G.R. No. 202051. April 18, 2016.
Republic of the Philippines, represented by the Department of Public Works & Highways; Engineer Simplicio D. Gonzales, District Engineer, Second Engineering District of Camarines Sur; and Engineer Victorino M. Del Socorro, Jr., Project Engineer, DPWH, Baras, Canaman, Camarines Sur, Petitioners, vs. Spouses Ildefonso B. Regulto and Francia R. Regulto, Respondents.

FACTS

Respondents Spouses Ildefonso and Francia Regulto are the registered owners of a 300-square-meter property in Naga City, Camarines Sur, covered by Transfer Certificate of Title (TCT) No. 086-2010000231. They acquired the property in 1994. The property originated from a Free Patent property covered by Original Certificate of Title (OCT) No. 235 dated April 14, 1956. In April 2011, the DPWH informed the spouses of the construction of the Naga City-Milaor Bypass Road, which would traverse 162 square meters of their property. The DPWH initially offered P243,000.00 as just compensation but later withdrew the offer. In a letter dated May 11, 2006, the DPWH, through District Engineer Rolando P. Valdez, informed the spouses they were not entitled to just compensation because their title originated from a Free Patent under Commonwealth Act No. 141 (Public Land Act), which contains a reservation of a 60-meter easement of right-of-way for public highways, with payment only for damages to improvements. The spouses protested, arguing their titled property was private land and not subject to the easement. They filed a complaint for payment of just compensation before the Regional Trial Court (RTC) of Naga City, Branch 62. The petitioners (Republic, et al.) filed a Motion to Dismiss, arguing no cause of action due to the statutory easement under C.A. No. 141 and failure to exhaust administrative remedies. The RTC denied the motion. In its Order dated May 24, 2012, the RTC ordered the petitioners to pay the spouses P243,000.00 as just compensation, reasoning that the government waived the encumbrance by not opposing the subdivision and sale of the lots after the 25-year period from the patent. The petitioners filed a petition for review on certiorari directly with the Supreme Court.

ISSUE

Whether the respondents are entitled to just compensation for the portion of their property traversed by the Naga City-Milaor Bypass Road, considering that the land was originally acquired by Free Patent under Commonwealth Act No. 141, which reserves an easement of right-of-way for public highways.

RULING

No. The Supreme Court partially granted the petition. The Court ruled that the property remains subject to the statutory easement under Section 112 of Commonwealth Act No. 141, as amended by Presidential Decree No. 635. This provision imposes a lien or legal easement in favor of the government, reserving a right-of-way not exceeding sixty meters for public highways over lands acquired under free patent or other public land patents. This encumbrance is annotated on the original certificate of title and, pursuant to Section 44 of Presidential Decree No. 1529 (Property Registration Decree), such an encumbrance attaches to the land and is carried over to all subsequent transfers, including the respondents’ TCT. The Court cited National Irrigation Administration v. Court of Appeals, which held that the easement is a subsisting burden on the land, and the government’s right to use the land within the 60-meter margin for public highways is not lost by prescription, laches, or estoppel. The RTC erred in concluding the government waived the easement by not opposing the subdivision; the law does not require the government to take affirmative action to preserve the easement. Therefore, the respondents are not entitled to payment for the land itself. However, they are entitled to payment for the improvements on the land affected by the project. The Court modified the RTC’s order, directing the petitioners to pay just compensation only for the improvements, if any, on the 162-square-meter area, in accordance with Section 5 of the Implementing Rules and Regulations of Republic Act No. 8974. The case was remanded to the RTC to determine the compensation for improvements.