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517 Phil. 1
EN BANC
[ G.R. NO. 166429, February 01, 2006 ]
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY EXECUTIVE SECRETARY EDUARDO R. ERMITA, THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), AND THE MANILA INTERNATIONAL AIRPORT AUTHORITY (MIAA), PETITIONERS, VS. HON. HENRICK F. GINGOYON, IN HIS CAPACITY AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, BRANCH 117, PASAY CITY AND PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., RESPONDENTS.
R E S O L U T I O N
TINGA, J.:
This Resolution treats of the following motions:
On the newly raised arguments, there are considerable factual elements brought up by the Government. In the main, the Government devotes significant effort in diminishing PIATCO's right to just compensation as builder or owner of the NAIA 3. Particularly brought to fore are the claims relating to two entities, Takenaka Corporation (Takenaka) and Asahikosan (Asahikosan) Corporation, who allegedly claim "significant liens" on the terminal, arising from their alleged unpaid bills by virtue of an Engineering, Procurement and Construction Contract they had with PIATCO. On account of these adverse claims, the Government now claims as controvertible the question of who is the builder of the NAIA 3.
The Government likewise claims as "indispensable" the need of Takenaka and Asahikosan to provide the necessary technical services and supplies so that all the various systems and equipment will be ready and operational in a manner that allows the Government to possess a fully-capable international airport terminal.
The Government's concerns that impelled the filing of its Motion for Reconsideration are summed up in the following passage therein: "The situation the Republic now faces is that if any part of its Php3,002,125,000 deposit is released directly to PIATCO, and PIATCO, as in the past, does not wish to settle its obligations directly to Takenaka, Asahikosan and Fraport, the Republic may end up having expropriated a terminal with liens and claims far in excess of its actual value, the liens remain unextinguished, and PIATCO on the other hand, ends up with the Php3,0002,125,000 in its pockets gratuitously."
The Court is not wont to reverse its previous rulings based on factual premises that are not yet conclusive or judicially established. Certainly, whatever claims or purported liens Takenaka and Asahikosan against PIATCO or over the NAIA 3 have not been judicially established. Neither Takenaka nor Asahikosan are parties to the present action, and thus have not presented any claim which could be acted upon by this Court. The earlier adjudications in Agan v. PIATCO made no mention of either Takenaka or Asahikosan, and certainly made no declaration as to their rights to any form of compensation. If there is indeed any right to remuneration due to these two entities arising from NAIA 3, they have not yet been established by the courts of the land.
It must be emphasized that the conclusive ruling in the Resolution dated 21 January 2004 in Agan v. PIATCO (Agan 2004) is that PIATCO, as builder of the facilities, must first be justly compensated in accordance with law and equity for the Government to take over the facilities. It is on that premise that the Court adjudicated this case in its 19 December 2005 Decision.
While the Government refers to a judgment rendered by a London court in favor of Takenaka and Asahikosan against PIATCO in the amount of US$82 Million, it should be noted that this foreign judgment is not yet binding on Philippine courts. It is entrenched in Section 48, Rule 39 of the Rules of Civil Procedure that a foreign judgment on the mere strength of its promulgation is not yet conclusive, as it can be annulled on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.[1] It is likewise recognized in Philippine jurisprudence and international law that a foreign judgment may be barred from recognition if it runs counter to public policy.[2]
Assuming that PIATCO indeed has corresponding obligations to other parties relating to NAIA 3, the Court does not see how such obligations, yet unproven, could serve to overturn the Decision mandating that the Government first pay PIATCO the amount of 3.02 Million Pesos before it may acquire physical possession over the facilities. This directive enjoining payment is in accordance with Republic Act No. 8974, and under the mechanism established by the law the amount to be initially paid is that which is provisionally determined as just compensation. The provisional character of this payment means that it is not yet final, yet sufficient under the law to entitle the Government to the writ of possession over the expropriated property.
There are other judicial avenues outside of this Motion for Reconsideration wherein all other claims relating to the airport facilities may be ventilated, proved and determined. Since such claims involve factual issues, they must first be established by the appropriate trier of facts before they can be accorded any respect by or binding force on this Court.
The other grounds raised in the Motion for Reconsideration are similarly flawed.
The Government argues that the 2004 Resolution in Agan did not strictly require the payment of just compensation before the Government can take over the airport facilities. Reliance is placed on the use by the Court of the word "for", instead of "before." Yet the clear intent of that ruling is to mandate payment of just compensation as a condition precedent before the Government could acquire physical possession over the airport facilities. The qualification was made out of due consideration of the fact that PIATCO had already constructed the facilities at its own expense when its contracts with the Government were nullified.
Even assuming that "for" may be construed as not necessarily meaning "prior to", it cannot be denied that Rep. Act No. 8974 does require prior payment to the owner before the Government may acquire possession over the property to be expropriated. Even Rule 67 requires the disbursement of money by way of deposit as a condition precedent prior to entitlement to a writ of possession. As the instant case is one for expropriation, our pronouncement is worthily consistent with the principles and laws that govern expropriation cases.
The Government likewise adopts the position raised by the Dissenting Opinion of Mr. Justice Corona that Rep. Act No. 8974 could not repeal Rule 67 of the Rules of Court, since the deposit of the assessed value is a procedural matter. It adds that otherwise, Rep. Act No. 8974 is unconstitutional.
Of course it is too late in the day to question the constitutionality of Rep. Act No. 8974, an issue that was not raised in the petition. Still, this point was already addressed in the Decision, which noted that the determination of the appropriate standards for just compensation is a substantive matter well within the province of the legislature to fix.[3] As held in Fabian v. Desierto, if the rule takes away a vested right, it is not procedural,[4] and so the converse certainly holds that if the rule or provision creates a right, it should be properly appreciated as substantive in nature. Indubitably, a matter is substantive when it involves the creation of rights to be enjoyed by the owner of property to be expropriated. The right of the owner to receive just compensation prior to acquisition of possession by the State of the property is a proprietary right, appropriately classified as a substantive matter and, thus, within the sole province of the legislature to legislate on.
It is possible for a substantive matter to be nonetheless embodied in a rule of procedure[5], and to a certain extent, Rule 67 does contain matters of substance. Yet the absorption of the substantive point into a procedural rule does not prevent the substantive right from being superseded or amended by statute, for the creation of property rights is a matter for the legislature to enact on, and not for the courts to decide upon. Indeed, if the position of the Government is sustained, it could very well lead to the absurd situation wherein the judicial branch of government may shield laws with the veneer of irrepealability simply by absorbing the provisions of law into the rules of procedure. When the 1987 Constitution restored to the judicial branch of government the sole prerogative to promulgate rules concerning pleading, practice and procedure, it should be understood that such rules necessarily pertain to points of procedure, and not points of substantive law.
The Government also exhaustively cites the Dissenting Opinion in arguing that the application of Rule 67 would violate the 2004 Resolution of the Court in Agan. It claims that it is not possible to determine with reasonable certainty the proper amount of just compensation to be paid unless it first acquires possession of the NAIA 3. Yet what the Decision mandated to be paid to PIATCO before the writ of possession could issue is merely the provisionally determined amount of just compensation which, under the auspices of Rep. Act No. 8974, constitutes the proffered value as submitted by the Government itself. There is thus no need for the determination with reasonable certainty of the final amount of just compensation before the writ of possession may be issued. Specifically in this case, only the payment or release by the Government of the proffered value need be made to trigger the operability of the writ of possession.
Admittedly, the 2004 Resolution in Agan could be construed as mandating the full payment of the final amount of just compensation before the Government may be permitted to take over the NAIA 3. However, the Decision ultimately rejected such a construction, acknowledging the public good that would result from the immediate operation of the NAIA 3. Instead, the Decision adopted an interpretation which is in consonance with Rep. Act No. 8974 and with equitable standards as well, that allowed the Government to take possession of the NAIA 3 after payment of the proffered value of the facilities to PIATCO. Such a reading is substantially compliant with the pronouncement in the 2004 Agan Resolution, and is in accord with law and equity. In contrast, the Government's position, hewing to the strict application of Rule 67, would permit the Government to acquire possession over the NAIA 3 and implement its operation without having to pay PIATCO a single centavo, a situation that is obviously unfair. Whatever animosity the Government may have towards PIATCO does not acquit it from settling its obligations to the latter, particularly those which had already been previously affirmed by this Court.
We now turn to the three (3) motions for intervention all of which were filed after the promulgation of the Court's Decision. All three (3) motions must be denied. Under Section 2, Rule 19 of the 1997 Rules of Civil Procedure the motion to intervene may be filed at any time before rendition of judgment by the court.[6] Since this case originated from an original action filed before this Court, the appropriate time to file the motions-in-intervention in this case if ever was before and not after resolution of this case. To allow intervention at this juncture would be highly irregular. It is extremely improbable that the movants were unaware of the pendency of the present case before the Court, and indeed none of them allege such lack of knowledge.
Takenaka and Asahikosan rely on Mago v. Court of Appeals[7] wherein the Court took the extraordinary step of allowing the motion for intervention even after the challenged order of the trial court had already become final.[8] Yet it was apparent in Mago that the movants therein were not impleaded despite being indispensable parties, and had not even known of the existence of the case before the trial court[9], and the effect of the final order was to deprive the movants of their land.[10] In this case, neither Takenaka nor Asahikosan stand to be dispossessed by reason of the Court's Decision. There is no palpable due process violation that would militate the suspension of the procedural rule.
Moreover, the requisite legal interest required of a party-in-intervention has not been established so as to warrant the extra-ordinary step of allowing intervention at this late stage. As earlier noted, the claims of Takenaka and Asahikosan have not been judicially proved or conclusively established as fact by any trier of facts in this jurisdiction. Certainly, they could not be considered as indispensable parties to the petition for certiorari. In the case of Representative Baterina, he invokes his prerogative as legislator to curtail the disbursement without appropriation of public funds to compensate PIATCO, as well as that as a taxpayer, as the basis of his legal standing to intervene. However, it should be noted that the amount which the Court directed to be paid by the Government to PIATCO was derived from the money deposited by the Manila International Airport Authority, an agency which enjoys corporate autonomy and possesses a legal personality separate and distinct from those of the National Government and agencies thereof whose budgets have to be approved by Congress.
It is also observed that the interests of the movants-in-intervention may be duly litigated in proceedings which are extant before lower courts. There is no compelling reason to disregard the established rules and permit the interventions belatedly filed after the promulgation of the Court's Decision.
WHEREFORE, the Motion for Partial Reconsideration of the petitioners is DENIED WITH FINALITY.
The motions respectively filed by Takenaka Corporation, Asahikosan Corporation and Representative Salacnib Baterina are DENIED.
SO ORDERED.
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Callejo, Azcuna, Chico-Nazario and Garcia, JJ., concur.
Panganiban, C.J., Puno and Carpio-Morales, JJ., I join the dissent opinion of Justice Corona.
Corona, J., please see dissenting opinion.
[1] See Section 28, Rule 39, 1997 Rules of Civil Procedure.
[2] "Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law, judgment or order shall not be applied." Bank of America v. American Realty Corp., 378 Phil. 1279, 1296 (1999); citing Philippine Conflict of Laws, Eight Edition, 1996, Paras, page 46. See also Querubin v. Querubin, 87 Phil. 124, 133. (1950), Mijares v. Ranada, G.R. No. 139325, 12 April 2005, 455 SCRA 397, 410.
[3] Decision, p. 23.
[4] Fabian v. Desierto, 356 Phil. 787, 809. (1998)
[5] "[A] particular rule may be procedural in one context and substantive in another." Fabian v. Desierto, id.
[6] See Section 2, Rule 19, Rules of Civil Procedure.
[7] 363 Phil. 225 (1999).
[8] Id. at 231.
[9] Id. at 232.
[10] Ibid.
In the Court's December 19, 2005 decision, the majority relied heavily on a strained interpretation of the 2004 resolution in Agan v. PIATCO and concluded that Rule 67 of the Rules of Court violated Agan. It then ruled that RA 8974 governed the expropriation of the NAIA IPT3. I wrote a dissenting opinion.
Petitioners are before us again with their motion for partial reconsideration, alleging that the December 19, 2005 decision requiring prior payment to PIATCO before any government takeover of NAIA IPT3 will only further delay instead of hasten its opening and operation. According to petitioners, the decision will also work grave injustice to the government and other lawful claimants to the just compensation. They specifically identify Takenaka Corporation and Asahikosan Corporation, unpaid contractor and supplier of materials in the construction of NAIA IPT3 as lawful claimants to the compensation due from the expropriation of the facilities. Petitioners call the Court's attention to the February 18, 2005 and December 2, 2005 orders of the High Court of Justice, Queen's Bench Division, London directing PIATCO to pay Takenaka and Asahikosan approximately US$81,000,000.
Petitioners also assert that Agan does not require prior payment of full compensation before any government takeover of NAIA IPT3 and that the application of Rule 67 in the expropriation proceedings does not violate Agan. They further argue that RA 8974 cannot repeal or amend Rule 67.
Takenaka and Asahikosan are also before us with their separate motions for leave to file motion for partial reconsideration-in-intervention and their respective motions for partial reconsideration-in-intervention. Both allege that, in an amended complaint dated January 11, 2005 filed by petitioners in the court a quo, they were impleaded as necessary parties. Without awaiting service of summons, they separately filed a manifestation and motion, in lieu of answer, manifesting that they did not object to the taking of NAIA IPT3, provided that they were justly compensated for their respective claims as unpaid contractor and supplier of materials in the construction of the facility.
They also maintain that the London court rendered two separate money judgments in their favor against PIATCO which they intend to enforce in Philippine courts. Hence, they prayed that they be allowed to intervene and establish their claims before any payment is made to PIATCO.
The majority resolves to deny petitioners' motion for partial reconsideration with finality. The motions of Takenaka and Asahikosan are also denied. In so doing, the majority again invokes Agan. I maintain my dissent.
I have more than adequately discussed in my original dissent the various points raised by petitioners. Here, I will concentrate only on the two major points which the majority used as basis in disposing of petitioners' motion for partial reconsideration and Takenaka's and Asahikosan's respective motions for leave to file motion for partial reconsideration-in-intervention and motions for partial reconsideration-in-intervention.
CLAIMS OF MOVANTS-INTERVENORS TAKENAKA AND ASAHIKOSAN
I asserted in my original dissent that it was incorrect to state that Agan constituted the law of the case here. I explained that, while both Agan and this case involved NAIA IPT3, the respective subject matters of the two cases were separate and distinct.
Moreover, Agan only required PIATCO to be given just compensation in accordance with law and equity as a condition for the government's take over of NAIA IPT3. It did not mandate any particular procedure for the payment of such compensation. In fact, it did not even touch on the State's right to expropriate NAIA IPT3. Thus, as Mr. Justice Puno (ponente in Agan) aptly stated in his separate opinion, "there is no need to strain in attempting to square the Agan ruling with the ruling in this case."
However, the majority again invokes Agan in making the all-too-sweeping statement that only PIATCO, as builder of the NAIA IPT3, is entitled to just compensation. I strongly disagree.
The fact that neither Takenaka nor Asahikosan was mentioned in Agan does not in any way affect their right to assert a claim in the compensation for NAIA IPT3. First, Agan merely required payment of compensation, without specifying how or in what manner and by whom or to whom and when. Second, Agan did not deal with the expropriation of NAIA IPT3, hence, it could not have determined the parties entitled to just compensation in case expropriation proceedings were instituted. Third, Takenaka and Asahikosan were not parties in Agan, hence, the Court could not be reasonably expected to mention them in that case. Finally, the law itself ordains the protection of all parties who have an interest in the property to be expropriated.
In my original dissent, I noted that both petitioners and PIATCO admit that there are other parties asserting an interest in NAIA IPT3. One of these parties is movant-intervenor Takenaka, PIATCO's contractor for the construction of NAIA IPT3.
Rule 67, Section 1 of the Rules of Court requires that all persons owning or claiming to own, or occupying, any part thereof or interest therein be joined as defendants in the expropriation case. This is based on the principle that, in eminent domain, just compensation is not due to the owner alone.[1]
As the Court held in De Knecht v. Court of Appeals,[2] when property is taken by eminent domain, the actual owner is not necessarily the only person who is entitled to compensation. All those who have a lawful interest in the property to be expropriated are entitled to compensation.[3] Every person having an estate or interest at law or in equity in the land taken is entitled to share in the award.[4]
As unpaid contractor and supplier of materials, Takenaka and Asahikosan have a lien on NAIA IPT3's facilities. As a general rule, claims which are liens on the property at the time of the taking are entitled to be satisfied out of the compensation awarded.[5] While a lien is not an estate or interest in the property but rather a remedy against it, which may be impaired without amounting to a taking requiring compensation, a condemnation award is considered to stand in place of the property so that valid liens on the property attach to the condemnation award and the lienor may proceed against the award in equity.[6]
The majority declares that "[i]f there is indeed any right to remuneration due to these two entities arising from NAIA 3, they have not yet been established by the courts of the land." Precisely. This is why no payment should be made to any party yet pending the determination of conflicting and various claims.
No payments should be made out of the fund until all persons named in the pleadings of the condemnor as having an interest in the property are given due notice and opportunity to make their claims.[7] As early as January 11, 2005, both Takenaka and Asahikosan were impleaded by petitioners as necessary parties in the expropriation proceedings in the court a quo. In the absence of a determination of Takenaka's and Asahikosan's respective claims, it would be wrong for the Court to order the release of the funds deposited with the Land Bank-Parañaque Branch and direct its payment to PIATCO alone.
Agan declared that compensation should be in accordance with law and equity. Following the majority's admonition that Agan be observed, would it not be lawful and just to allow Takenaka and Asahikosan to first establish their claims before any order of payment to PIATCO is made?
Also, the majority's stance is that RA 8974 and its implementing rules should be observed in the expropriation proceedings. Following this, Section 8 of the implementing rules of RA 8974, like Section 1 of Rule 67, provides that "all persons owning or claiming to own, or occupying, any part thereof or interest therein" should be named in the verified complaint "showing as far as practicable, the interest of each defendant separately." If a person claiming an interest in the property is not made a party, he is given the right to intervene and lay claim to the compensation.[8]
Thus, the majority should not have brushed aside the judgments in favor of Takenaka and Asahikosan. Their respective claims are based not on some unsubstantiated demand but on an actual judgment of a foreign court and their lawful liens on the property as unpaid contractor and supplier of materials.
Apportionment of the compensation award is ancillary to expropriation and should, if possible, be made without the necessity of bringing a new suit or action.[9] As Mr. Justice Puno astutely observed in his separate opinion:
The provisions of RA 8974 and its implementing rules with "guidelines for expropriation proceedings" radically alter the rules for expropriation under Rule 67. Congressional deliberations on the bills that were consolidated, reconciled and eventually enacted as RA 8974 show that the legislative intent was to amend Rule 67 and lay down rules of procedure for the expropriation of land or other real property to be acquired for right of way, site or location for national government infrastructure projects.
Clearly, RA 8974 which the majority described as a "significant change from previous expropriation laws such as Rule 67 ....." is a procedural law. No amount of hair-splitting can change this reality.
Being a procedural law effectively amending Rule 67, RA 8974 constitutes an invalid encroachment on the Court's rule-making power, a power reserved exclusively to this Court. It directly contravenes Echegaray v. Court of Appeals[11] where the Court ruled that the legislature has no power to annul, modify or augment the Rules of Court. It subverts the fundamental law and defeats the constitutional intent to strengthen the independence of this Court.
Mr. Justice Puno remarked in his separate opinion in this case:
At the risk of being branded as an alarmist, I can almost predict that the implementation of the majority decision will only further IMPEDE the already delayed opening of NAIA IPT3.
ACCORDINGLY, I vote to GRANT petitioners' motion for partial reconsideration as well as Takenaka Corporation's and Asahikosan Corporation's respective motions for leave to file motion for partial reconsideration-in-intervention and their motions for partial reconsideration-in-intervention.
[1] Joaquin Bernas, S.J., The 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A COMMENTARY, 2003 Edition, p. 393.
[2] De Knecht v. Court of Appeals, 352 Phil. 833 (1998).
[3] Id.
[4] Id.
[5] Eminent Domain, Section 200, 29A Corpus Juris Secundum 890.
[6] Eminent Domain, Section 268, 26 Am Jur 2d 685.
[7] Eminent Domain, Section 205, 29A Corpus Juris Secundum 916.
[8] De Knecht v. Court of Appeals, supra note 2.
[9] Supra note 7.
[10] Both Takenaka and Asahikosan allege that the February 18, 2005 and December 2, 2005 orders of the High Court of Justice, Queen's Bench Division, London have already attained finality.
[11] 361 Phil. 76 (1999).
(a) MOTION FOR PARTIAL RECONSIDERATION, dated 2 January 2006 of the decision of 19 December 2005 filed by the Office of the Solicitor General for petitioners;We first dispose of the Motion for Partial Reconsideration filed by petitioner Republic of the Philippines (Government). It propounds several reasons for the reconsideration of the Court's Decision dated 19 December 2005. Some of the arguments merely rehash points raised in the petition and already dispensed with exhaustively in the Decision. This applies in particular to the argument that Republic Act No. 8974 does not apply to the expropriation of the Ninoy Aquino International Airport Passenger Terminal 3 (NAIA 3), which is not a right-of-way, site or location. This Resolution will instead focus as it should on the new arguments, as well as the perspectives that were glossed over in the Decision.
(b) MOTION FOR LEAVE (To File Motion for Partial Reconsideration-in-Intervention), dated 5 January 2006 filed by counsel for petitioner-intervenor Asahikosan Corporation praying that the attached Motion for Partial Reconsideration and Intervention dated January 5, 2006 be admitted;(b-1) Aforesaid MOTION FOR PARTIAL RECONSIDERATION-IN-INTERVENTION, dated January 5, 2006;
(c) MOTION FOR LEAVE (To File Motion for Partial Reconsideration-in-Intervention), dated 5 January 2006 filed by counsel for petitioner-intervenor Takenaka Corp.;(c-1) Aforesaid MOTION FOR PARTIAL RECONSIDERATION-IN-INTERVENTION, dated 5 January 2006;
(d) MOTION FOR INTERVENTION – and – MOTION TO ADMIT THE ATTACHED MOTION FOR RECONSIDERATION-IN-INTERVENTION (of the Decision dated 19 December 2005), dated 6 January 2006 filed by counsel for movant-in-intervention Rep. Salacnib F. Baterina; and(d-1) Aforesaid MOTION FOR RECONSIDERATION-IN-INTERVENTION (of the Decision dated 19 December 2005) dated 6 January 2006.
On the newly raised arguments, there are considerable factual elements brought up by the Government. In the main, the Government devotes significant effort in diminishing PIATCO's right to just compensation as builder or owner of the NAIA 3. Particularly brought to fore are the claims relating to two entities, Takenaka Corporation (Takenaka) and Asahikosan (Asahikosan) Corporation, who allegedly claim "significant liens" on the terminal, arising from their alleged unpaid bills by virtue of an Engineering, Procurement and Construction Contract they had with PIATCO. On account of these adverse claims, the Government now claims as controvertible the question of who is the builder of the NAIA 3.
The Government likewise claims as "indispensable" the need of Takenaka and Asahikosan to provide the necessary technical services and supplies so that all the various systems and equipment will be ready and operational in a manner that allows the Government to possess a fully-capable international airport terminal.
The Government's concerns that impelled the filing of its Motion for Reconsideration are summed up in the following passage therein: "The situation the Republic now faces is that if any part of its Php3,002,125,000 deposit is released directly to PIATCO, and PIATCO, as in the past, does not wish to settle its obligations directly to Takenaka, Asahikosan and Fraport, the Republic may end up having expropriated a terminal with liens and claims far in excess of its actual value, the liens remain unextinguished, and PIATCO on the other hand, ends up with the Php3,0002,125,000 in its pockets gratuitously."
The Court is not wont to reverse its previous rulings based on factual premises that are not yet conclusive or judicially established. Certainly, whatever claims or purported liens Takenaka and Asahikosan against PIATCO or over the NAIA 3 have not been judicially established. Neither Takenaka nor Asahikosan are parties to the present action, and thus have not presented any claim which could be acted upon by this Court. The earlier adjudications in Agan v. PIATCO made no mention of either Takenaka or Asahikosan, and certainly made no declaration as to their rights to any form of compensation. If there is indeed any right to remuneration due to these two entities arising from NAIA 3, they have not yet been established by the courts of the land.
It must be emphasized that the conclusive ruling in the Resolution dated 21 January 2004 in Agan v. PIATCO (Agan 2004) is that PIATCO, as builder of the facilities, must first be justly compensated in accordance with law and equity for the Government to take over the facilities. It is on that premise that the Court adjudicated this case in its 19 December 2005 Decision.
While the Government refers to a judgment rendered by a London court in favor of Takenaka and Asahikosan against PIATCO in the amount of US$82 Million, it should be noted that this foreign judgment is not yet binding on Philippine courts. It is entrenched in Section 48, Rule 39 of the Rules of Civil Procedure that a foreign judgment on the mere strength of its promulgation is not yet conclusive, as it can be annulled on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.[1] It is likewise recognized in Philippine jurisprudence and international law that a foreign judgment may be barred from recognition if it runs counter to public policy.[2]
Assuming that PIATCO indeed has corresponding obligations to other parties relating to NAIA 3, the Court does not see how such obligations, yet unproven, could serve to overturn the Decision mandating that the Government first pay PIATCO the amount of 3.02 Million Pesos before it may acquire physical possession over the facilities. This directive enjoining payment is in accordance with Republic Act No. 8974, and under the mechanism established by the law the amount to be initially paid is that which is provisionally determined as just compensation. The provisional character of this payment means that it is not yet final, yet sufficient under the law to entitle the Government to the writ of possession over the expropriated property.
There are other judicial avenues outside of this Motion for Reconsideration wherein all other claims relating to the airport facilities may be ventilated, proved and determined. Since such claims involve factual issues, they must first be established by the appropriate trier of facts before they can be accorded any respect by or binding force on this Court.
The other grounds raised in the Motion for Reconsideration are similarly flawed.
The Government argues that the 2004 Resolution in Agan did not strictly require the payment of just compensation before the Government can take over the airport facilities. Reliance is placed on the use by the Court of the word "for", instead of "before." Yet the clear intent of that ruling is to mandate payment of just compensation as a condition precedent before the Government could acquire physical possession over the airport facilities. The qualification was made out of due consideration of the fact that PIATCO had already constructed the facilities at its own expense when its contracts with the Government were nullified.
Even assuming that "for" may be construed as not necessarily meaning "prior to", it cannot be denied that Rep. Act No. 8974 does require prior payment to the owner before the Government may acquire possession over the property to be expropriated. Even Rule 67 requires the disbursement of money by way of deposit as a condition precedent prior to entitlement to a writ of possession. As the instant case is one for expropriation, our pronouncement is worthily consistent with the principles and laws that govern expropriation cases.
The Government likewise adopts the position raised by the Dissenting Opinion of Mr. Justice Corona that Rep. Act No. 8974 could not repeal Rule 67 of the Rules of Court, since the deposit of the assessed value is a procedural matter. It adds that otherwise, Rep. Act No. 8974 is unconstitutional.
Of course it is too late in the day to question the constitutionality of Rep. Act No. 8974, an issue that was not raised in the petition. Still, this point was already addressed in the Decision, which noted that the determination of the appropriate standards for just compensation is a substantive matter well within the province of the legislature to fix.[3] As held in Fabian v. Desierto, if the rule takes away a vested right, it is not procedural,[4] and so the converse certainly holds that if the rule or provision creates a right, it should be properly appreciated as substantive in nature. Indubitably, a matter is substantive when it involves the creation of rights to be enjoyed by the owner of property to be expropriated. The right of the owner to receive just compensation prior to acquisition of possession by the State of the property is a proprietary right, appropriately classified as a substantive matter and, thus, within the sole province of the legislature to legislate on.
It is possible for a substantive matter to be nonetheless embodied in a rule of procedure[5], and to a certain extent, Rule 67 does contain matters of substance. Yet the absorption of the substantive point into a procedural rule does not prevent the substantive right from being superseded or amended by statute, for the creation of property rights is a matter for the legislature to enact on, and not for the courts to decide upon. Indeed, if the position of the Government is sustained, it could very well lead to the absurd situation wherein the judicial branch of government may shield laws with the veneer of irrepealability simply by absorbing the provisions of law into the rules of procedure. When the 1987 Constitution restored to the judicial branch of government the sole prerogative to promulgate rules concerning pleading, practice and procedure, it should be understood that such rules necessarily pertain to points of procedure, and not points of substantive law.
The Government also exhaustively cites the Dissenting Opinion in arguing that the application of Rule 67 would violate the 2004 Resolution of the Court in Agan. It claims that it is not possible to determine with reasonable certainty the proper amount of just compensation to be paid unless it first acquires possession of the NAIA 3. Yet what the Decision mandated to be paid to PIATCO before the writ of possession could issue is merely the provisionally determined amount of just compensation which, under the auspices of Rep. Act No. 8974, constitutes the proffered value as submitted by the Government itself. There is thus no need for the determination with reasonable certainty of the final amount of just compensation before the writ of possession may be issued. Specifically in this case, only the payment or release by the Government of the proffered value need be made to trigger the operability of the writ of possession.
Admittedly, the 2004 Resolution in Agan could be construed as mandating the full payment of the final amount of just compensation before the Government may be permitted to take over the NAIA 3. However, the Decision ultimately rejected such a construction, acknowledging the public good that would result from the immediate operation of the NAIA 3. Instead, the Decision adopted an interpretation which is in consonance with Rep. Act No. 8974 and with equitable standards as well, that allowed the Government to take possession of the NAIA 3 after payment of the proffered value of the facilities to PIATCO. Such a reading is substantially compliant with the pronouncement in the 2004 Agan Resolution, and is in accord with law and equity. In contrast, the Government's position, hewing to the strict application of Rule 67, would permit the Government to acquire possession over the NAIA 3 and implement its operation without having to pay PIATCO a single centavo, a situation that is obviously unfair. Whatever animosity the Government may have towards PIATCO does not acquit it from settling its obligations to the latter, particularly those which had already been previously affirmed by this Court.
We now turn to the three (3) motions for intervention all of which were filed after the promulgation of the Court's Decision. All three (3) motions must be denied. Under Section 2, Rule 19 of the 1997 Rules of Civil Procedure the motion to intervene may be filed at any time before rendition of judgment by the court.[6] Since this case originated from an original action filed before this Court, the appropriate time to file the motions-in-intervention in this case if ever was before and not after resolution of this case. To allow intervention at this juncture would be highly irregular. It is extremely improbable that the movants were unaware of the pendency of the present case before the Court, and indeed none of them allege such lack of knowledge.
Takenaka and Asahikosan rely on Mago v. Court of Appeals[7] wherein the Court took the extraordinary step of allowing the motion for intervention even after the challenged order of the trial court had already become final.[8] Yet it was apparent in Mago that the movants therein were not impleaded despite being indispensable parties, and had not even known of the existence of the case before the trial court[9], and the effect of the final order was to deprive the movants of their land.[10] In this case, neither Takenaka nor Asahikosan stand to be dispossessed by reason of the Court's Decision. There is no palpable due process violation that would militate the suspension of the procedural rule.
Moreover, the requisite legal interest required of a party-in-intervention has not been established so as to warrant the extra-ordinary step of allowing intervention at this late stage. As earlier noted, the claims of Takenaka and Asahikosan have not been judicially proved or conclusively established as fact by any trier of facts in this jurisdiction. Certainly, they could not be considered as indispensable parties to the petition for certiorari. In the case of Representative Baterina, he invokes his prerogative as legislator to curtail the disbursement without appropriation of public funds to compensate PIATCO, as well as that as a taxpayer, as the basis of his legal standing to intervene. However, it should be noted that the amount which the Court directed to be paid by the Government to PIATCO was derived from the money deposited by the Manila International Airport Authority, an agency which enjoys corporate autonomy and possesses a legal personality separate and distinct from those of the National Government and agencies thereof whose budgets have to be approved by Congress.
It is also observed that the interests of the movants-in-intervention may be duly litigated in proceedings which are extant before lower courts. There is no compelling reason to disregard the established rules and permit the interventions belatedly filed after the promulgation of the Court's Decision.
WHEREFORE, the Motion for Partial Reconsideration of the petitioners is DENIED WITH FINALITY.
The motions respectively filed by Takenaka Corporation, Asahikosan Corporation and Representative Salacnib Baterina are DENIED.
SO ORDERED.
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Callejo, Azcuna, Chico-Nazario and Garcia, JJ., concur.
Panganiban, C.J., Puno and Carpio-Morales, JJ., I join the dissent opinion of Justice Corona.
Corona, J., please see dissenting opinion.
[1] See Section 28, Rule 39, 1997 Rules of Civil Procedure.
[2] "Thus, when the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law, judgment or order shall not be applied." Bank of America v. American Realty Corp., 378 Phil. 1279, 1296 (1999); citing Philippine Conflict of Laws, Eight Edition, 1996, Paras, page 46. See also Querubin v. Querubin, 87 Phil. 124, 133. (1950), Mijares v. Ranada, G.R. No. 139325, 12 April 2005, 455 SCRA 397, 410.
[3] Decision, p. 23.
[4] Fabian v. Desierto, 356 Phil. 787, 809. (1998)
[5] "[A] particular rule may be procedural in one context and substantive in another." Fabian v. Desierto, id.
[6] See Section 2, Rule 19, Rules of Civil Procedure.
[7] 363 Phil. 225 (1999).
[8] Id. at 231.
[9] Id. at 232.
[10] Ibid.
DISSENTING OPINION
In the Court's December 19, 2005 decision, the majority relied heavily on a strained interpretation of the 2004 resolution in Agan v. PIATCO and concluded that Rule 67 of the Rules of Court violated Agan. It then ruled that RA 8974 governed the expropriation of the NAIA IPT3. I wrote a dissenting opinion.
Petitioners are before us again with their motion for partial reconsideration, alleging that the December 19, 2005 decision requiring prior payment to PIATCO before any government takeover of NAIA IPT3 will only further delay instead of hasten its opening and operation. According to petitioners, the decision will also work grave injustice to the government and other lawful claimants to the just compensation. They specifically identify Takenaka Corporation and Asahikosan Corporation, unpaid contractor and supplier of materials in the construction of NAIA IPT3 as lawful claimants to the compensation due from the expropriation of the facilities. Petitioners call the Court's attention to the February 18, 2005 and December 2, 2005 orders of the High Court of Justice, Queen's Bench Division, London directing PIATCO to pay Takenaka and Asahikosan approximately US$81,000,000.
Petitioners also assert that Agan does not require prior payment of full compensation before any government takeover of NAIA IPT3 and that the application of Rule 67 in the expropriation proceedings does not violate Agan. They further argue that RA 8974 cannot repeal or amend Rule 67.
Takenaka and Asahikosan are also before us with their separate motions for leave to file motion for partial reconsideration-in-intervention and their respective motions for partial reconsideration-in-intervention. Both allege that, in an amended complaint dated January 11, 2005 filed by petitioners in the court a quo, they were impleaded as necessary parties. Without awaiting service of summons, they separately filed a manifestation and motion, in lieu of answer, manifesting that they did not object to the taking of NAIA IPT3, provided that they were justly compensated for their respective claims as unpaid contractor and supplier of materials in the construction of the facility.
They also maintain that the London court rendered two separate money judgments in their favor against PIATCO which they intend to enforce in Philippine courts. Hence, they prayed that they be allowed to intervene and establish their claims before any payment is made to PIATCO.
The majority resolves to deny petitioners' motion for partial reconsideration with finality. The motions of Takenaka and Asahikosan are also denied. In so doing, the majority again invokes Agan. I maintain my dissent.
I have more than adequately discussed in my original dissent the various points raised by petitioners. Here, I will concentrate only on the two major points which the majority used as basis in disposing of petitioners' motion for partial reconsideration and Takenaka's and Asahikosan's respective motions for leave to file motion for partial reconsideration-in-intervention and motions for partial reconsideration-in-intervention.
CLAIMS OF MOVANTS-INTERVENORS TAKENAKA AND ASAHIKOSAN
I asserted in my original dissent that it was incorrect to state that Agan constituted the law of the case here. I explained that, while both Agan and this case involved NAIA IPT3, the respective subject matters of the two cases were separate and distinct.
Moreover, Agan only required PIATCO to be given just compensation in accordance with law and equity as a condition for the government's take over of NAIA IPT3. It did not mandate any particular procedure for the payment of such compensation. In fact, it did not even touch on the State's right to expropriate NAIA IPT3. Thus, as Mr. Justice Puno (ponente in Agan) aptly stated in his separate opinion, "there is no need to strain in attempting to square the Agan ruling with the ruling in this case."
However, the majority again invokes Agan in making the all-too-sweeping statement that only PIATCO, as builder of the NAIA IPT3, is entitled to just compensation. I strongly disagree.
The fact that neither Takenaka nor Asahikosan was mentioned in Agan does not in any way affect their right to assert a claim in the compensation for NAIA IPT3. First, Agan merely required payment of compensation, without specifying how or in what manner and by whom or to whom and when. Second, Agan did not deal with the expropriation of NAIA IPT3, hence, it could not have determined the parties entitled to just compensation in case expropriation proceedings were instituted. Third, Takenaka and Asahikosan were not parties in Agan, hence, the Court could not be reasonably expected to mention them in that case. Finally, the law itself ordains the protection of all parties who have an interest in the property to be expropriated.
In my original dissent, I noted that both petitioners and PIATCO admit that there are other parties asserting an interest in NAIA IPT3. One of these parties is movant-intervenor Takenaka, PIATCO's contractor for the construction of NAIA IPT3.
Rule 67, Section 1 of the Rules of Court requires that all persons owning or claiming to own, or occupying, any part thereof or interest therein be joined as defendants in the expropriation case. This is based on the principle that, in eminent domain, just compensation is not due to the owner alone.[1]
As the Court held in De Knecht v. Court of Appeals,[2] when property is taken by eminent domain, the actual owner is not necessarily the only person who is entitled to compensation. All those who have a lawful interest in the property to be expropriated are entitled to compensation.[3] Every person having an estate or interest at law or in equity in the land taken is entitled to share in the award.[4]
As unpaid contractor and supplier of materials, Takenaka and Asahikosan have a lien on NAIA IPT3's facilities. As a general rule, claims which are liens on the property at the time of the taking are entitled to be satisfied out of the compensation awarded.[5] While a lien is not an estate or interest in the property but rather a remedy against it, which may be impaired without amounting to a taking requiring compensation, a condemnation award is considered to stand in place of the property so that valid liens on the property attach to the condemnation award and the lienor may proceed against the award in equity.[6]
The majority declares that "[i]f there is indeed any right to remuneration due to these two entities arising from NAIA 3, they have not yet been established by the courts of the land." Precisely. This is why no payment should be made to any party yet pending the determination of conflicting and various claims.
No payments should be made out of the fund until all persons named in the pleadings of the condemnor as having an interest in the property are given due notice and opportunity to make their claims.[7] As early as January 11, 2005, both Takenaka and Asahikosan were impleaded by petitioners as necessary parties in the expropriation proceedings in the court a quo. In the absence of a determination of Takenaka's and Asahikosan's respective claims, it would be wrong for the Court to order the release of the funds deposited with the Land Bank-Parañaque Branch and direct its payment to PIATCO alone.
Agan declared that compensation should be in accordance with law and equity. Following the majority's admonition that Agan be observed, would it not be lawful and just to allow Takenaka and Asahikosan to first establish their claims before any order of payment to PIATCO is made?
Also, the majority's stance is that RA 8974 and its implementing rules should be observed in the expropriation proceedings. Following this, Section 8 of the implementing rules of RA 8974, like Section 1 of Rule 67, provides that "all persons owning or claiming to own, or occupying, any part thereof or interest therein" should be named in the verified complaint "showing as far as practicable, the interest of each defendant separately." If a person claiming an interest in the property is not made a party, he is given the right to intervene and lay claim to the compensation.[8]
Thus, the majority should not have brushed aside the judgments in favor of Takenaka and Asahikosan. Their respective claims are based not on some unsubstantiated demand but on an actual judgment of a foreign court and their lawful liens on the property as unpaid contractor and supplier of materials.
Apportionment of the compensation award is ancillary to expropriation and should, if possible, be made without the necessity of bringing a new suit or action.[9] As Mr. Justice Puno astutely observed in his separate opinion:
To be sure, the [December 2, 2005] Order [of the High Court of Justice, Queen's Bench Division, London] is not yet final.[10] Be that as it may, the Court cannot turn a blind eye to this new wrinkle of the case at bar. It is of judicial notice that despite Agan, the subject case has reached the international arbitral tribunals where the government and the private respondent have filed charges and countercharges. There is evident need to avoid the issues pestering the parties from further multiplying and for new proceedings to be started in other courts, lest public interest suffer further irretrievable prejudice.NATURE AND VALIDITY of RA 8974
There are at least two crucial differences between the respective procedures under [RA] 8974 and Rule 67.These are all statements of the majority in the December 19, 2005 decision. Repeatedly, RA 8974 has been referred to as providing a procedure that conforms to Agan.x x x x x x x x x
[RA] 8974, which provides for a procedure eminently more favorable to the property owner than Rule 67 ....x x x x x x x x x
While eminent domain lies as one of the inherent powers of the State, there is no requirement that it undertake a prolonged procedure, or that the payment of the private owner be protracted as far as practicable. In fact, the expedited procedure of payment ... under [RA] 8974 ....x x x x x x x x x
[RA] 8974 mandates a speedy method by which the final determination of just compensation may be had. (emphasis supplied)
The provisions of RA 8974 and its implementing rules with "guidelines for expropriation proceedings" radically alter the rules for expropriation under Rule 67. Congressional deliberations on the bills that were consolidated, reconciled and eventually enacted as RA 8974 show that the legislative intent was to amend Rule 67 and lay down rules of procedure for the expropriation of land or other real property to be acquired for right of way, site or location for national government infrastructure projects.
Clearly, RA 8974 which the majority described as a "significant change from previous expropriation laws such as Rule 67 ....." is a procedural law. No amount of hair-splitting can change this reality.
Being a procedural law effectively amending Rule 67, RA 8974 constitutes an invalid encroachment on the Court's rule-making power, a power reserved exclusively to this Court. It directly contravenes Echegaray v. Court of Appeals[11] where the Court ruled that the legislature has no power to annul, modify or augment the Rules of Court. It subverts the fundamental law and defeats the constitutional intent to strengthen the independence of this Court.
Mr. Justice Puno remarked in his separate opinion in this case:
Rule 67 is the rule this Court promulgated to govern the proceedings in expropriation cases filed in court. It has been the undeviating rule for quite a length of time. Following Article VIII, section 5(6) of the 1987 Constitution and the Echegaray jurisprudence, Rule 67 cannot be repealed or amended by Congress. This prohibition against non-repeal or non-amendment refers to any part of Rule 67 for Rule 67 is pure procedural law. Consequently, the Court should not chop Rule 67 into pieces and hold that some can be changed by Congress but others can[not] be changed. The stance will dilute the rule making power of this Court which can not be allowed for it will weaken its institutional independence. (emphasis supplied)There is no question that the appropriate standard of just compensation is a substantive matter, not a procedural one. That standard remains to be the fair market value of the property. But the manner of determining just compensation (including how it shall be paid and under what conditions a writ of possession may be issued) is a matter of procedure, not of substantive law. That Congress cannot validly legislate on.
At the risk of being branded as an alarmist, I can almost predict that the implementation of the majority decision will only further IMPEDE the already delayed opening of NAIA IPT3.
ACCORDINGLY, I vote to GRANT petitioners' motion for partial reconsideration as well as Takenaka Corporation's and Asahikosan Corporation's respective motions for leave to file motion for partial reconsideration-in-intervention and their motions for partial reconsideration-in-intervention.
[1] Joaquin Bernas, S.J., The 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A COMMENTARY, 2003 Edition, p. 393.
[2] De Knecht v. Court of Appeals, 352 Phil. 833 (1998).
[3] Id.
[4] Id.
[5] Eminent Domain, Section 200, 29A Corpus Juris Secundum 890.
[6] Eminent Domain, Section 268, 26 Am Jur 2d 685.
[7] Eminent Domain, Section 205, 29A Corpus Juris Secundum 916.
[8] De Knecht v. Court of Appeals, supra note 2.
[9] Supra note 7.
[10] Both Takenaka and Asahikosan allege that the February 18, 2005 and December 2, 2005 orders of the High Court of Justice, Queen's Bench Division, London have already attained finality.
[11] 361 Phil. 76 (1999).