G.R. No. 246201, December 07, 2022.
JOSE CO LEE, PETITIONER, VS. CITY OF OLONGAPO REPRESENTED BY ITS CITY MAYOR HON. ROLEN C. PAULINO, RESPONDENT.

FACTS

Petitioner Jose Co Lee is the registered owner of a parcel of land in East Tapinac, Olongapo City. The Sangguniang Panlungsod of Olongapo passed Ordinance No. 12, Series of 2012, reclassifying and rezoning government properties for a new civic center complex, later amended by Ordinance No. 19, Series of 2014. On December 23, 2014, the City’s planning and development coordinator, Architect Tony Kar M. Balde III, sent Lee a Notice of Negotiated Sale or Expropriation, offering to purchase the property. A subsequent letter dated March 24, 2015, offered PHP 13,824,000.00, which Lee rejected. On May 15, 2015, the Sangguniang Panlungsod passed Ordinance No. 15, Series of 2015, authorizing Mayor Rolen C. Paulino to expropriate parcels of land in East Tapinac for the civic center complex. After failing to reach an agreement, the City filed a Complaint for Expropriation. Lee filed an Answer alleging, among other defenses, that the Complaint stated no cause of action, the expropriation was not for public use, the Sangguniang Panlungsod failed to authorize the Mayor to file the Complaint and sign the verification, and that just compensation should be based on 100% of the BIR zonal valuation under The Right-of-Way Act, not 15% of the tax declaration value. During a hearing, Lee’s counsel called him to the witness stand to identify his Judicial Affidavit, but the City’s counsel objected on the ground that it was not offered to prove his affirmative defenses. The Regional Trial Court (RTC) issued an Order giving Lee time to file a comment on the objection and later deemed the case submitted for resolution. The RTC dismissed Lee’s affirmative defenses and declared the City had a lawful right to expropriate the property. The Court of Appeals affirmed the RTC’s ruling. Lee filed a Petition for Review on Certiorari before the Supreme Court.

ISSUE

Whether the Court of Appeals erred in affirming the trial court’s order holding that the respondent City of Olongapo has the lawful right to expropriate and take possession of the property owned by petitioner Jose Co Lee.

RULING

The Supreme Court found the Petition meritorious. It held that while the Mayor had authority to file the Complaint pursuant to Ordinance No. 15, the trial court violated Lee’s right to due process by not conducting a hearing to receive evidence on his affirmative defenses. Affirmative defenses that necessitate the presentation of evidence aliunde must be addressed in a full-blown trial and hearing. The absence of such a hearing constituted a violation of the property owner’s right to due process. The Court emphasized that the property owner who objects to the expropriation proceeding may file an answer, which shall specifically state their objections and defenses to the taking of their property. The case was remanded to the trial court for further proceedings to allow Lee to present evidence on his affirmative defenses.