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The power of eminent domain is the power of the State to take private property for public use.
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No private property shall be taken for public use without just compensation.
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Just compensation should be made at the time of taking, and the amount of payment should be the fair and equivalent value of the property.
Expropriation is involuntary in nature. The owner of a private property may be compelled to surrender his assets for public use. The acquisition by the government of private properties is through their exercise of eminent domain.
The power of eminent domain is one of the fundamental powers of the state. Simply put, it is the power of the State to take private property for public use, purpose, or welfare upon payment of just compensation. The power of eminent domain refers to the right given to the state, whereas expropriation usually refers to the process of exercising such right.
The State however must comply with all the requirements provided by law before they can expropriate a private property.
Section 9, Article III of the 1987 Constitution provides that:
“No private property shall be taken for public use without just compensation.”
In the case of Fermin Manapat vs. Court of Appeals, (G.R. No. 110478, October 15, 2007) the Supreme Court has recognized the following requisites for the valid exercise of the power of eminent domain:
- the property taken must be private property;
- there must be genuine necessity to take the private property;
- the taking must be for public use;
- there must be payment of just compensation; and
- the taking must comply with due process of law.
Absence of any of the above element, invalidates the State’s exercise of power of eminent domain.
In the case of Evergreen Manufacturing Corporation vs Republic of the Philippines, G.R. No. 218628, September 6, 2017, the Supreme Court explained just compensation:
“Just compensation in expropriation cases has been held to contemplate just and timely payment, and prompt payment is the payment in full of the just compensation as finally determined by the courts. Thus, just compensation envisions a payment in full of the expropriated property. Absent full payment, interest on the balance would necessarily be due on the unpaid amount.”
In Apo Fruits Corporation v. Land Bank of the Philippines, 647 Phil. 251 (2010). the Court explained the rationale for imposing interest on just compensation. It is to compensate the property owners for the income that they would have made if they had been properly compensated – meaning if they had been paid the full amount of just compensation – at the time of taking when they were deprived of their property.
Accordingly, just compensation should be made at the time of taking, and the amount of payment should be the fair and equivalent value of the property.
Note however that if the property owner voluntarily sells the property to the government, this would be a sale, and not an example of expropriation.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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