Barlota vs. Republic

SUPREME COURT REPORTS ANNOTATED 827 Page 1 of 27
*
G.R. No. 223334. June 7, 2017.
DANILO BARTOLATA, represented by his Attorney-in-

Fact REBECCA R. PILOT and/or DIONISIO P. PILOT,
petitioner, vs. REPUBLIC OF THE PHILIPPINES,
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS,
DEPARTMENT OF TRANSPORTATION and
COMMUNICATIONS, and TOLL REGULATORY BOARD,
respondents.
Civil Law; Sale of Public Lands; Under its plain meaning,

only public lands acquired by qualified applicants without public
auction and for residential purposes are free from any restrictions
against encumbrance or alienation.—As can be gleaned, RA 730
was crafted as an exception to Secs. 61 and 67 of CA 141. These
provisions govern the mode of disposition of the alienable public
lands enumerated under Sec. 59 of the same law. Synthesizing
the provisions, CA 141 provides that public lands under Sec. 59
can only be disposed for residential, commercial, industrial, and
other similar purposes through lease or sale, in both cases, “to the
highest bidder.” The conduct of an auction is then required under
Secs. 61 and 67. By way of exception, however, RA 730 now allows
the sale of public lands without public auction to qualified
applicants. It is through this exceptional case of purchase of
public land without public auction wherein PD 2004 would apply.
Petitioner’s assertion that both sales of public land with and
without public auction are subsumed under the coverage of PD
2004 is contrary to the very tenor of the law. Sec. 2 of RA 730, as
amended by PD 2004, is clear and unambiguous: SEC. 2. Lands
acquired under the provisions of this Act shall not be subject
to any restrictions against encumbrance or alienation before and
after the issuance of the patents thereon. (emphasis added) Under
its plain meaning, only public lands acquired by qualified
applicants without public auction and for residential purposes are
free from any restrictions against encumbrance or alienation. The
provision is inapplicable to petitioner’s property which was
http://central.com.ph/sfsreader/session/000001783bc8686d6ea7a62e003600fb002c009e/p... 17/03/2021
awarded to petitioner not in accordance with RA 730, but through

public auction.
_______________
* THIRD DIVISION.
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VOL. 827, JUNE 7, 2017 101

Bartolata vs. Republic
Eminent Domain; Taking; Jurisprudence teaches us that

“taking,” in the exercise of the power of eminent domain, “occurs
not only when the government actually deprives or dispossesses the
property owner of his property or of its ordinary use, but also when
there is a practical destruction or material impairment of the value
of his property.”—The Court affirmed the CA’s interpretation of
Sec. 112 of CA 141 and ruled that the Republic was under no
obligation to pay therein respondent Andaya just compensation in
enforcing its right-of-way. Be that as it may, the Court did not
foreclose the possibility of the property owner being entitled to
just compensation if the enforcement of the right-of-way resulted
in the “taking” of the portions not subject to the legal easement.
Jurisprudence teaches us that “taking,” in the exercise of the
power of eminent domain, “occurs not only when the government
actually deprives or dispossesses the property owner of his property
or of its ordinary use, but also when there is a practical
destruction or material impairment of the value of his property.”
As in Republic v. Andaya, 524 SCRA 671 (2007), even though the
Republic was not legally bound to pay just compensation for
enforcing its right-of-way, the Court nevertheless found that its
project to be undertaken — the construction of floodwalls for
Phase 1, Stage 1 of the Lower Agusan Development Project —
would prevent ingress and egress in Andaya’s private property
and turn it into a catch basin for the floodwaters coming from the
Agusan River, effectively depriving him of the normal use of the
remainder of his property. To the mind of the Court, this resulted
in a “taking” of what was left of Andaya’s property, entitling him
to consequential damages, awarded by the Court in the form of
just compensation.
Same; Just Compensation; Two (2) elements must concur

before the property owner will be entitled to just compensation for
the remaining property under Sec. 112 of Court of Appeals (CA)
141: (1) that the remainder is not subject to the statutory lien of
right-of-way; and (2) that the enforcement of the right-of-way
results in the practical destruction or material impairment of the
value of the remaining property, or in the property owner being
dispossessed or otherwise deprived of the normal use of the said
remainder.—Two elements must concur before the property owner
will be entitled to just compensation for the remaining property
under Sec. 112 of CA 141: (1) that the remainder is not subject to
the statutory lien of right-of-way; and (2) that the enforcement of
the right-of-way results in the practical destruction or material
impairment of the value of the remaining property, or in the
102
102 SUPREME COURT REPORTS ANNOTATED

property owner being dispossessed or otherwise deprived of

the normal use of the said remainder.
Civil Law; Quasi-Contracts; Solutio Indebiti; “Solutio
indebiti” arises when something is delivered through mistake to a
person who has no right to demand it.—Sec. 112 of CA 141
precludes petitioner from claiming just compensation for the
government’s enforcement of its right-of-way. The contract
allegedly entered by the parties for the government’s acquisition
of the affected portion of the property in exchange for just
compensation is then void ab initio for being contrary to law.
Consequently, petitioner has no right to collect just compensation
for the government’s use of the 223-square-meter lot. Anent the
P1,480,000 partial payment already made by respondents, such
amount paid shall be governed by the provisions on solutio
indebiti or unjust enrichment. “Solutio indebiti” arises when
something is delivered through mistake to a person who has no
right to demand it. It obligates the latter to return what has been
received through mistake. As defined in Article 2154 of the Civil
Code, the concept has two indispensable requisites: first, that
something has been unduly delivered through mistake; and
second, that something was received when there was no right to

demand it.
Estoppel; As a general rule, the State cannot be barred by
estoppel by the mistakes or errors of its officials or agents.—As a
general rule, the State cannot be barred by estoppel by the
mistakes or errors of its officials or agents. But as jurisprudence
elucidates, the doctrine is subject to exceptions, viz.: Estoppels
against the public are little favored. They should not be invoked
except [in rare] and unusual circumstances, and may not be
invoked where they would operate to defeat the effective
operation of a policy adopted to protect the public. They must be
applied with circumspection and should be applied only in those
special cases where the interests of justice clearly require it.
Nevertheless, the government must not be allowed to deal
dishonorably or capriciously with its citizens, and must
not play an ignoble part or do a shabby thing; and subject
to limitations . . ., the doctrine of equitable estoppel may be
invoked against public authorities as well as against private
individuals.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
103
VOL. 827, JUNE 7, 2017 103

The facts are stated in the opinion of the Court.

David B. Agoncillo for petitioner.
Office of the Solicitor General for respondents.
VELASCO, JR., J.:
Nature of the Case
Before the Court is a Petition for Review on Certiorari

assailing the Decision1 and Resolution of the Court of
Appeals (CA) in C.A.-G.R. CV No. 100523, dated July 10,
2015 and March 7, 2016, respectively. The challenged
rulings denied petitioner’s claim for just compensation on
the ground that the portion of his property that was used
by the government was subject to an easement of right-of-

way. Additionally, the CA ordered petitioner to return any
payment made to him by the government in relation to the
enforcement of the easement.
The Facts of the Case
Petitioner Danilo Bartolata acquired ownership over a

400-square-meter parcel of land identified as Lot 5, Blk. 1,
Phase 1, AFP Officer’s Village, Taguig, Metro Manila by
virtue of an Order of Award from the Bureau of Lands
dated December 14, 1987.2 It appears from the Order of
Award that petitioner was the sole bidder for the property
during a public auction conducted on August 14, 1987,3
with the offer of P15 per square meter or P6,000 total for
the 400-square-meter lot.4
_______________
1 Penned by Associate Justice Maria Elisa Sempio Diy and concurred

in by Associate Justices Stephen C. Cruz and Manuel M. Barrios.
2 Rollo, p. 118.
3 Id., at p. 125.
4 Id., at pp. 140-141.
104

Sometime in 1997, respondents acquired 223 square

meters of petitioner’s property for the development of the
Metro Manila Skyway Project. The parties agreed that in
exchange for the acquisition, petitioner would be paid just
compensation for the appraised value of the property, fixed
at P55,000 per square meter or an aggregate of
P12,265,000 for the entire affected area by the Municipal
Appraisal Committee of Taguig, Metro Manila.5
Subsequently, on August 14, 1997, respondents
appropriated P1,480,000 in favor of petitioner as partial
payment.
Since the date of initial payment, petitioner had, on

numerous occasions, demanded from respondents the
balance of P10,785,000.00, but the latter refused to settle
their outstanding obligation. This prompted petitioner to
file, on September 20, 2006, a Complaint6 for a sum of
money with the Regional Trial Court (RTC), Branch 166 in
Pasig City, docketed as Civil Case No. 70969.7
In their Supplemental Answer, dated July 9, 2009,
respondents raised that the Order of Award from the
Bureau of Lands granting title to petitioner over the
subject property contained the following encumbrance:
This award shall further be subject to the provisions of the

Public Land Law (Commonwealth Act No. 141, as amended), and
particularly the following conditions:
xxxx
2. The land shall be subject to the easement and
servitudes provided for in Section 109-114 of
8
Commonwealth Act No. 141, as amended. (emphasis added)
_______________
5 Id., at p. 134.
6 Id., at p. 77.
7 Entitled “Danilo Bartolata, rep. by Attorney-in-Fact Rebecca P. Pilot
& Dionisio P. Pilot v. Republic of the Philippines, Department of Public
Works and Highways, Department of Transportation and
Communications, and Toll Regulatory Board.”
8 Rollo, p. 141.
105
VOL. 827, JUNE 7, 2017 105

Respondents then argued that pursuant to Section 112

of Commonwealth Act No. 141 (CA 141),9 the government
is entitled to an easement of right-of-way not exceeding 60
meters in width, without need of payment for just
compensation, save for the value of improvements existing.
The pertinent provision reads:
SECTION 112. Said land shall further be subject to a

right-of-way not exceeding sixty (60) meters in width for
public highways, railroads, irrigation ditches, aqueducts,
telegraph and telephone lines and similar works as the
Government or any public or quasi-public service or enterprise,
including mining or forest concessionaires, may reasonably
require for carrying on their business, with damages for the
improvements only. (emphasis added)
Under the above cited provision, any payment for the

government’s use of the easement, unless made to
compensate the landowner for the value of the
improvements affected, is unwarranted. Consequently,
respondents prayed, by way of counterclaim, that the
P1,480,000 partial payment made to petitioner for the
acquisition of the latter’s property, which was well within
the 60-meter threshold width, be returned to the
government.
In rebuttal, petitioner contended that Presidential
Decree No. 2004 (PD 2004),10 which amended Republic Act
No. 730
_______________
9 AN ACT TO AMEND AND COMPILE THE LAWS RELATIVE TO LANDS OF

THE PUBLIC DOMAIN, approved on November 7, 1936.
10 AMENDING SECTION TWO OR REPUBLIC ACT NUMBERED SEVEN
HUNDRED AND THIRTY RELATIVE TO THE SALE WITHOUT PUBLIC
AUCTION OF PUBLIC LANDS OF THE REPUBLIC OF THE PHILIPPINES FOR
RESIDENTIAL PURPOSES TO QUALIFIED APPLICANTS UNDER CERTAIN
CONDITIONS, dated December 30, 1985.
106

(RA 730),11 allegedly removed the statutory lien attached to

the subject property. Sec. 2 of RA 730, as amended, now
reads:
SEC. 2. Lands acquired under the provisions of this Act shall

not be subject to any restrictions against encumbrance or
alienation before and after the issuance of the patents thereon.
Respondents, however, countered that petitioner could

not have benefited from PD 2004 since the removal of
restrictions and encumbrances contained in PD 2004 only
applies to public land sold by the government for
residential purposes without public auction, whereas
petitioner was awarded the subject property through a
public auction sale.
Ruling of the RTC
On November 28, 2012, the RTC promulgated its

Decision in Civil Case No. 70969 disposing the case in the
following wise:
WHEREFORE, premises considered, judgment is hereby

rendered dismissing plaintiff’s complaint for lack of merit and
insufficiency of evidence.
Defendant’s counterclaims are likewise denied and dismissed
for insufficiency of evidence.
No pronouncement as to costs.
SO ORDERED.12
Giving credence to respondents’ postulation, the RTC

ruled that PD 2004 could not have removed the
encumbrances attached
_______________
11 AN ACT TO PERMIT THE SALE WITHOUT PUBLIC AUCTION OF

PUBLIC LANDS OF THE REPUBLIC OF THE PHILIPPINES FOR RESIDENTIAL
PURPOSES TO QUALIFIED APPLICANTS UNDER CERTAIN CONDITIONS,
approved on June 18, 1952.
12 Rollo, p. 126.
107
VOL. 827, JUNE 7, 2017 107
to petitioner’s property since the law does not cover public

lands sold through auction. The RTC, therefore, ruled that
the government is entitled to a 60-meter width right-of-way
on the property, for which it is not entitled to pay just
compensation under Sec. 112 of CA 141.13
Nevertheless, the RTC found no reason to grant
respondents’ counterclaim. In ruling that petitioner is not
under obligation to return the initial payment made, the
RTC considered the fact that respondents effectively
entered into a contract of sale with petitioner for the
acquisition of the piece of land to be used for the Metro
Manila Skyway Project, which contract of sale was
consummated by respondents’ partial payment.14 By virtue
of this consummated contract of sale, so the RTC further
ratiocinated, petitioner never opposed the taking of his
property. He was made to believe, as he did in fact believe,
that he will be paid just compensation as agreed upon by
the parties. It cannot then be said that petitioner was
illegally paid when he transacted with the government in
good faith and when he relied on respondents’
representations that he is entitled to just compensation.
Ruling of the CA
On appeal, the CA modified the RTC ruling thusly:
WHEREFORE, premises considered, plaintiff-appellant’s

appeal is DENIED. On the other hand, defendants’ appeal is
GRANTED. Accordingly, the Decision dated November 28, 2012
of Branch 166, Regional Trial Court of Pasig City in Civil Case
No. 70969 is hereby AFFIRMED with the MODIFICATION
that plaintiff-appellant is ordered to return the amount of
P1,480,000.00 to the Republic of the Philippines.
SO ORDERED.15
_______________
13 Id., at p. 123.
14 Id., at p. 125.
15 Id., at p. 146.
108

The appellate court affirmed the RTC’s finding that the

subject property is still subject to the easement of right-of-
way, which is free of any compensation, except only for the
value of the existing improvements that may have been
affected. Echoing the RTC’s line of reasoning, the CA ruled
that PD 2004 could not be extended to benefit petitioner
who acquired the subject property through an auction sale.
The lot in issue is, therefore, subject to the statutory lien
embodied in Sec. 112 of CA 141.
Further upholding the government’s right to enforce
against petitioner’s property the easement for public
highways without cost, the CA granted respondents’
counterclaim on appeal. The CA noted that the portion of
petitioner’s property that was used by respondents
corresponds to the widths of 13.92 meters and 13.99
meters, well within the 60-meter limit under CA 141.16
Given that respondents never exceeded the threshold
width, and that petitioner never established that there
were improvements in his property that were affected, the
CA held that petitioner is not entitled to any form of
compensation. Consequently, the CA ordered him to return
the P1,480,000 partial payment made, lest he be unjustly
enriched by respondents’ use of the legal easement that
under the law should have been free of charge.
Aggrieved, petitioner moved for reconsideration of the
appellate court’s Decision, which motion was denied by the
CA through its March 7, 2016 Resolution. Hence, petitioner
elevated the case to this Court.
The Issues
In the instant recourse, petitioner raises the following

issues:
_______________
16 Id., at pp. 143-144.
109
VOL. 827, JUNE 7, 2017 109

1. THE HONORABLE COURT OF APPEALS

SERIOUSLY/GRAVELY COMMITTED AN ERROR IN LAW
AND WITH THE ESTABLISHED/ACCEPTED
JURISPRUDENCE IN UPHOLDING AND SUSTAINING
THE DECISION DATED 28 NOVEMBER 2012 OF THE
HONORABLE REGIONAL TRIAL COURT BRANCH 166 OF
PASIG CITY IN RULING THAT THE PROVISIONS OF
PRESIDENTIAL DECREE NO. 2004 IS INAPPLICABLE
OVER THE SUBJECT PARCEL OF LAND OF PETITIONER.
PASIG CITY IN RULING THAT THE PROVISIONS OF
COMMONWEALTH ACT NO. 141 APPLIES AS
ENCUMBRANCE OVER THE SUBJECT PARCEL OF LAND
OF PETITIONER.
xxxx
SERIOUSLY/GRAVELY COMMITED AN ERROR IN LAW
PASIG CITY IN RULING THAT PETITIONER IS NOT
ENTITLED TO BE PAID THE BALANCE OF JUST
COMPENSATION IN THE AMOUNT OF TEN MILLION
SEVEN HUNDRED EIGHTY-FIVE THOUSAND PESOS,
(P10,785,000.00) WITH LEGAL INTEREST COMMENCING
FROM
ACTUAL TAKING OF PROPERTY ON 14 AUGUST 1997
UNTIL FULLY PAID.
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VOL. 827, JUNE 7, 2017 109


PASIG CITY IN RULING THAT THE PARTIAL PAYMENT
MADE BY RESPONDENT IN THE AMOUNT OF ONE
MILLION FOUR HUNDRED EIGHTY THOUSAND PESOS
(P1,480,000.00), BE RETURNED BY PETITIONER TO
RESPONDENT.
5. ASSUMING WITHOUT ADMITTING AND FOR THE SAKE
OF ARGUMENT THAT THE SUBJECT PARCEL OF LAND
LAWFULLY OWNED BY PETITIONER IS SUBJECT TO
THE PROVISIONS OF COMMONWEALTH ACT NO. 141
WITH THE SIXTY (60) METERS ENCUMBRANCE OF
RIGHT-OF-WAY, PETITIONER SHOULD STILL BE
ENTITLED TO THE DIFFERENCE OF ONE HUNDRED
SIXTY-THREE SQUARE METERS, (163 sq. m.), OUT OF
THE TWO HUNDRED TWENTY-THREE SQUARE METERS
(223 sq. m.) TAKEN BY RESPONDENT FOR THE USE OF
THE METRO MANILA SKYWAY PROJECT, TO WHICH
JUST COMPENSATION THERETO MUST AND SHOULD
BE PAID BY RESPONDENT TO PETITIONER.17
To simplify, the Court is faced with the same issues that

confronted the CA, to wit:
1. Whether or not the subject property owned by petitioner is

subject easement of right-of-way in favor of the government;
2. Whether or not respondents are liable to pay just compensation
to petitioner; and
3. Whether or not petitioner should return the initial payment
made by respondents in the amount of P1,480,000.
_______________
17 Id., at pp. 47-48.
111
VOL. 827, JUNE 7, 2017 111

Petitioner maintains that RA 730 relaxed the mode of

acquiring public land, from the strict method of public
auction to the more lenient non-auction sale. Thus,
petitioner postulates that the CA’s interpretation of PD
2004 — that only public lands sold without auction sale are
covered by the decree’s removal of encumbrance — would
lead to a scenario wherein properties acquired through the
more stringent process would be subjected to more
restrictions than those acquired through the more relaxed
means.18 Petitioner, therefore, submits that PD 2004
should be interpreted to cover all government sales of
public land, with or without auction.
Furthermore, petitioner cites his constitutional right to
just compensation in exchange for public property taken for
public use.19 He laments that as early as August 14, 1997,
respondents have deprived him of his ownership rights
over more than half of his property for the development of
the Metro Manila Skyway Project. For 19 years and
counting, the government has been enjoying full use of 223
square meters of his parcel of land, all the while denying
petitioner payment for just compensation, resulting in the
violation of his constitutionally enshrined right.20
Petitioner, therefore, prays that respondents be directed to
pay the balance of P10,785,000 pursuant to the parties’
covenant, plus legal interest.
_______________
18 Id., at p. 55.
19 Constitution, Art. III, Sec. 9. Private property shall not be taken for
public use without just compensation.
20 Rollo, pp. 57-60; citing the expropriation cases of Republic v. Lim,
G.R. No. 161656, June 29, 2005, 462 SCRA 265; Republic v. Salem
Investment Corporation, G.R. No. 137569, June 23, 2000, 334 SCRA 320;
Heirs of Alberto Suguitan v. City of Mandaluyong, G.R. No. 135087, March
14, 2000, 328 SCRA 137; Association of Small Landowners in the
Philippines, Inc. v. Secretary of Agrarian Reform, G.R. No. 78742, July 14,
1989, 175 SCRA 343; Cosculluela v. Court of Appeals, No. L-77765, August
15, 1988, 164 SCRA 393; Visayan Refining Co. v. Camus and Paredes, 40
Phil. 550 (1919); Manila Railroad Co. v. Velasquez, 32 Phil. 286 (1915).
112

In connection with the foregoing, petitioner asserts that

he could not be held liable to return the initial payment
made by respondents in the amount of P1,480,000. This
amount, to petitioner, constitutes part and parcel of the
just compensation he is legally entitled to for the
government’s use of his private property. Respondents’
payment was then not tainted with illegality for which
petitioner may be held liable for its return.
Assuming for the sake of argument that petitioner
illegally obtained payment, petitioner claims that
respondents are barred from recovering the same as they
themselves are in pari delicto.21 Being the same parties
who cajoled petitioner into parting with his property in the
promise of being paid the appraised value and who did, in
fact, make such payment, albeit partial, respondents could
no longer recover what they have already paid. To sustain
the CA’s finding that petitioner ought to return the down
payment would be tantamount not only to allowing
respondents to abscond liability for paying the balance, but
also to virtually allowing the government to rob petitioner
of his property through machinations.22
Lastly, petitioner claims that in the alternative, even if
the property awarded to him by the Bureau of Lands is
subject to the easement under Sec. 112 of CA 141, he is still
entitled to just compensation in the amount of P8,959,000,
representing 163 sq. m. (223 sq. m. taken property less the
60 sq. m. easement) multiplied by the appraised value of
the property of P55,000 per square meter. Deducting the
initial payment made from the aggregate amount would
leave respondents’ total unpaid balance in the amount of
P7,485,000, plus legal interest, as per petitioner’s
computation.23
The Court’s Ruling
The petition is partly meritorious.
_______________
21 Id., at pp. 66-67.

22 Id., at pp. 66-68.
23 Id., at p. 69.
113
VOL. 827, JUNE 7, 2017 113

The easement of right-of-

way in favor of the govern-
ment subsists despite the
enactment of PD 2004
Resolving the first issue, the Court rejects petitioner’s

claim that the subject property is no longer subject to the
60-meter width easement of right-of-way in favor of the
government.
First, no less than the Order of Award granting
petitioner title over the subject property reads that the
parcel of land conferred to him is subject to the restrictions
contained under Sec. 109-114 of CA 141, which necessarily
includes the easement provided in Sec. 112. Notably,
petitioner was awarded the subject property in 1987, while
PD 2004, which allegedly removed all encumbrances and
restrictions from awarded properties, was signed into law
much earlier in 1985. This alone raises suspicion on the
applicability of PD 2004 to the subject property.
Second, the Court finds no reversible error in the RTC
and CA’s interpretation of the coverage of PD 2004 and RA
730. The title of RA 730 itself supports the rulings of the
courts a quo that the laws petitioner relied upon only cover
the sale of public lands for residential purposes and to
qualified applicants without public auction. To quote:
REPUBLIC ACT NO. 730 — AN ACT TO PERMIT THE SALE

WITHOUT PUBLIC AUCTION OF PUBLIC LANDS OF THE
REPUBLIC OF THE PHILIPPINES FOR RESIDENTIAL
PURPOSES TO QUALIFIED APPLICANTS UNDER CERTAIN
CONDITIONS. (emphasis added)
It can readily be inferred from the title of RA 730 that

the definite ambit of the law could not be extended to sales
of public lands via public auction, through which mode of
disposition petitioner acquired the subject property.
Consequently, when RA 730 was amended by PD 2004 to
the effect of remov-
114

ing encumbrances and restrictions on purchased properties

without public auction, petitioner could not have benefitted
from the same.
Lastly, even the contents of RA 730 belie petitioners’
claim. The foremost section of the law reads:
Section 1. Notwithstanding the provisions of sections

sixty-one and sixty-seven of Commonwealth Act Numbered
One hundred forty-one, as amended by Republic Act Numbered
Two hundred ninety-three, any Filipino citizen of legal age who is
not the owner of a home lot in the municipality or city in which he
resides and who has in good faith established his residence on a
parcel of the public land of the Republic of the Philippines which
is not needed for the public service, shall be given preference to
purchase at a private sale of which reasonable notice shall be
given to him not more than one thousand square meters at a price
to be fixed by the Director of Lands with the approval of the
Secretary of Agriculture and Natural Resources. It shall be an
essential condition of this sale that the occupants has constructed
his house on the land and actually resided therein. Ten percent of
the purchase price shall be paid upon the approval of the sale and
the balance may be paid in full, or in ten equal annual
installments. (emphasis added)
As can be gleaned, RA 730 was crafted as an exception

to Secs. 6124 and 6725 of CA 141. These provisions govern
the
_______________
24 SECTION 61. The lands comprised in classes (a), (b), and (c) of
section fifty-nine shall be disposed of to private parties by lease only
and not otherwise, as soon as the President, upon recommendation by the
Secretary of Agriculture and Commerce, shall declare that the same are
not necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or
lease under the provisions of this Act. (emphasis added)
25 SECTION 67. The lease or sale shall be made through oral
bidding; and adjudication shall be made to the highest bidder.
However, where an applicant has made improvements on the
115
VOL. 827, JUNE 7, 2017 115

mode of disposition of the alienable public lands

enumerated under Sec. 59 of the same law.26 Synthesizing
the provisions, CA 141 provides that public lands under
Sec. 59 can only be disposed for residential, commercial,
industrial, and other similar purposes through lease or
sale, in both cases, “to the highest bidder.” The conduct of
an auction is then required under Secs. 61 and 67.
By way of exception, however, RA 730 now allows the
sale of public lands without public auction to qualified
applicants.27 It is through this exceptional case of purchase
of public land without public auction wherein PD 2004
would apply.
Petitioner’s assertion that both sales of public land with
and without public auction are subsumed under the
coverage of PD 2004 is contrary to the very tenor of the
law. Sec. 2 of RA 730, as amended by PD 2004, is clear and
unambiguous:
SEC. 2. Lands acquired under the provisions of this

Act shall not be subject to any restrictions against
encumbrance or alienation before and after the issuance of
the patents thereon. (emphasis added)
_______________
land by virtue of a permit issued to him by competent authority, the sale

or lease shall be made by sealed bidding as prescribed in section twenty-
six of this Act, the provisions of which shall be applied wherever
applicable. If all or part of the lots remain unleased or unsold, the Director
of Lands shall from time to time announce in the Official Gazette or in any
other newspapers of general circulation, the lease or sale of those lots, if
necessary. (emphasis added)
26 SECTION 59. The lands disposable under this title shall be
classified as follows:
(a) Lands reclaimed by the Government by dredging, filing, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
27 RA No. 730, Sec. 1.
116

Under its plain meaning, only public lands acquired by

qualified applicants without public auction and for
residential purposes are free from any restrictions against
encumbrance or alienation. The provision is inapplicable to
petitioner’s property which was awarded to petitioner not
in accordance with RA 730, but through public auction.
What is more, the easement of right-of-way under Sec.
112 of CA 141 is not subsumed in the phrase “restrictions
against encumbrance or alienation” appearing in the
amendment introduced by PD 2004. This becomes obvious
upon examining the original text of Sec. 2 of RA 730, before
PD 2004 took effect:
Sec. 2. Except in favor of the Government or any of its branches,

units, or institutions, lands acquired under the provisions of this
act shall not be subject to encumbrance or alienation before the
patent is issued and for a term of ten years from the date of the
issuance of such patent, nor shall they become liable to the
satisfaction of any debt contracted prior to the expiration of the
said period. No transfer or alienation made after the said period
of ten years and within fifteen years from the issuance of such
patent except those made by virtue of the right of succession shall
be valid unless when duly authorized by the Secretary of
Agriculture and Natural Resources and the transferee of vendee
is a Filipino citizen. Every convenyance made shall be subject to
repurchase by the original purchaser or his legal heirs within a
period of five years from the date of conveyance.
Any contract or agreement made or executed in violation of this
section shall be void ab initio.
Consequently, it was erroneous for petitioner to harp on

Sec. 2 of RA 730, as amended by PD 2004, in his bid to
unshackle his property from its servient state, to release it
from the statutory lien prescribed under Sec. 112 of CA
141.
117
VOL. 827, JUNE 7, 2017 117

Petitioner is not entitled

to just compensation
The Court now determines how the subsisting easement

of right-of-way in favor of the government bears on
petitioner’s entitlement to just compensation. In resolving
petitioner’s principal claim, we apply the doctrine in
Republic v. Andaya (Andaya).28
The seminal case of Andaya likewise involved property
subject to the statutory lien under Sec. 112 of CA 141. As
held in the case:
It is undisputed that there is a legal easement of right-of-way

in favor of the Republic. Andaya’s transfer certificates of title
contained the reservation that the lands covered thereby are

subject to the provisions of the Land Registration Act and the
Public Land Act. Section 112 of the Public Land Act provides that
lands granted by patent shall be subject to a right-of-way not
exceeding 60 meters in width for public highways,
irrigation ditches, aqueducts, and other similar works of the
government or any public enterprise, free of charge, except
only for the value of the improvements existing thereon that
may be affected. In view of this, the Court of Appeals declared
that all the Republic needs to do is to enforce such right
without having to initiate expropriation proceedings and
without having to pay any just compensation. Hence, the
Republic may appropriate the 701 square meters
necessary for the construction of the floodwalls without
paying for it.29 (emphasis added)
The Court affirmed the CA’s interpretation of Sec. 112 of

CA 141 and ruled that the Republic was under no
obligation to pay therein respondent Andaya just
compensation in enforcing its right-of-way. Be that as it
may the Court did not foreclose the
_______________
28 G.R. No. 160656, June 15, 2007, 524 SCRA 671.

29 Id., at pp. 675-676.
118

possibility of the property owner being entitled to just

compensation if the enforcement of the right-of-way
resulted in the “taking” of the portions not subject to the
legal easement.
Jurisprudence teaches us that “taking,” in the exercise
of the power of eminent domain, “occurs not only when the
government actually deprives or dispossesses the property
owner of his property or of its ordinary use, but also when
there is a practical destruction or material impairment of
the value of his property.”30 As in Andaya, even though the

Republic was not legally bound to pay just compensation
for enforcing its right-of-way, the Court nevertheless found
that its project to be undertaken — the construction of
floodwalls for Phase 1, Stage 1 of the Lower Agusan
Development Project — would prevent ingress and egress
in Andayas private property and turn it into a catch basin
for the floodwaters coming from the Agusan River,
effectively depriving him of the normal use of the
remainder of his property. To the mind of the Court, this
resulted in a “taking” of what was left of Andaya’s property,
entitling him to consequential damages, awarded by the
Court in the form of just compensation.
To demonstrate in concrete terms, the property involved
in Andaya contained a total area of 10,380 square meters,
which can be divided in the following manner:
i. The 4,443-square-meter portion subject to the
easement of right-of-way, which can further be
subdivided into two:
a. The 701-square-meter portion corresponding to
total area of the 10-meter easement actually
utilized by the Republic; and
b. The 3,742-square-meter portion corresponding to
the unutilized area of the portion subject to the
60-meter width easement; and
_______________
30 Id., at p. 676, citing Republic v. Court of Appeals, G.R. No. 147245,

March 31, 2005, 454 SCRA 516, 536 and Ansaldo v. Tantuico, Jr., G.R.
No. 50147, August 3, 1990, 188 SCRA 300, 304.
119
VOL. 827, JUNE 7, 2017 119

ii. The remainder 5,937-square-meter portion not subject

to the government’s easement of right-of-way.
The 701-square-meter easement in Andaya was the site
for the floodwall project. This was the extent of the right-of-
way enforced by the government. The Court affirmed the
CA ruling that the Republic may acquire the 701-square-

meter property free of charge, save only for the value of the
improvements that may be affected.
As previously discussed, the floodwall project on the
701-square-meter property would have deprived Andaya of
the normal use of the remainder, i.e., both the 3,742 and
the 5,937-square-meter residual portions. But of the two,
the Court held that Andaya is entitled to just compensation
only for the 5,937-square-meter span. The Court
ratiocinated that though unutilized, the 3,742-square-
meter portion is still covered by Sec. 112 of CA 141 that
limits the property owner’s compensation to the value of
the improvements, not of the value of the property per se.
To recapitulate, two elements must concur before the
property owner will be entitled to just compensation for the
remaining property under Sec. 112 of CA 141: (1) that the
remainder is not subject to the statutory lien of right-of-
way; and (2) that the enforcement of the right-of-way
results in the practical destruction or material impairment
of the value of the remaining property, or in the property
owner being dispossessed or otherwise deprived of the
normal use of the said remainder.
This doctrine in Andaya was reiterated in the recent
Republic v. Regulto.31 We now apply the same parameters
for determining petitioner’s entitlement to just
compensation in the case at bar.
Recall that the subject property in this case is a 400-
square-meter parcel of land. The 223-square-meter portion
of the subject property was traversed by respondents’
Metro Manila
_______________
31 G.R. No. 202051, April 18, 2016, 790 SCRA 1.
120

Skyway Project. And as noted by the CA, the subdivision

plan shows that the covered area corresponds to the widths
of 13.92 meters and 13.99 meters, well within the 60-meter

width threshold provided by law. Respondents are then not
under any legal obligation to pay just compensation for
utilizing the 223-square-meter portion pursuant to the
Republic’s right-of-way under Sec. 112 of CA 141, and in
accordance with our ruling in Andaya.
Anent the remaining 177 square meters of the 400-
square-meter lot, suffice it to state that it was never proved
that the said area was not subject to the statutory lien.
Neither was it established that despite not having been
utilized for the Metro Manila Skyway Project, the
enforcement of the easement resulted in the “taking” of the
remaining property all the same. There is then no
evidentiary basis for awarding petitioner just
compensation, as correctly ruled by the RTC and the CA.
However, petitioner remains the owner of the said 177
square meters and can fully exercise all the rights of
ownership over the same.
Respondents are barred

by estoppel from recovering
the initial payment of
P1,480,000 from petitioner
Guilty of reiteration, Sec. 112 of CA 141 precludes

petitioner from claiming just compensation for the
government’s enforcement of its right-of-way. The contract
allegedly entered by the parties for the government’s
acquisition of the affected portion of the property in
exchange for just compensation is then void ab initio for
being contrary to law.32 Consequently, petitioner has no
right to collect just compensation for the government’s use
_______________
32 Article 1409. The following contracts are inexistent and void

from the beginning:
(1) Those whose cause, object or purpose is contrary to law, morals, good
customs, public order or public policy.
121
VOL. 827, JUNE 7, 2017 121

of the 223-square-meter lot. Anent the P1,480,000 partial

payment already made by respondents, such amount paid
shall be governed by the provisions on solutio indebiti or
unjust enrichment.
“Solutio indebiti” arises when something is delivered
through mistake to a person who has no right to demand it.
It obligates the latter to return what has been received
through mistake. As defined in Article 2154 of the Civil
Code,33 the concept has two indispensable requisites: first,
that something has been unduly delivered through
mistake; and second, that something was received when
there was no right to demand it.34
As discussed above, petitioner was never entitled to
collect and receive just compensation for the government’s
enforcement of its right-of-way, including the P1,480,000
payment made by respondents. For its part, the
government erroneously made payment to petitioner
because of its failure to discover earlier on that the portion
of the property acquired was subject to a statutory lien in
its favor, which it could have easily learned of upon perusal
of petitioner’s Order of Award. These circumstances satisfy
the requirements for solutio indebiti to apply.
Regardless, respondents’ action to compel petitioner to
return what was mistakenly delivered is now barred by the
doctrine of estoppel. The doctrine is based upon the
grounds of public policy, fair dealing, good faith and justice,
and its purpose is to forbid one to speak against his own
act, representations, or commitments to the injury of one to
whom they were directed
_______________
33 Article 2154. If something is received when there is no right to

demand it, and it was unduly delivered through mistake, the obligation to
return it arises.
34 Metropolitan Bank & Trust Company v. Absolute Management
Corporation, G.R. No. 170498, January 9, 2013, 688 SCRA 225, 238.
122

and who reasonably relied thereon. The doctrine of estoppel

springs from equitable principles and the equities in the
case.35
As a general rule, the State cannot be barred by estoppel
by the mistakes or errors of its officials or agents. But as
jurisprudence elucidates, the doctrine is subject to
exceptions, viz.:
Estoppels against the public are little favored. They should not be
invoked except [in rare] and unusual circumstances, and may not
be invoked where they would operate to defeat the effective
operation of a policy adopted to protect the public. They must be
applied with circumspection and should be applied only in those
special cases where the interests of justice clearly require it.
Nevertheless, the government must not be allowed to deal
dishonorably or capriciously with its citizens, and must
not play an ignoble part or do a shabby thing; and subject
to limitations . . . , the doctrine of equitable estoppel may be
invoked against public authorities as well as against private
individuals.36
In this case, petitioner was erroneously paid P1,480,000

on August 14, 1997 when respondents appropriated the
amount in his favor. However, because of respondents’
representation that the amount was a mere down payment
for just compensation, petitioner never objected to the
taking of his land and peacefully parted with his property,
expecting to be paid in full for the value of the taken
property thereafter. As the events unfolded, respondents
did not make good their guarantee. Instead, they would
claim for the recovery of the wrongful payment after almost
twelve (12) years, on July 9, 2009, as a counterclaim in
their Supplemental Answer. Indubitably, respondents are
barred by estoppel from recovering from petitioner
_______________
35 Megan Sugar Corporation v. Regional Trial Court of Iloilo, Branch

68, Dumangas, Iloilo, G.R. No. 170352, June 1, 2011, 650 SCRA 100, 110.
36 Republic v. Court of Appeals, G.R. No. 116111, January 21, 1999,
301 SCRA 366, 377; citing 31 CJS 675-676.
123
VOL. 827, JUNE 7, 2017 123

the amount initially paid. A modification of the assailed CA

ruling is, therefore, in order.
WHEREFORE, premises considered, the Court resolves
to PARTIALLY GRANT the petition. The award to
respondents for the recovery of the P1,480,000 initial
payment is hereby DELETED as their right to a refund
has already prescribed. Petitioner Danilo Bartolata
remains the owner of the 177-square-meter portion and can
exercise all rights of ownership over the said lot.
SO ORDERED.
Bersamin, Reyes, Perlas-Bernabe** and Tijam, JJ.,

concur.
Petition partially granted.
Notes.—According to the principle of solutio indebiti, if

something is received when there is no right to demand it,
and it was unduly delivered through mistake, the
obligation to return it arises. (CBK Power Company
Limited vs. Commissioner of Internal Revenue, 714 SCRA
46 [2014])
“Taking” under the power of eminent domain means
entering upon private property for more than a momentary
period, and under the warrant or color of legal authority,
devoting it to public use, or otherwise informally
appropriating or injuriously affecting it in such a way as
substantially to oust the owner and deprive him of all
beneficial enjoyment thereof. (Republic vs. Mupas, 769
SCRA 384 [2015])
——o0o——
_______________
** Designated additional member per Raffle dated February 15, 2017.
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Barlota vs. Republic

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SUPREME COURT REPORTS ANNOTATED 827 Page 1 of 27

DANILO BARTOLATA, represented by his Attorney-in-

Civil Law; Sale of Public Lands; Under its plain meaning,

awarded to petitioner not in accordance with RA 730, but through

VOL. 827, JUNE 7, 2017 101

Eminent Domain; Taking; Jurisprudence teaches us that

Same; Just Compensation; Two (2) elements must concur

102 SUPREME COURT REPORTS ANNOTATED

property owner being dispossessed or otherwise deprived of

second, that something was received when there was no right to

PETITION for review on certiorari of the decision and

VOL. 827, JUNE 7, 2017 103

The facts are stated in the opinion of the Court.

VELASCO, JR., J.:

Nature of the Case

Before the Court is a Petition for Review on Certiorari

by the government was subject to an easement of right-of-

The Facts of the Case

Petitioner Danilo Bartolata acquired ownership over a

1 Penned by Associate Justice Maria Elisa Sempio Diy and concurred

104 SUPREME COURT REPORTS ANNOTATED

Sometime in 1997, respondents acquired 223 square

Since the date of initial payment, petitioner had, on

This award shall further be subject to the provisions of the

VOL. 827, JUNE 7, 2017 105

Respondents then argued that pursuant to Section 112

SECTION 112. Said land shall further be subject to a

Under the above cited provision, any payment for the

9 AN ACT TO AMEND AND COMPILE THE LAWS RELATIVE TO LANDS OF

106 SUPREME COURT REPORTS ANNOTATED

(RA 730),11 allegedly removed the statutory lien attached to

SEC. 2. Lands acquired under the provisions of this Act shall

Respondents, however, countered that petitioner could

Ruling of the RTC

On November 28, 2012, the RTC promulgated its

WHEREFORE, premises considered, judgment is hereby

Giving credence to respondents’ postulation, the RTC

11 AN ACT TO PERMIT THE SALE WITHOUT PUBLIC AUCTION OF

VOL. 827, JUNE 7, 2017 107

Bartolata vs. Republic

to petitioner’s property since the law does not cover public

On appeal, the CA modified the RTC ruling thusly:

WHEREFORE, premises considered, plaintiff-appellant’s

108 SUPREME COURT REPORTS ANNOTATED

The appellate court affirmed the RTC’s finding that the

In the instant recourse, petitioner raises the following

16 Id., at pp. 143-144.

VOL. 827, JUNE 7, 2017 109

1. THE HONORABLE COURT OF APPEALS

VOL. 827, JUNE 7, 2017 109

JURISPRUDENCE IN UPHOLDING AND SUSTAINING

To simplify, the Court is faced with the same issues that

1. Whether or not the subject property owned by petitioner is

17 Id., at pp. 47-48.

VOL. 827, JUNE 7, 2017 111

Petitioner maintains that RA 730 relaxed the mode of

112 SUPREME COURT REPORTS ANNOTATED

In connection with the foregoing, petitioner asserts that

The Court’s Ruling

The petition is partly meritorious.

21 Id., at pp. 66-67.

VOL. 827, JUNE 7, 2017 113

The easement of right-of-

Resolving the first issue, the Court rejects petitioner’s