G.R. No. L-55166 and L-55167, May 21, 1987
TIONGSON, ET AL. vs. NATIONAL HOUSING AUTHORITY AND THE REPUBLIC OF THE PHILIPPINES

FACTS

The petitioners, owners of the “Tambunting Estate” and properties along Estero de Sunog-Apog in Tondo, Manila, challenged the constitutionality of Presidential Decrees Nos. 1669 and 1670. These decrees, issued on January 28, 1980, declared their respective properties expropriated for a zonal improvement program under a national slum improvement and resettlement policy. The decrees authorized the National Housing Authority to immediately take possession and implement a development plan. Crucially, Section 6 of each decree pegged just compensation based on the market value determined by the City Assessor under existing laws, with explicit instructions to consider that the lands were unimproved and squatted upon, which would “considerably depress the expropriation cost.” Each decree also set a maximum compensation ceiling—P17 million for Tambunting and P8 million for Sunog-Apog—payable in five annual installments.

ISSUE

The core issue is whether Presidential Decrees Nos. 1669 and 1670 are unconstitutional for violating the petitioners’ rights to due process, equal protection, and just compensation.

RULING

The Supreme Court declared the decrees unconstitutional. The legal logic centers on the violation of the constitutional guarantee of just compensation. The Court held that just compensation must be the fair and full equivalent of the property taken, determined as of the time of taking. The decrees impermissibly predetermined compensation by mandating the City Assessor to consider specific depreciating factors (like the presence of squatters and lack of improvements) and by imposing arbitrary maximum ceilings. This legislative pre-fixing effectively deprived the courts of their judicial function to determine just compensation based on competent and actual evidence, such as fair market value at the time of expropriation. By dictating a formula designed to lower value and setting a price cap, the decrees constituted a confiscatory taking, denying the owners the true and fair equivalent of their property. The Court emphasized that while the state has the power to designate property for expropriation, the determination of just compensation is a judicial prerogative that cannot be usurped by legislative or executive fiat in a manner that precludes a fair judicial ascertainment. The decrees’ flawed compensation scheme rendered them invalid for violating the fundamental right to just compensation.