G.R. No. 175983 ; April 16, 2009
METROPOLITAN CEBU WATER DISTRICT (MCWD), Petitioner, vs. J. KING AND SONS COMPANY, INC., Respondent.

FACTS

Petitioner Metropolitan Cebu Water District (MCWD), a government-owned and controlled corporation, sought to acquire a five-square meter portion of respondent J. King and Sons Company, Inc.’s property in Banilad, Cebu City, occupied by its production well. After failed negotiations for a voluntary sale, MCWD initiated expropriation proceedings. Its Board of Directors passed Board Resolution No. 015-2004, and the Local Water Utilities Administration (LWUA) authorized the filing of the expropriation complaint. MCWD filed the complaint and deposited ₱17,500.00 (100% of the current zonal value) with the Clerk of Court. The Regional Trial Court (RTC) granted MCWD’s motion for a writ of possession. Respondent filed a petition for certiorari with the Court of Appeals, which nullified the RTC’s orders and the writ of possession, ruling that the board resolution lacked particularity, there was no genuine necessity for expropriation, and the reliance on Republic Act No. 8974 for valuation contravened judicial determination of just compensation.

ISSUE

1. Whether there was sufficient authority from MCWD’s board of directors to institute the expropriation complaint.
2. Whether the procedure in obtaining a writ of possession was properly observed.

RULING

1. Yes, there was sufficient authority. MCWD’s power of eminent domain is derived from its charter, Presidential Decree No. 198, as amended. The exercise of this power requires: (a) a board resolution authorizing the expropriation, and (b) review by the LWUA. Both requirements were met. Board Resolution No. 015-2004 authorized the general manager to file expropriation cases. Furthermore, the LWUA Administrator, in a letter dated February 28, 2005, explicitly authorized MCWD to file the expropriation case against the owner of the specific five-square meter lot, identified by its TCT number. This letter provided the necessary particularity and debunked the claim of lack of LWUA review.
2. Yes, the procedure was properly observed. Republic Act No. 8974 , which governs the acquisition of right-of-way for national government infrastructure projects (including projects by government-owned and controlled corporations like MCWD), applies to this expropriation. Under Section 4 of R.A. No. 8974 , the implementing agency is entitled to a writ of possession upon filing the complaint and after paying the owner an amount equivalent to 100% of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue. MCWD complied by depositing ₱17,500.00, equivalent to 100% of the zonal value. The Court of Appeals erred in ruling that R.A. No. 8974 contravenes the judicial determination of just compensation. The law prescribes the standards for determining just compensation but does not preclude judicial determination. The payment of the zonal value is a prerequisite for the issuance of a writ of possession, but the final determination of just compensation remains a judicial function to be undertaken during the second stage of the expropriation proceedings. The claim regarding the necessity of the expropriation (e.g., the small size of the property) is a justiciable question to be resolved in the first stage of the expropriation proceeding, not a ground to nullify the writ of possession at the outset.