EPZA vs. Dulay, 149 SCRA 305 (1987) G.R. No. L-59603, April 29, 1987

Fact: On January 15, 1979, the President of the Philippines, issued Proclamation No. 1811, reserving a certain parcel of land of the public domain situated in the City of Lapu-Lapu, Island of Mactan, Cebu and covering a total area of 1,193,669 square meters, more or less, for the establishment of an export processing zone by petitioner Export Processing Zone Authority (EPZA). Not all the reserved area, however, was public land which includes, four (4) parcels of land with an aggregate area of 22,328 square meters owned by the private respondent. The petitioner, therefore, offered to purchase the parcels of land from the respondent in acccordance with the valuation set forth in Section 92, Presidential Decree (P.D.) No. 464, as amended. The parties failed to reach an agreement regarding the sale of the property. The petitioner filed with the then CFI of Cebu for expropriation with a prayer for the issuance of a writ of possession against the private respondent for the purpose of establishing the Mactan Export Processing Zone. The respondent judge issued a writ of possession, order of condemnation and order to appointing certain persons as commissioners to ascertain and report to the court the just compensation for the properties sought to be expropriated. The petitioner Objection to Commissioner’s Report on the grounds that P.D. No. 1533 has superseded Sections 5 to 8 of Rule 67 of the Rules of Court on the ascertainment of just compensation through commissioners; and that the compensation must not exceed the maximum amount set by P.D. No. 1533.

Issue: Whether the exclusive and mandatory mode of determining just compensation in P.D. No. 1533 which states “Section 1. In determining just compensation for private property acquired through eminent domain proceedings, the compensation to be paid shall not exceed the value declared by the owner or administrator or anyone having legal interest in the property or determined by the assessor, pursuant to the Real Property Tax Code, whichever value is lower, prior to the recommendation or decision of the appropriate Government office to acquire the property.” valid and constitutional?

Held: No, the method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render the Court inutile in a matter which under the Constitution is reserved to it for final determination. Although in an expropriation proceeding the court technically would still have the power to determine the just compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under the Rules of Court. The determination of “just compensation” in eminent domain cases is a judicial function. The executive department or the legislature may make the initial determinations but when a party claims a violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or executive order can mandate that its own determination shall prevail over the court’s findings. Much less can the courts be precluded from looking into the “just-ness” of the decreed compensation.