TL;DR

The Supreme Court ruled that property owners have a right to a full hearing in expropriation cases to present their defenses against the government’s taking of their property. In Jose Co Lee v. City of Olongapo, the Court emphasized that dismissing a property owner’s objections without a proper trial violates their fundamental right to due process. This decision reinforces that local governments must strictly adhere to procedural requirements in expropriation, ensuring fair opportunity for property owners to challenge the necessity and legality of the taking before their land is seized. The ruling protects landowners from arbitrary government action and underscores the importance of procedural fairness in eminent domain proceedings.

Expropriation Under Scrutiny: When is Public Use Truly Public?

Can a city declare your land for ‘public use’ without fully hearing your side of the story? This is the core question in the case of Jose Co Lee v. City of Olongapo. Mr. Lee contested the City of Olongapo’s attempt to expropriate his land for a civic center complex, arguing that the true intention was to benefit a private corporation, SM Prime Holdings. He claimed the city failed to make a valid offer and denied him a proper hearing to present his defenses. The Supreme Court ultimately sided with Lee, highlighting critical lapses in the city’s expropriation process and reaffirming the fundamental right to due process for property owners facing eminent domain.

The power of eminent domain, the state’s right to take private property for public use, is a significant governmental tool. In the Philippines, this power is delegated to local government units (LGUs) under Section 19 of the Local Government Code. However, this power is not absolute and is circumscribed by essential requisites. As the Supreme Court reiterated, citing Municipality of Parañaque v. V.M. Realty Corp., these requisites include: an authorizing ordinance, public use, just compensation, and a valid prior offer to the property owner. In Lee’s case, while the Court acknowledged the existence of an ordinance authorizing the expropriation, it found critical failures in other areas, particularly concerning the offer and the due process afforded to Lee.

A crucial element in expropriation is the ‘valid and definite offer’ to the landowner before initiating legal proceedings. This is not merely a formality but a substantive requirement intended to encourage negotiated settlements and avoid costly litigation. The Implementing Rules of the Local Government Code and jurisprudence emphasize that this offer must be genuine, providing the landowner a real opportunity to sell their property without the burden of court action. In Jesus is Lord Christian School Foundation Inc. v. Municipality of Pasig, the Supreme Court underscored that a ‘reasonable offer in good faith’ is necessary, and in City of Manila v. Alegar Corp., it was clarified that when an initial offer is rejected with a hint for negotiation, the government must actively pursue renegotiation. In Lee’s case, the Court found no evidence of genuine renegotiation after Lee rejected the initial offer, concluding that the city failed to exhaust all reasonable efforts to acquire the property through mutual agreement.

Beyond the offer, the Supreme Court strongly emphasized the violation of Lee’s procedural due process rights. Due process, a cornerstone of the Bill of Rights, mandates fairness in legal proceedings. It has both substantive and procedural aspects. Procedural due process, relevant here, requires adherence to the steps and procedures prescribed by law, ensuring fair play and preventing arbitrary actions. Rule 67 of the Rules of Court outlines the procedure for expropriation cases, including the property owner’s right to file an answer stating objections and defenses. The Supreme Court, referencing Robern Development Corp. v. Quitain, clarified that affirmative defenses requiring evidence must be addressed in a full-blown trial.

In Lee’s case, the trial court dismissed his affirmative defenses—including the claim that the expropriation was not for genuine public use and lacked proper authorization—without a trial. The Supreme Court found this a grave error, stating,

In this case, the trial court overruled petitioner’s affirmative defenses without conducting trial and hearing in violation of his right to due process.

This denial of a hearing was deemed a violation of Lee’s fundamental right to due process, effectively ousting the trial court of its jurisdiction. The Court stressed that allegations of improper public use necessitate the presentation of evidence and cannot be summarily dismissed. The ruling highlights that even when the government exercises eminent domain, it must respect the procedural rights of property owners to present their case and challenge the taking.

The Court also clarified the application of The Right-of-Way Act (RA 10752) versus the Local Government Code in expropriation cases. RA 10752, requiring a 100% deposit of BIR zonal valuation for immediate possession, applies specifically to ‘national government infrastructure projects.’ For local government projects, the Local Government Code, requiring only a 15% deposit based on current tax declaration, applies. This distinction is crucial in determining the required deposit for immediate possession in expropriation cases initiated by LGUs.

Ultimately, the Supreme Court’s decision in Jose Co Lee v. City of Olongapo serves as a potent reminder of the limits of governmental power in expropriation. It reinforces the necessity for LGUs to strictly comply with all legal requisites, particularly the need for a valid offer and the imperative to uphold procedural due process by granting property owners a full and fair hearing to contest expropriation actions. This case underscores the judiciary’s role in protecting individual property rights against potential governmental overreach, ensuring that ‘public use’ truly serves the public interest and not private gain.

FAQs

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Jose Co Lee v. City of Olongapo, G.R. No. 246201, December 07, 2022