G.R. No. 181892, 209917, 209696, 209731 September 8, 2015
Republic of the Philippines, represented by Executive Secretary Eduardo R. Ermita, the Department of Transportation and Communications, and Manila International Airport Authority vs. Hon. Jesus M. Mupas, in his capacity as Acting Presiding Judge of the Regional Trial Court, National Capital Judicial Region, Branch 117, Pasay City, and Philippine International Air Terminals Co., Inc.; Republic of the Philippines, represented by Executive Secretary Eduardo Ermita, Department of Transportation and Communications, and Manila International Airport Authority vs. Philippine International Air Terminals Company, Inc., Takenaka Corporation and Asahikosan Corporation; Takenaka Corporation and Asahikosan Corporation vs. Republic of the Philippines, represented by Executive Secretary Eduardo Ermita, Department of Transportation and Communications, Manila International Airport Authority, and Philippine International Air Terminals Company, Inc.; Philippine International Air Terminals Co., Inc. vs. Republic of the Philippines, as represented by Executive Secretary Eduardo Ermita, Department of Transportation and Communications, Manila International Airport Authority, Takenaka Corporation, and Asahikosan Corporation.

FACTS

The government pursued the remedy of expropriation to comply with the Supreme Court’s Decision in Agan, Jr. v. Philippine International Air Terminals Co., Inc., which declared the procurement contract for the construction of the NAIA Terminal 3 illegal and void ab initio. The improvements were built by Philippine International Air Terminals Co., Inc. (PIATCO) through its subcontractors.

ISSUE

The propriety of using expropriation as the government’s remedy to take over the NAIA Terminal 3 improvements, which were built under an illegal contract, and the determination of just compensation for such improvements.

RULING

Justice Leonen concurred in the result but expressed serious doubts about the propriety of the expropriation remedy. He opined that the improvements, being the product of an illegal and void ab initio contract, are not the kind of private property protected under Article III, Section 9 of the Constitution and should not be the subject of expropriation, as this would nullify the essence of the contract’s illegality. He suggested that any subsequent government payment should only be to adhere to the civil law policy against unjust enrichment, and the valuation should be based on the property’s utility at present, not its fair market value at the time of taking. However, since these issues were not raised and the government chose expropriation, the Court could not adequately address them. Justice Leonen reiterated his view that just compensation, while based on the value at the time of taking, should consider the present value of the property.