EMINENT DOMAIN Whether or not Petitioner can compel Respondent to accept the

payment of just compensation of the subject expropriated lot despite its failure to pay for 57
years

FACTS:
-

a) Petitioners Arguments (Republic, et al. Lost)

- Filed a special civil action for expropriation on 1938 with the Court of First Instance (CFI) of
Cebu, docketed as Civil Case No. 781, involving Lots 932 and 939 of the Banilad Friar Land
Estate, Lahug, Cebu City, for the purpose of establishing a military reservation for the Philippine
Army. Lot 932 was registered in the name of Gervasia Denzon under Transfer Certificate of Title
(TCT) No. 14921 with an area of 25,137 square meters, while Lot 939 was in the name of
Eulalia Denzon and covered by TCT No. 12560 consisting of 13,164 square meters.
-Argued that Respondent does not have ownership over the land but can only ask for the just
compensation
-Appealed to SC the decision of CA

b) Respondents Arguments (Lim Win)

- Became the lawful owner of Lot 932 pursuant to a court order on 2003 due to its foreclosure as
a mortgage by the original owners despite the expropriation done by Petitioner
-Argued that there was no transfer of ownership to Petitioner for fifty-seven (57) years have
lapsed from the time the Decision in the subject expropriation proceedings became final but
Petitioner has not compensated the owner of the property for P4,062.10
-CA promulgated a decision in his favor

ISSUE:
- Whether or not Petitioner can compel Respondent to accept the payment of just compensation
of the subject expropriated lot despite its failure to pay for 57 years

RULING:
Conclusion:
- Petitioner cannot compel Respondent. Ownership is vested to Respondent. The appeal is
dismissed
Rule:
- Significantly, in Municipality of Bian v. Garcia15 this Court ruled that the expropriation of
lands consists of two stages, to wit:
"x x x 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" x x x.
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. x x x.
-It is only upon the completion of these two stages that expropriation is said to have been
completed. In Republic v. Salem Investment Corporation,16 we ruled that, "the process is not
completed until payment of just compensation." Thus, here, the failure of the Republic to pay
respondent and his predecessors-in-interest for a period of 57 years rendered the expropriation
process incomplete.
- In summation, while the prevailing doctrine is that "the non-payment of just compensation does
not entitle the private landowner to recover possession of the expropriated lots,26 however, in
cases where the government failed to pay just compensation within five (5)27 years from the
finality of the judgment in the expropriation proceedings, the owners concerned shall have the
right to recover possession of their property. This is in consonance with the principle that "the
government cannot keep the property and dishonor the judgment." 28 To be sure, the five-year

period limitation will encourage the government to pay just compensation punctually. This is in
keeping with justice and equity. After all, it is the duty of the government, whenever it takes
property from private persons against their will, to facilitate the payment of just compensation. In
Cosculluela v. Court of Appeals,29 we defined just compensation as not only the correct
determination of the amount to be paid to the property owner but also the payment of the
property within a reasonable time. Without prompt payment, compensation cannot be considered
"just."
Application:
- In this case, it bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to
respondent in 1964, they were still the owners thereof and their title had not yet passed to the
petitioner Republic. In fact, it never did. Such title or ownership was rendered conclusive when
we categorically ruled in Valdehueza that: "It is true that plaintiffs are still the registered owners
of the land, there not having been a transfer of said lots in favor of the Government."
Conclusion:
- Thus, Petitioner cannot compel Respondent. Ownership is vested to Respondent. The appeal is
dismissed

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 161656

June 29, 2005

REPUBLIC OF THE PHILIPPINES, GENERAL ROMEO ZULUETA, COMMODORE

EDGARDO GALEOS, ANTONIO CABALUNA, DOROTEO MANTOS & FLORENCIO
BELOTINDOS, petitioners,
vs.
VICENTE G. LIM, respondent.
RESOLUTION
SANDOVAL-GUTIERREZ, J.:
Justice is the first virtue of social institutions.1 When the state wields its power of eminent
domain, there arises a correlative obligation on its part to pay the owner of the expropriated
property a just compensation. If it fails, there is a clear case of injustice that must be redressed.
In the present case, fifty-seven (57) years have lapsed from the time the Decision in the subject
expropriation proceedings became final, but still the Republic of the Philippines, herein
petitioner, has not compensated the owner of the property. To tolerate such prolonged inaction on
its part is to encourage distrust and resentment among our people the very vices that corrode
the ties of civility and tempt men to act in ways they would otherwise shun.
A revisit of the pertinent facts in the instant case is imperative.
On September 5, 1938, the Republic of the Philippines (Republic) instituted a special civil action
for expropriation with the Court of First Instance (CFI) of Cebu, docketed as Civil Case No. 781,
involving Lots 932 and 939 of the Banilad Friar Land Estate, Lahug, Cebu City, for the purpose
of establishing a military reservation for the Philippine Army. Lot 932 was registered in the name
of Gervasia Denzon under Transfer Certificate of Title (TCT) No. 14921 with an area of 25,137
square meters, while Lot 939 was in the name of Eulalia Denzon and covered by TCT No. 12560
consisting of 13,164 square meters.
After depositing P9,500.00 with the Philippine National Bank, pursuant to the Order of the CFI
dated October 19, 1938, the Republic took possession of the lots. Thereafter, or on May 14,
1940, the CFI rendered its Decision ordering the Republic to pay the Denzons the sum of
P4,062.10 as just compensation.
The Denzons interposed an appeal to the Court of Appeals but it was dismissed on March 11,
1948. An entry of judgment was made on April 5, 1948.
In 1950, Jose Galeos, one of the heirs of the Denzons, filed with the National Airports
Corporation a claim for rentals for the two lots, but it "denied knowledge of the matter." Another
heir, Nestor Belocura, brought the claim to the Office of then President Carlos Garcia who wrote

the Civil Aeronautics Administration and the Secretary of National Defense to expedite action on
said claim. On September 6, 1961, Lt. Manuel Cabal rejected the claim but expressed willingness
to pay the appraised value of the lots within a reasonable time.
For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons successorsin-interest, Francisca Galeos-Valdehueza and Josefina Galeos-Panerio,2 filed with the same
CFI an action for recovery of possession with damages against the Republic and officers of the
Armed Forces of the Philippines in possession of the property. The case was docketed as Civil
Case No. R-7208.
In the interim or on November 9, 1961, TCT Nos. 23934 and 23935 covering Lots 932 and 939
were issued in the names of Francisca Valdehueza and Josefina Panerio, respectively. Annotated
thereon was the phrase "subject to the priority of the National Airports Corporation to acquire
said parcels of land, Lots 932 and 939 upon previous payment of a reasonable market value."
On July 31, 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding
that they are the owners and have retained their right as such over Lots 932 and 939 because of
the Republics failure to pay the amount of P4,062.10, adjudged in the expropriation
proceedings. However, in view of the annotation on their land titles, they were ordered to
execute a deed of sale in favor of the Republic. In view of "the differences in money value from
1940 up to the present," the court adjusted the market value at P16,248.40, to be paid with 6%
interest per annum from April 5, 1948, date of entry in the expropriation proceedings, until full
payment.
After their motion for reconsideration was denied, Valdehueza and Panerio appealed from the
CFI Decision, in view of the amount in controversy, directly to this Court. The case was
docketed as No. L-21032.3 On May 19, 1966, this Court rendered its Decision affirming the CFI
Decision. It held that Valdehueza and Panerio are still the registered owners of Lots 932 and 939,
there having been no payment of just compensation by the Republic. Apparently, this Court
found nothing in the records to show that the Republic paid the owners or their successors-ininterest according to the CFI decision. While it deposited the amount of P9,500,00, and said
deposit was allegedly disbursed, however, the payees could not be ascertained.
Notwithstanding the above finding, this Court still ruled that Valdehueza and Panerio are not
entitled to recover possession of the lots but may only demand the payment of their fair market
value, ratiocinating as follows:
"Appellants would contend that: (1) possession of Lots 932 and 939 should be restored to them
as owners of the same; (2) the Republic should be ordered to pay rentals for the use of said lots,
plus attorneys fees; and (3) the court a quo in the present suit had no power to fix the value of
the lots and order the execution of the deed of sale after payment.

It is true that plaintiffs are still the registered owners of the land, there not having been a transfer
of said lots in favor of the Government. The records do not show that the Government paid the
owners or their successors-in-interest according to the 1940 CFI decision although, as stated,
P9,500.00 was deposited by it, and said deposit had been disbursed. With the records lost,
however, it cannot be known who received the money (Exh. 14 says: It is further certified that
the corresponding Vouchers and pertinent Journal and Cash Book were destroyed during the last
World War, and therefore the names of the payees concerned cannot be ascertained.) And the
Government now admits that there is no available record showing that payment for the
value of the lots in question has been made (Stipulation of Facts, par. 9, Rec. on Appeal, p.
28).
The points in dispute are whether such payment can still be made and, if so, in what
amount. Said lots have been the subject of expropriation proceedings. By final and
executory judgment in said proceedings, they were condemned for public use, as part of an
airport, and ordered sold to the Government. In fact, the abovementioned title certificates
secured by plaintiffs over said lots contained annotations of the right of the National
Airports Corporation (now CAA) to pay for and acquire them. It follows that both by
virtue of the judgment, long final, in the expropriation suit, as well as the annotations upon
their title certificates, plaintiffs are not entitled to recover possession of their expropriated
lots which are still devoted to the public use for which they were expropriated but only
to demand the fair market value of the same."
Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein
respondent,4 as security for their loans. For their failure to pay Lim despite demand, he had the
mortgage foreclosed in 1976. Thus, TCT No. 23934 was cancelled, and in lieu thereof, TCT No.
63894 was issued in his name.
On August 20, 1992, respondent Lim filed a complaint for quieting of title with the Regional
Trial Court (RTC), Branch 10, Cebu City, against General Romeo Zulueta, as Commander of the
Armed Forces of the Philippines, Commodore Edgardo Galeos, as Commander of Naval District
V of the Philippine Navy, Antonio Cabaluna, Doroteo Mantos and Florencio Belotindos, herein
petitioners. Subsequently, he amended the complaint to implead the Republic.
On May 4, 2001, the RTC rendered a decision in favor of respondent, thus:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff Vicente Lim and against all
defendants, public and private, declaring plaintiff Vicente Lim the absolute and exclusive
owner of Lot No. 932 with all the rights of an absolute owner including the right to
possession. The monetary claims in the complaint and in the counter claims contained in the
answer of defendants are ordered Dismissed.

Petitioners elevated the case to the Court of Appeals, docketed therein as CA-G.R. CV No.
72915. In its Decision5 dated September 18, 2003, the Appellate Court sustained the RTC
Decision, thus:
"Obviously, defendant-appellant Republic evaded its duty of paying what was due to the
landowners. The expropriation proceedings had already become final in the late 1940s and
yet, up to now, or more than fifty (50) years after, the Republic had not yet paid the
compensation fixed by the court while continuously reaping benefits from the expropriated
property to the prejudice of the landowner. x x x. This is contrary to the rules of fair play
because the concept of just compensation embraces not only the correct determination of
the amount to be paid to the owners of the land, but also the payment for the land within a
reasonable time from its taking. Without prompt payment, compensation cannot be
considered "just" for the property owner is made to suffer the consequence of being
immediately deprived of his land while being made to wait for a decade or more, in this
case more than 50 years, before actually receiving the amount necessary to cope with the
loss. To allow the taking of the landowners properties, and in the meantime leave them
empty-handed by withholding payment of compensation while the government speculates
on whether or not it will pursue expropriation, or worse, for government to subsequently
decide to abandon the property and return it to the landowners, is undoubtedly an
oppressive exercise of eminent domain that must never be sanctioned. (Land Bank of the
Philippines vs. Court of Appeals, 258 SCRA 404).
xxxxxx
An action to quiet title is a common law remedy for the removal of any cloud or doubt or
uncertainty on the title to real property. It is essential for the plaintiff or complainant to have a
legal or equitable title or interest in the real property, which is the subject matter of the action.
Also the deed, claim, encumbrance or proceeding that is being alleged as cloud on plaintiffs title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity
or legal efficacy (Robles vs. Court of Appeals, 328 SCRA 97). In view of the foregoing
discussion, clearly, the claim of defendant-appellant Republic constitutes a cloud, doubt or
uncertainty on the title of plaintiff-appellee Vicente Lim that can be removed by an action
to quiet title.
WHEREFORE, in view of the foregoing, and finding no reversible error in the appealed May 4,
2001 Decision of Branch 9, Regional Trial Court of Cebu City, in Civil Case No. CEB-12701,
the said decision is UPHELD AND AFFIRMED. Accordingly, the appeal is DISMISSED for
lack of merit."

Undaunted, petitioners, through the Office of the Solicitor General, filed with this Court a
petition for review on certiorari alleging that the Republic has remained the owner of Lot 932 as
held by this Court in Valdehueza vs. Republic.6
In our Resolution dated March 1, 2004, we denied the petition outright on the ground that the
Court of Appeals did not commit a reversible error. Petitioners filed an urgent motion for
reconsideration but we denied the same with finality in our Resolution of May 17, 2004.
On May 18, 2004, respondent filed an ex-parte motion for the issuance of an entry of judgment.
We only noted the motion in our Resolution of July 12, 2004.
On July 7, 2004, petitioners filed an urgent plea/motion for clarification, which is actually a
second motion for reconsideration. Thus, in our Resolution of September 6, 2004, we simply
noted without action the motion considering that the instant petition was already denied with
finality in our Resolution of May 17, 2004.
On October 29, 2004, petitioners filed a very urgent motion for leave to file a motion for
reconsideration of our Resolution dated September 6, 2004 (with prayer to refer the case to the
En Banc). They maintain that the Republics right of ownership has been settled in Valdehueza.
The basic issue for our resolution is whether the Republic has retained ownership of Lot 932
despite its failure to pay respondents predecessors-in-interest the just compensation therefor
pursuant to the judgment of the CFI rendered as early as May 14, 1940.
RULING
Initially, we must rule on the procedural obstacle.
While we commend the Republic for the zeal with which it pursues the present case, we reiterate
that its urgent motion for clarification filed on July 7, 2004 is actually a second motion for
reconsideration. This motion is prohibited under Section 2, Rule 52, of the 1997 Rules of Civil
Procedure, as amended, which provides:
"Sec. 2. Second motion for reconsideration. No second motion for reconsideration of a
judgment or final resolution by the same party shall be entertained."
Consequently, as mentioned earlier, we simply noted without action the motion since petitioners
petition was already denied with finality.
Considering the Republics urgent and serious insistence that it is still the owner of Lot 932 and
in the interest of justice, we take another hard look at the controversial issue in order to
determine the veracity of petitioners stance.

One of the basic principles enshrined in our Constitution is that no person shall be deprived of
his private property without due process of law; and in expropriation cases, an essential element
of due process is that there must be just compensation whenever private property is taken for
public use.7 Accordingly, Section 9, Article III, of our Constitution mandates: "Private property
shall not be taken for public use without just compensation."
The Republic disregarded the foregoing provision when it failed and refused to pay respondents
predecessors-in-interest the just compensation for Lots 932 and 939. The length of time and the
manner with which it evaded payment demonstrate its arbitrary high-handedness and
confiscatory attitude. The final judgment in the expropriation proceedings (Civil Case No. 781)
was entered on April 5, 1948. More than half of a century has passed, yet, to this day, the
landowner, now respondent, has remained empty-handed. Undoubtedly, over 50 years of delayed
payment cannot, in any way, be viewed as fair. This is more so when such delay is accompanied
by bureaucratic hassles. Apparent from Valdehueza is the fact that respondents predecessors-ininterest were given a "run around" by the Republics officials and agents. In 1950, despite the
benefits it derived from the use of the two lots, the National Airports Corporation denied
knowledge of the claim of respondents predecessors-in-interest. Even President Garcia, who
sent a letter to the Civil Aeronautics Administration and the Secretary of National Defense to
expedite the payment, failed in granting relief to them. And, on September 6, 1961, while the
Chief of Staff of the Armed Forces expressed willingness to pay the appraised value of the lots,
nothing happened.lawphil.net
The Court of Appeals is correct in saying that Republics delay is contrary to the rules of fair
play, as "just compensation embraces not only the correct determination of the amount to
be paid to the owners of the land, but also the payment for the land within a reasonable
time from its taking. Without prompt payment, compensation cannot be considered just."
In jurisdictions similar to ours, where an entry to the expropriated property precedes the payment
of compensation, it has been held that if the compensation is not paid in a reasonable time, the
party may be treated as a trespasser ab initio.8
Corollarily, in Provincial Government of Sorsogon vs. Vda. De Villaroya,9 similar to the present
case, this Court expressed its disgust over the governments vexatious delay in the payment of
just compensation, thus:
"The petitioners have been waiting for more than thirty years to be paid for their land
which was taken for use as a public high school. As a matter of fair procedure, it is the duty of
the Government, whenever it takes property from private persons against their will, to supply all
required documentation and facilitate payment of just compensation. The imposition of
unreasonable requirements and vexatious delays before effecting payment is not only
galling and arbitrary but a rich source of discontent with government. There should be

some kind of swift and effective recourse against unfeeling and uncaring acts of middle or
lower level bureaucrats."
We feel the same way in the instant case.
More than anything else, however, it is the obstinacy of the Republic that prompted us to dismiss
its petition outright. As early as May 19, 1966, in Valdehueza, this Court mandated the Republic
to pay respondents predecessors-in-interest the sum of P16,248.40 as "reasonable market value
of the two lots in question." Unfortunately, it did not comply and allowed several decades to pass
without obeying this Courts mandate. Such prolonged obstinacy bespeaks of lack of respect to
private rights and to the rule of law, which we cannot countenance. It is tantamount to
confiscation of private property. While it is true that all private properties are subject to the need
of government, and the government may take them whenever the necessity or the exigency of the
occasion demands, however, the Constitution guarantees that when this governmental right of
expropriation is exercised, it shall be attended by compensation.10 From the taking of private
property by the government under the power of eminent domain, there arises an implied promise
to compensate the owner for his loss.11
Significantly, the above-mentioned provision of Section 9, Article III of the Constitution is not a
grant but a limitation of power. This limiting function is in keeping with the philosophy of the
Bill of Rights against the arbitrary exercise of governmental powers to the detriment of the
individuals rights. Given this function, the provision should therefore be strictly interpreted
against the expropriator, the government, and liberally in favor of the property owner.12
Ironically, in opposing respondents claim, the Republic is invoking this Courts Decision in
Valdehueza, a Decision it utterly defied. How could the Republic acquire ownership over Lot 932
when it has not paid its owner the just compensation, required by law, for more than 50 years?
The recognized rule is that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. Jurisprudence on this settled
principle is consistent both here and in other democratic jurisdictions. In Association of Small
Landowners in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform,13 thus:
"Title to property which is the subject of condemnation proceedings does not vest the
condemnor until the judgment fixing just compensation is entered and paid, but the
condemnors title relates back to the date on which the petition under the Eminent Domain Act,
or the commissioners report under the Local Improvement Act, is filed.
x x x Although the right to appropriate and use land taken for a canal is complete at the
time of entry, title to the property taken remains in the owner until payment is actually
made. (Emphasis supplied.)

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to
property does not pass to the condemnor until just compensation had actually been made. In fact,
the decisions appear to be uniform to this effect. As early as 1838, in Rubottom v. McLure, it was
held that actual payment to the owner of the condemned property was a condition
precedent to the investment of the title to the property in the State albeit not to the
appropriation of it to public use. In Rexford v. Knight, the Court of Appeals of New York said
that the construction upon the statutes was that the fee did not vest in the State until the payment
of the compensation although the authority to enter upon and appropriate the land was complete
prior to the payment. Kennedy further said that both on principle and authority the rule is . . .
that the right to enter on and use the property is complete, as soon as the property is
actually appropriated under the authority of law for a public use, but that the title does not
pass from the owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:
If the laws which we have exhibited or cited in the preceding discussion are attentively
examined it will be apparent that the method of expropriation adopted in this jurisdiction
is such as to afford absolute reassurance that no piece of land can be finally and
irrevocably taken from an unwilling owner until compensation is paid..."(Emphasis
supplied.)
Clearly, without full payment of just compensation, there can be no transfer of title from the
landowner to the expropriator. Otherwise stated, the Republics acquisition of ownership is
conditioned upon the full payment of just compensation within a reasonable time.14
Significantly, in Municipality of Bian v. Garcia15 this Court ruled that the expropriation of lands
consists of two stages, to wit:
"x x x 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" x x x.
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. x x x.
It is only upon the completion of these two stages that expropriation is said to have been
completed. In Republic v. Salem Investment Corporation,16 we ruled that, "the process is not

completed until payment of just compensation." Thus, here, the failure of the Republic to pay
respondent and his predecessors-in-interest for a period of 57 years rendered the expropriation
process incomplete.
The Republic now argues that under Valdehueza, respondent is not entitled to recover possession
of Lot 932 but only to demand payment of its fair market value. Of course, we are aware of the
doctrine that "non-payment of just compensation (in an expropriation proceedings) does not
entitle the private landowners to recover possession of the expropriated lots." This is our ruling
in the recent cases of Republic of the Philippines vs. Court of Appeals, et al.,17 and Reyes vs.
National Housing Authority.18 However, the facts of the present case do not justify its
application. It bears stressing that the Republic was ordered to pay just compensation twice, the
first was in the expropriation proceedings and the second, in Valdehueza. Fifty-seven (57) years
have passed since then. We cannot but construe the Republics failure to pay just
compensation as a deliberate refusal on its part. Under such circumstance, recovery of
possession is in order. In several jurisdictions, the courts held that recovery of possession may be
had when property has been wrongfully taken or is wrongfully retained by one claiming to act
under the power of eminent domain19 or where a rightful entry is made and the party
condemning refuses to pay the compensation which has been assessed or agreed upon;20 or
fails or refuses to have the compensation assessed and paid.21
The Republic also contends that where there have been constructions being used by the military,
as in this case, public interest demands that the present suit should not be sustained.
It must be emphasized that an individual cannot be deprived of his property for the public
convenience.22 In Association of Small Landowners in the Philippines, Inc. vs. Secretary of
Agrarian Reform,23 we ruled:
"One of the basic principles of the democratic system is that where the rights of the individual
are concerned, the end does not justify the means. It is not enough that there be a valid objective;
it is also necessary that the means employed to pursue it be in keeping with the Constitution.
Mere expediency will not excuse constitutional shortcuts. There is no question that not even
the strongest moral conviction or the most urgent public need, subject only to a few notable
exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say
that a person invoking a right guaranteed under Article III of the Constitution is a
majority of one even as against the rest of the nation who would deny him that right.
The right covers the persons life, his liberty and his property under Section 1 of Article III
of the Constitution. With regard to his property, the owner enjoys the added protection of
Section 9, which reaffirms the familiar rule that private property shall not be taken for
public use without just compensation."

The Republics assertion that the defense of the State will be in grave danger if we shall order the
reversion of Lot 932 to respondent is an overstatement. First, Lot 932 had ceased to operate as
an airport. What remains in the site is just the National Historical Institutes marking stating that
Lot 932 is the "former location of Lahug Airport." And second, there are only thirteen (13)
structures located on Lot 932, eight (8) of which are residence apartments of military
personnel. Only two (2) buildings are actually used as training centers. Thus, practically
speaking, the reversion of Lot 932 to respondent will only affect a handful of military personnel.
It will not result to "irreparable damage" or "damage beyond pecuniary estimation," as what the
Republic vehemently claims.
We thus rule that the special circumstances prevailing in this case entitle respondent to recover
possession of the expropriated lot from the Republic. Unless this form of swift and effective
relief is granted to him, the grave injustice committed against his predecessors-in-interest, though
no fault or negligence on their part, will be perpetuated. Let this case, therefore, serve as a wakeup call to the Republic that in the exercise of its power of eminent domain, necessarily in
derogation of private rights, it must comply with the Constitutional limitations. This Court, as the
guardian of the peoples right, will not stand still in the face of the Republics oppressive and
confiscatory taking of private property, as in this case.
At this point, it may be argued that respondent Vicente Lim acted in bad faith in entering into a
contract of mortgage with Valdehueza and Panerio despite the clear annotation in TCT No.
23934 that Lot 932 is "subject to the priority of the National Airports Corporation [to
acquire said parcels of land] x x x upon previous payment of a reasonable market value."
The issue of whether or not respondent acted in bad faith is immaterial considering that the
Republic did not complete the expropriation process. In short, it failed to perfect its title over Lot
932 by its failure to pay just compensation. The issue of bad faith would have assumed relevance
if the Republic actually acquired title over Lot 932. In such a case, even if respondents title was
registered first, it would be the Republics title or right of ownership that shall be upheld. But
now, assuming that respondent was in bad faith, can such fact vest upon the Republic a
better title over Lot 932? We believe not. This is because in the first place, the Republic has no
title to speak of.
At any rate, assuming that respondent had indeed knowledge of the annotation, still nothing
would have prevented him from entering into a mortgage contract involving Lot 932 while the
expropriation proceeding was pending. Any person who deals with a property subject of an
expropriation does so at his own risk, taking into account the ultimate possibility of losing the
property in favor of the government. Here, the annotation merely served as a caveat that the
Republic had a preferential right to acquire Lot 932 upon its payment of a "reasonable
market value." It did not proscribe Valdehueza and Panerio from exercising their rights of
ownership including their right to mortgage or even to dispose of their property. In Republic vs.

Salem Investment Corporation,24 we recognized the owners absolute right over his property
pending completion of the expropriation proceeding, thus:
"It is only upon the completion of these two stages that expropriation is said to have been
completed. Moreover, it is only upon payment of just compensation that title over the property
passes to the government. Therefore, until the action for expropriation has been completed and
terminated, ownership over the property being expropriated remains with the registered owner.
Consequently, the latter can exercise all rights pertaining to an owner, including the right
to dispose of his property subject to the power of the State ultimately to acquire it through
expropriation.
It bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to respondent in 1964,
they were still the owners thereof and their title had not yet passed to the petitioner Republic. In
fact, it never did. Such title or ownership was rendered conclusive when we categorically ruled
in Valdehueza that: "It is true that plaintiffs are still the registered owners of the land, there
not having been a transfer of said lots in favor of the Government."
For respondents part, it is reasonable to conclude that he entered into the contract of mortgage
with Valdehueza and Panerio fully aware of the extent of his right as a mortgagee. A mortgage is
merely an accessory contract intended to secure the performance of the principal obligation. One
of its characteristics is that it is inseparable from the property. It adheres to the property
regardless of who its owner may subsequently be.25 Respondent must have known that even if
Lot 932 is ultimately expropriated by the Republic, still, his right as a mortgagee is protected. In
this regard, Article 2127 of the Civil Code provides:
"Art. 2127. The mortgage extends to the natural accessions, to the improvements, growing
fruits, and the rents or income not yet received when the obligation becomes due, and to the
amount of the indemnity granted or owing to the proprietor from the insurers of the property
mortgaged, or in virtue of expropriation for public use, with the declarations, amplifications,
and limitations established by law, whether the estate remains in the possession of the
mortgagor or it passes in the hands of a third person.
In summation, while the prevailing doctrine is that "the non-payment of just compensation does
not entitle the private landowner to recover possession of the expropriated lots,26 however, in
cases where the government failed to pay just compensation within five (5)27 years from the
finality of the judgment in the expropriation proceedings, the owners concerned shall have
the right to recover possession of their property. This is in consonance with the principle that "the
government cannot keep the property and dishonor the judgment."28 To be sure, the five-year
period limitation will encourage the government to pay just compensation punctually. This is in
keeping with justice and equity. After all, it is the duty of the government, whenever it takes
property from private persons against their will, to facilitate the payment of just compensation. In

Cosculluela v. Court of Appeals,29 we defined just compensation as not only the correct
determination of the amount to be paid to the property owner but also the payment of the
property within a reasonable time. Without prompt payment, compensation cannot be
considered "just."
WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 72915 is
AFFIRMED in toto.
The Republics motion for reconsideration of our Resolution dated March 1, 2004 is DENIED
with FINALITY. No further pleadings will be allowed.
Let an entry of judgment be made in this case.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez,
Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario, and Garcia, JJ., concur.