Monday, April 2, 2012

Municipality of Paranaque v VM Realty G.R. No. 127820. July 20, 1998

J. Panganiban

Petition for review on certiorari

Under a city council resolution, the Municipality of ParaƱaque filed on September 20, 1993, a Complaint for expropriation against Private Respondent  V.M. Realty Corporation over two parcels of land of 10,000 square meters. The city previously negotiated for the sale of the property but VM didn’t accept.
The trial court issued an Order dated February 4, 1994, authorizing petitioner to take possession of the subject property upon deposit with its clerk of court of an amount equivalent to 15 percent of its fair market value based on its current tax declaration.
According to the respondent, the complaint failed to state a cause of action because it was filed pursuant to a resolution and not to an ordinance as required by RA 7160 (the Local Government Code); and (b) the cause of action, if any, was barred by a prior judgment or res judicata. Petitioner claimed that res judicata was not applicable.
The trial court dismissed the case. The petitioner’s MFR was denied.  The CA affirmed.

1. WON a resolution duly approved by the municipal council has the same force and effect of an ordinance and will not deprive an expropriation case of a valid cause of action.
2. WON the principle of res judicata as a ground for dismissal of case is not applicable when public interest is primarily involved.

Held: No to 1st Yes to 2nd. Petition dismissed.

1. Petitioner contends that a resolution approved by the municipal council for the purpose of initiating an expropriation case “substantially complies with the requirements of the law” because the terms “ordinance” and “resolution” are synonymous for “the purpose of bestowing authority [on] the local government unit through its chief executive to initiate the expropriation proceedings in court in the exercise of the power of eminent domain.
To strengthen this point, the petitioner cited Article 36, Rule VI of the Rules and Regulations Implementing the Local Government Code, which provides:  “If the LGU fails to acquire a private property for public use, purpose, or welfare through purchase, the LGU may expropriate said property through a resolution of the Sanggunian authorizing its chief executive to initiate expropriation proceedings.”
Court-No. The power of eminent domain is lodged in the legislative branch of government, which may delegate the exercise thereof to LGUs, other public entities and public utilities. An LGU may therefore exercise the power to expropriate private property only when authorized by Congress and subject to the latter’s control and restraints, imposed “through the law conferring the power or in other legislations.
Sec 19, RA 7160
A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws.
Thus, the following essential requisites must concur before an LGU can exercise the power of eminent domain:
1.  An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property.
2.  The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless.
3.  There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws.
4.  A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted.
In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to a resolution of the municipal council.  Thus, there was no compliance with the first requisite that the mayor be authorized through an ordinance.
We are not convinced by petitioner’s insistence that the terms “resolution” and “ordinance” are synonymous.  A municipal ordinance is different from a resolution.  An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. An ordinance possesses a general and permanent character, but a resolution is temporary in nature.
If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would have simply adopted the language of the previous Local Government Code.  But Congress did not.  In a clear divergence from the previous Local Government Code, Section 19 of RA 7160 categorically requires that the local chief executive act pursuant to an ordinance.
Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private right of the people.[35] Accordingly, the manifest change in the legislative language -- from “resolution” under BP 337 to “ordinance” under RA 7160 -- demands a strict construction.
When the legislature interferes with that right and, for greater public purposes, appropriates the land of an individual without his consent, the plain meaning of the law should not be enlarged by doubtful interpretation.
Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to authorize an LGU to exercise eminent domain.  It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its implementation.
Strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but “inferior” domain, since it must conform to the limits imposed by the delegation, and thus partakes only of a share in eminent domain.
2. As correctly found by the Court of Appeals and the trial court, all the requisites for the application of res judicata are present in this case. There is a previous final judgment on the merits in a prior expropriation case involving identical interests, subject matter and cause of action, which has been rendered by a court having jurisdiction over it.
Be that as it may, the Court holds that the principle of res judicata, which finds application in generally all cases and proceedings, cannot bar the right of the State or its agent to expropriate private property.
Eminent Domain can reach every form of property which the State might need for public use whenever they need it.
While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it does apply to specific issues decided in a previous case.
In Republic vs De Knecht, the Court ruled that the power of the State or its agent to exercise eminent domain is not diminished by the mere fact that a prior final judgment over the property to be expropriated has become the law of the case as to the parties.  The State or its authorized agent may still subsequently exercise its right to expropriate the same property, once all legal requirements are complied with.

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