G.R. No. 125218 & G.R. No. 128077 January 23, 1998
FILSTREAM INTERNATIONAL INCORPORATED, petitioner, vs. COURT OF APPEALS, JUDGE FELIPE S. TONGCO and THE CITY OF MANILA, respondents. ( G.R. No. 125218 )

FILSTREAM INTERNATIONAL INCORPORATED, petitioner, vs. COURT OF APPEALS, ORLANDO MALIT, et al., respondents. (G.R. No. 128077)

FACTS

Petitioner Filstream International, Inc. is the registered owner of adjacent parcels of land in Tondo, Manila, with a total area of 3,571.10 square meters. On January 7, 1993, petitioner filed an ejectment suit against the occupants (private respondents in G.R. No. 128077) for termination of lease and non-payment of rentals. The Metropolitan Trial Court (MTC) ruled in favor of petitioner, a decision affirmed by the Regional Trial Court (RTC) and the Court of Appeals (CA), becoming final and executory. During the pendency of the ejectment case, the City of Manila approved Ordinance No. 7813 on November 5, 1993, authorizing the acquisition of said parcels of land, and later Ordinance No. 7855 declaring their expropriation for distribution to qualified tenants under its “land-for-the-landless” program. On May 23, 1994, the City filed a complaint for eminent domain before the RTC, which issued a Writ of Possession in favor of the City. Petitioner filed motions to dismiss the complaint and to quash the writ, which were denied by the RTC. Petitioner’s petition for certiorari with the CA ( G.R. No. 125218 ) was dismissed for non-compliance with formal requirements. Meanwhile, after the ejectment decision became final, the MTC issued a Writ of Execution. The occupants and the City moved to quash the writ, citing the expropriation as a supervening event. The MTC denied these motions and ordered demolition. The occupants and the City filed separate petitions for certiorari with the RTC, which issued injunctions against the execution. Petitioner’s subsequent petition for certiorari with the CA (G.R. No. 128077) was also dismissed. Hence, these consolidated petitions.

ISSUE

Whether the expropriation of petitioner’s properties by the City of Manila complied with the due process requirements under Republic Act No. 7279 (The Urban Development and Housing Act of 1992), particularly the order of priority in Section 9 and the procedure in Section 10.

RULING

The Supreme Court GRANTED the petitions. The expropriation of petitioner’s properties by the City of Manila was declared invalid for non-compliance with the mandatory procedure under R.A. 7279. Sections 9 and 10 of R.A. 7279 establish a sequence in acquiring land for socialized housing: government lands, then alienable lands of the public domain, then unregistered or abandoned lands, and only lastly, private lands. For private lands, the law requires exhaustion of all other modes of acquisition (negotiated purchase, voluntary offer to sell, expropriation) and a showing of compliance with the order of priority. The records revealed no showing that the City complied with these requirements before expropriating petitioner’s land. The expropriation, being void for violating petitioner’s right to due process, could not constitute a supervening event that would bar the execution of the final ejectment judgment. The resolutions of the Court of Appeals in both cases were REVERSED and SET ASIDE.