Case Summary (G.R. No. 213207)
Trial and Appellate Rulings
The Regional Trial Court sided with respondents, holding that fair market value is the proper measure. The Court of Appeals affirmed. The Republic petitioned this Court for review.
Precedent: EPZA vs. Dulay
In EPZA vs. Dulay (G.R. No. 59603, April 29, 1987), this Court held that fixing compensation by administrative decree violated the judiciary’s constitutional duty to determine just compensation. It declared PD 76 and related decrees (including PD 1533) unconstitutional as encroachments on judicial prerogatives.
Issues Presented
- Effect and temporal scope of declaring PD 1533 unconstitutional—whether the nullity is retroactive and applies to pending appeals where its constitutionality was not challenged below.
- Whether the EPZA ruling should apply to the present case.
(The deposit issue under Rule 67 was not contested.)
Retroactivity of Constitutional Invalidations
The core issue is whether a statute invalidated as unconstitutional operates as void ab initio or only prospectively. The Republic advocates a prospective-only application, limiting the EPZA decision’s reach.
Orthodox versus Modern Views on Void Statutes
An orthodox rule treats an unconstitutional enactment as never having existed—void ab initio for all purposes. The modern view limits invalidation to the parties before the court, allowing the statute to remain on the books but unrecognized in judicial determinations beyond that case.
Scope of Judicial Nullification
While a law may be constitutionally invalid in its entirety, it may also be valid generally but void in specific applications—e.g., retrospective effects impairing vested contract rights. The Court has previously upheld interim effects of statutes later voided, as in its moratorium-law jurisprudence, balancing equity and the fait accompli doctrine.
Application to the Present Cas
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Facts
- The Republic of the Philippines initiated expropriation proceedings to acquire portions of land owned by private respondents for the widening and concreting of the Nabua-Bato-Agos section of the Philippine-Japan Highway Loan (PJHL) road.
- The Republic’s right to expropriate was undisputed; the sole contention concerned the proper measure of just compensation.
- Private respondents insisted on compensation based on fair market value rather than the methodology prescribed by Presidential Decree No. 76, as amended, which sets compensation at the lower of the assessor’s valuation or the owner’s declared valuation.
- The Regional Trial Court ruled in favor of the private respondents, and upon appeal, the Court of Appeals affirmed the trial court’s judgment.
- The Republic filed a petition for review before the Supreme Court to challenge the valuation standard mandated by PD 76.
Issues Presented
- Effect of this Court’s prior declaration that Presidential Decree No. 1533 (and related decrees, including PD 76) is unconstitutional: should that declaration apply retroactively or only prospectively?
- Whether the Supreme Court’s decision in Export Processing Zone Authority (EPZA) vs. Dulay, which held that just compensation determinations are judicial functions and declared PD 1533 unconstitutional, should govern the present case.
- (Not in issue) Whether the land valuation on the tax declaration may serve as the basis for the ten-percent deposit under Rule 67 of the Revised Rules of Court.
Applicable Statutes and Decrees
- Presidential Decree No. 76, as amended: provides compensation based on assessor’s valuation