NATIONAL HOUSING AUTHORITY v. HEIRS OF ISIDRO GUIVELONDO

NATIONAL HOUSING AUTHORITY v. HEIRS OF ISIDRO GUIVELONDO

FIRST DIVISION

[G.R. No. 154411.  June 19, 2003]

PONENTE: J. YNARES-SANTIAGO

FACTS:

• On February 23, 1999, petitioner National Housing Authority filed with the Regional Trial Court of Cebu City, Branch 11, an Amended Complaint for eminent domain against Associacion Benevola de Cebu, Engracia Urot and the Heirs of Isidro Guivelondo for the purpose of the public use of Socialized housing.
• On November 12, 1999, the Heirs of Isidro Guivelondo filed a Manifestation stating that they were waiving their objections to NHA’s power to expropriate their properties. Thus an order of execution has been granted and the court already appointed commissioners to determine the amount for just compensation
• On April 17, 2000, the Commissioners submitted their report wherein they recommended that the just compensation of the subject properties be fixed at P11,200.00 per square meter wherein a partial judgment has been rendered.
•  After the report on the just compensation has completed, both parties filed an MR on the amount for the just compensation stating that it has no adequate basis and support. Both MR was denied by the court.
• While the judgment has been rendered in the RTC and an entry of judgment and the motion for execution has been issued, NHA filed a petition for certiorari to the Court of Appeals. The CA denied the petition on the ground that the Partial Judgment and Omnibus Order became final and executory when petitioner failed to appeal the same.
• Wherefore, the Petitioner NHA filed an appeal to the Supreme Court.

ISSUE

1)      WHETHER OR NOT THE STATE CAN BE COMPELLED AND COERCED BY THE COURTS TO EXERCISE OR CONTINUE WITH THE EXERCISE OF ITS INHERENT POWER OF EMINENT DOMAIN;

2)      WHETHER OR NOT WRITS OF EXECUTION AND GARNISHMENT MAY BE ISSUED AGAINST THE STATE IN AN EXPROPRIATION WHEREIN THE EXERCISE OF THE POWER OF EMINENT DOMAIN WILL NOT SERVE PUBLIC USE OR PURPOSE

3)    WHETHER OR NOT JUDGMENT HAS BECOME FINAL AND EXECUTORY AND IF ESTOPPEL OR LACHES APPLIES TO GOVERNMENT;

HELD:

The petition was denied and the judgment rendered by the lower court was affirmed. 

RATIO:

·         On the first issue, the court held that, yes the state can be compelled and coerced by the court to continue exercise its inherent power of eminent domain, since the NHA does not exercise its right to appeal in the expropriation proceedings before the court has rendered the case final and executory. In the early case of City of Manila v. Ruymann and Metropolitan Water District v. De Los Angeles, an expropriation proceeding was explained. 

·         Expropriation proceedings consists of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of private property to be made by the court with the assistance of not more than three commissioners.

·         The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit.  It ends with an order, if not of dismissal of the action, “of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint.”  An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits.  So, too, would an order of condemnation be a final one, for thereafter, as the Rules expressly state, in the proceedings before the Trial Court, “no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard.”

·         The second phase of the eminent domain action is concerned with the determination by the Court of “the just compensation for the property sought to be taken.” This is done by the Court with the assistance of not more than three (3) commissioners.  The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too.  It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue.  Obviously, one or another of the parties may believe the order to be erroneous in its appreciation of the evidence or findings of fact or otherwise.  Obviously, too, such a dissatisfied party may seek a reversal of the order by taking an appeal there from.

·         On the second issue, the court held that a socialized housing is always for the public used and that the public purpose of the socialized housing project is not in any way diminished by the amount of just compensation that the court has fixed.

·         On the third issue, the court ruled that in this case the doctrine of state immunity cannot be applied to the NHA, although it is “public in character”, it is only public in character since it is government-owned, having a juridical personality separate and distinct from the government, the funds of such government-owned and controlled corporations and non-corporate agency, although considered public in character, are not exempt from garnishment.

Notes:

Important Discussion in the case: 

When does the Doctrine of State Immunity not applied in the government agencies?

1. The universal rule that where the State gives its consent to be sued by private parties either by general or special law

2. If the funds belong to a public corporation or a government-owned or controlled corporation which is clothed with a personality of its own, separate and distinct from that of the government, then its funds are not exempt from garnishment.  This is so because when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other corporation.

GARNISMENT AS DEFINED BY BLACK LAW DICTIONARY:

Garnishment

-       A judicial proceeding in which a creditor (or  a potential creditor) asks the court to order a third party who is indebted to or is bailee for the debtor to turn over to the creditor any of the debtor’s property (such as wages or bank accounts) held by that third party.

-       A person can initiate a garnishment action as means of either prejudgment seizure or post judgment collection.

-       In short, it only means whether the Heirs of Guivelendo can file a case to NHA to compel the latter to give to them the amount of the just compensation as rendered by the court.