1. EMINENT DOMAIN NOT JUSTIFIED WHEN THE PROPERTY IS NOT LANDED ESTATE. — The land in question, which is situated in three different municipalities having a total area of about 26 hectares and several portions of which have already been sold to private parties, is sought to be expropriated under Republic Act Nos. 267 and 498, for the purpose of subdividing and reselling it to the tenants thereof and the landless residents of said municipalities. The order of the lower court dismissing the complaint for failure to state a cause of action is affirmed. The land sought to be expropriated is not a landed estate and, consequently, is beyond the purview of Republic Acts Nos. 267 and 498.

Appeal by the Province of Bulacan from an order of the Court of First Instance of the same province in Civil Case No. 1153 dismissing its amended complaint, on the ground that the same stated no cause of action.

On September 3, 1954, the Provincial Board of Bulacan passed Resolution No. 787 authorizing the acquisition of the property of B. E. San Diego, Inc., known as Hacienda Esguerra, situated in the municipalities of Meycauayan, Obando and Polo, with an aggregate area of about 64 hectares, for the purpose of subdividing and reselling the land to the tenants thereof and to the landless residents of said municipalities, as authorized by Republic Act Nos. 267 and 498. Accordingly, on August 26, 1955, the Provincial Fiscal of Bulacan, on behalf of said province, filed with the lower court the corresponding complaint for the expropriation of the land aforementioned, against its owner, B. E. San Diego, Inc., and the Rehabilitation Finance Corporation (now Development Bank of the Philippines), who held a mortgage on said land.

By order of the court dated December 3, 1955, Lots 5, 6, 7, 10-C and 11 involved in the case, with a total area of about 38 hectares, were excluded from the complaint upon petition of, and a showing by, the Central Cooperative Exchange, Inc., a government agency, that it had purchased said lots from B. E. San Diego, Inc. prior to the commencement of the action. As a result, an amended complaint was filed, for the expropriation of the remaining portion of the estate with a total area of about 26 hectares.

Defendant B. E. San Diego, Inc. filed a motion to dismiss the amended complaint alleging: that plaintiff had no cause of action, the property sought to be expropriated not being a landed estate, thus being beyond the purview of Republic Act Nos. 267 and 498; that the purpose to which plaintiff intended to devote it was not public in nature, and that it had theretofore sold several portions thereof which were already occupied by the vendees.

On June 17, 1959, the Court issued the appealed order.

The issue to be resolved is whether or not the land sought to be expropriated situated in three different municipalities of the province of Bulacan, with a total area of about 26 hectares, several portions of which have already been sold to private parties, falls within the purview of Republic Act Nos. 267 and 498 which authorize cities, municipalities, and provinces to purchase and/or expropriate homesites and landed estates within their respective jurisdictions and to resell them at cost to their respective residents etc. This issue is not new, for in a similar case instituted by the Province of Rizal against the same appellee herein, B. E. San Diego, Inc., (G.R. No. L-10802, January 23, 1959), we resolved it against the contention of appellant, saying, among other things, the following:jgc:chanrobles.com.ph

"The property involved in this case is a land of about sixty-six (66) hectares, situated in the municipalities of Caloocan and Malabon, Rizal. It is part of the Hacienda Esguerra, which originally belonged to one Isabel Esguerra, from whom it was purchased by the Archbishop of Manila. The latter leased most of it to some of the intervenors herein, who, in turn, subleased smaller portions to the alleged occupants thereof — numbering, according to the complaint in intervention, about seven hundred — whom the intervenors claim to represent. It would appear that, owing to difficulties encountered in dealing with the tenants, many of whom were, either in default, or in arrears, in the payment of rentals, the Archbishop of Manila had, upon liberation of the Philippines from the Japanese forces, adopted the policy of disposing of the land involved in this case. Neither its occupants, nor the aforementioned intervenors, however, seemed inclined to acquire the lots respectively held by, or leased to, them, at the price demanded by the owner or lessor. In fact, the record does not show affirmatively that any definite offer to buy had ever been made by said occupants and/or intervenors. Hence, on June 19, 1952, the Archbishop of Manila sold the land, for the sum of P880,000, to defendant herein, Bartolome San Diego, Incorporated, which thereupon dealt directly, not with the lessees, but with the actual occupants, thus abolishing the then prevailing sub-tenancy system. Moreover, after surveying and subdividing the land, defendant offered about 50 subdivided hectares thereof-after deducting the portions allotted for roads, parks, playgrounds, and other public places - for sale, on installments, in small lots, at prices ranging mostly from P7.00 to P8.00 per square meter. Thus, from September, 1952, to July, 1955, about two hundred (200) contracts to sell such lots were made.

"Believing that said lots could be purchased at a lesser price, if first expropriated by the government, the intervenors persuaded the plaintiff to institute the case at bar, on April 21, 1954. Plaintiff’s purpose, according to the complaint, as amended, is to sell and distribute the property in question among Filipino bona fide occupants and tenants, and to Filipino veterans, their widows and their children, pursuant to the conditions set forth in Republic Act No. 267 . . .." In its answer, dated October 14, 1954, defendant alleged that plaintiff has no cause of action said property not being a landed estate, and being beyond the purview of said Republic Act No. 267; that the purpose for which plaintiff seeks to devote it is not a public use; that ’defendant is willing to sell’ it ’to actual occupants first, and/or to any person interested in buying the same at reasonable costs’; that defendant has already sold ’more than 200 lots’ and has ’more than 1000 lots . . . available for sale’; and that the only purpose of this action is to ’delay the execution’ of the judgments rendered — seemingly in ejectment cases — against occupants of said land, eighty per centum (80%) of whom are ’squatters’. On November 10, 1954, defendant moved for the dismissal of the case, upon the ground that plaintiff is not in a position to pay the fair market value of the property in litigation, which, according to the complaint, is P431,856.66, it having failed to deposit this sum, despite an order, dated May 10, 1954, requiring said deposit; that defendant has been, and is, willing to sell the land, at reasonable prices, to actual bona fide tenants; and that said property is not a landed estate. In another motion dated February 11, 1955, defendant reiterated said motion to dismiss alleging that the complaint states no cause of action,; that the property in litigation is ’not intended for any public use and/or public benefit’ and that said property ’is not a landed estate."cralaw virtua1aw library

"In due course thereafter, the lower court rendered the aforementioned decision, granting defendant’s motion to dismiss, and dismissing the petition for expropriation, as well as the complaint in intervention, upon the authority of Guido v. Rural Progress Administration (47 O. G. 1848), Commonwealth v. Borja (L-1496, Nov. 9, 19 49), 51; City of Manila v. Arellano Law School (47 Off. Gaz. 4197), Lee Tay and Lee Chay v. Choco (L-3297, Dec. 29, 1950), Urban Estates Inc. v. Montesa (L-3830, March 15, 1951); Municipality of Caloocan v. Manotok Realty Inc. (L-6444, May 14, 1954), Republic v. Gabriel (L-6161, May 23, 1954), Municipal Government of Caloocan v. Chuan Huat & Co. (50 O.G. 5309), and Republic v. Baylosis (51 O. G., 722). Relying upon these cases, the lower court concluded:chanrob1es virtual 1aw library

‘. . . that the 66 hectares sought to be expropriated are not within the purview of Article XIII, Section 4 of the Constitution especially because the Hacienda Esguerra and other church properties were broken up and sold to defendant and others in reasonable areas, that plaintiff as delegate of the Republic of the Philippines can not claim greater right under Republic Act Nos. 267 and 498 which is predicated on the constitutions provision just cited under the truism that water cannot rise higher than its source; that some portions of the property has already been sold by defendant to 193 persons whose interests would be greatly prejudiced by the present proceedings while on the other hand, some of the principal intervenors are landowners in their own right and, therefore, disqualified under the law to acquire land from plaintiff; that the Constitution protects a landowner against indiscriminate and unwarranted expropriation; that to justify expropriation it must be for a public purpose and public benefit and that just to enable the tenants of a piece of land of reasonable area to own portion of it, even if their ancestors or predecessors had cleared, improved and dwelt on the land for many years, is no valid reason or justification under the law to deprive the owner of the property or his vendees by means of expropriation.’ (Record on Appeal, pp. 322-323.)

"This appeal hinges on whether, as held in the decision appealed from, the above mentioned cases are controlling in the case at bar, or whether the same should be determined, as claimed by appellants herein, in accordance with the view adopted in Rural Progress Administration v. Clemente Reyes (L-4708, Oct. 8, 1953), in which — by a 6 to 4 vote — this Court sanctioned the expropriation of a land, of about 20,737 square meters, purchased by Reyes from the San Juan de Dios Hospital, before the landed estate of the latter, of which it formed part, had been acquired by the government.

"Appellants’ pretense is untenable, for the rule enunciated in the Reyes case was explicitly abandoned, and the doctrine laid down in the Guido case, was expressly reaffirmed, as ’sound and wholesome,’ in the Baylosis case. The majority opinion therein restated the position of the Court in the following language:chanrob1es virtual 1aw library

. . . We feel that the decision in that Reyes case was a departure from the doctrine laid down in the leading case of Guido which doctrine has been subsequently affirmed and reiterated in a long line of cases, and we now believe that in abandoning the ruling made in the Reyes case, this Tribunal is merely returning to and re-affirming the sound and wholesome doctrine laid down in the Guido case.’ (Republic v. Baylosis, Et Al., 51 O.G., 722, 735).



‘In conclusion we hold that under Section 4, Article XIII of the Constitution, the Government may expropriate only landed estates with extensive areas, specially those embracing the whole or a large part of a town or city; that once a landed estate is broken up and divided into parcels of reasonable areas, either thru voluntary sales by the owner or owners of said landed estate, or thru expropriation, the resulting parcels are no longer subject to further expropriation under section 4, Article XIII of the Constitution; that mere notice of the intention of the Government to expropriate a parcel of land does not bind either the land or the owner so as to prevent subsequent disposition of the property such as mortgaging or even selling it in whole or by subdivision; that tenancy trouble alone whether due to the fault of the tenants or of the landowners does not justify expropriation; that the Constitution protects a landowner against indiscriminate and unwarranted expropriation; that to justify expropriation, it must be for a public purpose and public benefit, and that just to enable the tenants of a piece of land of reasonable area to own portion of it, even if they and their ancestors had cleared the land and cultivated it for their landlord for many years, is no valid reason or justification under the Constitution to deprive the owner or landlord of his property by means of expropriation.’ (Id., p. 739.)

"The majority of the Members of this Court still adheres to this view which must be respected by the minority, including the writer hereof, who concurred in the dissenting opinions in the Baylosis case."cralaw virtua1aw library

IN VIEW OF THE FOREGOING, the order appealed from is affirmed, with costs.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, Regala and Makalintal, JJ., concur.

Barrera, J., concurs in the result.