Philippine Supreme Court Jurisprudence > Year 2016 > April 2016 Decisions > G.R. No.

202051, April 18, 2016 - REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE

DEPARTMENT OF PUBLIC WORKS & HIGHWAYS; ENGINEER SIMPLICIO D. GONZALES,
DISTRICT ENGINEER, SECOND ENGINEERING DISTRICT OF CAMARINES SUR; AND
ENGINEER VICTORINO M. DEL SOCORRO, JR., PROJECT ENGINEER, DPWH, BARAS,
CANAMAN, CAMARINES SUR, Petitioners, v. SPOUSES ILDEFONSO B. REGULTO AND
FRANCIA R. REGULTO, Respondents.:

G.R. No. 202051, April 18, 2016 - REPUBLIC OF THE PHILIPPINES, REPRESENTED BY
THE DEPARTMENT OF PUBLIC WORKS & HIGHWAYS; ENGINEER SIMPLICIO D.
GONZALES, DISTRICT ENGINEER, SECOND ENGINEERING DISTRICT OF CAMARINES
SUR; AND ENGINEER VICTORINO M. DEL SOCORRO, JR., PROJECT ENGINEER, DPWH,
BARAS, CANAMAN, CAMARINES SUR, Petitioners, v. SPOUSES ILDEFONSO B. REGULTO
AND FRANCIA R. REGULTO, Respondents.

THIRD DIVISION

G.R. No. 202051, April 18, 2016

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF

PUBLIC WORKS & HIGHWAYS; ENGINEER SIMPLICIO D. GONZALES, DISTRICT
ENGINEER, SECOND ENGINEERING DISTRICT OF CAMARINES SUR; AND
ENGINEER VICTORINO M. DEL SOCORRO, JR., PROJECT ENGINEER, DPWH,
BARAS, CANAMAN, CAMARINES SUR, Petitioners, v. SPOUSES ILDEFONSO B.
REGULTO AND FRANCIA R. REGULTO, Respondents.

DECISION

PERALTA, J.:

For resolution of this Court is the petition for review on certiorari dated July 10, 2012
filed by petitioners, the Republic of the Philippines as represented by the Department of
Public Works and Highways (DPWH); Engineer Simplicio D. Gonzales, District Engineer,
Second Engineering District of Camarines Sur; and Engineer Victorino M. Del Socorro,
Jr., Project Engineer, DPWH, Baras, Canaman, Camarines Sur assailing the
Order1 dated May 24, 2012 of the Regional Trial Court (RTC) of Naga City, Branch 62,
which ordered herein petitioners to pay respondents spouses Ildefonso B. Regulto and
Francia R. Regulto (Spouses Regulto) the amount of Two Hundred Forty-Three
Thousand Pesos (P243,000.00) as just compensation for the part of their property
traversed by the Naga City-Milaor Bypass Project of the DPWH.
The factual antecedents are as follows:

Respondents spouses Ildefonso B. Regulto and Francia R. Regulto are the registered
owners of the property in controversy located at Mabel, Naga City, Camarines Sur
consisting of 300 square meters covered by Transfer Certificate of Title (TCT) No. 086-
2010000231.2 The Spouses Regulto acquired the said property by virtue of a deed of
absolute sale executed by Julian R. Cortes, attorney-in-fact of the spouses Bienvenido
and Beatriz Santos, in February 1994.3 The subject property originated from a Free
Patent property consisting of 7,759 square meters registered and covered by Original
Certificate of Title (OCT) No. 235 dated April 14, 1956.4

Sometime in April 2011, the DPWH Second Engineering District of Camarines Sur
apprised the Spouses Regulto of the construction of its road project, the Naga City-
Milaor Bypass Road, which will traverse their property and other adjoining
properties.5 The DPWH initially offered the spouses the sum of P243,000.00 or
P1,500.00 per square meter for the 162 square-meter affected area as just
compensation.6

However, in a letter dated May 11, 2006, the DPWH, through District Engr. Rolando P.
Valdez, withdrew the offer, and informed the Spouses Regulto that they were not
entitled to just compensation since the title of their land originated from a Free Patent
title acquired under Commonwealth Act (C.A.) No. 141, known as the Public Land Act,
which contained a reservation in favor of the government of an easement of right-of-
way of twenty (20) meters, which was subsequently increased to sixty (60) meters by
Presidential Decree (P.D.) No. 635, for public highways and similar works that the
government or any public or quasi-public service enterprise may reasonably require for
carrying on their business, with payment of damages for the improvements only. 7

The Spouses Regulto, in their letter dated May 30, 2011, protested the findings of the
DPWH and ordered them to cease from proceeding with the construction. 8 They alleged
that since their property is already covered by TCT No. 086-2010000231, it ceased to
be a public land.9 They communicated that the market value of the property is
P450,000.00 plus the Zonal Value of the Bureau of Internal Revenue (BIR), which is
more or less the acceptable just compensation of their property. 10 Furthermore, they
requested that they be furnished, within five (5) days from the receipt of their letter,
with a Program of Works and Sketch Plan showing the cost of the project and the
extent or area covered by the road that will traverse their property. 11

The DPWH furnished the Spouses Regulto with the sketch plan showing the extent of
the road right-of-way that will cut across their property.12 It also reiterated its earlier
position that the title to the land was acquired under C.A. No. 141. 13

On October 8, 2011, the Spouses Regulto filed a complaint for payment of just
compensation, damages with prayer for issuance of temporary restraining order and/or
writ of preliminary injunction before the RTC of Naga City, Branch 62, against herein
petitioners Republic of the Philippines, represented by the DPWH; District Engr. Valdez
of the Second Engineering District of Camarines Sur; and Project Engr. Del Socorro, Jr.
of the DPWH, Baras, Canaman, Camarines Sur.14
The Spouses Regulto averred that the DPWH acted with deceit, misrepresentation and
evident bad faith in convincing them to sign on a paper after relying on the assurance
that they would be paid with just compensation. 15 They also alleged that their property
is outside the coverage of Section 112, C.A. No. 141 because their land is a private
property, and that the same is situated beyond the 60-meter radius or width from the
public highways, railroads, irrigation ditches, aqueducts, telegraph and telephone lines,
airport runways, and other government structures.16

On August 5, 2011, the petitioners, through the Office of the Solicitor General (OSG),
filed a Motion to Dismiss on the ground that the Spouses Regulto do not have a cause
of action, and that their complaint failed to state the same. 17 Petitioners asseverated
that Section 112 of C.A. No. 141 is explicit on the encumbrance imposed upon lands
originally covered by a free patent or any other public land patent. 18 Petitioners also
alleged that the respondents failed to exhaust administrative remedies for not
appealing the findings of the Regional Infrastructure Right-of-Way (IROW) Committee
with the DPWH Regional Director or to the Secretary of Public Works and Highways. 19

In an Order dated October 17, 2011, the RTC denied the motion filed by the petitioners
citing that the insufficiency of the cause of action must appear on the face of the
complaint to sustain a dismissal based on lack of cause of action. 20 In this case, the
complaint stated allegations of nonpayment of just compensation. 21 Furthermore, the
court mentioned that one of the exceptions of the doctrine of exhaustion of
administrative remedies is when the issue is one of law and when circumstances
warrant urgency of judicial intervention, as in the case of the Spouses Regulto whose
portion of their property has already been occupied by the petitioners without just
compensation.22

In the Answer23 dated November 16, 2011, the petitioners reiterated their defense that
no legal right has been violated since C.A. No. 141, as amended by P.D. No.
1361,24 imposes a 60-meter wide lien on the property originally covered by a Free
Patent.25 Petitioners also avowed that Section 5 of the Implementing Rules and
Regulation (IRR) of the Republic Act (R.A.) No. 897426 provides that if the private
property or land is acquired under the provisions of C.A. No. 141, the government
officials charged with the prosecution of the projects or their representative is
authorized to take immediate possession of the property subject to the lien as soon as
the need arises, and the government may obtain a quitclaim from the owners
concerned without the need for payment for the land acquired under the said quitclaim
mode except for the damages to improvements only.27 Hence, petitioners maintained
that the Spouses Regulto are not entitled to a just compensation for the portion of their
property affected by the construction of the Naga City-Milaor Bypass Road. 28

The petitioners, in a Motion dated December 19, 2011, prayed for the issuance of the
writ of possession of the subject property in their favor for the construction of the
project to finally proceed and be completed without further delay. 29

On January 2, 2012, the RTC ordered the respondents spouses to remove the
obstructions that they erected on the subject property within three days, or the
petitioners may dismantle the same to proceed with the construction of the bypass road
project.30 Likewise, the petitioners were ordered to deliver the check already prepared
in the amount of Three Thousand Pesos (P3,000.00) for payment of the
trees/improvements on the property.31 The petitioners were also ordered to deposit
with any authorized government depository bank the amount of Thirty-Six Thousand
Four Hundred Fifty Pesos (P36,450.00) equivalent to the assessed value of the 162
square meters of the subject property, which was assessed at P67,500.00 by the 2010
tax declaration, that the road project will traverse. 32

In an Order dated January 27, 2012, the RTC dismissed the motion for reconsideration
filed by the Spouses Regulto, and sustained its earlier order that the petitioners deposit
the amount of P36,450.00.33 The RTC also acknowledged the receipt of the Spouses
Regulto of the check for the payment of the improvements on the property affected by
the project.34

Consequently, the RTC, in its Order dated May 24, 2012, ordered the petitioners to pay
the Spouses Regulto the amount of P243,000.00 as just compensation for the affected
portion of their property.35 The dispositive portion of the Order reads:
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WHEREFORE, premises considered, judgment is hereby rendered ordering the

defendants Engr. Rolando F. Valdez and Engr. Victorino M. del Socorro, Jr., Republic of
the Philippines and the Dept. of Public Works and Highways to pay plaintiffs-spouses
Ildefonso and Francia Regulto the amount of P243,000.00 as just compensation for
their property traversed by the Naga-Milaor Bypass Project.

SO ORDERED.36 ChanRoblesVirtualawlibrary

The RTC concluded that the government waived the encumbrance provided for in C.A.
No. 141 when it did not oppose the further subdivision of the original property covered
by the free patent or made an express intent on making its encumbrance before the
residential lots, which are part of the said subdivision, were sold to other innocent
purchasers for value, especially after the 25-year period has lapsed since the free
patent.37

Hence, the petitioners, through the OSG, filed the instant petition raising the following
issues:
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THE RTC ERRED IN HOLDING THAT RESPONDENTS ARE ENTITLED TO AND IN

ORDERING PETITIONERS TO PAY JUST COMPENSATION DESPITE THE
UNDISPUTED FACT THAT THE LAND WAS ORIGINALLY PUBLIC LAND AWARDED
TO RESPONDENTS' PREDECESSORS-IN-INTEREST BY FREE PATENT, AND THUS
A LEGAL EASEMENT OF RIGHT-OF-WAY EXISTS IN FAVOR OF THE
GOVERNMENT.

THE TRIAL COURT'S RATIOCINATION - THAT THE SUBJECT-PROPERTY HAS IPSO

FACTO CEASED TO BE "PUBLIC LAND" AND THUS NO LONGER SUBJECT TO THE LIEN
IMPOSED BY SAID PROVISION OF C.A. NO. 141, BY VIRTUE OF THE SUBJECT
PROPERTY BEING ALREADY COVERED BY A TRANSFER CERTIFICATE OF TITLE IN THEIR
NAME - CONTRAVENES SECTION 44 OF P.D. NO. 1529 AND NATIONAL IRRIGATION
ADMINISTRATION VS. COURT OF APPEALS.

THE RTC ERRED IN HOLDING THAT SECTION 8 ("EXPROPRIATION"), NOT SECTION 5

("QUIT CLAIM"), OF THE IMPLEMENTING RULES AND REGULATIONS OF R.A. NO. 8974
IS THE APPLICABLE PROVISION REGARDING THE MODE OF ACQUISITION OF
RESPONDENTS' PROPERTY.38 ChanRoblesVirtualawlibrary
This Court finds the instant petition partially meritorious.

At the outset, it is noted that petitioners filed the instant petition before this Court
without appealing the said case before the Court of Appeals (CA). A strict application of
the policy of strict observance of the judicial hierarchy of courts is unnecessary when
cases brought before the appellate courts do not involve factual but purely legal
questions.39 Section 2 (c),40 Rule 41, of the Revised Rules of Court provides that a
decision or order of the RTC may, as done in the instant petition, be appealed to the
Supreme Court by petition for review on certiorari under Rule 45, provided that such
petition raises only questions of law.41

The distinction between questions of law and questions of fact are explained in the case
of Navy Officers' Village Association, Inc. (NOVAI) v. Republic of the Philippines 42 as
follows:
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A question of law exists when the doubt or controversy concerns the correct application
of law or jurisprudence on a certain state of facts. The issue does not call for an
examination of the probative value of the evidence presented, the truth or falsehood of
the facts being admitted. In contrast, a question of fact exists when a doubt or
difference arises as to the truth or falsehood of facts or when the query invites the
calibration of the whole evidence considering mainly the credibility of the witnesses; the
existence and relevancy of specific surrounding circumstances, as well as their relation
to each other and to the whole; and the probability of the situation.
In the case at bar, the petitioners raise questions of law in disputing the denial by the
RTC in the application of C.A. No. 141 to impose the legal easement of right-of-way to
the subject property, and the application of Section 8 (Expropriation) of the IRR of R.A.
No. 8974 instead of Section 5 (Quit Claim) in the acquisition of the said property.

Essentially, the issue for resolution of this Court is whether the petitioners are
liable for just compensation in enforcing the Government's legal easement of
right-of-way on the subject property which originated from the 7,759 square-
meter of public land awarded by free patent to the predecessor-in-interest of
the Spouses Regulto.

Petitioners allege that a legal easement of right-of-way exists in favor of the

Government since the land in controversy was originally public land awarded by free
patent to the Spouses Regulto's predecessors-in-interest.

The RTC, however, ruled that the provision of C.A. No. 141 regarding the easement of
right-of-way in favor of the government is not applicable to the subject property since
the law is clearly meant for lands granted gratuitously by the government in favor of
individuals tasked to make it agriculturally productive. 43 It ruled that the subject
property is already a private property since the Spouses Regulto acquired the same
through a deed of absolute sale from the spouses Bienvenido and Beatriz Santos in
February 1994, and that the same originated from the property covered by TCT No.
24027.44

This Court finds that the RTC erroneously ruled that the provisions of C.A. No. 141 are
not applicable to the case at bar. On the contrary, this Court held that "a legal
easement of right-of-way exists in favor of the Government over land that was
originally a public land awarded by free patent even if the land is subsequently sold to
another."45 This Court has expounded that the "ruling would be otherwise if the land
was originally a private property, to which just compensation must be paid for the
taking of a part thereof for public use as an easement of right-of-way." 46

It is undisputed that the subject property originated from and was a part of a 7,759-
square-meter property covered by free patent registered under OCT No.
235.47 furthermore, the Spouses Regulto's transfer certificate of title, which the RTC
relied, contained the reservation: "subject to the provisions of the Property Registration
Decree and the Public Land Act, as well as to those of the Mining Law, if the land is
mineral, and subject, further, to such conditions contained in the original title as may
be subsisting."48

Jurisprudence settles that one of the reservations and conditions under the Original
Certificate of Title of land granted by free patent is that the said land is subject "to all
conditions and public easements and servitudes recognized and prescribed by law
especially those mentioned in Sections 109, 110, 111, 112, 113 and 114,
Commonwealth Act No. 141, as amended."49

Section 112 of C.A. No. 141, as amended, provides that lands granted by patent shall
be subjected to a right-of-way in favor of the Government, to wit:
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Sec. 112. Said land shall further be subject to a right-of-way not exceeding sixty
(60) meters on width for public highways, railroads, irrigation ditches, aqueducts,
telegraph and telephone lines, airport runways, including sites necessary for terminal
buildings and other government structures needed for full operation of the airport, as
well as areas and sites for government buildings for Resident and/or Project Engineers
needed in the prosecution of government-infrastructure projects, and similar works as
the Government or any public or quasi-public service or enterprise, including mining or
forest concessionaires, may reasonably require for carrying on their business, with
damages for the improvements only.

Government officials charged with the prosecution of these projects or their

representatives are authorized to take immediate possession of the portion of the
property subject to the lien as soon as the need arises and after due notice to the
owners. It is however, understood that ownership over said properties shall
immediately revert to the title holders should the airport be abandoned or when the
infrastructure projects are completed and buildings used by project engineers are
abandoned or dismantled, but subject to the same lien for future improvements. 50 ChanRoblesVirtualawlibrary

In other words, lands granted by patent shall be subject to a right-of-way not

exceeding 60 meters in width for public highways, irrigation ditches, aqueducts, and
other similar works of the government or any public enterprise, free of charge, except
only for the value of the improvements existing thereon that may be affected. 51

We are not persuaded with the ruling of the RTC that the government waived the
encumbrance imposed by C.A. No. 141 (Public Land Act) when it did not oppose the
subdivision of the original property covered by the free patent. The reservation and
condition contained in the OCT of lands granted by free patent, like the origins of the
subject property, is not limited by any time period, thus, the same is subsisting. 52 This
subsisting reservation contained in the transfer certificate of title of the Spouses
Regulto belies such supposition that the Government waived the enforcement of its
legal easement of right-of-way on the subject property when it did not oppose to the
subdivision of the property in 1995.

Petitioners allege that since the property in controversy was originally acquired under
the provisions of special laws, particularly C.A. No. 141, then Section 5 of the IRR of
R.A. No. 8974 should be applied in the present case. Petitioners insist that the
acquisition of the portion of the subject property is through execution of quitclaims.

Section 5 of the IRR of R.A. No. 8974 provides:

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SECTION 5. Quit Claim - If the private property or land is acquired under the

provisions of Special Laws, particularly Commonwealth Act No. 141, known as the
Public Land Act, which provides a 20-meter strip of land easement by the government
for public use with damages to improvements only, P.D. No. 635 which increased the
reserved area to a 60-meter strip, and P.D. No. 1361 which authorizes government
officials charged with the prosecution of projects or their representative to take
immediate possession of portion of the property subject to the lien as soon as the need
arises and after due notice to the owners, then a quit claim from the owners
concerned shall be obtained by the Implementing Agency. No payment by the
government shall be made for land acquired under the quit claim mode.53 ChanRoblesVirtualawlibrary

With the existence of the said easement of right-of-way in favor of the Government, the
petitioners may appropriate the portion of the land necessary for the construction of the
bypass road without paying for it, except for damages to the improvements.
Consequently, the petitioners are ordered to obtain the necessary quitclaim deed from
the Spouses Regulto for the 162-square-meter strip of land to be utilized in the bypass
road project.

It is noted that the 162 square meters of the subject property traversed by the bypass
road project is well within the limit provided by the law. While this Court concurs that
the petitioners are not obliged to pay just compensation in the enforcement of its
easement of right-of-way to lands which originated from public lands granted by free
patent, we, however, rule that petitioners are not free from any liability as to the
consequence of enforcing the said right-of-way granted over the original 7,759-square-
meter property to the 300-square-meter property belonging to the Spouses Regulto.

There is "taking," in the context of the State's inherent power of eminent domain, when
the owner is actually deprived or dispossessed of his property; when there is a practical
destruction or material impairment of the value of his property or when he is deprived
of the ordinary use thereof.54 Using one of these standards, it is apparent that there is
taking of the remaining area of the property of the Spouses Regulto. It is true that no
burden was imposed thereon, and that the spouses still retained title and possession of
the property. The fact that more than half of the property shall be devoted to the
bypass road will undoubtedly result in material impairment of the value of the property.
It reduced the subject property to an area of 138 square meters.

Thus, the petitioners are liable to pay just compensation over the remaining area of the
subject property, with interest thereon at the rate of six percent (6%) per annum from
the date of writ of possession or the actual taking until full payment is made.

The case of Republic v. Hon. Jesus M. Mupas55 elucidated just compensation in this

language:
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Just compensation is defined as "the full and fair equivalent of the property taken from
its owner by the expropriator." The word "just" is used to qualify the meaning of the
word "compensation" and to convey the idea that the amount to be tendered for the
property to be taken shall be real, substantial, full and ample. On the other hand, the
word "compensation" means "a full indemnity or remuneration for the loss or damage
sustained by the owner of property taken or injured for public use."

Simply stated, just compensation means that the former owner must be returned to the
monetary equivalent of the position that the owner had when the taking occurred. To
achieve this monetary equivalent, we use the standard value of "fair market value" of
the property at the time of the filing of the complaint for expropriation or at the time of
the taking of property, whichever is earlier.56 ChanRoblesVirtualawlibrary

Consequently, the case is remanded to the court of origin for the purpose of
determining the final just compensation for the remaining area of the subject property.
The RTC is thereby ordered to make the determination of just compensation payable to
the respondents Spouses Regulto with deliberate dispatch. The RTC is cautioned to
make a determination based on the parameters set forth by law and jurisprudence
regarding just compensation. chanrobleslaw

WHEREFORE, the petition for review on certiorari dated July 10, 2012 filed by the
Republic of the Philippines as represented by the Department of Public Works and
Highways; Engineer Simplicio D. Gonzales, District Engineer, Second Engineering
District of Camarines Sur; and Engineer Victorino M. Del Socorro, Jr., Project Engineer,
DPWH, Baras, Canaman, Camarines Sur, is hereby PARTIALLY GRANTED.

The case is hereby REMANDED to the Regional Trial Court of Naga City, Branch 62 for
the determination of the final just compensation of the compensable area consisting of
138 square meters, with interest thereon at the rate of six percent (6%) per
annum from the date of writ of possession or the actual taking until full payment is
made.

SO ORDERED. cralawlawlibrary

Velasco, Jr., (Chairperson), Perez, Reyes, and Perlas-Bernabe,*JJ., concur. chanroblesvirtuallawlibrary