G.R. No. 169263; September 21, 2011
CITY OF MANILA, Petitioner, vs. MELBA TAN TE, Respondent.

FACTS

On March 15, 1998, Manila City Mayor Joselito L. Atienza approved Ordinance No. 7951, enacted on February 3, 1998, authorizing the acquisition by negotiation or expropriation of real property along Maria Clara and Governor Forbes Streets for low-cost housing. The property included a 475-square-meter lot owned by respondent Melba Tan Te, which she acquired in 1996. The lot was occupied by families whose leasehold rights had expired. Respondent had obtained a favorable ejectment ruling and a Writ of Demolition against the occupants. The City of Manila initially filed an expropriation case, which was dismissed without prejudice after respondent moved for dismissal due to lack of cause of action, lack of a showing of an authorizing ordinance, and non-compliance with Republic Act (R.A.) No. 7279 (Urban Development and Housing Act of 1992).
On November 16, 2000, petitioner filed a second Complaint for expropriation before the Regional Trial Court (RTC) of Manila, Branch 24, attaching Ordinance No. 7951. It alleged that it had offered to purchase the property for ₱824,330.00 via a letter on May 21, 1999, but respondent failed to retrieve it despite notices. Petitioner deposited ₱1,000,000.00 cash in trust with the Land Bank of the Philippines as just compensation.
Respondent filed a Motion to Dismiss in lieu of an answer, arguing that Ordinance No. 7951 was invalid for taking property without just compensation; that petitioner failed to comply with the mandatory requirements of Sections 9 and 10 of R.A. No. 7279 (priorities and modes of land acquisition); and that she qualified as a “small property owner” exempt from R.A. No. 7279, as the subject lot was her only real property.
The RTC issued an Order on June 13, 2001, dismissing the complaint. It held that petitioner failed to submit a certification from the City Treasurer’s Office on the amount needed for just compensation, failed to show compliance with Sections 9 and 10 of R.A. No. 7279, and that respondent, owning no other realty, was a small property owner exempt from expropriation under the law. The Court of Appeals affirmed the RTC’s decision and denied reconsideration.

ISSUE

Whether the Regional Trial Court correctly dismissed the expropriation complaint based on the grounds raised in respondent’s Motion to Dismiss, particularly non-compliance with R.A. No. 7279 and respondent’s status as a small property owner.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ decision. The RTC correctly dismissed the expropriation complaint.
The Court held that in expropriation cases, a defendant may file a motion to dismiss in lieu of an answer to raise all objections and defenses to the plaintiff’s right to take the property. Respondent’s Motion to Dismiss properly raised the grounds of failure to state a cause of action due to non-compliance with R.A. No. 7279 and her exemption as a small property owner. These grounds are permissible in a motion to dismiss as they pertain to the very authority to expropriate.
The Court emphasized that compliance with Sections 9 and 10 of R.A. No. 7279 is mandatory for expropriation intended for socialized housing. These sections establish a prioritized order for land acquisition (e.g., government-owned lands first) and designate expropriation as a last resort. The complaint did not allege any prior compliance with these mandatory requirements, rendering it insufficient to establish a cause of action.
Furthermore, the Court found that respondent, owning only the 475-square-meter subject lot, qualified as a “small property owner” as defined in Section 3(q) of R.A. No. 7279 and was thus exempt from expropriation under the Act. Petitioner’s claim that it was denied an opportunity to prove otherwise in a full trial was unavailing, as these jurisdictional and foundational defects were apparent from the pleadings and could be resolved without a trial on the merits.
The Court also noted that the deposit of ₱1,000,000.00 did not cure the fundamental defects in the complaint regarding compliance with R.A. No. 7279 and the application of its exemptions. Therefore, the dismissal of the complaint was proper.