; (b) that the deposited amount did not constitute just compensation; (c) that P.D. No. 794 was unconstitutional for limiting just compensation to an assessed and lower market value determined by the provincial assessor; (d) that P.D. No. 1107 was unconstitutional for impairing freedom of contract and violating equal protection; and (e) that there was no public necessity for acquiring the petitioners’ properties. Petitioners also counterclaimed for damages due to the anguish and anxiety allegedly caused by the expropriation suit.

Motion for Writ of Possession and Tenant Intervention

On May 10, 1978, VISCA moved for the issuance of a writ of possession and attached a PNB cashier certification dated November 17, 1977 confirming the deposit of P74,050.00. The trial court heard the motion on June 8, 1978. VISCA introduced tax declarations reflecting the assessed values and the PNB certification, and the documents were admitted without objections. Petitioners were granted additional time to file written opposition.

On July 7, 1978, about 1,298 tenants moved to intervene and submitted an answer in intervention, asserting that they were tenant-tillers and occupants whose tenure was secured by law, and that they could not be removed from their landholdings through eminent domain. They further argued that P.D. No. 1107 was unconstitutional because constitutional expropriation referred to landed estates or haciendas and not to small agricultural lands, and that P.D. No. 27 and related issuances precluded expropriation of tenants’ properties. The trial court granted intervention on July 21, 1978.

VISCA denied the tenants’ claim that they were tenants of the lands being expropriated and maintained that reliance on P.D. No. 27 was misplaced, contending that the proscription therein applied to landlord-tenant relations, not to the State or entities acting on its behalf.

Trial Court Denial of Immediate Possession and the Dismissal of the Expropriation

After the pleadings, VISCA sought a writ of possession but, on March 29, 1979, the trial court denied the motion. The trial court reasoned, in substance, that: expropriation was not among the statutory grounds for ejectment of tenants under R.A. Nos. 1199 and 3844 and P.D. Nos. 316 and 583; granting possession would subject the presiding judge to criminal prosecution under Section 2 of P.D. No. 583; P.D. No. 42, as procedural, could not override agrarian substantive laws; P.D. No. 42 applied only to untenanted properties; the root crop experimentation purpose could not prevail over the tenant-intervenors’ rights; and there was doubt whether the lands were actually within the area identified in P.D. No. 1107.

VISCA moved for reconsideration, but on June 21, 1979, the trial court denied the motion. VISCA then pursued relief by filing a petition for review by certiorari with prayer for TRO and/or preliminary injunction on August 17, 1979, which the Court of Appeals docketed as CA-G.R. No. 09659-SP. The Court of Appeals issued a TRO on August 30, 1979 ordering maintenance of the status quo. Despite this, the trial court proceeded with scheduled hearings on September 5 and 6, 1979. On September 6, 1979, the trial judge dismissed the expropriation case in an order dated the same day. VISCA’s motion for reconsideration was denied on October 23, 1979, even though the trial judge had received the TRO on September 14, 1979.

VISCA later sought preliminary mandatory injunction in the Court of Appeals to reinstate the case. On December 10, 1979, the appellate court ordered the trial judge to reinstate the expropriation case as it stood on or before August 31, 1979. Separately, VISCA filed a notice of appeal on November 7, 1979, regarding the trial court’s dismissal and resolution. The record was forwarded to the Court of Appeals on December 6, 1979 and the appeal was docketed as CA-G.R. No. 10250-CAR. The Court of Appeals later consolidated the matters on February 20, 1980 and, on August 14, 1980, rendered a decision in the consolidated cases.

Court of Appeals Decision: Grave Abuse in Dismissal, and Error in Denying Writ of Possession

The Court of Appeals found the dismissal of the expropriation case to be tainted with grave abuse of discretion. It ruled that the trial court’s reasons did not justify dismissal with prejudice, emphasizing that the case schedules were subject to injunction in the certiorari petition, that the trial court had acted notwithstanding the TRO, and that VISCA’s request for postponement arose from circumstances tied to the appellate resolution process. The appellate court thus set aside the dismissal-related orders and reinstated the expropriation proceedings.

On the separate issue of immediate possession, the Court of Appeals ruled in favor of VISCA. It held that VISCA’s authority to take immediate possession was “clear and explicit” under Section 4 of P.D. No. 1107 in relation to P.D. No. 42, and that P.D. No. 42 did not justify limiting its effect to untenanted lands because the law itself did not distinguish. It further reasoned that VISCA had complied with deposit and notice requirements, that the writ motion had been duly heard, and that issuance of a possessory writ was mandatory upon compliance. It also addressed the relevance of P.D. No. 1533, which it viewed as establishing a uniform basis for deposits for immediate possession, and it held that the trial court should have ordered additional deposit rather than deny the writ if the initial deposit were insufficient.

Finally, the Court of Appeals rejected petitioners’ constitutional attacks against P.D. No. 1107, reasoning that the non-impairment of contracts guarantee remained subject to the State’s police power, and that constitutional tenurial security and contractual freedom were not absolute against reasonable legislation aimed at the public welfare.

Petitioners’ Assignments of Error Before the Supreme Court

The petitioners assailed the Court of Appeals’ rulings. They maintained, among other grounds, that the Court of Appeals erred in ordering a writ of possession because: most of the lands were allegedly not within the area defined in the annex to P.D. No. 1107; the lands were said to be devoted to another public purpose; there allegedly was no public necessity for acquiring the lands; there were other areas available for root crop research; the purposes did not require 325 hectares of prime rice and coconut lands; and the lands were said to be not contiguous and adjacent to VISCA. Petitioners also argued that issuing a writ of possession would render the expropriation proceedings moot and academic, and that VISCA could not comply with deposit requirements for just compensation.

They also assigned error to the Court of Appeals’ order reinstating the expropriation proceedings before the agrarian court, and they claimed grave procedural errors in the Court of Appeals’ disposition.

Supreme Court’s Disposition: Reinstatement Affirmed, Possession Modified Pending Judicial Determination of Just Compensation

The Court affirmed the Court of Appeals’ decision only insofar as it ordered reinstatement of CAR Case No. 1659. The Court characterized the dismissal with prejudice as precipitate under the circumstances and emphasized the presumption of constitutionality of P.D. No. 1107, despite petitioners’ constitutional attack. It held that VISCA was entitled to prosecute its expropriation case and to be heard on the merits under P.D. No. 1107, since the law remained in force and effective.

However, the Supreme Court declared the Court of Appeals’ conclusion regarding VISCA’s right to a writ of possession to be ineffectual in light of Export Processing Zone Authority v. Dulay. It held that the Court of Appeals’ premise—that entitlement to immediate possession could be derived from compliance with P.D. No. 1533 in relation to P.D. Nos. 1107 and 42—could not

Case Syllabus (G.R. No. 56219-20)

The consolidated petitions sought review of a Court of Appeals decision in an expropriation case filed before the Court of Agrarian Relations of Ormoc City.
In G.R. Nos. 56219-20, the Court had previously denied the petitions through a resolution dated February 27, 1981, which became final because petitioners did not seek reconsideration.
The remaining petitions in G.R. Nos. 56393-94 questioned the reversal of the trial court’s orders on dismissal of the expropriation complaint and on the availability of a writ of possession.
The Court affirmed the reinstatement of CAR Case No. 1659 but modified the appellate ruling on the conditions for issuance of a writ of possession.
The Court made the writ of possession contingent on compliance with the deposit requirement under Section 2, Rule 67, of the Revised Rules of Court, and on payment of just compensation determined by the trial court.
The Court declined to rule prematurely on petitioners’ substantive defenses that involved factual matters and on the constitutionality issues raised in the course of the proceedings.

Parties and Procedural Posture

Petitioners included JAIME T. PANES, DOMINADOR A. TAN, other individuals and tenants identified in the pleadings, and additional petitioning tenants and heirs, all challenging the appellate reversal.
Respondents were VISAYAS STATE COLLEGE OF AGRICULTURE and the Court of Appeals, with the Court of Appeals identified as being presided over by Justices Crisolito Pascual, Serafín R. Cuevas, and Carolina Grino-Aquino.
The expropriation case originated as CAR Case No. 1659 before the Court of Agrarian Relations.
The case reached the Court of Appeals through review petitions filed by respondent VISCA, including CA-G.R. No. 09659-SP and CA-G.R. No. 10250-CAR.
The Court of Appeals consolidated the two CA cases after respondent VISCA moved to consolidate them, and rendered its decision on August 14, 1980.
The trial court had denied immediate possession and had later dismissed the expropriation complaint.
The Court of Appeals set aside the trial court’s adverse orders and ordered reinstatement of the expropriation case, with directions concerning a writ of possession and compliance with P.D. No. 1533.
The Supreme Court reviewed the appellate decision but limited its modification to the legal basis governing issuance of a writ of possession.

Core Factual Background

On March 21, 1977, then President Marcos issued Presidential Decree (P.D.) No. 1107, establishing the Philippine Root Crops Research and Training Center in VISCA at Baybay, Leyte.
P.D. No. 1107 authorized VISCA to acquire, through negotiated sale or expropriation, private agricultural properties in specified barrios to specified hectare extents.
The expropriation complaint sought property located in Barrios Pangasugan up to 250 hectares, and in Guadalupe, Baybay, Leyte up to 75 hectares.
The public purposes alleged were: (1) establishment of experimental fields; (2) construction of buildings, laboratories, and housing facilities for Root Crops Center personnel; and (3) integration and conduct of country-wide researches on root crops.
Respondent VISCA deposited PHP 74,050.00 with the Philippine National Bank (PNB) as the assessed value for taxation purposes of the subject lands, as determined under P.D. No. 76.
On the basis of the deposit, VISCA prayed for a writ of possession, invoking P.D. No. 42, which allowed immediate possession upon deposit with the PNB of an amount equivalent to the assessed value for taxation purposes.
Petitioners challenged both the location and scope of the lands, the sufficiency of the deposit, and the constitutionality of multiple decrees governing just compensation and expropriation.
Petitioners claimed that the expropriation caused them anguish and anxiety and they sought damages through counterclaim.
Respondent VISCA moved for a writ of possession and supported it with the PNB certification of deposit and tax declarations evidencing assessed values.
The trial court admitted VISCA’s documents without objections and granted petitioners additional time to file written opposition.
Approximately 1,298 tenants intervened, asserting tenant-tiller status, tenurial security, and alleged constitutional and statutory bars to ejectment or removal through eminent domain.
The trial court denied the writ of possession after finding, among other points, that the case was not among the causes for ejectment of tenants recognized by specified agrarian laws and that there was doubt whether the properties fell within the area specified by P.D. No. 1107.
The trial court later dismissed the expropriation case, while the appellate court ultimately characterized the dismissal as grave abuse of discretion.

Disputed Legal Issues

The principal controversy concerned whether petitioners could prevent the issuance of a writ of possession pending trial in a CAR expropriation proceeding.
The petitions challenged whether the properties targeted by VISCA were within the area specified in the annex reference under P.D. No. 1107.
Petitioners disputed that the properties were necessary for the stated public purposes and argued that other areas and different land uses could suffice.
Petitioners argued that the targeted lands were already devoted to another public purpose and that the properties were not contiguous and adjacent to VISCA.
Petitioners asserted that the writ of possession would render the expropriation proceedings moot or academic.
Petitioners claimed that VISCA could not comply with the deposit and just compensation requirements as structured by the decrees relied upon in the trial court.
The petitions also questioned the appellate order reinstating the expropriation proceedings before the Court of Agrarian Relations.
Petitioners raised procedural complaints against the Court of Appeals’ disposition, characterizing them as grave procedural errors.

Statutory and Constitutional Framework

P.D. No. 1107 created the Root Crops Center and empowered VISCA to acquire lands for root crop research purposes through expropriation within specified loca