G.R. No. L-70959 & G.R. No. 72461, October 26, 1987
ELIGIO LEYVA, petitioner, vs. INTERMEDIATE APPELLATE COURT and REPUBLIC OF THE PHILIPPINES, respondents. REPUBLIC OF THE PHILIPPINES, petitioner, vs. INTERMEDIATE APPELLATE COURT and ELIGIO LEYVA, respondents.

FACTS

The Republic of the Philippines initiated an expropriation case to acquire portions of Eligio Leyva’s three contiguous parcels of land in General Santos City for the Makar Wharf development. The parties failed to agree on a price. The Republic filed a complaint, and after a provisional deposit, a writ of possession was issued. The trial court, applying Presidential Decrees Nos. 76, 464, and 794, fixed just compensation based on the formula stated therein: the lower value between the owner’s sworn declaration and the assessor’s market value. Using Leyva’s own sworn statement, which declared a drastically low value (e.g., P0.036 per sq.m.), the court set minimal compensation. Leyva contested the constitutionality of the decrees, arguing they infringed on judicial power.
The Intermediate Appellate Court affirmed with modification, adjusting compensation for two lots to P20 and P30 per square meter based on the assessor’s valuation but still within the decrees’ framework. Both parties sought review: Leyva assailed the constitutionality of the decrees and the compensation, while the Republic challenged the appellate court’s authority to modify the compensation and the appointment of commissioners.

ISSUE

The core issue is whether the provisions of Presidential Decrees Nos. 76, 464, 794, and 1533, which prescribe a formula for determining just compensation in expropriation cases, are constitutional.

RULING

The Supreme Court granted the petitions, declared the challenged decrees unconstitutional, and remanded the case for proper determination of just compensation. The Court, citing its recent ruling in Export Processing Zone Authority v. Dulay, held that the decrees’ formula—limiting compensation to the lower of the owner’s declared value or the assessor’s market value—constitutes an impermissible legislative encroachment on a fundamentally judicial function. The determination of just compensation is a judicial prerogative that requires the exercise of discretion and the consideration of all relevant factors, not a rigid, pre-ordained formula. Such a legislative prescription unduly restricts the courts’ constitutional duty to ensure the owner receives full and fair equivalent for the property taken.
Furthermore, the Court ruled that Presidential Decree No. 1533, which sought to eliminate the court’s discretion to appoint commissioners under Rule 67 of the Rules of Court, is likewise unconstitutional. The power to appoint commissioners is an integral part of the judicial process for ascertaining just compensation. Consequently, there was no valid repeal of Rule 67. The case was remanded to the trial court for the determination of just compensation in accordance with the procedure outlined in Rule 67, free from the unconstitutional constraints of the presidential decrees.